(By Balaseshan) Forest Oil Corp. (NYSE:FST) said it has appointed Patrick McDonald as President and Chief Executive Officer, effective immediately, following the completion of executive search process by its board of directors.
McDonald has been a director since 2004 and has served as interim CEO since June 2012. He has served as Chief Executive Officer, President and Director of Carbon Natural Gas Co., an oil and gas exploration company and its predecessor, Nytis USA, since 2004, and has served as Chairman of Carbon Natural Gas Co. since 2011.
In a separate release, Forest Oil updated second half of 2012 net sales volumes and capital expenditures guidance. The company also provided its current hedge position.
For the second half of 2012, the company raised its net sales volumes guidance to about 330 – 340 MMcfe/d (66% natural gas and 34% oil and natural gas liquids) from previous forecast of 320 – 330 MMcfe/d (67% natural gas and 33% oil and natural gas liquids).
For the second half of 2012, Forest plans to invest between $240 million and $260 million for capital expenditures (excluding capitalized interest, capitalized stock-based compensation, and asset retirement obligations incurred).
This represents an increase of $50 million from previous guidance and is primarily related to increased drilling efficiencies and a higher level of non-operated drilling activity than previously expected. Forest entered the third quarter operating nine drilling rigs and is currently operating 5 rigs within core Texas Panhandle, Eagle Ford and East Texas programs.
Additionally, Forest Oil said it plans to begin a private offering to eligible purchasers of $300 million of senior unsecured notes due 2020. The senior notes will be guaranteed by Forest Oil Permian Corp., a unit of Forest Oil.
Forest plans to use the net proceeds from the offering, together with borrowings under its bank credit facility, to fund a proposed redemption of 50% of its outstanding 8.5% Senior Notes due 2014. The principal amount outstanding of the 2014 Notes is $600 million.
FST closed Tuesday's regular session at $8.17. The stock has been trading between $5.68 and $19.75 for the past 52 weeks.