UPDATE 2-Forest Oil replaces CEO with long-time board member

* Board member Patrick McDonald to be interim CEO

* McDonald succeeds Clark; had been CEO since 2003

* Board has initiated a search process for a permanent CEO

* Shares up 2.2 percent in morning trading

June 22 (Reuters) - Forest Oil Corp, whose stock price has plunged more than 50 percent since January, replaced Chief Executive H. Craig Clark with a long-time board member on Friday.

Patrick McDonald, 55, a director at the independent oil and natural gas producer since 2004, takes over immediately. Clark had been CEO since 2003.

A Forest Oil spokesman declined to comment on the reason for Clark's departure.

Forest Oil Chairman James Lightner said in a statement that the first priority for McDonald, who has worked in the energy industry for more than 25 years, will be to "personally involve himself" in the company's expansion into the oil-rich Eagle Ford shale development in Texas.

Ratings agency Standard & Poor's said in March that there was "some uncertainty around (Forest Oil's) liquids-production growth and drilling costs over the next couple years" as it was relatively new to some of its liquids-rich fields.

McDonald also will focus on selling assets to cut Forest Oil's $1.8 billion debt load - more than double the company's current market value - Lightner said.

"Forest has valuable assets, hard-working and talented employees, and tremendous potential, and the Board is confident that the Company can significantly increase shareholder value," Lightner said.

The company had cash and equivalents of roughly $900,000 as of March 31.

McDonald will serve as interim CEO and has asked not to be considered as a permanent successor to Clark. He plans to remain CEO of Carbon Natural Gas Co, a small oil and natural gas exploration company.

Forest Oil has hired executive search firm Spencer Stuart to find a new CEO.

The company, valued at roughly $745 million, has lost more than two-thirds of its market value in the last year.

Shares rose 2.2 percent to $6.60 in morning trading on Friday.