Forestar Announces Second Quarter 2015 Charges Related to Non-Core Oil and Gas Assets

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Forestar Group Inc.
FOR
today announced non-cash charges of approximately ($57) million principally related to write-downs of non-core oil and gas assets located in the Marchand prospect in Oklahoma and Lansing-Kansas City formation in Nebraska and Kansas. "Following completion of our strategic review in May, we are executing initiatives focused on growing our core real estate business and harvesting cash flow from our non-core oil and gas business by significantly lowering its capital expenditures and operating costs," said Jim DeCosmo, President and Chief Executive Officer of Forestar. "These non-cash charges are principally related to well results, lower oil price forecasts, and suspension of exploration and drilling operations associated with non-core assets in Oklahoma, Nebraska and Kansas, and reflect the increased likelihood that these non-core oil and gas assets will be sold." As a result of these non-cash charges, the company expects an oil and gas segment loss in the range of ($56 – $58) million in second quarter 2015. Excluding these non-cash charges, second quarter 2015 oil and gas segment earnings would be essentially break-even, despite a significant decline in oil prices. In addition, second quarter 2015 real estate segment earnings are expected to be in the range of $14 – $16 million. As a result of non-cash charges associated with non-core oil and gas assets, the company estimates an unaudited net loss for second quarter 2015 in the range of ($33 – $36) million, or ($1.00 – $1.05) per share. Excluding these non-cash charges, second quarter 2015 net income is estimated to be in the range of $1 – $2 million, or $0.01 – $0.05 per share. "We are focused on building a best-in-class real estate business and growing net asset value by acquiring, entitling and developing residential and mixed-use communities and investing in multifamily, including projects which generate recurring cash flow. In addition, we remain committed to maintaining balance sheet strength and financial flexibility with adequate liquidity, providing a solid platform for real estate growth and investment to maximize long-term shareholder value," concluded Mr. DeCosmo. Forestar Group Inc.
FOR
will release its results for second quarter 2015 on August 5, before the market opens. The company will host a conference call on Wednesday August 5, 2015 at 10:00 a.m. ET to discuss results of second quarter 2015. To access the conference call, listeners calling from North America should dial 1-855-546-9555 at least 15 minutes prior to the start of the call. Those wishing to access the call from outside North America should dial 1-412-455-6094. The passcode is Forestar. Replays of the call will be available for two weeks following the completion of the live call and can be accessed at 1-855-859-2056 in North America and at 1-404-537-3406 outside North America. The passcode for the replay is 86155311. The conference call may also be accessed through Forestar Group's Internet site, www.forestargroup.com, by clicking on "Investor Relations – Investor Events".
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