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Denver-based Forest Oil Corporation’s (FST - Analyst Report) fourth-quarter 2013 earnings of 2 cents per share (excluding non-recurring items) came below the Zacks Consensus Estimate of 3 cents. The quarterly figure also decreased from the year-earlier earnings of 14 cents.

Full year 2013 earnings of 17 cents per share decreased significantly from the year-earlier earnings of 41 cents and also missed the Zacks Consensus Estimate of 18 cents.

Total revenue in the reported quarter decreased from the year-ago level of $88.5 million to $154.9 million, and failed to meet the Zacks Consensus Estimate of $97.0 million. Full year 2013 revenue was $441.7 million, down from $605.7 million in the prior year and below the Zacks Consensus Estimate of $457 million.

Production

Net sales volume shrunk nearly 21.2% year over year to 164.7 million cubic feet equivalent per day (MMcfe/d) in the reported quarter. The figure includes 38% liquids compared with 40% in the year-ago quarter.

The company’s oil net sales volume in the fourth quarter was 5.3 thousand barrels per day (MBbls/d) versus 6.8 MBbls/d in the year-earlier quarter. Natural gas sales volume was 101.8 MMcf/d versus 125.7 MMcf/d in the year-earlier quarter and comprised 62% of the total volume.

At the end of 2013, oil and gas proved reserves were 625 billion cubic feet equivalent (Bcfe) compared with 1,363 Bcfe at the end of 2012. Drill bit reserve replacement ratio excluding revisions was 197%. During 2013, Forest Oil added 148 Bcfe to proved reserves.

Realized Prices

The average equivalent price per Mcf (including the effect of hedging) was $6.14, down from the year-ago realization of $6.22. Natural gas was sold at $3.59 per Mcf, down from 3.83 per Mcf in the comparable prior-year quarter. Also, natural gas liquids (NGLs) were sold at $32.15 per barrel, down from $33.96 per barrel in the year-ago quarter and average realized oil price was $90.16 per barrel, down from $96.25 per barrel in the year-ago quarter.

Expenses

The fourth quarter production expenses increased 16.3% year over year to $1.50 per Mcfe. Unit general and administrative expenses decreased 14.3% year over year to 36 cents per Mcfe from the year-ago level of 39 cents per Mcfe.

Financials

At quarter end, Forest Oil had $1.1 million of cash and cash equivalents with $733.8 million of long-term debt (including current portion).

Zacks Rank

Forest Oil currently carries a short-term Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Vermilion Energy Inc. (VET - Snapshot Report), Matrix Service Company (MTRX - Snapshot Report) and New Source Energy Partners L.P. (NSLP - Snapshot Report). All these stocks hold a Zacks Rank #1 (Strong Buy).

 

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