S&P: Forest Oil still on watch

Standard & Poor's said the ratings on Forest Oil Corp. remain on CreditWatch with negative implications following the company's announcement that it will acquire all of the outstanding shares of The Wiser Oil Co. for a cash consideration of about $330 million, including about $160 million of assumed debt.

S&P also placed its B- corporate credit rating on Wiser on CreditWatch with positive implications.

S&P said it will determine the impact of the acquisition on Forest's business and financial profile in resolving the CreditWatch. The ratings on Forest were placed on CreditWatch with negative implications in January 2004 following the company's significant reserve write-down.

"The review will focus on the affect of the reserve revisions on the resultant credit profile after the recent acquisitions and the company's ability to reach significantly lower leverage targets, while reining in costs, which are substantially high relative to peers," said S&P credit analyst Kimberly Stokes.

The positive CreditWatch listing for Wiser reflects the superior credit strength of Forest and the strong likelihood for a ratings upgrade following the resolution of the CreditWatch on Forest and the close of the acquisition.

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