New date set for closing Forest Alaska sale

Forest Oil Corp. said Aug. 1 that an amendment to its agreement to sell its Alaska assets to Pacific Energy Resources Ltd. has extended the closing date to Aug. 24. When the sale was announced at the end of May, it was expected to close at the end of June.

Asked about the delay in mid-July, Pacific Energy told Petroleum News that it was still negotiating “detailed terms” with Forest. The sale includes Forest’s wholly owned subsidiary, Forest Alaska Operating, including shares in nine Cook Inlet basin fields, a 40 percent interest in Cook Inlet Pipeline Co., and almost 1 million exploration acres in the Cook Inlet and Susitna basins of Southcentral Alaska.

Under the terms of the amendment Forest will receive cash of $268 million to repay the full balance of the Forest Alaska Operating term loans; cash of $132 million to be paid to Forest; 10 million shares of Pacific common stock; and a $60.75 million zero-coupon senior subordinated note from Pacific due 2014.

In addition to extending the closing date to Aug. 24, Forest said the amendment also provides for a deposit of 5 million shares of Pacific common stock in addition to the $5.2 million cash already received and “substantially reduces the circumstances under which the closing would not occur.”