Forest Oil Closes Permian Acquisition

Forest Oil has closed its previously announced Permian and South Texas property acquisition. This transaction was effected through the purchase of a private company on December 31, 2003. The assets acquired included 102 BCFE of estimated oil and gas reserves which presently produce approximately 25 MMcfe/d. In 2004, Forest intends to sell 5-10 percent of these properties that are deemed marginal. Forest assumed operations responsibility for the assets immediately upon closing.

The amount of cash consideration paid at closing for the oil and gas assets of the Seller (including all land, pipelines, facilities, and offices) is approximately $103 million. Forest funded 100 percent of its purchase price utilizing its existing credit facility. As of the close of business December 31, 2003, Forest estimates it will have $323 million drawn on its credit facility on a consolidated basis.