Forcenergy Announces 1999 Business Plan Highlights

Forcenergy Announces 1999 Business Plan Highlights 1998 Year-End Reserves and Full-Cost Write Down Hiring of Donaldson Lufkin & Jenrette as Strategic Advisor Miami (March 3, 1999).Forcenergy Inc (NYSE: FEN) announced today that its 1999 business plan is focused on reducing debt while maintaining production levels through a program of asset sales, low-risk workovers and promoted drilling activities. Highlights of the 1999 business plan include the following: (i) a reduction in capital expenditures, (ii) a reduction in expenses, (iii) a debt reduction plan based on asset sales and (iv) the hiring of a strategic advisor. 1999 Business Plan Forcenergy's 1999 capital budget has been revised sharply downward in order to limit capital expenditures to internally generated discretionary cash flow. As a result, a capital budget of approximately $70 million is planned for 1999. As a part of the revised 1999 capital program, Forcenergy is currently marketing a package of high quality Gulf of Mexico drilling opportunities. Specifically, Forcenergy is planning to promote a 50% or more interest in all Gulf of Mexico wells planned to be drilled in 1999. In response to an overall lower level of activity, Forcenergy has reduced its general and administrative costs by approximately $8 million or 26% on an annualized basis. As a part of this program Forcenergy has lowered its overall staff (including contract labor) by 13% to approximately 254 employees in February 1999. In order to reduce debt during 1999, Forcenergy has planned to divest of several non-core onshore producing properties as well as a portion of its producing properties in the South Marsh Island area of the Gulf of Mexico. Targeted proceeds of $75 million will reduce outstandings under the Company's senior credit facility and reduce its deficit working capital position. The Gulf of Mexico properties currently being marketed are producing properties with high-quality upside potential in the form of probable and possible reserves and additional 3-D seismic orientated prospects that are mapped and ready to be tested. 1998 Year-End Reserves and Full-Cost Write Down Forcenergy's proven oil and gas reserves as of December 31, 1998, using oil and gas prices and cost information in conformance with the rules and regulations of the Securities and Exchange Commission, total 111 million of barrels of oil equivalent. These reserves are comprised of 49.382 million barrels of oil and 370.040 billion cubic feet of natural gas. The present value of estimated future pre-tax net cash flows assuming a 10% discount rate is $436.1 million. Preliminary analysis indicates Forcenergy will be required to recognize a non-cash full-cost ceiling test write down in the range of $225 to $275 million during the fourth quarter. The write down is attributable to the reduction in book value of the Company's oil and gas reserves resulting from the application of the ceiling test limitation for companies using the full- cost method of accounting. The charge is a result of the significant deterioration in realized crude oil and natural gas prices in the fourth quarter of 1998 as compared to earlier periods. Hiring of Strategic Advisor Forcenergy has retained the firm of Donaldson Lufkin & Jenrette ("DLJ") to serve as its strategic advisor. The Company is working with DLJ in order to examine possible strategic alternatives available for strengthening its balance sheet and positioning the Company to capitalize on the numerous opportunities within its existing asset base. Forcenergy expects to release fourth quarter and full year 1998 financials on March 31, 1999. A conference call will be scheduled for that same date. Details on the conference call will be released several days prior to the release date. Forcenergy (NYSE:FEN) is an independent oil and gas company engaged in the exploration, acquisition, development, exploitation and production of oil and natural gas. Certain statements in this news release regarding future expectations and plans for future activities may be regarded as "forward looking statements" within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as financial market conditions, operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulation of oil and natural gas, as well as other risks discussed in detail in the Company's SEC filings, including the Annual Report and Form 10-K for the year ended December 31, 1997. Actual results may vary materially. Contact: J. Russell E. Joseph GradyPorter (305) 856-8500 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/03/03/19990303BIT00170/bit0001.doc http://www.bit.se/bitonline/1999/03/03/19990303BIT00170/bit0002.pdf