IN THE UNITED STATES BANUPTCY COURT

In re: )
AUTHORITY TO PAY OR HONOR PRE TO: (a) the Offce of

FOR THE DISTRICT OF DELAWAR

Chapter 11

) )

PACIFIC ENERGY RESOURCES LTD., et ai., 1 )

Debtors. )
Deadline for Objections: April

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

Related Docket No. 15

1, 2009 at 4:00 p.m. prevailng Eastern time Hearing Date: AprilS, 2009 at 11:00 a.m. prevailng Eastern time

NOTICE OF DEBTORS' EMERGENCY MOTION FOR PETITION AND POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS
for the District of Delaware; (b) the creditors the United States Trustee holding the thirty-five (35) largest unsecured claims against the Debtors' estates (on a consolidated basis); (c) the Debtors' pre-petition and post-petition lenders or their counsel; (d) all parties who have requested notice pursuant to Bankptcy Rule 2002 and (e) the Royalty and Overrding Royalty Owners

PLEASE TAKE NOTICE that on March 9, 2009, the debtors and debtors-inpossession (collectively, the "Debtors") in the above-captioned case filed the Debtors'

Emergency Motion for Authority to Payor Honor Prepetition and Postpetition Obligations to
Royalty Interests (the "Motion"), attached hereto as Exhibit A, with the Clerk of

the United

States Bankptcy Cour for the District of

Delaware. The motion seeks entry of an order

authorizing the Debtors to pay prepetition amounts to owners of royalty interests and and

overrding royalty interests in specified oil and gas leases.

1 The Debtors in these cases, along with the last four digits of each of the Debtors' federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The
mailing address for all of

the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

PLEASE TAKE FURTHER NOTICE that any response or objection the

Motion must be filed on or before April

1, 2009 at 4:00 p.m. prevailng Eastern Time.

Objections or other responses to the Motion, if any, must also be served so that
they are received not later than April

1, 2009 at 4:00 p.m. prevailng Eastern time, by: (a)

(proposed) counsel to the Debtors, Pachulski Stang Ziehl & Jones LLP, 919 North Market Street,

1 ih Floor, Wilmington, DE 19899-8705, Attn: Laura Davis Jones, Esq.; Fax: 302-652-4400,

e-mail: ljonespszjlaw.com; and (2) Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica
Blvd., 11th Floor, Los Angeles, CA 90067-4100; Attn: IraD. Kharasch, Esq; Fax: 310-201-

0760, e-mail: ikharash~pszilaw.com; (b) counsel to the Lenders: Goldman Sachs (1) Bingham

McCutchen, 399 Park Avenue, New York, NY 10022, Attn: Jeffrey Sabin, Esq.; Fax: 212752-5378, e-mail: ieffrey.sabin(qbingham.com and (2) Bingham McCutchen, One Federal

Street, Boston, MA 01221-1726, Attn: Amy Kyle, Fax: 617-345-5001, e-mail:

amy~kylebingham.com and Silver Point Finance: Skadden, Ars, Slate, Meagher & Flom,
LLP, 333 West Wacker Drive, Chicago, IL 60606-1285, Attn: Seth Jacobson, Esq.; Fax: 312407-8511, e-mail: seth.iacobson~skadden.com and (c) the Office of

the United States Trustee,

J. Caleb Boggs Federal Building, 844 N. King Street, Suite 2207, Lock Box 35, Wilmington,

Delaware 19801, Attn: Joseph McMahon, Esq.

A HEARNG ON THE MOTION WILL BE HELD BEFORE THE

HONORALE KEVIN J. CARY AT THE UNITED STATES BANKRUPTCY COURT,

824 MART STREET, FIFTH FLOOR, COURTROOM #5, WILMINGTON,

DELAWAR 19801 ON APRIL 8, 2009 AT 11:00 A.M. PREVAILING EASTERN TIME.

IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE

COURT MAY APPROVE THE MOTION WITHOUT FURTHER NOTICE OR HEARG.
Dated: March 16, 2009

P ACHULSKI STANG ZIEHL & JONES LLP

avis Jones (DE Bar No. 2436)

Ira . Kharasch (CA Bar No. 109084)

Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) Robert M. Saunders (CA Bar No. 226172) James E. O'Neil (DE Bar No. 4042) Kathleen P. Makowski (DE Bar No. 3648) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100

Facsimile: 310/652-4400
Email: liones(qpszilaw.com

ikharasch(qpszi law .com

smcfarland~pszilaw.com
rsaunders(qpszi law .com

ioneil~pszilaw.com
kmakowski~pszilaw .com

(Proposed) Counsel for Debtor and Debtor in Possession Pacific Energy Resources Ltd.

68773-001 \DOCS _DE: 145945.1

EXHIBIT A

IN THE UNITED STATES BANUPTCY COURT

In re: )

FOR THE DISTRICT OF DELAWAR

Chapter 11

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

Case No. 09- 10785 L(Jointly Admstered)

Debtors. ))

DEBTORS' EMERGENCY MOTION FOR AUTHORITY TO PAY OR HONOR PREPETITION AND POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS
The above-captioned debtors and debtors in possession (collectively the

"Debtors"), file ths Motion for Authority to Payor Honor Pre-Petition Obligations to Royalty
Interests ("Motion") and in support of same, the Debtors respectfully represent as follows:

Jurisdiction And Venue

1. This Cour has jursdiction over the subj ect matter of the Motion pursuant
to 28 U.S.C. 157 and 1334. Consideration of

this Motion is a core proceeding under 28 V.S.C.

157(b)(2). Venue of

ths proceeding is proper in this distrct pursuant to 28 V.S.C. 1408 and

1409.

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

DOCS_DE:1456113

IN THE UNITED STATES BANUPTCY COURT

In re: )
AUTHORITY TO PAY OR HONOR PRE

FOR THE DISTRICT OF DELAWAR

Chapter 11

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

Case No. 09- 10785 L(Jointly Admstered)

Debtors. ))

DEBTORS' EMERGENCY MOTION FOR PETITION AND POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS
The above-captioned debtors and debtors in possession (collectively the

"Debtors"), file ths Motion for Authority to Payor Honor Pre-Petition Obligations to Royalty
Interests ("Motion") and in support of same, the Debtors respectfully represent as follows:

Jurisdiction And Venue

1. This Cour has jursdiction over the subj ect matter of the Motion pursuant
to 28 US.C. 157 and 1334. Consideration of

this Motion is a core proceeding under 28 US.C.

157(b)(2). Venue of

ths proceeding is proper in this distrct pursuant to 28 US.C. 1408 and

1409.

i The Debtors in these cases, along with the last four digits of each of the Debtor's federal tax identification
number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacifc Energy Alaska Holdings, LLC (tax J.D. # not available); Cameros Acquisition Corp. (5866); Pacifc Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

DOCS_DE:145611.

: ; ;

Backeround
2. The Debtors commenced these Cases by each filing a voluntary petition
on the date hereof (the "Petition Date"). The Debtors have continued in the possession of

their

property and have continued to operate and maiage their business as debtors in possession
pursuant to sections 1 107(a) and 1108 of

the Banptcy Code. No request has been made for

the appointment of a trustee or an examiner in this case, and no official committee has yet been
appointed by the U.S. Trustee.
3. The Debtors are a group ofinq,ependent energy companies engaged in the

acquisition, development and exploitation of oil ard gas properties in the western United States.
The Debtors' intent is to provide the operational focus necessar to their properties to exploit

their full potential, and are focused on applying their extensive engineering, operating, geologic,
and geophysical expertise to provide significant-proved reserve and production growth.
4. The Debtors' curent oihmd gs assets are located offshore near

California and principally offshore in Alaska. The Debtors acquired their curent oil and gas

assets in transactions occurrng in the four quarer of2006 and during 2007, and their existing
secured debt is related to these acquisitions. The Debtors' revenue is largely dependent on the
market price for the underlying crude oil produced; iii- addition to the level of production. Their
revenue for 2008 was approximately

$226.2 mIion. :

5. The general factual background relating to the Debtors' commencement of

these chapter 11 cases is set forth in detail in the Affdavit of Gerald A. Tywoniuk, Chief

-L,. i'
" ~: DOCS_DE:

14561 1.

; ; I

Baclround
2. The Debtors commenced these Cases by

each filing a voluntay petition

their

on the date hereof

(the "Petition Date"). The Debtors have continued in the possession of

property and have continued to operate and maiag~ th~ir business as debtors in possession
pursuat to sections 1 107(a) and 1108 of

the Banptcy Code. No request has been made for

the appointment of a trustee or an examiner in this case, and no official committee has yet been
appointed by the U.S. Trustee.
3. The Debtors are a group of inqependent energy companies engaged in the

acquisition, development and exploitation of oil mid gas properties in the western United States.
The Debtors' intent is to provide the operational focus necessar to their properties to exploit

their full potential, and are focused on applying their extensive engineering, operating, geologic, and geophysical expertise to provide significant:proved reserve and production growth.
4. The Debtors' curent oIl ~d gs assets are located offshore near

California and principally offshore in Alaska. The Debtors acquired their curent oil and gas

assets in transactions occurrng in the fourh quarer of 2006 and durng 2007, and their existing
secured debt is related to these acquisitions. The Debtors' revenue is largely dependent on the
market price for the underlying crude oil produced; "in" addition to the level of production. Their
revenue for 2008 was approximately

$226.2 mlion. :

5. The general factual backgroUId relating to the Debtors' commencement of

these chapter 1 1 cases is set forth in detail in the Affdavit of Gerald A. Tywoniuk, Chief
. i i.,.

DOCS_DE:l45611.

Financial Offcer of Pacifc Energy Resources Ltd, in Support of First Day Motions (the
"Affidavit") filed contemporaneously with this Motio~ and incorporated herein by reference.

Relief Reauested
6. As stated in the Affidavit, Pacific Energy Resources, Ltd. ("PERL") leases

oil and gas producing assets located in the Beta Unit (the "Beta Assets") from the Minerals
Management Service ("MMS") of the United States Deparment of

Interior and Pacific Energy

Alaska Operating ("PEAO") owns working int~rests in certain oil and gas leases principally with

the State of Alaska (the "Alaska Assets"). PERL and PEAO are obligated, pursuant to the oil
and gas leases and related operating agreements, to remit to the lessors of the oil and gas leases

(the "Royalty Interest Owners") their share of the production from the producing wells located

on the respective leases, free of expenses of production (the "Royalties") and to the owners of
.;

the overrding royalty interests (the ORR OwneFsn the overriding royalties (the "ORRI").2
7. As of the Petition Date, PERL estimates that it owes the Minerals

.,

Management Service ("MMS") of

the United States Deparent of

Interior, the Royalty Interest

Owner in the Beta Assets, $2,000,000 in Roylty and 'PEAO estimates that it owes the Royalty
Interest Owners in the Alaska Assets, including tltcl State .f Alaska, approximately $1,700,000 in

Royalty. In addition, PERL owes the ORR Owners3 in the Beta Assets approximately $641,000
and PEAO owes the ORR Owners in the Alaska Assets approximately $524,000.

t
2 Landowner's royalty interests and overriding royalty inter~sts ~re propert interests in oil and gas leases. 30
USCA section 1734(14); AS 43.55.900; Armstrong Petroleum

Corp. v. Tri-Valley Oil & Gas Co" 116 Cal.App.4'h. 11

Cal.Rptr.3d 412 Cal. App. 5 Dist.. 2004, citing 8 Wiliams & Meyers, Oil & Gas Law (2003) Manual olOil & Gas Terms, p. 952. An overriding royalty is an interest hi th~ gross i:rodl,ction of oil and gas under a lease, in addition to
the usual royalties paid to the lessor, free of any expenses. ;

3 The ORR Owners in the Beta Assets and the Alaska Assets are affliates of Goldman Sachs and Silver Point.
DOCS_DE:145611.

i .

Financial Offcer of Pacifc Energy Resources Ltd, in Support of

First Day Motions (the

"Affdavit") fied contemporaneously with this Motion and incorporated herein by reference.

Relief Reauested

: .i

6. As stated in the Affdavit, Pacific Energy Resources, Ltd. ("PERL") leases

oil and gas producing assets located in the Beta Unit (the "Beta Assets") from the Minerals
Management Service ("MMS") of

the United States Deparment ofInterior and Pacific Energy

Alaska Operating ("PEAO") owns workingint~rests in certain oil and gas leases principally with

the State of Alaska (the "Alaska Assets"). PERL and PEAO are obligated, pursuant to the oil
and gas leases and related operating agreements, to remit to the lessors of the oil and gas leases

(the "Royalty Interest Owners") their share of the production from the producing wells located
on the respective leases, free of expenses of

production (the "Royalties") and to the owners of

.,

the overrding royalty interests (the ORR OwneFs?) the overriding royalties (the "ORR").2
7. As of the Petition Date, PERL estimates that it owes the Minerals

.,.

Management Service ("MMS") of

the United States Deparent ofInterior, the Royalty Interest

Owner in the Beta Assets, $2,000,000 in Roylty aid 'PEAO estimates that it owes the Royalty

..

Interest Owners in the Alaska Assets, including tlIclBtate.f Alaska, approximately $1,700,000 in

Royalty. In addition, PERL owes the ORR Owners3 in the Beta Assets approximately $641,000
and PEAO owes the ORR Owners in the Alaska Assets approximately $524,000.

2 Landowner's royalty interests and overriding royalty interests ~re propert interests in oil and gas leases. 30
USCA section 1734(14); AS 43.55.900; Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co.. 116 Cal.App.4'h, 11

Cal.Rptr.3d 412 Cat. App. 5 Dist., 2004, citing 8 Wiliams & Meers, Oil & Gas Law (2003) Manual olOil & Gas Terms, p. 952. An overriding royalty is an interest hi th~ gross ~roduction ofoIl and gas under a lease, in addition to
the usual royalties paid to the lessor, free of any expenses. ;

3 The ORR Owners in the Beta Assets and the Alaska Assets are affliates of Goldman Sachs and Silver Point.
3

DOCS_DE: 145611.

i;. ;! 'i "

8. The Debtors request that the Court enter an order authorizing them in their

discretion, to deliver, in the ordinar course ofl)U~i~ess, the fuds owed to Royalty Interest
Owners and ORR Owners as required by the 'rase.sancl;related operating agreements as the
Royalties and overrding royalties are not property of these estates and non-payment of

Royalties

and overriding royalties could jeopardize the oil and gas leases. Payments to the Royalty Interest
Owners and ORR Owners are in arears and should be paid promptly.

Basis For Reier

9. Landowner's royalty interests and overriding royalty interests are property

interests in oil and gas leases. 30 USCA section 1734(14); AS 43.55.900; Armstrong Petroleum

Corp. v. Tri-Valley Oil & Gas Co" 116 CaI.App.4th, 11 Cal.Rptr.3d 412 Cal. App. 5 Dist., 2004,
citing 8 Wiliams & Meyers, Oil & Gas Law (2003).Manual of

Oil & Gas Terms, p. 952. An

overriding royalty is an interest in the gross'pr9.dution ofoH and gas under a lease, in addition to

the usual royalties paid to the lessor, free of any expenses.

10. A debtor's possessory interest in an account that holds oil and gas sales
proceeds that are subject to a royalty interest is propert of the estate, cours recognize the

royalty holder's equitable interest in the fuds. MCZ, fIne. v. Andrus Resources, Inc. (In re MCZ,

Inc.), 82 B.R. 40, 42 (Ban. S.D. Tex. 1987)'"MCZ1s possessory interest in the Cullen Account
fuds is property of the estate subject to the Cour's :power to recognze the equitable interest of
the third-pary royalty owners for whose benefit the fuds were escrowed.") (citations omitted).
Cf Johnson v. Barnhil (In re Antweil), 154'B.R.' 982; 986-87 (Ban. D.N.M. 1993) (granting
.~ ! .i : . ~ ,.. :.:. i

DOCS_DE:

14561 I.

8. The Debtors request that the Court enter an order authorizing them in their

discretion, to deliver, in the ordinar course of bus)i~ess, the fuds owed to Royalty Interest
Owners and ORR Owners as required by the~~ase.sand:related operating agreements as the
Royalties and overrding royalties are not property of these estates and non-payment of

Royalties

and overriding royalties could jeopardize the oil and gas leases. Payments to the Royalty Interest
Owners and ORR Owners are in arears and should be paid promptly.

Basis For ReIief

9. Landowner's royalty interests and overriding royalty interests are property
interests in oil and gas leases. 30 USCA section 1734(14); AS 43.55.900; Armstrong Petroleum

Corp. v. Tri-Valley Oil & Gas Co" 116 Cal.AppAth, 11 Cal.Rptr.3d 412 CaL. App. 5 Dist., 2004,
citing 8 Wiliams & Meyers, Oil & Gas Law (2003).Manual of

Oil & Gas Terms, p. 952. An

overriding royalty is an interest in the grss'pr~dutin of'H and gas under a lease, in addition to

the usual royalties paid to the lessor, free of any expenses.

10. A debtor's possessory interest in an account that holds oil and gas sales
proceeds that are subject to a royalty interest is propert of the estate, cours recognize the
royalty holder's equitable interest in the fuds. MCZ, /Inc. v. Andrus Resources, Inc. (In re MCZ,

Inc.), 82 B.R. 40, 42 (Ban. S.D. Tex. 1987H"MCZ~s possessory interest in the Cullen Account fuds is property of the estate subject to the Cour's :power to recognze the equitable interest of
the third-pary royalty owners for whose benefit the fuds were escrowed.") (citations omitted).

Cf Johnson v. Barnhil (In re Antweil), 154 B.R: 982; 986-87 (Ban. D.N.M. 1993) (granting
.~! ' .1;'! i. L:' i

DOCS_DE:

14561 1.

summar judgment to trstee on preferential transfer

complaint where oil and gas sales proceeds

had been held in commingled account). . . , .

.' .

:1

11. As evidenced by their budget fied in these cases the Debtors expect to pay
futue Royalty and ORR payments in the ordinar course of

business.

12. The Debtors submit that the requested relief seeks authority to conduct its

business in a maner already within the ordinar course of business and does not affect propert
of

the estates. Because the Debtors anticipat~ distrib~ting payments to Royalty and ORR

..

Owners on a monthly basis and because the inittal payments may relate to past due amounts or

time periods that "straddle" the Petition Date, the Debtors seek to have the Cour address the
propriety of paying those amount at this time;

all in ai. abundance of caution.

,
. , . .

Remainder of Page Intentionally Left Blank)

,I. '.

':: i .

DOCS_DE: 145611.

,summar judgment to trstee on preferential transfer

complaint where oil and gas sales proceeds

. --

had been held in commingled account). _ - , :!

11. As evidenced by their budget fied in these cases the Debtors expect to pay
futue Royalty and ORR payments in the ordinar course of

business.

12. The Debtors submit that the requested relief

seeks authority to conduct its

business in a maner already within the ordinar course of business and does not affect propert
of

the estates. Because the Debtors anticipat~ distrib~ting payments to Royalty and ORR

Owners on a monthly basis and because the initial payments may relate to past due amounts or

time periods that "straddle" the Petition Date, the Debtors seek to have the Cour address the
propriety of paying those amount at this time;

all in aa abundance of caution.

- , -

Remainder of

Page Intentionally Left Blank)

': i .

.,

DOCS_DE:145611.

WHEREFORE, the Debtors respectfuly request that the Cour enter an order
granting the Debtors authority, in their discretion, to deliver to the Royalty Owners and the

ORR Owners the prepetition amounts due theinfor ,their-espective Royalty and ORR and to
honor postpetition obligations to Royalty Owners and ORRI Owners, and for such other and

fuher relief as is just and proper.

Dated: March~, 2009

P ACHULSKI STANG ZIEHL & JONES LLP

aura Davis . nes. (DE: Bar o. 2436) Ira D. Kh asch (CA Bar No. 109084) Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) Robert M. Sandets eCA Bar No. 226172)
James E. O'Neil (DE Bar No. 4042)

Kathleen P.' Makowski (DE Bar No. 3648)

919 North M.ket Street, 17th Floor

P.O. Box 8705;;' .'. Wilmington, DE i 9899-8705

Telephone: 302/652,.4100

Facsimile: 310/652-4400

Email: ljones~pszjlaw.com
ikharaschpszj law.

com

smcfarland~pszj law.com

rsaunders~pszjlaw.com joneilps'zjlaw.com kmakowsk.i~pszjlaw.com

(Proposed) Counel for Debtor and Debtor in Possession
Pac.ific Energy ~es,urces Ltd.

.. I. .
';
.. :.

" .l',

(" !.'
14561 1.3

DOCS_DE:

WHEREFORE, the Debtors respectfully request that the Cour enter an order

granting the Debtors authority, in their discretion, to deliver to the Royalty Owners and the

ORR Owners the prepetition amounts due theinfor ,their-espective Royalty and ORR and to
honor postpetition obligations to Royalty Owners and ORRI Owners, and for such other and

fuher relief as is just and proper.

Dated: March -=, 2009

P ACHULSKI STANG ZIEHL & JONES LLP

aura Davis . nes. (DE: Bar o. 2436) Ira D. Kh asch (CA Bar No. 109084) Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) Robert M. Saunders (CA Bar No. 226172)
James E. O'Neil (DE Bar No. 4042)

Kathleen P.' Makowski (DE Bar No. 3648) 919 North Mrket Street, 1 ih Floor P.O. Box 87u5'; " .i'. Wilmington, DE 19899-8705 Telephone: 302/652..100
Facsimile: 310/652-4400

Email: Ijones(fpszjlaw.com
ikharaschpszj law.

com

smcfarland(fpszj law.com

rsaunders(fpszjlaw.com jonei1(fpsijlaw.com
kmakowsk.i(fpszj law.

com

(Proposed) Counel for Debtor and Debtor in Possession

Pac.ific Ei;ergy aeso,urces Ltd.
. I

., I. .
.

i' ",

(, I.'
OOCS_DE:14561

1.

In re: )
Upon consideration of

IN THE UNTED STATES BANUPTCY COURT FOR THE DISTRICT OF DELAWAR

Chapter 11

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

Case No. 09- 10785 L(J ointly Administered)

Debtors. ))

ORDER GRATING DEBTORS' EMERGENCY MOTION FOR AUTHORITY TO PAY OR HONOR PREPETITION AND POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS
the debtors and debtors-In-

the motion (the "Motion"Y of

possession (the "Debtors") for Authority to Payor Honor Pre-Petition Obligations to Royalty
Interests; and upon the Affdavit of Gerald A. Tywoniuk, Chief Financial Officer of

Pacific
the

Energy Resources, Ltd., In Support of

First Day Motions (the "Affdavit"); and notice of

Motion having been sufficient and appropriate under the circumstances; and it appearg that the

relief requested in the Motion is essential to the ongoing operations of the Debtors, is in the best

interests ofthe Debtors, their estates, creditors and other paries in interest, and may be
authorized pursuant to Section 105(a) of

the Banptcy Code; and after due deliberation and

sufficient cause appearng therefor, it is hereby

ORDERED that the Motion is granted; and it is fuher

ORDERED that the Debtors are authorized, in their discretion, to deliver to the

Royalty Owners and the ORR Owners the prepetition amounts due them for their respective
i The Debtors in these cases, along with the last four digits of each of the Debtor's federal tax identification

number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacifc Energy Alaska Holdings, LLC (tax J.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 the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. mailing address for all of
2 Capitalized term shall have the meanig ascribed to them in the Motion.

DOCS_DE:145611.

) PACIFIC ENERGY RESOURCES LTD., et at,! ) )

In re: )
Upon consideration of

IN THE UNTED STATES BANUPTCY COURT FOR THE DISTRICT OF DELAWAR

Chapter 11

Case No. 09- 10785 L(Jointly Administered)

Debtors. )

ORDER GRATING DEBTORS' EMERGENCY MOTION FOR AUTHORITY TO PAY OR HONOR PREPETITION AND
POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS
the debtors and debtors-in-

the motion (the "Motion"Y of

possession (the "Debtors") for Authority to Payor Honor Pre-Petition Obligations to Royalty
Interests; and upon the Affidavit of Gerald A. Tywoniuk, Chief Financial Officer of

Pacific
the

Energy Resources, Ltd., In Support of

First Day Motions (the "Affdavit"); and notice of

Motion having been sufficient and appropriate under the circumstances; and it appearg that the

relief requested in the Motion is essential to the ongoing operations of the Debtors, is in the best
interests ofthe Debtors, their estates, creditors and other pares in interest, and may be
authorized pursuant to Section 105(a) of

the Banptcy Code; and after due deliberation and

suffcient cause appearng therefor, it is hereby

ORDERED that the Motion is granted; and it is fuher
ORDERED that the Debtors are authorized, in their discretion, to deliver to the

Royalty Owners and the ORR Owners the prepetition amounts due them for their respective
the Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacifc Energy Alaska Holdings, LLC (tax J.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 the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802. mailing address for all of
i The Debtors in these cases, along with the last four digits of each of

2 Capitalized term shall have the meanig ascribed to them in the Motion.

DOCS_DE:145611.

i f.

Royalty and ORR and to honor postpetition obligations'to Royalty Owners and ORR Owners;

and it is fuer
ORDERED that the Debtors are authorized and empowered to take such actions
as may be reasonably necessar to implement and effectuate this Order.

Dated:

,2009

"

United States Banptcy Judge

.1.'

,~ . '

DOCS_DE:

14561

1.

i t'.

Royalty and ORR and to honor postpetition obligations'to Royalty Owners and ORR Owners;

and it is fuher
ORDERED that the Debtors are authorized and empowered to take such actions
as may be reasonably necessar to implement and effectuate this Order.

Dated:

,2009

"

United States Banptcy Judge

,~ . .

DOCS_DE:

14561 1.

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELA WARE

In re:

PACIFIC ENERGY RESOURCES LTD., et al., 1

Debtors.

) ) ) ) )

Chapter 11

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

CERTIFICATE OF SERVICE
I, James E. O'Neil, Esquire, hereby certify that on the 16th day of

March 2009, I

caused a copy of the following document to be served on the individuals on the attached service
list in the maner indicated:

NOTICE OF DEBTOR'S EMERGENCY MOTION FOR AUTHORITY TO PAY OR HONOR PREPETITION AND POSTPETITION OBLIGATIONS TO ROYALTY INTERESTS;

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

the Debtors' federal tax identification

number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska

Holdings, LLC (tax I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The
mailng address for all of

the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

68773-001 \DOCS_DE: 146094.1

Pacific Energy Royalty Service List Case No. 09-10785 (KJC)

Doc. No. 146093

First Class Mail

State of Alaska (3)

09 - First Class Mail

Natural Resources Division of Oil and Gas 550 West 7th Ave., Suite 800 Anchorage, AK 99501
Alaska Deparment of

First Class Mail

MTGLQ Investors, L.P. 85 Broad Street New York, New York 10004

First Class Mail

Natural Resources Division of Oil and Gas 550 West 7th Ave., Suite 1410 Anchorage, AK 99501
Alaska Deparment of

First Class Mail

Goldman Sachs E&P Capital 1000 Louisiana, Suite 550 Houston, Texas 77002 Attn: John K. Howie

First Class Mail Alaska Tax Division

550 W 7th Ave Suite 500 Anchorage, AK 99501-3555

First Class Mail

SPCP Group, L.L.C. and SPCP Group III LLC
Two Greenwich Plaza, 1 st Floor

First Class Mail

Linda Lautigar Banuptcy Coordinator MMS / Denver Federal Center

Greenwich, CT 06830

First Class Mail Skadden, Ars, Slate, Meagher & Flom LLP
333 West Wacker Drive Suite 2100 Chicago, IL 60606 Attention: Seth E. Jacobson L. Byron Vance III

POBox 25165
Mail Stop 370B2 Denver, CO 80225

First Class Mail

Kristina Engelbert RDI Royalty Distributors, Inc. P. O. Box 24116 Tempe, AZ 85285

68773-002\DOCS _DE: 146093.1

Pacific Energy Resources Ltd. 2002 Service List (with top 35)
Case No. 09-10785
Document No. 145745

06 - Hand Delivery 54 - First Class Mail

04 - 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 the Debtors and Debtors in Possession) Ian S. Fredericks, Esquire Skadden Arps, Slate, Meagher & Flom LLP One Rodney Square P.O. Box 636 Wilmington, DE 19899 Hand Delivery (Counsel for J. Aron & Company) Don A. Beskrone, Esquire Amanda M. Winfree, Esquire Ashby & Geddes, P .A.
500 Delaware Avenue, 8th Floor

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

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

Wilmington, DE 19899
Hand Delivery (Counsel for Union Oil Company of California, a California Corporation) Norman M. Monhait, Esquire Rosenthal, Monhait & Goddess, P A Citzens Ban Center, Suite 1401 919 Market Street, P.O. Box 1070 Wilmington, DE 19899

Los Angeles, CA 90067

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

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

First Class Mail

(United States Attorney General) Eric H. Holder, Jr. Office of the Attorney General U.S. Department of Justice 950 Pennsylvania Avenue, N.W. Washington, DC 20530-0001

Vito 1. DiMaio 230 N. Market Street

Wilmington, DE 19801

First Class Mail

Secretary of State Division of Corporations Franchise Tax P.O. Box 7040 Dover, DE 19903

First Class Mail

Michael A. Berman, Esq. Securities & Exchange Commission
Offce of

General Counsel-Banptcy

100 F Street, N.E. Washington, DC 20549

First Class Mail

Secretary of Treasury P.O. Box 7040 Dover, DE 19903

First Class Mail

Matthew Berry, Esquire
Offce of General Counsel

Federal Communications Commission

445 ith Street, S.W.

First Class Mail

Secretary of Treasury 15th & Pennsylvania Avenue, N.W. Washington, DC 20220

Washington, DC 20554

First Class Mail

Office of the General Counsel Pension Benefit Guaranty Corp 1200 K. Street, N.W. Washington, DC 20005-4026

First Class Mail

Attn: Insolvency

District Director Internal Revenue Service 31 Hopkins Plaza, Room 1150 Baltimore, MD 21201

First Class Mail

(Top 35 Creditor)

Forest Oil Corporation

707 1 ih St., Ste. 3600

First Class Mail

Internal Revenue Service P.O. Box 21126 Philadelphia, PA 19114-0326

Denver, CO 80202

First Class Mail

(Top 35 Creditor)

First Class Mail

Attn: Insolvency Internal Revenue Service 1352 Marows Road, 2nd Floor
Newark, DE 19711-5445

Marathon Oil Company 14194 Collection Ctr. Dr Chicago, IL 60693

First Class Mail

(Top 35 Creditor)

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

Occidental Petroleum Barbara Zimmerman 111 West Ocean Blvd., Suite 800 Long Beach, CA 90802

First Class Mail

(Top 35 Creditor) Energy Capital Solutions

2651 N. Starood

Ste.410
Dallas, TX 75201

First Class Mail

(Top 35 Creditor)

First Class Mail

(Top 35 Creditor)

Digitel Data Joint 1 0811 Westview Cir Dr

Suite 100 Bldg C

Houston, TX 77043-2739

Whale Building, LLC 4000 W. Diamond Blvd. Suite 240 Anchorage, AK 99502

First Class Mail

(Top 35 Creditor) AFCO Robert J. Ratner, Esquire 110 Willam Street, 29th Floor New York, NY 10038-3901

First Class Mail

(Top 35 Creditor)

John Guzman Crane 24824 Seagrove Ave. Wilmington, CA 90744

First Class Mail First Class Mail

(Top 35 Creditor)

(Top 35 Creditor)

General Petroleum P.O. Box 31001-1235 Pasadena, CA 91110-1235

South Coast Air Quality 21865 Copley Drive Diamond Bar, CA 91765

First Class Mail First Class Mail

(Top 3 5 Creditor) A & E Welding 14011 Anderson St. Paramount, CA 90723

(Top 3 5 Creditor)
National Oilwell

10330 Old Seward Hwy Anchorage, AK 99515

First Class Mail First Class Mail

(Top 35 Creditor) Universal Sodexho P.O. Box 843753 Dallas, TX 75284-3753
(Top 35 Creditor) Sulzer Pumps (US) Inc.

P.O. Box 404609 Atlanta, GA 30384-4609

First Class Mail

Blue Shield of California Sherrie Russo P.O. Box 629014 El Dorado Hils, CA 95762-9014

First Class Mail

(Top 35 Creditor)

Cameron Surface Systems 10330 Old Seward Hwy Anchorage, AK 99515

First Class Mail

(Top 35 Creditor) Wilson P.O. Box 200822 Dallas, TX 75320-0822

First Class Mail

(Top 35 Creditor)

Landmark Square Co. LLC

Attn: Paula Culp

P.O. Box 56798 Los Angeles, CA 90074-6798

First Class Mail

(Top 35 Creditor)

First Class Mail

(Top 35 Creditor)

ESS Support Services 201 Post Road Anchorage, AK 99501

Marine Preservation 8777 N Gainey Ctr Dr Scottsdale, AZ 85258

First Class Mail

(Top 35 Creditor)
Beecher Carlson

First Class Mail

(Top 35 Creditor)

Attn: Adam Meyerowitz 2002 Summit Blvd, Suite 900 Atlanta, GA 30319

Coffman Engineers 800 F Street Anchorage, AK 99501

First Class Mail First Class Mail

(Top 35 Creditor)

The O'brien's Group Inc P.O. Box 8500 Philadelphia, P A 19178-2591

(Top 35 Creditor) Prudential P.O. Box 856138 Louisvile, KY 40285

First Class Mail First Class Mail

(Top 3 5 Creditor) Cook Inlet Region Inc. P.O. Box 93330

(Top 35 Creditor) Udelhoven Oilfield System

184 E. 53RD Avenue

Anchorage, AK 99518

Anchorage, AK 99509-3330

First Class Mail

First Class Mail

(Top 35 Creditor) The Industrial Company P.O. Box 17544 Denver, CO 80217-0544

(Top 35 Creditor)

Bakersfield Pipe & Supply 2530 Palm Drive Signal Hil, CA 90755

First Class Mail First Class Mail

(Top 35 Creditor)

(Top 35 Creditor) PETROS

3075 Walnut Ave.

XTO Energy 810 Houston Street Fort Worth, TX 76102-6298

Long Beach, CA 90807

First Class Mail First Class Mail

(Top 35 Creditor)

R&T Pacific Associates P.O. Box 90155 Long Beach, CA 90809-0155

(Top 3 5 Creditor) B.O.P. Products, LLC 9118 Sweetbrush Drive Houston, TX 77064-1415

First Class Mail

(Top 35 Creditor)

First Class Mail

(Counsel to Goldman Sachs and J.Aron & Company) Jeffrey Sabin, Esquire Steven Wilamowsky, Esquire Scott K. Seamon, Esquire Bingham McCutchen LLP
399 Park Avenue

CISPRI P.O. BOX 7314 NIKISKI, AK 99635

First Class Mail

POLLARD WIRELINE P.O. Box 1360 Kenai, AK 99611

New York, NY 10022

First Class Mail

Chevron Oil Company
Attn: Steven Lastraps

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

California Franchise Tax Board
Banptcy, BE MSA 345

P.O. Box 2952 Sacramento, CA 95812-2952

First Class Mail

(Counsel for Union Oil Company of California, a California Corporation) Cabot Christianson, Esquire Christianson & Spraker
911 West 8th Avenue, Suite 201

First Class Mail

Aera Energy LLC 10000 Ming Avenue Bakersfield, CA 93311-1164

Anchorage, AK 99501

First Class Mail

SWEPI LP

FOREIGN First Class Mail

(Top 35 Creditor) TSX INC. P.O. Box 421
Toronto, Ontario

P.O. Box 576 Houston, TX 77001-0576

First Class Mail

Noble Energy, Inc.

M5X 112 Canada

100 Glenborough, Suite 100 Houston, TX 77067

FOREIGN First Class Mail

(Top 35 Creditor) Bateman & Co. P.O. BOX 792
Cayman Islands, KY-1301

First Class Mail

(Counsel to Silver Point Finance) Seth Jacobs, Esquire

Ana Meresidis, Esquire

Skadden, Ars, Slate, Meagher & Flom, LLP

333 West Wacker Drive Chicago, IL 60606-1285

FOREIGN First Class Mail

TSX Kerry D. Krochak, B.A., LL.B. Manager, Listed Issuer Services Toronto Stock Exchange 300 Fifth Avenue SA, 10th Floor Calgary, AB T2P 3C4

FOREIGN First Class Mail

(Transfer Agents)
Bernadette Vilarica

Relationship Manager, Client Services

Computershare Investor Services Inc. 510 Burrard Street, 3rd Floor

Vancouver, BC V6C 3B9