Forest Oil Agrees to Revised Terms for Rockies Divestiture Package
Forest Oil has agreed to revised terms with the buyer of its Rockies divestiture package. Under the terms of the revised agreement:
- The cash purchase price was reduced from $258 million to $200 million.
- The effective date was changed from July 1, 2008 to December 1, 2008. Cash flow from the assets during this period is estimated at approximately $12 million and will be retained by Forest.
- The buyer has agreed to assume certain gas balancing liabilities.
- The buyer has agreed to pay a potential additional payment to Forest based on the price of natural gas in 2009. The potential additional payment is capped at $21 million.
- The deposit amount associated with the sale was increased from $13 million to $33 million.
- All material seller representations and warranties and material conditions to close have been eliminated
The transaction is currently scheduled to close on November 25, 2008. Forest will reassess 2008 guidance upon the close of this transaction.
- 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)