Forest Oil Names McDonald as Permanent CEO
Forest Oil Corp. announced Wednesday that it will keep interim chief executive Patrick McDonald on as its permanent president and CEO.
Forest has been weighed down by debt and by low natural gas prices that have made it difficult for the company to raise enough money to transition into more profitable, but more expensive oil production.
Forest is one of several U.S. energy companies that has tried to shift away from natural gas as the fuel's price dropped below $3 per million British thermal units from 2008 highs of nearly $14 per BTU.
Mr. McDonald has served as the interim CEO since Forest's previous chief executive was terminated by the board of directors in June, according to a securities filing by the company. Since then the company has been working with outside advisors to choose a new top executive.
"Pat's leadership has been instrumental in Forest taking the important initial steps to deleverage and strengthen the balance sheet and he has successfully led the transition to an oil-focused operational strategy," said James Lightner, chairman of Forest's board of directors.
Several analysts and shareholders have wondered in recent months whether Forest might have to look at drastic solutions to its problem, including selling the company. Forest has maintained in the past that it will generate cash by selling assets.
Andrew Coleman, an analyst with Raymond James, said it appears that in the short term, the company will "keep grinding ahead."
"It's unlikely that a new CEO would come in if they had a sale in the works," he said. And if oil and gas prices continue on an upward trajectory, "the worst is probably behind the company," he said.
Also on Wednesday Forest announced the pricing of $500 million in senior notes it will use to fund redemption of outstanding notes and to reduce borrowing from its credit facility.
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