Forest Sells Undeveloped Permian Acreage For $35 Million
To buy 52,400 net acres in the Permian Basin of Crockett County.
Forest Oil (NYSE: FST) sold 52,400 net acres in Permian Basin for $35 million, the company announced on Sept. 3.
Forest said the acreage was in Crockett County, Texas. Forest did not disclose the buyer, which acquired a largely undeveloped acreage position located West Texas.
The sale is expected to close by Sept. 10. Forest intends to use the proceeds to reduce outstanding borrowings under its bank credit facility. Following the closing of this transaction, Forest will retain its Permian Basin acreage position of approximately 68,250 gross acres (63,500 net) located in Pecos and Reeves counties, Texas.
“Overall, we view the transaction as a positive for FST as the company divests a non-core asset that they have been trying to sell for quite some time,” said Guy Baber, head of integrated company research for Simmons & Co. International.