Forest Oil to Sell Certain Assets in West Texas, New Mexico
Forest Oil has entered into two definitive agreements to sell certain operated and non-operated properties in West Texas and New Mexico for approximately $118 million. The two transactions are expected to close in the third quarter of 2009 and are subject to customary closing conditions and post-closing purchase price adjustments. These properties are currently producing 9 MMcfe/d.
At July 31, 2009, not including the proceeds from the divestitures described above, Forest had approximately $636 million outstanding under its bank credit facilities, a reduction of approximately $49 million from June 30, 2009. The reduction was primarily the result of free cash flow generation. The Company's current borrowing base totals $1.62 billion resulting in approximately $981 million of remaining borrowing capacity under its bank credit facilities at July 31, 2009. Forest intends to use the proceeds from these asset divestitures to repay a portion of the outstanding borrowings under its bank credit facilities. Pro forma availability under the bank credit facilities would be $1.1 billion as of July 31, 2009.
Asset Divestiture Program
Year-to-date dispositions for 2009, either completed or under contract, including the divestitures described above, are expected to yield proceeds of approximately $148 million with associated production of 12 MMcfe/d. These properties were the majority of the remaining properties targeted in Forest's April 2008 announced asset divestiture program that was not completed in its entirety in 2008. Forest will continue to pursue the additional asset sales announced in August of 2008. The Company intends to update 2009 guidance upon the closing of the transactions announced today.
- 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)