Forest Oil selling South Louisiana properties
DENVER (AP) — Forest Oil is selling all of its South Louisiana properties for about $220 million as part of its plan to shed some non-core assets.
The natural gas and oil producer said Friday that it plans to use the proceeds from the sale to pay back outstanding borrowings under its credit facility.
The properties included in the sale had estimated proved reserves of 45 billions of cubic feet equivalent as of Dec. 31.
Forest Oil Corp. previously announced that it is selling its East Texas natural gas gathering assets for $34 million. It is also selling about 5,600 net acres in the Eagle Ford Shale for $15 million as well as some other properties for $8 million. The Eagle Ford shale formation stretches from the western Texas-Mexico border to Louisiana.
"Our team has made meaningful strides in improving the company's financial position, and we will continue to focus on other non-core divestitures to improve our balance sheet and increase our financial flexibility as we maintain focus on the development of our core oil properties," President and CEO Patrick McDonald said in a statement.
McDonald was named president and CEO in September. He had served as interim CEO since June, after the departure of H. Craig Clark.
The Denver company said that it plans to update its 2012 forecast once the sale of the South Louisiana properties closes.
The deal is expected to close on Nov. 16.
Forest Oil shares finished at $8.83 on Thursday. They have risen 55 percent from a 52-week low of $5.68 in mid-July. They traded as high as $17.22 last December.