Forest Oil -3% as Moody's downgrades credit rating

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

Forest Oil (FST -2.9%) shares slump after Moody's downgrades the company's credit rating to BBB with a negative outlook, citing the reallocation of capital away from Eagle Ford drilling which will result in lower oil production than previously expected and thus lower cash flow and higher leverage.

Separately, Barclays cuts its FST target price to $1.50 due to weaker FY 2015 oil production estimates; FST revealed difficulties with several wells in the Eagle Ford shale in its Q4 results, causing it to lower its type curve assumptions and slow drilling activity until it further processed seismic data (