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Forest shows loss for quarter; Enron adjustments hurt results Company is betting heavily on Cook Inlet properties, expected to consume half its capital budget of $250 million to $350 million for 2002 Allen Baker PNA Contributing Writer
Forest Oil Corp. showed a loss of $29.7 for the fourth quarter as writeoffs including $10.5 million related to Enron hurt results. That compared to a $55.5 million profit a year earlier.
For the year, Denver-based Forest earned $103.7 million, a decline of 21 percent from the 2000 figure.
Forest set aside $8.3 million in the fourth quarter as a reserve for money due from Enron Corp. for gas it delivered, as well as $2.3 million to write off derivative contracts with Enron.
An unsuccessful $10 million well in Albania was part of $18.1 million in impairments of oil and gas properties for the quarter, up from $5.9 million in impairments for the 2000 quarter.
With these and other adjustments, Forest calculates pro forma net earnings at $4.8 million, down 91 percent from $54.1 million a year earlier. For the year, Forest put pro forma earnings at $143.4 million, up 5 percent from 2000’s $136.8 million. Emphasis on Redoubt Shoal This year, Forest is betting heavily on its Cook Inlet properties, which are expected to consume half of the company’s capital budget of $250 million to $350 million.
“The majority of the money we’re spending is getting Redoubt on line,” said Don Stevens, Forest’s vie president of capital markets and treasurer. “It’s a wonderful project. You rarely see things in this business that get better every time you run the estimates.”
But Forest’s capital budget is much slimmer than the $565 million the company spent on drilling 120 wells and making other investments. For this year, 24 exploratory wells are expected to consume 31 percent of the capital budget.
The company sold some producing properties in the Gulf of Mexico to Unocal at the end of 2001, and daily natural gas production for the quarter dropped 16 percent to 273 million cubic feet daily.
Liquids production held steady at 30,600 barrels daily.
Alaska production was up 46 percent for the quarter, to the equivalent of 73 million cubic feet of gas. Much of that came as a result of new wells on the west side of Cook Inlet shared with Unocal, Stevens said. Alaska is 16 percent of Forest’s production Alaska represented 16 percent of Forest’s total 2001 production. But Alaska contributed to higher expenses as well, as the company had to spend money on pipeline maintenance.
Company-wide, gas brought an average of $2.79 per thousand cubic feet, down 35 percent from $4.21 a year earlier.
Liquids were sold for an average of $19.23 a barrel, down from $23.21 in 2000’s final quarter.
Forest’s revenues for the quarter were $174 million, down 44 percent from $308 million a year earlier. For the year, revenues were $1,018 million, up 12 percent from $913 million in 2000.
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