**Exhibit 10.1**

**THIRD AMENDMENT TO THEAMENDED AND RESTATED COMBINED CREDIT AGREEMENTS**

THIS THIRD AMENDMENT TO THE AMENDED AND RESTATEDCOMBINED CREDIT AGREEMENTS, dated as of November 3, 2006 but effective as ofOctober 31, 2006 (the “Amendment”),among **FOREST OIL CORPORATION**, a New Yorkcorporation (the “U.S. Borrower”), **CANADIAN FOREST OIL LTD.** and each other subsidiary ofCanadian Forest which becomes a “Borrower” (as defined in the Canadian CreditAgreement) under the Canadian Credit Agreement (the “CanadianBorrowers”), each of the lenders that is a signatory to, or whichbecomes a signatory to, the U.S. Credit Agreement (together with its successorsand assigns, the “U.S. Lenders”), eachof the lenders that is a signatory to, or which becomes a signatory to, theCanadian Credit Agreement (together with its successors and assigns, the “Canadian Lenders”, and together with the U.S.Lenders, the “Combined Lenders”), **BANK OF AMERICA, N.A.** and **CITIBANK,N.A.**, as Co-Global Syndication Agents, **BNP PARIBAS**and **HARRIS NESBITT FINANCING, INC.**, asCo-U.S. Documentation Agents, **BANK OF MONTREAL**and **THE TORONTO-DOMINION BANK**, asCo-Canadian Documentation Agents, **JPMORGAN CHASE BANK, N.A.,TORONTO BRANCH**, formerly known as JPMorgan Chase Bank, TorontoBranch, as Canadian Administrative Agent and **JPMORGANCHASE BANK**,**N.A.**, formerlyknown as JPMorgan Chase Bank, as Global Administrative Agent (in such capacity,together with its successors in such capacity, the “GlobalAdministrative Agent”).

**WITNESSETH**:

1.             TheU.S. Borrower, Global Administrative Agent, the Co-Global Syndication Agents,the Co-U.S. Documentation Agents, and the U.S. Lenders are parties to thatcertain Amended and Restated Credit Agreement, dated as of September 28, 2004,as amended by (i) that certain First Amendment to the U.S. CreditAgreement dated as of October 16, 2005 and (ii) that certain SecondAmendment to the Amended and Restated Combined Credit Agreements dated as ofDecember 21, 2005 (as previously amended, the “U.S.Credit Agreement”), pursuant to which the U.S. Lenders agreed tomake loans to and extensions of credit on behalf of the U.S. Borrower.

2.             TheCanadian Borrowers, Global Administrative Agent, the Canadian AdministrativeAgent, the Co-Global Syndication Agents, the Co-Canadian Documentation Agents,and the Canadian Lenders are parties to that certain Amended and RestatedCredit Agreement, dated as of September 28, 2004, as amended by that certainSecond Amendment to the Amended and Restated Combined Credit Agreements datedas of December 21, 2005 (as previously amended, the “CanadianCredit Agreement”, and together with the U.S. Credit Agreement, the “Combined Credit Agreements”), pursuant towhich the Canadian Lenders agreed to make loans to and extensions of credit onbehalf of the Canadian Borrowers.

3.             Theparties to the Combined Credit Agreements intend to amend the Combined CreditAgreements as follows:

NOW, THEREFORE, in consideration of the premises andthe mutual covenants herein contained, the parties hereto agree as follows:

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**I.             ****Amendments toU.S. Credit Agreement****.**

A.            Section 1.1 of the U.S. Credit Agreement hereby isamended by inserting the following definitions of “Alaska Assets”, “ForestHoldco” and “Forest Opco” in appropriate alphabetical order:

“              “Alaska Assets”means the Oil and Gas Properties located in the State of Alaska or in the U.S.Federal waters adjacent to the State of Alaska and associated property whichare described in Schedule 7.4(h).”

“              “Forest Holdco”means Forest Alaska Holding LLC, a Delaware limited liability company.”

“              “Forest Opco”means Forest Alaska Operating LLC, a Delaware limited liability company.”

B.            Section 7.4(h) of the U.S. Credit Agreement ishereby amended through the addition of a new sentence at the end of Section7.4(h) to read as follows:

“Notwithstanding theforegoing, Borrower shall be permitted at any time prior to December 31, 2006to (1) transfer the Alaska Assets to Forest Holdco or to Forest Opco, if ForestHoldco and Forest Opco as of the time of such transfer are Unrestricted Subsidiariesor (2) redesignate Forest Holdco and Forest Opco as UnrestrictedSubsidiaries; provided that no portion of such transfer shall reduce orincrease the amount of the Investment basket available to the Borrower pursuantto the calculation set forth in Section 7.4(h)(ii).”

C.            Section 7.5(f) of the U.S. Credit Agreement ishereby amended through the insertion of the following text in the last line ofsuch Section between the words “Mariner Energy, Inc.;” and the word “and”:

“; and providedfurtherthat, the foregoing restriction shall not apply to the transfer at any timeprior to December 31, 2006 by Borrower of the Alaska Assets to Forest Holdco orForest Opco or the designation at any time prior to December 31, 2006 ofForest Holdco and Forest Opco as Unrestricted Subsidiaries”.

D.            Section 7.5(g) of the U.S. Credit Agreement ishereby amended through the addition of the following sentence at the end ofsuch Section:

“The foregoing restriction shall not apply to the transfer at any timeprior to December 31, 2006 by Borrower of the Alaska Assets to ForestHoldco or Forest Opco or the designation at any time prior to December 31, 2006of Forest Holdco and Forest Opco as Unrestricted Subsidiaries.”

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E.             Section 7.8(b)(3) of theU.S. Credit Agreement is hereby amended to read as follows:

“(3) 50% of the net cashproceeds received by Borrower from any sale of Equity Interests after October1, 2000; provided, however, that this calculation shall notinclude any proceeds relating to the sale of Equity Interests in FERI (asdefined below), Forest Holdco or Forest Opco.”

F.             The U.S. Credit Agreement hereby is amended by insertingSchedule 7.4(h) to this Amendment as Schedule 7.4(h) to the U.S.Credit Agreement following Schedule 7.4 to the U.S. Credit Agreement.

**II.            **Effectiveness****.****  This Amendment shall become effective as of October31, 2006 when the Global Administrative Agent shall have received counterpartshereof duly executed by the U.S. Borrower, the Global Administrative Agent, theCanadian Administrative Agent, and all of the Majority Lenders (or, in the caseof any party as to which an executed counterpart shall not have been received,telegraphic, telex, or other written confirmation from such party of executionof a counterpart hereof by such party).

**III.           **Reaffirmation of Representations andWarranties****.**** To induce the Majority Lenders, the Global Administrative Agent and theCanadian Administrative Agent to enter into this Amendment, the U.S. Borrowerhereby reaffirms, as of the date hereof, the following:

A.            The representations and warranties of each Loan Party (assuch term is defined in the U.S. Credit Agreement and the Canadian CreditAgreement, collectively, the “Combined Loan Parties”) set forth in the CombinedLoan Documents to which it is a party are true and correct on and as of thedate hereof (or, if stated to have been made expressly as of an earlier date,were true and correct in all material respects as of such date).

B.            Each of the U.S. Borrower and its Restricted Subsidiariesis duly organized, validly existing and in good standing under the laws of thejurisdiction of its organization, has all requisite power and authority tocarry on its business as now conducted and, except where the failure to do so,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect, is qualified to do business in, and is in goodstanding in, every jurisdiction where such qualification is required.

C.            The execution, delivery and performance by U.S. Borrower andthe Canadian Borrowers of this Amendment are within U.S. Borrower’s and theCanadian Borrowers’ corporate powers, and have been duly authorized by allnecessary corporate action.  ThisAmendment has been duly executed and delivered by U.S. Borrower and the CanadianBorrowers and, when duly executed and delivered by the other parties hereto,will constitute, a legal, valid and binding obligation of U.S. Borrower and theCanadian Borrowers, enforceable in accordance with its terms, subject toapplicable bankruptcy, insolvency, reorganization, moratorium or other lawsaffecting creditors’ rights generally and subject to general principles ofequity, regardless of whether considered in a proceeding in equity or at law.

D.            The execution, delivery and performance by the U.S.Borrower and the Canadian Borrowers of this Amendment (i) do not requireany Governmental Approval or third party

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approvals, except such as have been obtained or madeand are in full force and effect, (ii) will not violate any applicableGovernmental Rule or the Organic Documents of U.S. Borrower and the CanadianBorrowers or any order of any Governmental Authority, (iii) will not violate orresult in a default under any indenture, agreement or other instrument bindingupon U.S. Borrower or the Canadian Borrowers or either of their assets, or giverise to a right thereunder to require any payment to be made by U.S. Borroweror the Canadian Borrowers, and (iv) will not result in the creation orimposition of any Lien on any asset of U.S. Borrower or the Canadian Borrowers.

E.             No Default under the Combined Loan Documents hasoccurred and is continuing and the U.S. Borrower is in compliance with thefinancial covenants set forth in Article VIof the U.S. Credit Agreement.

F.             No event or events have occurred which individually orin the aggregate could reasonably be expected to have a Material AdverseEffect.

**IV.           **Defined Terms****.****  Except as amended hereby, terms used hereinwhen defined in the U.S. Credit Agreement shall have the same meanings hereinunless the context otherwise requires.

**V.            **Reaffirmation of Combined CreditAgreements****.**** This Amendment shall be deemed to be an amendment to the Combined CreditAgreements, and the Combined Credit Agreements, as amended hereby, are herebyratified, approved and confirmed in each and every respect.  All references to the Combined CreditAgreements herein and in any other document, instrument, agreement or writingshall hereafter be deemed to refer to the Combined Credit Agreements as amendedhereby.

**VI.           **Governing Law****.****  **THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK.**

**VII.         **Severability of Provisions****.****Any provision of this Amendment held to be invalid, illegal or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extentof such invalidity, illegality or unenforceability without affecting thevalidity, legality and enforceability of the remaining provisions hereof; andthe invalidity of a particular provision in a particular jurisdiction shall notinvalidate such provision in any other jurisdiction.

**VIII.        **Counterparts****.****This Amendment may be executed in counterparts (and by different parties heretoon different counterparts), each of which shall constitute an original, but allof which when taken together shall constitute a single contract.  Delivery of an executed counterpart of asignature page of this Amendment by telecopy shall be effective as delivery ofa manually executed counterpart of this Amendment.

**IX.           **Headings****.****  Article and section headings used herein arefor convenience of reference only, are not part of this Amendment and shall notaffect the construction of, or be taken into consideration in interpreting,this Amendment.

**X.            **Successors and Assigns****.****  This Amendment shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns.

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**XI.          ****No OralAgreements****.**  **THIS AMENDMENT, THECOMBINED CREDIT AGREEMENTS, AS AMENDED HEREBY, AND THE OTHER COMBINED LOANDOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.**

**THEREARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.**

**[SIGNATURESBEGIN ON FOLLOWING PAGE]**

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IN WITNESS WHEREOF, theU.S. Borrower, the Canadian Borrower, the Combined undersigned Lenders, theGlobal Administrative Agent, and the other “agents” under the Combined CreditAgreements have executed this Amendment as of the date first above written.
|        | **U.S. BORROWER**        |
|--------|--------------------------|
|   | ** **               |
|   | FOREST OIL CORPORATION   |
|   |                     |
|   | By:                      | /s/ DAVID H. KEYTE |   |
|   | Name:                    | David H. Keyte |
|   | Title:                   | Executive Vice President & |
|   |                     | Chief Financial Officer |
|   |                     |   |
|   |                     |   |
|   | **CANADIAN  BORROWER**   |
|   | ** **               |
|   | CANADIAN FOREST OIL LTD. |
|   |                     |
|   |                     |   |
|   | By:                      | /s/ JAMES R. GOOD |   |
|   | Name:                    | James R. Good |
|   | Title:                   | President |
|        |                          |  |  |  |

 

[Signature Page to Forest Oil

Corporation Third Amendment]

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|            | **AGENTS  AND COMBINED LENDERS**                                                                                                |
|------------|---------------------------------------------------------------------------------------------------------------------------------|
|       | ** **                                                                                                                      |
| ** ** | **JPMORGAN CHASE BANK****, N.A.,** formerly  known as JPMorgan Chase Bank, as Global  Administrative Agent and as a U.S. Lender |
|       |                                                                                                                            |
|       |                                                                                                                            |
|       | By:                                                                                                                             | /s/ J. SCOTT FOWLER |   |
|       | Name:                                                                                                                           | J. Scott Fowler |
|       | Title:                                                                                                                          | Senior Vice President |
|            |                                                                                                                                 |  |  |  |

 

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|        | **BANK  OF AMERICA, N.A.**, as a Co-Global  Syndication Agent and as a U.S. Lender |
|--------|------------------------------------------------------------------------------------|
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                                | /s/ RONALD E. MCKAIG |   |
|   | Name:                                                                              | Ronald E. McKaig |
|   | Title:                                                                             | Senior Vice President |
|        |                                                                                    |  |  |  |

 

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|        | **CITIBANK,  N.A.**, as a Co-Global Syndication  Agent and as a U.S. Lender |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |   |
|   |                                                                        |   |
|   | By:                                                                         | /s/ TODD J. MOGIL |   |
|   | Name:                                                                       | Todd J. Mogil |
|   | Title:                                                                      | Attorney-in-Fact |
|        |                                                                             |  |  |  |

 

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|        | **BNP  PARIBAS**, as a Co-U.S. Documentation  Agent and as a U.S. Lender |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |   |
|   |                                                                     |   |
|   | By:                                                                      | /s/ BETSY JOCHER |   |
|   | Name:                                                                    | Betsy Jocher |
|   | Title:                                                                   | Director |
|   |                                                                     |   |
|   |                                                                     |   |
|   | By:                                                                      | /s/ ROBERT LONG |   |
|   | Name:                                                                    | Robert Long |
|   | Title:                                                                   | Vice President |
|        |                                                                          |  |  |  |  |  |

 

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|        | **BMO  CAPITAL MARKETS FINANCING,  INC. (f/k/a HARRIS NESBITT FINANCING,   INC.)**, as a Co-U.S. Documentation Agent and as  a U.S. Lender |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |   |
|   |                                                                                                                                       |   |
|   | By:                                                                                                                                        | /s/ JAMES V. DUCOTE |   |
|   | Name:                                                                                                                                      | James V. Ducote |
|   | Title:                                                                                                                                     | Vice President |
|        |                                                                                                                                            |  |  |  |

 

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|        | **CREDIT  SUISSE, CAYMAN ISLANDS  BRANCH (fka CREDIIT SUISSE FIRST  BOSTON****,** acting through its  Cayman Islands  branch), as a Lender |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |   |
|   |                                                                                                                                       |   |
|   | By:                                                                                                                                        | /s/ VANESSA GOMEZ |   |
|   | Name:                                                                                                                                      | Vanessa Gomez |
|   | Title:                                                                                                                                     | Vice President |
|   |                                                                                                                                       |   |
|   |                                                                                                                                       |   |
|   | By:                                                                                                                                        | /s/ LAURENCE LAPEYRE |   |
|   | Name:                                                                                                                                      | Laurence Lapeyre |
|   | Title:                                                                                                                                     | Associate |
|        |                                                                                                                                            |  |  |  |  |  |

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|        | **U.S. BANK NATIONAL ASSOCIATION,** as a  Lender |
|--------|--------------------------------------------------|
|   |                                             |   |
|   |                                             |   |
|   | By:                                              | /s/ D. MAHONEY |   |
|   | Name:                                            | Daria Mahoney |
|   | Title:                                           | Vice President |
|        |                                                  |  |  |  |

 

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|        | **THE BANK OF NOVA SCOTIA,** as a Lender |
|--------|------------------------------------------|
|   |                                     |   |
|   |                                     |   |
|   | By:                                      | /s/ N. BELL |   |
|   | Name:                                    | Nadine Bell |
|   | Title:                                   | Senior Manager |
|        |                                          |  |  |  |

 

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|        | **FORTIS CAPITAL CORP.****,** as a Lender |
|--------|-------------------------------------------|
|   |                                      |   |
|   |                                      |   |
|   | By:                                       | /s/ DAVID MONTGOMERY |   |
|   | Name:                                     | David Montgomery |
|   | Title:                                    | Senior Vice President |
|   |                                      |   |
|   |                                      |   |
|   | By:                                       | /s/ D. HOLLEY |   |
|   | Name:                                     | Darrell Holley |
|   | Title:                                    | Managing Director |
|        |                                           |  |  |  |  |  |

 

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|        | **DEUTSCHE BANK TRUST COMPANY  AMERICAS,**as a Lender |
|--------|-------------------------------------------------------|
|   |                                                  |   |
|   |                                                  |   |
|   | By:                                                   | /s/ SUSAN LEFEVRE |   |
|   | Name:                                                 | Susan LeFevre |
|   | Title:                                                | Director |
|   |                                                  |   |
|   | By:                                                   | /s/ OMAYRA LAUCELLA |   |
|   | Name:                                                 | Omayra Laucella |
|   | Title:                                                | Vice President |
|        |                                                       |  |  |  |  |

 

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|        | **BANK  OF SCOTLAND****,** as a Lender |
|--------|----------------------------------------|
|   | ** **                             |
|   |                                   |   |
|   | By:                                    |   |   |
|   | Name:                                  |   |
|   | Title:                                 |   |
|        |                                        |  |  |  |

 

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|        | **ABN AMRO BANK N.V.,** as a Lender |
|--------|-------------------------------------|
|   | ** **                          |
|   |                                |   |
|   | By:                                 | /s/ J. REED |   |
|   | Name:                               | John D. Reed |
|   | Title:                              | Director |
|   |                                |   |
|   |                                |   |
|   | By:                                 | /s/ TODD D. VAUBEL |   |
|   | Name:                               | Todd D. Vaubel |
|   | Title:                              | Assistant Vice President |
|        |                                     |  |  |  |  |

 

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|        | **UBS LOAN FINANCE LLC,** as a Lender |
|--------|---------------------------------------|
|   | ** **                            |
|   |                                  |   |
|   | By:                                   | /s/ R.L. TAVROW |   |
|   | Name:                                 | Richard L. Tavrow |
|   | Title:                                | Director |
|   |                                  | Banking Products Services, US |
|   |                                  |   |
|   | By:                                   | /s/ IRJA R. OTSA |   |
|   | Name:                                 | Irja R. Otsa |
|   | Title:                                | Associate Director |
|   |                                  | Banking Products Services, US |
|        |                                       |  |  |  |  |  |

 

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|        | **TORONTO DOMINION (TEXAS) LLC**(as successor in interest to Toronto Dominion  (Texas), Inc.)**,**  as a Lender |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                            |   |
|   |                                                                                                            |   |
|   | By:                                                                                                             | /s/ D. BRITO |   |
|   | Name:                                                                                                           | Debbi L. Brito |
|   | Title:                                                                                                          | Authorized Signatory |
|        |                                                                                                                 |  |  |  |

 

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|        | **COMPASS BANK,** as a Lender |
|--------|-------------------------------|
|   |                          |   |
|   |                          |   |
|   | By:                           | /s/ PATRICK M. MCWILLIAMS |   |
|   | Name:                         | Patrick M. McWilliams |
|   | Title:                        | Vice President |
|        |                               |  |  |  |

 

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|        | **CAPITAL ONE, N.A.****(Formerly HIBERNIA  NATIONAL BANK),** as a Lender |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |   |
|   | By:                                                                      | /s/ NANCY G. MORAGAS |   |
|   | Name:                                                                    | Nancy G. Moragas |
|   | Title:                                                                   | Sr. Vice President |
|        |                                                                          |  |  |  |

 

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|        | **JPMORGAN  CHASE BANK, N.A.,  TORONTO BRANCH**, formerly known as JPMorgan Chase Bank, Toronto Branch,  as  Canadian Administrative Agent and as a Lender |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                            |   |
|   |                                                                                                                                                            |   |
|   | By:                                                                                                                                                             | /s/ J. FOWLER |   |
|   | Name:                                                                                                                                                           | J. Scott Fowler |
|   | Title:                                                                                                                                                          | Senior Vice President |
|        |                                                                                                                                                                 |  |  |  |

 

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|        | **BANK OF MONTREAL**, as a Co-Canadian  Documentation Agent and as a Lender |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |   |
|   |                                                                        |   |
|   | By:                                                                         | /s/ JAMES V. DUCOTE |   |
|   | Name:                                                                       | James V. Ducote |
|   | Title:                                                                      | Vice President |
|        |                                                                             |  |  |  |

 

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|        | **THE TORONTO-DOMINION BANK**, as a              |
|--------|--------------------------------------------------|
|   | Co-Canadian Documentation Agent and as a  Lender |
|   |                                             |   |
|   |                                             |   |
|   | By:                                              | /s/ D. BRITO |   |
|   | Name:                                            | Debbi L. Brito |
|   | Title:                                           | Authorized Signatory |
|        |                                                  |  |  |  |

 

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|        | **BANK OF AMERICA, N.A., CANADA  BRANCH,**as a Lender |
|--------|-------------------------------------------------------|
|   |                                                  |   |
|   |                                                  |   |
|   | By:                                                   | /s/ M. SALES DE ANDRADE |   |
|   | Name:                                                 | Medina Sales de Andrade |
|   | Title:                                                | Assistant Vice President |
|        |                                                       |  |  |  |

 

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|        | **CITIBANK, N.A.****, CANADIAN  BRANCH,** as a  Lender |
|--------|--------------------------------------------------------|
|   |                                                   |   |
|   |                                                   |   |
|   | By:                                                    | /s/ N. ZARINPOUR |   |
|   | Name:                                                  | Niyousha Zarinpour |
|   | Title:                                                 | Authorised Signer |
|        |                                                        |  |  |  |

 

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SCHEDULE 7.4(h)

ALASKA ASSETS

Proved and Probable Reserves located in the CookInlet:

Offshore (Fields)

McArthur River

Trading Bay

West McArthur River

Redoubt Shoal

Cosmopolitan

Sabre

Onshore (Fields)

West Foreland

Three Mile Creek

Kustatan

Associated production infrastructure, including 4onshore facilities, 7 platforms, 6 platform rigs and the Kustatan ProcessingFacility, and related real and contract rights and other ancillary propertiesas well as all other tangible and intangible property associated with thereserves.

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