Forest Oil Announces 2012 Guidance; Capital Budget of $550 Million to $600 Million Designed to be Near Cash Flow

Forest Oil Corporation

(Forest or the Company) today announced its 2012 capital budget and guidance. Forest's capital budget for 2012 will focus heavily on oil and other liquids-based drilling opportunities within Forest's concentrated asset base. The Company intends to deploy approximately nine to ten operated drilling rigs in 2012 with a total capital budget of $550 million to $600 million and anticipates this capital budget will be near discretionary cash flow at current commodity prices. Highlights from the Company's 2012 guidance are as follows: 2012 annual net sales volumes increase organically to 350 MMcfe/d to 355 MMcfe/d, representing a 5% to 6% increase compared to 2011 2012 annual net liquids sales volumes increase organically to 17.5 MBbls/d to 17.8 MBbls/d, representing a 10% increase compared to 2011 The information contained throughout this press release presented for 2011 comparisons, unless otherwise indicated, relates only to Forest on a pro forma basis, exclusive of our former Canadian operations, which now reside with Lone Pine Resources Inc. H. Craig Clark, President and CEO, stated, “We expect to allocate the majority of our exploration and development capital to the Texas Panhandle and East Texas / North Louisiana areas, which will be the primary drivers of our organic production growth for 2012. In addition to these areas, we intend to continue to test new oil shale objectives in various areas of our asset portfolio with the ultimate goal of transitioning them to full scale development. Importantly, we expect to see liquids growth of approximately 10% in 2012 which is expected to enhance cash flow. Our 2012 capital budget reflects our strategy of growth through the drill bit at a measured pace while staying within a reasonable bandwidth of cash flow and earning attractive returns on invested capital.”