Forest Oil has entered an agreement to sell its South Texas oil & gas properties outside of the Eagle Ford Shale to Hilcorp. The deal will raise $325 million that will be used to pay down debt. The company has sold approximately $600 million in non-core assets in the past six months. This deal is estimated to cover 129,000 acres. Forest will retain all of its natural gas hedges and now has approximately 95% of its gas production hedged for 2013. The properties sold included production of 66 mmcfed (86% natural gas) and 272 Bcfe of proved reserves.
Patrick R. McDonald, CEO, stated, “We are pleased to announce further progress in our deleveraging plan with the sale of our non-core South Texas natural gas properties at metrics that are attractive to Forest shareholders …….The allocation of capital and resources towards our core oil and liquids assets in the Texas Panhandle and Eagle Ford,….on a pro forma basis, the liquids contribution of our production mix is approximately forty percent and will continue to increase due to our oil-focused drilling program…..”