Pacific Energy Resources Ltd. has agreed to buy Forest Oil Corp. and Forest Alaska Holding LLC‘s oil and gas properties in Alaska for US$448 million and 5.5 million shares.

Pacific Energy, based in Long Beach, Calif., but trading its shares on the Toronto stock market, said $380 million of the purchase price will be used to pay down debt encumbering the properties.

 

“This represents a tremendous opportunity to build a new position that fits well within our business strategy and expertise,‘‘ Pacific Energy president Darren Katic said in a release.

 

“These large legacy assets have exactly the kind of characteristics we look for when pursing acquisition opportunities. The established production, with long life reserves, generates strong predictable cash flow.‘‘

 

The company also said it will raise US$465 million in a financing from an unnamed source, under which Pacific energy will issue 3.75 million shares to the source in addition to fees and reimbursement of expenses.

 

Pacific Energy said it has received estimates of total proved reserves of 15.8 million barrels of oil equivalent at the properties to be purchased.

 

The assets include nine fields located in the Cook Inlet area of Alaska covering the major fields of McArthur River, Redoubt Shoal, West McArthur River and Trading Bay.

 

Shares in the company were up six cents at C$3.20 in morning trading on the Toronto Stock Exchange.

 

PIN/Oilweek.com

News Code 105975

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