Forest Oil announced Jan. 7 that it plans to sell its Alaska assets as part of a company restructure following a $1.5 billion acquisition of Houston Exploration Co. Forest will acquire 100 percent of Houston Exploration’s shares in a stock and cash transaction.
Forest intends to divest it Alaska entity to reduce pro forma debt, the company said.
“In order to reduce our leverage and to further narrow our geographic focus, we will seek to sell our Alaskan entity in 2007,” said Craig Clark, Forest’s president and chief executive officer.
Forest says that it hopes to reduce its debt by $500 million to $600 million by the end of 2007 by the “sale of Alaska and other assets and free cash flow.” And during a teleconference on Jan. 8 Forest Chief Financial Officer David Keyte said “Alaska will be the major part of that.”
“Our goal is to reduce our long term debt from initial estimates of $1.9 billion to $1.3 billion by year end, but a lot of this depends on timing and when we begin to manage the (restructured) business,” Keyte said.
In March Clark described Cook Inlet onshore natural gas, where Forest has built a significant acreage position, as one of the company’s up and coming positions. And in November the company spun off its Alaska assets as a separate subsidiary.
Forest has working interests in several Cook Inlet oil and gas fields, and operates the West McArthur River, Kustatan, West Foreland and Redoubt fields. The company also has a 12.5 percent interest in the Cosmopolitan prospect offshore the southern Kenai Peninsula, where operator Pioneer Natural Resource is evaluating possible oil and gas production.
For the full story see the Jan. 14 edition of Petroleum News.