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Forest Provides an Update on Eagle Ford Shale Drilling

Source: www.gulfoilandgas.com 4/12/2013, Location: North America

Forest Oil Corporation (Forest or the Company) provided an update on its Eagle Ford Shale drilling program for 2013 and 2014 and announced a teleconference call scheduled for April 12, 2013 at 7:00 AM Mountain Time to discuss the release.

Forest recently announced the signing of a definitive agreement with an industry partner for the future development of the Company's Eagle Ford Shale acreage position. Under the terms of the agreement, the industry partner will pay a $90 million drilling carry in the form of future drilling and completion services and related development capital in order to earn a 50% working interest in Forest's Eagle Ford Shale acreage position. In conjunction with the agreement, Forest plans to accelerate development by increasing drilling activity to four rigs, from one to two rigs currently, by the end of the third quarter of 2013. Forest projects that the capital carry amount combined with the accelerated pace of development will bring forward approximately$250 million in PV10 economics.

Forest anticipates that the accelerated development program will hold an aggregate of 55,000 gross (27,500 net) acres in Gonzales County, compared to 40,000 gross (40,000 net) acres based on the current development program. The increased acreage position has 688 gross (344 net) locations identified based on 80-acre spacing, and Forest anticipates being able to drill 80 gross (40 net) wells per year beginning in 2014. Based on Forest's current estimated ultimate recovery of 300 Mboe per location, the Eagle Ford acreage contains a potential gross unrisked resource of over 200 MMboe (100 MMboe net).

Forest estimates that its share of capital expenditures in the accelerated development plan for 2013 and 2014 will total approximately $125 million and $220 million, respectively. The accelerated development plan will result in ten and twenty additional net wells being drilled in 2013 and 2014, respectively. The 2013 additional net wells are primarily scheduled to be on-line later in the year and thus will not materially change Forest's average net sales volumes for 2013.

However, average net sales volumes from the Eagle Ford are expected to more than double from an average of 2,800 boe/d in 2013 to 6,500 boe/d during 2014 as the benefits from a full year of the accelerated development program are realized. Importantly, the Eagle Ford program is anticipated to generate lease level income of approximately 68% and 80% of the total net capital expenditures for 2013 and 2014.

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