Forest Oil has declared its 2010 capital budget and related operational guidance. As a result of significantly increased liquidity in 2010 from Forest's non-core 2009 divestiture program and the streamlining of its asset base primarily to three core areas with high growth potential, Forest intends to increase its drilling activity through the deployment of 20 operated rigs by the end of the first quarter of 2010. Highlights from the Company's 2010 guidance are as follows:

Net sales volumes increase organically 10% -12% fourth quarter 2010 over fourth quarter 2009 60% of 2010 drilling capital is expected to be horizontal Capital spending increases 18% compared to guided 2009 capital spending Cash costs to decline in 2010; maintaining Forest's position as a low cost producer in the industry

H. Craig Clark, President and CEO stated, "With the divestitures of the Permian Basin and other non-core properties, Forest is poised to grow production from its three core properties, the Greater Buffalo Wallow Area, the East Texas / North Louisiana Area, and the Deep Basin in Canada. These assets will consume approximately 75% of Forest’s capital budget in 2010 and will generate the majority of the double-digit organic production growth for the Company. The program will focus not only on shales, but will also include horizontal drilling in tight gas sands and carbonates. We will also continue to focus on cost control and believe that there will be further improvement in 2010. With the recent de-levering of the balance sheet, Forest will return to its strategy of growth through the drill bit at a measured pace while staying within a reasonable bandwidth of cash flow and earning great returns on invested capital."

Forest intends to focus its 2010 capital budget on growth from its unconventional resource bases, including the Greater Buffalo Wallow Area, the Haynesville Shale and the Cotton Valley Sands in East Texas / North Louisiana, and the Deep Basin in Canada. The focus of the drilling program will primarily involve horizontal drilling in these core areas that have significant growth opportunities with large project inventories. Forest entered 2010 operating 12 drilling rigs and intends to expand the fleet to 20 rigs by the end of the first quarter. This activity level should remain relatively consistent for the remainder of 2010.

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