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Forest Oil Acquires Ark-La-Tex Assets, Q1 Net Sales Volumes Up

Posted on: Monday, 5 May 2008, 09:01 CDT

Forest Oil has acquired producing assets, including approximately 69,000 gross acres, located primarily in its Ark-La-Tex core areas with Haynesville Shale potential.

The acquisition adds an additional 500 identified drilling locations in east Texas and north Louisiana to the company's drilling inventory in the Ark-La-Tex area. The assets produced approximately 13 million cubic feet equivalent per day (mmcfe/d) in 2007 and contained an estimated 110 billion cubic feet equivalent (bcfe) of estimated proved reserves.

The cash consideration paid at closing for the oil and gas assets is approximately $281 million and was funded utilizing Forest's existing credit facility.

Forest's average oil and gas net sales volumes for the three months ended March 31, 2008 were approximately 478mmcfe/d, a 58% increase over 302mmcfe/d in the same period in 2007.

Craig Clark, president and CEO of Forest Oil, said: "The recent Ark-La-Tex acquisition is another strategic transaction for the company, adding 500 bolt-on drilling locations to our highly successful Cotton Valley play in both east Texas and north Louisiana with additional exposure to the Travis Peak, Bossier and Haynesville plays."

Source: Datamonitor

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