Forest Oil Corp. agreed Tuesday to sell its Alaskan oil and gas assets for $464 million to Pacific Energy Resources Ltd.
Denver-based Forest will receive $380 million to pay off the assets’ debt, $68 million in cash and 5.5 million shares of Pacific Energy Resources stock valued at $16 million.
“Our equity ownership in Pacific indicates our confidence in their plan for further developing these assets based on their work in similar fields in the U.S.,” said H. Craig Clark, president and chief executive of Forest.
The properties have proved reserves equivalent to 181 billion cubic feet of natural gas, Forest said. That amount would supply the U.S. for about three days.
Oil-and-gas analyst David Tameron of Wachovia Capital Markets LLC said Forest is receiving an attractive sale price, higher than the $375 million price that Tameron had earlier estimated.
“We are very excited about the possibility of expanding our operations into a new area where we have the potential to add value as well as complement the existing asset base and expertise of the company,” said Darren Katic, president of Long Beach, Calif.-based Pacific Energy Resources.
Forest had announced plans to sell its Alaskan assets in January when it agreed to buy oil-and-gas producer Houston Exploration Co. for $1.5 billion.
Forest had said then it would try to sell its Alaska holdings to reduce debt and narrow its geographic focus.
The Alaska sale is set to close June 30.
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
