IN THE UNITED STATES BANUPTCY COURT

FOR THE DISTRICT OF DELAWAR

In re: ) Chapter 11
)

PACIFIC ENERGY RESOURCES LTD., et aI., 1 ) Case No. 09-10785(KJC)

) (Jointly Admnistered)

) )

Debtor.
Deadline for Objections: June 24, 2009 at 4:00 p.rn Hearig Date: July 1, 2009 at 10:00 a.rn

DEBTORS' MOTION FOR AN ORDER (A) APPROVING PROCEDURES FOR SALE OF THE DEBTORS' ALASKA ASSETS; (B) SCHEDULING AUCTION AND HEARNG TO CONSIDER APPROVAL OF SALE; (C) APPROVING NOTICE OF RESPECTIVE DATES, TIMES, AND PLACES FOR AUCTION AND FOR HEARNG ON APPROVAL OF (I) SALE AND (II) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES; (D) APPROVING FORMS OF NOTICE: AND eEl GRATING RELATED RELIEF
Pacific Energy Resources Ltd. ("PERL"),2 Pacific Energy Alaska Holdings, LLC

("PEAH"), Pacific Energy Alaska Operating LLC ("PEAO") and the other above-captioned

debtors and debtors in possession (collectively, the "Debtors") hereby move this Cour for entry
ofan order approving procedures for the sale of

the Debtors' Alaska Assets (defined below); (b)

scheduling auctions and a hearng to consider approval of each sale (the "Sale Hearng"); ( c)

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); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The
the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. 2 Capitalized term that are not expressly defined herein shall have the meanigs ascribed to such term in the
mailing address for all of

proposed Purchase and Sale Agreement (the "Agreement") between PEAO and PEAR, on the one hand, and the Successful Bidder (defined below) for the Alaska Assets, on the other hand, substantially in the form attached hereto as Exhibit A.

DOCS_LA:203387.12

approving notice of respective dates, times, and places for auctions, the Sale Hearing, (ii) each

sale, and (ii) the assumption and assignent of certain executory contracts and unexpired leases;
(d) approving forms of notice; and (e) granting related relief (the "Motion"). In support of

this

Motion, the Debtors respectfully state as follows:

Introduction
1. The Debtors are seeking offers for the sale of two sets of assets
(collectively, the "Alaska Assets"):

(I) "Group 1 Assets": (A) PEAO's interests in leased oil and gas production assets
located in Alaska (and related assets and contracts) that are operated by PERL (the "Operated Alaska Interests"); (B) PEAO's interests in leased gas production assets located in Alaska (and related assets and contracts) that are operated by Aurora Gas, LLC (the "Aurora Operated Alaska Interests,,);3 and (C) PEAH's 50% of the issued and outstanding common stock (the "Stock) of Cook Inlet Pipe Line Company ("CIPL"); and

(II) "Group 2 Assets": PEAO's interests in leased oil and gas production assets
located in Alaska (and related assets and contracts) that are operated by Union Oil
(the "Nonoperated Alaska Interests").

The Debtors propose to sell the Group 1 Assets and Group 2 Assets (each a "Group" and,

collectively, the "Groups") in two separate concurent auctions (the "Auctions") that are
proposed to be scheduled to commence on July 20, 2009 at 10:00 a.m. prevailing Eastern time. Qualified Bidders are not required to bid for both sets of Alaska Assets but any bidder that bids

for both sets must bid separately for each set; nevertheless bidders may bid for subsets ofthe

Group 1 Assets, such as paricular leases and wells or bid for the Operated Alaska Interests

without bidding for the Aurora Operated Alaska Interests or the Stock (or visa versa). Bidders

3 Aurora Gas, LLC is not an affiiate of

the Debtors.

DOCS_LA:203387.12

for the Group 2 Assets must bid for the entirety of the Group 2 Assets. The sales wil be on an

"as is," "where is," and "with all faults" basis.

Jurisdiction
2. The Cour has jursdiction over the Procedures Motion pursuant to 28

U.S.C. 157 and 1334. This proceeding is a core proceeding within the meanng of28 U.S.C.
157(b)(2)(A), (M), (N) and (0). 3. Venue of these proceedings and the Procedures Motion is proper in this

Distrct pursuant to 28 U.S.C. 1408 and 1409.

4. The statutory predicates for the relief sought herein are sections 105, 363,

365, 1107 and 1108 of chapter 11 oftitle 11 ofthe United States Code (the "Banptcy Code"),
Rules 2002(a)(2), 6004, 6006 and 9014 ofthe Federal Rules of

Banptcy Procedure (the

(b), 6004-1 and 9006-1 of the Local Rules of

"Banptcy Rules"), and Rules 2002-1

Banptcy
Delaware (the

Practice and Procedure ofthe United States Banptcy Cour for the Distrct of

"Local Rules").

Back2:round
5. On March 9,2009 (the "Petition Date"), the Debtors commenced these
cases (the "Cases") by filing voluntary petitions for relief under chapter 11 of

the Banptcy

Code. The Debtors have continued in the possession of their property and have continued to

operate and manage their businesses as debtors and debtors in possession pursuant to

sections 1107(a) and 1108 ofthe Banptcy Code. No trstee or examiner has been appointed

DOCS _ LA:203387. 1 2

in the Debtors' chapter 11 cases. The Office of the United States Trustee appointed an Offcial
Committee of

Unsecured Creditors (the "Committee") in these Cases.

6. The Debtors are a group of

independent energy companes engaged in the

acquisition, development and exploitation of oil and gas properties in the western United States.
The Debtors' revenue for 2008 was approximately $226.2 milion, of

which approximately 64%,

or $125.2 million, was attbutable to the Alaska Assets, with approximately $43.9 milion

attbutable to the Operated Alaska Interests and $101 milion attbuted to the Nonoperated
Alaska Interests.
7. PERL owns 100% of the membership interests in PEAH. Substantially all
of

PERL's other assets are expected by the Debtors to be the subject of a separate motion for

approval of sale procedures for the Beta Assets (defined below).4

8. PEAH owns 100% of

the membership interests in PEAO. PEAH also

owns 20,000 shares of Stock, which constitute 50% of all issued and outstanding shares of

CIPL's common stock.s PEAH's membership interests in PEAO and the Stock are substantially

all ofthe assets ofPEAH.

4 PERL owns working interests in leases from the United States Departent of Interior Minerals Management
approximtely nie miles off the operator of

Service for sites located in the Beta Unit (the "Beta Interests"). The Beta Unit is located in federal waters the coast of Huntigton Beach, Californa (in the San Pedro Channel area). PERL is
the Beta Interests. Among its other assets, PERL also own 100% of

the issued and outstanding

capital stock (the "SPBPCo Stock") of San Pedro Bay Pipeline Company ("SPBPCo"), which owns and operates the pipeline from the Beta Unit to shore, where it connects to another pipeline (not operated by SPBPCo) that connects to the Conoco/Phillips refiery located in Los Angeles, Californa. PERL also own 100% of the equity interests in certain other Debtors that have de minimis assets, which will not be the subject of a sale procedures motion. The Beta Interests and SPBPCo stock are referenced herein as the "Beta Assets." 5 Union Oil own the other 50% ofCIPL's issued and outstanding common stock. Union Oil is an affiliate of
Chevron Corporation. It is not affiliated with any of

the Debtors.

DOCS _ LA:203387.12

9. PEAO owns workig interests in certain oil and gas leases (the "Leases")
principally from the State of Alaska and related assets (i.e., the Alaska Interests) which are
operated by PERL or Union OiI.6 The Alaska Interests are substantially all of

the assets of

PEAO.

Debtors' Marketin2: Efforts

10. Prepetition, on December 8, 2008, the Debtors engaged Albrecht &

Associates, Inc. ("Albrecht"), as agent, to assist the Debtors in their efforts to market and sell
substantially all of

their operating assets. Albrecht was retained by the Debtors as sales agent in

the Debtors' chapter 11 cases by an order of

the Banptcy Cour. Albrecht has been assisting

PERL with the sale ofthe Beta Assets.

11. Prepetition, on December 19, 2008, the Debtors engaged Lazard Frres &

Co., LLC ("Lazard"), as investment baner, for the purose of

implementing and executing on

one or more strategic alternatives. Lazard was retained by the Debtors as investment baner in
the Debtors' chapter 11 cases by an order of the Banptcy Cour. Lazard has been assisting
PEAH and PEAO mainly with the sale of

the Alaska Assets.

their professionals, the Debtors conducted two

12. With the assistance of

concurent processes - one for the Alaska Assets and the other for the Beta Assets (collectively,

the "Assets") - to solicit bids ("Bids") for the sale ofthe Assets. The Debtors and Lazard began
the sale process for the Alaska Assets by preparng an in-depth offering memorandum around
6 The Alaska Interests that are operated by PERL are referenced herein as the "Operated Alaska Interests" and the

Alaska Interests that are operated by Union Oil are referenced herein as the "Non-Operated Alaska Interests." The Alaska Interests operated by Union Oil are in the Trading Bay Unit and Tradig Bay Field located in Cook Inet, Alaska near Anchorage. The Alaska Interests operated by PERL are located in and near (offshore and onshore)
Cook Inlet.

DOCS_LA:203387.12

April

3, 2009, with descriptions of

the business and financial projections for the business, and

provided prospective buyers with access via computer to a virtal "data room" established by the

Debtors, Lazard and the Debtors' transactional counsel, Rutan & Tucker, LLP, with respect to
the proposed sale.
13. Lazard identified several potential operating, strategic and financial buyers

for the Alaska Assets and approached more than 40 potential buyers to solicit their interest in

acquiring the Alaska Assets. Confidentiality agreements were sent to approximately 26 ofthese
potential buyers, approximately 15 of such potential buyers executed and retued confidentiality

agreements, and approximately 11 requested and received the offering memorandum. Also, the
Debtors' year-end 2008 reserve reports are available to potential buyers in the Debtors' data
room.
14. As a result of

the Debtors' and Lazard's marketing effort, the Debtors

received four expressions of interests for all or portions of their Alaska Assets (one of which was
combined with an expression of

interest for the Beta Assets), and three potential buyers made

site visits to Alaska.

15. The Debtors with the assistance of

Lazard and their other professionals

intend to market and seek higher and better bids for the Alaska Assets and, pursuant to the

proposed sale procedures set forth herein (the "Sale Procedures"), to hold the Auction on July

20, 2009 at i 0:00 a.m. Eastern time or on another date specified by this Cour. The Debtors
believe that the months of marketing efforts that have taken place to date would result in the
highest and best price for the Alaska Assets.

DOCS_LA:203387.12

Necessity of Prompt Sale

16. The Debtors have incured, and continue to incur, signficant losses with

respect to the Alaska Assets and are unable to generate suffcient positive cash flow to sustain
their on-going operations. Since the Petition Date, these losses have either remained accrued and
unpaid or have been fuded through borrowings under the Debtor's debtor in possession loan
facility ("DIP Financing Facility"). In order to minimize their losses and protect the value of

the

business as a going concern, the Debtors' prepetition secured lenders, as a condition of

providing

the DIP Financing Facility, required the Debtors to pursue a sale ofthe Alaska Assets on an
expedited basis.
17. The Debtors must meet a strct schedule for attempting to sell the Alaska

Assets or abandon them pursuant to a requirement in an amendment to the credit agreement (the

"Credit Agreement Amendment") anticipated by this Cour's final order approving the DIP

Financing Facility in these Cases, as follows: (a) a June 16,2009 deadline to file motion to

approve sale to stalkng horse and associated procedures or, if no stalkng horse, this Motion to
approve the Sale Procedures; (b) a July 16, 2009 deadline for entry of

the Sale Procedures Order

requested by this Motion; (c) a July 20, 2009 deadline for the Auctions requested by this Motion;

(d) a July 27,2009 deadline for entr ofthe Sale Order; (e) an August 4,2009 deadline for
closing of any sales (or such later date as may be necessary to obtain regulatory approvals). The
Credit Agreement Amendment also requires the Debtors to file a motion to abandon the
Nonoperated Alaska Interests by June 16,2009 as an alternative to the proposed sale of

the

Alaska Assets, which the Debtors have filed concurently with this Motion.

DOCS_LA:203387.12

18. The Debtors received offers for some or all of

the Alaska Assets prior to

filing this Motion, but none of

the offerees could serve as a stalkng horse bidder for either ofthe

proposed Auctions because, for among other reasons, each offer had one or more contingencies

(such as a financing conlingency) and/or did nol include a nonrefundable deposil. Therefore, lhe

Debtors fied this Motion, which requests approval of proposed Auctions that do not have a
stalkng horse bidder.

19. Because of

the ongoing operating losses, the Debtors have no alternative

means to fud operation of the Alaska Assets and thus must sell the Alaska Assets.

20. As stated above, the Debtors' losses for the Alaska Assets have been
fuded solely through borrowings on the DIP Credit Agreement. Durg the first four months of
2009, the average monthly cash loss, inclusive of

required capital maintenance projects and

mandatory provisions for futue abandonment obligations, was approximately $500,000. These
cash losses have been exacerbated in recent months as the eruption and the continuance of

elevated seismic activity at the volcano Mount Redoubt, which has caused the shut-in ofCIPL's
pipeline and terminallng facilities, the region's sole means of

bringing the crude oil produced to

market. Whle it is expected that an alternative, yet more costly, outlet to market wil be
developed and employed within the next couple of months, the Debtors curently budget a cash
loss of

$2.5 milion for the months of June and July, 2009. Once the Debtors are able to resume

sales of crude oil it is expected that the operated properties, on a normalized basis, would

continue to incur signficant operating losses of approximately $700,000 each month. The

Debtor plans to fie a claim with its business interrption insurance carer to recoup the added

DOCS _ LA:203387. 1 2

costs of

transportation and the value of delayed sales; however, there is no assurance that such

claim will be paid or paid timely.

21. In addition to the approximately $2.5 million expected cash loss durng

June and July, 2009, the Debtors have accrued but unpaid amounts due to overrding royalty

interest ("ORR") holders and for lease royalty payment obligations. The prepetition amounts
due to the ORR holders and for lease royalty payment obligation is approximately $300,000.

Postpetition, based on production through May 31,2009, the Debtors estimate an additional
amount due of approximately $300,000.
22. Each month, the Debtors are obligated to fud $200,000 into escrow

established on behalf ofthe Deparent of

Natual Resources ("DNR") of

the State of Alaska for

the potential future abandonment costs of

the Osprey Platform in the Redoubt field. The

Debtors did not make the April and May, 2009 escrow payments (totaling approximately

$400,000). In addition, the Debtors have not budgeted to make escrow payments durng the
months of June and July, 2009 (for at total amount owed as of July 31, 2009 of $800,000).
23. As with the Operated Alaska Interests, the Debtors have incured, and

continue to incur, signficant operating losses with respect to their Nonoperated Alaska Interests
and are unable to generate sufficient positive cash flow to sustain their on-going operations.
Each month, Union Oil, the operator of

the Nonoperated Alaska Interests, sends to the Debtors a

statement detailing the Debtors' share of Joint Operating Bilings ("JIBs") for the Nonoperated
Alaska Interest. Since September, 2008, the Debtors have not made any cash payments to Union
Oil with respect to these JIBs. Rather, on a prepetition basis, Union Oil has offset the Debtors'

DOCS_LA:203387.12

share of

production against the amount owed. As of

the Petition Date, the accrued but unpaid

balance of

the JIBs is approximately $29.5 milion per Union OiL. The Debtors, however,

dispute this amount. On a postpetition basis, the Debtors have continued to accrue expenses
associated with Union Oil's operation of

the Nonoperated Alaska Interests. The Debtors

estimate the amount that Union Oil would claim to be owed in respect of postpetition JIBs to be
an additional $9.0 million (also subject to dispute).

Relief Requested
24. Pursuant to this Motion, the Debtors seek the entr of the Sale Procedures

Order: (a) approving the Sale Procedures; (b) scheduling or setting (all prevailing Eastern time):

(i) the deadline for submitting bids pursuant to the Sale Procedures to be July 13,2009 at 12:00
noon; (ii) the Auctions pursuant to the Sale Procedures to commence at approximately 10:00
a.m. on July, 20, 2009; (iii) the deadline for filing and serving objections to the Sale Motion to be
July 21,2009 at 4:00 p.m. (or such later date that is five days before the date of

the Sale Hearng,

as scheduled by this Cour); and (iv) the Sale Hearing (as defined in the Sale Procedures) on or
before the July 27,2009 deadline for the entry of

the Sale Order set forth in the Credit

Agreement Amendment.

Sale Procedures
25. The proposed sale procedures (the "Sale Procedures") are attached hereto
as Exhibit B. The following is a sumary of pertinent terms of

the Sale Procedures (the Sales

Procedures, however, should be reviewed in their entirety and bidders and paries in interest

DOCSJA:203387.12

10

should not rely on this sumar; capitalized terms not defined herein have the meanngs
ascribed to such terms in the Sale Procedures):
26. As more fully discussed below, all bids shall be made by a letter or other

wrting ("Offer Letter") RECENED by the Notice Paries on or before July 13, 2009 at Noon
(Eastern time) (the "Bid Deadline") by mail, delivery service, fax or email sumarzing the
material terms of

the bid. Each Offer Letter must be accompaned by a proposed Agreement

substantially in the form that is attached as Exhibit A to this Motion. Each bidder must submit a
separate Agreement (clean copy and a redlined copy that is marked for any changes proposed by
the bidder) for each Group of Alaska Assets (or subset of

Group 1 Assets) for which the bidder

makes a bid. The Offer Letter must, in substance:

(a)

state that the Potential Bidder's offer is IRVOCABLE until the closing of the purchase of the relevant Group or Group's of Alaska Asset (or the Group 1 Assets) if such Potential Bidder is the Successful Bidder or a Back-Up Bidder (as such terms are defined below);
subset of that the Good Faith Deposit (defined below) is NONRFUNABLE if

(b)

the

Potential Bidder is designated the Successful Bidder;

(c)

not request a "break-up fee," "overbid fee" or similar payment or any payment or reimbursement of any fee to its advisor( s) but if its bid is designated the Baseline Bid (defined below), it may request to be reimbursed the actual amount of any nonrefudable commitment fee ("Commitment Fee") paid at or after the time of such designation to an identified financing source, not to exceed 2% of the cash to be actually fuded by such financing source on behalf of the Potential Bidder for the purchase of Alaska Assets at closing (the "Expense Reimbursement"); provided, however, that such Commitment Fee shall be limited solely to
financing obtained

to fud the purchase ofthe Group of Alaska Assets (or

subset of the Group 1 Assets) and not any financing obtained to operate
the relevant Alaska Assets after closing;

(d)

state that the Potential Bidder shall be ready, wiling and able (if it pays
any unpaid Commitment Fee) to close the purchase of

the Group or

Groups of Alaska Assets (or subset of the Group 1 Assets) specified in the

DOCS _ LA:203387. 12

11

Agreement within eleven calendar days (or the next business day if the eleventh day is not a business day) after the entr ofthe Sale Order; and
( e) if the bid is for the Group 1 Assets, a percentage and! or dollar amount

allocation of the total consideration offered among the Operated Alaska Interests, Aurora Operated Alaska Interests and the Stock.

The Offer Letter shall not contain any due diligence or other contingencies, other than a
financing contingency that is conditioned solely on payment of a Commitment Fee.

27. Each Bid must be accompaned by a cash deposit (the "Good Faith
Deposit") received by the Debtors at or prior to the Bid Deadline in an amount equal to at least
ten percent of the proposed purchase price for the Alaska Assets contained in such Bid, but in no
event less than $250,000. The Good Faith Deposit is NONRFUNABLE if

the Potential

Bidder is designated the Successful Bidder (whether initially or after being previously designated
a Back-Up Bidder) unless the Debtor defaults under any executed and delivered Agreement.
28. Also, each Potential Bidder shall provide written evidence that

demonstrates that it has the necessar financial ability to close the contemplated transaction and
provide adequate assurance of futue performance under all contracts to be assumed in such
contemplated transaction, as more specifically described in the Sale Procedures.
29. Notwithstanding the aforestated requirements, the Debtors' secured

lenders (the "Lenders"), either together or individually, may credit bid their outstanding
indebtedness under section 363(k) of

title 11 ofthe United States Code and any such bid shall

constitute a Qualified Bid and an allowed claim for bidding puroses only.
30. A "Qualified Bidder" is a Potential Bidder (or combination of

Potential

Bidders whose bids for each Group of Alaska Assets (or a subset of

the Group 1 Assets) do not

DOCS _ LA:203387. 1 2

12

overlap and who shall also be referred to herein as a single Qualified Bidder) that timely delivers

the documents and Good Faith Deposit described above, and that the Debtors in their discretion
and with assistance from their advisors determine has made a bona fide offer that the Potential
Bidder would (or would if a CommIlmenl Fee were paid) be able to timely consumate the
purchase ofthe relevant Group or Groups of Alaska Assets (or a subset of

the Group 1 Assets), if

selected as a Successful Bidder or a Back-Up Bidder. The Debtors shall have the right to reject
any and all Bids that they believe, in their reasonable discretion after consultation with the
Lenders and the Offcial Committee of

Unsecured Creditors appointed in the Cases (the

"Committee"), do not comply with the Sale Procedures or for any reason or no reason.
31. If the Debtors have received more than one Qualifyng Bid for a Group of

Alaska Assets (or a subset of

the Group 1 Assets) they may conduct an auction (the "Auction")

for each such Group (or a subset ofthe Group 1 Assets) to determine the highest and best bid
with respect to the respective Alaska Assets (or subset of the Group 1 Assets).
32. At least 24 hours prior to each Auction, after consultation with the

Lenders and the Committee, the Debtors shall determine in their reasonable discretion which

Qualified Bid, if any, constitutes the "Baseline Bid," if any, for each Group of Alaska Assets (or
a subset of a Group of

the Group 1 Assets) based on Bid Assessment Criteria set forth in the Sale

Procedures.
33. The Auction shall commence at 10:00 a.m. (Eastern time) on July 20,

2009, at the offices ofthe Debtors' banptcy counsel, Pachulski, Stang, Ziehl & Jones LLP,

DOCS _ LA:203387. 1 2

13

780 Third Ave., 36th Floor, New York, NY 10017-2024. Any Auction shall be conducted
according to the following procedures:
34. The Debtors shall provide all Qualified Bidders (a) notice ofthe identity

of any Qualified Bidder that has been selected by the Debtors to make the Baseline Bid for each Group of Alaska Assets (or subset of the Group 1 Assets) and (b) copies of all Qualified Bids at
least 24 hours prior to the Auction, which may exclude any confidential financial information, as

determined by the Debtors in their sole reasonable discretion or which has been so designated by

a Qualified Bidder in writing. The Qualified Bidder whose Qualified Bid is designated a
Baseline Bid shall notify the Notice Paries in wrting if

it has paid a Commitment Fee after the

date of its Offer Letter and would therefore be seeking an Expense Reimbursement if it is
overbid.
35. At the star of each Auction, the Debtors shall describe the material

business terms of the Baseline Bid. All Bids made thereafter shall be Overbids (as defined
below) and shall be made and received on an open basis, and all material non-confidential terms

of each Overbid shall be fully disclosed to all other Qualified Bidders. The Debtors shall
maintain a list or other compilation of

the Baseline Bid and Overbids, or may have a transcript

made of each Auction instead of or in addition to makng such a list or compilation.

36. An "Overbid" is any bid made before or at an Auction subsequent to the

Debtors' anouncement ofthe Baseline Bid. To submit an Overbid for puroses of an Auction, a

Qualified Bidder must comply with the following conditions: At each Auction, the bidding shall
begin with a minimum Overbid, if any, that is, at a minimum, equal to the Baseline Bid plus an

DOCS_LA:203387.12

14

initial overbid incremental amount, in cash, equal to the sum of (i) any Expense Reimbursement

and (ii) $100,000, and continue in subsequent mimum overbid incremental amounts of at least
$100,000 in cash. No Qualified Bidder, however, may credit bid any Expense Reimbursement.
The Debtors shall anounce at the Auction the material terms of each Overbid. The Debtors, as

appropriate and in their reasonable discretion after consultation with the Lenders and the
Committee shall have the ability to increase or decrease the Minimum Overbid Increments
durng an Auction.
37. Upon conclusion of

the bidding (as determined by the Debtors in their

reasonable discretion after consultation with the Lenders and Committee), the Auction shall be
closed, and the Debtors, after consultation with the Lenders and Committee with respect hereto,
shall immediately identify the highest and best offer for portions or all of

the Assets (which may

the Group 1

be an aggregate of

bids for less than all of a Group of Alaska Assets or subset of

Assets) (the "Successful Bid") and the entity submitting such Successful Bid (the "Successful
Bidder"), which highest and best offer would in the Debtors' business judgment provide the

greatest amount of net value to the Debtors' estates (or anyone or more of them), and the next
highest and best offer after the Successful Bid (the "Back-up Bid") and the entity submitting the
Back-Up Bid (the "Back-Up Bidder"), and advise the Qualified Bidders of such determination.

38. The Debtors shall endeavor to close the sale ofthe Alaska Assets to the
Successful Bidder(s) promptly after the entr of an order ofthe Banptcy Cour after the Sale

Hearng approving such sale unless the Banptcy Cour or the United States Distrct Cour for
the Distrct of

Delaware enters a stay of such sale. The Debtors' presentation of a paricular

DOCS _ LA:203387. 1 2

15

Qualified Bid to the Banptcy Cour for approval does not constitute the Debtors' acceptance
of such Qualified Bid.
39. If a Successful Bidder fails to consumate an approved sale in accordance

with the applicable Agreement or such Agreement is terminated, the Debtors shall be authorized,

but not required, to deem the Back-up Bid, as disclosed at the Sale Hearg, the Successful Bid,
and the Debtors shall be authorized, but not required, to consumate the sale with the Qualified
Bidder submitting such Bid without fuher order of the Banptcy Cour.

Procedures for the Assumption and Assi2:nment of Assumed Executory Contracts

40. As noted above, pursuant to the Sale Motion, the Debtors may seek to

assume certain executory contracts and unexpired leases to be identified on schedules to the Agreement, other than those executor~ contracts and unexpired leases excluded by the

Successful Bidder pursuant to its Agreement with the relevant Debtors (the "Assumed Executory
Contracts").
41. At least intially, the Assumed Executory Contracts shall be those

executory contracts and unexpired leases that the Debtors believe should be assumed and
assigned as par of the orderly transfer of each Group of Alaska Assets (or subset of

Group 1

Assets). The Successful Bidder may choose to exclude (or to add) certain executory contracts or

unexpired leases to the list of Assumed Executory Contracts, subject to fuher notice.
42. In the interim, the Debtors wil serve the Sale Motion and the Notice to

Counter

parties to Executory Contracts and Unexpired Leases That May be Assumed and

Assigned (the "Cure Notice") in substantially the form of

Exhibit E hereto upon each

DOCS_LA:203387.12

16

counterparty to the Assumed Executory Contracts. The Cure Notice shall state the date, time and
place ofthe Sale Hearng as well as the date by which any objection to the assumption and

assignent of Assumed Executory Contracts must be filed and served. The Cure Notice also

shall identify the amounts, if any, that the Debtors believe are owed to each counterparty to an

Assumed Executory Contract in order to cure any defaults that exist under such contract (i.e., the

"Cure Amounts"). If a contract or lease is assumed and assigned pursuant to this Cour's order
approving same, then unless the Assumed Executory Contract counterpary properly and timely
fies and serves an objection to the Cure Amount contained in the Cure Notice, the Assumed
Executory Contract counterpary shall receive at the time of the closing of

the sale (or as soon as

reasonably practicable thereafter), the Cure Amount as set forth in the Cure Notice, if any, with payment to be made pursuant to the terms of the Agreement, as executed and delivered by at
closing by one or more of

the relevant Debtors. If an objection is filed by a counterparty to an

Assumed Executory Contract, the Debtors propose that such objection must set forth a specific
default in any executory contract or unexpired lease and claim a specific monetar amount that

differs from the amount, if any, specified by the Debtors in the Cure Notice.
43. If any counterparty objects for any reason to the assumption and

assignent of an Assumed Executory Contract, the Debtors propose that the counterpary must

file the objection by no later than (i) 4:00 p.m. prevailing Eastern time on July 21,2009 (or such

later date that is five days before the date ofthe Sale Hearng, as scheduled by this Cour), or (ii)
the date otherwise specified in the Cure Notice (or, alternatively, the date set forth in the motion to assume such Assumed Executory Contract if such contract is to be assumed and assigned after

DOCS_LA:203387.12

17

the Sale Hearing); provided, however that any counterpary may raise at the Sale Hearng an
objection to the assumption and assignent of

the Assumed Executory Contract solely with

futue performance

respect to the Successful Bidder's ability to provide adequate assurance of

under the Assumed Executory Contract.

44. The Successful Bidder shall be responsible for satisfyng any requirements

regarding adequate assurance of futue performance that may be imposed under section 365(b) of

the Banptcy Code in connection with the proposed assignent of any Assumed Executory
Contract, as shall be provided in the Sale Motion. The Debtors propose that the Cour make its

determinations concernng adequate assurance of futue performance under the Assumed

Executory Contracts pursuant to section 365(b) of

the Banptcy Code at the Sale Hearing.

Cure Amounts disputed by any counterpary shall be resolved by the Cour at the Sale Hearng.
45. Except to the extent otherwise provided in the Purchase Agreement with

the Successful Bidder, subject to the payment of any Cure Amounts, the assignee of the Assumed Executory Contracts shall not be subject to any liability to the assigned contract
counterparty or lessor that accrued or arose before the closing date of the sale of the relevant
Alaska Assets and the Debtors shall be relieved of all

liability accruing or arsing thereafter

pursuant to section 365(k) of

the Bankptcy Code.

Basis for Relief

46. This Cour has the authority to grant the relief requested herein. The
Banptcy Code provides, in relevant par, that "the trstee, after notice and a hearng, may use,
sell, or lease, other than in the ordinar course of business, property of

the estate." 11 U.S.C.

DOCS_LA:203387.12

18

 363(b)(I). A debtor in possession's decisions to use, sell, or lease assets outside the ordinary
course of business must be based upon the sound business judgment of

the debtor in possession.

See Offcial Committee of Unsecured Creditors of LTV Aerospace and Defense Co. v. LTV Corp.
(in re Chateaugay Corp.), 1)73 F.2d 141, 143 (2d Cir. 11)1)2) (holding that a

judge determning a

section 363(b) application must find from the evidence presented before him a good business

reason to grant such application); see also Meyers v. Martin (In re Martin), 91 F.3d 389, 395 (3d
Cir. 1996); In re Abbotts Dairies of Pennsylvania, Inc., 788 F .2d 143 (3d Cir. 1986); Committee
of

Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983)
property outside of the ordinar course of

(court may approve the sale of

business where it finds

a good business reason for such sale); In re Exaeris, Inc., 380 B.R. 741, 744 (Ban. D. DeL.
2008) ("The sale of assets which is not in the debtor's ordinar course of

business requires proof

that: (1) there is a sound business purose for the sale; (2) the proposed sale price is fair; (3) the
debtor has provided adequate and reasonable notice; and (4) the buyer has acted in good faith."),
citing In re Delaware & Hudson Railway Co., 124 B.R. 169, 176 (D. DeL. 1991).
47. The business judgment rule is satisfied where "the directors of a

corporation acted on an informed basis, in good faith and in the honest belief that the action
taken was in the best interests of

the company." Offcial Comm. of Subordinated Bondholders v.

Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650,656 (S.D.N.Y. 1992), appeal
dismissed, 3 F.3d 49 (2d Cir. 1993) (quoting Smith v. Van Gorkom, 488 A.2d 858,872 (DeL.
1985)). In fact, "( w )

here the debtor ariculates a reasonable basis for its business decisions (as

distinct from a decision made arbitrarily or capriciously), courts wil generally not entertain

DOCS _ LA:203387. 12

19

objections to the debtor's conduct." Committee of Asbestos-Related Litigants and/or Creditors v.

Johns-Manvile Corp. (In re Johns-Manvile Corp.), 60 B.R. 612, 616 (Ban. S.D.N.Y. 1986).
Cours, absent a showing of

bad faith, self-interest, or gross negligence, wil uphold a board's

decisions as long as they are attbutable to any "rational business purose." In re Integrated
Res. Inc., 147 B.R. at 656.
48. The paramount goal of any proposed sale of

property of a debtor is to

maximize the proceeds received by the estate. See, e.g., Four B. Corp. v. Food Barn Stores, Inc.
(In re Food Barn Stores, Inc.), 107 F.3d 558,564-65 (8th Cir. 1997) (with reference to

banptcy sales, "a primary objective ofthe Code (is) to enhance the value ofthe estate at
hand."); Integrated Res., 147 B.R. at 659 ("It is a well-established principle of

banptcy law

that the. . . Debtors' duty with respect to such sales is to obtain the highest price or greatest

overall benefit possible for the estate.") (quoting Cello Bay Co. v. Champion Intl Corn (In re

Atlanta Packaging Prods., Inc.), 99 B.R. 124, 131 (Ban. N.D. Ga. 1988)).
49. To that end, cours unformly recognze that procedures intended to

enhance competitive bidding are consistent with the goal of maximizing the value received by
the estate and therefore are appropriate in the context of

banptcy sales. See, e.g., Integrated

Res., 147 B.R. at 659 (such procedures "encourage bidding and maximize the value ofthe

debtor's assets"); In re Financial News Network, Inc., 126 B.R. 152, 156 (Ban. S.D.N.Y 1991)
("court-imposed rules for the disposition of assets. .. (should) provide an adequate basis for
comparson of offers, and (should) provide for a fair and efficient resolution of

banpt

estates"), app'l dismissed 931 F.2d 217 (2d Cir. 1991).

DOCS_LA:203387.12

20

50. The Debtors believe that the Sale Procedures proposed herein establish the
parameters under which the value of the Alaska Assets may be tested at the Auction and ensuing
Sale Hearng. Such procedures will increase the likelihood that the Debtors wil receive the

greatest possible consideration for the Alaska Assets because they will ensure a competitive and

fair bidding process. They also allow the Debtors to undertake the Auction process in as
expeditious a maner as possible, which the Debtors believe is essential to maximizing the value

of the estates.
51. The Debtors submit that the proposed Sale Procedures are reasonable

under the facts and circumstances ofthese cases, especially,in light of

the extensive marketing of

the Alaska Assets that the Debtors and their professionals have conducted. The Debtors wil also
continue their marketing efforts through the time ofthe Auction.
52. The Debtors believe that the approval of

the Sale Procedures provide the

Debtors with the best possibility of maximizing the value ofthe Alaska Assets for the benefit of
creditors, and, accordingly, request that the Cour approve the Sale Procedures.
53. The Debtors also submit that the form of Notice of

Sale Procedures,

Auction Date and Sale Hearng, substantially in the form attached hereto as Exhibit C, would
provide adequate notice of the Sale Procedures, Auction Date and Sale Hearing after service by

the Debtors on the parties provided notice ofthis Motion (as identified below) and should

therefore be approved. The Debtors' investment baners would also send such notice to
potential bidders.

DOCS _ LA:203387. 1 2

21

54. The Debtors also submit that the form of

Notice of Auction and Sale

Hearng, substantially in the form attached hereto as Exhibit D, would provide adequate notice ofthe Auction Date and Sale Hearng after service by the Debtors on their known creditors and
should therefore be approved.
55. The Debtors also submit that the form of

Cure Notice, substantially in the

form attached hereto as Exhibit E, would provide adequate notice ofthe potential assumption
and assignent of executory contracts and unexpired leases and cure amounts to contract

counterparies and lessors, and should therefore be approved.

No Prior Request
56. No prior request for the relief sought in this Bid Procedures Motion has

been made to this or any other cour.

Notice
57. Notice ofthis Motion either has been or will be given to the following
parties or, in lieu thereof, to their counsel, ifknown: (i) the Offce of

the United States Trustee,

(ii) the Debtors' lenders under the DIP Financing Facility, (iii) the Offcial Committee of
Unsecured Creditors, and (iv) those persons who have requested notice pursuant to Rule 2002 of
the Federal Rules of Bankptcy Procedure. The Debtors submit that, in light of

the natue ofthe

relief requested, no other or fuher notice need be given.

DOCS_LA:203387.12

22

WHEREFORE, the Debtors respectfully request that the Cour enter an order,
substantially in the form fied contemporaneously with this Motion, granting the relief requested

herein and such other and fuher relief as this Cour deems appropriate.
Dated: June -l, 2009

PACHUSKI STANG ZIEHL & JONES LLP

. Kharasch (CA Bar No. 109084) es E. O'Neil (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100

kL

Facsimile: 310/652-4400
Email: ikharasch(fpszjlaw.com

j oneil(fpszyjlaw .com rsaunders(fpszjlaw.com

Counsel for Debtors and Debtors in Possession

DOCS _ LA:203387. 1 2

Exhibit A

DRAFT

PURCHASE AND SALE AGREEMENT

( L
BY AND BETWEEN
AND

PACIFIC ENERGY ALASKA OPERATING LLC

AND

PACIFIC ENERGY ALASKA HOLDINGS, LLC

Dated as of , 2009

TABLE OF CONTENTS
Pa2:e

ARTICLE 1
1.1

1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9

DEFINITIONS. ................ ................... ................... ............ ............................ ....... 1 Abandonment Obligations.. .......................... ....... .................. ............................... 1 Affected Employees ..... .......... .... ..... ............. ..................... .... .................... ............ 1 Affiliates.................. ............................... .... ..... ... ..... ................................ .............2 Agreement.................. .............................. ........... ........ ......................... ............. .... 2 Alaska Interest or Alaska Interests ....................................................................... 2 Alaska Interests Closing ....................................................................................... 3 Alaska Interests Closing Date............................................................................... 3 Alaska Interests Deposit ................. ............. ........................ .................................3
Alaska Interests Purchase Price............. ........................... ...................... .............. 3

1.10
1.11

1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20

1.21

Allocated Value.............. .................... ... .... ........................................ ........... ........ 3 Applicable Laws .................. ............. ..................... ............ ....... ...................... ......3 Assignment and Bill of Sale. ......................... ...... ................. ................................4
Associated Paries.. ..................... .................. ................. .......................................4

Assumed Liabilities .............................................................................................. 4 Bankrptcy Case...... ............................... .......... .............. ........................ .............. 4 Bankrptcy Claim...... ............................ ................................................ ...............4 Bankrptcy Code ............................... ................................................. ........ .......... 4 Bankrptcy Costs ............. ................ ......................... ........................ ............... ..... 5 Bankrptcy Court.............. ............................. .......... .......... ........... ........................5 Business Day..... .................... ................................ ............ ....... .............................5
Bu yer..................................................................................................................... 5

1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30

1.31

Casualty Loss........................................................................................................ 5 CERCLA...............................................................................................................5

CIPLC ........................ ..... ...................... ..... .................. .......................... ........ .... ... 5 Claim or Claims. ................ ..... ..... .... ..... ..................... ........ ........... ................. .......5 Confidentiality Agreement.............. ............. ......................... ................................5 Consents................................................................................................................ 5

1.32 1.33 1.34 1.35 1.36 1.37 1.38 1.39 1.40

1.41

Contracts............................................................................................................... 5 Credit Agreements ........... ............... ................................................... ........... ........ 6 Defect Value......................................................................................................... 6 DNR ..............;....................................................................................................... 6 Easements ............................................................................................................. 6 Effective Time..................................... ......................... .......................... .............. 6 Environmental Laws......... .................. ................................................ ........ .......... 6 Environmental Liabilities...................................................................................... 6 Escrow Agreement................ ...................... ....................... ...... ............. ........... .....6
Excluded Items. .............................. ............... ................ ........................................6

Excluded Liabilities ............... ................ .......... ............... ......................................8 Execution Date...................................................................................................... 8

Fee Interests .............. .......................... ....... ................ .............. ............ .................8

Final Alaska Interests Purchase Price................................................................... 8

Final Settlement Statement ........................................ ...................... .............. ....... 8

1.42

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1.43 Forest Indemnities..... .................. ................... .................. ................... .................. 8

1.44 GAAP ... .... ........ .... ...... ............. ................... ....... ... ....... ..........................................8

1.45 Gas........................................................................................................................ 8 1.46 Governmental Bonds...... ........ ................................ .......................... ....................8

1.47 Governmental Entity....... ............................................. .........................................9

1.48 Hiring Period.......... ........ ..... ................ ..................................................................9

1.49 Imbalances ............. ....... ....... .............. ......................... .................. ....... .................9

1.50 J. Aron................................................................................................................... 9 1.51 Lands..................................................................................................................... 9

1.52 Leases........... .... ........... ............ ........................................ .......... ............... '" ..... ..... 9

1.53 Liability or Liabilities...... ...... ................................ ............................................... 9 1.54 Material Amount ..... ......... ...... .... .................. ............ ....... ................................... ... 9 1.55 Minimal Defect...... ......... ........................................ ..............................................9 1.56 Net Revenue Interest............................... ........................... .................. ................. 9 1.57 NORM................... ........ ......................... ............................. ................ .................. 9 1.58 Oil ......................................................................................................................... 9 1.59 Organizational Documents.. .................... ............................................................ 10
1.60 Pary or Parties.......... .... ....... ............... .... .... ... ............... ....... ......... ...... ........ ........ 10

1.61 PEAH ... ................. ..... ... ................. .... ............. .......... ........ ....... ... ........... ............. 10

1.62 PEAO ............................................... ......................................... ...... .................... 10 1.63 PERL................ ....................... ........................................ ......... ........ ................... 10
1.64 Permits............. ....................... ........................................ .................................... 10

1.65 Permitted Encumbrances .............................. ................. ..................................... 10 1.66 Person.................................................................................................................. 10 1. 67 Preliminar Alaska Interests Purchase Price...................................................... 10 1.68 Preliminary Settlement Statement....................................................................... 10 1.69 Production Taxes ..................... ................................................ ........................... 10 1.70 Property or Properties..... ........... ............................ ............................................. 10 1.71 Property Conditions ........ ............................................................. ........ ............... 11
1.72 Property Taxes....... ........ ........................ .............................. ......... ...... ................ 11 1.73 Prospective Employees .......................................................................................11

1.74 Purchase Price..................................................................................................... 11

1.75 PV - NRI ............................................................................................................... 11 1.76 Records........ .... ........... ............. ... ............... .......... ........... .................................... 11 1.77 Related Agreements..... ............ .................. .......... ............. .................................. 12

1.78 Remaining Employees ............. ............................. .............................................. 12 1.79 Royalty Interests ......................... ........................................................................ 12
1.80 Sale Order.. .............................. ......... .................................................................. 12

1.81 Sale Procedures Order............. ................................. ........................................... 12 1.82 Securities Act................ ........ ....................... ................................ ...... ................. 12
1.83 Seller or Sellers................................................................................................... 12

1.84 Silver Point................. ........................ ........................ ...................... ............ ....... 12 1.85 Site Visit Indemnity Agreement .................... .......... ................ .................... ....... 12 1.86 Stock............ .... ............ ............ .............. ..... ..................... ................................... 13
1.87 Stock Closing........................... ............................. .............................................. 13

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1.88 Stock Closing Date ................ ........................ ......... ........... ................... ............ ..13
1.89 Stock Deposit...................................................................................................... 13

1.90 Stock Purchase Price........................................................................................... 13 1.91 Strct Liability.............. .............................................. ................ ........................ .13 1.92 Tangible Assets ............. ............ .................................... ............. ..................... ....13 1.93 Third Pary.......................................................................................................... 13 1.94 Title Defect......................................................................................................... 13 1.95 Title Defect Notice................. ........... ........... .................... ..................... ............ ..13
1.96 Transaction Documents ...................................................................................... 13

1.97 Uncured Title Defect....... ......................... ................................... .................... ....13 1.98 Uncured Title Defects Value.... ....................................... .......... ..................... ....13 1.99 Units.. ............... ...................... ........... ............... ...................... .................... ...... ...13 1.1 00 WARN Act....... ...................... ....... ............ ....................... ......... ............ .............. 14 1.101 Well or Wells...................................................................................................... 14

ARTICLE 2 PURCHASE AND SALE................................................................................... 14

2.1 Interests and Stock........ ........ ........... ..................... ...................... .................... ....14

2.2 Assumption...... ..................... ........... ............. ......................... ................... ........ ..14

ARTICLE 3
3.1

3.2
3.3

PURCHASE PRICE ............................... ............... ........................... .................. 14 Purchase Price. ........ ........... .......................................... ................ ....................... 14 Increases in Alaska Interests Purchase Price...................................................... 14 Decreases in Alaska Interests Purchase Price..................................................... 15

ARTICLE 4
4.1

BUYER'S REVIEW ...........................................................................................16

16 Access to Assets and Properties....................................................... ................... 17
Buyer's Review before the Execution Date........................................................

4.2 4.3 4.4 4.5 4.6 4.7 4.8

Environmental Review...... ........................................................... ....................... 17 Tangible Assets; Casualty Loss. ...................................... ......... ...................... ....17 No Representation or Waranty of Accuracy; Disclaimer. .................................17 Acknowledgments of Buyer.......... .................... ................................. .............. ..18 Independent Evaluation................... ..... ... ......................................... ..................21 Buyer's Confidentiality Obligations; Press Releases. ........................................21

ARTICLE 5
5.1

5.2 5.3 5.4 5.5 5.6

TITLE AND TITLE DEFECTS ................... ....... ...............................................22 Title Defect......................................................................................................... 22 Title Defect Notice. ........................................................................ ..................... 22 Determination of Title Defects and Defect Values............................................. 23 Calculation of Defect Value. .............. ............. ......... .............. ............................. 23 Consequences of Title Defect ................................................ .................... .........24 Description and Other Errors ..............................................................................24

ARTICLE 6 CERTAIN COVENANTS BETWEEN EXECUTION DATE AND CLOSINGS............. .................. ................................................. ......................... 25
6.1 Related Agreements. . ................. ....... .......................... ......... ............................... 25

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6.2
6.3 6.4 6.5 6.6 6.7 6.8

Third Pary Notifications and Regulatory Approvals for the Alaska Interests. .............................................................................................................. 25 Third Pary Notifications and Regulatory Approvals for the Stock. .................. 26 Termination of Sellers' Insurance............. .................. ................ ......... ...............26 Conduct of Business Pending the Alaska Interests Closing. ..............................26 Preferential Rights to Purchase. ..........................................................................28
Sale Procedures ....... .............................. ......................... ...................... ............... 29

Payment of Deposits ... .................... .................................................................... 29

ALASKA INTERESTS CLOSING............................. ....... ................ ................ 29 Alaska Interests Closing Date............................................................................. 29 Closing Obligations; Deliveries.......................................................................... 29 Sellers' Conditions.............................................................................................. 31 Buyer's Conditions ........ ......................... .................... ................. .......................32
STOCK CLOSING .............. ....................... .............. ...................... ....................33 Stock Closing Date ........ ....... ..................... ................................. ........................33 Closing Obligations; Deliveries.................. ................ .................... ....................33 Sellers' Conditions.............................................................................................. 34 Buyer's Conditions ....... ...... .................... ..................... ................ .......................34
TERMINATION...... .......... .................... ...................... ..................... .................. 35 Events of Termination......................... ................................................................35 Effect of Termination.. ................ ..................................... ...................................36 Events of Termination of Stock Sale ..................................... ....................... ...... 36 Effect of Termination of Stock Sale. .................................................................. 36

ARTICLE 7
7.1

7.2 7.3 7.4

ARTICLE 8
8.1

8.2 8.3 8.4

ARTICLE 9
9.1

9.2 9.3 9.4

ARTICLE 10 CERTAIN OBLIGATIONS AFER ALASKA INTERESTS CLOSING ........................................................................................................... 37 10.1 Filing and Recording...................... ................................... ............................. ..... 37
10.2 Copies ........ ...... ........................... ................................ ................................... ..... 37

10.3 Furter Assurances.................... ............................. ............. ................................37 10.4 Post-Closing Consents. ............ .............................. ............. .................... ............37 10.5 Buyer's Compliance............... ................................ .............. ...............................38 10.6 Allocation of Proceeds, Costs and Expenses. .....................................................38
10.7 Plugging and Abandoning Wells and Platforms; Remediation; Security for Buyer's Obligations.. ....... .......................... ............................ ........................38

10.8 Preliminary Settlement Statement............ ................... ............. ...........................40 10.9 Final Settlement Statement. .................... .................... ........................ ................40 10.10 Post-Closing Revenues .............................. ................. ................... .....................41 10.11 Post-Closing Expenses ............................ .................... ........................ ................ 41 10.12 Audits.................. ................ .................... .............. ..............................................41 10.13 Reservation of Claims ..................... ....... .............................................................42
ARTICLE 11 TAXES, COSTS, AND FEES.... ............................................ ...................... ...... 42 11.1 Property Taxes. ......................... .............................. ...... ........................... ...........42

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11.2 Production Taxes ................. ..... ................................ ........... ..................... .......... 42 11.3 Other Taxes...... .......................... ......................................... ................... ............. 42

ARTICLE 12 POST-CLOSING OPERATIONS BY BUYER.................................................43 12.1 Operation by Buyer. ....... ......................... ................ ........................... .......... .......43 12.2 Removal of Signs.. ................................... .............. ......... .............. ......................43 12.3 Risk of Loss.... .................................................. ......................... ............... ..........43
ARTICLE 13 EMPLOYEES AND PERSONNEL ................................. ........................... .......43 13.1 Offers of Employment. ........ ..... ....... ............................ .......................................43 13 .2 WARN Act Indemnification ........ ............................................ ........... ................ 44
13.3 General Employee Provisions...... ....................................................... ................44

ARTICLE 14 BUYER'S RELEASE, DISCHARGE, AND COVENANT NOT TO SUE; BUYER'S OBLIGATIONS TO INDEMNIFY, DEFEND, AND HOLD HARMLESS; DISPUTE RESOLUTION ..............................................45 14.1 Buyer's Release and Discharge of Sellers and their Associated Paries.............45 14.2 Buyer's Covenant Not to Sue Sellers or their Associated Parties ......................45
14.3 Buyer's Obligations to Indemnify, Defend, and Hold Sellers and their
Associated Paries Harless ............. .................................... ............... ...............45

14.4 Buyer's Obligations. ..................... ....... ............ .................................. .................46 14.5 Buyer's Duty to Defend........................... ........ .............................. ............ .........48 14.6 Dispute Resolution. ........ ..................................... ......................... ............ ........... 48 14.7 Retroactive Effect ................................................. .............. ................... ............. 48 14.8 Inducement to Sellers. ........ ................ .......................... ...... ................... ..............48
ARTICLE 15 ENVIRONMENTAL MA TIERS ............... ........ ........................... ......... ........ ...48 15.1 Buyer's Acknowledgment Concerning Possible Contamination of the
Tangible Assets and the Properties ...... ............................. ........... ............... ........48
15.2 Disposal of

Materials, Substances, and Wastes; Compliance with Law ............49

ARTICLE 16 REPRESENTATIONS AND W ARRANTIES...................................................49 16.1 Representations by Sellers .................................................. ................ ................ 49
16.2 Representations by Buyer... ................................................................ ................50

ARTICLE 17 COMMUNICATIONS........ .............................................. ........... ......................53

ARTICLE 18 MISCELLANEOUS............................ .... ............. ...................... ............. ...........54 18.1 Entire Agreement.... ............................................... ............. ................... .............54 18.2 Successors and Assigns; Amendment; Survival................................................54 18.3 Exclusive Remedy................. ........................................................ .....................54 18.4 Choice of Law.. .................... ........................ ................. ................ ............... .......55 18.5 Assignment......... ................. ..... ............. ...................................... ............... ........55 18.6 No Admissions.............................. ........... ....... ..... ............... ....... .............. ...........55 18.7 No Third Pary Beneficiares.......... ........... ......... .................. ................... ...........55 18.8 Public Communications.. .............................................. ....... .................. ............. 55

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18.9 Headings and Titles.............. .............. .... .............................................................55

18.10 Bulk Transfer Law......... ...... ............. ....... ...........................................................55 18.11 Severability....... ................. ...................... .................. .........................................55
18.12 Counterpars..... .......................... ............... .................. ........................................56

18.13 Not to Be Construed against the Drafter. ..................... ......... ............................. 56 18.14 No Waiver ......... ................... ................... .................... .................. ......................56
18.15 Expenses.... .............. ............................. ..................... .........................................56

18.16 Time of Essence....... ..... ................ ....... ....................................................... ........ 56

18.17 No Parnership.............. ....................... ................. .............................................. 56

18.18 Foreign Trade Law Compliance........ ........... .................... ......... ..... .............. ...... 56
18.19 Rules of Construction......................................................................................... 56

Exhibits and Schedules

Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G

Description of the Alaska Interests Certain Contracts Comprising the Alaska Interests Form of Assignment and Bil of Sale Form of Non-Foreign Affidavit Copy of Site Visit Indemnity Agreement Copy of Sale Procedures Order
- Form of Transition Services Agreement

Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 -

Certain Consents Certain Excluded Items

Performance Bonds

Permitted Encumbrances Certain Disclosures

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this "Agreement"), dated as of , 2009 (the "Execution Date"), is by and between , a

with an address of

("Buyer"), PACIFIC ENERGY ALASKA

OPERATING LLC, a Delaware limited liabilty company with an address of 111 W. Ocean
Boulevard, Suite 1240, Long Beach, California 90802 ("PEAO"), and PACIFIC ENERGY ALASKA HOLDINGS, LLC, a Delaware limited liabilty company with an address of 111 W. Ocean Boulevard, Suite 1240, Long Beach, California 90802 ("PEAH"). PEAO and PEAH may each be referred to herein as a "Seller" and collectively as the "Sellers." Sellers and Buyer may each be referred to herein as a "Pary" and collectively as the "Parties."

R E C ! TAL ,:
A. Pursuant to an Asset Sales Agreement by and between Forest Oil Corporation and

PERL (as defined below) and a Membership Interest Purchase Agreement by and among Forest Oil Corporation, Forest Alaska Holdings LLC, Forest Alaska Operating LLC and PERL, each dated May 24, 2007, as amended, Sellers acquired the Alaska Interests (as defined below), and PEAH acquired the Stock (as defined below) and 100% of the membership interests in PEAO.

B. Buyer desires to purchase the Alaska Interests and the Stock from Sellers, and
Sellers desire to sell the Alaska Interests and the Stock to Buyer, in each case effective as of the Effective Time (as defined below), and subject to the terms and conditions of this Agreement.
C. Sellers are debtors in possession under the protection of Chapter 11 of the United

States Bankrptcy Code pursuant to jointly administered cases under Case Number 09-10785

(the "Bankrptcy Case") filed with the United States Bankrptcy Court for the District of Delaware (the "Bankrptcy Court"). The transactions contemplated by this Agreement,
including the purchase and sale of the Alaska Interests and the Stock hereunder, are subject to

approval by the Bankrptcy Court pursuant to Sections 105, 363 and 365 of the Bankrptcy
Code (as defined below).

A G R E E MEN T ,:

In consideration of their mutual promises under this Agreement, the benefits to be

derived by each Pary, and other good and valuable consideration, the Paries agree as follows:

ARTICLE 1 DEFINITIONS
The following terms, when used in this Agreement, have the following definitions:
1.1 Abandonment Oblie:ations. Defined in Section 1O.7(a).
1.2 Affected Emplovees. Defined in Section 13.1

(a).

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1.3 Affiiates. A Person's "Parent Companies" and "Affiliated Companies." "Parent

Companies," "Affiliated Companies," and "Controllng Interest" shall have the following
meanings:
(a) A Person's "Parent Companies" means any and all entities having a

"Controlling: Interest" in such Person;

(b) A Person's "Affilated Companies" means any and all entities in which the Person or the Parent Companies of such Person have a direct or indirect "Controllng
Interest"; and
(c) "Controllng Interest" means a legal or beneficial ownership of more than

50% of the voting stock or other voting rights in an entity.

1.4 Aereement. Defined in the preamble of this Agreement, as more particularly

described in Section 18.19(c).

1.5 Alaska Interest or Alaska Interests. All of Sellers' right, title and interest in and

to, except for the Excluded Items and subject to the limitations and terms expressly set forth
herein and in Exhibit A and Exhibit B:
(a) All Fee Interests, Leases and Lands, together with corresponding surface

and subsurface interests in and to all the property and rights incident thereto, including any Units; all tenements and hereditaments belonging to the Leases and the Units; all production from the Units allocated to any such Lands; and all reversionary interests, cared interests, options, convertible interests, net profits interests, together with all rights that arise by operation of Applicable Laws or otherwise in all properties and land unitized, communitized or pooled with the Leases or Lands;
(b) All Easements;

(c) All Wells;

(d) All Tangible Assets;
(e) All Oil and Gas (or the proceeds from the sale of Oil and Gas) produced

after the Effective Time;

(t) All Contracts;
(g) All unitization, commumtization and pooling declarations, orders and

agreements (including all units formed by voluntary agreement and those formed under
the rules, regulations, orders or other official acts of Governmental Authorities) to the extent they relate to the Properties or the production of Oil and Gas therefrom;
(h)
(i)

All Permits;

All Records;

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(j) All Royalty Interests;

(k) All parnership and joint venture interests (tax, state law or otherwise)
affecting any Properties, Easements, Wells or Tangible Assets;

(1) To the extent assignable, all rights to indemnities (including the Forest Indemnities) and releases from any Third Pary relating to the Properties, Easements, Wells or Tangible Assets, in each case only to the extent such indemnities and releases relate to (i) activities occurrng on or after the Effective Time or (ii) any Claim or Liability assumed by Buyer under this Agreement, provided that Sellers shall retain their interest in such representations, waranties, indemnities and releases to the extent Sellers
may potentially remain liable for any such Claim or Liability;
(m) All intangibles, including operating revenues and accounts receivable

relating to the period after the Effective Time, in each case associated with the Properties or the production of Oil and Gas attrbutable thereto;
(n) All leases or subleases of Tangible Property as to which Sellers are (i)

lessor or sublessor or (ii) lessee or sublessee, together with any options to purchase the underlying property; and
(0) All leases for real property used by Sellers in connection with the

operation of their business (such as leases for office and warehouse space, but excluding the Leases); and
(p) Right to seek a refund from the State of Alaska for any overpaid royalties

relating to Sellers' interests in the Chevron Operated Assets.

The Alaska Interests shall explicitly exclude the Excluded Items, which are not being
transferred hereunder.

1.6 Alaska Interests Closinl!. Defined in Section 7.1.

1.7 Alaska Interests Closinl! Date. The date on which the Alaska Interests Closing occurs, subject to the modification of the term "Alaska Interests Closing Date" as set forth in
Section 6.6(d).

1.8 Alaska Interests DeDosit. Defined in Section 6.8.

1.9 Alaska Interests Purchase Price. The amount set forth in Section 3.l(a).

1.10 Allocated Value. The portion of the Purchase Price allocated to specific portions
of the Alaska interests and the Stock as set forth on Exhibit A.

1.11 ADDlIcable Laws. Any and all federal, state, native American, county, municipal laws, ordinances, regulations, rules, permits, or other regulatory requirements and any administrative, executive or judicial or court orders or judgments, as well
or other federal, state or local

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as the common law, in each case which are applicable to any of the Paries, CIPL, the Alaska
Interests, or the Stock.

1.12 Assiimment and Bil of Sale. An instrment substantially in the form of

Exhibit C.

1.13 Associated Parties. As to each Pary, its successors, assigns, members,

shareholders, directors, offcers, employees, agents, representatives, contractors, subcontractors

and Affiliates.

1.14 Assumed Liabilties. The following Liabilties of Sellers:

(a) All Liabilties associated with, related to or arsing from the ownership of

the Alaska Interests or the Stock on or after the Effective Time;

(b) All Liabilities associated with, related to or arsing from the operation of

the Properties on or after the Effective Time;

(c) All Environmental Liabilties;
(d) All accounts payable that accrue on or after the Effective Time;
(e) All joint interest bilings due to Chevron or its affiliates in connection with

the Chevron Operated Assets, whether associated with, related to or arsing from the
periods prior to, on or after the Effective Time;
(t) All royalty obligations associated with, relating to or arsing from the

Alaska Interests that accrue on or after the Effective Time;

(g) All Claims arsing out of the ownership or operation of the Alaska

Interests on or after the Effective Time;

(h) All plugging, abandonment, decommissioning, removal and/or restoration

Liabilties associated with, related to or arsing from the Alaska Interests with respect to the periods prior to, on or after the Effective Time; and
(i) All Liabilties under litigation to which either or both Sellers is currently a

pary or is joined as a party after the Execution Date.

For purposes of clarty, Assumed Liabilities excludes any and all Liabilities not
specifically referenced in this Section 1.14.
1.15

Bankruptcy Case. Defined in the Recitals of this Agreement.

Bankruptcy Claim. As defined in Section 101(5) of

1.16
1.17

the Bankrptcy Code.

Bankruptcv Code. Title 11 of the United States Code, as amended.

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1.18 Bankruptcv Costs. All costs and claims related to the Bankrptcy Case,
including all administrative expenses and claims for administrative expenses pursuant to
Section 503 of the Bankuptcy Code.

1.19 Bankruptcv Court. Defined in the Recitals of this Agreement.

1.20 Bbl Barel of oiL.

1.21 Business Dav. Any day on which the Banptcy Court is physically open to the
public.
1.22 Buver. Defined in the preamble of this Agreement.

1.23 Casualtv Loss. Any loss, damage or reduction in value of the Tangible Assets
that occurs during the period between the Execution Date and the Alaska Interests Closing as a
result of acts of God, fire, explosion, terrorism, earthquake, volcanic activity, windstorm, storm

or flood, but excluding any loss, damage or reduction in value as a result of depreciation,
ordinary wear and tear and any change in condition of the Tangible Assets for production of Oil and Gas through normal depletion (including the watering out of any well or sand infiltration of any well).

1.24 CERCLA. The Comprehensive Environmental Response, Compensation and

Liability Act, as amended.

1.25 Chevron Operated Assets. All of PEAO's assets and other interests II or
associated with the Trading Bay Unit or Trading Bay Field in Cook Inlet, Alaska.

1.26 CIPL. Cook Inlet Pipe Line Company, a Delaware corporation.

1.27 Claim or Claims. Collectively, any and all written or oral claims, demands,
suits, causes of action, losses, damages, liabilties, fines, penalties and costs (including attorneys' fees and costs of litigation) asserted or, as applicable, filed by any Person.
1.28 Confidentialitv Al!reement. The Confidentiality Agreement, dated ( ),

2009, between Sellers and Buyer.

1.29 Consents. Any approval, consent, ratification, waiver or other authorization from

any Person (including any of the foregoing issued, granted, granted, given or otherwise made
available by or under the authority of any Governmental Entity or pursuant to any Applicable Laws), including those set forth on Schedule 1.
1.30 Contracts. All farout and farmin agreements, operating agreements, production

sales and purchase contracts, processing contracts, gathering contracts, transportation contracts,

saltwater disposal agreements, surface leases, subsurface leases, division and transfer orders,
areas of mutual interest, balancing contracts, and all other written contracts, contractual rights,

interests and other written agreements and instrments covering or affecting any or all of the Alaska Interests or the production, handling or transportation of Oil and Gas attributable thereto
or the use or ownership or operation of any of the Alaska Interests or the Oil, Gas, water or other

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substances produced therefrom, to be assigned to or assumed by Buyer under this Agreement, including those certain contracts listed on Exhibit B, but excluding the Credit Agreements.
1.31 Credit Aereements. (i) The Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement, dated as of March 11, 2009, among PERL, Sellers, 1. Aron, Silver Point and certain other lenders, guarantors and others pary thereto, as amended, supplemented and modified from time to time, and (ii) the Second Lien Credit Agreement, dated August 24, 2007, among Sellers, 1. Aron, Silver Point and certain other lenders, guarantors and others pary thereto, as amended, supplemented and modified from time to time.

1.32 Defect Value. With respect to each Title Defect, the reduction of the value of the affected Property as a result of such Title Defect, calculated in accordance with the guidelines set
forth in Section 5.4.

1.33 DNR. Alaska Department of Natural Resources.

1.34 Easements. All easements, rights-of-way, rights-of-use, servitudes, licenses,

authorizations, permits, and similar surface and other rights and interests applicable to, or used or useful in connection with, any or all of the Properties, as described on Exhibit A.

1.35 Effective Time. In the case of (i) the Alaska Interests, as of 7:00 a.m. California
time on July 1,2009, and (ii) the Stock, as of

the Stock Closing.

1.36 Environmental Laws. Any and all Applicable Laws of any Governmental Entity whose purpose is to conserve or protect human health, the environment, wildlife or natural

resources, including those Applicable Laws relating to storage, handling and use of chemicals and other hazardous materials; those relating to the generation, processing, treatment, storage, transport, disposal, cleanup, remediation or other management of waste materials or hazardous substances of any kind; and those relating to the protection of environmentally sensitive or
protected areas. Without limiting the foregoing, Environmental Laws expressly includes the

Clean Air Act, as amended; the Federal Water Pollution Control Act, as amended; the Rivers and

Harbors Act of 1899, as amended; the Safe Drinking Water Act, as amended; CERCLA; the
Superfund Amendments and Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery Act of 1976, as amended; the Hazardous and Solid Waste

Amendments Act of 1984, as amended; the Toxic Substances Control Act, as amended; the Hazardous Materials Transportation Act, as amended; Title 46 of the Alaska Statutes; and Title
18 of the Alaska Administrative Code.
1.37 Environmental Liabilties. All Liabilities under Environmental Laws relating

to, arising out of, in connection with, or attributable to ownership or operation of the Alaska Interests, whether associated with, related to or arising from the periods prior to, on or after the
Effective Time.

1.38 Escrow Aereement. Defined in Section io.7(c).

1.39 Excluded Items. The (i) reservations, exceptions and exclusions, if any, listed on Exhibit A and Exhibit B, (ii) the items listed in Schedule 2, and (iii) the following:

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(a) pipelines, fixtures, equipment, interests in land or any other property

owned by any Third Party such as lessors, contractors, purchasers or transporters of Oil or Gas, including any of Sellers' Affiliates;
(b) Sellers' geological or geophysical data containing information not related

to the Alaska Interests;

(c) (i) cash located on or at the Properties, (ii) deposits with Government

Entities, contractors and vendors, and (iii) other cash equivalents, in each case to the extent that such cash was generated from transactions occurrng prior to the Effective Time or such deposit was made prior to the Effective Time or such transactions or
deposits do not relate to the Alaska Interests;
(d) items used, consumed or disposed of in the ordinary course of business

prior to the Closing;

(e) all rights to representations, waranties, indemnities (including the Forest

Indemnities) and releases from any Third Party, except indemnities and releases that are specifically included in the Alaska Interests pursuant to Section 1.5(1.
(t) all surety bonds, plugging bonds, abandonment bonds, standby trust

agreements, escrow accounts for plugging, abandonment, decommissioning, removal and restoration obligations, and other bonds posted by or at the request of Sellers, and security deposits and other security furnished by Sellers or their predecessors in interest;
(g) except for the right to proceeds assigned pursuant to Section 6.4, all rights

under insurance policies held by Sellers or any of their Affiliates covering any of the
Alaska Interests or Sellers' interests in CIPL;
(h) Tangible Assets currently in use in connection with the ownership or

operation of other property not included in the Alaska Interests;

(i) Records that are subject to attorney-client privilege, work product

immunity or other privileges against disclosure enjoyed by Sellers or any of their

Associated Parties, including all privileged information and work product of Sellers and CIPL from the period up to and including the Closing;

U) any interests, properties or assets owned by any Person other than Sellers;

(k) any and all Claims against operators or other third paries arising out of
the operation of the Properties, Alaska Interests or CIPL prior to the Effective Time;
(1) the Redoubt Interrption Claim; and

(m) all Contracts between a Seller or Sellers, on one hand, and PERL or any
Affiliate of PERL (other than Sellers), on the other hand.

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1.40 Excluded Liabilties. Without limiting the definition of Assumed Liabilties or implying that Buyer is assuming any Liabilty other than the Assumed Liabilties, the following Claims against and Liabilities and obligations of Sellers are excluded and not assumed by Buyer:
(a) All Liabilities associated with, related to or arsing from debt instrments

to which one or both Sellers is a party, except for Liabilties that relate to Permitted
Encumbrances;
(b) All accounts payable that have accrued prior to the Effective Time;

(c) All royalty obligations associated with, related to or arising from the

Alaska Interests that have accrued prior to the Effective Time;

(d) All Claims, except Environmental Claims and Abandonment Obligations,

arsing out of the ownership or operation of the Alaska Interests prior to the Effective
Time; and

(e) All Bankrptcy Claims (except Environmental Claims and Abandonment

Obligations) and Bankrptcy Costs (except Environmental Claims and Abandonment

Obligations ).
1.4 i Execution Date. Defined in the preamble.
1.42 Fee Interests. All fee interests to the surface and in the Oil and Gas, including

rights under grant deeds, mineral deeds, conveyances or assignments, as described on Exhibit A.
1.43 Final Alaska Interests Purchase Price. The actual Alaska Interests Purchase

Price, as adjusted in accordance with Section 3.2 and Section 3.3, determined based on the Final
Settlement Statement.

1.44 Final Settlement Statement. Defined in Section io.9(a).

1.45 Forest Indemnities. Sellers' rights to indemnification provided by Forest Oil Corporation under the Assets Sales Agreement and Membership Interest Purchase Agreement, each as amended, referenced in the Recitals to this Agreement and under that certain indemnity letter dated January 29,2008, as supplemented on November 6,2008.

1.46 GAAP. Generally accepted accounting principles in Canada, as in effect from

time to time.

1.47 Gas. Natural gas, including casinghead gas, gas-well gas and other hydrocarbon

gases.

1.48 Governmental Bonds. All bonds or other forms of financial security (including

all lease-specific abandonment bonds, areawide bonds, operator bonds, right of way bonds, supplemental bonds for abandonment accounts) required by the DNR or other Governmental
Entities in connection with Buyer's acquisition and ownership of the Alaska Interests or Buyer's designation as an operator of the Properties or any Alaska Interest.

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1.49 Governmental Entitv. Any federal, state, native American, county, municipal or other federal, state or local governmental entity or judicial or regulatory agency, board, body, department, bureau, commission, instrmentality, court, trbunal or quasi-governmental entity in any jurisdiction (domestic or foreign) having jurisdiction over any Pary or any affected asset, or over any of the transactions contemplated by this Agreement.
1.50 Hirin2: Period. Defined in Section 13.l(a).
1.5 i Imbalances. Over-production or under-production subject to an imbalance or

make-up obligation with respect to Oil and Gas produced from or allocated to the Properties,
regardless of whether such over-production or under-production, imbalance or make-up
obligation arses at the wellhead, pipeline, gathering system, transportation or other location and

regardless of whether the same arses under contract or by operation of Applicable Laws.
1.52 .T. Aron. J. Aron & Company.
i .53 Lands. All of the lands covered by the Leases.

i .54 Leases. The Oil and Gas leases and subleases, and the surface and subsurface

leasehold estates created thereby, as described in Exhibit A.

i .55 Liabiltv or Liabilties. Collectively, all damages (including consequential and

punitive damages), including damages for personal injury, death or damage to personal or real property (both surface and subsurface) and costs for remediation, restoration or clean up of contamination, whether the injury, death or damage occurred or occurs on or off any of the Properties by migration, disposal or otherwise; losses; fines; penalties, expenses; costs to remove or modify facilities on or under any of the Properties; costs to recondition or repair the Tangible Assets; all Abandonment Obligations, including without limitation, plugging liabilities for all Wells, platforms, pipelines and other facilties; attorneys' fees; court and other costs incurred in defending a Claim; liens; and judgments; in each instance, whether these damages and other costs are foreseeable or unforeseeable.

i .56 Material Amount. An amount, as of the date of estimation or determination,

equal to $1,000,000 or more.

1.57 Minimal Defect. Any individual Title Defect with a Defect Value of less than
$1,000,000.

1.58 MMBTU. One milion British Thermal Units.

1.59 Net Revenue Interest. Sellers' interest in and to all production of Oil and Gas saved, produced and sold from any Property.
1.60
1.61

NORM. Naturally occurrng radioactive materiaL.

OiL. Crude oil, distilate, drp gasoline, condensate and other liquid hydrocarbons.

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1.62 Oreanizational Documents. With respect to any Person, its certificate of

incorporation, formation or organization (or comparable) document, its by-laws, parnership agreement or any certificate of formation, limited liabilty company agreement or operating
agreement, or any other similar organizational instrument or document governing such Person or applicable to ownership.
1.63 Party or Parties. Defined in the preamble of this Agreement.

1.64 PEAH. Defined in the preamble of this Agreement. 1.65 PEAO. Defined in the preamble of this Agreement.
1.66 PERL. Pacific Energy Resources Ltd., a Delaware corporation, which is a debtor in possession under the Bankrptcy Case, owner of all of the issued and outstanding membership interests of PEAH and operator of certain Alaska Interests.
1.67 Permits. All transferable environmental and other governmental (whether
federal, state, local or tribal) certificates, consents, permits, licenses, orders, authorizations,

franchises and related instrments or rights relating to the ownership, operation or use of the Propertes, including credits or the right to create credits or other transferable rights relating to
past or future emissions reductions.

1.68 Permitted Encumbrances. Any mortgage, deed of trust, lien, encumbrance,

Claim, royalty, obligation or interest (i) related to one or more Assumed Liabilty, (ii) set forth on Exhibit A or Exhibit B, or (iii) set forth on Schedule 4.
1.69 Person. Any individual, corporation, parnership, joint venture, association,

limited liabilty company, joint stock company, trust, estate, unincorporated organization,
Governmental Entity or other entity.
1.70 Post-Closine Approvals. The Successor Operator Approval and the Stock

Transfer Approval, each of which Buyer shall obtain as soon as possible post-Closing.

1.71 Preliminary Alaska Interests Purchase Price. An estimate of the Alaska

Interests Purchase Price, as adjusted in accordance with Section 3.2 and Section 3.3, determined based on the Preliminary Settlement Statement.
1.72 Preliminary Settement Statement. Defined in Section 10.8.

1.73 Production Taxes. All federal, state or local taxes, assessments, levies or other
charges, which are imposed upon production from the Properties, including, without limitation, excise taxes on production, severance or gross production, as well as any interest, penalties and fines assessed or due in respect of any such taxes, whether disputed or not.
1.74 Property or Properties. The real properties included within or covered by the Leases, Lands, Units and Pee Interests.

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1.75 Property Conditions. The physical condition or any other aspect of the
Propertes and the Tangible Assets, including (a) the structural integrty of any improvements on the Properties or the Tangible Assets; (b) the conformity of improvements on the Properties or the Tangible Assets to any plans or specifications for such Properties or the Tangible Assets; (c) the conformity of the Properties or the Tangible Assets to past, current or future applicable zoning or building code requirements; (d) the existence of soil instabilty, past soil repairs, soil

additions or conditions of soil fill, or susceptibilty to landslides; (e) the sufficiency of any undershoring; (t) the sufficiency of any drainage; (g) whether the Properties or the Tangible Assets are located wholly or parially in a flood plain or a flood hazard boundar or similar area;

(h) any other matter affecting the stability or integrity of the land, or any buildings or
improvements situated on or as par of the Properties or the Tangible Assets; (i) the availabilty

of public utilities and services for the Properties or the Tangible Assets; (j) the fitness or suitabilty of the Properties or the Tangible Assets for any intended use; (k) the potential for furter development of the Alaska Interests; (1) the existence of vested land use, zoning or
building entitlements affecting the Alaska Interests or the Tangible Assets; or (m) the presence of toxic wastes, hazardous materials or frable asbestos in, on or about the Alaska Interests or the Tangible Assets.

1.76 Property Taxes. All federal, state or local taxes, assessments, levies or other
charges, which are imposed upon the Properties or other real and personal property of Sellers that is acquired by Buyer hereunder, including, without limitation, ad valorem, property, documentary or stamp, as well as any interest, penalties and fines assessed or due in respect of any such taxes, whether disputed or not.
1.77 Prospective Emplovees. Defined in Section 13.l(a).

1.78 Purchase Price. Defined in Section 3.l(b).

1.79 PV-NRI. Defined in Section 5.4(b).

1.80 RCA. Regulatory Commission of Alaska.

1.81 Redoubt Interruption Claim. Any and all claims or rights of Sellers or their
Affilates relating to the business interrption arsing from or related to the volcanic and seismic

activity that began in March 2009.

1.82 Successor Operator Approval. Final, unconditional approval by the DNR and any other applicable Governmental Entity of the Buyer as the successor operator for the Alaska Interests operated by PERL pursuant to the Transition Services Agreement.
1.83 Stock Transfer Approval. Final, unconditional approval by the RCA and any

other applicable Governmental Entity of the transfer of the Stock from PEAH to Buyer.

1.84 Records. All books and records, files, records, data, correspondence, studies,
surveys, reports, Oil and Gas sales contract files, gas processing fies, geologic, proprietary geophysical and seismic data (including raw data and any interpretative data or information

relating to such geologic, geophysical and seismic data) and other data (in each case whether in written or electronic format) in Sellers' possession and relating to the operation of the Properties,
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including all title records, prospect information, title opinions, title insurance reports, abstracts, property ownership reports, customer lists, supplier lists, sales materials, well logs, well tests, maps, engineering data and reports, health, environmental and safety information and records, Third-Pary licenses, promotional materials, operational records, technical records, reserve estimates and economic estimates; production and processing records, division order, lease, land and right-of-way files, accounting and financial files, tax records (other than income tax), and contract files (including all fies regarding the Contracts and related files); provided, however, "Records" shall not include (a) Sellers' general corporate, accounting and financial books and records, even if containing references to Properties, (b) books, records (including seismic data) and fies that may not be disclosed under the terms of any Third Party agreement (and consent to
make disclosure has not been obtained) or are not transferable without payment of fees or penalties (except as may be agreed to be paid by Buyer) or cannot be disclosed under Applicable Laws, (c) information entitled to legal privilege, including attorney work product and attorney-

client communications (excluding title opinions, which shall be included in the Records), and

information relating to Excluded Items, (d) Sellers' studies related to internal reserve
assessments, (e) income tax information, (t) records relating to the acquisition or disposition (or proposed acquisition or disposition) of the Properties, including proposals received from or made to, and records of negotiations with, Persons other than Buyer and economic analyses associated therewith, (g) seismic data already owned or held by Buyer, and (h) Excluded Items.
1.85 Related A2reements. Defined in Section 6.l(a).
1.86 Remainin2 Employees. Defined in Section 13.l(a).

1.87 Royalty Interests. All royalties, overrding royalties, sliding scale royalties, shut-in royalties, rights to royalties in kind, or other interests in production of Oil and Gas,
excluding working interests, as set forth on Exhibit A.

1.88 Sale Order. The sale order entered by the Bankrptcy Court approving the consummation of the purchase and sale of the Alaska Interests and the Stock as contemplated by this Agreement.
1.89 Sale Procedures Order. The Sale Procedures Order attached hereto as Exhibit F,
which was entered by the Bankrptcy Court on ( ),2009.
1.90 Securities Act. The Securities Act of 1933, as amended, or any successor law

thereto, as well as all regulations and rules issued pursuant to that act or any such successor law thereto.
1.91 Seller or Sellers. Defined in the preamble of this Agreement.

1.92 Silver Point. Silver Point Finance, LLC.

1.93 Site Visit Indemnity A2reement. The Agreement for Indemnification and

Responsibility for Damages to the Subject Properties in Connection with Site Visit and
Investigation, dated as of ( ), 2009, between Sellers and Buyer, as amended and

supplemented, a copy of which is attached as Exhibit E.

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1.94 Stock. 20,000 shares of common stock of CIPL.

1.95 Stock Closin2:. Defined in Section 8.1.

1.96 Stock Closin2: Date. The date on which the Stock Closing occurs.

1.97 Stock DeDosit. Defined in Section 6.8.

1.98 Stock Purchase Price. Defined in Section 3.l(b ).

1.99 Strict Liabiltv. Includes strict statutory liabilty, strict products liabilty and
strict environmental liabilty.

1. 100 Tan2:ible Assets. All pipelines, flowlines, plants, gathering and processing systems, buildings, vehicles, compressors, meters, tans, machinery, tools, pullng machines,
utility lines, personal property, all computer and automation equipment located in proximity to the Properties (including SCADA equipment and Rosemont transmitters, telecommunications equipment, field radio telemetry and associated frequencies and licenses, pressure transmitters and central processing equipment that is used primarly in connection with the ownership or operation of the Properties), equipment, fixtures, and improvements and other appurtenances, on or to, the Properties, insofar as they are used or were obtained in connection with the ownership, operation, maintenance or repair of the Properties or relate to the production, treatment, sale, or disposal of Oil and Gas produced from the Properties or attributable thereto.

1.101 Third Partv. A Person other than Buyer and its Affiliates or Sellers and their Affilates.
1.102 Transition Services Aereement. A Transition Services Agreement to be entered into between PERL and Buyer at the Alaska Interests Closing, substantially in the form of
Exhibit G.

1.103 Transition Termination Date. The date that the Transition Services Agreement
expires or is terminated.

1.104 Title Defect. Defined in Section 5.1.

1.105 Title Defect Notice. Defined in Section 5.2.
1.106 Transaction Documents. Defined in Section 18.1.

1. 107 Uncured Title Defect. Any Title Defect, other than a Minimal Defect, with
respect to which Sellers do not cure or agree to cure pursuant to Section 5.5(a).
1.108 Uncured Title Defects Value. The aggregate Defect Value for all Uncured Title Defects.

1. 109 Units. All rights in any pooled or unitized or communitized acreage by virtue of the Lands being a par thereof, as described on Exhibit A.

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1.110 WARN Act. Defined in Section 13.2.

1.111 Well or Wells. All well bores, both abandoned and unabandoned, including Oil

wells, Gas wells, injection wells, disposal wells and water wells associated with the Properties, including wells drlled after the Execution Date.

ARTICLE 2
PURCHASE AND SALE
2.1 Interests and Stock. Sellers agree to sell the Alaska Interests and the Stock to Buyer, and Buyer agrees to buy the Alaska Interests and the Stock from Sellers, for the
consideration recited in and subject to the terms of this Agreement.

2.2 Assumption. Prom and after the Alaska Interests Closing, but effective as of the Effective Time, Buyer shall assume and be responsible for all Assumed Liabilties, all on the
terms more specifically provided in this Agreement.

ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price.
(a) Alaska Interests Purchase Price. The total purchase price for the Alaska

Interests wil be $( ), subject to adjustment pursuant to Section 3.2 and

Section 3.3 below (the "Alaska Interests Purchase Price").

(b) Stock Purchase Price. The total purchase price for the Stock wil be
$( ) (the "Stock Purchase Price," and together with the Alaska Interests

Purchase Price, the "Purchase Price").

(c) Adustments. Notwithstanding any other provision of this Agreement to the contrary, (i) the Stock Purchase Price shall not be subject to adjustment and (ii) the
Alaska Interests Purchase Price shall be subject to adjustment only as set fort in

Section 3.2 and Section 3.3 below. Except as set forth in Section 3.2 and Section 3.3, Buyer and Sellers agree that there shall be no adjustments to the Purchase Price of any
kind, of any amount, for any reason.
3.2 Increases in Alaska Interests Purchase Price. The Alaska Interests Purchase

Price wil be increased by the following amounts:

(a) the amount of any costs and expenses, accounts payable and other

disbursements, including royalties, rentals, Property Taxes or Production Taxes, and penalties and interest, paid by Sellers and fairly attrbutable to Buyer pursuant to this Agreement, including any capital expenditures permitted under this Agreement pursuant
to Section 6.5(a)(iv)
(b) a fixed overhead charge of $200,000 per month for the period beginning at

the Effective Time and ending at the Alaska Interests Closing Date;

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(c) the amount of all prepaid expenses, including Property Taxes, that are paid

by Sellers and fairly attributable to the Alaska Interests for the period of time on or after the Effective Time;
(d) the value of the following items, less any applicable Production Taxes and

royalties (which are the obligation of Buyer):

(i) all Oil and Gas in pipelines or in tanks (including in storage, line

fil and tank bottoms) upstream of the sales custody transfer meter at the Effective Time that are fairly attributable to the Properties, which shall have a value equal to the market price or, if applicable, the contract price in effect as of the Effective Time;
(ii) all Oil and Gas held by Sellers or by CIPL for the account of

Sellers (including Oil in storage, linefill and tank bottoms) at the Effective Time, which shall have a value equal to the market price or, if applicable, the contract price in effect as of the Effective Time;
(iii) all Imbalances owed to Sellers by a Third Pary as of the Effective

Time, multiplied by $60.00 per Bbl in the case of Oil and $9.00 per MMBTU in the case of Gas;
( e) the amount of any taxes paid by Sellers pursuant to Aricle 11; and
(f) the amount of all proceeds, receipts (including producing receipts, drillng

receipts and construction overhead receipts), reimbursements, credits, and income paid to or received by Buyer, including proceeds from the sale of Oil and Gas (excluding the Oil and Gas accounted for in Sections 3.2(c)(i) and 3.2(c)(ii), net of all applicable Property Taxes and Production Taxes and royalties paid by Buyer, that are fairly attributable to
Sellers pursuant to this Agreement.
3.3 Decreases in Alaska Interests Purchase Price. The Alaska Interests Purchase
Price wil be decreased by the following amounts:

(a) an amount equal to any costs and expenses, accounts payable and other

disbursements, including royalties, rentals, Property Taxes or Production Taxes, and penalties and interest, that are paid by Buyer and fairly attributable to Seller pursuant to
this Agreement;

(b) the amount of all proceeds, receipts (including producing receipts, drillng
receipts and construction overhead receipts), reimbursements, credits, and income paid to
or received by Sellers, excluding proceeds from the sale of Oil and Gas, net of all

applicable Property Taxes, Production Taxes and royalties paid by Sellers, that are fairly attributable to Buyer pursuant to this Agreement;
(c) the amount of any suspended funds retained by Sellers pursuant to

Section io.6(a);

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(d) the amount, if any, by which the aggregate of the Uncured Title Defects

Value exceeds $ 1 ,000,000; provided, however, that in no event wil the Alaska Interests Purchase Price be decreased under this Section 3.3(d) by more than $2,500,000;

(e) the Allocated Value of all Properties subject to a preferential right to

purchase and not sold to Buyer at the Alaska Interests Closing pursuant to Section 6.6; and
(t) the value of all Imbalances owed by Sellers to a Third Pary as of the

Effective Time, multiplied by $60.00 per Bbl in the case of Oil and $9.00 per MMBTU in the case of Gas.
ARTICLE

BUYER'S REVIEW
4.1 Buver's Review Before the Execution Date.
(a) Prior to the Execution Date, Sellers have made available to Buyer certain

data relating to the Alaska Interests, the Stock and the Properties for Buyer's review.

Buyer acknowledges that it thoroughly reviewed all of this material before Buyer submitted its offer to purchase the Alaska Interests and the Stock and executed this Agreement. Buyer shall notify Sellers in writing if it wishes to review fies or data in
addition to those previously provided, but Sellers' obligation to provide additional files or

data shall be limited to files and data that are reasonably available to it. SELLERS HAVE NO OBLIGATION TO PROVIDE ACCESS TO, AND BUYER WAIVES

ALL CLAIMS TO INSPECT, SELLERS' INTERPRETIVE, PREDICTIVE,

CONFIDENTIAL, PRIVATE, PROPRIETARY OR PRIVILEGED INFORMATION OR WORK PRODUCT (INCLUDING PERSONNEL

RECORDS), OR INFORMATION THE DISSEMINATION OF WHICH IS
RESTRICTED BY APPLICABLE LAW OR CONTRACTS BETWEEN SELLERS AND ANY THIRD PARTY. Sellers have no obligation to provide any documents or any other information to Buyer that is available to the general public, whether in the
public records or from a Governmental Entity on request.
(b) By entering into this Agreement, Buyer acknowledges and represents that

it has reviewed and inspected the Alaska Interests (including the Tangible Assets), the Stock and the Property, in each case to its satisfaction to enable it to submit its offer to purchase the Alaska Interests and the Stock and to execute this Agreement, and that it is not entitled to a reduction in the Purchase Price (except in strict accordance with the adjustment provisions of Section 3.2 and Section 3.3), indemnification or any other recourse of any kind whatsoever against Sellers or any of their respective Associated
Paries if Title Defects arse after the Execution Date. Buyer has undertaken all

appropriate inquiry to its satisfaction, and has made an informed decision to acquire the Stock and the Alaska Interests on the basis of its own investigations and without reliance on statements or investigations by any other Person, including Sellers, CIPL, PERL and
their respective Associated Paries.

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4.2 Access to Assets and Properties.

(a) Buyer acknowledges that it has had the opportunity to inspect and

inventory the Tangible Assets and the Properties before the Execution Date. On Buyer's request, Sellers wil provide additional access to the Tangible Assets and the Properties at any reasonable time before the Alaska Interests Closing on and subject to the terms of the Site Visit Indemnity Agreement.
(b) All visits to the premises and facilties by Buyer and on Buyer's behalf

wil be scheduled by mutual consent of the Paries, subject to Buyer's providing Sellers at least five Business Days' written notice of the locations that it wishes to visit and the proposed times. Sellers may accompany Buyer and its Associated Paries during their site

visits. Entr onto the Tangible Assets and the Properties wil be subject to Third-Pary
restrictions, if any, and to Sellers' safety, industral hygiene and drug and alcohol requirements, and at Buyer's sole risk and expense (including the cost of helicopter and
boat charers to access platforms).

4.3 Environmental Review. Prior to the Execution Date, Buyer and its Associated Paries were offered an opportunity to inspect and inventory (i) the Tangible Assets and the
Properties with respect to environmental matters and (ii) Sellers' environmental records relating to the Tangible Assets and the Property, and Buyer has conducted such reviews to its satisfaction.
4.4 Tan2:ible Assets: Casualty Loss.

(a) Buyer acknowledges that (i) prior to the Execution Date, it has had the opportunity to inspect and inventory the condition of the Tangible Assets and Properties to its satisfaction and (ii) there wil be no adjustment of the Purchase Price on the basis of the condition of the Tangible Assets or Properties. Buyer acknowledges that certain of the Tangible Assets observed during Buyer's inspections may be used or replaced with items of substantially equivalent condition and value before the Alaska Interests Closing as a result of normal and customary operations.

(b) Through and until the Alaska Interests Closing, Sellers shall notify Buyer of each instance of Casualty Loss to the Tangible Assets or any part thereof occurrng from and after the Execution Date, to the extent known to Sellers and to the extent the
estimated amount of such Casualty Amount is a Material Amount.
(c) If, after the Effective Time, any portion of the Tangible Assets suffers a

Casualty Loss (including as a result of volcanic activity or other acts of God), then Buyer shall nevertheless be required to close.
4.5 No Representation or Warranty of Accuracy: Disclaimer.
(a) Sellers make no representation or warranty whatsoever (express, statutory

or implied) and expressly disclaim all representations and waranties as to the accuracy or completeness of the files or any other information that they have provided to Buyer or may provide to Buyer or that have been provided or may be provided by Sellers'
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Associated Paries or other Persons. Conveyance of the Alaska Interests (including the

Tangible Assets), the Stock and the Property shall be without representation or waranty whatsoever (express, statutory or implied) as to title, description, physical condition of
the Alaska Interests (including the Tangible Assets), the Stock or the Properties

(including the environmental condition), of the Alaska Interests (including the Tangible
Assets and Properties that are par of the Alaska Interests), quality, value, fitness for

purpose, merchantability or otherwise. Buyer shall satisfy itself prior to the Alaska Interests Closing, and at the Alaska Interests Closing wil be deemed to have satisfied itself entirely as to the type, condition, quality and extent of the property and property
interests that comprise the Alaska Interests (including the Tangible Assets, the Properties, the Stock and any other property or assets that are par of the Alaska Interests) being sold and conveyed to Buyer pursuant to this Agreement.

(b) BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLERS HAVE NOT MADE, AND WILL

NOT MAKE, ANY REPRESENTATION OR WARRNTY WHATSOEVER (EXPRESS, IMPLIED OR STATUTORY) IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY IT,

INCLUDING THE ACCURACY OR COMPLETENESS OF DATA,

INFORMATION OR MATERIALS FURNISHED AT ANY TIME TO BUYER OR ANY OF ITS ASSOCIATED PERSONS IN CONNECTION WITH THE STOCK, THE ALASKA INTERESTS (INCLUDING THE TANGIBLE ASSETS) OR THE

PROPERTIES, OR THE QUALITY OR QUANTITY OF OIL AND GAS

RESERVES (IF ANY) A TTRIBUT ABLE TO THE ALASKA INTERESTS, OR THE ABILITY OF THE ALASKA INTERESTS TO PRODUCE OIL AND GAS. NONE OF SELLERS' ASSOCIATED PARTIES (NOR CIPL OR ANY OTHER

PERSON) IS AUTHORIZED TO MAKE ANY WARRNTY OR

REPRESENTATION ON SELLERS' BEHALF. ALL DATA, INFORMATION AND OTHER MATERIALS FURNISHED BY SELLERS ARE PROVIDED TO BUYER AS A CONVENIENCE ONLY, AND RELIANCE ON OR USE OF THEM
IS AT BUYER'S SOLE RISK.

4.6 Acknowled2:ments of Buver. By proceeding with the transactions contemplated

in this Agreement, Buyer shall be deemed to have acknowledged and admitted, that:
(a) Buyer has been given full opportunity to adequately inspect the Tangible

Assets and the Properties;

(b) Buyer is aware that the Tangible Assets and the Properties have been used

for the exploration, development, production, treating and transporting of Oil and Gas, and that physical changes to the environment may have occurred or wil occur as a result of such use and that Sellers have disclosed, and Buyer is further aware, that there exists the possibilty that there could have occurred or wil occur from such use one or more

releases of hazardous substances or releases of chemical substances into, or other

pollution or contamination of or into, the ambient air, seawater, surface water,
groundwater, soil, seabed or subsurface strata of any real property included in the

Properties and of contiguous or a series of contiguous, real properties not a par of the

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Properties and that pursuant to Alaska Statute 46.03.780 Buyer may be liable to the State

of Alaska for damages based on the injuries to, including the death of, fish, animals,
vegetation, or the environment of the State of Alaska;
(c) Buyer has entered into this Agreement based solely on its own
investigation of the physical condition of the Tangible Assets and the Properties

(including the environmental condition of the Properties and the surrounding

environment);

(d) Buyer acknowledges that at the Stock Closing it wil acquire the Stock and at the Alaska Interests Closing it wil acquire the Alaska Interests, including the Tangible Assets and the Properties, based solely on its own investigation of the physical or other

condition thereof and assumes the risk that adverse conditions outside the scope of Sellers' representations and waranties set forth in Section 16.1 may not be revealed by Buyer's own investigation. Buyer, with full knowledge of the foregoing and after
conducting the investigations and evaluations referenced in the immediately preceding

sentence and elsewhere in this Agreement, is ACQUIRING THE STOCK AND THE

ALASKA INTERESTS, INCLUDING THE TANGIBLE ASSETS AND THE PROPERTY, ON AN "AS IS, WHERE IS, WITH ALL FAULTS" BASIS, and,
Buyer, by acquiring the Stock and the Alaska Interests on an "AS IS, WHERE IS, WITH

ALL FAULTS" basis, waives any other rights of indemnification, contrbution or recourse it may have against or from Sellers or any of their Associated Paries with respect to the condition of the Stock and the Alaska Interests, including the
environmental condition of the Tangible Assets, the Properties and the surrounding

environment and any and all damage to the Tangible Assets, the Properties and the
surrounding environment (including as a result of volcanic activity or other acts of God). As part of Buyer's agreement to purchase and accept the Stock and the Alaska Interests "AS IS, WHERE IS, WITH ALL FAULTS" and not as a limitation on such agreement, except as specifically set forth in this Agreement to the contrary, Buyer hereby unconditionally and irrevocably waives and releases any and all actual or potential rights Buyer might have against Sellers regarding any form of waranty, express or implied, of any kind or type, relating to the Stock, the Alaska Interests, its improvements or the

Property Conditions, and such waiver and release is absolute, complete, total and unlimited in every way. Except as specifically set forth in this Agreement to the contrary, such waiver and release includes a waiver and release of express waranties,
implied waranties, waranties of fitness for a paricular use, waranties of

merchantability, warranties of habitability, Strct Liabilty rights, and claims of every kind and type, including claims regarding defects which might have been discoverable,
claims regarding defects which were not or are not discoverable, environmental claims,

environmental liability claims, and all other extant or later created or conceived of Strict
Liabilty or Strct Liabilty type claims and rights;

(e) In connection with the waivers, releases and limitations of liability set

the Parties expressly waives any rights under Section 1542 of the California Civil Code, which provides:
forth in this Agreement (including in Aricle 14), each of

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"A general release does not extend to claims which the

creditor does not know or suspect to exist in his favor at the time of executing the release which if known by him must have materially affected his settlement with the debtor."

Each Party has been advised by its legal counsel as to the significance of this waiver of
Section 1542 relating to unknown, unsuspected and concealed Claims, and each Pary

acknowledges that it fully understands and agrees to such waiver;

(f) Buyer hereby agrees, represents and warants that the matters released,

waived, and limited herein are not limited to matters which are known or disclosed. In this connection and to the extent permitted by law, including the decision of the Alaska Supreme Court in Witt v. Watkins, 579 P.2d 1065 (Alaska 1978), Buyer hereby agrees,
represents and warrants that Buyer realizes and acknowledges that factual matters now

unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses, and expenses which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer neverteless hereby intends to release, discharge and acquit Sellers from any such unknown causes of action, claims, demands, debt, controversies, damages, costs, losses and expenses which might in any which way be
included in the waivers and matters released as set forth in this Agreement; and
(g) Without limiting clauses (d) and (e) above, Buyer expressly acknowledges

the following specific disclaimers:

(i) Buyer has made its own estimates of prospective data such as

future Oil and Gas production rates, value of exploration prospects, operating costs and Abandonment Obligations, based on Buyer's own abilities and skills to explore, produce, operate, and abandon the Properties and the Alaska Interests
and is not relying on Sellers' own estimates of such data.
(ii)

The Properties may contain asbestos, hazardous substances or

NORM.
(ii) Portons of the Properties and the Alaska Interests are or may be

located in a "Wetland" as defined in the "Federal Manual for Determining

Jurisdictional Wetland" or Applicable Laws.

(iv) Portons of the Properties and the Alaska Interests are or may be

located in a "Flood Zone" as defined by the U.S. Federal Emergency Management Administration or other Government Entities.
(v) Sellers do not represent or warrant that ownership, use, operation,

maintenance, improvement or abandonment of any intellectual property rights included within the Alaska Interests or owned or held by CIPL would not infringe
any patent, copyright, trademark or trade secret rights of any Person.

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(h) Buyer has had the full opportunity to review and is aware of the matters
with respect to the Properties, the Alaska Interests, the Stock and CIPL as identified in
Schedule 5.

By initialing where indicated below, the Paries specifically agree to the foregoing acknowledgements, disclaimers and releases in this Section 4.6.
PEAO
(Initials)

PEAH
(Initials)

BUYER
(Initials)

4.7 IndeDendent Evaluation. Buyer has made an independent evaluation of the

Alaska Interests (including the Tangible Assets), the Stock and the Properties, and acknowledges that Sellers have made no statements or representations concerning the present or futre value of the anticipated income, costs or profits, if any, to be derived from the Stock, the Properties or the Alaska Interests (including the Tangible Assets), or the quantity and quality of any Oil and Gas or other minerals, if any, that may be produced from the Alaska Interests and the Properties, and

that SELLERS DO NOT IMPLIEDLY OR EXPRESSL Y WARRNT ANY

DESCRIPTION, TITLE, VALUE, QUALITY OR PHYSICAL CONDITION OF THE ALASKA INTERESTS (INCLUDING THE TANGIBLE ASSETS), THE STOCK OR

THE PROPERTIES (INCLUDING, WITHOUT LIMITATION, THE

ENVIRONMENTAL CONDITION OF THE PROPERTIES), MERCHANTABILITY OR FITNESS FOR PURPOSE OF ANY OF THE ALASKA INTERESTS (INCLUDING THE TANGIBLE ASSETS), THE STOCK OR PROPERTIES, OR OTHER PERSONAL PROPERTY OR FIXTURES LOCATED THEREON OR USED IN CONNECTION THEREWITH. Buyer further acknowledges that, in entering into this Agreement, it has relied solely upon its independent examination of the Alaska Interests (including the Tangible Assets and the Properties) and the Stock and the public records relating to the Alaska Interests (including the Tangible Assets and the Properties) and the Stock and its independent estimates, computations, evaluations, reports, and studies based thereon. Buyer acknowledges that it has made such investigation of the Property Conditions as Buyer deems adequate, and shall rely solely upon its own investigation of such conditions and not upon any statement or opinion by Sellers or any Associated Party of Sellers or any Third Party. Except for representations in Section 16.1, Sellers shall not be responsible for any innocent or negligent misrepresentation or
failure to investigate the Alaska Interests or the Stock on the part of Sellers, any Associated Party of Sellers or any Third Party.
4.8 Buver's Confidentialitv Oblie:ations: Press Releases.

(a) Except as set forth in Section 18.8, Buyer wil keep confidential all information concerning the Alaska Interests (including the Tangible Assets) and the
Stock, as set forth in the Confidentiality Agreement and the Site Indemnity Agreement.
(b) In the event of termination of this Agreement, Buyer shall promptly, and

in any event within five days of such termination, (i) return to Sellers all documentation or other information concerning the Alaska Interests, the Stock or otherwise pursuant to or in connection with this Agreement, that it obtained from Sellers or any Associated Pary of Sellers or CIPL, (ii) destroy all of its work papers and analyses that incorporate

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the information, and (iii) be subject to these confidentiality obligations for five years after the Execution Date, all in accordance with the Confidentiality Agreement. However, (i) if the Alaska Interests Closing occurs, then Buyer's confidentiality obligations under this

Section 4.8 with respect to the Alaska Interests wil not survive the Alaska Interests
Closing and (ii) if the Stock Closing occurs, then Buyer's confidentiality obligations under this Section 4.8 with respect to the Stock wil not survive the Stock Closing.

ARTICLE 5 TITLE AND TITLE DEFECTS

5.1 Title Defect. "Title Defect" means anyone or more of the following, provided,

however, that each of the following is subject in all respects to any disclosure on Exhibit A or

Exhibit B to the contrary, including the disclosure of any mortgage, deed of trust, lien,
Encumbrance, Claim, royalty, obligation or interest:
(a) Sellers' title to all or any par of the Alaska Interests becomes subject to an

outstanding mortgage, deed of trst, lien or other monetary encumbrance or adverse

Claim not listed or referenced on Exhibit A or Exhibit B that would induce a purchaser to suspend payment of proceeds for the Alaska Interest or require the furnishing of security or indemnity. Evidence that Sellers receive their full share of proceeds from a purchaser or Third-Party operator for an Alaska Interest shall constitute a presumption that no Title Defect exists with respect to such Alaska Interest;
(b) Sellers' working interest would be reduced if a Third Pary were to

exercise a reversionary, back-in or other similar right affecting Sellers' title to the Leases not listed or referenced on Exhibit A or Exhibit B; or
(c) Sellers default in any material respect under a material provision of a
lease, farout agreement or other Contract, which default results in a material

loss of title

to any part of the Alaska Interests;

provided, however, that the term "Title Defect" does not include (i) a lien or encumbrance in the form of a judgment secured by a supersedes bond or other security approved by the court issuing

the order; (ii) the loss of lease acreage between the Execution Date and the Alaska Interests
Closing Date because the term of a Lease expires; (ii) any defect, Claim, encumbrance,

exception, reservation or other matter in existence as of the Execution Date.

5.2 Title Defect Notice. Buyer wil have until ten days after the Execution Date to
provide Sellers a written notice ("Title Defect Notice") of any Title Defect that Buyer in good

faith finds unacceptable. Each Title Defect Notice must include, in reasonable detail, a
description of (a) the Alaska Interest with respect to which the claimed Title Defect relates, (b) the nature of such claimed Title Defect, and (c) Buyer's calculation of the Defect Value in accordance with the guidelines set forth in Section 5.4. Any Title Defect that is not identified by a timely-delivered Tite Defect Notice wil thereafter be forever waived by Buyer and such Title Defect wil transfer with the affected Alaska Interest.

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5.3 Determination of

Title Defects and Defect Values.

(a) Within three Business Days after Sellers' receipt of a Title Defect Notice,
Sellers wil notify Buyer as to whether Sellers agree with the Title Defect claimed therein and/or the proposed Defect Value attributed to such Title Defect. If Sellers do not agree

with any such claimed Title Defect and/or any such proposed Defect Value, then the Paries wil promptly enter into good faith negotiations and wil attempt to agree on such matters. The value agreed to by the Parties with respect to a Title Defect wil be the
Defect Value for such Title Defect.
(b) If the Parties do not reach an agreement concerning either the existence of

a Title Defect or the associated Defect Value within five Business Days after Sellers'
receipt of a Tite Defect Notice, then, upon Sellers' or Buyer's written request, the

disputes wil be submitted to the Bankrptcy Court for resolution.

5.4 Calculation of Defect Value.
(a) If, because of a Title Defect, title to or Sellers' rights in a particular Alaska

Interest fails completely with the effect that Sellers have no ownership interest in such Alaska Interest, the Defect Value wil be the Allocated Value of such Alaska Interest.
(b) If a Title Defect exists because Sellers own a lesser Net Revenue Interest in a Property, then the Defect Value wil be the Allocated Value for such Property

multiplied by a fraction (i) the numerator of which is the net present value, as of the Effective Time, of Sellers' interest in the future net revenues from such Property (the
"PV-NRI") minus the net present value as of the Effective Time, of Sellers' interest in the future net revenues from such Property calculated based upon the same production, cost, and assumed future price estimates and discount rate and such other methods, techniques

and assumptions utilized but taking into account the Title Defect, and (ii) the
denominator of which is the PV -NRI.
(c) If a Title Defect is a lien, encumbrance or other charge upon a particular

Alaska Interest that is liquidated in amount, then the Defect Value for such Title Defect shall be the amount necessary to be paid to remove the Title Defect from the affected Alaska Interest.
(d) If a Title Defect represents an obligation or burden upon a paricular

Alaska Interest of a type not described in Section 5.4(b) or Section 5.4(c), then the Defect Value with respect to such Title Defect wil be the sum the Paries mutually agreed upon in good faith as the present value of the adverse economic effect such Title Defect wil have on such Alaska Interest. If the Paries cannot reach an agreement as to such Defect Value, then the dispute wil be submitted to the Bankrptcy Court for resolution.
(e) If less than 100% of the assets comprising an Alaska Interest is subject to

a Title Defect, the Parties agree that only the value of the portion of the Alaska Interest affected by the Title Defect wil be used to consider the Defect Value; accordingly, the
Paries agree that the value of any portion of the Alaska Interest (if less than 100% of the

Alaska Interest) affected by the Title Defect wil be based on an amount equal to (i) the
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product of (A) the Allocated Value of 100% of such Alaska Interest and (B) a fraction, the numerator of which is the average weighted production of the portion of the Alaska

Interest affected by the Title Defect and the denominator of which is the aggregate
average weighted production of 100% of the Alaska Interest, or (ii) if the Alaska Interest
is not a producing Alaska Interest, as reasonably agreed to among the Paries. The Paries

agree that the phrase "average weighted production" as used herein wil be based on the historical production information from Sellers' records for the three full calendar months immediately preceding the Execution Date.
(f) Notwithstanding the foregoing provisions of this Section 5.4, a Title

Defect with respect to an Easement wil be deemed a Title Defect of the Property
serviced by such Easement, unless an appropriate replacement Easement is obtained by
Sellers therefor.

(g) The calculation of a Defect Value wil take into consideration any and all

applicable guidelines set forth in Sections 5.4(a) through 5.4m.

5.5 Consequences of Title Defect. Sellers wil have five Business Days after the

final determination of a Title Defect and its associated Defect Value to elect, in their sole
discretion, by written notice to the Buyer, any of the following:
(a) to cure, or agree to cure, the Title Defect;

(b) that the Title Defect be an Uncured Tite Defect; or

(c) to terminate this Agreement.

In connection with the exercise of the option set forth in the preceding clause (a), Sellers may delay the Alaska Interests Closing for up to 30 days while they investigate the Title Defect and

possible curative measures, and such right to delay the Alaska Interests Closing wil be in
addition to any other rights of Sellers' to delay the Alaska Interests Closing under this

Agreement.

5.6 Description and Other Errors. If either Party determines, either before or
within 30 days after the Alaska Interests Closing, that the description of an Alaska Interest is incorrect or that certain Alaska Interests were erroneously included in or erroneously excluded from the respective definitions thereof, other sales information or any conveyancing instruments,
then Sellers and Buyer shall meet and use their respective commercially reasonable efforts to

resolve the error without need of further consideration, and shall, as applicable, execute and
deliver, or use commercially reasonable efforts to cause to be executed and delivered, such other instruments of conveyance and take such other actions as either Pary reasonably may request in connection therewith. If the Parties cannot resolve any such purported error within 15 days of the

commencement of negotiations, then the issue wil be submitted to the Bankrptcy Court for
resolution.

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ARTICLE 6 CERTAIN COVENANTS BETWEEN EXECUTION DATE AND CLOSINGS

6.1 Related Aereements.
(a) Except as otherwise provided in this Agreement, the sale of the Alaska

Interests wil be subject to the terms and conditions of all oil, gas and mineral leases,
assignments, subleases, farout agreements, unit agreements, joint operating agreements,

pooling agreements, letter agreements, easements, rights-of-way, gathering and

transportation agreements, obligations and other Contracts, in each case to the extent that Sellers are paries (or as such Contracts are otherwise binding upon Sellers) and that
concern or pertain to the Alaska Interests (each of the foregoing, but expressly excluding

any agreement that constitutes an Excluded Item, a "Related Agreement" and collectively, the "Related Agreements").
(b) At the Alaska Interests Closing and to the extent approved by the Sale

Order, the Paries wil execute and deliver all documents necessary for Buyer to assume
the Related Agreements, and the Buyer shall assume all of Sellers' obligations and

liabilties under the Related Agreements, subject to the terms of the Transition Agreement. Buyer's obligations shall apply to all Related Agreements, whether or not
recorded.

(c) Buyer acknowledges that, by virtue of its purchase of the Stock, all
obligations and liabilities under all agreements to which CIPL is a pary shall remain the obligations and liabilities of CIPL and neither Seller nor any of its Associated Paries shall have any obligation or liabilty under any such agreement.
6.2 Third Party Notifcations and Reeulatorv Approvals for the Alaska Interests.

(a) Buyer acknowledges that the sale of the Alaska Interests may require the
providing of notice to, and Consent of, lessors, joint interest owners, farmers, sublessors, assignors, grantors, paries to agreements, Governmental Entities having jurisdiction
(including a borough, municipality, city, or vilage in the State of Alaska, the State of

Alaska, Department of Natural Resources, Division of Oil & Gas, the United States Bureau of Land Management, the Regulatory Commission of Alaska, the United States
Environmental Protection Agency, the Alaska Oil and Gas Conservation Commission,

and State of Alaska, Deparment of Natural Resources, Mental Health Trust Land

Office), or any other Third Pary.

(b) Buyer acknowledges that it is and shall be solely responsible for obtaining
all Consents applicable to the sale of the Alaska Interests (including a borough,

municipality, city, or vilage in the State of Alaska, the State of Alaska, Deparment of

Natural Resources, Division of Oil & Gas, the United States Bureau of Land
Management, the Regulatory Commission of Alaska, the United States Environmental Protection Agency, the Alaska Oil and Gas Conservation Commission, and State of Alaska, Deparment of Natural Resources, Mental Health Trust Land Office) and wil furnish Sellers with copies, or other acceptable proof, of the granting or receipt of each

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such Consent (other than the Post-Closing Approvals) at least two days before the Alaska Interests Closing Date.
(c) If Buyer does not furnish Sellers with all Consents (other than the Post-

Closing Approvals) applicable to the sale of the Alaska Interests (including a borough, municipality, city, or vilage in the State of Alaska, the State of Alaska, Deparment of

Natural Resources, Division of Oil & Gas, the United States Bureau of Land
Management, the Regulatory Commission of Alaska, the United States Environmental Protection Agency, the Alaska Oil and Gas Conservation Commission, and State of Alaska, Deparment of Natural Resources, Mental Health Trust Land Office) at least two days before the Alaska Interests Closing Date, then Sellers may, at their option, elect to
(i) delay the Alaska Interests Closing as to any or all of the Alaska Interests, with no charge to either Party for the delay, to permit Buyer to obtain the Consents; (ii) waive the

condition set forth in Section 7.3(d) and proceed with the Alaska Interests Closing
without all Consents; or (iii) elect not to proceed with the Alaska Interests Closing and terminate this Agreement.
6.3 Third Party Notifications and Ree:ulatorv ADDrovals for the Stock.

(a) Buyer acknowledges that the sale of the Stock may require the providing
of notice to, and Consent of, certain Third Paries.

(b) Buyer acknowledges that it is and shall be solely responsible for obtaining all Consents applicable to the sale of the Stock and wil furnish Sellers with copies, or other acceptable proof, of the granting or receipt of each such Consent (other than the
Post-Closing Approvals) at least two days before the Stock Closing Date.
(c) If Buyer does not furnish Sellers with all Consents applicable to the sale of

Stock (other than the Post-Closing Approvals) at least two days before the Stock Closing Date, then Sellers may, at their option, elect to (i) delay the Stock Closing as to the Stock, with no charge to either Party for the delay, to permit Buyer to obtain the Consents; (ii)

waive the condition set forth in Section 8.3(c) and proceed with the Stock Closing
without all Consents; or (iii) elect not to proceed with the Stock Closing.

6.4 Termination of Sellers' Insurance. Until the Alaska Interests Closing Date, Sellers shall maintain all insurance that they have provided for the Alaska Interests or the Property, including any insurance they or any of their Affliates may car as operator of any
Alaska Interests. At the Alaska Interests Closing, Sellers shall assign to Buyer all Sellers' right title and interest in any proceeds to be received pursuant to such insurance policies with respect

to any casualty or loss (other than the Redoubt Interrption Claim) occurrng between the
Effective Time and the Alaska Interests Closing Date, provided there has been no Purchase Price adjustment as a result of the event giving rise to the proceeds.
6.5 Conduct of Business Pendine: the Alaska Interests Closine:.
(a) Subject in all respects to the requirements and restrictions of, or as may

result from or relate to, the Bankrptcy Case and orders entered therein, or the Credit Agreements, from the Execution Date to the Alaska Interests Closing Date, except as
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provided herein or as otherwise consented to in writing by Buyer, Sellers, on a joint and several basis, wil:
(i) not act in any manner with respect to the Properties other than in

the normal, usual and customar manner, consistent with prior practice (including

paying or causing to be paid all associated costs and expenses, and meant to
preserve intact the business and Properties and associated goodwil);
(ii) except as referenced in Exhibit A, not dispose of or relinquish any

of the Properties (other than sales of Oil and Gas in the ordinar course; the
disposition of used, surplus or obsolete Tangible Assets; relinquishment resulting from the expiration of a non-producing Lease; and the abandonment of a Lease not operated by Sellers or their Affilated Parties);

(iii) not waive, compromise or settle, or violate, breach or default

under, any material right or Claim included in the Properties;
(iv) not make or enter into an agreement to make, terminate or amend

an agreement for capital expenditures or workover expenditures with respect to the Properties in excess of $ 1 ,000,000 (net to Sellers' interest), except as required by Applicable Law or when required by an emergency when there shall have been insufficient time to obtain advance consent (provided, that Sellers wil promptly notify Buyer of any such emergency expenditures);
(v) not incur Liabilities with respect to the Properties for which Buyer

would be responsible after the Alaska Interests Closing, other than transactions in the normal, usual and customar manner, of a nature and in an amount consistent with past practices employed by Sellers with respect to the Properties;
(vi) not take any affirmative action that would result in any of the

Properties to be subject to any new encumbrances that would impose a Liabilty in excess of $250,000;

(vii) not cancel any financial indebtedness owed to Sellers that is fairly
attributable to the Properties for the period of time on or after the Effective Time;

(viii) not, except as otherwise provided in this Agreement, amend or terminate, or violate, breach, or default under, any agreement relating to the
Properties having a value in excess of $1,000,000;
(ix) use commercially reasonable efforts to preserve relationships with

each Third Pary having material business dealings with respect to the Properties;
(x) pay all taxes and assessments with respect to the Properties that

become due and payable prior to the Effective Time; and

(xi)

comply in all material respects with all Applicable Laws.

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(b) Notwithstanding anyting in Section 6.5(a) or elsewhere in this

Agreement to the contrary, from and after the Execution Date, neither Seller shall have
any obligation to:
(i) pay any joint interest bilings due to Chevron or its affliates; or

(ii) repair or otherwise perform maintenance on any Tangible Assets

that may fail on or after the Execution Date.

6.6 Preferential Riehts to Purchase.
(a) Sellers shall use the Allocated Value to provide any required preferential

right to purchase notifications. Sellers shall provide such notifications promptly after the Execution Date with respect to each applicable Property and shall comply in all material respects with the agreement in which the applicable preferential purchase right arses insofar as it pertains to such preferential right, to the extent required or authorized by the Bankrptcy Court.
(b) If, prior to the Alaska Interests Closing Date, a holder of a preferential

purchase right notifies Sellers that it elects to exercise its rights with respect to a Property (in accordance with the agreement under which the preferential purchase right arses), such Property wil not be sold to Buyer (subject to the remaining provisions in this

Section 6.6), and the Alaska Interests Purchase Price wil be reduced by the relevant
Allocated Value or, if

the preferential right affects less than 100% of such Property, a pro

rata portion thereof calculated using the methodology contemplated by Section 6.6(c), and the Paries wil remove such Property (or portion thereof) from this Agreement.

Sellers shall promptly notify Buyer of the exercise of any preferential purchase rights in
respect of the Properties. Notwithstanding the aforementioned, Buyer remains obligated

to purchase the remainder of the Properties not affected by exercised preferential purchase rights in accordance with this Agreement.
(c) If less than 100% of a Property is purchased pursuant to the exercise of a

preferential purchase right, the Paries agree that only the value of the purchased portion
of the Property wil be used to consider an adjustment to the Alaska Interests Purchase

Price pursuant to Section 6.6(b); accordingly, the Paries agree that the value of any

portion of the Property (if less than 100% of the Property) purchased pursuant to the exercise of a preferential purchase right wil be based on an amount equal to (i) the product of (A) the Allocated Value of 100% of such Property and (B) a fraction, the numerator of which is the average weighted production of the purchased portion of the Property and the denominator of which is the aggregate average weighted production of 100% of the Property, or (ii) if the Property is not a producing Property, as reasonably
agreed to among the Paries. The Paries agree that the phrase "average weighted

production" as used herein wil be based on the historical production information from

Sellers' records for the three full calendar months immediately preceding the Execution
Date.

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(d) If for any reason the purchase and sale of a Property or portion thereof

covered by an exercised preferential purchase right is not or cannot be consummated with the holder of the preferential purchase right within (120) days after the Alaska Interests

Closing Date and the holder of such preferential right does not object, or waives any objection, to the satisfaction of Buyer, to a sale of such Property hereunder, Sellers shall sell, assign and convey to Buyer and Buyer shall purchase and accept from Sellers, within ten Business Days after Sellers' prompt notice of the same to Buyer, such Properties
pursuant to the terms of this Agreement and for a purchase price equal to the. Allocated

Value (or any portion thereof pursuant to Section 6.6( c)) (provided, that "Alaska Interests Closing Date" with respect to such Properties shall mean the date of assignment of such
Properties from Sellers to Buyer).

6.7 Sale Procedures. The sale procedures regarding the transactions contemplated

by this Agreement wil be governed by the Sale Procedures Order and any other applicable
orders, including the Sale Order, entered by the Bankrptcy Court.

6.8 Payment of Deposits. On or before the deadline required by the Sale Procedures Order, Buyer shall pay to Sellers by wire transfer of immediately available funds to an account or accounts specified by Sellers: (i) an amount prescribed in the Sale Procedures Order with respect to the Alaska Interests Purchase Price (without takng into account any adjustments pursuant to Section 3.2 or Section 3.3) (the "Alaska Interests Deposit"), and (ii) an amount prescribed in the Sale Procedures Order with respect to the Stock Purchase Price (the "Stock
Deposit"). Both the Alaska Interests Deposit and the Stock Deposit shall be nonrefundable

except as specifically set forth in Article 9. At the Alaska Interests Closing, the Alaska Interests
Deposit shall be applied to the Preliminary Alaska Interests Purchase Price. At the Stock

Closing, the Stock Deposit shall be applied to the Stock Purchase Price.

ARTICLE 7 ALASKA INTERESTS CLOSING

7.1 Alaska Interests Closine: Date. The purchase and sale of the Alaska Interests
contemplated by this Agreement (the "Alaska Interests Closing") shall take place at 611 Anton
Boulevard, 14th Floor, Costa Mesa, California, on the (_J Business Day after the date of entry of the Sale Order or at such other time and place as the Paries may agree; provided, however,

that the Alaska Interests Closing shall in any event be effective as of the Effective Time.

7.2 Closine: Oblie:ations: Deliveries. Subject to the satisfaction of all of the conditions precedent to the Alaska Interests Closing set forth in this Article 7, at the Alaska
Interests Closing the following shall occur:

(a) Certificate of Buver. Buyer shall deliver to Sellers a certificate in form

and substance satisfactory to Sellers, effective as of the Alaska Interests Closing Date and

executed by Buyer's duly authorized officer, certifying as to (i) Buyer's

acknowledgement and agreement to the acknowledgements, disclaimers and releases set forth in Section 4.6, (ii) compliance with the conditions set forth in Section 7.3(a) and (iii) the incumbency and specimen signature of each officer of Buyer executing this

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Agreement and the other Transaction Documents to which Buyer is or is intended to be a

pary.
(b) Certificate of Sellers. Each Seller shall deliver to Buyer a certificate in

form and substance satisfactory to Buyer, effective as of the Alaska Interests Closing
Date and executed by such Sellers' duly authorized officer, certifying as to (i) compliance

with the conditions set forth in Section 7.4(a), and (ii) the incumbency and specimen

signature of each officer of such Seller executing this Agreement and the other
Transaction Documents to which such Seller is or is intended to be a pary.

(c) Assi2:nment and Bil of Sale. Sellers and Buyer shall execute and deliver counterparts of the Assignment and Bil of Sale. The Assignment and Bil of Sale, when
delivered at the Alaska Interests Closing, shall be effective as of the Effective Time, be

without waranty of any kind (e.g., title, fitness, condition), and shall restate (or
incorporate by reference) the indemnities, releases and waivers contained in this Agreement.
(i) Exhibit A to this Agreement states Sellers' interest in the Alaska

Interests, to the best of Sellers' knowledge and belief. The Assignment and Bil of Sale shall not, however, state or warant the interests in the Alaska Interests
assigned to Buyer.
(ii) The Paries shall execute and acknowledge any such other

instruments reasonably necessary to effectuate the conveyance of the Alaska Interests to Buyer, including without limitation, separate instruments on any officially approved form for the assignment of the Leases and for each Lease,
Easement, franchise, license or similar interest issued by a Governmental Entity.
(d) Letters in Lieu. Sellers shall prepare and the Parties shall execute letters-

in-lieu-of-transfer orders (or other instruments) to give notice of the transactions hereunder to remitters of proceeds from the sale of Oil and Gas production from the
Alaska Interests.
(e) Consents. Buyer shall deliver to Sellers evidence reasonably satisfactory

to Sellers that Buyer has obtained all required Consents (other than the Post-Closing
Approvals) related to the sale of the Alaska Interests.
(1) Financial Security. Buyer shall deliver to Sellers evidence reasonably

satisfactory to Sellers of Buyer's ability to perform fully its financial obligations under this Agreement, including Abandonment Obligations, together with evidence reasonably
satisfactory to Sellers that Buyer has otherwise satisfied all requirements of Applicable

Law with respect to transfer of the Alaska Interests, including Buyer's delivery to Sellers of the original counterpart of all Governmental Bonds.

(g) Payment of Purchase Price. Buyer wil pay to Sellers an amount equal
to the Preliminar Alaska Interests Purchase Price, less the amount of the Alaska Interests Deposit (which shall be credited toward the Alaska Interests Purchase Price), by wire transfer of immediately available funds to an account or accounts specified by Sellers.
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(h) Transition Services A2:reement. PERL and Buyer shall execute and

deliver counterparts of the Transition Services Agreement.

(i) Non-Foreien Affdavit. Each Seller shall execute and deliver to Buyer a
Non-Foreign Affidavit in substantially the form attached hereto as Exhibit D.

(j) Chan2:e of Operator Documentation. Buyer shall deliver to Sellers

evidence reasonably satisfactory to Sellers of the following:
(i) that Buyer has complied with the requirements of all Applicable

Laws relating to the transfer of operatorship of the Alaska Interests, including

those regarding the assumption of responsibilty for the Abandonment

Obligations, and each other platform and facility that is included in the applicable Alaska Interests or located on the Property;
(ii) that each appropriate bond, surety letter, letter of credit, other

financial security or Required Bond has been accepted by the relevant

Governmental Entities in respect of the change of operator of the Alaska Interests; and
(iii) that Buyer obtained all necessary permits or transfers of permits to

operate the Alaska Interests (other than the Post-Closing Approvals).

(k) Other Documents. The Paries shall execute and deliver other documents reasonably required to close the sale of the Alaska Interests and implement the related
terms of this Agreement, including assignments, deeds, assumption agreements,

additional bils of sale and the like, as well as instrments necessary under operating agreements, plans of unitization and Applicable Laws affecting the Alaska Interests to
transfer the Alaska Interests and related obligations from Sellers to Buyer.

(1) Deliverv of Possession. Sellers shall deliver possession of the Tangible Assets to Buyer at Buyer's expense as soon as practicable after the Alaska Interests
Closing Date.

7.3 Sellers' Conditions. The obligations of Sellers to be performed at the Alaska

Interests Closing are subject to the satisfaction or waiver in writing by Sellers at or prior to the Alaska Interests Closing, of the following conditions:
(a) Representations True: Performance of Obli2:ations. All representations and waranties of Buyer contained in this Agreement shall be true in all material respects at and as of the Alaska Interests Closing as if such representations and waranties were
made at and as of the Alaska Interests Closing, and Buyer shall have performed and

satisfied in all material respects all obligations required by this Agreement to be

performed and satisfied by it at or prior to the Alaska Interests Closing.

threatened before any court or Governmental Entity seeking to restrain, prohibit, or

(b) No Pendine Suits. No suit or other proceeding shall be pending or

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declare ilegal, or seeking substantial damages in connection with, the sale of the Alaska Interests or related transactions contemplated by the Agreement.
(c) Governmental Bonds. Buyer shall have delivered to Sellers copies of all
Governmental Bonds, together with evidence satisfactory to Sellers that all Governmental

Bonds have been accepted by the applicable Governmental Entities; and Buyer shall have delivered to Sellers evidence reasonably satisfactory to Sellers that Buyer has otherwise

satisfied all requirements of Applicable Law with respect to transfer of the Alaska
Interests.

(d) Consents. Each Consent related to the Alaska Interests (other than the
Post-Closing Approvals) shall have been obtained and shall be in full force and effect.

(e) Insurance. Sellers shall have received certificates, dated as of a date no more than five days prior to the Alaska Interests Closing Date, from Buyer's insurers certifying that (i) Buyer has purchased insurance (on a claims made basis) covering Buyer's ownership and operation of the Tangible Assets and Property in such amounts,
and with such deductibles and limits, as is commercially reasonable and (ii) such

insurance wil be in full force and effect as of the Alaska Interests Closing Date.

(f) Chan2:e of Operator. Buyer shall have obtained all regulatory approvals and permits and satisfied all requirements of financial security to operate the Alaska
Interests (other than the Post-Closing Approvals).

(g) Additional Documents. Buyer shall have delivered or provided to Sellers

all Contracts, information, approvals, documents and instrments (i) required to be delivered or provided by Buyer pursuant to this Agreement prior to the Alaska Interests Closing or (ii) as Sellers may have reasonably requested.

(h) Bankruptcv Court Approval. The Bankrptcy Court shall have issued
the Sale Order and the Sale Order shall have become final and shall not have been stayed.
(i) Actions. Buyer shall have taken all actions described in Section 7.2 as

being required of Buyer.

7.4 Buver's Conditions. The obligations of Buyer to be performed at the Alaska

Interests Closing are subject to the satisfaction or waiver in writing by Buyer at or prior to the Alaska Interests Closing, of the following conditions:

(a) Representations True: Performance of Oblie:ations All representations

and warranties of Sellers contained in this Agreement regarding the Alaska Interests shall
be true in all material respects at and as of the Alaska Interests Closing as if such

representations and waranties were made at and as of the Closing, and Sellers shall have

performed and satisfied in all material respects all obligations required by this Agreement to be performed and satisfied by them at or prior to the Alaska Interests Closing.

threatened before any court or Governmental Entity seeking to restrain, prohibit, or

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(b) No Pendine: Suits. No suit or other proceeding shall be pending or

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declare ilegal, or seeking substantial damages in connection with, the sale of the Alaska
Interests or related transactions contemplated by the Agreement.

(c) Bankruptcv Court Approval. The Bankrptcy Court shall have issued
the Sale Order and the Sale Order shall have become final and shall not have been stayed.

(d) Actions. Sellers shall have taken all actions described in Section 7.2 as
being required of Sellers.

ARTICLE 8
STOCK CLOSING
8.1 Stock Closinl! Date. The purchase and sale of the Stock contemtlated by this

Agreement (the "Stock Closing") shall take place at 611 Anton Boulevard, 141 Floor, Costa Mesa, California, on the Alaska Interests Closing Date, or at such other time and place as the
Parties may agree; nroviclecl. however, that the Stock Closing shall in any event he effective as of the Effective Time.

8.2 Closinl! Oblil!ations: Deliveries. Subject to the satisfaction of all of the conditions precedent to the Stock Closing set forth in this Aricle 8. at the Stock Closing the
following shall occur:

(a) Certificate of Buver. Buyer shall deliver to Sellers a certificate in form

and substance satisfactory to Sellers, effective as of the Stock Closing Date and executed by Buyer's duly authorized officer, certifying as to (i) Buyer's acknowledgement and agreement to the acknowledgements, disclaimers and releases set fort in Section 4.6. (ii) compliance with the conditions set forth in Section 8.3(a) and (iii) the incumbency and

specimen signature of each officer of Buyer executing this Agreement and the other
Transaction Documents to which Buyer is or is intended to be a pary.
(b) Certificate of Sellers. Each Seller shall deliver to Buyer a certificate in

form and substance satisfactory to Buyer, effective as of the Stock Closing Date and
executed by such Sellers' duly authorized officer, certifying as to (i) compliance with the conditions set forth in Section 8.4(a), and (ii) the incumbency and specimen signature of
each officer of such Seller executing this Agreement and the other Transaction

Documents to which such Seller is or is intended to be a pary.

(c) Consents. Buyer shall deliver to Sellers evidence reasonably satisfactory

to Sellers that Buyer has obtained all required Consents (other than the Post-Closing
Approvals) related to the sale of the Stock.

(d) Payment of Purchase Price. Buyer wil pay to Sellers an amount equal
to the Stock Purchase Price, less the amount of the Stock Deposit (which shall be applied to the Stock Purchase Price), by wire transfer of immediately available funds to an account or accounts specified by Sellers.

(e) Stock. PEAR shall arange for delivery to the Buyer of the original certificate representing the Stock, duly endorsed for transfer (or accompanied by duly
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executed stock powers), with such delivery to be made upon Buyer's provision to Sellers of the Stock Transfer Approval.

(t) Other Documents. The Paries shall execute and deliver other documents
reasonably required to close the sale of the Stock and implement the related terms of this Agreement, and to transfer the Stock from PEAH to Buyer upon Buyer's provision to Sellers of the Stock Transfer Approval. Sellers' representative on the board of directors of CIPL shall resign from such board concurrent with the Stock Closing.

(g) BankruDtcv Court ADDrovaL. The Bankrptcy Court shall have issued
the Sale Order and the Sale Order shall have become final and shall not have been stayed.
8.3 Sellers' Conditions. The obligations of Sellers to be performed at the Stock

Closing are subject to the satisfaction or waiver in writing by Sellers at or prior to the Stock
Closing, of the following conditions:

(a) ReDresentations True: Performance of Obli2:ations. All representations and warranties of Buyer contained in this Agreement shall be true in all material respects at and as of the Stock Closing as if such representations and waranties were made at and as of the Stock Closing, and Buyer shall have performed and satisfied in all material respects all obligations required by this Agreement to be performed and satisfied by it at or prior to the Stock Closing.

threatened before any court or Governmental Entity seeking to restrain, prohibit, or declare ilegal, or seeking substantial damages in connection with, the sale of Stock and
related transactions contemplated by the Agreement.

(b) No Pendin2 Suits. No suit or other proceeding shall be pending or

(c) Consents. Each Consent related to the sale of the Stock (except for the
Post-Closing Approvals) shall have been obtained and shall be in full force and effect.
(d) Alaska Interests Closin2. The Alaska Interests Closing shall occur

concurrently with the Stock Closing.

(e) Additional Documents. Buyer shall have delivered or provided to Sellers all contracts, information, approvals, documents and instruments (i) required to be
delivered or provided by Buyer pursuant to this Agreement prior to the Stock Closing or (ii) as Sellers may have reasonably requested.
(t) Actions. Buyer shall have taken all actions described in Section 8.2 as

being required of Buyer.

(g) BankruDtcv Court ADDrovaL. The Bankrptcy Court shall have issued
the Sale Order and the Sale Order shall have become final and shall not have been stayed.

8.4 Buver's Conditions. The obligations of Buyer to be performed at the Stock

Closing are subject to the satisfaction or waiver in writing by Buyer at or prior to the Stock
Closing, of the following conditions:

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(a) Representations True: Performance of Oblieations All representations

and waranties of Sellers contained in this Agreement regarding the Stock shall be true in
all material respects at and as of the Stock Closing as if such representations and

waranties were made at and as of the Stock Closing, and Sellers shall have pedormed

and satisfied in all material respects all obligations required by this Agreement to be
pedormed and satisfied by it at or prior to the Stock Closing.

threatened before any court or Governmental Entity seeking to restrain, prohibit, or declare ilegal, or seeking substantial damages in connection with, the sale of Stock and
related transactions contemplated by the Agreement.
(c) Alaska Interests Closine. The Alaska Interests Closing shall occur

(b) No Pendin2: Suits. No suit or other proceeding shall be pending or

concurrently with the Stock Closing.

(d) Actions. Sellers shall have taken all actions described in Section 8.2 as
being required of Sellers.

ARTICLE 9 TERMINATION

9.1 Events of Termination. This Agreement may be terminated at any time prior to
the Alaska Interests Closing:
(a) as provided in Section 5.5(c);
(b) as provided in Section 6.2(c)(iii;

(c) by mutual written consent of

Buyer and Sellers;

(d) by Sellers, if the Alaska Interests Closing has not occurred on or before

(September 10), 2009 through no fault of Buyer;

(e) by Sellers, if the Alaska Interests Closing has not occurred on or before

(September 10), 2009 due, in whole or in part, to Buyer's failure to pedorm any covenant or obligation contained in this Agreement that is required to be pedormed by such date (including Buyer's failure to obtain any Consents);
(t) by either Sellers or Buyer, if the Bankrptcy Court does not enter the Sale

Procedures Order and the Sale Order on or before (August 31),2009; or

(g) by Sellers, with written notice to Buyer if there is a material violation or

breach by Buyer of any covenant, representation, waranty or obligation contained in this

Agreement and such violation or breach has not been waived by Sellers or cured by
Buyer within seven days after receipt of written notice thereof from Sellers.

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9.2 Effect of Termination.

(a) Liabiltv; Alaska Interests DeDosit.
(i) If this Agreement is terminated pursuant to Section 9.l(a), 9.l(c),

9.l(d) or 9.1(f), such termination shall be without liability to any Party and Sellers shall refund the Alaska Interests Deposit to Buyer within three Business Days of the date of such termination.
(ii) If this Agreement is terminated pursuant to Section 9.l(b), 9.l(e),

or 9.l(g), Buyer shall forfeit the Alaska Interests Deposit, which shall be retained by Sellers as liquidated damages, and such termination shall otherwise be without liabilty to any Pary.
(b) Survival of Confidentialitv. Notwithstanding the termination of this

Agreement or any other provision of this Agreement to the contrary, the terms of any confidentiality provisions contained in the Site Visit Indemnity Agreement and the
Confidentiality Agreement shall remain in full force and effect.

9.3 Events of Termination of Stock Sale. The sale of Stock contemplated by this
Agreement may be terminated at any time prior to the Stock Closing:
(a) as provided in Section 6.3(c)(ii);

(b) by mutual written consent of Buyer and Sellers;

(c) by Sellers, if the Stock Closing has not occurred on or before

(February 28, 2010) through no fault of Buyer;

(d) by Sellers, if the Stock Closing has not occurred on or before

(February 10, 2010) due, in whole or in par, to Buyer's failure to perform any covenant or obligation contained in this Agreement that is required to be performed by such date (including Buyer's failure to obtain any Consents); or
(e) by Sellers, with written notice to Buyer if there is a material violation or

breach by Buyer of any covenant, representation, waranty or obligation contained in this Agreement and such violation or breach has not been waived by Sellers or cured by Buyer within seven days after receipt of written notice thereof from Sellers.
9.4 Effect of Termination of Stock Sale.

(a) Liabiltv; Stock DeDosit.

(i) If the sale of Stock contemplated by this Agreement is terminated

pursuant to Section 9.3(b) or 9.3(c), such termination shall be without liabilty to any Pary and Sellers shall refund the Stock Deposit to Buyer within three Business Days of the date of such termination.

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(ii) If the sale of Stock contemplated by this Agreement is terminated

pursuant to Section 9.3(a). 9.3(d). or 9.3(e), Buyer shall forfeit the Stock Deposit, which shall be retained by Sellers as liquidated damages, and such termination shall otherwise be without liability to any Pary.
(b) Survival of Confdentialitv. Notwithstanding the termination of the sale

of Stock contemplated by this Agreement or any other provision of this Agreement to the contrary, the terms of any confidentiality provisions contained in the Site Visit Indemnity Agreement and the Confidentiality Agreement shall remain in full force and effect.

ARTICLE 10 CERTAIN OBLIGATIONS AFTER ALASKA INTERESTS CLOSING

After the Alaska Interests Closing, Sellers and Buyer shall each take the following actions:

10.1 Filniz and Recordiniz. Sellers wil decide which Pary wil fie or record the conveyance documents in the appropriate governmental records. The recording Pary wil
provide either the original or photocopies of the fied or recorded document, including the

recording data, as agreed to by the Paries, to the non-recording Pary. Buyer shall reimburse

Sellers for the filng, recording, and other reasonable fees that Sellers incur if Sellers fie or
record the documents.

10.2 Copies. If originals or the last-remaining copies of any data or Records are
provided to Buyer, Sellers may have access to them at reasonable times and upon reasonable notice during regular business hours for as long as any Alaska Interests are in effect after the Effective Time (or until all of the Abandonment Obligations have been fully satisfied and discharged or a longer period if required by Applicable Law). Sellers may, during this period and at their expense, make copies of the data and records pursuant to a reasonable request. Without limiting the generality of the two preceding sentences, for as long as any Alaska Interests are in effect after the Effective Time (or until all of the Abandonment Obligations have been fully satisfied and discharged or for a longer period if required by Applicable Law), Buyer may not
destroy or give up possession of any original or last-remaining copy of the data or Records

without first offering Sellers the opportunity, at Sellers' expense, to obtain the original or a copy. After this period expires, Buyer must offer to deliver the data and Records (or copies) to Sellers, at Sellers' expense, before giving up possession or destroying them.
10.3 Further Assurances. Buyer and Sellers each shall, from time to time after the

Alaska Interests Closing and upon reasonable request from the other Paries, execute, acknowledge and deliver in proper form any conveyance, assignment, transfer or other
instrument reasonably necessary to accomplish the sale of Alaska Interests and the Stock and related obligations contemplated by this Agreement (including the correction of scrivener's
errors in the preparation of documents delivered at the Alaska Interests Closing).
10.4 Post-Closiniz Consents.
(a) If Sellers elect to close without all Consents related to the Alaska Interests

(other than the Post-Closing Approvals), Buyer shall use its best efforts and proceed
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dilgently after the Alaska Interests Closing to obtain and promptly provide evidence of such Consents to Sellers. Buyer shall also use its best efforts and proceed diligently after the Alaska Interests Closing to obtain and promptly provide evidence to Sellers of the
Post-Closing Approvals.

(b) From and after the Effective Time, Buyer wil be responsible for all
amounts due under any Contract, including the Related Agreements, related to all or any portion of the Alaska Interests that requires approval for assignment.

10.5 Buyer's Compliance. From and after the Alaska Interests Closing, Buyer shall
comply with (a) all Applicable Laws applicable to Buyer's ownership or operation of the Alaska Interests, and (b) all Related Agreements, in either case insofar as they concern or pertain to the Alaska Interests. If and when Buyer obtains Successor Operator Approval, Buyer shall comply with all Applicable Laws applicable to Buyer's operatorship of the Alaska Interests.
10.6 Allocation of Proceeds. Costs and Expenses.
(a) All proceeds, receipts, reimbursements, receivables, credits and income

attributable to the Alaska Interests, including all rights to production of Oil and Gas and proceeds from the sale of such production, to the extent accruing during the period prior to the Effective Time, shall be for the account of Sellers.
(b) All proceeds, receipts, reimbursements, receivables, credits and income

fairly attributable to the Alaska Interests, including all rights to production of Oil and Gas and proceeds from the sale of such production, accruing during the period from and after

the Effective Time, shall be for the account of Buyer. For accounts pertaining to the Alaska Interests held by Sellers in suspense or escrow at the Effective Time, Sellers wil pay in full the royalty accounts, if any, that were suspended because the amount due is less than the statutory minimum for payment and, as to all other such accounts, shall retain such funds and wil disburse funds from time to time after the Alaska Interests
Closing upon proof satisfactory to Sellers that the money is due to the Person claiming it.
(c) Except as otherwise provided in this Agreement and subject to the Alaska

Interests Purchase Price adjustments in Section 3.2 and Section 3.3, Sellers wil be
responsible for handling all invoices and makng all payments and disbursements before the Alaska Interests Closing Date and Buyer wil be responsible for handling all invoices and making all payments and disbursements on or after the Alaska Interests Closing Date.

10.7 Plul!l!inl! and Abandoninl! Wells and Platforms: Remediation: Security for
Buyer's Oblil!ations.
(a) Buyer recognizes, assumes and covenants to either timely perform and

accomplish properly, or cause to be timely performed and accomplished properly, in accordance with Applicable Law and the Related Agreements, all of Sellers' obligations

to plug, abandon, decommission, restore and remediate the Alaska Interests (including the Tangible Assets) and the Properties affected thereby, whether arsing before, on or after the Effective Time, including obligations, as applicable, to:

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(i) obtain plugging exceptions in operator's name for each Well with a

current plugging exception, or permanently plug and abandon the Well;

(ii) plug, abandon, and if necessary, reabandon each Well;

(iii) remove all equipment and facilities, including flowlines, pipelines,

and platforms;
(iv) close all pits; and

(v) restore and remediate the surface, subsurface, seabed and offshore

sites associated with the Tangible Assets and the Properties (all of the foregoing in this Section 1O.7(a), "Abandonment Obligations").

(b) Buyer wil pay all costs and expenses associated with the obligations
assumed under Section 1O.7(a). Subject to Section 1O.7(c), at the Alaska Interests Closing

Buyer shall (i) deliver to Sellers satisfactory documentation that Buyer has secured all necessary bonds required by any Governmental Entity or Third Pary in order to own and,

where applicable, operate the Assets, and evidence that Buyer has obtained an
appropriate release or assumption agreement from each obligee of the performance bonds identified on Schedule 3 in order that Sellers shall have no further obligations under such performance bonds subsequent to the Alaska Interests.

(c) As of the Execution Date, the DNR has stated that the trust account for the
Redoubt Unit wil be $12,000,000. PERL has established an Escrow Agreement for

Abandonment Liabilties for Redoubt Unit ("Escrow Agreement") in favor of DNR into which PERL has deposited the sum of approximately $6,800,000. The terms of the Escrow Agreement between PERL and DNR anticipates that such Escrow Agreement shall be fully funded by March 1,2010. Notwithstanding the Escrow Agreement, Buyer agrees to assume the Abandonment Obligations and shall secure all of Buyer's postClosing plugging and abandonment and surface restoration obligations pertaining to the

Redoubt Unit, providing for such terms by fully funding the existing escrow or by
replacing such funds with a bond issued by an approved surety as is acceptable to Sellers and DNR in their reasonable discretion.

performing the Abandonment Obligations, and shall promptly deliver to Sellers

(d) Buyer shall maintain accurate records of its actual expenditures incurred in

reasonably detailed reports of such expenditures certified by an independent accounting firm promptly after the end of each calendar year in which Abandonment Obligations are performed. For purposes of this Agreement, any expenditures for an Abandonment Obligation completion of which requires approval from a Governmental Entity or Third
Pary shall not be deemed expended until the calendar year in which such approval is
obtained. Sellers or their authorized representatives may audit Buyer's records for the

purpose of verifying the actual expenditures incurred in performing the Abandonment Obligations. Any disputes concerning the amount of such expenditures or their attrbution to performance of Abandonment Obligations shall be submitted to the Bankrptcy Court
for resolution.

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10.8 Preliminary Settlement Statement. Sellers wil prepare, in accordance with this

Agreement, a statement ("Preliminary Settlement Statement"), and deliver a copy to Buyer no

later than thee Business Days prior to the Alaska Interests Closing Date, setting forth each

adjustment to the Alaska Interests Purchase Price they anticipate to be appropriate as of the Alaska Interests Closing Date to determine the Preliminary Alaska Interests Purchase Price and showing the calculation of such adjustments in accordance with Aricle 3. Buyer wil have one Business Day after receipt of the Preliminary Settlement Statement to review such statement and to provide written notice to Sellers of Buyer's objection, if any, to any item on the Preliminary Settlement Statement. Buyer's notice wil clearly identify the item(s) objected to and the reasons and support for the objection(s). The Paries shall attempt to agree on the amount of the Preliminar Alaska Interests Purchase Price to be paid at the Alaska Interests Closing no later than one Business Day prior to the Alaska Interests Closing. If the Paries do not agree by that date, the arithmetic average of Sellers' and Buyer's respective good faith estimates shall be used to determine the adjustments to the Preliminary Alaska Interests Purchase Price. If Buyer does not provide written objection(s) within the one Business Day period, the Paries wil treat the Preliminary Settlement Statement as correct for purposes of determining the Preliminary Alaska
Interests Purchase Price.
10.9 Final Settlement Statement.

(a) Determination of Final Alaska Interests Purchase Price. After the

Alaska Interests Closing, Sellers wil prepare, in accordance with this Agreement, a statement ("Final Settlement Statement"), and deliver a copy to Buyer no later than 30 days after the Alaska Interests Closing Date, setting forth its determination of each
adjustment to the Alaska Interests Purchase Price but excluding any amounts paid by the Paries under Section 10.10 and Section 10.11, and showing the calculation of such

adjustments in accordance with Aricle 3. Buyer wil have five days after receipt of the Final Settlement Statement to review such statement and to provide written notice to Sellers of Buyer's objection to any item on the statement. Buyer's notice wil clearly identify the item(s) objected to and the reasons and support for the objection(s). If Buyer
does not provide written objection(s) within the five-day period, the Paries wil treat the

Final Settlement Statement as correct and the Final Alaska Interests Purchase Price wil
not be subject to further adjustment. If Buyer provides written objection(s) within the
five- day period, the Paries wil treat the Final Settlement Statement as correct with

respect to the items not objected to, and Buyer and Sellers wil meet to negotiate and resolve the objections within three days of Sellers' receipt of Buyer's objections. If the
Paries agree on all objections, the Paries wil treat the adjusted Final Settlement

Statement as agreed upon by the Parties as correct and the Final Alaska Interests

Purchase Price wil not be subject to further adjustment. Any items not agreed to at the end of such three-day period may, upon either Sellers' or Buyer's written request, be submitted to the Bankrptcy Court for resolution.

Interests Purchase Price is more than the Preliminar Alaska Interests Purchase Price, Buyer wil pay such difference to Sellers via wire transfer to an account or accounts specified by Sellers, in immediately available funds, within two Business Days after the Final Settlement Statement has been agreed to by the Parties or determned by the
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(b) Payment of Final Alaska Interests Purchase Price. If the Final Alaska

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Bankrptcy Court, as applicable. If the Final Alaska Interests Purchase Price is less than the Preliminary Alaska Interests Purchase Price, Sellers wil pay such difference to Buyer via wire transfer to an account specified by Buyer, in immediately available funds, within two Business Days after the Final Settlement Statement has been agreed to by the Paries or as determined by the Bankrptcy Court, as applicable.

10.10 Post-Closinf! Revenues. Except as expressly provided otherwise in this Agreement, Buyer shall pay to Sellers any and all amounts received after the Alaska Interests Closing by Buyer (to the extent not accounted for in the Preliminary Settlement Statement or the Final Settlement Statement) that are attrbutable to the ownership of the Alaska Interests prior to the Effective Time. Except as expressly provided otherwise in this Agreement, Sellers shall pay to Buyer any and all amounts received after the Alaska Interests Closing by Sellers (to the extent not accounted for in the Preliminary Settlement Statement or the Final Settlement Statement) that are attributable to the ownership of the Alaska Interests on or after the Effective Time. The Party responsible for a payment required under this Section 10.10 shall pay the Pary entitled to receive payment within ten Business Days after the end of the month in which such amounts were received by the Pary responsible for payment and no further adjustments shall be made with respect to such amounts in the Final Settlement Statement.
10.11 Post-Closin2: Expenses. Except as expressly provided otherwise in this Agreement, Sellers shall reimburse Buyer for any and all costs and disbursements paid after the
Alaska Interests Closing by Buyer during the 30 day period immediately following the Alaska Interests Closing Date (to the extent not accounted for in the Preliminary Settlement Statement or the Final Settlement Statement) that are attributable to the ownership of the Alaska Interests prior

to the Effective Time. Except as expressly provided otherwise in this Agreement, Buyer shall reimburse Sellers for any and all costs and expenses paid after the Alaska Interests Closing by Sellers during the 30 day period immediately following the Alaska Interests Closing Date (to the
extent not accounted for in the Preliminary Settlement Statement or the Final Settlement

Statement) that are attributable to the ownership of the Alaska Interests on or after the Effective Time. The Pary responsible for a payment required under this Section 10.11 shall pay the Pary entitled to receive payment within ten Business Days after the end of the month in which such amounts were received by the Party responsible for payment and no further adjustments shall be made with respect to such amounts in the Final Settlement Statement.

10.12 Audits. Notwithstanding anything in this Agreement to the contrary, (a) Sellers
shall have the right to conduct and participate in audits related to joint operations provided for

under any operating or other Contract relating to the Alaska Interests in accordance with the terms thereof to the extent any such audit relates to the period of time prior to the Effective

Time, (b) Buyer shall have the right to conduct and paricipate in audits related to joint
operations provided for under any operating or other Contract relating to the Alaska Interests in accordance with the terms thereof to the extent any such audit relates to the period of time on or after the Effective Time, and (c) no audit Claim of Sellers or Buyer related to joint operations under any operating or other Contract relating to the Alaska Interests in accordance with the
terms thereof is waived or released by Sellers or Buyer under this Agreement, nor shall any

indemnity in this Agreement affect any such audit Claim by Sellers or Buyer related to joint operations under any operating or other Contract relating to the Alaska Interests in accordance

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with the terms thereof to the extent any such audit relates to the period prior to the Alaska Interests Closing Date.

10.13 Reservation of Claims. At the Alaska Interests Closing, Sellers shall reserve all Claims, accounts receivable and rights of any kind concerning the Alaska Interests or Properties against any Third Party (to the extent such Claims, accounts receivable and rights would not be a

recoupment or setoff against any Assumed Liabilty), which Claims, accounts receivable or rights accrue before the Effective Time (including those against overrding royalty owners,
royalty owners, working-interest owners, and Oil or Gas purchasers), whether discovered before
or after the Alaska Interests Closing.

ARTICLE 11 TAXES. COSTS. AND FEES

i i. i Property Taxes. Property Taxes wil be apportioned between Sellers and Buyer

as of the Alaska Interests Closing Date. Whether the Alaska Interests are valued based on the previous year's production or any other basis, Buyer is obligated to pay the current year's ad valorem tax assessment and all subsequent Property Taxes, subject to the following apportionment provisions. The basis of the apportionment wil be the assessment for the tax year in which the Alaska Interests Closing Date occurs or, if that assessment is not known, then the

basis of the apportionment wil be the assessment for the previous tax year. Buyer wil be responsible for all Property Taxes and interest that are applied to the Alaska Interests
retroactively after the Alaska Interests Closing Date.

11.2 Production Taxes. All Production Taxes attributable to the Alaska Interests wil
be apportioned between the Paries as of the Alaska Interests Closing Date. Sellers wil be

responsible for paying or withholding all Production Taxes that have accrued before the Alaska Interests Closing Date and for fiing all statements, returns, and documents pertinent to them.

Buyer wil be responsible for paying or withholding all Production Taxes that accrue or are applied retroactively after the Alaska Interests Closing Date; for fiing all statements, returns,
documents incident to them; and for obtaining reimbursements, if any, relating to those taxes.

11.3 Other Taxes. Buyer wil pay all applicable state and local sales taxes, use taxes,
gross receipts taxes, business license taxes, other taxes (except taxes imposed on Sellers'

income), and fees from and after the Alaska Interests Closing Date. Buyer wil pay all state and local taxes, including penalty and interest, if any, assessed after the Alaska Interests Closing
Date against any Pary attributable to periods after the Alaska Interests Closing Date with respect

to this transaction or, if paid by Sellers, Buyer wil promptly reimburse Sellers for amounts paid if related to the period after the Effective Time. Sellers wil pay all applicable state and local
sales taxes, use taxes, gross receipts taxes, business license taxes, other taxes (except taxes

imposed on Seller's income), and fees prior to the Alaska Interests Closing Date. Buyer wil pay all state and local taxes, including penalty and interest, if any, assessed after the Alaska Interests
Closing Date against any Pary attributable to periods prior to the Alaska Interests Closing Date

with respect to this transaction or, if paid by Buyer, Sellers wil promptly reimburse Buyer for amounts paid if related to the period prior to the Effective Time. Buyer wil pay all documentary stamp taxes and documentar transfer taxes.

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ARTICLE 12
POST-CLOSING OPERATIONS
If the Alaska Interests Closing occurs, the provisions of

this Arcle 12 shall apply.

12.1 Operation. As of the Alaska Interests Closing, operation of the Alaska Interests
wil be conducted under, subject and pursuant to the terms of the Transition Services Agreement. On the Transition Termination Date, operation of the Alaska Interests wil be turned over to, and become the responsibility of, Buyer.

12.2 Removal of Sh!ns. Sellers may either remove their names and signs from any
Property, or may require Buyer to do so. If Sellers' name or signs remain on any Property after the Transition Termination Date, Buyer shall (a) remove any remaining signs and references to Sellers promptly, but no later than the time required by Applicable Law or 45 days after the Transition Termination Date, whichever occurs first, (b) install signs complying with Applicable Laws, including signs showing Buyer as operator of any Alaska Interests of which it is the operator, and (c) notify Sellers of the removal and installation. Sellers reserve a right of access to any Property after the Alaska Interests Closing to remove their signs and names from all the Property, or to confirm that Buyer has done so. If Sellers remove signs because Buyer has not done so, Sellers wil charge its costs to Buyer, and Buyer wil pay Sellers' invoice within 15 days after receipt.

12.3 Risk of Loss. Unless this Agreement is terminated, the risk of loss for damage to or destruction of the Alaska Interests or any of the Property wil pass from Sellers to Buyer as of

the Effective Time, INCLUDING DAMAGE OR DESTRUCTION RESULTING IN WHOLE OR IN PART FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLERS OR THEIR ASSOCIATED PARTIES. Damage to, or destruction of, any of the
Alaska Interests or any of the Property wil not be cause for Buyer to delay the Alaska Interests Closing or terminate this Agreement.

ARTICLE 13 EMPLOYEES AND PERSONNEL

13.1 Offers of Emplovment.

(a) Buyer may select and offer employment with Buyer to all or a portion of those employees of Sellers or PERL who are identified on a list to be provided by Sellers within ten days after the Execution Date (the "Prospective Employees"). Buyer's offers of employment to the selected Prospective Employees shall be made in writing and shall be made during a "Hiring Period" beginning on the date of this Agreement and ending on the 30th day prior to the Transition Termination Date. Such offers may impose a ten-day
deadline for response, so long as the deadline for response is within the Hiring Period.

The date as of which employment with Buyer is to begin in accordance with all such
offers shall be the day after the Transition Termination Date. Buyer may require that

each Prospective Employee submit a formal application for employment. Buyer shall have no obligation under this Agreement to employ any Prospective Employee. Those Prospective Employees who accept Buyer's employment offers and become employees

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of Buyer on day after the Transition Termination Date are the "Affected Employees."

Sellers make no representation or waranty, express or implied, regarding the qualifications, capabilties or fitness for duty of any of the Affected Employees. The
Prospective Employees who do not become Affected Employees are the "Remaining

Employees." Nothing in this Agreement shall affect Buyer's right to terminate the employment of any Affected Employee on or after the date he or she becomes an
employee of Buyer, with or without cause, or Sellers' or PERL's right to terminate the employment of any Prospective Employee or Remaining Employee, before or after the Alaska Interests Closing Date.

(b) Buyer shall control and be responsible for the process of selecting from
the Prospective Employees those Prospective Employees to whom Buyer makes an offer of employment.
(c) At least five days prior to the Transition Termination Date, Buyer shall

notify Sellers in writing as to the list of Affected Employees.

13.2 WARN Act Indemnification. Buyer shall indemnify Sellers and each of their
Affilates against all

liabilities arising out of the notification or other requirements of the Worker

Adjustment and Retraining Notification Act of 1988, as amended ("WARN Act") and each
comparable law of any state, with respect to the Affected Employees in connection with actions taken by Buyer on or after the Alaska Interests Closing Date.
13.3 General Emplovee Provisions.
(a) If any of the arrangements described in this Aricle 13 are determined by

the U.S. Internal Revenue Service or other applicable Governmental Entity, or by a court of competent jurisdiction, to be prohibited by Applicable Law, Sellers and Buyer shall modify such arrangements to as closely as possible retain the intent and economic benefits and burdens of the parties as reflected herein in a manner which is not prohibited
by Applicable Law.

(b) As soon as reasonably practicable after the Alaska Interests Closing Date, and to the extent required for Buyer to comply with the terms of this Aricle 13, Sellers wil provide to Buyer a list of all Affected Employees' length of service used under the employee benefit plans or policies of Sellers or their Affiliates as of the Alaska Interests
Closing Date.

(c) If Buyer hires any Remaining Employee within six months after he or she

terminates employment with Sellers or PERL, Buyer shall notify Sellers of such event and shall reimburse Sellers or PERL for any severance pay paid by Sellers or PERL to such Remaining Employee as soon as possible after the hire date.

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ARTICLE 14 BUYER'S RELEASE. DISCHARGE. AND COVENANT NOT TO SUE: BUYER'S OBLIGATIONS TO INDEMNIFY. DEFEND. AND HOLD HARMLESS: DISPUTE RESOLUTION

14.1 Buyer's Release and Dischar2:e of Sellers and their Associated Parties. Buyer releases and discharges Sellers and their Associated Paries from each Claim and Liability relating to the Alaska Interests (including the Tangible Assets), CIPL, the Stock, the Propertes
and the transactions contemplated hereby (including all Abandonment Obligations), regardless of when or how the Claim or Liability arose or accrued, or arises or accrues, or whether the Claim

or Liabilty is foreseeable or unforeseeable. BUYER'S RELEASE AND DISCHARGE OF

SELLERS AND THEIR ASSOCIATED PARTIES INCLUDE CLAIMS AND

LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLERS OR THEIR ASSOCIATED PARTIES, WHETHER THE

NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, OR

CONCURRNT. The only exception to Buyer's release and discharge of Sellers and their
Associated Paries is stated in Section 14.4(c), and the release and discharge are binding on Buyer and its successors and assigns.

14.2 Buyer's Covenant Not to Sue Sellers or their Associated Parties. Buyer covenants not to sue Sellers or their Associated Parties with regard to any Claim or Liability relating to the Alaska Interests (including the Tangible Assets), CIPL, the Stock, the Properties, and the transactions contemplated hereby (including any Abandonment Obligations), regardless of when or how the Claim or Liabilty arose or accrued, or arises or accrues, or whether the Claim or Liability is foreseeable or unforeseeable. BUYER'S COVENANT NOT TO SUE

SELLERS OR THEIR ASSOCIATED PARTIES INCLUDES CLAIMS AND

LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLERS OR THEIR ASSOCIATED PARTIES, WHETHER THE

NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, OR

CONCURRNT. The only exception to Buyer's covenant not to sue Sellers or their Associated Paries is stated in Section 14.4(c), and the covenant is binding on Buyer and its successors and
aSSigns.

14.3 Buyer's Oblil!ations to Indemnify. Defend. and Hold Sellers and their Associated Parties Harmless. Buyer wil indemnify, defend, and hold harmless Sellers and
their Associated Paries for, and wil pay to Sellers the amount of, each Claim and Liability
relating to, arsing, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Buyer in this

Agreement, the Assignment and Bil of Sale or any other certificate or document
delivered by Buyer pursuant to this Agreement;
(b) any breach by Buyer of any covenant or obligation of Buyer in this

Agreement, the Assignment and Bil of Sale or any other certificate or document
delivered by Buyer pursuant to this Agreement; and

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(c) the Alaska Interests (including the Tangible Assets), CIPL, the Stock, the

Propertes, and the transactions contemplated hereby (including all Abandonment

Obligations ),

regardless of when or how the Claim or Liabilty arose or accrued, or arses or accrues, or
whether the Claim or Liability is foreseeable or unforeseeable. BUYER'S OBLIGATIONS TO INDEMNIFY, DEFEND, AND HOLD SELLERS AND THEIR ASSOCIATED PARTIES

HARMLESS INCLUDE CLAIMS AND LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLERS OR THEIR
ASSOCIATED PARTIES, WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, OR CONCURRNT. The only exception to Buyer's obligations to indemnify, defend, and hold Sellers and their Associated Paries harless is stated in
Section l4.4(c), and the obligations are binding on Buyer and its successors and assigns.

14.4 Buver's Oblieations.

(a) In each instance of Buyer's obligations to release, discharge, indemnify,

defend, and hold Sellers and their Associated Paries harless and its covenant not to sue Sellers or their Associated Paries, the Claims and Liabilties subject to the obligations

include the following:

(i) the ownership of the Stock and the Alaska Interests by Sellers,

PERL or their respective Associated Parties, the operation of the Tangible Assets, Alaska Interests, CIPL, and the Properties by Sellers, PERL or their respective
Associated Paries, and the acts or omissions of Sellers, PERL or their respective

Associated Paries in connection with the Alaska Interests, CIPL, the Properties or the Related Agreements, whether arsing or accruing before or after the Effective Time.
(ii) the ownership of the Stock and the Alaska Interests by Buyer, the

operation of the Alaska Interests, CIPL, Tangible Assets and the Properties by Buyer or its Associated Paries, and the acts or omissions of Buyer or its Associated Paries in connection with the Alaska Interests, CIPL, the Properties or
under this Agreement or the Related Agreements, whether arsing or accruing before or after the Effective Time.
(iii) the acts or omissions of any Third Pary relating to the Stock,

CIPL, the Properties or the Alaska Interests.

indemnify, defend, and hold Sellers and their Associated Paries harmless and its
covenant not to sue Sellers or their Associated Paries include Claims and Liabilities arsing in any manner from the following:
(i) the review, inspection and assessment of the Alaska Interests and

(b) Buyer's obligations under this Agreement to release, discharge,

the Property by Buyer and its Associated Paries;

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(ii) any error in describing the Alaska Interests or the Property, or any

error in the conveyance instrments;

(iii) rights and obligations of the Paries or any Third Pary under the

Related Agreements;
(iv) closing without a Consent;
(v) failure by any Third Party to approve or consent to any aspect of

this transaction;
(vi) obligations to plug and abandon Wells, pipelines and platforms and

remediate the Tangible Assets and the Properties;

(vii) payment of Real Property Taxes or other taxes applicable to any of

the Stock, CIPL, the Alaska Interests and any Property;

(viii) payments or disbursements paid or payable by Sellers or Buyer to

any Third Party;

(ix) a physical or environmental condition relating to the Tangible

Assets or any Property, including Claims and Environmental Liabilties, or failure to comply with the Environmental Laws;
(x) remediation activities, including damages incurred by Buyer or its

Associated Paries during or arsing from remediation activities;

(xi) lawsuits filed before the Effective Time, but amended after the

Effective Time to include the Stock, CIPL, the Alaska Interests or Property or Sellers' ownership of or activities regarding the Stock, CIPL, the Alaska Interests
or Property; and
(xii) obligations to inspect or to repair or recondition any of the Alaska

Interests or Property.
(c) Buyer's obligations to indemnify, defend, and hold Sellers and their

Associated Parties harmless do not apply, however, to:

(i) Claims or Liabilities with respect to the Alaska Interests, CIPL, the

Stock or the Properties that result from a judgment rendered or settlement reached

in a lawsuit filed before the Effective Time, but only to the extent that acts or omissions that gave rise to the cause of action are attributable to the conduct or
operation or ownership of Sellers or their Associated Paries before the Effective

Time; or
(ii) Documents.

Claims that Sellers breached this Agreement or the Transaction

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(d) The Paries recognize that certain lawsuits with respect to the Stock, CIPL, the Properties and the Alaska Interests may have been fied before the Effective Time,
but concern activities continuing after the Effective Time, so that after the Execution

Date, Buyer may be a proper pary to such lawsuits. For these lawsuits, Buyer's
obligations to indemnify, defend, and hold Sellers and their Associated Parties harless

wil apply to activities occurrng after the Effective Time. Sellers wil continue to defend
their own interests and provide principal counsel in an action under this Section 14.4(d)

for which they remains a pary after the Effective Time.

14.5 Buver's Dutv to Defend. Buyer acknowledges that its obligations to indemnify,
defend, and hold Sellers and their Associated Paries harless under this Agreement include

obligations to pay the attorneys' fees and court and other costs incurred by Sellers and their Associated Parties in defending all Claims. As to each Claim and Liabilty, Sellers, at their sole option, may elect to (a) manage their own defense, in which event Buyer shall reimburse Sellers and their Associated Paries for all attorneys' fees and court and other costs reasonably incurred in defending a Claim, upon delivery to Buyer of invoices for these fees and costs; or (b) tender its defense as to any Claim to Buyer, in which event Buyer wil be responsible for all aspects of defending the Claim at issue and resulting Liabilties.

14.6 Dispute Resolution. Any and all disputes between the Paries relating to, arsing out of, in connection with, or attributable to this Agreement, including this Aricle 14, the Sale

Procedures Order and/or the Sale Order, shall be submitted to the Bankrptcy Court for
resolution. Any decision of the Bankrptcy Court regarding this Agreement shall be conclusive

and wil be binding on the Paries and their respective successors and assigns, subject to any
rights to rehearing, appeal or certiorar.

14.7 Retroactive Effect. In addition to the assumption of liabilities and releases and
indemnities in the Agreement applicable to times from and after the Execution Date, Buyer

acknowledges that its obligations to release, discharge, defend, and hold Sellers and their
Associated Parties harmless and its covenant not to sue Sellers or their Associated Paries apply to matters occurrng or arsing before the Execution Date to the extent provided in this Agreement.

14.8 Inducement to Sellers. BUYER ACKNOWLEDGES THAT IT HAS EVALUATED ITS OBLIGATIONS UNDER THIS ARTICLE 14 BEFORE IT DETERMINED AND SUBMITTED ITS OFFER TO PURCHASE THE ALASKA INTERESTS AND THE STOCK AND THA T ITS ASSUMPTION OF THESE OBLIGATIONS IS A MATERIAL INDUCEMENT TO SELLERS TO ENTER INTO
THIS AGREEMENT WITH, AND CLOSE THE SALES OF THE ALASKA INTERESTS
AND THE STOCK HEREUNDER.

ARTICLE 15 ENVIRONMENTAL MATTERS

15.1 Buver's Acknowlede:ment Concernine: Possible Contamination of the
Tane:ible Assets and the Properties. Buyer is aware that the Tangible Assets and the Property

have been used for exploration, development, production, processing and transportation of Oil

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and Gas and that there may be petroleum, produced water, wastes, or other materials located on or under the Properties or associated with the Alaska Interests or CIPL. Equipment and sites included in the Tangible Assets or the Propertes or owned, leased or operated by or on behalf of CIPL may contain asbestos, hazardous substances, or NORM. NORM may affix or attach itself to the inside of Wells, materials, and equipment as scale, or in other forms; the Wells, materials, and equipment located on the Properties or included in the Alaska Interests or owned, leased or operated by or on behalf of CIPL may contain NORM and other wastes or hazardous substances; and NORM-containing material and other wastes or hazardous substances may have been buried,

come in contact with the soil, or otherwise been disposed of on the Properties or properties owned, leased or operated by or on behalf of CIPL. Special procedures may be required for the
remediation, removal, transportation, or disposal of wastes, asbestos, hazardous substances, and

NORM from the Tangible Assets and the Properties or from properties owned, leased or
operated by or on behalf of CIPL. Buyer is aware that it may be strictly liable under Alaska Statute 46.03.822 for any hazardous substances that mayor have been released on or from the

Tangible Assets or the Properties or on or from properties owned, leased or operated by or on

behalf of CIPL.

BUYER WILL ASSUME ALL LIABILITY FOR THE ASSESSMENT,

REMEDIATION, REMOVAL, TRANSPORTATION, AND DISPOSAL OF WASTES,

ASBESTOS, HAZARDOUS SUBSTANCES, AND NORM FROM THE ALASKA

INTERESTS AND THE PROPERTIES AND ASSOCIATED ACTIVITIES AND WILL CONDUCT THESE ACTIVITIES IN ACCORDANCE WITH ALL APPLICABLE LAWS, INCLUDING THE ENVIRONMENTAL LAWS.
15.2 Disposal of Materials. Substances. and Wastes; Compliance with Law. Buyer

shall store, handle, transport and dispose of or discharge all materials, substances, and wastes from the Alaska Interests, Tangible Assets and the Properties (including produced water, drilling

fluids, NORM, and other wastes), whether present before or after the Effective Time, in
accordance with Applicable Laws. Buyer shall keep records of the types, amounts, and location of materials, substances, and wastes that are stored, transported, handled, discharged, released, or disposed of onsite and offsite. When any Lease or other lease included in the Alaska Interests

terminates or Buyer subsequently transfers any portion of the Alaska Interests, Buyer shall
undertake additional testing, assessment, closure, reporting, or remedial action with respect to the Tangible Assets, Alaska Interests or Properties as is necessary to satisfy all local, state, or federal

requirements in effect at that time and necessary to restore the Alaska Interests, Properties or
Tangible Assets.

ARTICLE 16 REPRESENTATIONS AND WARRANTIES

16.1 Representations bv Sellers. Each Seller represents and warants to Buyer as

follows:
(a) Subject to approval of the Bankptcy Court and to the Sale Order, this

Agreement and the Transaction Documents to which Sellers are paries have been duly

authorized, executed and delivered by Sellers,

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(b) This Agreement constitutes, and the Transaction Documents to which

Seller is a party, when executed and delivered by Seller wil constitute, the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to the general principles of equity and all orders entered or to be entered in the Bankrptcy Case and any related proceedings.

(c) PEAH is the record and beneficial owner of 20,000 shares of common
stock of CIPL, which constitutes the Stock. At the Stock Closing, the Stock wil be free and clear of any liens and encumbrances in accordance with the Sale Order, subject to all orders entered or to be entered in the Bankrptcy Case and any related proceedings.

16.2 Representations bv Buver. Buyer represents and warants to Sellers as follows:

(a) Existence. Buyer is a ( ) duly organized, validly existing and in

good standing under the Applicable Laws of the State of ( ).

(b) Power. Authorization. Execution. Buyer has all requisite ( 1

power and authority to execute, deliver, and perform this Agreement and the Transaction
Documents to which it is a pary and to consummate the transactions contemplated

hereunder and thereunder. The execution, delivery, and performance of this Agreement and the Transaction Documents to which Buyer is a pary have been duly authorized by all requisite paries, and this Agreement and the Transaction Documents to which it is a
pary has been duly executed and delivered by Buyer.

(c) Qualifications and Bondinl!. Buyer is now, and, upon and after the

Closing, shall continue to be, qualified with all applicable Governmental Authorities to own and operate the Alaska Interests and has, and shall maintain, all necessary bonds, permits and other authorizations required by any Governmental Entity or Third Party in order to own or operate the Alaska Interests including, but not limited to, those bonds identified on Schedule 3.
(d) Enforceabiltv. This Agreement constitutes, and the Transaction

Documents to which it is a pary, when executed and delivered by Buyer wil constitute, the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, except as enforceabilty may be subject to (i) bankrptcy, insolvency,

reorganization or other similar Applicable Laws now or hereafter in effect affecting the enforcement of creditors rights generally, and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

(e) Non-Contravention. The execution and delivery by Buyer of this

Agreement and the Transaction Documents to which it is a pary and the performance by Buyer of the terms hereof and thereof do not conflct with or result in a violation of:
(i) the Organizational Documents of Buyer, or

(ii) any material agreement, instrment, order, writ, judgment, or

decree to which Buyer is a pary or is subject.

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(f) Brokers. Neither Buyer nor any Affiliate of Buyer has incurred any

liabilty, contingent or otherwise, for broker's fees, finder's fees, agent's commissions, or other similar forms of compensation in connection with this Agreement or any contract or
transaction contemplated hereby or thereby for which Sellers shall have any

responsibility whatsoever. Buyer releases Sellers and their Associated Paries from, and

shall fully protect, indemnify, and defend Sellers and their Associated Parties and hold them harless from and against, any and all Liabilties relating to, arsing out of or connected with, directly or indirectly, commissions, finders' fees, or other remuneration due to any such agent, broker, or finder claiming by, though, or under Buyer or any Affiliate of Buyer.
(g) Investi2:ation. Buyer, for itself and on behalf of its Affliates, investors,

shareholders, directors and offcers, represents and warants that it is knowledgeable of

the Oil and Gas business and of the usual and customary practices of producers and

operators. Buyer has had access to and an opportunity to inspect all relevant information relating to the Stock, the Alaska Interests and the Properties, sufficient to enable Buyer to

evaluate the merits and risks of its acquisition of the Stock, Alaska Interests and the
Properties. Buyer has had the opportunity to ask questions and receive answers relating to
the Stock, Alaska Interests and the Properties, and to obtain such additional information

as Buyer has desired regarding, the business, financial condition and affairs of CIPL. In makng its decision to enter into this Agreement and to consummate the transactions contemplated herein, Buyer has relied solely upon the representations and waranties
made in this Agreement and upon its contractual rights in this Agreement to conduct its

own independent, due-dilgence investigation of the Stock, Alaska Interests and the Properties. ACCORDINGLY, BUYER, FOR ITSELF AND ON BEHALF OF ITS ASSOCIATED PARTIES ACKNOWLEDGES THAT NEITHER SELLERS NOR ANY ASSOCIATED PARTIES OF SELLERS HAVE MADE, AND SELLERS, FOR THEMSELVES AND FOR THEIR RESPECTIVE ASSOCIA TED PARTIES,

HEREBY EXPRESSLY DISCLAIMS AND NEGA TES, ANY

REPRESENTATIONS OR WARRNTIES (OTHER THAN THOSE EXPRESS REPRESENTA TIONS AND WARRNTIES MADE IN THIS AGREEMENT), WHETHER EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR
OTHERWISE, RELATING TO THE STOCK, ALASKA INTERESTS AND THE PROPERTIES.
(h) Investment Matters. Buyer:
(i) is an "accredited investor," as defined in Rule 501 of Regulation D

promulgated under the Securities Act;

(ii) is acquiring thc Alaska Intcrcsts and the Stock for its own benefit

and account and not with a view toward any sale or distribution thereof, nor with
any present intention of makng a distrbution of any fractional undivided interests

within the meaning of the Securities Act or any applicable state blue sky laws or other applicable securities laws; and

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(iii) has received and thoroughly read this Agreement, including all

schedules and exhibits hereto. Buyer has had an opportunity to discuss this
Agreement and the disclosures herein with its legal counseL. Buyer acknowledges

that it has had the opportunity to ask questions of Sellers and their Associated
Paries and that Buyer has received satisfactory answers respecting, and has obtained such additional information as Buyer has desired in connection with, the transactions contemplated by this Agreement.

(i) Funds Available. Buyer has sufficient funds to enable it to:

(i) pay the Alaska Interests Purchase Price;

(ii) pay the Stock Purchase Price; and

(iii) post all bonds and deposits required by the transactions

contemplated by this Agreement, including all Governmental Bonds.

proceedings pending against, contemplated by, or to the knowledge of Buyer, threatened against Buyer.
(k) Securities Matters.

U) BankruDtcv. There are no bankrptcy, reorganization or arangement

(i) Buyer acknowledges that the Alaska Interests and the Stock have

not been registered under the Securities Act or any other securities laws and may

be sold, assigned, pledged or otherwise disposed of in the absence of such

registration only pursuant to an exemption from such registration and in
accordance with this Agreement.
(ii) Buyer intends to acquire the Alaska Interests and the Stock for its

own benefit and account and is not acquiring the Alaska Interests or Stock with

the intent of distributing fractional undivided interests in them or otherwise sellng them in a manner that would be subject to regulation by federal or state securities laws. If Buyer sells, transfers, or otherwise disposes of the Alaska Interests, the Stock or fractional undivided interests in them in the future, it wil
do so in compliance with Applicable Laws.
(iii) Buyer has at no time been presented with or solicited by or through

any public promotion or other form of advertising in connection with this

transaction.
(1) Basis of Buver's Decision. Buyer:
(i) has reviewed and investigated the Stock, the Alaska Interests and

the Properties to its satisfaction in order to enter into this Agreement;

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(ii) has evaluated the Stock, the Alaska Interests and the Property to its

satisfaction and has made an informed decision, as a prudent and knowledgeable Buyer, to acquire the Stock and the Alaska Interests;
(iii) is knowledgeable and experienced in the evaluation, acquisition,

and operation of oil and gas properties;

(iv) has evaluated the merits and risks of purchasing the Alaska

Interests and the Stock and has formed an opinion based solely upon its knowledge and experience and not in reliance on any statements or actions by
Sellers or their Associated Paries; and

(v) is acquiring the Alaska Interests and the Stock "AS is, WHERE is, WITH ALL FAULTS."

(m) Material Factor. Buyer acknowledges that its representations and

waranties contained in this Agreement are a material inducement to Sellers to enter into

this Agreement with Buyer, and to close the transactions contemplated hereunder.

ARTICLE 17 COMMUNICATIONS

Unless otherwise provided in this Agreement, any notice, request, instruction,

correspondence or other document to be given hereunder by either Party to the other shall be in writing and delivered in person or by courier service requiring acknowledgment of receipt of

delivery or mailed by certified mail, postage prepaid and return receipt requested, or by
telecopier, as follows:
If to Sellers:

c/o Pacific Energy Resources Ltd.

Attn: President

111 W. Ocean Boulevard, Suite 1240 Long Beach, California 90802

Telephone: (562) 628-1526

Facsimile: (562) 628-1536

with a copy to:

Rutan & Tucker, LLP Attn: Gregg Amber 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626
Telephone: (714) 641-5100

Facsimile: (714) 546-9035

and to:

Pachulski Stang Ziehl & Jones LLP Attn: Ira D. Kharasch 10100 Santa Monica Blvd., 11th Floor Los Angeles, California 90067
Telephone: (310) 277-6910

Facsimile: (310) 201-0760

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If to Buyer:

( ( (

)
) )

) ) )

Telephone: ( Facsimile: (

Notice given by personal delivery, courier service or mail shall be effective upon actual receipt. Notice given by telecopier shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. Any Party may change any address to which notice is to be given to it by giving Notice as provided above of such change of
address.

ARTICLE 18 MISCELLANEOUS
18.1 Entire Aereement. This Agreement, the Transition Services Agreement, the

Confidentiality Agreement, the Site Visit Indemnity Agreement and the other documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto, including the exhibits and the schedules hereto (collectively, the "Transaction Documents"), (a) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, between the Paries with respect to the subject matter hereof except for the Confidentiality Agreement and Site Visit Indemnity Agreement, which shall continue in full force and effect, and shall survive any

termination of this Agreement or the Alaska Interests Closing and the Stock Closing in
accordance with its terms; and (b) are not intended to confer upon any other Person any rights or

remedies hereunder. Each Party agrees that (i) the other Party (including its agents and
representatives) has made no other representation, waranty, covenant or agreement to or with such Pary relating to the transactions contemplated hereby other than those expressly set forth in the Transaction Documents, and (ii) such Party has not relied upon any representation, waranty, covenant or agreement relating to the transactions contemplated hereby, other than those referred
to in clause (i) above.
18.2 Successors and Assiens; Amendment; SurvivaL. This Agreement is binding on
and inures to the benefit of the Paries and their respective successors, heirs, representatives, and

assigns and may be supplemented, altered, amended, modified, or revoked only in writing signed
by both Paries. Neither the assignment of this Agreement nor of any Alaska Interests, the Stock

or any par or portion thereof wil relieve Buyer of its obligations under this Agreement unless and to the extent Sellers consent in writing to release Buyer, which consent may be withheld for any reason. All of the covenants, agreements, representations and waranties, and indemnities made by each Party contained in this Agreement shall survive the Alaska Interests Closing and
the Stock Closing.

18.3 Exclusive Remedv. If the Alaska Interests Closing occurs, the express
indemnities set forth in this Agreement shall be the exclusive remedies for the Paries for the

breach of any representation, waranty or covenant set forth in this Agreement or any Claim

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arsing out of, resulting from or related to the transactions contemplated hereby, and each Pary hereby releases, waives and discharges, and covenants not to sue (and shall cause its Associated
Paries to release, waive, discharge and covenant not to sue) with respect to, any cause of action

not expressly provided for in this Agreement, including Claims under state or federal securities Laws and Claims available at common law, in equity or by statute.

18.4 Choice of Law. This Agreement and its performance shall be construed in
laws of the State of California, without regard to choice of law rules of any jurisdiction, including California.
accordance with, and enforced under, the internal

18.5 Assie:nment. Neither this Agreement nor the rights and obligations under it may

be assigned or delegated by Buyer without Sellers' prior written consent, which consent may be withheld for any reason, and an attempted assignment or delegation is null and void; provided, however, that Buyer may assign this Agreement to a wholly-owned subsidiary so long as Buyer remains primarly liable for any and all obligations of Buyer hereunder.
18.6 No Admissions. To the fullest extent permitted by Applicable Laws, including

Federal Rule of Civil Procedure Rule 408, neither this Agreement, nor any part of it, nor any performance hereunder, nor any payment of any amount hereunder, shall constitute or may be
construed as a finding, evidence of, or an admission or acknowledgment of (a) any liability, fault, past or present wrongdoing, or violation of law, rule, regulation, or policy, by either Seller

or Buyer or their respective Associated Paries or (b) any rights, claims or positions asserted by any Third Pary.

18.7 No Third Party Beneficiaries. The only third pary beneficiares of this
Agreement are the Associated Paries of Sellers and solely respect to Aricle 14. Except as set
fort in the immediately preceding sentence.. there are no Third Pary beneficiares of this

Agreement.

18.8 Public Communications. Unless provided otherwise in this Agreement, no Pary

shall make or issue, or cause to be made or issued, any press release or public communication

concerning this Agreement or the transactions contemplated by this Agreement without the other
Paries' prior written consent, which consent shall not be unreasonably withheld; provided,

however, that, upon giving the other Parties at least 24-hours' advance notice, any Party (or an Affilate of such Party) may make or issue, or cause to be made or issued, any press release or

public communication as may be required by Applicable Laws or the public disclosure

requirements applicable to such Pary or any Affiliate of such Pary.
18.9 Headine:s and Titles. The headings and titles in this Agreement are for guidance

and convenience of reference only and do not limit or otherwise affect or interpret the terms or provisions of this Agreement.

18.10 Bulk Transfer Law. Buyer waives compliance with the provisions of any
applicable bulk sales or bulk transfers Law.

18.11 Severabilty. The provisions of this Agreement are severable at Sellers' option. If a court of competent jurisdiction finds any par of this Agreement to be void, invalid or

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otherwise unenforceable, then Sellers may decide whether to enforce this Agreement without the void, invalid, or unenforceable pars or to terminate this Agreement.
18.12 Counterparts. This Agreement may be executed in multiple counterpars, each

of which shall be deemed to be an original, and all of which together shall be considered one
instrument.

18.13 Not to Be Construed a2:ainst the Drafter. Each Pary acknowledges that it has read this Agreement, has had opportunity to review it with an attorney of its choice, and has
agreed to all of its terms. Under these circumstances, the Parties agree that the rule of
constrction that a contract be construed against the drafter may not be applied in interpreting

this Agreement.

18.14 No Waiver. No waiver by either Pary of any par of this Agreement shall be
deemed to be a waiver of any other par of this Agreement or a waiver of strict performance of
the waived part in the future.

18.15 Expenses. Except as otherwise expressly provided herein, all expenses incurred
by each Party in connection with the transaction contemplated herein, including, without

limitation, attorney's fees, are for the account of the Pary incurring the same, and the Pary

incurrng such expenses shall defend, indemnify, and hold harmless the other Pary from and
against such expenses.

18.16 Time of Essence. Time is ofthe essence in the performance of this Agreement.

18.17 No Partnership. Nothing contained in this Agreement shall be deemed to create a joint venture, partnership, tax parnership, or agency relationship between the Paries.

18.18 Foreien Trade Law Compliance. Both Paries agree that all imports, exports, and re-exports, if any, under this Agreement shall be undertaken in accordance with all Applicable Laws of the United States with respect to foreign trade and export control. Both
Paries further agree to fully cooperate in complying with such Applicable Laws and in assisting the other Pary with such compliance. If licenses of any kind are required, including United States trade or export licenses, exports/re-exports and/or technology sharng wil occur only after such licensees) have been obtained. Buyer shall notify Sellers of any request of a United States Governmental Entity for information, documentation, or data relating to any Contract that Buyer has entered into with Sellers. Buyer shall provide responses to requests from a United States Government Entity for information, documentation, or data of any kind to such entity promptly upon request. Copies of the responses to a United States Governmental Entity shall be provided to Sellers promptly upon Sellers' request.

Sellers are relying upon the representations and waranties of Buyer that it shall fully
comply with all United States foreign trade and export control

laws and regulations including

any prohibitions on the transfer or release of products or technology contrary to such Applicable Laws or regulations.
18.19 Rules of Construction. For purposes of this Agreement:

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(a) Unless the context otherwise requires, (i) "or" is not exclusive; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) words in the singular include the plural and words in the plural include the singular; (iv) words in the masculine include the feminine and words in the feminine include the masculine; (v) any date specified for any action that is not a Business Day shall be deemed to mean the first Business Day after such date; (vi) a reference to a Pary includes its successors and permitted assigns; (vii) the word "includes" and its syntactical varants mean "includes, but is not limited to" and corresponding syntactical varants, and the rule ejusdem generis shall not be invoked to restrict or limit the scope of the general term or phrase followed or preceded by an enumeration of paricular examples; (vii) the words "hereof," "herein," and "hereunder" and words of similar import shall refer to this Agreement as a whole and not to any paricular provision of this Agreement; and (ix) any reference to dollars shall be a reference to U.S. dollars.
(b) References in this Agreement to Aricles, Parts, Sections, or other

subdivisions are, unless otherwise specified, to corresponding Articles, Parts, Sections, or

other subdivisions of this Agreement. Neither the captions to Aricles, Pars, Sections, or

other subdivisions of this Agreement (including the section headings of this

Section 18.19(b)), nor the Table of Contents, shall be deemed to be a part of this
Agreement or this Section 18.19(b).
(c) All Exhibits and Schedules to this Agreement are hereby incorporated by

reference herein, form a par of this Agreement, and shall have the same force and effect as if actually set out in the body of this Agreement. All references to this Agreement shall include all Exhibits and Schedules, as well as all attachments incorporated herein. All references in this Agreement to Exhibits and Schedules refer to the Exhibits and Schedules to this Agreement, unless expressly provided otherwise.
(d) In the event of a conflct between (i) the provisions of this Agreement and

(ii) the provisions of any other document, the provisions of this Agreement shall control
and prevail as between the Paries.
(e) References herein to any agreement or other instrument shall, unless the

context otherwise requires (or the definition thereof otherwise specifies), be references to
the same as it may from time to time be changed, amended, modified, amended and

restated, or extended.
(Signature Page Follows)

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The Paries have executed this Agreement on the date below their signatures, to be
enforceable and binding as of the Execution Date.

Dated:

,2009

PACIFIC ENERGY ALASKA OPERATING LLC

By:

Name: Daren Katic

Title: President

Dated:

,2009

PACIFIC ENERGY ALASKA HOLDINGS, LLC

By:

Name: Daren Katic

Title: President

Dated:

,2009

(BUYER)

By: Name: Title:

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DRAFT

Exhibit G to Purchase and Sale Agreement

(Alaska)

TRANSITION SERVICES AGREEMENT THIS TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of

, 2009 (the "Effective Date"), by and between PACIFIC ENERGY

RESOURCES LTD., a Delaware corporation ("PERL"), and , a ("Buyer"). PERL and Buyer are sometimes hereinafter referred to individually as a "Party" and collectively as the "Paries".

The definitions of capitalized terms used but not defined in this Agreement are set forth in that certain Purchase and Sale Agreement (together with the Exhibits and Schedules made a

part thereof, the "Purchase Agreement"), dated as of ,2009, by and between PERL
and Buyer.
In connection with the purchase and sale of the Assets pursuant to the Purchase

Agreement, PERL has agreed to assist Buyer by providing certain transition services with respect to the Assets for a limited time period following Closing, upon the terms and conditions set forth herein.

NOW, THEREFORE, for a good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Paries agree as follows:

ARTICLE I
PERL SERVICES

Section 1.1 Services. Buyer has requested that PERL provide, following the Closing, certain transition services relating to the Assets. The Paries agree that PERL wil provide or cause to be provided the transition services described on Schedule 1.1 in substantially the same manner as those services have been provided with respect to the
Assets during the period immediately preceding the date of this Agreement (collectively, the "PERL Services") for the period commencing as of the Closing Date and ending (i) on the next
Business Day after Buyer is approved by the State of Alaska, Deparment of Natural

Resources, Division of Oil & Gas as the successor unit operator of those Assets currently operated by PERL; or (ii) one hundred twenty (120) days after the Closing Date; whichever
occurs first (the "PERL Services Term"). PERL shall have no obligation to materially alter the

PERL Services to accommodate changes in the commercial or physical operation of the

Assets.

Section 1.2 EmDlovees. At all times during the performance of PERL

Services, all persons performing such PERL Services (i) shall be in the employ and/or under the control of PERL (including agents, contractors, temporary employees and consultants); (ii)
shall be independent from Buyer and not employees of Buyer; and (iii) shal not be entitled to any

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DRAFT
payment, benefit or perquisite directly from Buyer on account of such PERL Services. PERL wil not be required to provide any paricular PERL Service if the provision of such service would violate any Applicable Laws or Contracts. PERL wil use commercialy reasonable efforts to secure consents and/or approvals of vendors, lessors and licensors relating to the provision of the PERL Services.

Section l.3 Standard of Performance. PERL shall perform or cause to be performed the PERL Services with the same degree of care, skill and prudence it customarly exercises for its own operations, and in material compliance with Applicable Laws. Buyer acknowledges that PERL is not a professional provider of the types of services included in the PERL Services and that the personnel providing such services have other responsibilities and wil not be dedicated full time to performing the PERL Services.

Section 1.4 Records. PERL shall maintain or cause to be maintained true and correct records of all receipts, invoices, reports and such other documents as are customarly maintained by it for its own operations relating to the PERL Services rendered hereunder. Buyer
shall have the right to inspect such records durng regular offce hours following reasonable prior

written notice of any such inspection.

Section 1.5 Representatives of PERL. PERL wil, at all times during the
PERL Services Term, keep representatives of PERL available either by telephone, pager or in person, to receive communications from Buyer regarding the PERL Services and to respond to inquiries concerning the performance of the PERL Services. The PERL representatives are
designated in Schedule 1.5.

Section 1.6 Limitation of PERL Services. Except as expressly agreed herein, in connection with the performance of its obligations under this Agreement, in no event shall PERL be obligated to: (a) make modifications to its existing systems; (b) acquire additional
assets, equipment, rights or properties (including computer equipment, software, furniture, furnishings, fixtures, machinery, vehicles, tools and other tangible personal property); (c) hire additional employees; (d) undertake any capital expenditures; (e) pay any costs related to the

transfer or conversion of data from PERL to Buyer; or (f) identify, list or register PERL as the
operator of any facility for which a permit, license or registration is required under

Environmental Laws or identify, list or register PERL as the generator of any Hazardous
Materials arsing from operation of the Assets after Closing.

Section 1.7 Capital Expenditures. Notwithstanding anything to the contrary,

unless Buyer shall otherwise consent in writing (which consent shall not be unreasonably

withheld or delayed), PERL wil not incur any capital expenditures for an individual project or matter in excess of $250,000 (net to the interest of Buyer) except in case of emergency or as may otherwise be required to prevent injury or damage to Persons, property or the environment or except for capital expenditues that have been approved prior to the date of ths Agreement or are

covered by the authorizations for expenditures ("AF's") listed on Schedule to the

Purchase Agreement.

ARTICLE II

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COMPENSATION
Section 2.1 Compensation for PERL Services. During the PERL Services Term (unless earlier terminated in accordance with Article V), Buyer shall pay to PERL the amount set forth on Schedule 2.1 for the provision of the PERL Services.

Section 2.2 No Advance Oblieation. Notwithstanding anything in this

Agreement to the contrary, PERL shall not be obligated to make or advance any payments on behalf of Buyer pursuant to any of the PERL Services except to the extent that at least five (5)
Business Days before such payment is due (i) Buyer has advanced adequate immediately

available funds to PERL for such purpose or (ii) PERL has received and is then holding adequate immediately available funds from Buyer for PERL Services.

Section 2.3 Forward Invoicine. PERL, at its option, may advance any funds needed to make any payments on behalf of Buyer pursuant to any of the PERL Services, and
Buyer shall reimburse PERL for all such advances. In lieu of advancing such funds, PERL may,

at its sole option, require Buyer to advance to PERL the estimated amount of the payments
required to be made on behalf of Buyer pursuant to any of the PERL Services for any month; and adjustment between the estimated payment amounts and the actual payment amounts shall be made on the next month's biling. Such advances shall be reflected in an invoice from PERL to Buyer and shall be due and payable on or before the later of (i) ten (10) Business Days before the first day of the calendar month in which it is anticipated such estimated payments wil be incurred or (ii) ten (10) Business Days after such invoice is received by Buyer.
AR TI CLE III

PAYMENT AND DEFAULT

Section 3.1 Submission of Invoice. PERL shall submit an invoice (the "Invoice") to Buyer on or before the tenth (loth) Business Day of each month setting fort the amounts due PERL hereunder for the PERL Services for the preceding month and any advances made by PERL on behalf of Buyer pursuant to Section 2.3 for which Buyer has not made an
advance payment pursuant to Section 2.2.

Section 3.2 Payment of Invoices. Absent manifest error in calculations

contained in an Invoice (if there is a manifest error, such error wil be corrected promptly), Buyer shall pay on or before the last Business Day of each month in which it receives an Invoice the

amounts invoiced to it by wire transfer of immediately available funds to the bank account
designated by PERL. Adjustment credits or debits shall be shown on the Invoice next succeeding

the Invoice in which the adjustment is made. Interest wil accrue on any unpaid invoiced amounts at the Prime Rate from the date due, compounded quarerly, until such amounts,
together with all accrued and unpaid interest thereon, are paid in fulL. Any preexisting obligation

to make payment for the PERL Services provided hereunder shall survive the termination of a PERL Service and this Agreement.

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Section 3.3 Payment Disputes. As soon as reasonably practicable, but in no

event later than 20 days after Buyer receives an Invoice, Buyer may object to any invoiced amounts for any PERL Service, provided such objection is made in writing to PERL. As soon as reasonably practicable, but in no event later than fifteen (15) days after PERL receives Buyer's

written report, the Pares shall meet and undertake to agree on the adjustments (if any) to the Invoice. If the Paries fail to agree on the adjustments (if any) within the l5-day period, either
Pary may submit the disputed items to the Accounting Referee for resolution. The Pares shall

diect the Accounting Referee to resolve the dispute within twenty (20) days after having the relevant materials submitted for review. The decision of the Accounting Referee wil be binding
on and non-appealable by the Pares. The fees and expenses associated with the Accounting Referee

wil be borne equally by the Pares. Any amounts owed by one Pary to the other as a result of the

final Invoice amount wil be paid within five (5) Business Days after the date when the
amounts are agreed upon by the Pares or the Pares receive a decision of the Accounting Referee,

and the adjustments included in the final Invoice wil be final and binding between the Paries
and not subject to further audit or arbitration.

Section 3.4 Default.

(a) Buyer Default.

(i) Buyer shall be in default under ths Agreement (a "Buyer Default") if

Buyer fails to timely pay any invoiced amount for PERL Services provided pursuant to this

Agreement in accordance with the provisions of this Article 3, which failure continues for at least fifteen (15) days following receipt of written notice to Buyer that such invoiced
amount is past due.
(ii) Upon the occurrence of a Buyer Default, PERL may, at its option,

suspend all or any portion of the provision of PERL Services hereunder, including PERL Services for which payment is outstanding, until such time as the Buyer Default is cured and all amounts owed to PERL under this Agreement for such suspended PERL Services are paid in full. PERL's suspension of the provision of any of the PERL Services in accordance
with ths Section 3.4(b) shall not give rise to any default on the par of

PERL.

(b) PERL Default.

(i) PERL shall be in default under this Agreement (a "PERL Default") if PERL fails to provide a PERL Service to Buyer in accordance with the terms and conditions of this Agreement, which failure continues for at least thirty (30) days
following receipt of written notice to PERL; provided, if PERL cannot reasonably cure
such failure withn such thy (30) day period, no PERL Default shal be deemed to occur

provided PERL demonstrates that it has taken steps to cure such failure within such thirty (30) day period and dilgently prosecutes such cure to completion.
(ii) Upon the occurrence of a PERL Default, Buyer may, at its option and

as its sole remedy, (A) secure such PERL Service from any Person qualified to provide such PERL Service (a "Third Party Provider") and (B) for the minimum remaining term
PERL is obligated to provide such PERL Service under the terms of this Agreement, receive

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from PERL concurently on the date payment is due to a Thid Pary Provider, payment of the
positive difference, if any, between the cost of purchasing such substitute PERL Service and the amount that would have been paid to PERL under the terms of ths Agreement for such

PERL Service if no PERL Default with respect to such PERL Service had occurred.

Section 3.5 Taxes. Any sales or similar taxes imposed on PERL for PERL

Services that PERL is required to payor incur shall be passed on to Buyer as an explicit
surcharge and shall be paid by Buyer in addition to any PERL Service fee payment, whether
included in the applicable Invoice or added retroactively. If Buyer submits to PERL a tiely and

valid resale or other exemption certificate acceptable to PERL and sufficient to support the exemption from Taxes, then such Taxes wil not be added to the PERL Service fee payable pursuant to this Aricle 3; provided, if PERL is ever required to pay such Taxes, Buyer wil promptly reimburse PERL for such Tax, including any interest, penalties and attorneys' fees
related thereto. The Parties wil cooperate to minimize the imposition of any Taxes.

Section 3.6 Transition Accountine. Not later than the fifteenth (15th) Business Day following each month, PERL shall prepare or cause to be prepared a detailed settlement
statement of the Assets and Buyer's estimated share of operating revenues and expenditures

detailing the estimated production volumes and revenues, operating costs, capital expenditures, royalties, overrding royalties, severance and ad valorem taxes and wil disburse any receipts, net
of expenses, to Buyer within five (5) days from the date of such settlement statement. All

remittances to Buyer shall be made by wire transfer to the account of Buyer, Account No.

, at Bank, ABA No.

To the extent disbursements exceed receipts for Buyer's account resulting in a cash shortfall for

the period covered by the settlement statement, Buyer shall reimburse PERL for such cash
shortfall within five days from the date of such settement statement.

Section 3.7 Final Service Settement Statement. No later than one hundred
eighty (180) days after the end of the PERL Services Term, PERL wil deliver to Buyer a final settlement statement (the "Final Service Settlement Statement") setting forth the actual amount of net production, revenue and expenditures and the resulting adjustment to the estimated proceeds already remitted to PERL or paid by Buyer. As soon as reasonably practicable, but in no event
later than twenty (20) days afer Buyer receives the Final Settlement Statement, Buyer may deliver

to PERL a written report containing any changes that Buyer proposes to be made to such
statement. If Buyer fails to timely deliver the written report to PERL containing changes Buyer proposes to be made to the Final Service Settlement Statement, the statement as delivered by PERL wil be deemed to be correct and wil be final and binding on the Parties and not subject to
further audit or arbitration. As soon as reasonably practicable, but in no event later than fifteen

(15) days after PERL receives Buyer's written report, the Pares shall meet and undertake to agree on the final adjustments to the Final Service Settlement Statement. If the Parties fail to agree on the final adjustments within the I5-day period, either Pary may submit the disputed
items to the Accounting Referee for resolution. The Paries shall direct the Accounting Referee to
resolve the disputes within twenty (20) days after having the relevant materials submitted for

review. The decision of the Accounting Referee wil be binding on and non-appealable by the

Paries. The fees and expenses associated with the Accounting Referee wil be borne equally by

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the Paries. Any amounts owed by one Pary to the other as a result of the Final Settlement Statement, together with interest on such amount from (and including) the Closing Date to (and excluding) the date of payment at the Prime Rate, wil be paid withn five Business Days afer the

date when the amounts are agreed upon by the Paries or the Paries receive a decision of the Accounting Referee, and the Adjustments included in the Final Settlement Statement wil be
final and binding between the Paries and not subject to further audit or arbitration.

ARTICLE iv

TERM OF AGREEMENT

No PERL Services shal be provided afer the expiration or earlier termation of the PERL Services Term, except by the mutual written agreement of Paries. The PERL Services may be terminated prior to the expiration of the PERL Services Term by following the procedures set forth in Aricle 5.

ARTICLE V
CESSATION OF SERVICES

Section 5.1 Discontinuation of Services. After the Effective Date, Buyer may,

without cause and in accordance with the terms and conditions hereunder, request the
discontinuation of the PERL Services by giving PERL at least 30 days prior written notice, provided: (a) Buyer shall be liable to PERL for all costs and expenses PERL remains obligated to pay under any existing contract related to the PERL Services and (b) PERL shall use commercially reasonable efforts to minimize all such costs and expenses. Buyer may request
parial discontinuation of the PERL Services and PERL shall use commercially reasonable efforts

to accommodate such request. In such case, by mutual written agreement, the Parties may
agree to a parial discontinuation of the PERL Services and a corresponding reduction in

cnsideration payable therefor pursuant to Aricle III.

Section 5.2 Procedures Upon Discontinuation or Termination of Services. Upon the discontinuation or termination of the PERL Services hereunder, this Agreement shall be of
no furter force and effect, except as to obligations accrued prior to the date of discontinuation or

termnation; provided however, Arcle I, Aricle VI, Article VII and Sections 8.2, 8.3, 8.4 and
8.13 of this Agreement shall survive such discontinuation or termination. PERL shall, within

thirty (30) days after discontinuation or termination of the PERL Services, deliver to Buyer all property in its possession, including all books, records, contracts, receipts for deposits and all other papers or documents maintained by PERL and which pertain exclusively to the PERL Services; provided, PERL may retain archival copies of materials provided to Buyer pursuant to this Section 5.2.

Section 5.3 Continuation of PERL Services Post PERL Services Term. The
Paries acknowledge and agree that the PERL Services wil continue (and PERL shal continue to perform) past the PERL Services Term as necessary to complete such PERL Services applicable
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to the production month in which the PERL Services Term expires including (without limitation)

accounts payable, revenue accounting and regulatory and reporting services.

ARTICLE VI
CONFIDENTIALITY

Section 6.1 Generallv. Each Pary agrees: (a) to hold in trust and maintain
confidential; (b) not to disclose to others (other than Affliates, prospective lenders or investors,

and the advisors of the foregoing, all to the extent such paries are bound by similar obligations of confidentialty) without prior written approval from the providing Pary; (c) not to use for any

purpose, other than such purpose as may be authorized in writing by the providing Party; and
(d) to prevent duplication of and disclosure to any other pary, any information received from the

providing Party or developed, presently held or continued to be held, or otherwise obtained by the receiving Party under this Agreement. Such information includes all results of any PERL Services provided hereunder, information disclosed by eithcr Pary orally, visually, in writing or
in other tangible form, and includes all nonpublic or proprietary information of any nature

(including prices, trade secrets, technological know-how, data and all other nonpublic or

proprietary concepts, methods of doing business, ideas, materials or information), and all
information derived from any nonpublic or proprietary information.
Section 6.2 Exceptions. The foregoing obligations of confidence,

nondisclosure and nonuse shall not apply to any information that: (a) was in the public domain at the time of disclosure by one Pary to the other; (b) enters the public domain though no fault of the disclosing Pary; (c) was communicated to one Pary by a Non-Pary free of any obligation of confidence known to the recipient; or (d) was developed by offcers, employees or agents of or consultants to one Pary independently of and without reference to the proprietar information of another Pary, and, in the case of the disclosing Pary, was not developed while performng under this Agreement. Specific information shall not be deemed to come under the above exceptions merely because it is embraced by more general information that is or becomes public knowledge.

Section 6.3 Required Disclosure. The receiving Party may disclose the
providing Pary's information to the extent necessary or convenient and appropriate to attorneys of litigants or to Governmental Authorities to comply with any obligation imposed on the receiving Pary in connection with a proceeding in a court or other Governental Authority of competent jursdiction, provided that the receiving Pary gives reasonably prompt notice to the providing Pary of the need for such disclosure, together with such other information about the proceeding as wil enable the providing Party to evaluate the obligation and the need and to elect either to intervene
or otherwise appear or act in the proceeding to protect directly the providing Pary's information

at the expense of the providing Pary. Alternatively, the providing Pary may request the receiving Paity to, and if so requested, the receiving Paity shall, make a reasonable and diligent effoit at the expense of the providing Pary to obtain a protective order or otherwise to protect the confidentiality of information sought to be obtained in said proceeding.
Section 6.4 Len2:th of Confidentiality Obli2:ation. Each Party agrees to

maintain and protect the confidentiality of the information of the providing Party as set forth in this Aricle VI for a period of two (2) years from the date of termination of this Agreement.

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ARTICLE VII
INDEMNITY

Section 7.1 Buyer's Indemnification for Non-Party Claims. Buyer agrees,

to the fullest extent permtted by Applicable Laws, to release, indemnify, defend and hold harless PERL and its Affliates against and from all Claims asserted by Third Pares caused by or arsing

out of or resulting from the provision of PERL Services pursuant to this Agreement. Buyer shall periodically reimburse any Person entitled to indemnity under this Aricle VII for its legal and other expenses incurred in connection with defending any such Claim. The indemnity obligations of Buyer pursuant to the preceding sentence shall apply to any Claim asserted against PERL in connection with or as a result of the performance of PERL Services, including any Claim actually or allegedly resulting from the sole, joint or concurrent negligence, or other fault of PERL, as well as any strict liabilty Claim that may be asserted or imposed against PERL,

including, but not limited to, any such Claims asserted pursuant to Environmental Laws;
provided, however, such indemnity obligations shall not apply to any Claim actually resulting on the account of the wilful misconduct of PERL.

Section 7.2 Defense of Non-Party Claims. Upon receipt of a written notice

of a Claim setting forth the pariculars associated with the underlying Claim (including a copy of

the written underlying Claim, if any) as then known by PERL, involving a Non-Pary for which Buyer believes it may have an obligation of indemnity under ths Agreement, Buyer shall, if it so elects in accordance with this Section 7.2 (without prejudice to its right to contest its obligation of indemnity under this Agreement), assume the defense of any such Claim with counsel selected by Buyer, and PERL shall cooperate in all reasonable respects. In all instances, PERL may employ separate counsel and paricipate in the defense of any such Clai; provided, if Buyer has assumed the defense of any Claim pursuant to this Section 7.2 and has agreed to indemnify PERL, the fees and expenses of counsel employed by PERL with respect to such Claim shall be borne solely by PERL. With respect to any such Claim: (a) Buyer shall defend PERL against such Claim, (b) Buyer shall pay any judgment entered or settement, (c) Buyer shall not consent to the entry of any judgment or enter into any settlement that (i) does not include a provision whereby the plaintiff or claimant in the matter releases PERL from all liability with respect to such Claim, and (ii) would restrct PERL's ability to conduct its business in the ordinar course,
and (d) PERL shall not consent to the entry of any judgment or enter into any settlement with

respect to such Claim without Buyer's prior written consent. If Buyer has not elected to
undertake the defense of any such Claim, or if Buyer assumes the defense of any such Claim pursuant to this Section 7.2 but fails to dilgently defend against the Claim within thirty (30) days following any written notice from PERL assertng such failure, then PERL shall have the right to defend, at the sole cost and expense of Buyer (to the extent PERL is entitled to indemnfication hereunder), such Claim by all appropriate proceedings. In such instances, PERL shall have full control of such defense and proceedings; provided, PERL shal not sette such Claim without the written consent of Buyer; provided further, if Buyer fails to notify PERL in writing as to whether or not it consents to such settlement within thirty (30) days following its receipt of notice of such settlement from PERL, then such consent shall be deemed given. Buyer may participate in, but

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not control, any defense or settlement controlled by PERL pursuant to ths Section 7.2, and Buyer

shall bear its own costs and expenses with respect to such paricipation. Notwithstanding the

liabilty to PERL under this Section 7.2 and if such dispute is resolved in favor of Buyer, Buyer shall not be required to bear the costs and expenses of PERL's defense pursuant to this Section 7.2.
other provisions of this Section 7.2, if Buyer disputes its potential

ARTICLE VIII
MISCELLANEOUS

Section 8.1 Counterparts. This Agreement may be executed in counterparts,

each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement.

Section 8.2 Notices. All notices that are required or may be given pursuant to
this Agreement shall be sufficient in all respects if given in writing and sent (properly addressed

as set forth below) via (a) U.S. mail with all postage and other charges fully prepaid; (b)
electronic mail with a PDF of the notice or other communication attached (with the original sent by U.S. mail the same day such electronic mail is sent); (c) facsimile transmission; (d) hand delivery; or (e) commercial overnight delivery services.

If to PERL:

NAM
ADDRESS Facsimile: Attention: Email: With a copy to:

If to Buyer:

NAM
ADDRESS Facsimile: Attention: Email: With a copy to:

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Either Pary may change its address by notifying the other Pary in writing of such address
change. A notice shall be deemed effective on the date on which such notice is received by the addressee, if by mail, or on the date sent, if by facsimile, on the date received (as evidenced by fax machine confirmation of receipt) or if by electronic mail, on the date received (as evidenced by computer generated confirmation of receipt);or hand delivery on the date received or overnight delivery on the date received, provided, if such date is not a Business Day, then the date of receipt shall be on the next date that is a Business Day.

Section 8.3 Governin2: Law: Jurisdiction: Venue, (a) This Agreement and the
legal relations between the Paries shall be governed by and construed in accordance with the

laws of the State of Delaware, without regard to principles of conflicts of laws that would direct the application of the laws of another jurisdiction.
(b) The Parties agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arsing out of or in connection with, this Agreement or the
transaction contemplated hereby shal be brought in the United States Distrct Cour for the

District of Delaware or any state court sitting in Delaware, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arsen from a transaction of
business in the State of Delaware, and each of the Paries hereby irrevocably consents to the

jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permtted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served
on any pary anywhere in the world, whether within or without the jurisdiction of any such court.

Section 8.4 Consent to Personal Jurisdiction: Waiver of Jurv TriaL. Each Pary
consents to personal jurisdiction in any action brought in the United States federal courts located in the State of Delaware with respect to any dispute, claim or controversy arsing out of or in relation to or in connection with this Agreement, and each of the Pares hereto agrees that any action instituted by it against the other with respect to any such dispute, controversy or claim wil
be instituted exclusively in the United States District Court for the District of

Delaware. The Parties hereby waive trial by jury in any action, proceeding or counterclaim brought by any Pary against another in any matter whatsoever arsing out of or in relation to or in connection with this Agreement.
Section 8.5 Captions. The captions in this Agreement are for convenience

only and shall not be considered a par of or affect the construction or interpretation of any provision of this Agreement.

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Section 8.6 Waivers. Any failure by any Party to comply with any of its
obligations, agreements or conditions herein contained may be waived by the Pary to whom
such compliance is owed by an instrment signed by the Pary to whom compliance is owed and

expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

Section 8.7 Assiimment. No Party shall assign or otherwise transfer all or any
par of this Agreement, nor shall any Pary delegate any of its rights or duties hereunder, without the prior written consent of the other Pary and any transfer or delegation made without such consent shall be void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Paries hereto and their respective successors and assigns.

Section 8.8 Entire Aereement. This Agreement and the Schedules attached
hereto constitute the entire agreement among the Paries pertaining to the subject matter hereof,

and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Paries pertaining to the subject matter hereof.
Section 8.9 Amendment. This Agreement may be amended or modified only by an agreement in writing signed by PERL and Buyer and expressly identified as an amendment or modification.

Section 8.10 No Third-Person Beneficiaries. Nothing in this Agreement shall

entitle any Person other than Buyer and PERL to any claim, cause of action, remedy or right of
any kind.
Section 8.11 References.

In this Agreement:
(a) References to any gender includes a reference to all other genders;

(b) References to the singular includes the plural, and vice versa;
(c) Reference to any Aricle or Section means an Article or Section of this

Agreement;
(d) Reference to any Schedule means a Schedule to this Agreement, all of

which are incorporated into and made a par of this Agreement;

(e) Unless expressly provided to the contrary, "hereunder", "hereof, "herein" and

words of similar import are references to this Agreement as a whole and not any particular
Section or other provision of this Agreement;
(f) References to "$" or "dollars" means United States dollars; and

(g) "Include" and "including" shall mean include or including without

limiting the generality of the description preceding such term.

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Section 8.12 Construction. Each of PERL and Buyer has had the opportunity to
exercise business discretion in relation to the negotiation of the details of the transaction

contemplated hereby. This Agreement is the result of ar's-length negotiations from equal bargaining positions. It is expressly agreed that this Agreement shall not be construed against
any Party, and no consideration shall be given or presumption made, on the basis of who drafted

this Agreement or any particular provision thereof.

Section 8.13 Limitation on Damaees. Notwithstanding anything to the

contrary contained herein, none of Buyer, PERL or any of their respective Affliates shall be entitled to consequential, special or punitive damages in connection with this Agreement and the
transactions contemplated hereby (other than consequential, special or punitive damages suffered by third Persons for which responsibilty is allocated between the Paries pursuant to the terms of ths Agreement) and each of Buyer and PERL, for itself and on behalf of its Affliates, hereby expressly waives any right to consequential, special or punitive damages in connection with ths Agreement and the transactions contemplated hereby (other than consequential, special or punitive damages suffered by third Persons for which responsibilty is allocated between the
Paries pursuant to the terms of this Agreement).

Section 8.14 No Fiduciarv Dutv. It is expressly understood and agreed that

this Agreement is a purely commercial transaction between the Paries and that nothing stated herein shall operate to create any fiduciary duty which a Pary shall owe to the other Pary.
IN WITNESS WHEREOF, this Agreement has been signed by each of the Parties as of the date first above written.
PERL:

PACIFIC ENERGY RESOURCES LTD.

By.

Name:
Title:
Buyer:

COMPANY
By:

Name:
Title:

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SCHEDULE 1.1 to

TRASITION SERVICES AGREEMENT

The PERL Services to be provided pursuant to the Transition Services Agreement shall include, hut not he limited to, the following:
1. Bookkeeping, accounting, financial reporting services, including the preparation of monthly and quarterly financial statements
2. Billng and collection, and accounts receivable maintenance services

3. Payables management and processing services

4. Budgeting and forecasting services
5. Treasury, cash management, and support

6. Computer hardware and software and support services, data processing and storage, computer backup and maintenance services, help desk services, and
telecommunication services
7. Oil and gas marketing services

8. Engineering services
9. Drilling and support services

10. On-site field services, including without limitation foremen, pumpers and field
technicians 11. Purchasing and logistics services 12. Land and lease administration and general contract administration services 13. Environmental, health and safety compliance resources and personnel, including,

but not limited to, conducting oil spil responses using Company owned
equipment, as needed. 14. Insurance support and insurance coverage under PERL's policies or policies

issued in the name of the Company, including general liabilty, excess liabilty, , commercial crime, and fiduciary liability, workers' compensation, auto liability as may be requested from time to time
15. Regulatory compliance services

a. Management and administrative support services and personnel, office

supplies and equipment, and office space and records retention space in California, including utilities
b. Management and administrative personnel in Anchorage. Office and related costs in Anchorage to be charged directly to Buyer.

16. Human resources support services, payroll agent activities, and benefit plan
administration support services, as needed

DRAF
SCHEDULE 2.1 to the

TRASITION SERVICES AGREEMENT

The Fees for the Services shall include:

1. Monthly Fee - The fees for the Services provided under the Operating Agreement shall be TWO HUNDRED THOUSAND DOLLARS per month or such fees as determined by the parties to reflect changes in the direct and indirect costs to PERL to provide the Services. The parties agree that the foregoing amount is the value of the Services to be provided under the Agreement.
In addition, Seller shall bil actual payroll and benefit costs for general and administrative

personnel located in Anchorage, AK, and actual costs of operating that office (rent, equipment,
supplies, etc.)
2. Out-of-Pocket Expenses - All actual out-of-pocket expenses incurred on behalf of the

Company by PERL including, without limitation, fees and expenses incurred in connection with the engagement of subcontractors, outside consultants, advisors, independent reserve engineers and accountants that PERL may engage to advise on Company matters and all costs associated with any special equipment and materials that may be required in the operation of the Properties and conduct of the Operations.

schedule b perl (2) (2) (4).doc

Exhibit B

In re: )

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWAR

Chapter 11

) )

PACIFIC ENERGY RESOURCES LTD, et al., 1 )

Debtors. )

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

Deadline for Submittg Bids: July 13, 2009 at 12:00 noon Auction Date: July 20, 2009 at 10:00 a.rn
Deadline for Objections to Sale Motion: July _, 2009 at 4:00 p.rn

Hearig Date on Approval of Sale: , 2009 at _ _.rn

SALE PROCEDURES FOR ALASKA ASSETS

Pacific Energy Resources Ltd. ("PERL"), Pacific Energy Alaska Holdings, LLC ("PEAH"), Pacific Energy Alaska Operating LLC ("PEAO") and the other above-captioned debtors and debtors in possession (collectively the "Debtors") commenced their respective
District of

chapter 11 cases by fiing voluntar petitions with the United States Banptcy Cour for the Delaware (the "Banptcy Cour") on March 9, 2009. Such cases are jointly
administered for procedural proposes under Case No. 09-10785 (KC).

By motion dated June 16,2009 (the "Motion"), the Debtors sought, among other things, the process and procedures set forth below (the "Sale Procedures") through which they wil identify the highest and best offer for oil and gas production assets located in Alaska (and related assets and contracts) owned by PEAO and stock owned by PEAH in a nondebtor corporation that owns a pipeline and terminalling facilities in Alaska. On July _,2009, the Banptcy Cour entered its order (the "Sale Procedures Order"), which, among other things, approved these Sale Procedures.
approval of

the Successful Bidder and Back-Up Bidder (defined below), if any, for each of the Group 1 Assets (or a subset thereof) and/or Group 2 Assets (as such terms are defined two Auctions (defined below) to be held on July at all, at each of below) shall be determined, if
The identity of

20,2009 at 10:00 a.m. (Eastern time) at the offces ofthe Debtors' banptcy counsel Pachulski
Stang Ziehl & Jones LLP, 780 Third Ave., 36th Floor, New York, NY 10017-2024.

On _,2009, at _:__.m. (Eastern time), as fuher described below, the

Banptcy Cour shall conduct a hearng (the "Sale Hearng") to consider approval the sale of
1 The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are:

Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdigs, LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of
the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.

68773-002\DOCS _ LA:203444.9

the Group 1 Assets (or a subset thereof) and/or Group 2 Assets to each respective Successful
Bidder (defined below), if any. At the Sale Hearg, the Debtors shall seek entr of an order (the

"Sale Order") authorizing and approving the proposed sale or sales.

Assets for Sale

The Debtors are seeking offers for sale for two groups of assets (collectively, the "Alaska Assets"):

(I) "Group 1 Assets": (A) PEAO's interests in leased oil and gas production assets
located in Alaska (and related assets and contracts) that are operated by PERL or Aurora Gas, LLC (the "Operated Alaska Interests") (B) PEAO's interests in leased gas production assets located in Alaska (and related assets and contracts) that are operated by Aurora Gas, LLC (the "Aurora Operated Alaska Interests,,);2 and (C) PEAH's 50% of the issued and outstanding common stock (the "Stock") of Cook Inlet Pipe Line Company ("CIPL,,);3 and

(II) "Group 2 Assets": PEAO's interests in leased oil and gas production assets
located in Alaska (and related assets and contracts) that are operated by Union Oil
(the ''Nonoperated Alaska Interests").

The Debtors propose to sell the Group 1 Assets and Group 2 Assets (each a "Group" and, collectively, the "Groups") in two separate concurent Auctions (defined below) that are scheduled to commence on the same date at approximately the same time. Qualified Bidders are not required to bid for both sets of Alaska Assets but any bidder that bids for both sets must bid separately for each set; nevertheless bidders may bid for subsets of the Group 1 Assets, such as particular leases and wells or bid for the Operated Alaska Interests without bidding for the Aurora Operated Alaska Interests or Stock (or visa versa). Bidders for the Group 2 Assets must bid for the entirety of the Group 2 Assets. The sales will be on an "as is," "where is," and "with all faults" basis.
Bidding Process

As more fully discussed below, all bids shall be made by a letter or other wrting ("Offer Letter") RECENED by the Notice Paries (defined below) on or before July 13, 2009 at Noon
(Eastern time) (the "Bid Deadline") by mail, delivery service, fax or email sumarzing the

the bid. Each Offer Letter must be accompaned by a proposed Purchase and Sale Agreement (the "Agreement") in a form that is attached as an exhibit to the Sale Procedures Motion, which is also available from the Debtors' investment baner Lazard Frres & Co. LLC, 600 Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email: robert.1ynd(flazard.com). Each bidder must submit a separate Agreement (clean copy and a
material terms of

2 Aurora Gas, LLC is not an affiiate of

the Debtors. 3 The other 50% of the issued and outstandig common stock of CIPL is owned by Union Oil Company of

Californa ("Union Oil"), an affliate of Chevron Corporation.

2
68773-002\DOCS _ LA:203444.9

redlined copy that is marked for any changes proposed by the bidder) for each of Group of
Alaska Assets (or a subset of the Group 1 Assets) for which the bidder makes a bid.

Participation Requirements
In order to participate in the bidding process and otherwise be considered for any purose
hereunder, a person (a "Potential Bidder") interested in one or both Groups of

the Alaska Assets the Group 1 Assets) must first deliver (uness previously delivered) to the Debtors (or a subset of and the other Notice Paries (defined below), not later than the Bid Deadline:
1. Confidentiality Agreement. An executed confidentiality agreement in form and

substance acceptable to the Debtors and their counsel (a "Confidentiality Agreement"), a

form of

which is available from the Debtors' investment baner Lazard Frres & Co.

LLC, 600 Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email:

robert.lynd~lazard.com).
2. Offer Letter, Agreement and Evidence of Authority. A bid ("Bid") in the form of an

Offer Letter accompaned by a proposed Agreement, as set forth above, and evidence of equity holders', board of directors', or other relevant authority for the Potential Bidder to make the Bid, execute the Agreement and close the proposed purchase. The Offer Letter
must, in substance:

(a) state that the Potential Bidder's offer is IRVOCABLE until the closing ofthe purchase of the relevant Group or Groups of Alaska Assets (or subset of the Group 1 Assets) if such Potential Bidder is the Successful Bidder or a Back-Up Bidder (as such terms are defined below);
(b) that the Good Faith Deposit (defined below) is NONRFUNABLE if

the

Potential Bidder is designated the Successful Bidder;

(c) not request a "break-up fee," "overbid fee" or similar payment or any payment or

reimbursement of any fee to its advisor( s) but if its bid is designated the Baseline Bid (defined below), it may request to be reimbursed the actual amount of any
nonrefudable commitment fee ("Commitment Fee") paid at or after the time of

the cash to the Potential Bidder for be actually fuded by such financing source on behalf of the purchase of Alaska Assets at closing (the "Expense Reimbursement"); provided, however, that such Commitment Fee shall be limited solely to financing obtained to fud the purchase of the Group of Alaska Assets (or subset of the Group 1 Assets) and not any financing obtained to operate the relevant Alaska Assets after closing;
such designation to an identified financing source, not to exceed 2% of

(d) state that the Potential Bidder shall be ready, willng and able (if it pays any

the Group or Groups of Alaska Assets (or subset of the Group 1 Assets) specified in the Agreement within eleven calendar days (or the next business day if the eleventh day is not a business day) after the entry ofthe Sale Order; and
unpaid Commitment Fee) to close the purchase of

3
68773-002\DOCS _ LA:203444.9

(e) ifthe bid is for the Group 1 Assets, a percentage and!or dollar amount allocation

of the total consideration offered among the Operated Alaska Interests, the Aurora
Operated Alaska Interests and the Stock.

The Offer Letter shall not contain any due diligence or other contingencies, other than a
financing contingency that is conditioned solely on payment of a Commitment Fee. The

clean copy ofthe Agreement accompanying the Offer Letter shall be executed by the Potential Bidder and evidence of due authority of the signatory shall also be provided with the Offer Letter.
3. Good Faith Deposit. Each Bid must be accompaned by a cash deposit (the "Good Faith

Deposit") received by the Debtors at or prior to the Bid Deadline by a wire transfer or
ban check payable to the order of "Pacific Energy Alaska Operating LLC" in an amount

equal to at least ten percent ofthe proposed purchase price for the Alaska Assets contained in such Bid, but in no event less than $250,000. The Good Faith Deposit is NONRFUNABLE ifthe Potential Bidder is designated the Successful Bidder (whether initially or after being previously designated a Back-Up Bidder) unless the Debtor defaults under any executed and delivered Agreement.
4 Proof of Operational and Financial Abilitv to Perform. By the time of presentation of a

Bid, each Potential Bidder shall provide wrtten evidence that the Debtors reasonably conclude demonstrates it has the necessar financial ability to close the contemplated transaction and provide adequate assurance of future performance under all contracts to be assumed in such contemplated transaction. Such information should include, among other things, the following:
(a) the Potential Bidder's curent financial statements (audited if

they exist);

(b) contact names and numbers for verification of financing sources;

(c) evidence ofthe Potential Bidder's operating ability (which may be through an

identified proposed third-pary operator or temporarly by PERL for the Operated Alaska Assets until such Potential Bidder or its designated third-pary operator
has Qbtained all necessar governental approvals); and
(d) proof of internal financial resources and any debt or equity fuding commitments

(conditioned solely upon the payment of a Commitment Fee) that are needed to timely close the contemplated transactions.

Each Potential Bidder shall deliver wrtten copies of its Bid by the Bid Deadline to the Debtors c/o Pacific Energy Alaska Operating LLC, 111 W. Ocean Boulevard, Suite 1240, Long
Beach, CA, Att: Gerald A. Tywoniuk, Chief

Financial Offcer (email:

gtywoniuk(pacenergy.com), with a copy to: (a) the Debtors' financial advisor Zolfo Cooper

LLC, 1166 Avenue ofthe Americas, 24th Floor, New York, NY, Att: Scott W. Winn, Senior
Managing Director (email: swinn(zolfocooper.com) and Mark A. Cervi (email: mcervi(zolfocooper.com); (b) the Debtors' investment baner Lazard Frres & Co. LLC, 600

Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email:

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68773-002\DOCS _ LA:203444.9

robert.1ynd(ilazard.com); and (c) the Debtors' counsel (i) (A) Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 11th Floor, Los Angeles, Californa 90067-4100, Att: Ira D.
Kharasch (email: ikharasch(ipszjlaw.com) and Robert M. Saunders (email:

rsaunders(ipszjlaw.com) and (B) Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th

received by any of

Floor, Wilmington, Delaware 19801, Att: James A. O'Neil (email: joneil(ipszjlaw.com); (ii) Rutan & Tucker, LLP, 611 Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Att: Gregg Amber (email: gamber(irutan.com) and Garett Sleichter (email: gsleichter(irutan.com); and (iii) Schully, Roberts, Slattery & Marno, PLC, 1100 Poydras Street, Suite 1800, New Orleans, LA 70163, Att: Anthony C. Marno (email: amarino(ischullyroberts.com); (d) counsel to the Unsecured Creditors (the "Committee"): Steptoe & Johnson, 1330 Connecticut Ave., N.W., Washington, DC 20036, Att: Fil Agusti (email: fagusti(isteptoe.com); and (e) counsel to the agents for the debtor in possession financing lenders (the "Lenders"): (i) Bingham McCutchen LLP, 399 Park Avenue, New York, NY 10022, Attn: Jeffrey S. Sabin (email: jeffrey.sabin(ibingham.com) and (ii) Skadden, Ars, Slate, Meagher & Flom LLP, 333 West Wacker Drive Chicago, Ilinois 60606, Att: Seth E. Jacobson (email: seth.jacobson(iskadden.com). (collectively, the "Notice Paries"). Bids the other Notice Paries without
Official Committee of the Notice Paries may be shared with any of

prior notice to the Potential Bidder.

Notwithstanding the aforestated requirements, the Lenders, either together or individually, may credit bid their outstanding indebtedness under section 363(k) of title 11 ofthe United States Code and any such bid shall constitute a Qualified Bid and an allowed claim for bidding puroses only.
Access to Due Diligence Materials
Only Potential Bidders that execute and deliver a Confidentiality Agreement to the Debtors are eligible to receive due diligence access or additional non-public information. Ifthe Debtors determine that a Potential Bidder that has satisfied the Paricipation Requirements does not constitute a Qualified Bidder, then such Potential Bidder's right to receive due diligence access or additional non-public information shall terminate and such Potential Bidder shall promptly retu all confidential and non-public information to the Debtors without retaining any
copies. The Debtors shall not be obligated to fush any due diligence information after the Bid

Deadline. The Debtors are not responsible for, and shall bear no liability with respect to, any information obtained by Qualified Bidders in connection with the sale of any of the Alaska Assets (whether such information is provided by the Debtors or their professionals or omitted by them). The Debtors shall exercise their sole discretion in providing or withholding confidential information to Potential Bidders that have executed and delivered to the Debtors a Confidentiality Agreement but have not yet qualified as Qualified Bidders.
Due Diligence From Bidders

Each Potential Bidder and Qualified Bidder (each, a "Bidder") shall comply with all reasonable requests for additional information and due diligence access by the Debtors or their advisors regarding such Bidder and its contemplated transaction and operational and financial ability to timely close a sale. Failure by a Potential Bidder to comply with requests for additional

5
68773-002\DOCS _ LA:203444.9

information and due diligence access wil be a basis for the Debtors to determine that the Potential Bidder is not or no longer is a Qualified Bidder. Failure by a Qualified Bidder to comply with such requests for additional information and due diligence access wil be a basis for the Debtors to determine that a bid made by a Qualified Bidder is not a Qualified Bid.

Designation as Qualifed Bidder

Potential Bidders whose A "Qualified Bidder" is a Potential Bidder (or combination of bids for each Group of Alaska Assets (or a subset of the Group 1 Assets) do not overlap and who shall also be referred to herein as a single Qualified Bidder) that timely delivers the documents and Good Faith Deposit described above, and that the Debtors in their discretion and with assistance from their advisors determine has made a bona fide offer that the Potential Bidder
would (or would if a Commitment Fee were paid) be able to timely consumate the purchase of

the relevant Group or Groups of Alaska Assets (or a subset of the Group 1 Assets), if selected as a Successful Bidder or a Back-Up Bidder.

A Bid received after the Bid Deadline shall not constitute a Qualified Bid unless the Debtors designate such Bid as a Qualified Bid after consultation with their debtor in possession Unsecured Creditors appointed financing lenders (the "Lenders") and the Official Committee of in the Debtors chapter 11 cases (the "Committee").

The Debtors shall have the right to reject any and all Bids that they believe, in their reasonable discretion after consultation with the Lenders and the Committee, do not comply with the Sale Procedures or for any reason or no reason. In the event that any Potential Bidder is
determined by the Debtors not to be a Qualified Bidder, the Potential Bidder shall be refuded its

Good Faith Deposit without interest thereon, within three business days after that determination. The Debtors shall not be obligated to deposit the fuds constituting a Bidder's Good Faith
Deposit in an interest-bearng account or investment.

before the beginnng of

The Debtors, as soon as is practicable after receipt of each Bid but not later than 24 hours the relevant Auction, shall notify each Potential Bidder whether it is a Qualified Bidder.

Auctions
If no timely, conforming Qualifyng Bids are submitted by the Bid Deadline, the Debtors shall not hold the relevant Auction and may withdraw any Sale Motion for the relevant Group of Alaska Assets (or subset of the Group 1 Assets) without prejudice. If only one timely Qualifyng Bid is submitted for a Group of Alaska Assets (or subset ofthe Group 1 Assets), the Debtors shall not hold the Auction, but may designate the sole Qualifying Bidder to be the Successful Bidder with respect to the Group of Alaska Assets (or with respect to the subset of Group 1 Assets) and proceed with the Sale Hearing or reject the Bid or withdraw the proposed sale after consultation with Lenders and Committee. If the Debtors have received more than one Qualifyng Bid for a Group of Alaska Assets (or a subset ofthe Group 1 Assets) they may conduct an auction (the "Auction") for each such

6
68773-002\DOCS _ LA:203444.9

the respective Alaska Assets (or subset of

Group (or a subset ofthe Group 1 Assets) to determine the highest and best bid with respect to the Group 1 Assets).

At least 24 hours prior to each Auction, after consultation with the Lenders and the Committee, the Debtors shall determine in their reasonable discretion which Qualified Bid, if any, constitutes the "Baseline Bid," if any, for each Group of Alaska Assets (or a subset of the Group 1 Assets). In making such determination, the Debtors may take into account, among other things, (a) the number, type and natue of any changes to the Agreement requested by each Qualified Bidder; (b) the extent to which such modifications are likely to delay closing of the sale of the relevant Group of Alaska Assets and the cost to the Debtors or any of them of such modifications or delay; (c) the consideration (in type and amount) to be received by the Debtors the Qualified Bidder to close a transaction and the timing them; (d) the likely ability of or any of thereof; (e) the net benefit to the estate or estates, takng into account any Expense Reimbursement (the "Bid Assessment Criteria").
any Qualified the identity of The Debtors shall provide all Qualified Bidders (a) notice of Bidder that has been selected by the Debtors to make the Baseline Bid for each Group of Alaska Assets (or subset of the Group 1 Assets) and (b) copies of all Qualified Bids at least 24 hours prior to the Auction, which may exclude any confidential financial information, as determined by the Debtors in their sole reasonable discretion or which has been so designated by a Qualified Bidder in writing. The Qualified Bidder whose Qualified Bid is designated a Baseline Bid shall its Offer notify the Notice Parties in wrting ifit has paid a Commitment Fee after the date of Letter and would therefore be seeking an Expense Reimbursement if it is overbid.
The Auction shall commence at 10:00 a.m. (Eastern time) on July 20, 2009, at the

the Debtors' bankptcy counsel, Pachulski, Stang, Ziehl & Jones LLP, 780 Third Ave., 36th Floor, New York, NY 10017-2024.
offices of

Any Auction shall be conducted according to the following procedures:

1. Participation and Attendance at the Auction

Only a Qualified Bidder that has submitted a Qualified Bid is eligible to paricipate at an Auction. Each Qualified Bidder must have a representative at the relevant Auction in order to make an Overbid (defined below). Each Qualifying Bidder shall be required to confirm that it has not engaged in any collusion with respect to the bidding or the sale.
Unless the Debtors in their reasonable discretion after consultation with the Lenders and the Committee agree with another pary in interest that it may attend the Auction, only the authorized representatives of each ofthe Qualified Bidders, the Debtors, the Lenders, the United States Trustee shall be permitted to attend the Auction. Committee and the Office of
2. The Debtors Shall Conduct the Auction

The Debtors and/or their professionals shall direct and preside over each Auction. The Debtors may conduct each Auction in the maner they determine in their reasonable discretion

7
68773-002\DOCS _ LA:203444.9

after consultation with the Lenders and Committee could result in the highest and best offer for the relevant Group of Alaska Assets.
the Baseline Bid. All Bids made thereafter shall be Overbids (as defined below) and shall be made and received on an open basis, and all material non-confidential terms of each Overbid shall be fully disclosed to all other Qualified Bidders. The Debtors shall maintain a list or other compilation of the Baseline Bid and Overbids, or may have a transcript made of each Auction
At the star of each Auction, the Debtors shall describe the material business terms of

instead of or in addition to makng such a list or compilation.

3. Terms of Initial Bid and Overbids

An "Overbid" is any bid made before or at an Auction subsequent to the Debtors' the Baseline Bid. To submit an Overbid for purposes of an Auction, a Qualified Bidder must comply with the following conditions:
anouncement of

(a) Minimum Overbid Increments

At each Auction, the bidding shall begin with a minmum Overbid, if any, that is, at a minimum, equal to the Baseline Bid plus an initial overbid incremental amount, in cash, equal to the sum of (i) any Expense Reimbursement and (ii) $100,000, and continue in subsequent minimum overbid incremental amounts of at least $100,000 in cash. No Qualified Bidder, however, may credit bid any Expense Reimbursement.
(b) Remainin2: Terms are the Same as for Qualified Bids

Except as modified herein, an Overbid must comply with the relevant conditions for a Qualified Bid set forth above. Any Overbid made by a Qualified Bidder must remain open and binding on the Qualified Bidder until and unless (i) the Debtors accept a higher Qualified Bid as an Overbid and (ii) such Overbid is not selected as a Back-Up Bid (as defined below).
To the extent not previously provided (which shall be determined by the Debtors in their reasonable discretion after consultation with the Lenders and Committee), a Qualified Bidder submitting an Overbid must submit at the Debtors' request, as par of its Overbid, written evidence (in the form of financial disclosure or credit-quality support information or operational ability information, or qualification for governental approval or any enhancement reasonably acceptable to the Debtors) demonstrating such Qualified Bidder's ability to timely close the
transaction proposed by such Overbid.
(e) Announcin2: Overbids

The Debtors shall announce at the Auction the material terms of each Overbid, which may include the basis for calculating the total consideration offered in each such Overbid and the resulting benefit to the Debtors' estates based on, inter alia, the Bid Assessment Criteria.

8
68773-002\DOCS _ LA:203444.9

4. Additional Procedures

The Debtors, as appropriate and in their reasonable discretion after consultation with the Lenders and Committee may adopt rules for the Auction at or prior to the Auction that should better promote the goals of the Auction and that are not materially inconsistent with any of the provisions of the Sale Procedures Order. Such rules shall provide that at the Auction all Bids shall be made and received in one room, on an open basis, and all other Qualified Bidders shall be entitled to be present for all bidding with the understanding that the tre identity of each Qualified Bidder (i.e., the principals submitting the Bid) shall be fully disclosed to all other Qualified Bidders and that all material terms of each Qualified Bid shall be fully disclosed (subject to any confidentiality restrctions) to all other Qualified Bidders throughout the entire Auction. The Debtors, as appropriate and in their reasonable discretion after consultation with the Lenders and the Committee shall have the ability to increase or decrease the Minimum Overbid Increments durng an Auction.

The Debtors in their reasonable discretion after consultation with the Lenders and Committee may, subject to the terms of the final DIP financing order entered in the Debtors' chapter 11 cases, extend the Bid Deadline or the Auction Date beyond the dates provided herein. In the event of such an extension, the Debtors shall provide notice to the Notice Paries and any Qualified Bidders of such extension, any related time and location details with respect to same, and any consequent continuance ofthe Sale Hearng.
5. Consent to Jurisdiction as Condition to Biddin2:

All Qualified Bidders at the Auction shall be deemed to have consented to the exclusive

core jursdiction of the Banptcy Cour and waived any right to a jur tral or alternative
dispute resolution in connection with any disputes relating to the Auction or any Bid, and the construction and enforcement of each Qualified Bidder's Agreement and related documents.
6. Closin2: the Auction
Upon conclusion of the bidding (as determined by the Debtors in their reasonable discretion after consultation with the Lenders and Committee), the Auction shall be closed, and the Debtors, after consultation with the Lenders and Commttee with respect hereto, shall immediately identify the highest and best offer for portions or all of the Alaska Assets (which may be an aggregate of bids for less than all of a Group of Alaska Assets or subset of

the Group

1 Assets) (the "Successful Bid") and the entity submitting such Successful Bid (the "Successful Bidder"), which highest and best offer would in the Debtors' business judgment provide the greatest amount of net value to the Debtors' estates (or anyone or more of them), and the next highest and best offer after the Successful Bid (the "Back-up Bid") and the entity submitting the Back-Up Bid (the "Back-Up Bidder"), and advise the Qualified Bidders of such determination.

Acceptance of Successful Bid

The Debtors, after consultation with the Lenders and Commttee, may (a) at any time

until closing ofthe sale ofthe relevant Group of Alaska Assets (or subset of the Group 1 Assets), determine which Qualified Bid, if any, is the highest and best offer and (b) reject at any time
9
68773-002\DOCS _ LA:203444.9

before entr of an order of the Banptcy Cour approving a Qualified Bid, any Bid for no reason or any reason including because it is (i) inadequate or insufficient; (ii) not in conformty

with the requirements of the Banptcy Code, these Sale Procedures, or any other terms and conditions of sale; or (iii) contrar to the best interests of the Debtors, their estates (or any of them) and their creditors.
The Debtors shall be deemed to have accepted a Qualified Bid only when: (a) the Debtors have received the prior wrtten consent ofthe Required Lenders (as such term is used in Amendment No.2 to the Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement approved by order ofthe Bankptcy Court), which may be granted or withheld in their sole discretion, and (b) the Qualified Bid has been approved by the Banptcy Cour by an order that has become final and, at the Debtors' discretion after consulting with the
Lenders and Committee, no longer subject to rehearng, appeal or certiorar.
The rights of all paries in interest to object to the Debtors' selection of

the Successful

Bidder, including the assignent of any of such objector's assumed executory contracts or

unexpired leases (the "Assumed Contract") thereto, are preserved, and the Debtors reserve the right to contest any such objection including (without limitation) because the objector lacks undisputed standing, provided, however, that any objection to such assignent on the basis of
amounts necessary, pursuant to Section 365 of

the Banptcy Code, to cure all defaults under

such objector's Assumed Contracts must be made and/or reserved in accordance with any procedures set forth in the order approving these Sale Procedures.

"As Is, Where Is, and With All Faults"

The sale ofthe Assets shall be on an "as is," "where is," and "with all faults" basis and
without representations or waranties of any kind, natue, or description by the Debtors, their

agents or their estates except to the extent set forth in the executed and delivered Agreement with the Successful Bidder. Each Qualified Bidder shall be deemed to acknowledge and represent that it has had an opportnity to conduct any and all due diligence regarding the relevant Group of Alaska Assets prior to makng its offer, that it has relied solely upon its own independent review, investigation and!or inspection of any documents and/or the Alaska Assets in making its bid, and that it did not rely upon any wrtten or oral statements, representations, promises,
waranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise,

regarding the Assets, or the completeness of any information provided in connection therewith, its Bid or any Overbids or the Auction, except as expressly stated in these Sale Procedures or the executed and delivered Agreement with the Successful Bidder.

Free Of Any And All Interests

Except as otherwise provided in the executed and delivered Agreement with the Successful Bidder and subject to the approval of Debtors' right, title the Banptcy Cour, all of and interest in and to the relevant Group of Alaska Assets subject thereto shall be sold free and clear of all pledges, liens, securty interests, encumbrances, claims, charges, options and interests thereon and there against (collectively, the "Interests") other than claims, liabilities and obligations of one or more of the Debtors expressly assumed by the Successful Bidder in its Agreement and third pary property interests to which the Alaska Assets are subject (such as
10
68773-002\DOCS _ LA:203444.9

royalty, overrding royalty and similar oil and gas interests), in accordance with Banptcy
Code 363(f), with such Interests to attach to the net proceeds ofthe sale ofthe Alaska Assets.

Sale Hearing

The Sale Hearng shall be conducted by the Banptcy Cour on _, 2009 at

_:_ _.m. (Eastern time), or on such other date and time as may be established or continued by
the Bankptcy Cour. Any continuation of

the Sale Hearng that is anounced in open courl

need not be separately noticed to the Notice Paries or Qualified Bidders.

Closing
The Debtors shall endeavor to close the sale ofthe Alaska Assets to the Successful
Bidder( s) promptly after the entry of an order of the Banptcy Cour after the Sale Hearng
Distrct of

approving such sale unless the Banptcy Cour or the United States Distrct Cour for the Delaware enters a stay of such sale. The Debtors' presentation of a paricular Qualified Bid to the Banptcy Court for approval does not constitute the Debtors' acceptance
of such Qualified Bid.

If a Successful Bidder fails to consumate an approved sale in accordance with the applicable Agreement or such Agreement is terminated, the Debtors shall be authorized, but not required, to deem the Back-up Bid, as disclosed at the Sale Hearng, the Successful Bid, and the Debtors shall be authorized, but not required, to consumate the sale with the Qualified Bidder submitting such Bid without fuher order ofthe Banptcy Cour. Any Back-Up Bidder that is notified by the Debtors that it has become the Successful Bidder shall be the "Successful Bidder" as that defined term is used herein.
Return of Good Faith Deposits

Any Good Faith Deposit ofthe Successful Bidder shall be applied to the purchase price of the relevant transaction at closing. Good Faith Deposits of all Qualified Bidders (other than
the Successful Bidder and any Back-Up Bidder) shall be retued to the respective Qualified

Bidders with any accumulated interest thereon, if any, within three business days after the conclusion of the relevant Auction. The Good Faith Deposit of any Back-Up Bidder shall be
retued to the Back-Up Bidder with any accumulated interest thereon, if any, within three
business days after the closing of

the relevant sale with the Successful Bidder. If a Successful Bidder (including any Back-Up Bidder that has become the Successful Bidder) fails to
consumate an approved sale because of a breach or failure to perform on the par of such

Successful Bidder, the Debtors shall be entitled to retain such Successful Bidder's Good Faith the damages resulting fi'om such Successful Bidder's breach or failure to perform.
Deposit as pai1 of

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68773-002\DOCS _ LA:203444.9

Exhibit C

EXHIBIT C

IN THE UNTED STATES BANUPTCY COURT

Inre )

FOR THE DISTRICT OF DELAWAR

Chapter 11

) PACIFIC ENERGY RESOURCES LTD., et ai.,1 )

Debtors. )
)

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

Deadline for Submitting Bids: July 13, 2009 at 12:00 noon

Auction Date: July 20, 2009 at 10:00 a.m. Deadline for Objections to Sale Motion and Auction: July _, 2009 at 4:00 p.m.
Hearing Date on Approval of Sale: _ _, 2009 at _ _.m.

NOTICE OF SALE PROCEDURES. AUCTION DATE. AND SALE HEARNG

PLEASE BE ADVISED that, on June 16,2009, the debtors and debtors in possession

herein (the "Debtors") filed the Debtors' Motion for an Order (A) Approving Procedures For
Sale of

the Debtors' Alaska Assets; (B) Scheduling Auction and Hearing to Consider Approval of

Sale; (C) Approving Notice of Respective Dates, Times, and Places for Auction and for Hearing
on Approval of (1) Sale and (II) Assumption and Assignment of Certain Executory Contracts an
Unexpired Leases; (D) Approving Forms of

Notice; and (E) Granting Related Relief(the "Sale

Procedures Motion").

. 2

PLEASE BE FURTHER ADVISED that, on July _, 2009, the Cour entered an order
approving the Sale Procedures Motion (the "Sale Procedures Order"), which governs the bidding

The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay the Debtors Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of
is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.
2

Capitalized term not otherwise defined herein shall have the meanigs set fort in the Sale Procedures Motion.

68773-002\DOCS _ LA:203681 .3

process (the "Sale Procedures") for the sale. A copy of

the Sale Procedures is attached hereto as

Exhibit 1.
PLEASE BE FURTHER ADVISED that among other things, the Sale Procedures Order
sets July 13, 2009 at 12:00 noon (Eastern time) as the deadline for submitting bids on the Alaska
Assets (or any of

them), and (ii) provides that an auction or auctions (the Auction") ofthe Alaska

Assets (or any ofthem) may be conducted on July 20,2009, commencing at approximately
10:00 a.m. (Eastern time), at Pachulski Stang Ziehl and Jones LLP, 780 Third Avenue, 36th

Floor, New York, NY 10017.

PLEASE BE FURTHER ADVISED that the Debtors have filed a motion (the "Sale

Motion") seeking Cour approval of the sale of the Alaska Assets to the highest and best
bidder( s) at the Auction, free and clear of all

liens, claims and encumbrances pursuant to section

liens, claims and

363 of

title 11 of

the United States Code (the "Banptcy Code"), with all

encumbrances to attach to the proceeds of

the sale with the same validity and in the same order

of priority as they attached to the relevant Alaska Assets prior to the sale, including the
assumption by the Debtors and assignent to the buyer of certain executory contracts and
unexpired leases pursuant to section 365 of

the Banptcy Code, all as more fully set forth in

the Sale Procedures Order and Sale Procedures.

PLEASE BE FURTHER ADVISED that any response or objection to the Sale Motion or

the conduct of the Auction must be filed with the United States Banptcy Cour for the District
of

Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on or before July _,

68773-002\DOCS _ LA:20368 1.3

2007, at 4:00 p.m. (Eastern time). By the same time, you must also serve a copy of

the response

or objection upon: (i) the Debtors c/o Pacific Energy Alaska Operating LLC, 111 W. Ocean
Boulevard, Suite 1240, Long Beach, CA, Att: Gerald A. Tywoniuk, Chief

Financial Offcer

(email: gtywoniuk(pacenergy.com). with a copy to: (a) the Debtors' financial advisor Zolfo
Cooper LLC, 1166 Avenue of

the Americas, 24th Floor, New York, NY, Att: Scott W. Winn,

Senior Managing Director (email: swinn(zolfocooper.com) and Mark A. Cervi (email:

mcervi(zolfocooper.com); (b) the Debtors' investment baner Lazard Frres & Co. LLC, 600

Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email:

robert.1ynd(lazard.com); and (c) the Debtors' counsel (i) (A) Pachulski Stang Ziehl & Jones

LLP, 10100 Santa Monica Blvd., 11th Floor, Los Angeles, Californa 90067-4100, Att: Ira D.
Kharasch (email: ikharasch(pszjlaw.com) and Robert M. Saunders (email:
rsaunders(pszjlaw.com) and (B) Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th

Floor, Wilmington, Delaware 19801, Att: James A. O'Neill (email: joneil(pszjlaw.com); (ii)
Rutan & Tucker, LLP, 611 Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Att: Gregg
Amber (email: gamber(rutan.com) and Garett Sleichter (email: gsleichter(rutan.com); and .
(iii) Schully, Roberts, Slattery & Marno, PLC, 1100 Poydras Street, Suite 1800, New Orleans,

LA 70163, Attn: Anthony C. Marno (email: amarino(schullyroberts.com); (d) counsel to the

Official Committee of

Unsecured Creditors (the "Committee"): Steptoe & Johnson, 1330

Connecticut Ave., N.W., Washington, DC 20036, Att: Fil Agusti (email:

fagusti(steptoe.com); and (e) counsel to the agents for the debtor in possession financing

68773-002\DOCS _ LA:203681 .3

lenders (the "Lenders"): (i) Bingham McCutchen LLP, 399 Park Avenue, New York, NY

10022, Att: Jeffrey S. Sabin (email: jeffrey.sabin(fbingham.com) and (ii) Skadden, Ars,
Slate, Meagher & Flom LLP, 333 West Wacker Drive Chicago, Ilinois 60606, Att: Seth E.
Jacobson (email: seth.jacobson(fskadden.com).

PLEASE BE FURTHER ADVISED that an evidentiar hearng (the "Sale Hearng") on

the relief requested in the Sale Motion (among other things, to confirm the results of any Auction and approve the sale of the relevant Alaska Assets to the Successful Bidder( s), if any) wil be
held on
,2009, at __.m. (Eastern time) before the Honorable Kevin J. Carey,

United States Banptcy Judge, at the United States Distrct Cour for the Distrct of

Delaware,

824 Market Street, 5th Floor, Couroom 5, Wilmington, Delaware 19801. The Sale Hearng
may be adjourned from time to time without fuher notice to creditors or parties in interest other
than by announcement of

the adjourent in open cour on the date scheduled for the Sale

Hearng.

(Remainder of page is intentionally blan)

68773-002\DOCS _ LA:20368 1.3

PLEASE BE FURTHER ADVISED that all requests for information concernng

information on the Sale Procedures, the proposed sale of the Alaska Assets, or the Sale Motion

should be directed in wrting to the Debtors' investment baner Lazard Frres & Co. LLC, 600

Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email:

robert.lynd(lazard.com).

Dated: July _, 2009

PACHUSKI STANG ZIEHL & JONES LLP

Ira D. Kharasch (CA Bar No.1 09084) James E. O'Neil (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 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 j oneil(pszyjlaw .com

rsaunders(pszjlaw.com
Counsel for Debtors and Debtors in Possession

68773-002\DOCS _ LA:203681 .3

Exhibit D

EXHIBIT D

IN THE UNITED STATES BANUPTCY COURT

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

FOR THE DISTRICT OF DELAWAR

Chapter 11

1 ) Case No. 09-10785 (KJC)

(Jointly Admstered)

Debtors. )
Deadline for Submittng Bids: July 13, 2009 at 12:00 noon Auction Date: July 20, 2009 at 10:00 a.m. Deadline for Objections to Sale Motion and Auction: July _, 2009 at 4:00 p.m.
Hearing Date on Approval of Sale: _ _, 2009 at _ _.m.

NOTICE OF AUCTION AND SALE HEARNG

PLEASE BE ADVISED that, on June 16,2009, the debtors and debtors in
possession herein (the "Debtors") filed the Debtors' Motion for an Order (A) Approving
Procedures For Sale of

the Debtors' Alaska Assets; (B) Scheduling Auction and Hearing to

Consider Approval of Sale; (C) Approving Notice of Respective Dates, Times, and Places for

Auction and for Hearing on Approval of (I) Sale and (II) Assumption and Assignment of Certain
Executory Contracts an Unexpired Leases; (D) Approving Forms of

Notice; and (E) Granting

2

Related Relief

(the "Sale Procedures Motion").

The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay
Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of

the Debtors

is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.

2
Capitalized term not otherwise defied herein shall have the meanigs set fort in the Sale Procedures Motion.

68773-002\DOCS _ LA:203680.3

PLEASE BE FURTHER ADVISED that, on July _, 2009, the Cour entered an

order approving the Sale Procedures Motion (the "Sale Procedures Order"), which governs the
bidding process (the "Sale Procedures") for the sale.
PLEASE BE FURTHER ADVISED that among other things, the Sale Procedures Order sets July 13, 2009 at 12:00 noon (Eastern time) as the deadline for submitting bids on the
Alaska Assets (or any of them), and (ii) provides that an auction or auctions (the Auction") of

the

Alaska Assets (or any of them) may be conducted on July 20, 2009, commencing at approximately
10:00 a.m. (Eastern time), at Pachulski Stang Ziehl and Jones LLP, 780 Third Avenue, 36th Floor,
New

York, NY 10017.

PLEASE BE FURTHER ADVISED that the Debtors have filed a motion (the "Sale

Motion") seeking Cour approval ofthe sale ofthe Alaska Assets to the highest and best bidder(s)
at the Auction, free and clear of all

liens, claims and encumbrances pursuant to section 363 oftitle

liens, claims and encumbrances to

11 of

the United States Code (the "Banptcy Code"), with all

attach to the proceeds of the sale with the same validity and in the same order of priority as they
attached to the relevant Alaska Assets prior to the sale, including the assumption by the Debtors and
assignent to the buyer of certain executory contracts and unexpired leases pursuant to section 365

of the Banptcy Code, all as more fully set forth in the Sale Procedures Order and Sale
Procedures.

PLEASE BE FURTHER ADVISED that any response or objection to the Sale

Motion or the conduct of the Auction must be filed with the United States Banptcy Cour for the
District of

Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on or before July

68773-002\DOCS _ LA:203680.3

_,2007, at 4:00 p.m. (Eastern time). By the same time, you must also serve a copy of

the response

or objection upon: (i) the Debtors c/o Pacific Energy Alaska Operating LLC, 111 W. Ocean
Boulevard, Suite 1240, Long Beach, CA, Att: Gerald A. Tywoniuk, Chief

Financial Officer

(email: gtywoniuk(fpacenergy.com). with a copy to: (a) the Debtors' financial advisor Zolfo
Cooper LLC, 1166 Avenue of

the Americas, 24th Floor, New York, NY, Att: Scott W. Winn,

Senior Managing Director (email: swinn(fzolfocooper.com) and Mark A. Cervi (email:

mcervi(fzolfocooper.com); (b) the Debtors' investment baner Lazard Frres & Co. LLC, 600

Travis, Suite 2300, Houston, TX 77002, Attn: Robert L. Lynd (email: robert.1ynd(flazard.com);
and (c) the Debtors' counsel (i) (A) Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica

Blvd., 11th Floor, Los Angeles, Californa 90067-4100, Att: Ira D. Kharasch (email:
ikharasch(fpszjlaw.com) and Robert M. Saunders (email: rsaunders(fpszjlaw.com) and (B)

Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th Floor, Wilmington, Delaware 19801,
Attn: James A. O'Neil (email: joneil(fpszjlaw.com); (ii) Rutan & Tucker, LLP, 611 Anton Blvd.,

14th Floor, Costa Mesa, CA 92626, Att: Gregg Amber (email: gamber(frutan.com) and Garett

Sleichter (email: gsleichter(frutan.com);and(iii)Schully.Roberts.Slattery&Marno.PLC.11 00

Poydras Street, Suite 1800, NewOrleans, LA 70163, Att: Anthony C. Marno (email:
amarino(fschullyroberts.com); (d) counsel to the Offcial Committee of

Unsecured Creditors (the

"Committee"): Steptoe & Johnson, 1330 Connecticut Ave., N.W., Washington, DC 20036, Attn:

Fil Agusti (email: fagusti(fsteptoe.com); and (e) counsel to the agents for the debtor in possession
financing lenders (the "Lenders"): (i) Bingham McCutchen LLP, 399 Park Avenue, New York,

NY 10022, Attn: Jeffrey S. Sabin (email: jeffrey.sabin(fbingham.com) and (ii) Skadden, Ars,

68773-002\DOCS _ LA:203680.3

Slate, Meagher & Flom LLP, 333 West Wacker Drive Chicago, Ilinois 60606, Att: Seth E.

Jacobson (email: seth.jacobsonskadden.com).

PLEASE BE FURTHER ADVISED that an evidentiar hearng (the "Sale Hearg")

on the relief requested in the Sale Motion (among other things, to confrm the results of any
Auction and approve the sale of the relevant Alaska Assets to the Successful Bidder( s), if any) wil
be held on
_,2009, at __.m. (Eastern time) before the Honorable Kevin J. Carey,

United States Banptcy Judge, at the United States Distrct Cour for the Distrct of

Delaware,

824 Market Street, 5th Floor, Couroom 5, Wilmington, Delaware 19801. The Sale Hearng may

be adjoured from time to time without fuher notice to creditors or paries in interest other than by
announcement of

the adjourent in open cour on the date scheduled for the Sale Hearng.

(Remainder of page is intentionally blan J

68773-002\DOCS _ LA:203680.3

PLEASE BE FURTHER ADVISED that all requests for information concernng

information on the Sale Procedures, the proposed sale of

the Alaska Assets, or the Sale Motion

should be directed in wrting to the Debtors' investment baner Lazard Frres & Co. LLC, 600

Travis, Suite 2300, Houston, TX 77002, Att: Robert L. Lynd (email: robert.1yndcqlazard.com).

Dated: July _, 2009

PACHUSKI STANG ZIEHL & JONES LLP

Ira D. Kharasch (CA Bar No. 109084) James E. O'Neil (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100

Facsimile: 310/652-4400
Email: ikharaschcqpszj j oneillcqpszyj law.

com

law .com

rsaunderscqpszjlaw.com

Counsel for Debtors and Debtors in Possession

68773-002\DOCS _ LA:203680.3

Exhibit E

EXHIBIT E

IN THE UNITED STATES BANUPTCY COURT

FOR THE DISTRICT OF DELAWAR
In re
1

) Chapter 11

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

PACIFIC ENERGY RESOURCES LTD., et al.,

Debtors.

) )
Cure Objection Deadline: July _, 2009 at 4:00 p.m.

Sale Hearing: _ _,2009 at _ _.m.

NOTICE TO COUNTERP ARTIES TO EXECUTORY CONTRACTS AND UNEXPIRED LEASES THAT MAY BE ASSUMED AND ASSIGNED
PLEASE TAK NOTICE that, on March 9,2009, the above-captioned debtors and
debtors in possession (the "Debtors") commenced chapter 11 banptcy cases. On June 16,2009,
the Debtors fied the Debtors' Motion for an Order (A) Approving Procedures For Sale of

the

Debtors' Alaska Assets; (B) Scheduling Auction and Hearing to Consider Approval of Sale; (C)

Approving Notice of Respective Dates, Times, and Places for Auction and for Hearing on Approval
of (1) Sale and (II) Assumption and Assignment of Certain Executory Contracts an Unexpired
Leases; (D) Approving Forms of

Notice; and (E) Granting Related Relief(the "Sale Procedures

Motion").

. 2

The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay the Debtors Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of
is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.
2

Capitalized term not otherwise defined herein shall have the meanings set fort in the Sale Procedures Motion.

68773-002\DOCS _ LA:203679.3

PLEASE TAK FURTHER NOTICE that, on July _,2009, the Cour entered an
order approving the Sale Procedures Motion (the "Sale Procedures Order"), which governs (i) the

bidding process (the "Sale Procedures") for the sale ofthe Alaska Assets, and (ii) procedures for the
assumption and assignent of certain executory contracts and unexpired leases of the Debtors.

PLEASE TAK FURTHER NOTICE that the Debtors filed a motion (the "Sale
Motion") seeking Cour approval ofthe sale of

the Alaska Assets to the highest and best bidder(s),

if any, at an auction or auctions scheduled on July 20, 2009 at 10:00 a.m. (Eastern time), free and
clear of all

liens, claims and encumbrances pursuant to section 363 oftitle 11 ofthe United States
liens, claims and encumbrances to attach to the proceeds of

Code (the "Banptcy Code"), with all

the sale with the same validity and in the same order of priority as they attached to the Alaska
Assets prior to the sale, including the assumption by the Debtors and assignent to the buyer of \

certain executory contracts and unexpired leases pursuant to section 365 of the Banptcy Code
(the "Assumed Executory Contracts"). A copy of the Sale Motion is enclosed herewith.
PLEASE TAK FURTHER NOTICE that an evidentiary hearing (the "Sale
Hearng") on the relief requested in the Sale Motion (among other thngs, to authorize the
assumption and assignent of

the Assumed Executory Contracts) wil be held on

,2009,

at _ _.m. (Eastern time) before the Honorable Kevin J. Carey, United States Banptcy Judge,

at the United States Distrct Cour for the Distrct of

Delaware, 824 Market Street, 5th Floor,

Couroom 5, Wilmngton, Delaware 19801. The Sale Hearng may be adjoured from time to time without fuher notice to creditors or paries in interest other than by anouncement ofthe
adjourent in open cour on the date scheduled for the Sale Hearng.

2
68773-002\DOCS _ LA:203679.3

PLEASE TAK FURTHER NOTICE THAT, PURSUANT TO THE SALE

MOTION AN CONSISTENT WITH THE SALE PROCEDURES ORDER, THE

DEBTORS INTEND TO ASSUME AN EXECUTORY CONTRACT OR UNEXPIRED

LEASE TO WHICH YOU MAY BE A PARTY. THE ASSUMED EXECUTORY

CONTRACT IS DESCRIBED ON EXHIBIT 1 ATTACHED TO THIS NOTICE. THE

AMOUNT SHOWN ON EXHIBIT 1 HERETO AS THE "CURE AMOUNT" IS THE

AMOUNT, IF AN, BASED UPON THE DEBTORS' BOOKS AND RECORDS, WHICH

THE DEBTORS ASSERT IS OWED TO CURE AN DEFAULTS EXISTING UNDER THE

ASSUMED EXECUTORY CONTRACT AS OF THE DATE SHOWN ON SUCH EXHIBIT.
PLEASE TAK FURTHER NOTICE that if

you disagree with the Cure Amount

shown for the Assumed Executory Contract on Exhibit 1, you must fie in wrting with the United
States Banptcy Cour for the Distrct of

Delaware, 824 Market Street, 5th Floor, Wilmington,

Delaware 19801, an objection on or before 4:00 p.m. Eastern time on July _,2009. If a contract or

lease is assumed and assigned pursuant to this Cour's order approving same, then unless you properly and timely fie and serve an objection to the Cure Amount contained in this Notice, you

shall receive at the time ofthe closing ofthe sale (or as soon as reasonably practicable thereafter),
the Cure Amount set forth herein, with payment made pursuant to the terms of

the applicable

purchase and sale agreement for any Alaska Assets related to your contract or lease.
PLEASE TAK FURTHER NOTICE that if

you have any other objection to the

Debtors' assumption and assignent of the Assumed Executory Contract to which you may be a

pary or to the Sale Motion, you also must file that objection in the maner and by the date and time

3
68773-002\DOCS _ LA:203679.3

stated above; provided, however, that you may raise at the Sale Hearng an objection to the
assumption and assignent of the Assumed Executory Contract solely with respect to the
Successful Bidder( s), if any, ability to provide adequate assurance of futue performance under the

Assumed Executory Contract. In addition, any objection must set forth the specific default or

defaults alleged and set forth any cure amount as alleged by you.

PLEASE TAK FURTHER NOTICE that any objection so fied must be served so
as to be received by that same date and time upon the following parties: (i) the Debtors c/o Pacific

Energy Alaska Operating LLC, 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA, Att:
Gerald A. Tywoniuk, Chief

Financial Offcer (email: gtywoniuk~pacenergy.com). with a copy to:

the Americas, 24th Floor,

(a) the Debtors' financial advisor Zolfo Cooper LLC, 1166 Avenue of

New York, NY, Attn: Scott W. Winn, Senior Managing Director (email:

swinn~zolfocooper.com) and Mark A. Cervi (email: mcervi~zolfocooper.com); (b) the Debtors'

investment baner Lazard Frres & Co. LLC, 600 Travis, Suite 2300, Houston, TX 77002, Attn:

Robert L. Lynd (email: robert.iynd~lazard.com); and (c) the Debtors' counsel (i) (A) Pachulski
Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 11th Floor, Los Angeles, Californa 900674100, Att: Ira D. Kharasch (email: ikharasch~pszjlaw.com) and Robert M. Saunders (email:

rsaunders~pszjlaw.com) and (B) Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th

Floor, Wilmington, Delaware 19801, Att: James A. O'Neil (email: joneill~pszjlaw.com); (ii)
Rutan & Tucker, LLP, 611 Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Att: Gregg Amber
(email: gamber~rutan.com) and Garett Sleichter (email: gsleichter~rutan.com); and (iii) Schully,

Roberts, Slattery & Marino, PLC, 1100 Poydras Street, Suite 1800, New Orleans, LA 70163, Attn:

4
68773-002\DOCS _ LA:203679.3

Anthony C. Marno (email: amarno(schullyroberts.com); (d) counsel to the Offcial Commttee

of

Unsecured Creditors (the "Committee"): Steptoe & Johnson, 1330 Connecticut Ave., N.W.,

Washington, DC 20036, Att: Fil Agusti (email: fagusti(steptoe.com); and (e) counsel to the
agents for the debtor in possession financing lenders (the "Lenders"): (i) Bingham McCutchen LLP, 399 Park Avenue, New York, NY 10022, Att: Jeffrey S. Sabin (email:
jeffrey.sabin(bingham.com) and (ii) Skadden, Ars, Slate, Meagher & Flom LLP, 333 West

Wacker Drive Chicago, Ilinois 60606, Att: Seth E. Jacobson (email:

seth.jacobson(skadden.com), (collectively, the "Notice Paries").

PLEASE TAK FURTHER NOTICE that the Successful Bidder, if any, shall be
responsible for satisfying any requirements regarding adequate assurance of futue performance that

may be imposed under section 365(b) of the Banptcy Code in connection with the proposed
assignent of any Assumed Executory Contract, as wil be provided in the Sale Motion. The Court

shall make its determinations concernng adequate assurance of futue performance under the
Assumed Executory Contracts pursuant to section 365(b) of

the Banptcy Code at the Sale

Hearng. Cure Amounts disputed by any counterpary will be resolved by the Cour at the Sale

Hearing.

PLEASE TAK FURTHER NOTICE that, except to the extent otherwise provided
in the applicable purchase and sale agreement, subject to the payment of any Cure Amounts, the
assignee of

the Assumed Executory Contracts wil not be subject to any liability to you that may

have accrued or arisen before the closing date of the sale of the relevant Alaska Assets and the

5
68773-002\DOCS _ LA:203679.3

Debtors shall be relieved of all

liability accruing or arsing thereafter pursuant to section 365(k) of

the Banptcy Code.

PLEASE TAK FURTHER NOTICE THAT IF

YOU DO NOT TIMELY

FILE AN SERVE AN OBJECTION AS STATED ABOVE, THE COURT MAY GRAT

THE RELIEF REQUESTED IN THE SALE MOTION WITH NO FURTHER NOTICE.

AN NON-DEBTOR PARTY TO AN ASSUMED EXECUTORY

CONTRACT WHO DOES NOT FILE A TIMELY OBJECTION TO THE CURE AMOUNT
FOR SUCH ASSUMED EXECUTORY CONTRACT IS DEEMED TO HAVE CONSENTED
TO SUCH CURE AMOUNT.

Dated: July _, 2009

PACHUSKI STANG ZffHL & JONES LLP

Ira D. Kharasch (CA Bar No. 109084) James E. O'Neil (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 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

joneil~pszyjlaw.com rsaunders~pszjlaw.com
Counsel for Debtors and Debtors in Possession

6
68773-002\DOCS _ LA:203679.3

EXHIBIT 1
ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE

CURE AMOUNT
(As OF

COUNTERPARTY

DEBTOR PARTY

,2009)

EXHIBIT E

IN THE UNITED STATES BANUPTCY COURT

FOR THE DISTRICT OF DELAWAR
In re
) Chapter 11
1

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

PACIFIC ENERGY RESOURCES LTD., et al.,

Debtors.

)
Cure Objection Deadline: July _, 2009 at 4:00 p.m.

Sale Hearing: _ _,2009 at _ _.m.

NOTICE TO COUNTERP ARTIES TO EXECUTORY CONTRACTS AND UNEXPIRED LEASES THAT MAY BE ASSUMED AND ASSIGNED

PLEASE TAK NOTICE that, on March 9,2009, the above-captioned debtors and
debtors in possession (the "Debtors") commenced chapter 11 banptcy cases. On June 16,2009,
the Debtors filed the Debtors' Motion for an Order (A) Approving Procedures For Sale of

the

Debtors' Alaska Assets; (B) Scheduling Auction and Hearing to Consider Approval of Sale; (C)
Approving Notice of Respective Dates, Times, and Places for Auction and for Hearing on Approval
of (1) Sale and (II) Assumption and Assignment of Certain Executory Contracts an Unexpired
Leases; (D) Approving Forms of Notice; and (E) Granting Related Relief

(the "Sale Procedures

Motion").

. 2

The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdigs LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay
Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of

the Debtors

is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.

2

Capitalized term not otherwise defined herein shall have the meanings set fort in the Sale Procedures Motion.

68773-002\DOCS _ LA:203679.3

PLEASE TAK FURTHER NOTICE that, on July _,2009, the Cour entered an
order approving the Sale Procedures Motion (the "Sale Procedures Order"), which governs (i) the

bidding process (the "Sale Procedures") for the sale ofthe Alaska Assets, and (ii) procedures for the
assumption and assignent of certain executory contracts and unexpired leases of

the Debtors.

PLEASE TAK FURTHER NOTICE that the Debtors filed a motion (the "Sale
Motion") seeking Cour approval of the sale of

the Alaska Assets to the highest and best bidder(s),

if

any, at an auction or auctions scheduled on July 20,2009 at 10:00 a.m. (Eastern time), free and
liens, claims and encumbrances pursuant to section 363 oftitle 11 of

clear of all

the United States

Code (the "Banptcy Code"), with all

liens, claims and encumbrances to attach to the proceeds of

the sale with the same validity and in the same order of priority as they attached to the Alaska
Assets prior to the sale, including the assumption by the Debtors and assignent to the buyer of
certain executory contracts and unexpired leases pursuant to section 365 of

the Banptcy Code

(the "Assumed Executory Contracts"). A copy of the Sale Motion is enclosed herewith.

PLEASE TAK FURTHER NOTICE that an evidentiar hearing (the "Sale

Hearng") on the relief

requested in the Sale Motion (among other things, to authorize the

_, 2009,

assumption and assignent ofthe Assumed Executory Contracts) wil be held on

at _ _.m. (Eastern time) before the Honorable Kevin J. Carey, United States Banptcy Judge,

at the United States District Cour for the District of

Delaware, 824 Market Street, 5th Floor,

Courroom 5, Wilmington, Delaware 19801. The Sale Hearg may be adjoured from time to time

without fuher notice to creditors or paries in interest other than by anouncement of the

adjourent in open court on the date scheduled for the Sale Hearng.

2
68773-002\DOCS _ LA:203679.3

PLEASE TAK FUTHER NOTICE THAT, PURSUANT TO THE SALE

MOTION AND CONSISTENT WITH THE SALE PROCEDURES ORDER, THE
DEBTORS INTEND TO ASSUME AN EXECUTORY CONTRACT OR UNEXPIRED

LEASE TO WHICH YOU MAY BE A PARTY. THE ASSUMED EXECUTORY

CONTRACT IS DESCRIBED ON EXHIBIT 1 ATTACHED TO THIS NOTICE. THE

AMOUNT SHOWN ON EXHIBIT 1 HERETO AS THE "CURE AMOUNT" IS THE

AMOUNT, IF AN, BASED UPON THE DEBTORS' BOOKS AND RECORDS, WHICH
THE DEBTORS ASSERT IS OWED TO CURE AN DEFAULTS EXISTING UNDER

THE

ASSUMED EXECUTORY CONTRACT AS OF THE DATE SHOWN ON SUCH EXHIBIT.

PLEASE TAK FURTHER NOTICE that if

you disagree with the Cure Amount

shown for the Assumed Executory Contract on Exhibit 1, you must file in wrting with the United
States Bankptcy Cour for the Distrct of

Delaware, 824 Market Street, 5th Floor, Wilmington,

Delaware 19801, an objection on or before 4:00 p.m. Eastern time on July _,2009. If a contract or

lease is assumed and assigned pursuant to this Cour's order approving same, then unless you
properly and timely file and serve an objection to the Cure Amount contained in this Notice, you
shall receive at the time ofthe closing of the sale (or as soon as reasonably

practicable thereafter),

the Cure Amount set forth herein, with payment made pursuant to the terms of the applicable
purchase and sale agreement for any Alaska Assets related to your contract or lease.
PLEASE TAK FURTHER NOTICE that if

you have any other objection to the

the Assumed Executory Contract to which you maybe a

Debtors' assumption and assignent of

pary or to the Sale Motion, you also must file that objection in the maner and by the date and time

3
68773-002\DOCS _ LA:203679.3

stated above; provided, however, that you may raise at the Sale Hearng an objection to the
assumption and assignent of the Assumed Executory Contract solely with respect to the
Successful Bidder( s), if any, ability to provide adequate assurance of futue performance under the

Assumed Executory Contract. In addition, any objection must set forth the specific default or

defaults alleged and set forth any cure amount as alleged by you.

PLEASE TAK FURTHER NOTICE that any objection so fied must be served so
as to be received by that same date and time upon the following parties: (i) the Debtors c/o Pacific

Energy Alaska Operating LLC, 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA, Att:
Gerald A. Tywoniuk, Chief

Financial Offcer (email: gtywoniukpacenergy.com). with a copy to:

the Americas, 24th Floor,

(a) the Debtors' financial advisor Zolfo Cooper LLC, 1166 Avenue of

New York, NY, Att: Scott W. Winn, Senior Managing Director (email:

swinnzolfocooper.com) and Mark A. Cervi (email: mcervizolfocooper.com); (b) the Debtors'

investment baner Lazard Frres & Co. LLC, 600 Travis, Suite 2300, Houston, TX 77002, Att:
Robert L. Lynd (email: robert.1yndlazard.com); and (c) the Debtors' counsel (i) (A) Pachulski
Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 11 th Floor, Los Angeles, Californa 900674100, Att: Ira D. Kharasch (email: ikharaschpszjlaw.com) and Robert M. Saunders (email:

rsaunderspszjlaw.com) and (B) Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th
Floor, Wilmington, Delaware 19801, Attn: James A. O'Neil (email: joneilpszjlaw.com); (ii)

Rutan & Tucker, LLP, 611 Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Att: Gregg Amber
(email: gamberrutan.com) and Garett Sleichter (email: gsleichterrutan.com); and (iii) Schully,

Roberts, Slattery & Marino, PLC, 1100 Poydras Street, Suite 1800, New Orleans, LA 70163, Attn:

4
68773-002\DOCS _ LA:203679.3

Anthony C. Marno (email: amarno~schullyroberts.com); (d) counsel to the Offcial Committee

of

Unsecured Creditors (the "Committee"): Steptoe & Johnson, 1330 Connecticut Ave., N.W.,

Washington, DC 20036, Att: Fil Agusti (email: fagusti~steptoe.com); and ( e) counsel to the
agents for the debtor in possession financing lenders (the "Lenders"): (i) Bingham McCutchen
LLP, 399 Park Avenue, New York, NY 10022, Att: Jeffrey S. Sabin (email:
jeffrey.sabin~bingham.com) and (ii) Skadden, Ars, Slate, Meagher & Flom LLP, 333 West

Wacker Drive Chicago, Ilinois 60606, Att: Seth E. Jacobson (email:

seth.jacobson~skadden.com), (collectively, the "Notice Paries").
PLEASE TAK FURTHER NOTICE that the Successful Bidder, if any, shall be
responsible for satisfying any requirements regarding adequate assurance of futue performance that

may be imposed under section 365(b) of the Banptcy Code in connection with the proposed
assignent of any Assumed Executory Contract, as wil be provided in the Sale Motion. The Cour

shall make its determinations concernng adequate assurance of futue performance under the
Assumed Executory Contracts pursuant to section 365(b) of

the Banptcy Code at the Sale

Hearng. Cure Amounts disputed by any counterpary wil be resolved by the Cour at the Sale

Hearng.
PLEASE TAK FURTHER NOTICE that, except to the extent otherwise provided
in the applicable purchase and sale agreement, subject to the payment of any Cure Amounts, the

assignee ofthe Assumed Executory Contracts wil not be subject to any liability to you that may
have accrued or arisen before the closing date of the sale of the relevant Alaska Assets and the

5
68773-002\DOCS _ LA:203679.3

Debtors shall be relieved of all

liability accruing or arsing thereafter pursuant to section 365(k) of

the Banptcy Code.

PLEASE TAK FURTHER NOTICE THAT IF YOU DO NOT TIMELY

FILE AND SERVE AN OBJECTION AS STATED ABOVE, THE COURT MAY GRAT
THE RELIEF REQUESTED IN THE SALE MOTION WITH NO FURTHER NOTICE.

AN NON-DEBTOR PARTY TO AN ASSUMD EXECUTORY

CONTRACT WHO DOES NOT FILE A TIMELY OBJECTION TO THE CURE AMOUNT
FOR SUCH ASSUMED EXECUTORY CONTRACT IS DEEMED TO HAVE CONSENTED
TO SUCH CURE AMOUNT.

Dated: July _, 2009

P ACHUSKl STANG ZIEHL & JONES LLP

Ira D. Kharasch (CA Bar No. 109084) James E. O'Neil (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 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

joneil(pszyjlaw.com rsaunders(pszjlaw.com
Counsel for Debtors and Debtors in Possession

6
68773-002\DOCS _ LA:203679.3

EXHIBIT 1
AsSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE

CURE AMOUNT

COUNTERPARTY

DEBTOR PARTY

(As OF ,2009)

IN THE UNITED STATES BANUPTCY COURT

FOR THE DISTRICT OF DELAWAR

Inre
PACIFIC ENERGY RESOURCES LTD., et al.,
Debtors.
1

) Chapter 11

) ) Case No. 09-10785 (KC)

) (Jointly Administered)

)
) Re: Docket No.

ORDER (A) APPROVING PROCEDURES FOR SALE OF THE DEBTORS' ALASKA ASSETS; (B) SCHEDULING AUCTION AND HEARNG TO CONSIDER APPROVAL OF SALE; (C) APPROVING NOTICE OF RESPECTIVE DATES, TIMES, AND PLACES FOR AUCTION AND FOR HEARNG ON APPROVAL OF (I) SALE AND (II) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES; (D) APPROVING FORMS OF NOTICE: AND (E) GRATING RELATED RELIEF
This matter coming before the Cour on the Motion for an Order (A) Approving
Procedures for Sale of the Debtors' Alaska Assets; (B) Scheduling Auction and Hearing to
Consider Approval of Sale; (C) Approving Notice of Respective Dates, Times, and Places for

Auction and for Hearing on Approval of (I) Sale and (II) Assumption and assignment of Certain
Executory Contracts and Unexpired Leases; (D) Approving Forms of

Notice; and (E) Granting

2

Related Relief(the "Sale Procedures Motion") filed on June 16,2009 by the above-captioned
debtors and debtors in possession (collectively, the "Debtors"); the Cour having reviewed the Sale
Procedures Motion and having heard the statements of counsel regarding the relief requested in the

The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings LLC (tax LD. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of the Debtors
is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA.
2

Unless otherwise noted, capitalized term used herein have the meanigs ascribed in the Sale Procedures Motion and

the Sale Procedures (as such term are defined herein).

DOCS _ LA:203570.4

Sale Procedures Motion at a hearg before the Cour (the "Sale Procedures Hearng"); the Cour
finding that (a) the Cour has jursdiction over this matter

pursuant to 28 D.S.C. 157 and 1334,

(b) this is a core proceeding pursuant to 28 US.C. 157(b )(2), (c) venue of these chapter 11 cases

in this distrct is proper pursuant to 28 US.C. 1408 and 1409, and (d) notice ofthe Sale
Procedures Motion and the Sale Procedures Hearng was sufficient under the circumstances, the
Cour having determined that the legal and factual bases set forth in the Sale Procedures Motion and

at the Sale Procedures Hearng establish just cause for the relief granted herein and it appearng that
the relief requested is in the best interest of

the Debtors and their estates;

IT is HEREBY ORDERED THAT:

1. The Sale Procedures Motion is granted.

2. The form of

Purchase and Sale Agreement, substantially in the form of

Exhibit A to the Sale Procedure Motion, is approved.

3. The Sale Procedures for Alaska Assets attached to the Sale Procedures

Motion as Exhibit B (the "Sale Procedures") are approved.

4. The Notice of Sale Procedures, Auction Date, and Sale Hearing,

substantially in the form of

Exhibit C to the Sale Procedures Motion (the "Sale Procedures

Notice"), is approved and shall be served with the Sale Motion on the persons that had been
served with the Sale Procedure Motion.
5. The Notice of Auction and Sale Hearing, substantially in the form of

Exhibit D to the Sale Procedures Motion (the "Creditor Notice"), is approved and shall be served

on the creditors ofthe Debtors and all persons asserting a right to an oil and!or gas royalty
related to the Alaska Assets.
2
DOCS_LA:203570A

6. The Notice to Counter

parties to Executory Contracts and Unexpired

Leases That May be Assumed and Assigned, substantially in the form of Exhibit E to the Sale

Procedures Motion (the "Cure Notice"), is approved and shall be served on each Debtor's

contract counterparies and lessors with executory contracts and unexpired leases that a Debtor
may seek to assume and/or assign in conjunction with the sale of any of

the Alaska Assets (the

"Assumed Executory Contracts"); provided, however, the relevant Debtor or Debtors may
withdraw any Cure Notice by filing such a withdrawal with this Cour up to the time of any

relevant Closing (as such term is defined in the relevant Agreement, as executed and delivered
by the relevant Debtors(s)).
7. The deadline for submitting bids pursuant to the Sale Procedures shall be

July 13, 2009 at 12:00 noon prevailing Eastern time.

8. The Auctions pursuant to the Sale Procedures shall commence at

approximately 10:00 a.m. prevailing Eastern time on July 20,2009.

9. The hearing to consider the Sale Motion shall be held on July _,2009 at

_ _.m. prevailing Eastern time (the "Sale Hearing") before the Honorable Kevin J. Carey,

United States Banptcy Judge, at the United States Distrct Cour for the Distrct of

Delaware,

824 Market Street, 5th Floor, Couroom 5, Wilmington, Delaware 19801. The deadline to
object to (a) the relief sought by the Sale Motion; (b) the Debtors' conduct of

the Auction(s); and

(c) other than as expressly set forth below, the assumption and!or assignent of or cure amount

for an executory contract or unexpired leases identified in a Cure Notice is July _, 2009 at 4:00

p.m. prevailing Eastern Time. The Sale Hearing may be adjoured from time to time without

3
DOCS _ LA:203570A

fuher notice to creditors or paries in interest other than by anouncement ofthe adjourent in
open cour on the date scheduled for the Sale Hearng.
10. The Debtors shall serve the Sale Motion and the Cure Notice upon each

counterparty to the Assumed Executory Contracts. The Cure Notice shall state the date, time and
place of

the Sale Hearng as well as the date by which any objection to the assumption and

assignent of Assumed Executory Contracts must be fied and served. The Cure Notice also
shall identify the amounts, if any, that the Debtors believe are owed to each counterpary to an

Assumed Executory Contract in order to cure any defaults that exist under such contract (i.e., the

"Cure Amounts"). If a contract or lease is assumed and assigned pursuant to this Cour's order
approving same, then unless the Assumed Executory Contractcounterpary properly and timely
fies and serves an objection to the Cure Amount contained in the Cure Notice, the Assumed
Executory Contract counterpary shall receive at the time of the closing of

the relevant sale (or as

soon as reasonably practicable thereafter), the Cure Amount as set forth in the Cure Notice, if

any, with payment made pursuant to the terms ofthe Agreement, as executed and delivered at
closing by one or more of

the relevant Debtors. If an objection is filed by a counterpary to an

executory

Assumed Executory Contract, such objection must set forth a specific default in any

contract or unexpired lease and claim a specific monetar amount that differs from the amount, if
any, specified by the Debtors in the Cure Notice.
11. If any counterparty objects for any reason to the assumption and

assignent of an Assumed Executory Contract, the counterpary must file the objection by no

later than (i) 4:00 p.m. prevailing Eastern time on July _,2009, or (ii) the date otherwise

specified in the Cure Notice (or, alternatively, the date set forth in the motion to assume such
4
DOCS _ LA:203570.4

Assumed Executory Contract if such contract is to be assumed and assigned after the Sale
Hearng); provided, however, that any counterpar may raise at the Sale Hearg an objection to
the assumption and assignent of an Assumed Executory Contract solely with respect to the

Successful Bidder's ability to provide adequate assurance of futue performance under the
Assumed Executory Contract.
12. The Successful Bidder shall be responsible for satisfyng any requirements

regarding adequate assurance of futue performance that may be imposed under section 365(b) of

the Bankptcy Code in connection with the proposed assignent of any Assumed Executory
Contract, as wil be provided in the Sale Motion. The Cour shall make its determinations
concerning adequate assurance of futue performance under the Assumed Executory Contracts
pursuant to section365(b) of

the Banptcy Code at the Sale Hearng. Cure Amounts disputed

by any counterpary wil be resolved by the Cour at the Sale Hearng.

13. Except to the extent otherwise provided in the Agreement with the

Successful Bidder, subject to the payment of any Cure Amounts, the assignee of

the Assumed

Executory Contracts shall not be subject to any liability to the assigned contract counterpary or
lessor that accrued or arose before the closing date of the sale of the relevant Alaska Assets and
the Debtors shall be relieved of all

liability accruing or arsing thereafter pursuant to section

365(k) ofthe Banptcy Code.

5
DOCS _ LA:203570A

14. Notwithstanding the foregoing, nothig herein shall prejudice or otherwise

affect the right ofthe Debtors or any of

them to select a "stalkng horse" bidder and to retu to

this Cour to seek approval of appropriate buyer protections or modifications to this Order or the
Sale Procedures approved hereby.

Dated: July _, 2009

The Honorable Kevin J. Carey

United States Banptcy Judge

6
DOCS_LA:203570.4

IN THE UNITED STATES BANUPTCY COURT

In re: )
caused a copy of

FOR THE DISTRICT OF DELAWAR

Chapter 11

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

Case No. 09-10785 (KC)

(Jointly Adminstered)

Debtors. ))

CERTIFICATE OF SERVICE
I, James E. O'Neil, Esquire, hereby certify that on the 16th day of June, 2009, I
the following documents to be served on the individuals on the attached service

lists in the maner indicated:

DEBTORS' MOTION FOR AN ORDER (A) APPROVIG PROCEDURS FOR SALE OF THE DEBTORS' ALASKA ASSETS; (B) SCHEDULING AUCTION AN HEARNG TO CONSIDER APPROVAL OF SALE; (C) APPROVIG NOTICE OF

RESPECTIV DATES, TIMS, AN PLACES FOR AUCTION AN FOR HEARG ON APPROVAL OF (I SALE AN (I ASSUMTION AN ASSIGNMNT OF CERTAI EXECUTORY CONTRACTS AN UNXPIRD LEASES; (D) APPROVIG FORMS OF NOTICE; AN (E) GRATING RELATED RELIEF; EXHITS A THROUGH E; AN
(PROPOSED) ORDER A) APPROVIG PROCEDURS FOR SALE o.F THE DEBTORS' ALASKA ASSETS; (B) SCHEDULING AUCTION AN

HEARG TO CONSIDER APPROVAL OF SALE; (C) APPROVIG NOTICE OF RESPECTIV DATES, TIMS, AN PLACES FOR AUCTION AN FOR HEARG ON APPROVAL OF (I SALE AN (I ASSUMTION AN ASSIGNMNT OF CERTAI EXECUTORY CONTRACTS AN UNXPIRD LEASES; (D) APPROVIG FORMS OF NOTICE; AN (E) GRATING RELATED RELIEF.

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); Petroca1 Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operatig 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.

68773-001 \DOCS_DE: 148092.5

Pacific Energy - Real Propert Lease_

Counterparies Service List
Case No. 09-10795 (KJC)

First Class Mail

John Kuterbach, Division Head Alaska Deparment of Environmental Conservation Air Permits Program Division of Air Quality Deparment of Environmental Conservation 410 Wiloughby Ave., Ste 303 P.O. Box 111800

Document No. 149471

26 - First Class Mail

First Class Mail

John Gol1, Regional Director
Fred Kig, Director of Leasing Servces

Juneau, AK 99811-1800

Mierals Management Servce Centerpoint Building

3801 Centerpoint Drive, Suite 500 Anchorage, AK 99503

First Class Mail

Melissa Ainsworth, Bureau of Land
Management- Alaska
Bureau of

Land Management, Alaska State

Offce

First Class Mail Mr. Kevin R. Banks Acting Director

Temple Davidson, Petroleum Land Manager Natural State of Alaska Deparment of Resources Division of Oil and Gas

6881 Abbott Loop Road Anchorage AK 99507

First Class Mail

Christopher Pace Deparent of Environmenta Conservation
Financial Responsibilty Program

550 W. 7th Ave, Ste 800

Anchorage, AK 99501-3561

First Class Mail

State of Alaska Mental Heath Trust
Deparent of

Division of Spil Prevention and Response 410 Wiloughby Ave., Ste 303 P.O. Box 111800 Juneau, i\K 99811-1800

Natual Resources

Division of Oil and Gas

550 W. 7th Ave, Ste 800 Anchorage, AK 99501-3561

First Class Mail

Jody J. Colombie Special Assistat to the Commission
Alaska Oil & Gas Conservation Commssion

First Class Mail

Mike Franger, Senior Resource Manager Trust Land Offce State of Alaska Mental Heath Trust
Deparent of

333 W. 7th Ave., Ste. 100 Anchorage, AK 99501

First Class Mail

Cook Inet Regional (CIRI)

Natual Resources

Division of Oil and Gas

718 L Street Suite 202 Anchorage, AK 999501

2525 C Street, Suite 500

Anchorage, AK 99503 Anchorage, AK 99509-3330

First Class Mail

Marathon Oil Corporation
3201 C Street, Suite 800

Anchorage, AK 99503

First Class Mail

Aurora Gas Llc 6051 N Course Dr Suite 200 Houston, TX 77072

First Class Mail

Federal Oil & Gas Leases Alaska State Office 6881 Abbott Loop Road Anchorage, AK 99507

First Class Mail

Chevron Chevron North America Exploration and Production Company Union Oil Company of California 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503

First Class Mail

Oil & Gas Lease
2525 C Street, Suite 500

P.O. Box 93330 Anchorage, AK 99507

First Class Mail

OIL & Gas Leases Alaska State Office 222 West 7th Ave. #13 Anchorage, AK 999513-7504

First Class Mail

Forest Oil Corporation 707 - 17th Street, Suite 3600 Denver, Colorado 80202

First Class Mail

First Class Mail
Bob Tannahil

Pipeline Easements PO Box 93330 Anchorage, AK 99509-9330

Senior Trust Officer

Trust Deparment First National Ban Alaska
PO Box 100720

First Class Mail

Throughput Agreement 4773 Payshere Circle Chicago, IL 60674

Anchorage, AK 99510-0720

First Class Mail

Anur Tohan
Assistat Regional Counsel

First Class Mail

Thoughput Agreement

EPA Regional Administrator Att: Underground Injection Control, Groundwater Unit, (OCE-127) Financial

C/O Max D. Medema 2800 Kempton Hils Drive Anchorage, AK 99516

Responsibilty U.S. EP A/egion 10

1200 Sixth Street Seattle, W A 98101

First Class Mail Federal Oil & Gas Leases (Cosmopolita) Alaska OCS Region 3801 Centerpoint Drive, Suite 500 Anchorage, AJ 99503 First Class Mail
Pipeline Easements PO Box 2682

First Class Mail

Federal Oil & Gas Leases (Cosmopolitan) Alaska OCS Region 3801 Centerpoint Drive, Suite 500

Kenai, AJ 99611

Anchorage, AJ 99503

First Class Mail

Copper River leases (AK) 301 S MAIN ST Midland, TX

First Class Mail

Throughput Agreement
PO Box 19046

Green Bay, WI 54307-9046

Pacific Energy Resources Ltd. 2002 Service List

Case No. 09-10785
Document No. 145745

12 - Hand Delivery
39 - First Class Mail

02 - FOREIGN First Class Mail

Hand Delivery (United States Attorney) Ellen W. Slights, Esq. United States Attorney's 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 Ars, 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, 8th Floor

Counsel for Debtors) Laura Davis Jones, Esquire James E. O'Neil, Esquire
Katheen P. Makowski, Esquire

Pachulski Stag Ziehl & Jones LLP

919 North Market Street, 17th Floor

P.O. Box 8705 Wilmington, DE 19899-8705

Interoffce Pouch to Los Angeles

Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire

Scoti E. McFarland, Esquire

Wilmington, DE 19899
Hand Delivery (Counsel for Union Oil Company of California, a California Corporation) Norman M. Monhait, Esquire Rosenthal, Monhait & Goddess, P A
Citizens Ban Center, Suite 1401

Pachulski Stag ZieW & Jones LLP 10100 Santa Monica Blvd., 11th Floor

Los Angeles, CA 90067

Hand Delivery (United States Trustee) Joseph McMahon, Esquire Offce of the United States Trustee J. Caleb Boggs Federal Building

919 Market Street, P.O. Box 1070 Wilmington, DE 19899

844 Nort Kig Street, Suite 2207

Lockbox 35

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

Hand Delivery (Counsel for Westchester Fire Insurance Company and Noble Energy Inc.) Tobey M. Daluz, Esquire Joshua E. Zugerman, Esquire Ballard Spah Andrews & Ingersoll, LLP
919 N. Market Street, 12th Floor

Vito 1. DiMaio 230 N. Market Street

Wilmington, DE 19801

Wilmington, DE 19801

Hand Delivery (Counsel for Oxy Long Beach Inc.) David L. Finger, Esquire
Finder, Slanina Liebesman, LLC

First Class Mail

(United States Attorney General) Eric H. Holder, Jr. Office of the Attorney General U.S. Deparment of Justice 950 Pennsylvania Avenue, N.W. Washington, DC 20530-0002

One Commerce Center 1201 N. Orange St., ih Floor

Wilmington, DE 19801

Hand Delivery (Official Committee ofUnsecUfed Creditors) David B. Stratton, Esquire

James C. Carignan, Esquire

First Class Mail

Secretary of State Division of Corporations Franchise Tax P.O. Box 7040 Dover, DE 19903

Pepper Hamilton LLP

Hercules Plaza, Suite 1500

1313 Market Street Wilmington, DE 19899

First Class Mail

Secretar of Treasur P.O. Box 7040 Dover, DE 19903

Hand Delivery (Counsel for Marathon Oil Company) Kevin J. Mangan, Esquire Womble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501
Wilmington, DE 19801

First Class Mail

Secreta of Treasury 15th & Pennsylvania Avenue, N.W. Washington, DC 20220

Hand Delivery
(Counsel for Cook Inlet Region, Inc.)
Eric Lopez Schnabel, Esquire

First Class Mail

Att: Insolvency

District Director
Internal Revenue Service

Dorsey & Whitney (Delaware) LLP

1105 North Market Street, Suite 16th Floor
Wilmington, DE 19801

3 1 Hopkins Plaza, Room 1150 Baltimore, MD 21201

Hand Delivery (Counsel for Area Energy LLC) Norman L. Pernick, Esquire Karen M. McKinley, Esquire
Cole, Schotz, Meisel, Forman & Leonard,

First Class Mail

Internal Revenue Service P.O. Box 21126 Philadelphia, PA 19114-0326

P.A. 500 Delaware Avenue, Suite 1410

Wilmgton, DE 19801

First Class Mail

Att: Insolvency

Internal Revenue Service 1352 Marows Road, 2nd 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

SWEPI LP

P.O. Box 576 Houston, TX 77002-0576

First Class Mail

Noble Energy, Inc.

First Class Mail

Michael A. Berman, Esq. Securities & Exchange Commission Office of General Counsel-Banptcy 100 F Street, N.E. Washington, DC 20549

100 Glenborough, Suite 100 Houston, TX 77067

First Class Mail

(Counsel to Silver Point Finance) Seth Jacobs, Esquire

Ana Meresidis, Esquire

Skadden, Arps, Slate, Meagher & Flom, LLP 333 West Wacker Drive Chicago, IL 60606-1285

First Class Mail

Matthew Berr, Esquire

Office of General Counsel Federal Communications Commission

445 iih Street, S.W.

First Class Mail

(Counsel to Goldman Sachs and J.Aron & Company) Jeffrey Sabin, Esquire Steven Wilamowsky, Esquire Scott K. Seamon, Esquire
Bingham McCutchen LLP

Washington, DC 20554

First Class Mail POLLAR WIRELINE

P.O. Box 1360 Kenai, AK 99611

First Class Mail

Chevron Oil Company
Att: Steven Lastraps

399 Park Avenue New York, NY 10022

First Class Mail

(Counsel to Goldman Sachs and J.Aron & Company) Amy Kyle Bingham McCutchen (Boston) One Federal Street Boston, MA 01221-1726

3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503

First Class Mail Californa Franchise Tax Board

Banptcy, BE MSA 345

P.O. Box 2952 Sacramento, CA 95812-2952

First Class Mail First Class Mail

Aera Energy LLC 10000 Ming Avenue Bakersfield, CA 93311-1164

(Counsel for Union Oil Company of California, a Californa Corporation) Cabot Christianson, Esquire
Christianon & Spraker

911 West 8th Avenue, Suite 201

Anchorage, AK 99501

First Class Mail

Linda Lautigar

First Class Mail

(Counsel for Westchester Fire Insurance Company) Robert McL. Boote, Esquire Ballard Spah Andrews & Ingersoll, LLP
1735 Market Street, 51 st Floor

Banptcy Coordinator
MMS / Denver Federal Center POBox 25165 Mail Stop 370B2 Denver, CO 80225

Philadelphia, PA 19103

First Class Mail

Kristina Engelbert RDI Royalty Distributors, Inc. PO Box 24116
Tempe, AZ 85285

First Class Mail

(Counsel for Rosecrans Energy, Ltd. And
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MTGLQ Investors, L.P. 85 Broad Street New York, New York 10004

Meyers, Nave, Riback, Silver & Wilson 333 South Grand Avenue, Suite 1670 Los Angeles, CA 90071

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TSX Kerry D. Krochak, B.A., LL.B. Manager, Listed Issuer Services Toronto Stock Exchange
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Computershare Investor Services Inc.

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