Forest Oil Reports Loss as Expected in Q1 - Analyst Blog


Denver-based Forest Oil Corporation 's ( FST ) first-quarter 2014 loss of 2 cents per share (excluding non-recurring items) came in line with the Zacks Consensus Estimate. Moreover, the quarterly figure decreased approximately 167% from the year-earlier earnings of 3 cents.

The lackluster performance was mainly due to a fall in net sales volume and oil sales volume. Lower oil prices also contributed to the decline.

Total revenue in the reported quarter decreased 44.8% to $65.2 million from the year-ago level of $118.2 million and missed the Zacks Consensus Estimate of $67.0 million.


Net sales volume shrunk nearly 57% year over year to 105.1 million cubic feet equivalent per day (MMcfe/d) in the reported quarter. It comprised 32% liquids compared to 34% in the prior-year quarter.

The company's oil net sales volume in the first quarter decreased nearly 42% from the year-ago period to 3.6 thousand barrels per day (MBbls/d). On the bright side, natural gas sales volume in the quarter was 71.5 MMcf/d and accounted for 68% of the total quarterly volume.

Realized Prices

The average equivalent price per Mcf (including the effect of hedging) was $6.34, up 8.6% from the year-ago realization of $5.84. Natural gas was sold at $3.84 per Mcf, up 6.1% from the comparable prior-year quarter. However, natural gas liquids (NGLs) were sold at $33.45 per barrel, up nearly 9% from the year-ago quarter and average realized oil price was $89.88 per barrel, down 7.6% from the year-ago quarter.


The first-quarter lease operating expenses of $1.53 per Mcfe increased 35% year over year. Unit general and administrative expenses rose 100% to 72 cents per Mcfe from the year-ago level of 36 cents per Mcfe. Transportation and processing costs per unit increased nearly 50% to $0.27 per Mcfe from $0.18 per Mcfe in the first quarter of 2013.


At the quarter-end, Forest Oil had $48.3 million of cash and cash equivalents with $800.2 million of long-term debt (including current portion), representing a debt-to-capitalization ratio of 95.8% (up from 46.4% at the end of fourth-quarter 2013).

Zacks Rank

At present, Forest Oil has a Zacks Rank #3 (Hold). However, other stocks in the oil and gas sector like Unit Corp ( UNT ), Targa Resources Partners LP ( NGLS ) and Boardwalk Pipeline Partners LP ( BWP ), sporting a Zacks Rank #1 (Strong Buy) are expected to perform better.

BOARDWALK PIPLN (BWP): Free Stock Analysis Report

FOREST OIL CORP (FST): Free Stock Analysis Report

TARGA RESOURCES (NGLS): Free Stock Analysis Report

UNIT CORP (UNT): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BWP , FST , NGLS , UNT

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