Forest Oil Closes Permian Basin Divestiture for $800MM
Forest Oil closed the previously announced sale of the remainder of its Permian Basin properties in West Texas and New Mexico for approximately $800 million to SandRidge Exploration and Production, LLC, a wholly-owned subsidiary of SandRidge Energy, Inc., subject to customary post-closing purchase price adjustments. The proceeds from this sale will be used to repay all outstanding borrowings under Forest’s U.S. and Canadian credit facilities, redeem the Company’s 7 ¾% Senior Notes due 2014, fund any capital expenditures in excess of discretionary cash flow, pay the current tax liability as a result of this transaction, which is estimated to be $55 - $75 million, and for other corporate purposes. In connection with the closing of this transaction, the global borrowing base under Forest’s credit facilities has been reduced to $1.3 billion.
7 ¾% Senior Notes due 2014
Forest is calling for redemption all of the $150 million principal amount outstanding of its 7 ¾% Senior Notes due 2014 (CUSIP #346091AU5) in accordance with the terms of those notes. The redemption price for the notes is 101.292% of their principal amount, plus accrued and unpaid interest from November 1, 2009 to the redemption date. The notes will be automatically redeemed on January 27, 2010, and no further interest will accrue on these notes after the day prior to redemption. A Notice of Redemption will be furnished to all registered holders of the 7 ¾% Senior Notes due 2014.
UPDATED 2009 GUIDANCE
Forest is revising its previously guided 2009 oil and gas net sales volumes downward by 0.5 Bcfe to a range of 181.5 to 192.5 Bcfe to adjust for the effect of closing its Permian Basin divestiture earlier than originally anticipated. The Company anticipates that oil and gas net sales volumes for 2009 will be in the lower end of the guided range. The impact results in a reduction to guidance of 5 MMcfe/d for the three months ended December 31, 2009. All other guidance detailed in Forest's press releases dated November 2, 2009, May 4, 2009 and February 3, 2009 has not changed.
- Forest Oil to Put Texas Panhandle Properties Up For Sale (Jul 15)
- Forest Oil Partners with Schlumberger on Eagle Ford Shale Land (Apr 12)
- Forest Oil to Sell South Texas Assets Excluding Eagle Ford (Jan 03)
Company: SandRidge Energy, Inc. more info
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