LONDON, August 21, 2014 /PRNewswire/ --
Investor-Edge.com has issued free post-earnings report and analysis on Forest Oil Corporation (NYSE: FST) as the company featured in the headlines on Monday, August 11, 2014 after reporting its Q2 2014 financial results. The company's GAAP net loss widened $0.53 per share sequentially in second quarter of 2014. Additionally, Forest Oil Corp.'s total revenue declined $56.38 million year-over-year in the reported quarter. Our free coverage report can be accessed at:
http://www.investor-edge.com/register
Earnings Overview
Forest Oil Corp.'s average net sales volumes in Q2 2014 declined to 100 millions of cubic feet equivalent per day (MMcfe/d) (69% natural gas, 31% liquids) from 105 MMcfe/d (68% natural gas, 32% liquids) in the previous quarter, primarily due to delays in well completions and lower-than-expected production rate from an East Texas well. The second quarter 2014 net loss included ceiling test write-down of oil and gas properties of $77 million, merger-related costs of $10 million, a $7 million unrealized loss on derivative instruments, Rig lease buyout/stacking costs of $3 million, while it also contained gain of $22 million on sale of assets. The oil and gas exploration and production company spent $82 million on exploration and development capital in H1 2014, which is below the budgeted exploration and development capital of $109 million for the period, primarily attributable to drilling and completion delays within the Ark-La-Tex and Eagle Ford areas. The free research on FST can be downloaded as in PDF format at:
http://www.Investor-Edge.com/FSTFreeReport
In FY 2013, Forest Oil Corp. completed the divestiture of its oil and natural gas property, which resulted in a decline in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to $30.90 million from $88.15 million in the prior year. During the reported quarter, Forest Oil Corp. completed two Cotton Valley wells in Rusk County that had a 30-day average gross production rate of 11 MMcfe/d (40% liquids). The company also drilled and initiated completion operations on a well within its light sweet crude oil play located in Cherokee County, Texas. For FY 2014, the company expects average net sales volumes to be in a range of 105-110 MMcfe/d. The company also expects an increase in FY 2014 production expense (including lease operating expense, ad valorem taxes, production taxes, and product processing, gathering and transportation) from $1.55-1.65 per Mcfe to $1.95-2.05 per Mcfe.
Patrick R. McDonald, President and Chief Executive Officer at Forest Oil Corp., said that during the second quarter of 2014, the company achieved several objectives as it announced a proposed merger with Sabine Oil & Gas that is expected to be completed by Q4 2014 and will create one of the industry's largest East Texas players. Mr. McDonald added that the company has received final disbursement of escrowed funds from its $1 billion Texas Panhandle divestiture. He stated that for H2 2014, the company aims to direct capital to the highest rate-of-return projects and generate increased capital efficiency within the drilling program to optimize capital spending ahead of the merger closing, which will result in decrease of capital expenditure and reduction in the number of wells to be completed during the second half of the year as compared to the company's earlier guidance. Sign up and read the free analyst's notes on FST at:
http://www.Investor-Edge.com/FST-21082014
The Denver based-petroleum company underperformed market expectations by reporting lower than expected revenues for the second quarter 2014. Total revenue declined from $116.81 million in Q2 2013 to $60.44 million in the reported quarter, which is below the Bloomberg analysts' expectations of $67.53 million. Furthermore, Forest Oil Corp. reported GAAP net loss of $82.72 million or $0.71 loss per diluted share, compared with GAAP net earnings of $33.44 million, or $0.28 per diluted share in the year-ago quarter, and the Bloomberg consensus GAAP net loss estimate of $1.63 million, or $0.01 loss per diluted share. Visit Investor-Edge and access the latest research on FST at:
http://www.Investor-Edge.com/FSTEarningsCoverage
Stock Performance
A day after the earnings release, on Tuesday, August 12, 2014, Forest Oil Corp.'s shares plummeted 8.50% to end the session at $1.83. On the last close, Wednesday, August 20, 2014, Forest Oil Corp.'s shares lost 4.27% further to end the day at $1.57, after vacillating between $1.56 and $1.65. A total of 1.07 million shares were traded, which was below its three months average volume of 2.50 million shares. Forest Oil Corp.'s shares have lost 5.99% in the previous three trading sessions, 28.96% in the last one month, and 56.51% on YTD basis. The stock is trading below its 50-day and 200-day moving averages of $2.15 and $2.69, respectively. Forest Oil Corp.'s stock has a Relative Strength Index (RSI) of 28.62.
Sneak Peek to Corporate Insider Trading
On August 12, 2014, Frederick B. (Britt) Dearman II, Forest Oil Corp.'s Senior Vice President, Southern Region, sold 4,103 shares worth $8,164.97 at an average price of $1.99. Complimentary in-depth research on FST is available at:
http://www.Investor-Edge.com/FSTInsiderTrading
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