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Forest reports first quarter loss; drills 13 new wells with 77 percent success rate Production slips in quarter; partly due to tanker lifting delays in Alaska cutting production by more than 2,000 daily barrels Allen Baker PNA Contributing Writer
Forest Oil Corp. reported a loss of $1.8 million in the first quarter as production slid along with prices. Forest, based in Denver, had a much bigger loss in the fourth quarter — $29.7 million, due partly to unusual items such as a $10 million Enron writeoff.
In the year-ago quarter, Forest earned $81.3 million.
The company’s daily liquids production slid 27 percent to 21,500 barrels daily from 29,500 daily barrels a year ago. Forest said tanker lifting delays in Alaska pushed inventories up by 210,000 barrels, which cut the production figure by more than 2,000 daily barrels. Liquids sold for an average of $18.76 a barrel, down 30 percent from a year earlier.
Gas production was down 20 percent to 246.7 million cubic feet daily from 308.5 million.
Forest sold some producing properties in the Gulf of Mexico to Unocal late last year. The company said there was also some normal decline in the Gulf due to reduced capital spending there.
Average sale price for gas was $2.68 for a thousand cubic feet, down 60 percent from $6.72 a year ago.
Production permits in for Redoubt Forest participated in the drilling of 13 new wells and had a 77 percent success rate to show for the work. Among those was the Redoubt Number 4 well in Cook Inlet, which boosted the estimate of recoverable oil at Redoubt Shoal to 100 million barrels or more. The company just received permits to begin the production phase for that field from its Osprey platform. (See related story on page 1.)
A well in the Trading Bay field, where Forest has a 47 percent working interest, was drilled to 15,042 feet and is expected to produce 3,200 barrels a day.
Forest is planning to invest about $130 million in Alaska this year, roughly half its total exploration budget. Exploration and development spending in the first quarter totaled $79.8 million company-wide.
Revenue for the quarter was $149.2 million, a drop of 59 percent from the $367.9 million Forest took in a year ago. Fourth-quarter revenues were $174 million.
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