Net sales volumes increased 31% from 2007 and 6% sequentially to 505

MMcfe/d

Adjusted net earnings per share increased 130% from 2007 to $1.54 per

share

Adjusted EBITDA increased 101% from 2007 to $377 million

Adjusted discretionary cash flow increased 118% from 2007 to $344

million

Total cash costs per-unit decreased 17% from 2007 to $2.47 per Mcfe

Production expense per-unit decreased 19% from 2007 to $1.46 per Mcfe

DENVER–(EMWNews)–Forest Oil Corporation (NYSE:FST) (Forest or the Company) today

announced financial and operational results for the second quarter of

2008. For the quarter ended June 30, 2008, the Company reported the

following highlights:

• Record adjusted net earnings of $135.1 million, up 191% over $46.5

  million in 2007, on revenues of $515.2 million

• Record adjusted EBITDA of $377.2 million, up 101% over $187.5 million

  in 2007

• Record adjusted discretionary cash flow of $344.1 million, up 118%

  over $157.9 million in 2007

• Closed the acquisition of producing assets in Forest’s

  Ark-La-Tex Focus Area for approximately $281 million

H. Craig Clark, President and CEO, stated, “As

we had previously announced, the second quarter of 2008 was the first

quarter of the Company’s increased capital

spending in our Focus Areas. This quarter’s 6%

sequential growth rate (4% organic) is the first data point on our

stated goal to increase our annualized 2008 organic production growth

rate to about 15% by increasing our capital spending. The sequential

increase in production and flat cash costs of $2.47 per Mcfe, once again

demonstrates Forest has proven itself as a highly successful and

disciplined operator even in times of high commodity prices. We expect

to continue to see the trend of solid production growth while

controlling cash costs throughout the remainder of the year. I am also

pleased that we are on schedule in our exploration efforts and in

testing our significant shale acreage.”

SECOND QUARTER 2008 RESULTS

For the three months ended June 30, 2008, Forest reported a net loss of

$68.0 million or $(.78) per basic share. This loss compares to Forest’s

net earnings of $76.8 million or $1.11 per basic share in the

corresponding period in 2007. The net loss for the three months ended

June 30, 2008 was affected by the following item:

• The non-cash effect of net unrealized losses relating to recording

  derivative instruments and investments at fair value and to foreign

  currency exchange, totaling $319.5 million ($203.1 million net of tax)

Without the effect of this item, Forest’s

adjusted net earnings were a record $135.1 million or $1.54 per basic

share. This is an increase of 191% over Forest’s

adjusted net earnings of $46.5 million or $.67 per basic share in the

corresponding 2007 period.

Forest’s adjusted EBITDA increased 101% for

the three months ended June 30, 2008 to a record $377.2 million compared

to adjusted EBITDA of $187.5 million in the corresponding 2007 period.

Forest’s adjusted discretionary cash flow

increased 118% for the three months ended June 30, 2008 to a record

$344.1 million compared to adjusted discretionary cash flow of $157.9

million in the corresponding 2007 period.

The significant increase in adjusted net earnings, adjusted EBITDA and

adjusted discretionary cash flow was primarily due to increased net

sales volumes from successful drilling activity and acquisitions,

including the acquisition of The Houston Exploration Company (Houston

Exploration) in June 2007. Also contributing to the significant increase

was higher per-unit price realizations and lower per-unit cash costs.

Net Sales Volumes, Revenues, and Average Sales Price
			Three Months Ended June 30, 2008
			Gas (MMcf/d)		Oil (MBbls/d)		NGLs (MBbls/d)		Total (MMcfe/d)
Net sales volumes
	United States		310.6		10.4		8.2		422.1
	Canada		64.1		2.3		0.8		82.6
Totals			374.7		12.7		9.0		504.7
Revenues (in thousands)
	United States		$276,064		115,750		42,024		433,838
	Canada		53,005		23,168		5,067		81,240
Totals			$329,069		138,918		47,091		515,078
Average sales price
	United States		$ 9.77		122.62		56.18		11.29
	Canada		9.08		110.85		71.37		10.81
Totals			$ 9.65		120.48		57.50		11.21

For the three months ended June 30, 2008, Forest’s

average oil and gas net sales volumes were 505 MMcfe/d, representing a

31% increase over 385 MMcfe/d in the corresponding 2007 period. The

volumes were higher for the three months ended June 30, 2008 due to

Forest’s drilling and acquisition activities.

Forest’s price differential to NYMEX for

natural gas was $1.28 per Mcf for the three months ended June 30, 2008

compared to $1.24 per Mcf in the corresponding 2007 period. Realized

price for natural gas was $9.65 per Mcf for the three months ended June

30, 2008 compared to $6.31 per Mcf in the corresponding 2007 period.

Forest’s price differential to NYMEX for oil

and condensate was $3.50 per Bbl for the three months ended June 30,

2008 compared to $5.02 per Bbl in the corresponding 2007 period.

Realized price for oil and condensate was $120.48 per Bbl for the three

months ended June 30, 2008 compared to $60.00 per Bbl in the

corresponding 2007 period.

Forest’s realized price for natural gas

liquids was $57.50 per Bbl, or 46% of NYMEX oil prices, for the three

months ended June 30, 2008 compared to $35.78 per Bbl, or 55% of NYMEX

oil prices, in the corresponding 2007 period. The decrease in the

average natural gas liquids price as a percentage of NYMEX was the

result of relative weakness in the ethane market for the three months

ended June 30, 2008.

Total Cash Costs

Total cash costs per-unit decreased 17% for the three months ended June

30, 2008 to $2.47 per Mcfe compared to $2.99 per Mcfe in the

corresponding 2007 period. The reduction is a result of Forest’s

improved asset mix and successful cost control initiatives.

Forest’s oil and gas production expense

per-unit decreased 19% for the three months ended June 30, 2008 to $1.46

per Mcfe from $1.80 per Mcfe in the corresponding 2007 period. The

improved results were due to the addition of the natural gas oriented

Houston Exploration assets, the divestiture of the high operating cost

Alaska assets and successful cost control initiatives. The improvements

were partially offset by higher production taxes as a result of higher

commodity prices.

Forest’s general and administrative expense

per-unit, excluding stock-based compensation expense, increased slightly

for the three months ended June 30, 2008 to $.31 per Mcfe compared to

$.30 per Mcfe in the corresponding 2007 period.

Forest’s interest expense decreased 4% for

the three months ended June 30, 2008 to $28.0 million, or $.61 per Mcfe,

compared to $29.1 million, or $.83 per Mcfe, in the corresponding 2007

period due to higher interest capitalization in 2008 offset by increased

average debt levels.

Depreciation and Depletion Expense

Forest’s depreciation and depletion expense

per-unit increased 12% for the three months ended June 30, 2008 to $2.76

per Mcfe compared to $2.46 per Mcfe in the corresponding 2007 period.

The increase was primarily due to the Houston Exploration acquisition.

Capital Expenditures

Forest invested $294.3 million in exploration and development activities

(excluding capitalized interest, equity compensation and asset

retirement obligations) and $292.0 million in acquisition activities for

the three months ended June 30, 2008.

OPERATIONAL PROJECT UPDATE

FOCUS AREAS

The Focus Area assets (Greater Buffalo Wallow Area, Ark-La-Tex, South

Texas and the Alberta Deep Basin) constituted 68% of Forest’s

net sales volumes and 63% of capital expenditures for the three months

ended June 30, 2008. These assets are primarily large tight-gas sand

development projects in North America. Forest employed 31 rigs in these

areas during the second quarter of 2008 compared to 27 rigs in the first

quarter of 2008. Current plans are to increase rigs employed in the

Focus Areas to 37 by the end of 2008. Net sales volumes from these

assets were up 10% sequentially to 342 MMcfe/d in the second quarter of

2008 compared to 310 MMcfe/d in the first quarter of 2008.

NEW FRONTIER PROGRAM

Utica Shale (60 – 100% WI) –

In accordance with the previously announced schedule, Forest commenced

drilling a three to four well horizontal test program in July of 2008.

As all the wells will be drilled consecutively then fracture stimulated

consecutively, results are expected to be available in the fourth

quarter of 2008. Initial indications from the 2007 summer vertical

drilling program indicated that the shale could be effectively fracture

stimulated. As previously announced, if the 2008 horizontal drilling

program is successful, Forest intends to undertake a pilot program in

2009 with full scale development expected to begin in 2010.

Haynesville/Bossier Shale (52 – 100% WI)

– During the quarter, Forest increased its

acreage position in East Texas/North Louisiana by 92% to approximately

143,000 gross acres (113,000 net acres) through acquisitions and leasing

activity. Forest believes that it has approximately 116,000 gross acres

(91,000 net acres) prospective for the Haynesville/Bossier Shale trend

in the current area of heightened activity in East Texas/North

Louisiana. Forest has commenced its vertical pilot program for 2008

which includes 10 – 15 wells to test the

Haynesville/Bossier Shale in order to identify potential horizontal

targets. The Company then plans to follow up with a combined vertical

and horizontal program to optimize the economics in the play. Within

this plan, Forest intends to commence a three well Haynesville/Bossier

Shale horizontal program in the fourth quarter of 2008 based on its

pilot program results.

PROPERTY DIVESTITURES

The Company has identified the properties to be included in its

previously announced sale package and is currently marketing the

properties. The assets, located primarily in the Permian Basin and the

Rockies, are anticipated to sell for $300 million to $500 million.

Forest anticipates closing the sale of these properties by the end of

the third quarter of 2008. For the six months ended June 30, 2008,

Forest has sold approximately $53 million of low growth, primarily

non-operated assets with combined net production of approximately 4

MMcfe/d.

UPDATED 2008 GUIDANCE

The guidance below represents Forest’s

updated guidance for 2008 based on the previously announced expected

capital expenditures of $1.15 billion to $1.25 billion and the effects

of property dispositions that have already occurred. Except as indicated

below, all other guidance detailed in Forest’s

press releases dated February 21, 2008 and May 2, 2008 has not changed.

Oil and Gas Net Sales Volumes: As a result of Forest’s

sale of 4 MMcfe/d of producing properties, Forest expects total net

sales volumes of 188 – 192 Bcfe in 2008.

Forest estimates its net sales volumes will average 525 to 535 MMcfe/d

in the third quarter of 2008 and 540 to 555 MMcfe/d in the fourth

quarter of 2008. Forest will reassess 2008 oil and gas net sales volumes

guidance upon the divestiture of its sale package in the Permian Basin

and the Rockies.

Price Differentials: Based on current prices, Forest expects the

natural gas price differential for the remainder of 2008 will average

$1.50 to $1.75 per MMbtu less than the NYMEX Henry Hub price.

Based on current prices, Forest expects the oil and condensate

differential for the remainder of 2008 will average $4.00 to $6.00 per

Bbl less than the NYMEX West Texas Intermediate (WTI) price.

Based on current prices, Forest expects the realized price for natural

gas liquids for the remainder of 2008 will average 45% of the NYMEX WTI

price.

The foregoing guidance is subject to all of the cautionary statements

and limitations described in Forest’s press

release dated February 21, 2008 and below, under the headline “Forward-Looking

Statements.”

NON-GAAP FINANCIAL MEASURES

In addition to net income determined in accordance with generally

accepted accounting principles (GAAP), Forest has provided net earnings

adjusted for certain items, a non-GAAP financial measure, which

facilitates comparisons to earnings forecasts prepared by stock analysts

and other third parties. Such forecasts generally exclude the effects of

items that are difficult to predict or to measure in advance and are not

directly related to Forest’s ongoing

operations. A reconciliation between GAAP net earnings and net earnings

adjusted for certain items is provided in the paragraphs on page two of

this release in which the non-GAAP measure is presented. Net earnings

excluding the effects of certain items should not be considered a

substitute for net earnings as reported in accordance with GAAP.

In addition to reporting net earnings as defined under GAAP, Forest also

presents adjusted EBITDA, which consists of net earnings (loss) plus

income tax (benefit) expense; unrealized losses (gains) on derivative

instruments, net; unrealized foreign currency exchange gains; unrealized

losses on other investments, net; realized foreign currency exchange

gains; interest expense; accretion of asset retirement obligations;

depreciation and depletion; and stock-based compensation. Further,

Forest presents adjusted discretionary cash flow, which consists of

adjusted EBITDA minus interest expense; current income tax expense; and

other non-cash items. Management uses adjusted EBITDA and adjusted

discretionary cash flow as measures of operational performance. Adjusted

EBITDA and adjusted discretionary cash flow should not be considered as

alternatives to net earnings as reported under GAAP. The following is a

reconciliation of net earnings (loss) to adjusted EBITDA to adjusted

discretionary cash flow (in thousands):

			Three Months Ended June 30,
			2008			2007
Net earnings (loss)			$ (68,018	)		76,799
Income tax (benefit) expense			(36,140	)		34,081
Unrealized losses (gains) on derivative instruments, net			319,640			(34,813	)
Unrealized foreign currency exchange gains			(460	)		(6,271	)
Unrealized losses on other investments, net			276			–
Realized foreign currency exchange gains			–			(1,734	)
Interest expense			27,979			29,103
Accretion of asset retirement obligations			1,967			1,292
Depreciation and depletion			126,584			86,126
Stock-based compensation			5,416			2,925
	Adjusted EBITDA		377,244			187,508
Interest expense			(27,979	)		(29,103	)
Current income tax expense			(4,000	)		(2,217	)
Other non-cash items			(1,128	)		1,680
	Adjusted discretionary cash flow		$344,137			157,868

Total Cash Costs

Total cash costs is a non-GAAP measure calculated in accordance with oil

and gas industry standards that is used by management to assess the cash

operating performance. Total cash costs is defined as all cash operating

costs, including production expense; general and administrative expense

(excluding stock-based compensation); interest expense; and current

income tax expense.

			Three Months Ended June 30,
			2008		Per Mcfe		2007		Per Mcfe
			(In thousands, except per-unit amounts)
Production expense			$ 67,202		1.46		63,093		1.80
General and administrative expense (excluding stock-based compensation of $5,416 and $2,925, respectively)			14,416		0.31		10,482		0.30
Interest expense			27,979		0.61		29,103		0.83
Current income tax expense			4,000		0.09		2,217		0.06
	Total cash costs		$113,597		2.47		104,895		2.99

TELECONFERENCE CALL

A conference call is scheduled for Wednesday, August 6, 2008, at 12:00

P.M. MT to discuss the release. You may access the call by dialing toll

free 800-399-6298 (for U.S./Canada) and 706-634-0924 (for International)

and request the Forest Oil teleconference (ID # 57179626). A Q&A period

will follow.

A replay will be available from Wednesday, August 6 through August 13,

2008. You may access the replay by dialing toll free 800-642-1687 (for

U.S./Canada) and 706-645-9291 (for International), conference ID #

57179626.

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,

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 its future natural gas and liquids production,

revenues and expenses and other forward-looking statements are subject

to all of the risks and uncertainties normally incident to the

exploration for and development and production and sale of oil and gas.

These risks include, but are not limited to, price volatility, inflation

or lack of availability of goods and services, environmental risks,

drilling and other operating risks, regulatory changes, the uncertainty

inherent in estimating future oil and gas production or reserves, and

other risks as described in reports that Forest files with the

Securities and Exchange Commission (SEC), including its 2007 Annual

Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports

on Form 8-K. Also, the financial results of Forest’s foreign operations

are subject to currency exchange rate risks. 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 North America

and selected international locations. Forest’s principal reserves and

producing properties are located in the United States in Arkansas,

Colorado, Louisiana, New Mexico, Oklahoma, Texas, Utah, and Wyoming, and

in Canada. 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.

FOREST OIL CORPORATION Condensed Consolidated Balance Sheets (Unaudited)
			June 30, 2008		December 31, 2007
ASSETS			(In thousands)
Current assets:
Cash and cash equivalents			$ 10,811		9,685
Accounts receivable			273,270		201,617
Derivative instruments			2,391		30,006
Other investments			29,001		34,694
Deferred income taxes			135,399		23,854
Other current assets			80,747		61,518
	Total current assets		531,619		361,374
Net property and equipment			5,587,241		5,025,815
Goodwill			265,798		265,618
Other assets			44,831		42,741
			$ 6,429,489		5,695,548
Forest Oil Corporation Patrick J. Redmond, 303-812-1441 Director – Investor Relations Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89 Get Unlimited Organic Website Traffic to your Website  TheNFG.com now offers Organic Lead Generation & Traffic Solutions