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ForestOil Announces Record Estimated Proved Reserves and Record Estimated NetSales Volumes in 2008; Issues 2009 Guidance; Increases DerivativePosition and Schedules Year-End Earnings Release and Teleconference Tuesday, February 03, 2009 8:49 AM Symbols: FST Forest Oil Corporation (NYSE:FST): Estimated proved reserves increased 26% to a record 2,668 Bcfe in 2008 Reserve replacement ratio in 2008 was 549% from all capitalactivities with finding, development, and acquisition costs of $2.61 perMcfe Organic reserve replacement ratio in 2008 was a record 281%, withfinding and development costs of $2.54 per Mcfe Net sales volumes for 2008 are estimated at a record 189.6 Bcfe, anincrease of 22% compared to 2007 Anticipated non-cash ceiling test impairment of approximately $1.5billion after-tax Fourth quarter and year end 2008 teleconference scheduled forTuesday, February 24, 2009, at 12:00 PM MT Forest Oil Corporation (NYSE:FST) (Forest or the Company) todayannounced its estimated proved oil and gas reserves and estimatedproduction results for the year ended December 31, 2008. The Companyreported the following highlights: Record estimated proved reserves of 2,668 Bcfe, replacing 549% of production with finding, development and acquisition costs of $2.61 per Mcfe Net sales volumes are estimated to be a record 518 MMcfe/d for the year ended December 31, 2008, an increase of 22% compared to 2007 H. Craig Clark, President and CEO, stated, “Forest’s investment resultsfor 2008 were very solid given the difficult cost environment seen bythe industry. For the year, our drilling program added reservesorganically at $2.54 per Mcfe, in line with our current three-yearaverage of $2.26. Our acquisition program added reserves at $2.68 perMcfe and includes all costs related to adding over 150,000 netundeveloped acres primarily in Forest’s core East Texas/N. Louisiana andPanhandle areas. Production grew 22% from total investments and 17%organically during 2008. Reserve replacement from all activities was549% and a record 281% organically, both excellent, as the amount spenton our exploration and development capital program approximateddiscretionary cash flow. Our estimated proved reserves at December 31, 2008 were a record 2,668Bcfe despite a reduction of 212 Bcfe for revisions, which werepredominately price related due to lower year end prices. In summary, webelieve these to be excellent investment results. The resulting reservebase, our large undeveloped land position, and low cost structureprovide us with a very solid foundation in our core areas with manyinvestment options moving forward.” ESTIMATED PROVED RESERVES, PRODUCTION, AND CAPITAL EXPENDITURES Forest reported year end estimated proved reserves of approximately2,668 Bcfe, up 26% compared to 2,119 Bcfe at December 31, 2007.Estimated proved reserves, which are 63% proved developed (consistentwith Forest’s proved developed percentage pro forma for the Cordilleratransaction in the third quarter of 2008), consist of approximately 75%natural gas. The pre-tax present value of estimated proved reserves atyear end, based on constant prices and costs at year end and discountedat 10%, totaled approximately $4.0 billion, compared to $6.0 billion atDecember 31, 2007. The valuation was based on year end NYMEX prices fornatural gas of $5.71 per MMbtu and oil of $44.60 per barrel, compared toNYMEX prices for natural gas of $6.80 per MMbtu and oil of $95.98 perbarrel at December 31, 2007. Forest’s estimated proved reserves wereaudited by DeGolyer and MacNaughton, an independent third partyengineering firm. As a result of the significant decline in the NYMEX spot price in 2008,Forest anticipates it will record a non-cash ceiling test impairment ofapproximately $1.5 billion after-tax for the three months and year endedDecember 31, 2008. The majority of this impairment was due to liquidsrealizations decreasing approximately 60% in the fourth quarter of 2008.Forest has a portion of its expected 2009 and 2010 production hedged.The value of these derivative instruments was not included in theceiling test calculation as the Company does not utilize cash flow hedgeaccounting for its derivative contracts. The following table reflects the 2008 activity related to Forest’sestimated proved reserve amounts, and includes calculations of findingand development costs and reserve replacement ratios utilizing estimatednet sales volumes and estimated capital expenditure amounts. Estimated Proved Reserves (Bcfe) December 31, 2007 2,119 Purchases of properties 511 Discoveries and extensions 533 Reserve additions 1,044 Estimated net sales volumes (190 ) Sales of properties (93 ) Revisions (212 ) Reserve subtractions (495 ) December 31, 2008 2,668 2008 All-sources reserve replacement ratio excluding revisions 549 % 2008 All-sources finding, development and acquisition costs excluding revisions (per Mcfe) $ 2.61 2008 Organic reserve replacement ratio excluding revisions 281 % 2008 Organic finding and development costs excluding revisions (per Mcfe) $ 2.54 2008 Reserve : production ratio (years) 14.0 CAPITAL ACTIVITIES For the year ended December 31, 2008, Forest estimated that the Companyinvested $1.36 billion in exploration and development activities and$1.37 billion in acquisitions. Other costs included as capitalexpenditures were an estimated $15.0 million associated with assetretirement obligations and an estimated $27.7 million of capitalizedinterest and equity compensation. The following table summarizesestimated capital expenditures incurred for the year ended December 31,2008 (in millions): Exploration and development $ 1,356 Acquisitions 1,369 Total costs from all capital activities 2,725 Add: Asset retirement obligations 15 Capitalized interest and equity compensation 28 Total capital expenditures $ 2,768 GUIDANCE The following 2009 Guidance and Fourth Quarter 2008 DifferentialGuidance are subject to all the cautionary statements and limitationsdescribed below and under the caption “Forward-Looking Statements”. Prices for Forest’s products are determined primarily by prevailingmarket conditions. Market conditions for these products are influencedby regional and worldwide economic and political conditions, consumerproduct demand, weather, and other substantially variable factors. Thesefactors are beyond Forest’s control and are difficult to predict. Inaddition, prices received by Forest for its liquids and gas productionmay vary considerably due to differences between regional markets,transportation availability, and demand for different grades ofproducts. Forest’s financial results and resources are highly influencedby this price volatility. Estimates for Forest’s future production are based on assumptions ofcapital expenditure levels and the assumption that market demand andprices for liquids and gas will continue at levels that allow foreconomic production of these products. The production, transportation, and marketing of liquids and gas arecomplex processes that are subject to disruption due to transportationand processing availability, mechanical failure, human error, andmeteorological events (including, but not limited to severe weather,hurricanes, and earthquakes). Forest’s estimates are based on certainother assumptions, such as well performance, which may varysignificantly from those assumed. Therefore, Forest can give noassurance that Forest’s future production will be as estimated. 2009 GUIDANCE For the year ended December 31, 2009, Forest intends to invest between$500 million and $600 million on exploration and development activities,which the Company expects to be funded through internally generateddiscretionary cash flow in 2009. Forest will concentrate its drillingactivities in its core areas with a focus in 2009 on its EastTexas/North Louisiana corridor, including Haynesville/Bossier drilling,and Buffalo Wallow areas and will have limited spending throughout itsother productive regions. H. Craig Clark, President and CEO, further stated, “Our capital plan for2009 reflects our desire to stay within anticipated cash flow, while ourplanned well count reflects a significant increase in capital employedin horizontal drilling. Over 33% of our capital is planned to be spenton drilling horizontal wells. Further, in 2009, we will rely almostexclusively on our Lantern rig fleet to drill our vertical andhorizontal wells. In the fourth quarter of 2008, we employed as many as43 third party rigs on our operated projects. We expect this number,which is now eight, to go to one in 2009 as Forest does not havelong-term rig contracts. Our current operated rig count, includingLantern rigs, is 15. Our capital plan is designed to deliver approximately the same net salesvolumes and estimated proved reserves in 2009 as in 2008 and will keepour attractive land base intact while focusing on capital efficiency andreducing drilling costs. It is critical for us to take all possible steps to protect our assetbase in this difficult time to allow our shareholders to benefit fromour large inventory of projects when more reasonable project economicsand capital markets return. We believe the reduction in 2009 activity byus and the industry will ultimately help reduce service costssignificantly. Our 2009 plan does not anticipate significant costreductions at this time.” Oil and Gas Net Sales Volumes: Forest expects total net salesvolumes of 185 to 195 Bcfe in 2009. This sales volume estimate considersthe negative impact of increased Alberta royalty rates as of January 1,2009. The effect of the increased rates is to reduce reported net salesvolume estimates by 3 Bcfe in 2009. Net sales volumes are expected to becomprised of approximately 75% natural gas and 25% liquids (15% crudeand condensate and 10% natural gas liquids). Price Differentials: 2009 price differential guidance does notinclude the effects of oil, natural gas and basis derivatives discussedbelow. Changes in fair value and cash settlements of oil, natural gasand basis derivatives are classified as a component of Realized andunrealized (gains) losses on derivative instruments, net in the Otherincome and expense section of the Statement of Operations. Based on current prices, Forest expects its natural gas pricedifferentials in the first quarter of 2009 will average $1.25 to $1.50per MMbtu less than the NYMEX Henry Hub price. Based on current prices, Forest expects its oil price differentials inthe first quarter of 2009 will average $5.00 to $6.00 per Bbl less thanthe NYMEX West Texas Intermediate (WTI) price. Based on current prices, Forest expects natural gas liquids realizationsin the first quarter of 2009 will average 40% of the WTI price. Production Expense: Forest expects production expense (whichincludes lease operating expense, ad valorem taxes, production taxes andproduct processing, gathering and transportation) will be $240 to $275million or $1.30 to $1.40 per Mcfe. General and Administrative (G&A) Expense: Forest expects G&Aexpense will be approximately $57 to $63 million, not including stockcompensation expense. This results in an anticipated cost ofapproximately $.30 to $.33 per Mcfe. Stock Compensation Expense: Forest expects stock compensationexpense will be approximately $18 to $22 million. Depreciation, Depletion and Amortization (DD&A) Expense:Forest expects its DD&A rate will be $2.15 to $2.25 per Mcfe. This ratereflects the impact of the anticipated impairment expense to the fullcost pool due to ceiling test limitations in 2008. Income Tax Expense: Forest’s effective income tax rate isexpected to be 36% (inclusive of applicable federal and state taxes),and Forest’s current tax is expected to be 5 - 10% of the total incometax expense. FOURTH QUARTER 2008 DIFFERENTIAL GUIDANCE As a result of pipeline and plant disruptions caused by hurricanes inthe fourth quarter of 2008, Forest has updated its price differentialsfor the three months ended December 31, 2008. Price Differential (All guidance is before any effects of oil,natural gas, or basis derivatives): Forest expects the natural gasprice differential for the three months ended December 31, 2008 willaverage $2.00 - $2.05 per MMbtu less than the NYMEX Henry Hub price. Forest expects the oil and condensate price differential for the threemonths ended December 31, 2008 will average $4.95 - $5.00 per Bbl lessthan the NYMEX West Texas Intermediate (WTI) price. Forest expects the realized price for natural gas liquids for the threemonths ended December 31, 2008 will average 40% of the NYMEX WTI price. OIL, NATURAL GAS, AND BASIS DERIVATIVES As of February 2, 2009, Forest had natural gas and oil derivatives inplace for 2009 and 2010 covering the aggregate average daily volumes andweighted average prices shown below. None of these natural gas and oilderivatives contain knock-out provisions that would cause a derivativeto cease to exist at prices below an established threshold. Forest’sbank group is comprised entirely of commercial banks. These banks ortheir affiliates are also Forest’s derivative counterparties. 2009 2010 Natural gas swaps: Contract volumes (Bbtu/d) 160.0 (1) 45.0 Weighted average price (per MMBtu) $ 8.24 6.50 Natural gas collars: Contract volumes (Bbtu/d) 40.0 - Weighted average ceiling price (per MMBtu) $ 9.76 - Weighted average floor price (per MMBtu) $ 7.31 - Summary weighted average natural gas derivatives: Contract volumes (Bbtu/d) 200.0 (1) 45.0 Weighted average ceiling price (per MMBtu) $ 8.54 6.50 Weighted average floor price (per MMBtu) $ 8.05 6.50 Oil swaps: Contract volumes (MBbls/d) 4.5 1.5 Weighted average price (per Bbl) $ 69.01 72.95 (1) 10.0 Bbtu/d of natural gas swaps are subject to a written put of $6.00 per MMBtu. Furthermore, Forest has basis swaps in connection with natural gas swapsin order to fix the price differential between the NYMEX price and theindex price at which the natural gas production is sold. As of February2, 2009, Forest had basis swaps in place for 2009 and 2010 covering theaggregate average daily volumes and weighted average prices shown below: 2009 2010 Houston Ship Channel basis swaps: Contract volumes (Bbtu/d) 48.3 - Weighted average price (per MMBtu) (0.33 ) - NGPL Texok zone basis swaps: Contract volumes (Bbtu/d) 40.0 - Weighted average price (per MMBtu) (0.53 ) - AECO basis swaps: Contract volumes (Bbtu/d) 25.0 - Weighted average price (per MMBtu) (0.65 ) - NGPL Mid-Con zone basis swaps: Contract volumes (Bbtu/d) 60.0 60.0 Weighted average price (per MMBtu) (1.04 ) (1.04 ) Centerpoint basis swaps: Contract volumes (Bbtu/d) 30.0 30.0 Weighted average price (per MMBtu) (0.95 ) (0.95 ) Summary weighted average basis swaps Contract volumes (Bbtu/d) 203.3 90.0 Weighted average price (per MMBtu) (0.71 ) (1.01 ) EXPLANATION OF RESERVE REPLACEMENT RATIO, FD&A COSTS AND CASH COST The following discussion relates to Forest’s estimated proved reservesin 2008: Forest all-sources reserve replacement ratio of 549% was calculated bydividing the sum of total reserve additions, 1,044 Bcfe, by estimated2008 net sales volumes of 190 Bcfe. Forest FD&A costs of $2.61 per Mcfe exclude revisions and werecalculated by dividing the sum of estimated total exploration,development, and acquisition costs, $2.73 billion, by the sum of totaladditions to estimated proved oil and gas reserves during 2008 of 1,044Bcfe. Forest organic reserve replacement ratio of 281% was calculated bydividing discoveries and extensions during 2008 of 533 Bcfe, by 2008estimated net sales volumes of 190 Bcfe. Forest organic F&D costs of $2.54 per Mcfe exclude revisions and werecalculated by dividing the sum of estimated total exploration anddevelopment costs, $1.36 billion, by discoveries and extensions during2008 of 533 Bcfe. NON-GAAP FINANCIAL MEASURES PV-10 is the estimated future net cash flows from estimated provedreserves discounted at an annual rate of 10 percent before giving effectto income taxes. Standardized Measure is the after-tax estimated futurecash flows from estimated proved reserves discounted at an annual rateof 10 percent, determined in accordance with generally acceptedaccounting principles (GAAP). Forest uses PV-10 as a measure of thevalue of the Company's estimated proved reserves and to compare relativevalues of estimated proved reserves among exploration and productioncompanies without regard to income taxes. Forest believes thatsecurities analysts and rating agencies use PV-10 in similar ways.Forest’s management believes PV-10 is a useful measure for comparison ofestimated proved reserve values among companies because, unlikeStandardized Measure, it excludes future income taxes that often dependprincipally on the characteristics of the owner of the reserves ratherthan on the nature, location and quality of the reserves themselves.Below is a reconciliation of PV-10 to Standardized Measure (in billions): December 31, 2008 2007 PV-10 $ 4.0 6.0 Effect of income taxes (0.7 ) (1.5 ) Standardized measure $ 3.3 4.5 FOURTH QUARTER AND YEAR END 2008 EARNINGS RELEASE DATE ANDTELECONFERENCE Forest has scheduled its fourth quarter and year end earnings release tobe issued after the close of trading on the New York Stock Exchange onMonday, February 23, 2009. A conference call is scheduled for Tuesday, February 24, 2009, at 12:00PM MT to discuss the release. You may access the call by dialing tollfree 800.399.6298 (for U.S./Canada) and 706.634.0924 (for International)and request the Forest Oil teleconference (ID # 84156257). A Q&A periodwill follow. A replay will be available from Tuesday, February 24 through March 10,2009. You may access the replay by dialing toll free 800.642.1687 (forU.S./Canada) and 706.645.9291 (for International), conference ID#84156257. FORWARD-LOOKING STATEMENTS This news release includes forward-looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of theSecurities Exchange Act of 1934. All statements, other than statementsof historical facts, that address activities that Forest assumes, plans,expects, believes, projects, estimates or anticipates (and other similarexpressions) will, should or may occur in the future are forward-lookingstatements. The forward-looking statements provided in this pressrelease are based on management's current belief, based on currentlyavailable information, as to the outcome and timing of future events.Forest cautions that its future natural gas and liquids production,revenues, cash flows, liquidity, plans for future operations, expenses,outlook for oil and natural gas prices, timing of capital expenditures,and other forward-looking statements are subject to all of the risks anduncertainties normally incident to the exploration for and developmentand production and sale of oil and gas. These risks include, but are not limited to, oil and natural gas pricevolatility, Forest’s access to cash flows and other sources of liquidityto fund its capital requirements, its level of indebtedness, its abilityto replace production, the impact of the current financial crisis onForest’s business and financial condition, a lack of availability ofgoods and services, environmental risks, drilling and other operatingrisks, regulatory changes, the uncertainty inherent in estimating futureoil and gas production or reserves, economic conditions and other risksas described in reports that Forest files with the Securities andExchange Commission (SEC), including its 2007 Annual Report on Form10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.Also, the financial results of Forest's foreign operations are subjectto currency exchange rate risks. Any of these factors could causeForest's actual results and plans to differ materially from those in theforward-looking statements. Forest Oil Corporation is engaged in the acquisition, exploration,development, and production of natural gas and liquids in North Americaand selected international locations. Forest's principal reserves andproducing properties are located in the United States in Arkansas,Louisiana, New Mexico, Oklahoma, Texas, Utah, and Wyoming, and inCanada. Forest's common stock trades on the New York Stock Exchangeunder the symbol FST. For more information about Forest, please visitits website at www.forestoil.com. February 3, 2009 Forest Oil Corporation Patrick J. Redmond, 303-812-1441 Director- Investor Relations (Source: Business Wire )

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