Canaccord Genuity Morning Coffee on Forest Oil (FST): Run, Forest! Run!
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Price: $10.18 --0%
Rating Summary:
5 Buy, 13 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
5 Buy, 13 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Canaccord Genuity Morning Coffee on Forest Oil (NYSE: FST): Run, Forest! Run!
Shares of Forest Oil slid after the company forecast disappointing production and sales for 2012. The company announced 2012 capital spending guidance of $550-600 million, below Canaccord Genuity Energy Analyst John Gerdes' ~$700-million expectation. The 2012 capital plan contemplates a five- to six-rig program in the Texas Panhandle (two rigs targeting shallow oil targets), a two-rig program in the Haynesville Share, a one-rig program in the Eagle Ford Shale and a one-rig program in the Wolfcamp Shale. From a production perspective, management issued 2012 production guidance of 350-355 Mmcfepd (5-6% growth pro-forma Canadian spin-off) with liquids expected to average 17.5-17.8 Mbopd or ~30% of production. While total company guidance was in line with Gerdes 350 Mmcfepd expectation, he was looking for liquids to comprise ~36% of total output next year versus guidance of ~30%. Net-net, a lower spending outlook with similar production suggests better capital productivity according to Gerdes, though this is more than offset by the negative impact of a meaningfully lower liquids composition.
Note - shares of FST are trading down 4.2% (-$0.58) to $13.48 this morning. Yesteday, shares fell almost 13%.
Shares of Forest Oil slid after the company forecast disappointing production and sales for 2012. The company announced 2012 capital spending guidance of $550-600 million, below Canaccord Genuity Energy Analyst John Gerdes' ~$700-million expectation. The 2012 capital plan contemplates a five- to six-rig program in the Texas Panhandle (two rigs targeting shallow oil targets), a two-rig program in the Haynesville Share, a one-rig program in the Eagle Ford Shale and a one-rig program in the Wolfcamp Shale. From a production perspective, management issued 2012 production guidance of 350-355 Mmcfepd (5-6% growth pro-forma Canadian spin-off) with liquids expected to average 17.5-17.8 Mbopd or ~30% of production. While total company guidance was in line with Gerdes 350 Mmcfepd expectation, he was looking for liquids to comprise ~36% of total output next year versus guidance of ~30%. Net-net, a lower spending outlook with similar production suggests better capital productivity according to Gerdes, though this is more than offset by the negative impact of a meaningfully lower liquids composition.
Note - shares of FST are trading down 4.2% (-$0.58) to $13.48 this morning. Yesteday, shares fell almost 13%.
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