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Previous: FORD MOTOR CREDIT CO, 424B3, 2000-08-10 |
Next: YEAGER WOOD & MARSHALL INC, 13F-HR, 2000-08-10 |
<PAGE>
Filed by Forest Oil Corporation
pursuant to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Forest Oil Corporation Commission
File No: 001-13515
Forcenergy Commission File No: 000-26444
Subject Companies: Forest Oil Corporation and
Forcenergy Inc
THE FOLLOWING IS A PRESS RELEASE DISSEMINATED BY FOREST OIL CORPORATION
ON AUGUST 10, 2000.
[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 REPORTS RECORD EARNINGS FOR THE
SECOND QUARTER 2000
DENVER, COLORADO - AUGUST 9, 2000 - Forest Oil Corporation (NYSE:FST)
reported today net earnings exclusive of currency translation of $11.4
million or $.21 per share for the second quarter of 2000 compared to a net
loss of $258,000 or $.01 per share in the corresponding 1999 period. This is
the second consecutive quarter of record earnings for the company. Including
a non-cash foreign currency translation loss of $4.1 million in 2000 and a
gain of $4.3 million in 1999, second quarter net earnings were $7.3 million
or $.14 per common share in 2000 compared to $4.0 million or $.09 per common
share in 1999.
For the first six months of 2000, Forest reported net earnings exclusive of
currency translation of $22.0 million or $.41 per share compared to a net
loss of $2.0 million or $.05 per share in the corresponding 1999 period. The
earnings for the first six months of 2000 exceed the Company's previous
annual earnings record. Including a non-cash foreign currency translation
loss of $4.8 million in 2000 and a gain of $6.5 million in 1999, the six
month net earnings were $17.2 million or $.32 per common share in 2000
compared to $4.5 million or $.10 per common share in 1999.
The increase in earnings was due primarily to higher product prices. The
Company's average sales prices, net of hedging, for natural gas and liquids
in the first six months of 2000 were up 34% and 66%, respectively, over the
previous year.
For the second quarter of 2000, the Company's net daily production averaged
226 MMCFE (million cubic feet equivalent of natural gas), up 3% from 220
MMCFE in the first quarter of 2000. Production in the second quarter of 2000,
while higher than that reported in the first quarter, was negatively impacted
by property sales (2.3 MMCF/D) and the government ordered shut-in at the
Surmont field in Canada (1.5 MMCF/D).
<PAGE>
PAGE 2 OF 13
FINANCIAL AND PRODUCTION INFORMATION - HISTORICAL
The following table sets forth certain of Forest's historical financial and
production statistics for the first two quarters of 2000:
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
6/30/00 3/31/00 Change
------- ------- ------
<S> <C> <C> <C>
Production revenue (millions) $ 59.7 54.5 10%
Natural gas production (BCF) 14.5 13.9 4%
Average gas sales price ($/MCF) $ 2.81 2.53 11%
Liquids production (MBBLS) 1,003 1,026 (2)%
Average liquids sales price ($/BBL) $ 18.86 18.86 -
Total production (BCFE) 20.5 20.1 2%
Cash flow before working capital
changes (millions) $ 36.0 34.0 6%
EBITDA* (millions) $ 45.3 42.3 7%
Weighted average shares outstanding
(millions) 53.7 53.7 -
</TABLE>
* Earnings before interest, taxes, depreciation and depletion, translation of
subordinated debt and extraordinary gain on extinguishment of debt.
<PAGE>
PAGE 3 OF 13
The following table sets forth natural gas and liquids production, sales
prices, lease operating expense and the resulting netback statistics for each
of Forest's regions for the three months ended June 30, 2000:
<TABLE>
<CAPTION>
Three Months Ended June 30, 2000
---------------------------------------------------------------------
Offshore Onshore Western Total
Gulf of Gulf United United Total
Mexico Coast States States Canada Company
-------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NATURAL GAS
Production (MMCF) 6,738 2,088 2,562 11,388 3,124 14,512
Sales price received (per MCF) $ 3.65 3.55 3.03 3.49 2.12 3.19
Effects of energy swaps (per MCF)(1) (.41) (.46) (.34) (.40) (.30) (.38)
-------- ------- ------- ------ ------ -------
Average sales price (per MCF) $ 3.24 3.09 2.69 3.09 1.82 2.81
LIQUIDS
Oil and condensate:
Production (MBBLS) 196 213 37 446 276 722
Sales price received (per BBL) $ 25.64 27.48 28.76 26.77 28.96 27.61
Effects of energy swaps (per BBL)(1) (7.03) (7.51) (7.73) (7.31) (7.78) (7.49)
-------- ------- ------- ------ ------ -------
Average sales price (per BBL) $ 18.61 19.97 21.03 19.46 21.18 20.12
Natural gas liquids:
Production (MBBLS) - 47 134 181 100 281
Average sales price (per BBL) $ - 13.87 15.75 15.28 16.22 15.62
Total liquids production (MBBLS) 196 260 171 627 376 1,003
Average liquids sales price (per BBL) $ 18.63 18.87 16.89 18.25 19.86 18.86
TOTAL PRODUCTION:
Production volumes (MMCFE) 7,914 3,648 3,588 15,150 5,380 20,530
Average sales price (per MCFE) $ 3.22 3.12 2.73 3.08 2.44 2.91
Operating expense (per MCFE) .41 .86 .45 .53 .50 .52
-------- ------- ------- ------ ------ -------
Netback (per MCFE) $ 2.81 2.26 2.28 2.55 1.94 2.39
-------- ------- ------- ------ ------ -------
-------- ------- ------- ------ ------ -------
</TABLE>
(1) Energy swaps were entered into to hedge the price of spot market
volumes against price fluctuations. Hedged natural gas volumes were
6,061 MMCF in the three months ended June 30, 2000. Hedged oil and
condensate volumes were 597,000 barrels in the three months ended June
30, 2000. The aggregate net loss under energy swap agreements was
$10,906,000 for the period and was accounted for as a decrease to oil
and gas sales.
<PAGE>
PAGE 4 OF 13
Lease operating expense decreased 5% to $.52 per MCFE in the second quarter
of 2000 from $.55 per MCFE in the corresponding 1999 period and decreased 4%
to $.50 per MCFE in the first six months of 2000 from $.52 in corresponding
period of 1999. The decreases in per unit rates are due primarily to fewer
workovers in the Gulf Coast Region, offset partially by higher production
taxes due to higher product prices. General and administrative expense
increased 29% to $.22 per MCFE in the second quarter of 2000 and increased
18% to $.20 per MCFE in the first six months of 2000, compared to the
corresponding 1999 periods. The increases are due primarily to the expense
being spread over a lower production base, as well as higher employee-related
costs and professional service costs.
Depletion expense was $1.10 and $1.08 per MCFE in the second quarter and six
months ended June 30, 2000, respectively, compared to $.94 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.
In April 2000, Forest purchased approximately $5.0 million principal amount
of 8 3/4% senior subordinated debentures at an average price of 92.6% of par
value, resulting in an extraordinary gain of $192,000.
Net debt has remained relatively constant in the first six months of 2000 as
capital spending has been financed with cash flow.
HEDGING
The company currently has swaps and collars in place covering the aggregate
volumes and weighted average prices shown below:
<TABLE>
<CAPTION>
2000 2001 2002
------ ----- -----
<S> <C> <C> <C>
NATURAL GAS SWAPS:
Contract volumes (BBTU) 9,891 8,355 6,080
Weighted average price (per MMBTU) $ 2.53 2.54 2.48
NATURAL GAS COLLARS:
Contract volumes (BBTU) 610 - -
Weighted average ceiling price (per MMBTU) $ 2.90 - -
Weighted average floor price (per MMBTU) $ 2.75 - -
OIL SWAPS:
Contract volumes (MBBLS) 261 - -
Weighted average price (per BBL) $ 21.88 - -
OIL COLLARS:
Contract volumes (MBBLS) 644 548 -
Weighted average ceiling price (per BBLS) $ 20.93 27.00 -
Weighted average floor price (per BBL) $ 18.19 21.58 -
</TABLE>
<PAGE>
PAGE 5 OF 13
PRO FORMA INFORMATION
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. The transaction is subject to approval by the
shareholders of both companies and to customary regulatory approval. The
following table sets forth certain pro forma financial and production
statistics for Forest based on the pooling of interests method of accounting
for the merger with Forcenergy:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2000 June 30, 2000
------------------ ----------------
<S> <C> <C>
Production revenue (millions) $ 136.9 $ 268.3
Natural gas production (BCF) 28.4 55.2
Average gas sales price ($/MCF) $ 2.83 $ 2.72
Liquids production (MBBLS) 2,763 5,739
Average liquids sales price ($/BBL) $ 20.42 $ 20.59
Total production (BCFE) 45.0 89.6
Net daily production (MMCFE) 494 492
Income from continuing
operations (millions) $ 18.6 $ 41.1
Basic earnings from continuing
operations per share $ .20 $ .43
Cash flow before working capital
changes (millions) $ 83.6 $ 165.3
EBITDA* (millions) $ 94.9 $ 189.1
Weighted average shares
outstanding (millions) 94.9 94.9
Long-term debt (millions) $ 627 $ 627
Shareholders' equity (millions) $ 628 $ 628
</TABLE>
* Earnings before interest, taxes, depreciation and depletion, translation of
subordinated debt and extraordinary gain on extinguishment of debt.
* * * * *
CONFERENCE CALL
The Company's management will hold a teleconference call on Thursday, August
10, 2000 at 11:00 a.m. EST to review the second 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.
<PAGE>
PAGE 6 OF 13
A replay of the teleconference call will be available from Thursday, August
10 through Friday, August 18. The replay can be accessed by dialing toll-free
(800) 642-1687 (for U.S./Canada) and (706) 645-9291 (for International),
reservation no. 573434.
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 the Company 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 Company's 1999
Annual Report on Form 10-K as filed with the Securities and Exchange
Commission.
Forest Oil Corporation is engaged in the acquisition, exploration,
development, production and marketing of natural gas and crude oil in North
America. 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.
INVESTOR NOTICES
Investors and security holders are advised to read the joint proxy
statement/prospectus that will be included in the Registration Statement on
Form S-4 to be filed with the SEC in connection with the proposed merger
between Forest and Forcenergy. Forest and Forcenergy will file the joint
proxy statement/prospectus with the SEC. Investors and security holders may
obtain a free copy of the joint proxy statement/prospectus (when available)
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
will be contained in the Registration Statement on Form S-4 when it is filed.
August 9, 2000
<PAGE>
PAGE 7 OF 13
FOREST OIL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- ------------
(In Thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,826 3,155
Accounts receivable 78,711 64,719
Other current assets 8,503 3,484
----------- ------------
Total current assets 94,040 71,358
Net property and equipment, at cost 715,537 697,616
Goodwill and other intangible assets, net 20,616 22,092
Other assets 9,151 8,986
----------- ------------
$ 839,344 800,052
----------- ------------
----------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 70,315 72,589
Accrued interest 9,972 10,105
Other current liabilities 2,626 3,481
----------- ------------
Total current liabilities 82,913 86,175
Long-term debt 395,676 371,680
Other liabilities 13,857 14,262
Deferred income taxes 10,247 8,951
Shareholders' equity:
Common stock 5,412 5,381
Capital surplus 724,369 721,832
Accumulated deficit (378,852) (396,007)
Accumulated other comprehensive loss (11,012) (11,774)
Treasury stock, at cost (3,266) (448)
----------- ------------
Total shareholders' equity 336,651 318,984
----------- ------------
$ 839,344 800,052
----------- ------------
----------- ------------
</TABLE>
<PAGE>
PAGE 8 OF 13
FOREST OIL CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------ ------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Revenue:
Marketing and processing $ 58,716 40,514 102,718 80,846
Oil and gas sales:
Gas 40,813 32,291 75,971 65,253
Oil, condensate and natural gas liquids 18,912 14,782 38,263 24,666
-------- -------- -------- --------
Total oil and gas sales 59,725 47,073 114,234 89,919
-------- -------- -------- --------
Total revenue 118,441 87,587 216,952 170,765
Operating expenses:
Marketing and processing 57,645 39,664 100,693 79,135
Oil and gas production 10,696 12,438 20,367 23,703
General and administrative 4,470 3,883 8,103 7,981
Depreciation and depletion 23,443 21,767 45,554 44,366
-------- -------- -------- --------
Total operating expenses 96,254 77,752 174,717 155,185
-------- -------- -------- --------
Earnings from operations 22,187 9,835 42,235 15,580
Other income and expense:
Other (income) expense, net 310 683 214 (2,555)
Interest expense 9,448 10,407 18,524 21,064
Translation (gain) loss on subordinated debt 4,101 (4,301) 4,814 (6,517)
-------- -------- -------- --------
Total other income and expense 13,859 6,789 23,552 11,992
-------- -------- -------- --------
Earnings (loss) before income taxes and
extraordinary item 8,328 3,046 18,683 3,588
Income tax expense (benefit):
Current 141 78 306 (81)
Deferred 1,113 (1,075) 1,414 (824)
-------- -------- -------- --------
1,254 (997) 1,720 (905)
-------- -------- -------- --------
Earnings before extraordinary item 7,074 4,043 16,963 4,493
Extraordinary item - gain on extinguishment of debt 192 - 192 -
-------- -------- -------- --------
Net earnings $ 7,266 4,043 17,155 4,493
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of common shares
outstanding 53,677 44,655 53,687 44,651
-------- -------- -------- --------
-------- -------- -------- --------
Basic earnings per common share $ .14 .09 .32 .10
-------- -------- -------- --------
-------- -------- -------- --------
Diluted earnings per common share $ .13 .09 .32 .10
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
<PAGE>
PAGE 9 OF 13
FOREST OIL CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
2000 1999
------- -------
(In Thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings before extraordinary item $ 16,963 4,493
Adjustments to reconcile net earnings before extraordinary item
to net cash provided by operating activities:
Depreciation and depletion 45,554 44,366
Amortization of deferred debt costs 740 610
Translation loss (gain) on subordinated debt 4,814 (6,517)
Deferred income tax expense (benefit) 1,414 (824)
Other, net 558 (2,946)
Decrease (increase) in accounts receivable (18,081) 3,087
Increase in other current assets (1,680) (2,093)
Decrease in accounts payable (7,373) (381)
Increase in accrued interest and other current liabilities 4,877 291
------- -------
Net cash provided by operating activities 47,786 40,086
Cash flows from investing activities:
Capital expenditures for property and equipment (73,609) (48,656)
Proceeds from sale of assets 7,234 14,781
Increase in other assets, net (1,464) (976)
------- -------
Net cash used by investing activities (67,839) (34,851)
Cash flows from financing activities:
Proceeds from bank borrowings 71,757 66,151
Repayments of bank borrowings (42,024) (168,780)
Issuance of 10 1/2% senior subordinated notes, net of issuance costs - 98,561
Redemption of 8 3/4% senior subordinated notes (4,630) -
Redemption of 11 1/4% senior subordinated notes - (45)
Proceeds from the exercise of options 1,963 -
Purchase of treasury stock (2,818) -
Decrease in other liabilities, net (567) (2,081)
------- -------
Net cash provided (used) by financing activities 23,681 (6,194)
Effect of exchange rate changes on cash 43 (43)
------- -------
Net increase (decrease) in cash and cash equivalents 3,671 (1,002)
Cash and cash equivalents at beginning of period 3,155 3,415
------- -------
Cash and cash equivalents at end of period $ 6,826 2,413
------- -------
------- -------
Cash paid (refunded) during the period for:
Interest $ 17,763 23,286
Income taxes $ (3,319) 470
</TABLE>
<PAGE>
PAGE 10 OF 13
FOREST OIL CORPORATION
Condensed Pro Forma Combined Balance Sheets
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
----------------------------- Combined
Forest Forcenergy Adjustments Forest
-------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,826 2,887 - 9,713
Accounts receivable 78,711 37,255 - 115,966
Other current assets 8,503 25,662 - 34,165
-------- ---------- ----------- ---------
Total current assets 94,040 65,804 - 159,844
Net property and equipment, at cost 715,537 544,818 - 1,260,355
Goodwill and other intangible assets, net 20,616 - - 20,616
Other assets 9,151 9,454 - 18,605
-------- ---------- ----------- ---------
$ 839,344 620,076 - 1,459,420
-------- ---------- ----------- ---------
-------- ---------- ----------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 70,315 49,246 30,000 149,561
Accrued interest 9,972 130 - 10,102
Other current liabilities 2,626 18,778 - 21,404
-------- ---------- ----------- ---------
Total current liabilities 82,913 68,154 30,000 181,067
Long-term debt 395,676 231,000 - 626,676
Other liabilities 13,857 - - 13,857
Deferred income taxes 10,247 - - 10,247
Redeemable preferred stock - 30,589 (30,589) -
Shareholders' equity:
Common stock 5,412 240 3,885 9,537
Capital surplus 724,369 268,558 31,604 1,024,531
Accumulated deficit (378,852) 22,548 (34,900) (391,204)
Unearned compensation - (1,013) - (1,013)
Accumulated other comprehensive loss (11,012) - - (11,012)
Treasury stock, at cost (3,266) - - (3,266)
-------- ---------- ----------- ---------
Total shareholders' equity 336,651 290,333 589 627,573
-------- ---------- ----------- ---------
$ 839,344 620,076 - 1,459,420
-------- ---------- ----------- ---------
-------- ---------- ----------- ---------
</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, the issuance
of 68.6141 Forest common shares for each $1,000 principal amount of
Forcenergy preferred stock, and transaction costs estimated at approximately
$30 million (approximately $25 million after tax).
<PAGE>
PAGE 11 OF 13
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statement of Operations
Three Months Ended June 30, 2000
<TABLE>
<CAPTION>
Historical Pro Forma
----------------------- Combined
Forest Forcenergy Forest
------ ---------- ---------
<S> <C> <C> <C>
Revenue:
Marketing and processing $ 58,716 - 58,716
Oil and gas sales 59,725 77,136 136,861
------- ------ -------
Total revenue 118,441 77,136 195,577
Operating expenses:
Marketing and processing 57,645 - 57,645
Oil and gas production 10,696 20,769 31,465
General and administrative 4,470 6,812 11,282
Depreciation and depletion 23,443 27,528 50,971
------- ------ -------
Total operating expenses 96,254 55,109 151,363
------- ------ -------
Earnings from operations 22,187 22,027 44,214
Other income and expense:
Other income (expense), net 310 (887) (577)
Interest expense 9,448 4,404 13,852
Translation loss on subordinated debt 4,101 - 4,101
------- ------ -------
Total other income and expense 13,859 3,517 17,376
------- ------ -------
Earnings before income taxes and extraordinary item 8,328 18,510 26,838
Income tax expense 1,254 6,953 8,207
------- ------ -------
Income from continuing operations $ 7,074 11,557 18,631
------- ------ -------
------- ------ -------
Weighted average number of common shares outstanding 53,677 94,928
------- -------
------- -------
Basic earnings from continuing operations per common share $ .14 .20
------- -------
------- -------
Diluted earnings from continuing operations per share $ .13 .19
------- -------
------- -------
</TABLE>
<PAGE>
PAGE 12 OF 13
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statement of Operations
Six Months Ended June 30, 2000
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------ Combined
Forest Forcenergy Forest
------- ---------- ---------
<S> <C> <C> <C>
Revenue:
Marketing and processing $ 102,718 - 102,718
Oil and gas sales 114,234 154,102 268,336
------- ------- -------
Total revenue 216,952 154,102 371,054
Operating expenses:
Marketing and processing 100,693 - 100,693
Oil and gas production 20,367 42,572 62,939
General and administrative 8,103 9,962 18,065
Depreciation and depletion 45,554 55,155 100,709
------- ------- -------
Total operating expenses 174,717 107,689 282,406
------- ------- -------
Earnings from operations 42,235 46,413 88,648
Other income and expense:
Other income (expense), net 214 (2,068) (1,854)
Interest expense 18,524 9,724 28,248
Translation loss on subordinated debt 4,814 - 4,814
------- ------- -------
Total other income and expense 23,552 7,656 31,208
------- ------- -------
Earnings before income taxes and extraordinary item 18,683 38,757 57,440
Income tax expense 1,720 14,638 16,358
------- ------- -------
Income from continuing operations $ 16,963 24,119 41,082
------- ------- -------
------- ------- -------
Weighted average number of common shares outstanding 53,687 94,938
------- -------
------- -------
Basic and diluted earnings from continuing operations per
common share $ .32 .43
------- -------
------- -------
</TABLE>
<PAGE>
PAGE 13 OF 13
FOREST OIL CORPORATION
Condensed Pro Forma Combined Statement of Cash Flows
Six Months Ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
----------------------- Combined
Forest Forcenergy Forest
------- ---------- ---------
<S> <C> <C> <C>
Cash flow from operating activities:
Net earnings before extraordinary item $ 16,963 24,119 41,082
Adjustments to reconcile net earnings before extraordinary
item to net cash provided by operating activities:
Depreciation and depletion 45,554 55,155 100,709
Amortization of deferred debt costs 740 - 740
Translation loss on subordinated debt 4,814 - 4,814
Deferred income tax expense 1,414 14,638 16,052
Stock option compensation - 2,000 2,000
Other, net 558 (637) (79)
Decrease (increase) in accounts receivable (18,081) 4,177 (13,904)
Increase in other current assets (1,680) (7,204) (8,884)
Decrease in accounts payable (7,373) (32,534) (39,907)
Increase (decrease) in accrued interest and other
current liabilities 4,877 (15,227) (10,350)
------- -------- --------
Net cash provided by operating activities before
reorganization items 47,786 44,487 92,273
Change in reorganization items - (9,541) (9,541)
------- -------- --------
Net cash provided by operating activities 47,786 34,946 82,732
Cash flow from investing activities:
Capital expenditures for property and equipment (73,609) (88,924) (162,533)
Proceeds from sales of assets 7,234 951 8,185
Increase in other assets, net (1,464) (1,089) (2,553)
------- -------- --------
Net cash used by investing activities (67,839) (89,062) (156,901)
Cash flow from financing activities:
Proceeds from bank borrowings 71,757 70,057 141,814
Repayments of bank borrowings (42,024) (148,530) (190,554)
Proceeds from issuance of preferred stock - 38,800 38,800
Redemption of 8 3/4% senior subordinated notes (4,630) - (4,630)
Proceeds from the exercise of options 1,963 - 1,963
Purchase of treasury stock (2,818) - (2,818)
Increase (decrease) in other liabilities, net (567) 170 (397)
------- -------- --------
Net cash provided (used) by financing activities 23,681 (39,503) (15,822)
Effect of exchange rate changes on cash 43 - 43
------- -------- --------
Net increase (decrease) in cash and cash equivalents 3,671 (93,619) (89,948)
Cash and cash equivalents at beginning of period 3,155 96,506 99,661
------- -------- --------
Cash and cash equivalents at end of period $ 6,826 2,887 9,713
------- -------- --------
------- -------- --------
</TABLE>
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