Forest Oil -38% as Q4 results prompt concerns about asset quality


Forest Oil (FST -38%) plunges after Q4 earnings and revenues came in below expectations and disappointing Eagle Ford results which further call into question FST's asset quality.

Q4 average net sales volume totaled 164.7M cfe, down 47% Y/Y; average realized prices for gas and oil, including realized derivative gains, were $3.59 and $90.16, respectively, vs. $3.83 and $96.25 in the year-ago period.

Year-end 2013 estimated proved reserves were 625B cfe vs. 1,363B cfe at the end of 2012, mostly the result of 800B cfe of asset sales.

Wells Fargo downgrades shares to Market Perform from Outperform following FST's move to defer 2014 Eagle Ford activity as the company reprocesses existing 3D seismic surveys: "Combined with weaker well results, not what we, nor the Street, wanted to see."

Goldman Sachs reiterates its Sell rating and cuts its price target to $2.50 from $4, citing heightened risk in FST's acreage position, which is "the key asset for the company."

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Comments (6)
  • Patent News
    , contributor
    Comments (1464) | Send Message
     
    10,000$ bet that goldman is buying shares now or will be soon when they downgrade it?
    26 Feb 2014, 10:57 AM Reply Like
  • rollingstone100
    , contributor
    Comments (78) | Send Message
     
    a pre announcement might have been in order for this disaster. This is almost a total surprise not reflected in put options nor FST's bonds yesterday.
    FST's management team has failed its shareholders. It is time for its shareholders to take control.
    26 Feb 2014, 10:57 AM Reply Like
  • maudie
    , contributor
    Comments (486) | Send Message
     
    After management's miss yesterday, "Fat, drunk and stupid is no way to go through life, son."
    26 Feb 2014, 11:10 AM Reply Like
  • freegriff
    , contributor
    Comments (114) | Send Message
     
    the question is, who owns the debt?
    26 Feb 2014, 12:37 PM Reply Like
  • papayamon
    , contributor
    Comments (1293) | Send Message
     
    Not to take pleasure from trading misfortune of others, but finally an oil/gas stock that I don't own crashes. Was pondering a buy in here too.
    26 Feb 2014, 12:51 PM Reply Like
  • User 353732
    , contributor
    Comments (5152) | Send Message
     
    This is not the first time FST has crashed and for the same reason. The company lost credibility some years ago; slowly rebuilt it and now has lost it again;
    FST needs to auctioned off.
    26 Feb 2014, 01:06 PM Reply Like
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