Forest Oil buying stake in Texas Panhandle

By OGJ editors

HOUSTON, Mar. 1 -- Forest Oil Corp., Denver, agreed to acquire a private company whose primary asset is 83% interest and operatorship of Buffalo Wallow natural gas field in the Texas Panhandle.

Forest did not name the private company but said the purchase price is $200 million and assumption of $30 million in debt. The deal is expected to close Mar. 31.

The acquisition involves 8,300 gross acres in Buffalo Wallow field, plus 25,000 gross acres of undeveloped land primarily in Wheeler County, Tex. The undeveloped property contains drilling targets in Granite Wash, Atoka, and Morrow formations.

Forest Pres. and CEO Craig Clark said Buffalo Wallow, developed on 40-acre spacing, has been approved for 20-acre spacing.

Forest said the deal will add proved reserves of 120 bcf equivalent and increase production by 25-30 MMcfd equivalent, beginning in April. The reserves are 71% natural gas and 46% proved developed.

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