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Forest to Acquire Houston Exploration in $1.5b Deal

Maritime Activity Reports, Inc.

January 9, 2007

Forest Oil Corporation has entered into a definitive agreement to acquire 100 percent of the outstanding stock of The Houston Exploration Company in a stock and cash transaction totaling approximately $1.5 billion plus the assumption of net debt estimated to be $100 million at December 31, 2006. Forest Oil worked with JANA Partners LLC (JANA), the holder of 14.7% of the outstanding shares of Houston Ex, with the result that JANA on Sunday agreed to vote in favor of the transaction. JANA has also agreed not to propose any extraordinary transactions with Forest or to seek to influence the management or control of Forest for a year following the close of the transaction. The transaction positions Forest as one of the top independent onshore North American exploration and production companies. The acquisition will also create a highly concentrated and complementary set of oil and natural gas assets focused in all regions of Texas. On a pro forma basis at December 31, 2005, the Company would have estimated proved reserves of approximately 2.0 trillion cubic feet of natural gas equivalents (Tcfe) of which approximately 69% would be classified as proved developed and approximately 70% would be natural gas. Source: Rigzone

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