By Jim Polson
Forest Oil Corp. intends to sell oil and natural gas fields in the Texas Panhandle that may fetch as much as $1 billion, more than the company’s market value.
The Denver-based energy company hired JPMorgan Chase & Co. to sell about 100,000 acres, including producing wells, after receiving unsolicited offers, according to a filing today. The assets may be worth $900 million to $1 billion, Maggie Savage, a Milwaukee-based analyst for Robert W. Baird & Co., estimated in a note to clients today.
Proceeds from a sale would be used to pay debt, Forest Chief Executive Officer Patrick R. McDonald said in a statement. Forest’s net debt was $1.64 billion as of March 31, according to data compiled by Bloomberg from filings. The company’s market value was $572.6 million today, after a 28 percent decline in the stock price this year.
The divestiture would leave Forest with assets in East Texas and the Eagle Ford shale in West Texas. The company agreed in April to sell a half stake in future Eagle Ford wells to Schlumberger Ltd. for $90 million.
Forest rose 4 percent to $4.77 at 9:46 a.m. in New York, after rising as much as 8.1 percent, the biggest intraday gain since May 3.