Texas Panhandle Area

Forest holds approximately 184,000 gross acres (111,000 net) and is currently running 5 rigs in the Texas Panhandle Area.

Since Forest's last earnings release, the Company completed two horizontal Granite Wash wells (94% working interest) that had an average 24-hour initial production rate of 13 MMcfe/d, including approximately 1,400 Bbls/d of oil and natural gas liquids or 64% of total equivalent production.

Additionally, the Company completed one Missourian Wash well (100% working interest) that had a 24-hour initial production rate of 650 Boe/d. This well was completed with a shorter lateral, testing the areal extent of the Missourian Wash interval.

Forest completed its first Tonkawa well during the first quarter of 2012. The Tonkawa well (89% working interest) had a 24-hour initial production rate of 1,640 Bbls/d of oil, 200 Bbls/d of natural gas liquids, and 1.6 MMcf/d of natural gas, for a total equivalent rate of 2,100 Boe/d. Forest has initially identified 63 Tonkawa potential locations, with additional acreage being reviewed for prospectivity.

The Company experienced production curtailments in the Texas Panhandle Area related to a downstream NGL plant outage and to third party compression issues, which together resulted in a reduction of net sales volumes of approximately 9 MMcfe/d during the quarter.

Eagle Ford Shale

Forest holds approximately 112,000 gross acres (103,000 net) and is currently running one rig in the oil-bearing section of the Eagle Ford Shale play.

Since Forest's last earnings release, the Company completed three horizontal wells (100% working interest) targeting the upper-most member of the Eagle Ford Shale interval. The first well reached a 24-hour maximum production rate of 605 Boe/d (96% oil). This well, which utilized a new stimulation design, had a 30-day average production rate of greater than 500 Boe/d and, in less than 60 days, had cumulative production of approximately 25,000 barrels of oil.

Forest completed its second and third wells in April and they are currently testing at 24-hour rates of 449 Boe/d (92% oil) and 116 Boe/d (97% oil). The third well was drilled in the most structurally up-dip acreage position in order to delineate the areal extent of the play.

The Eagle Ford Shale development plan has evolved from targeting the lower section of the interval with larger fracture stages to targeting the uppermost section of the interval using smaller fracture stages. The results from this transition have led to a 133% increase in the wells' 30-day average production rate to 468 Boe/d from the initial development program average production rate of 201 Boe/d.

East Texas / North Louisiana Area - Cotton Valley & Haynesville Shale

Forest holds approximately 163,000 gross acres (123,000 net) in the East Texas / North Louisiana Area.
Since Forest's last earnings release, the Company completed one horizontal Cotton Valley well (90% working interest) in East Texas that had an average 24-hour initial production rate of 10.3 MMcfe/d, including 662 Bbls/d of oil and natural gas liquids or 39% of total equivalent production. Forest currently has two rigs running in this area focusing on the liquids-rich Cotton Valley interval.

Additionally, Forest completed one well in its Red River Parish acreage (57% working interest) that had an average initial restricted rate of approximately 9.5 MMcf/d, with flowing pressures averaging 7,800 psi. This well has averaged 8.0 MMcf/d over its first 42 producing days. Due to the current low natural gas price environment, Forest has redeployed the Haynesville rig to drill the liquids-rich Cotton Valley interval in East Texas.

Permian Basin

Forest holds approximately 126,000 gross acres (114,500 net) in the Permian Basin, including 68,500 gross acres (63,000 net) in the Delaware Basin prospective for the Wolfbone oil play and 57,500 gross acres (51,500 net) in the Midland Basin prospective for the Wolfcamp Shale oil play.

Since Forest's last earnings release, the Company completed two horizontal Wolfcamp Shale oil wells (100% working interest) that had average 24-hour initial production rates of approximately 200 Boe/d (96% oil). The wells were completed in the lower part of the Wolfcamp Shale interval. Based on initial well data, Forest intends to target the middle and upper portion of the Wolfcamp Shale interval in the future development of the play.

After the completion of the Wolfcamp Shale oil wells, Forest moved the rig to the Delaware Basin to drill its first vertical Wolfbone well, which is currently awaiting completion. The drilling of a second well has commenced and is scheduled to be completed in the second quarter of 2012.