Forest Oil Posts Profit In Q3, Revenue Drops - Update

(RTTNews) - Forest Oil Corp. (FST), an independent oil and gas company, Monday reported a profit for the third quarter, compared to a loss last year, as the prior year included hefty charges. Revenues fell from the previous year. The stock dropped more than 4 percent in the extended trade.

Net income was $2 million or $0.02 per share compared with net loss of $459 million or $3.97 per share last year.

The latest results included unrealized losses on derivative instruments of $7 million, rig stacking costs of $2 million as well as decrease in the valuation allowance of deferred tax assets, net of non-deductible stock based compensation costs of $1 million.

Results for the prior-year quarter included ceiling test write-down of oil and natural gas properties of $330 million and impairment charges of $80 million.

Excluding items, adjusted earnings for the recent quarter were $7 million or $0.06 per share. On average, 18 analysts polled by Thomson Reuters estimated earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues fell to $118.19 million from $156.07 million in the prior year. Analysts estimated revenues of $132.42 million.

Average net sales volumes were 209 Mmcfe/d. Patrick McDonald, CEO, said, "The third quarter saw us make meaningful strides in development of the Eagle Ford Shale as we increased drilling activity by adding a fourth rig to the field. This resulted in a 67% increase in gross production volumes from the Eagle Ford during the quarter.''

The firm expects production from the Eagle Ford and Ark-La-Tex assets during the fourth quarter to be consistent with its 2013 guidance. Incorporating the impact of lower-than-forecasted production from the Texas Panhandle assets, the company expects company-wide net sales volumes to average 200-205 MMcfe/d for the fourth quarter and 208-210 MMcfe/d for the full year 2013.

The company said it remains on track to meet its goal of average net production volumes of around 2,800 Boe/d from the Eagle Ford during 2013 and the firm expects Eagle Ford oil volumes to more than double in 2014.

FST, which closed up 4.4 percent at $5.02, fell 4.2 percent in the extended session to trade at $4.81.