Forest Oil Announces Second Quarter 2012 Results

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

						Three Months Ended June 30,
						2012						Per Mcfe						2011							Per Mcfe
						(In thousands, except per-unit amounts)
Production expense						$	37,689					$	1.23					$	39,553						$	1.30
General and administrative expense (excludingstock-based compensation of $5,707 and $3,057,respectively)							10,714						0.35						10,303							0.34
Interest expense							34,317						1.12						37,819							1.24
Current income tax expense							327						0.01						29,443							0.97
Total cash costs						$	83,047					$	2.72					$	117,118						$	3.85
Current income tax expense associated withCanadian dividend tax							-						-						(28,921	)						(0.95	)
Pro forma total cash costs						$	83,047					$	2.72					$	88,197						$	2.90

_________________________ 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.

Depreciation and Depletion Expense

Forest's per-unit depreciation and depletion expense for the three months ended June 30, 2012 increased 39% to $2.39 per Mcfe compared to $1.72 per Mcfe in the corresponding 2011 period. The increase was primarily the result of higher finding and development costs associated with Forest's oil and liquids focused capital expenditure program.

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