Forest Oil to use existing credit facility for purchase of producing assets

By Sara Rosenberg

New York, Aug. 18 - Forest Oil Corp. plans to use borrowings under its existing credit facility to initially fund the acquisition of producing assets, including in the Greater Buffalo Wallow and East Texas/North Louisiana areas, according to a news release.

The company is buying the producing assets from Cordillera Texas LP for about $708 million in cash and 3.5 million shares of common stock in a transaction that is expected to close at the end of the third quarter.

Forest Oil intends to ultimately fund the acquisition by divesting an additional $500 million to $600 million of non-core, non-strategic assets.

These asset sales are in addition to the already announced $300 million to $500 million property divestiture package that is currently being marketing and hoped to close by the end of the third quarter.

Proceeds from each of these property sale packages will be used to repay borrowings under Forest's credit facility.

Forest Oil is a Denver-based company engaged in the acquisition, exploration, development and production of natural gas and liquids.

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