Forest Oil Corporation (FST) reported earnings for the first quarter of 2010, and held a conference call on May 4, 2010 to discuss the results. The company made comments on its acreage in the Eagle Ford Shale in Texas.
“We've seen deals by offset operators in recent weeks that price Eagle Ford acreage at $10,000 to $15,000 an acre depending on how you calculate it.”
“We've also announced the addition of 106,000 gross and 102,000 net acres in the Eagle Ford. Our acreage is concentrated in Gonzalez and Wilson counties, where we expect the Eagle Ford to be in the oil window. Our Gonzalez and Wilson County acreage offsets the EOG acreage that they highlighted at the recent analyst day.”
“Acquisition of 3D seismic is slated for this area with acquisition expected to be complete by the end of the third quarter. We acquired the bulk of this position during 2009 with prices of less than $500 per acre, so our cost of entry fits our model of getting large positions early in the cycle of the play inexpensively. This position not only has Eagle Ford potential, but also has additional horizontal potential in shallower formations such as the Austin Chalk.”
Source: Seeking Alpha
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