Seeking Alpha

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."
Comments (6)
  • Patent News
    , contributor
    Comments (1312) | Send Message
     
    10,000$ bet that goldman is buying shares now or will be soon when they downgrade it?
    26 Feb, 10:57 AM Reply Like
  • rollingstone100
    , contributor
    Comments (33) | 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, 10:57 AM Reply Like
  • maudie
    , contributor
    Comments (468) | Send Message
     
    After management's miss yesterday, "Fat, drunk and stupid is no way to go through life, son."
    26 Feb, 11:10 AM Reply Like
  • willygriff
    , contributor
    Comments (51) | Send Message
     
    the question is, who owns the debt?
    26 Feb, 12:37 PM Reply Like
  • papayamon
    , contributor
    Comments (1059) | 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, 12:51 PM Reply Like
  • User 353732
    , contributor
    Comments (4785) | 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, 01:06 PM Reply Like
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