Forest Oil has entered into two definitive agreements to sell certain operated and non-operated properties in West Texas and New Mexico for approximately $118 million. The two transactions are expected to close in the third quarter of 2009 and are subject to customary closing conditions and post-closing purchase price adjustments. These properties are currently producing 9 MMcfe/d.

At July 31, 2009, not including the proceeds from the divestitures described above, Forest had approximately $636 million outstanding under its bank credit facilities, a reduction of approximately $49 million from June 30, 2009. The reduction was primarily the result of free cash flow generation. The Company's current borrowing base totals $1.62 billion resulting in approximately $981 million of remaining borrowing capacity under its bank credit facilities at July 31, 2009. Forest intends to use the proceeds from these asset divestitures to repay a portion of the outstanding borrowings under its bank credit facilities. Pro forma availability under the bank credit facilities would be $1.1 billion as of July 31, 2009.

Tags: Forest Oil Corporation