IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

)
)

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

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

)

Hearing Date: June 28, 2011 at 1:00 p.m. Objection Deadline: March 10, 2011, at 4:00 p.m.

NOTICE OF FILING OF FINAL FEE APPLICATION FOR ALLOWANCE AND PAYMENT OF SUCCESS FEE IN ACCORDANCE WITH THE ORDER APPROVING THE SERVICES AGREEMENT OF ZOLFO COOPER MANAGEMENT, LLC AND SCOTT W. WINN AS CHIEF RESTRUCTURING OFFICER TO THE DEBTORS FOR THE PERIOD MARCH 9, 2009 THROUGH DECEMBER 15, 2010 TO: (i) United States Trustee, (ii) the Debtors; (iii) counsel to the Debtors, (iv) counsel to the Official Committee of Unsecured Creditors; and (v) other service parties set forth in the Interim Compensation Procedures Order entered in this case.

Zolfo Cooper Management, LLC ("Zolfo") and Scott W. Winn as chief restructuring officer to Pacific Energy Resources Ltd.., et al. (the "Debtors") has filed the attached Final Application of Zolfo Cooper Management, LLC and Scott W. Winn for Allowance and Payment of Success Fee in Accordance with the Order Approving the Services Agreement for the Periodfrom March 9, 2009 through December 15, 2010 (the "Application") with the United States Bankruptcy Court for the District of Delaware, 824 Market Street, Wilmington, Delaware 19801 (the "Bankruptcy Court"). Pursuant to the Application, Zolfo seeks

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 I.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.

compensation for services rendered to the Debtors in the amount of $1,000,000.00 (the "Success Fee") and reimbursement of costs incurred upon the Debtors behalf in the amount of $0.00 (the "Application"). Objections or responses to the Application, if any, must be made in writing, filed with the United States Bankruptcy Court for the District of Delaware, Marine Midland Plaza, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801 no later than March 10, 2011, at
4:00 p.m. prevailing Eastern time.

Objections or other responses to the Application, if any, must also be served so that they are received not later than March 10, 2011, 4:00 p.m., prevailing 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 Ziehi & Jones LLP, 919 North Market Street, 17th Floor, Wilmington, DE 19899-8705, Attn: James E. ONeill, Esq.; Fax: 302-652-4400, e-mail: joneill@pszjlaw.com and (2) Pachuiski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 1 1th Floor, Los Angeles, CA 90067-4100; Attn: Ira D. Kharasch, Esq.; Fax: 310-201-0760, e-mail: ikharashcpszilaw.com (c) the Office of the United States Trustee, J. 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 of the 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: can gnan(pepperlaw.com (the "Notice Parties")

A HEARING ON THE APPLICATION shall occur on June 28, 2011 at 1:00 p.m. before The Honorable Kevin J. Carey, at the United States Bankruptcy Court, 824 Market Street, 5th Floor, Courtroom No. 5, Wilmington, Delaware. IF YOU FAIL TO RESPOND OR OBJECT IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR HEARING. Dated: February 18, 2011 PACHULSKI STANG ZIEHL & JONES LLP

/s/ Scotta E. McFarland Ira D. Kharasch (CA Bar No. 109084) Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) Robert M. Saunders (CA Bar No. 226172) James E. ONeill (DE Bar No. 4042) Kathleen P. Makowski (DE Bar No. 3648) 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Telephone: 302/652-4100 Facsimile: 310/652-4400 Email: ikharasch@pszjlaw.com smcfarland@pszjlaw.com rsaunders@pszjlaw.com joneill@pszjlaw.com kmakowski(pszi law.com Counsel for Debtors and Debtors in Possession.
68773-003\DOCSDE: 167978.1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

III

re:

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

PACIFIC ENERGY RESOURCES LTD, et aL, )

)

Debtors.

APPLICATION OF ZOLFO COOPER MANAGEMENT, LLC AND SCOTT W. WINN FOR ALLOWANCE AND PAYMENT OF SUCCESS FEE IN ACCORDANCE WITH THE ORDER APPROVING THE SERVICES AGREEMENT Name of Applicant: Authorized to Provide Professional Services to: Date of Retention: Period for which compensation is sought: Amount of compensation sought as actual, reasonable and necessary: Amount of Final Expense Reimbursement sought as actual, reasonable and necessary: __________ Zolfo Cooper Management, Li.0 and Scott W. Winn Debtors and Debtors-in-Possession Effective as of March 9, 2009 March 9, 2009 through December 15, 2010 $1,000,000 Success Fee Not applicable

The Debtors in these cases, along with the last tour 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. I not available); Carneros Acquisition Corp. (5866): Pacific Energy Alaska Operating LLC (7021): San Pedro Bay Pipeline Company (1234); Carneros Energy, Inc. (9487); and Gotland Oil, mc, (5463). The mailing address for all of the Debtors is Ill W. Ocean Boulevard, Suite 1240. Long Beach, CA 90802.

IN THE UNflEl) STATES BANKRUPTCY COURT FOR THE I)ISTRICF OF DELAWARE In PACIFIC ENERGY RESOURCES LTD., et al, Debtors Chapter 11 Case No. 09-10785 (KJC) (Jointly Administered)

APPLICATION OF ZOLFO COOPER MANAGEMENT, LLC FOR AN ORDER FOR ALLOWANCE AND PAYMENT OF SUCCESS FEE

Zolfo Cooper Management, LLC ("Zolfo Cooper") hereby moves the Court by this application ("Application"), for allowance and payment of a success lee in the amount of $1 ,000,000 ("Success Fee") in accordance with the Services Agreement ("Services Agreement") dated as of March 4, 2009, as amended by Amendment to Agreement dated April 10, 2009 ("Amendment") by and between the Debtors. Scott W. Winn ("Mr. Wino"), and Zolfo Cooper (with the Services Agreement and Amendment hereafter, collectively referred to as the "Agreement"), and as modified by the Order Approving The Services Agreement Between The Debtors, Zolfo Cooper Management. LLC And Scott W. Wino, Nunc Thu Tunc To The Petition Date, entered on May 1, 2009 (the "Retention Order"), a copy of which is attached hereto as Exhibit A. In support of the Application, Zolfo Cooper respectfully represent as follows:

The Debtors in these cases, along with the last thur digits of each of the Debtors federal tax identification number, arc: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax I.D. # not available); Carricros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Carneros Energy, Inc. (9487); and Gotlaiicl Oil, Inc. (5463). The mailing address for all of the Debtors is Ill W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

Background

A.

General Background

1.

The Debtors were a group of independent energy companies engaged in

the acquisition, development and exploitation of oil and gas properties in the western United States. 2. The Debtors oil and gas assets were located offshore near California, and

onshore and offshore in Alaska. The Debtors acquired their oil and gas assets in transactions occurring in the fourth quarter of -2006 and during 2007, and their secured debt was related to these acquisitions. The Debtors revenue was largely dependent on the market price for the underlying crude oil produced, in addition to the level of production. Their revenue for 2008 was approximately $226.2 million. 3. On March 9, 2009 (the "Petition Date"), the Debtors filed voluntary

petitions in this Court for relief under chapter 11 of the Bankruptcy Code. The factual background regarding the Debtors, including their business operations, their capital and debt structure and the events leading to the filing of the chapter 11 cases, is set forth in detail in the Affidavit of Gerald A. Tywoniuk, Chief Financial Officer of Pacific Energy Resources Ltd., In Support of First Day Motions. 4. The Debtors continued to operate their businesses and manage their
pOSSeSSiOn

properties as debtors in

under sections 1107 and 1108 of the Bankruptcy Code. No

trustee or examiner was appointed in these chapter I cases. The Committee oft nsecured Creditors was appointed on March 19, 2009. 5. On December 15, 2010, the Court entered a Confirmation Order approving

the Plan. On December 23, 2010, the Plan became effective (the "Effective Date").

6.

This application is made pursuant to the Agreement and the Retention

Order approving the Agreement.

Zolfo Coopers Retention and Compensation Arrangement

7.

The Retention Order authorized the Debtors to retain Zolfo Cooper and

the services of Mr. Winn as a Chief Restructuring Officer. Under the Agreement, Mr. Winn was authorized to make decisions with respect to all aspects of the management and operation of the Debtors businesses, including without limitation, organization and human resources, marketing and sales, logistics, finance and administration and such other areas as Mr. Wino may identify, in such a manner as he deems necessary or appropriate in his sole discretion in a manner consistent with the business judgment rule, the provisions of local law, and the Bankruptcy Code applicable to the obligations of persons acting on behalf of corporations, in connection with the chapter 11 cases, and in accordance with the terms of the Agreement and the Retention Order.
Summary of Transaction Fee Request:

Additionally, the Agreement and the Retention Order, provided, inter alia, that Zolfo Cooper was to he paid a Success Fee of $1,000,000 upon the following: 2 Success Fee 3. (a) A Success Fee of One Million Dollars ($1,000,000) shall he payable in cash upon the confirmation of a plan which is consented to by the lenders or consummation of a sale under 363 of the Bankruptcy Code which occurs on or prior to the expiration of the Debtor in Possession ("DIP") financing which is anticipated to expire in September 2009, as may be extended ("DIP Fxpiration"). (b) Notwithstanding anything to the contrary in the previous paragraph. a Success Fee shall not be payable "upon the consummation of a sale under 363 of the Bankruptcy Code which occurs on or prior to the expiration of the Debtor in Possession ("Dill") financing which is anticipated to expire
Under the Retention Order, the Success Fee could be increased to $1,250,000 if certain milestones were met. Zolfo Cooper is not seeking approval of the incremental Success Fee.

in September 2009, as may be extended (the "DIP Expiration")" unless the sale includes the sale of (i) substantially all of the Bela Assets, (ii) substantially all of the Alaska Assets or (iii) substantially all of the Debtors Assets. For the avoidance of doubt, Zolfo Cooper shall he entitled to only one Success Fee regardless of the number of sale transactions. (c) Additionally, the Debtors, the Committee and the Lenders waived their rights to challenge the reasonableness of the Success Fee. As the Court is aware, the Plan, which was consented to by the Lenders, was confirmed on December 15, 2010. Additionally, a sale under 363 of the Bankruptcy Code (which included a sale of substantially all the Beta Assets, Alaska Assets and all the Debtors Assets) was consummated prior to the expiration of the DIP Financing, which was due to expire on December 15, 2010. Therefore, all of the elements of 3a. of the Retention Order have been satisfied. 10. Additionally, the exceptions of 31. of the Retention Order are not

triggered because the DIP was in place at the time of the 363 sale. Nevertheless, we point out that the 363 sale constituted a sale of substantially all of the Beta Assets and a sale of substantially all of the Debtors Assets. Moreover, it can even he argued that the 363 sales constituted as sale of substantially all the Alaska Assets. 11 For all the foregoing reasons, Zolfo Cooper has met the requirements

necessary and has earned the Success Fee described hcicin.

Summary of Significant Accomplishments and Professional Services Rendered

12.

The retention of Mr. Winn and Zolfo Cooper proved exceptionally

valuable to Pacific Energys restructuring process. Mr. Winn and the Zolfo Cooper learn were instrumental in efficiently designing and effectuating a successful prOCCSS that led to plan confirmation. Zolfo Coopers efforts were invaluable in that we crafted a solution in the face of

i) Debtors which had lost all credibility with their stakeholders, ii) two secured lenders in the case, J. Aron & Company, a Goldman Sachs affiliate ("J. Aron"). and Silver Point Finance, LLC ("Silver Point", and .1. Aron and Silver Point hereafter each individually referred to as "Lender" and collectively referred to as the "Lenders"), with vastly different and opposing perspectives on the outcome of the case, and iii) a series of other operating, regulatory, environmental and litigation challenges. This result could not have been achieved without Zolfo Coopers unique approach in continually driving the process forward while overcoming the constant obstacles and unanticipated roadblocks. 13. Zolfo Cooper was first retained approximately 2 /2 months prior to the

Petition Date. At that time this appeared to be a straightforward matter Debtors with uncomplicated businesses, only 2 secured lenders and a relatively simple capital structure. However, within several days of our arrival, we became acutely aware of the problems facing the Debtors attempted reorganization efforts that arose from the standoff between the Lenders regarding the way in which the Debtors should proceed to reorganize. There was complete disharmony between and among the Debtors and each of the Lenders as a result of the Lenders concerns over the Debtors performance and the Lenders different objectives with respect to asset disposition. This translated to the Lenders allowing the Debtors to operate only under an extremely tight and short (effectively a week-to-week) budget which threatened the very ability to restructure, Since each Lender held approximately fifty percent of the scented debt on the Debtors assets, neither Lender could force an outcome upon the other against its will. The Debtors were cffective]y sitting on the sidelines while the Lenders debated with each other over the asset disposition. All of these factors had resulted in an inability to develop an approach to the case.

14.

After immersing ourselves in the Debtors businesses and understanding

the various operations, our next priority was to fully understand and analyze each of the Lenders positions. Each of the Lenders had wholly opposing views of the way in which the Debtors should proceed with respect to the material assets and the overall outcome of the case. It became clear to us that while Silver Point was much more willing to explore the possibility of restructuring alternatives to a sale process, J. Aron was much more inclined to move straight to a sale. Understanding these differing perspectives, harmonizing their positions and driving the Lenders as well as other parties in interest forward was critical to a successful outcome. 15. With the understanding of the Lenders divergent agendas and desires with

respect to the ultimate outcome, we concluded that the strategy had to he a two-track approach to he pursued simultaneously with respect to both the Alaska Assets and Beta Assets. The Lenders were not going to agree at the outset on a path, so presenting the two most likely paths for each of the Alaska Assets and Beta Assets was the only way to move the Lenders toward resolution. 16. With respect to the Beta Assets, we realized that in order to move the

restructuring forward, we had to explore and develop both a sale and restructuring alternative simultaneously. We concluded that a 363 sale effort, with the inherent statutory process it forces, was essential to bring the Lenders to the table to discuss and negotiate an outcome suitable for both parties. Yet for either the sale or restructuring strategy to be successful, we first had to understand the investment requirements in terms of the maintenance, development and production levels that would he needed to achieve these outcomes. Zolfo Cooper worked alongside the Debtors to develop strategic alternatives within the budgetary and time constraints, and recommended certain courses of action. We provided valuable assistance in the planning, analysis and projections needed to support and facilitate both a 363 sale and reorganization.

Again, not only was Zolfo Cooper instrumental in conceiving the two-track strategy with respect to the Beta Assets, but significantly, Zolfo Cooper was the party that was able to drive each of the Lenders forward and to resolution and agreement on how to restructure the Beta Assets. Zolfo Cooper achieved this Lender harmony by first moving the Lenders forward on each of their separate agendas and strategies and later, as the process developed, by forging the Lenders positions into agreement. Ultimately, the parties completed a restructuring through a sale to the Lenders. 17. With respect to the Alaska Assets, the Debtors had to be ready to abandon

the assets if it were unable to locate a buyer. It was critical for us to proceed along both a sale and abandonment track parallel because the budget for Alaska was essentially month-to-month and it was conceivable that the Debtors could simply lose their funding without sufficient notice and ample time to then begin an orderly wind down. Therefore, we executed on a sale process, including negotiating the transactions and at the same time preparing the Debtors and shareholders for a possible abandonment, including (i) working closely with the Alaska stakeholders to ensure a smooth transition of responsibility, (ii) drastically reducing the potential environmental issues associated therewith, and (iii) insuring the protection of the assets through an orderly shut-in of the facilities. Again, our significant efforts were working alongside counsel to develop the two-track strategy, continuously working with the Lenders to keep the financing in place and ultimately moving the Lenders in the direction of a sale of certain of the Alaska Assets and abandonment of Certain other of the Alaska Assets. We worked tirelessly to keep the Lenders supportive and focused on continuing to finance the operations and the dual-track strategy.

VA

18.

Implementing these parallel paths was complicated by influences outside

of the Debtors control. These complications affected both the Alaska Assets and Beta Assets, as follows: Alaska - volcanic eruption of Mt. Redoubt which suspended oil shipments in the region throughout the sale process and effectively the entirety of the case; environmental liability issues which overwhelmed the value of the assets in the current economic and oil price environment; the joint ownership of the Trading Bay Unit, Trading Bay Field and the Cook Inlet Pipeline Company assets with Union Oil Company of California and the disputes that arose therefrom; and the multiple lessors, landowners, and regulatory agencies associated with the properties which increased the amount of claims in terms of numbers and amount and the complexity with respect to negotiating a sale or abandonment of the assets. All of these issues presented complications which required intensive effort at a time where we still had Lenders unable to agree on the process and effectively week-by-week financing which threatened the ability to restructure. Beta - assets operating under what was effectively temporary authority by the Minerals Management Services ("MMS") whereby they were allowed to use a repurposed water line to transport natural gas between platforms and the testing of this line resulted in it failing to meet minimum structural requirements which caused the Debtors to temporarily have to flare the produced gas at a high daily cost and risked requiring a full shut in of Eureka platform eliminating over 50% of the Beta oil production; dynamics involving the sellers of the Beta Assets whereby there was a requirement to maintain a huge ($98 million) abandonment account with the MMS to provide for the ultimate plugging and removal of the Beta structures upon the end of the fields useful life, which was complicated by the fact that the sellers were owed over $7 million related to a production carve out from the sale transaction, and which earn out priority was a point of contention throughout the case and complicated any discussions into whether there were any alternate ways to structure that security; employee retention issues which threatened the ability of the properly to continue to operate; and the requirement that the MMS had to approve any sale which compounded the difficulties. Again, all these issues presented complications to a process already complicated by the disharmony between the Lenders. 19. Ultimately the restructuring of the Beta Assets and the sale/abandonment

of the Alaska Assets resulted from a process we forged. That process was one in which we tested the market, evaluated the Lenders assets, dealt with uneconomic Alaska entities and associated complications in Alaska and brought to resolution a reorganization of the Beta Assets, whereby J. Aron exited from the capital structure and Silver Point continued in the

capital structure. This resolution was in the best interests of the Debtors, met both l.,endcrs needs and led to a fully consensual Plan, 20. We delivered significant value to the outcome of this case. Neither the

Debtors, Silver Point, J. Aron, nor any of the other constituents could have successfully driven this case to an outcome on their own. We worked through the strategic, tactical, investment, cash and management issues to bring this to a reasonable and successful outcome that met the needs of all the parties. 21. Mr. Winn and the Zolfo Cooper team rendered significant services that

substantially benefited the Debtors during our approximately 12 month engagement.

Significant Professional Services Rendered

22,

The services that ZC has performed were substantial and necessary in this

Chapter 11 case and added material additional value. ZC performed such services with the minimum amount of duplication with the Debtors other advisors. The following is a summary of significant prolessional services rendered by ZC to the Debtors as part of the bankruptcy process. (a) Accounting / Auditing: (i) ZC worked closely with the Debtors corporate accounting team to provide guidance and assist with closing the Debtors books as of the petition date. ZC provided guidance to aid the Debtors in segregating pre and post-petition liabilities and establishing proper accruals, Additionally. ZC worked closely with the Debtors to analyze a series of comp] icatecl intercompany transactions associated with the acquisition of the Alaska Assets and entities. ZC also worked closely with the Debtors Alaska accounting staff to analyze the status of the royalty accounting for the multitude of overriding royalty interest holders in Alaska.

(ii)

(iii)

The work performed in this category was substantial and necessary and directly supported the Debtors ability to accurately prepare the Statements of Financial Affairs and Schedule of Assets and Liabilities, provided accurate data that was required to support the multiple asset sales processes required by the DIP financing agreement, provided accurate data for the claims reconciliation process, and aided in the general management of the chapter II cases.

(h)

Asset Analysis and Recovery (i) ZC provided guidance and worked closely with the Debtors accounting staff to assemble the voluminous invoice and disbursement data necessary to prepare a preliminary preference analyses. ZC tasks included instructing the Debtors accounting staff to compile the necessary data for each Debtors entities. ZC then spent time analyzing such data and created templates that the accounting staff could use to work through the analysis. ZCs efforts were designed to minimize the hours spent by ZC personnel thereby minimizing the costs to the Debtors Estates. ZCs efforts on the preference analysis identified significant potential recoveries to the Estate. The work performed in this category was substantial and necessary in that the significant potential recoveries identified provided the necessary negotiating currency for the Secured Lenders to reach an agreement with the Unsecured Creditors Committee to remove their objection on the Debtors proposed DIP financing.

(ii)

(c)

Asset Disposition (i) ZC provided guidance and worked closely with the Debtors and their other advisors to develop the sales process and timeline and support the process of data accumulation, data analysis, and data room preparation to support both the Beta and Alaska sales processes. ZC also participated in discussions with the Debts and their advisors to prepare the bidding procedures and a proposed form of purchase and sale agreement which was necessary to expedite the sale PFOCCSS and ensure uniformity between competing bidders, ZC participated in direct discussions with a Chinese bidder which included participating in a trip to Hong Kong to discuss the Opportunity to support a plan of reorganization or purchase the assets. This Chinese bidder was ultimately selected as the winning bidder on the Alaska Operated Assets. III]

(ii)

(iii)

(iv)

ZC participated in discussions and negotiations with other multiple potential bidders. ZC materially participated in discussion on purchase and sale agreements and prepared many of the supporting schedules. ZC participated in organizing data requests from potential bidders and worked with the Debtors to maintain the online virtual data room. ZC look a lead role in developing custom near-term liquidity financial forecasts for multiple potential bidders based on various operating assumptions. ZC coordinated this effort with the Debtors internal staff which maintained primary control of the long term forecast. ZC took the lead role ensuring there was constant and open communications with the Lenders throughout the entirety of the asset disposition processes including participating in regularly scheduled weekly update calls, adhoc calls as required and preparation of reports and demonstrative summary schedules to assist with meeting and calls. ZC also provided guidance and worked closely with the Debtors other advisors to develop an alternative abandonment strategy that ran parallel with the Alaska sale process, such that a failed sale process Would allow for the timely abandonment of certain Alaska Assets to alleviate the burden of negative cash flow from the Alaska operations. As part of this process ZC took a lead role in the development of the operational timeline through numerous discussions with the Debtors technical personnel in Alaska. ZC also worked closely with Debtors Bankruptcy and Oil and Gas counsel to ensure the Estate would he able to overcome any ob]ections to the abandonment in court. ZC prepared multiple presentations and reports and numerous conference calls and meetings addressing the abandonment strategy. ZC also developed numerous budgets that reflected the costs to plug and abandon the wells and prepare the assets to be left idle and led negotiations with the Lenders to fund the budget to effectuate the abandonment, ZC also led discussions with the stakeholders of the abandoned assets and maintained a detailed communication log. These efforts ultimately allowed the Debtors Counsel to successfully argue the abandonment motions in court. ZC, again in parallel to the sale process, developed an asset swap strategy for the Alaska Non-Operated Assets. This strategy would have significantly eliminated the liabilities associated the Alaska

(v)

(vi)

(vii)

(viii)

(ix)

(x)

Non-Operated Assets and would have made the remainder of the assets significantly nioie attractive to potential bidders. (xi) The work performed in this category was substantial and necessary in that the Debtors were ultimately successful in: (i) selling the Beta Assets, (ii) selling the majority of the portion of the Alaska Operated Assets, and (iii) successfully abandoning the Alaska Non-Operated Assets and other remaining properties that represented a liability to the estate pursuant to bankruptcy court authority,

(d)

Business Analysis (i) ZC worked closely with management to understand and explore options for dealing with the Alaska Assets and the Debtors strained relationship with Chevron. ZC developed multiple alternatives for addressing this issue which included asset swap scenarios and potentially trading working interest for royalty interest. ZC worked closely with Management to understand and carefully analyze the costs and benefits of various capital expenditure projects proposed by the operations teams. The projects included spending under three categories of projects: (i) growth spending which were designed to increase the volume of production at the assets and potentially increasing the value of the assets in the sale process, (ii) ongoing maintenance projects and (iii) addressing the deferred maintenance as of the petition date. ZC prepared detailed schedules and analyses of the projects and maintained communication with the Lenders and ultimately was able to gain approval to commence many of the critical projects. ZC developed a comprehensive report outlining the Debtors recommended strategy for addressing the Alaska Assets and eliminating the associated cash burn. ZC led the presentation of this report to the Lenders. 2..0 also provided multiple follow up reports and analysis to support the l)ebtois eventual successful strategy. ZC provided oversight to assist the Debtors in managing the Estates liquidity and in planning for the near term funding requirements. As part of this process ZC reviewed and approved all Debtors proposed disbursements after thoroughly reviewing all invoices to insure no payments were made that would violate the automatic stay or any other court order. Additionally, ZC insured that no disbursements would cause the Debtors to violate their

(ii)

(iii)

(iv)

12

extremely tight financial covenants contained in the DIP credit agreement, (v) ZC performed substantial work in developing and maintaining multiple shortterm and long term cash forecasts, Specifically, Some of the major cash forecasting tasks are described below. However, this list is not all inclusive but merely reflects the significant and recurring tasks performed. (1) Developed the initial DIP cash flow forecast used to size the DIP financing facility. This forecast was also the primary tool used to develop the financial covenants for the DIP financing. Additionally, ZC prepared a revised DIP budget for each of nine DIP amendments. Created and maintained multiple iterations of a stand-alone Alaska Operated Assets cash forecasts. Such forecasts were used to determine the funding needed over various time frames for differing capex build-out scenarios in order to assist the Debtors and their Lenders in developing a plan for the Alaska Assets. This forecast included creating a ground up G&A analysis for the Alaska Assets. The forecast also included profitability by platform so the better performing assets could be analyzed on a stand-alone basis. Assisted the Debtors in developing a long range plan for the Alaska Assets that could be used to help sell the assets to various investor groups. Created and maintained multiple iterations of a stand-alone cash forecast of the Beta Assets to determine the amount of cash produced under different capital spending plans and overhead plans. Worked closely with the Debtors to create numerous accrual based capital expenditure plans. Created detailed cash forecasts for each of the capital expenditure Scenarios. Prepared a weekly report to be the basis of our weekly Update call with the Lenders as required by the DIP credit agreement. Created analyses detailing both production and financial trends. Provided progress updates on various aspects of the bankruptcy and sales process as appropriate. Created a multitude of analyses tracking actual performance versus budgeted performance for each spending category (e.g. lease operating expenses, general and administrative expenses, capital expenditures, 13

(2)

(3)

(4)

(5)

(6)

(7)

professional fees, etc.). Provided explanations for variances from budget for each category. (8) Developed a wind down budget detailing the expenses to be paid by the estate following the transfer of assets to the Lenders under the Lenders credit hid. Analyzed liabilities expected to he outstanding at the estate. Forecasted the cost of professional fees to he incurred by the Estate in completing its wind down. Created numerous iterations to account for the changing timeline for the closing of the Beta Assets credit bid by the Lenders.

(vi)

ZC performed detailed reviews of the reserve reports developed by third party reservoir engineers to understand the affects of the difference assumptions made. Additionally, ZC used data from these reports to enhance many of the financial models that ZC maintained.
ZC prepared a weekly operations and restructuring deck and led a weekly conference call between the Debtors, Lenders and other professionals.

(vii)

(e)

Business Operations (i) ZC worked closely with management to prepare a comprehensive communications package to notify employees, vendors, shareholders, and other stakeholders of the chapter Ii filing. Additionally, ZC coordinated the process for distribution of the communications materials. ZC participated in numerous discussions and strategy sessions regarding the Alaska operations. Specifically, because of vendor issues, particular attention was required to ensure that the assets remained operational. Further complicating this was the volcanic activity at Mount Redoubt which began shortly after the petition date and continued through the summer. This volcanic activity forced the closure of the only feasible sales outlet for the oil produced at the Debtors Alaskan Assets. ZC materially participated in each meeting of the Debtors Board of Directors and provided updates as to the status of the restructuring. ZC worked closely with the Debtors management and operations personnel to identify potential critical vendors and to assist counsel in preparing a critical vendor motion which was ultimately approved by the court.

(ii)

(iii)

(iv)

IEI

M
(vi)

ZC assisted the Debtors in negotiations with the Lenders to fund the I)&O insurance tail policy to protect the officers and directors post-close. ZC spent significant time individually and working with the Alaska accounting staff to understand the Debtors current and future royalty obligations to the overriding royalty interest holders on the Alaska lease interests. ZC developed the timeline and assisted with coordination of the Alaska and Bakersfield office moves and closures. ZC also provided oversight for the de minimus sale of the office furniture at each location and assisted with the negotiation of new lease terms with the landlords.

(vii)

(f)

Case Administration (i) (ii) ZC prepared for and attended hearings in Delaware as required. ZC provided oversight and assisted the Debtors to prepare the Statement of Financial Affairs ("SOFA") and Schedules of Assets and Liabilities ("Schedules") for each of the Debtors entities. Additionally, ZC assisted with the updates and revisions to the SOFAs and Schedules. ZC also prepared a template for the Debtors to use for the Monthly Operating Reports and assisted the Debtors to develop a streamlined process to minimize the burden of preparing the monthly report. ZC Tracked all prepetition payments made by the DebtorS against relevant court filings allowing such payments (e.g. - critical vendor, insurance, employee, etc.) to ensure that limits set by the court were adhered to. Directed the filing of amended motions in order to allow additional payments as necessary. Helped negotiate payment terms with various creditors throughout the bankruptcy process in order to provide additional liquidity to the Debtors. Handled information requests from the Unsecured Creditors Committee ("UCC"). Provided operational and financial details to the advisors for the IJCC in order to assist them in providing comprehensive updates to the UCC. Explained the mechanics of the cash flow forecast and the reasoning behind certain historical and projected flow assumptions.

(iii)

(iv)

(v)

(g)

Claims Administration and Objections

15

(i)

ZC worked closely with the Debtors to a develop a comprehensive listing of potential 503(b)9 administrative claims. Additionally, ZC provided Support to the Debtors primary claims reconciliation efforts. ZC also provided oversight on the project to audit Chevrons joint interest billings for the Alaska Non-Operated Assets in an effort to reduce a portion of Chevrons claim against the Debtors.

(ii) (iii)

(h)

Data Analysis (I) (ii) ZCs primary work in this area was to assist the Debtors in building a comprehensive database of executory contracts. Additionally, ZC performed analysis on the data received by the Debtors royalty distributor related to the Alaska overriding royalty interests. ZC also worked through the raw accounts payable and cash disbursement data when preparing the preliminary preference analysis.

(iii)

(i)

Employee Benefits I Pensions (i) ZC developed a Key Employee Incentive Plan which covered the Executives, management and key operational employees over the course of the Bankruptcy. ZC worked closely with counsel to prepare a reasonable plan that would be approved by the Court and assisted in the negotiation of the plan with the UCC. In preparing the plan, ZC analyzed the historic operating expense and production data and projected lease operating results to create plan incentive benchmarks, Additionally, ZC, through discussion with the Debtors investment bankers and oil and gas broker, developed an expected sales price range for each of the assets to incentivize the executives to maximize the recovery to the Estate. This incentive plan was ultimately approved by the court. ZC also prepared a supplemental Key Employee Incentive and Retention Plan to maintain the appropriate staff while the Alaska Assets were wound down prior to abandonment and throughout the transition to the governmental agencies and landowners of the respective assets. Additionally, ZC prepared schedules detailing the Debtors performance against the key employee incentive plan benchmarks for use in determining the payouts to the employees covered under each of the plans. 16

(ii)

(iii)

(j)

Fee / Fmploymcnt Applications and Objections (i) ZC assisted the Debtors with their negotiations with the other Debtors advisors. ZC was instrumental in the agreement reached between Lazard and Albrecht to eliminate overlap of responsibilities and fees. Additionally, ZC assisted the Debtors to overcome UCC objections to the engagement of its advisors. ZC also coordinated the retention and management of all of the ordinary course professionals.

(ii) (k)

Financing (i) ZC developed a template and accumulated the necessary data on a weekly basis to report the status of operations, the sale processes, and any other developments to the Lenders. This weekly report was a lender requirement that was a condition of the DIP financing. ZC took a lead role in assisting the Debtors in negotiating nine different amendments to the I)lP Credit agreement including preparing and negotiating a revised DIP budget with the Lenders. ZC also took a lead role in developing the other reports required by the Lenders as a condition of the DIP financing. These report included a detailed Alaska Strategy Report and reports on the abandonment strategy. ZC also took a lead role in organizing and preparing data pursuant to numerous Lender data requests.

(ii)

(iii)

(iv) (1)

Litigation Consulting (i) ZC supported the Debtors counsel on numerous occasions to prepare data and respond to data requests related to litigation around the Alaska overriding royalty interest holders.

(m)

lvi ecting of Creditors

(i) (n)

ZC prepared for and participated in the 341 meeting of creditors.

Plan and Disclosure Statement (i) ZC worked closely with the Debtors and their other advisors to construct and present numerous restructuring proposals to the Existing Lenders and potential new lenders.

17

(ii)

ZC developed and presented multiple proposals to the Lenders and potential investors outlining various potential restructuring scenarios some of which were designed to maintain all the Debtors existing assets and some were designed to restructure only subsets of the existing assets.

(o)

Relief from Stay Proceedings (i) ZC worked closely with counsel to develop and analyze the data necessary to perform the lowest intermediate Balance Test Analysis which was necessary in responding to the ORRI holders relief from stay motions. Additionally, ZC assisted the Debtors and Counsel in responding to Chevrons relief from stay motions.

(p)

lax Issues (i) ZC worked closely the Debtors, Debtors tax counsel and Debtors tax advisors to develop multiple transaction scenarios to allow us to understand the tax consequences of each and select the appropriate course of action.

(q)

Valuation (i) ZC spent time reviewing and analyzing the Debtors reserve reports to understand the value assigned to each of the Debtors assets.

Standards of Review

23. the Success

FCC

Zolfo Cooper, LLC hereby represents that the professional Fees sought for

is reasonable under the standards established in Sections 330 and 331 of the

Bankruptcy Code. 24. In particular, under Section 330 (a)(3)(F) of the Bankruptcy Code, the

standard for review for reasonableness of professional IBes is the cost of comparable services in a non-bankruptcy setting. Inasmuch as transaction fees are a normal part of Zolfo Coopers fee structure, both within and outside of bankruptcy, approval Of the Success Fee is appropriate to assure comparable compensation for comparable services.

18

25.

Recent examples of bankruptcy transaction IBes, awarded to firms

providing services to troubled companies, include the following: Enron Corp., a chapter II case in the Southern District of New York. Stephen F. Cooper and ZC were awarded a success fee of$12.5 million. In re Enron Corp., 2006 WL 1030421 (Bankr. S.D.N.Y. 2006). Northwestern Corp., a chapter 11 case in the District of Delaware. Lazard Freres & Co. LLC, financial advisor to the Debtor, was awarded a transaction fee of $2.75 million, "which brings it in the line with the transaction fee of the financial advisors employed by the Official Committee of the Unsecured Creditors." In re Northwestern Corp ., 324 B.R. 538, 547-48 (Bankr. D. Del. 2005), revd, 344 B.R. 40 (D. Del. 2006) (it was error to reduce the fee; full $5.5 million awarded). Warnaco, a chapter 11 Case in the Southern District of New York. Alvarez & Marsal, was awarded a success fee of $2.25 million. Warnaco Proxy Statement, filed April 2003. Farmland Industries, a chapter 11 case in the Western District of Missouri. Houlihan Lokey Howard & Zukin financial Advisors, Inc., financial advisors for the Unsecured Creditors Committee, was awarded a success fee of 1% of the amount distributed to unsecured creditors, with a minimum guaranty of $1 million and a cap of $3 million. In re Farmland Industries, Inc., 286 B.R. 895, 897, n. I (Bankr. W.D. Mo. 2002). cipine Corporation, a chapter II case in the Southern District of New York. AlixPartners was awarded a success fee of $6.0 million. In re Calpine Corp.. Case No. 05-60200 (BRL). SDNY, Order Grantingp_plication of Professionals for Allowance of Eighth Interim and Final Compensation of Services Rendered and Reimbursement of Actual and Necessary Expenses, filed Mar. 27, 2008. Dana Corporation, a chapter 11 case in the Southern District of New York, AlixPartners was awarded a success fee of $4.0 million. In re Dana Corp., Case No. 06-10354 (BRL), SDNY, Order Grantingjplication of Professionals ftr Allowance of ]ntcrim and Final Compensation of Services Ren d ered and Reimbursement of Actual and NccessarExpcpscs, filed May 28, 2008. Bts Holdings, Inc., a chapter II case in the District of Delaware. Zolfo Cooper was awarded a success fee of $750,000. In ic Bullets Holdings, Inc.. Case No.08-10141 (MEW), Certificate ofNo Objection Regarding Docket No. 2539 filed July 21, 2009 Mark IV Corporation, a chapter 11 case in the Southern District of New York. Zolfo Cooper was awarded a success fee of $1.5 million. In re Mark IV Industries. Inc., et al., Case No. 09-12795 (SMB), SDNY, Order Approving

19

Applications for Allowance of Final Compensation and Reimbursement of js tiled December 18, 2009 Flying J Inc., a chapter 11 case in the District of Delaware. Zolfo Cooper was awarded a success fee of $1.8 million. In re Flying J Inc., eta]., Case No. 0813384 (MFW), D. Del,Orders Approving the Applications for Allowance and Payment of Consummation Fees, Filed October 20, 2010 and December 8, 20 10 26. In short, success fees are a normal part of compensation for firms which

provide financial advisory, crisis and interim management and turnaround services to debtors, and may be approved on that basis alone. In addition, Zolfo Cooper respectfully represents that the approval of the Success Fee is both warranted and appropriate because: (i) the Agreement, as modified by the Retention Order, provides for the payment of these fees under the circumstances of this case; and (ii) the Zolfo Cooper team played a significant and critical leadership role in the bankruptcy process that brought about the consensual Plan.

20

WHEREFORE, Zolfo Cooper Management, LLC requests that allowance be made to it in the sum of $1,000,000 as a success fee, and order the payment thereof, and further requests such other and further relief as this Court may deem just and proper. Dated: February, 2011 New York, New York ZOLFO COOPFRMANAGEMENI, LLC

I s/ Scott W. Winn By: Scott W. Winn

VERIFICATION

Scott W. Wirin, under penalty of perury, deposes and says:

1 1 am Senior Managing Director of the applicant firm. Zolfo Cooper Management. LLC ("Zolfo Cooper") 2. 1 have personally performed many of services rendered by Zolfo Cooper, as interim management for the Debtors, and am familiar with all other work performed on behalf of the Debtors by the professionals and paraprofessionals of Zolfo Cooper. 3. The facts set forth in the foregoing Application are true and correct to the best of my knowledge, information and belief.

/s/ Scott W. Winn SCOTT W, WINN

22

EXHIBIT A

42125-00 1\DOCS DE:6375. 1

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ) Chapter 11 Case No. 09-10755 (KJC) (Jointly Administered)

PACIFIC ENERGY RESOURCES LTD., et g ) ) Debtors. )

R6., 1)0(k t

ORDER APPROVING THE SERVICES AGREEMENT BETWEEN THE DEBTORS,

ZOLFO COOPER MANAGEMENT, LLC AND SCOTT W. WINN, NUNC PRO TUNC TO

THE PETITION DATE

Upon the motion, dated March 4, 2009 (the "Motion") of Pacific Energy Resources Ltd. and certain of its affiliates, as debtor and debtors in possession (collectively, the "Debtors"), for entry of an order approving the services agreement as amended pursuant to the Amendment to Agreement dated April 10, 2009 (the "Arreement"), by and between the Debtors, Zolfo Cooper Management, LLC ("Zolfo Cooper") and Scott W. Winn ("Winn") wherein the Debtors shall engage Zolfo Cooper and Winn to provide the Debtors with the services of Winn as Chief Restructuring Officer ("Q" or "Executive Officer"), and additional individuals provided by Zolfo Cooper (the "Associate Directors"), who will perform other services required of Zolfo Cooper and Winn. (as defined in the Agreement); and the Court having found that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; and the Court having found

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 I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Carneros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is 11 1 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and the Court having found that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. 1408 and 1409; and the Court having found that the relief requested in the Motion is in the best interests of the Debtors estates, their creditors and other parties in interest; and the Debtors having provided appropriate notice of the Motion and the opportunity for a hearing on this Motion under the circumstances and no other or future notice need be provided; and the Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before the Court (the "Hearing"); and the Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before the Court; after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. 2. The Motion is granted nunc pro tunc to the Petition Date, as modified herein. The Debtors shall be, and hereby are, authorized to employ Zolfo Cooper and Winn

to provide management services to the Debtors on the terms and conditions set forth in the Agreement subject to the following terms and other applicable provisions of this Order, which apply notwithstanding anything in the Motion, the Agreement, or any exhibit(s) related thereto to the contrary: (a) Zolfo Cooper and its affiliates shall not act in any other capacity (for example, and without limitation, as a financial advisor, claims agent/claims administrator, or investor/acquirer) in connection with the above-captioned cases. in the event the Debtors seek to have Zolfo Cooper personnel assume executive officer positions that are different than the Executive Officers, or to materially change the terms of the Agreement, as modified herein, by either (1) modifying the functions of the Executive Officers, (ii) adding new Executive Officers, or (iii) altering or expanding the scope of the Agreement as modified herein, a motion to modify the retention shall be filed. Zolfo Cooper shall file with the Court with copies to the Office of the United States Trustee for the District of Delaware ("U.STrustee") and all official committees a

(h)

(c)

report of staffing on the engagement for the previous month. Such report shall include the names and functions filled of the individuals assigned. All staffing shall be subject to review by the Court in the event an objection is flied. (d) No principal, employee or independent contractor of Zolfo Cooper or its affiliates shall serve as a director of any of the above-captioned Debtor(s) during the pendency of the above-captioned cases. Zolfo Cooper shall file with the Court, and provide notice to the U.S. Trustee and all official committees, reports of compensation earned and expenses incurred on a monthly basis. Such reports shall contain summary charts which describe the time incurred and services provided, identify the compensation earned by each executive officer and staff employee provided and itemize the expenses incurred. Time records shall (i) be appended to the reports, (ii) contain detailed time entries describing the task(s) performed, (iii) be organized by project category and (iv) the time entries shall identify the time spent completing each task in 1/10/hour increments and the corresponding charge (time multiplied by hourly rate) for each task. All compensation shall be subject to review by the Court in the event an objection is filed. Success fees, transaction fees, or other back-end fees shall be approved by the Court at the conclusion of the case on a reasonableness standard and are not being pre-approved by entry of this Order. No success fee, transaction fee or back-end fee shall be sought upon conversion of the case, dismissal of the case for cause, or appointment of a trustee, Notwithstanding anything in the Motion or the Agreement to the contrary, the indemnification provisions described in the Agreement are approved only to the extent set forth below: (i) The Debtors are permitted to indemnify those persons serving as executive officers on the same terms as provided to the Debtors other officers and directors under the corporate bylaws and applicable state law, along with insurance coverage under the Debtors D&O policy; and There shall be no other indemnification of the Zolfo Cooper Indemnitees.

(e)

(f)

(g)

(ii) (h)

Notwithstanding anything in the Agreement to the contrary, there shall be no limitation on liability provision limiting the extent of Winn, Zolfo Cooper and its personnels liability, and the entirety of paragraph 8 of the Agreement is deleted and shall have no further force or effect. For a period of three years after the conclusion of the engagement, neither Zolfo Cooper, Winn nor any of their affiliates shall make any investments in the Debtors or the reorganized Debtors. Zolfo Cooper shall disclose any and all facts that may have a bearing on whether the firm, its subsidiaries and/or any individuals working on the engagement hold or

(i)

(j)

represent any interest adverse to the Debtors, their creditors, or other parties in interest. The obligation to disclose identified in this subparagraph is a continuing obligation. (k) Notwithstanding anything in paragraph 2 of the Agreement to the contrary, Zolfo Cooper employees who are appointed officers of the Debtors shall be subject to all duties and obligations pertaining to their status as officers under applicable law. Notwithstanding anything in paragraph 13(c) of the Motion or paragraph 4 of the Agreement to the contrary, the Debtors are not obligated to reimburse Zolfo Cooper, Winn or the Associate Directors expenses for legal counsel,

(1)

3. Notwithstanding the terms of the Agreement and the Motion, the Debtors, Zolfo Cooper, the Official Committee of Unsecured Creditors (the "Committee"), and the Lenders have stipulated and agreed that the Success Fee provided under the Agreement is modified and is subject to paragraph 2(f) of this Order, provided, however, except as set forth in paragraphs 3(c) and 3(d) below, that the Debtors, the Committee and the Lenders hereby waive their rights to challenge the reasonableness of the Success Fee pursuant to the first sentence of paragraph 2(f) if the Success Fee is paid in accordance with the following: (a) A Success Fee of One Million Dollars ($1,000,000) shall be payable in cash upon the confirmation of a plan which is consented to by the lenders or consummation of a sale under 363 of the Bankruptcy Code which occurs on or prior to the expiration of the Debtor in Possession ("DIP") financing which is anticipated to expire in September 2009, as may be extended ("DIP Expiration"). Notwithstanding anything to the contrary in the previous paragraph, a Success Fee shall not be payable "upon the consummation of a sale under 363 of the Bankruptcy Code which occurs on or prior to the expiration of the Debtor in Possession ("DIP") financing which is anticipated to expire in September 2009, as may be extended (the "DIP Expiration")," unless the sale includes the sale of (i) substantially all of the Beta Assets, (ii) substantially all of the Alaska Assets or (iii) substantially all of the Debtors Assets. For the avoidance of doubt, Zolfo Cooper shall be entitled to only one Success Fee regardless of the number of sale transactions. The Success Fee shall be increased to One Million Two Hundred and Fifty Thousand Dollars ($1,250,000) for reasons including, but not limited to, that i) recoveries are greater than anticipated, or ii) the plan is filed and/or a 363 sale

(b)

(c)

occurs at an accelerated time-frame prior to the DIP Expiration, but in any event, shall be subject to further discussion and agreement. (d) Notwithstanding anything to the contrary in the previous paragraph, any increase of the Success Fee from $1,000,000 to $1,250,000 shall be subject to court approval upon the filing of a motion requesting an increase and upon a showing that the basis for the increase provided a substantial benefit to the estate beyond those which are currently contemplated. For the avoidance of doubt, the Committee shall retain all rights to object to any increase, including without limitation, any basis for the increase.

4. All compensation and reimbursement due to, and other rights of Zolfo Cooper and Winn in accordance with the Agreement as modified by this Order, including without limitation indemnification obligations, shall be treated and allowed (subject to the compensation review procedures identified in this Order) as administrative expenses in accordance with Section 503 of the Bankruptcy Code and shall be paid in accordance with the Agreement.

5, Zolfo Cooper shall apply its pre-petition retainer to allowed fees and expenses prior to
seeking payment from the debtors cash flows. 6. Notwithstanding anything in the Motion or the Agreement to the contrary, the Debtors

will not offer Zolfo Cooper personnel employment during the pendency of the cases.
7. Notwithstanding anything in the Motion or the Agreement to the contrary, in the event that Zolfo Cooper augments its professional staff with independent contractors, Zolfo Cooper will charge the Debtors for the independent contractors services at the compensation rate provided by Zolfo Cooper to the independent contractor. 8. Nothing in this Order shall be deemed to affect any and all rights that the Committee or any party-in-interest may have to seek avoidance, pursuant to Chapter 5 of the Bankruptcy Code, of any prepetition payments made by the Debtors to Zolfo Cooper, and all such rights are hereby expressly preserved.

9. Nothing in this Order shall be deemed to affect any and all rights that the Committee has and the rights of the Committee reserves all of its rights to object to the payment of any Success Fee to Zolfo Cooper in the event that (i) the Debtors terminate Zolfo Coopers employment for cause, including, but not limited to Zolfo Coopers bad-faith, self-dealing, breach of fiduciary duty, gross-negligence or willful misconduct, or

(ii) Zolfo Cooper terminates its

employment prior to all conditions being satisfied for the payment of a Success Fee.

10. All time periods set forth in this Order shall be calculated in accordance with Rule 9006(a) of the Federal Rules of Bankruptcy Procedure. 11. The Debtors are authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the Motion, 12. Notwithstanding the possible applicability of Rules 6004(h), 7062, 9014 of the Federal Rules of Bankruptcy Procedure or otherwise, the terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 13. The Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation and enforcement of this Order.

Dated:

AN4*\ ( , 2009 Wilmirn, Delaware

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In Fe: PACIFIC ENERGY RESOURCES LTD., et al., Debtors. )
)

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

) ) )

AFFIDAVIT OF SERVICE STATE OF DELAWARE COUNTY OF NEW CASTLE ) ) ss: )

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 I 8 th day of February, 2011 she caused a copy of the following document(s) to be served upon the parties on the attached service lists in the manner indicated: Notice and Final Fee Application (Success Fee) of Zolfo Cooper Management, LLC and Scott W. Winn as Chief Restructuring Officer to the Debtors for the Period March 9, 2009 - December 15, 2010 [No ice Only - 2002 service list] Ka hleen Forte Finlay on Sworn to ai1 Subscribed before me 4his 1s . day of 1bruar20f1
-

Notary Public Commission Exp.:

DOCS_DE: 167979.1

-MONlCA MIGELA MOUTOR NOTARY PUKIC STATE OF_____ DELAWARE

20 2012

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 I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is Ill W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

I>acitIc Energy Resources Ltd. Fee App Service List Case No. 09-10785 Document No. 147432 03 Hand Delivery 05 First Class Mail 02 Overnight Delivery 0 1 Interoffice Pouch

Hand Delivery (Counsel to Official Committee of Unsecured Creditors) David B. Stratton, Esquire James C. Carignan, Esquire Pepper Hamilton LLP Hercules Plaza, Suite 1500 1313 Market Street Wilmington, DE 19899 First Class Mail (Debtors) Mr. Gerry Tywoniuk Senior Vice President & CFO Pacific Energy Resources 111 We. Ocean Boulevard, Suite 1240 Long Beach, CA 90802 First Class Mail (Debtors) Mr. Scott W. Winn Senior Managing Director Zolfo Cooper 1166 Sixth Avenue, 24th Floor New York, NY 10026 First Class Mail (Counsel to Official Committee of Unsecured Creditors) Francis J. Lawall, Esquire Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 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

(Counsel for Debtors) Laura Davis Jones, Esquire James E. ONeill, Esquire Kathleen P. Makowski, Esquire Pachuiski Stang Ziehi & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705
Interoffice Pouch to Los Angeles (Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire Scotta E. McFarland, Esquire Pachuiski Stang Ziehi & Jones LLP 10100 Santa Monica Blvd., I I 1 Floor Los Angeles, CA 90067 Hand Delivery (United States Trustee) Joseph McMahon, Esquire Office of the United States Trustee J. Caleb Boggs Federal Building 844 North King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801 Hand Delivery (Copy Service) Parcels, Inc. Vito I. DiMaio 230 N. Market Street Wilmington, DE 19801

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) Warren H. Smith Warren H. Smith & Associates, P.C. Republic Center 325 N. St. Paul, Suite 1250 Dallas, Texas 75201 Overnight Delivery (Office of the Fee Auditor) Ms. Melanie M. White Warren H. Smith & Associates, P.C. Republic Center 325 N. St. Paul, Suite 1250 Dallas, Texas 75201
68773-001 \DOCS DE: 147432.1

Pacific Energy Resources Ltd. 2002 Service List Case No. 09-10785 Document No. 145745 20 - Hand Delivery 51 - First Class Mail 02 - FOREIGN First Class Mail

Hand Delivery (United States Attorney) Ellen W. Slights, Esq. United States Attorneys Office District of Delaware 1007 N. Orange Street, Suite 700 Wilmington, DE 19801 Hand Delivery (Counsel for Silver Point Finance) Ian S. Fredericks, Esquire Skadden Arps, Slate, Meagher & Flom LLP One Rodney Square P.O. Box 636 Wilmington, DE 19899 Hand Delivery (Counsel for J. Aron & Company) Don A. Beskrone, Esquire Amanda M. Winfree, Esquire Ashby & Geddes, P.A. 500 Delaware Avenue, 8 1h Floor Wilmington, DE 19899 Hand Delivery (Counsel for Union Oil Company of California, a California Corporation) Norman M. Monhait, Esquire Rosenthal, Monhait & Goddess, PA Citizens Bank Center, Suite 1401 919 Market Street P.O. Box 1070 Wilmington, DE 19899 Hand Delivery (Counsel for Westchester Fire Insurance Company and Noble Energy Inc.) Tobey M. Daluz, Esquire Joshua E. Zugerman, Esquire Ballard Spahr Andrews & Ingersoll, LLP 919 N. Market Street, 12 th Floor Wilmington, DE 19801

(Counsel for Debtors) Laura Davis Jones, Esquire James E. ONeill, Esquire Kathleen P. Makowski, Esquire Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Interoffice Pouch to Los Angeles Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire Scotta E. McFarland, Esquire Pachuiski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd., 11th Floor Los Angeles, CA 90067 Hand Delivery (United States Trustee) Joseph McMahon, Esquire Office of the United States Trustee J. Caleb Boggs Federal Building 844 North King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801 Hand Delivery (Copy Service) Parcels, Inc. Vito I. DiMaio 230 N. Market Street Wilmington, DE 19801

Hand Delivery (Counsel for Oxy Long Beach Inc.) David L. Finger, Esquire Finder, Slanina Liebesman, LLC One Commerce Center 1201 N. Orange Street, 7th Floor Wilmington, DE 19801 Hand Delivery (Official Committee of Unsecured Creditors) David B. Stratton, Esquire James C. Carignan, Esquire Pepper Hamilton LLP Hercules Plaza, Suite 1500 1313 Market Street Wilmington, DE 19899 Hand Delivery (Counsel for Marathon Oil Company) Kevin J. Mangan, Esquire Womble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Hand Delivery (Counsel for Cook Inlet Region, Inc Eric Lopez Schnabel, Esquire Dorsey & Whitney (Delaware) LLP 300 Delaware Avenue, Suite 1010 Wilmington, DE 19801 Hand Delivery (Counsel for Area Energy LLC) Norman L. Pernick, Esquire Karen M. McKinley, Esquire Cole, Schotz, Meisel, Forman & Leonard, P.A. 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801

Hand Delivery (Counsel for Ammadon Limited and Catherwood Limited) Mark E. Felger, Esquire Cozen OConnor 1201 N. Market Street, Suite 1400 Wilmington, DE 19801 Hand Delivery (Counsel for Forest Oil Corporation) Robert J. Dehney, Esquire Curtis S. Miller, Esquire Morris Nichols Arsht & Tunnell LLP 1201 N. Market Street Wilmington, DE 19899 Hand Delivery (Counsel for Stellar Energy LLC) Brian E. Farnan, Esquire Phillips, Goldman & Spence, P.A. 1200 North Broom Street Wilmington, DE 19806 Hand Delivery (Counsel for Ramshorn Investments, Inc.) Jonathan L. Parshall, Esquire Murphy & Landon 1011 Centre Road, Suite 210 Wilmington, DE 19805 Hand Delivery (Counsel for Longfellow Energy LP) Teresa K.D. Currier, Esquire Saul Ewing LLP 222 Delaware Avenue, Suite 1200 Wilmington, DE 19899 Hand Delivery (Counsel for Rise Energy Partners, LP) Christopher A. Ward, Esquire Justin K. Edelson, Esquire Polsinelli Shughart, PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801

Hand Delivery (Counsel to Cook Inlet Pipe Line Company) Stephen M. Miller, Esquire Brett D. Fallon, Esquire Douglas N. Candeub, Esquire Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19899 Hand Delivery (Counsel to Waveland Services, Inc.) Mary F. Caloway, Esquire Mona A. Parikh, Esquire Buchanan Ingersoll & Rooney PC 1105 North Market Street, Suite 1900 Wilmington, DE 19801 First Class Mail (United States Attorney General) Eric H. Holder, Jr. Office of the Attorney General U.S. Department of Justice 950 Pennsylvania Avenue, N.W. Washington, DC 20530-0002 First Class Mail Secretary of State Division of Corporations Franchise Tax P.O. Box 7040 Dover, DE 19903 First Class Mail Secretary of Treasury P.O. Box 7040 Dover, DE 19903 First Class Mail Secretary of Treasury 15th & Pennsylvania Avenue, N.W. Washington, DC 20220

First Class Mail Attn: Insolvency District Director Internal Revenue Service 31 Hopkins Plaza, Room 1150 Baltimore, MD 21201 First Class Mail Internal Revenue Service P.O. Box 21126 Philadelphia, PA 19114-0326 First Class Mail Attn: Insolvency Internal Revenue Service 1352 Marrows Road, 2d Floor Newark, DE 19711-5445 First Class Mail Mark Schonfeld, Esq. Regional Director Securities & Exchange Commission New York Regional Office 3 World Financial Center, Suite 400 New York, NY 10281-1022 First Class Mail Michael A. Berman, Esq. Securities & Exchange Commission Office of General Counsel-Bankruptcy 100 F Street, N.E. Washington, DC 20549 First Class Mail Matthew Berry, Esquire Office of General Counsel Federal Communications Commission 12 tStreet, S.W. Washington, DC 20554 First Class Mail POLLARD WIREL[NE P.O. Box 1360 Kenai, AK 99611

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