Societe Generale: Forest Oil's 4Q11 Highlights Issues

According to a research report published today by Societe Generale, Forest Oil Corporation's FST 4Q11 RPS missed Street estimates. In the report Societe Generale weighed in on the possible problem: “FST's 4Q11 highlights issues with a switch towards more liquids exploitation in a weak natural gas price environment when FST's output was still 70% natural gas with significant gas price hedging. Unit production costs (cash and non-cash) collectively rose 30% vs. 4Q10 impacted by more costly liquids production and DD&A that was boosted by negative reserve revisions.” Societe Generale maintains its Buy rating and $19 PT on Forest Oil, which closed yesterday at $14.44.