Sabine Oil & Gas Merger with Forest Oil Corporation

Forest Oil Eagle Ford Acreage Map Year-end 2013

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.

“Forest’s asset portfolio is an excellent complement with Sabine’s asset portfolio and we have confidence that Sabine’s management team is equipped to deliver exceptional shareholder value through the enhanced opportunities that are embedded in Forest’s assets.”

— Forest CEO, Patrick McDonald

The combined company, which is expected to be listed on the NYSE as "SABO", will hold a 207,000 net acreage position in East Texas, and a 65,000 net acreage position in the Eagle Ford. Estimated proved reserves from the combined company's assets are 1.5 trillion cubic feet equivalent (71% gas) (as of December 31, 2013), and estimated daily production of 345 million cubic feet equivalent (65% gas) for 2014.

Forest Oil Was in Trouble

The merger comes on the heels of multiple asset divestitures by Forest over the past several years. In early January of 2013, the company sold some of its South Texas assets to pay down debt.

Read more: Forest Oil Sells South Texas Assets

Recently, Forest Oil hit a snag in the Eagle Ford during the fourth quarter of 2013, after three gross (1.5 net) wells hit a fault line in the company’s southern acreage. 77% of the company’s $290-310 million capital budget was slated for the Eagle Ford in 2014, but new estimates were set at 36% after problems arose.

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

The new company's headquarters will be based in Houston, TX, and led by Sabine's current executive management. Prior to the merger, Sabine Oil and Gas was a privately held company.

Read more at forestoil.com

NFR Energy Makes Eagle Ford Acquisition - $81 Million

NFR Energy Eagle Ford Acreage Map

NFR Energy is acquiring $736 million in properties and plans to change its company name. The deal includes the acquisition of 66,300 net acres and 6,500 boe/d of production in the Anadarko Basin and Eagle Ford of South Texas.

The company is spending $655 million for assets in the Anadarko Basin in North Texas and Oklahoma, along with $81 million for Eagle Ford assets. The Eagle Ford assets include 2,300 acres in what the company calls the "core of the core" in DeWitt County.

NFR Energy Eagle Ford Sugarkane Prospect Map

The graphic to the right highlights the company's 2,300 acre Sugarkane Project in DeWitt County, but, as you can see in the graphic at the top of the page, most of the company's acreage is in Lavaca County near the Lavaca-Fayette county line. The company estimates proven reserves across its Eagle Ford assets is more than 20 million boe. Production in the area is approximately 55% oil and NGLs.

NFR noted the following in regard to the Sugarkane project:

• 2,300 net acres
• "Core of the Core"
• 26+ horizontal drilling locations, with potential for more with downspacing
• Reservoir is analogous to the Haynesville in this area
• Expecting substantial improvement from better stimulation designs and tighter well spacing

The acquisition adds another core area of development for the company in the Eagle Ford.

After the acquisition, the company's assets are broken down as follows:

• 197,000 net acres in East Texas (Cotton Valley and Haynesville)
• 64,000 net acres in the Anadarko Basin (Granite Wash and Cleveland)
• 24,300 net acres in the Eagle Ford
• 27,200 boe/d of production (26% liquids)

David Sambrooks, NFR's CEO, stated, "These acquisitions immediately result in a large, well balanced company with three major producing and development basins and exposure to oil, gas and NGLs...."

First Reserve, an energy private equity company, backed NFR as a start up in partnership with Nabors Industries. First Reserve is now acquiring Nabor's equity interest in the company. Once the acquisition is complete, NFR Energy will change its name to Sabine Oil & Gas, LLC.

Read the full press release at nfrenergy.com