Forest Oil Corp., Denver, (NYSE: FST) reports three wells in the Texas Panhandle Granite Wash had combined initial production of 77 million cubic feet of gas equivalent.

Well #5 (50% working interest) had initial production of 8.6 million cubic feet of gas, 700 barrels of oil and condensate and 1,200 barrels of gas liquids for a total 20 million cubic feet equivalent per day.

Well #6 (50%) had initial production of 10.7 million cubic feet of gas, 600 barrels of oil and condensate and 1,400 barrels of gas liquids for a total 23 million cubic feet equivalent per day.

Well #7 (56%) had initial production of 13.2 million cubic feet of gas, 600 barrels of oil and condensate and 2,200 barrels of gas liquids for a total 30 million cubic feet equivalent per day.

The three wells had an average initial production of 24 million cubic feet equivalent per day, and Forest’s Granite Wash program has an average initial production rate per well of 28 million cubic feet equivalent per day (57% liquids). Forest will continue its three rig program in this area to focus on liquids-rich prospects in the current commodity price environment.

In addition to Forest’s Texas Panhandle Granite Wash program, the company has participated in two successful wells in the northern sections of its acreage, targeting the lower Morrow interval. Forest’s first horizontal well in Lipscomb County was drilled and completed with a 24-hour initial production rate of 8 million cubic feet equivalent per day, while its second horizontal well was drilled and completed with a 24-hour initial production rate of 20 million cubic feet equivalent per day.

These wells are significant as they confirm the prospectivity of Forest’s northern acreage in the Texas Panhandle where it holds 47,000 gross (37,000 net) acres. Forest will continue its one rig drilling program in the northern area of the Texas Panhandle.

In the Haynesville play, Forest recently acquired and farmed-in to a total of 25,000 gross (17,000 net) acres in Shelby County, Texas and Sabine Parish, Louisiana. The properties are in the area where there has been recent industry success, including Forest’s well in Sabine Parish that had an initial 24-hour production rate of 21 million cubic feet equivalent per day.

Forest has approximately 40,000 gross (28,000 net) acres in the core area of the Haynesville/Bossier shale, which includes Red River and Sabine parishes in Louisiana and Shelby County in Texas. The company has a total of approximately 103,000 gross (72,000 net) acres prospective for the Haynesville/Bossier within the play’s defined limits.

Forest has 467 gross drilling locations, not including existing proved undeveloped locations, in Red River and Sabine parishes, Louisiana and Shelby County, Texas and 776 locations in Harrison, Panola, Gregg, and Rusk counties, Texas. Forest is currently running three rigs in the play, with approximately 15 wells planned in 2010.

The first well in 2010, the fifth well since inception of the program, had an initial 24-hour production rate of 20 million cubic feet equivalent per day, which brings Forest’s total program average 24-hour initial production rate to 18 million cubic feet equivalent per day.

Forest president and chief executive Craig Clark says, “In addition to our highly successful drilling program in the southern section of our Texas Panhandle acreage we have recently validated the prospectivity of our northern acreage in the Panhandle through our most recent horizontal well that came on-line at a 24-hour initial production rate of 20 million cubic feet equivalent per day in Lipscomb County, Texas. This well, along with the extensive knowledge we have achieved through our database of more than 600 well bores across our Panhandle acreage, continues to validate the entire acreage position in the Texas Panhandle as highly prospective.”

Forest has oil and gas operations primarily in Arkansas, Louisiana, New Mexico, Oklahoma, Texas, Utah, Wyoming and in Canada.