Forest acquires Greater Buffalo Wallow acerage for $892M
Forest Oil Corp. is set to acquire processing assets, including roughly 118,000 gross acres from Cordillera Texas LP, in Greater Buffalo Wallow and East Texas/North Louisiana.
Forest attributes estimated proved reserves of 350 bcfe with additional net unrisked potential of 1,200 bcfe and nearly 1,500 additional vertical and horizontal drilling locations to the properties.
The properties produced an average of approximately 34 MMcfe/d in the first half of 2008 and are focused primarily in the Granite Wash, Atoka, and Morrow intervals in the Greater Buffalo Wallow Area and in the Cotton Valley and Travis Peak intervals in East Texas.
The acquired acreage in East Texas also has James Lime, Haynesville/Bossier Shale and Pettet rights. Forest will pay nearly $708 million in cash and deliver 3.5 million shares of Forest's common stock to the seller for a total estimated value of $892 million.
While Forest will initially fund the acquisition from the $1.21 billion available in its credit facility, the company intends to ultimately fund the acquisition by divesting identified non-core, non-strategic assets.
Forest has identified an additional $500 - 600 million of non-core, non-strategic assets that it intends to sell in order to fund this acquisition. This divestiture package is in addition to Forest's already announced $300 - 500 million property divestiture package that Forest is currently marketing and hopes to close by the end of the third quarter 2008.
Add RSS Feed