CONTACTS:
Investors: Ron Kurtz
713-267-3686
Media: John Campbell
707-764-2222


                      HEADWATERS FUNDS RELEASED FROM ESCROW



SCOTIA, California (November 19, 1999) -- The Pacific Lumber Company has
announced that the money it received from the government for the Headwaters
Forest has been released from escrow.

On March 1, 1999, when the Headwaters Agreement was signed, $285 million was
placed into an escrow account, which now totals $292.9 million. More than half
of that amount ($169 million) has been placed in a Scheduled Amortization
Reserve Account to support future principal payments on the Timber
Collateralized Notes of Scotia Pacific Company LLC, a wholly-owned subsidiary of
Pacific Lumber.

The Company believes that the decision to release the money from escrow and
establish a Scheduled Amortization Reserve Account is consistent with the goals
of the Headwaters Agreement, one of which was to provide for enhanced
predictability and security for The Pacific Lumber Company and its 1,300
employees.

(Note: An open letter to Scotia Pacific noteholders containing more detailed
information about the Scheduled Amortization Reserve Account follows this
announcement).


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