IN THE UNITED STATES BANKRUPTCY COURT

In re: )

FOR THE DISTRICT OF DELA WARE

Chapter i i
)

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

Case No. 09- i 0785(KJC)

Debtors. )

(Jointly Administered)
Related Docket No. 289

Deadline for Objections: May 27, 2009 at 4:00 p.m. prevailng Eastern time
Hearing Date: June 3, 2009 at 1 :00 p.m. prevailng Eastern time

CERTIFICATION OF COUNSEL WITH RESPECT TO ORDER APPROVING KEY EMPLOYEE INCENTIVE PLAN AND AUTHORIZING PAYMENTS THEREUNDER
On May i i, 2009, Pacific Energy Resources, et at. (the "Debtors") fied Debtors'
Motion for an Order Approving a Key Employee Incentive Plan and Authorizing Payments

Thereunder (Docket No. 289) (the "Motion").

In response thereto the Official Committee of

Unsecured Creditors (the

"Committee") provided informal comments. The Debtors have resolved the concerns of the
Committee and have revised the language in the proposed order. A copy of the revised proposed

order is attached hereto as Exhibit A, which has been agreed to by the paries. The U.S. Trustee has also been provided with a copy of the revised order. A blackline copy of the order is
attached hereto as Exhibit B.

The Debtors respectfully request that the Court enter the attached form of
proposed revised order at its earliest convenience. Should the Court have any questions regarding the proposed revised order, the
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 J.D. # not available); Cameros Acquisition Corp. (5866); Pacific Energy Alaska Operating LLC (702 i); San Pedro Bay Pipeline Company the Debtors is i i i W. Ocean (1234); Cameros Energy, Inc. (9487); and Gotland Oil, Inc. (5463). The mailng address for all of Boulevard, Suite 1240, Long Beach, CA 90802.

Debtors stand ready to respond.

Dated: June 1, 2009

P ACHULSKI STANG ZIEHL & JONES LLP

ur Davis Jones (DE Bar No. 2436)

a . Kharasch (CA Bar No.1 09084)

otta E. McFarland (DE Bar No. 4184, CA Bar No. 165391) Robert M. Saunders (CA Bar No. 226172)
James E. O'Neil (DE Bar No. 4042)

Kathleen P. Makowski (DE Bar No. 3648) 919 North Market Street, 1 ih Floor P.O. Box 8705 Wilmington, DE 19899-8705
Telephone: 302/652-4100
Facsimile: 310/652-4400

Email: lionespszilaw.com

ikharaschpszilaw.com smcfarlandpszilaw.com rsaunderspszilaw.com ioneilpszilaw.com kmakowskipszilaw.com

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

DOCS_DE: i 48864. i

EXHIBIT A

42125-001 \DOCS_DE:6375. i

IN THE UNITED STATES BANKRUPTCY COURT

In re: )

FOR THE DISTRICT OF DELAWARE

Chapter 11

) )

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

Debtors. )

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

Related Docket No. 289

ORDER APPROVING KEY EMPLOYEE INCENTIVE PLAN AND AUTHORIZING PAYMENTS THEREUNDER
This matter came before the Court on the Debtors' Motion for an Order
Approving Key Employee Incentive Plan and Authorizing Payments Thereunder (the

"Motion"), fied by the above-captioned debtors and debtors in possession (the

"Debtors"). The Court having reviewed the Motion, finds that (a) the Court has
jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (b) this is a core
proceeding pursuant to 28 U.S.c. 157(b)(2), (c) venue of

this chapter 11 case in this

the Motion

district is proper pursuant to 28 U.S.c. 1408 and 1409, and (d) notice of

was sufficient under the circumstances, and the Court having determined that the legal and factual bases set forth in the Motion establish cause for the relief granted herein and
it appearing that the relief requested is in the best interest of the Debtor, its estate,
creditors, and other parties in interest;
i The Debtors in these cases, along with the last four digits of each Debtor's 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 the Debtors is i I I W. Ocean Boulevard, Suite 1240, Long Gotland Oil, Inc. (5463). The address for all of
Beach, CA.

DOCS_LA:202855.4

IT is HEREBY ORDERED THAT:

1. The Motion is GRANTED and the Incentive Plan is APPROVED

as modified herein.
2. The Debtors are authorized to implement the Incentive Plan set

forth in the Motion and modified herein.

3. The respective bonuses payable to Participating Employees in (a)

Group 1 of

the Incentive Plan are earned by each such Participating Employee upon the

receipt by debtor Pacific Energy Resources, Ltd. of a bona fide third party offer for the
Beta Assets that meets or exceeds the target amounts set forth under Metric I a of the

Incentive Plan and/or, as applicable, the royalty reduction targets set forth under Metric
lb; and (b) Group 2 of

the Incentive Plan are earned by each such Participating Employee

upon the receipt by debtor Pacific Energy Alaska Operating LLC of a bona fide third
part offer for the Alaska Assets that meets or exceeds the target amounts set forth under

Metric 2 of the Incentive Plan. Bonuses are payable to the Participating Employees in Groups I and 2 in accordance with paragraph 5 below only upon the applicable closing of

the sale of the applicable assets or confirmation of a plan in the relevant case. The
Participating Employee's bonus, if any, becomes unearned (i) at the time of voluntary
separation by the Participating Employee from employment with the Debtors or (ii) upon
termination of employment for cause by one or more of

the Debtors.

DOCS _LA :202855.4

4. The respective bonuses payable to Participating Employees in

Groups 3 and 4 of the Incentive Plan are payable to the Participating Employees in each such group in accordance with paragraph 5 below only upon the later of (a) final reconciliation and verification of performance against the applicable milestones; or (b)

the September II, 2009 payroll. The Participating Employee's bonus, if any, becomes
unearned (i) at the time of voluntary separation by the Participating Employee from

employment with the Debtors or (ii) upon termination of employment for cause by one or
more of the Debtors.
5. If

the Participating Employees meet their respective performance

goals, as set forth in the Incentive Plan, then the Debtors are authorized to pay the

respective performance bonuses of Participating Employees pursuant to the terms of the

Incentive Plan, as set forth in the Motion and this Order, to Participating Employees
whom ( a) are employees of one or more of the Debtors at the date and time of the

applicable payment as set forth in this Order (the "Payment Date") or (b) were terminated
by the Debtors without cause prior to the Payment Date.
6. This Court shall retain jurisdiction over all matters set forth in the

Motion and this Order, including the entitlement of any party to any payment pursuant to
the Incentive Plan.

Dated: June

,2009
The Honorable Kevin J. Carey

United States Bankptcy Judge

DOCS _ LA:202855.4

EXHIBIT B

42125-001 \DOCS_DE:6375. 1

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

Debtors. )

) )

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

Related Docket No. -2H

ORDER APPROVING KEY EMPLOYEE INCENTIVE PLAN AND AUTHORIZING PAYMENTS THEREUNDER
This matter came before the Court on the Debtors' Motion for an Order
Approving Key Employee Incentive Plan and Authorizing Payments Thereunder (the

"Motion"), fied by the above-captioned debtors and debtors in possession (the

"Debtors"). The Court having reviewed the Motion, finds that (a) the Court has

jurisdiction over this matter pursuant to 28 U.S.c. 157 and 1334, (b) this is a core
proceeding pursuant to 28 U.S.C. 157(b)(2), (c) venue of

this chapter 11 case in this

district is proper pursuant to 28 D.S.C. 1408 and 1409, and (d) notice ofthe Motion

was suffcient under the circumstances, and the Cour having determined that the legal
and factual bases set forth in the Motion establish cause for the relief granted herein and it
appearing that the relief

requested is in the best interest ofthe Debtor, its estate, creditors,

and other parties in interest;

IT is HEREBY ORDERED THAT:

1. The Motion is GRATED and the Incentive Plan is APPROVED_

as modified herein.

1 The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: Pacific Energy Resources Ltd. (3442); Petrocal Acquisition Corp. (6249); Pacific Energy Ala ska 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 the Debtors is 1 i i W. Ocean Boulevard, Suite 1240, Gotland Oil, Inc. (5463). The address for all of
Long Beach, CA.

UDOCS_LA:201&.1 12028554

2. The Debtors are authorized to implement the Incentive Plan set

forth in the Motion and modified herein.

3. The respective bonuses payable to Participating Employees in (a)

Group 1 of

the Incentive Plan are earned by each such Participating Employee upon the

receipt by debtor Pacific Energy Resources Ltd. of a hona fide third party offer for the
Beta Assets that meets or exceeds the target amounts set forth under Metric 1 a of the

Incentive Plan and/or. as applicable. the royalty reduction targets set forth under Metric
1 b: and (b) Group 2 of

the Incentive Plan are earned by each such Participating Employee

upon the receipt by debtor Pacific Energy Alaska Operating LLC of a hona fide third

party offer for the Alaska Assets that meets or exceeds the target amounts set forth under
Metric 2 of

the Incentive Plan. Bonuses are payable to the Participating Employees in

Groups 1 and 2 in accordance with paragraph 5 below only upon the applicable closing of

the sale of the applicable assets or confirmation of a plan in the relevant case. The
Participating Employee's bonus. if any. becomes unearned (i) at the time of voluntary

separation by the Participating Employee from employment with the Debtors or (ii) upon
termination of employment for cause by one or more of

the Debtors.

~DOCS_LA:2016g6.11202855.4

4. The respective bonuses pavable to Participating Employees in

Groups 3 and 4 of

the Incentive Plan are pavable to the Participating Employees in each

such group in accordance with paragraph 5 below only upon the later of (a) final
reconciliation and verification of

performance against the applicable milestones: or (b)

the S~tember 11. 2009 pavoii. The Participating Employee's bonus. if any becomes
unearned (i) at the time of

voluntary separation by the Participating Employee from

employment with the Debtors or (ii) upon termination of employment for cause by one or
more of

the Debtors.
.5 If

the Participating Employees meet their respective performance

goals, as set forth in the Incentive Plan, then the Debtors are authorized to pay th
Purticipating Employees thei~ respective performance bonuses of Participating

Employees pursuant to the terms of

the Incentive Plan, as set forth in the Motion and this

the Debtors

Order. to Participating Employees whom (a) are employees of one or more of

at the date and time of

the applicable pavment as set forth in this Order (the "Pavent

Date") or (b) were terminated by the Debtors without cause prior to the Payment Date.
4:.6 This Court shall retain jurisdiction over all matters set forth in the

Motion and this Order, including the entitlement of any pary to any payment pursuant to
the Incentive Plan.

Dated: June _, 2009

The Honorable Kevin J. Carey

United States Bankptcy Judge

;;DOCS_LA:20186.1 12028554

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