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Forest Oil Announces Final Distribution Ratio For Special Stock Dividend To Shareholders

U.S. Federal Income Tax Consequences

Forest has obtained a private letter ruling from the U.S. Internal Revenue Service and an opinion of its outside tax advisor that the distribution by Forest of the shares of Lone Pine common stock held by Forest should qualify for U.S. federal income tax purposes as a tax-free distribution to its shareholders, except for any cash received in lieu of a fractional share of Lone Pine common stock. You should consult your own tax advisor regarding the particular tax consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local, and foreign tax laws. The information statement will contain additional details on the U.S. federal income tax consequences of the distribution. Forest will provide its shareholders with information to enable them to compute their tax basis in both Forest common stock and Lone Pine common stock. This information will be available under the Investor Relations tab on Forest’s website at and Lone Pine’s website at

Canadian Federal Income Tax Consequences

The distribution of the shares of Lone Pine common stock to Canadian resident shareholders of Forest will give rise to income for such shareholders for Canadian tax purposes. However, in certain circumstances, the Canadian Income Tax Act provides that the distribution of shares of common stock to Canadian resident shareholders in a U.S. tax-free spin-off can be a tax-free transaction for Canadian income tax purposes. To qualify, the U.S. corporation must provide certain required information (including the names and addresses of all Canadian resident shareholders) to the Canada Revenue Agency (CRA) generally within six months following the spin-off so the CRA can determine whether the spin-off meets the Canadian tax law requirements for tax-free treatment in Canada. Forest is considering making an application to the CRA to allow the distribution of the shares of Lone Pine common stock to be a tax-free transaction in Canada. If the CRA concludes that the requirements for tax-free treatment have been met, to receive such treatment, the Canadian shareholders must file an election and provide additional information to the CRA with their income tax returns for the taxation year in which the spin-off occurs.

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