Forest Alaska seeks loan waiver of leverage and interest coverage ratios

By Sara Rosenberg

New York, April 18 - Forest Alaska Operating LLC is in the process of negotiating a waiver from its credit facility lenders regarding expected non-compliance with the March 31 leverage ratio and interest coverage ratio tests, according to an 8-K filed with the Securities and Exchange Commission Wednesday.

The expected non-compliance is based on the company's assessment that consolidated EBITDAX will be lower than previously anticipated due to several factors, including a failure to include in the credit agreements' definition of EBITDAX the sale of a significant quantity of Alaskan crude oil sold during the fourth quarter of 2006, higher-than-expected lease operating expense relating to non-operated properties and the purchaser's inability to take a delivery of a significant quantity of crude oil originally scheduled for March 26 until April 5.

Forest Alaska is a subsidiary of Forest Oil Corp. that was formed to hold oil and gas interests in the Cook Inlet region of Alaska.

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