Austin’s Forestar Group sells off last oil and gas assets for $85.6 million

Austin-based Forestar Group Inc. has reached an agreement to sell substantially all of its remaining oil and gas assets for $85.6 million, continuing its divestiture of holdings outside its main residential and mixed-use development portfolio.

In a filing with the U.S. Securities and Exchange Commission, the developer said it had agreed to sell about almost 520,000 acres of “fee minerals” in Texas, Louisiana, Alabama and Georgia to Mineral Resources Partners LLC.

The deal comes about three months after Forestar sold about 58,000 acres of timberland in three separate sales collectively worth almost $104.6 million. Those properties were in Georgia and Alabama.

Last April, the company said it would sell off some of its noncore investments as part of a plan to address shareholder concerns. In November, the company said it divested $425 million in noncore assets and reduced its outstanding debt by more than $320 million during the prior year.

The company in 2016 also sold the Radisson Hotel and Suites in downtown Austin in a $130 million deal. The property’s new owner said that the hotel — following a $75 million renovation — will reopen as The Line Austin in spring of 2018.

Forestar Group reported net income of $9.7 million and revenue of $47.2 million for the third quarter. The company is scheduled to report its fourth-quarter earnings March 1.

Forestar Group was spun off from the former Temple-Inland Inc. in 2007. It operates in real estate, oil and gas and other natural resources.

Forestar Group’s shares closed Friday up 30 cents, or 2.3 percent, at $13.30.

The real estate company began selling off non-core holdings last April at shareholder behest.