Sabine Oil & Gas Merger with Forest Oil Corporation

Sabine Investors Will Hold 73.5% of New Company's Stock
Forest Oil Eagle Ford Acreage Map Year-end 2013

Forest Oil Eagle Ford Acreage Map Year-End 2013 | Click to Enlarge

Houston-based Sabine Oil and Gas and Denver-based Forest Oil Corp will merge in an all-stock transaction.

At closing, which is expected some time during the fourth quarter, Sabine investors will hold 73.5% of the combined company’s stock. The announcement of the merger was revealed by both companies in early May of 2014.

 

 

 

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Forest Oil Eagle Ford Drilling Shifting Gears in 2014 Due to Faulting

Forest Oil 30 Day Drilling Averages Down ~25% in Fourth-Quarter of 2013
Forest Oil Eagle Ford Acreage Map Year-end 2013

Forest Oil Eagle Ford Acreage Map Year-End 2013 | Click to Enlarge

Forest Oil is shifting gears in the Eagle Ford, after three gross (1.5 net) wells hit a fault line in the company’s southern acreage during the fourth-quarter.

In 2013, Forest reported results on 44 gross (22 net) wells, with a 30-day average gross production rate of 408 boe/d. By contrast, 17 gross (8.5 net) wells drilled during the fourth-quarter had a 30-day average gross production of 304 boe/d. That’s about ~25% less for the fourth-quarter, compared to the full year. Both gross production rates included the results from three gross (1.5 net) wells impacted by faulting.

The company had plans for 2014 to more than double its oil production in the Eagle Ford; however, due to faulting’s negative impact on production in the fourth-quarter, the company is pulling back the reins.

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Eagle Ford Rig Count 265 – Forest Plans to Double Eagle Ford Output in 2014 – Dec 6, 2013

Forest Will Operate 3 Rigs in the Region Throughout 2014
Forest Oil Eagle Ford Acreage Map Year-end 2013

Forest Oil Eagle Ford Acreage Map Year-End 2013 | Click to Enlarge

The Eagle Ford Shale rig count held flat at 265 rig running over the past week. The natural gas rig count rebounded from an Eagle Ford era low of 23 to 26 running this week and the oil rig count fell from it’s all-time high of 241 to 238.

Forest Oil released its 2014 capital budget and provided production guidance this week. The company plans to spend 77% of its $290-310 million capital budget in the Eagle Ford and expects production from the play to double over the next 12 months.

Forest will operate three rigs in the region next year. Read more in the article: Forest Oil Will Double Oil Production in 2014 – Securing Eagle Ford Acreage

The U.S. rig count increased 12 rigs from 1,763 to 1,775 running over the past week. A total of 375 rigs are targeting natural gas (8 more than last week) and 1,397 (6 more than last week) are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 842 or 47% of rigs active in the U.S. are running in Texas. [Read more…]

Forest Oil Will Double Oil Production in 2014 – Securing Eagle Ford Acreage

Now Seeking Opportunites To Add To Their Eagle Ford Acreage Position
Forest Oil Eagle Ford Acreage Map Year-end 2013

Forest Oil Eagle Ford Acreage Map Year-End 2013 | Click to Enlarge

Forest Oil expects to grow company-wide production by 11% next year, with oil production growing 90-100%.

Sales volumes from the Eagle Ford will drive growth. The company expects production from South Texas to more than double to 6,250 boe/d in 2014.

Forest is planning to spend 77% of its $290-310 million capital budget in the Eagle Ford. [Read more…]

Forest Oil Sells Panhandle Assets to Focus Efforts in the Eagle Ford

The Panhandle Assets Were Producing 100 mmcfe/d
Forest - Schlumberger Eagle Ford Acreage

Forest – Schlumberger Eagle Ford Acreage | Click to Enlarge

Forest Oil is selling assets in the Texas Panhandle for $1 billion to Templar Energy and will focus the company’s efforts in the Eagle Ford. The Panhandle assets produced an average of 100 mmcfe/d during the first nine months of 2013. [Read more…]

Forest Oil’s Eagle Ford Production Jumps 21% in the Second Quarter

Schlumberger JV Allows Forest To Drill More While Investing Less
Forest - Schlumberger Eagle Ford Acreage

Forest – Schlumberger Eagle Ford Acreage | Click to Enlarge

Forest Oil agreed to a joint venture with Schlumberger in the Eagle Ford during the second quarter and it didn’t take long for the company to increase its activity in the region. Forest Oil’s operated Eagle Ford production grew 59% to 4,300 boe/d and net production grew 21% to 2,300 boe/d during the second quarter.

The company completed nine Eagle Ford wells at an average initial production rate of 529 boe/d and well costs have fallen from $7 million in 2012 to $6 million in the quarter.

The first seven wells completed with Schlumberger’s HiWay flow channel technique were in various stages of completion at the end of the quarter. Watch for production results from these wells in the coming weeks. [Read more…]

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