Forest Oil shares rise on deal with Schlumberger
Forest Oil shares rise as it speeds up Texas production by bringing in Schlumberger
NEW YORK (AP) -- Forest Oil jumped nearly 12 percent in premarket trading after it said it would speed up production in the Eagle Ford shale by bringing in oil services giant Schlumberger.
The deal calls for Schlumberger to pay a $90 million drilling carry in the form of future drilling and completion work, and in exchange will get a 50 percent working interest in Forest Oil's Eagle Ford shale acreage in Gonzales County, Texas. The two companies will split future drilling 50-50.
Forest Oil believes the faster development will result in 10 additional wells this year and 20 next year. The new wells won't change its sales volume for 2013, but average volumes from the Eagle Ford area are expected to more than double next year as the benefits of the speed-up take hold.
Shares of Forest Oil Corp. rose 59 cents to $5.60 before the opening bell. They're still near the low end of their 52-week range of $4.58 to $13.69.
