The fully drawn $1 billion revolving credit line, drawn March 15, could be cut due to low oil prices, Reuters said. Sabine had about $327 million in cash on hand.
The transactions will complement the company’s Cotton Valley, Haynesville and Bossier assets.
The combination creates one of the largest gathering and processing systems in the Haynesville and Cotton Valley plays.
Amelia Resources has 17 years’ experience in the Cotton Valley.
Hydraulic fracturing and horizontal drilling are helping the field's East Texas portion regain traction.
The company had solid well results but liquidity is a concern, analysts say.
Under the agreement, the company acquired 33% of the seller's interest in several thousand acres.
The assets include 39 vertical wellbores with net production of ~3 mmcfepd.
At year-end 2011, the company had booked 39 Bcfe of proved reserves for the assets.
By the fourth quarter of 2012, Forest plans to reduce its operated rigs from two to one targeting the Cotton Valley liquids interval.