The assets include Forest subsidiary Forest Alaska Holding LLC and remaining assets not held by Forest Alaska, including an equity interest in Cook Inlet Pipeline Co.
Properties include nine fields in the Cook Inlet area, with the major fields of McArthur River, Redoubt Shoal, West McArthur River and Trading Bay, and the minor fields of West Foreland, Three Mile Creek, Sabre, Kustatan and Cosmopolitan.
Net production is approximately 5,900 BOE per day (80% oil). Proved reserves are 15.8 million BOE (181 billion cu. ft. equivalent), of which 13.2 million bbl. are proved producing, and possible and probable reserves of 44.7 million bbl. for total proved, probable and possible reserves of 60.6 million bbl.
The assets also include nearly 1 million net undeveloped acres covering three offshore fields-Corsair, Raptor and Valkyrie-and the onshore Susitina Basin and others.
Pacific Energy president Darren Katic says, "These large legacy assets have exactly the kind of characteristics we look for when pursing acquisition opportunities. The established production, with long-life reserves, generates strong predictable cash flow. The multiple infill drilling opportunities provide a low-risk means to grow production through redevelopment."
Forest president and chief executive H. Craig Clark says, "Our equity ownership in Pacific indicates our confidence in their plan for further developing these assets based on their work in similar fields in the U.S."
Pacific Energy will fund the deal with a financing commitment of up to US$465 million. Energy Capital Solutions LP is financial advisor to Pacific Energy and Scotia Waterous is financial advisor to Forest. The deal was expected to close on June 30.
Standard & Poor's Ratings Services has affirmed Forest's BB- corporate credit rating and revised its outlook on the company's credit quality to stable from negative.
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