Dallas, Texas 02/03/2014 (FINANCIALSTRENDS) – The $464 million market capped Forest Oil Corporation (NYSE:FST) was down 3.1 percent during 31st January trading. This swells last week trading loss of the stock to 11.8 percent for the week in question and by a substantive 56 percent in the trailing 12 months. The steep sell-off has occurred on the back of Moody’s Investors Service providing a negative outlook on the operations of the oil firm for 2014. The rating agency also provided an update on the “B3 senior unsecured notes rating along with the SGL-3Speculative Grade Liquidity Rating”. The negative outlook spooked the markets and this resulted in the selloff in the stock last week.
Providing its rationale behind the negative outlook, Moody’s Investors Service Vice President Andrew Brooks has been quoted to have said that, “The completion of a series of major divestitures has left behind a much smaller E&P company seeking to stabilize its operations, generate higher quality cash flows and ultimately achieve a reduction in debt leverage. The negative outlook remains in place reflecting the execution challenges Forest faces in achieving these objectives following its significant downsizing.”
In addition Moody’s Investors Service provided updates on the following operations of Forest Oil Corporation (NYSE:FST). The corporate family rating has been pegged at B2, while the “probality of default” rating has been further qualified to B2-PD. The senior unsecured notes offered by Oil Corporation (NYSE:FST) has been rated a B3, while the “Speculative Grade Liquidity Rating” continues to carry a SGL-3 rating.
It is appropriate to note at this juncture that in the past few quarters, the operations of this small capped gas firm has been facing challenges. It’s revenue growth measured on a QoQ basis has gone down by 24 percent while its net income ( net loss) has ballooned to a-$318 million.