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In re: )
)
)
Debtors. )
NOTICE OF FILING OF EXECUTION VERSION OF AMENDMENT NO.3 TO SENIOR SECURED SUPER PRIORITY PRIMING DEBTOR IN POSSESSION CREDIT AND GUARNTY AGREEMENT REGARING MOTION OF THE DEBTORS TO APPROVE INTERIM AND FINAL ORDERS PURSUANT TO 11 U.S.C. SECTIONS 105,
361,362,363,364,365 AND 507: (1) APPROVING SENIOR SECURED
SUPERPRIORITY POSTPETITION FINANCING; (2) AUTHORIZING USE OF CASH COLLATERA; (3) GRATING LIENS AND PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS; (4) GRATING ADEQUATE PROTECTION; (5) MODIFYING AUTOMATIC STAY~ AND (6) SCHEDULING A FINAL HEARNG
On March 9,2009, the above-captioned debtors and debtors in possession
(collectively, the "Debtors"), filed the Motion of the Debtors to Approve Interim and Final
Orders Pursuant to 11 Us.e. Sections 105, 361, 362, 363, 364, 365 and 507: (1) Approving
Senior Secured Super
(4) Granting Adequate Protection; (5) Modifing Automatic Stay; and (6) Scheduling a Final
Hearing (Docket No. 18) (the "DIP Motion") and Exhibits to the Motion (Docket No. 19) with
the United States Banptcy Court for the District of
Delaware 19801. On June 4,2009 the Cour entered the Final Order (1) Approving Senior
Secured Super priority Post petition Financing;(2) Authorizing Use of
Cash Collateral;
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 I.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Cameros
Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of
Adequate Protection; and (5) Modifing Automatic Stay Docket No. 415) (the "Final DIP
Order").
Attached is Amendment No.3 to Senior Secured Super Priority Priming Debtor in
Possession Credit and Guaranty Agreement regarding the DIP Motion.
Dated: August 7, 2009
Email: ljones(qpszjlaw.com
kmakowski(qpszjlaw.com
Counsel for Debtor and Debtor in Possession Pacific Energy Resources Ltd.
68773-001 \DOCS_DE:
151 758.1
EXECUTION VERSION
This WAIVER AND AMENDMENT NO. 3 TO SENIOR SECURED SUPER PRIORITY PRIMING DEBTOR IN POSSESSION CREDIT AND GUARANTY
AGREEMENT (this "Amendment"), effective as of July 17, 2009 (the "Effective Date"), by and among PACIFIC ENERGY RESOURCES LTD. (the "Companv"), PACIFIC ENERGY
ALASKA HOLDINGS, LLC ("PEAH"), PACIFIC ENERGY ALASKA OPERATING LLC ("PEAO" and, together with the Company and PEAH, the "Borrowers"), certain
Subsidiares
of the Company, as Guarantors (the "Guarantors" and together with the Borrowers,
the "Credit Parties"), the financial institutions party hereto as Lenders under the Credit
Agreement (as hereinafter defined) (collectively, the "Lenders"), J. ARON & COMPANY, as administrative agent for the Lenders (in its capacity as administrative agent, the "Administrative Agent"), and J. ARON & COMPANY and SILVER POINT FINANCE, LLC, as collateral agents for the Lenders (in their capacity as collateral agents, the "Collateral Agents"), amends certain provisions of that certain Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement dated as of March 11,2009 (as amended and in effect from time
to time, the "Credit Agreement") by and among the Credit Parties, the Lenders, the
Administrative Agent, the Collateral Agents and certain other parties thereto from time to time.
A. WHEREAS, the Company and the Lenders desire to amend certain provisions of
the Credit Agreement and waive certain Events of Default that have occurred under the Credit Agreement as provided more fully herein below.
B. Capitalized terms used but not defined herein shall have the meanings assigned to
Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the suffciency and receipt of which are hereby acknowledged, the
parties hereto agree as follows:
the Credit Agreement is hereby amended by inserting the following (a) Section 1.1 of new definition in appropriate alphabetical order:
"Third Amendment" means that certain Amendment NO.3 to Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement effective as of
July 17, 2009, by and among the Credit Parties, the Lenders, the Administrative Agent,
"Second Amendment" at the end of the first sentence contained therein with the text "Third
Amendment".
(c) Section 2.16(a)(iii) of the Credit Agreement is hereby amended by, in the last sentence contained therein, (i) immediately after the text "Notwithstanding the foregoing,"
inserting the text "(A)" and (ii) inserting before the period at the end of such sentence the
following text: ", and (B) all good faith deposits made by bidders in connection with the
purchase and sale of the PERL Assets or any of the Alaska Properties shall, until otherwise
A/73098005.3
ordered by the Bankptcy Court, be deposited into and remain in the trust account of Pachulski Stang Ziehl & Jones LLP, Borrowers' bankptcy counseL."
(d) Section 6.13 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
6.13 Budget. The Borrowers wil not allow (x) the payment of any expenses or disbursements other than those set forth in the Budget; provided that the sum of (A) the actual weekly expenses and disbursements for any calendar-week period
plus (B) any budgeted amounts from the immediately preceding calendar week
not spent during such week, may exceed the expenses and disbursements
budgeted for such calendar-week period set forth in the Budget as line item "Total
such Measurement Period as set forth in the Budget as line item "Rolling
Cumulative Net Operating Cash Flow" solely as a result of a delay in PERL's or PEAO's receipt of lift payments during such Measurement Period, the actual net cash flow shall be recalculated as of the next succeeding week and, so long as the
actual cumulative net cash flow for the next such Measurement Period (as
determined for such next succeeding week) is not less than eighty-five percent
(85%) of the net cash flow budgeted for such Measurement Period (or greater than one hundred fifteen percent (115%) if negative), the Borrowers shall be deemed to be in compliance with this clause (y) with respect to the immediately
preceding week; and, provided further that, in the event the actual cumulative net cash flow for any Measurement Period set forth in the Budget is less than eightyfive percent (85%) of the net cash flow for such Measurement Period as set forth in the Budget as line item "Rolling Cumulative Net Operating Cash Flow" solely as a result of the earlier than forecast receipt of PERL's or PEAO's lift payments prior to such Measurement Period, the actual net cash flow shall be recalculated
as if the lift payment occurred when forecast and, so long as the recalculated
actual cumulative net cash flow is not less than eighty-five percent (85%) of the
net cash flow budgeted for such Measurement Period (or greater than one hundred
-2A/73098005.3
the above test, "Measurement Period" shall mean (a) for the weeks ended March 13, 2009, March 20, 2009 and March 27, 2009, the applicable week then ended
(provided that the tests set forth above shall be subject to a twenty-five percent
(25%), and not a fifteen percent (15%), variance) and (b) for the week ended
April 3, 2009 and each week thereafter, the period of four weeks then ended.
(e) Section 5 is hereby amended by inserting immediately after Section 5.37
clause (vii) contained therein the date "July 24, 2009" and substituting in lieu thereof the date "August 7, 2009" and (ii) deleting in clause (ix) contained therein the date "August 4,2009" and
substituting in lieu thereof
(g) Schedules 4.19, 4.20 and 4.23 to the Credit Agreement are hereby amended by
deleting each such Schedule in its entirety and substituting in lieu thereof Schedules 4.19, 4.20
and 4.23, respectively, attached hereto as Exhibit B.
SECTION 2. WAIVER. Subject to the terms and conditions of this Amendment, the
Administrative Agent, the Collateral Agents and the Lenders hereby expressly waive any Events of Default that may have occurred under Section 8.1 (d) of the Credit Agreement resulting from
the Borrowers' failure to comply with the following provisions of
(a) Section 6.
13 (y), solely with respect to the Borrowers' failure to comply with the cumulative net cash flow requirement with respect to the Measurement Period ending July 17,2009; and
(b) Section 5.4(b), solely with respect to the Borrowers' failure to notify each Lender
of the occurrence of any Default or Event of
This Amendment shall not constitute a waiver of the occurrence or the continuance of any other Event of Default other than the Events of Default expressly described in clauses (a)
and (b) above.
SECTION 3. REPRESENTATIONS AND WARRNTIES. TO INUCE THE OTHER PARTIES HERETO TO ENTER INTO THIS AMENDMENT, THE CREDIT PARTIES
A/73098005.3
-3-
(a) This Amendment has been duly authorized, executed and delivered by the Credit Parties and this Amendment and the Credit Agreement constitute each Credit Part's legal,
valid and binding obligation, enforceable against it in accordance with its terms except as such
enforceability may be limited by bankptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(b) The execution and delivery by each Credit Part of this Amendment and the
performance by the various Credit Parties of their obligations under the Transaction Documents
to which each is a part, and the consummation of the transactions contemplated by the various
Transaction Documents, do not and wil not (a) conflict with any provision of (i) any Law, (ii) the Organizational Documents of any Credit Part, or (iii) any agreement, judgment, license,
order or permit applicable to or binding upon any Credit Part, (b) result in the acceleration of
any Indebtedness owed by any Credit Part, or (c) result in or require the creation of any Lien upon any assets or properties of any Credit Part except, in each case as expressly contemplated
in the Transaction Documents and, except in the case of clauses (a)(iii), (b) and (c) of this Section 2(b), such conflicts, results or requirements as arise in connection with the filing,
prosecution and resolution of the Case. Except as expressly contemplated in the Transaction
Documents no consent, approval, authorization or order of, and no notice to or filing with, any Governental Authority or third part is required in connection with the execution, delivery or
performance by any Credit Part of any Transaction Document or to consummate any
after giving effect to this Amendment, true and correct in all material respects on and as of the Effective Date, except where such representations and warranties expressly relate to an earlier date (in which case they were true and correct in all material respects as of such earlier date).
(d) No Default or Event of Default under the Credit Agreement and other
Transaction Documents has occurred and is continuing, other than the Defaults or Events of
Default described in Section 2 above.
( e) The Liens under the Security Documents are valid and subsisting and secure the
Company's and the Guarantors' obligations under the Credit Agreement and the other
Transaction Documents.
delivered by (i) a duly authorized officer ofthe Credit Parties and (ii) the Required Lenders.
(b) The Administrative Agent shall have received a revised Budget in form and
A/73098005.3
-4-
Transaction Documents shall have occurred and be continuing as of the Effective Date, other than the Defaults or Events of Default described in Section 2 above. The representations and warranties in this Amendment, in the Credit Agreement and in the other Transaction Documents shall be true and correct in all material respects, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on and as of such earlier date.
SECTION 5. EFFECT
ACKNOWLEDGEMENTS.
ON
TRANSACTION
DOCUMENTS;
(a) The Lenders and Administrative Agent hereby expressly reserve all of their
respective rights, remedies, and claims under the Credit Agreement and the other Transaction
Documents. Nothing in this Amendment shall constitute a waiver or relinquishment of the rights
of each of the Lenders and the Administrative Agent to collect the full amounts owing to it
under the Credit Agreement and the other Transaction Documents.
(b) The Credit Parties, the Lenders and Administrative Agent, hereby adopt, ratify,
and confirm the Credit Agreement, and each of the foregoing parties acknowledge and agree that the Credit Agreement and the other Transaction Documents are and remain in full force and effect, and each of the Credit Parties acknowledges and agrees that neither its liabilities under the Credit Agreement and the other Transaction Documents nor the validity, perfection, or priority of any lien or security interest securng the Obligations are impaired in any respect by
this Amendment.
I i "-
ANY NUBER OF COUNTERPARTS AND BY DIFFERENT PARTIES HERETO IN SEP ARA TE COUNTERP ARTS, EACH OF WHICH WHEN SO EXECUTED AND
DELIVERED SHALL BE DEEMED AN ORIGINAL, BUT ALL SUCH COUNTERPARTS
SECTION 7. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN THE NEW YORK GENERAL OBLIGATIONS LAW 5-l401 AND 5-1402) AND ANY APPLICABLE LAWS OF THE UNTED STATES OF AMERICA (INCLUDING THE BANKUPTCY CODE).
SECTION 8. HEADINGS. THE HEADINGS OF THIS AMENDMENT ARE FOR PURPOSES OF REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE AFFECT THE MEANIG HEREOF.
Remainder of page intentionally left blank.)
A/73098005.3
-5-
IN WITNESS \\iBEREOF. the parties hereto have caused this Amendment to be duly executed by their respective officers on or about August 5, 2009, to be eflectivc as of the
Efectivc Date.
/-1;l
't '
as a Borrower /- I
/!
By:
Nanc:
ltle: CFO li
SAN PEDRO BAY PIPELINE COMP ANY.
Title: CF0
CARNEROS ACQUISITION CORP.,
as a Guarantor
as a Guaraiy.r
Bv: t/ 0
Title: ~FO
I
/ r1 /1
. /~ ,By:/7~//~ . .
Title: /CFO
",/ ~ 7
- N e: Glrald Tywoniuk
/~ :/
A/73098005
-p~
An309800S.
Name: Title:
By: ~(~//
Name: zac~~zJ~
Title: Authorized Signatory
By:
Name: Title:
BY:Nam~'1'i'
Title: onze. ignatory
Name: Title:
ch .. _ M. Zeitln
Au orized Signatory
Name: Title:
~ M. Zeitln
Authorized Signatory
A173098005
Exhibit A
(attach Budget)
A/73098005.3
Pacific Encrg)' ReSflurces Ltd. Weckl)' DIP Forecast ((.,1,' S's iii/hol/soiids)
Revised Budget
il
JL
3/27
:!
:U :U
.5
51n
S/29 27,193 27.145 27,098 27.050 5.005 $ 415 404 640 403 634 403 2.723 635 27,291 27.242
:i
il
~
il
Barrels produced 22.050 24.11 I 24.069 25.427 25.3&2 26,563 27,390 27.340 204Ul
Re\'enue receipts
4,509
479 290 335 408 656 30
392 144
1.'4
1.47
Royalty payments LOE SG&A / pcrfonnancc uond Criticnl vendor payments Opernlng outflows
iw
642 479 190 43N 656 415 3,358 404 640 1,588 2,024 (479) (290) 3.853 (415) (3,358) (404) 4,365
l1 3n4
Jc
6H
t,550
(1.550)
293 (634) 21)3 (927)
2Q
0(5)
'"7
247 134 134 127
("")
(1.588)
25 134
,"7
D4
Total ('ush Flow (1.169) 10497 (916) (551) (626) (699) 3.592 (676) (52:-) 4.241
~
J.
12
0.482)
D4 127
25
.. ..
--(1.12)
2.483 2.800 2,797 271) 2,624 25 25
..,mfti1'
3,850 3.84(, 3.843 3.109 2.275 2.449 2.099 1.573 2.485 611
-- --
(Ul43)
Bilrrels produced
Re\"cnuc receipis
2.622 36
1.032 $
B3
199 173 1611 231 74 105 227 155 40
185 257 79 27
14' 19
5'
Royalty paymenis LOE SG&A / per/annance uond Unined Con\lland Critical \'endor payments Operating OlitfOWS
iso
593 305 331 225 207 407 220 416 (137) 20 (120) 20 (407) 69 (297) (1) (207) 69 (332) 22 (593) 355 150 255
111 24(j 50
4'
7J 11
"
60 44
160
4'
104
76 60 11
.i
i9
40 208 (20S) 16
..
(05)
,o7
146 (I(ll)) 19
Corpor.tc SG&A & Othcr Contingency Capex: Profcssional Fees Monthly Interest Puyment
3.029 1.032 1.077
lJ
1.06
271) 169 25 567 561 25 .120
26g 25 2M
47 25
12
S.005 .6
~ ~
4.509
..
L.
(1.234) (1,978) (1.978) (46) (2.024) (131) (692) (2.716) (3,047) 3.386 670 1,415 310 (286) (25) (308) (25) (355) (490) (69) 4,453) (1,545) (4,384) (355) (27) (475) 2,5311 (3.4611,
!d
(1,206) (535) 1.443
(355) (30)
Net Oper.iing ('ash Flow Cuiiulative Net Operatiug Cash Flow Rolling Cuiiulative Nel Operating Cash Flow
(1.893) (1,893) (1,"93)
2.224 331 2,224
~
(3,&46) (4.381) (2,357) 307 (169) (25)
~ ~ !:
(588) (4.969) (2,253) 3.988 (981) (1.651)
(1.09)
0.874)
50X 304 (169) (1.506) (165) (567) (562)
Swap Settlcments - Beta (552) (30) (552) (127) (462) (30) (343) (1,910) (2,8'l0) 1,545 (930)
..
(\65) (J20)
(.1.17) (266)
(D7)
()27)
(2,475) 2,475)
(1,536) 5,990)
IIwml'lllRT:l"tlri.
Net Cash
PERL Balance 1.90 (1.727) (1,213)840 805 7722,771 Flow (2.005) 500 775 1.940 (978) (1.261) 814
3,280
'"
(1,15)
1,600 (475) 2,7&0 (85) 817 (2,106) 2,300 (157)
782
(1.20)
1.50(1
Ending Balance --
(")
500
(12)
PEAO Balance Net ('asli Flo\\ PERL Funding Cash Sweep Ending Balance 250 (470) 720 500 355 855 (183) 183 SilO 855
500
Q 500
(24) 24
1,409
500 ("5) 85
("')
"
(12) 12
5011
SOil
son
5011
SOil
SUO
suo
:;011
Beta Earn Out Segregaled Funds AERA Restricted ClIsh COlltlilmtion Noble Restricted Cash Contribution Ending Balance
(6.300)
~
7.106
AK Segregatcd Fuiids Restrictcd Cash Contributions Ending Balance 3,010 (25) 455 1,510
~
)6
945 669 (64) (930)
3,790
2,233
(381
(394)
1,468
9,J1I9
i oD
7/27/200lJ
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100
Debtor Professionals
3,000
100 16 15
B Auditors
60 45
150
263
100
100
2.300
350
100 134 98 15
563 214
206
27 35 38 324 50 72 462
20 360 80 80 450
400 219
1,193
1,250
153
20
Pachulski Stang Ziehl & Jones LLP Rutan & Tucker LLP Schully, Roberts Zolfo Cooper Creditoi' Pi'ofessioiials Andrews Kurth LLP Bingham Birch, Hortoii, Bitter and Cherat
257 436
15 25 82 5 25 2 23 196
26 250 20 250
Reed Ferril
Skadden
256 232 336
27 98
Unsecured Professionals
Other
18
5 25 150 160
660 752
30
US Trustee
Contingency Fee
30
78
a1lIlUIlHlllJor.,..
-- -- -- ~ ~ ~ ~ ~ -- ~ -- -- ~ -- -- ~
50
18
6,900
Debtor Professionals
50 20 20 20
15 15
3,000
20
15 100 7 5 100 110
63
Albrecht DeGolyer and MacNaughton Devlin Jensen Hartig Rhodes JTB Auditors Lazard Meyers, Norris. Penney Millstream Energy LLC
6 15 75 100 15 75 100
Netherland Sewell
67 34
100
65
80 150 563
100 100 65
2,300
22
I,
15 16
67 28 22 57
65
20
234 335 50
20 20
350 450
100 100 124
398
124 109
20 316
450
100 100
400
100 100
2,400 635
22 253 62 89 308
444
116 120 41 I 6
450
20
65 I
400
20
400
7 133 33 33 133
2.547
250
5 25 82 171
1,250
78
20
Omni Management Pachulski Stang Ziehl & Jones LLP Rutan & Tucker LLP Schully, Roberts Zolfo Cooper Creditor Pl'ofessionals Andrews Kurth LLP Bingham Birch, Horton, Bittner and Cherot
257
186 5 22 82
250
5 25 150
250
5 25 150
20 250
5 25 150
Reed Ferril
Skadden
7 83 2 8
1,526 32
13 I
Unsecured Professionals
Other
18
5 I 196 170
222
200
50
200
200
200
860 1,200
10
10
10
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30f3
6,900
7/27/2009
Exhibit B
A/73098005.3
SCHEDULE 4.19 TO SENIOR SECURED SUPER PRIORITY DEBTOR IN POSSESSION CREDIT AND GUARNTY AGREEMENT
Title to Properties
With respect to Pacific Energy Alaska Operating LLC, no representation or warranty respecting good or defensible title can be made in connection with leases ADL-47567 and ADL47562.
With respect to exploration licenses, only exploration rights, and not any rights to produce or market oil and gas, have been granted thereunder. Only if and when one or more oil and gas leases have been issued will the holder(s) thereof have any rights to produce oil and gas.
Following failure to comply with DNR work obligation deadline requirements, Pacific Energy Alaska Operating LLC appealed its rights to the Corsair leases (oil and gas leases bearing
ADL Nos. 389923; 389507; 389514; 389513; 389197; 389196; 389198; and 389515) and to develop the Corsair Unit. On June 30, 2009, the Director of DNR's Division of Oil and Gas approved pending proposals to create a new unit containing such lease acreage and approved the application of Pacific Energy Alaska Operating LLC to assign 100% of Pacific Energy Alaska Operating LLC's working interests to Escopeta Oil Company, L.L.C.("Escopeta") in all eight Corsair prospect leases as follows: (i) for ADLs 389196, 389197, 389198 and 389515, subject to the payment of back rentals for ADL 389515; and (ii) ADLs 389507,389513, 389514 and
389923, subject to the payment of back rentals for all four leases. Payment of the back rentals for the five leases described was due within 30 days of the issuance of the decision (i.e., July 30,
2009). Assuming the back rentals were timely paid, it is possible that Pacific Energy Alaska
Operating LLC may obtain some future payment from the Corsair prospect pursuant to
assignments of its working interests in such leases pursuant to that certain letter agreement, dated February 11,2009, among Pacific Energy Resources Ltd., Pacific Energy Alaska Operating LLC and Escopeta Oil Company, L.L.c. regarding "Farm-out of Oil and Gas Lease bearing ADL Nos. 389923; 389507; 389514; 389513; 389197; 389196; 389198; and 389515, Cook Inlet Basin, Alaska." If the back rentals were not timely paid, Escopeta may lose its rights under such leases (and consequently Borrowers may lose any possible future payments under the farm-out). Escopeta claimed in a letter to PERL dated August 3, 2009, that Pacific Energy breached the terms of the farm-out agreement by failing to deliver to Escopeta the five leases free and clear of all rental payments due in 2008 and 2009, and that Escopeta has therefore cancelled the farm-out agreement. This matter has been referred to Borrower's bankptcy counsel for further analysis
and disposition.
A/73098005.3
SCHEDULE 4.20 TO SENIOR SECURED SUPER PRIORITY DEBTOR IN POSSESSION CREDIT AND GUARANTY AGREEMENT
No Defaults
Schedule 4.20(a)
Specified Defaults (as that term is defined in the Forbearance Agreement and Eighth
Amendment to Second Lien Credit Agreement, dated as of December 19, 2008, by and among Pacific Energy Alaska Operating LLC, Pacific Energy Alaska Holdings, LLC, the other Loan
Parties part thereto, certain financial institutions as Lenders and Silver Point Finance, LLC as
Agent, as amended, supplemented and modified from time to time) and certain additional
defaults under the Prepetition Transaction Documents occurrng after December 19, 2008.
The entering into of the Agreement and the other Transaction Documents, as well as the
consummation of the transactions contemplated thereby, by the Credit Parties may result in certain defaults under the PEAO Second Lien Credit Agreement and the other Loan Documents (as defined in the PEAO Second Lien Credit Agreement).
Defaults under Sections 5(a)(vi) of the PERL ISDA Agreement, as amended pursuant to the Postpetition Hedge Amendment, relating to defaults under the PEAO Second Lien Credit
Agreement and the other Loan Documents (as defined in the PEAO Second Lien Credit Agreement) and defaults under Section 5(a)(vii) of the PERL ISDA Agreement, as amended pursuant to the Postpetition Hedge Agreement, relating to the Case or the insolvency of the
Credit Parties.
As of early February 2009, Pacific Energy Alaska Op~rating LLC has stopped deliverig gas under that certain Fuel Gas Supply Agreement between Forest Oil Corporation and Union Oil Company of Califomia dated November 25, 2002 (as assigned by Forest Oil Corporation to Pacific Energy Alaska Operating LLC). Union Oil Company of California (now Chevron) is
now buying gas and biling it back to Pacific Energy Alaska Operating LLC under the joint interest billings described on Schedule 6.1.
The Credit Parties owe joint interest billngs due to Chevron of approximately $36.2 milion as
of June 30, 2009 before any reduction for the $5.5 milion of segregated proceeds received to
The filing, prosecution and resolution of the Case constitutes a breach and/or an event of default
under some (and perhaps all) of the Contractual Obligations of Pacific Energy Resources Ltd.
and its Subsidiaries.
A/73098005.3
Schedule 4.20(b)
1. Membership Interest Purchase Agreement dated as of May 24, 2007 by and among Forest Alaska Holding LLC, Pacific Energy Alaska Operating LLC, Forest Oil Corporation and Pacific Energy, as amended on July 31, 2007 pursuant to Amendment No. i to Membership
Interest Purchase Agreement.
2. Asset Sale Agreement dated as of May 24, 2007 by and among Forest Oil Corporation and
Pacific Energy Resources Ltd., as amended on July 31, 2007 pursuant to Amendment No.1 to Asset Sale Agreement.
3. Share Acquisition and Registration Rights Agreement, dated July 31, 2007, between Pacific
4. Senior Subordinated Accreting Note dated August 24, 2007 made by Pacific Energy
Resources Ltd. in favor of Forest Alaska Holding LLC, the obligations of which are
guaranteed by Pacific Energy Alaska Holdings, LLC and Pacific Energy Alaska Operating
LLC.
5. Counterpart Agreement to Senior Subordinated Accreting Note dated July 30, 2008 executed by Cameros Acquisition Corp., Cameros Energy, Inc. and Gotland Oil, Inc.
6. Unsecured Convertible Promissory Note in the face amount of $1,032,732.34 dated
February 10,2009 made by Pacific Energy Resources Ltd. in favor of
7. Amended and Restated Purchase and Sale Agreement, dated November 1, 2006, between
Aera Energy, LLC and Pacific Energy Resources Ltd.
8. Purchase and Sale Agreement, dated November 13, 2006, between SWEPI LP and Pacific
10. Fuel Gas Agreement Between Forcenergy Inc. and Marathon Oil Company Dated December 30, 1996 (as assigned by Forest Oil Corporation, as successor in interest to Forcenergy Inc., to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales
Agreement).
11. Fuel Gas Supply Agreement between Forest Oil Corporation and Union Oil Company of
California dated November 25, 2002 (as assigned by Forest Oil Corporation to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
12. Agreement Regarding Throughput Charge By and Among Forcenergy Inc., SPC LLC, as successor to Stewart Petroleum Co. and The Medema Family Trust effective June 1, 1997, dated December 9, 1999 Consent to Assignment (as assigned by Forest Oil Corporation, as
A/73098005.3
successor in interest to Forcenergy Inc., to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
13. Agreement Regarding Throughput Charge By and Among Forcenergy Inc., Stewart
Petroleum Co. and WPS Energy Services, Inc. effective January i, 1997, dated August 26, 1997 Consent to Assignment (as assigned by Forest Oil Corporation, as successor in interest to Forcenergy Inc., to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales
Agreement).
14. Agreement Regarding Throughput Charge by and among Forcenergy Inc., Stewart Petroleum
Co., and Midcoast Energy Resources, Inc. dated July 29, 1997 (as assigned by Forest Oil Corporation, as successor in interest to Forcenergy Inc., to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
15. Gas Transportation and Measurement Station Usage Agreement between Forest Oil Corporation, as Shipper, and Aurora Gas, LLC, as Transporter, dated October 27, 2005 (as assigned by Forest Oil Corporation to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
16. Asset Sales Agreement between Pacific Energy Alaska Operating LLC and Pioneer Natural Resources Alaska, Inc. dated February 14,2007.
17. Overrding Royalty Agreement between Pacific Energy Alaska Operating LLC and Pioneer Natural Resources Alaska, Inc. dated February 16,2007.
18. Trading Bay Field Joint Operating Agreement by and between Union Oil Company of
California and Marathon Oil Company dated June 12, 1996.
19. Unocal / Forest Oil Alignment Agreement Trading Bay Field / Trading Bay Unit dated January i, 2002 by and between Union Oil Company of Califomia and Forest Oil
Corporation (as assigned by Forest Oil Corporation to Pacific Energy Alaska Operating LLC
pursuant to the Asset Sales Agreement).
20. Unit Agreement for the Development and Operation of the Trading Bay Unit Area State of
Alaska dated February 6, 1967 by Union Oil Company of Califomia, as Operator, and
Standard Oil Company of Califomia, et. aI, as non-Operators, as amended and including all Ratifications and Joinders.
21. Trading Bay Facilities Agreement between Union Oil Company of Californa dba Unocal Alaska and Forest Oil Company dated May 1,2002 (as assigned by Forest Oil Corporation to
Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
22. Amendment No. I: Trading Bay Facilities Agreement dated effective April
16, 2007.
23. Joint Operating Agreement for Three Mile Creek Exploration Unit, Cook Inlet, Alaska by and between Aurora Gas, LLC, as Operator, and Forest Oil Corporation, as non-Operator,
dated January I, 2004 (as assigned by Forest Oil Corporation to Pacific Energy Alaska Operating LLC pursuant to the Asset Sales Agreement).
A/73098005.3
24. Unit Operating Agreement - Trading Bay Unit, dated September 1, 1970, by and between Union Oil Company of Califomia, as Operator, and Marathon Oil Company, et. al. as nonOperators.
25. Reservation of Production Payment attached as Attachment I to Assignment of Bill of Sale, dated effective November i, 2006, from Area Energy LLC to Pacific Energy Resources Ltd.
26. Reservation of Production Payment attached as Attachment I to Assignment of Bill of Sale, dated effective November 1, 2006, from SWEPI LP to Pacific Energy Resources Ltd.
27. Reservation of Production Payment attached as Attachment I to Assignment of Bil of Sale, dated effective November i, 2006, from Noble Energy, Inc. to Pacific Energy Resources Ltd.
28. Sining Fund Trust Agreement, dated as of November i, 2006, between Pacific Energy
Resources Ltd. and Aera Energy LLC.
29. Supplemental Bond For Decommissioning Liabilities Trust Agreement, dated March 1,2007,
among U.S. Bank National Association, Pacific Energy Resources Ltd., and The United States of America acting by and through the Minerals Management Service United States
Departent of the Interior.
30. Pipeline Operating Agreement dated as of March 12, 2008 by and between Pacific Energy Resources Ltd. and San Pedro Bay Pipeline Company.
31. Petroleum Pipeline Transportation Agreement, dated November 1, 2006, between Pacific
of Californa, acting though the SLC, and San Pedro Bay Pipeline Company, dated
33. The undertaking by San Pedro Bay Pipeline Company of a surety bond in the amount of $3,000,000 in favor of the State of Califomia pursuant to Agreement No. PRC 5636.1 _
General Lease - Right of
Way Use by and between the State of Califomia, acting through the SLC, and San Pedro Bay Pipeline Company.
34. Intercompany Promissory Note, dated as of December 19, 2008, made by Pacific Energy Alaska Operating LLC in favor of Pacific Energy Resources Ltd.
35. Letter agreement, as amended April 30, 2009*, between Pacific Energy Resources Ltd. and Lazard Frres & Co. LLC.
36. Services Agreement, as amended April 10, 2009*, among Pacific Energy Resources Ltd., Scott W. Winn and Zolfo Cooper Management, LLC.
37. Commission and Exclusivity Agency Agreement, as amended April i, 2009*, between
Albrecht & Associates, Inc. and Pacific Energy Resources Ltd.
A/73098005.3
38. Letter agreement, dated February II, 2009, among Pacific Energy Resources Ltd., Pacific Energy Alaska Operating LLC and Escopeta Oil Company, L.L.C. regarding "Farm-out of Oil and Gas Lease bearing ADL Nos. 389923; 389507; 389514; 389513; 389197; 389196; 389198; and 389515, Cook Inlet Basin, Alaska."
39. Consulting Agreement, as amended April 8,2009*, between Pacific Energy Resources Ltd. and Millstream Energy, LLC.
A/73098005.3
SCHEDULE 4.23 TO SENIOR SECURED SUPER PRIORITY DEBTOR IN POSSESSION CREDIT AND GUARANTY AGREEMENT
Pacific Energy Alaska Operating LLC has failed to pay certain joint interest billings to Chevron. Chevron has the right under the joint operating agreement to place a lien on Pacific Energy
Alaska Operating LLC's share of production if its joint interest bilings are not paid on time. Chevron has exercised, and continues to exercise, this right, the effect of which is to offset Pacific Energy Alaska Operating LLC's share of production to reduce the joint interest bilings
owed by Pacific Energy Alaska Operating LLC to Chevron.
Following failure to comply with DNR work obligation deadline requirements, Pacific Energy Alaska Operating LLC appealed its rights to the Corsair leases (oil and gas leases bearing
ADL Nos. 389923; 389507; 389514; 389513; 389197; 389196; 389198; and 389515) and to develop the Corsair Unit. On June 30, 2009, the Director of DNR's Division of Oil and Gas approved pending proposals to create a new unit containing such lease acreage and approved the application of Pacific Energy Alaska Operating LLC to assign 100% of Pacific Energy Alaska Operating LLC's working interests to Escopeta Oil Company, L.L.C.("Escopeta") in all eight Corsair prospect leases as follows: (i) for ADLs 389196, 389197, 389198 and 389515, subject to the payment of back rentals for ADL 389515; and (ii) ADLs 389507,389513, 389514 and
389923, subject to the payment of back rentals for all four leases. Payment of the back rentals for the five leases described was due within 30 days of the issuance of the decision (i.e., July 30,
2009). Assuming the back rentals were timely paid, it is possible that Pacific Energy Alaska
Operating LLC may obtain some future payment from the Corsair prospect pursuant to
assignments of its working interests in such leases pursuant to that certain letter agreement, dated February 11,2009, among Pacific Energy Resources Ltd., Pacific Energy Alaska Operating LLC and Escopeta Oil Company, L.L.C. regarding "Farm-out of Oil and Gas Lease bearing ADL Nos.
389923; 389507; 389514; 389513; 389197; 389196; 389198; and 389515, Cook Inlet Basin,
Alaska." If the back rentals were not timely paid, Escopeta may lose its rights under such leases (and consequently Borrowers may lose any possible future payments under the farm-out). Escopeta claimed in a letter to PERL dated August 3, 2009, that Pacific Energy breached the terms of the farm-out agreement by failing to deliver to Escopeta the five leases free and clear of all rental payments due in 2008 and 2009, and that Escopeta has therefore cancelled the farm~out agreement. This matter has been referred to Borrower's bankptcy counsel for further analysis and disposition.
A/73098005.3