Getting smaller can be a good way of cleaning up a balance sheet and improving a company's growth prospects. In the case of Forest Oil (FST),
though, I have some real concerns about whether management hocked the
family silver and kept the stainless steel instead. I do believe that
Forest shares trade below their current NAV and that more experience
could lead to better results (which in turn would lead to a meaningfully
better NAV), but that upside has to be set against the reality that
Forest Oil may be on the outside looking in when it comes to the Eagle
Ford and may not have the capital or technical expertise to maximize the
Permian assets anytime soon.
Follow this link to continue:
Forest Oil Trying To Make A Go Of It With Second-Rate Assets
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