IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: PACIFIC ENERGY RESOURCES LTD., et al.,1 Debtors.

) ) ) ) )

Chapter 11 Case No. 09-10785 (KJC) (Jointly Administered)

Objection Deadline: June 16, 2009 Hearing Date: Only If Objections Are Timely Filed

FIRST MONTHLY APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF STEPTOE & JOHNSON LLP, AS COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, FOR THE PERIOD FROM MARCH 19, 2009 THROUGH MARCH 31, 2009 Name of Applicant: Authorized to Provide Professional Services to: Date of Retention: Period for which Compensation and Reimbursement is Sought: Amount of Compensation Sought as Actual, Reasonable and Necessary: Amount of Expense Reimbursement Sought as Actual, Reasonable and Necessary: This is a: X monthly Steptoe & Johnson LLP Counsel to the Official Committee of Unsecured Creditors May 1, 2009 nunc pro tunc March 19, 2009 March 19, 2009 through March 31, 20092 $131,319.25 $1,494.05 interim final application.

The Debtors in these cases are: Pacific Energy Resources Ltd.; Petrocal Acquisition Corp; Pacific Energy Alaska Holdings, LLC; Carneros Acquisition Corp.; Pacific Energy Alaska Operating LLC; San Pedro Bay Pipeline Company; Carneros Energy, Inc.; and Gotland Oil, Inc. 2 The applicant reserves the right to include any time expended in the time period indicated above in future application(s) if it is not included herein.

The total time expended for preparation of this fee application will be reflected in subsequent fee applications. PRIOR APPLICATIONS FILED

Date Filed

Period Covered

Requested Fees

Requested Expenses

Approved Fees

Approved Expenses

No prior fee applications have been filed.

S&J PROFESSIONALS Name of Professional Individual Position with the Applicant, Year of Obtaining License to Practice, Area of Expertise Restructuring Partner, Member of CA Bar since 1984 Restructuring Partner, Member of DC Bar since 1979; Member of NY Bar since 1991 Energy Partner, Member of DC Bar since 1980 Regulatory & Industry Affairs Partner, Member of DC Bar since 1989; Member of MO Bar since 1987 Regulatory & Industry Affairs Of Counsel, Member of MD Bar since 1993; Member of DC Bar since 1978 Restructuring Associate, Member of CA Bar since 2002 Hourly Total Billing Rate Hours (including Billed Changes) 740.00 39.90 Total Compensation

Robbin L. Itkin

$29,526.00

Filiberto Agusti

650.00

26.70

$17,355.00

Steven G. Reed Cynthia L. Quarterman

645.00 555.00

13.10 1.80

$ 8,449.50 $ 999.00

Scott A. Harman

505.00

9.60

$ 4,848.00

Katherine C. Piper

480.00

58.60

$28,128.00

Name of Professional Individual

Joshua R. Taylor

Jeffrey M. Theodore

William E. Flynn

Rustin C. Silverstein

Kimberly Hollingsworth

Position with the Applicant, Number of Years in that Position, Year of Obtaining License to Practice, Area of Expertise Litigation Special Counsel, Member of DC Bar since 2004; Member of NC Bar since 2001; Member of VA Bar since 2000 Litigation Associate, Member of DC Bar since 2007; Member of MD Bar since 2006 Regulatory & Industry Affairs Associate, Member of DC Bar since 2009; Member of PA Bar since 2008 Business Solutions Associate, Member of AZ Bar since 2007 Paralegal 2003

Total Hourly Billing Rate Hours (including Billed Changes)

Total Compensation

480.00

35.20

$16,896.00

375.00

14.45

5,418.75

335.00

37.50

$ 12,562.50

255.00

6.20

1,581.00

205.00

27.10

$ 5,555.50

Grand Total: Total Hours: Blended Rate:

$131,319.25 270.15 $475.00

COMPENSATION BY CATEGORY Task Codes Asset Analysis and Recovery Business Operations Case Administration Employee Benefits/Pensions Fee/Employment Applications Fee/Employment Objections Post-Petition Financing Hearings Committee Correspondence Committee Meetings Canadian Proceedings TOTAL Total Hours 71.80 7.80 38.70 0.30 20.40 12.20 69.95 1.60 22.60 16.70 8.10 270.15 Total Fees $ 33,004.00 $ 3,822.00 $ 16,481.00 $ 144.00 $ 8,215.00 $ 5,913.50 $ 36,004.75 $ 739.00 $ 14,436.00 $ 8,877.00 $ 3,683.00 $131,319.25

EXPENSE SUMMARY Expense Categories Legal Research/On-line Information Retrieval Reproduction/Scan Copy Service Provider3 (if applicable) Lexis/Nexis and Westlaw Total Expenses $ 1,453.05

TOTAL

$ 41.00 $ 1,494.05

S&J may use one or more service providers. The service providers identified herein below are the primary service providers for the categories described.

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: PACIFIC ENERGY RESOURCES LTD., et al.,1 Debtors.

) ) ) ) )

Chapter 11 Case No. 09-10785 (KJC) (Jointly Administered)

Objection Deadline: June 16, 2009 Hearing Date: Only If Objections Are Timely Filed

FIRST MONTHLY APPLICATION FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES OF STEPTOE & JOHNSON LLP, AS COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, FOR THE PERIOD FROM MARCH 19, 2009 THROUGH MARCH 31, 2009 Pursuant to sections 330 and 331 of Title 11 of the United States Code (the Bankruptcy Code), Rule 2016 of the Federal Rules of Bankruptcy Procedure (collectively, the Bankruptcy Rules), and the Courts Administrative Order Under 11 U.S.C. 105(A) and 331 Establishing Procedures for Interim Compensation and Expense Reimbursement of Professionals and Committee Members (Dkt. No. 147), entered on or about April 8, 2009 (the Administrative Order), Steptoe & Johnson LLP (Steptoe), counsel to the Official Committee of Unsecured Creditors (Committee), hereby submits its First Monthly Application for Compensation and for Reimbursement of Expenses for the Period from March 19, 2009 through March 31, 2009 (the Application).

The Debtors in these cases are: Pacific Energy Resources Ltd.; Petrocal Acquisition Corp; Pacific Energy Alaska Holdings, LLC; Carneros Acquisition Corp.; Pacific Energy Alaska Operating LLC; San Pedro Bay Pipeline Company; Carneros Energy, Inc.; and Gotland Oil, Inc.

By this Application, Steptoe seeks a monthly interim allowance of compensation in the amount of $131,319.25 and actual and necessary expenses in the amount of $1,494.05 for a total allowance of $132,813.30, and payment of $105,055.40 (80% of the allowed fees) and reimbursement of $1,494.05 (100% of the allowed expenses) for a total payment of $106,549.45 for the period March 19, 2009 through March 31, 2009 (the Interim Period). In support of this Application, Steptoe respectfully represents as follows: Background 1. On March 9, 2009 (the Petition Date), the Debtors filed voluntary

petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors continue in possession of their properties and continue to operate and manage their businesses as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Committee was appointed on or about March 19, 2009. No trustee or examiner has been appointed in the Debtors chapter 11 cases. 2. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157

and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). 3. On or about April 8, 2009, the Court entered the Administrative Order,

authorizing certain professionals (Professionals) to submit monthly applications for interim compensation and reimbursement for expenses, pursuant to the procedures specified therein. The Administrative Order provides, among other things, that a Professional may submit monthly fee applications. If no objections are made within twenty (20) days after service of the monthly fee application the Debtors are authorized to pay the Professional eighty percent (80%) of the requested fees and one hundred percent (100%) of the requested expenses. Beginning with the period ending May 31, 2009, at three-month intervals, each Professional shall file and serve an

interim application for allowance of the amounts sought in its monthly fee applications for that period. All fees and expenses paid are on an interim basis until final allowance by the Court. 4. The retention of Steptoe, as counsel to the Committee, was approved

effective as of March 19, 2009 by this Courts Order Authorizing and Approving the Employment of Steptoe & Johnson LLP as Counsel to the Official Committee of Unsecured Creditors of Pacific Energy Resources Ltd., et al., Nunc Pro Tunc to March 19, 2009 (Dkt. No. 261), entered on or about May 1, 2009 (the Retention Order). The Retention Order authorized Steptoe to be compensated on an hourly basis and to be reimbursed for actual and necessary outof-pocket expenses. STEPTOES APPLICATION FOR COMPENSATION AND FOR REIMBURSEMENT OF EXPENSES Compensation Paid and Its Source 5. All services for which Steptoe requests compensation were performed for

or on behalf of the Committee. 6. Steptoe has received no payment and no promises for payment from any

source for services rendered or to be rendered in any capacity whatsoever in connection with the matters covered by this Application. There is no agreement or understanding between Steptoe and any other person other than the partners of Steptoe for the sharing of compensation to be received for services rendered in this case. Steptoe has not received any payments from the Debtors estates to date. Fee Statements 7. The fee statements for the Interim Period are attached hereto as Exhibit A.

These statements contain daily time logs describing the time spent by each attorney and paraprofessional during the Interim Period. To the best of Steptoes knowledge, this Application

complies with sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules and the Administrative Order. Steptoe charges for its professional services are based upon the time, nature, extent and value of such services and the cost of comparable services other than in a case under the Bankruptcy Code. Steptoe has reduced its charges related to any non-working travel time to fifty percent (50%) of Steptoes standard hourly rate. To the extent it is feasible, Steptoe professionals attempt to work during travel. Actual and Necessary Expenses 8. A summary of actual and necessary expenses incurred by Steptoe for the

Interim Period is attached hereto as part of Exhibit A. Steptoe customarily charges $0.10 per page for photocopying expenses related to cases, such as this one. Steptoes photocopying machines automatically record the number of copies made when the person that is doing the copying enters the clients account number into a device attached to the photocopier. Steptoe summarizes each clients photocopying charges on a daily basis. 9. With respect to providers of on-line legal research services (eg., LEXIS

and WESTLAW), Steptoe charges the standard usage rates these providers charge for computerized legal research. Steptoe bills its clients the actual amounts charged by such

services, with no premium. Any volume discount received by Steptoe is passed on to the client. Summary of Services Rendered 10. The names of the partners and associates of Steptoe who have rendered

professional services in these cases during the Interim Period, and the paralegals and case management assistants of Steptoe who provided services to these attorneys during the Interim Period, are set forth in the attached Exhibit A.

11.

Steptoe, by and through such persons, has prepared and assisted in the

preparation of various motions, objections and orders submitted to the Court for consideration, advised the Committee on a regular basis with respect to various matters in connection with the Debtors bankruptcy cases, and performed all necessary professional services which are described and narrated in detail below. Steptoes efforts have been extensive in the first few months of these cases due to the size, complexity, and accelerated schedule of the Debtors bankruptcy cases, particularly under the terms of the Debtors proposed debtor-in-possession financing. Summary of Services by Task 12. The services rendered by Steptoe during the Interim Period can be Steptoe attempted to place the services

grouped into the task categories set forth below.

provided in the category that best relates to such services. However, because certain services may relate to one or more categories, services pertaining to one category may in fact be included in another category. These services performed, by categories, are generally described below, with a more detailed identification of the actual services provided set forth on the attached Exhibit A. Exhibit A identifies the attorneys and paraprofessionals who rendered services relating to each category, along with the number of hours for each individual and the total compensation sought for each category. A. Asset Analysis and Recovery (Task Code 101) 13. This category includes services related to the analysis of the Debtors

assets. During the Interim Period, Steptoe, among other things: (1) reviewed and analyzed documents regarding the Debtors prepetition credit agreements, royalty payments and oil and gas leases; (2) analyzed the Debtors requests to make certain prepetition royalty payments and

developed objections thereto; and (3) corresponded and conferred regarding other asset analysis issues with the Committee members and the Debtors counsel. Fees: $33,004.00; B. Hours: 71.80

Business Operations (Task Code 103) 14. This category includes services related to the Debtors operational issues.

During the Interim Period, Steptoe, among other things: (1) conducted negotiations with the Debtors and their counsel regarding cash management issues; (2) analyzed and corresponded with Debtors counsel regarding critical vendor issues; and (3) corresponded and conferred regarding operational issues with the Debtors and their counsel. Fees: $3,822.00; C. Hours: 7.80

Case Administration (Task Code 104) 15. This category includes services related to the general and administrative

responsibilities for the case. During the Interim Period, Steptoe, among other things: (1) reviewed correspondence and pleadings filed by the Debtors in the initial weeks of the cases; (2) maintained a memorandum of critical dates; (3) maintained document control; (4) prepared hearing notebooks; (5) maintained service lists; (6) drafted a motion to provide for confidentiality protections for Committee members pursuant to 11 U.S.C. 1102; and (7) negotiated with the Debtors and the Committees financial advisors regarding confidentiality issues. In addition, to the extent that services performed do not fit squarely into one particular task code, they may be placed here. Fees: $16,481.00; Hours: 38.70

10

D.

Employee Benefits/Pensions (Task Code 106) 16. This category includes services related to the Debtors employee matters.

During the Interim Period, Steptoe, among other things performed analysis regarding the Debtors employee wage motion and corresponded with the Debtors counsel regarding such motion. Fees: $144.00; E. Hours: 0.30

Fee/Employment Applications (Task Code 107) 17. This category includes services related to the retention of Steptoe, as

counsel, and Deloitte Financial Advisory Services, LLP, as financial advisors, for the Committee. Fees: $8,215.00; F. Hours: 20.40

Fee/Employment Objections (Task Code 108) 18. This category includes services related to the employment applications

filed with respect to the Debtors various of professionals. During the Interim Period, Steptoe, among other things, performed work reviewing and negotiating with the Debtors regarding the proposed retentions of the Debtors investment banker, asset sales agent, and chief restructuring officer; and the employment of the Debtors various ordinary course professionals. Fees: $5,913.50; G. Hours: 12.20

Post-Petition Financing (Task Code 115) 19. This category includes services related to the Debtors requested interim

and final orders approving post-petition financing. During the Interim Period Steptoe, among other things: (1) analyzed the Debtors proposed debtor in possession credit facility (DIP Facility) and its impact on the estates; (2) worked with the Committees financial advisors

11

regarding the evaluation of the DIP Facility and potential objections thereto; (3) drafted an objection to the DIP Facility; (4) negotiated with the Debtors and the proposed post-petition lenders regarding the DIP Facility; and (5) analyzed financial information from the Debtors with respect to the DIP Facility. Fees: $36,004.75; H. Hearings (Task Code 116) 20. This category includes services related to hearings. During the Interim Hours: 69.95

Period, Steptoe, among other things prepared for and attended hearings in Debtors cases. Fees: $739.00; I. Hours: 1.60

Committee Correspondence (Task Code 121) 21. This category includes services related to general Committee issues.

During the Interim Period, Steptoe, among other things: (1) responded to Committee member requests; (2) corresponded with Committee members regarding the Debtors various motions and actions in these cases; and (3) advised the Committee with regard to matters arising in these cases. Fees: $14,436.00; J. Hours: 22.60

Committee Meetings (Task Code 122) 22. This category includes services related to Committee meetings. During

the Interim Period, Steptoe, among other things prepared for, attended, advised at and prepared the minutes of various Committee meetings. Fees: $8,877.00; Hours: 16.70

12

K.

Canadian Proceedings (Task Code 123) 23. This category includes services related to the Debtors Canadian

bankruptcy proceedings. During the Interim Period, Steptoe, among other things analyzed the Debtors Canadian proceeding documents and corresponded with the Debtors counsel regarding such proceedings and their potential impact on the Debtors estates and potential recoveries for creditors. Fees: $3,683.00; Hours: 8.10

Summary of Services by Task 24. The nature of services performed by these persons is fully set forth in

Exhibit A attached hereto. The rates reflected are Steptoes normal hourly rates for work of this character. The reasonable value of the services rendered by Steptoe for the Committee during the Interim Period is $131,319.25. 25. In accordance with the factors enumerated in section 330 of the

Bankruptcy Code, it is respectfully submitted that the fees and costs incurred by Steptoe are fair and reasonable given (a) the complexity of the case, (b) the time expended, (c) the nature and extent of the services rendered, (d) the value of such services, and (e) the costs of comparable services other than in a case under the Bankruptcy Code. Moreover, Steptoe has reviewed the requirements of Rule 2016-2 of the Local Bankruptcy Rules of Procedure and the Administrative Order and believes that this Application complies with such Rule and Order.

13

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE ) ) ) ) ) ) )

In re PACIFIC ENERGY RESOURCES LTD., et al.,1 Debtors.

Chapter 11 Case No. 09-10785 (KJC) (Jointly Administered)

Objection Deadline: 6/16/09 at 4:00 p.m. Hearing Date: To be Scheduled.

NOTICE OF MONTHLY FEE APPLICATION PLEASE TAKE NOTICE that Steptoe & Johnson LLP, counsel to the Official Committee of Unsecured Creditors, (hereinafter referred to as Applicant), has filed its First Monthly Application for Compensation and Reimbursement of Expenses for the Period From March 19, 2009 Through March 31, 2009 (the Application). Any objections or other responses (collectively, the Objections) to the Application must be filed with the Clerk of the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on or before June 16, 2009 at 4:00 p.m. (Eastern Time) (the Objection Deadline). In addition, any Objections to the Application must be served so as to be received no later than the Objection Deadline upon the following entities: Filiberto Agusti, Esq. Joshua R. Taylor, Esq. Steptoe & Johnson LLP 1330 Connecticut Avenue NW Washington, D.C. 20036 David B. Stratton, Esq. James C. Carignan, Esq. Pepper Hamilton LLP Hercules Plaza, Suite 5100 1313 North Market Street P.O. Box 1709 Wilmington, Delaware 19899-1709 Francis J. Lawall, Esq. Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, Pennsylvania 19103-2799

Robbin L. Itkin, Esq. Katherine C. Piper, Esq. Steptoe & Johnson LLP 2121 Avenue of the Stars Suite 2800 Los Angeles, California 90067

The Debtors in these cases are: Pacific Energy Resources Ltd.; Petrocal Acquisition Corp; Pacific Energy Alaska Holdings, LLC; Carneros Acquisition Corp.; Pacific Energy Alaska Operating LLC; San Pedro Bay Pipeline Company; Carneros Energy, Inc.; and Gotland Oil, Inc.

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Joseph McMahon, Esq. Office of the United States Trustee 844 King Street, Suite 2207 Lockbox 35 Wilmington, Delaware 19801 Laura Davis Jones, Esq. Pachulski Stang Ziehl & Jones LLP 919 North Market Street 17th Floor PO Box 8705 Wilmington, Delaware 19899-8705

Scott Winn Pacific Energy Resources Ltd. 111 W. Ocean Boulevard Suite 1240 Long Beach, California 90802 Ira Kharasch, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Boulevard 11th Floor Los Angeles, California 90067-4100

In the event one or more Objection(s) to the Application are filed, a Hearing on the Application will be held before the Honorable Kevin J. Carey, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 5th Floor, Wilmington, Delaware 19801 on a date and time to be determined and subsequently noticed. IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR OPPORTUNITY FOR A HEARING. Dated: May 26, 2009 PEPPER HAMILTON LLP /s/ Leigh-Anne M. Raport David B. Stratton, Esq. (DE No. 960) James C. Carignan, Esq. (DE No. 4230) Leigh-Anne M. Raport, Esq. (DE No. 5055) Hercules Plaza, Suite 5100 1313 N. Market Street P.O. Box 1709 Wilmington, Delaware 19899-1709 Tel: (302) 777-6500 Fax: (302) 421-8390 and Francis J. Lawall, Esq. 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103-2799 Tel: (215) 981-4000 Fax: (215) 981-4750 and

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Filiberto Agusti, Esq. (DC Bar No. 270058) (admitted pro hac vice) Joshua R. Taylor, Esq. (VA Bar No. 45919) STEPTOE & JOHNSON LLP 1330 Connecticut Avenue NW Washington, DC 20036 Tel: (202) 429-3000 Fax: (202) 506-3902 and Robbin L. Itkin, Esq. (CA Bar No. 117105) (admitted pro hac vice) Katherine C. Piper, Esq. (CA Bar No. 222828) (admitted pro hac vice) STEPTOE & JOHNSON LLP 2121 Avenue of the Stars, Suite 2800 Los Angeles CA 90067 Tel: (310) 734-3200 Fax: (310) 734-3300 Counsel for the Official Committee of Unsecured Creditors of Pacific Energy Resources Ltd., et al.

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Exhibit A

CERTIFICATE OF SERVICE I, Leigh-Anne M. Raport, hereby certify that on the 26th day of May, 2009, I caused the foregoing First Monthly Application for Compensation and Reimbursement of Expenses of Steptoe & Johnson LLP, as Counsel to the Official Committee of Unsecured Creditors for the Period From March 19, 2009 Through March 31, 2009 to be served upon the entities identified on the attached service list in the manner indicated.

/s/ Leigh-Anne M. Raport Leigh-Anne M. Raport (DE No. 5055)

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SERVICE LIST Joseph McMahon, Esq. Office of the United States Trustee 844 King Street, Suite 2207 Lockbox 35 Wilmington, Delaware 19801 VIA HAND DELIVERY Laura Davis Jones, Esq. Pachulski Stang Ziehl & Jones LLP 919 North Market Street 17th Floor PO Box 8705 Wilmington, Delaware 19899-8705 VIA HAND DELIVERY Scott Winn Pacific Energy Resources Ltd. 111 W. Ocean Boulevard Suite 1240 Long Beach, California 90802 VIA FEDEX Ira Kharasch, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Boulevard 11th Floor Los Angeles, California 90067-4100 VIA FEDEX

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