Forest Oil Announces Third Quarter 2013 Results

  Forest Oil Announces Third Quarter 2013 Results

Third Quarter 2013 Average Net Sales Volumes of 209 MMcfe/d

Third Quarter 2013 Eagle Ford Shale Average Gross Production Volumes of 7.2
MBoe/d Increased 67% Compared to the Second Quarter of 2013

Third Quarter 2013 Eagle Ford Shale Average Net Production Volumes of 3.3
MBoe/d Increased 43% Compared to the Second Quarter of 2013

Eagle Ford Shale Drilling and Completion Costs Reduced 10% to $5.75 Million
Compared to the Second Quarter of 2013

Announced Sale of Texas Panhandle Assets for Proceeds of $1.0 Billion

Business Wire

DENVER -- November 4, 2013

Forest Oil Corporation (NYSE:FST) (Forest or the Company) today announced
financial and operational results for the third quarter of 2013.

For the three months ended September 30, 2013, Forest reported net earnings of
$2 million, or $0.02 per diluted share, compared to $33 million, or $0.28 per
share in the second quarter of 2013. Net earnings for the third quarter of
2013 included the following items:

  *Unrealized losses on derivative instruments of $7 million ($4 million net
    of tax)
  *Rig stacking costs of $2 million ($1 million net of tax)
  *Decrease in the valuation allowance of deferred tax assets, net of
    non-deductible stock based compensation costs of $1 million ($1 million
    net of tax)

Without the effect of these items, Forest’s results for the third quarter were
as follows:

  *Adjusted net earnings of $7 million, or $0.06 per diluted share, compared
    to adjusted net earnings of $7 million or $0.06 per share, in the second
    quarter of 2013
  *Adjusted EBITDA of $85 million compared to adjusted EBITDA of $88 million
    in the second quarter of 2013
  *Adjusted discretionary cash flow of $54 million compared to adjusted
    discretionary cash flow of $58 million in the second quarter of 2013.

Patrick R. McDonald, President and CEO, stated, “The third quarter saw us make
meaningful strides in development of the Eagle Ford Shale as we increased
drilling activity by adding a fourth rig to the field. This resulted in a 67%
increase in gross production volumes from the Eagle Ford during the quarter.

Our drilling focused on delineating the field and continuing the acreage
holding phase of the program. We are working in conjunction with our partner
to design and implement additional technological refinements and enhancements
to our drilling and completion process as we continue efforts to improve well
results, productivity, recoveries, and cost efficiencies. We also are
evaluating reservoir performance and characteristics in regard to the
determination of the optimal drilling density and downspacing for each area of
the field with the goal of maximizing oil recovery. Among the tangible
benefits of the Eagle Ford joint venture, we realized a 10% sequential
decrease in average well costs during the third quarter to $5.75 million per
well.

We remain on track to meet our goal of average net production volumes of
approximately 2,800 Boe/d from the Eagle Ford during 2013 and we expect Eagle
Ford oil volumes to more than double in 2014. We plan to continue the current
level of activity for the fourth quarter which will provide a solid foundation
of production heading into 2014.

“We anticipate a 2014 Eagle Ford program designed to complete the holding of
the remainder of our acreage position and transition to full-scale development
drilling by mid-year as we concentrate on drilling the most productive areas
within the field. Based on the current level of activity, approximately 60
gross (30 net) wells will be spud in 2013 and approximately 80 gross (40 net)
wells will be spud in 2014. We are currently operating four drilling rigs, but
believe with continued improvements in drilling efficiencies we will only
require three rigs to complete the 2014 program.

“We also recently entered into an agreement for the sale of our Texas
Panhandle assets for $1 billion in expected proceeds. This transaction will be
a tax-free event to Forest and is scheduled to close in late November. The net
proceeds will be used to reduce debt.”

Average Net Sales Volumes, Average Realized Prices, and Revenues

Forest's average net sales volumes for the three months ended September 30,
2013 were 209 MMcfe/d. Third quarter 2013 average net sales volumes were 1%
lower compared to the second quarter of 2013 primarily due to a 7% decline in
net sales volumes associated with the Texas Panhandle assets which were offset
by a 43% increase in net production volumes in the Eagle Ford and a 1%
increase in the Ark-La-Tex Area.

During the third quarter, the company-wide differential for crude oil was
$2.88 per Bbl less than the NYMEX West Texas Intermediate (WTI) price,
compared to $0.53 per Bbl less than the WTI price in the second quarter of
2013. This was primarily due to the spread between WTI and Light Louisiana
Sweet (LLS) narrowing further during the quarter.

The following table details the components of average net sales volumes,
average realized prices, and revenues for the three months ended September 30,
2013:

                          Three Months Ended September 30, 2013
                           Gas        Oil          NGLs        Total
                           (MMcf/d)     (MBbls/d)      (MBbls/d)     (MMcfe/d)
                                                                     
Average Net Sales            125.7        6.8             7.1          209.0
Volumes
                                                                     
                                                                  
Average Realized Prices    Gas          Oil            NGLs          Total
                           ($/Mcf)      ($/Bbl)        ($/Bbl)       ($/Mcfe)
                                                                     
Average realized prices
not including realized     $ 3.02       $ 102.94       $  29.22      $ 6.14
derivative gains
(losses)
Realized gains (losses)     0.52        (7.91  )       -           0.06
on NYMEX derivatives
Average realized prices
including realized         $ 3.55       $ 95.03       $  29.22      $ 6.20
derivative gains
(losses)
                                                                     
Revenues (in thousands)    Gas          Oil            NGLs          Total
                                                                     
Revenues not including
realized derivative        $ 34,966     $ 63,926       $  19,136     $ 118,028
gains (losses)
Realized gains (losses)     6,059       (4,914 )       -           1,145
on NYMEX derivatives
Revenues including
realized derivative        $ 41,025     $ 59,012      $  19,136     $ 119,173
gains (losses)
                                                                       

Total Cash Costs

Forest's total cash costs for the third quarter of 2013 decreased 4% to $64
million, compared to $66 million in the second quarter of 2013. Total cash
costs per-unit for the third quarter of 2013 decreased 4% to $3.31 per Mcfe,
compared to $3.46 per Mcfe in the second quarter of 2013.

The following table details the components of total cash costs for the
comparative periods:

                  Three Months Ended
                   September 30,   Per Mcfe    June 30, 2013   Per Mcfe
                   2013
                   (In thousands, except per-unit amounts)
Production         $  26,702         $ 1.39        $  27,294         $ 1.42
expense
General and
administrative
expense
(excluding
stock-based           7,981            0.42           9,864            0.51
compensation of
$1,784 and
$3,250,
respectively)
Interest expense      29,519           1.54           29,392           1.53
Current income       (587    )       (0.03 )       (212    )       (0.01 )
tax benefit
Total cash costs   $  63,615        $ 3.31       $  66,338        $ 3.46  

________________________

Total cash costs is a non-GAAP measure that is used by management to assess
the Company’s cash operating performance. Forest defines total cash costs as
all cash operating costs, including production expense; general and
administrative expense (excluding stock-based compensation); interest expense;
and current income tax expense.

Total Capital Expenditures

Forest's exploration and development capital expenditures for the three months
ended September 30, 2013 and June 30, 2013 are set forth in the table below
(in thousands):

                                         Three Months Ended
                                          September 30, 2013   June 30, 2013
                                                                 
Exploration and development               $      79,794          $    69,276
Land and leasehold acquisitions                 1,118               1,461
Total capital expenditures                       80,912               70,737
                                                                 
Add:
ARO, capitalized interest, and                  5,751               2,896
capitalized equity compensation
                                          $      86,663          $    73,633
                                                                      

Total capital expenditures for the nine months ended September 30, 2013 were
$279 million, which compares to Forest’s full year 2013 guidance of $355-375
million.

                          OPERATIONAL PROJECT UPDATE

Eagle Ford Shale

Forest accelerated drilling during the third quarter of 2013 to advance toward
the completion of the acreage holding phase of the Eagle Ford development
program and to delineate further the field in preparation for full-scale
development drilling during 2014. Progress continues toward the goal of
holding an aggregate of 55,000 gross (27,500 net) acres. Approximately 70% of
the target acreage has been held to date with the remainder expected to be
held by mid-2014. Forest estimates it has an inventory of 688 gross (344 net)
locations based on 80-acre spacing, a drilling inventory of over eight years
based on current development plans and prior to downspacing. In that respect,
reservoir performance and characteristics are being evaluated in regard to
determining optimal drilling density and well spacing for each of the areas of
the field with the goal of maximizing the recovery of the oil in place.

Gross production volumes from the Eagle Ford averaged approximately 7,200
Boe/d during the third quarter of 2013, compared to approximately 4,300 Boe/d
in the second quarter of 2013, or an increase of 67%. Net production volumes
averaged approximately 3,300 Boe/d (3,100 Bbls/d average net sales volumes)
during the third quarter of 2013, compared to approximately 2,300 Boe/d (2,200
Bbls/d average net sales volumes) in the second quarter of 2013, or an
increase of 43%. Due primarily to the timing of well completions falling later
in the quarter, fourth quarter Eagle Ford volumes are projected to increase
slightly over the third quarter.

During the third quarter, Forest completed a total of eighteen gross (nine
net) wells within the Eagle Ford. Twelve gross (six net) wells were completed
with a 30-day average gross production rate of 542 Boe/d, including three
recent wells that had a 30-day average gross production rate of 715 Boe/d.

The remaining six gross (three net) wells were primarily in the northeast
section of our acreage position and had a 30-day average gross production rate
of 229 Boe/d. The Company will continue to monitor the performance of these
wells and analyze the geologic characteristics of this shallower section of
our acreage position and how to optimize its development.

Forest continues to operate more efficiently through a combination of
decreased drilling and completion time, utilizing a more targeted completion
design and capitalizing on operational synergies associated with pad drilling.
Specifically, the most recent four-well pad was drilled in 49 days compared to
a previous average of 56 days, representing a 13% decrease. In addition,
drilling and completion costs for the wells drilled during the third quarter
averaged approximately $5.75 million, or 10% lower than the wells drilled
during the second quarter. Forest expects to see continued improvement in well
costs following the implementation of centralized production facilities, the
use of existing pad locations, and continued optimization of completion
techniques. Further cost reductions are expected once full-scale development
drilling commences.

Ark-La-Tex Area

Forest currently maintains a large acreage position including approximately
239,000 gross (162,000 net) acres in the greater Ark-La-Tex Area, including
the Arkoma Basin. Approximately 78% of the acreage is held by production, of
which 85% is operated by Forest. The asset base provides repeatable and
predictable drilling and recompletion opportunities in multiple horizons.
Recent drilling activity has focused on the high liquid yield Cotton Valley
formation and other liquids-rich horizons within East Texas.

During the third quarter, two horizontal Cotton Valley wells were completed
with a 30-day average gross production rate of 10 MMcfe/d (38% liquids or 640
Bbls/d). Forest has drilled five wells during 2013 that have had a 30-day
average gross production rate of 9 MMcfe/d (40% liquids). Well costs have
averaged approximately $7-8 million to drill and complete and the Company
believes that costs can be reduced as pad drilling is implemented in certain
areas of the region in 2014.

During the third quarter of 2013, net sales volumes in the Ark-La-Tex Area
averaged approximately 96 MMcfe/d.

Texas Panhandle Area

As previously announced, Forest has entered into a definitive agreement to
sell its oil and gas assets located in the Texas Panhandle Area for $1.0
billion. The transaction is expected to close on or before November 25, 2013.
Proceeds will be used to reduce debt.

During the third quarter of 2013, net sales volumes in the Texas Panhandle
Area averaged approximately 95 MMcfe/d.

Fourth Quarter 2013 Outlook

We expect production from the Eagle Ford and Ark-La-Tex assets during the
fourth quarter to be consistent with what was embedded in our 2013 guidance.
However, incorporating the impact of lower-than-forecasted production from the
Texas Panhandle assets, including the impact caused by the deferral of certain
completion operations at the request of the disclosed purchaser of these
assets, Forest expects company-wide net sales volumes to average approximately
200-205 MMcfe/d (60% natural gas and 40% liquids) for the fourth quarter of
2013 and 208-210 MMcfe/d for the full year 2013. Based on current LLS prices,
Forest expects oil price differentials for the fourth quarter to average
$6.00-7.00 per Bbl less than the WTI price.

Forest’s updated guidance for the fourth quarter of 2013 remains subject to
the cautionary statements and limitations contained in Forest’s February 20,
2013 press release under the caption “2013 Guidance” as well as those stated
below under the caption “Forward-Looking Statements.” Except as indicated
above, guidance detailed in Forest’s press releases dated February 20, 2013
and May 6, 2013 remains unchanged.

Forest intends to provide 2014 guidance following the closing of the Texas
Panhandle transaction.

                            DERIVATIVE INSTRUMENTS

As of November 4, 2013, Forest had natural gas and oil derivatives in place
for the remainder of 2013 and through 2014 covering the aggregate average
daily volumes and weighted average prices shown below:

                                    Oct - Dec  
                                     2013          2014
Natural gas swaps:
Contract volumes (Bbtu/d)               126.7        80.0
Weighted average price (per MMBtu)   $  4.02       $ 4.34
                                                   
Oil swaps:
Contract volumes (MBbls/d)              6.0          3.5
Weighted average price (per Bbl)     $  96.92      $ 95.34
                                                     

In connection with entering into certain 2014 oil swaps with premium hedged
prices, Forest sold oil puts that gave the counterparties the option to put
2,000 Bbls/d to Forest at a weighted average price of $70.00 per Bbl on a
monthly basis during 2014.

In connection with the execution of certain commodity swaps shown in the table
above, Forest sold swaption instruments to counterparties in exchange for
Forest receiving premium hedged prices on the swaps. The table below sets
forth the outstanding swaptions as of November 4, 2013:

                                    2014       2015
Natural gas swaptions:
Contract volumes (Bbtu/d)              40.0         -
Weighted average price (per MMBtu)   $ 4.50       $ -
                                                  
Oil swaptions:
Contract volumes (MBbls/d)             2.0          6.0
Weighted average price (per Bbl)     $ 100.00     $ 100.79
                                                  

                         NON-GAAP FINANCIAL MEASURES

Adjusted Net Earnings

In addition to reporting net earnings (loss) as defined under generally
accepted accounting principles (GAAP), Forest also presents adjusted net
earnings, which is a non-GAAP performance measure. Adjusted net earnings
consist of net earnings (loss) after adjustment for those items shown in the
table below. Adjusted net earnings does not represent, and should not be
considered an alternative to, GAAP measurements such as net earnings (loss)
(its most comparable GAAP financial measure), and Forest's calculations
thereof may not be comparable to similarly titled measures reported by other
companies. By eliminating the items shown below, Forest believes that the
measure is useful to investors because similar measures are frequently used by
securities analysts, investors, and other interested parties in their
evaluation of companies in the oil and gas industry. Forest's management does
not view adjusted net earnings in isolation and also uses other measurements,
such as net earnings (loss) and revenues, to measure operating performance.
The following table provides a reconciliation of net earnings, the most
directly comparable GAAP measure, to adjusted net earnings for the periods
presented (in thousands):

                                         Three Months Ended
                                          September 30, 2013   June 30, 2013
                                                                 
Net earnings                              $    2,214             $  33,439
Change in valuation allowance on               (903      )          (12,330  )
deferred tax assets
Rig stacking, net of tax                       1,326                803
Unrealized losses (gains) on derivative       4,265              (14,584  )
instruments, net of tax
Adjusted net earnings                     $    6,902            $  7,328    
                                                                 
Earnings attributable to participating        208                222      
securities
                                                                             
Adjusted net earnings for diluted         $    6,694            $  7,106    
earnings per share
                                                                 
Weighted average number of diluted            116,242            116,033  
shares outstanding
                                                                 
Adjusted diluted earnings per diluted     $    0.06             $  0.06     
share
                                                                             

Adjusted EBITDA

In addition to reporting net earnings (loss) as defined under GAAP, Forest
also presents adjusted net earnings before interest, income taxes,
depreciation, depletion, and amortization (adjusted EBITDA), which is a
non-GAAP performance measure. Adjusted EBITDA consists of net earnings (loss)
after adjustment for those items shown in the table below. Adjusted EBITDA
does not represent, and should not be considered an alternative to, GAAP
measurements such as net earnings (loss) (its most comparable GAAP financial
measure), and Forest's calculations thereof may not be comparable to similarly
titled measures reported by other companies. By eliminating the items shown
below, Forest believes the measure is useful in evaluating its fundamental
core operating performance. Forest also believes that adjusted EBITDA is
useful to investors because similar measures are frequently used by securities
analysts, investors, and other interested parties in their evaluation of
companies in the oil and gas industry. Forest's management uses adjusted
EBITDA to manage its business, including in preparing its annual operating
budget and financial projections. Forest's management does not view adjusted
EBITDA in isolation and also uses other measurements, such as net earnings and
revenues, to measure operating performance. The following table provides a
reconciliation of net earnings, the most directly comparable GAAP measure, to
adjusted EBITDA for the periods presented (in thousands):

                                         Three Months Ended
                                          September 30, 2013   June 30, 2013
                                                                 
Net earnings                              $    2,214             $  33,439
                                                                 
Income tax benefit                             (587      )          (212     )
Interest expense                               29,519               29,392
Depreciation, depletion, and                   43,973               43,804
amortization
Unrealized losses (gains) on derivative        6,678                (22,913  )
instruments, net
Stock-based compensation                       797                  2,832
Accretion of asset retirement                  546                  549
obligations
Rig stacking                                  2,076              1,258    
Adjusted EBITDA                           $    85,216           $  88,149   
                                                                 

Adjusted Discretionary Cash Flow

In addition to reporting net cash provided by operating activities as defined
under GAAP, Forest also presents adjusted discretionary cash flow, which is a
non-GAAP liquidity measure. Adjusted discretionary cash flow consists of net
cash provided by operating activities after adjustment for those items shown
in the table below. This measure does not represent, and should not be
considered an alternative to, GAAP measurements such as net cash provided by
operating activities (its most comparable GAAP financial measure), and
Forest's calculations thereof may not be comparable to similarly titled
measures reported by other companies. Forest's management uses adjusted
discretionary cash flow as a measure of liquidity and believes it provides
useful information to investors because it assesses cash flow from operations
before changes in operating assets and liabilities, which fluctuate due to the
timing of collections of receivables and the settlements of liabilities, and
other items. Forest's management uses adjusted discretionary cash flow to
manage its business, including in preparing its annual operating budget and
financial projections. This measure does not represent the residual cash flow
available for discretionary expenditures. Forest’s management does not view
adjusted discretionary cash flow in isolation and also uses other
measurements, such as net cash provided by operating activities, to measure
operating performance. The following table provides a reconciliation of net
cash provided by operating activities, the most directly comparable GAAP
measure, to adjusted discretionary cash flow for the periods presented (in
thousands):

                                         Three Months Ended
                                          September 30, 2013   June 30, 2013
                                                                 
Net cash provided by operating            $    73,573            $  76,090
activities
                                                                 
Changes in operating assets and
liabilities:
Accounts receivable                            (6,370    )          4,433
Other current assets                           (6,165    )          (840     )
Accounts payable and accrued                   2,462                (32,653  )
liabilities
Accrued interest and other                     (9,031    )          10,895
                                                                
Adjusted discretionary cash flow          $    54,469           $  57,925   
                                                                             

Net Debt

In addition to reporting total debt as defined under GAAP, Forest also
presents net debt, which is a non-GAAP debt measure. Net debt consists of the
principal amount of debt adjusted for cash and cash equivalents at the end of
the period. Forest's management uses net debt to assess Forest's indebtedness.

The following table sets forth the components of net debt (in thousands):

                  September 30, 2013            June 30, 2013
                   Principal     Book^(1)        Principal     Book^(1)
Credit facility    $ 115,000       $ 115,000       $ 130,000       $ 130,000
7 1/4% Senior        1,000,000       1,000,322       1,000,000       1,000,337
notes due 2019
7 1/2% Senior       500,000        500,000        500,000        500,000
notes due 2020
Total debt           1,615,000       1,615,322       1,630,000       1,630,337
                                                                   
Less: cash and      2,121          2,121          421            421
cash equivalents
                                                                   
Net debt           $ 1,612,879     $ 1,613,201     $ 1,629,579     $ 1,629,916

         Book amounts include the principal amount of debt adjusted for
^(1)   unamortized premiums on the issuance of certain senior notes of $0.3
         million and $0.3 million at September 30, 2013 and June 30, 2013,
         respectively.
         

                             TELECONFERENCE CALL

A conference call is scheduled for Tuesday, November 5, 2013, at 7:00 AM MT to
discuss the release. You may access the call by dialing toll free 866.318.8612
(for U.S./Canada) and 617.399.5131 (for International) and request the Forest
Oil teleconference (ID # 97252170). The conference call will also be webcast
live on the Internet and can be accessed by going to the Forest Oil website at
www.forestoil.com in the “Investor Relations” section of the website. A Q&A
period will follow.

A replay of the conference call will be available through November 11, 2013.
You may access the replay by dialing toll free 888.286.8010 (for U.S./Canada)
and 617.801.6888 (for International), conference ID # 55242948. An archive of
the conference call webcast will also be available at www.forestoil.com in the
“Investor Relations” section of the website.

                          FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical
facts, that address activities that Forest assumes, plans, intends, expects,
believes, projects, estimates or anticipates (and other similar expressions)
will, should, or may occur in the future are forward-looking statements. The
forward-looking statements provided in this press release are based on
management's current belief, based on currently available information, as to
the outcome and timing of future events. Forest cautions that 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, timing and terms of any divestitures, and other
forward-looking statements relating to Forest are subject to all of the risks
and uncertainties normally incident to the exploration for and development and
production and sale of liquids and natural gas.

These risks relating to Forest include, but are not limited to, oil and
natural gas price volatility, its level of indebtedness, its ability to
replace production, its ability to compete with larger producers,
environmental risks, drilling and other operating risks, regulatory changes,
credit risk of financial counterparties, risks of using third-party
transportation and processing facilities, the decision to sell or offer for
sale, or to determine not to sell any portion of its assets, the ability to
enter into agreements relating to such sales on desirable terms or at all, the
timing of any such agreements, the ability to consummate any such sales, the
ability to realize the anticipated benefits of any such sales, the ability to
determine the use of proceeds from any such sales, the ability to determine
whether to reduce outstanding indebtedness and the amount and timing of any
such reductions, and other risks as described in reports that Forest files
with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K. Any of these factors could cause
Forest's actual results and plans to differ materially from those in the
forward-looking statements.

Forest Oil Corporation is engaged in the acquisition, exploration,
development, and production of natural gas and liquids in the United States.
Forest's principal reserves and producing properties are located in the United
States in Arkansas, Louisiana, Oklahoma, and Texas. Forest's common stock
trades on the New York Stock Exchange under the symbol FST. For more
information about Forest, please visit its website at www.forestoil.com.

November 4, 2013

                                                          
FOREST OIL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
                                                                
                                             September 30,      December 31,
                                             2013               2012
            ASSETS                           (In thousands)
                                                                
Current assets:
     Cash and cash equivalents               $ 2,121            $ 1,056
     Accounts receivable                       63,734             67,516
     Derivative instruments                    16,461             40,190
     Other current assets                     8,905            16,318     
            Total current assets               91,221             125,080
                                                                
Net property and equipment                     1,513,632          1,754,238
                                                                
Deferred income taxes                          6,221              14,681
Goodwill                                       239,420            239,420
Derivative instruments                         3,039              8,335
Other assets                                  55,784           60,108     
                                             $ 1,909,317       $ 2,201,862  
                                                                
            LIABILITIES AND SHAREHOLDERS'
            EQUITY
                                                                
Current liabilities:
     Accounts payable and accrued            $ 189,362          $ 164,786
     liabilities
     Accrued interest                          23,567             23,407
     Derivative instruments                    5,467              9,347
     Deferred income taxes                     6,221              14,681
     Other current liabilities                14,904           14,104     
            Total current liabilities          239,521            226,325
                                                                
Long-term debt                                 1,615,322          1,862,088
Asset retirement obligations                   25,323             56,155
Derivative instruments                         4,134              7,204
Other liabilities                             88,107           92,914     
            Total liabilities                  1,972,407          2,244,686
                                                                
Shareholders' equity:
     Common stock                              11,976             11,825
     Capital surplus                           2,552,707          2,541,859
     Accumulated deficit                       (2,608,289 )       (2,575,994 )
     Accumulated other comprehensive loss     (19,484    )      (20,514    )
            Total shareholders' equity         (63,090    )       (42,824    )
            (deficit)
                                                               
                                             $ 1,909,317       $ 2,201,862  
                                                                             

FOREST OIL CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
                                 
                                      Three Months Ended
                                      September 30,
                                      2013                   2012
                                      (In thousands, except per share amounts)
                                                               
Revenues:
  Oil, gas, and NGL sales             $   118,028              $  156,014
  Interest and other                     166                   54        
        Total revenues                    118,194                 156,068
                                                               
Costs, expenses, and other:
  Lease operating expenses                19,245                  27,426
  Production and property taxes           4,667                   8,842
  Transportation and processing           2,790                   3,580
  costs
  General and administrative              9,765                   13,416
  expense
  Depreciation, depletion, and            43,973                  73,845
  amortization
  Ceiling test write-down of oil          -                       329,957
  and natural gas properties
  Impairment of properties                -                       79,529
  Interest expense                        29,519                  36,223
  Realized and unrealized losses on       5,533                   22,795
  derivative instruments, net
  Other, net                             1,075                 11,727    
        Total costs, expenses, and       116,567               607,340   
        other
  Earnings (loss) before income           1,627                   (451,272  )
  taxes
  Income tax (benefit) expense           (587      )            7,280     
  Net earnings (loss)                 $   2,214               $  (458,552  )
                                                               
                                                               
Basic and diluted weighted average        116,242                 115,417
shares outstanding
                                                               
Basic and diluted earnings (loss)     $   0.02                $  (3.97     )
per common share
                                                                            

FOREST OIL CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                           
                                                 Three Months Ended
                                                 September 30,
                                                 2013             2012
                                                 (In thousands)
Operating activities:
Net earnings (loss)                              $ 2,214          $ (458,552 )
                                                                  
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
     Depreciation, depletion, and amortization     43,973           73,845
     Deferred income tax                           -                41,110
     Unrealized losses on derivative               6,678            51,795
     instruments, net
     Ceiling test write-down of oil and            -                329,957
     natural gas properties
     Impairment of properties                      -                79,529
     Stock-based compensation                      797              2,970
     Accretion of asset retirement obligations     546              1,719
     Other, net                                    261              1,800
                                                                  
     Changes in operating assets and
     liabilities:
            Accounts receivable                    6,370            (10,007  )
            Other current assets                   6,165            2,121
            Accounts payable and accrued           (2,462   )       22,783
            liabilities
            Accrued interest and other            9,031          (29,669  )
                    Net cash provided by           73,573           109,401
                    operating activities
                                                                  
Investing activities:
Capital expenditures for property and
equipment:
     Exploration, development, acquisition,        (85,824  )       (203,101 )
     and leasehold costs
     Other fixed assets                            (151     )       (1,101   )
Proceeds from sales of assets                     31,460         7,800    
                    Net cash used by investing     (54,515  )       (196,402 )
                    activities
                                                                  
Financing activities:
Proceeds from bank borrowings                      137,000          208,000
Repayments of bank borrowings                      (152,000 )       (556,000 )
Issuance of senior notes, net of issuance          -                491,250
costs
Change in bank overdrafts                          (2,406   )       (17,050  )
Other, net                                        48             (710     )
                    Net cash (used) provided       (17,358  )       125,490
                    by financing activities
                                                                  
Net increase in cash and cash equivalents          1,700            38,489
Cash and cash equivalents at beginning of         421            680      
period
Cash and cash equivalents at end of period       $ 2,121         $ 39,169   
                                                                             

Contact:

Forest Oil Corporation
Larry C. Busnardo, 303-812-1441
Director – Investor Relations
 
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