A portion of our other capital for Canada is Fort (MAYBE AN ERROR OF TRANSCRIPTION: MUST READ IT: FOR...) Quebec. We will be shooting seismic as soon as the snow clears in advance of our next horizontal well. The excellent data point that was just released from an industry world further, demonstrates the evolution of horizontal technology applications in shale-place particularly here. We were the first mover in this plant and just as others have gone to school on our work we now have the opportunity to do the same. As we said earlier, our large acreage position in Quebec has excellent term, a favorable royalty and tax regime and this combined with a premium gas market results in an enviable position for Forest.

Finally, let’s discuss acreage acquisition in 2009. While we decreased capital spending through the dropper we continued to add acreage at favorable prices in our core areas as well as adding some acreages into some new areas. We acquired approximately 150,000 net acres in 2009 for an average price of just over $300 per acre. This acreage will provide for some immediate opportunities in 2010 as well the out years. And of course, a lot it adds to our horizontal inventory which is has become a driver for the company.

At our Analyst Conference, March 18th, we will present detailed updates on our operations in the core areas and we look forward to seeing you all there.

Operator, we are now ready for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Dave Kistler with Simmons & Company.

Dave Kistler – Simmons & Company

Good afternoon, guys. Craig, you were talking little bit about service cost and the uptick that appears to be taken place there as the rig count kind of moves up on horizontal directed side of things, service intense deeper well going up. Previously in your comments you mentioned that you were going to lock down service cost you benefited by not doing it in 2009. Can you talk a little bit about your thoughts on locking them down at this point?

Craig Clark

Well, obviously for rigs we wouldn’t do that and haven’t in the past because of our ownership but in terms of discount agreements for certain services we’ll be doing that for 2010. You never catch the bottom; it’s just with your works more predictable. And secondly, in terms of you service cost intensity I would probably reiterate that it’s more on a completion side and the drilling side this time.

Dave Kistler – Simmons & Company

Okay, that’s helpful. Thinking a little bit about the Granite Wash, as you guys kind of start working your way through that, targeting a variety of different formations, can you kind of talk about how you are strategically doing that? It looks – I don’t know if it’s for sure to-date you’ve only been targeting one particular area, but can you guys give us some more color around that?

Craig Clark

I think it's safe to say, Dave, between us and the industry out there, you are seeing other formations within the Granite Wash other than some of the formations that were tested initially that are now being opened up. That’s one of the great things about having an OBO component or operated by others because we have hidden data points from that as well. And I think that something that will be key in 2010 is, you will see delineation of this play, and it won't just be from a geographic standpoint, it will be from a vertical standpoint. So, at this point I’ll tell you that we are seeing more than just the initial zones that everybody reported being tested, and we’ll have an update for you next month.

J.C. Ridens

Dave, the 400 well database that we’ve basically drilled or acquired, the drilled is spread throughout all four counties. And I can't tell you which zone will be which were. We have actually done two zones as industry so far, one in the Granite Wash and one in the Atoka, and we participated in those wells as well. But the 400 wells are spread throughout the map; in fact three rigs are down south in Wheater Henfield [ph] and one’s up in north. So we are spreading out the lease and the verticals to guys.

Dave Kistler – Simmons & Company

Okay, and then just jumping a little bit away from stuff you talked about on the call, another company was out this morning putting up some results from the Utica Shale, and that’s something that we haven't heard about from you guys for quite awhile. Any update relative to that, anything intriguing about that? I am not even sure if you’ve seen that news yet today.

Craig Clark

Yeah, we have seen that news, and yes it's intriguing, because I think that it lends further validation to the play obviously. That’s a impressive rate that was reported on that well. And as I said in my comments, I think that that is reflective of, I’ve seen the evolution of technology within a plays, we did them, we start this process and then others join us. Obviously, we are going to ramp that learning curve up more as we have said throughout this year. We have spent the year taking what we learned previously back to the lab and looking at ways to enhance our future efforts, and I think that what we saw today shows that the plays got some legs to it and some excitement to it.

J.C. Ridens

And yes, we were aware the well engineered us.

Dave Kistler – Simmons & Company

Great. I appreciate that color. I’ll let somebody else jump on.

J.C. Ridens

Okay. Thanks, Dave.

Operator

Our next question comes from the line of Scott Hanold with RBC Capitals Markets.

Scott Hanold – RBC Capitals Markets

Good afternoon.

Craig Clark

Hi, Scott.

Scott Hanold – RBC Capitals Markets

Hey, could you speak with the Utica for a bit because obviously I think you all have bought about 270,000 net acres yet and. Remind me where we are at in the lease terms, if I remember right they’re pretty long. And can you kind of give us an idea of where that industry well was drilled relative to your acreage?

Craig Clark

Well, the acreage doesn’t run north, south, it runs along the river, and they’re blocks adjacent to us as you can imagine with those large blocks. Most of our acreage is concentrated in three large blocks, and there is this as well. On the lease terms they have form outs, I believe the competitor, so they have some obligations that have required them to do constant activity, I believe. Our terms do not – we’ve met those obligations, and I think we are in year two or three of ten year leases, so we got lots of time. Needless to say we did all the work first and for the benefit of the industry, and now get to – get to somebody to reciprocate there, the first well they have announced, these are the first non-Forest horizontal drills out here -- was drilled based on the release by one of our blocks, one of them by acreage, they blocked a PUD so I do not know the mileage, but its obviously pretty close.

Scott Hanold – RBC Capitals Markets

Okay. Okay. And when you look at your activity, I think J.C. did you say you have been shooting seismic in that area this year. I mean, what else can we see from Forest in 2010 and in the year to come?

J.C. Ridens

Well, after we get the seismic shot and acquired and then analyzed then our plan is to follow it up with oil. So I am thinking that in 2010 you ought to see another well of out of this, provided that we get snow cleared and get the seismic acquired in a timely fashion.

Scott Hanold – RBC Capitals Markets

Okay, very good. All right, thanks guys.

Operator

Our next question comes from the line of Brian Singer with Goldman Sachs.

Brian Singer – Goldman Sachs

Thank you. Good afternoon.

Craig Clark

Good afternoon, Brian.

J.C. Ridens

Good afternoon.

Brian Singer – Goldman Sachs

I am wondering if you could add up a bit more color on that – on a deep basin. It’s been area you have had for some time, and if you could just add beyond the changes and some the stimulus royalties, what has improved and what does that means for your overall Canadian production, oil and gas for this year?

Craig Clark

Well, we obviously gave them more capital in part because they didn’t have much in the past two years because of the taxes, and we gave them a lot because we announced the down spicing spacing and verticals and multi-zones and places like Wall River and then AV with oil and that was a natural phenomena here regardless of what we think can happen in the deep basin from a horizontal or deviated standpoint.

So, vertical well economics there actually may look better than just about any where else because of the lack of taxes. So they got to play catch up on capital including, I think, about $20 million pipeline.

In addition to that, we've been public not only saying the high gas sand and carbon – has had potential to on a deviated standpoint with the new fracs, new completions, which is nothing more than what happened in East Texas in the Cotton Valley, which people were caught on to and obviously let us to do the Buffalo Wallow which is obviously exceeded our expectation as you know, Brian.

We would like to replicate that into deep basin throughout what our acreage position and we gave you more capital to do that this year, including pipeline infrastructure. We’ll hope to highlight that at the Analyst Conference, but clearly we would like to replicate the success in tight gas and covenants regardless of the new flavor of the day shale up there. Clearly, we would like to do that starting with the vertical work we have done in both foot hills and the deep basin.

From yesterday question and answer conference by FOREST OIL:

(...)

Brian Singer – Goldman Sachs

And what does that mean for overall Canadian production this year --?

Craig Clark

We have not yet Canadian production separate but it’s a key cog in the growth that we projected for the entire company. I think all three areas of East Texas, North Louisiana, Buffalo Wallow over the Panhandle and they all contribute up the same rate. I will tell you that, the growth is driven by Buffalo Wallow because those wells are so good, but clearly Canada pulls it weight in terms of growth. It shrank quite a bit after the property sales, so it’s percentage will be higher, but I don’t know the exact number.

Brian Singer – Goldman Sachs

Thank you. And lastly, what are your thoughts on the Bossier Shale and the potential for that overlay your Haynesville acreage?

Craig Clark