Forest Oil selling south Texas properties
Forest Oil agrees to sell most of its south Texas holdings for $325 million after taxes
DENVER (AP) -- Forest Oil Corp. said Thursday that it will sell most of its south Texas properties and receive after-tax proceeds of $325 million, which it will use to pay down debt.
Forest shares rose 43 cents, or 6.2 percent, to $7.34 in midday trading.
The company didn't disclose who is buying the properties, and the sale doesn't include the company's oil-shale holdings in the Eagle Ford field.
Forest said the sale is expected to close around Feb. 15 with an effective date of Jan. 1. The price is subject to closing adjustments.
The properties generated $60 million in income during 2012, produced 66 million cubic feet of natural gas per day in the third quarter and held estimated proved reserves of 272 billion cubic feet at year end, the company said.
Forest said the deal marked significant progress in improving its balance sheet and shifting its focus from gas to oil and gas liquids in the Texas Panhandle and Eagle Ford fields.
Jefferies & Co. said the price was "at the lower end of gas transactions" and would improve the company's debt burden "very modestly." Jefferies has a "Hold" rating on Forest shares.
