Inability to find a buyer for its “high-quality” Gulf of Mexicoproperties pushed Miami-based Forcenergy over the edge into Chapter11 bankruptcy this week, Chairman Stig Wennerstrom said in aconference call.

“We had a lot of interest in [the properties] but no success ingetting to closing. It’s a soft market. It’s a buyers’ market outthere, and, by the way, these properties are not for sale anymore.”

Forcenergy, which has current production of about 200 MMcf/d ofgas and 22,000 barrels/d of oil and condensate, is laden with debt.The company owes $315 million from a $320 million credit facilityas well as $50 to $60 million of payables to vendors, some of whichare overdue. On a net basis, the company has about $40 million ofnegative working capital.

“We also attempted to raise capital basically for the last 12months in a market with downward spiraling product prices, both inoil and gas. We didn’t succeed in raising capital to the terms wewere looking for,” Wennerstrom said. “Lately, what made us act overthe weekend is that we heard rumors that trade vendors tried toorganize and were talking about pushing us into involuntarybankruptcy. We said that is not in the best interest of all thestakeholders in the company.”

The last trade in Forcenergy shares was Friday. The stock closedat 2 1/8. The stock’s 12-month high is 27 _ and low is _.

Independent Forcenergy for the nine months ended Sept. 30 hadtotal revenues of $210.6 million and a net loss of $19.8 millionversus net income of $18.9 million for the period one year prior.Activities are in the Gulf of Mexico, Alaska, Australia andoffshore Gabon. Forcenergy began life as a Swedish company whichthen created an American subsidiary based in Miami. Forcenergy Inc.and subsidiary Forcenergy Resources are the two entities filing forbankruptcy protection. Most of the company’s assets are held byForcenergy Inc.

Wennerstrom touted the company’s asset base, saying it has muchupside potential. “And we had a positive discretionary cash flow,even in months like January. It is clearly on the positive side.The immediate plan for the near future is to contact ourbondholders to discuss conversion of debt to equity.

“We will complete our debt financing, which is well underway. Weare looking at a pretty sizeable debt financing to provide us withample capital through the bankruptcy process. We also will beworking to secure new capital to strengthen the company andincrease its ability when we emerge from bankruptcy to act onopportunities in the marketplace.”

One analyst listening to the company’s conference callquestioned how Forcenergy could have positive discretionary cashflow in January or more recently when the company owes vendors $50to $60 million, at least some of it overdue.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.