SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                            FORM 10-K
                                
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
           For the fiscal year ended December 31, 1996
                                
                               OR
                                
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
      For the transition period from _________ to ________
                                
                 Commission File Number 0-26444
                                
                         FORCENERGY INC
     (Exact name of registrant as specified in its charter)
                                
         Delaware                         65-0429338
(State of other jurisdiction of        (I.R.S. Employer
incorporation or organization)       Identification No.)

   2730 S.W. 3rd Avenue
         Suite 800
      Miami, Florida                      33129-2237
(Address of principal executive offices)  (Zip Code)

 Registrant's telephone number, including area code:  (305) 856-8500
                      ____________________
                                
Securities registered pursuant to Section 12(b) of the Act:  NONE
                                
   Securities registered pursuant to Section 12(g) of the Act:
                                
             Common Stock, par value $.01 per share

      Indicate by check mark whether the Registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the Registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes X  No 

      Indicate  by checkmark if disclosure of delinquent  filings
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and  will  not  be  contained, to the best  of  the  Registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form  10-K  or  any
amendment to this Form 10-K. ______

      As  of  March  24, 1997, there were outstanding  22,577,838
shares  of common stock of the Registrant.  The aggregate  market
value on such date of the voting stock of the Registrant held  by
non-affiliates was an estimated $342.8  million.

               DOCUMENTS INCORPORATED BY REFERENCE
                                
      Portions of the Registrant's definitive Proxy Statement for
its  1997  Annual  Meeting of Shareholders  are  incorporated  by
reference into Part III hereof.
<PAGE>
                            FORM 10-K
                         FORCENERGY INC
                        Table of Contents
                                

Item                          PART I                                  Page

1   BUSINESS                                                            1
2   PROPERTIES                                                         11
3   LEGAL PROCEEDINGS                                                  14
4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                14

                             PART II
                                
5   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
     MATTERS                                                           14
6   SELECTED FINANCIAL DATA                                            15
7   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
     AND RESULTS OF OPERATIONS                                         16
8   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                        20
9   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
     AND FINANCIAL DISCLOSURE                                          20

                            PART III
                                
10  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                 20
11  EXECUTIVE COMPENSATION                                             20
12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
     MANAGEMENT                                                        20
13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     20

                             PART IV
                                
14  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
     8-K                                                               21

    GLOSSARY OF OIL AND GAS TERMS                                      28
<PAGE>
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
         DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
                                




      This  Annual  Report on Form 10-K includes "forward-looking
statements"  within the meaning of Section 27A of the  Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of
the  Securities  Exchange Act of 1934, as amended (the  "Exchange
Act").   All statements other than statements of historical  fact
included   in  this  Form  10-K,  including  without  limitation,
statements  under  "Business"  and "Management's  Discussion  and
Analysis  of  Financial  Condition  and  Results  of  Operations"
regarding the planned capital expenditures, increases in oil  and
gas production, the number of anticipated wells to be drilled  in
1997  and  thereafter, the Company's financial position, business
strategy  and  other plans and objectives for future  operations,
are  forward-looking statements.  Although the  Company  believes
that   the   expectations  reflected  in   such   forward-looking
statements  are  reasonable, it can give no assurance  that  such
expectations will prove to have been correct.  There are numerous
uncertainties inherent in estimating quantities of proved oil and
natural gas reserves and in projecting future rates of production
and  timing  of development expenditures, including many  factors
beyond  the  control of the Company.  Reserve  engineering  is  a
subjective process of estimating underground accumulations of oil
and  natural gas that cannot be measured in an exact way, and the
accuracy of any reserve estimate is a function of the quality  of
available  data  and of engineering and geological interpretation
and judgment.  As a result, estimates made by different engineers
often  vary from one another.  In addition, results of  drilling,
testing and production subsequent to the date of an estimate  may
justify  revisions  of  such estimates  and  such  revisions,  if
significant, would change the schedule of any further  production
and  development  drilling.  Accordingly, reserve  estimates  are
generally  different from the quantities of oil and  natural  gas
that  are  ultimately recovered. All subsequent written and  oral
forward-looking  statements  attributable  to  the   Company   or
persons  acting  on its behalf are expressly qualified  in  their
entirety by such factors.






<PAGE>
                             PART I
                                

ITEM 1.  BUSINESS

Overview

      Forcenergy  Inc, a Delaware corporation (the  "Company"  or
"Forcenergy"), formerly Forcenergy Gas Exploration, Inc.,  is  an
independent  oil  and  gas  company  engaged in  the exploration,
acquisition, development,  exploitation and production of oil and
natural gas.  Forcenergy, and its predecessors, have been engaged
in  the  oil  and  gas exploration and production business  since
1982, the year in which it was founded by the President and Chief
Executive Officer, Stig Wennerstrom.

      On  August 2, 1995, the Company completed an initial public
offering  of 6,210,000 shares of common stock of the Company,  at
$10.00 per share, resulting in net proceeds of $55.7 million (the
"1995 Offering").

      Forcenergy has experienced significant growth in  the  last
six  years,  primarily through the exploitation, enhancement  and
development  of  acquired producing properties  in  the  Gulf  of
Mexico  and the 1996 acquisition of producing properties  in  the
Cook  Inlet,  Alaska area.  At December 31, 1996, Forcenergy  had
net  proved reserves of approximately 585 Bcfe, 58% of which were
located  in  the Gulf of Mexico and 27% of which were located  in
Alaska.   Approximately 56% of the Company's net proved  reserves
on  such  date were oil and approximately 78% of proved  reserves
were  classified  as  proved  developed.  The  Company  currently
operates approximately 75% of its Gulf of Mexico production.  The
Company's  primary  focus  is  its  Gulf  of  Mexico  and  Alaska
activities,  however, the Company has also acquired interests  in
certain   high-potential   undeveloped  international   leasehold
acreage, primarily in Gabon, Africa and Australia.

Strategy

      Gulf  of  Mexico.  The Company's business  strategy  is  to
increase   reserves   and  cash  flows  primarily   through   the
exploration,  exploitation  and  development  of  its   producing
properties  while also  acquiring additional  properties  in  the
Gulf  of  Mexico.   Management   believes  it   has  assembled  a
three  to  five  year inventory  of development, exploitation and
exploratory  drilling opportunities  in  the  Gulf  of  Mexico on
acreage  currently  held  by production.  Most  of  the prospects
comprising  this  inventory  are  located  in   fields which have 
prolific production histories  and  which  the  Company  believes
will   yield   significant   additional   reserves   through  the
application of modern  exploration  and development technologies.
Management believes  that  the  Company's high quality asset base
positions it for future growth through  a continuing  program  of
further   development    through   selective   exploitation   and
exploratory drilling and through the enhancement   of  production
through workovers and recompletions.  The  Company emphasizes the
use of  3-D seismic  and   computer-aided exploration  technology
together with geologic and engineering studies of  its properties
<PAGE>
to   evaluate   and   prioritize   drilling   prospects. Focusing
drilling  activities    on  producing  properties in a relatively
concentrated area in the Gulf of Mexico  permits  the Company  to
utilize  its   base  of  geological,  engineering  and production 
experience    in   the    region    to    maximize  its  drilling
success   and   to   minimize  finding  and  development   costs.
Furthermore,  the Company's concentration of drilling  activities
on  its  producing properties allows the utilization of  existing
infrastructure which greatly reduces incremental lease  operating
expenses   and  capital  costs  associated  with  new  production
facilities  and minimizes timing delays in commencing production.
The  Company plans to continue to pursue acquisitions of  working
interests  in producing properties that offer further development
potential   and   provide  operating  synergies   with   existing
properties.

     The Company prefers to operate its Gulf of Mexico properties
because  functioning  in  that  capacity  positions  it  to  more
effectively manage production performance and operating  expenses
and  allows  it  to  control the timing  and  amount  of  capital
expenditures.  Forcenergy operates 91 structures and 177 wells in
the Gulf of Mexico, and believes that the operating expertise and
experience of its personnel have been instrumental in its ability
to  significantly enhance and improve production rates  and  cash
flows.   Of particular importance, a significant portion  of  the
drilling prospects the Company expects to pursue during the  next
three  to  five  years  are accessible from  existing  production
facilities operated by the Company.

      Cook Inlet, Alaska.  The Company's business strategy in the
Cook  Inlet area is to increase production and cash flow  through
the exploitation of existing producing properties  as   well   as
conducting   selective  exploration  activities.    The   Company
believes  that  it has assembled a high quality  producing  asset
base  with  exploitation potential as well as  exploratory  lease
positions  that  will  give the Company  an  opportunity  to  add
significant new reserves through drilling.  Since its  discovery,
oil and gas activities in the Cook Inlet area have been dominated
by  major  oil companies.  The Company believes that it  will  be
able to economically exploit opportunities previously not pursued
by  the  major oil companies by utilizing proprietary 3-D seismic
data, smaller, automated offshore production facilities and other
methods  that have proven successful in the Company's  operations
in the Gulf of Mexico.

Technology

      Forcenergy  utilizes advanced technology in its exploration
and  development activities in order to reduce drilling risks and
finding   costs  and  to  more  effectively  prioritize  drilling
prospects  based on return potential.  The Company  has  acquired
825  square  miles of 3-D seismic surveys on 64 of  its  offshore
lease  blocks and 64,500 linear miles of high quality 2-D seismic
<PAGE>
data on the other offshore properties.  The ability to obtain the
3-D  seismic data for offshore properties at reasonable costs has
enabled   the  Company  to  identify  multiple  development   and
exploratory prospects in mature producing fields which  were  not
identified through earlier technologies.  The Company employs  16
geologists/geophysicists experienced in interpreting 3-D data and
has  invested  in 14 Landmark geophysical workstations  for  that
purpose.

Recent Developments

     From January 1996 to February 1997, the Company has spent an
aggregate of approximately $212.4 million on several acquisitions
including,  (1)  Marathon  Oil  Company's  interest  in   certain
producing crude oil properties in the Cook Inlet area and Prudhoe
Bay Unit, Alaska, (the "Marathon Acquisition") and a 30% interest
in  the Cook Inlet Pipeline Company, (2) Great Western Resources,
Inc.  ,  an  independent  oil  and gas  company  ("Great  Western
Acquisition"), and (3) various working interests in other oil and
gas properties in the Gulf of Mexico and the Permian Basin.

      The Marathon Acquisition.  On December 30, 1996, Forcenergy
acquired the 48% average working interest of Marathon Oil Company
("Marathon") in the McArthur River Field (Trading Bay  Unit)  and
Marathon's  50% interest in the Trading Bay Field,  both  in  the
Cook  Inlet, and Marathon's 0.05% working interest in the Prudhoe
Bay  Unit   for  $107.8  million. In January  1997,  the  Company
acquired  Marathon's interest in the Cook Inlet Pipeline  Company
for  $7.4  million in cash and the guarantee of $6.7  million  in
Cook  Inlet  Pipeline  Company debt.   Net  production  from  the
interests acquired is currently approximately 7,000 Bbls  of  oil
per  day  ("BOPD").   Net  proved reserves  associated  with  the
Trading  Bay Unit, Trading Bay Field and Prudhoe Bay Unit totaled
approximately 25.9 MMbbls of oil as of December 31, 1996.

      The  UNOCAL  Alliance.  On December 17, 1996,  the  Company
entered  into  an alliance with Union Oil Company  of  California
("UNOCAL  "), operator of the Company's properties  in  the  Cook
Inlet  Basin,  to  jointly pursue lease sale  activities  and  to
further develop Unocal's existing Cook Inlet Basin properties  in
Alaska.   The  agreement  requires Forcenergy  to  expend  up  to
$30  million within the next five years on lease acquisition  and
development and exploratory drilling on prospects generated as  a
result  of this alliance.  It also provides Forcenergy access  to
Unocal's  geologic and geophysical data base in  the  Cook  Inlet
Basin, including approximately 37,000 linear miles of 2-D seismic
data  and  6,000 square miles of 3-D seismic data. The  agreement
also  provides  that Forcenergy and Unocal shall each  contribute
technical  staff  to the alliance in a joint effort  to  identify
development prospects in and around Unocal's existing Cook  Inlet
properties as well as exploratory opportunities in the area.  The
Company has identified a number of prospects that will be further
evaluated for drilling potential.  During 1997, the Company plans
<PAGE>
to  spend  $15.0 million on several development and  exploitation
wells  and  to undertake a 3-D seismic survey over a  Cook  Inlet
prospect.

      As  part of its alliance with Unocal, on December 18, 1996,
Forcenergy  acquired a 50% interest in 17 State of  Alaska  lease
tracts.   The  Company's net expenditure in the  lease  sale  was
approximately $1.7 million.
 
     Great  Western  Acquisition.  In January  1997,  Forcenergy
acquired all of the outstanding stock of Great Western Resources,
Inc.  ("Great  Western") for approximately $48.3 million.   Great
Western  had  oil  and gas operations located  primarily  in  the
onshore  Gulf  Coast regions of Louisiana and Texas and  offshore
Gulf  of  Mexico.  Great Western's highest value asset was  South
Marsh  Island 18, which is strategically located adjacent to  the
Company's recent SMI 11 #54 discovery.  Great Western also had  a
20%  interest  in  an  exploration concession  in  Peru.   As  of
September  30, 1996, Great Western had total proved  reserves  of
approximately 33.2 Bcfe of natural gas.  Great Western's  current
net  daily  production is approximately 1,000  Bbls  of  oil  and
14,000 Mcf of natural gas.

      Other  Working  Interest Acquisitions.  In June  1996,  the
Company  acquired  working interests in eleven   Gulf  of  Mexico
producing fields from Amerada Hess Corporation (the "Amerada Hess
Acquisition")  for  a  cash consideration of  $6.9  million.   In
August  1996, the Company acquired an additional working interest
in one of these fields, Mustang Island 742/754, for approximately
$4.0 million, increasing its total working interest in this field
to  100%.   In  December 1996, the Company acquired interests  in
eight fields in the Gulf of Mexico in three separate transactions
for  an  aggregate  purchase price of $23.5 million.   The  first
transaction  involved the acquisition of a 33%  working  interest
position  in  Mustang  Island  Block 746,  bringing  Forcenergy's
ownership  in  the  block  to 100%.  In  the  second  transaction
Forcenergy acquired a 33% working interest position in the  South
Marsh  Island  Block  136/137 field, also  bringing  Forcenergy's
ownership  in  the  field  to 100%.  In  the  third  transaction,
Forcenergy  acquired  an average 20% working  interest  in  seven
fields  in  the  Gulf of Mexico.  Estimated net  proven  reserves
associated   with   these   acquisitions  include   approximately
862  Mbbls  of  oil and 21.7 Bcfe of natural gas.  The  interests
acquired  currently are producing approximately 500 Bbls  of  oil
per  day and 12,000 Mcf of natural gas per day ("MCFPD"), net  to
Forcenergy's interest.  In February 1997, the Company acquired an
average 75% non-operated working interest in producing fields  in
the   Permian   Basin   for  an  aggregate  purchase   price   of
$14.5  million.   Estimated proven reserves associated  with  the
properties totaled approximately 3.4 MMbbls of oil and 7.2 Bcf of
natural  gas  as  of the acquisition date.  Current  average  net
daily production from the properties is approximately 380 Bbls of
oil and 1,000 Mcf of natural gas.
<PAGE>
      During 1996, the Company also acquired interests in certain
undeveloped  leasehold  acreage or concessions  in  international
areas   primarily   offshore   Australia   and   Gabon,   Africa.
Exploratory  activities in these areas are expected to  begin  in
1997.

Gulf of Mexico Properties

     The Company currently holds working interests in 112 Gulf of
Mexico  and  Gulf Coast lease blocks, including  a  100%  working
interest  in  36  of  these blocks and  50%  or  greater  working
interest  in  19 other blocks, and operates 51 of  the  producing
blocks  representing 75% of the its current Gulf  of  Mexico/Gulf
Coast  production.  The following table lists the average working
interest,  net proved reserves and the operator for the Company's
13   largest  offshore  Gulf  of  Mexico  properties,  comprising
approximately  82% of the Company's net proved  reserves  in  the
Gulf  of  Mexico  and  47%  of  the Company's  total  net  proved
reserves, as of December 31, 1996:


                                          Estimated Net
                                        Proved Reserves at
                                         December 31, 1996
                              Average           Natural
                              Working    Oil      Gas    Total
     Field                   Interest  (Mbbls)  (MMcf)  (MMcfe)  Operator
     -----                   --------  -------  ------  -------  --------
South Marsh Island 
 6/10/11/18/19/285 Complex:     100%   5,352    30,471   62,583   Company
South Marsh Island 
 Block 106 North and 
 Block 106 South/Block 115      100%   3,519    12,156   33,270   Company
South Marsh Island 137 Field,
 Block 136/137                  100%     886    21,071   26,387   Company
Ship Shoal 230 Field, Block 
 219                            100%   1,963     5,835   17,613   Company
West Cameron 205 Field          100%     103    13,719   14,337   Company
High Island A-467 Field         100%      93    10,453   11,011   Company
Ship Shoal 26 Field             100%     292     8,392   10,144   Company
Chandeleur 25 Field             100%      --     8,959    8,959   Company
High Island A-280 Field         100%      38     8,979    9,207   Company
Mustang Island 754              100%      20     4,604    4,724   Company
Vermilion 262 Field              88%     873     8,525   13,763   Company
East Cameron 14 Field            50%     358    12,150   14,298   Company
South  Pass 24 Field             71%   6,606    10,405   50,041   Third Party

Alaska Properties

      Forcenergy currently holds an average 48% working  interest
in  the McArthur River Field (Trading Bay Unit) and a 50% working
interest in the Trading Bay Field in the Cook Inlet area.   These
fields  had estimated net proved reserves of 25.9 million barrels
of  oil  and comprised approximately 27% of the Company's   total
estimated net proved reserves at  December 31, 1996.
<PAGE>
1996 Offshore and Gulf Coast Drilling Activity

      During  1996  the Company continued to focus on  increasing
reserves and cash flow by targeting development, exploitation and
exploration prospects on recently acquired properties,  developed
in  most  cases through the use of 3-D seismic data. The  Company
spent  $130.4  million  in capital drilling  expenditures  during
1996,  including $4.5 million in capitalized internal  costs  and
$4.4  million on geological and geophysical costs, including  3-D
seismic  data.   In  the  Gulf of Mexico,  nineteen  of  nineteen
development  wells  and  seven  of  ten  exploratory  wells  were
successful.   The following is a brief description of  properties
where  significant activity occurred during 1996,  all  of  which
were  operated by the Company except for the South Pass 24 field.
The  working  interest  ownership of  the  Company  is  noted  in
parenthesis.

      South Marsh Island Block 106 North (SMI 106 N/2) and  Block
106 South  (SMI 106 S/2) and South Marsh Island 115 (100% working
interest).  The  Company acquired  its working interests in these
fields in a series of acquisitions from 1993 to 1995. During 1996, 
the Company successfully drilled  and completed  six  development
and two exploratory wells in SMI 106 N/2. These  eight wells  are
currently producing at a combined net average rate of 2,581  BOPD
and   8,862  MCFPD.   These  activities  have  increased  current
production  in these   fields  to  approximately 3,305  BOPD  and
10,535 MCFPD, net to the Company.

      East  Cameron 14 Field (50% average working  interest).   A
development well was completed in the first quarter of 1996.  The
well  is  currently averaging 2,667 MCFPD, net  to  the  Company,
increasing  total net production in this field  to  84  BOPD  and
3,317  MCFPD.  Reserves were encountered in seven other zones  in
this  well.   The  Company  is  currently  evaluating  plans  for
additional drilling in the field.

      South  Pass  24  Field  (approximate  71%  average  working
interest). During 1996, five development wells were drilled,  all
of  which have been completed.  Initial production tests from the
five  completed wells totaled 335 BOPD and 238 MCFPD, net to  the
Company  increasing total net production in this field  to  2,623
BOPD  and  3,368  MCFPD  by the end of 1996,  compared  with  net
production  of 891 BOPD and 501 MCFPD at the time of  acquisition
of  the  properties.   Under Louisiana law, new  wells  permitted
prior to June 30, 1996, or wells which have been shut in for more
than  two  years  and  which are permitted prior  to  that  date,
qualify for a five year exemption from the state severance tax of
12.5% on the value of oil production sold and $.07 per Mcf on the
volume  of  natural  gas  sold during the  five  years  following
June 30, 1996.  Five development wells are planned in 1997.
<PAGE>
      Ship  Shoal  230 Field, Block 219 (100% working  interest).
One   dually   completed  well  was  drilled  and  completed   in
April 1996. Production from this well is currently averaging  450
BOPD  and  618  MCFPD, net to the Company.  This  well  increased
total  average net production in this field to 923 BOPD and 3,864
MCFPD based on January 1997 production.

      High Island 467 Field (100% working interest).  The Company
completed all three wells of a three-well drilling project during
1996.   Two  development  wells and  one  exploratory  well  were
drilled and are currently producing at a combined average rate of
153  BOPD and 10,118 MCFPD, net to Forcenergy.  This brings total
net  field  production  to 195 BOPD and  20,244  MCFPD  based  on
January 1997 production.  The Company plans one exploratory  well
at  High Island 467 during 1997 and two exploratory wells in  the
adjacent High Island 470 field.

      South Marsh Island 6/10/11/18/19/285 Complex (100% working
interest). In September 1996,  the  Company  completed  drilling
operations on an exploratory well which encountered approximately
140 feet of TVD (true vertical depth) pay in four sands and which
added approximately 22.1 BCFE in estimated net  proved  reserves.
This well is currently producing at rates of 647 BOPD and  4,416
MCFPD,  net to the Company.  During the fourth quarter  of  1996,
the  Company  completed  two development wells  and  drilled  one
exploratory dryhole.  The two development wells are producing  at
a  combined rate of 578 BOPD and 5,699 MCFPD, net to the Company.
These   drilling  activities  bring  total  current   net   field
production to 1,499 BOPD and 12,542 MCFPD for the  field complex.
In  March  1997,  the Company completed a development  well  that
added 17.5 BCFE in estimated net proved reserves and the well  is
currently  producing  approximately 500 BOPD  and  10,000  MCFPD.
Four exploitation/exploratory wells are planned for 1997.

       South   Timbalier  148  (15.5%  working  interest).    One
exploratory  well  was  completed  during  1996.   The  well   is
currently  producing 150 BOPD and 3,984 MCFPD, net to Forcenergy.
In  February  1997,  one exploratory well was  completed  and  is
currently producing 291 BOPD and 4,895 MCFPD, net to the Company.
The Company plans two additional exploratory wells in 1997.

Additional Future Projects

     In addition to the activity described above, the Company has
identified  a  substantial inventory of additional  exploitation,
development, exploratory, workover and recompletion  projects  on
its  existing offshore properties which it may undertake over the
next  three to five years.  Many of these projects are  currently
being  reviewed  by  the Company's geologists  and  geophysicists
utilizing 3-D seismic data acquired in the last three years.
<PAGE>
Onshore Properties

       Forcenergy   owns   working  and  royalty   interests   in
approximately 2,461 producing oil and gas wells in 224 fields  in
the  Rocky  Mountain, Gulf Coast, Permian Basin  and  Appalachian
regions  of  the  United States.  Management  believes  that  the
Company's   stable   reserve   base  of   long-lived,   primarily
non-operated, onshore properties complements the Gulf  of  Mexico
operations  by providing an additional source of cash  flow  that
requires  limited management involvement.  The Company's  onshore
properties  accounted  for approximately  15%  of  estimated  net
proved reserves at December 31, 1996.  Approximately $4.3 million
in  capital was spent on onshore properties during 1996,  40%  of
which  was  incurred  on  the waterflood project  in  the  Howard
Glasscock/Snyder  field.   The following  is  a  summary  of  the
Company's most significant onshore properties:

      Altamont/Bluebell  Field.  The Altamont/Bluebell  Field  is
located in Duchesne and Uintah Counties, Utah.  The Company  owns
working  interests  ranging from less than 1% to  27.9%  (average
approximately  7%)  in  approximately 250 active  wells  and  has
overriding  royalty interests in another 190 wells.  The  Company
also owns an 8.125% working interest in the Altamont natural  gas
processing plant.  In the month of January 1997, Forcenergy's net
production,  including gas plant liquids, averaged 502  BOPD  and
1,162  MCFPD.   Estimated net proved reserves as of December  31,
1996 were 1,108 Mbbls and 3,189 MMcf.

      Whitney  Canyon  Field.  Forcenergy owns working  interests
ranging  from 14.1% to 18.9% in three wells in this Uinta County,
Wyoming field and a 3.02% working interest in the Whitney  Canyon
gas  processing plant.  The Company's share of total  sales  from
processed gas and condensate and plant liquids currently averages
130 BOPD and 1,570 MCFPD.  Net proved reserves as of December 31,
1996 for the Company's Whitney Canyon wells and share of the  gas
processing  plant  were estimated at 223 Mbbls and  10,913  MMcf.
Nine wells were connected during 1996 to the gas processing plant
along  a  recently  installed extension of the  gathering  system
which currently processes gas from the Yellow Creek field located
approximately 35 miles south of the plant.

      Howard  Glasscock/Snyder Field.  During 1995,  the  Company
acquired   an  approximate  50%  non-operated  working   interest
position  in the Howard Glasscock/Snyder Field located in  Howard
County,  Texas.  During  May  1996,  the  Company  increased  its
position in the Howard Glasscock/Snyder Field to 75%.  Forcenergy
and its partners drilled twenty water injection wells during 1996
and  completed  its  planned  secondary  waterflood  project   in
December  1996, with response anticipated during the second  half
of  1997.  As  of  December 31, 1996, the  Company's  net  proved
reserves were estimated at 2,170 Mbbls.  Current daily production
from primary recovery methods is 210 BOPD, net to the Company.
<PAGE>
Title to Properties

      As  is  customary in the oil and natural gas industry,  the
Company  makes only a cursory review of title to farmout  acreage
and  to  onshore  undeveloped oil and  natural  gas  leases  upon
execution  of  the  contracts.   Prior  to  the  commencement  of
drilling  operations, a thorough title examination  is  conducted
and  curative  work  is  performed with  respect  to  significant
defects.   The  Company performs complete  reviews  of  title  to
federal and state offshore lease blocks prior to acquisition.  To
the   extent  title  opinions  or  other  investigations  reflect
material  title defects, the seller of the property, rather  than
the  Company, is typically responsible for curing any such  title
defects at its expense.  If the Company were unable to remedy  or
cure  any  title  defect of a nature such that it  would  not  be
prudent   to   commence   drilling  operations   on   undeveloped
properties,  the  Company  could suffer  a  loss  of  its  entire
investment  in  the  leasehold.  The Company has  obtained  title
opinions  on  substantially all of its producing  properties  and
believes  that  it has satisfactory title to such  properties  in
accordance with standards generally accepted in the oil  and  gas
industry.  Substantially all of the Company's oil and natural gas
properties  are  and  will continue to  be  mortgaged  to  secure
borrowings  under the Company's bank loan agreement (the  "Senior
Credit Facility".

Abandonment Costs

      Forcenergy is responsible for the costs associated with the
plugging  of  wells, the removal of facilities and equipment  and
site  restoration on its oil and gas properties, pro rata to  its
working  interest.    The Company provides  for  expected  future
abandonment liabilities by accruing for such costs as a component
of   depletion,  depreciation  and  amortization  as   production
occurs.   As of December 31, 1996, total undiscounted abandonment
costs  estimated to be incurred were approximately $89.5  million
for   properties  in  federal  and  state  waters.   For  onshore
properties,  salvage  values received for equipment  are  usually
sufficient  to  offset  the  abandonment  costs.   Estimates   of
abandonment  costs  and  their timing  may  change  due  to  many
factors,   including  actual  drilling  and  production  results,
inflation   rates,   and  changes  in  environmental   laws   and
regulations.  No significant abandonment costs are anticipated to
be incurred in 1997.

      The Minerals Management Service ("MMS") requires lessees of
Outer  Continental Shelf ("OCS") properties to  post  performance
bonds  in  connection with the plugging and abandonment of  wells
located  offshore  and the removal of all production  facilities.
Operators  in  the  OCS waters of the Gulf  of  Mexico  are  also
currently required to post an area wide bond for the lesser of $3
million,  or $500,000 per producing lease.  The Company currently
has  additional  supplemental bonding on its offshore  leases  as
required  by the MMS.  Under certain circumstances, the  MMS  has
<PAGE>
the  authority  to  suspend or terminate  operations  on  federal
leases for failure to comply with applicable bonding requirements
or other regulations applicable to plugging and abandonment.  Any
such  suspensions  or  terminations of the  Company's  operations
could  have a material adverse effect on the Company's  financial
condition and results of operations.

Competition

      Forcenergy  encounters competition from other oil  and  gas
companies  in  all  phases  of  its  operations,  including   the
acquisition  of producing properties. Competitors  include  major
integrated  oil  and natural gas companies, numerous  independent
oil  and  natural  gas companies, individuals  and  drilling  and
income  programs.   Many competitors are large,  well-established
companies with substantially larger operating staffs and  greater
capital   resources  than  the  Company's  and  which,  in   many
instances,  have been engaged in the energy business for  a  much
longer  time.   Such  companies may  be  able  to  pay  more  for
productive   oil  and  natural  gas  properties  and  exploratory
prospects and to define, evaluate, bid for and purchase a greater
number  of  properties and prospects than the Company's financial
or  human  resources  permit.  Forcenergy's  ability  to  acquire
additional properties and to discover reserves in the future will
be  dependent  upon its ability to evaluate and  select  suitable
properties and to consummate transactions in a highly competitive
environment.

Marketing and Customers

      Forcenergy sells substantially all of its natural gas under
short-term contracts (maximum of one year in duration) at pricing
based  on  current spot market indexes.  A minor portion  of  the
Company's gas production is committed to be processed through gas
plants.   Crude  oil  and  condensate is typically  sold  at  the
wellhead on month-to-month contracts at posted field prices, plus
a slight premium, in the area where production occurs.

      Most of the Company's production is transported through gas
gathering  systems and oil and gas pipelines which are not  owned
by  the  Company.  Transportation space on such gathering systems
and  pipelines  is occasionally limited and at times  unavailable
due  to repairs or improvements being made to such facilities  or
due to such space being utilized by other companies with priority
transportation  agreements. Forcenergy's access to transportation
options  can  also  be affected by regulation of  intrastate  and
interstate   gas  transportation.  In  an  attempt   to   promote
competition,  the  Federal Energy Regulatory Commission  ("FERC")
has  issued  a  series of orders which have altered significantly
the  marketing and transportation of natural gas (See "Government
Regulation").  The effect of these orders to  date  has  been  to
enable producers such as the Company to market their natural  gas
production  to  purchasers  other than the  interstate  pipelines
located in the vicinity of their producing properties. While  the
Company   has  not  experienced  any  inability  to  market   its
production,   if  transportation  space  is  restricted   or   is
unavailable, the Company's cash flow could be adversely affected.
<PAGE>
      During  1996,  two  purchasers of the Company's  production
accounted for more than 10% of the value of oil and gas  sold  by
the  Company.   Based on current demand for oil and  natural  gas
sold,  the  Company does not believe the loss of these purchasers
would have a material adverse effect on the Company's results  of
operations  or cash flow (See Note 11 to the Company's  Financial
Statements).

      The  Company utilizes forward sales contracts and commodity
swaps  for  portions  of its current oil and  gas  production  to
achieve more predictable cash flows and to reduce its exposure to
fluctuations  in  oil and gas prices.  The remaining  portion  of
current production is not hedged so as to provide the Company the
opportunity  to benefit from increases in prices on that  portion
of  the  production,  should  price increases  materialize.   The
Company has entered into forward sales and swap arrangements with
respect  to  approximately 28% of its estimated net  natural  gas
production  through  the second quarter of  1997  at  a  weighted
average  price  of  approximately $2.04 per Mcf.   For  the  same
period, the Company has hedged approximately 18% of its estimated
net  oil  production at a weighted average price of   $18.02  per
Bbl.   In  addition, for the same period, the Company has  hedged
through  collar arrangements approximately 20% of  its  estimated
net  oil  production with a floor of $18.00  per Bbl and ceilings
ranging  from $23.90 to up to $26.30 per Bbl.  For this  purpose,
this  estimated net production through the second quarter assumes
current  production rates.  All of these arrangements are settled
on a monthly basis.  The Company accounts for its commodity swaps
and  collars  as hedging activities and , accordingly,  gains  or
losses  are  included in oil and gas revenues for the period  the
production was hedged.  The Company continuously reevaluates  its
hedging  program  in light of market conditions, commodity  price
forecasts, capital spending plans, and debt service requirements.
The Company may hedge additional volumes through the remainder of
1997.  (See Note 9 to the Company's Financial Statements).

Operating Risks of Oil and Gas Operations

      The oil and gas business involves certain operating hazards
such  as  well  blowouts,  cratering, explosions,  uncontrollable
flows of oil, natural gas or well fluids, fires, formations  with
abnormal  pressures, pollution, releases of toxic gas  and  other
environmental  hazards and risks, any of which  could  result  in
substantial   losses  to  the  Company  through   the   loss   of
hydrocarbons, pollution claims, personal injury suits and  damage
to  properties of the Company and others.  The Company's offshore
operations also are subject to the additional hazards  of  marine
operations, such as severe weather, capsizing and collision  that
can cause substantial damage to facilities, and possible business
interruption.   The  availability  of  a  ready  market  for  the
Company's  oil  and natural gas production also  depends  on  the
proximity  of  reserves  to, and the capacity  of,  oil  and  gas
gathering systems, pipelines and trucking or terminal facilities.
Additionally, the Company may be liable for environmental damages
caused by previous owners of property purchased or leased by  the
<PAGE>
Company.   As a result, substantial liabilities to third  parties
or  governmental entities may be incurred, the payment  of  which
could  reduce  or eliminate the funds available for  drilling  or
acquisitions, or result in the loss of the Company's  properties.
In  accordance  with  customary  industry  practices,  Forcenergy
maintains insurance against some, but not all, of such risks  and
losses.    The  Company  does  not  carry  business  interruption
insurance.   The  occurrence of an event  not  fully  covered  by
insurance  could have a material adverse effect on the  financial
condition, results of operations and cash flow of the Company.

Environmental Matters

      The Company, as an owner or lessee and operator of oil  and
gas  properties, is subject to federal, state and local laws  and
regulations  governing the discharge of materials into,  and  the
protection  of, the environment.  These laws and regulations  may
require  the  acquisition of a permit before drilling  commences,
restrict  the  types,  quantities and  concentration  of  various
substances   that  can  be  released  into  the  environment   in
connection  with  drilling and production  activities,  limit  or
prohibit  drilling  activities  on  certain  lands  lying  within
wilderness,  wetlands  and  other  protected  areas,  and  impose
substantial   liabilities  for  pollution  resulting   from   the
Company's   operations.   Stricter  standards  in   environmental
legislation  may  be imposed in the oil and gas industry  in  the
future, such as proposals made in Congress and at the state level
from  time to time that would reclassify certain oil and  natural
gas  exploration and production wastes as "hazardous wastes"  and
make the reclassified wastes subject to more stringent and costly
handling, disposal and clean-up requirements.  The impact of  any
such changes, however, would not likely be any more burdensome to
the Company than to any other similarly situated company involved
in oil and gas exploration and production.

      The Comprehensive Environmental Response, Compensation  and
Liability  Act  ("CERCLA"), also known as  the  "Superfund"  law,
imposes liability, without regard to fault or the legality of the
original  conduct,  on  certain  classes  of  persons   who   are
considered  to  be responsible for the release  of  a  "hazardous
substance" into the environment.  These persons include the owner
or  operator  of  the disposal site or sites  where  the  release
occurred and companies that disposed or arranged for disposal  of
the  hazardous substances found at the site.  Under CERCLA,  such
persons  may  be subject to joint and several liability  for  the
costs  of  cleaning up the hazardous substances, for  damages  to
natural  resources, and for the costs of certain health  studies.
Furthermore,  it is not uncommon for neighboring  landowners  and
other  third  parties  to  file claims for  personal  injury  and
property damage allegedly caused by hazardous substances or other
pollutants released into the environment.

      The  Oil  Pollution  Act  of  1990  (OPA)  and  regulations
promulgated  pursuant thereto impose a variety of obligations  on
"responsible  parties"  with respect to  the  prevention  of  oil
<PAGE>
spills  and liability for damages resulting from such spills.   A
"responsible party" includes the owner or operator of a  facility
or vessel that could be the source of an oil spill.  For offshore
facilities,  the responsible party is the lessee or permittee  or
holder  of  a right of use and easement (granted under applicable
state  law or the Outer  Continental Shelf Lands Act "OCSLA")  of
the  area  in  which the offshore facility is located.   The  OPA
assigns liability to each responsible part for oil removal  costs
and  a  variety of public and private damages,  including natural
resource   damages.   While  liability  limits  apply   in   some
circumstances, a responsible party for an Outer Continental Shelf
facility  must pay all spill removal costs incurred by a federal,
state or local government.  The OPA establishes a liability limit
(subject  to  indexing) for offshore facilities  of  all  removal
costs  plus  $75,000,000.   A  party  cannot  take  advantage  of
liability  limits if the spill was caused by gross negligence  or
willful  misconduct  or  resulted from  violation  of  a  federal
safety,  construction,  or operating regulation.   If  the  party
fails  to  report a spill or to cooperate fully in  the  cleanup,
liability  limits likewise do not apply.  Few defenses  exist  to
the liability imposed by OPA.

      The OPA also imposes ongoing  requirements on a responsible
party,  including proof of financial responsibility  to  cover  a
substantial  portion  of environmental clean-up  and  restoration
costs  that  could  be  incurred  by  governmental  entities   in
connection with an oil spill.  Other requirements imposed by  the
OPA include the preparation of an oil spill contingency plan.   A
failure   to  comply  with  ongoing  requirements  or  inadequate
cooperation in a spill event may subject a responsible  party  to
civil or criminal enforcement action.  In short, the OPA places a
burden  on offshore lease holders to conduct safe operations  and
take other measures to prevent oil spills; if one occurs, the OPA
then imposes liability for resulting damages.

      In addition, the OCSLA authorizes  regulations relating  to
safety  and  environmental protection applicable to  lessees  and
permittees operating on the OCS.  Specific design and operational
standards may apply to OCS vessels, rigs, platforms, vehicles and
structures.  Violations of environmental related lease  condition
or  regulations  issued  pursuant to  the  OCSLA  can  result  in
substantial  civil  and criminal penalties as well  as  potential
court  injunctions curtailing operations and the cancellation  of
leases.   Such  enforcement liabilities can  result  from  either
governmental prosecution or citizen initiated legal actions.

      The Company maintains insurance coverages which it believes
are  customary in the industry, although it is not fully  insured
against  many environmental risks.  Although the Company has  not
experienced  any  material adverse effect  from  compliance  with
environmental  requirements, nor is  it  aware  of  any  material
environmental claims existing at December 31, 1996, there  is  no
assurance  that material costs relating to environmental  matters
will not be incurred in the future.
<PAGE>
Government Regulation

      Forcenergy's  drilling, production and  transportation  and
marketing  operations are subject to various types of  regulation
at the federal, state and local levels.  Such regulation includes
requiring permits for the drilling of wells, maintaining  bonding
requirements  in order to drill or operate wells, and  regulating
the  location  of  wells,  the surface  use  and  restoration  of
properties  upon  which wells are drilling and the  plugging  and
abandonment  of  wells.  Regulations also  can  limit  production
rates,  require capital for environmental compliance  and  affect
the transportation and marketing of hydrocarbons.

      Certain operations the Company conducts are on federal  oil
and  gas leases, which the MMS administers.  The MMS issues  such
leases   through  competitive  bidding.   These  leases   contain
relatively   standardized  terms  and  require  compliance   with
detailed MMS regulations and orders pursuant to OCSLA (which  are
subject  to change by the MMS).  For offshore operations, lessees
must  obtain  MMS approval for exploration plans and  development
and   production  plans  prior  to  the  commencement   of   such
operations.  In addition to permits required from other  agencies
(such   as   the  Coast  Guard,  Army  Corps  of  Engineers   and
Environmental  Protection Agency), lessees must obtain  a  permit
from the MMS prior to the commencement of drilling.  The MMS  has
promulgated regulations requiring offshore production  facilities
located on the OCS to meet stringent engineering and construction
specifications.  The MMS also has issued regulations  restricting
the flaring or venting of natural gas, and proposed to amend such
regulations  to  prohibit the flaring of liquid hydrocarbons  and
oil without prior authorization.

      In  December  1995,  the MMS issued an  advance  notice  of
proposed rulemaking in which it proposed to amend its regulations
governing  the  calculation of royalties  and  the  valuation  of
natural  gas produced from federal leases.  The principle feature
in  the  amendments, as proposed, would establish an  alternative
market-index  based  method  to calculate  royalties  on  certain
natural  gas  production  sold  to  affiliates  or  pursuant   to
non-arm's-length   sales  contracts.   The  MMS   proposed   this
rulemaking to facilitate royalty valuation in light of changes in
the  gas  marketing  environment. The MMS also  proposed  a  rule
describing  the  types  of  transportation  components  that  are
deductible  for calculating and reporting royalties, as  well  as
various cost components associated with marketing functions  that
are  not deductible.  In addition, the MMS has recently issued  a
notice  of proposed rulemaking in which it proposes to amend  its
regulations  governing  the  calculation  of  royalties  and  the
valuation  of  crude  oil  produced from  federal  leases.   This
proposed  rule  would  modify the valuation procedures  for  both
arm's-length  and  non-arm's-length  crude  oil  transactions  to
decrease reliance on crude oil posted prices and assign  a  value
to  crude oil that better reflects market value, establish a  new
MMS  form  for collecting value differential data, and amend  the
valuation  procedure for the sale of federal royalty oil.   These
new  regulations, as proposed, would have a minimal effect on the
<PAGE>
Company's   past  royalty  payment  practices  as  the  Company's
production  has been sold solely to non-affiliates.  The  Company
cannot predict what additional action the MMS will take on  these
matters,  nor  can  it predict at this stage  of  the  rulemaking
proceeding how the Company might be affected if amendments to the
regulations are adopted.

       In  addition,  the  MMS  is  conducting  an  inquiry  (not
specifically  directed at the Company) into  certain  contractual
agreements  from  which  producers on MMS  leases  have  received
settlement  proceeds that are royalty bearing and the  extent  to
which  producers  have paid the appropriate  royalties  on  those
proceeds.  The Company believes that this inquiry will not have a
material impact on its financial condition, liquidity or  results
of operations.

      The  FERC  regulates interstate natural gas  transportation
rates  and  service  conditions, which affect  the  marketing  of
natural  gas  produced by the Company, as well  as  the  revenues
received by the Company for sales of such production.  Since  the
mid-1980s, the FERC has issued a series of orders, culminating in
Order Nos. 636, 636-A, 636-B, and 636-C ("Order 636"), that  have
significantly altered the marketing and transportation of natural
gas.    Order   636  mandates  a  fundamental  restructuring   of
interstate  pipeline sales and transportation service,  including
the   unbundling   by   interstate  pipelines   of   the   sales,
transportation,  storage and other components  of  the  city-gate
sales  services  such  pipelines previously  performed.   One  of
FERC's  purposes in issuing the orders is to increase competition
within  all phases of the natural gas industry. Generally,  Order
636  has  eliminated  or  substantially  reduced  the  interstate
pipelines'  traditional role as wholesalers of natural  gas,  and
has substantially increased competition and volatility in natural
gas  markets.  While significant regulatory uncertainty  remains,
Order  636 may ultimately enhance the Company's ability to market
and  transport its natural gas, although it may also subject  the
Company  to  greater  competition and more  restrictive  pipeline
imbalance   tolerances  and  greater  associated  penalties   for
violation  of such tolerances.  The FERC has issued final  orders
in   all   Order   No.  636  individual  pipeline   restructuring
proceedings.  The United States Court of Appeals for the District
of Columbia Circuit ("D.C. Circuit") has generally affirmed Order
No.  636  and remanded certain issues for further explanation  or
clarification.   The issues remanded for further  action  do  not
appear  to  materially affect the  Company.  A number of  parties
have  appealed  the  D.C. Circuit's ruling to the  United  States
Supreme  Court  and  proceedings  on  the  remanded  issues   are
currently ongoing before FERC following its issuance of Order No.
636-C  in  February 1997.  Numerous petitions for review  of  the
individual pipeline restructuring orders are currently pending in
that court.  Although it is difficult to predict when all appeals
of pipeline restructuring order will be completed or their impact
on  the   Company, the Company does not believe that it  will  be
affected  by  the  restructuring rule and orders any  differently
than  other  natural  gas producers and  markets  with  which  it
competes.
<PAGE>
      The  FERC  has  announced several important transportation-
related  policy  statements and proposed rule changes,  including
the  appropriate  manner  in which interstate  pipelines  release
capacity  under Order No. 636 and, more recently, the price  that
shippers can charge for their released capacity.  In addition, in
1995,  the  FERC  issued  a policy statement  on  how  interstate
natural  gas  pipelines  can recover the costs  of  new  pipeline
facilities.  In January 1996, the FERC issued a policy  statement
and  a  request  for  comments  concerning  alternatives  to  its
traditional cost-of-service ratemaking methodology.  A number  of
pipelines  have obtained FERC authorization to charge  negotiated
rates  as one such alternative.  While any additional FERC action
on  these  matters would affect the Company only indirectly,  any
new  rules and policy statements may have the effect of enhancing
competition  in  natural  gas markets,  by  among  other  things,
encouraging  non-producer  natural gas  marketers  to  engage  in
certain purchase and sale transactions.

      The  FERC  also regulates rates and service conditions  for
interstate  transportation of crude oil, liquids and  condensate,
which can affect the amount the Company receives from the sale of
these  products.  Sales of crude oil, condensate and gas  liquids
by  the  Company  are not currently regulated  and  are  made  at
negotiated  prices.  Effective January 1, 1995, the FERC  adopted
regulations  establishing an indexing system  for  transportation
rates  for oil pipelines, which generally indexes such  rates  to
inflation.   The Company is not able to predict what  effect,  if
any,   these   regulations  will  have  on  it   however,   these
regulations,  or  any  amendments  to  these  regulations,  could
increase  the  cost  of  transporting  crude  oil,  liquids   and
condensate by pipeline.

      Cook Inlet Pipeline Company is an interstate common carrier
and  as such is subject to rate regulation by the FERC under  the
Interstate Commerce Act ("ICA").  The ICA requires that petroleum
pipeline  rates  be  just and reasonable and  non-discriminatory.
The  ICA  permits interest parties to challenge proposed  new  or
changes  rates  and  authorizes  the  FERC  to  suspend   ad   to
investigate  such rates.  If upon completion of an investigation,
the  FERC  finds that a proposed new or changed rate is unlawful,
it  is  authorized to require the carrier to refund the  revenues
collected  during the pendency of the investigation in excess  of
those  that would have been collected under the prior  rate.   In
addition, the FERC, upon complaint or on its own motion and after
investigation,   may  order  a  carrier  to   change   its   rate
prospectively.  Upon an appropriate showing, a shipper may obtain
reparations for damages sustained for a period of up to two  year
prior  to the filing of a complaint.  Cook Inlet Pipeline Company
is  also  subject  to regulation by the Alaska  Public  Utilities
Commission  with  respect to any intrastate  transportation  Cook
Inlet Pipeline Company provides.

      Legislation  affecting the oil and gas  industry  is  under
constant  review  for amendment or expansion   by  Congress,  the
FERC, state regulatory bodies and the courts.  The Company cannot
predict when or if any such  proposals might become effective, or
their  effect, if any, on the Company's operations.  The  natural
gas  industry  historically  has  been  very  heavily  regulated;
<PAGE>
therefore,  there  is  no  assurance  that  the  less   stringent
regulatory  approach recently pursued by the  FERC  and  Congress
will  continue  indefinitely  into the  future.   The  regulatory
burden  on  the  oil  and  natural  gas  industry  increases  the
Company's  cost of doing business and, consequently, affects  its
profitability  and  cash  flow.  In as  much  as  such  laws  and
regulations  are  frequently expanded, amended or  reinterpreted,
the  Company  is unable to predict the future cost or  impact  of
complying with such regulations.

Offices

     Forcenergy currently leases approximately 12,600 square feet
of  office  space in Miami, Florida, where its principal  offices
are  located, approximately 900 square feet in Denver,  Colorado,
approximately  26,000  square feet  in  New  Orleans,  Louisiana,
approximately  851  square  feet  in  Lafayette,  Louisiana,  and
approximately 28,000 square feet in Houston, Texas.  The  Houston
office  lease  will  expire on July 31, 1997 at  which  time  the
Company  plans to move to a space of approximately  8,000  square
feet.  The Company recently opened an office in Anchorage, Alaska
and is currently leasing 8,500 square feet of office space.

Employees

      As  of  February  28, 1997, Forcenergy had  204  full  time
employees,  31 of whom are located at the Company's  headquarters
in  Miami,  Florida and 76 of whom are located at  the  Company's
regional offices in New Orleans, Lafayette and Intracoastal City,
Louisiana,   Houston,  Texas,  Denver,  Colorado  and  Anchorage,
Alaska.   Ninety-seven employees work offshore  in  the  Gulf  of
Mexico.   None  of  Forcenergy's employees are represented  by  a
labor union.

ITEM 2.   PROPERTIES

Acreage Data

     The following table sets forth the approximate developed and
undeveloped  acreage  in  which the  Company  held  a  leasehold,
mineral  or  other  interest at December 31,  1996.   Undeveloped
acreage  includes  leased  acres on which  wells  have  not  been
drilled  or completed to a point that would permit the production
of commercial quantities of oil and gas, regardless of whether or
not such acreage contains proved reserves.
  
                                       Developed Acres       Undeveloped Acres
                                      -----------------    ---------------------
                                       Gross      Net        Gross       Net
                                      -------   -------   ---------  ---------

     Offshore - Gulf of Mexico        364,660   172,354     138,062     87,592
     Offshore - Coastal Alaska        113,348    76,658      43,907     22,772
     Onshore  - United States         717,189    78,120     348,980     90,702
     Offshore - Australia                  --        --   2,786,623    696,656
     Offshore - Gabon, Africa              --        --     682,428    102,364
     Onshore  - Other international        --        --     649,393    266,100
                                    ---------   -------   ---------  ---------
       Total                        1,195,197   327,132   4,649,393  1,266,186
                                    =========   =======   =========  =========
<PAGE>
Oil and Gas Reserves

       The  following  table  summarizes  the  estimates  of  the
Company's  historical net proved reserves as of January  1,  1997
and  the  present values attributable to those reserves  on  such
date  using  constant  prices  and  operating  costs  as  of  the
valuation  date,  discounted at a  rate  of  10%  per  annum,  in
accordance with Securities and Exchange Commission ("Commission")
guidelines.  The reserve data and present values as of January 1,
1997  for  the  onshore properties, the Alaska properties  and  a
small  portion of the offshore properties have been estimated  by
Netherland,  Sewell  &  Associates, Inc.,  independent  petroleum
engineering consultants.  The reserve data and present values  as
of  January  1, 1997 for the majority of the offshore  properties
have  been  estimated by Collarini Engineering Inc.,  independent
petroleum engineering consultants.  (See Note 15 to The Company's
Financial Statements)

                                                         As of
                                                    January 1, 1997
                                                    ---------------
Net Proved Reserves:
Liquids(Mbbls)(1)                                        54,659
Natural gas (Mmcf)                                      256,913
     Total (MMcfe)                                      584,867
Present value of future net revenues
 before income taxes (thousands)                    $ 1,055,911
Standardized measure of discounted
 future net cash flows (thousands)(2)               $   802,145

--------
[FN]
<F1>
Includes crude oil, condensate and natural gas liquids.
<F2>
The standardized measure  of discounted  future net cash
flows  represents the present value of future net revenues  after
income  taxes  discounted at 10% in accordance with Statement  of
Financial Accounting Standards No. 69.
[/FN]

      Since  January  1,  1996, the Company  has  not  filed  any
estimates  of  proved  oil  and gas  reserves  with  any  federal
authority or agency other than with the Commission.

Drilling Activity

      The following table sets forth the drilling activity of the
Company  on  its  properties for the twelve month  periods  ended
December 31, 1996, 1995 and 1994.
<PAGE>
                                        Year Ended December 31,
                                 ------------------------------------
                                     1996        1995         1994
                                 ------------------------------------
                                 Gross  Net  Gross   Net  Gross   Net
                                 -----  ---  -----   ---  -----   ---
     Offshore Drilling Activity:
--------------------------------
Development:
 Oil                               11   10.4    8    5.9     1    1.0
 Gas                                8    5.7    2    1.7     5    3.7
 Non productive                     -     .2    -      -     1    1.0
                                   --   ----   --    ---    --    ---
     Total                         19   16.3   10    7.6     7    5.7
                                   ==   ====   ==    ===    ==    ===
Exploratory:
 Oil                                5    4.4    5    5.0     -      -
 Gas                                2    1.3    2    1.5     1    0.3
 Non productive                     4    1.4    2    2.0     -      -
                                   --    ---   --    ---    --    ---
     Total                         11    7.1    9    8.5     1    0.3
                                   ==    ===   ==    ===    ==    ===

     Onshore Drilling Activity:
-------------------------------
Development:
 Oil                                4    2.0    2    0.1     9    0.5
 Gas                                -      -    -      -     4    1.7
 Non productive                     -      -    -      -     -      -
                                   --    ---   --    ---    --    ---
     Total                          4    2.0    2    0.1    13    2.2
                                   ==    ===   ==    ===    ==    ===

Exploratory:
 Oil                                -      -    -      -     -      -
 Gas                                -      -    1    0.5     4    0.2
 Non productive                     1     .2    3    2.0     4    2.8
                                   --    ---   --    ---    --    ---
     Total                          1     .2    4    2.5     8    3.0
                                   ==    ===   ==    ===    ==    ===


Productive Wells

      The following table sets forth the number of productive oil
and  gas  wells in which the Company owned a working interest  at
December 31, 1996:
<PAGE>
                                          Total Productive Wells
                                          -----------------------
                                           Gross             Net
                                          ------            -----
          Oil                              1,540             543
          Gas                                512             250
             Total                         2,052             793


      Productive  wells  consist  of producing  wells  and  wells
capable  of  production,  including gas wells  awaiting  pipeline
connections.  The Company has only 16 wells that are completed in
more than one producing horizon; those wells have been counted as
single wells.

ITEM 3.      LEGAL PROCEEDINGS

      Forcenergy is not a party to, nor are any of its properties
subject to, any pending legal proceedings that in the opinion  of
management, are likely to have a material adverse effect  on  its
financial condition or results of operations.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security
holders during the fourth quarter of the Company's fiscal year
ended December 31, 1996.
                                
                             PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS

      The Company's common stock is traded on the NASDAQ/National
Market  under the symbol "FGAS".  The following table sets forth,
for  the  periods indicated, the range of closing  high  and  low
prices  of  the common stock as reported by NASDAQ.  The  Company
completed an initial public offering on August 2, 1995, therefore
no public market existed for the common stock prior to that date.

                                                  High     Low
                                                 -------  -------
     1995 Third Quarter (July 28 through 
      September 30, 1995)                        $ 11.38  $ 10.00
          Fourth Quarter                         $ 11.50  $  9.25

     1996 First Quarter                          $ 11.69  $ 10.50
          Second Quarter                         $ 19.25  $ 11.63
          Third Quarter                          $ 24.88  $ 17.75
          Fourth Quarter                         $ 37.50  $ 22.88

      At March 1, 1997, the Company had 32 shareholders of record
of  its  common stock.  The Company estimates that an  additional
3,400 shareholders hold common stock in street name.
<PAGE>


Recent Sales of Unregistered Securities

      On February 14, 1997, under Rule 144A of the Securities and
Exchange  Commission, the Company closed on the private placement
of  $200  million  in 8.5% Senior Subordinated  Notes  priced  at
$99.338 for a yield to maturity of 8.6%.  Salomon Brothers  acted
as  principal underwriter for the private placement.   Additional
purchasers   were   Donaldson,  Lufkin  &   Jenrette   Securities
Corporation,  Goldman,  Sachs  & Co.,  Lehman  Brothers  and  ING
Barings.  The Company received approximately $194.0 million,  net
of underwriters discount ($5.0 million) and other expenses of the
private placement.

Dividend Policy

      Certain  covenants set forth in the senior credit  facility
and  the  senior  subordinated notes restrict  and/or  limit  the
ability  of the Company to pay cash dividends.  The Company  does
not contemplate payment of any cash dividends in the near future.

ITEM 6.   SELECTED FINANCIAL INFORMATION

     The following table sets forth selected historical financial
data for the Company as of and for each of the periods indicated.
The   following   data  should  be  read  in   conjunction   with
"Management's Discussion and Analysis of Financial Condition  and
Results  of  Operations" and the Company's  financial  statements
included elsewhere in this report.
<PAGE>
<TABLE>
<CAPTION>
                                       For the Years Ended December 31,
                           -----------------------------------------------------
                              1996       1995       1994       1993       1992
                           ---------  ---------  ---------  ---------  ---------
                                  (in thousands, except per share amounts)
<S>                        <C>        <C>        <C>        <C>        <C>     
Income Statement data:
Revenues:
  Oil and gas sales <F1>   $ 138,698  $  72,147  $  58,354  $  49,652  $  24,937
  Other <F1>                     683        494        388        441        475
                           ---------  ---------  ---------  ---------  ---------
                             139,381     72,641     58,742     50,093     25,412

Expenses:
  Lease operating             38,786     24,507     23,744     16,632     7,769
  Depletion, deprecia-
   tion and amortization      58,464     31,295     24,572     19,889     8,014
  Production taxes             3,454      1,868      1,701      1,560       606
  General and admini-
   strative                    7,971      5,670      6,463      3,166     2,523
                           ---------  ---------  ---------  ---------  --------
                             108,675     63,340     56,480     41,247    18,192
                           ---------  ---------  ---------  ---------  -------- 
  
Income from operations        30,706      9,301      2,262      8,846     6,500
Interest and other 
 income (loss)                   650       (561)       789        545       197
Interest expense, net 
 of amounts capitalized      (13,367)   (11,668)    (9,529)    (6,192)   (2,303)
                           ---------  ---------  ---------  ---------  --------
Income (loss) before 
 income taxes                 17,989     (2,928)    (6,478)     3,199     4,394
Income tax provision 
 (benefit) <F2>                6,711     (1,075)    (2,403)     2,337        --
Minority interest                 --         --         --        107       132
                           ---------  ---------   --------  ---------  --------
Net income (loss) <F2>     $  11,278  $  (1,853)  $ (4,075) $     755  $  4,262
                           =========  =========   ========  =========  ========
Net income (loss) per
 common and common
 equivalent share <F2>     $     .57  $    (.14)  $   (.50)
                           =========  =========   ========
Unaudited pro forma 
 data <F2>:
 Income before income
  taxes, including
  minority interest                                          $  3,092  $  4,262
 Income tax provision                                           1,207     1,639
                                                             --------  --------
 Net income                                                  $  1,885  $  2,623
                                                             ========  ========
 Net income per common
  share                                                      $    .29  $    .41
                                                             ========  ========
 Weighted average 
  common and common
  equivalent shares           19,726     12,910      8,188      6,520     6,451
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             As of December 31,
                        ------------------------------------------------------ 
                            1996       1995        1994       1993        1992
                        ---------  ---------   ---------  ---------   --------
                                 (in thousands, except per share amounts)
<S>                     <C>        <C>         <C>        <C>        <C>
Balance sheet data:
 Working capital
  (deficit)             $   6,745  $ (11,775)  $   5,445  $   1,865  $  (1,246)
 Total assets             585,925    335,090     220,287    187,786    127,684
 Total liabilities        336,989    180,129     149,226    144,450     82,432
 Long-term debt           272,932    130,729     131,646    127,234     75,758
 Stockholders'equity      248,936    154,961      71,061     43,336     45,252

<FN>
<F1>
Natural gas liquid revenues for 1992, 1993 and 1994 have been  reclassified from
other revenues to oil and gas  sales  for consistent presentation with 1995 and
1996 revenues.
<F2>
Prior to September 14, 1993, the Company was exempt from United  States federal
and certain state  income  taxes as a  result  of its partnership status.  The
unaudited pro  forma data reflects the  income   tax expense that  would  have
been recorded   had the Company  not  been  exempt   from  paying such  income
taxes.  Net income per share data for 1993 and 1992  is described as unaudited
pro forma because of the Company's former partnership status.
</FN>
</TABLE>

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS

      The  following  discussion is  intended  to  assist  in  an
understanding of the Company's historical financial position  and
results  of  operations for each year of the  three-year  periods
ended  December  31, 1996 and should be read in conjunction  with
the  financial statements of the Company appearing  elsewhere  in
this report.

Results of Operations

Production Data

      The following table sets forth the Company's historical oil
and  natural  gas  production data during the  periods  indicated
(production in thousands):
<PAGE>
                                          Year Ended December 31,
                                       -----------------------------
                                         1996       1995       1994
                                       -------    -------    -------

     Production:
      Liquids (Mbbls) (F1)               4,006      2,343      1,753
      Natural gas (MMcf)                32,738     21,112     17,121
      Total (MMcfe)                     56,774     35,170     27,639
     Average realized sales prices:
      Oil (per Bbl)                    $ 17.07    $ 17.23    $ 15.69
      Plant products (per Bbl)           14.96      10.00       9.96
      Liquids <F1>                       16.93      16.46      15.04
      Natural gas (per Mcf)               2.16       1.59       1.87
     Expenses (per Mcfe):
      Lease operating                  $   .68    $   .70    $   .86
      Production taxes                     .06        .05        .06
      Depletion, depreciation and 
       amortization                       1.03        .88        .88
      General and administrative, net      .14        .16        .23
     _____________
[FN]
<F1>
Includes crude oil, condensate and natural gas liquids.
[/FN]

Comparison of the Years  ended December 31, 1996 and December 31, 1995

      Operating  and Net Income.  Operating income  increased  to
$30.7  million  for  the year ended December  31,  1996,  a  230%
improvement compared to the $9.3 million reported for  the  prior
year.  Net income for 1996  rose to $11.3 million compared  to  a
net  loss  of  $1.9  million in 1995.  The  improvement  in  both
operating  income and net income/loss was attributable  primarily
to  higher production volumes and higher net realized oil and gas
prices.

      Production.  The Company's net liquids production  rose  to
4,006 Mbbls for the year ended December 31, 1996 from 2,343 Mbbls
in  1995,  a  71% improvement.  Net gas production  increased  to
32,738 Mmcf in 1996, a 55% increase over the 21,112 Mmcf produced
last  year.   On  an  equivalent unit basis,  1996  oil  and  gas
production  increased to 56,774 Mmcfe, 61% more than  the  35,170
Mmcfe  produced during 1995.  The increase in both  oil  and  gas
production  was  attributable  to  new  production  from   recent
acquisitions of oil and gas properties as well as from successful
drilling  and workover programs begun in late 1995 and continuing
through 1996.

      Revenues.  Revenues for the 1996 year increased  to  $139.4
million,  a 92% improvement over the $72.6 million reported  last
year,  primarily because of higher production volumes and  higher
net realized prices.  Average net realized liquid prices rose  to
$16.93  per  barrel in 1996, a 3% increase over  the  $16.46  per
<PAGE>
barrel received in 1995.  Average net realized gas prices rose to
$2.16  per  Mcf  in 1996, a 36% increase over the $1.59  per  Mcf
reported in 1995.

      Average  prices received for field production for the  1996
year  were  $20.49 per bbl and $2.40 per mcf for oil and  natural
gas, respectively.  After taking into account the effects of 1996
hedging  activities entered into to guarantee a certain level  of
cash flow from production, specifically a $12.8 million reduction
in  oil revenue and a $7.7 million reduction in gas revenue,  net
realized prices were reduced to $17.07 per bbl and $2.16 per  mcf
for  oil and natural gas, respectively.  Average realized  prices
for  1995  were $17.23 per bbl of oil and $1.59 per mcf  of  gas.
Effects  of hedging activities were not significant in  the  year
ended December 31, 1995.

      Lease  Operating Expenses.  Lease operating  expenses  were
$38.8 million in 1996 compared to the $24.5 million reported  for
1995,  an  increase primarily due to new fields  acquired  during
1995  and  1996  and  to  workover-type  repair  and  maintenance
activities  in 1996.  On an equivalent unit of production  basis,
expenses decreased to $.68 per Mcfe in 1996 from $.70 per mcf  in
1995,  a  decrease attributable primarily to increased production
levels on existing properties during the latter part of 1996.

      Depletion,  Depreciation and Amortization  ("DD&A").   DD&A
expense increased to $58.5 million in 1996 from the $31.3 million
reported  for 1995, an increase attributable to higher production
levels and to an increase in the DD&A rate per unit of production
to $1.03 per Mcfe, compared to $.88 per mcf in 1995.

        General   and   Administrative   Costs.    General    and
administrative  costs  were $8.0 million in  1996  compared  with
$5.7  million  reported in 1995, an increase due to  the  overall
growth  of the Company during the latter half of 1995 and through
1996.    On  an  equivalent  Mcf  produced  basis,  general   and
administrative expenses decreased to $.14 per Mcfe in 1996 from a
rate  of  $.16  per  Mcfe in 1995, primarily due  to  the  higher
production levels in 1996.

       Interest  Expense.   Interest  expense,  net  of   amounts
capitalized,  increased  to $13.4 million  in  1996  compared  to
$11.7  million  last year.  The increase in interest  expense  is
primarily due to higher debt levels during 1996.

       Income   Tax  Provision  (Benefit).   Income  tax  expense
increased to $6.7 million in 1996, from a benefit of $1.1 million
in 1995, due to the improvement in results of operations compared
to 1995.
<PAGE>
Comparison of the Years Ended December 31, 1995 and December 31,
1994

      Operating and Net Income. Operating income increased  304%,
to $9.3 million in 1995 from $2.3 million in 1994.  The Company's
net  loss for 1995 was $1.9 million compared with a net  loss  of
$4.1  million  in 1994.  These improvements were attributable  to
higher  oil and gas production and lower per unit lease operating
costs.

     Production. Net liquid production increased by 34%, to 2,343
Mbbls  in  1995  from 1,753 Mbbls in 1994 and net gas  production
increased  by 23%, to 21.1 Bcf in  1995 from 17.1 Bcf   in  1994.
Forcenergy's  total net equivalent production increased  to  35.2
Bcfe  in  1995, a 28% improvement over the 27.6 Bcfe produced  in
1994,  due  primarily  to the acquisition of additional  offshore
properties in late 1994 and in early 1995 and the addition of new
production attained from the successful 1995 drilling program.

      Revenues.  Total revenues increased 24% to $72.6 million in
1995  compared with $58.7 million in 1994, primarily  because  of
higher   production   volumes,  which  in  turn   resulted   from
acquisitions  closed  during 1995 and  the  Company's  successful
drilling program.  Oil revenues for the year increased by 47%, to
$38.6  million  in  1995 from $26.3 million in  the  prior  year.
Average  net realized liquid prices of $16.46 per barrel in  1995
were 9% higher than the $15.04 per barrel received in 1994.   Gas
revenues  rose to $33.6 million in 1995, 5% more than  the  $31.9
million  in  1994;  however,  average  net  realized  gas  prices
declined  to  $1.59 per Mcf in 1995, 15% below the $1.87  average
per Mcf received in 1994.

       Lease   Operating  Expenses.   Lease  operating   expenses
increased by $763,000, or 3%, in 1995 compared to 1994 because of
the  addition  of  new properties; however, on an  Mcfe  produced
basis, costs declined 19% from $.86 per Mcfe in 1994 to $.70  per
Mcfe in 1995.  This decline in the per unit cost was attributable
to  the  Company's  success  in  adding  new  production  through
development  of  new  reserves  from  existing   properties   and
facilities  and  through  acquiring new properties  that  provide
operating synergies with existing properties.

       Depletion,  Depreciation  and  Amortization.   Total  DD&A
increased  27% to $31.3 million during 1995 compared  with  $24.6
million  during 1994, primarily as a result of higher  production
volumes  in 1995 as the DD&A rate was substantially the same  for
both years.

      General  and  Administrative.  General  and  administrative
expenses  declined to $5.7 million  in 1995, 12%  less  than  the
$6.5  million  incurred in 1994.  The costs  for  1994  reflected
higher  third-party  engineering and consulting  fees  associated
with  several  acquisition possibilities that never materialized.
Additionally,  the Company billed more general and administrative
expenses, as provided for in joint operating agreements, to joint
interest owners in 1995 due to the increased drilling activity.
<PAGE>
       Interest  Expense.   Interest  expense,  net  of   amounts
capitalized,  increased 23% to $11.7 million,  compared  to  $9.5
million in 1994.  This increase was primarily attributable to the
acquisition related increases in the Company's debt levels  prior
to the repayment of a portion of that debt with proceeds from the
initial public offering.

     Interest and Other Income.  Interest and other income (loss)
reflected  a net charge of $561,000 in 1995 compared with  income
of  $789,000  in  1994.   The  1995 charge  included  a  non-cash
adjustment  to  certain  balance  sheet  items  associated   with
activities  in previous years.  Interest income was  $474,000  in
1995 compared with $454,000 in the prior year.

      Income  Tax  Provision (Benefit).  The income  tax  benefit
decreased to $1.1 million in 1995, from $2.4 million in 1994, due
to the improvement in the results of operations.

Liquidity and Capital Resources

     The Company has historically funded its operations, acquisitions,
capital expenditures and working capital requirements from  cash flow 
from operations, bank borrowings and private and public placements of
debt and equity securities.  The Company's primary  sources  of funds
for each of the past three years were as follows:
 
                                                1996         1995        1994
                                             ----------   ---------   ---------
Net cash provided by operating activities    $   65,228   $   28,574  $  22,433
Borrowings under the Senior Credit Facility     255,968       35,709      6,872
Repayments under the Senior Credit Facility    (250,091)  $  (38,666)        --
Proceeds from issuance of common stock           46,318       55,753     31,800
Proceeds from Bridge Loan                            --        8,000         --
Issuance of long-term debt                      169,114           --         --

      The  Company had $9.7 million in cash at December 31,  1996
compared  to  $3.0 million at the end of 1995.   Working  capital
was  $6.7  million  at December 31, 1996 compared  with  negative
working  capital  of  $11.8 million at December  31,  1995.   The
increase  in  cash was due to the Company's receipt  of  proceeds
from  the  1996  Offerings (discussed below).   The  increase  in
working  capital was due to the increase in cash  and,  as  well,
increases  in oil and gas sales receivables related to production
and price increases.

      Forcenergy  generated approximately $65.2 million  in  cash
from  operations  during 1996 compared to  $28.6  million  during
1995.   This  increase  was  due to  additional  production  from
acquired properties and the 1996 drilling program and from higher
oil and gas prices.
<PAGE>
      Total capital expenditures were $284.0 million for the year
ended  December  31, 1996, including $152.5 attributable  to  the
cost  of  acquisitions.   Funding  for  these  expenditures   was
provided  through the Company's existing Senior Credit  Facility,
net proceeds from the 1996 Offerings and funds from operations.

     During November 1996, the Company sold, in concurrent public
offerings   (the   "1996  Offerings"),  $175  million   aggregate
principal amount of 9 1/2% Senior Subordinated Notes due 2006 and
1,635,408  shares  of Common Stock. Concurrently  with  the  1996
Offerings,  all  of the outstanding 7% Exchangeable  Subordinated
Notes  were converted into Common Stock, and options to  purchase
214,866  shares of common stock were exercised by certain holders
of  the 7% Exchangeable Subordinated Notes.  The Company received
approximately  $210  million  in aggregate  net  proceeds  (after
underwriting fees, commissions and estimated offering  expenses),
a   substantial  portion  of  which  were  used  to  retire   all
outstanding   borrowings  under  the  Company's   Senior   Credit
Facility.  The balance of the net proceeds have been utilized for
general  corporate purposes, including capital  expenditures  and
acquisitions.

      During December 1996, and January 1997, the Company  closed
several acquisitions aggregating $201.0 million, funded primarily
by  the Company's Senior Credit Facility and cash remaining  from
the  1996 Offerings.  In February 1997, the Company closed  on  a
private  placement of  $200 million in 8.5%  Senior  Subordinated
Notes  priced  at $99.338 for a yield to maturity of  8.6%.   The
Company received approximately $194.0 million in net proceeds and
used  the  majority  of those proceeds to repay  all  outstanding
indebtedness  under  the Company's Senior Credit  Facility.   The
Company's borrowing base and maximum commitment under the  Senior
Credit  Facility  is  $195.0 million and, at February  28,  1997,
after  reduction  for issued letters of credit, the  Company  had
approximately  $189.1 million available under the  facility.   At
February  28,  1997,  the  Company also had  approximately  $38.5
million in cash available for general corporate purposes.

      The  Company's  capital  expenditure  budget  for  1997  is
estimated  to  be  approximately $195 million.   Forcenergy  will
continue  to  evaluate its capital spending plans throughout  the
year.    Actual   levels   of  capital  expenditures   may   vary
significantly  due  to a variety of factors,  including  drilling
results,  oil  and gas prices, industry conditions  and  outlook,
future  acquisitions  of  properties  and  the  availability   of
capital.   Although  the  1997 budget does  not  incorporate  any
acquisitions,  the  Company  will continue  to  selectively  seek
acquisition   opportunities   where   it   believes   significant
exploration and development potential exists.

     Revenues generated from operations are highly dependent upon
the price of, and demand for, oil and natural gas.  Historically,
the  markets for oil and natural gas have been volatile  and  are
likely  to  continue to be volatile in the future as  prices  are
subject  to  wide  fluctuations in response to  relatively  minor
<PAGE>
changes  in  the  supply of and demand for oil and  natural  gas,
market  uncertainty and a variety of additional factors that  are
beyond  the control of the Company.  These uncontrollable factors
include the level of consumer product demand, weather conditions,
domestic  and  foreign governmental regulations,  the  price  and
availability  of  alternative fuels and  political  and  economic
conditions in the Middle East, Russia, Mexico and Canada that can
affect  the supply and price of foreign oil and natural gas.   It
is  impossible  to  predict  future oil  and  natural  gas  price
movements  with any certainty.  Declines in oil and  natural  gas
prices  may  adversely affect the Company's financial  condition,
liquidity  and  results  of operations.  Lower  prices  also  may
reduce  the amount of reserves that can be produced economically,
as  well  as limit the ability to continue to exploit and develop
the existing reserve base.

      The  Company  utilizes, from time to  time,  forward  sales
contracts and commodity swaps for portions of its current oil and
gas  production  to achieve more predictable cash  flows  and  to
reduce  its exposure to fluctuations in oil and gas prices.   The
remaining portion of current production is not hedged  so  as  to
provide the Company the opportunity to benefit from increases  in
prices  on that portion of the production, should price increases
materialize.  All of these arrangements are settled on a  monthly
basis.   The Company accounts for its commodity swaps and collars
as  hedging  activities and, accordingly,  gains  or  losses  are
included  in  oil and gas revenues for the period the  production
was  hedged.   The Company continuously re-evaluates its  hedging
program in light of market conditions, commodity price forecasts,
capital spending, and debt service requirements.  (See Note 9  to
the Company's Financial Statements.)

      Management  believes that cash on hand  at  year-end,  cash
flows  from  operations  and  the borrowing  capacity  under  the
Company's Senior Credit Facility will be adequate to meet  future
liquidity   needs,  including  funding  the  Company's  financial
obligations and capital program.

New Accounting Pronouncements

     The Financial Accounting Standards Board (the "FASB") issued
Statement  of  Financial Accounting Standards ("SFAS")  No.  125,
"Accounting for Transfers and Servicing of Financial  Assets  and
Extinguishments  of Liabilities," in June 1996.   This  statement
provides  accounting  and reporting standards  for,  among  other
things,  the transfer and servicing of financial assets, such  as
factoring receivables with recourse.  This statement is effective
for  transfers and servicing of financial assets occurring  after
December  31, 1996, and is to be applied prospectively.   Earlier
or   retroactive  application  is  not  permitted.   The  Company
<PAGE>
believes  the adoption of this statement will not have an  impact
on  the  financial  condition or results  of  operations  of  the
Company.

      In  February 1997, the FASB issued SFAS No. 128,  "Earnings
Per Share" ("EPS")("SFAS 128").  SFAS 128 specifies new standards
for the computation, presentation and disclosure requirements for
EPS.   SFAS  128  is  intended  to improve  the  EPS  information
provided  in  financial  statements by simplifying  the  existing
computational guidelines revising the disclosure requirements  to
provide  more  consistent  and  meaningful  information  and   by
increasing  the  comparability of EPS data  on  an  international
basis.   Some of the changes made to simplify the EPS computation
include:   (a)  eliminating the presentation of primary  EPS  and
replacing it with basic EPS, with the principal difference  being
that  common  stock  equivalents (CSEs)  are  not  considered  in
computing basic EPS; (b) eliminating the modified treasury  stock
method  and  the  three percent materiality  provision;  and  (c)
revising the contingent share provisions and the supplemental EPS
data  requirements.  SFAS 128 also makes a number of  changes  to
existing  disclosure  requirements.  SFAS 128  is  effective  for
financial statements issued for periods ending after December 15,
1997,  including  interim  periods.   The  Company  has  not  yet
determined the impact of the implementation of SFAS 128.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       The   financial  statements  and  supplementary  financial
information required to be filed under this item are presented on
pages  F-1  through F -27 of this Form 10-K, and are incorporated
herein by reference.


ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE

Changes in Accountants

      On  October 16, 1995, the Company reported on  Form  8-K  a
change in the Company's independent accountants.

Disagreements with Accountants on Accounting and Financial
Disclosures

     None.


                            PART III


      Items 10, 11, 12 and 13 of Part III are incorporated herein
by  reference  from  Forcenergy's Proxy Statement  for  the  1997
Annual Meeting of the Stockholders, which is expected to be filed
with  the Securities and Exchange Commission no later than  April
30, 1997.
<PAGE>
                              PART IV

ITEM  14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND  REPORTS
            ON FORM 8-K

(a)  Documents included in this report:

  1. Financial Statements
                                                                       Page
     Report of independent accountants                                  F-2
     Consolidated balance sheets as of December 31, 1996 and 1995       F-4
     Consolidated statements of operations for each of the three
      years in the period ended December 31, 1996                       F-5
     Consolidated statements of stockholders' equity for each of
      the three years in the period ended December 31, 1996             F-6
     Consolidated statements of cash flows for each of the three
      years in the period ended December 31, 1996                       F-7
     Notes to consolidated financial statements                         F-8

  2. Financial Statement Schedules

           All  financial statement schedules have  been  omitted
     because they are either not required, not applicable or  the
     information  required to be presented  is  included  in  the
     Company's financial statements and related notes.

  3. a. Exhibits:

     
     2.1  Agreement and Plan of Merger, dated as of September 14,
          1993,  among Forcenergy Partners, L.P., Forcenergy  Gas
          Exploration, Inc. and the Company.  (Filed  as  Exhibit
          4.2 to the Registration Statement on Form S-1 filed  on
          June  2, 1995, as amended on July 6, 1995 and July  25,
          1995 and is included herein by reference (File No.  33-
          93020))
     
     2.2  Supplemental Agreement and Plan of Merger, dated as  of
          September  14,  1993, among Forcenergy Partners,  L.P.,
          Forcenergy Gas Exploration, Inc., and the Company, Stig
          Wennerstrom, and Forcenergy AB.  (Filed as Exhibit  4.3
          to the Registration Statement on Form S-1 filed on June
          2,  1995, as amended on July 6, 1995 and July 25,  1995
          and included herein by reference (File No. 33-93020))
     
     2.3  Purchase and Sale/Exchange Agreement dated December 12,
          1994  between Conoco Inc. and the Company.   (Filed  as
          Exhibit 10.37 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))
<PAGE>
     2.4  Purchase  and Sale Agreement dated September  15,  1994
          between  Ashlawn Energy, Inc. and the Company.   (Filed
          as  Exhibit 10.38 to the Registration Statement on Form
          S-1  filed on June 2, 1995, as amended on July 6,  1995
          and  July  25, 1995 and is included herein by reference
          (File No. 33-93020))

     2.5  Agreement and Plan of Merger dated as of May  25,  1995
          among  the  Company, Ashlawn Energy, Inc.,  Jeannie  M.
          Hines,  William  A. Hines, Donna B. Hines,  William  M.
          Hines,  Ann  Gilbert and Louis F. Gilbert.   (Filed  as
          Exhibit 10.34 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))
     
     2.6  Certificate  of  Merger of Ashlawn  Energy,  Inc.  into
          Forcenergy Gas Exploration, Inc. dated August 2,  1995.
          (Filed  as  Exhibit 2.1 to the Quarterly Form  on  10-Q
          filed  on  November 14, 1995 for the six  month  period
          ending  June  30,  1995  and  is  included  herein   by
          reference (File No. 0-26444))

     2.7  Purchase  and  Sale  Agreement  dated  April  19,  1996
          between  Amerada  Hess  Corporation  and  the  Company.
          (Filed  as Exhibit 2 to the Current Report on Form  8-K
          on  July  15,  1996, as subsequently  amended,  and  is
          included herein by reference (File No. 0-26444))
     
     2.8  Purchase  and  Sale Agreement dated December  12,  1996
          between  Marathon Oil Company and the Company.   (Filed
          as  Exhibit 2.1 to the Current Report on Form 8-K filed
          on January 14, 1997 and is included herein by reference
          (File No. 0-26444))
     
     3.1  Amended  and  Restated Certificate of Incorporation  of
          the Company dated July 25, 1995.  (Filed as Exhibit 3.1
          to  the  Quarterly Form on 10-Q filed on  November  14,
          1995  for  the  nine month period ending September  30,
          1995  and is included herein by reference (File No.  0-
          26444))   and  Amendment  No.  1  thereto  filed   with
          Amendment No. 2 to Form S-1 filed on June 6,  1996  and
          is included herein by reference (File No. 333-4600).

     3.2  Bylaws  of the Company.  (Filed as Exhibit 3.2  to  the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))
     
     4.1  Specimen  Common Stock certificate.  (Filed as  Exhibit
          4.1  to the Registration Statement on Form S-1 on  June
          2,  1995, as amended on July 6, 1995 and July 25,  1995
          and  is  included  herein by reference  (File  No.  33-
          93020))
<PAGE>
     
     4.2  Registration Rights Agreement dated as of  October  10,
          1995  by  and between Forcenergy Gas Exploration,  Inc.
          and  Forcenergy  AB.  (Filed as Exhibit  4.3  with  the
          Annual  Report on Form 10-K for the fiscal  year  ended
          December  31, 1995 and is included herein by  reference
          (File No. 0-26444).
     
     4.3  Form  of Indenture dated as of November 6, 1996 between
          Forcenergy  Inc, as Issuer, and Bankers Trust  Company,
          as  Trustee.  (Filed as Exhibit 4.2 to the Registration
          Statement  on  Form  S-3  on  October  30,   1996,   as
          subsequently  amended,  and  is  included   herein   by
          reference (File No. 333-13657))
     
     4.4* Form of Indenture dated as of February 14, 1997 between
          Forcenergy Inc, as Issuer and Bankers Trust Company, as
          Trustee (filed herewith).

     10.1 Employment   Agreement,  dated  as   of  September  14,
          1993  between the Company and Stig Wennerstrom.  (Filed
          as Exhibit 10.1 to the Registration Statement on Form S-
          1 filed on June 2, 1995, as amended on July 6, 1995 and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))
     
     10.2 First Amendment to Employment Agreement  dated effective
          as  of  May  18, 1995  between  the   Company  and  Stig
          Wennerstrom. (Filed as Exhibit 10.2  to the Registration
          Statement on Form S-1 filed on June  2, 1995, as amended
          on July 6, 1995 and July 25, 1995 and is included herein
          by reference (File No. 33-93020))
     
     10.3 Indemnification   Agreement,   dated  as  of  September
          14,  1993  between  the Company and  Stig  Wennerstrom.
          (Filed as Exhibit 10.3 to the Registration Statement on
          Form  S-1 filed on June 2, 1995, as amended on July  6,
          1995  and  July  25,  1995 and is  included  herein  by
          reference (File No. 33-93020))

     10.4 Indemnification   Agreement,   dated   as  of September
          14,  1993 between the Company and Harold Simon.  (Filed
          as Exhibit 10.4 to the Registration Statement on Form S-
          1 filed on June 2, 1995, as amended on July 6, 1995 and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

     10.5 Form  of  Indemnification Agreement between the Company
          and  certain officers and directors.  (Filed as Exhibit
          10.5 to the Registration Statement on Form S-1 filed on
          June  2, 1995, as amended on July 6, 1995 and July  25,
          1995 and is included herein by reference (File No.  33-
          93020))
<PAGE>
     10.6 Forcenergy Gas Exploration, Inc. 1993 Stock Option Plan
          for  Officers and Key Employees and forms of  incentive
          and  nonqualified stock option agreements.   (Filed  as
          Exhibit 10.6 to the Registration Statement on Form  S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))
     
     10.7 Forcenergy Gas Exploration, Inc. 1995 Stock Option Plan
          and  forms  of incentive and nonqualified stock  option
          agreements.  (Filed as Exhibit 10.7 to the Registration
          Statement on Form S-1 filed on June 2, 1995, as amended
          on  July  6,  1995  and July 25, 1995 and  is  included
          herein by reference (File No. 33-93020))

     10.8 Forcenergy  Gas  Exploration, Inc.  1995  Non  Employee
          Director  Stock  Option Plan and forms of  nonqualified
          stock option agreement.  (Filed as Exhibit 10.8 to  the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

     10.9 Forcenergy  Gas  Exploration, Inc. 1995 Employee  Stock
          Purchase   Plan.   (Filed  as  Exhibit  10.9   to   the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

    10.10 Deed  of    Trust,  Mortgage,   Assignment,   Security
          Agreement  and Financing Statement dated September  15,
          1993 between the Company and Internationale Nederlanden
          (U.S.)  Capital  Corporation,  as  Agent.   (Filed   as
          Exhibit 10.15 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.11 Note  Purchase  Agreement  dated  as  of  September 15,
          1993  among  the  Company, Forcenergy  Offshore,  Inc.,
          Chemical Equity Associates, FS Energy Associates, L.P.,
          Financial   Strategic  Portfolios,   Inc.   --   Energy
          Portfolio,  Financial  Strategic  Portfolios,  Inc.  --
          Utilities Portfolio, Burden Direct Investment  Fund  I,
          L.P.,   A.C.  Israel  Enterprises,  Inc.,  Lamar   Life
          Insurance  Company, Clark Partners I,  Brinson  Venture
          Capital  Fund  III,  L.P.,  Brinson  Trust  Company  as
          Trustee  of  the Brinson Map Venture Capital  Fund  III
          Trust  and  Virginia  Retirement  System.   (Filed   as
          Exhibit 10.16 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))
<PAGE>
    10.12 Consent  and  Modification   Agreement  dated   May  4,
          1994  among the Company and Chemical Equity Associates,
          FS   Energy   Associates,  L.P.,  Financial   Strategic
          Portfolios,   Inc.   --  Energy  Portfolio,   Financial
          Strategic  Portfolios,  Inc.  --  Utilities  Portfolio,
          Burden  Direct  Investment Fund I,  L.P.,  A.C.  Israel
          Enterprises, Inc., Lamar Life Insurance Company,  Clark
          Partners  I,  Brinson Venture Capital Fund  III,  L.P.,
          Brinson  Trust  Company as Trustee of the  Brinson  Map
          Venture  Capital Fund III Trust and Virginia Retirement
          System, including form of option agreement.  (Filed  as
          Exhibit 10.17 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.13 Amendment   to   Note   Purchase  Agreement  among  the
          Company  and  Chemical  Equity  Associates,  FS  Energy
          Associates, L.P., Financial Strategic Portfolios,  Inc.
          --  Energy  Portfolio, Financial Strategic  Portfolios,
          Inc.  --  Utilities Portfolio, Burden Direct Investment
          Fund I, L.P., A.C. Israel Enterprises, Inc., Lamar Life
          Insurance  Company, Clark Partners I,  Brinson  Venture
          Capital  Fund  III,  L.P.,  Brinson  Trust  Company  as
          Trustee  of  the Brinson Map Venture Capital  Fund  III
          Trust  and  Virginia  Retirement  System.   (Files   as
          Exhibit  10.4 to the Quarterly Form  on 10-Q  filed  on
          November 14, 1995 for the six month period ending  June
          30,  1995 and is included herein by reference (File No.
          0-26444))

    10.14 Note   Exchange  and  Registration   Rights   Agreement
          dated  as  of September 15, 1993 among the Company  and
          Chemical Equity Associates, FS Energy Associates, L.P.,
          Financial   Strategic  Portfolios,   Inc.   --   Energy
          Portfolio,  Financial  Strategic  Portfolios,  Inc.  --
          Utilities Portfolio, Burden Direct Investment  Fund  I,
          L.P.,   A.C.  Israel  Enterprises,  Inc.,  Lamar   Life
          Insurance  Company, Clark Partners I,  Brinson  Venture
          Capital  Fund  III,  L.P.,  Brinson  Trust  Company  as
          Trustee  of  the Brinson Map Venture Capital  Fund  III
          Trust  and  Virginia  Retirement  System.   (Filed   as
          Exhibit 10.19 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.15 Amendment   to    Note   Exchange   and    Registration
          Rights  Agreement among the Company and Chemical Equity
          Associates,  FS  Energy  Associates,  L.P.,   Financial
          Strategic   Portfolios,  Inc.  --   Energy   Portfolio,
          Financial   Strategic  Portfolios,  Inc.  --  Utilities
          Portfolio, Burden Direct Investment Fund I, L.P.,  A.C.
          Israel Enterprises, Inc., Lamar Life Insurance Company,
<PAGE>
          Clark  Partners  I, Brinson Venture Capital  Fund  III,
          L.P.,  Brinson Trust Company as Trustee of the  Brinson
          Map   Venture  Capital  Fund  III  Trust  and  Virginia
          Retirement  System.   (Filed as  Exhibit  10.1  to  the
          Quarterly Form on 10-Q filed on November 14,  1995  for
          the  six  month  period ending June  30,  1995  and  is
          included herein by reference (File No. 0-26444))

    10.16 Form  of   Second   Amendment  to  Note  Exchange   and
          Registration Rights Agreement (Filed as Exhibit 2.5  to
          the Registration Statement on Form S-3 filed on October
          7, 1996, as amended on October 16, 1996 and is included
          herein by reference (File No. 33-13657))

    10.17 Subordination   Agreement  dated  as  of  September 15,
          1993  among  the Company and Internationale Nederlanden
          (U.S.) Capital Corporation, as Agent for the Banks  who
          are  party to the Credit Agreement, and Chemical Equity
          Associates,  FS  Energy  Associates,  L.P.,   Financial
          Strategic   Portfolios,  Inc.  --   Energy   Portfolio,
          Financial   Strategic  Portfolios,  Inc.  --  Utilities
          Portfolio, Burden Direct Investment Fund I, L.P.,  A.C.
          Israel Enterprises, Inc., Lamar Life Insurance Company,
          Clark  Partners  I, Brinson Venture Capital  Fund  III,
          L.P.,  Brinson Trust Company as Trustee of the  Brinson
          Map   Venture  Capital  Fund  III  Trust  and  Virginia
          Retirement  System.   (Filed as Exhibit  10.21  to  the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

    10.18 Voting   and    Holdback   Agreement   dated    as   of
          September  15,  1993 among the Company, Forcenergy  AB,
          Wictor  Forss and Chemical Equity Associates, FS Energy
          Associates, L.P., Financial Strategic Portfolios,  Inc.
          --  Energy  Portfolio, Financial Strategic  Portfolios,
          Inc.  --  Utilities Portfolio, Burden Direct Investment
          Fund I, L.P., A.C. Israel Enterprises, Inc., Lamar Life
          Insurance  Company, Clark Partners I,  Brinson  Venture
          Capital  Fund  III,  L.P.,  Brinson  Trust  Company  as
          Trustee  of  the Brinson Map Venture Capital  Fund  III
          Trust  and  Virginia  Retirement  System.   (Filed   as
          Exhibit 10.22 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.19 Amendment   to   Voting   and  Holdback Agreement among
          the  Company and Chemical Equity Associates, FS  Energy
          Associates, L.P., Financial Strategic Portfolios,  Inc.
          --  Energy  Portfolio, Financial Strategic  Portfolios,
          Inc.  --  Utilities Portfolio, Burden Direct Investment
          Fund I, L.P., A.C. Israel Enterprises, Inc., Lamar Life
          Insurance  Company, Clark Partners I,  Brinson  Venture
<PAGE>
          Capital  Fund  III,  L.P.,  Brinson  Trust  Company  as
          Trustee  of  the Brinson Map Venture Capital  Fund  III
          Trust  and  Virginia  Retirement  System.   (Files   as
          Exhibit  10.2 to the Quarterly Form  on 10-Q  filed  on
          November 14, 1995 for the six month period ending  June
          30,  1995 and is included herein by reference (File No.
          0-26444))
     
    10.20 Warrants   to   Purchase   Common  Stock of the Company
          dated  October 28, 1994 issued to Donaldson,  Lufkin  &
          Jenrette  Securities  Corporation  and  DLJ  First  ESC
          L.L.C.   (Filed  as  Exhibit 10.24 to the  Registration
          Statement on Form S-1 filed on June 2, 1995, as amended
          on  July  6,  1995  and July 25, 1995 and  is  included
          herein by reference (File No. 33-93020))

    10.21 Consulting   Agreement    dated    January   18,   1991
          between  the  Company  and  Wictor  Forss.   (Filed  as
          Exhibit 10.25 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.22 Incentive   Stock   Option   Agreement  dated September
          14,  1993  between  the Company and  Stig  Wennerstrom.
          (Filed  as  Exhibit 10.26 to the Registration Statement
          on  Form S-1 filed on June 2, 1995, as amended on  July
          6,  1995  and July 25, 1995 and is included  herein  by
          reference (File No. 33-93020))

    10.23 Non-Qualified   Stock    Option     Agreement     dated
          September  14,  1993 and amendment dated  November  23,
          1993  between the Company and Stig Wennerstrom.  (Filed
          as  Exhibit 10.27 to the Registration Statement on Form
          S-1  filed on June 2, 1995, as amended on July 6,  1995
          and  July  25, 1995 and is included herein by reference
          (File No. 33-93020))

    10.24 Form   of   Incentive   Stock  Option Agreement between
          the  Company and Stig Wennerstrom under the 1995  Stock
          Option   Plan.    (Filed  as  Exhibit  10.28   to   the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

    10.25 Form   of   Non-Qualified   Stock    Option   Agreement
          between the Company and Stig Wennerstrom under the 1995
          Stock  Option  Plan.  (Filed as Exhibit  10.29  to  the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

    10.26 Form  of  Incentive  Stock  Option  Agreement   between
          the  Company  and its officers and directors  excluding
          Stig  Wennerstrom under the 1995 Stock Option  Plan  or
          the 1995 Non-Employee Director Plan.  (Filed as Exhibit
          10.30  to the Registration Statement on Form S-1  filed
<PAGE>
          on  June  2, 1995, as amended on July 6, 1995 and  July
          25,  1995 and is included herein by reference (File No.
          33-93020))

    10.27 Form   of    Non-Qualified    Stock   Option  Agreement
          between  the  Company  and its officers  and  directors
          excluding Stig Wennerstrom under the 1995 Stock  Option
          Plan or the 1995 Non-Employee Director Plan.  (Filed as
          Exhibit 10.31 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.28 Subscription   Agreement   dated   September  14,  1993
          between  the  Company  and Forcenergy  AB.   (Filed  as
          Exhibit 10.32 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.29 Stock    Purchase    Agreement   dated   May  12,  1994
          between  the  Company  and Forcenergy  AB.   (Filed  as
          Exhibit 10.33 to the Registration Statement on Form S-1
          filed  on June 2, 1995, as amended on July 6, 1995  and
          July 25, 1995 and is included herein by reference (File
          No. 33-93020))

    10.30 Form   of   Waiver  letter  of  Donaldson,   Lufkin   &
          Jenrette  Securities Corporation related to Warrant  to
          purchase  Common Stock dated October 28, 1994.   (Filed
          as  Exhibit 10.35 to the Registration Statement on Form
          S-1  filed on June 2, 1995, as amended on July 6,  1995
          and  July  25, 1995 and is included herein by reference
          (File No. 33-93020))

    10.31 Form  of  Waiver   letter  of   DLJ   First ESC  L.L.C.
          related  to  Warrant  to purchase  Common  Stock  dated
          October  28,  1994.   (Filed as Exhibit  10.36  to  the
          Registration  Statement on Form S-1 filed  on  June  2,
          1995, as amended on July 6, 1995 and July 25, 1995  and
          is included herein by reference (File No. 33-93020))

    10.32 Form  of  Irrevocable  Proxy  granted  by Forcenergy AB
          to  representatives    of   the    holders    of    the
          Exchangeable  Subordinated Notes.   (Filed  as  Exhibit
          10.41  to the Registration Statement on Form S-1  filed
          on  June  2, 1995, as amended on July 6, 1995 and  July
          25,  1995 and is included herein by reference (File No.
          33-93020))
     
    10.33 Second   Restated   Credit    Agreement  dated December
          1,   1995  among  Forcenergy  Gas  Exploration,   Inc.,
          Internationale Nederlanden (U.S.) Capital  Corporation,
          as   Agent,  and  Certain  Financial  Institutions,  as
          Lenders.   (Filed  as  Exhibit 10.38  with  the  Annual
<PAGE>
          Report on Form 10-K  for the fiscal year ended December
          31,  1995 and is incorporated herein by reference (File
          No. 0-26444))
     
    10.34 Third   Restatement  of  Credit  Agreement  dated as of
          April  26,  1996,  as  amended,  among  Forcenergy  Gas
          Exploration, Inc. and Internationale Nederlanden (U.S.)
          Capital  Corporation, as Agent and Lender, and  certain
          Financial   Institutions  named  therein  as   Lenders.
          (Filed  as  Exhibit 10.37 to the Registration Statement
          on  Form  S-1 on May 3, 1996 and is included herein  by
          reference (File No. 333-4600))

   10.35* First   Amendment   to   Third   Restatement of  Credit
          Agreement   by   and   among   Forcenergy    Inc    and
          Internationale  Nederlanden (U.S.) Capital  Corporation
          and  certain  financial institutions named  therein  as
          Lenders.

   10.36* Second   Amendment   to   Third  Restatement of  Credit
          Agreement   by   and   among   Forcenergy    Inc    and
          Internationale  Nederlanden (U.S.) Capital  Corporation
          and  certain  financial institutions named  therein  as
          Lenders.

   10.37* Third  Amendment   to   Third  Restatement   of  Credit
          Agreement   by   and   among   Forcenergy    Inc    and
          Internationale  Nederlanden (U.S.) Capital  Corporation
          and  certain  financial institutions named  therein  as
          Lenders.

    10.38 Amendment to the Forcenergy Inc 1995 Stock Option  Plan.
          (Filed  as  Exhibit  10.2  to  the  Quarterly  Form  on
          10-Q  filed on November 7, 1996 and is included  herein
          by reference (File No. 0-26444))

    11.1* Computation of earnings per share.

    21.1* Subsidiaries of the Company.
     
    23.1* Consent of Coopers & Lybrand L.L.P.
     
    23.2* Consent of Price Waterhouse LLP
     
     99.1 Press  Release  announcing  the  closing  on  a  private
          placement  (pursuant to Rule 144A) of  $200  million  in
          8 1/2% Senior Subordinated Notes priced at $99.338, with
          a yield to maturity of 8.6%. (Filed as Exhibit 99 to the
          Current  Report on Form 8-K  filed on February 21,  1997
          and is included herein by  reference (File No. 0-26444))
     

     * Filed herewith.
     All other exhibits have been previously filed.
<PAGE>
b.   Reports on Form 8-K

      On  October 4, 1996, the Company filed a Current Report  on
Form  8-K  including  the  financial  statements  and  pro  forma
financial information for the Conoco and the Ashlawn acquisitions
(as  reported  in  previous  filings) strictly  for  purposes  of
incorporation by reference in future filings under the Securities
Act of 1933.

      No  other reports on Form 8-K were filed during the  fourth
quarter of 1996.

      On  January 14, 1997 and as amended on March 17, 1997,  the
Company  filed  a  Current  Report  on  Form  8-K  reporting  the
acquisition  of  certain properties in the  Cook  Inlet  area  of
Alaska from Marathon Oil Company.

      On February 21, 1997, the Company filed a Current Report on
Form  8-K  reporting  the private placement of  $200  million  in
Senior  Subordinated Notes priced at $99.338, with  a  coupon  of
8.5% and yield to maturity of 8.6%.
<PAGE>

                  GLOSSARY OF OIL AND GAS TERMS

     The definitions set forth below shall apply to the indicated
terms  as  used  herein. All volumes of natural gas  referred  to
herein are stated at the legal pressure base of the state or area
where the reserves exist and at 60 degrees Fahrenheit and in most
instances are rounded to the nearest major multiple.

     Bcf. Billion cubic feet.

     Bcfe. Billion cubic feet equivalent, determined using  the
ratio  of  six  Mcf  of  natural gas to one  Bbl  of  crude  oil,
condensate or natural gas liquids.

     Bbl.  One  stock tank barrel, or 42 U.S.  gallons  liquid
volume,  used  herein in reference to crude oil or  other  liquid
hydrocarbons.

     BOPD.  Barrels of oil per day.

     Btu. British thermal unit, which is the heat required  to
raise  the temperature of a one-pound mass of water from 58.5  to
59.5 degrees Fahrenheit.

     Completion. The installation of permanent equipment for the
production  of  oil or gas, or in the case of  a  dry  hole,  the
reporting of abandonment to the appropriate agency.

     Developed acreage. The number of acres which are allocated
or assignable to producing wells or wells capable of production.

     Development well. A well drilled within the proved area of
an  oil  or gas reservoir to the depth of a stratigraphic horizon
known to be productive.

     Discounted  Present  Value. A method  of  determining  the
present  value  of  proved reserves. Under the  SEC  method,  the
future net revenues before income taxes from proved reserves  are
estimated assuming that oil and natural gas prices and production
costs  remain constant. The resulting stream of revenues is  then
discounted  at  the  rate of 10% per year to obtain  the  present
value.

     Dry hole or well. A well found to be incapable of producing
hydrocarbons in sufficient quantities such that proceeds from the
sale of such production exceed production expenses and taxes.

    Exploratory well. A well drilled to find and produce oil or
gas reserves not classified as proved, to find a new reservoir in
a  field  previously found to be productive  of  oil  or  gas  in
another reservoir or to extend a known reservoir.

    Farm-in or farm-out. An agreement whereupon the owner of a
working  interest  in  an oil and gas lease assigns  the  working
interest  or  a portion thereof to another party who  desires  to
drill  on the leased acreage. Generally, the assignee is required
to  drill one or more wells in order to earn its interest in  the
<PAGE>
acreage.   The assignor usually retains a royalty or reversionary
interest in the lease.  The interest received by an assignee is a
"farm-in"  while the interest transferred by the  assignor  is  a
"farm-out."

     Field. An area consisting of single reservoir or multiple
reservoirs  all  grouped  on or related to  the  same  individual
geological structural feature and/or stratigraphic condition.

     Gross  acres or gross wells. The total acres or wells,  as
the case may be, in which a working interest is owned.

     Mbbls. One thousand barrels of crude oil or other  liquid
hydrocarbons.

     Mbbls/d. One thousand barrels of crude oil or other liquid
hydrocarbons per day.

     Mcf. One thousand cubic feet.

     Mcfe. One thousand cubic feet equivalent, determined using
the  ratio  of  six Mcf of natural gas to one Bbl of  crude  oil,
condensate or natural gas liquids.

     MMbbls. One million barrels of crude oil or other  liquid
hydrocarbons.

     MMBtu. One million Btus.

     MMcf. One million cubic feet.

     MCFPD. One million cubic feet per day.

     MMcfe. One million cubic feet equivalent, determined using
the  ratio  of  six Mcf of natural gas to one Bbl of  crude  oil,
condensate or natural gas liquids.

     Net  acres or net wells. The sum of the fractional working
interests owned in gross acres or gross wells.

     Oil. Crude oil and condensate.

     Present  value. When used with respect  to  oil  and  gas
reserves, the estimated future gross revenue to be generated from
the  production  of proved reserves, net of estimated  production
and future development costs, using prices and costs in effect at
the date indicated, without giving effect to non-property related
expenses  such  as  general  and  administrative  expenses,  debt
service  and  future  income  tax expenses  or  to  depreciation,
depletion  and amortization, discounted using an annual  discount
rate of 10%.
<PAGE>
     Productive  well. A well that is found to  be  capable  of
producing   hydrocarbons  in  sufficient  quantities  such   that
proceeds  from  the  sale  of such production  exceed  production
expenses and taxes.

     Proved  developed  producing reserves.  Proved  developed
reserves  that  are  expected  to be  recovered  from  completion
intervals currently open in existing wells and able to produce to
market.

     Proved  developed nonproducing reserves. Proved  developed
reserves  expected to be recovered from zones  behind  casing  in
existing wells.
<PAGE>
     Proved  reserves. The estimated quantities of  crude  oil,
natural  gas  and  natural  gas  liquids  which  geological   and
engineering  data  demonstrate with reasonable  certainty  to  be
recoverable in future years from known reservoirs under  existing
economic and operating conditions.

     Proved undeveloped location. A site on which a development
well can be drilled consistent with spacing rules for purposes of
recovering proved undeveloped reserves.

     Proved  undeveloped  reserves. Proved  reserves  that  are
expected  to be recovered from new wells on undrilled acreage  or
from  existing  wells  where a relatively  major  expenditure  is
required from recompletion.

     Recompletion. The completion for production of an existing
well  bore in another formation from that in which the  well  has
been previously completed.

     Reservoir.  A porous and permeable underground  formation
containing  a natural accumulation of producible oil  and/or  gas
that  is  confined by impermeable rock or water barriers  and  is
individual and separate from other reservoirs.

     Royalty  interest. An interest in an oil and gas  property
entitling the owner to a share of oil or gas production  free  of
costs of production.

     Undeveloped acreage. Lease acreage on which wells have not
been  drilled  or  completed to a point  that  would  permit  the
production of commercial quantities of oil and gas regardless  of
whether such acreage contains proved reserves.

     Updip. A higher point in the reservoir.

     Working  interest. The operating interest which gives  the
owner   the   right  to  drill,  produce  and  conduct  operating
activities on the property and a share of production, subject  to
all  royalties, overriding royalties and other burdens and to all
costs of exploration, development and operations and all risks in
connection therewith.

     Workover.  Operations on a producing well to  restore  or
increase production.
<PAGE>
                            SIGNATURES


      Pursuant to the requirements of Section 13 or 15(d) of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

                                FORCENERGY INC
                                                                 
                                                                 
Dated:  March 26, 1997          By:         /s/  E. Joseph Grady
                                    ----------------------------------------
                                                 E. Joseph Grady
                                    Vice President - Chief Financial  Officer

      Pursuant to the requirements of the Securities Exchange Act
of  1934,  this  report has been signed below  by  the  following
persons in the capacities and on the dates indicated:

By:           /s/ Stig Wennerstrom                     Date:  March 26, 1997
     -------------------------------------------    
                  Stig Wennerstrom
       President and Chief Executive Officer
           (Principal Executive Officer)


By:             /s/ E. Joseph Grady                    Date:  March 26, 1997
     --------------------------------------------
                E. Joseph Grady
       Vice President - Chief Financial Officer
     (Principal Financial and Accounting Officer)


By:          /s/ Bruce  L. Burnham                      Date:  March 26, 1997
     ---------------------------------------------
             Bruce L. Burnham, Director
 

By:          /s/ Arnold L. Chavkin                      Date:  March 26, 1997
     ---------------------------------------------
            Arnold L. Chavkin, Director


By:              /s/ Eric Forss                         Date:  March 26, 1997
     ---------------------------------------------
                Eric Forss, Director


By:              /s/ Robert Issal                       Date:  March 26, 1997
     ----------------------------------------------    
                     Robert Issal
     Director & Chairman of the Board of Directors


By:              /s/ Kevin Penn                         Date:  March 26, 1997
     ----------------------------------------------
             Kevin S. Penn, Director


By:         /s/   William  F.  Wallace                  Date:  March 26, 1997
     ----------------------------------------------
           William F. Wallace, Director


By:            /s/ Jeffrey A. Weber                     Date:  March 26, 1997
     ----------------------------------------------
            Jeffrey A. Weber, Director
<PAGE>
                                
                             ITEM 8
                                
           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                
                                
                   ANNUAL REPORT ON FORM 10-K
                                
              FOR THE YEAR ENDED DECEMBER 31, 1996
                                
                         FORCENERGY INC
                                
                         MIAMI, FLORIDA
<PAGE>
                                
                REPORT OF INDEPENDENT ACCOUNTANTS
                                
                                
To the Board of Directors and Stockholders
of Forcenergy Inc


We  have audited the accompanying consolidated balance sheets  of
Forcenergy  Inc as of December 31, 1996 and 1995 and the  related
consolidated statements of operations, stockholders'  equity  and
cash flows for the years then ended. These consolidated financial
statements  are  the responsibility of the Company's  management.
Our  responsibility is to express an opinion on  these  financial
statements based on our audits.

We  conducted  our  audits in accordance with generally  accepted
auditing  standards. Those standards require  that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the amounts and disclosures in the financial statements. An audit
also  includes  assessing  the  accounting  principles  used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In  our  opinion,  the  financial statements  referred  to  above
present  fairly,  in  all  material  respects,  the  consolidated
financial position of Forcenergy Inc as of December 31, 1996  and
1995, and the consolidated results of its operations and its cash
flows  for  the  years then ended, in conformity  with  generally
accepted accounting principles.


COOPERS & LYBRAND L.L.P.


Miami, Florida
February 17, 1997
<PAGE>
                REPORT OF INDEPENDENT ACCOUNTANTS
                                
                                
To the Board of Directors and Stockholders
of Forcenergy Inc


In  our opinion, the statements of operations, of cash flows  and
of  changes  in stockholders' equity for the year ended  December
31, 1994 present fairly, in all material respects, the results of
operations  and cash flows of Forcenergy Inc for the  year  ended
December   31,  1994,  in  conformity  with  generally   accepted
accounting  principles.   These  financial  statements  are   the
responsibility of the Company's management; our responsibility is
to  express an opinion on these financial statements based on our
audit.   We conducted our audit of these statements in accordance
with generally accepted auditing standards which require that  we
plan  and perform the audit to obtain reasonable assurance  about
whether   the   financial  statements  are   free   of   material
misstatement.   An  audit includes examining, on  a  test  basis,
evidence  supporting the amounts and disclosures in the financial
statements,   assessing  the  accounting  principles   used   and
significant  estimates  made by management,  and  evaluating  the
overall  financial statement presentation.  We believe  that  our
audit  provides  a  reasonable basis for  the  opinion  expressed
above.    We  have  not  audited  the  financial  statements   of
Forcenergy Inc for any period subsequent to December 31, 1994.



PRICE WATERHOUSE LLP

Houston, Texas
June 1, 1995, except as to
  Note 1 which is as of
  July 6, 1995
<PAGE>
                             FORCENERGY INC
                      CONSOLIDATED BALANCE SHEETS
                                                             December 31,
                                                        --------------------
                                                           1996       1995
                                                        ---------  ---------
                                                           (in thousands)
ASSETS:
Current Assets:
  Cash                                                  $   9,669  $   2,996
  Accounts receivable, net                                 29,416     15,325
  Other current assets                                     10,673      6,999
                                                        ---------  ---------
     Total current assets                                  49,758     25,320
                                                        ---------  ---------
Investment in surety bonds, at cost                         3,926      6,164
                                                        ---------  ---------
Property, plant and equipment, at cost (full cost
  method) net of accumulated depletion, depreciation
  and amortization                                        523,711    298,832
                                                        ---------  ---------
Other assets                                                8,530      4,774
                                                        ---------  ---------
                                                        $ 585,925  $ 335,090
                                                        =========  =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
  Accounts payable                                      $   8,643  $  17,811
  Accrued liabilities                                      34,370     15,000
  Accrued acquisition  obligation                              --      4,284
                                                        ---------  ---------
     Total current liabilities                             43,013     37,095
                                                        ---------  ---------
Long-term debt                                            272,932    130,729
                                                        ---------  ---------
Deferred income taxes                                      21,044     12,305
                                                        ---------  ---------    
Commitments and contingencies (Note 10)

Stockholders' Equity:
  Preferred stock, $.01 par value; 5,000,000 shares
      authorized;  none  issued  or   outstanding              --        --
  Common stock, $.01 par value; 50,000,000 shares
     authorized; 22,577,838 and 18,260,447 issued
     and outstanding at December 31, 1996 and
     1995, respectively                                       226        183    
  Capital in excess of par value                          246,032    163,378
  Retained earnings (deficit)                               2,678     (8,600)
                                                        ---------  ---------
     Total stockholders' equity                           248,936    154,961
                                                        ---------  ---------
                                                        $ 585,925  $ 335,090    
                                                        =========  =========

The accompanying notes are an integral part of these financial statements.
<PAGE>
                                 FORCENERGY INC
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                
                                
                               
                                         For the Year Ended December 31,
                                      ------------------------------------
                                         1996          1995        1994
                                      ----------    ---------   ----------
                                   (in thousands, except per share amounts)
Revenues:
 Oil and gas sales                     $ 138,698    $  72,147    $  58,354
 Other                                       683          494          388
                                       ---------    ---------    ---------
                                         139,381       72,641       58,742
                                       ---------    ---------    ---------
Expenses:
 Lease operating                          38,786       24,507       23,744
 Depletion, depreciation and
  amortization                            58,464       31,295       24,572
 Production taxes                          3,454        1,868        1,701
 General and administrative                7,971        5,670        6,463
                                       ---------    ---------    ---------
                                         108,675       63,340       56,480
                                       ---------    ---------    ---------

Income from operations                    30,706        9,301        2,262
Interest and other income (expense)          650         (561)         789
Interest expense, net of 
 amounts capitalized                     (13,367)     (11,668)      (9,529)
                                       ---------    ---------    ---------
Income (loss) before income taxes         17,989       (2,928)      (6,478)
Income  tax provision (benefit)            6,711       (1,075)      (2,403)
                                       ---------    ---------    ---------
Net  income (loss)                     $  11,278    $  (1,853)   $  (4,075)
                                       ---------    ---------    ---------
Net income (loss) per common
 and common equivalent share           $     .57    $    (.14)   $    (.50)
                                       =========    =========    =========
Net income per common and common
 equivalent share - 
 assuming full dilution                $     .62    $    (.14)   $    (.50)
                                       =========    =========    =========

                                



   The accompanying notes are an integral part of these financial statements.
<PAGE>
                                FORCENERGY INC
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                

                                                            Retained
                                               Capital in   Earnings
                                Common Stock    Excess of (Accumulated
                              Shares    Amount  Par Value    Deficit)   Total
                             ---------  ------  ---------  ---------  ---------
                                       (in thousands, except shares)

Balance, January 1, 1994     6,684,594  $  67  $  45,941  $  (2,672)  $  43,336

Issuance of common stock     2,355,892     24     31,776         --      31,800
Net loss                            --     --         --     (4,075)     (4,075)
                            ----------  -----  ---------  ---------   ---------
Balance, December 31, 1994   9,040,486     91     77,717     (6,747)     71,061

Issuance of common stock     9,219,961     92     85,661         --      85,753
Net loss                            --     --         --     (1,853)     (1,853)
                            ----------  -----  ---------  ---------   ---------
Balance, December 31, 1995  18,260,447    183    163,378     (8,600)    154,961 

Conversion of 7% Exchangeable
  Subordinated Notes         2,343,047     23     35,813         --      35,836
Exercises of stock options     323,503      3      5,442         --       5,445
Issuance of common stock     1,650,841     17     41,399         --      41,416
Net income                          --     --         --     11,278      11,278
                            ----------  -----  ---------  ---------   ---------
Balance, December 31, 1996  22,577,838  $ 226  $ 246,032  $   2,678   $ 248,936
                            ==========  =====  =========  =========   =========
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
 The accompanying notes are an integral part of these financial statements.
<PAGE>
                                 FORCENERGY INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                
                                              For the Year Ended December 31,
                                           -----------------------------------
                                               1996        1995         1994
                                           ----------  ----------   ----------
                                                       (in thousands)
Cash flows from operating activities:
  Net income (loss)                        $   11,278  $   (1,853)  $   (4,075)
                                           ----------  ----------   ---------- 
 Adjustments to reconcile net income
   (loss) to net cash provided by 
   operating activities:
  Depletion, depreciation and amortization     59,518      32,516       25,480
  Deferred income taxes                         6,612      (1,075)      (2,403)
  Deferred interest                             2,107       2,040        2,040
  Other                                          (210)       (194)        (167)
  (Increase) decrease in accounts receivable  (14,091)     (4,965)       1,097
  Increase in other current assets             (3,674)        (63)      (1,637)
  Increase in other assets                         --        (113)        (668)
  (Decrease) increase in accounts payable      (4,859)      3,688        2,181
  (Decrease) increase in other 
   accrued liabilities                          8,547      (1,407)         585
                                            ---------  ----------   ----------
                                               53,950      30,427       26,508
                                            ---------  ----------   ----------
Net cash provided by operating activities:     65,228      28,574       22,433
                                            ---------  ----------   ----------

Cash flows from investing activities:
  Acquisitions of oil and gas properties     (152,478)    (41,462)     (13,778)
  Capital expenditures                       (130,269)    (36,913)     (44,391)
  Purchase of surety bonds                         --      (1,020)          --
  Sale of surety bonds                          2,151       2,730           --
  Bond escrow proceeds                             --          --        2,855
  Proceeds from sale of assets                  1,072         803           16
  Increase in other assets                       (340)         --           --
                                           ----------  ----------   ----------
Net cash used in investing activities        (279,864)    (75,862)     (55,298)
                                           ----------  ----------   ----------
<PAGE>
Cash flows from financing activities:
  Borrowings under senior credit facility     255,968      35,709        6,872
  Repayments under senior credit facility    (250,091)    (38,666)          --
  Issuance of long-term debt, 
   net of expenses                            169,114          --           --
  Principal payments on short-term debt            --          --       (4,500)
  Repayment of acquisition debt                    --      (5,700)          --
  Issuance of common stock, net                46,318      55,753       31,800
                                           ----------  ----------   ----------
Net cash provided by financing activities     221,309      47,096       34,172
                                           ----------  ----------   ----------
Net increase (decrease) in cash                 6,673        (192)       1,307
                                           ----------  ----------   ----------
Cash at beginning of period                     2,996       3,188        1,881
                                           ----------  ----------   ----------
Cash at end of period                      $    9,669  $    2,996   $    3,188
                                           ==========  ==========   ==========
                                
The accompanying notes are an integral part of these financial statements.
<PAGE>

                         FORCENERGY INC
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

     Forcenergy Inc, formerly Forcenergy Gas Exploration, Inc., a
Delaware Corporation, and its subsidiary (the "Company"),  is  an
independent  oil  and  gas company engaged  in  the  exploration,
acquisition, development, exploitation and production of domestic
oil  and  natural  gas  properties. The  Company  was  originally
founded  as a privately held corporation ("old FGE") in  1982  by
the current President and Chief Executive Officer of the Company.
In  1989, "old FGE" entered into a limited partnership agreement,
as  general partner and owner of a 3% partnership interest,  with
Forcenergy  AB ("FAB"), a Swedish corporation, forming Forcenergy
Partners,    L.P.,   a   Delaware   limited   partnership    (the
"Partnership"). On August 16, 1993, a wholly-owned subsidiary  of
FAB  was  formed  and  on  September 14,  1993,  that  subsidiary
succeeded  to FAB's 97% interest in the Partnership and  acquired
by  merger "old FGE's" 3% interest in the Partnership and assumed
the  name  of Forcenergy Gas Exploration, Inc.  On May 12,  1994,
the  Company issued 2,355,892 shares of its common stock  to  FAB
for cash consideration, less offering costs, of $31,800,000.

      On  July 28, 1995, 6,210,000 shares of the Company's  stock
were  issued  pursuant to the Company's initial  public  offering
(the  "Initial Public Offering"). The proceeds from  the  initial
public offering were $55.7 million, net of underwriting and other
offering   costs  of  $6.4  million.   On  May  23,   1996,   the
shareholders  approved a change in the name  of  the  Company  to
Forcenergy Inc.

      As  an  independent  oil  and gas producer,  the  Company's
revenue,   profitability   and  future   rate   of   growth   are
substantially dependent upon prevailing prices for  natural  gas,
oil  and  condensate, which are dependent upon  numerous  factors
beyond  the  Company's control, such as economic,  political  and
regulatory  developments and competition from  other  sources  of
energy.  The energy markets have historically been very volatile,
as  evidenced by the recent volatility of gas prices,  and  there
can  be  no assurance that oil and gas prices will not be subject
to  wide  fluctuations in the future.  A substantial or  extended
decline  in  oil  and  gas prices could have a  material  adverse
effect   on   the  Company's  financial  position,   results   of
operations,  quantities  of oil and  gas  reserves  that  may  be
economically produced and access to capital.
<PAGE>
Principles of Consolidation

      The  consolidated financial statements include the accounts
of   Forcenergy  Inc  and  Forcenergy  International  Inc.    All
intercompany transactions and accounts have been eliminated.
                                
Accounting Estimates

      The  preparation of financial statements in conformity with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of  assets, liabilities, revenues and expenses and disclosure  of
contingent  assets and liabilities. Actual results  could  differ
from those estimates.

Cash/Cash Equivalents

      The Company considers all highly liquid investments with  a
maturity  of  three  months or less when  purchased  to  be  cash
equivalents.  The Company maintains cash deposits with  a  single
financial  institution.  At  certain times,  these  deposits  may
exceed federally insured limits.

Accounts Receivable

    Accounts receivable relate primarily to sales of oil and gas
production  and  amounts  due  from  joint interest partners for 
expenditures made by the Company on behalf of such partners. The
Company reviews  the financial condition of potential purchasers
and partners prior to signing sales or joint interest agreements.

At December 31, 1996 and 1995, the allowance for doubtful accounts
was $250,000 and $50,000 respectively. The December Company requires
certain  forms  of  financial  assurance from its most significant
customers.

Investment in Surety Bonds

      Investment  in  surety  bonds are  classified  as  held-to-
maturity  and  represent  government  securities  purchased   and
pledged   pursuant  to  supplemental  bonding  requirements   for
offshore  properties.   The securities are carried  at  amortized
cost, which approximates market at December 31, 1996 and 1995.

Oil and Gas Properties

      The Company follows the full cost method of accounting  for
oil  and gas properties whereby all productive and non-productive
exploration, development and acquisition costs incurred  for  the
purpose  of  finding oil and gas reserves are capitalized.   Such
capitalized  costs  include  lease  acquisition,  geological  and
<PAGE>
                             FORCENERGY INC
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

geophysical   work,  delay  rentals,  drilling,  completing   and
equipping  oil  and  gas  wells,  together  with  internal  costs
directly  attributable to property acquisition,  exploration  and
development  activities.  No gains or losses are recognized  upon
the  sale or other disposition of oil and gas properties,  except
in unusually significant transactions.

       The  Company  provides  for  expected  future  abandonment
liabilities by amortizing such costs as a component of depletion,
depreciation  and  amortization over the expected  lives  of  the
properties.  At December 31, 1996, total undiscounted abandonment
costs  estimated to be incurred, net of estimated salvage values,
for  properties  in  federal and state waters were  approximately
$89.5 million, of which $10.3 million was accrued at December 31,
1996  through  accumulated depletion.   For  onshore  properties,
salvage  values received for equipment are usually sufficient  to
offset the abandonment costs.

      Under  the Securities and Exchange Commission's  full  cost
accounting rules, the Company reviews the carrying value  of  its
oil  and gas properties each quarter.  Under full cost accounting
rules,  capitalized  costs  of oil and  gas  properties,  net  of
deferred  tax  reserves,  may not exceed  the  present  value  of
estimated future net revenues from proved reserves, discounted at
10  percent,  plus  the  lower of cost or fair  market  value  of
unproved   properties,  as  adjusted  for  related  tax  effects.
Application  of  this  rule  generally  requires  pricing  future
production at the unescalated oil and gas prices in effect at the
end of each fiscal quarter and requires a permanent write-down of
capitalized  costs if the "ceiling" is exceeded, even  if  prices
declined  for only a short period of time. At December 31,  1996,
the  value  of  the Company's oil and gas reserves  and  unproved
properties  for  purposes of the ceiling  limitation  calculation
exceeded  capitalized costs, based on prices  in  effect  on  the
reserve  valuation  date.   While  the  Company  has  never  been
required   to  write-down  its  asset  base,  future  significant
downward revisions of quantity estimates or declines in  oil  and
gas  prices from those in effect on January 1, 1997 that are  not
offset  by  other  factors could result in a non-cash  charge  to
earnings.  During the first quarter of 1997, oil and natural  gas
prices  declined  from those being received  as  of  the  reserve
valuation date; however, valuing the year-end reserves at average
prices  being  received as of March 1, 1997 would not  result  in
capitalized cost exceeding the present values of estimated future
net reserves.

      The  majority  of the Company's oil and gas properties  are
located in the Gulf of Mexico and Cook Inlet, Alaska.
<PAGE>
                                
                            FORCENERGY
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Deferred Financing Costs

      Included  in  other assets at December 31,  1996  are  debt
issuance  costs  of  $10,047,000 relating to  the  Senior  Credit
Facility and the 9 1/2% Notes and $6,345,000 at December 31, 1995
relating  to  the Senior Credit Facility and the 7%  Exchangeable
Subordinated Notes (the "Exchangeable Notes"), respectively.  The
Exchangeable  Notes were converted to common  stock  during  1996
(see  Note 4).  These costs are amortized over the terms  of  the
related debt.  Accumulated amortization at December 31, 1996  and
1995 was $2,839,000 and $2,868,000, respectively.

Revenue Recognition

      Revenues  from oil and natural gas production are  recorded
using  the  sales  method,  net  of  royalties  and  net  profits
interests.  When the Company's share of sales volumes exceed,  or
are  less than, the Company's entitled share of production  based
on the net revenue interest attributable to its working interest,
an   imbalance  occurs.  Under  the  sales  method   of   revenue
recognition, the net over/under-produced volumes are not recorded
as  a liability, or receivable, respectively.  The under-produced
party  later takes sales volumes in excess of its entitled  share
of  future production to eliminate the imbalance.  To the  extent
an  imbalance  exceeds  the remaining estimated  proved  oil  and
natural gas reserves for a given property, the Company records  a
liability or a receivable, as appropriate. At December 31,  1996,
the Company's net imbalance position was not material.

      During 1996, 1995 and 1994 the Company maintained a hedging
program  on  a  portion  of its estimated  future  production  to
provide  a certain minimum level of cash flow from its  sales  of
crude  oil  and  natural gas (See Note 9). Any hedging  gains  or
losses  under  these  contracts are recognized  in  revenue  upon
monthly settlement of hedged production.

Stock-Based Compensation

       Statement  of  Financial  Accounting  Standards  No.   123
"Accounting   for  Stock-Based  Compensation,"  ("SFAS   No.123")
encourages, but does not require companies to record compensation
costs  for stock-based employee compensation plans at fair value.
The  Company  has  chosen to continue to account for  stock-based
employee compensation using the intrinsic value method prescribed
in  Accounting  Principles Board Opinion No. 25, "Accounting  for
Stock  Issued to Employees".  Accordingly, compensation cost  for
stock options, awards and warrants is measured as the excess,  if
any,  of  the quoted market price of the Company's stock  at  the
date of the grant over the amount an employee must pay to acquire
the stock (See Note 7).
<PAGE>
                            FORCENERGY INC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Income Taxes

      The  Company  follows the asset and liability  approach  to
account for income taxes.  Under this method, deferred taxes  are
recognized  for temporary differences between the  book  and  tax
basis of assets and liabilities. These temporary differences  are
measured  using  applicable enacted tax rates and  provisions  of
enacted tax laws.

Earnings Per Share

      Earnings  per  share is calculated based  on  the  weighted
average  number of shares outstanding during the year for  common
stock  and, when dilutive, common stock equivalents.  The effects
of  the  common stock equivalents were dilutive in 1996 and  were
either  immaterial  or  were  not  dilutive  in  1995  and  1994.
Weighted  average  common  and  common  equivalent  shares   were
19,725,894,  12,909,828 and 8,188,496 for 1996,  1995  and  1994,
respectively.

      Fully  diluted  earnings per common and  common  equivalent
share  for  1996  was  calculated  giving  consideration  to  the
conversion of the Exchangeable Notes into Common Stock (See  Note
4)  and exercises of options to purchase common stock during 1996
as  if the conversions and exercises occurred on January 1, 1996.
The   weighted  average  common  and  common  equivalent  shares,
assuming  full  dilution,  were 22,568,160  for  the  year  ended
December  31,  1996.   Fully  diluted  earnings  per  share   was
antidilutive in 1995 and 1994.

     Supplemental earnings per share for the years ended December
31,  1996  and  1995  were $.64 per share  and  $.01  per  share,
respectively.  Supplemental earnings per share for 1996  reflects
what   primary  earnings  per  share  would  have  been  had  the
Exchangeable  Notes  conversion (See  Note  4)  and  1996  option
exercises occurred on January 1, 1996.  Supplemental earnings per
share  for  1995 assumes the Initial Public Offering occurred  on
January 1, 1995 with proceeds being used to retire certain of the
Company's long-term debt.
                                
Environmental Expenditures

      Environmental  expenditures relating to current  operations
are expensed or capitalized, as appropriate, depending on whether
such  expenditures provide future economic benefits.  Liabilities
are  recognized when the expenditures are considered probable and
can be reasonably estimated.  Measurement of liabilities is based
<PAGE>
                           FORCENERGY INC
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

on  currently  enacted laws and regulations, existing  technology
and    undiscounted   site-specific   costs.    Generally,   such
recognition coincides with the Company's commitment to  a  formal
plan of action.

Common Stock Conversion and Split

      Effective July 6, 1995 the Company increased the authorized
number of shares of common and preferred stock to 50,000,000  and
5,000,000,  respectively,  and reclassified  and  converted  each
share  of  Class  A  Common Stock and Class B Common  Stock  into
98.337 shares of Common Stock.

New Accounting Pronouncements

     The Financial Accounting Standards Board (the "FASB") issued
Statement  of  Financial  Accounting Standards  "SFAS"  No.  125,
"Accounting  for Transfer and Servicing of Financial  Assets  and
Extinguishments  of Liabilities," in June 1996.   This  statement
provides  accounting  and reporting standards  for,  among  other
things,  the transfer and servicing of financial assets, such  as
factoring  receivables with recourse. This statement is effective
for  transfers and servicing of financial assets occurring  after
December  31, 1996, and is to be applied prospectively.   Earlier
or   retroactive  application  is  not  permitted.   The  Company
believes  the adoption of this statement will not have an  impact
on  the  financial  condition or results  of  operations  of  the
Company.

     In February 1997, the FASB issued SFAS No. 128, Earnings Per
Share (EPS) (SFAS 128).  SFAS 128 specifies new standards for the
computation,  presentation and disclosure requirements  for  EPS.
SFAS  128 is intended to improve the EPS information provided  in
financial  statements  by simplifying the existing  computational
guidelines,  by revising the disclosure requirements  to  provide
more consistent and meaningful information and by increasing  the
comparability of EPS data on an international basis.  Some of the
changes  made  to  simplify  the EPS  computation  include:   (a)
eliminating the presentation of primary EPS and replacing it with
basic  EPS, with the principal difference being that common stock
equivalents (CSEs) are not considered in computing basic EPS; (b)
eliminating  the  modified treasury stock method  and  the  three
percent  materiality provision; and (c) revising  the  contingent
share  provisions  and  the supplemental EPS  data  requirements.
SFAS  128  also makes a number of changes to existing  disclosure
requirements.   SFAS  128 is effective for  financial  statements
issued  for  periods  ending after December 15,  1997,  including
interim  periods.  The Company has not yet determined the  impact
of the implementation of SFAS 128.
<PAGE>
                            FORCENERGY INC
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reclassifications

      Certain  minor  reclassifications have  been  made  to  the
Company's 1995 and 1994 financial statements to conform  them  to
classifications used in 1996.

NOTE 2 -- ACQUISITIONS AND MERGERS

1996 Acquisitions

     The Company completed several acquisitions during 1996 at an
aggregate  cost of approximately $148.0 million.   The  two  most
significant acquisitions are discussed below, including pro forma
results  of  operations for the Company assuming the acquisitions
had  been completed on January 1, 1995.  The aggregate effect  of
other  acquisitions on the results of operations of  the  Company
for the periods presented was not material.
                                
     On June 28, 1996, the Company acquired certain producing oil
and  gas  leasehold interest and related equipment  from  Amerada
Hess Corporation ("Amerada Hess") for a net cash consideration of
$6.9  million.   The  acquisition has been  accounted  for  as  a
purchase and the results of operations of the properties acquired
are  included  in  the Company's results of operations  effective
June 28, 1996.

      On  December  30, 1996, the Company acquired  Marathon  Oil
Company's interests in certain crude oil properties in  the  Cook
Inlet  area and Prudhoe Bay Unit, Alaska ("Marathon") for  a  net
cash  consideration of $107.8 million.  The acquisition has  been
accounted for as a purchase and the results of operations of  the
properties  acquired  are included in the  Company's  results  of
operations effective December 30, 1996.

1995 Acquisitions

     The Company completed several acquisitions during 1995 at an
aggregate  cost  of  approximately $92.1 million.  The  two  most
significant acquisitions are discussed below, including pro forma
results  of  operations for the Company assuming the acquisitions
had  been completed on January 1, 1994.  The aggregate effect  of
other  acquisitions on the results of operations of  the  Company
for the periods presented was not material.

      On March 3, 1995, the Company acquired certain offshore oil
and  gas  properties  from Conoco, Inc.  ("Conoco")  for  a  cash
acquisition  price  of $24.5 million.  The acquisition  has  been
accounted for as a purchase and the  results  of  operations  for 
the  properties  acquired  are included  in the Company's results
of operations effective  March 3, 1995.
<PAGE>
                             FORCENERGY INC
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 

     On  August 2, 1995, the Company completed a plan of  merger
with Ashlawn Energy, Inc. ("Ashlawn"). The consideration for  the
acquisition  of  Ashlawn was approximately $3.3  million  in  net
cash,  common stock of the Company with an indicated market value
of  $30.0  million, based upon the initial public offering  price
and  the  assumption of $5.7 million of Ashlawn  debt.   The  net
assets  acquired  consisted primarily of oil and gas  properties.
This  transaction was accounted for as a purchase and the results
of  operations  of the properties acquired are  included  in  the
Company's results of operations effective August 2, 1995.

      The following pro forma statement of operations information
has  been prepared to give effect to the Amerada Hess acquisition
and the Marathon acquisition as if such transactions had occurred
on   January  1,  1995,  and  the  Conoco  transaction  and   the
acquisition  of Ashlawn as if such transactions had  occurred  on
January 1, 1994.  The historical results of operations have  been
adjusted to reflect (i) revenues and expenses attributable to the
properties,   (ii)   the  difference  between   the   properties'
historical  depletion,  depreciation, and amortization  and  such
expense  calculated based on the value allocated to the  acquired
assets,  (iii)  the increase in interest expense associated  with
the  debt incurred, and (iv) the increase in income taxes  giving
retroactive  effect  to the transactions.   Management  does  not
believe  the  pro forma amounts purport to be indicative  of  the
results  of  operations  that would have been  reported  had  the
acquisitions occurred at the dates indicated below or that may be
reported in the future (in thousands, except per share amounts).


                                          Pro forma (unaudited)
                                  -------------------------------------
                                           For the Years Ended
                                     1996          1995          1994
                                  ---------     ---------     ---------
  Revenues                        $ 198,263     $ 138,007     $  76,553
  Income from operations          $  52,133     $  22,278     $   4,869
  Net income (loss)               $  18,939     $  13,810     $  (2,278)
  Net  income (loss) per share    $     .96     $    1.07     $   (0.33)
<PAGE>
                         FORCENERGY INC
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


NOTE 3 -- PROPERTY, PLANT AND EQUIPMENT

      Investments  in  property, plant   and  equipment  were  as
follows at December 31, 1996 and 1995:
     
                                                  1996         1995
                                              ----------    ----------
                                                    (in thousands)
     Oil and Gas Properties:
       Proved                                 $  601,725    $  343,378
       Unproved                                   63,077        39,057
                                              ----------    ----------
                                                 664,802       382,435
     Office Equipment                              3,712         2,738
     Less: accumulated depletion, 
      depreciation and amortization             (144,803)      (86,341)
                                              ----------    ----------
     Net Property, Plant and Equipment        $  523,711    $  298,832
                                              ==========    ==========


      Depreciation, depletion and amortization for  oil  and  gas
properties for the years ended December 31, 1996, 1995  and  1994
was,   $57.8   million,   $30.8  million   and   $24.4   million,
respectively.  Depletion, depreciation and amortization rates per
Mcfe  of  hydrocarbons  produced (using a  Bbl-to-Mcf  conversion
factor of 1 to 6) for the years ended December 31, 1996, 1995 and
1994 were  $1.03, $.88 and $.88, respectively.

      Included  in property, plant and equipment are  capitalized
internal costs of $2.3 million, $1.1 million and $951,000 for the
years  ended  December  31,  1996, 1995  and  1994  respectively,
relating  to  oil  and gas property acquisition, exploration  and
development costs.

      During the years ended December 31, 1996, 1995 and 1994 the
Company  capitalized interest of $2.2 million, $2.6  million  and
$1.5  million,  respectively, on expenditures made in  connection
with  exploration and developmentprojects on significant unproved
properties   that   are   not  subject  to   current   depletion,
depreciation or amortization.  Interest is capitalized  only  for
the   period  that  activities  are  in  progress  to  bring  the
properties to their intended use.

      The  following  sets forth the composition  of  capitalized
costs excluded from the depletion, depreciation, and amortization
base at December 31, 1996, 1995 and 1994:
<PAGE>
                           FORCENERGY INC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                         1996       1995       1994
                                      --------   --------    --------
                                               (in thousands)
     Property Acquisition             $ 44,941   $ 30,394    $ 22,012
     Development Costs                  13,567      4,916       2,752
     Interest Capitalized                4,569      3,747       1,886
                                      --------   --------    --------
     Total                            $ 63,077   $ 39,057    $ 26,650
                                      ========   ========    ========
     
      At  December 31, 1996, approximately 72% of excluded  costs
relate to offshore activities in the Gulf of Mexico, 16% of these
costs  relate to offshore activities in Alaska and the  remainder
relates   to   domestic  onshore  and,  to   a   lesser   extent,
international activities.  The inclusion of these  costs  in  the
depletion, depreciation and amortization computation will  be  at
the  point  in  time  that  it  is determined,  through  drilling
activities,  that  proved reserves do or  do  not  exist  on  the
applicable properties, typically within three to five years.

NOTE 4 -- DEBT

     Long-term debt consists of the following:

                                                    December 31,
                                               ------------------------
                                                   1996          1995
                                               ---------      ---------
       Senior Credit Facility                  $  97,932      $  92,054
       9 1/2% Senior Subordinated Notes          175,000             --
       7 1/2% Exchangeable Subordinated Notes         --         38,675
                                               ---------      ---------
                                               $ 272,932      $ 130,729
                                               =========      =========
Senior Credit Facility

      During  1996  the  Company renegotiated its  Senior  Credit
Facility  to  increase  both the maximum  loan   amount  and  the
borrowing  base from $120 million to $195 million.  The borrowing
base is subject to redetermination semi-annually based on revised
reserve  estimates. The loan is collateralized  by  substantially
all  of  the Company's oil and gas properties.  The Senior Credit
Facility  provides  for borrowings on a revolving  basis  through
December 31, 1997, at which time the amounts outstanding  convert
to a term loan with quarterly principal payments through June 30,
2001.   Future annual principal payments, as a percentage of  the
principal  balance outstanding at the time of conversion  to  the
term loan, will be 36% in 1998, 30% in 1999, 23% in 2000, and 11%
<PAGE>
                         FORCENERGY INC
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

in  2001.   During 1996, advances, at the Company's option,  bore
interest  at  either  the  prime  rate,  or  LIBOR  plus  1.375%.
Interest on prime loans is due quarterly while interest on  LIBOR
loans  is  due  the earlier of quarterly, or   the  end  of  each
designated  interest  period.   Commitment  fees  on  the  unused
portion  of the facility are due quarterly at an annual  rate  of
0.5%.

      At  December  31,  1996 the Company had  drawn  down  $97.9
million  under  the facility and an additional  $5.8  million  of
availability  was  committed  to outstanding  letters  of  credit
issued  under  the  facility.  The Company  had  available  funds
pursuant to this agreement of $91.3 million at December 31, 1996.

      The Senior Credit Facility contains certain covenants which
include  maintenance  of a minimum tangible  net  worth,  certain
financial   ratios,  restrictions  on  asset  sales,   affiliated
transactions   and  compensation  and  certain   limitations   on
dividends and additional debt or liens.
                                
9 1/2% Notes

      On  November  6,  1996,  the Company  issued  an   aggregate
principal amount of $175 million of 9 1/2% Senior Subordinated Notes
(the "9 1/2% Notes") which mature on November 1,  2006.  The  91/2%
Notes  were issued under an Indenture (the "9 1/2% Notes Indenture")
which provides that interest is payable semiannually, in arrears,
on  May  1  and November 1 of each year, commencing May 1,  1997,
with principal due at maturity.

      The 9 1/2% Notes are redeemable in whole or in part  at  the
option of the Company, at any time on or after November 1,  2001,
at  the  redemption prices (expressed as percentages of principal
amount)  set  forth below, plus accrued and unpaid  interest,  if
any, thereon.

             Year                              Percentage
             ----                              ----------
             2001                               104.750%
             2002                               103.167%
             2003                               101.583%
             2004 and thereafter                100.000%
                  
<PAGE>
                       FORCENERGY INC
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


      Prior to November 1, 2001, the Company may redeem the 9 1/2%
Notes, in whole or in part, at the Make-Whole Price, plus accrued
and unpaid interest, if any, through the date of redemption.  The
Make-Whole Price is defined as the greater of (i) the sum of  the
outstanding  principal  amount  and  Make-Whole  Amount  (defined
below) of such 9 1/2% Notes, and (ii) the redemption price of such
9 1/2%  Notes on November  1,  2001, determined  pursuant  to  the
Indenture  (104.75%  of  the principal amount).   The  Make-Whole
Amount is defined as the excess, if any, of (i) the present value
of  the remaining interest premium and principal payments due  on
such 9 1/2% Notes as if such 9 1/2% Notes were redeemed on November
1, 2001, computed using a discount rate equal to the Treasury Rate
plus  50 basis points, over (ii) the outstanding principal amount
of such 9 1/2% Notes. In addition, during the first 36 months after
October 31, 1996, the Company may redeem up to $61.25 million  in
aggregate principal amount of the 9 1/2% Notes at a redemption price
of 109.5% of the principal amount thereof plus accrued and unpaid
interest,  if  any, thereon to the redemption date with  the  net
proceeds of an offering of common equity; provided that at  least
$113.75  million in aggregate principal amount of the 9 1/2%  Notes
remain  outstanding  immediately after  the  occurrence  of  such
redemption.

      The 9 1/2% Notes holders may, at their election, require that
the Company prepay the 9 1/2% Notes upon the occurrence of a "change
of  control"  as  defined  in the 9 1/2% Notes  Indenture.   Upon  a
"change  of  control",  the holders may require  the  Company  to
repurchase all or any part of the 9 1/2% Notes at a repurchase price
equal  to  101%  of the aggregate principal amount  thereof  plus
accrued and unpaid interest, if any, thereon.  Furthermore, under
certain circumstances, the Company may become obligated to  offer
to  purchase  all or a portion of the 9 1/2% Notes at  100%  of  the
principal  amount  thereof,  together  with  accrued  and  unpaid
interest, if any, with the net proceeds of certain asset sales.

8 1/2%  Notes

      On  February  14,  1997, the Company  issued  an  aggregate
principal  amount  of  $200 million in 8 1/2%   Senior  Subordinated
Notes  priced at $99.338, with an effective yield to maturity  of
8.6% (the 8 1/2% Notes), which mature on February 15, 2007.  The 8 1/2%
Notes  were issued under an Indenture (the "8 1/2% Notes Indenture")
which provides that interest on the 8 1/2% Notes will be payable  in
cash in arrears semiannually on February 15 and August 15 of each
year, commencing August 15, 1997.
<PAGE>
                            FORCENERGY INC
        NOTES TO CONSOLIDATED FINANCIAL STATMENTS (continued)

      The  8 1/2%  Notes are redeemable in whole or in part  at  the
option of the Company, at any time on or after February 15, 2002,
at  the  redemption prices set forth below plus,  in  each  case,
accrued and unpaid interest, if any, thereon.

               Year                              Percentage
               ----                              ----------
               2002                               104.250%
               2003                               102.833%
               2004                               101.417%
               2005 and thereafter                100.000%

      Prior to February 15, 2002, the Company may redeem the 8 1/2%
Notes, in whole or in part, at the Make-Whole Price, plus accrued
and unpaid interest, if any, through the date of redemption.  The
Make-Whole  Price is defined as the greater of  (i)  the  sum  of
outstanding  principal  amount  and  Make-Whole  Amount  (defined
below) of such 8 1/2% Notes, and (ii) the redemption price of such
8 1/2%  Notes on February 15, 2002, determined pursuant to the 8 1/2%
Notes  Indenture  (104.25% of the principal amount).   The  Make-
Whole Amount is defined as the excess, if any, of (i) the present
value  of  the remaining interest premium and principal  payments
due on such 8 1/2%  Notes as if such 8 1/2% Notes were  redeemed
on February 15, 2002, computed using a discount rate equal to the
Treasury  Rate  plus 50 basis points, over (ii)  the  outstanding
principal amount  of  such 8 1/2% Notes.  In addition,  during the
first  36 months after February 11, 1997, the Company may  redeem
up to $70 million in aggregate principal amount of the 8 1/2% Notes
at  a  redemption price of 108.5% of the principal amount thereof
plus  accrued  and  unpaid  interest,  if  any,  thereon  to  the
redemption  date with the net proceeds of an offering  of  common
equity  of the Company; provided that at least $130.0 million  in
aggregate principal amount of the 8 1/2% Notes  remain  outstanding
immediately  after the occurrence of such redemption.   Any  such
redemption  must occur within 60 days of the date of the  closing
of such common equity offering.

      Upon  a "change of  control" in the Company, as defined  in
the 8 1/2% Notes Indenture, the 8 1/2% Notes holders may require, at
their  election, that the Company prepay all or a portion of  the
8 1/2% Notes at a purchase price equal to 101% of  the  aggregate
principal  amount  thereof plus accrued and unpaid  interest,  if
any,  thereon.   Furthermore,  under certain  circumstances,  the
Company  may  become  obligated to offer to  purchase  all  or  a
portion of the 8 1/2% Notes at 100% of the principal amount thereof,
together with accrued and unpaid interest, if any, with  the  net
proceeds of certain asset sales.
<PAGE>
                              FORCENERGY INC
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

      The 9 1/2% Notes Indenture and the 8 1/2% Notes Indenture  both
contain  certain  covenants  which  include  the  following:  (i)
limitations  on  disposition of proceeds from asset  sales;  (ii)
limitations  on payment of dividends, making of distributions  or
certain  investments;  (iii) limitations  on  the  incurrence  of
additional  indebtedness or liens (iv) limitations  on  sale  and
leaseback    transactions;    (v)   limitations    on    mergers,
consolidations  and  transfers  of  substantially  all   of   the
Company's  assets;  and (vi) limitation on  certain  transactions
with affiliates.  The Company is in compliance with all covenants
under both indentures.

      The 9 1/2% Notes and the 8 1/2% Notes are both subordinate 
to the Senior Credit Facility and rank pari passu with each other.

7% Exchangeable Subordinated Notes

      On  November 6, 1996, in conjunction with a public offering
of  common stock by the Company, the Company's Exchangeable Notes
were  exchanged into a total of 2,343,047 shares of common stock.
The  exchange  resulted  in a non-cash  credit  to  stockholder's
equity  totaling  $35.8 million, representing principal,  accrued
deferred interest and capitalized debt issuance cost relating  to
the Exchangeable Notes.

      The placement agent for the Exchangeable Notes offering was
granted  warrants to purchase 98,337 shares of common stock  with
an  exercise price of $14.51 per share.  These warrants expire on
September  14, 1998.  No warrants have been exercised  (See  Note
7).

      The  Company's aggregate long-term debt maturities for each
of the next five calendar years are estimated to be as follows:

                                             (in thousands)

             1997                                      --
             1998                               $  35,255
             1999                                  29,379
             2000                                  22,524
             Thereafter                           185,774
                                                ---------
             Total                              $ 272,932
                                                =========

      The  fair value of the Company's fixed rate 9 1/2% Notes at
December  31,  1996  is $184.2 million based  on  current  market
prices  at  December 31, 1996.  The Senior Credit Facility,  with
interest  at  the  prime rate and LIBOR, approximates  market  at
December 31, 1996.
<PAGE>
                         FORCENERGY INC
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


NOTE 5 -- INCOME TAXES

      The  Company's provision (benefit) for income taxes  is  as
follows:

                                          Year ended December 31,
                                      -------------------------------
                                        1996       1995         1994
                                      -------    --------     -------
                                              (in thousands)
  Deferred:
  Federal                             $ 5,991    $   (980)    $ (2,082)
  State                                   720         (95)        (321)
                                      -------    --------     --------
     Total                            $ 6,711    $ (1,075)    $ (2,403)
                                      =======    ========     ========


      The Company's deferred income tax liabilities (assets) were
comprised of the following differences between financial and  tax
reporting (in thousands):

                                                 December 31,
                                      --------------------------------
                                         1996        1995       1994
                                      --------    --------    --------
  Capitalized costs and write-offs    $ 28,556    $ 21,660    $  7,880
  Net operating loss carry forwards     (7,512)     (7,611)     (4,206)
  Deferred interest deductions              --      (1,744)       (983)
                                      --------    --------    --------
  Deferred tax liability              $ 21,044    $ 12,305    $  2,691
                                      ========    ========    ========

     The Company had no deferred tax asset valuation allowance at
December 31, 1996, 1995 or 1994.

      A  reconciliation of the federal statutory income tax rates
to the Company's effective rate is as follows:


                                              Year  ended December 31,
                                              ------------------------
                                               1996     1995     1994
                                              ------    -----    -----
  Income taxes at federal statutory rates      35.0%    34.0%    34.0%
  State income tax, less federal benefit       12.6      3.3      3.3
  Other, net                                    (.3)    (0.6)    (0.2)
                                               ----     ----     ---- 
 Total                                         37.3%    36.7%    37.1%
                                               ====     ====     ====
<PAGE>
                        FORCENERGY INC
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

      At  December 31, 1996, the Company had a net operating loss
carryforward  ("NOL")  for  tax  purposes  of  $20,140,000.   The
Company's  NOLs expire as follows: $6,357,000 in 2008, $4,654,000
in 2009 and $9,129,000 in 2010.  During 1996, the Company amended
its   1994   federal  income  tax  return  decreasing   its   NOL
carryforward  by   $27,832,000.   The  Company's  initial  public
offering of its common stock during 1995 resulted in a change  of
ownership under Section 382 of the Internal Revenue Code of 1986,
as amended, and caused an annual limitation in the utilization of
the  Company's NOLs. The Company has determined that  the  annual
limitation for utilization of its NOLs as a result of Section 382
is approximately $4.5 million.

NOTE 6 -- LEASES

      The  following  is a schedule by calendar  year  of  future
minimum   rental  payments,  covering  primarily  office   space,
required  under  operating leases with a term in  excess  of  one
year:

                                     ( in thousands)
        1997                             $ 1,105
        1998                                 879
        1999                                 632
        2000                                 622
        2001                                 585
                                         -------
        Total                            $ 3,823
                                         =======

      Total  rental  expense for operating leases  was  $584,000,
$419,000 and $362,000 for the years ended December 31, 1996, 1995
and 1994, respectively.

NOTE 7 -- STOCK OPTION, PERFORMANCE AND PURCHASE PLANS

      The  Company has adopted the disclosure provisions of  SFAS
No.  123.  Accordingly, no compensation costs have been  recorded
for  the stock options or warrants as the exercise price  of  all
options granted was the fair market value on the date of grant.

      The  Company has reserved 4,000,000 shares of common  stock
for issuance under stock option plans to officers, employees, and
directors,  2,150,000  of  which were previously  authorized  for
grant  under  the Company's stock option plans and 1,850,000  for
which  the  Company  is seeking authorization approval  from  the
shareholders  at the 1997 Annual Meeting of Shareholders  on  May
15, 1997.
<PAGE>
                          FORCENERGY INC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock Option Plans

      The  exercise  price  for  options  granted  to  directors,
officers  and employees is the fair market value of the stock  at
the  date of grant.  The outstanding options have varying vesting
periods, expire at various dates through the year 2006,  and  are
exercisable  at prices ranging from $10.00 to $32.00  per  share,
with an aggregate exercise price of $35.1 million.

      The Company's President and Chief Executive Officer has the
right  to  require the Company to purchase any shares of   Common
Stock  owned as a result of the exercise of stock options at  the
then   current  market  price  of  the  Common  Stock   and   any
unexercised stock options at the excess of the fair market  value
of the Common Stock over the option price, upon (i) a termination
of  employment,  (ii)  the maturity of, or  inability  to  obtain
financing  to exercise the stock options and (iii) any expiration
of the right to exercise stock options.

     The following table summarizes the stock option activity for
the 1994, 1995 and 1996:


                                                                       Weighted
                                                                       Average
                                           Number     Option Price     Exercise
                                         of Shares      Per Share        Price

     Outstanding at January 1, 1994        638,256   $12.02 - $14.51  $  13.33
       Granted                              98,337    12.02 -  14.51
       Canceled                            (34,452)            14.51
                                         ---------   ---------------
     Outstanding at December 31, 1994      702,141    12.02 -  14.51     13.27
       Granted                           1,003,777    10.00 -  14.51
                                         ---------   ---------------
     Outstanding at December 31, 1995    1,705,918    10.00 -  14.51     11.59
       Granted                             391,629    10.50 -  15.13     12.04
                                           604,300    19.00 -  26.88     24.36
                                            75,000             32.00     32.00
       Exercised                          (108,637)   10.00 -  14.51     14.09
       Canceled                           (157,292)   10.00 -  14.51     12.18
                                         ---------   
     Outstanding at December 31, 1996    2,510,918    10.00 -  32.00     15.25
                                         =========
<PAGE>
                            FORCENERGY INC
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

     The following table summarizes information about stock
options outstanding at  December 31, 1996:

                             Weighted
                              Average   Weighted                    Weighted
 Range of     Outstanding    Remaining   Average    Exercisable      Average
 Exercise   at December 31,    Life     Exercise  at December 31,  Exercisable
  Prices          1996        Years      Price          1996         Price
 --------   --------------   --------   --------  --------------   -----------
$10.00-$14.51   1,817,618       8.37      $11.53      907,520         $11.65
 15.13- 21.44     249,300       9.59       20.11           --             --
        32.00     444,000       9.85       27.74           --             --
                ---------
                2,510,918
                =========

     The  weighted  average fair value for options granted during
1996 was $12.95.

      If  compensation expense for the stock options and warrants
had  been determined and recorded based on the fair value on  the
grant  date and using the Black-Scholes option pricing  model  to
estimate  the  theoretical future value  of  those  options,  the
Company's  net  income  (loss) and net income  (loss)  per  share
amounts  would  have  been  reduced  to  the  pro  forma  amounts
indicated below:
                                                    1996        1995
                                                 --------   ---------
     Pro forma net income (loss)                 $  9,196   $  (5,039)
                                                 --------   ---------
     Pro  forma net income (loss) per share      $    .47   $    (.39)
                                                 --------   ---------

     Due to the uncertainties in these estimates, such as varying
vesting dates and exercise possibilities, and the possibility  of
future awards and cancellations, these pro forma disclosures  are
not likely to be representative of the effects on reported income
for future years.

      For  proforma purposes, the fair value of each option grant
is  estimated  on the date of grant with the following  weighted-
average assumptions:
                                             1996     1995
                                             ----     ----
     Expected life (years)                    10        10
     Interest rate                           6.5%      6.5%
     Volatility                               40%       40%
     Dividend yield                           --        --
<PAGE>
                                FORCENERGY INC
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock Price Performance Incentive Plan

      On November 21, 1996, the Board of Directors of the Company
adopted,  subject to shareholder approval,  the 1997 Stock  Price
Performance Incentive Plan (the "Performance Plan") covering  all
employees of the Company. The Performance Plan has a commencement
date  of  January 1, 1997 and expires on December 31, 1999.   The
purpose  of  the  Performance Plan is  to  provide  a  meaningful
financial incentive to employees that will assist the Company  in
recruiting  and  retaining high quality  industry  professionals,
while simultaneously benefiting the shareholders by aligning  the
financial  interests of employees with those of the  shareholders
by  focusing their efforts on the price performance of the stock.
The  plan  provides that should the price of the Company's  stock
reach  $60  per share at any time during the term  of  the  plan,
every  employee  will receive a non-cash award of  the  right  to
receive  common stock in the Company in an amount  equivalent  in
value to five (5) times his/her annual salary on January 1,  1997
(or  date of hire, if later).  For employees hired after  January
1,  1997, the award will be prorated giving consideration to  the
date  of hire and the stock price on the date of hire.  The right
to  receive the common stock, and the granting of the stock, will
vest  to  each employee still employed by the Company,  in  equal
amounts,  on  the first through third anniversaries of  the  date
that the stock reaches $60 per share.

     Should the price of the common stock not reach $60 per share
during  the  term  of the plan, but reaches $50 per  share,  each
employee  will receive, on December 31, 1999, a similar right  to
receive common stock with similar vesting provisions but with  an
equivalent value of two and one-half times his/her salary.   That
right  would vest, in equal amounts on December 31,  in the years
2000  through  2002.  Compensation expense will be recognized  by
the Company from the award date through the vesting period with a
cumulative recognition of compensation expense recognized on  the
date of award, giving consideration to employee services rendered
prior  to  the award date.  At December 31, 1996, annual salaries
for all employees was approximately $10 million.  The Performance
Plan  is still subject to shareholder approval at the 1997 Annual
Meeting of Shareholders on May 15, 1997.

Employee Stock Purchase Plan

      The  Company  has  adopted  the Forcenergy  Employee  Stock
Purchase Plan (the "Stock Purchase Plan"), which will permit full-
time  Company employees (or part time for at least 20  hours  per
week  and at least five months per year) to acquire common  stock
at  a  small discount from its fair market value through  payroll
deductions.  Up to a maximum 100,000 shares of common  stock  may
<PAGE>
                           FORCENERGY INC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

be  sold  to participants under the Stock Purchase Plan.   As  of
December 31, 1996, a total of 25,674 shares had been purchased by
participants in the plan.

NOTE 8 -- EMPLOYEE 401 (K) PLAN

      The Company maintains the FGE Employee 401 (k) Plan for the
benefit of all full-time employees.  This plan currently provides
for  a tax deferred contribution by the Company of 50% (25% prior
to   January   1,  1997)  of  the  participants'   current   year
contributions  to  the  extent that such  contribution  does  not
exceed 5% of total annual compensation.  Participants vest in the
contributions  made  by the Company after one  year  of  service.
Total pre-tax contributions per employee are limited each year by
the  Internal Revenue Service.  During 1996, 1995 and  1994,  the
Company  incurred  approximately $73,000,  $32,000  and  $27,000,
respectively, of compensation expense related to this plan.

NOTE 9 -- FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

      The  Company is a party to financial instruments with  off-
balance-sheet risk in the normal course of business to reduce its
exposure to changing commodity prices.  Commodity swap agreements
are  utilized  to  hedge  oil and gas  prices  for  varying  time
periods.   The swap agreements contain an element of credit  risk
and  price risk.  The Company attempts to minimize the extent  of
credit  risk  by  limiting the counterparties to major  banks  or
significant industry participants.  Any hedging gains  or  losses
under  these contracts are recognized in revenue upon  settlement
of hedged production.  Since 1994, the Company has entered into a
number  of  oil  and  gas  swap arrangements  with  oil  and  gas
purchasers   and   industry  trading  companies.    Under   these
agreements,  monthly  settlements are based  on  the  differences
between  the price specified in the instrument and the settlement
price of certain oil and gas futures contracts quoted on the  New
York  Mercantile  Exchange ("NYMEX").   In  instances  where  the
applicable  settlement price is less than the price specified  in
the  contract,  the Company receives a settlement  based  on  the
difference and in instances where the applicable settlement price
is  higher than the specified prices, the Company pays an  amount
based  on  the  difference.  The Company utilizes  these  forward
sales  contracts and commodity swaps for portions of its  current
oil and gas production to achieve more predictable cash flows and
to reduce its exposure to fluctuations in oil and gas prices. The
remaining portion of current production is not hedged  so  as  to
provide the Company the opportunity to benefit from increases  in
<PAGE>
                          FORCENERGY INC
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

prices  on that portion of the production, should price increases
materialize.  The Company recognized a decrease of $20.5  million
in  1996  oil and gas sales, an increase of $117,000 in 1995  oil
and  gas  sales and a decrease of $151,000 in 1994  oil  and  gas
sales as a result of these agreements.

      The  Company  has  entered  into  forward  sales  and  swap
arrangements  with respect to approximately 28% of its  estimated
net natural gas production through the second quarter of 1997  at
a weighted average price of approximately $2.04 per Mcf.  For the
same  period,  the Company has hedged approximately  18%  of  its
estimated  net  oil  production at a weighted  average  price  of
$18.02  per  Bbl.  In addition, for the same period, the  Company
has  hedged through collar arrangements approximately 20% of  its
estimated  net oil production through the second quarter  with  a
floor of $18.00 per Bbl and ceilings of $23.90 to $26.30 per Bbl.
The  production  percentages reflected assume current  production
rates.  All of these arrangements are settled on a monthly basis.
The   Company  accounts  for  its  commodity  swaps  as   hedging
activities and, accordingly, gains or losses are included in  oil
and  gas revenues for the period the production was hedged.   The
Company continuously reevaluates its hedging program in light  of
market  conditions, commodity price forecasts, capital  spending,
and  debt service requirements.  The Company may hedge additional
volumes through the remainder of 1997.  Based on NYMEX prices  in
effect  on  March 18, 1997 applied to all contracts in  place  on
December  31, 1996, a theoretical cash settlement cost for  those
contracts  would  have  approximated $1.3  million.   Practically
speaking,  NYMEX  prices  upon which  these   contracts  will  be
settled  over  the  life of the contract,  will  most  likely  be
volatile,  therefore, it is not possible to  determine,  at  this
time,  what  ultimate  gain or loss will be realized  from  these
contracts.

NOTE 10 -- COMMITMENTS AND CONTINGENCIES

      The  Company  is  involved  in various  litigation  matters
arising   in   the  normal  course  of  business.    Management's
assessment is that none of these matters are anticipated to  have
a material adverse affect on the financial position or results of
operations of the Company.


                                
<PAGE>
                                
                         FORCENERGY INC
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


NOTE 11 -- SIGNIFICANT CUSTOMERS

     The following table reflects sales to oil and gas purchasers
who  individually  accounted for more than 10% of  the  Company's
total oil and gas revenues (in thousands):

                                           1996       1995        1994
                                        --------   --------    --------
     Texon Corporation                  $ 24,793   $     --    $     --
     Coast Energy Group                 $ 69,491   $ 21,155    $  7,662
     Mobil Oil Corp                     $    --    $  7,930    $ 11,767

NOTE 12 -- CURRENT ASSETS AND LIABILITIES

      Current  assets  and liabilities include the  following  at
December 31, 1996:

     Current assets:

      Accounts receivable-joint interest billing         $  1,567
      Accrued oil and gas sales                            27,416
      Other                                                   683
      Allowance for doubtful accounts                        (250)
                                                         --------
       Accounts receivable, net                          $ 29,416
                                                         ========

      Prepaid drilling cost                              $  4,868
      Royalties  and  production  taxes
       receivable  from  joint interest owners              2,584
      Other                                                 3,221
                                                         --------
       Other current assets                              $ 10,673
                                                         ========

     Current liabilities:

      Accrued drilling cost                              $ 17,155
      Accrued lease operating expenses                      5,921
      Accrued interest expense                              2,650
      Other                                                 8,644
                                                         --------
       Accrued liabilities                               $ 34,370
                                                         ========

<PAGE>
                             FORCENERGY INC
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

      The  Company paid cash interest costs including capitalized
interest of $11,459,000, $10,065,000 and $8,512,000 for the years
ended December 31, 1996, 1995 and 1994 respectively.  During 1996
the  Company  paid  federal income taxes  amounting  to  $81,000,
consisting  solely of alternative minimum tax.  During  1996  and
1995, the Company invested in additions to oil and gas properties
through  accounts  payable  and  other  accrued  liabilities  and
obligations  in  the  amount  of  $21,217,000  and   $19,925,000,
respectively.

      A  summary  of non-cash investing and financing  activities
relating  to  the  1995 Ashlawn acquisition  is  as  follows  (in
thousands):

       Issuance of common stock                          $ 30,000
       Deferred income taxes recognized                    10,689
       Assumption of debt                                   5,700
                                                         --------
               Total included in oil and gas properties  $ 46,389
                                                         ========
                                
NOTE 14 --  SUBSEQUENT EVENT

      In January 1997, the Company acquired all of the oustanding
stock  of  Great Western Resources, Inc. for approximatley  $48.3
million   in  cash  consideration.   The  transaction  has   been
accounted for as a purchase.

NOTE  15  --  SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

Cost Incurred in Oil and Gas Producing Activities

     Presented below are costs incurred in petroleum property
acquisition, exploration and development activities (in
thousands):
                                         1996         1995         1994
                                      ---------    ---------     ---------
     Acquisition of properties:
       Proved properties              $ 123,015    $  75,836     $  10,437
       Unproved properties               25,179       16,300         3,341
     Exploration costs                   42,262        6,264         3,834
     Development costs                   92,555       45,485        39,525
                                      ---------    ---------     ---------
          Total                       $ 283,011    $ 143,885     $  57,137
                                      =========    =========     =========
<PAGE>

                                FORCENERGY INC
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Capitalized Costs Related to Oil and Gas Producing Activities

      The  following  table presents total capitalized  costs  of
proved   and   unproved  properties  and  accumulated  depletion,
depreciation  and amortization related to oil and  gas  producing
operations (thousands):

                                          1996        1995         1994
                                      ---------    ---------    ---------
     Proved properties                $ 601,725    $ 343,378    $ 215,781
     Unproved properties                 63,077       39,057       26,650
                                      ---------    ---------    ---------
                                      $ 664,802    $ 382,435    $ 242,431
     Accumulated depletion, 
      depreciation and amortization    (143,061)     (85,251)     (57,481)
                                      ---------    ---------    ---------
          Total                       $ 521,741    $ 297,184    $ 184,950
                                      =========    =========    =========

      Of  the capitalized cost of unproved properties at December
31,  1996,  $35,280,000, $6,559,000, $5,279,000  and  $15,959,000
were  incurred  in  1996, 1995, 1994 and  years  prior  to  1994,
respectively. The Company anticipates evaluating these properties
over  the  next three to five years as it continues its  property
exploitation and development program.

Results of Operations from Oil and Gas Producing Activities

      The  results  of  operations from  oil  and  gas  producing
activities,  which  do not include revenues associated  with  the
production and sale of sulfur and processing fees for third party
gas,  and excluding corporate overhead and interest costs are  as
follows (in thousands):
<PAGE>
                             FORCENERGY INC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                          For the Year Ended December 31,
                                      -------------------------------------
                                         1996          1995          1994
                                      ---------     ---------     ---------
     Revenues <F1>                    $ 159,232     $  72,147     $  58,354
     Production costs                   (42,240)      (26,375)      (25,445)
     Depreciation, depletion 
      and amortization                  (57,811)      (30,830)      (24,572)
     Income tax expense                 (14,415)       (5,573)       (3,110)
     Results of operations for 
      petroleum producing activities  $  24,232     $   9,369     $   5,227

     Average sales prices;
     Liquids (per Bbl)<F2>            $   16.93     $   16.46     $   15.04
     Gas (per Mcf)                    $    2.16     $    1.59     $    1.87

___________
[FN]
<F1>
Does not include 1996 hedging losses amounting to $20.5 million
<F2>
Includes condensate, oil and natural gas liquids
[/FN]

Reserve Quantities (unaudited)

      Estimates of proved reserves of the Company and the related
standardized   measure  of  discounted  future  net   cash   flow
information  are  based  on the reports of independent  petroleum
engineers.  The Company's proved reserves for onshore properties,
Alaska and certain offshore properties acquired in 1996 have been
estimated by Netherland, Sewell and Associates, Inc., independent
reservoir engineering consultants, for the estimated reserves  as
of  January  1, 1997 and 1996 and by Joe C. Neal and  Associates,
independent reservoir engineering consultants, as of  January  1,
1995.  Estimates of offshore reserves as of January 1, 1997, 1996
and  1995  were made by Collarini Engineering, Inc.,  independent
reservoir  engineering consultants.  All of the Company's  proved
reserves are located offshore or onshore - United States.   There
are numerous uncertainties inherent in estimating oil and natural
gas  reserves and their estimated values, including many  factors
beyond  the control of the producer.  The reserve data set  forth
herein  represents only estimates.  Reservoir  engineering  is  a
subjective process of estimating underground accumulations of oil
and  natural  gas  that cannot be measured in  an  exact  manner.
Estimates of economically recoverable oil and gas reserves and of
future  net  cash  flows  necessarily depend  upon  a  number  of
variable  factors and assumptions, such as historical  production
from  the  area  compared with production  from  other  producing
areas,   the  assumed  effects  of  regulations  by  governmental
agencies  and assumptions concerning future oil and  gas  prices,
future  operating costs, severance and excise taxes,  development
costs  and workover and remedial costs, all of which may in  fact
vary  considerably  from  actual  results.   For  these  reasons,
estimates of the economically recoverable quantities of  oil  and
<PAGE>
                          FORCENERGY INC
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

natural  gas  attributable to any particular group of properties,
classifications of such reserves based on risk of  recovery,  and
estimates  of  the  future  net  cash  flows  expected  therefrom
prepared  by  different  engineers or by the  same  engineers  at
different times may vary substantially and such reserve estimates
may  be subject to downward or upward adjustment based upon  such
factors.   Actual  production,  revenues  and  expenditures  with
respect   to  the  Company's  reserves  will  likely  vary   from
estimates, and such variances may be material.

      The  present  value  of  estimated future  net  cash  flows
included  herein  should not be construed as the  current  market
value  of estimated oil and natural gas reserves attributable  to
the  Company's  operations.  In accordance  with  the  applicable
requirements  of  the  Securities and  Exchange  Commission  (the
"Commission"),  the  estimated discounted  net  cash  flows  from
proved  reserves are generally based on current prices and  costs
as  of the date of the estimate, whereas actual future prices and
costs  may  be  materially higher or lower.   Current  prices  in
effect  as  of  the  valuation  date incorporated  the  estimated
effects of hedging agreements in place as of the valuation  date,
and  for the period the agreements will be in effect.  As of  the
reserve  valuation  date, the Company had  entered  into  forward
sales and swap arrangements with respect to approximately 28%  of
its  estimated  net  natural gas production  through  the  second
quarter  of  1997  at a weighted average price  of  approximately
$2.04  per  Mcf.   For  the same period, the Company  has  hedged
approximately  18%  of  its estimated net  oil  production  at  a
weighted average price of $18.02 per Bbl.  In addition,  for  the
same  period,  the Company has hedged through collar arrangements
approximately  20%  of its estimated net oil  production  with  a
floor  of  $18.00 and ceilings ranging from $23.90 to $26.30  per
Bbl.   Actual future cash flows will also be affected by  factors
such  as  the amount and timing of actual production, supply  and
demand  for  oil  and natural gas, curtailments or  increases  in
consumption by purchasers and changes in governmental  regulation
or  taxation.   The timing of actual future net cash  flows  from
proved reserves, and their actual present value, will be affected
by  the  timing of both production and the incurrence of expenses
in  connection  with development and production of  oil  and  gas
properties. In addition, the calculation of the present value  of
the  future net revenues using a 10% discount as required by  the
Commission,  is  not  necessarily the most  appropriate  discount
factor  based on interest rates in effect from time to  time  and
the  risk associated with the Company's reserves or the  oil  and
gas industry in general.
<PAGE>
                          FORCENERGY INC
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

      The  Company's estimates of its proved reserves and  proved
developed  reserves of oil and gas as of December 31, 1994,  1995
and 1996 and the changes in its proved reserves are as follows:



                                               Oil          Gas
                                              (Mbbl)       (MMcf)
                                            -------      -------
     1994
     Proved developed and undeveloped:
        Beginning of year                     10,776      138,862
        Production                            (1,753)     (17,121)
        Purchases of minerals-in-place           898       23,775
        Extensions and discoveries             2,431       19,392
        Sales of minerals-in-place                (3)          (1)
        Revisions to previous estimates       (1,039)       7,215
                                             -------      -------
        End of year                           11,310      172,122
                                             =======      =======
     Proved developed:
        Beginning of year                      8,121      101,653
                                             =======      =======

        End of year                            9,035      125,468
                                             =======      =======

     1995
     Proved developed and undeveloped:
        Beginning of year                     11,310      172,122
        Production                            (2,343)     (21,112)
        Purchases of minerals-in-place        10,691       57,786
        Extensions and discoveries             6,018       21,344
        Sales of minerals-in-place              (467)      (5,586)
        Revisions to previous estimates         (751)      (6,502)
                                             -------      -------
        End of year                           24,458      218,052
                                             =======      =======

     Proved developed:
        Beginning of year                      9,035      125,468
                                             =======      =======

        End of year                           16,050      154,705
                                             =======      =======             
<PAGE>
                                FORCENERGY INC
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

     1996
     Proved developed and undeveloped:
        Beginning of year                     24,458      218,502
        Production                            (4,006)     (32,738)
        Purchases of minerals-in-place        27,206       38,107
        Extensions and discoveries             4,718       19,419
        Sales of minerals-in-place               (38)      (3,552)
        Revisions to previous estimates        2,321       17,625
                                             -------      -------
        End of year                           54,659      256,913
                                             =======      =======

     Proved developed:
        Beginning of year                     16,050      154,705
                                             =======      =======

        End of year                           45,040      187,949
                                             =======      =======

                                
      Proved  reserves are estimated quantities of crude oil  and
natural  gas which geological and engineering data indicate  with
reasonable certainty to be recoverable in future years from known
reservoirs  under  existing  economic and  operating  conditions.
Proved  developed  reserves  are proved  reserves  which  can  be
expected  to  be recovered through existing wells  with  existing
equipment and operating methods.

      Revisions to previous estimates for each year of the  three
year period ended December 31, 1996 were primarily the result  of
property performance revisions.

Standardized  Measure  of   Discounted  Future  Net  Cash   Flows
(unaudited)

     The standardized measure of discounted future net cash flows
relating  to  proved  oil  and gas reserves  is  as  follows  (in
thousands):
<PAGE>
                            FORCENERGY INC
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                          For the Year ended December 31,
                                    -----------------------------------------
                                        1996           1995           1994
                                    -----------    -----------    -----------
     Future cash inflows            $ 2,220,916    $ 1,128,646    $   465,300
     Future production costs           (588,973)      (242,370)      (134,774)
     Future development and 
      dismantlement costs              (191,022)      (143,845)       (82,300)
     Future income tax expense         (377,857)      (183,850)       (27,176)
                                    -----------    -----------    -----------
     Future net cash flows            1,063,064        558,581        221,050
     10% annual discount for 
      estimated timing of cash flows   (260,919)      (151,625)       (68,423)
                                    -----------    -----------    -----------
     Standardized measure of
      discounted future net
      cash flows                    $   802,145    $   406,956    $   152,627
                                    ===========    ===========    ===========

      The  following  table summarizes the principal  sources  of
change in the standardized measure of discounted future net  cash
flows (in thousands):

                                          For the Year ended December 31,
                                    -----------------------------------------
                                         1996           1995          1994
                                    -----------    -----------    -----------
    Standardized measure -- 
     beginning of period            $   406,956    $   152,627    $   159,173
    Sales of oil and gas produced,
     net of production costs           (116,993)       (45,655)       (35,274)
    Purchases of minerals-in-place      277,205        167,129         21,645
    Extensions and discoveries          122,500         91,413         20,841
    Sales of minerals-in-place           (4,268)        (4,395)           (13)
    Net changes in prices and
     production costs                   131,553        181,480        (49,976)
    Changes in estimated future
     development and dismantlement
     costs                               (7,436)        (6,322)       (5,956)
     Revisions to previous quantity
      estimates                          70,230        (20,468)         (207)
     Accretion of discount               40,696         15,263        15,917
     Changes in timing of 
      production and other                1,523        (10,611)        6,134
     Net changes in income taxes       (119,821)      (113,505)      (20,343)
                                    -----------    -----------   -----------
     Standardized measure-end
      of period                     $   802,145    $   406,956   $   152,627
                                    ===========    ===========   ===========
<PAGE>

                             FORCENERGY INC
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

      The  standardized measure is based on current prices as  of
the  valuation date and reflects overall weighted average  prices
of:
                                  For the Year ended December 31,
                                  ------------------------------
                                     1996       1995      1994
                                  --------   --------  ---------
     Oil (per Bbl)                $  23.19   $  19.16  $  16.15
     Gas (per Mcf)                $   3.71   $   3.02  $   1.64

     The standardized measure of discounted future net cash flows
was  calculated  by applying current prices to  estimated  future
production, less future expenditures (based on current costs)  to
be  incurred in developing and producing such proved reserves and
the  estimated effect of future income taxes based on the current
tax  law.   The  resulting future net cash flows were  discounted
using a rate of 10% per annum.

      Subsequent  to  the  reserve valuation date,  the  industry
experienced a softening in oil and natural gas prices.   Weighted
average  prices  that the Company estimates it will  receive  for
March  1997 production are $20 - $22 per barrel and $1.80 - $1.90
per Mcf for oil and natural gas, respectively.  These changes  in
prices  would have had an effect on the Standardized  Measure  of
Discounted  Cash Flows of the Company's reserves  at  January  1,
1997.
<PAGE>