Pacific Energy Resources announced today that it has completed its acquisition of all of Forest Oil Corp.’s Alaska assets. The two companies announced the purchase agreement for Forest’s Alaska properties at the end of May and since then the companies have been negotiating the detailed terms of the deal.
Under the final agreement Pacific Energy has acquired a 100 percent interest in Forest Alaska Operating LLC, the Forest subsidiary that owned most of Forest’s Alaska properties. Pacific Energy has also acquired other Forest assets in Alaska that were not owned by Forest Alaska Operating. The purchase price was $400 million, plus the issuance of 10 million shares of Pacific Energy common stock and a seller note to Forest with a net present value of approximately $30 million, Pacific Energy said.
The assets that Pacific Energy has acquired include interests in nine producing fields in the Cook Inlet area; nearly 1 million net acres in oil and gas leases; and a 50 percent equity interest in the Cook Inlet pipeline that carries oil down the west side of Cook Inlet to the Drift River terminal, Pacific Energy said.
“We are extremely pleased to have successfully completed this acquisition; it represents a tremendous opportunity for the corporation and its shareholders,” said Darren Katic president of Pacific Energy. “This package of assets is a direct extension of our business strategy; the established production, with long life reserves, generates strong predictable cash flow. The multiple infill drilling opportunities provide a low risk means to grow the corporation’s production through redevelopment. Significant undeveloped acreage with multiple high quality exploration targets provides large exploration upside.”
“The close of this transaction marks a key strategic event for Forest,” said Craig Clark, president and CEO of Forest Oil. “The producing assets of the company are now entirely onshore North America and focused primarily on repeatable plays in tight-gas sands and long-lived oil. Additionally, with the sale of these assets, Forest has reduced the leverage on its balance sheet.”