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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 22, 1999
FOREST OIL CORPORATION
(Exact name of registrant as specified in charter)
New York 0-13515 25-0484900
(State or other juris- (Commission (IRS Employer
diction of incorporation) file number) Identification No.)
2200 Colorado State Bank Building, 1600 Broadway, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 812-1400
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ITEM 5.
Filed herewith is a pro forma combined statement of operations of the Company
for the nine months ended September 30, 1998 giving effect to acquisitions
completed in February 1998 and June 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Condensed pro forma combined Statement of Operations of Forest Oil
Corporation for the nine months ended September 30, 1998.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOREST OIL CORPORATION
(Registrant)
Dated: January 22, 1999 By
-----------------------
Daniel L. McNamara
Secretary
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FOREST OIL CORPORATION
CONDENSED PRO FORMA COMBINED FINANCIAL STATEMENTS
On February 3, 1998, Forest Oil Corporation (Forest) purchased interests in
13 oil and gas properties located onshore Louisiana from a private company
for total consideration of approximately $230,776,000 (the Louisiana
Acquisition). The consideration consisted of 1,000,000 shares of Forest
Common Stock and approximately $216,557,000 of cash. The cash portion of the
consideration was funded from the Company's bank credit facility and from the
issuance of $75,000,000 principal amount of 8 3/4% Senior Subordinated
Debentures.
On April 6, 1998 Forest entered into a definitive purchase and sale agreement
with The Anschutz Corporation to acquire certain oil and gas property
interests from Anschutz in exchange for 5,950,000 shares of Forest Common
Stock (the Anschutz Transaction). The properties include an interest in the
Anschutz Ranch Field which is located in Utah and Wyoming, prospects and
producing acreage in Canada, and interests in projects in various other
countries (the Anschutz Properties). On June 25 and 29, 1998, in two
separate closings, Forest acquired all of the Anschutz Properties with the
exception of an interest in a project in Thailand. The closing relating to
this interest, which is not material to the Company or to the transaction, was
completed in December 1998.
The following unaudited condensed pro forma combined statement of operations
for the nine months ended September 30, 1998 assumes that the Louisiana
Acquisition and the Anschutz Transaction occurred as of January 1, 1997. The
pro forma results of operations are not necessarily indicative of the results
of operations that would actually have been attained if the transactions had
occurred as of this date. This statement should be read in conjunction
with the historical financial statements and related notes of Forest, the
Statement of Oil and Gas Revenue and Direct Operating and Production Expenses
of the properties acquired in the Louisiana Acquisition included in the Form
8-K/A dated February 3, 1998, and the Statement of Oil and Gas Revenue and
Direct Operating Expenses of the Anschutz Ranch Field included in the Form
8-K dated June 25, 1998.
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FOREST OIL CORPORATION
CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS (NOTE A)
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Louisiana Combined Anschutz
Acquisition Forest and Transaction Pro Forma
Forest Adjustments Louisiana Adjustments Combined
Historical (Note B) Acquisition (Note C) Forest
------------ -------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Revenue:
Marketing and processing $ 104,748 - 104,748 - 104,748
Oil and gas sales:
Gas 86,785 2,435 (1) 89,220 5,483 (1) 94,703
Oil, condensate and natural gas liquids 37,151 1,199 (1) 38,350 3,076 (1) 41,426
------- ----- ------- ----- -------
Total oil and gas sales 123,936 3,634 127,570 8,559 136,129
------- ----- ------- ----- -------
Total revenue 228,684 3,634 232,318 8,559 240,877
Operating expenses:
Marketing and processing 99,502 - 99,502 - 99,502
Oil and gas production 29,997 378 (1) 30,375 1,427 (1) 31,802
General and administrative 15,192 - 15,192 - 15,192
Depreciation and depletion 74,163 1,770 (2) 75,933 3,343 (2) 79,276
Impairment of oil and gas properties 140,000 - 140,000 - 140,000
------- ----- ------- ----- -------
Total operating expenses 358,854 2,148 361,002 4,770 365,772
------- ----- ------- ----- -------
Earnings (loss) from operations (130,170) 1,486 (128,684) 3,789 (124,895)
Other income and expense:
Other income, net (7,951) - (7,951) - (7,951)
Interest expense 28,429 1,432 (3) 29,861 - 29,861
Minority interest in loss of subsidiary (517) - (517) - (517)
Translation loss on subordinated debt 8,328 - 8,328 - 8,328
------- ----- ------- ----- -------
Total other income and expense 28,289 1,432 29,721 - 29,721
------- ----- ------- ----- -------
Earnings (loss) before income taxes (158,459) 54 (158,405) 3,789 (154,616)
Income tax benefit (14,960) - (14,960) - (14,960)
------- ----- ------- ----- -------
Income (loss) from continuing operations $(143,499) 54 (143,445) 3,789 (139,656)
------- ----- ------- ----- -------
------- ----- ------- ----- -------
Weighted average number of common shares outstanding 39,651 - 39,651 5,950 (3) 42,925
------- ----- ------- ----- -------
------- ----- ------- ----- -------
Loss from continuing operations attributable to
common stock $(143,499) - (143,445) - (139,656)
------- ----- ------- ----- -------
------- ----- ------- ----- -------
Basic loss per share from continuing operations $ (3.62) - (3.62) - (3.25)
------- ----- ------- ----- -------
------- ----- ------- ----- -------
Diluted loss per share from continuing operations $ (3.62) - (3.62) - (3.25)
------- ----- ------- ----- -------
------- ----- ------- ----- -------
</TABLE>
See accompanying notes to condensed pro forma combined statement of operations.
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FOREST OIL CORPORATION
NOTES TO CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
SEPTEMBER 30, 1998
(UNAUDITED)
A. BASIS OF PRESENTATION
The accompanying unaudited condensed pro forma combined statement of
operations for the nine months ended September 30, 1998 assumes that the
Louisiana Acquisition and the Anschutz Transaction occurred as of January 1,
1997. The pro forma results of operations are not necessarily indicative of
the results of operations that would actually have been attained if the
transactions had occurred as of this date. This statement should be read
in conjunction with the historical financial statements and related notes of
Forest, the Statement of Revenue and Direct Operating Expenses of the
properties acquired in the Louisiana Acquisition included in Form 8-K/A dated
February 3, 1998 and the Statement of Revenue and Direct Operating Expenses
of the Anschutz Properties included in Form 8-K dated June 25, 1998.
B. ACQUISITION OF LOUISIANA PROPERTIES
On February 3, 1998, Forest purchased interests in 13 oil and gas properties
located onshore Louisiana from a private company for total consideration of
approximately $230,776,000. The consideration consisted of 1,000,000 shares
of Forest Common Stock and approximately $216,557,000 of cash. The cash
portion of the consideration was funded by borrowings under the Company's
bank credit facility and from the issuance of $75,000,000 principal amount of
8 3/4% Senior Subordinated Debentures.
The historical information of Forest Oil Corporation in the accompanying
condensed pro forma combined statement of operations for the nine months
ended September 30, 1998 includes the historical revenue and direct operating
expenses of the Louisiana properties subsequent to their acquisition on
February 3, 1998. In addition, the following pro forma adjustments have been
made to the accompanying historical revenue and direct operating expenses of
Forest Oil Corporation for the nine months ended September 30, 1998:
1. To record oil and gas revenue and related production expense of the
Louisiana properties for the period from January 1, 1998 to February 2,
1998.
2. To adjust depletion expense to reflect the pro forma combined depletion
rate giving effect to the acquisition of the properties.
3. To increase interest expense for interest associated with the debt incurred
in connection with the Louisiana Acquisition.
C. ACQUISITION OF ANSCHUTZ PROPERTIES
On January 9, 1998 Forest entered into an agreement in principle with The
Anschutz Corporation to purchase certain oil and gas property interests in
exchange for shares of Forest Common Stock. On April 6, 1998 a definitive
purchase and sale agreement was executed. The properties include an interest
in The Anschutz Ranch Field which is located in Utah and Wyoming, prospects
and producing acreage in Canada, and interests in projects in various other
countries (the Anschutz Properties). Forest's consideration consists of
5,950,000 shares of Common Stock. On June 25 and 29, 1998, in two separate
closings, Forest acquired all of the Anschutz Properties with the exception
of an interest in a project in Thailand. The closing relating to this
interest, which is not material to the Company or to the transaction, was
completed in December 1998.
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C. ACQUISITION OF ANSCHUTZ PROPERTIES (continued)
The historical information of Forest Oil Corporation in the accompanying
condensed pro forma combined statement of operations for the nine months
ended September 30, 1998 includes the historical revenue and direct operating
expenses of the Anschutz Ranch Field subsequent to its acquisition on June
25, 1998. There was no significant production from any of the other acquired
properties. In addition, the following adjustments have been made to the
accompanying condensed pro forma combined statement of operations for the
nine months ended September 30, 1998:
1. To record oil and gas revenue and related production expense for the
Anschutz Ranch Field for the period from January 1, 1998 to June 25, 1998.
2. To adjust depletion expense to reflect the pro forma combined depletion
rate giving effect to the acquisition of the Anschutz Ranch Field.
3. To adjust the weighted average shares outstanding to reflect shares issued
in connection with the Anschutz Acquisition.
