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

) ) ) ) ) )

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

Cure Objection Deadline: October 27, 2009 at 4:00 p.m. Eastern Time Sale Hearing: November 3, 2009 at 10:00 a.m. Eastern Time

NOTICE TO COUNTERPARTIES TO EXECUTORY CONTRACTS AND UNEXPIRED LEASES THAT MAY BE ASSUMED AND ASSIGNED PLEASE TAKE NOTICE that, on March 9, 2009, the above-captioned debtors and debtors in possession (the Debtors) commenced chapter 11 bankruptcy cases. On October 14, 2009, the Debtors filed the Debtors Motion for an Order (a) Vacating This Courts Abandonment Order in Part for Certain Alaska Assets and (b) Authorizing the Debtors to Sell Such Assets to Cook Inlet Energy, LLC (the Reconsideration and Sale Motion), a copy of which is enclosed herewith with the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court). PLEASE TAKE FURTHER NOTICE that the Reconsideration and Sale Motion seeks an order of the Bankruptcy Court (1) vacating its Order Granting Alternative Motion of the Debtors for an Order Authorizing Abandonment of Certain Interests in Oil and Gas Properties in
The Debtors in these cases, along with the last four digits of each 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); Carneros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (7021); San Pedro Bay Pipeline Company (1234); Carneros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The address for all of the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Reconsideration and Sale Motion.
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Alaska (Excluding Trading bay) and Rejection of Executory Contracts Relating Thereto entered on September 11, 2009 (the Abandonment Order) (Docket No. 876) as it relates to certain of the Sold Assets (as defined below) and (2) approval of (a) the sale by the Debtors to Cook Inlet Pipeline, LLC (the Buyer) of certain of the Debtors assets (the Sold Assets) located in Alaska, consisting generally of PEAOs interests in leased oil and gas production and exploration assets located in Alaska (and related assets) that were formerly operated by PERL or presently operated by Aurora Gas, LLC (an entity that is unrelated to the Debtors), other than other certain oil and gas leases and related assets located in the Redoubt Unit as well as other Excluded Items (as defined in the Purchase and Sale Agreement, which is attached to the Reconsideration and Sale Motion as Exhibit A), and (b) the assumption by the Debtors and assignment to the Buyer of certain contracts and leases to be assumed by the Debtors and assigned to the Buyer at the closing of the proposed sale pursuant to section 365 of the Bankruptcy Code, a list of which is attached hereto as Exhibit 1 (the Assumed Executory Contracts).
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PLEASE TAKE NOTICE that the amount shown on Exhibit 1 attached to this Notice as the Cure Amount for the Assumed Executory Contract listed on Exhibit 1 to which you are a party is the amount, based upon the Debtors books and records, which the Debtors assert is owed to cure any defaults existing under that Assumed Executory Contract as of the Petition Date. PLEASE TAKE FURTHER NOTICE that an evidentiary hearing (the Hearing) on the relief requested in the Reconsideration and Sale Motion (among other things, to authorize the assumption and assignment of the Assumed Executory Contracts) will be held on November 3,
The Buyer will select the executory contracts from among the Assumed Executory Contracts listed on Exhibit 1 that it chooses to assume, so not all of the Assumed Executory Contracts listed on Exhibit 1 will necessarily be assumed.
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2009, at 10:00 a.m. (Eastern time) before the Honorable Kevin J. Carey, United States Bankruptcy Judge, at the United States District Court for the District of Delaware, 824 Market Street, 5th Floor, Courtroom 5, Wilmington, Delaware 19801. The Hearing may be adjourned from time to time without further notice to creditors or parties in interest other than by announcement of the adjournment in open court on the date scheduled for the Hearing. PLEASE TAKE FURTHER NOTICE THAT, PURSUANT TO THE RECONSIDERATION AND SALE MOTION, 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 ANY, BASED UPON THE DEBTORS BOOKS AND RECORDS, WHICH THE DEBTORS ASSERT IS OWED TO CURE ANY DEFAULTS EXISTING UNDER THE ASSUMED EXECUTORY CONTRACT AS OF THE DATE SHOWN ON SUCH EXHIBIT. PLEASE TAKE FURTHER NOTICE that if you disagree with the Cure Amount shown for the Assumed Executory Contract on Exhibit 1 to which you are a party, you must file in writing with the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 5th Floor, Wilmington, Delaware 19801, an objection to such Cure Amount on or before 4:00 p.m. Eastern time on October 27, 2009. If a contract or lease is assumed and assigned pursuant to this Courts order approving same, then unless you properly and timely file and serve an objection to the Cure Amount listed on Exhibit 1 to this Notice, you shall receive at the time of the closing of

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the sale (or as soon as reasonably practicable thereafter), the Cure Amount set forth herein (if any), with payment (if any) made pursuant to the terms of the applicable purchase and sale agreement for any Sold Assets. PLEASE TAKE FURTHER NOTICE that if you have any other objection to the Debtors assumption and assignment of the Assumed Executory Contract to which you may be a party or to the Sale Motion, you also must file that objection in the manner and by the date and time stated above. In addition, any objection must set forth the specific default or defaults alleged and set forth any cure amount as alleged by you. PLEASE TAKE FURTHER NOTICE that any objection so filed 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 Resources Ltd., 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA, Attn: Gerald A. Tywoniuk, Chief Executive Officer (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, Attn: Scott W. Winn, Senior Managing Director (email: swinn@zolfocooper.com) and Mark A. Cervi (email: mcervi@zolfocooper.com); (b) the Debtors investment banker, Lazard Frres & Co. LLC, 600 Travis, Suite 2300, Houston, TX 77002, Attn: Robert L. Lynd (email: robert.lynd@lazard.com); and (c) the Debtors counsel (i) (A) Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 11th Floor, Los Angeles, California 90067-4100, Attn: 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, Attn: James A. ONeill (email: joneill@pszjlaw.com); (ii) Rutan & Tucker, LLP, 611

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Anton Blvd., 14th Floor, Costa Mesa, CA 92626, Attn: Gregg Amber (email: gamber@rutan.com) and Cristy Parker (email: cparker@rutan.com); and (iii) Schully, Roberts, Slattery & Marino, PLC, 1100 Poydras Street, Suite 1800, New Orleans, LA 70163, Attn: Anthony C. Marino (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, Attn: Fil Agusti (email: fagusti@steptoe.com); and (e) counsel to the Debtors secured lenders (the Lenders): (i) Bingham McCutchen LLP, 399 Park Avenue, New York, NY 10022, Attn: Jeffrey S. Sabin (email: jeffrey.sabin@bingham.com); and (ii) Skadden, Arps, Slate, Meagher & Flom LLP, 333 West Wacker Drive, Chicago, Illinois 60606, Attn: Seth E. Jacobson (email: seth.jacobson@skadden.com). PLEASE TAKE FURTHER NOTICE that the Buyer shall be responsible for satisfying any requirements regarding adequate assurance of future performance that may be imposed under section 365(b) of the Bankruptcy Code in connection with the proposed assignment of any Assumed Executory Contract. The Court shall make its determinations concerning adequate assurance of future performance under the Assumed Executory Contracts pursuant to section 365(b) of the Bankruptcy Code at the Hearing. Cure Amounts disputed by any counterparty will be resolved by the Court at the Hearing. PLEASE TAKE FURTHER NOTICE THAT IF YOU DO NOT TIMELY FILE AND SERVE AN OBJECTION AS STATED ABOVE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE SALE MOTION WITH NO FURTHER NOTICE.

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ANY NON-DEBTOR PARTY TO ANY 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: October 14, 2009 PACHULSKI STANG ZIEHL & JONES LLP /s/ Scotta E. McFarland Ira D. Kharasch (CA Bar No. 109084) James E. O'Neill (Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) Scotta E. McFarland (Bar No. 4184) 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 joneill@pszyjlaw.com rsaunders@pszjlaw.com smcfarland@pszjlaw.com Counsel for Debtors and Debtors in Possession

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EXHIBIT 1

Exhibit 1
COUNTERPARTY DEBTOR ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE Office Landline and Internet $4,996 PEAO , , MHT-9300062, MHT-9300063 $0 CURE AMOUNT (AS OF OCTOBER 13, 2009)

ACS P.O. Box 196666 Anchorage, AK 99519-6665 Alaska Mental Heath Trust Authority The Trust Land Office 718 L Street, Suite 202 Anchorage, AK 99501 Aurora Gas LLC 6051 North Course Drive Suite 200 Houston, TX 77043 Aurora Gas LLC 6051 North Course Drive Suite 200 Houston, TX 77043 Branch of Realty Bureau of Indian Affairs West-Central Alaska Field Office 3601 C Street, Suite 1100 Anchorage, AK 99503-5947 Branch of Realty Bureau of Indian Affairs West-Central Alaska Field Office 3601 C Street, Suite 1100 Anchorage, AK 99503-5947 Bureau of Land Management/West Foreland 222 W. 7th Ave, #13 Anchorage, AK 99513 Bureau of Land Management/West Foreland 222 W. 7th Ave, #13 Anchorage, AK 99513

PEAO

PEAO

Joint Operating Agreement (Three Mile Creek)

$174,782 (billed through June, 2009) $0

PEAO

Gas Trans. & Measurement Agreement (Oct 2005)

PEAO

Grant of Easement for Right of Way (A47826)

$0

PEAO

Grant of Easement for Right of Way (AA8272-B)

$0

PEAO

Oil & Gas Lease BLM-A-035017/West Foreland

$0

PEAO

West Foreland # 1-West Foreland Field Compensatory Royalty Agreement [See same agreement below listed under the State of Alaska Dept. of Natural Resources]

Bureau of Land Management/West Foreland 222 W. 7th Ave, #13 Anchorage, AK 99513

PEAO

West Foreland # 2-West Foreland Field Royalty Sharing Agreement [See same agreement below listed under the State of Alaska Dept. of Natural Resources]

[See same agreement below listed under the State of Alaska Dept. of Natural Resources] [See same agreement below listed under the State of Alaska Dept. of Natural Resources]

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COUNTERPARTY

DEBTOR

ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE Oil & Gas Lease BLM-A-035017/West Foreland (Land Owner) Includes BLM and $500,000 escrowed funds

Bureau of Land Management/West Foreland 222 W. 7th Ave, #13 Anchorage, AK 99513 Cook Inlet Region, Inc. PO Box 93330 Anchorage, AK 99509-9330

PEAO

CURE AMOUNT (AS OF OCTOBER 13, 2009) [See same oil & gas lease below listed under Cook Inlet Region, Inc.] $539,861

PEAO

Oil & Gas Lease BLM-A-035017/West Foreland (Land Owner) Includes BLM and $500,000 escrowed funds

Cook Inlet Region, Inc. PO Box 93330 Anchorage, AK 99509-9330

PEAO

West Foreland General Agreement and related agreements and pipeline easements

$8,483.63

Cook Inlet Region, Inc. PO Box 93330 Anchorage, AK 99509-9330

PEAO

Kustatan Trading Bay Subsurface Easement Agreement along with related Kustatan Subsurface Easement dated December 5, 2002 Response Action Contract

$23,992

Cook Inlet Spill Prevention and Response, Inc. P. O. Box 7314 Nikiski, AK 99635 ExxonMobil 3301 C St # 400 Anchorage, AK 99503-3958 Escopeta Oil & Gas Corp. 5005 Riverway, Suite 440 Houston, TX 77056 FP Mailing Solutions Dept. 4272 Carol Stream, IL 60122-4272 Frontier Business Systems 1432 Ingra St. Anchorage, AK 99501 Industrial Refuse Inc. 44196 Kalifornsky Beach Rd. Soldotna, AK 99669 Lewis & Lewis 405 E. Fireweed Lane Anchorage, AK 99503

PERL

$11,705

PEAO

Point Thomson Unit Joint Operating Agreement Letter Agreement Regarding Farm-Out (Feb 2009) Postage Meter

$0

PERL and PEAO PEAO

$0

$58.00 PEAO Copier Lease $0 PEAO Container Rentals $809.32 PEAO Printer Maintenance Contract $1,053.93

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COUNTERPARTY

DEBTOR

ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE Oil & Gas Lease OCS-Y-01665 and OCSY-01664/Cosmopolitan

CURE AMOUNT (AS OF OCTOBER 13, 2009) $0

MMS Alaska OCS Region 3801 Centerpoint Drive, Suite 500 Anchorage, AK 99503 MTA Communications, Inc. 1740 S. Chugach St. Palmer, AK 99645 Salamatof Native Association PO Box 2682 Kenai, AK 99611 Salamatof Native Association PO Box 2682 Kenai, AK 99611

PEAO

PEAO

Phone Maintenance

$1,372

PEAO

PEAO

Amendment #1 Surface Use and Easement Agreement (orig. agreement is dated August 27, 1999, amendment is effective August 1, 2002) West Foreland General Agreement and related agreements and pipeline easements

$50,000

$8,485

Spectra Logic Corporation 1700 North 55th St. Boulder, CO 80301 State of Alaska/Cosmopolitan 801 W. 10th Street Suite 302 Juneau, AK 99811

PEAO

Software Maintenance Contract $0

PEAO

Oil & Gas Lease ADL-384404, ADL384403, ADL-18790, ADL-387102, ADL389230, ADL-389525, ADL-389526, ADL390308, ADL-390309 /Cosmopolitan

$0

$0

$0

$0

State of Alaska/Redoubt 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Three Mile Creek 801 W. 10th Street Suite 302 Juneau, AK 99811

PEAO

Oil & Gas Lease ADL-390368, Kustatan $2,889

PEAO

Oil & Gas Lease ADL-388233, MHT9300024, /Three Mile Creek

$0

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COUNTERPARTY

DEBTOR

ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE Oil & Gas Lease ADL-359111, ADL359112/West McArthur River Unit

CURE AMOUNT (AS OF OCTOBER 13, 2009) $0

State of Alaska/West McArthur River 801 W. 10th Street Suite 302 Juneau, AK 99811

PEAO

$0

State of Alaska/West Foreland801 W. 10th Street Suite 302Juneau, AK 99811 State of Alaska/Alexander Prospect 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Raptor Prospect 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Tutina Prospect 801 W. 10th Street Suite 302 Juneau, AK 99811

PEAO

Oil & Gas Lease ADL-389509, ADL389510, ADL-389511, ADL-389512, ADL390551, ADL-389503, ADL-389504, ADL390549, ADL-390735/West Foreland Oil & Gas Lease ADL-390578, ADL390585/North Alexander Prospect

$0

PEAO

$0

PEAO

Oil & Gas Lease ADL-17595, ADL390370, ADL-390379, ADL391108/Raptor Prospect Oil & Gas Lease ADL-390555, ADL390556, ADL-390557/Tutina Prospect

$0

PEAO

$0

$0 State of Alaska/Pretty Creek 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Point Thomson 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Olsen Creek 801 W. 10th Street Suite 302 Juneau, AK 99811 State of Alaska/Falls Creek Prospect 801 W. 10th Street Suite 302 Juneau, AK 99811 PEAO Oil & Gas Lease ADL-390571, ADL390579, ADL-390749/Pretty Creek Oil & Gas Lease ADL-47567, ADL47562/Point Thomson Oil & Gas Lease ADL-390100/Olsen Creek Oil & Gas Lease ADL-384314/Falls Creek Prospect/

$0

PEAO

$0

PEAO

$0

PEAO

$0

State of Alaska/South Susitna Basin 801 W. 10th Street Suite 302

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PEAO

Oil & Gas Lease ADL-390078/South Susitna Basin

$0

COUNTERPARTY

DEBTOR

ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE

CURE AMOUNT (AS OF OCTOBER 13, 2009)

Juneau, AK 99811

State of Alaska Dept. of Natural Resources 550 W. 7th Avenue, Suite 800 Anchorage, AK 95501 State of Alaska Dept. of Natural Resources 550 W. 7th Avenue, Suite 800 Anchorage, AK 95501 Symantec Corporation P.O. Box 60000 San Francisco, CA 94160 Tesoro 300 Concord Plaza Drive San Antonio, TX 78218 The O'Brien's Group, Inc. P. O. Box 8500 Philadelphia, PA 19178-2591 United States EPA Region 10 1200 6th Street Seattle, WA 98101 US Bank 1310 Madrid St., Suite 101 Marshall, MN 56258-4002 XTO Energy P.O. Box 730587 Dallas, TX 75373-0587

PEAO

West Foreland # 1-West Foreland Field Compensatory Royalty Agreement

$0

PEAO

West Foreland # 2-West Foreland Field Royalty Sharing Agreement

$0

PEAO

Software License $0

PEAO

Oil Sales Contract $0

PEAO

Oil Spill Responder/Coordinator Contract $0

PERL

Stand-By Trust Agreement

$0

PEAO

Copier Lease $1,520.53

PEAO

Radio Tower and Communications Services

$0

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