Exhibit 10.1


THIRD AMENDMENT TO THE

AMENDED AND RESTATED COMBINED CREDIT AGREEMENTS


THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED
COMBINED CREDIT AGREEMENTS, dated as of November 3, 2006 but effective as of
October 31, 2006 (the “Amendment”),
among FOREST OIL CORPORATION, a New York
corporation (the “U.S. Borrower”), CANADIAN FOREST OIL LTD. and each other subsidiary of
Canadian Forest which becomes a “Borrower” (as defined in the Canadian Credit
Agreement) under the Canadian Credit Agreement (the “Canadian
Borrowers”), each of the lenders that is a signatory to, or which
becomes a signatory to, the U.S. Credit Agreement (together with its successors
and assigns, the “U.S. Lenders”), each
of the lenders that is a signatory to, or which becomes a signatory to, the
Canadian 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., as
Co-U.S. Documentation Agents, BANK OF MONTREAL
and THE TORONTO-DOMINION BANK, as
Co-Canadian Documentation Agents, JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, formerly known as JPMorgan Chase Bank, Toronto
Branch, as Canadian Administrative Agent and JPMORGAN
CHASE BANK, N.A., formerly
known as JPMorgan Chase Bank, as Global Administrative Agent (in such capacity,
together with its successors in such capacity, the “Global
Administrative Agent”).


WITNESSETH:


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


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


3.             The
parties to the Combined Credit Agreements intend to amend the Combined Credit
Agreements as follows:


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









 



I.              Amendments to
U.S. Credit Agreement.


A.            Section 1.1 of the U.S. Credit Agreement hereby is
amended by inserting the following definitions of “Alaska Assets”, “Forest
Holdco” 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 which
are 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 is
hereby amended through the addition of a new sentence at the end of Section
7.4(h) to read as follows:


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


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


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


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


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



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


“(3) 50% of the net cash
proceeds received by Borrower from any sale of Equity Interests after October
1, 2000; provided, however, that this calculation shall not
include any proceeds relating to the sale of Equity Interests in FERI (as
defined below), Forest Holdco or Forest Opco.”


F.             The U.S. Credit Agreement hereby is amended by inserting
Schedule 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 October
31, 2006 when the Global Administrative Agent shall have received counterparts
hereof duly executed by the U.S. Borrower, the Global Administrative Agent, the
Canadian Administrative Agent, and all of the Majority Lenders (or, in the case
of any party as to which an executed counterpart shall not have been received,
telegraphic, telex, or other written confirmation from such party of execution
of a counterpart hereof by such party).


III.           Reaffirmation of Representations and
Warranties. 
To induce the Majority Lenders, the Global Administrative Agent and the
Canadian Administrative Agent to enter into this Amendment, the U.S. Borrower
hereby reaffirms, as of the date hereof, the following:


A.            The representations and warranties of each Loan Party (as
such term is defined in the U.S. Credit Agreement and the Canadian Credit
Agreement, collectively, the “Combined Loan Parties”) set forth in the Combined
Loan Documents to which it is a party are true and correct on and as of the
date 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 Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry 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 in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.


C.            The execution, delivery and performance by U.S. Borrower and
the Canadian Borrowers of this Amendment are within U.S. Borrower’s and the
Canadian Borrowers’ corporate powers, and have been duly authorized by all
necessary corporate action.  This
Amendment has been duly executed and delivered by U.S. Borrower and the Canadian
Borrowers and, when duly executed and delivered by the other parties hereto,
will constitute, a legal, valid and binding obligation of U.S. Borrower and the
Canadian Borrowers, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, 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 require
any Governmental Approval or third party



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


E.             No Default under the Combined Loan Documents has
occurred and is continuing and the U.S. Borrower is in compliance with the
financial covenants set forth in Article VI
of the U.S. Credit Agreement.


F.             No event or events have occurred which individually or
in the aggregate could reasonably be expected to have a Material Adverse
Effect.


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


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


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


VII.         Severability of Provisions.
Any provision of this Amendment held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.


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


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


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



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XI.           No Oral
Agreements.  THIS AMENDMENT, THE
COMBINED CREDIT AGREEMENTS, AS AMENDED HEREBY, AND THE OTHER COMBINED LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.


THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


[SIGNATURES
BEGIN ON FOLLOWING PAGE]



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IN WITNESS WHEREOF, the
U.S. Borrower, the Canadian Borrower, the Combined undersigned Lenders, the
Global Administrative Agent, and the other “agents” under the Combined Credit
Agreements 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

  
					



 



 2
 






 



 


	
  

  	
  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

  
					



 



 3
 






 



 


	
  

  	
  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

  
					



 



 4
 






 



 


	
  

  	
  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

  
							



 



 5
 






 



 


	
  

  	
  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

  
					



 



 6
 






 



 


	
  

  	
  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

  
							




 7
 






 



 


	
  

  	
  U.S. BANK NATIONAL ASSOCIATION, as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. MAHONEY

  	
   

  
	
   

  	
  Name:

  	
  Daria Mahoney

  
	
   

  	
  Title:

  	
  Vice President

  
					



 



 8
 






 



 


	
  

  	
  THE BANK OF NOVA SCOTIA, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ N. BELL

  	
   

  
	
   

  	
  Name:

  	
  Nadine Bell

  
	
   

  	
  Title:

  	
  Senior Manager

  
					



 



 9
 






 



 


	
  

  	
  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

  
							



 



 10
 






 



 


	
  

  	
  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

  
						



 



 11
 






 



 


	
  

  	
  BANK
  OF SCOTLAND, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 



 12
 






 



 


	
  

  	
  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

  
						



 



 13
 






 



 


	
  

  	
  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

  
							



 



 14
 






 



 


	
  

  	
  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

  
					



 



 15
 






 



 


	
  

  	
  COMPASS BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PATRICK M. MCWILLIAMS

  	
   

  
	
   

  	
  Name:

  	
  Patrick M. McWilliams

  
	
   

  	
  Title:

  	
  Vice President

  
					



 



 16
 






 



 


	
  

  	
  CAPITAL ONE, N.A. (Formerly HIBERNIA

  NATIONAL BANK), as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NANCY G. MORAGAS

  	
   

  
	
   

  	
  Name:

  	
  Nancy G. Moragas

  
	
   

  	
  Title:

  	
  Sr. Vice President

  
					



 



 17
 






 



 


	
  

  	
  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

  
					



 



 18
 






 



 


	
  

  	
  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

  
					



 



 19
 






 



 


	
  

  	
  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

  
					



 



 20
 






 



 


	
  

  	
  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

  
					



 



 21
 






 



 


	
  

  	
  CITIBANK, N.A., CANADIAN
  BRANCH, as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ N. ZARINPOUR

  	
   

  
	
   

  	
  Name:

  	
  Niyousha Zarinpour

  
	
   

  	
  Title:

  	
  Authorised Signer

  
					



 



 22














 


SCHEDULE 7.4(h)


ALASKA ASSETS


Proved and Probable Reserves located in the Cook
Inlet:


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 4
onshore facilities, 7 platforms, 6 platform rigs and the Kustatan Processing
Facility, and related real and contract rights and other ancillary properties
as well as all other tangible and intangible property associated with the
reserves.



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