Dallas, Texas 10/07/2013 (Financialstrend) – Forest Oil Corporation (NYSE:FST) stock shed close to 9.61% in one single trading session on October 4. At close of business the share price had settled at $5.74 per share with close to 18 million shares of the stock changing hands through the day. This was 6 times the average trading volume of the stock. The sell off was on the back of news that the oil major had managed to sell its Texas property for close to $1 billion proceeds.
On October 3 Forest Oil Corporation, through a its subsidiary Forest Oil Permian Corporation, entered into a sale agreement with Templar Energy LLC. The deal will hand over control of all the oil and gas properties of Forest Corp, located in the Texas panhandle area to Templar Energy. The agreement was backdates to October with both companies targeting November 25 for a final closure of the deal.
The deal has been valued at $1 billion which will be paid out in cash. As part of the sale agreement, Templar has set aside $ 30 million in an escrow account as earnest money for the transaction. The deal also envisions $10 million to be set aside in a separate escrow account by Forest Oil. This will act as Forest Oil’s indemnity for any future obligations. The extended cut off for this sale is December 31.
The stock plummeted by close to 10% due to above announcement. Forest Oil has a market cap of $666 million with accumulated loss of $779 million over the previous 12 months trading period. Its sales have dipped by close to 13% on a quarter on quarter basis with 116 million shares outstanding.
The oil firm had managed to sell $546 million with a gross margin of 76%. After the steep fall in the previous trading session, the stock is trading 37% below its 52 week high valuation.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.