Forest Oil Corporation announced that it completed its previously announced acquisition of producing assets, including approximately 69,000 gross acres (47,000 net acres), located primarily in its Ark-La-Tex core areas with Haynesville Shale potential. The acquisition adds an additional 500 identified drilling locations in East Texas and North Louisiana to the Company's already large drilling inventory in the Ark-La-Tex area. The assets produced approximately 13 MMcfe/d in 2007 and contained an estimated 110 Bcfe of estimated proved reserves.
The cash consideration paid at closing for the oil and gas assets is approximately $281 million and was funded utilizing Forest's existing credit facility. The economic effective date for the transaction was March 1, 2008, and the purchase price remains subject to customary post-closing adjustments.
H. Craig Clark, President and CEO, stated, "The recent Ark-La-Tex acquisition is another strategic transaction for the Company, adding 500 bolt-on drilling locations to our highly successful Cotton Valley play in both East Texas and North Louisiana with additional exposure to the Travis Peak, Bossier and Haynesville plays. We intend to apply our operational excellence to these assets, including the utilization of horizontal drilling, improved gas processing and transportation infrastructure, as we prudently invest our capital in 2008 and beyond."
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