Forest Oil to sell Arkoma Basin natural gas properties

Forest Oil Corp.

Forest Oil Corp. (NYSE:FST) has entered into a definitive agreement to sell its natural gas properties located in the Arkoma Basin for after-tax cash proceeds of approximately $185 million.

The properties produced 22 MMcfe/d (100% natural gas) during the third quarter of 2014, had estimated proved reserves of 159 Bcfe (100% natural gas) as of December 31, 2013, and generated approximately $23 million of lease-level income during the past twelve months ended September 30, 2014 (when NYMEX Henry Hub pricing averaged $4.27 per Mcf).

The aforementioned Arkoma Basin transaction is not related to Forest’s pending business combination with Sabine Oil & Gas LLC, and Sabine has given its consent to the sale of Forest’s Arkoma Basin assets.

The transaction is expected to close on or before December 15, 2014, with an economic effective date of October 1, 2014, and is subject to customary closing conditions and post-closing purchase price adjustments.

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