Forest Oil Increases Production and Capital Expenditures Guidance
Forest Oil Corporation announced an increase to 2006 production guidance and that its Board has approved an increase in 2006 capital expenditures.
Forest last updated its 2006 guidance on August 7, 2006. The following is made subject to all of the cautionary statements and limitations contained in the August 7, 2006, press release. Given those statements and limitations as well as the limitations discussed below, the 2006 guidance components are updated as follows:
Production Guidance. In connection with this increase in capital, Forest expects production in 2006 to average between 305 and 320 MMcfe/d, with the increases expected in the fourth quarter.
Capital Expenditures. We estimate that expenditures for exploration and development will be approximately $580 million in 2006, an increase of approximately $80 million from the previous guidance. Additional capital, including additional amounts allocated to leasehold purchases in growth areas, will be spent primarily in Texas in the Greater Vermejo/Haley, Cotton Valley, Katy and Barnett Shale areas and in the Deep Basin of Alberta. Other increases were approved for outside operated projects and capital due to increased working interests in certain fields and increased service costs. For the first six months of 2006, Forest believes that its capital investment activities in Remainco (i.e., the portion of Forest not included in the March 2, 2006, spin-off transaction with Mariner Energy, Inc.) have resulted in all-in finding, development, and acquisition costs approximately the same as those experienced in 2005 despite acquisition and service cost increases in 2006.
H. Craig Clark, President and CEO, stated: "The 2006 capital program in our major properties continues to provide excellent rates of return as well as better than anticipated reserve and production growth in the first half of 2006. As a result of the success we have achieved so far, we are increasing our capital budget as well as our full year production guidance. We are optimistic that by increasing our investment rate and maintaining our operational momentum we can deliver excellent growth, both in terms of reserves and production, in 2006 and get a head start on 2007."
- 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)