IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In Re: Chapter 11 PACIFIC ENERGY RESOURCES LTD.

et al., Debtors. [Re: Docket Nos. 456 and 641] COOK INLET REGION, INC.S SUPPLEMENTAL OPPOSITION TO DEBTORS MOTION TO ABANDON THE NON-TRADING BAY (GROUP 1) ASSETS Cook Inlet Region, Inc. (CIRI) hereby supplements its opposition to Debtors Debtors Alternative Motion for an Order Authorizing Abandonment of Certain Interests in Oil and Gas Properties in Alaska (Excluding Trading Bay) and Rejection of Executory Contracts Relating Thereto (Docket No. 456) (the Motion), filed at docket number 641 (the Objection) based on the following grounds: 1. The Debtors still have not provided any evidence on why imminent harm Case No. 09-10785 (KJC) (Jointly Administered)

does not exist or will not be created under the Debtors minimalist abandonment program. The Court does not have sufficient evidencenone, in factto make the determination that it must meet under the Midlantic standard. Instead, the Debtors argue to the Court that it has presented to the landowners a proposed abandonment plan which is the most it can offer given its lack of funds. In short, the Debtors say we have no money and have done all we can. The Debtors position is capped by its offer to provide transition services at significant cost, including allocation of administrative expenses from the California headquarters.

2.

The Debtors proposal to prepare the oil and gas properties for turnover to

the landowners, as highlighted in the State of Alaska objection (Docket No. 793) and the BLM objection (Docket No. 631), is less than the bare minimum required to prevent near certain harm to the public. The Debtors commit a paltry $257,000 toward preparing to abandon the Group 1 properties to the landowners, while the States estimate of costs is in excess of $50 million, and BLMs estimate for plugging and abandoning the two gas wells alone is $4 million.1 The Debtors must commit more funds, at a minimum, to satisfy the Midlantic standard. Moreover, the Debtors say that their fall-back is to simply convert the case to a Chapter 7. This cannot be allowed by the Court as a means for the Debtors (and their lenders) to avoid their responsibility to the public as required by Midlantic. 3. As required by Midlantic, the Court must require the Debtors to commit all

unencumbered assets (including avoidance and recovery rights) to address costs of abandonment. 2 The Debtors have made no showing that they have done so. In addition, any abandonment requirements not covered by unencumbered assets must be given administrative priority status. 4. The Debtors should be required to commit much more to the effort to

deliver the properties in a safe condition. CIRI has requested that abandonment be denied until an appropriate environmental review of these properties has been performed, at Debtors expense, and appropriate amounts have been escrowed for needed
1

A report commissioned by the Debtors dated December 31, 2008 puts the abandonment costs for the gas wells at approximately $1.7 million. 2 This should include any funds from the escrowed amounts under the State agreements that would otherwise be available to the estates unsecured creditors.

remediation.

Even if the Court declines to grant this relief, however, it should

nonetheless require the Debtors to devote all remaining unencumbered assets, on a priority basis, toward meeting its abandonment obligations. These funds should include the $1.238 million in excess cash flow it will generate per the abandonment budget, and should be equitably apportioned among the affected parties and properties. 5. In addition to more financial contribution by the Debtors toward proper

abandonment, CIRI must be made a named additional insured on all applicable insurance policies that cover the Debtors properties. The Debtors have provided endorsements showing CIRI as an additional insured for the policies for 2008 and 2009, however, CIRI must be added as additional insured for 2007 as well. WHEREFORE, for these reasons and for the reasons stated in CIRIs Objection and this supplement to the Objection, CIRI respectfully requests that the Court deny the Motion in its entirety and for such other further relief deemed just and proper. Dated: August 28, 2009 DORSEY & WHITNEY (DELAWARE) LLP By: /s/ Robert W. Mallard Eric Lopez Schnabel, Esq. (DE # 3672) Robert W. Mallard, Esq. (DE # 4279) 1105 N. Market Street, Suite 1600 Wilmington, DE 19801 Tel: (302) 425-7171 and Michael R. Mills, Esq. (Admitted Pro Hac Vice) DORSEY & WHITNEY LLP 1031 West Fourth Avenue 600 Anchorage, AK 99501-5907 Counsel for Cook Inlet Region, Inc.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ______________________________________ In re: ) Chapter 11 ) PACIFIC ENERGY RESOURCES LTD., et al., ) Case No. 09-10785 (KJC) ) Debtors. ) (Jointly Administered) ) _____________________________________ ) ) CERTIFICATE OF SERVICE I, Robert W. Mallard, Esq., hereby certify that on the 28th of August, 2009, that COOK INLET REGION, INC.S SUPPLEMENTAL OPPOSITION TO DEBTORS MOTION TO ABANDON THE NON-TRADING BAY (GROUP 1) ASSETS, was served upon the parties on the attached service list in the manner indicated thereon. Dated: August 28, 2009 DORSEY & WHITNEY (DELAWARE) LLP /s/ Robert W. Mallard Robert W. Mallard (DE Bar No. 4279) 1105 North Market Street (16th Floor) Wilmington, Delaware 19801 Counsel for Cook Inlet Region, Inc.

Service List Pacific Energy Alaska Operating LLC Attn: Gerald A. Tywoniuk, CFO 111 W. Ocean Boulevard, Suite 1240 Long Beach, CA gtywoniuk@pacenergy.com Via E-Mail Zolfo Cooper LLC Attn: Scott W. Winn Mark A. Cervi 1166 Avenue of the Americas 24th Floor New York, NY swinn@zolfocooper.com mcervi@zolfocooper.com Via E-mail Lazard Freres & Co., LLC Attn: Robert L. Lynd 600 Travis, Suite 2300 Houston, TX 77002 robert.lynd@lazard.com Via E-mail Ira D. Kharasch Robert M. Saunders Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd, 11th Floor Los Angeles, CA 90067-4100 ikharasch@pszjlaw.com rsaunders@pszjlaw.com Via E-mail James E. O'Neill Pachulski Stang Ziehl & Jones LLP 919 N. Market Street 17th Floor Wilmington, DE 19801 Via E-mail Rutan & Tucker, LLP Attn: Gregg Amber Garett Sleichter 611 Anton Blvd., 14th Floor Costa Mesa, CA 92626 gamber@rutan.com gsleichter@rutan.com Via E-mail Schully, Roberts, Slattery & Marino, PLC Attn: Anthony C. Marino 1100 Pydras Street, Suite 1800 New Orleans, LA 70163 amarino@schullyroberts.com Via E-mail Steptoe & Johnson Attn: Fil Agusti 1330 Connecticut Ave., N.W. Washington, DC 20036 fagusti@steptoe.com Via E-mail Bingham McCutchen LLP Attn: Jeffrey S. Sabin 399 Park Avenue New York, NY 10022 jeffrey.sabin@bingham.com Via E-mail Skadden, Arps, Slate, Meagher & Flom LLP Attn: Seth E. Jacobson 333 West Wacker Drive Chicago, IL 60606 seth.jacobson@skadden.com Via E-mail Philip M. Abelson Dewey & LeBoeuf 1301 Avenue of the Americas New York, NY 10019-6092 pabelson@dl.com Via E-Mail