Seeking Alpha

In big reversal, Forest Oil -5.5% after favorable initial reaction to asset sale

  • Gain turns to pain for Forest Oil (FST -5.5%), whose big premarket rise is now a sharp decline as analysts say FST failed to receive a premium for its $1B sale of Texas Panhandle assets.
  • Stifel Nicolaus says the deal was largely in line with prior transactions at 5.5x EV/T12M EBITDA vs. the corporate average of 5.2x EV/2014 EBITDA or $60K per flowing barrel.
  • Jefferies says it’s not clear where growth will come from after the sale, and FST will need to eventually pursue acquisitions to bolster its portfolio.
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Comments (1)
  • User 353732
    , contributor
    Comments (5012) | Send Message
    US independents that cannot grow need a change of management: FST becomes an acquisition target for an independent with a better strategy and management.
    4 Oct 2013, 12:36 PM Reply Like
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