Forest Oil Corporation provided its 2011 capital budget and related guidance. As a result of positive operational momentum and economic organic growth achieved in 2010, the Company intends to focus 75% of its drilling activity in its liquids-rich Granite Wash assets in the Texas Panhandle and its royalty-incentivized Deep Basin gas assets and Peace River Arch light-oil assets in Canada. Additionally, Forest expects to commence a first-half of 2011 weighted development program of its Eagle Ford oil asset, with an initial investment of $50 million of capital allocated to the play. These areas have significant horizontal project inventories on large undeveloped land bases that have the ability to carry future development for an extended period of time. In total, approximately 80% of the 2011 capital budget will be allocated to liquids-rich prospects, with the remainder allocated primarily to gas development in the Deep Basin of Alberta, Canada, that has favorable economic attributes through substantial provincial royalty incentives. 2011 guidance highlights are as follows:

• Average annual net sales volumes of 490 MMcfe/d, which represents an organic increase of approximately 10% compared to 2010 annual guidance • Capital spending of $600 million to $650 million, which represents a decrease of approximately 10% compared to 2010 annual guidance • Cash costs of $2.15 to $2.35 per Mcfe, which represents a decrease of approximately 7% compared to 2010 annual guidance; improving upon Forest's position as a low cost producer

H. Craig Clark, President and CEO stated, 'Our portfolio of assets provides us with the ability to organically grow production by double-digits while spending near cash flow. The focus in 2011 will be in the Granite Wash in the Texas Panhandle, the Deep Basin and Peace River Arch assets in Canada, and our Eagle Ford oil asset in South Texas. In total, we expect to spend 80% of our exploration and development budget in 2011 on liquids-rich prospects. The Granite Wash is expected to receive about half of our budget in 2011 with development efforts focused in both our southern and central fairways through the utilization of six horizontal rigs. Our methodical development efforts in the Granite Wash continue to expand the play both geographically and geologically, expanding our opportunity set in the Texas Panhandle. We will allocate about one-third of our budget to Canada, focusing on the Deep Basin in our Nikanassin resource play and in the Peace River Arch in our Evi light oil play. As we have in virtually all of our development plays, we intend to transition the Nikanassin resource play to horizontal development in 2011 and expand the scope of horizontal drilling in our Evi field. We also initially intend to deploy a one to two rig drilling program in our Eagle Ford oil window acreage in Gonzales and Wilson Counties focused on the first-half of 2011. Our 2011 production guidance reflects mid-case type curves with no material production contribution from the Eagle Ford. In summary, we expect to focus our drilling on liquids to enhance returns while generating organic double-digit production growth and spending near cash flow.'

The focus of Forest's drilling program in 2011 will primarily involve horizontal drilling in areas that have significant growth opportunities through large project inventories. Forest entered 2011 operating six drilling rigs, after ramping down activity at the end of 2010 to reposition its rig fleet, and intends to expand the fleet to 13 to 14 rigs by the end of the first quarter.

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