GEOGRAPHICAL SEGMENTS

6 Months Ended

Jun. 30, 2011

GEOGRAPHICAL SEGMENTS

GEOGRAPHICAL SEGMENTS

(11) GEOGRAPHICAL SEGMENTS

At June 30, 2011, Forest conducted operations in one industry segment — oil and gas exploration and production — and had three reportable geographical business segments — United States, Canada, and International. Forest’s remaining activities were not significant and therefore were not reported as a separate segment, but have been included as a reconciling item in the information below. The segments were determined based upon the geographical location of operations in each business segment. The segment data presented below was prepared on the same basis as the Condensed Consolidated Financial Statements.

	Oil and Gas Exploration and Production
	Three Months Ended June 30, 2011									Six Months Ended June 30, 2011
	United States		Canada		International			Total Company		United States		Canada		International			Total Company
	(In Thousands)
Oil, natural gas, and NGL sales	$	186,593	$	51,255	$	—		$	237,848	$	352,903	$	87,516	$	—		$	440,419
Costs and expenses:					—									—
Lease operating expenses	23,483		8,980		—			32,463		47,113		17,207		—			64,320
Production and property taxes	12,655		623		—			13,278		24,261		1,226		—			25,487
Transportation and processing costs	3,415		4,390		—			7,805		7,066		8,015		—			15,081
Depletion	50,545		20,601		—			71,146		97,349		39,196		—			136,545
Accretion of asset retirement obligations	1,480		279		28			1,787		2,903		554		54			3,511
Segment earnings (loss)	$	95,015	$	16,382	$	(28	)	$	111,369	$	174,211	$	21,318	$	(54	)	$	195,475
Capital expenditures(1)	$	246,289	$	108,724	$	3,415		$	358,428	$	436,067	$	186,667	$	3,932		$	626,666
Goodwill(2)	$	239,420	$	17,966	$	—		$	257,386	$	239,420	$	17,966	$	—		$	257,386
Long-lived assets(2)(3)	$	2,196,410	$	815,794	$	95,466		$	3,107,670	$	2,196,410	$	815,794	$	95,466		$	3,107,670
Total assets(2)	$	3,387,568	$	893,797	$	96,348		$	4,377,713	$	3,387,568	$	893,797	$	96,348		$	4,377,713

(1) Includes changes in estimated discounted asset retirement obligations of $1.8 million and $1.9 million recorded during the three and six months ended June 30, 2011, respectively.

(2) As of June 30, 2011.

(3) Consists of net property and equipment.

A reconciliation of segment earnings to consolidated earnings before income taxes is as follows:

	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
	(In Thousands)
Segment earnings	$	111,369		$	195,475
Interest and other income	286			850
General and administrative expense	(15,737		)	(34,771		)
Depreciation and amortization expense	(2,176		)	(4,340		)
Interest expense	(38,842		)	(76,722		)
Realized and unrealized gains on derivative instruments, net	46,047			9,801
Other, net	(10,265		)	(4,658		)
Earnings before income taxes	$	90,682		$	85,635

	Oil and Gas Exploration and Production
	Three Months Ended June 30, 2010									Six Months Ended June 30, 2010
	United States		Canada		International			Total Company		United States		Canada		International			Total Company
	(In Thousands)
Oil, natural gas, and NGL sales	$	169,699	$	38,255	$	—		$	207,954	$	354,021	$	75,662	$	—		$	429,683
Costs and expenses:
Lease operating expenses	22,479		5,943		—			28,422		45,947		11,577		—			57,524
Production and property taxes	11,862		625		—			12,487		22,668		1,247		—			23,915
Transportation and processing costs	3,271		2,749		—			6,020		5,926		4,953		—			10,879
Depletion	43,919		16,216		—			60,135		80,430		29,332		—			109,762
Accretion of asset retirement obligations	1,627		258		24			1,909		3,176		523		49			3,748
Segment earnings (loss)	$	86,541	$	12,464	$	(24	)	$	98,981	$	195,874	$	28,030	$	(49	)	$	223,855
Capital expenditures(1)	$	164,270	$	52,240	$	991		$	217,501	$	330,766	$	159,881	$	2,105		$	492,752
Goodwill(2)	$	239,420	$	16,276	$	—		$	255,696	$	239,420	$	16,276	$	—		$	255,696
Long-lived assets(2)(3)	$	1,879,893	$	548,632	$	89,095		$	2,517,620	$	1,879,893	$	548,632	$	89,095		$	2,517,620
Total assets(2)	$	2,938,736	$	622,162	$	89,878		$	3,650,776	$	2,938,736	$	622,162	$	89,878		$	3,650,776

(1) Includes changes in estimated discounted asset retirement obligations of $6.8 million and $(2.8) million recorded during the three and six months ended June 30, 2010, respectively.

(2) As of June 30, 2010.

(3) Consists of net property and equipment.

A reconciliation of segment earnings to consolidated earnings before income taxes is as follows:

	Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
	(In Thousands)
Segment earnings	$	98,981		$	223,855
Interest and other income	141			277
General and administrative expense	(17,781		)	(36,534		)
Depreciation and amortization expense	(2,311		)	(4,996		)
Interest expense	(37,109		)	(75,152		)
Realized and unrealized gains on derivative instruments, net	25,031			118,242
Other, net	(12,640		)	(2,807		)
Earnings before income taxes	$	54,312		$	222,885