Forest Oil Corp., Denver, (NYSE: FST) plans to buy The Wiser Oil Co., Dallas, (NYSE: WZR) for $10.60 per share in a deal valued at $330 million, including assumption of about $160 million of debt. Forest would gain 35% and 67% more proved reserves and production, respectively, in Canada, and 29% and 26% more proved reserves and production, respectively, in the Permian Basin, as well as Gulf Coast and Canadian acreage. Wiser's proved reserves at year-end were 191 billion cu. ft. equivalent (51% gas; 30% Canadian, 45% Permian Basin; 85% proved developed). Production was 64 million equivalent per day in first-quarter 2004 (50% Canadian, 20% Permian Basin). The deal will be funded with equity, debt and cash on hand. Petrie Parkman & Co. was financial advisor and rendered a fairness opinion to Wiser. Forest plans to hedge the additional production. With this deal, Forest will have purchased in the last year approximately 515 billion cu. ft. equivalent of proved reserves, 175 million equivalent of daily production and 360,000 net undeveloped acres for $720 million. Separately, Forest plans to sell at least $100 million of non-strategic assets in the U.S. and Canada, primarily from its existing portfolio. The asset dispositions are anticipated by year-end. "This negotiated transaction will provide additional quality assets to our Canadian, Western and Gulf regions, all within their defined areas of operations," says Craig Clark, Forest president and chief executive. Standard & Poor's Ratings Services said the ratings on Forest remain on CreditWatch with negative implications, where they were placed in January following Forest's reserve write-down.
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