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)

) ) )

CERTIFICATION OF COUNSEL REGARDING STIPULATION FOR PAYMENT OF ESCROWED FUNDS TO KREIELSHEIMER REMAINDER FOUNDATION AND ALLOWANCE OF NONPRIORITY GENERAL UNSECURED CLAIM
The undersigned hereby certifies that: The above-captioned debtor and debtors in possession Pacific Energy Alaska Operating LLC ("PEAO") has entered into a stipulation (the "Stipulation") with Kreielsheimer Remainder Foundation ("KRF") to allow KRF a to receive a payment of $38,585 from an escrow account (the "Royalty Account") maintained at First National Bank of Alaska (the "Escrow Agent") and allowance of a nonpriority general unsecured claim against PEAOs estate in the amount of $10,462, and resolving all other claims of KRF as set forth in the Stipulation. 2. A copy of the Stipulation and the proposed order (the "Order") are

attached to this certification.

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); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is III W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

68773-002\DOCS_LA:220571 .2

3. the Stipulation.

The parties hereby request the Court enter the attached Order approving

Dated: June 12010

PACHULSKI STANG ZIEHL & JONES LLP

I-D. Kharasch (CA Bar No. 109084) Jyhes E. ONeill (DE Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 919 North Market Street, 17 t Floor P.O. Box 8705 Wilmington, DE 19899-8705 Telephone: 302/652-4100 Facsimile: 310/652-4400 Email: ikharasch@,pszj law. corn joneill@pszjlaw.com rsaunders@pszjlaw.com Counsel for Debtors and Debtors in Possession

68773-002\DOCSLA:220571.2

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

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

Related Docket No.

)
)

ORDER APPROVING STIPULATION FOR PAYMENT OF ESCROWED FUNDS TO KREIELSHEIMER REMAINDER FOUNDATION AND ALLOWANCE OF NONPRIORITY GENERAL UNSECURED CLAIM Upon consideration of the Stipulation for Payment o.fEscrowed Funds to Kreilsheimer Remainder Foundation and Allowance of Nonpriority General Unsecured Claim (the Stipulation"), 2 it is hereby ORDERED THAT: The Stipulation, a copy of which is attached hereto as Exhibit A, is approved. 2. The Escrow Agent (or PEAO as the case may be) is authorized and

directed to pay $38,485 to KRF from funds in or from the Royalty Account within thirty (30) days of the entry of this Order.
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); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is Ill W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.
2

Capitalized terms that are not expressly defined herein shall have the meanings ascribed to such terms in the Stipulation.

68773-002DOCS_LA220568 2

KRF shall be allowed a nonpriority general unsecured claim against PEAOs chapter I estate in the amount of $10,462. 4. The Proof of Claim filed by KRF in the case of PERL (designated by the

Debtors claims agent as claim number 404) is hereby withdrawn with prejudice and disallowed in its entirety. This Court shall retain jurisdiction with respect to all matters arising from or related to the implementation of the Stipulation and this Order. Dated: .2010.

The Honorable Kevin J. Carey Chief United States Bankruptcy Judge

68773-00200CSLA:220568.2

EXHIBIT A

68773-002\IDQCSLA220568 2

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: PACIFIC ENERGY RESOURCES LTD., et al., Debtor.

) Chapter 11
)

) Case No. 09-10785 (KJC)

)

) (Jointly Administered)
)

STIPULATION FOR PAYMENT OF ESCROWED FUNDS TO KREIELSHEIMER REMAINDER FOUNDATION AND ALLOWANCE OF NONPRIORITY GENERAL UNSECURED CLAIM WHEREAS, on March 9, 2009 (the "Petition Date") the above-captioned debtors and debtors in possession (the "Debtors") commenced their cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. WHEREAS, prior to the Petition Date, Leo T. Kreielsheimer ("Kreielsheimer") owned certain overriding royalty interests ("Kreielsheimer ORRIs") in the West Foreland Field (an oil and gas field located in Alaska) owned by Pacific Energy Alaska Operating, LLC ("PEAO"), one of the Debtors. WHEREAS, prior to the Petition Date, Kreielsheimers decedants estate assigned the Kreielsheimer ORRJs to the Kreielsheimer Remainder Foundation ("KRF"). WHEREAS, Forest Oil Corporation ("Forest"), which had owned the predecessor of PEAO, obtained an order from the Alaska Oil and Gas Conservation Commission
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); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailing address for all of the Debtors is 111 W. Ocean Boulevard, Suite 1240, Long Beach, CA 90802.

D005_LA:220538.4

("AOGCC") to establish an escrow until a Royalty Sharing Agreement ("RSA") was negotiated between the United States Bureau of Land Management, the State of Alaska and PEAO or its predecessor for the sharing of royalties (lessors royalties and overriding royalty interests) for the upper zone of West Foreland #2 natural gas well. WHEREAS, Forest funded a segregated escrow account (the "Royalty Account") at First National Bank of Alaska (the "Escrow Agent") and turned over the account to PEAO in conjunction with the acquisition of PEAOs predecessor by Pacific Energy Resources, Ltd., on of the Debtors, in August 2007. WHEREAS, the RSA was subsequently completed and funds distributed pursuant to AOGCC order in December 2008. WHEREAS, of the $2.5 million funded by Forest into the Royalty Account, approximately $550,699.39 (which includes interest accrued since that time) remains in the Royalty Account, including $94,140 of suspended royalties to owners of overriding royalty interest that need to be paid once title is cleared or proper addresses are obtained, including $38,485 owed to Kreielsheimer, which were assigned to KR.F (the "KRF Royalties"). WHEREAS, the Debtors now wish to distribute a portion of the KRF Royalties to KRF.
As requested in Debtors Motion for Order Implementing Prior Orders of this Court by Authorizing Debtors to Pay Net Proceeds of Certain Collateral to the Debtors Postpetition Lenders filed with this Court [Docket No. 1561] (the "Payment Motion") on April 30, 2010 (which is currently scheduled to be heard on June 23, 2010), upon authorization by this Court, the Escrow Agent would transfer the funds in the Royalty Account to the Debtors and the Debtors would then transfer $38,485 from the Royalty Account to the KRF and $55,665 (being $94,140 less $38,485) from the Royalty Account to Cook Inlet Energy, LLC ("CIE"), the purchaser of most of PEAOs Group I Assets (as defined in the Payment Motion) to be administered by CIE, if CIE agrees, or by the Debtors for the benefit of royalty holders listed on Exhibit A to the Payment Motion (which includes Kreielsheimer), with the balance of $456,559.39 ($550,699.39 less $94,140) to be paid to the Debtors lenders. This Stipulation proposes similar relief as the Payment Motion solely with respect to the payment of $38,485 to KRF. The proposed order

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NOW, THEREFORE, the Debtors and KRF, by their attorneys, hereby stipulate and agree, that upon the Courts approval of this Stipulation: The Escrow Agent (or PEAO as the case may be) is authorized and directed to pay $3 8,485 to KRF from funds in or from the Royalty Account within thirty (3 0) days of the entry of an order approving this Stipulation. 2. Also, upon this Courts approval of this Stipulation, KRF shall be allowed

a nonpriority general unsecured claim against PEAOs chapter 11 estate in the amount of $10,462. Upon approval of this Stipulation by this Court, the Proof of Claim filed by KRF in the case of PERL (designated by the Debtors claims agent as claim number 404) is hereby withdrawn with prejudice and disallowed in its entirety. 4. Except as to the obligations to be performed under this Stipulation, KRF

and its predecessors, successors, assigns, officers, managers, members, former and present employees, agents, representatives, affiliates, and attorneys and all persons acting by, through, under, or in concert with them or any of them, irrevocably and unconditionally release and forever discharge the Debtors and any of their respective predecessors, successors, assigns, executors, trustees, agents, representatives, affiliates and attorneys, and all persons acting by, through, under, or in concert with any of them, from any and all contractual and extra-contractual actions, torts, express or implied warranties, causes of action, suits, debts, liens, contracts, rights, agreements, obligations, promises, liabilities, claims, demands, damages, controversies, losses,
approving the Payment Motion would be modified to reflect the payment to KRF under this Stipulation (if approved and made prior to the June 23 hearing).

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costs and expenses of whatever kind or nature, whether now known or unknown, suspected or unsuspected, fixed or contingent which arose or are related in any way to events occurring before the date hereof. 5. Except as to the obligations to be performed under this Stipulation, the

Debtors irrevocably and unconditionally release and forever discharge KRF from any and all contractual and extra-contractual actions, torts, express or implied warranties, causes of action, suits, debts, liens, contracts, rights, agreements, obligations, promises, liabilities, claims (including any and all proofs of claims and requests for payment filed or otherwise asserted in any of the Debtors cases), demands, damages, controversies, losses, costs and expenses of whatever kind or nature, whether now known or unknown, suspected or unsuspected, fixed or contingent which arose or are related in any way to events occurring before the date hereof. This stipulation is in settlement of a disputed claim. Nothing herein is deemed to be an admission or can be used as evidence against KRF or the Debtors in any other proceeding. The terms of this Stipulation have been negotiated by and between the parties and shall not be construed against any party hereto. Each party has (1) carefully read and understand the scope and effect of each provision; and (2) consented to and executed this Stipulation freely and without fraud, coercion, duress or undue influence. Each party shall bear its own costs and expenses, including attorneys fees, in connection with the negotiation, preparation and performance of this Stipulation. This Stipulation shall inure to the benefit of, and shall be binding upon, the successors and assigns of the parties, and each of them. No amendment of any provision of

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this Stipulation shall be effective unless it is in writing and signed by the parties, and no waiver of any provision of this Stipulation, and no consent to any variation thereof, shall be effective unless it is in writing and signed by the party against whom such waiver is asserted, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 8. This Stipulation sets forth the entire agreement and understanding between

the parties relating to the matters covered herein and supersedes all other prior agreements, discussions and documents, if any, related to the subject matter hereof. No party shall be bound by any terms, conditions, definitions, understandings or representations with respect to the subject matter hereof, other than as expressly provided for herein, except as may hereafter be agreed to in a writing signed by the applicable parties. The recitals are incorporated into and made part of this Stipulation. This Stipulation may be signed in counterpart originals, which, when fully executed, shall constitute a single original. Any signature delivered by a party by facsimile transmission or by electronic means shall be deemed an original signature hereto.

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9.

The effectiveness of this Stipulation is conditioned upon its approval by

Bankruptcy Court. The Bankruptcy Court shall retain jurisdiction to resolve any disputes or controversies arising from or related to this Stipulation. Dated: June, 2010 STOEL RIVES LLP PACHULSKI STANG ZIEHL & JONES LLP

By: Erin L. Eliasen 600 University Street, Suite 3600 Seattle, Washington 98101 206-386-7605 Attorneys for Kreielsheimer Remainder Foundation

By: Ira .jkharasch (CA Bar No. 109084) JanWs E. ONeill (DE Bar No. 4042) Robert M. Saunders (CA Bar No. 226172) 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Telephone: 302/652-4100 Facsimile: 310/652-4400 ikharasch@pszjlaw.com Email: joneillpszjlaw.eom rsaunders@pszjlaw.com Counsel for Debtors and Debtors in Possession

DOCS_LA:220538.4

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