Denver-based Forest Oil Corporation (NYSE: FST, Stock Forum) reported its estimated production results for 2008 Tuesday morning, as well as its guidance for exploration and development activities this year.

The company notes that its net sales volumes are estimated to be 518 MMcfe/d for the year ended December 31, up 22% compared to 2007.

"Forest's investment results for 2008 were very solid given the difficult cost environment seen by the industry. For the year, our drilling program added reserves organically at $2.54 per Mcfe, in line with our current three-year average of $2.26,” said H. Craig Clark, the company’s president and CEO.

The company says its estimated proved reserves consist of approximately 75% natural gas.

For the year ended December 31, 2008, Forest estimated that the company invested $1.36 billion in exploration and development activities and $1.37 billion in acquisitions. For 2009, it says it intends to invest between $500 million and $600 million on exploration and development activities, and will concentrate its drilling activities in its core areas with a focus in 2009 on its East Texas/North Louisiana corridor, including Haynesville/Bossier drilling, and Buffalo Wallow areas and will have “limited spending throughout its other productive regions.”

Last April, the company announced that it had made a natural gas discovery in Quebec’s Utica Shale. Forest noted that over the previous two years, it accumulated approximately 269,000 net acres, under lease or farmout, in the St. Lawrence Lowlands. At the time, the company said it planned to drill three horizontal wells in 2008 to refine its drilling and completion techniques, with first production expected in 2009 with the potential for a full scale drilling program in 2010 and beyond.


Buck