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Forest Oil Corporation Message Board

  • herrick_douglas herrick_douglas Feb 27, 2014 9:59 AM Flag

    Denver Post Article..Loan FST Issues

     

    First an admission....I have lost money on FST's spin-off, LPR, so this missive obviously is not completely objective. Having said that...in an attempt to put FST latest earnings in perspective in terms of what really matters....I am providing relevant segments from todays Denver Post for longs, as well as potential investors, to consider. You ignore such news at your peril (no I am not short stock, just do not want to see others take a hosing from this management team).

    "Oil and gas driller Forest Oil warned investors Wednesday that it could fail to comply with requirements under one of its borrowing agreements, potentially causing roughly $800 million in bond debt to come due and forcing a bankruptcy filing.

    Officials are trying to reach a deal with lenders that would help them stay within the loan's requirements according to the companies filing with the Securities and Exchange Commission. Without a deal with lenders, the company's bond debt could also become due and payable immediately.

    Quoting from FST SEC filing:" At worse, it could also result in foreclosure of our assets and potential bankruptcy," the company said in the regulatory filing. The announcement caused the companies bond prices to plummet."

    Small to mid-size E&P's are all about debt ratio and staying within loan covenants. This company is in violation of its loan covenants and is trying to reach a deal with its borrowers. As investors....you will ALWAYS be getting the short end of any deal worked out with lenders. All of you need to pay attention to what really matters to this company right now and cease with the pumping until loan issues are sorted out. There was a reason for the volume yesterday...the institutional investors were feeling the ship.

    From one who learned the hard way.

    This topic is deleted.
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    • It's weird that this is the first comment I have seen on Yahoo about this press release and the company's caution about the possibility of foreclosure and bankruptcy. I bought yesterday thinking it would be an easy 15-20% gainer, but then the press release came out after hours -- scared the poop out of me and I felt fortunate to bail this morning at a minimal gain. I'm surprised this has not tanked further after the press release -- are we at a bottom, or is the bottom going to fall out?

    • cease pumping or, in other words, don't say anything good about Forest...ehhh? we'll Lenders have faced this with many businesses over the years and the usually common sense prevails...what the heck is the Lenders going to do with reposssed equipment? just like FNMA and Freddie Mac...it's all worrisome when companies struggle but, take it from one working FOR a company that struggled....lenders will work with the company unless they absolutely can't. and by the way, the company I was with is now thriving...it's just business.

    • Thank you, thank you, thank you... I like oil E&P and hold SN in the Eagle Ford. I was strongly considering a fairly good bet on FST thinking that the market had over-reacted to their earnings release and had created a 'special situation'. Alas, you due diligence with the Devner Post article opened my eyes. And, duh, why didn't I factor in yesterday's huge volume -- which obviously indicated institutional dumping -- not reacting to the ER...

      All the very best,
      Don

 

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