Board and Management Structure
The combined company’s board will initially consist of two existing Forest directors, Patrick McDonald and Dod Fraser and five former Sabine directors approved by the Forest board: David Sambrooks, who will serve as Chairman, Duane Radtke, who will serve as Lead Director, Alex Krueger, Brooks Shughart and John Yearwood as directors. Tom Chewning will join the combined company’s board at closing as an independent director and Chairman of the Audit Committee.
Mr. Chewning has over 40 years of executive and financial experience. He served as President and Chief Executive Officer of Dominion Energy, a subsidiary of Dominion Resources, from 1995 to 1999, and then as Chief Financial Officer of Dominion Resources from 1999 until his retirement in 2009.
The combined company will be led by David Sambrooks, President and Chief Executive Officer, Todd Levesque, Executive Vice President and Chief Operating Officer and Michael Magilton, Senior Vice President and Chief Financial Officer. Mr. Magilton will join the company on January 1, 2015 following completion of his tenure as Vice President, Finance & Treasurer at Quantum Resources Management, which he joined in 2011. Prior to Quantum, he served as a Vice President with private equity firm Aurora Capital Group. Full biographies for Messrs. Chewning and Magilton are included below.
Complementary Assets
In addition to a top-tier 207,000 net acreage position in East Texas, the combination of assets is expected to create a 65,000 net acreage position in the Eagle Ford as well a position in the Haynesville in North Louisiana and a highly economic liquids rich position in the Granite Wash. The complementary nature of Sabine and Forest’s assets should present considerable opportunities to generate savings through operating synergies, economies of scale, and optimized capital allocation.
The combined company will have estimated proved reserves of 1.4 trillion cubic feet equivalent (71% gas) (as of September 30, 2014), and estimated daily production of approximately 305 million cubic feet equivalent (66% gas) for 2014.
The combined company has multiple opportunities to de-lever its balance sheet through an optimized capital program and accretive divestments. As an example of action already taken, Forest closed the divestment of its Arkoma Basin assets on December 15, 2014, receiving cash proceeds of approximately $184 million after closing adjustments. This sale represented an 8.1x multiple of trailing twelve month cashflow. The combined company plans to explore additional divestment opportunities to further improve the balance sheet.
NYSE Listing Status
Forest has been informed by the New York Stock Exchange that trading in its common stock will be suspended immediately and is being delisted due to the company’s failure to meet the requirements for continued listing. David Sambrooks commented: “We are committed to having the common stock listed on an active exchange and we expect to seek relisting on an exchange as soon as we meet the listing requirements.” Prior to qualifying for a new listing, the common stock is expected to immediately trade in the OTCQB market under a new ticker symbol.
About Sabine
Sabine Oil & Gas LLC is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States. Sabine’s current operations are principally located in Cotton Valley Sand and Haynesville Shale in East Texas, the Eagle Ford Shale in South Texas, and the Granite Wash in the Texas Panhandle. For more information about Sabine, please visit its website at www.sabineoil.com.
About Forest Oil
Forest Oil Corporation is engaged in the acquisition, production, exploration, and development of natural gas and liquids in the United States. Forest’s principal reserves and producing properties are located in East Texas, the Eagle Ford in South Texas and Louisiana. For more information about Forest Oil, please visit its website at www.forestoil.com.
Biographies for Thomas Chewning and Michael Magilton
Thomas Chewning – Director
Mr. Chewning has over 40 years of experience in a variety of businesses, with tenures as chief executive officer and chief financial officer. He began his career as a commercial lending officer and executive in the commercial banking industry, and served as President of Air Van Lines, Inc. Mr. Chewning joined Dominion Resources, Inc. in 1987 where he held a variety of financial positions with the company’s operating subsidiaries. From 1995-1999 he held the positions of President and Chief Executive Officer of Dominion Energy, a Dominion Resources subsidiary, and led Dominion’s acquisition and development of its oil and gas properties. In 1999, Mr. Chewning was named Chief Financial Officer of Dominion Resources, a position he held until his retirement in 2009. Mr. Chewning received a Bachelor of Arts degree in History from the University of North Carolina at Chapel Hill and his MBA from the Wharton School of Finance.
Michael Magilton - Senior Vice President and Chief Financial Officer
Mr. Magilton is completing his tenure as Vice President, Finance & Treasurer of Quantum Resources Management, which he joined in 2011. He previously served as a Vice President with Aurora Capital Group from 2007 to 2010 and prior to that held positions in private equity with Wellspring Capital Management and First Reserve Corporation. Mr. Magilton began his career as an investment banking analyst with Banc of America Securities and Morgan Stanley. Mr. Magilton graduated with a Bachelor of Science degree in Business Administration from Creighton University, with a double major in International Business and Finance, and obtained his MBA from Harvard Business School.
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