Forest Oil Says 2006 Proved Reserves Increased 25%

Forest Oil announced its estimated proved oil and gas reserves and production results for the fourth quarter and year ended December 31, 2006. The Company reported the following highlights:

--Forest's estimated proved reserves increased 25% in 2006 (as compared to Remainco) to 1,455 Bcfe at December 31, 2006

--Forest replaced 372% of 2006 Remainco net sales volumes and 134% of the reserves distributed in the spin-off of the Company's Gulf of Mexico operations. The Company now has estimated proved reserves comparable to December 31, 2005 but with a focus on repeatable drilling programs in onshore North American resource plays.

--Estimated proved reserves pro forma for the recently announced proposed acquisition of The Houston Exploration Company (Houston Ex) increase to over 2.1 Tcfe as of December 31, 2006

--Forest's estimated net sales volumes are anticipated to be 317 MMcfe/d in the fourth quarter of 2006, an increase of 12% compared to Remainco's 283 MMcfe/d in the fourth quarter of 2005

H. Craig Clark, President and CEO, stated, "The results from the implementation of the 4-point strategy which we began over three years ago are clearly evident in the operating results for the fourth quarter and full year 2006. Our focus on costs and efficient exploitation efforts on growth assets have enabled us to achieve these very favorable results in a difficult cost year for the industry. Our disciplined and balanced investment approach allowed us to increase reserves 25% during the year and increase production 14%. We have essentially replaced the Gulf of Mexico with our 2006 activity alone. During the fourth quarter, like other Texas operators, Forest was exposed to severe and inclement weather in Texas which negatively impacted production. However, we were still able to meet our increased production guidance for the quarter and the year. In addition, with the rest of the industry, we booked our 2006 proved reserves using year end natural gas prices that are substantially lower than those used at year end 2005 which negatively affected proved reserve volumes. Despite these challenges Forest had an excellent quarter and year in growing both production and reserves at very attractive costs.

We intend to fully implement the same successful 4-point strategy on the assets acquired in the proposed acquisition of Houston Ex. Our continued focus on costs and our disciplined investment approach has made Forest very successful in achieving superior results within the framework of a low risk investment and business model."

ESTIMATED PROVED RESERVES, PRODUCTION, AND CAPITAL EXPENDITURES

Forest reported year end estimated proved reserves of approximately 1,455 Bcfe, all of which are located in North America. The estimated proved reserves, which are 71% proved developed, consist of approximately 53% natural gas and 47% liquids. The pre-tax present value of estimated proved reserves at year end, based on constant prices and costs and discounted at 10% totaled $3.3 billion. The valuation was based on gas prices of $5.64 per MMbtu and oil prices of $61.05 a barrel NYMEX, compared to gas prices of $10.08 per MMbtu and oil prices of $61.04 a barrel one year earlier. Forest's estimated proved reserves were audited by an independent third party engineering firm.

Forest Remainco's estimated average net sales volumes for the quarter and year ended December 31, 2006 are anticipated to be 317 MMcfe/d and 310 MMcfe/d, respectively. Forest Remainco's unaudited exploration and development capital expenditures for the year ended December 31, 2006 were $589 million. Total unaudited exploration, development and acquisition capital expenditures for the year ended December 31, 2006 were $904 million. The following table reflects the 2006 activity related to Forest Remainco's estimated proved reserve amounts, and includes calculations of finding and development costs and reserve replacement ratios utilizing these estimated net sales volumes and unaudited capital expenditure amounts:

                                                           Estimated
                                                             Proved
                                                            Reserves
                                                              (Bcfe)
                                                           -----------
December 31, 2005                                               1,161

Purchases of
   properties                                                     138
Discoveries and
   extensions                                                     182
Revisions                                                         100
                                                           -----------
Reserve additions                                                 420

Net sales volumes                                                (113)
Sales of properties                                               (13)
                                                           -----------
Reserve subtractions                                             (126)
                                                           -----------

December 31, 2006                                               1,455
                                                           ===========

2006 All-Sources Reserve Replacement Ratio                        372%
2006 Finding, Development and Acquisition Costs (per Mcfe)     $ 2.15
2006 Organic Reserve Replacement Ratio                            258%
2006 Finding and Development Costs (per Mcfe)                  $ 2.09
2006 Reserve Life (Years)                                        12.9

DERIVATIVES

Forest currently has derivatives in place for 2007 through 2010 covering the aggregate average daily volumes and weighted average prices shown below. Forest recently increased its volume of natural gas hedged by 40 Bbtu/d for the last 9 months of 2007 related to the proposed acquisition of Houston Ex with swaps averaging approximately $7.77 per MMBtu. The following is a summary of derivatives Forest has in place as of February 4, 2007:

                                    Remainder
                            1Q 2007    2007        2008   2009   2010
                            ------- ---------     ------ ------ ------
Natural gas swaps:
Contract volumes (Bbtu/d)     20.0      60.0  (1)
Weighted average price (per
 MMBtu)                     $ 8.10      7.88

Natural gas collars:
Contract volumes (Bbtu/d)     35.0      35.0
Weighted average ceiling
 price (per MMBtu)          $11.70     11.70
Weighted average floor
 price (per MMBtu)          $ 8.76      8.76

Oil swaps:
Contract volumes (MBbls/d)     7.0       7.0        6.5    4.5    1.5
Weighted average price (per
 Bbl)                       $70.03     70.03      69.72  69.01  72.95

Oil collars:
Contract volumes (MBbls/d)     4.0       4.0
Weighted average ceiling
 price (per Bbl)            $87.18     87.18
Weighted average floor
 price (per Bbl)            $65.81     65.81

(1) 40.0 of the 60.0 Bbtu/d of natural gas swaps are associated with
 Forest's proposed acquisition of The Houston Exploration Company.

EXPLANATION OF RESERVE REPLACEMENT RATIO AND FD&A COSTS

The following discussion relates to Forest's estimated proved reserves in 2006 pro forma adjusted for the spin-off ("Spin-off") of its Gulf of Mexico operations and subsequent merger of those operations with a subsidiary of Mariner Energy, Inc. on March 2, 2006. We refer to the portion of Forest not included in the Spin-off as "Remainco" and the Spin-off properties as "Spinco". When we refer to "Total Company" or "Forest", we mean Remainco or, for the time prior to the Spin-off, Remainco and Spinco added together.

Forest Remainco's all-sources reserve replacement ratio of 372% was calculated by dividing the sum of total additions, 420 Bcfe, by estimated 2006 net sales volumes of 113 Bcfe.

Forest Remainco's FD&A costs of $2.15 per Mcfe were calculated by dividing the sum of total unaudited exploration, development and acquisition costs, $904 million, by the sum of total additions to estimated proved oil and gas reserves during 2006 of 420 Bcfe.

Forest Remainco's organic reserve replacement ratio of 258% was calculated by dividing the sum of total additions to estimated proved oil and gas reserves during 2006, excluding purchases of properties, 282 Bcfe, by estimated 2006 net sales volumes of 109.5 Bcfe, which excludes the 13 MMcfe/d of net sales volume attributable to the Cotton Valley acquisition that closed on March 31, 2006.

Forest Remainco's organic F&D costs of $2.09 per Mcfe were calculated by dividing the sum of total unaudited exploration and development costs, $589 million, by the sum of total additions to estimated proved oil and gas reserves during 2006, excluding purchases of properties, of 282 Bcfe.

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