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

|About: Forest Oil Corporation (FST)|By:, SA News Editor

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.