NEWS BULLETIN

February 17, 2005 --- Vol. 11, No. 18February 2005

Forest hits gas onshore on west side of Cook Inlet

Forest Oil Corp. said Feb. 16 that it has two successful gas wells onshore in the Cook Inlet area of Alaska, the 100 percent owned West Foreland No. 2 and the 30 percent owned Three Mile Creek Unit No. 1.

Forest said the West Foreland No. 2 well was drilled up structure to the West Foreland No. 1 well and tested 15 million cubic feet of gas a day from two zones.

The Three Mile Creek Unit No. 1 exploration well flowed at a rate of 1 million cubic feet per day on initial testing from shallow Beluga intervals, Forest said. Additional testing will be completed this spring, once weather allows for the mobilization of a rig across Cook Inlet, the company said.

“These wells are the first of our new onshore gas focus in the Cook Inlet area,” said Craig Clark, Forest Oil president and chief executive office. “We enjoy a large acreage position surrounding these discoveries so we have a lot of running room. The Cook Inlet acreage is near existing infrastructure so the time and costs it takes to hook up to sales is minimal.”

Three Mile Creek is operated by 70 percent owner Aurora Gas, which applied last fall to drill a gas well at the 8,080-acre unit, which was approved in January 2004. The unit is some 45 miles west of Anchorage in Southcentral Alaska and some seven miles north of the village of Tyonek.

State offers exploration incentive credits in Cook Inlet

Alaska is offering exploration incentive credits for 73 offshore Cook Inlet tracts in its 2005 Cook Inlet areawide lease sale. The Alaska Department of Natural Resources Division of Oil and Gas said today that it will open bids for the North Slope Foothills and Cook Inlet areawide oil and gas lease sales May 19 beginning at 8:30 a.m. at the Loussac Public Library in Anchorage.

The North Slope Foothills sale area lies between the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska and is bounded by the Umiat Meridian baseline on the north and by the Gates of the Arctic National Park and Preserve on the south. There are 1,347 tracts ranging in sizes from 1,280 acres to 5,760 acres. Minimum bid is $5 an acre; all leases have a fixed royalty rate of 12.5 percent and a 10-year lease term.

The Cook Inlet sale area is in the Matanuska and Susitna valleys, the Anchorage Bowl, the western and southern Kenai Peninsula from Point Possession to Anchor Point, on the western shore of Cook Inlet from the Beluga River to Harriet Point as well as within Cook Inlet. There are 815 tracts in the Cook Inlet sale area, ranging from 640 acres to 5,760 acres. Minimum bid is $5 an acre; all leases have a fixed royalty rate of 12.5 percent and a seven-year lease term.

The division said 73 offshore Cook Inlet tracts have been assigned an exploration incentive credit of $200 per foot drilled for the first exploratory well per tract, not to exceed 20 percent of total well costs.

Credit may be earned during the first three years of the primary term, and is inclusive of other allowed exploration and development credit programs.

A list of tracts eligible for the credit will be available on the division’s Web site: www.dog.dnr.state.ak.us/oil


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