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Forest Oil begins sale of Alaska assets
Kay Cashman Petroleum News
Depending on whom you ask, Forest Oil and its Alaska subsidiaries have some or all of their Alaska assets for sale.
According to Forest’s broker and potential buyers who have talked to the Forest Oil official at its Denver headquarters in charge of the sale, all of Forest’s assets in Alaska are on the market. Those potential buyers declined to be identified, but Scotia Waterous, an international oil and gas acquisitions and divestitures firm used by Forest in the past, has a Feb. 22 posting on its Web site that says Forest Oil “has initiated a process for the sale of its entire Alaskan position, including its wholly owned subsidiary Forest Alaska Operating LLC and other assets in the Cook Inlet area. Forest has retained Scotia Waterous as its financial advisor for this transaction.”
But there is some indication that Forest Oil and its subsidiary are more interested in selling Cook Inlet basin producing assets and just two exploration assets, which is evident from the way most of Forest’s exploration acreage is excluded from a map that is part of the sale overview on Scotia Waterous’ web page (www. Waterous.com). The map on the site shows the location of nine assets, including Forest-operated production, partner-operated production, and offshore exploration prospects Cosmopolitan and Sabre — no other exploration acreage. (The Mapmakers Alaska map adjacent to this story shows all Forest acreage in Alaska, less the Copper River license.)
However, other assets in Scotia Waterous’ sale overview include approximately “one million net undeveloped acres,” which would account for the rest of Forest’s assets in Alaska, including Cook Inlet basin exploration acreage on and offshore, two Susitna basin exploration licenses and ownership in a Copper River exploration license.
Scotia Waterous also listed the following under other Alaska assets for sale: defined exploration upside on and offshore, 40 percent interest in Cook Inlet Pipeline Co. and considerable seismic data.
A data room for the sale is scheduled to open in Denver the week of March 11.
Cash and overriding royalty for Cosmo Two of Forest’s Alaska assets have already sold — a 12.5 percent interest in the Cook Inlet offshore Cosmopolitan oil and gas unit and a small interest in the Prudhoe Bay unit.
In the case of Cosmopolitan, Forest had an offer from a third party for its interest but when it notified unit operator Pioneer Natural Resources Alaska of its intent to sell Pioneer exercised its preferential right to acquire Forest’s interest as defined by the operating agreement, Tadd Owens told Petroleum News March 5. Owens is Pioneer’s director, government and public affairs in Alaska.
The transaction, Owens said, involved “a combination of cash and overriding royalty.”
Forest traded its small working and royalty interests in the Prudhoe Bay unit late last year to the three main Prudhoe owners, BP, ExxonMobil and ConocoPhillips. Forest’s top executive in Alaska, Leonard Gurule, confirmed the trade, but he declined to say what the Prudhoe interest was traded for.
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