At the end of September, Robert S. Boswell will step down as chairman of Denver-based Forest Oil Corp. Earlier this summer, he relinquished the reins as chief executive officer. Replacing Boswell as chief executive officer is current president H. Craig Clark; the company's new chairman will be Forrest E. Hoglund, current board member and former chairman and president of Enron Oil & Gas. Within the investment community, the news signals not so much a sea change as it does another step in the company's evolution. "Bob Boswell did a great job of transitioning the company from a small, publicly traded company with a heavy family influence to a larger, more visible operator better appreciated and accepted by Wall Street," says G. Bryan Dutt, president of Ironman Energy Capital LP, an independent energy-investment fund based in Bellaire, Texas. "Now, Craig Clark will help complete Forest's transition to a company that's focused even more heavily on shareholder return." Dutt says investors should see less of an emphasis by Forest Oil on its foreign assets going forward and more attention paid by management to bringing down operating costs within its portfolio of North American assets. "We expect to see the company concentrate more on its core competencies-the areas it knows best-and to bring about greater efficiencies in its field operations." Indeed, in Forest Oil's recent presentation at The Oil and Gas Conference in Denver, the company indicated that average monthly lease operating expenses had already been pruned to $11.7 million during first-quarter 2003 from $15.5 million during 2001. Might such efforts translate into higher market valuation? "We bought shares of Forest Oil based upon our meetings with Craig Clark, and we bought even more shares when we found out that Forrest Hoglund was going to be chairman," says Dutt. "Hoglund's guidance and solid industry overview, combined with Clark's focus on lowering operating costs, is going to be tremendous for shareholders." Greg L. McMichael, Denver-based E&P analyst for A.G. Edwards & Sons, sees the change at the top of Forest Oil as an acceleration of the company's effort to find out what it's really good at, to focus on its North American core assets and to take more control of them, that is, not have as many nonoperated properties as in the past. With nonoperated properties, the analyst points out, it's very difficult to control costs. "Under Craig Clark, there's going to be more emphasis on acquisition-and-development plays versus exploration plays, which require long lead times before they begin cash-flowing," McMichael explains. The company's recent McAllen Ranch acquisition in South Texas is a small, but good example of this strategy, he says. "Forest paid $12 million for the property and the cash flow coming off just one well there is currently between $700,000 and $800,000 per month. This means that acquisition is going to pay out in 18 months or less-with plenty of cash flow upside remaining from additional gas drilling." Forest Oil, however, is looking at much bigger acquisitions. McMichael says the company told analysts at the Denver conference that it was capable of doing a $750-million to $1-billion buy, if the right opportunity arose. Richard Levine, head of Richard H. Levine & Associates, an independent, Montreal-based investment firm, says Clark told analysts at the conference that Forest Oil was going to become less dependent on frontier, foreign exploration plays in the future-Canada excluded. "He indicated the company was going to concentrate on drilling in the Fort Liard area of the Northwest Territories, but that there would be more accountability going forward, in terms of bringing exploration programs onstream in a timely fashion, as well as bottom-line accountability," the analyst says. "Clark also mentioned that never again will the company become highly dependent on just one asset, such as Cook Inlet." Concludes Levine, "This guy talks turkey and is aggressive. He's going to make things happen." -Brian A. Toal