Forest Oil Corporation (NYSE:FST) (Forest or the Company) today announced that it has reached an agreement with its commercial banks to increase their commitments under Forest’s combined credit facility from $1.0 billion to $1.8 billion. The borrowing base of the combined credit facility will also be increased from $1.4 billion to $1.8 billion. All other material terms of the combined credit facility will remain the same.

The amended combined credit facility will consist of a U.S. facility in the amount of $1.65 billion and a Canadian facility in the amount of $150 million. Forest expects to complete the documentation and implement the amended combined credit facility in mid-May, 2008. As of May 2, 2008, Forest had approximately $600 million drawn on its combined credit facility.

David H. Keyte, Executive Vice President and CFO, stated, “The high quantity and quality of asset deal flow that we are currently seeing led us to significantly increase our liquidity to allow us the flexibility to capitalize on this environment. Forest’s ability to receive $800 million of new commitments from its banks in this credit market is a testament to our loyal financial relationships and highlights the importance of a strong producing asset base. In the current credit market we feel it is absolutely imperative to have the ability to transact within existing credit capacity in a quick and efficient manner. The new commitments will provide us in excess of $1 billion in liquidity which we will be able to access if the right opportunity arises.”

J.P. Morgan Securities Inc. acted as the sole Arranger on the transaction.

------------------------------------...