Forest Oil increasing credit facility to $1.8 billion

By Sara Rosenberg

New York, May 8 - Forest Oil Corp. has reached an agreement to upsize its credit facility to $1.8 billion from $1 billion, according to a news release.

The borrowing base of the facility will also be increased to $1.8 billion from $1.4 billion.

The amended credit facility will consist of a U.S. facility in the amount of $1.65 billion and a Canadian facility in the amount of $150 million.

Forest expects to complete the documentation and implement the amended credit facility in mid-May.

JPMorgan acted as the arranger on the deal.

As of May 2, the company had about $600 million drawn on its credit facility.

"The high quantity and quality of asset deal flow that we are currently seeing led us to significantly increase our liquidity to allow us the flexibility to capitalize on this environment. Forest's ability to receive $800 million of new commitments from its banks in this credit market is a testament to our loyal financial relationships and highlights the importance of a strong producing asset base," said David H. Keyte, executive vice president and chief financial officer, in the release.

"In the current credit market, we feel it is absolutely imperative to have the ability to transact within existing credit capacity in a quick and efficient manner. The new commitments will provide us in excess of $1 billion in liquidity, which we will be able to access if the right opportunity arises."

Forest is a Denver-based oil and gas company.

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