<PAGE>
Exhibit 99.1
[FOREST OIL LOGO]
NEWS FOR FURTHER INFORMATION
FOREST OIL CORPORATION CONTACT: DONALD H. STEVENS
1600 BROADWAY, SUITE 2200 VICE PRESIDENT AND TREASURER
DENVER, COLORADO 80202 (303) 812-1500
FOR IMMEDIATE RELEASE
FOREST OIL CORPORATION AND FORCENERGY INC REPORT RECORD PRO FORMA EARNINGS FOR
THE THIRD QUARTER 2000
DENVER, COLORADO - NOVEMBER 13, 2000 - Forest Oil Corporation (NYSE:FST)
(Forest) reported today record pro forma net earnings exclusive of currency
translation of $36.6 million or $.37 per share for the third quarter of 2000
compared to $4.1 million or $.08 per share in the corresponding 1999 period.
These results give effect to the proposed merger between Forest and Forcenergy
Inc (NASDAQ:FORC) (Forcenergy). Including a non-cash foreign currency
translation loss of $2.8 million in 2000 and a gain of $755,000 in 1999, pro
forma net earnings for the third quarter were $33.8 million or $.34 per common
share compared to $4.8 million or $.10 per common share for the corresponding
period in 1999.
For the first nine months of 2000, Forest reported pro forma net earnings
exclusive of currency translation of $82.7 million or $.84 per share compared to
net earnings of $2.0 million or $.04 per share in the corresponding 1999 period.
Including a non-cash foreign currency translation loss of $7.6 million in 2000
and a gain of $7.3 million in 1999, pro forma net earnings for the first nine
months of 2000 were $75.1 million or $.76 per common share compared to $9.3
million or $.20 per common share in 1999.
The pro forma amounts reported include the combined results of Forest and
Forcenergy for the three months and nine months ended September 30, 2000 under
the pooling of interests method of accounting. Accordingly, the results of
operations of Forcenergy prior to its December 31, 1999 reorganization and fresh
start reporting will not be included in the financial statements of the combined
company.
The increases in pro forma earnings from the 1999 periods were due primarily to
higher production volumes and higher product prices. The pro forma production
level represents a 107% increase over the third quarter of 1999 due to the
proposed merger with Forcenergy. The Company's pro forma average sales prices
for natural gas and liquids in the first nine months of 2000, net of hedging,
increased 40% and 76%, respectively, compared to the previous year.
<PAGE>
For the third quarter of 2000, the Company's pro forma net daily production
averaged 501 MMCFE (million cubic feet equivalent of natural gas), an increase
of 1.3% over the second quarter of 2000. This is the third sequential quarterly
increase in production, all resulting from drilling activity. This pro forma
production level represents a 107% increase over the third quarter of 1999 due
to the proposed merger with Forcenergy.
PRO FORMA FINANCIAL AND PRODUCTION INFORMATION
The following table sets forth certain historical and pro forma financial and
production statistics for the three and nine months ended September 30, 2000:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
------------------ ------------------
2000 1999 CHANGE 2000 1990 CHANGE
---- ---- ------ ----- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Production revenue (millions) $ 229.3 93.1 146% $ 600.3 263.9 127%
Natural gas production (BCF) 28.9 15.5 86% 84.10 48.2 74%
Average gas sales price ($/MCF) $ 3.17 2.27 40% $ 2.88 2.08 38%
Liquids production (MBBLS) 2,873 1,134 153% 8,612 3,308 160%
Average liquids sales price ($/BBL) $ 24.28 13.76 76% $ 21.82 12.17 79%
Total production (BCFE) 46.1 22.3 107% 135.7 68.1 99%
Net daily production (MMCFE) 501.3 248.1 102% 495.3 249.4 99%
Income from continuing
operations (millions) $ 33.8 5.4 526% $ 74.9 9.9 657%
Basic earnings from continuing
operations per share $ .34 .10 240% $ .76 .20 280%
Cash flow before working capital
changes (millions) $ 105.8 26.5 299% $ 271.1 65.7 313%
Weighted average shares outstanding
(millions) 95.1 48.6 96% 95.2 46.0 107%
EBITDA* (millions) $ 120.3 37.2 223% $ 311.5 99.7 212%
Long-term debt (millions) $ 646.9 383.7 69% $ 646.9 383.7 69%
Shareholders' equity (millions) $ 709.4 309.3 129% $ 709.4 309.3 129%
</TABLE>
* Earnings before interest, taxes, depreciation and depletion, translation of
subordinated debt and extraordinary gain on extinguishment of debt.
<PAGE>
The following tables set forth pro forma natural gas and liquids production,
sales prices, lease operating expense and the resulting netback statistics for
each of Forest's and Forcenergy's planned regions for the three months and nine
months ended September 30, 2000:
<TABLE>
<CAPTION>
Three Months Ended September 30, 2000
-------------------------------------------------------------------------
Offshore Onshore Western Total
Gulf of Gulf United United Total
Mexico Coast States Alaska States Canada Company
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NATURAL GAS
Production (MMCF) 19,719 1,992 4,342 - 26,053 2,831 28,884
Sales price received (per MCF) $ 4.37 4.35 3.55 - 4.23 2.91 4.10
Effects of energy swaps (per MCF)(1) (1.00) (.98) (.78) - (.96) (.65) (.93)
-------- -------- -------- -------- -------- -------- --------
Average sales price (per MCF) $ 3.37 3.37 2.77 - 3.27 2.26 3.17
LIQUIDS
Oil and condensate:
Production (MBBLS) 943 195 344 688 2,170 288 2,458
Sales price received (per BBL) $ 30.93 31.28 30.51 27.06 29.67 30.26 29.74
Effects of energy swaps (per BBL)(1) (4.68) (6.07) (4.84) (3.67) (4.51) (6.04) (4.69)
-------- -------- -------- -------- -------- -------- --------
Average sales price (per BBL) $ 26.25 25.21 25.67 23.39 25.16 24.22 25.05
Natural gas liquids:
Production (MBBLS) 30 52 228 - 310 105 415
Average sales price (per BBL) $ 23.70 19.79 19.27 - 19.79 19.48 19.71
Total liquids production (MBBLS) 973 247 572 688 2,480 393 2,873
Average liquids sales price (per BBL) $ 26.18 24.07 23.12 23.39 24.49 19.71 24.28
TOTAL PRODUCTION:
Production volumes (MMCFE) 25,557 3,474 7,774 4,128 40,933 5,189 46,122
Average sales price (per MCFE) $ 3.60 3.64 3.25 3.90 3.57 2.97 3.50
Operating expense (per MCFE) (.61) (.78) (.97) (1.20) (.75) (.67) (.74)
-------- -------- -------- -------- -------- -------- --------
Netback (per MCFE) $ 2.99 2.86 2.28 2.70 2.82 2.30 2.76
======== ======== ======== ======== ======== ======== ========
</TABLE>
(1) Energy swaps were entered into to hedge the price of spot market
volumes against price fluctuations. Hedged natural gas volumes were
14,780 MMCF in the three months ended September 30, 2000. Hedged oil
and condensate volumes were 1,548,500 barrels in the three months ended
September 30, 2000.
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000
-------------------------------------------------------------------------
Offshore Onshore Western Total
Gulf of Gulf United United Total
Mexico Coast States Alaska States Canada Company
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NATURAL GAS
Production (MMCF) 56,826 6,505 11,796 - 75,127 8,926 84,053
Sales price received (per MCF) $ 3.51 3.44 3.07 - 3.44 2.39 3.33
Effects of energy swaps (per MCF)(1) (.49) (.41) (.40) - (.47) (.29) (.45)
-------- -------- -------- -------- -------- -------- --------
Average sales price (per MCF) $ 3.02 3.03 2.67 - 2.97 2.10 2.88
LIQUIDS
Oil and condensate:
Production (MBBLS) 2,779 626 1,057 2,162 6,624 837 7,461
Sales price received (per BBL) $ 28.86 28.98 28.77 25.12 27.64 27.98 27.67
Effects of energy swaps (per BBL)(1) (5.23) (6.73) (5.41) (4.12) (5.04) (6.50) (5.20)
-------- -------- -------- -------- -------- -------- --------
Average sales price (per BBL) $ 23.63 22.25 23.36 21.00 22.60 21.48 22.47
Natural gas liquids:
Production (MBBLS) 96 142 596 - 834 317 1,151
Average sales price (per BBL) $ 20.53 15.49 17.91 - 17.80 17.08 17.60
Total liquids production (MBBLS) 2,875 768 1,653 2,162 7,458 1,154 8,612
Average liquids sales price (per BBL) $ 23.53 21.00 21.39 21.00 22.06 20.27 21.82
TOTAL PRODUCTION:
Production volumes (MMCFE) 74,076 11,113 21,714 12,972 119,875 15,850 135,725
Average sales price (per MCFE) $ 3.23 3.23 3.08 3.50 3.23 2.66 3.16
Operating expense (per MCFE) (.60) (.78) (.98) (1.01) (.73) (.56) (.71)
-------- -------- -------- -------- -------- -------- --------
Netback (per MCFE) $ 2.63 2.45 2.10 2.49 2.50 2.10 2.45
======== ======== ======== ======== ======== ======== ========
</TABLE>
(1) Energy swaps were entered into to hedge the price of spot market
volumes against price fluctuations. Hedged natural gas volumes were
38,128 MMCF in the nine months ended September 30, 2000. Hedged oil and
condensate volumes were 5,449,500 barrels in the three months ended
September 30, 2000.
Lease operating expense was $.74 per MCFE and $.71 per MCFE on a pro forma
combined basis in the third quarter and first nine months of 2000, respectively,
compared to $.47 per MCFE and $.50 per MCFE reported by Forest Oil in the
corresponding 1999 periods. The increases in per unit rates were due primarily
to higher operating costs associated with Forcenergy properties, increased
production taxes and to increased workover activity on Forest properties.
General and administrative was $.17 per MCFE and $.19 per MCFE on a pro forma
combined basis in the third quarter and first nine months of 2000, respectively,
approximately equal to $.18 per MCFE reported by Forest Oil in the corresponding
1999 periods.
<PAGE>
Depletion expense was $1.12 per MCFE and $1.11 per MCFE on a pro forma combined
basis in the third quarter and nine months ended September 30, 2000,
respectively, compared to $.96 and $.95 per MCFE in the corresponding periods in
1999. The increase in the per-unit rate is due primarily to increased
anticipated future development costs in the current inflationary environment for
oilfield services.
On a pro forma basis, lease operating expense of $.74 per MCFE in the third
quarter of 2000 represented a 6% increase over the pro forma amounts reported by
the companies in the second quarter of 2000. The increase is the result of
higher workover activity in the third quarter. Pro forma general and
administrative expense of $.17 per MCFE in the third quarter of 2000 represents
a 32% decrease compared to the second quarter, which contained non-merger
related severance costs recorded by Forcenergy. Pro forma depletion expense per
MCFE was approximately the same in the two most recent quarters of 2000.
HEDGING
Forest and Forcenergy, in combination, have swaps and collars in place covering
the aggregate average daily volumes and weighted average prices shown below:
<TABLE>
<CAPTION>
2000 2001 2002
-------- -------- --------
<S> <C> <C> <C>
NATURAL GAS SWAPS:
Contract volumes (BBTU/d) 147 23 17
Weighted average price (per MMBTU) $ 2.89 2.54 2.48
NATURAL GAS COLLARS:
Contract volumes (BBTU/d) 7 35 -
Weighted average ceiling price (per MMBTU) $ 2.90 5.87 -
Weighted average floor price (per MMBTU) $ 2.75 3.77 -
OIL SWAPS:
Contract volumes (BBLS/d) 13,500 1,000 -
Weighted average price (per BBL) $ 23.92 28.43 -
OIL COLLARS:
Contract volumes (BBLS/d) 3,500 6,000 -
Weighted average ceiling price (per BBL) $ 20.93 31.70 -
Weighted average floor price (per BBL) $ 18.19 25.39 -
</TABLE>
PROPOSED MERGER
On July 10, 2000, Forest and Forcenergy jointly announced a proposed merger.
Under the merger agreement, Forcenergy common stockholders will receive 1.6
Forest common shares for each share of Forcenergy common stock they own. Forest
will also exchange its common shares for Forcenergy's outstanding preferred
stock, at a ratio of 68.6141 Forest common shares for each $1,000 principal
amount of Forcenergy preferred stock. The exchange ratios are subject to
adjustment if a proposed 1-for-2 reverse stock split of Forest common shares is
approved. Approximately 63% of Forcenergy shareholders and 36% of Forest
shareholders have agreed to vote in favor of the merger. Shareholder meetings of
both Forest and Forcenergy have been scheduled
<PAGE>
for 10:00 a.m. MST and 11:00 a.m. CST, respectively, on December 7, 2000. If
approved, the merger is expected to be completed immediately thereafter.
* * * * *
CONFERENCE CALL
The Company's management will hold a teleconference call on Tuesday, November
14, 2000 at 11:00 a.m. EST to review the third quarter 2000 results. If you
would like to participate, please call toll-free (888) 781-5307 (for
U.S./Canada) and (706) 634-0611 (for International) and request the Forest Oil
teleconference. There will not be a replay of the teleconference.
FORWARD-LOOKING STATEMENTS
This news release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although Forest believes that its expectations are based
on reasonable assumptions, it can give no assurance that expected results will
be achieved. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include the
timing and extent of changes in commodity prices for oil and gas, operating
risks and other risk factors as described in the Forest's 1999 Annual Report on
Form 10-K as filed with the Securities and Exchange Commission (SEC) and
Forest's joint proxy statement/prospectus included in the Registration Statement
on Form S-4 filed with the SEC on November 7, 2000 in connection with the
proposed merger between Forest and Forcenergy.
INVESTOR NOTICES
Investors and security holders are advised to read the joint proxy
statement/prospectus included in the Registration Statement on Form S-4 filed
with the SEC on November 7, 2000 in connection with the proposed merger between
Forest and Forcenergy. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents filed by Forest and
Forcenergy with the SEC at the SEC's web site at www.sec.gov. The joint proxy
statement/prospectus and such other documents (relating to Forest) may also be
obtained for free from Forest by directing such request to: Forest Oil
Corporation, 1600 Broadway, Suite 2200, Denver, Colorado 80202, Attention:
Donald H. Stevens, Vice President and Treasurer; telephone: 303-812-1400;
e-mail: [email protected].
Forest, its directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" of proxies from
Forest's shareholders in connection with the merger. Information regarding such
persons and a description of their interests in the merger is contained in the
Registration Statement on Form S-4.
Forest Oil Corporation is engaged in the acquisition, exploration, development,
production and marketing of natural gas and crude oil in North America and
selected international locations. Forest's principal reserves and producing
properties are located in the United States in the Gulf of Mexico, Louisiana,
Texas, Oklahoma and Wyoming and in Canada in Alberta and the Northwest
Territories. Forest's common stock trades on the New York Stock Exchange under
the symbol FST.
###
November 13, 2000
<PAGE>
FOREST OIL CORPORATION
Condensed Pro Forma Combined Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(In Thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,064 99,661
Accounts receivable 131,575 106,051
Other current assets 35,456 22,346
---------- ----------
Total current assets 176,095 228,058
Net property and equipment, at cost 1,319,663 1,209,616
Goodwill and other intangible assets, net 19,830 22,092
Other assets 19,335 15,687
---------- ----------
$ 1,534,923 1,475,453
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 122,538 101,737
Accrued interest 3,229 30,355
Pre-petition accounts payable and accrued liabilities 1,851 47,908
Accrued reorganization costs - 11,236
Other current liabilities 23,093 15,867
---------- ----------
Total current liabilities 150,711 207,103
Long-term debt 646,947 686,153
Other liabilities 15,433 14,262
Deferred income taxes 12,417 8,951
Shareholders' equity:
Common stock 9,606 9,221
Capital surplus 1,038,746 957,992
Accumulated deficit (323,970) (396,007)
Unearned compensation (945) -
Accumulated other comprehensive loss (10,756) (11,774)
Treasury stock, at cost (3,266) (448)
---------- ----------
Total shareholders' equity 709,415 558,984
---------- ----------
$ 1,534,923 1,475,453
========== ==========
</TABLE>
The pro forma statements are prepared using the pooling-of-interests method of
accounting for the merger and give effect to the issuance by Forest of 1.6
Forest common shares for each share of Forcenergy common stock and the issuance
of 68.6141 Forest common shares for each $1,000 principal amount of Forcenergy
preferred stock. The pro forma statements do not include any adjustments related
to merger transaction costs, which will be expensed when the merger is
consummated. The pro forma statements do not give effect to the proposed 1-for-2
reverse stock split.
<PAGE>
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2000 1999 2000 1999
------ ------ ------ ------
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Revenue:
Marketing and processing $ 67,973 42,414 170,691 123,260
Oil and gas sales:
Gas 91,556 35,119 241,706 100,372
Oil, condensate and natural gas liquids 69,751 15,601 187,937 40,267
------- ------- ------- -------
Total oil and gas sales 161,307 50,720 429,643 140,639
------- ------- ------- -------
Total revenue 229,280 93,134 600,334 263,899
Operating expenses:
Marketing and processing 67,162 41,438 168,282 120,572
Oil and gas production 34,112 10,386 96,624 34,089
General and administrative 7,652 4,031 25,717 12,012
Depreciation and depletion 53,029 22,203 153,738 66,569
------- ------- ------- -------
Total operating expenses 161,955 78,058 444,361 233,242
------- ------- ------- -------
Earnings from operations 67,325 15,076 155,973 30,657
Other income and expense:
Other (income) expense, net 46 129 (1,275) (2,425)
Interest expense 14,411 10,820 42,659 31,884
Translation (gain) loss on subordinated debt 2,824 (755) 7,638 (7,272)
------- ------- ------- -------
Total other income and expense 17,281 10,194 49,022 22,187
------- ------- ------- -------
Earnings before reorganization items, income
taxes and extraordinary item 50,044 4,882 106,951 8,470
Reorganization items:
Interest income - - (533) -
------- ------- ------- -------
Earnings before income taxes and extraordinary
extraordinary item 50,044 4,882 107,484 8,470
Income tax expense (benefit):
Current 325 (17) 631 (98)
Deferred 15,925 (505) 31,977 (1,329)
------- ------- ------- -------
16,250 (522) 32,608 (1,427)
------- ------- ------- -------
Earnings before extraordinary item 33,794 5,404 74,876 9,897
Extraordinary item - gain (loss) on
extinguishment of debt - (598) 192 (598)
------- ------- ------- -------
Net earnings $ 33,794 4,806 75,068 9,299
======= ======= ======= =======
Earnings attributable to common stock $ 32,334 4,806 72,037 9,299
======= ======= ======= =======
</TABLE>
<PAGE>
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statements of Operations
(Unaudited)
(continued)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2000 1999 2000 1999
------ ------ ------ ------
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Weighted average number of common shares
outstanding 95,124 48,556 95,150 45,967
========= ======== ======== ========
Basic earnings per common share:
Earnings attributable to common stock
before extraordinary item $ .34 .11 .76 .21
Extraordinary item - loss on
extinguishment of debt - (.01) - (.01)
-------- -------- -------- --------
Earnings attributable to common stock $ .34 .10 .76 .20
========= ======== ======== ========
Diluted earnings per common share:
Earnings attributable to common stock
before extraordinary item $ .33 .11 .74 .21
Extraordinary item - loss on
extinguishment of debt - (.01) - (.01)
-------- -------- -------- --------
Earnings attributable to common stock $ .33 .10 .74 .20
========= ======== ======== ========
</TABLE>
<PAGE>
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
2000 1999
------ ------
(In Thousands)
Cash flows from operating activities:
<S> <C> <C>
Net earnings before extraordinary item $ 74,876 9,897
Adjustments to reconcile net earnings before extraordinary item to
net cash provided by operating activities:
Depreciation and depletion 153,738 66,569
Amortization of deferred debt costs 1,114 958
Translation loss (gain) on subordinated debt 7,638 (7,272)
Deferred income tax expense (benefit) 31,977 (1,329)
Stock plan compensation 2,435 -
Other, net (665) (3,122)
Increase in accounts receivable (30,125) (2,589)
Increase in other current assets (10,092) (5,163)
Increase (decrease) in accounts payable (31,724) 4,071
Decrease in accrued interest and other current liabilities (16,572) (2,077)
---------- ----------
Net cash provided by operating activities before reorganization items 182,600 59,943
Reorganization items:
Interest 533 -
Accrued reorganization costs (11,236) -
---------- ----------
Net cash used in reorganization items (10,703) -
---------- ----------
Net cash provided by operating activities after reorganization items 171,897 59,943
Cash flow from investing activities:
Capital expenditures for property and equipment (277,695) (83,313)
Proceeds from sales of assets 8,577 17,341
Increase in other assets, net (3,514) (506)
---------- ----------
Net cash used by investing activities (272,632) (66,478)
Cash flows from financing activities:
Proceeds from bank borrowings 246,907 96,288
Repayments of bank borrowings (272,283) (309,485)
Proceeds of 10 1/2% senior subordinated notes, net of issuance costs - 98,561
Proceeds from issuance of preferred stock 38,800 -
Redemption of 8 3/4% senior subordinated notes (4,630) -
Redemption of 11 1/4% senior subordinated notes - (9,083)
Proceeds of common stock offering, net of cost - 131,188
Proceeds from the exercise of options 6,291 1,388
Purchase of treasury stock (2,818) -
Decrease in other liabilities, net (2,153) (2,453)
---------- ----------
Net cash provided by financing activities 10,114 6,404
Effect of exchange rate changes on cash 24 (20)
---------- ----------
Net decrease in cash and cash equivalents (90,597) (151)
Cash and cash equivalents at beginning of period 99,661 3,415
---------- ----------
Cash and cash equivalents at end of period $ 9,064 3,264
========== ==========
</TABLE>
