38079--3/16/2006--FOREST_OIL

related topics

{gas, price, oil}

{loss, insurance, financial}

{acquisition, growth, future}

{cost, operation, labor}

{cost, regulation, environmental}

{operation, international, foreign}

{provision, law, control}

{competitive, industry, competition}

Oil and gas price declines could adversely affect Forest's revenue, cash flows, and profitability. We may not be able to obtain adequate financing to execute our operating strategy. Estimates of oil and gas reserves are uncertain and inherently imprecise. In estimating future net revenues from proved reserves, future prices and costs are assumed to be fixed and a fixed discount factor is applied. Our revenues, profitability, and cash flow could be materially less than our estimates if these assumptions and discount factor are incorrect. Lower oil and gas prices may cause us to record ceiling limitation writedowns. Leverage will materially affect our operations. We may incur significant abandonment costs or be required to post substantial performance bonds in connection with the plugging and abandonment of wells, platforms, and pipelines. We may not be able to replace production with new reserves. Our operations are subject to numerous risks of oil and gas drilling and production activities. We may not be insured against all of the operating risk to which our businesses are exposed. Our international operations may be adversely affected by currency fluctuations and economic and political developments. Hedging transactions may limit our potential gains. Competition within our industry may adversely affect our operations. Our growth may partially depend on our ability to acquire oil and gas properties on a profitable basis. We operate a drilling subsidiary and it involves many operating risks, any one of which could prevent us from realizing profits. Our oil and gas operations are subject to various environmental and other governmental regulations that materially affect our operations. We have limited control over the activities on properties we do not operate. The Spin-off closing and transition activities may divert management's attention away from normal operations. If we fail to realize the anticipated benefits of the Spin-off, Forest shareholders may experience lower returns than expected. Our Restated Certificate of Incorporation and By-laws have provisions that discourage corporate takeovers.

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38079--3/16/2006--FOREST_OIL_CORP