You are on page 1of 28

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF pELA W ARE

In re:

Chapter 11

PACIFIC ENERGY RESOURCES LTD., et al., i


Debtors.

)
) ) ) )

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

Deadline for Objections: September 17, 2009 at 4:00 p.m. (ET) Hearing Date: September 24, 2009 at 2:30 p.m. (ET)

DEBTORS' SECOND MOTION FOR ORDER UNDER SECTIONS 365(a) AND 554(a) OF THE BANKRUPTCY CODE AUTHORIZING THE DEBTORS TO (1) REJECT CERTAIN EXECUTORY CONTRACTS; (2) REJECT CERTAIN UNEXPIRED LEASES; AND (3) ABANDON ANY PERSONAL PROPERTY REMAINING AT THE PREMISES OF ANY REJECTED REAL PROPERTY LEASE
The above-captioned debtors and debtors'in possession (the "Debtors") hereby

move this Court for entry of an order authorizing the Debtors to (1) reject five employment

agreements and two related indemnification agreements, (2) reject two offce leases, (3) reject
various contacts and leases of

personal property related to Bakersfield offce operations, and (4)


the effective date of the rejection of

abandon any personal property that remains, as of

the leases

of

the offces, at the office locations (the "Motion"). In support of

this Motion, the Debtors

respectfully state as follows:

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 1.0. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC
(7021); San Pedro Bay Pipeline Company (1234); Cameros Energy, mailng address for all of the Debtors is III W. Ocean Boulevard,

Inc. (9487); and Gotland Oil, Inc. (5463). The Suite 1240, Long Beach, CA 90802.

68773-002\DOCS_LA:207236. i

Preliminary Statement
1. Consistent with the Debtors' efforts to liquidate their assets and wind

down their business, the Debtors seek approval of the rejection of five employment agreements
described on Exhibit A hereto (the "Employment Agreements"); the rejection of

the leases of

office space in Bakersfield, California and Anchorage, Alaska, both as more paricularly
described on the attached Exhibit B (the "Real Propert Leases); and the rejection of

various

contracts and leases of personal property related to Bakersfield office operations that are set forth

on the attached Exhibit C (the "Offce Contracts" and together with the Employment Agreements and Real Property Leases, the "Rejected Agreements"). Because the Debtors are liquidating
their assets and winding down their business operations; the estates have no further need for the

Real Property Leases and the Office Contracts. Also, because of these same circumstances, the
Debtors have determined that the Employment Agreements should be rejected and that on a
going forward bases, all of

the Debtors' employees wil be at wil employees. The Rejected

Agreements, therefore, are of no value to the Debtors and, in fact, are burdensome to the
Debtors' estates. The Debtors, in the exercise of

their reasonable business judgment, have


the Rejected Agreements-is in the best interest of

determined that the rejection of

their creditors

and their estates, and, therefore, seek this Court's approval of such rejection.
2. By September 30,2009, the Debtors wil have vacated the premises

covered by the Real Property Leases and returned the keys to the respective landlords (unless

otherwise agreed to between the landlord and the Debtors). If, however, any personal property,
remains in the premises covered by the Real Property Lases (except any personal property that

68773-002\DOCS_LA:207236. i

remains on the premises pursuant to an agreement between the Debtors and the respective
landlord) after September 30,2009, (the "Remaining Personal Property"), it is of

negligible
the abandonment of

value and the Debtors seek this Cour's approval of

such Remaining

Personal Property.

Jurisdiction .
3. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157

and 1334. This is a core proceeding pursuant to 28 U.S:C. 157(b)(2). Venue is proper before

this Cour pursuant to 28 U.S.C. 1408 and 1409.


4. The statutory predicates for the relief sought herein are sections 365(a)
and 554(a) of title of

the United States Code (the "Bankptcy Code") and Rules 6006 and 6007

of

the Federal Rules of

Bankptcy Procedure (the "Banruptcy Rules"). Back2round

5. On March 9, 2009 (the "Petition Date"), the Debtors commenced these


cases by filing voluntary petitions for relief under chapter 11 of

the Bankptcy Code.


their property and have

6. The Debtors have continued in the possession of

continued to operate and manage their businesses as debtors and debtors in possession pursuant
to sections 1107(a) and 1108 of

the Banptcy Code. No trustee or examiner has been


the United States Trustee appointed an

appointed in the Debtors' chapter 11 cases. The Office of

Official Committee of

Unsecured Creditors on March 19,2009.


7. The Debtors are a group of independent energy companies engaged in the

acquisition, development and exploitation of oil and gas properties in the western United States.

The Debtors' current oil and gas assets are located offshore near California and principally

68773-002\DOCS_LA:207236. i

offshore in Alaska. The Debtors have maintained business offces in Long Beach, California,
Bakersfield, California and Anchorage, Alaska.
8. The Employment Agreements to be rejected are those with (i) Vladimir
Katic, Chairman of the Board and Chief

Executive Officer, (ii) Darren Katic, President, (iii) John

Rainwater, Executive Vice President and Chief Operating Officer, (iv) Gerald Tywoniuk, Senior
Vice President-Finance and Chief

Financial Offcer and (v) Steven Liles, Vice President and


Beta Operations. Each of

general Manager of

the Employment Agreements obligates Pacific

Energy Resources, Ltd., among other things, to pay salaries, provide benefits and pay substantial

amounts of severance under certain conditions. A list of the Employment Agreements is set
forth on Exhibits A attached hereto.
9. Although the Debtors are considering negotiating arrangements to remain

in a portion of the offce space in Anchorage, Alaska, they have no continuing need for all of the
space. The lease does not terminate until May, 2012 and

costs the estates $32,000 per month in the Bakersfield location by September 30,

rent. The Debtor wil cease doing business out of

2009.' The Bakersfield lease does not terminate until December, 2011 and costs the estates

approximate $6,001.86 per month in rent. The two Real Property Leases and certain information
about each is set forth on Exhibit B attached hereto.
10. Because the Debtors intend to vacate the Bakersfield office, they have no

further need for the contracts and leases related to the operations of that offce. The pertinent
details of

the three Office Contracts are set forth on Exhibit C attached hereto.

68773-002\DOCS_LA:207236. i

Relief ReQuested

11. By this Motion, the Debtors seek .entry of an order pursuant to sections
365 and 554 of

the Banuptcy Code and Bankptcy Rule 6006 authorizing and approving the
the Rejected Agreements2 effective as of September 30,2009 and the

Debtors' rejection of

abandonment of

the Remaining Personal Property, if any, located at the premises covered by the

Real Property Leases effective as of that same date.


12. To the extent notice of

intention to reject has not been previously

provided, the fiing and service of

this Motion shall serve as notice to each non-Debtor party to


the Debtors' intent

the Rejected Agreements (collectively, the "Non-Debtor Contract Parties") of

to reject the Rejected Agreements.


13. The Debtors have determined in their reasonable business judgment that

the Rejected Agreements are unnecessary to the operation of

the Debtors' business because the

Debtors are liquidating their assets and winding down their business. The continued
performance under the Rejected Agreements would be costly without benefiting the Debtors or
their estates. As to the Real Property Leases, based upon the Debtors' knowledge of

the market

and discussions with the landlords and other professionals, the Debtors do not believe that the
Real Property Leases are under-market or otherwise of any meaningful value to the estate. If the

Debtors were required to keep the Real Property Leases and perform thereunder while they

marketed and attempted to assign them, the administrative expenses would be prohibitive in light

2 The Debtors reserve all rights with respect to the characterization of

the Rejected Agreement and any rejection

or other damages that may be asserted.

68773-002\DOCS_LA:207236. i

of

the fact that the Debtors' no longer need the locations and an assignee would likely not
the Rejected Agreements, therefore, is in the best interests of

materialize. The rejection of

the

Debtors' estates and the creditors. The Rejected Agreements should, therefore, be rejected
effective as of

September 30, 2009.


14. The Bakersfield and Anchorage leases may contain various items of

personal property owned by the Debtors. While the Debtors wil have removed all personal
property of

any value to the Debtors' estates (except as agreed to between the respective landlord

and the Debtors), there may be personal property remaining at the premises of such a diminimis

value that it would cost more to remove than it is worth. The Debtors, therefore, seek to abandon
any Remaining Personal Property (except as agreed to between the respective landlord and the

Debtors) effective as of September 30,2009.

Basis for Relief


15. Section 365(a) of

the Bankuptcy Code provides that a debtor in

possession, "subject to the court's approval, may... reject any executory contract or unexpired

lease .nfthe debtor." 11 U.S.C. 365(a). See also University Med. Ctr. v. Sullvan (In re
University Med. Ctr.), 973 F.2d 1065, 1075 (3d Cir. 1992). "This provision allows a trustee to

relieve the bankptcy estate of burdensome agreements which have not been completely
performed." Stewart Title Guar. Co. v. Old Republic Natl Title Co., 83 F.3d 735, 741 (5th Cir.
1996) citing In re Muerexco Petroleum, Inc., 15 F.3d 60,62 (5th Cir. 1994).

16. The decision to assume or reject an executory contract or unexpired lease


is a matter within the "business judgment" of

the debtor. See NLRB v. BUdisco (In re BUdisco),

682 F.2d 72, 79 (3d Cir. 1982) ("The usual test for rejection of an executory contract is simply

68773-002\DOCS_LA:207236.1

whether rejection would benefit the estate, the 'business judgment' test."); In re Taylor, 913 F.2d
102, 107 (3d Cir. 1990); see also In re Federal Mogul Global, Inc,-, 293 B.R. 124, 126 (D. DeL.

2003); In re HQ Global Holdings, 290 B.R. 507, 511 (Ban. D. DeL. 2003). The business
judgment standard mandates that a court approve a debtor's business decision unless the decision
is the product of

bad faith, whim or caprice. See In re Trans World Airlines, Inc., 261 B.R. 103,

121 (Banr. D. DeL. 2001). See also Summit Land Co. v.Allen (In re Summit Land Co.), 13 B.R.

310, 315 (Banr. D. Utah 1981) (absent extraordinary circumstances, court approval of a
debtor's decision to assume or reject an executory contract "should be granted as a matter of
course").
17. Rejection of an executory contract or unexpired leases is appropriate

where rejection would benefit the estate. See Sharon Steel Corp. v. National Fuel Gas

Distribution Corp. (In re Sharon Steel Corp.), 872 F.2d 36, 40 (3d Cir. 1989). The standard for
rejection is satisfied when a debtor has made a business determination that rejection wil benefit
the estate. See Commercial Fin. Ltd. v. Hawaii Dimensions, Inc. (In re Hawaii Dimensions,

Inc.), 47 B.R. 425,427 (D. Haw. 1985) ("under the business judgment test, a court should
approve a debtor's proposed rejection if such rejection wil benefit the estate.").
18. If a debtor's business judgment has been reasonably exercised, a court

should approve the rejection of an unexpired lease or executory contract. See, e.g., In re Federal

Mogul Global, Inc., 293 B.R. 124, 126 (D. DeL. 2003).
19. Pursuant to section 365(a) of

the Banptcy Code, the Debtors seek to

reject the Rejected Agreements effective as of September 30,2009, in order to avoid the
possibilty of incurring any additional expenses and costs related to the Rejected Agreements.

68773-002\DOCS _ LA:207236. i

See NLRB v. BUdisco & BUdisco, 465 U.S. 513, 530 (1984) (stating that rejection relates back to
the petition date).

20. The Debtors have no use for the services or equipment provided by the

Office Contracts or Real Property Leases. The Debtors have determined that continuation of the

Employment Agreements is not beneficial to the Debtors estates and believes that it wil be more

beneficial to have all employees employed as at wil employees. Accordingly, the Debtors have
determined in the exercise of

their business judgment to reject the Rejected Agreements in order

to avoid incurring possible administrative expenses and because the Rejected Agreements do not

provide any value to the Debtors' estates, and are burdensome to the Debtors. .

21. The Debtors may have claims and/or defenses against a contract counterpary arising under, or independently of, the Rejected Agreements. The Debtors do not waive
such claims by the fiing of this Motion or the rejection of

the Rejected Agreements. In addition,

nothing herein shall be construed as a concession or evidence that the Rejected Agreements have

not expired, been terminated or otherwise currently are riot in full force and effect. Rather, the
Debtors expressly reserve all rights with respect thereto,.

including their right to seek a later

determination of

these issues, and their right to dispute the validity, status, characterization or

enforceabilty of the Rejected Agreements set forth herein.


22. In addition, the Debtors seek authority to abandon any Remaining

Personal Property located at the offce leases, except as otherwise agreed with the respective
landlords, as is, where is, and in accordance with section 554(a) of

the Banruptcy Code.

Section 554(a) provides that "(a)fter notice and a hearing, the trustee may abandon any property
of the estate that is burdensome to the estate or that is of. inconsequential value and benefit to the

68773-002\DOCS_LA:207236. i

estate." 11 U.S.C. 554(a). To the extent there is any Remaining Personal Property, the
Debtors believe that the costs associated with moving any such Remaining Personal Property
wil greatly exceed the value of such personal property. Accordingly, the Debtors believe that

the Remaining Personal Property has no value to the estate and should be deemed abandoned as
of September 30, 2009 consistent with the date of rejectn of the Real Property Leases.

Notice
23. Notice of

this Motion has been given to the following parties or, in lieu

thereof, to their counsel, if known: (i) the Office of the United States Trustee (ii) counsel to the
Committee; (iii) the Non-Debtor Contract Parties; (iv) counsel for the agents for the prepetition
and postpetition lenders; and (v) 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 nature of

the relief requested, no other or further notice need be given.

No Prior ReQuest
24. No prior motion for the relief

requested herein has been made to this or

any other Court.

68773-002\DOCS_LA:207236.1

WHEREFORE, the Debtors respectfully request that the Court enter an order approving the Debtors' reject the Rejected Agreements effective as of September 30, 2009, abandon any Remaining Personal Property (except as agreed to otherwise with the respective
landlords), and grant such other relief as is just and proper.

Dated: September 4,2009

PACHULSKI STANG ZIEHL & JONES LLP

Kharasch (CA Bar No. 109084)


Jai s E. O'Neill (DE Bar No. 4042)

Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100

Facsimile: 310/652-4400
Email: ikharasch~pszjlaw.com

joneil~pszjlaw.com
smcfarland~pszjlaw.com Counsel for Debtors and Debtors in Possession.

68773-002\DOCS_LA:207236. i

10

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE DISTRICT OF DELA WARE

In re:

PACIFIC ENERGY RESOURCES LTD., et al., i


Debtors.

) ) ) ) ) )

Chapter 11

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

Deadline for Objections: September 17,2009 at 4:00 p.m. (ET) Hearing Date: September 24, 2009 at 2:30 p.m. (ET)

NOTICE OF DEBTORS' SECOND MOTION FOR ORDER UNDER SECTIONS 365(a) AND 554(a) OF THE BANKRUPTCY CODE AUTHORIZING THE DEBTORS TO (1) REJECT CERTAIN EXECUTORY CONTRACTS; (2) REJECT CERTAIN UNEXPIRED LEASES; AND (3) ABANDON ANY PERSONAL PROPERTY REMAINING AT THE PREMISES OF ANY REJECTED REAL PROPERTY LEASE
TO: (i) Office of the United States Trustee fotthe District of Delaware; (ii) counsel to the Debtors' prepetition and postpetition secured lenders; (iii) counsel to the Official Committee of Unsecured Creditors; (iv) all counter-parties to the leases and contracts that are the subject of the Motion; and (v) those persons who have requested notice pursuant

to Bankptcy Rule 2002.

PLEASE TAKE NOTICE that the debtors and debtors in possession (collectively, the "Debtors"), in the above-captioned cases, fied the attached Debtors' Second Motion/or Order
Under Sections 365(a) and 554(a) o/the Bankruptcy Code Authorizing the Debtors to (1) Reject

Certa/n Executory Contracts; (2) Reject Certain Unexpired Leases; and (3) Abandon any

Persqnal Property Remaining at the Premises 0/ any Rejected Real Property Lease (the
i

"Motion"), with the United States Bankruptcy Court for the District of Delaware, 824 Market
i The Debtors in these cases, along with the last four digits of each ofthe Debtors' federal tax identification
number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Alaska Holdings, LLC (tax 1.0. # 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 ILL W. Ocean Boulevard, .S~ite 1240, Long Beach, CA 90802.

68773-002\DOCS_LA:207236. i

Street, Wilmington, Delaware 19801 (the "Banptcy Cour"). Pursuant to the Motion, the
Debtors seek to reject various employment agreements, two office leases and various contacts
and leases of personal property related to office equipment.

PLEASE TAKE FURTHER NOTICE that any response or objection to the relief
sought in the Motion must be fied with the Banruptcy Court on or before September 17,2009

at 4:00 p.m. prevailng Eastern Time.

PLEASE TAKE FURTHER NOTICE that at the same time, you must also serve a
copy of

the response or objection upon: (a) counsel to the Debtors: (1) Pachulski Stang Ziehl &

Jones LLP, 919 North Market Street, 1 ih Floor, Wilmington, DE 19899-8705, Attn: James
O'Neil, Esq.; Fax: 302-652-4400, e-mail: joneil~pszjlaw.com and (2) Pachulski Stang Ziehl

& Jones LLP, 10100 Santa Monica Blvd., 11 th Floor, Los Angeles, CA 90067-4100; Attn: Ira

D. Kharasch, Esq; Fax: 310-201-0760, e-mail: ikharash~pszjlaw.com (b) counsel to the


Lenders: (1) Goldman Sachs (i) Bingham McCutchen, 399 Park A venue, New York, NY

10022, Attn: Jeffrey Sabin, Esq.; Fax: 212-752-5378, e-mail: jeffrey.sabin~bingham.com and
(ii) Bingham McCutchen, One Federal Street, Boston, MA 01221-1726, Attn: Amy Kyle, Fax:

617-345-5001, e-mail: amy.kyle~bingham.com and (2) Silver Point Finance: Skadden, Arps,
Slate, Meagher & Flom, LLP, 333 West Wacker Drive, Chicago, IL 60606-1285, Attn: Seth

Jacobson, Esq.; Fax: 312-407-8511, e-mail: seth.jacobson~skadden.com and (c) the Office of
the United States Trustee, 1. Caleb Boggs Federal Buildihg, 844 N. King Street, Suite 2207,

Lock Box 35, Wilmington, Delaware 19801, Attn: Joseph McMahon, Esq. and (d) counsel for
the Official Committee of Unsecured Creditors: (1) Steptoe & Johnson LLP, 2121 Avenue of

the

Stars, 28th Floor, Los Angeles, CA 90067; Attn: Katherine C. Piper, Esq., Fax: (310) 734-3173,

e-mail: kpiper~steptoe.com and (2) Pepper Hamilton LLP, Hercules Plaza, Ste 5100, 1313 N.

68773-002\DOCS_LA:207236. i

Market Street, Wilmington, DE 19801; Attn: James C. Carignan, Esq., Fax: (302) 421-8390, e-

mail: jcarignan~pepperlaw.com.
PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND IN
ACCORDANCE WITH THIS NOTICE, THE COURT MA Y GRANT THE RELIEF

DEMANDED BY THE MOTION WITHOUT FURTHER NOTICE OR HEARING.

PLEASE TAKE FURTHER NOTICE THAT A HEARIG TO CONSIDER THE


RELIEF SOUGHT IN THE MOTION WILL BE HELD ON SEPTEMBER 24, 2009 AT 2:30

P.M. PREVAILING EASTERN TIME BEFORE THE HONORABLE KEVIN 1. CAREY AT


THE UNITED STATES BANKRUPTCY COURT, 824 MARKT STREET, FIFTH FLOOR,
COURTROOM #5, WILMINGTON, DELAWARE 19801.
Dated: September 4, 2009

PACHULSKI STANG ZIEHL & JONES LLP

Ir arasch (CA Bar No.1 09084)


Ja es . O'Neil (DEBar No. 4042)

Scotta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100

Facsimile: 310/652-4400
Email: ikharasch~pszjlaw.com

joneil~pszjlaw.com
smcfarland(fpszj law .com

Counsel for Debtors and Debtors in Possession.

68773-002\DOCS_LA:207236. i

EXHIBIT A
EMPLOYMENT AGREEMENTS

Debtor Party

Employee
John Rainwater

Title
Executive Vice President and Chief Operating Officer Sr. Vice PresidentFinance and Chief Financial Offcer Chairman and Chief Executive Officer Chairman and Chief Executive Officer

Starting Date
11/7/08

Expiration Date
11/7/10

Pacific Energy Resources Ltd. Pacific Energy


Resources Ltd.

Gerald Tywoniuk

11/7/08

11/7/11

Pacific Energy
Resources Ltd.

Vladimir Katic

1/1/08

1/31/12

Pacific Energy
Resources Ltd.

Vladimir Katic

7/30/05

Pacific Energy
Resources Ltd.

(Indemnification Agreement) Steven Liles

Vice President and General Manager of


Beta Operations

11/7/08

11/7/11

Pacific Energy
Resources Ltd.

Daren Katic
Darren Katic

President President

1/1/08

1/31/12

Pacific Energy
Resollrces Ltd.

7/30/05

(Indemnification Agreement)

68773-002\DOCS_LA:207409. i

EXHIBIT B

REAL PROPERTY LEASES

Debtor Party

Type of Lease
Office Lease

Property Address

Landlord
GWR BSP Bakersfield, LLP Air Commercial Real Estate Association 800 W. 6th Street Suite 800 Los Angeles, CA 90017 Carr-Gottstein Properties 6401 "A" Street Anchorage, AK 99518

Starting
Date
1/1/07

Expiration Date
12/31/11

Monthly Rent
$6,001.86

Cameros Energy, Inc.

4450 Califomia
A venue

Bakersfield, CA

93309

Pacific Energy
Alaska Operating,

Office Lease

Carr-Gottstein Bldg.

6/1/08

5/31/12

$32,000

LLC

310 "K" Street Suite 700 Anchorage, AK

68773-002\DOCS _LA:20743 i. i

EXHIBIT C
OFFICE CONTRACTS

Debtor Party

Type of Contract
Mailng System

Counter- Party

Starting Date
8/14/08

Expiration Date
11/14/11

Monthly Cost
$115.00

Carneros Energy,

Inc.

Pacific Energy Resources Ltd.

Pitney Bowes Global Financial Services LLC P.O. Box 856460 Louisvile, KY 40285-6460 Telecommunications Time Warner Telecom Holdings Inc.
1430 Truxtun Ave.

12/29/06

12/29/09

Agreed Rate for Monthly Service

Suite 875 Bakersfield, CA 93301

Pacifc Energy Resources Ltd.

Copier Lease

Turk's Kern Copy, Inc.


1701 18th Street

4/19/07

4/19/10

$263.22

Bakersfield, CA 93301

68773-002\DOCS_LA:207434. i

IN THE UNITED STATES BANKRUPTCY COURT

In re: )
Upon consideration of

FOR THE DISTRICT OF DELAWARE


Chapter 11

) )

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

Debtors. )
)

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


Related to Docket No.

ORDER GRANTING DEBTORS' SECOND MOTION FOR ORDER UNDER SECTIONS 365(a) AND 554(a) OF THE BANKRUPTCY CODE AUTHORIZING THE DEBTORS TO (1) REJECT CERTAIN EXECUTORY CONTRACTS; (2) REJECT CERTAIN UNEXPIRED LEASES; AND (3) ABANDON ANY PERSONAL PROPERTY REMAINING AT THE PREMISES OF ANY REJECTED REAL PROPERTY LEASE
the motion (the "Motion")2 of

the captioned debtors and

debtors in possession (the "Debtors"), seeking entry of an order under sections 365(a) and 554(a)
of

the Bankptcy Code authorizing the Debtors to reject five employment agreements and two

related indemnity agreements, two office leases and certain contracts and leases of personal

property related to the conduct of business out of the Bakerfield offce, and abandon personal
property at such premises, effective as of September 30, 2009; and it appearing that the relief
requested is in the best interests of

the Debtors' estates and creditors; and it appearing that this

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 1.0. # 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 ILL W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion.

68773-002\DOCS_LA:207236. i

Court

has

jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; and it appearing

that this proceeding is a core proceeding pursuant to 28 U.S.C. 1408 and 1409; and adequate
notice of the Motion having been given; and it appearing' that no other notice need be given; and

after due deliberation and suffcient cause appearing therefore, it is hereby:


ORDERED that the Motion is granted; and it is further
ORDERED that the Employment Agreements and Indemnity Agreements listed
on Exhibit A to the Motion shall be deemed rejected as of

the September 30,2009; and it is

further

ORDERED that the Real Property Leases listed on Exhibit B to the Motion shall

be deemed rejected as of September 30, 2009; and it is further


ORDERED that the Office Contracts listed on Exhibit C to the Motion shall be
deemed rejected as of

September 30,2009.

ORDERED that the Debtors are authorized to abandon the Remaining Personal

Property located in the premises underlying the Real Property Leases effective as of September

30,2009, except as otherwise agreed between the respective landlord and the Debtors; and it is
further

ORDERED that the Debtors reserve all rights to contest any rejection or other
claims and/or the characterization of

the Rejected Agreements as executory contracts or

unexpired leases, or otherwise; and it is further

ORDERED that the Debtors reserve all rights to contest any fied claims arising
from the rejection of

the Rejected Agreements or otherwise; and it is further

68773-002\DOCS_LA:207236. i

ORDERED that the Debtors do not waive any claims that they may have against
any of

the counterparies to the Rejected Agreements, whether or not such claims are related to

the Rejected Agreements; and it is further

ORDERED that this Cour shall retain jurisdiction to hear and determine all
matters arising from the implementation of this Order; and it is further
ORDERED that notwithstanding the possible applicability of

Rules 6004(h),

7062,9014 of

the Federal Rules of

Bankptcy Procedure, or otherwise, the terms and conditions

of

this Order shall be immediately effective and enforceable upon its entry.

Dated: September _, 2009

The Honorable Kevin 1. Carey Chief United States Bankruptcy Judge

68773-002\DOCS_LA:207236. i

IN THE UNITED STATES BANKRUPTCY COURT

In re: )
STATE OF DELAWARE )
) ss:

FOR THE DISTRICT OF DELA WARE


Chapter 11

) )

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

Debtors. )

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

AFFIDAVIT OF SERVICE

COUNTY OF NEW CASTLE )


Kathleen Forte Finlayson, being duly sworn according to law, deposes and says
that she is employed by the law firm of

Pachulski Stang Ziehl & Jones LLP, attorneys for the

Debtors in the above-captioned action, and that on the 4th day of September, 2009 she caused a
copy of

the following document(s) to be served upon the parties on the attached service lists in

the manner indicated:

Notice and Debtors Second Motion to Reject Certain Executory Contracts and Unexpired Leases and Abandon any Personal Propert Remaining at the Premises of any Rejected Real Property Lease

DEBR L. YOU
Notary Public
Commission Exp.:
DOCS_DE: i 52825. i

2(/((

STATE OF DElA My ci ex JU ", 201

NOTAR PU

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 is1 1 1 W.

Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

Pacific Energy Real Property Lease Rejection Service List Case No. 09-10795 (KJC)
Document No. 152814

11 - First Class Mail

Via First Class Mail AIR Commercial Real Estate Assoc. 800 West 6th Street, Suite 800 Los Angeles, CA 90017
Via First Class Mail Car-Gottstein Properties 6401 "A" Street Anchorage, AK 99518 Via First Class Mail
Darren Katic

648 First Street Hermosa Beach, CA 90254

Via First Class Mail


Vladimir Katic

648 First Street Hermosa Beach, CA 90254

Via First Class Mail Pitney Bowes Global Financial Services LLC 1313 North Atlantic Street, Floor 3 Spokane, WA 99201-2303
Via First Class Mail John Rainwater 915 Vista Verde Way Bakersfield, CA 93309

Via First Class Mail Steven Liles 6305 E. Vista Street Long Beach, CA 90803 Via First Class Mail Time Warer Telecom Holdings, Inc. 1430 Truxtun Avenue
Suite 875 Bakersfield, CA 93301

Via First Class Mail Turk's Kern Copy, Inc. Attn: Luis Carmona 1701 18th Street Bakersfield, CA 93301

Via First Class Mail Gerald Tywoniuk 106 Avenue B Redondo Beach, CA 90277
Via First Class Mail Whale Building, LLC c/o Denali Commercial Management 4000 W. Diamond Blvd., Suite 240 Anchorage, Alaska 99518
68773-002\DOCS_DE: 1 528 14. 1

Pacific Energy Resources Ltd. 2002 Service List


Case No. 09- 10785
Document No. 145745

14 - Hand Delivery
43 - 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

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

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

Interoffice Pouch to Los Angeles Counsel for Debtors) Robert M. Saunders, Esquire Ira D. Kharasch, Esquire Scotta E. McFarland, Esquire Pachlski Stang Ziehl & Jones LLP
10100 Santa Monica Blvd., 11th 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
Citizens Ban Center, Suite 1401

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

919 Market Street, P.O. Box 1070 Wilmington, DE 19899


Hand Delivery (Counsel for Westchester Fire Insurance Company and Noble Energy Inc.) Tobey M. Daluz, Esquire Joshua E. Zugerman, Esquire Ballard Spah Andrews & Ingersoll, LLP 919 N. Market Street, 1 th Floor Wilmington, DE 19801

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

Vito L DiMaio 230 N. Market Street Wilmington, DE 19801

Hand Delivery (Counsel for Oxy Long Beach Inc.) David L. Finger, Esquire
Finder, Slanina Liebesman, LLC

One Commerce Center 1201 N. Orange St., ih Floor Wilmington, DE 19801


Hand Delivery

Hand Delivery (Counsel for Ammadon Limited and Catherwood Limited) Mark E. Felger, Esquire Cozen 0' Connor 1201 N. Market Street, Suite 1400 Wilmington, DE 19801 Hand Delivery (Counsel for Forest Oil Corporation) Robert J. Dehney, Esquire Curtis S. Miler, Esquire Morris Nichols Arsht & Tunnell LLP 1201 N. Market Street Wilmington, DE 19899

Unsecured (Offiial Committee of Creditors) David B. Stratton, Esquire James C. Carignan, Esquire Pepper Hamilton LLP
Hercules Plaza, Suite 1500

1313 Market Street Wilmington, DE 19899

First Class Mail


(United States Attorney General) Eric H. Holder, Jr. Office of the Attorney General U.S: Deparment of Justice Pennsylvania Avenue, N.W. 950 Washington, DC 20530-0002

Hand Delivery (Counsel for Marathon Oil Company) Kevin 1. Mangan, Esquire Womble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801
Hand Delivery (Counsel for Cook Inlet Region, Inc.) Eric Lopez Schnabel, Esquire Dorsey & Whitney (Delaware) LLP
1105 North Market Street, Suite 16th Floor

First Class Mail


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

Wilmington, DE 19801

First Class Mail


Hand Delivery (Counsel for Area Energy LLC) Norman L. Pernick, Esquire Karen. M. McKinley, Esquire
Cole;Schotz, Meisel, Forman & Leonard, P.A. 500 Delaware Avenue, Suite 1410

Secr.etary of Treasury P.O. Box 7040

Dover, DE 19903

First Class Mail


Secretary of T:reasury

Wilmington, DE 19801

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

First Class Mail


Attn: Insolvency

First Class Mail


Chevron Oil Company
Attn: Steven Lastraps

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

3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503

First Class Mail


First Class Mail
Internal Revenue Service P.O. Box 21126 Philadelphia, P A 19114-0326

California Franchise Tax Board Bankruptcy, BE MSA 345 P.O. Box 2952 SacrameIlto, CA 95812-2952

First Class Mail


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

First Class Mail


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

First Class Mail


First Class Mail
Mark Schonfeld, Esq. Regional Director Securities & Exchange Commission New York Regional Offce 3 World Financial Center, Suite 400 New York, NY 10281-1022
SWEPI LP
P.O.

.t....

Box 576

Houston, TX 77002-0576
Fir&t Class Mail
Noble Energy, Inc.

100Glenborough, Suite 100 Houston, TX 77067

First Class Mail


Michel A. Berman, Esq. Securities & Exchange Commission Office of General Counsel-Bankptcy 100 F Street, N.E. Washington, DC 20549

First Class Mail


(Counsel to Silver Point Finance) Seth Jacobs, Esquire Anrii Meresidis, Esquire Skadden, Arps, Slate, Meagher & Flom, LLP 155 N. Wacker Drive, Suite 2700 Chicago, IL 60606-1720

First Class Mail


Matthew Berry, Esquire Office of General Counsel Federal Communications Commission
445 iih Street, S.W.

First Class Mail


(Coimsel to Goldman Sachs and 1.Aron & Company)
Jeffi~ey Sabin, Esquire

Washington, DC 20554

First Class Mail


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

Steven Wilamowsky, Esquire


ScoH K. Seamon, Esquire

Bingham McCutchen LLP 3 9~ Park Avenue N ew York, NY 10022

..j,

First Class Mail


(Counsel to Goldman Sachs and J.Aron & Company) Amy Kyle Bingham McCutchen (Boston) One Federal Street Boston, MA 01221-1726

First Class Mail (Counsel to United States Deparment of


Interior, including the Minerals
Management Service)

E. Kathleen Shahan, Esquire U.S.'Department of Justice 1100L Street, NW Washington, D.C. 20005

First Class Mail


Linda Lautigar

First Class Mail


(Consel for Westchester Fire Insurance Company) Robert McL. Boote, Esquire Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51 st Floor

Banptcy Coordinator
MMS / Denver Federal Center POBox 25165 Mail Stop 370B2 Denver, CO 80225

Philadelphia, P A 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
Sherwin D. Y oelin)

First Class Mail


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

John J. Haris, Esquire Rachel M. Feiertag, Esquire Meyers, Nave, Riback, Silver & Wilson 333 South Grand Avenue, Suite 1670 Los Angeles, CA 90071

First Class Mail


First Class Mail
Goldman Sachs E&P Capital
Attn: Matthew C. Tarver

(Counsel for Oxy Long Beach Inc.) Richard M. Kremen, Esquire


Jodie E. Buchman, Esquire

1000 Louisiana, Suite 550 Houston, Texas 77002

DLA Piper LLP (US)


6225 Smith Avenue

Baltimore, MD 21209

First Class Mail


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

First Class Mail


(Counsel for Noble Energy Inc.)
Rhe;~ G. Campbell, Esquire

Greenwich, CT 06830

First Class Mail


Seth E. Jacobson, Esquire L. Byron Vance III, Esquire Skadden, Arps, Slate, Meagher & Flom LLP 155 N. Wacker Drive, Suite 2700 Chicago, IL 60606-1720

Mithell E. Ayer, Esquire Thompson & Knight LLP 333'lay Street, Suite 3300 Houston, TX 770022

First Class Mail


(Offcial Committee of

First Class Mail


Unsecured

(Counsel for DCFS Trust subservicer for


DCFS Trust)
Marin A. Mooney, Esquire

Creditors) Francis J. Lawall, Esquire Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, P A 19103

Deily, Mooney & Glastetter, LLP 8 Thurlow Terrace Albany, NY 12203

First Class Mail

First Class Mail


(Official Committee of

Unsecured

Creditors) Filiberto Agusti, Esquire Steven Reed, Esquire


JoshuaTaylor, Esquire

(Counsel for Aera Energy LLC) Steven E. Rich, Esquire Mayer Brown LLP
350 South Grand Avenue, 25th Floor

Los Angeles, CA 90071

Steptoe & Johnson LLP 1330 Connecticut Avenue NW Washington, DC 20036

First Class Mail


(Claims representative for the County of Kern)

Attn: Banptcy Division


First Class Mail
Unsecured Creditors) Robbin Itkin, Esquire Katherine Piper, Esquire Kelly Frazier, Esquire Steptoe & Johnson LLP
(Official Committee of

c/o ,Linda Delgado

P.O, Box 579 Bakersfield, CA 93302

First Class Mail


Aurora Gas LLC 6051 North Course Drive, Suite 200 Houston, TX 77043

2121 Avenue of the Stars, 28th Floor

Los Angeles, CA 90067

First Class Mail

First Class Mail


(Counsel for Cook Inlet Region, Inc.)
Michael R. Mils, Esquire

Dorsey & Whitney LLP


1031 W. 4th Ave., Suite 600

Anchorage, AK 99501

First Class Mail


(Counsel for the State of Alaska) Lorenzo Marinuzzi, Esquire Morrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104

(Consel for Union Oil Company of California) Richard L. Epling, Esquire David A. Crichlow, Esquire Roger Elder, Esquire Pilsbury Winthrop Shaw Pittman LLP 1540 Broadway New York, NY 10036

First Class Mail


(Counsel for Minerals Management Service) DeAn L. Owen, Esquire the Solicitor, Rocky Mountain
Office of

Reg~on
755 Parfet Street, Suite 151

Lakewood, CO 80215

," I.

First Class Mail


(Counsel for Ammadon Limited and Catherwood Limited) Philip M. Abelson, Esquire Dewey & Leboeuf LLP 1301 Avenue of the Americas New York, NY 10019
~ .i

First Class Mail


(Counsel for Forest Oil Corporation) Steven M. Abramowitz, Esquire Ronald L. Oran, Esquire Vinson & Elkins
666 Fifth Avenue, 26th Floor

New York, NY 10103

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