IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11
PACIFIC ENERGY RESOURCES LTD., et all) Case No. 09-10785 (KJC)
)

Debtors. )
)

) ) (Jointly Administered)
) Objection Deadline: January 12, 20 10 ~ 4:00 p.m.

SIXTH MONTHLY APPLICATION OF LAZARD FRERES & CO. LLC; INVESTMENT BANKER AND FINANCIAL ADVISOR TO THE DEBTORS FOR ALLOWANCE OF COMPENSA TION AND REIMBURSEMENT OF EXPENSES FOR THE PERIOD SEPTEMBER 1,2009 THROUGH SEPTEMBER 30,2009

To: The Notice Parties Listed on Exhibit A hereto

Name of Applicant:

Lazard Frres & Co. LLC

Debtors and Debtors-in-Possession

Authorized to Provide
Professional Services to:

Date of Retention:

May 1, 2009 nunc pro tunc March 8, 2009

Period for which compensation and/or reimbursement is sought:

Amount of Compensation sought as actual, reasonable, and necessary:
Amount of Expenses sought as actual, reasonable, and necessary

September 1,2009 through September 30,2009

$100,000.00
$4,425.222

Total Compensation and Expense Reimbursement Requested:

Less: Amounts Paid to Date:

$104,425.22
(0.00)

Net Amount of Compensation Requested:

$104,425.22

the Debtors' federal tax identification numbers, are: Pacific Energy resources Lts. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021);_San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is III W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. 2 Prior to the petition date, Lazard was paid $50,000 for pre-petition costs incurred but not yet processed. As of September 30,
2009 the unapplied balance of

i The Debtors in these cases, along with the last four digits of each of

the retainer was $25,895.77.

This is a: ~ monthly interim _ final application

The total time expended for fee application preparation was approximately 3.5 hours.

Summary of

Monthly Fee and Expense Invoices for the Compensation Period:

(REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11
)

PACIFIC ENERGY RESOURCES LTD., et a3) Case No. 09-10785 (KJC)

)
) (Jointly Administered)

Debtors. )
) Objection Deadline: January 12, 2010 ~ 4:00 p.m.

SIXTH MONTHLY APPLICATION OF LAZARD FRERES & CO. LLC, INVESTMENT BANKER AND FINANCIAL ADVISOR TO THE DEBTORS FOR ALLOWANCE OF COMPENSATION AND REIMBURSEMENT OF EXPENSES FOR THE PERIOD SEPTEMBER 1,2009 THROUGH SEPTEMBER 30, 2009
TO THE HONORABLE KEVIN J. CAREY, UNITED STATES BANKRUPTCY JUDGE:

Lazard Frres & Co. LLC, ("Lazard"), Investment Banker and Financial Advisor

to Pacific Energy Resources Ltd. ("Pacific Energy"), and certain of its subsidiaries and affiiates

(collectively, the 'Debtors") hereby submits its Sixth Monthly Fee Application (the
"Application") pursuant to sections 327(a) and 3238(a) of title 11 of

the United States Code (the

Bankruptcy Procedure (the

"Bankruptcy Code) and Rule 2014 and 2016 of

the Federal Rules of

"Bankruptcy Rules") and 2014-1 of the Local Rules of Bankruptcy Practice and Procedure of the

United States Bankruptcy Court for the District of Delaware (the "Local Rules") for an
allowance of compensation for professional services rendered and for reimbursement of actual

and necessary expenses incurred in connection with such services from September 1, 2009
through and including September 30, 2009 (the "Compensation Period") as set forth in their

the Debtors' federal tax identification numbers, are: Pacific Energy resources Lts. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (i 234);
Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of

3 The Debtors in these cases, along with the last four digits of each of

the Debtors is I I 1 W. Ocean

Boulevard, Suite 1240, Long Beach, CA 90802.

engagement letter (the "Second Amended Engagement Letter"), attached hereto as Exhibit B.

Pursuant to the Administrative Order of this Court dated April 8, 2009 (Docket No. 147)

approving procedures for interim compensation and reimbursement of professionals (the

'Compensation Order"), Lazard seeks interim allowance in aggregate amount of $104,425.22 for
financial advisory services provided to the debtors. In support of this Application, Lazard
respectfully represents as follows:

BACKGROUND
1. On March 9, 2009 (the "Petition Date"), the debtors fied voluntary petitions

for relief under chapter 11 of the United States Bankruptcy Code. Pursuant to sections 1107 and

1108 the Bankruptcy Code, the debtors have continued to operate their businesses and manage
their properties as debtors in possession since the Petition Date.

2. This Application is submitted pursuant to the terms of the Administrative

Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses dated
April 8, 2009 (the "Administrative Order").

3. On May 1, 2009, this Court entered certain Order Pursuant to sections 327(a)

and 328(a) of title 11 of the United States Code (the "Bankruptcy Code") and Rules 2014 and
2016 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and Rule 2014-1

of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankptcy Court

for the District of Delaware (the "Local Rules") authorizing the retention and employment of
Lazard Freres & Co. LLC as Investment Banker and Financial Advisor to the Debtors nunc pro
tunc to the petition date (the "Retention Order"), attached hereto as Exhibit C.

COMPENSATION REQUEST
Lazard seeks allowance of compensation for professional services rendered to the
Debtor during the Compensation Period in the aggregate amount of $100,000.00 and for

reimbursement of expenses incurred in connection with the rendition of such services in the
aggregate amount of $4,425.22, for a total award $104,425.22 (the "Total Compensation

Amount"). In support of this Application, Lazard respectfully represents as follows:

4. For the convenience of

the Court and all parties in interest, attached hereto as

Exhibit D is a summary setting forth the name of each professional for whose work on these
reorganization cases compensation is sought.

SUMMARY OF SERVICES

5. The Managing Director and Vice President of Lazard who have rendered
professional services during the Compensation Period in these cases are as follows: John

Rutherford (Managing Director) and Robert Lynd (Vice President).

6. During the Compensation Period, the Debtors relied heavily on the

experience and expertise of the above-named persons in dealing with matters described in
Paragraph 8. As a result, Lazard's highly skiled restructuring professionals devoted significant

time and effort to perform properly and expeditiously the required professional services.

7. During the Compensation Period, Lazard provided the Debtor with a broad
list of potential bidders and provided updates on court document fiings and Sales Procedures to
potential bidders for both the Alaska and Beta packages.

CONCLUSION
8. It is respectfully submitted that the amount requested by Lazard is fair and

reasonable given (a) the complexity of the issues presented, (b) the time and labor required, (c)

the skill necessary to perform the financial advisory services, (d) the preclusion of other
employment, and (e) the customary fees charged to clients in bankruptcy and non-bankruptcy

situations.

WHEREFORE Lazard respectfully requests (i) an interim allowance of compensation for

professional services rendered during the Compensation Period in the amount of $1 04,425.22.

Total Amount of Compensation Requested:

Less: Amounts Paid to Date:

$104,425.22
($0.00)

Net Amount of Compensation Requested:

$104,425.22

Dated:

December , 2009
New York, New York

LAZARD FRRES & CO. LLC

John Rutherford

Managing Director

Lazard Frres & Co. LLC 30 Rockefeller Plaza, 61 st Floor New York, NY 10020 (212/632-6000)

Investment Banker and Financial Advisor to the

Debtors and Debtors-in-Possession

CONCLUSION
8. It is retfy submitted tht the amount requested by Lad is fai and
reaonable given (a) the complexity of

the issues prented, (b) the tie and labor required (c)

the skill necess to perform the ficial advisory serces, (d) the preclusion of other

employment, and (e) the cusmar fees charged to client in batcy and non-banptcy

situons.

WHREFORE Lad respectfly request (i) an interim allowace of compensation for

professional serices rendered durg the Competion Period in the amount of$104,425.22.

Tota Amount of Compensaton Requested: Less: Amunts Paid to I)ate: Net Amount of Compenation Requestd:

5104,425.22
(50~OO)

5104,425.22

Daed:

Decembe .! 2009

New York, New York

LAZ FRRES & CO. LLC

Rutherord

ang Dirctor
Lad Fr & Co. LLC
30 Rockefeller Plaz 61st Floor

New York, NY 10020

(2121632-6000) Investent Baer and Finci Advsor to the

Debtors and Debtors-in-Posesion

VERIICATION
JOHN RUTHRFORD, bein duly sworn deposes and says:
1. I am a Mangig Director of Lad Frres & Co. LLC ("Laj, whch mainta offces
for providi investent bag servces at 30 Rockefeller Plaz New York, New York
10020. Lad has acte as an invesent baner and ticiat advisor to and rendered

professional seces on beha of PACIFIC ENRGY RESOURCES LID., et at. (the

"Debtors").
2. This afdavit is submittd puruat to Banptcy Cod Rule 2016 in comiecon with

Lazd's applicaon (the "Application") for Alowace of Compenation and

Reimburement of Expes for the tie peod frm Septeber 1, 2009 thugh an

includg September 30, 2009 in the amount of $104,425.22.

--- 3. All of the

services for which compenson is sougt .byLa.were perfenned for and on

beha of the Debtors an not on behaf of any other pen.
4. No ageement or understading exists betwee Lazd and any other entity for the sharng of

compensation reived or to be recived for serces rendere in or in connection with these

cases.

J:i= MN~
No - ,__t~tPfNew York
rlANNA MURNANE

Sworn to before ths '7 day of Decmbe 2009

Notary Public, State of New York No. 41-4729327

Qualified In Queens County D

COmmission Expires March 30, 20.L

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELA WARE

In re: ) Chapter 11
) PACIFIC ENERGY RESOURCES LTD., et al., i) Case No. 09-10785(KJC)

Debtors. )

) (Jointly Administered)

) Objections Deadline: January 12,2010 at 4:00 p.m.

NOTICE OF FILING OF FEE APPLICATION

TO: (i) the Debtors; (ii) counsel to the Debtors; (iii) the United States Trustee, (iv) counsel to the Official Committee of Unsecured Creditors and (v) the fee auditor (the "Notice Parties")
Lazard Frres & Co. LLC ("Lazard"), investment banker and financial advisor

to the debtors and debtors in possession in the above-captioned case (the "Debtors"), has fied
its Monthly Application

for Compensation and Reimbursement of Expenses of Lazard Frres

& Co. LLC as Investment Banker and Financial Advisor to the Debtors and Debtors in
Possession, for the Period from September 1, 2009 through September 30, 2009, seeking
compensation for services in the amount of $1 00,000.00 and reimbursement of costs incurred in

the amount of $4,425.22 (the "Application");

PLEASE TAK FURTHER NOTICE that objections, if

any, to the Application must

be made in accordance with the Administrative Order Under 11 U.S.C. 105(a) and 331

Establishing Procedures for Interim Compensation and Reimbursement of Expenses for

Professionals and Committee Members (Docket No. 147) (the "Administrative Order") and must

be fied with the Clerk of the United States Bankuptcy Court for the District of Delaware, 824

i The Debtors in these cases, along with the last four digits of each of the Debtors' federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (702 i);

San Pedro Bay Pipeline Company (\234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing
address for all of

the Debtors is i 11 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

Market Street, Wilmington, Delaware 19801, and received by no later than 4:00 p.m. (Eastern

Time) on January 12,2010 (the "Objection Deadline").

Objections or other responses to the Application, if any, must also be served so

that they are received not later than January 12,2010 at 4:00 p.m. prevailng Eastern time,
by: (a) the Debtors, (1) Pacific Energy Resources, 111 W. Ocean Boulevard, Suite 1240, Long
Beach, CA 90802, Attn: Gerry Tywoniuk, Senior VP & CFO and(2) Zolfo Cooper, 1166 Sixth
Avenue, 24th Floor, New York, NY 10036, Attn: Scott W. Winn, Senior Managing Director;
(b) counsel to the Debtors, (1) Pachulski Stang Ziehl & Jones LLP, 919 North Market Street, 1 ih

Floor, Wilmington, DE 19899-8705, Attn: James E. O'Neil, Esq.; Fax: 302-652-4400, e-mail:

ioneil~pszilaw.com and (2) Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd.,
11 th Floor, Los Angeles, CA 90067-4100; Attn: Ira D. Kharasch, Esq; Fax: 310-201-0760,
e-mail: ikharash~pszilaw.com (c) the Office of

the United States Trustee, 1. Caleb Boggs

Federal Building, 844 N. King Street, Suite 2207, Lock Box 35, Wilmington, Delaware 19801,
Attn: Joseph McMahon, Esq. and (d) counsel for the Official Committee of

Unsecured Creditors

(the "Committee"), (1) Steptoe & Johnson LLP, 2121 Avenue ofthe Stars, 28th Floor, Los

Angeles, CA 90067; Attn: Katherine C. Piper, Esq., Fax: (310) 734-3173, e-mail:
kpiper~steptoe.com and (2) Pepper Hamilton LLP, Hercules Plaza, Ste 5100, 1313 N. Market

Street, Wilmington, DE 19801; Attn: James C. Carignan, Esq., Fax: (302) 421-8390, e-mail:
icarignan~pepperlaw.com (the "Notice Parties")

PLEASE TAKE FURTHER NOTICE that if any responses or objections to the

Application are timely fied, served and received, a hearng on the Application will be held at the

convenience of the Bankruptcy Court. Only those objections made in writing and timely fied
and received in accordance with the Administrative Order and the procedures described herein

wil be considered by the Bankuptcy Court at such hearing.

PLEASE TAK FURTHER NOTICE that, pursuant to the Administrative Order, if
no objection to the Application is timely filed, served and received by the Objection Deadline, the

Applicant may be paid an amount equal to the lesser of (1) 80 percent of the fees and 100 percent

of expenses requested in the Application or (ii) 80 percent of the fees and 100 percent of the
expenses not subject to an objection without the need for further order of the Bankruptcy Court.
Dated: December 22, 2009

PACHULSKI STANG ZIEHL & JONES LLP

(
. Kharasch (CA Bar No. 109084)
c ta E. McFarland (DE Bar No. 4184, CA Bar No. 165391)

Robert M. Saunders (CA Bar No. 226172)

James E. O'Neil (DE Bar No. 4042)

Kathleen P. Makowski (DE Bar No. 3648) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100 Facsimile: 310/652-4400

Email: ikharasch~pszilaw.com
smcfarland~pszi law .com

rsaunders~pszi law .com

ioneil~pszi law.com
kmakowski~pszi law .com

Counsel for Debtors and Debtors in Possession.

68773-002\DOCS_DE: i 55993. i

EXHIBIT A - NOTICE PARTIES

Debtors
Pacific Energy Resources Ltd. 111 W. Ocean Boulevard, Suite 1240 Long Beach, CA 90802
Att: Scott Winn, CRO

Counsel for the Debtors

Pachulski, Stag Ziehl & Jones LLP

919 Nort Market Street, 17th Floor P.O. Box 8750 Wilmington, DE 19899-8705
Att: Laura Davis Jones, Esq.

Pachulski, Stang Ziehl & Jones LLP

10100 Santa Monica Boulevard, 11 th Floor

Los Angles, CA 90067-4100

Att: Ira Kharasch, Esq

Counsel for the Committee of Unsecured Creditors

Steptoe & Johnson LLP
2121 Avenue of

the Stas, 28th Floor

Los Angeles, CA 90067

Att: Katherine C. Piper, Esq.

Offce of

the United States Trustee

the United States Trustee J. Caleb Boggs Federal Building, Rm. 2207 844 King Street, Suite 2313 Wilmington, DE 19801
Offce of

Att: Joseph McMahon

EXHIBIT B

Engagement Letter

1,;\ ZAH.H

lAAOFARES & CO. LLC

600 TRAVI STIEET, SUIT 2300 HOUTON; TX 77002
PHONE 713-236-4600

FAX 713-236604

WW.lazard.cam

December 19, 2008

Pacific Energy Resources Ltd.

I II W. Ocea Blvd, Suite 1240

Long Beach, CA 90802

Attention:

Mr. Darren Katie President

Dear Ladies and Gentlemen:

This lelter agreement (the "Agreement") confirms the unde.rstaiiding and agre.ement

its controlled subsidiaries (collectively wiluny entity formed or used tor the purposes set forth
between Lazard Frres & CO. LLC ("Lazard") and Pacific Energy Resources, Ltd. and

herein, the "Company'i).

AsSigmlienr Scope;

The Company hereby retains Ln~ard as its investment banker to provide the Company with
.general restructuring advice and to advise it in connection with any RestrLictuting, Sale

Transaction ai:dlor Financing (each as defined below) on .the terms and conditions set forth herein. As used .in lis Agl'ement, the term "Restructuring'; shall mean. collectively. any
restructuring, reorganization (whether or not pursUant

to Chapter 11 of the United States

Bankptcy Codq) and/or recapitalization uf .all or a significurlt porticmor the Coiiipat1fs

outstanding indebtedm:ss (including ban1~ debt, bond debt, and other on and off balance sheet
indebtedness), trade claims, leases (both Oil and ofT balance sheet), asbestos ~nc: other litigation related claims and obligations, unfunded pension and retiree medcal liabilities, or other liabilties (collectively, the "Existing Obligation!,") tha.t is achieved. witloUt limitation, through a solicitation of waivers and consents from the holders of Existing Obligations (collectively, the "Stakeholders"); rescheduling of the maturities of Existin~ Obligations; a chaug hl. inlerest

rates. re:urchase, settlment or forgiveness of Existing Obligations; conversion of Existing Obligations into equity; an exchange offer involving the issuance of new securities in exchange for Existing ObljgatiOns; the issuance of new securities, sale or disposition of assets, su1eof dbt or equity seourities or other interests or other similar transaction or sa-lies of transactions. By signing this Agreement, we hereby accept our appointment as your investment biiker uJtder the
terms hereof.

PARIS LONDON NEW VORK Ai'STEROAM ATLAIlTA BERliN BOMBAY llHlGO FRAfFUT HAMURll HONll KONG HOUSTON.

tOSAAGELES MADRID MIlN MONTRE NEWDEHU ROME SAtiFRAIICis SeOUL SiNlORE STOCKHOLM YOrlY TOKYO TORTO.

Pacific Energy Resources Ltd;

December 19, 2008
Page 2

Descriotioii of Sel1,ices:
1. Lazard agrees, iii consideration of the compensation provided in Section 2 below, to

perform such of the .following investment bankng services aii the Cmpan.y may reiionably
request, including:
(a)

Reviewing and analyzing the Company's business, operations. ahd

financial projections:
Evaluating the Company's potential debt capacity in light

(b)

or its projected

cash flows;
(c)
Assisting in the determination of a capital strcture for ihe Company;
Assisting in the detemunitiotl f a

(d)

range f values for the Company on a

the

going concern basis;

(e)
Advising the Company Ori facticsand stategies for negotiating with

Stakeholders;

(0

Rendering financial advice to th Company and participating in meetings or negotiations with ihe. Stakeholders (including the administrative agen,t) and/or rating agencies or other appropriate parties in connection with any

Reslrctunng;
(g)

Advising the Company on the timing, nature, arid terms f neW securities,
other consideration or other inducements

to b~ offered pursuant to the

Restructuring;
(11)

Advising and assisting the Company in evaluating potential FlUmcingl

trani;nctioni; by theCQmpany, and, su.bject to Lnzards agreement so to act
and, if requested by Lazard, to execution of appropriare igreements, on

behalf of the Company, contacting potential sources of capital as the

.Company may designate and assisting the Company in implementing such
a Fimil'cing;

(i)
0)

AssistinE the Company in preparing documentatin within our area of

expertse that is requred in c;onne.ction with the Restructunng;

Assistng the Company in identifying and evalllating canidates for potential Side Traiisaclion(s), advising the Company in connection with
negotiations and aiding in the consummation of Sale TmIisaCtion(s)2;

i A~ used jn lls Agreement. ihe lenn "Finnncing" menns nny ininsmClou or seri.e. Qr iraiisicilons in'~olving IIle plblic or pnvnie issu:ic. snle.

er plncemeni or cqiiiiy. equity-linked. or debi ,"curiei"", 'Iii-inimcol.. or bligniions or ihe Cmnflnny. Including .n)' dblor-jn-po.s..on pn.ncins or ..i1lio:icins in connec'\on whir 0 cnse under ihe uliJptey Code.
.. A.t u.'i in ihis Agreement. ilic terrn "Sole TrunliDclion" m;ini lioy Imrism;1inn tlr JoleS or Irii!iOCiion',rinvol\'ilg (u) tin ncqiiisidnn, rmI'ar~

consolidation. or oter busiess combinoon pursUu1i 10 \hich II.. biislnc&., at nsi;is of be Company ii. dircily of iridirccUy. coinbine wlib

Pacific Energy Resources Ltd. December 19.2008

Page 3
(k) Attending meetings or the Company's Board of Directors and its

committees with respect to matters on which we have been engaged to

advise you;
(l Providing testimony,

as necessary, with respect to matters on which. we have been engaged to advise you in any proceeding blirote the Bankruptcy Court; and

(m) Providing the Company with other financial restructunng advice, Lazad wil use reasonable efforts to coordinate its activities hereunder with the
Company's o.ther advisors s reasnably directed by the Company,

Fees:

2. As consideration for thl, services to be provided, the Company shall pay Lazard the
following fees:
fa) A fee of $300,000, paYable on eXecution of this Agri;ement.

(b) A monthly fee of $150,000 (the "Monthly Fee"),pnybJe on Match 1,

2U09, atd on the first dny ofeach month therefter until the earlier- of the
completion of the Restructuring or tlie termnation f Lazards engagement
p!ll'SUiint to Section 10. .

(c) A fee equal to $3,500,000, payable upon the consummation of a

Restructring (tQe "Restrcturing Fee"); provided, however, that

if a

Restructuring is to be completed through a "pre-packaged"r 'ipre~

aranged" plan of reQtgani.zatidn; the Restrcturing Fee sliall be earned and shall be payable upon the earlier of (i) execution of definitive
agreements \v.ith respect to such plan and (ii) delivery of binding consents to. such plan by a suffcient number of creditors and/or nteholders, as the
case muy be, to hind the creditors and/or noteholders, as (hclse may be, to the pIan; provided, fuither, that in the event thatUizad .is paid a fee in

connection with a "pre-packagep" or "pre-aranged" plan and such Plan is not consummated, Lazard shall return such fee to the Company.
(d) (i) If, whether in connectii:m with the consummation of a Restrcturing.Q(
otherwise, the Company consummates a Sale Transaction incorporating all or a inajonty of the aisets,ot ail or a majority Ot controllIng jntei:est in (bt equity securities of the Company, Lazard shall be paid a fee (the "Sale

4noiJr comi'ooy; (b) the ucquisiiioi. diltlly or indirectly, by'n buyer or biiyes (whicb tenn shall include a "grop" "r """,, as defined in Soclinn 13"Cd) orihe Seeurilics llxcbnse Act nr 1934. 05 omended),.of equl1y inicre,is or oplions, or any combliiiiici Ihei con5l1iuUilg u
majority or th. ihen oUISlandiog ~iock or ihe Coin!'_ny or ,,'''So.lng a .najodi .of i~e ihen nulslondng V!llnlHiower or ihcCntPDtly (e.ol!l as

may ocur willi currllt Sinkeholder. ;I a. n:ull or a ResiruCluring) (c) aiiy olhae piubusc or acquis\ilon. dlni!y or indiriiy, by ..bu)'t or bU)ocra ofsignifClmu",els, securities Or ",her mcresis or.ihe Cnm;.ny or (d) ihe romi.iinn nr. jnini. veniu", nr pOllniisip with ihe Copany or dlrcjI' j~vesiment in lilt CQnipiiy.for Ili. purpose of c;riin~.alt.iisfet.ofii Iniel't in lheCompiiy 10 ihlid.plly. F.or ibe iividiicc or
doubi, ooch of iIc foregoing sholl. indiide iransaci;""s in which oily.holders of dchi securities or nbligailnns nfil1Comp4ny exchongil or conven
uny ponlon ofsuDb.securiiies or obligiirO,, for

equity juterMs or .ssel..oIOlb.r liieicsis.

Pacific Energy Resources :Ld. ~cember 19,2008 Page 4

Triinsaction Fee") equnl lo the greater .of (A) the fee calculated based on the AggregateConsderation as set forth in Schedule I hereto or (8) the
Restructuring Fee.

connection with the consummation of a Resthictuniig or (ii) If, whether in otherwise, the Company consummates any Sale Transaction not covered by clause (i) above, the Company sliaIJ pay. Lazard a fee (the "Minority
Snle Transaction Fe.e'') based 011 the Aggregate Consideration ca1culatel

as set forth in Schedule I hereto.. One-half of any fee paid under this Section 2(d)(ii) shall be credited ~gainst any fees subsequeptly payable
UDder Section 2() or Section 2(d)(i).

(iii Any Sale Ttaiisctioii Fee or Minority Sale transaction Fee shall be
payable upon consumrnation .of the applicable Sal Transaction.
(e) A fee, payable upon cQnsummation ofa Financing, equal to the amount set forth in SchediIe II (the"Financing Flee"). One-half of arty Financing

Fec(s) paid shall be .credited against any Restrcturing Fee suoieqllehtly payable.
(f) F'or the avoidance of any doubt, more than one fe~ may be payable

pursuant to clauses (c), (~) and (el above;pro,vied, that it.is underslood and agreed that the Company shan not be tequiied to pay Lazard both a
Restructuring Fee .and a Sale Transaction Fee pursuant to the Section 2. In
the event. that the aggregate,

fees paid pursuant to clauses (a) tliou~h !e) of

(i) $150,000 of such fees .paid shall be credited (without duplication) against any fees subsequently payable
this Section 2 exceed $5 miIlon, then

pursuant to this Section 2, and (it) for each. incremental $1 nuion of

aggregate fees paid pursuiint to such clauses. n ~xcess f $5 Iillon, ai

additional $150,000 of such incremental fees paid shall be credited

(without duplication) against any fees sUbSeqllenty pyable pursuant to

this Secp.on 2,.

(g) (i) In addition to any fees that may be payable to Luzllrd nnd, regardless of

whether any transaction. ccuts, the Company shall promptlY reiinburse

LiizQrd for all: (A) reasonable expenses (incluing tmvei and lodging, data proce.';sing and communications charges, .courier services and other

appropriate expenditures) and (B) other reasonable fee and expenses,

including expenses of.counsel, if any; and
(ii) An expense advance retWRer of

$50,000 (the "Expense Advance")

payable upon the execution of this Agreement, .to be applied by Lazard against the expens~s that it incurs and that :are reimbursable puruant to
clause (i) iibove.
(h) As par of thecompensatioti payable to Lazard hereunder, the Company

agrees to the indemnification, contribution and i'elar~d provisions (the

Pacific Energy Resources Ltd. Decemher 19, 208

Pag 5

"Indemnification Letter") attached to this Agreement as Addendum A and

incorporated herein in their entirety.
(i) All amounts reterencedhereundei' reflect United States currency and shall

be paid promptly in cash after such amounts accrue hereunder.

Relemioii iii CIUlmer 11 ProceedillJ!S:

3. In the event of the commencement of (*npter 11 proceedings, the. Compaiiy iigrees that it wil use best efforts to obtain prompt nuthonzation from the Bankrptcy Court to retain Lazard on the eims and conditions set forth in this Agreement under the provisions f Section 328(a) of the Bankruptcy Code. Subject to beingso retained, Lazard agrees that dunng the pendency of any such proceedings, it shall continue t(j perform its obligations under ths Agleementand that it shall file interim and final lIppIlcations for allowance of the fees and
expenses payable to. it under tbe terms of this AgreelTcm pursua,tit to the applioable Fepera

Rules of Bankrptcy Procedre, and the looal rules, and order of the Bankruptcy Cour The Company shall supply Lszid with a draft of the ~pplicatioh and proposed retention onlr authonzing Lazard's retention suffciently in advance of.the filing of such application and
proposed order to enable Lazard amI its cOunsel tp revlewand comment thereon. Lard .shall be under no obligation to provide any services under this agreement iti the evenlthat tbe Company becomes n debtor under the Bankruptcy Code unless Lazard;s retention (itdr the trms of 1ms

Agreemeii1 is approved under section 328(a)of the Bankruptcy Code by final order of the
Bankrptcy Court, which order is acceptable to Lazard. In so agreeing to seek Lazard's retention
under Section 328(0) of the Bankruptcy Code, the Company acknowledges that It believe that

Lazard's general restructunng exper.ience and expertise, its knowledgeofthe capital inarkets aiid its merger and acquisition capabilties wil Inure to the benefit of the Company in pursuing .any
Restructuring, Sale Transaction 0.1 Finaiicing, that the value to the Ctlnpany of Lazard's services hereunder denves in substantial pait from that expertise and experience and that, accordingly, the structure and amount of the contingent RstructurJilg Fee, Saie Trtnsiiction Fee aiid Financing Fee is. reasonable regardless of the number of hours to be expended by Lazard's profes$lOnds in

the performance of the services to be provided hereunder.

Q.
4. No fee payable to any other person, by you or any other pary, shall reduce: Or

otherwise affect any reepaya~le hereunderto us.

5. Th Company wil furnsh or cause to be furnshed to Lazard such current and

historicaL. financial informatioJiand other iiifimatin regiirding the busiiess of the C\lmp;ny as Lazard may request in connection with this engagement. The Company repre.sents and wutrants
to Lazard that all of

the foregoing information wil be aocurate .and complete at the time it is

furnished, and agrees to keep Lazard adviSed of all developments matenally affecting the

Company or its financial positit. In performing its :services pursuant fo this Agreement,.
including in connection with any valua.lionof the Comparty, LazardshiiIl be entitled to rely. upon

information fufished to it by the Company or that is publicly available, may assume the accuracy and completeness of such information iind shall not assume any respoitsibilty for'

Pacific Energy Resources Ltd. Deember 19, 2008

Page 6

independent verification of any such .infonnation. Lazard wil not, as pan of its engagement,
undertake any independent valuation or appraisal of any of the assets or HabJities of the Company .of of any third. party, or opie or gi ve advice to the Board of .Directors., the Company or management or sharehoiders with respect thereto orwitIi respect to any issues of solvency.

6, In perfonning its services pursuant to this Agreement, Lazad is not assuming any
(or not to pursue) any riot to effect) any Restructuring, Sale Trarisactkin, Financing or other trnsaction. Lazard shall nol hnv~ any obligation or rcsponsibilty to provide "cnsis
responsibilty for the decisii;n ofthe Company or any other party to pursue business strategy or to effect (or

management" for or businss consullaIil services to, the Company, and. shall have no
responsibilty for designing or implementing operatirig, orgaiuzational, adnunstrative, cash management or liquidity improvements; nor shall Lazad be responsible for providing any tax,
legal or otherspeciiilist advice.
7. It. is understood Elnd agreed that nothing

contained in this Agreement .shall constitute

otherwise;

an express or implied commitment by Lazard or Lazard Capftal Markets LLCorljY i;f t\iejr
respective affiiates to underwnte, place or purchase any securities ina financing or

which commitment snall only beset fOIth in a, se1ara.te undi:rwriting, placement agency or purchie agreement, as applicable, relating to the financing.
8. Simultaneously herewith, the patties herelo ar enh~ng into the Indemnifcation Letter. The Indemnification Letter shaH survive any terminntionor expir.ation oHbis Agreement.
9. In order to cprdinate o!Jr efforts on behalf of the Conipany during the period Qf our discussions,

engagement hereunder, the Company wil promptly inform Lazard of any

negotiations, or inquiries regarding a potential trinsation, inciuding any suh discussions or inquiries that have occurred during the six month period prior to the date of this Agreement. In the event that Lazard recei,ves iin inquiry concerning any transaction, we wiU promptly inform

the Company of such inquiry. .

10. Our engagement hereunder may be terminale by you or uS .at aiy lime witJ;ut liabilty or continuing obligation to you or us, except that following such termination and any
expiration of this Agreement (a) we slinl.I remin enti.tIed to any fees accrued pursuant to Section
2 but not yet paid prior to such termination or expiration, ,as the case may be, and to

reimbursement of expenses incurred prior to Such te.nniiiation or expira.tion, as the.cae rtay b.e.

expiration of this Agreement, we and (b) in the cas.e of termination by the Company and any sJ:alll'emain entitlea to fi paymeIit Of al.1 feeS. collemplateq py Secti; ~ htlreof j) teipct af
any Restructuring, any Sale Transaction and

any Financing announced or resulting from

negotiations occurring dudng the period from the date hereof iiot1l one year following such

teffnaton or expiration, as the case may be.

i I. The Company recognizes that Lazd has been engaged

only by the Company and

that the Company's engagement of Lazard is not deemed to be on bha1f of and is not intended to confer rights UPOn any sliarehold~r, parter or other Owner oftlie Conipaily, rty creditor, lender

or any other person not a party hereto as against Lazard or any of its affliates or any of their respective directors, offcers, members, agents, employees or representatives. Unless otherwise

Pacific Energy Resources Ltd~ December 19,2008

Page 1

expressly agreed, no one, other than senior management or the Board of Directors of the
Company is authorized to rely upon the Compnny's engagement of Lazad or liiiy statments,
advice, opiiuons or conduct by Lazard. Without linuting the foregoing, any advice; written 01'
oral, rendered to the Company's Board of

Dliectors otmanagemeilt in tbecouise of the

Company's engagement of Lazard are solely for the purose of assistng senior management or

the Board of Din:ctors of the Company, as the case miiy be, in evalullting any Restrctuting, Sate
Transaction or

Financing and does not constitue a recommendation to any stakeholder of the

Or shQuld take in connection with the Restructuring, Sale

Company that suh stakeholder might

Transaction or Financing. Any advice, written or oral, rendered by Lazard may not be disclosed
publicly or made available i. third ptties without ..the pror written consent of Lazard.
Notwithstanding the foregoing, nothing herein shall

prohibit YOll from di~closingto any anrj an

persons the u~x treatment nd ta" structule f any transaction and lh~ poitiot1s of aily iiiatedals that relate to such tro tratment or tax structure. Laard's role herein is that of an independe1l contractor; nothing herein is intended to .create or shall be constred as creating a fiduciary
relationship between Lilzard and tlie Company Or its Board ofbin:.ctors..

i 2. In connection with the services to be provided hereunder, Lazard may employ the, services of its affiiates and Lazard Capital Mark~ts LtC and may shae with miy,suqh flntty any information conceining the Company, provIded that Laard aid such entiies shall.hOld iuy iionpublic information confidential in accordance with U1Cl respective customary pQlicies relang to

nonpublic information. Any such entity so employed shall be entitled to aU of the benefits
afforded to Lard hereunder reimbursed for its casts and expenses Oil the same basis

and under the lndcmnificati()n Letter and shaH be entitled to be iis Lazard.

13. The provisions hereof shall inure

to the benefits of and be binding upon the

SUCCeSsors and assigns of the Cdmpany, Lazard and any other personetititle .to indemnity iider
the Indemnifcation Letter. You agree that the Company's obligations pursuant to .this Agreement shall be joint and severaL. This Agreement and the l'eIale.' lndeinrufilltion Letter

enibody th entie agreement and understanding. among the partes hereto and supersedes any

and all prior agreements, arrangements, and understandings. related to the matters provided for herein.

14. This Agreement and any claim related directly or indirectly to ihis Agreement
(im:1uding any claim concerning advice provide pur,si.ant to this Agreement) shall be governed

'by and construed iii accordance with the laws of the State f New York withQiit regard to the
principle of conflcts of law. No s.uch claim shalI be Gommei;ced,proseclIted. or continued in any

forum other than the courts. of the State of New York located in the. City and County of New York or in the United States District COUlt for the Southern Distrlct or New York, .and eac;h of
the paries hereby submits to the jurisdiction or such courts. The Companyheleby WlVes on behalf of itself, and itS successors and assigns any and all right tt: argiie that th~ choiCe of forum provision is or has become unr.easonable in anylegnl proceeding. The Company waives all right to tri.aJ by jury in any action, proceeding or coun.~rclaim (whether based upon contract, toi: 0(" otherwise) related to or arising out of the engagement of Lazard pursuant to, or the .perfomance byLuzard of the services contemplated by, this Agreer'ient.

II the foregoing Agreement is in accordance with yourundersUlndng of the tenus of our

Pacific: Energy Reso\lt~ Ltd.. December) 9, 2008

Page 8

engagement, please sign and return to us the enclosed duplicate hereof.

Vertry yours,

Accted. and Agreed toiis of

the date fist written above.

PACIFIC ENERGY RESOURCES LTD.) on behalf of itself and its controlled subsidiaries

By.
Dmen Kate President

Pacific Energy Res()l)cesLtd.

December 19, 2008
Pa~e 8.

engagement, please sign and return to us the enclosed duplicate hereof.

Very truly yours;

LAZARD FRERE & CO. LLC

By:
John RQtherford

Managing Director

Accepted and Agreed to as of !:e date first written above.

PACIFIC ENERGY RESOURCES LTD., on behalf of itself and its controlJed subsidiares

By,

; - -Darren Katie

Pr.esidenl

Pacific Energy R.~ourc.es LtG.

December 19,2008 Pas;e 9

SCHEDULE I
Fees for Bille TranSactions

The followingtabJe outlines the $ale Trasaction fee schedllle. The totDl fee 1s calculated by breaking down the Aggregate Consideration and multiplying eaoh iiicrementby the

corresponding incremeiltal fee. For xample, for a transaction jn which the Aggregate

totals $1,013.500. '

Aggregate Consideration
. ($ iii milions)

Consideration paid is $60,000,000, the fee would be $470,000 + $412,500 + $131 ,OOOwhich

JiicteinenlDl Fee %

$0 - $25 $25 - $50 $50 - $100

$100 - $200 $200 - $300 $300 - $400 $400 - $500 $500 - $600 $600 - $700 $700 - $800
$800 - $9()O

1.88% 1.65% 1.31% 0.98% 0.83% 0;75% 0.68% 0.65% 0.62% 0.59%

056%
0.53%

$900 +

For purposes hereof, the term "Aggregllte Consideratioil" ineaits (x) the Ioul 'umouii.l of cash

and the fair market value (on the date of.paY1lent) of all of the propert paid and puyable(including
amounts. paid into escrQw) in connectiOn with the Sale 1'1'ansaation (oJ: any rel,ated triinsacton), including amounts paid and payable in respect of convertible sec~ties, preferred equity secuiities,
principal amount of 'all ind,eb.tednes~ for \lorroweq money ot otlerliibilities of the Company

warants,. stockapprecilltion' rights, option or similar rights, whether or not vested, plus (y) the or
the sale of assets; all indebtedness for borrowed money or other liabilties assumed by

relevant Company entity, as appJicable, assetforth on the msttecent balance. shee.t, or, irt case

of the third par.

Aggregate Consideration shaII ,also include the aggregte aniounlof any ,dividends or other

distributions declared byth Company or relevant Compa!)y enLity, 1l ~ppJicable. .after the da(e
hereof other than nonnal quarrly cash dividend~, and,. in the case or the sale of

assets, the net :viilue

of any current assets not sold by the Company or tel~vl1nt Companyentit; ~~pplica:bie. For purposes of calculating Aggregate Consideration, (i) all shllres wiI be deemed transferred where a
Sale Transaction is effected by the trnsfer of shares, (n) constituting more tlian 30% of the then

outsicinding equity securities of orequiiy intereSt in the Company or I'lev!\nt Coiipany eniiy, as
applicable, or (b) possessing more than 30% of the then outstanding voting equity Scufiies of or equity interest in the Company or relevant Company entity,

pOWer f the outstinding

as applciibIi:, and

(ii) the value of securities (wheth~r debt or equity) that ar freely tradable In :nn stablished public

Pacific Energy ResourcesLtd. Decem,b:er 19,2008

Page 10
market wil be deterl1inedon the basis of the average closing price in such market for the 10

days prior (0 the closing of the Sale Trarisaction (the "Valuation Date"); and the value of securities

trding

that have no established public market or other propert wiIJ be (he fir miiket vaiue of stich
securities or other property on such Valuation Date and any restricted stock (i.e., stock ina 'public

company not freely tradeable) received shall be valued at 85% of the public market price ot suh stock. Aggre.gate . Consideration shall also be deemed to include pension liabilities. guarantees of

monies borrowed assumed directly or indirectly by any tliir4 party. and, the amount of all
indi#ediless "credit bid" by any creditor of the Coinpany. If the Aggregiite Consideration is subject
t increase by conlingent payments related 10 future even~s. the porlonQf oW: fee

relating thereto

shall be calculated by us iii gOd faith ant! paid to us upon ensunuii~ion Qf the Sale Transaction.

SCHDULE II
Fees for FinancinJ!s

The following table outlns the Financng Fees. The total Financing Fee shall be
calculated hy multiplying the applicable fee

Financing.

percentage by the total gross proceeds raised i each

Funds Raised

Fee

Senior Secured Debt

Senior Debt Subordinated Debt Convertible Debt*

1.00% 3.00%

:t50%
3.75%
5.Q-%

Convertible Preferred Stockif

Common Stock*

6.00%

* It IS understood that the applicable fee percentages for convertible debt~ convertible preferred
stock and common

stock shall each b,e reduced by ,50% witb respect to the portion ()f the gross

proceedS raised n a Financing from any of PetroTrnns Company I.q, CNOOCJntema,tionaJ

Limited; Sinopec Intemational Linlited, ChinaJilYstinbnt Crtittioii, Chinn Investment

Carpotation. China Major Prpject Iniemational Investments Limited; and AeON Investinents.

Pacific Energy Resources,Ltd.

Indem,ification Utter
December 19,2008
Page 1

December 19, 2008

Pacific Energy Resources Ltd.

1 I 1 W. Ocean Blvd, Suite 1240

Long Beach, CA 90802-1015

Attention:
Mr. Darren Katie

President
Genllemen:

In connection with our engagement to advise and assist Pacific Energy Rsorces Ltd. and iis controIled subsidiares (collectively, "you") with the matters set forth in the engagtfftlnt
letter of even date herewith, you and we are entering into this letter agt.eement. It is lindersttlod

and agreed that iti t.he event that Lazard.Prres & CO. LLC or any of our affliate. or any of our or Lheir respecLve directors. officers, members, employees, genti or cnfrollilg persons, if iiriy

(each of the foregiilg, including Lazard Frres' & Co. Ltc; 'being an "inemnfedPersan"), proceeding or investigttion brought or threatened by or nganst any person, including your secuntyholders, related to, arising out of or in connection with oiir engagement, you wiii promptly. reimburse each such ltdemnified Person for its. legal and other expenses (inducting the cost of lIny investIgationand preparation) as and when they are incurred in connection therewith. You wiU indmnify and hold harmless each Indemnified Person from and against an.y losses, claims. dain\lge~;. Iiabilities or expenses to which any Indemnified Person may become subject under any applicable federal or state Jaw, or
become involved in any cap~city in any action, Claim,

otherwise, reJated to, arising out of or in connection with our engagement, wheih~t or n.ol iiny
pending or threlltened action, claim, pi:oceeding or investigation giving rise to SLIGh losses;

claims, damages, liabilties or expenses isiniiiated or brought by yol, or on youi' behif and

whether r not in c.onnectio.n with aiiy aciion, claim, prceeding or investigationjn which 'you or any such Indemnified Person are a pily, except tothe ext~n.t that any such Joss,claim, dum~,

liabiIity or expense is found bya court of competent jurisdiction in a judgment which has
become final in that it is no longer subject to appeal or review tQ have resulted primarly from such Indemnifled Person's bad faith, grss negligence, or intentional misconduct. Youa/so agree
thal no Indemnified Person shall have any liabiljty (whether director indirect or, incontict or

tort or otherwise) to you or your securityholders or creditors related to. arising Oiit. of or in connecon with our engagement except -to the extent thiIt ariy loss, claim, dnige Or liabilty is
found by a court of competent jurisdiction in a

judgment which has become final in'tha.t ids no

longer subject to appeal or review to have resulted primarily from such Indemnifled Person's bad faith, gross negligence, or intentional misconduct. If multiple G1aims are brought against any

Indemnified Person in an arbitration relted to, arsing out of or: hi connection with our
engagement, and indemnification is permitted under applicable law with rcspect .to at least one such claim, yu agre that any arbitration award shall be concliisively deemed to be based on claims as to which indemnification is .permtted and provided for Iiereun;det, ex.cept to the. extent

Pacifii; Energy Resources, Ltd.

IndemnifieatiQn I.ti;r

Dec,ember '19. 2008 Pige 2

the arbitration award expressly states that the award, or any portion thereof, is b13sed sol~ly. on a

claim as to which indemcufication is not availabJe.

If for any reason the foregoing indemnificatjon 's held unenforCeable (other tha due to 11
failure to meet the staiidard of care set forth

above), then you shall contribute ~o the IOSS,C1hri.

damage, liabilty or expense rOT which such indemrification is held unenforceble in such

Proportion as Is appropriate to reflect the rehitive benefits reCived, or soiJght to be received, by

you and your securityholders ,.and creditrs on the Qne hand and the Indemnifed Persons on the
otti~t hand in tI1.e matters contemplated' by our engagement as weB as the yourselves and stich persns, with respect to SUch loss,

relative fault. of claim, damagc, liabilty or expense and

holders and creditors

any other relevant equitable considerations. You agree that for the puroses hereof tbe reative
benefits received, o~ sought to be reeived, by you and your security Indemnified Persons shall be

and the

deemed to be in the same proporrjonas' (i the tptal v.alue pld or proposed t bt piud by ot to you and yOur seculItyholders and creditors, as the case may be, pursuant to any transaction (whether or not consummated) for which We ha\T btn engaged to
perform investment banking services bears to (Ii) the fees paid or proposed to be paid to us in connec.tion with such engagement; provided. however, that, to the ..extent permitted byappricab1e law, in no eVent shall we or any other Indemnified Person be required to contribute an aggregate amount in excess of the aggregate fees accuaUy paid to us fr stich inve.~tinem barikig sti:v.lces. Your reimbursement, indemnity, and contribution obligations under tms agreement.shal be joint

and several, shall be in addition to any liabilty which YOll may otherwise have. sba1 not be
limited by my rights we or any other Indemnified Person

may otherwise have and 'shaH be

binding upon and inure to the benfit of any successors, assigns, heirs and j:rsonal
representatives of yourselves, ourelves, and any other IndemnfiedPersons.

You agre that, without our prior written consent (which wil not be unreasonably entry of any judgment in any pem;ling or tli.rea.tene clai, action, proceeding or investigation In respect of which
withheld), you wil not settle, compromise or consent to the

indemnification or contributiOn cO\lld be sought hereundr (WbeUiet- or not We .or any other

Indemnied PersQnS are an actual or poiential party to such. cliiim,aciion. proceeding or

investigation), unless such settJ,ement; compromise .or consent incl.udes, an unconditional release
,of each Xndemnitied Person from all liabilty arsing out of such claim, action, proceeding or investigation. No waiver, imendment or other modification of this agr.eement shall be effective unless in writing and signed by each party to be bound thereby. This agreement and any claim related directly or indirectly to this agreerpcilt i;hii1I be governed nd constru,edin ac.cordance

with the laws of the State of New York (without giving regard iothe cont1cts of law pt()vsions

thereof). No such claim shall be commenced, prosecuted oi:contiiiued in any forum other than
ihe coults of the Slate of New York locilted In the City and County of New York or the United, to the jurisdiction of such court. You hereby waive on behalf of yourself andyoursucessors and
States Dis.trIct Court for the Southern Dlsirict of New York, and each of us,hereby submits

assigns any and all right to argue that the choice of forom provision is or bas become'

unreasonable. You (on your own behGlf and, to tIle xtent permitted by applicable lw, nbehlt of your secuiityholders and creditors) waive 'all right to tral by jury in an:y action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to, arising out of orin

Pacfic Energy Resourccst Ltd.

IndemficatiOn lAtter
Decmbe 19,2008.
Page 3:

connecon with ourenagemcmt. This a.greeent shall rei~n in efect indefitely,

notwthtading any tennt10n or expiration of our engagement.

Ver try yours,

LAZA FRES 8r CO. LLC

./

By

AGREED TO AN ACCEPTED
as of the date first
above wrtten:

PACIFICENEJtGY R.ESOT.CES, LTD.,

on behalf ofitselt and ts controlled subsidiares

By,

Daren Katie President

Pacific Energy Resourc.es,Ltd. IndeniifcatiQIl Lettei:

December 19, 2Od8
Page 3

connection with our engagement. This agreement shaH remain 10 effect indefinitely,
notwithstanding any terinIiiiitIOl1 r expiration of our engagement.

Very tiuly yours,

LAZARD FRERES & CO. LLC

By;

John Rutherford
Managing. D1retor

AGREED TO AND ACCEPTED as of the date first

above written:

PACIFC ENERGY RESOURCES. LTD.,

00 behalf of itself and itscontroIled S sidiaries

By
Darren Katie

President

EXHIBIT C

Retention Order

IN TH UNITED STATES BANKUPTCY COURT

FOR TH DISTRICT OF DELAWAR

In re:
P AClFIC ENERGY RESOURCES L TO., el al. i
)

Chapter I I

Debtors.

) ) ) )

Case No. 09-10785 (.KC) (Jointly Admnistered)

Related To Docket No. 171

CONSENT ORDER AUTHORIZING TH EMPLOYMNT AND RETENTION OF LAZARD FRRES & CO. LLC AS INSTMENT BANKER AN
FINANCIAL ADVISOR TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE PURSUANT 'f0 11 U.S.C. 327(a) AN 328(a). FED. R. BANKR. P. 2014 AND 2016. AND DEL. BAN~ L.R. 2014-1
the above-captioned debtors

Upon the application (the "Application,,)2 of

(collectively, the "Debtors") for entr of an order (the "Order") pursuant to sections 327(a) and

328(a) of the Bankptcy Code, Banptcy Rules 2014 and 2016, and Local Rule 2014-1.

authorizing the Debtors to employ and retain Lazad Frres & Co. LLC ("Lazard") as investment
banker and financial advisor to the Debtors nunc pro tunc to the petition date (the "Petition

Date") on the term set fort in the engagement letter between Debtors and Lazd, dated as of
April 30, 2009 (the "Second Amended Engagement Letter") attached hereto as Exhibit "1", and
the related indemnification agreement of even date (the "IndenmificatiOn Letter" and. together

with the Engagement Letter, the "Second Amended Latard Agrement"); and upon the
Declaration of Gerr Tywoniuk in Support of

the Firt Day Pleadings; and upon consideration of

i The Debtors in these cases, along with the last four digits of each of the Debtors' federl ta identification

munber, are: Pacific Energy Reurces Ltd. (3442); Petraeal Acquisition Corp. (6249); Pacific Energy Alasa

Holdings, LLC (ta I.D. # not available); Cameros Acquisition Cor. (S866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5%3). The mailing address for all of the Debtors is i It W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. 2 Capitalized terms used herein but not defined herein shall have tbe meanings ascribed to such term in the Application.

68773.002\DOCS_LA:20 i 654. i

the Declaration of Ar N. Letkovits in support of

the Application; and tbe Cour being satisfied

that the relief requested herein and the employment of Lazad is necessar and in the best

interests of the Debtors' estates, their creditors, and other pares in interest; and Lazard having

represented to the U.S. Trustee and ths Cour that it does not hold debt or equity
securities of the Debtors for its own account; and the Court having

jurisdiction over th matter

pursuant to 28 U.S.C. 1334; and it appearg that this proceeding is a core proceeding pursuat
to 28 V.S.C. lS7(b)(2); and it appearing that venue of

this proceeding is proper pu.rsuant to

28 U.S.C. 1408 and 1409; and the Court being satisfied that notice of

this Application and

opportmity for a hearng On this Application was appropriate under the paricular circumtances
and that no other or further notice need be given; and the Court

being satisfied that Lazard

neither holds nor represents any interest adverse to the Debtors' estates with respect to the

matters upon which it is to be employed; and the Cour being satisfied that Lazrd is a
"disinterested person," as that term is defined in Bankrptcy Code section 101(14) of

the

Bankrptcy Code; and after due deliberation and suffcient cause appearing therefor, it is hereby

ORDERED, that the Application is grted as modified below; and it is further

ORDERED, that, as modified by this Order, in accordance with Banptcy Code

sections 327(a) and 328(a), Bankrptcy Rules 2014 and 2016, and Local Rule 2014.1, the

Debtors are authorized to employ and reta Lazd in accordance with the term and conditions
set fort in the Lazard Agreement, as modified herein, effective nunc pro tunc to the Petition

Date; and it is fuer

ORDERED, that, subject to the following "ORDERED" pargraph of

this Order,

an of

Lazard's fees and expenses in these cases, including, without limitation, the Monthly Fee,
2

68773-002\DOCS_LA:201654.1

the Sale Transaction Fee, the Financing Fee and the Testiony Fee (each as dermed in the

Second Amended Engagement Letter), are approved pursuant to Banptcy Code section

328(a); and it is fuher

ORDERED, that, notwithstading anytg to the contrar in this Order, the U.S.
Trustee shall retain the right and be entitled to object to the Monthy fees, the Sale Transaction
Fee, the Financing Fee and the Testimony Fee based on the reasonableness stadard under

Bankruptcy Code sections 330 and 331. The Debtors and Lazard fuher stipulate and agree that
this Order and the record relating to the Cour's consideration of

the Application shall not

prejudice or otherwise affect the rights of

the U.S. Trustee to challene the reasonableness of

Lazard's compensation under Banptcy Code sections 330 and 331. Accordigly, nothg in

this Order or the record shall constitute a finding ot fact or conclusion of law bindig on the U.S.
Trustee, on appeal or otherwise, with respect to the reasonableness of Lazard's compensation;

and it is further

ORDERED, that Lazd shall fie fee applications for monthly, interim and finl
allowance of compensation and reimbursement of expenses pursuat to the procedures set fort

in Bankruptcy Code sections 330 an.d 331 , the Bankruptcy Rules. the Local Rules. and any

other

appllcable procedures and orders of the Cour; provided, however, tht Lazard shall be
compensated and reimbursed consistent with the two prior "ORDERED" paragrphs of this
Order; and it is further
ORDERED, that the Debtors are authorized to pay Lazad's fees and to reimbure

Lazard for its costs and expenses as provided in the Second Amended Lazrd Engagement Letter
in accordance with the monthly, interim and final fee application process approved by ths Cour,
3
68773-002\DOCS_LA:20 16S4.1

and none of

the fees payable to Lazard shall constitute a "bonus" or fee enhncement under

applicable law; and it is furter

ORDERED, that, notwithstading anyting to the contrar in this Order, Lazd

sball not seek reimbursement for the fees and expenses of its counsel that were incurrd in
connection with the prosecution of

this Application; and it is furer

ORDERED, that, notwithstanding anyting to the contrar in the Banptcy

Code, the Banptcy Rules, the Local Rules, orders of this Cour or any guidelines regarding
submission and approval of fee applications, in tight of serices to be provided by Lazard and the
structure of

Lazard's compensation pursuant to the Second Amended Engagement Letter, Lazad

and its professionals shall be granted a limited waiver of the informtion requirements set fort
in Local Rule 2016-2 to keep time records in Y2 -hour increments; and it is fuer
ORDERED, that, nothing in the Application, the Lefkovitz Afdavit, or the
Second Amended Engagement Letter shall be constred to authorie the sharng of compensation
in contrvention of

Banptcy Code section 504; and it is furher

ORDERED, that pargraph 4 oftbe EnKagement Letter shall not preclude this

Court frm ordering appropriate remedies in the event that these cases are found to be
administratively insolvent: and it is further
ORDERED, that notwithstading anytng to the contr in the Second

Amended Engagement Letter, the Committee and the DIP Lenders shall have the abilty, prior to
the payment of any Sale Transaction Fee, to object to the detennnation tht a third-part offer is

"bona fide" and nothing contained in this Order shall be deemed to operate as a waiver of such
right to object.
4
68773-002\DOCS_LA:20 1654.1

ORDERED, that the provisions set fort in the Indemnification Letter are
approved, subject during the pendency of

these cases to the following:

subparagrph (d), in, the Debtors are

(a) subject to the provisions of

authorized to indeniify, and to provide contrbution and

reimburement to, and shall indenuify, and provide contrbuton and

reimburement to, the Indemnified Persons (as dermed in the Indemnification Letter) in accordance with the Indemnification Lettr for any claim arising from, related to, or in connection with the services provided for in the Second Amended Engagement Letter;
(b) notwithstading any provisions of

the Indemification Letter to the contrry, the Debtors shall have no obligaton to indemnfy Lazrd or

provide contrbution or reimburement to Laard (i) for any claim or expense that is judicially determned (the determination having

become final) to have arsen from Lazad's bad faith, self-dealing, breach of fiduciar duty (if any), wilful misconduct or gross negligence, (ii) for a contractu dispute in which the Debtors allege the Cour detennines Lazrd's contractual obligations if the breach of that indemnification, contribution, or reimbursement would not be
pennssible pursuat to In re United Arists Theatr ComDany. et. aI., 31 S F.3d 217 (3d Cir. 2003), or (ii) for any claim or expense that is

settled pror to a judicial determnation as to the exclusions set fort in

clauses (i) and (ii) above, but determined by the Cour after notice and

a hearing pursuant to subpargraph (d), infa, to be a claim or expense for which Lazrd should not receive indeIIity, contnbution or reimbursement under the terms of the Indemnification Letter. as modified by this Order;
(c) if, during the pendency of the Debtors' cases, the indemnification is
held unenforceable by reason of

the exclusions set fort in

subparagraph (b) above and Lazard makes a claim for the payment of any amounts by the Debtors on account of the Debtors' contrbution the obligations, then the proviso set fort in the second sentence of contribution provisions in the Indemnification Letter shall not apply; and

(d) if. before the earlier of (i) the entr of an order confinTing a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entr of an order closing these cases, Lazrd believes that it is entitled to the payment of any amounts by the
Debtors on account of the Debtors' indemnfication, contrbution,

and/or reimbursement obligations under the Indemification Letter. as modified by ths Order, including without limitation the advancement of defense costs, Lazard must file an application therefor in ths Court,
and the Debtors may not pay any such amounts to Lazrd before the

5
6~773-O()2\IJS _LA :2016$4.1

entr of an order by this Cour approving the payment. This

time during which the Court shall have jurisdiction over any request for
subparagraph (d) is intended only to specify the period of

compensation and expenses by Lazrd for indemnfication

contribution, or reimbursement and is not a provision limiting the

durtion of

the Debtors' obligation to indemnfy Lazard; and it is

furter
ORDERED, that nothing in this Order shall be deemed to affect any and all rights
that the Committee or any part-in-interest may have to seek avoidance, pursuat to Chapter 5 of

the Banptcy Code, of any prepetitjon payments made by the Debtors to Laz and all such
rights are hereby expressly preserved, and it is fter

ORDERED, that the Debtors ar authori, empower and directed to take all
actions necessary to implement the reller granted puruant to ths Order; and it is furter

ORDERED, that, durng the pendency of

these cases, ths Cour shall retain

Jurisdiction with respect to all matter arsing from or J.

Dated: May , , 2009

6
68713-002\DCS_LA:20 1654,1

EXHIBIT D
Details of Hours Expended

Pacific Energy Resources, Inc. Lazard Frres & Co. LLC

September 1, 2009 - September 30, 2009

Summary of Services Rendered by Project

Project #

Project Description
Interface with Professionals, Offcial Committees, and Oter Paries-In-Interest

Sep
0.0 0.0 0.0 0.0 0.0 0.0
10.5

2
3

4
5

Business Operations Planning, Monitoring, Reporting and Analysis, and Projections Preparation and/or Review of Cour Filngs Cour Testimony/Deposition and Preparation Valuation Analysis
Capital Strctue Review and Analysis

6
7
8

9
10

iI

Merger & Acquisition Activity Financing Including DIP and Exit Financing General Corporate Finance, Research and Analysis, and Other Due Dilgence Fee Application, Engagement Employee Retention Program

0.0 0.0 0.0 0.0

10.5

TOTAL
Summary of Services Rendered by Professional

Name
Robert Lynd, Associate

Sep
10.5

TOTAL

10.5

Pacific EDerg Resources, IDt.

Time Detal

La Frres & Co. LLC

Robert Lynd - Associate

Date:
09/08/09 09/08/09 09/09/09
09/1 0/09

AK Sale Update Call Cook Inet Energy Bid Discussion Group I Assets Conference Cal
Group 1 Call

09/14/09 09/14/09 09/17/09 09/22/09 09/24/09 09/29/09

Cook Inlet Statu Call

Pacifc Energy Cal

Weekly Update Call

1.0 1.0 1,0 1.0 1,0 1.0

7 7 7 7 7
7 7 7 7

i.

Weekly Update Call Weekly Update Call

Weekly Update Call

1,0 1.0 1.0

SEPTEMBER HOURS

10.5

EXHIBIT E
Fee Calculation

Pacific Energy Resources Ltd. Monthly Fee Application Lazard Frres & Co. LLC
September 1, 2009 - September 30, 2009

Fee Calculation

Item
Monthy Fees: September 1,2009 - September 30,2009

Amount Incurred
$ 1 00,000.00

TOTAL

$100,000.00

Summarv of Out-or-Pocket Expenses (I)

Item
Car Services and Taxis
Employee Meals

Amount Incurred
$13.20 47.31 4,364.71

Travel

TOTAL

$4,425.22

(1) Additional expense detail wil be funished upon request.

Pacific Energy-Sept 09.XLS

Expense Detail

LAZARD
DEAL OPEN ITEMS BY CATEGORY
ALL EXPENSES

HOU00150 - Pacific Energy Resources LTD.

Currency: USD - us Dollar

EXPENSE TYPE OPENIG BALANCE

TRAS DATE DESCRITION

1/111900

BALANCE
0.00

Car Services and Taxis

Marin-Lazdlome 07/21/2009
Marin-Lazd/clien meeng 07/31/2009

9/3/2009 9/3/2009

Subtota:
9/4/2009 9/4/2009

7.05 6.15 13.20

Employee Meals

Lynd-PREGO 88430012080 HOUSTON TX 07/21/2009 Lynd-PIZZITOLAS BAR B CU HOUSTON T 07/14/2009

Subtotal:

25.00
22.31 47.31

Travel

Lynd-CONTTAL Coach IAHILGAIAH 08/19/2009

Lynd-CONTTAL Coach IA LGAIAH 07/30/2009

Lynd-CONTINTAL AIRINS Coach, LGA to IAH 07/21/2009 Lynd-TI BENJAMI NY $237.00/night x 2 nights 08/03/2009

8/27/2009 8/27/2009 8/27/2009 8/27/2009 8/27/2009 8/27/2009

Lynd-MAOTT NEW YORK - lnt. ~359 07/21/2009

Lynd-LilRARY HOTEL NEW YORK - 1 nt. (g $289 07/20/2009 Lynd-BUSH lN ARPRT HOUSTON - parking 08/0212009 Lynd-AMRICAN EXPRESS E TICKET FEE 08/19/2009 Lynd-AMERICAN EXPRESS E TICKET FEE 07/21/2009 Lynd-AMRICAN EXPRESS E TICKET FEE 08/30/2009 Lynd-CON1l AL ELEC TICKElNG HOUS 07/221009

812/2009
8/27/2009 8/27/2009 8/27/2009 8/27/2009 8/27/2009

1,480.80 1,480.80 622.40 556.54 413.66 333.71 54.00 36.00 36.00 36.00 32.20

Lynd-CONTINTAL AIRINS NEW YORK 08/31/2009

Subtotal:

(717.40) 4,364.71

CLOSING BALANCE as of 9/30/2009

4,425.22

IN THE UNITED STATES BANKRUPTCY COURT

In re: )
STATE OF DELAWARE )
) ss:

FOR THE DISTRICT OF DELA WARE

Chapter 11

PACIFIC ENERGY RESOURCES LTD., et al., i )

Case No. 09- 10785 (KJC)

Debtors. )

(Jointly Administered)

AFFIDAVIT OF SERVICE

COUNTY OF NEW CASTLE )

Kathleen Forte Finlayson, being duly sworn according to law, deposes and says

that she is employed by the law firm of Pachulski Stang Ziehl & Jones LLP, attorneys for the
Debtors in the above-captioned action, and that on the 22nd day of

December, 2009 she caused a

copy ofthe following document(s) to be served upon the parties on the attached service lists in
the manner indicated:

Notice and Fee Application of Lazard Freres & Co. LLC as Investment Banker and Financial Advisor for the Debtors for the Period September 1-30,2009

DEBR L. YOUNG
NOTARY PUBLIC

STATE OF DELAWAR

.. -ii 11J1~. .. Ju 11, 201

i The Debtors in these cases, along with the last four digits of each of

the Debtors' federal tax

identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros
Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of

the Debtors is 111 W.

Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

Pacifc Energy Resources Ltd.

Hand Delivery
(Counsel to Official Committee of

Fee App Service List

Case No. 09-10785
Document No. 147432

Unsecured

03 - Hand Delivery 06 - First Class Mail 01- Overnight Delivery

Creditors) David B. Stratton, Esquire James C. Carignan, Esquire Pepper Hamilton LLP
Hercules Plaza, Suite 1500

01 - Interoffice Pouch

1313 Market Street Wilmington, DE 19899

(Counsel for Debtors) Laura Davis Jones, Esquire James E. O'Neil, Esquire Kathleen P. Makowski, Esquire Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705

First Class Mail (Debtors)

Mr. Gerry Tywoniuk Senior Vice President & CFO Pacific Energy Resources
111 We. Ocean Boulevard, Ste 1240

Long Beach, CA 90802

Interoffice Pouch to Los Angeles (Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire Scotta E. McFarland, Esquire Pachulski Stang Ziehl & Jones LLP
10100 Santa Monica Blvd., 11 th Floor

First Class Mail (Debtors)

Mr. Scott W. Winn Senior Managing Director Zolfo Cooper
1166 Sixth Avenue, 24th Floor

New York, NY 10026

(via First Class Mail) (The Fee Auditor) Warren H. Smith Warren H. Smith & Associates, P.C. Republic Center
325 N. St. Paul, Ste 1250

Los Angeles, CA 90067

Hand Delivery (United States Trustee) Joseph McMahon, Esquire Office of the United States Trustee 1. Caleb Boggs Federal Building 844 North King Street, Suite 2207
Lockbox 35

Dallas, Texas 75201

First Class Mail

(Counsel to Offcial Committee of

Wilmington, DE 19801
Hand Delivery (Copy Service)
Parcels, Inc.

Unsecured

Credi tors)

Vito i. DiMaio 230 N. Market Street Wilmington, DE 19801

Francis J. Lawall, Esquire Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, P A 19103

First Class Mail

(counsel to Official Committee of Unsecured Creditors) Filiberto Agusti, Esquire Steven Reed, Esquire Joshua Taylor, Esquire Steptoe & Johnson LLP 1330 Connecticut Avenue NW Washington, DC 20036

First Class Mail

(counsel to Official Committee of Unsecured Creditors) Robbin Itkin, Esquire Katherine Piper, Esquire Kelly Frazier, Esquire Steptoe & Johnson LLP
2121 Avenue of

the Stars, 28th Floor

Los Angeles, CA 90067

Overnight Delivery

the Fee Auditor) Ms. Melanie M. White Warren H. Smith & Associates, P.C. Republic Center
(Office of

325 N. St. Paul, Ste 1250

Dallas, Texas 75201

68773-00J\DOCS_DE: 147432. I