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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2003


FOREST OIL CORPORATION
(Exact name of registrant as specified in charter)

New York   1-13515   25-0484900
(State or other jurisdiction
of incorporation)
  (Commission
file number)
  (IRS Employer
Identification No.)

1600 Broadway, Suite 2200, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:    303.812.1400





Item 2. Acquisition or Disposition of Assets.

        During the fourth quarter of 2003, Forest Oil Corporation (Forest) completed an acquisition of certain oil and natural gas properties in South Louisiana and offshore Gulf of Mexico (the Acquired Properties) from Union Oil Company of California pursuant to the terms and conditions of a Purchase and Sale Agreement between the parties. Forest also acquired certain assets and assumed certain liabilities related to the Acquired Properties. The total cash consideration paid by Forest in the acquisition was approximately $207.2 million. The acquisition was funded by borrowings under Forest's credit facility and net proceeds from a common stock offering.


Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a)
Financial Statements of Businesses Acquired.

        See "Index to Financial Statements—Financial Statements of the Acquired Properties" on page F-1.

(b)
Pro Forma Financial Information.

        See "Index to Financial Statements—Unaudited Pro Forma Condensed Combined Financial Statements" on page F-1.

(c)
Exhibits.

        The following exhibit is filed with this Current Report on Form 8-K/A:

Exhibit
  Description
23   Consent of KPMG LLP

2



FOREST OIL CORPORATION

INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS OF THE ACQUIRED PROPERTIES:    
 
Independent Auditors' Report

 

F-2
  Combined Statements of Revenue and Direct Operating Expenses of the Acquired Properties for the Nine Months Ended September 30, 2003 and the Year Ended December 31, 2002   F-3
  Notes to Combined Statements of Revenue and Direct Operating Expenses of the Acquired Properties   F-4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS:

 

 
 
Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2003

 

F-8
  Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2003.   F-9
  Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2002   F-10
  Notes to Unaudited Pro Forma Condensed Combined Financial Statements   F-11

F-1



Independent Auditors' Report

To Forest Oil Corporation:

        We have audited the accompanying combined statements of revenue and direct operating expenses (the Statements) of certain oil and natural gas properties in South Louisiana and offshore Gulf of Mexico (the Acquired Properties), acquired from Union Oil Company of California by Forest Oil Corporation (Forest), for the nine months ended September 30, 2003 and the year ended December 31, 2002. The Statements are the responsibility of Forest's management. Our responsibility is to express an opinion on the Statements based on our audits.

        We conducted our audits in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements. We believe that our audits provide a reasonable basis for our opinion.

        The accompanying Statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 1. The presentation is not intended to be a complete presentation of revenue and expenses of the Acquired Properties.

        In our opinion, the Statements referred to above present fairly, in all material respects, the revenue and direct operating expenses of the Acquired Properties for the nine months ended September 30, 2003 and the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.

    /s/ KPMG LLP
KPMG LLP

Denver, Colorado
January 9, 2004

F-2



FOREST OIL CORPORATION

COMBINED STATEMENTS OF REVENUE
AND DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES

 
  Nine months ended
Sepetember 30,
2003

  Year ended
December 31,
2002

 
  (In Thousands)

Revenue:          
  Oil and gas sales   $ 144,613   156,607

Direct operating expenses:

 

 

 

 

 
  Oil and gas production     26,564   30,348
   
 
    Revenue in excess of direct operating expenses   $ 118,049   126,259
   
 

See accompanying notes to Combined Statements of Revenue and Direct Operating Expenses of the Acquired Properties.

F-3



FOREST OIL CORPORATION

NOTES TO COMBINED STATEMENTS OF REVENUE AND
DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES

Nine months ended September 30, 2003 and the
year ended December 31, 2002

(1)   Basis of Presentation

        During the fourth quarter of 2003, Forest Oil Corporation (Forest) acquired certain oil and natural gas properties in South Louisiana and offshore Gulf of Mexico (the Acquired Properties) from Union Oil Company of California (Unocal).

        The accompanying combined statements of revenue and direct operating expenses were derived from the historical accounting records of Unocal and reflect the revenue and direct operating expenses of the Acquired Properties. Such amounts may not be representative of future operations.

        During the periods presented, the Acquired Properties were not accounted for as a separate division by Unocal and therefore certain costs, such as depreciation, depletion and amortization, general and administrative expenses, and corporate income taxes were not allocated to the individual properties nor would such allocated historical costs be representative of future costs. Additionally, full separate financial statements prepared in accordance with accounting principles generally accepted in the United States of America are not presented as such information is neither readily available on an individual property basis nor practicable to obtain in theses circumstances.

        During the periods presented in the accompanying combined statements of revenue and direct operating expenses, natural gas production from the Acquired Properties was purchased by an affiliate of Unocal. It is anticipated that Forest will sell future natural gas production from the Acquired Properties to unaffiliated third parties on a month to month basis in the spot market using published indices.

(2)   Supplemental Oil and Gas Reserve Information (Unaudited)

        Supplemental oil and natural gas reserve information related to the Acquired Properties is reported in compliance with Statement of Financial Accounting Standards No. 69, Disclosures about Oil and Gas Producing Activities (FAS 69). Net proved oil and natural gas reserves of the Acquired Properties and the standardized measure of discounted future net cash flows related to those reserves were prepared by Forest's petroleum engineers as of and for each period presented.

ESTIMATED NET QUANTITIES OF OIL AND GAS RESERVES ATTRIBUTED TO THE ACQUIRED PROPERTIES

        Proved reserves are estimated quantities of crude oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

        The estimated proved reserve volumes presented as of January 1, 2002 and December 31, 2002 were calculated by adding back actual production from the Acquired Properties during the applicable periods. The following table presents the estimated remaining net proved and proved developed oil and gas reserves attributable to the Acquired Properties at September 30, 2003, December 31, 2002 and

F-4



January 1, 2002, along with a summary of changes in the quantities of net remaining proved reserves during the nine months ended September 30, 2003 and the year ended December 31, 2002.

 
  Crude Oil
(MBbl)

  Natural Gas
(MMcf)

 
           
Estimated total proved reserves:          
  January 1, 2002   9,331   160,295  
    Production for 2002   (2,025 ) (36,483 )
   
 
 
  December 31, 2002   7,306   123,812  
   
Production for the nine months of 2003

 

(1,156

)

(19,523

)
   
 
 
  September 30, 2003   6,150   104,289  
   
 
 

Estimated proved developed reserves:

 

 

 

 

 
  January 1, 2002   8,844   137,082  
  December 31, 2002   6,819   100,599  
  September 30, 2003   5,663   81,076  

STANDARDIZED MEASURES OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES

        Estimated future net cash flow information presented as of January 1, 2002 and December 31, 2002 was calculated by adding back costs associated with the Acquired Properties during the applicable periods. It may be useful for certain comparative purposes, but should not be solely relied upon in evaluating the Acquired Properties or their performance. In computing the Standardized Measure, future cash inflows were estimated by applying period-end oil and natural gas prices to the estimated future production of period-end proved reserves. The prices used for the September 30, 2003 calculation were $27.93 per barrel of oil and $4.67 per Mcf of gas. Year-end 2002 prices used were $29.93 per barrel of oil and $4.60 per Mcf of gas. Future cash inflows were reduced by estimated future development, abandonment and production costs based on period-end costs in order to arrive at net cash flow before tax. Future income tax expense has not been considered as the properties are not a tax paying entity. FAS 69 requires the use of a 10% discount rate.

        Changes in the demand for oil and natural gas, inflation and other factors make estimates of future net cash flows inherently imprecise and subject to substantial revision. This table should not be construed to be an estimate of the current market value of the proved reserves of the Acquired Properties. Management does not rely upon the information that follows in making investment decisions.

F-5


        Information with respect to the standardized measure of discounted future net cash flows for the Acquired Properties at September 30, 2003 and December 31, 2002 is as follows:

 
  September 30,
2003

  December 31,
2002

 
 
  (Dollars in thousands)

 
Future oil and gas sales   $ 646,374   772,415  
Future production costs     (150,177 ) (176,741 )
Future development costs     (64,123 ) (64,123 )
Future abandonment costs     (79,415 ) (79,415 )
   
 
 
Future net cash flows     352,659   452,136  
10% Annual discount for estimated timing of cash flows     (54,098 ) (79,635 )
   
 
 
  Standardized measure of discounted future net cash flows   $ 298,561   372,501  
   
 
 

        Principal changes in the standardized measure of discounted future net cash flows for the Acquired Properties during the nine months ended September 30, 2003 and the year ended December 31, 2002 are as follows:

 
  Nine months
ended
September 30,
2003

  Year ended
December 31,
2002

 
 
  (Dollars in thousands)

 
Beginning of period   $ 372,501   233,947  
  Sales of oil and gas, net of production costs     (118,049 ) (126,259 )
  Net changes in prices     16,171   241,418  
  Accretion of discount on reserves at beginning of period     27,938   23,395  
   
 
 
End of period   $ 298,561   372,501  
   
 
 

F-6



FOREST OIL CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

        During the fourth quarter of 2003, Forest Oil Corporation (Forest) completed an acquisition of certain oil and natural gas properties in South Louisiana and offshore Gulf of Mexico (the Acquired Properties) from Union Oil Company of California pursuant to the terms and conditions of a Purchase and Sale Agreement between the parties. Forest also acquired certain assets and assumed certain liabilities related to the Acquired Properties. The total cash consideration paid by Forest in the acquisition was approximately $207.2 million. The acquisition was funded by borrowings under Forest's credit facility and net proceeds from a common stock offering.

        The following unaudited pro forma condensed combined balance sheet gives effect to the acquisition and the common stock offering as if those transactions occurred on September 30, 2003. The unaudited pro forma condensed combined balance sheet should be read in conjunction with the historical financial statements and related notes of Forest.

        The following unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2003 and the year ended December 31, 2002 give effect to the acquisition and the common stock offering as if those transactions occurred as of January 1, 2002. The pro forma results of operations are not necessarily indicative of the results of operations that would have actually been attained if the transactions had occurred as of that date. These unaudited pro forma financial statements should be read in conjunction with the historical financial statements and related notes of Forest and the Combined Statements of Revenue and Direct Operating Expenses of the Acquired Properties included herein.

F-7




FOREST OIL CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (NOTE A)

SEPTEMBER 30, 2003

 
  Forest Oil
Corporation
Historical

  Pro Forma
Adjustments
(Notes B, C)

  Pro Forma
Combined

 
 
  (In Thousands)

 
ASSETS  
Current assets:                
  Cash and cash equivalents   $ 5,388     5,388  
  Accounts receivable     144,072     144,072  
  Derivative instruments     14,355   3,669 (1) 18,024  
  Current deferred tax asset     11,662     11,662  
  Other current assets     34,052     34,052  
   
 
 
 
    Total current assets     209,529   3,669   213,198  

Net property and equipment at cost

 

 

2,018,863

 

217,223
40,990

(1)
(2)

2,277,076

 

Goodwill and other tangible assets, net

 

 

13,440

 


 

13,440

 

Other assets

 

 

20,409

 

5,676

(1)

26,085

 
   
 
 
 
    $ 2,262,241   267,558   2,529,799  
   
 
 
 

LIABILITIES

 
Current liabilities:                
  Accounts payable   $ 159,405     159,405  
  Accrued interest     14,119     14,119  
  Derivative instruments     22,575   729 (1) 23,304  
  Asset retirement obligation     15,264     15,264  
  Other current liabilities     4,834     4,834  
   
 
 
 
    Total current liabilities     216,197   729   216,926  

Long-term debt

 

 

754,797

 

207,245
(112,616)

(3)
(8)

849,426

 
Asset retirement obligation     142,682   40,990 (2) 183,672  
Other liabilities     25,268   18,594 (1) 43,862  
Deferred income taxes     41,454     41,454  

Shareholders' equity:

 

 

 

 

 

 

 

 
  Common stock     5,034   512 (8) 5,546  
  Capital surplus     1,185,711   112,104 (8) 1,297,815  
  Accumulated deficit     (56,223 )   (56,223 )
  Accumulated other comprehensive income     3,191     3,191  
  Treasury stock     (55,870 )   (55,870 )
   
 
 
 
    Total shareholders' equity     1,081,843   112,616   1,194,459  
   
 
 
 
    $ 2,262,241   267,558   2,529,799  
   
 
 
 

See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.

F-8



FOREST OIL CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (NOTE A)

NINE MONTHS ENDED SEPTEMBER 30, 2003

 
  Forest
Historical

  Acquired Properties
Historical

  Pro Forma
Adjustments
(Notes B, C)

  Pro Forma
Combined

 
  (In Thousands)

Revenue:                  
  Oil and gas sales:                  
    Natural gas   $ 322,048   111,400     433,448
    Oil, condensate and natural gas liquids     160,666   33,213     193,879
   
 
 
 
      Total oil and gas sales     482,714   144,613     627,327
    Marketing and processing, net     2,828       2,828
   
 
 
 
      Total revenue     485,542   144,613     630,155

Operating expenses:

 

 

 

 

 

 

 

 

 
  Oil and gas production     110,892   26,564     137,456
  General and administrative     31,032       31,032
  Depreciation and depletion     153,874     45,940 (4) 199,814
  Accretion of asset retirement obligation     9,723     2,459 (5) 12,182
  Impairment of oil and gas properties     135       135
   
 
 
 
      Total operating expenses     305,656   26,564   48,399   380,619
   
 
 
 

Earnings from operations

 

 

179,886

 

118,049

 

(48,399

)

249,536

Other income and expense:

 

 

 

 

 

 

 

 

 
  Other expense (income), net     5,837       5,837
  Interest expense     37,039     1,753 (6) 38,792
   
 
 
 
      Total other income and expense     42,876     1,753   44,629
   
 
 
 

Earnings before income taxes and cumulative effect of change in accounting principle

 

 

137,010

 

118,049

 

(50,152

)

204,907

Income tax (benefit) expense:

 

 

 

 

 

 

 

 

 
  Current     237       237
  Deferred     54,004     25,801 (7) 79,805
   
 
 
 
      54,241     25,801   80,042
   
 
 
 

Earnings before cumulative effect of change in accounting principle

 

$

82,769

 

118,049

 

(75,953

)

124,865
   
 
 
 
Weighted average number of common shares outstanding:                  
  Basic     48,098     5,123 (9) 53,221
   
 
 
 
  Diluted     48,958     5,123 (9) 54,081
   
 
 
 
 
Basic earnings per common share before cumulative effect of change in accounting principle

 

$

1.72

 

 

 

 

 

2.35
   
         
 
Diluted earnings per common share before cumulative effect of change in accounting principle

 

$

1.69

 

 

 

 

 

2.31
   
         

See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.

F-9



FOREST OIL CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (NOTE A)

YEAR ENDED DECEMBER 31, 2002

 
  Forest
Historical

  Acquired
Properties
Historical

  Pro Forma
Adjustments
(Notes B, C)

  Pro Forma
Combined

 
 
  (In Thousands)

 
Revenue:                    
  Oil and gas sales:                    
    Natural gas   $ 288,542   109,054     397,596  
    Oil, condensate and natural gas liquids     183,198   47,553     230,751  
   
 
 
 
 
      Total oil and gas sales     471,740   156,607     628,347  
    Marketing and processing, net     3,954       3,954  
   
 
 
 
 
      Total revenue     475,694   156,607     632,301  

Operating expenses:

 

 

 

 

 

 

 

 

 

 
  Oil and gas production     158,699   30,348     189,047  
  General and administrative     39,126       39,126  
  Depreciation and depletion     186,221     82,977 (4) 269,198  
  Impairment of oil and gas properties            
   
 
 
 
 
      Total operating expenses     384,046   30,348   82,977   497,371  
   
 
 
 
 
Earnings from operations     91,648   126,259   (82,977 ) 134,930  

Other income and expense:

 

 

 

 

 

 

 

 

 

 
  Other expense (income), net     7,921       7,921  
  Interest expense     50,433     3,066 (6) 53,499  
  Translation loss (gain) on subordinated debt     (332 )     (332 )
   
 
 
 
 
      Total other income and expense     58,022     3,066   61,088  
   
 
 
 
 

Earnings before income taxes

 

 

33,626

 

126,259

 

(86,043

)

73,842

 

Income tax (benefit) expense:

 

 

 

 

 

 

 

 

 

 
  Current     268       268  
  Deferred     12,082     15,282 (7) 27,364  
   
 
 
 
 
      12,350     15,282   27,632  
   
 
 
 
 
Net earnings   $ 21,276   126,259   (101,325 ) 46,210  
   
 
 
 
 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 
  Basic     46,935     5,123 (9) 52,058  
   
 
 
 
 
  Diluted     48,207     5,123 (9) 53,330  
   
 
 
 
 
Basic earnings per common share   $ 0.45           .89  
   
         
 
Diluted earnings per common share   $ 0.44           .87  
   
         
 

See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.

F-10



FOREST OIL CORPORATION

Notes To Unaudited Pro Forma Condensed Combined Financial Statements

September 30, 2003

A.    Basis Of Presentation

        The accompanying unaudited pro forma condensed combined balance sheet gives effect to the acquisition of the Acquired Properties and a common stock offering as if those transactions occurred on September 30, 2003 with pro forma adjustments to give effect to the purchase accounting for the acquisition and the application of the net proceeds from the common stock offering. The unaudited pro forma condensed combined balance sheet should be read in conjunction with the historical financial statements and related notes of Forest.

        The accompanying unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2003 and the year ended December 31, 2002 assume that the acquisition and the common stock offering both occurred as of January 1, 2002. The pro forma results of operations are not necessarily indicative of the results of operations that would actually have been attained if the transactions had occurred on that date. These unaudited pro forma statements should be read in conjunction with the historical financial statements and related notes of Forest and the Statements of Revenue and Direct Operating Expenses of the Acquired Properties.

B.    Acquisition Of Unocal Properties

        On October 31, 2003, Forest acquired certain oil and natural gas properties in South Louisiana and offshore Gulf of Mexico from Unocal for total cash consideration of approximately $207.2 million.

(1)
A reconciliation of the total cash consideration to the assets acquired and liabilities assumed is as follows:

 
  (In Thousands)
 
         
Assets Acquired:        
  Derivative asset-short term   $ 3,669  
  Oil and gas assets     217,223  
  Other assets:        
    Gas balancing receivable     3,746  
    Derivative asset long-term     1,930  
   
 
      5,676  

Liabilities Assumed:

 

 

 

 
  Derivative liability short-term     (729 )
  Other liabilities:        
    Derivative liability long-term     (3,783 )
    Deferred revenue     (13,170 )
    Oil balancing liability     (1,256 )
    Other     (385 )
   
 
      (18,594 )
   
 
Total cash consideration   $ 207,245  
   
 
(2)
Adjustment to record the asset retirement obligation related to the Acquired Properties, with a corresponding amount recorded as a non-cash addition to oil and gas properties.

(3)
Adjustment to record borrowings under Forest's credit facility utilized to fund the purchase of the assets acquired net of the liabilities assumed.

F-11


(4)
Adjustment to reflect combined depletion, depreciation and amortization expense based on the portion of the purchase price allocated to proved oil and gas properties and based on estimates of proved reserves of the Acquired Properties as of the beginning of each period presented.

(5)
Adjustment to reflect accretion expense for the asset retirement obligation related to the Acquired Properties.

(6)
Adjustment to reflect interest expense associated with the debt incurred in connection with the acquisition net of reduced interest expense resulting from the application of the proceeds from the common stock offering.

(7)
Adjustment to reflect provision for income taxes resulting from pro forma income before income taxes assuming an effective tax rate of 38%.

C.    Common Stock Offering

        In October 2003 Forest issued 5,123,000 shares of common stock at a price of $23.10 per share. Net proceeds from this offering were approximately $112.6 million after deducting underwriting discounts and commissions and estimated offering expenses. Forest initially used the net proceeds from the offering to repay debt outstanding under its credit facility.

(8)
Adjustment to reflect the issuance of common stock and application of the resulting net proceeds to reduce debt outstanding under Forest's credit facility.

(9)
Adjustment to increase the weighted average shares outstanding for the common stock issued in October 2003.

F-12



SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    FOREST OIL CORPORATION
(Registrant)

Dated: January 14, 2004

 

By

 

/s/  
JOAN C. SONNEN      
Joan C. Sonnen
Vice President—Controller and
Chief Accounting Officer

3




QuickLinks

FOREST OIL CORPORATION INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report
FOREST OIL CORPORATION COMBINED STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES
FOREST OIL CORPORATION NOTES TO COMBINED STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES Nine months ended September 30, 2003 and the year ended December 31, 2002
FOREST OIL CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
FOREST OIL CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (NOTE A) SEPTEMBER 30, 2003
FOREST OIL CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (NOTE A) NINE MONTHS ENDED SEPTEMBER 30, 2003
FOREST OIL CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (NOTE A) YEAR ENDED DECEMBER 31, 2002
FOREST OIL CORPORATION Notes To Unaudited Pro Forma Condensed Combined Financial Statements September 30, 2003
SIGNATURES