Forest Oil (FST) continues to deleverage, announcing the sale of all of its South Texas...

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Bob de'Long Comments (608)
 
FST had previously described these Eagle Ford properties as “core.” However FST claimed IRRs of only 25% - 45% at $90 oil. The Eagle Ford accounted for 35% of FST’s 2012 capital spending. Selling them appears to be a good move.

That leaves the Texas panhandle as FST’s main area of focus. FST and others have been making terrific Hogshooter wells. This is a complex area and the closest thing FST has to a Crown Jewel.

FST is also active pursuing the Cotton Valley = 39% NGLs and oil and 61% natural gas. I’m not keen on this play. However, FST claims its 100,000 acres are HBP (held by production); so the wells will have to compete for capital with the Hogshooter wells (unless there is something FST isn’t telling us).

FST has a market capitulation of $820,000, which seem pretty high for what they have.

FST now gives us a fairly pure Hogshooter play. I don’t own any now, but I’ll be looking to jump in.
3 Jan, 08:05 AM Reply Like