COSTS, EXPENSES, AND OTHER

The table below sets forth the components of “Other, net” in the Condensed Consolidated Statements of Operations for the periods indicated.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In Thousands)
Accretion of asset retirement obligations	$	381		$	549		$	894		$	1,793
Write-off of debt issuance costs	—			—			3,323			—
Loss on debt extinguishment	—			—			—			25,223
Gain on asset dispositions, net	(22,185		)	—			(21,391		)	—
Merger-related costs	10,202			—			10,202			—
Rig stacking/lease termination	3,075			1,258			8,259			4,296
Other, net	(775		)	(214		)	(1,941		)	(899		)
	$	(9,302	)	$	1,593		$	(654	)	$	30,413

Accretion of Asset Retirement Obligations

Accretion of asset retirement obligations is the expense recognized to increase the carrying amount of the liability associated with Forest’s asset retirement obligations as a result of the passage of time. Forest’s asset retirement obligations consist of costs related to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and natural gas properties.

Write-off of Debt Issuance Costs

On March 31, 2014 Forest entered into the Second Amendment to the Credit Facility, which was effective as of that date. The Second Amendment reduced aggregate lender commitments from $1.5 billion to $500.0 million, necessitating a proportionate write-off of $3.3 million in unamortized debt issuance costs associated with the Credit Facility prior to the Second Amendment.

Loss on Debt Extinguishment

In March 2013, Forest redeemed $300.0 million in principal amount of 8½% senior notes at 107.11% of par, recognizing a loss of $25.2 million upon redemption due to the $21.3 million call premium and write-off of $3.9 million of unamortized debt issuance costs and discount.

Gain on Asset Dispositions, Net

In October 2013, Forest entered into an agreement to sell all of its oil and natural gas properties located in the Texas Panhandle for $1.0 billion in cash. This divestiture closed in November 2013 and Forest has received proceeds of $985.3 million through June 2014, after customary purchase price adjustments. Net gains of $19.0 million and $18.2 million were recognized on the divestiture for the three and six months ended June 30, 2014, respectively, as customary post-closing purchase price adjustments were made and additional proceeds were received, including the $20.2 million received in May 2014. Also included in the gain on asset disposition line item is a $3.2 million gain recognized on the sale of Forest’s South African subsidiary. See Note 5 for more information on these divestitures.

Merger-Related Costs

In connection with the pending merger with Sabine, Forest has incurred expenses that are comprised primarily of legal and financial advisor costs. See Note 1 for more information on the pending merger.

Rig Stacking/Lease Termination

Rig stacking comprises the expenses incurred to operate and maintain drilling rigs, which Forest has historically leased under operating leases, that were not being utilized on capital projects. Rig stacking expenses for the three and six months ended June 30, 2014 were $1.6 million and $4.4 million, respectively. Rig stacking expenses for the three and six months ended June 30, 2013 were $1.3 million and $4.3 million, respectively.

During the three months ended March 31, 2014, Forest terminated the operating leases on seven drilling rigs and during the three months ended June 30, 2014, Forest terminated the operating leases on two additional drilling rigs. In connection with these lease terminations, Forest recognized expense of $1.4 million and $3.9 million during the three and six months ended June 30, 2014, respectively.

As of June 30, 2014, Forest has six rigs remaining under non-cancelable operating leases which are scheduled to terminate in September 2014. Lease payments under the remaining operating leases are $.4 million per month.