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EXHIBIT 10.36

BREA OLINDA FIELD MINERAL SALE

DATED FEBRUARY 28, 2003, EFFECTIVE JANUARY 1, 2003

TO

BLACKSAND PARTNERS, L.P.

•   TRANSITION AGREEMENT (“TA”)   •   PAYMENT AND PERFORMANCE AGREEMENT (“PAPA”)
  •   PURCHASE AND SALE AGREEMENT (“PSA”)

 

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MINERAL

PAYMENT AND PERFORMANCE AGREEMENT

WELL ABANDONMENT AND OIL FIELD
ACCOMMODATION PROGRAM AND
OPERATOR/NUEVO IMPROVEMENTS

 

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              PAGE NO.

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1. DEFINITIONS
    1  
1.1 PSA
    1  
1.2 DEVELOPER
    1  
1.3 DEVELOPMENT DECLARATION
    1  
1.4 DEVELOPMENT DOCUMENTS
    2  
1.4 DEVELOPMENT DOCUMENTS
    2  
1.5 REIMBURSEMENT AMOUNTS
    2  
1.6 DRE
    2  
1.7 PARCEL
    2  
1.8 PROGRAM
    2  
1.9 UNAVOIDABLE DELAY
    2  
2. WELL ABANDONMENT AND OIL FIELD ACCOMMODATION PROGRAM AND IMPROVEMENTS
    2  
2.1 PROGRAM
    2  
2.1.1 Operator’s Surface Facilities
    3  
2.1.1.1 Removal of Surface Facilities
    3  
2.1.1.2 Remediation Responsibilities
    3  
2.1.2. Third Party Easements and Licenses
    4  
2.1.3. On-Site Representative
    5  
2.1.4. Reimbursement
    5  
2.1.4.1. Reimbursement Plan
    5  
2.1.4.2. Program Segments and Notices to Proceed
    5  
2.1.5. Anchor Points and Pulling Pads
    8  
2.1.6. Well Vaulting
    8  
2.1.7. Insurance
    8  
2.1.8. Completion of the Program
    8  
2.1.8.1. Performance by Each Party
    8  
2.1.8.2. Final Acceptance
    8  
2.1.8.3. Liability Allocation
    9  
2.1.8.4. Construction Easement
    10  
2.1.9. Developer Option to Purchase Wells
    10  
2.2. THE PROGRAM AND PARTY RESPONSIBILITIES
    11  
I.    Post closure-Pre Grading Events
    11  
II.   Site Clearing and Site Grading Events Within the Development Areas
    14  
III. Post-Grading Events
    18  
2.3 DEVELOPER IMPROVEMENTS AND ADDITIONAL PAYMENTS
    20  
2.3.1 Processing Costs – Employee Costs
    20  
2.3.2  Operator Improvements
    21  
2.3.3. Governmental Modifications
    21  
2.4 MISCELLANEOUS
    21  
2.4.1 Remedies
    27  

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2.4.1.1 Default/Cure
    21  
2.4.1.2 Remedies Cumulative
    21  
2.4.1.3 Waiver
    22  
2.4.2. Continuous Operation
    22  
2.4.3. Assignment
    23  
2.4.4 Subdivision Maps and Applications
    23  
2.4.5. Captions
    23  
2.4.6. Invalidity of a Provision
    23  
2.4.7. Notices
    23  
2.4.8. Binding Effect
    25  
2.4.9. Further Assurances
    25  
2.4.10. Time of Essence
    25  
2.4.12. Attorneys’ Fees
    26  
2.4.13 Payments
    26  
2.4.14 Applicable Law
    26  

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ATTACHMENTS

     
Attachment 1
  LEGAL DESCRIPTION OF LAND
Attachment 2
  LIST OF ENGINEERING FIRMS PER SECTION 2.1.9
Attachment 3
  OIL FIELD RELATED THIRD PARTY EASEMENTS AND LICENSE – TPEL
Attachment 4
  BREA FIELD DEVELOPMENT ACCOMMODATION PROGRAM

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MINERAL

PAYMENT AND PERFORMANCE AGREEMENT

     This Payment and Performance Agreement (“Agreement” or “PAPA”) is made this
28th day of February, 2003, by and between NUEVO ENERGY COMPANY, a Delaware
corporation (“Nuevo”) and BLACKSAND PARTNERS, L.P., a Texas Limited Partnership
(“Operator”). Such entities are hereinafter individually or collectively
referred to as a “Party” or the “Parties.”

PREAMBLE:

     A. Concurrently herewith, Operator has acquired from Nuevo that certain
real property consisting of mineral interests located in Orange County,
California, more particularly described on Attachment “1” which is appended
hereto and incorporated herein by this reference (“Minerals”).

     B. In accordance with the Purchase and Sale Agreement of even date
herewith, pursuant to which Operator is acquiring the Minerals, the Parties wish
to set forth herein certain obligations of Operator, Nuevo and Developer
(defined below in Section 1.2) regarding the Program (defined below in
Section 2.1) and the construction of other improvements.

     C. As described herein and in the Development Declaration (defined in
Section 1.3), Operator has assumed certain obligations with respect to the
Program, which, pursuant to this Agreement, Nuevo is required to perform.

     NOW, THEREFORE, in consideration of the PREAMBLE and the covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, including without
limitation the conveyance of the Minerals to Operator by Nuevo, the Parties
hereby covenant and agree as follows:

     1. Definitions. Unless otherwise expressly provided herein, the following
words and phrases when used in this Agreement shall have the following meanings;
all terms not specifically defined herein shall have the meaning prescribed for
them in the PSA or elsewhere in the Development Documents.

         1.1 PSA. “PSA” or “Purchase and Sale Agreement” shall mean that certain
agreement described in Paragraph “B” of the Preamble to this Agreement.

         1.2 Developer. “Developer” shall mean Nuevo as the initial applicant to
Governmental Agencies for development of the Project or any entity (or entities
collectively or individually) which subsequently acquires all or any portion of
the surface fee interest in the Parcel for the purpose of developing all or a
portion of the Project, from and after the effective date of such acquisition.

         1.3 Development Declaration. “Development Declaration” shall mean that
certain Declaration of Development Covenants, Conditions and Restrictions
encumbering the Parcel between Nuevo and Operator and recorded as described in
the Repository Instructions.

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         1.4 Development Documents. “Development Documents” shall have the
meaning prescribed in the PSA.

         1.5 Final Acceptance. “Final Acceptance” means the date on which
Developer or Operator has delivered an Acceptance Confirmation for those
activities in each Program Segment set forth in Section 2.1.4.2, after it has
conducted a final inspection of all work performed by the other or Nuevo in
connection with the activity.

         1.6 Reimbursement Amounts. “Reimbursement Amounts” shall have the
meaning given in Section 2.1.4.1. of this Agreement.

         1.7 DRE. “DRE” shall mean the California Department of Real Estate or
such other governmental agency of the State of California which administers the
sale of subdivided lands pursuant to Sections 11000 et seq. of the California
Business and Professions Code, or any similar California statute hereinafter
enacted.

         1.8 Parcel. “Parcel” shall mean all that certain real property
described on Attachment “1” which is appended hereto and incorporated herein by
this reference, less and except the Minerals acquired by Operator.

         1.9 Program. “Program” has the meaning set forth in Section 2.1.

         1.10 Unavoidable Delay. “Unavoidable Delay” shall mean any prevention,
delay or stoppage in the completion of a Party’s Work as defined herein caused
by fire, explosion, unavailability or breakdown of machinery or equipment or by
acts of God, war, riot, civil insurrection, labor disputes, inability to obtain
labor or materials or reasonable substitutes therefor, any order, regulation,
request or recommendation of a Governmental Agency, or other similar matters or
causes beyond the reasonable control of the responsible party other than for the
payment of money; provided, however, that nothing in this Section shall excuse
the performance of any act rendered difficult solely because of the financial
condition of a party.

     2. Well Abandonment and Oil Field Accommodation Program and Improvements.

         2.1 Program. Nuevo, at no cost and expense to Operator except as may be
expressly provided in this Agreement, shall conduct a well abandonment and oil
field accommodation program for the Parcel composed of those tasks and
activities which are described in this Section 2 and are specifically set out in
Attachment 4 hereto, which, together with those tasks and activities of
Developer described in this Section 2 and specifically set out in Attachment 4
are hereinafter referred to as the “Program.” In connection with the performance
of the Program, Nuevo shall, in the event of conveyance of the Parcel, enter
into an agreement with any successor Developer which will provide for the
performance by Developer of those tasks and activities described in this
Section 2 as Developer’s responsibility. The Program shall be undertaken with
Operator’s cooperation, and in accordance with standards promulgated at the time
of such work by the California Department of Conservation, Division of Oil, Gas
and Geothermal Resources (“CDOGGR”) or such other governmental agency having
jurisdiction

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over the activity, other legal and regulatory requirements, as amended from time
to time (but such amendment applicable only to those activities for which Final
Acceptance has not been received), and good oil field practices, all subject to
the terms of this Agreement. Generally, the Program will be accomplished as
follows:

               2.1.1 Operator’s Surface Facilities.

                     2.1.1.1 Removal of Surface Facilities and Subsurface
Pipelines. Nuevo shall remove certain of Operator’s surface equipment as
specified in Attachment 4, to the extent and when necessary in accordance with
the applicable Developer Notice to Proceed within the Development Areas and
lands adjacent thereto, including those areas designated for continued oil and
gas operations, to accommodate Developer’s Grading Plan. This will include, but
not be limited to, pumping units, concrete cellars and concrete pads immediately
contiguous to the wellheads, power poles, transformers, manifolds, test bubbles,
compressors, tanks, vessels and above ground pipelines. In addition, Nuevo shall
drain, flush and cap subsurface pipelines, to the extent and when necessary in
accordance with the applicable Developer Notice to Proceed within the
Development Areas and lands adjacent thereto to accommodate Developer’s Grading
Plan. Removal of subsurface pipelines to the extent deemed necessary or
desirable shall be the responsibility of Developer. Prior to Nuevo’s
commencement of work, Operator shall isolate and cease operation of all
equipment and facilities to be removed and shall take such other steps as are
reasonably necessary to allow such removal to be conducted in accordance with
all applicable regulatory requirements and consistent with good oil field
practices. The surface equipment will be removed from such wells, not just those
to be abandoned, to facilitate the grading. Each wellhead will be surveyed and
marked by Operator one (1) time only and Nuevo and Developer will inspect and
approve the markings. After inspection and approval of the well markings,
Developer will be responsible for grading around the well casings without
damaging them. Upon approval of the well markings, Developer shall proceed in a
timely manner and be responsible to pay, and shall be solely liable for, any and
all damage to any wells caused by Developer’s grading operations.

     The acts or omissions of Developer or Nuevo in accordance with the terms of
this Agreement may not be imputed to Operator unless expressly stated herein.
Developer and Nuevo are each performing their obligations hereunder as
independent contractors and not as a subcontractor or agent of Operator.
Furthermore, the actions or omissions of Operator must be based upon a specific
duty imposed by this Agreement or law upon Operator, and not delegated to Nuevo.

         2.1.1.2 Remediation Responsibilities. Should Developer encounter soil
that appears to be crude oil or oil well production impacted (evidenced by
staining or odor), Developer shall immediately notify Operator’s field
operations person and Nuevo’s on-site representative. Developer shall be fully
responsible for funding, implementing and completing all environmental testing,
assessment, remediation, monitoring, reporting or other requirements (with the
assistance of Operator or Nuevo if the absence of such assistance would prevent
Developer from properly performing such responsibilities) with respect to such
crude oil or oil well production impacts. To the extent that such crude oil
impact or oil well production impact is associated with active and producing
wells or operational pipelines or facilities, Operator shall be responsible for
completion of any required well, pipeline or facility repairs. Notwithstanding

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the foregoing, Nuevo at its sole cost and expense shall be and remain
responsible for (i) those remediation activities described in the approved
Remedial Action Plan submitted December 16, 1999, as amended October 3, 2001,
December 27, 2001 and January 13, 2003 (“EIR Remediation”) and (ii) crude oil or
other oil well production releases that result from work and activities
undertaken by Nuevo in furtherance of this Agreement. Upon discovery of crude
oil or oil well production contamination in the vicinity of a well identified in
Schedule B of Attachment 4 or temporary or permanent pipeline or facility,
Operator’s field operations person, Nuevo’s onsite representative and
Developer’s on site representative shall determine as soon as reasonably
practical if the soil is crude oil impacted as a result of a leak caused by
(i) Operator’s ongoing production activity in which event costs associated with
cleanup and remediation to oil field standards shall be the responsibility of
Operator, (ii) the activities of Nuevo in performance of the Program including
EIR Remediation in which event costs associated with cleanup and remediation
shall be the responsibility of Nuevo or (iii) from any other causes in which
event the costs associated with cleanup and remediation, including costs to
bring cleanup associated with ongoing production activities from oil field
standards to residential standards, together with clean up and remediation of
all contamination other than the EIR Remediation, shall be Developer’s
responsibility. The Parties agree that if Operator’s field operations person and
Developer’s and Nuevo’s on site representatives cannot make such a determination
or cannot agree on the source of the apparent soil contamination within seven
(7) business days, Nuevo, Developer and Operator will designate a representative
from a reputable, soils engineering firm that routinely does soils work (“Soil
Firm”) who is familiar with soil contamination issues to designate the source of
the apparent soil contamination. If the parties are unable to select a Soils
Firm, any party to this Agreement may make application to the Superior Court of
Orange County for the timely appointment of a Soil Firm. The Soil Firm’s
representative shall take a sufficient number of samples to permit initial and
follow-up testing and such representative’s determination as to all matters,
including the allocation of costs, including its fees, shall be final and
binding on the parties hereto. The parties shall use their commercially
reasonable efforts to secure the determination by the Soil Firm’s representative
of the source of the apparent soil contamination shall be made as soon as
practicable after notification to the Soil Firm. If the Soil Firm’s
representative cannot make a conclusive determination as to the source of the
apparent soil contamination, the soil contamination shall be presumed to have
been from other than ongoing production activity. The party whose actions are
found to have created the contamination shall in addition to the clean up and
remediation cost, pay for the Soil Firm’s work; and if more than one party is
found to have created such contamination, the costs of the Soil Firm’s work will
be prorated by such firm among the parties creating the contamination in
proportion to that Parties’ contribution to such contamination.

               2.1.2. Third Party Easements and Licenses. Nuevo and Operator
will cooperate with Developer in attempting to remove and/or relocate from the
Development Areas oil field related easements and licenses for pipelines
(“TPEL”) belonging to other entities, including those of Southern California
Edison. Nuevo is not aware, to the best of its knowledge, of any other TPEL on
or affecting the Parcel except as described in Attachment “3,” hereto. Nuevo and
Operator shall not be required to incur any costs, in their efforts to cooperate
in the removal and/or relocation of the TPEL. Temporary pipelines may be
required in some areas while the grading is in progress. Operator and Nuevo will
use commercially reasonable efforts, at no cost to Operator and Nuevo, to assist
Developer at Developer’s expense in causing these pipelines to be reinstalled by
the respective companies in permanent easements after the grading

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is complete. Operator agrees that upon Developer’s written notice, Operator will
assist Developer in giving notice to the third party companies in an attempt to
have the pipelines removed and replaced. Operator and Developer acknowledge
receipt of copies of the easement documents, both recorded and unrecorded,
listed on Attachment “3” hereto and incorporated herein by this reference.

               2.1.3. On-Site Representative. Nuevo, Operator and Developer
shall each have the right to have representatives on-site both before the
grading begins and during the grading operations on the Parcel to observe such
grading operations. Developer agrees to give Operator sufficient notice prior to
commencement of grading to allow Operator to arrange to have a representative
on-site at Operator’s cost, if Operator so elects.

               2.1.4. Reimbursement.

                     2.1.4.1. Reimbursement Plan. Operator and Nuevo agree that
the costs to implement the Program (“Reimbursement Amounts”) shall not be borne
by Operator, unless otherwise provided herein. Notwithstanding any term in the
Agreement to the contrary, Operator shall only be responsible for the cost of
incremental work, if any, requested by Operator under Section 2.3.2. The parties
recognize that the Project may be modified as a result of new or additional
governmental requirements or as a result of the mutual agreement of the
Developer and Operator or among Developer, Operator and Nuevo as specified
herein. In no event shall any modification requested by Developer or any
additional or new governmental requirements prior to Final Acceptance result in
costs, expenditures or commitments by Operator.

                     2.1.4.2. Program Segments and Notices to Proceed. The
Program shall be implemented into segments as shown below, and each Program
Segment shall commence upon proper receipt of a written notice issued by
Developer and delivered to Nuevo and Operator specifying the Program Segment to
be performed (“NTP”), as follows:

              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Pre-Phase I Initial Activity   NTP will be issued as mutually agreed between
Nuevo and Developer.    
•
  Preliminary and detailed engineering and design       Not Applicable
 
           
•
  Permitting       Not Applicable
 
           
•
  Remediation required by EIR       Developer
 
           
•
  Initial abandonment of 25 idle and reabandoned wells       Not Applicable

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              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Pre-Phase I Intermediate Activity   NTP will not issue prior to receipt of all
required Operator permits or, to the extent certain activity can be commenced
without permits, as mutually agreed between Nuevo and Developer.    
•
  Begin procurement of all required materials and equipment

      Not Applicable
•
  Remove infrastructure and initial abandonment of active wells       Not
Applicable
 
           
•
  Begin construction of tank farm and field infrastructure       Not Applicable
 
            Pre-Phase I Final Activity   NTP will not issue prior to receipt of
all required Operator permits or, to the extent certain activity can be
commenced without permits, as mutually agreed between Nuevo and Developer.    
•
  Complete construction of tank farm and field infrastructure

      Operator
•
  Construct power system       Operator
 
           
•
  Temporary removal of equipment       Not Applicable
 
            Phase I   NTP will not issue prior to receipt of all required
Operator permits or, to the extent certain activity can be commenced without
permits, as mutually agreed between Nuevo and    
•
  Raise/lower Phase I well heads   Developer.   Operator
 
           
•
  Final abandonment of Phase I wells       Developer
 
           
• 
  Accommodation of retained wells       Operator (and Developer for limited
purpose of design compliance)  
•
  Remove infrastructure and initial abandonment of Phase II wells       Not
Applicable
 
           
•
  Temporarily remove Phase II retained
well equipment       Not Applicable

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              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Phase II   NTP will not issue prior to receipt of all required Operator permits
or, to the all required Operator permits or, to the extent certain activity can
be commenced without permits, as    
•
  Raise/lower Phase II well heads
  mutually agreed between Nuevo and Developer.   Operator

 
           
•
  Final abandonment of Phase II wells       Developer
 
           
•
  Accommodation of retained wells (21 wells)       Operator (and Developer for
limited purpose of design compliance)
 
           
•
  Remove infrastructure and initial abandonment of Phase III wells (8 wells)    
  Not Applicable
 
           
•
  Temporarily remove Phase II retained
well equipment       Not Applicable
 
            Phase III   NTP will not issue prior to receipt of all required
Operator permits or, to the extent certain activity can be commenced without
permits, as mutually agreed between Nuevo and Developer.    
•
  Raise/lower Phase III well heads

      Operator
•
  Final abandonment of Phase III wells       Developer
 
           
•
  Seismic Sensor installation       Developer

     Upon receipt of the NTP for any Program Segment specified above, Nuevo
shall be obligated to commence the required work within forty-five (45) days and
complete the work within the time duration specified in Attachment 4. Operator
shall cooperate in good faith with Nuevo and Developer in the implementation of
the Program. Operator shall (i) promptly process all permit requests; (ii) at
its cost comment on all submittals of specifications or plans within ten
(10) business days of receipt thereof; and (iii) at its cost make all facilities
available for accommodation under the Program such that Nuevo may commence the
Program Segment within 45 days of receipt of a NTP. To the extent that Operator
fails to fully and timely cooperate with Nuevo, and Nuevo, as a result of
Operator’s acts or omissions, incurs penalties, damages or incremental costs in
performing the Program, such penalty, damage or cost shall be the responsibility
of Operator and Operator hereby agrees to defend, indemnify and hold Nuevo
harmless therefrom. Operator shall also be liable to Developer for any and all
incremental reasonable cost or expense incurred by Developer in the development
of the Development Areas as a result of Operator’s failure to comply with the
provisions of this Section. Operator expressly agrees to pay such incremental
Developer costs and defend, indemnify and hold Nuevo harmless therefrom. In
addition to the foregoing, should Operator fail to temporarily or permanently
shut in any well in accordance with the Program, Nuevo shall have the right, but
not the obligation to shut-in such well at Operator’s sole risk and expense. In
the event Developer abandons or suspends the Program other than as a result of
Unavoidable Delay, and does not resume Program activity within the time period
specified in Section 2.4.1.1 after receiving written notice from Operator, Nuevo
shall restore such wells to production at Developer’s risk and sole expense
provided that Nuevo has been prepaid by Developer an amount adequate to restore
such wells.

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To the extent Nuevo acts as the Developer hereunder and fails properly to carry
out the responsibilities and obligations allocated to Developer in this
Section 2, Operator, after ten (10) days written notice to Nuevo, may take over
and discharge such responsibilities and obligations at the sole cost and expense
of Nuevo, to be reimbursed in cash to Operator within thirty (30) days of proper
completion of such Work by Operator, fully in compliance with this PAPA and all
plans and specifications for such Work.

               2.1.5. Anchor Points and Pulling Pads. As part of the Program,
Nuevo shall be responsible for construction of the anchor points and pulling
pads necessary for Operator’s continuing Oil Operations within the Exclusive Use
Areas and Joint Use Areas within the Development Areas and graded areas adjacent
thereto.

               2.1.6. Well Accommodation. As part of the Program, Nuevo will
relocate below the surface of the Parcel, all operating wellheads in the
Development Areas, and those required wells within the adjacent grading areas
and Public Park areas, and as required by appropriate Governmental Agency rules
as more particularly set out in Attachment 4, Schedule B.

               2.1.7. Insurance. Each Party shall use commercially reasonable
efforts to name the other parties as Additional Insureds, on each Party’s
standard blanket insurance policy covering its activities related to the
Minerals or in connection with the Program Improvements, for the duration of
their construction or their activities on the Minerals and any portion of the
Parcel.

               2.1.8. Completion of the Program.

                     2.1.8.1. Performance by Each Party. Nuevo shall timely
commence and complete each Program Segment within the time duration specified in
Attachment 4 after receipt of all required permits for such Segment. Phase I, II
and III Segments will not commence until after completion of Developer’s grading
for that Segment. In no event shall Nuevo or Operator be obligated to design,
construct or install any improvements nor undertake work or activities other
than those specified in Attachment 4. Should Developer or Operator’s failure to
perform, including, without limitation, pursuant to Section 2.1.4, other than
for the payment of money, or should Nuevo’s failure to complete any aspect of
the work or any Program Segment result from an Unavoidable Delay, such required
performance shall be excused for the period of time that the Unavoidable Delay
prevents performance and the time duration for the Program Segment shall be
extended by the length of time performance is delayed. Provided, however, that
nothing in this Section shall excuse the performance of any act rendered
difficult solely because of the financial condition of a party. In the event
that any delay due to Unavoidable Delay is anticipated by a Party, such Party
shall promptly notify the other parties of such delay, its cause and the
estimated duration of the delay. Each Party shall exercise due diligence to
shorten, mitigate and avoid the effects of the delay and shall keep all Parties
informed as to its efforts.

                     2.1.8.2. Final Acceptance. Developer and Operator shall
respectively conduct a final inspection of those activities in each Program
Segment as set forth in Section 2.1.4.2 as to the items by their name in the
“Acceptance Confirmation” in such section

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within fifteen (15) days of written notice of completion. In addition Operator
shall have the right, but not the obligation, to perform a final inspection of
the Developer’s work and comment on the same. Developer and Operator shall
deliver to Nuevo (with a copy to the other) (i) its written confirmation of
“Final Acceptance of all matters” (each an “Acceptance Confirmation”) for each
activity in a Program Segment designated for its Acceptance or (ii) an
Acceptance Confirmation of all matters it considers as completed and a detailed
description of any items in the Program Segment designated for its Acceptance
which it in good faith cannot give “Final Acceptance” together with its
requirements therefor. The issuance of an Acceptance Confirmation of each
completed activity within the Program Segment and of all matters shall be
contingent upon acceptance of the work by the appropriate governmental authority
to the extent required. If the parties cannot resolve any item for which an
Acceptance Confirmation has not been given within 30 days, such unresolved item
shall be submitted to arbitration in accordance with this Agreement. Upon
completion of any outstanding items, Operator or Developer shall deliver an
Acceptance Confirmation thereof to Nuevo and the other within 10 days of such
completion. After Final Acceptance, Developer shall be responsible for and shall
release, hold harmless and indemnify Operator and Nuevo from all claims,
demands, losses or damages, of any sort whatsoever, relating to the design,
engineering, permitting, maintenance, repair, replacement, relocation, removal
and reinstallation of any abandoned wells, pipelines or facilities located
within or adjacent to the Development Areas and all other matters for which it
has given an Acceptance Confirmation and, together with all other work performed
hereunder shall be referred to as “Developer Liability”. After Final Acceptance,
Operator shall be responsible for and shall release, hold harmless and indemnify
Developer and Nuevo from all claims, demands, losses or damages of any sort
whatsoever, relating to the design, engineering, permitting, installation,
repair, relocation, removal and reinstallation of all active wells, pipelines or
facilities and all other matters for which it has given Final Acceptance
(“Operator Liability”). It is the intention of the Parties that upon Final
Acceptance, Nuevo shall have no further liability or obligation with respect to
the Program and the wells, equipment and facilities accommodated under the
Program. Upon Final Acceptance, Nuevo and Operator shall be relieved of any and
all liability directly or indirectly related to Developer Liability; provided
that notwithstanding the foregoing, so long as Nuevo is Developer, Nuevo shall
not be relieved of Developer Liability. Upon Final Acceptance, as between Nuevo
and Operator, Nuevo shall be relieved of further liability or obligation and
Operator shall indemnify, release and hold Nuevo harmless from any and all
claims, including third party claims, related to Operator Liability.
Notwithstanding anything to the contrary contained herein, Operator, prior to
Final Acceptance, shall not be liable or responsible for any increased costs
which result from governmental requirements to obtain additional permits or
remediate or restore the Parcel to a higher standard resulting from the real
estate development and all such incremental or increased costs shall be the
responsibility of Developer.

                     2.1.8.3. Liability Allocation. Notwithstanding the above or
the Indemnities Developer gives in its agreement to purchase the Parcel, at any
time prior to Final Acceptance, Developer may, in its reasonable discretion,
seek arbitration as provided in Section 2.1.4.3 against Nuevo to obtain damages
for losses suffered as a result of the failure of Nuevo to timely or properly
complete the Program Segment or work thereunder. All disputes between any of the
Parties herein shall be resolved through arbitration. Any award in such
arbitration shall be limited to the recovery of actual direct damages incurred
by Developer.

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Developer shall not be entitled to indirect, consequential, special, exemplary
or punitive damages. After Final Acceptance by Developer, Developer shall have
no cause of action with respect to Developer’s Liability against Operator or
Nuevo, or their successors or assigns. After Final Acceptance by Operator,
Operator shall have no cause of action against Developer or Nuevo or their
successors or assigns for Operator’s Liability but Operator or Developer may, in
its reasonable discretion, maintain a lawsuit, arbitration or other action
against any construction entities hired by Nuevo (but not Nuevo itself) to
perform work on the Parcel pursuant to a written contract (“Construction
Entities”), to obtain damages for losses suffered as a result of Nuevo’s failure
to timely or properly construct the completed work, to the extent caused by such
Construction Entities. In that regard, to the extent it possesses and may assign
same, Nuevo hereby conveys, transfers and assigns (and, if necessary, will
convey, transfer and assign at such time as such cause of action arises) to
Operator and Developer a non-exclusive assignment of its rights and interests in
and to any relevant contracts or subcontracts, for the limited purposes stated
herein, without any obligation by Nuevo to participate in such lawsuit or
action, as a party or otherwise, and without any responsibility, warranty,
representation or liability for any outcome pursuant thereto or damages awarded
therein. Construction Entities include contractors, subcontractors, materialmen
or other independent entities, but not Operator or Nuevo, their respective
constituent partners, officers, employees or any other related entities. Upon
ten (10) days written request, Nuevo will provide Operator and Developer with a
list of such Construction Entities which have supplied Operator and/or Nuevo
with the Preliminary Notice prescribed by the California Civil Code for the
maintenance of mechanic’s lien rights (See Exhibit “F” to the PSA). Nuevo
further agrees to not enter into any contract with a Construction Entity that
waives the liability for such entity’s negligence.

                     2.1.8.4. Construction Easement. Operator and Developer,
their respective successors and assigns, hereby grant to Nuevo together with the
right to partition, grant and transfer the same, a nonexclusive easement in
gross over the Parcel to the extent necessary to complete all work required by
the Program.

               2.1.9. Developer Option to Purchase Wells. Developer may at any
time prior to commencement of grading, elect to purchase any or all of
Operator’s active wells lying within the Development Areas solely for the
purpose of well abandonment by giving notice by certified mail of such well
designation. The value of a producing oil well or an injection well shall be
determined by mutual agreement of the parties taking into consideration the
current condition of the well, the reserves assigned to the well, the well’s
production, operating cost, plugging and abandonment cost, for an injector well,
the replacement cost, and any other matter deemed relevant. For purposes of this
Section 2.1.9, the value of a well shall be equal to the average of the values
determined by the reserve engineers, one to be selected by each party from the
list attached as Attachment 2. Each party shall select one company from such
list by providing written notice thereof within ten days of the certification
date of Operator’s notice. The value, once determined, shall be final. Prior to
grading, the determined value shall be paid by Developer to Operator, and such
costs to Developer shall not be considered as costs to implement the Program.
Developer shall notify Operator within ten (10) days of receipt of the
determination of values which wells it elects to purchase. Developer shall pay
the amount to Operator within twenty (20) days of such notice. Upon receipt of
such payment, Operator shall promptly (i) shut in any applicable wells, if
active, and (ii) deliver to Developer a Bill of Sale for

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any such well and transfer operatorship to Developer. Developer shall (iii)
assume operatorship and obtain all necessary permits and governmental approvals
to act as Operator, (iv) not return any well it purchases to production, and
(iv) cause such wells to be plugged and abandoned and all gathering lines and
facilities abandoned and, if above ground, removed all in accordance with all
Governmental Agency regulatory requirements at Developer’s sole cost and expense
in the same time and manner required of Operator under the Program. Any
ancillary costs associated with the purchase and plugging and abandonment of any
such wells and removal of facilities therefor shall not be considered as
Reimbursement Amounts.

         2.2. The Program and Party Responsibilities. Except as otherwise
provided herein, Operator, Nuevo and Developer shall cooperate in the completion
of the Program and each Party shall perform its obligations in a commercially
reasonable manner, and in good faith, as described below and elsewhere herein:

     I. Post closure-Pre Grading Events

         A. Operator and Nuevo have mutually agreed or, if so indicated, shall
mutually agree, in a manner consistent with Attachment 4 hereto, to the
following matters as more specifically set out in Attachment 4 and schedules
thereto:

i.   the location and size of the area for the expansion of the existing Tonner
Canyon Tank Farm (“Tank Farm”), which will be required prior to the
decommissioning of the existing East Naranjal Tank Farm (“EN Tank Farm”).   ii.
  the general alignment and grade for service lines to the Tank Farm and plan
facilities to accommodate the operating wells previously served by the East
Naranjal Tank Farm. (References to grade within this Agreement refer only to
those lines for which burial is required.) The final alignment and grade will be
mutually agreed to so as to avoid conflict with future development to the extent
possible and to avoid future interruption of service.   iii.   the general
alignment and grade for the surface and subsurface installation of the 12KV
service line from the existing electrical substation to the new site and to the
existing Stearns gas plant location (“Gas Plant”). The final alignment and grade
have been selected as to minimize conflict with future development and avoid
future interruption of service.   iv.   INTENTIONALLY OMITTED   v.   shall
mutually agree upon the location, alignment and grade of the “sales point” for
the ConocoPhillips (formerly Tosco) pipeline to serve the Tank Farm.

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vi.   shall mutually agree upon the location, alignment and grade of the gas
gathering system and associated facilities, and service lines between the Gas
Plant and the Tank Farm.   vii.   shall mutually agree upon the final grade
elevations for each existing well remaining in the Development Areas, or
impacted by grading for the Development Areas.   viii.   shall mutually agree
upon access plans to provide for interim and final access to accommodate the
Program work and all future oilfield-related activities.

         B. Developer, at Developer’s cost and expense, shall:

i.   Prepare the Grading Plan and process it through the appropriate
Governmental Agency. The Grading Plan shall be designed to be completed in three
phases to correspond to the work set out in Attachment 2, all as approved by the
appropriate Governmental Agency.   ii.   Prepare a soils and geological review
of the Grading Plan.   iii.   Satisfy, or cause to be satisfied, all mitigation
measures precedent to grading found in the Final Tonner Hills EIR.   iv.  
Prepare a preliminary utility master plan (“Street and Utility Improvement
Plans”) to serve as a basis for the Facilities Plan (see C.v., below) and to be
submitted to, and approved by, the appropriate Governmental Agency.   v.  
Provide grade elevations for all wells to be retained or abandoned within the
Development Areas or impacted by grading required for the Development Areas.  
vii.   Obtain coverage under the National Pollutant Discharge Eliminating System
(NPDES) statewide General Construction Activity Stormwater Permit from the State
Water Quality Control Board.   viii.   Cause a Remedial Action Plan to be
completed and processed through the County of Orange Health Care Agency,
Division of Environmental Health, or such agency as may have current
jurisdiction of any identified contaminants.

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         C. Nuevo at Developer’s cost and expense shall:

i.   Complete construction drawings for the expanded Tank Farm and facilities
related thereto and process them through the appropriate Governmental Agencies
(including, if necessary, the South Coast Air Quality Management District).  
ii.   Complete improvement and relocation plans and process them through the
appropriate Governmental Agencies (as necessary) for the relocation of the Tank
Farm service lines, the East Naranjal Tank Farm service lines, the Gas Plant
service lines, natural gas gathering lines and 12KV power lines.   iii.  
Prepare and submit the well abandonment program, as set out in Attachment 4, for
permitting through CDOGGR.   iv.   Prepare schematic facilities plans for
pipelines and facilities (“Facilities Plan”) to service the wells to be
accommodated within and adjacent to the Development Areas.   v.   Construct the
Tank Farm improvements.   vi.   Remediate the identified contaminated soils
associated with the EN Tank Farm. Exhumed soils will be isolated and stockpiled
for placement by Developer with the grading of the first phase of development in
accordance with the approved Remedial Action Plan. Exhumed soils not meeting the
criteria for placement on site will be removed from the site for appropriate
disposal.   vii.   Decommission the EN Tank Farm once the service lines are
connected to the improved Tank Farm.   viii.   Construct the new service lines
as required to the Tank Farm, rerouting lines currently serving the East
Naranjal Tank Farm, and prepare as-built plans for those service lines which are
permanent.   ix.   Drain, flush and mark for grading any identified abandoned EN
Tank Farm and Tank Farm pipelines.   x.   Construct the temporary or permanent
(as applicable) gas gathering lines and facilities to the Gas Plant.   xi.  
Flush and mark any identified abandoned below ground pipelines and facilities
for grading.   xii.   Relocate the 12KV line from the existing electrical
substation to the existing Gas Plant and Tank Farm as necessary.

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xiii.   Locate and mark all identified pipelines and facilities within the area
to be graded.   xiv.   Relocate the point of sale for the ConocoPhillips
(formerly Tosco) pipeline to the relocated ConocoPhillips (formerly Tosco)
pipeline to connect to such new point of sale.   xv.   Complete the design
drawing for all service-related facilities not otherwise contemplated herein.  
xvi.   Prepare and submit fire and seismic protection plans for accommodated
facilities.

     II. Site Clearing and Site Grading Events Within the Development Areas.

         A. Upon notice from Developer of the issuance of a grading permit, and
prior to site clearing, Nuevo, with the cooperation of Operator, shall, after
the receipt of the NTP on a Segment-by-Segment basis, in accordance with the
work associated with the Program Segment as further set out in Attachment 4:

i.   “Shut in” the appropriate wells as necessary; and all appurtenant service
lines and pipelines for such wells will be drained, flushed and marked in place.
  ii.   Disassemble and remove the surface facilities for such wells (test
bubbles, manifolds, valves, etc.).   iii.   Remove all well site equipment
associated with such wells.   iv.   Remove all of Operator’s surface and
subsurface power lines and transformers.   v.   Relocate, as necessary, power
lines, pipelines and facilities to service wells located outside of the
Development Areas.   vi   Cause all identified wells impacted by grading to be
clearly marked.   vii.   Commence well abandonment operations for those wells
that are to be permanently abandoned. Identify and isolate any contaminated
soils associated with the wells for remediation as called for in the approved
Remedial Action Plan. Soils not meeting the criteria for placement in deep
fills, if any, will be removed from the site for appropriate disposal.

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viii.   Remove and crush all well cellars associated with the wells to be
abandoned and accommodated; the concrete will be crushed, and stockpiled for
later placement by Developer.   ix.   Maintain full authority over the cleanup
and remediation operations for any crude oil released as a result of Developer’s
performance. All such costs shall be for the account of Developer.   x.  
Provide Developer with copies of all inspection records and reports and test
results for any contaminated soils associated with the well work.

     B. Upon the issuance of a grading permit, Developer at Developer’s cost
shall, on a Segment-by-Segment basis, in accordance with the work associated
with the applicable Program Segment as further set out in Attachment 4:

i.   Provide construction staking to define the limits of the area to be cleared
and developed.   ii.   If not previously commenced, notify the appropriate
Governmental Agencies and all interested parties of the commencement of the
soils remediation program as required under the approved Remedial Action Plan.
(This assumes that the majority of the soils remediation efforts will occur
during the grading operations, and will utilize a modified direct burial
approach.)   iii.   Coordinate grading with Nuevo, such that the scheduled
sequence of wells to be shut-in or abandoned, as appropriate, is consistent with
Developer’s grading program.   iv.   Provide notice to the grading contractor as
to the well locations and the necessity of avoiding wells during the clearing
and grading operation(s).   v.   Cause a comprehensive health and safety plan to
be prepared and submitted to Nuevo and Operator and all the appropriate
Governmental Agencies prior to commencement. The plan shall cover both grading
and remediation activities.   vi.   If not previously remediated by Nuevo during
the soils remediation process of those sites that are set out in Attachment 4 as
Developer’s responsibility, remediate (at Developer’s cost) those specific sites
requiring remediation identified in the approved Remedial Action Plan that lie
within Development Areas or within the grading area adjacent to the Development
Areas including

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    exhuming and remediating the contaminated soils which it shall also isolate
and stockpile for placement by the Developer in deep fills during the phased
grading operation in accordance with the approved Remedial Action Plan. Soils
not meeting the criteria for placement in deep fills, if any, will be removed by
Developer (at Developer’s cost) from the site for appropriate disposal.   vii.  
At all times comply with the mitigation measures of the Final Tonner Hills EIR,
and the requirements, as applicable, of the USF&WS Resource Management Plan.

         C. During grading, Nuevo shall, on a Segment-by-Segment basis, in
accordance with the Work associated with the applicable Program Segment as
further set out in Attachment 4:

i.   Identify and isolate any contaminated soils associated with the wells for
remediation as called for in the approved Remedial Action Plan. Isolated soils
meeting the criteria of the approved Remedial Action Plan will be stockpiled for
placement in deep fills by Nuevo. Soils not meeting the criteria will be removed
from the site for appropriate disposal.   ii.   Provide Developer with copies of
well abandonment reports for all well abandonment activities completed as
provided to and from CDOGGR.   iii.   Design the final Facilities Plan in
accordance with the Street and Utility Improvement Plans provided by Developer.
  iv.   Relocate temporary service lines serving the oil operations as may be
necessary.

         D. During grading, on a Segment-by-segment basis, in accordance with
the phasing plan, Developer shall:

i.   Prepare and process the Precise Area Plans and Level B Tentative Maps
through the appropriate Governmental Agencies, showing the final lot layout and
the Joint Use and Exclusive Use Areas to be retained around the wells remaining
in operation. The Precise Area Plans will clearly identify all wells to be
abandoned, and identify all abandoned wells that will require methane venting in
accordance with the requirements of the Orange County Fire Authority and other
appropriate Governmental Agencies.

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ii.   Grade the Development Areas in accordance with the approved Grading Plan.
  iii.   Immediately notify Nuevo and Operator in the event Developer excavates
any unidentified previously abandoned wells. Developer shall promptly reabandon
such wells in accordance with the requirements of all appropriate Governmental
Agencies.   iv.   Place soils stockpiled as a result of Developer’s remediation
activities within deep fills in accordance with the criteria established within
the approved Remedial Action Plan. The location and constituency components of
these soils will be detailed and reported in the final grading report prepared
by the Developer.   v.   Install all required erosion control devices in
accordance with the approved Grading Plan, ensuring that storm runoff will be
diverted from the area(s) affected by the Program.   vi.   At all times comply
with the General Construction Activity Stormwater Permit.   vii.   Based upon
the approved Precise Area Plans, provide Nuevo and Operator with grade
elevations and staking for all wells.   viii.   Prepare the grading plans
(“Grading Plans”) and process them for approval by the appropriate Governmental
Agencies.   ix.   Prepare the final Street and Utility Improvement Plans and
process them for approval by the appropriate Governmental Agencies. The Street
and Utility Improvement Plans will identify the oil production service
facilities as provided by Operator’s Facilities Plan.   x.   Prepare the Level B
Final Maps and process them for approval by the appropriate Governmental
Agencies, and record such maps at the County Recorder’s office. The Level B
Final Maps will identify all Exclusive and Joint Use Areas.   xi.   Identify and
dispose of any previously unidentified oil production facilities or third party
facilities uncovered during the course of the grading operation.   xii.  
Cleanup and remediate any crude oil released during the course of the grading
operations according to standards approved by the appropriate Governmental
Agency.

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xiii.   Prepare a final soils and geological report on the Development Areas and
obtain from the appropriate Governmental Agency, a final compaction certificate
relating thereto, within sixty (60) days of completion of grading for each
phase.   xiv.   Reabandon or otherwise accommodate, if necessary, any
unidentified wells or facilities within the Development Area in accordance with
CDOGGR specifications and requirements.

         E. During grading, Developer and Nuevo shall cooperate with each other
in the implementation of the Program, as follows:

i.   Design of the Precise Area Plans, Level B Tentative and Final Maps and
final Street and Utility Improvement Plans to avoid conflicts between the oil
production service facilities and the utilities required to service the
Development Areas; Nuevo shall have the reasonable right of approval in event of
design conflicts.   ii.   Design the Precise Area Plans to ensure that all Joint
and Exclusive Use Areas necessary for the wells and facilities are shown to the
Parties and meet all Parties’ joint satisfaction.   iii.   Identification and
differentiation of naturally-occurring tar seep or oil-bearing sands from crude
oil released as a result of oil operations; provided that unless Developer and
Nuevo can conclusively determine that such contamination resulted from ongoing
production activity, such contamination shall be presumed to be from
naturally-occurring tar seep or oil-bearing sands.

     III. Post-Grading Events:

         A. Upon completion of Grading within the Development Areas, on a
Segment-by-Segment basis in accordance with the approved phasing plan, Nuevo
shall:

i.   Cause all abandoned wells within the Development Areas to be capped below
those grades provided by Developer in accordance with CDOGGR and the
requirements of the EIR, Planned Community Text and Area Plan. Final inspections
of such wells shall be conducted by CDOGGR.   ii.   Cause all appropriate
pumping equipment to be installed within the Exclusive Use Areas.

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iii.   Complete all oil production service facilities to be installed to service
the producing and injection wells. Service lines will be connected to the new
site and Tank Farm.   iv.   Install permanent pipelines and facilities as
determined by Nuevo in its discretion as required for Operator’s continued
operations in accordance with grading operations.   v.   Provide as-built
drawings to Developer and Operator showing the line and grade for all installed
facilities.   vi.   Install seismic monitoring devices as required by the
mitigation measures in the Final Tonner Hills Environmental Impact Report.

         B. Upon completion of the GRADING within the Development Areas, on a
phase-by-phase basis in accordance with the approved phasing plan, Developer
shall:

i.   Install the utility systems in accordance with the approved Street and
Utility Improvement Plans.   ii.   Install the street improvements in accordance
with the approved Street and Utility Improvement Plans. Such Plans shall make
provision for oil field related facilities to the extent deemed necessary by
Nuevo to operate wells in the Development Areas. The utility and street
improvements are anticipated to take four months beyond the completion of
grading.   iii.   Install oil facility screening devices in accordance with the
requirements of, and plans approved by, the appropriate Governmental Agencies.  
iv.   Provide construction staking for the installation of Operator’s wells,
pipelines and facilities within the Development Areas.   v.   Construct methane
gas vents over abandoned oil wells as may be necessary to accommodate the
housing development.   vi.   Construct all required active and passive methane
mitigations as required by the Final Tonner Hills Environmental Impact Report,
the Orange County Fire Authority or other Governmental Agency.

         C. Upon completion of grading within the Development Areas, Developer
and Nuevo shall cooperate with each other to:

i.   Develop Homebuyer notification language to be supplied by Developer to
future surface purchasers with respect to the past and

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    continuing oil operations. State Proposition 65 language will be included in
any Homebuyer notification.   ii.   Develop Homebuyer notification language for
inclusion within the Division of Real Estate Public Report, Grant Deed or
Covenants, Conditions and Restrictions, as may be appropriate or required as to
the placement of remedial soils within the deep fills.   iii.   Satisfy any EIR
mitigation measures regarding the past and continuing oil operations.   iv.  
Obtain a conditional case closure letter from the County of Orange Health Care
Agency, Division of Environmental Health for the approved Remedial Action Plan.

         2.3 Developer Improvements and Additional Payments. It is understood
and agreed that Developer shall have the primary responsibility for and shall,
at its sole cost and expense, complete all work required to accomplish the
“Developer Improvements” including: (a) soil remediation, (b) relocation of
third party easements and licenses (TPEL), (c) all matters to the extent
allocated to Developer in Sections 2.1 and 2.2, hereof, (d) Mass/Grading
operations in the best commercial manner and completion of such operations in
the shortest time but, in all cases, within the time duration set out for the
activity in Attachment 4, so as to minimize the disruption of Operator’s
remaining Oil Operations, (e) after Final Acceptance by Developer of the
completed work, Developer shall be solely responsible for all maintenance,
repair, replacement, removal, and reinstallation of such completed work for
which Developer assumes Developer’s Liability and for any liability as a result
thereof or pertaining thereto. Developer shall bear the cost of future
relocation of such work requested by Developer and performed by Operator.
Developer shall fully cooperate with Nuevo and Operator in the implementation of
the Program. Developer shall (i) timely process all of its permit requests;
(ii) comment on all applicable submittals of specifications or plans within five
business days; and (iii) make all facilities available for accommodation under
the Program such that Nuevo may commence the Project Segment. To the extent that
Developer fails to fully and timely cooperate with Nuevo and Nuevo incurs
penalties, damages or incremental costs in performing the Program, such penalty,
damage or cost shall be the responsibility of Developer and Developer hereby
agrees to indemnify and hold Nuevo harmless therefrom. Developer shall also be
liable to Operator for any and all incremental cost or expense incurred by
Operator in the performance of its work in the Program as a result of
Developer’s (or Nuevo’s, if acting on behalf of Developer) failure to fully and
timely perform and complete Developer’s Improvements. Developer shall use good
faith, commercially reasonable efforts to timely and expeditiously perform its
obligations and rights under this Agreement in a manner that minimizes the
interruption or curtailment of production and shall be liable to and indemnify
Operator for all losses resulting from the failure to do so.

               2.3.1 Processing Costs – Employee Costs. Operator and Nuevo agree
not to charge Developer for their employees or overhead costs allocable to such
employees in the processing of the Governmental Approvals.

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               2.3.2 Operator Improvements. Nuevo shall submit to Operator the
preliminary and final detailed design and engineering of all facilities,
pipelines and well accommodation plans (“Operator Improvements”) when completed.
Operator shall have ten (10) business days to review and comment on the plans.
All final decisions with respect to the plans including pipeline and facility
locations, use of new, refurbished or salvaged equipment and materials and the
staging of the work to be performed shall be made by Nuevo in the exercise of
its reasonable discretion and in a manner consistent with customary oil field
practices. Should Operator request changes or modifications to the design and
engineering of Operator Improvements other than changes or modifications
required by applicable law or governmental regulations and should Nuevo
determine that such modifications can be incorporated into the Program within
the time duration specified in Attachment 4, Nuevo shall make such modification
provided that Operator prepays all incremental costs associated with such
modification. Operator shall not request a modification to the wells or well
classifications set out in Schedule B to Attachment 4 without first obtaining
the written approval of Developer. Incremental costs associated with such well
changes, if any, shall be pre-paid by Operator.

               2.3.3. Governmental Modifications. Should the Program be modified
to reflect changes that result from decisions of Governmental Entities, court
orders or settlement of litigation or by agreement such that fewer wells are
accommodated, abandoned, or less infrastructure is removed or altered, then
Nuevo shall have no obligation or duty of any kind or character with respect to
such wells or facilities that are removed from the Program.

         2.4 Miscellaneous.

               2.4.1 Remedies.

                     2.4.1.1 Default/Cure. Each of the terms conditions,
covenants and provisions of the Development Documents is a material
consideration for this Agreement, the breach of which shall be deemed a default
hereunder. Said default shall be deemed to have occurred if a Party has not
effected a cure within ten (10) days for payment of money hereunder and thirty
(30) days for all other defaults of receipt of notice specifying the breach in
the case of any of the obligations hereunder; provided, however, except as
otherwise specified herein, in the case of a breach of any of Nuevo’s
obligations hereunder, other than for the payment of money, which is not capable
of being cured within said thirty (30) day period, no default shall be deemed to
have occurred so long as Nuevo commences to cure such default within ten
(10) days of Notice and thereafter diligently and continuously prosecutes the
same to completion; provided however, that any such cure shall be accomplished
within ninety (90) days of the event giving rise to the Notice.

                     2.4.1.2 Remedies Cumulative. All rights, options and
remedies of either Party contained in this Agreement shall be construed and held
to be cumulative, and none of them shall be exclusive of the other, and either
Party shall have the right to pursue any one or all of such remedies or any
other remedy or relief which may be provided by law or equity, whether or not
stated in this Agreement. Further, either Party may exercise

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hereunder, any of the rights, options and remedies, as and to the extent,
described in Sections 5 and 13 of the Development Declaration.

                     2.4.1.3 Arbitration. Except for the right of either party
to apply to a court of competent jurisdiction for temporary restraining orders,
preliminary injunctions, writs of attachment, writs of possession or other
equitable or provisional relief, any controversy, dispute or claim of any kind
or nature arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement, without limitation, any
claim based on contract, tort or statute, shall be settled by final and binding
arbitration by three (3) arbitrators in accordance with the Rules of the
American Arbitration Association then in effect (the “Rules”). Each party to the
arbitration shall, in accordance with the Rules, nominate one (1) arbitrator to
the arbitrational tribunal and the two (2) arbitrators so appointed shall
appoint the third arbitrator in accordance with the Rules, the three
(3) arbitrators constituting the arbitration tribunal. The arbitration shall be
held in Orange County, California. Reasonable discovery shall be allowed in
connection with such arbitration. At the request of a party, the arbitration
tribunal may issue orders for interim relief as deemed necessary to safeguard
property that is the subject of the arbitration or in order to accomplish the
objectives of this Agreement. Such interim measures may also be sought from
judicial authority having jurisdiction. The decision of the majority of the
arbitrators shall be reduced to writing, shall be the sole and exclusive remedy
between the parties regarding any and all such disputes or differences, and
shall be final and binding on all parties to the arbitration; and, application
may be made to any court of competent jurisdiction for an order of enforcement
and shall be enforceable in any court of competent jurisdiction. The parties
agree to exclude any right of application or appeal to the courts of any
jurisdiction in connection with any questions of law arising in the course of
arbitration or with respect to any award made, except for enforcement purposes.
Consequential, punitive, or incidental or other similar damages shall not be
allowed.

     In the event any such arbitration (or other proceeding) is brought to
enforce or interpret any of the covenants, terms or provisions of this
Agreement, the prevailing party in any and all such arbitration(s) or other
proceeding(s), including any bankruptcy proceedings, shall be entitled to
recover from the non-prevailing party all of the attorneys’ fees and costs
incurred by such party in each and every such arbitration or other proceeding,
including any and all appeals or petitions therefrom. As used in this Agreement,
attorneys’ fees shall be deemed, to the extent allowed by law, to mean the full
and actual costs of any legal services actually performed in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services, and shall not be limited to “reasonable
attorneys’ fees” as defined in any statute or rule of court.

                     2.4.1.4 Waiver. No waiver by either party of a default
under any of the terms of this Agreement by the other, and no delay or failure
to enforce any of the terms of this Agreement shall be a waiver of or shall
affect a default other than as specified in such waiver. The consent or approval
of either party to any act by the other requiring consent or approval shall not
be deemed to waive or render unnecessary consent or approval to or of any
subsequent similar acts.

               2.4.2. Continuous Operation. Operator agrees to use good faith,
commercially reasonable efforts to cooperate with Nuevo so that Nuevo can
proceed

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continuously, diligently and in a timely manner in accordance with the terms and
conditions of this Agreement and in accordance with and as required under the
Development Documents, and except where mutual agreement is expressly required,
if Nuevo cannot proceed continuously and diligently due to Operator’s unexcused
failure to cooperate the same shall, at the option of Nuevo, be considered as an
event of default herein, except as such failure to so proceed is excused by
reason of any Unavoidable Delay.

               2.4.3. Assignment. Nuevo may assign its rights hereunder at any
time without the consent of Developer.

               2.4.4 Subdivision Maps and Applications. Subject to the
provisions of the Development Documents, if required to do so, and provided
there exists no default thereunder, Operator agrees, without cost to Operator
and Nuevo, to execute any and all Developer approved Level B Final Maps,
applications and petitions pertaining to the development of any portion of the
Parcel.

               2.4.5. Captions. The captions used herein are for convenience
only, are not part of this Agreement and do not in any way limit or amplify the
scope or intent of the terms and provisions hereof.

               2.4.6. Invalidity of a Provision. If any provision of this
Agreement shall be adjudged by a court in a final and non-appealable judgment to
be void, invalid, illegal or unenforceable for any reason, the same shall in no
way affect (to the maximum extent permissible by law) any other provision of
this Agreement, the application of any such provision under circumstances
different from those adjudicated by the court, or the validity or enforceability
of this Agreement as a whole, but only to the extent that performance of such
remaining provisions would not be inconsistent with the intent and purposes of
this Agreement.

               2.4.7. Notices. Any notice to be given or other document to be
delivered by any Party to the other or others hereunder, and any payments
between parties, may be delivered in person to an officer of any party, or may
be delivered by Federal Express, private commercial delivery or courier service
for next business day delivery, or may be deposited in the United States mail,
duly certified or registered, return receipt requested, with postage prepaid,
and addressed to the party for whom intended, as follows:

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                  If to Nuevo (“Nuevo”):    
 
                    Nuevo Energy Company
1021 Main, Suite 2100
Houston, Texas 77002

      Attn:   Phillip A. Gobe

      Phone:   713-374-4832

      Fax:   713-374-4817

      Email:   gobep@nuevoenergy.com
 
           

      and    
 
           

      Attn:   Phillip E. Sorbet

      Phone:   661-395-5431

      Fax:   661-395-5294

      Email:   sorbetpp@nuevoenergy.com
 
           

  Copy to:                 Ullom Associates
16149 Redmond Way, Ste. 401
Redmond, Washington 98052

      Fax:   (425) 836-2870

      Phone:   (425) 836-2728

      Email:   ullomjw@aol.com
 
                    Nossaman, Guthner, Knox & Elliott, LLP
18101 Von Karman Avenue, Suite 1800
Irvine, California 92612-1047

      Attn:   William P. Tanner, III

      Fax:   (949) 833-7878

      Phone:   (949) 833-7800

      Email:   wtanner@nossaman.com
 
                To Operator:   BlackSand Partners, L.P.

      Attn:   Tim Collins         1801 Broadway, Suite 600
Denver, Colorado 80202

      Fax:   (303) 296-0329

      Phone:   (303) 296-1908

      Email:   timdenver@aol.com

24

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  Copy to:                 Arthur Wright, Esq.
Thompson & Knight LLP
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201

      Fax:   (214)999-1695

      Phone:   (214) 969-1409

      Email:   arthur.wright@tklaw.com
 
           

  To Developer:                 To be added upon execution of this Agreement by
any Developer.

            Notice may also be given by facsimile transmission (“Fax”) to any
party at the respective Fax number given above or by email, provided receipt of
such transmission shall be confirmed by follow-up notice within seventy-two (72)
hours by another method authorized above. Any party hereto may from time to
time, by written notice to the other, designate a different address which shall
be substituted for the one above specified. If any notice or other document is
sent by mail as aforesaid, the same shall be deemed served or delivered
seventy-two (72) hours after the mailing thereof as above provided. Notice by
any other method shall be deemed served or delivered upon actual receipt at the
address or Fax number listed above.

               2.4.8. Binding Effect. Subject to Section 2.3.3 concerning
assignments, it is the intent of the Parties that the covenants, conditions, and
agreements imposed by this Agreement (i) shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs and assigns to all
or any portion of the Minerals or to a Developer and (ii) all of the obligations
of Nuevo as stated herein shall be binding upon and enforceable against Nuevo by
any successor to Buyer.

               2.4.9. Further Assurances. Each of the Parties shall execute and
deliver all additional papers, documents and other assurances, and shall do all
acts and things reasonably necessary in connection with the performance of its
obligations hereunder and to carry out the intent of the Parties.

               2.4.10. Time of Essence. Time is of the essence of each provision
of this Agreement of which time is an element. Any reference in this Agreement
to time for performance of obligations or to elapsed time shall mean consecutive
calendar days, months or years, as applicable, unless otherwise explicitly
indicated herein.

               2.4.11. Term. This Agreement shall remain in effect from the date
first shown above until Final Acceptance or the Expiration of the Development
Agreement between Nuevo and Orange County dated December 19, 2002. Expiration of
this Agreement shall not terminate any payment obligation, indemnity obligation
or assumption of liability all of which shall survive this Agreement and remain
in full force and effect.

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               2.4.12. Attorneys’ Fees. If any action or proceeding is
instituted to enforce or interpret any provision of this Agreement the
prevailing party shall by entitled to recover such amounts as the court
may-judge to be reasonable as costs incurred in such action, including, without
limitation, court costs and attorneys’ fees.

               2.4.13 Payments. Any amounts which are due and owing to Nuevo or
Operator pursuant to the various terms of the Development Documents shall be
paid as specified. If any of these amounts are not paid when due, such amounts
shall bear interest as specified in the particular Section of the Development
Document requiring such payment or, if not so specified, then at the maximum
nonusurious rate which may be charged by a nonexempt lender.

               2.4.14 Applicable Law This Agreement and the documents in the
forms attached as exhibits hereto shall be governed by and construed under the
laws of the State of California.

     The Parties have executed this Agreement on the date first set forth above.

              BLACKSAND PARTNERS, L.P.,   NUEVO ENERGY COMPANY, a Texas Limited
Partnership   a Delaware corporation
 
           
By:
  BlackSand Energy, Inc.,   By:   /s/ GEORGE B. NILSEN

  a Delaware corporation      

--------------------------------------------------------------------------------

 
          George B. Nilsen
Its:
  General Partner   Its:   Senior Vice President
 
           
By:
  /s/ TIM COLLINS   By:   /s/ Phillip A. Gobe

 

--------------------------------------------------------------------------------

       

--------------------------------------------------------------------------------

 
 
  Tim Collins       Phillip A. Gobe
Its:
  President   Its:   Chief Operating Officer

             
By:
      By:    

 

--------------------------------------------------------------------------------

       

--------------------------------------------------------------------------------

 
Its:
      Its:    

         

--------------------------------------------------------------------------------

 
 
            TIM COLLINS   “Developer”
 
           
Its:
  Chairman   By:    

         

--------------------------------------------------------------------------------

 

      Its:    

         

--------------------------------------------------------------------------------

 

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PAYMENT AND PERFORMANCE AGREEMENT

ATTACHMENT “1”

LEGAL DESCRIPTION OF LAND

 

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TABLE OF CONTENTS

ATTACHMENT “1”

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42" WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25’ WEST 62.67 CHAINS TO A 2" × 4" POST
MARKED 62.67 IN’MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" ×
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A
4" × 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45" WEST 20.00 CHAINS TO A 2" ×
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39" EAST 55.48 CHAINS
TO A 2" × 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30" EAST 20.00
CHAINS TO A 2" × 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45" EAST 134.63
CHAINS TO A 2" × 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30" EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

    BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION
OIL COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY
OF THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA
TO GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK
44, PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF
THE AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER
LINE OF CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET
AND BREA CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73°
32' 24" WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE
AT SAID POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16"
EAST), A DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0°
10' 11" EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE
OF 500 FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE
SOUTH 0° 10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A
DISTANCE OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC. , BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

    BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING
BEING MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" x 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" x 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2' x 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2' x 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2' x 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243. ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS, IN
THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

    BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “N 10°33'18"E 381.48' “ ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;    
  THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

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    THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY
OF PARCEL 1 OF PARCEL MAP NO. 86-243. SAID POINT ALSO BEING THE NORTHERLY
TERMINUS OF SAID COURSE SHOWN AS “ N10°33' 18"E 381.48' ;       THENCE SOUTHERLY
ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE POINT OF
BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000–054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

    BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86–243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “N 10°33'18"E 381.48" “ ON SAID RECORD OF SURVEY NO. 2001–1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86–243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;    
  THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86–243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “N10°33'18“E 381.48' “;       THENCE SOUTHERLY ALONG
SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

    BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM

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    THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED
BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48" 11" WEST 529.60 FEET TO A
2"×2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE NORTH
85° 48" 16" WEST, 380.00 FEET TO A 2"×2" STAKE; THENCE NORTH 4° 11" 44" EAST
1750.00 FEET TO A 2"×2" STAKE; THENCE SOUTH 85° 48" 16" EAST 380.00 FEET TO A
2"×2" STAKE; THENCE SOUTH 4° 11" 44" WEST 1750.00 FEET TO A 2"×2" STAKE AND THE
TRUE POINT OP BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘Al" SITE DEPICTION ", IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(STAMP) [h12901h1290152.gif]
  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:

  -s- KATHLEEN SUSAN TETRAULT [h12901h1290153.gif]
KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004

  January 31, 2003
JN: 13207.00

Page 5 of 5

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ATTACHMENT “2”

LIST OF ENGINEERING FIRMS PER SECTION 2.1.9

Cawley, Gillespie & Associates, Inc.

DeGoIyer & McNaughton, Inc.

Notherland, Sewell & Associates, Inc.

Ryder Scott Company

 

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ATTACHMENT 3

RELATED THIRD-PARTY EASEMENTS,
CONTRACTS AND LICENSE AGREEMENTS

(Oil Field Related Third Party Easements and License – TPEL)

                                  Recording Document Type

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Grantee

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

Right-of-Way
  1/26/82   Union Oil Company of California   Mobil Oil
Corporation   82-340271
Los Angeles
County
 
               
License
  8/21/67   Union Oil Company of California   Shell Oil
Company   Unrecorded
 
               
License PSA
  11/10/88   Union Oil Company of California   Shell Western E&P Inc.  
Unrecorded
 
               
Easement
  7/27/62   Union Oil Company of California   Boy Scouts of America, Los Angeles
Area Council   8/1/62
6245/654
 
               
Easement
  9/13/84   Union Oil Company of California   City of Brea   10/11/84
84-421551
 
               
Easement
  9/10/85   Union Oil Company of California   City of Brea   10/7/85
85-382994
 
               
Easement
  9/2/86   Union Oil Company of California   Brea H.O.P.E. Inc.   10/1/86
86-459482
 
               
Easement
  3/18/96   Union Oil Company of California   City of Brea   3/29/96 Inst.
19960153323
 
               
Easement
  3/18/96   Union Oil Company of California   City of Brea   3/29/96 Inst.
19960153324
 
               
Easement
  1/26/82   Union Oil Company of California   Mobil Oil
Corporation   3/31/82 Inst. 82-340271 [Los Angeles County]
 
               
Easement
  8/21/67   Union Oil Company of California   Shell Oil
Company   N/A
 
               
Easement
  11/10/88   Union Oil Company of California   Shell Western E&P Inc.   N/A
 
               
Easement
  4/1/58   Union Oil Company of California   The Metropolitan Water District of
Southern California   5/21/58
4291/400
 
               
Easement for Oil
Wells
  10/16/58   Collier Carbon and Chemical Corporation   Union Oil Company of  
11/3/58
4470/10

1

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ATTACHMENT 3

                                  Recording Document Type

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Grantee

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

            California                      
Non-Exclusive Easement and Right-of-Way
  7/27/62   Union Oil Company of California   Boy Scouts of America, Los Angeles
Area Council   8/1/62
6245/654
 
               
Right-of-Way
  10/2/62   Union Oil Company of California   Southern
California
Edison Company   1/18/63
6399/705
 
               
Grant of Easement
  9/18/78   Union Oil Company of California   Southern
California
Edison Company   2/5/79
13024/1157
 
               
Grant of Easement
  5/17/88   Union Oil Company of California, dba UNOCA1   Southern
California
Edison Company   6/7/88
Inst. 88-268095
 
               
Easement
  9/15/95   Union Oil Company of California, dba UNOCA1   UNOCAL
California
Pipeline
Company   10/25/95
Inst.
19950473641
 
               
Grant of Easement
  12/11/95   Union Oil Company of California, dba UNOCA1   Southern
California
Edison Company   1/4/96
Inst.
19960004773
 
               
Easement PSA
  3/18/96   Union Oil Company of California   City of Brea   3/29/96
Inst.
19960153322
 
               
Easement PSA
  3/18/96   Union Oil Company of California   City of Brea   3/29/96
Inst.
19960153323
 
               
Easement PSA
  3/18/96   Union Oil Company of California   City of Brea   3/29/96
Inst.
19960153324
 
               
Easement
  5/7/96   Nuevo Energy
Company   Union Oil
Company of
California dba
UNOCA1   5/26/96
Inst.
19960254739
 
               
Pipeline Right-
Of-Way
  5/12/02   The Sterns Ranchos
Company   Pacific Coast Oil
Company   6/25/02
Do not have
recording info.
 
               
License
  5/1/59   Union Oil Company of California   Shell Oil
Company   Do not have
recording info.

Any other Third Party Easement or License disclosed in Preliminary Title Report
#OR-2252674, dated September 13, 2002, First American Title Company.

2

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ATTACHMENT 3

ADDITIONAL CONTRACTS AND GIFT DEED

1.   Memorandum of Understanding between Nuevo, County of Orange and City of
Brea dated December 10, 2002 regarding pre-annexation.   2.   Development
Agreement dated December 19, 2002, between Nuevo and County of Orange.   3.  
Impact Mitigation Agreement between Brea Olinda Unified School District and
Nuevo dated as of October 28, 2002.   4.   Gift Deed dated January 30, 2003 from
Nuevo to the Brea-Olinda Unified School District Conveying 0.425 acres, recorded
on February 25, 2003 as Instrument No. 2003000207265 in the official records of
Orange County.

3

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Attachment

Brca Field Development Accommodation Program

                                          Agency     Duration       Responsible
      Approval Cost (S)

--------------------------------------------------------------------------------

  Activity

--------------------------------------------------------------------------------

  Category

--------------------------------------------------------------------------------

  Party

--------------------------------------------------------------------------------

  Action

--------------------------------------------------------------------------------

  Required

--------------------------------------------------------------------------------

PRE-PHASE I Initial Activity    
170,000
  7weeks   G,T   Nuevo   Preliminary Engineering Design: Pipelines, Tank Farms,
Utilities, Power System    
300,000
  7weeks   T   Nuevo   SCAQMD Permitting: Tank Farm(s), Compressors, Pumps,
Vessel, etc.   SCAQMD
 
  3months   R   Developer   Re-vegetation of Open Space (Reference Schedule E)  
USA COE
3,061,500
  36weeks   A.B.C.D.E   Nuevo   Begin Procurement: Tanks, Vessels, Pipe,
Transformers, Pumps    
1,830,000
  20weeks   G   Nuevo   Detailed Engineering Design    
2,080,000
  20weeks   M,0   Nuevo   Initial Abandonment of Idle Wells & Re-Abandonments
(25 Total) Covering All Phases of Project (Reference    
 
              Well Work Listing - Schedule B)   CALDOGGR PRE-PHASE I
Intermediate Activity    
3,061,500
  36weeks   A,B,C,D,E   Nuevo   Continue Procurement: Tanks, Vessels, Pipe,
Transformers, Pumps    
1,908,200
  4months   R   Nuevo   Remediation Required by EIR (Reference Schedule D)  
OCHCA
 
  4weeks   G   Nuevo   Building Permits: Tanks, Power System, Vessels   BLDGDEPT
 
              Removal of Infrastructure within Development Area (Reference
Drawings BO-200-2003, 2004, 2005) and Initial    
1,150,000
  13weeks   I,M   Nuevo   Abandonment of Active Wells (17 wells) for Phase I
(Reference Well Work Listing - Schedule B)   OCHCA
1,000,000
  30weeks   A.C.F   Nuevo   Begin Construction of Field Infrastructure    
1,000,000
  30weeks   D   Nuevo   Begin Construction of Power System    
456,000
  19wweks   B   Nuevo   Construct Expanded Tonner Canyon Tank Facility   SCAQMD
 
          Developer   Tentative Map (needed prior to grading)     PRE-PHASE I
Final Activity    
1,661,000
  30weeks   A,C,F   Nuevo   Construct Field Infrastructure    
 
          Developer   Corehouse Demolition    
1,840,000
  30weeks   D   Nuevo   Construct Power System    
500,000
  4 weeks   L   Nuevo   Temporary Removal of Equipment for Accommodated Wells
(46 wells) for Phase I in Development and Grading    
 
              Areas (Reference Well Work Listing - Schedule B)    
3,417,936
  9months   I,R   Nuevo   2ast Naranjal Tank Farm Demolition & Remediation  
OCHCA
PHASE I
                   
 
          Developer   Grading to include line and grade for wells and associated
permanent infrastructure    
2,135,000
  17 weeks   P   Nuevo   Raise/Lower Wellheads of All Phase I Accommodated Wells
(46 Wells) (Reference Well Work    
 
              Listing-Schedule B)    
165,000
  4 weeks   M,O   Nuevo   Final Abandonment of Phase I Wells (35 Idle,
Re-Abandonments & Active WellsX Reference Well Work Listing -    
 
              Schedule B)   CALDOGGR
1,941,000
  17 wwks   L   Nuevo   Accommodation for Phase I Accommodated Wells (46 Wells)
( Reference Well Work Listing - Schedule B)    
225,000
  13 weeks   I,R   Nuevo   Removal of Infrastructure (Reference Drawings
BO-200-2003, 2004, 2005) within Development Area and Initial    
200,000
  4 weeks   I,L   Nuevo   Abandonments of Active Wells (8 wells) for Phase II
(Reference Well Work Listing - Schedule B)   CALDOGGR
 
              Temporary Removal of Equipment for Accommodated Wells (21 wells)
for Phase II (Reference Well Work    
 
              Listing - Schedule B)    
PHASE II
                   
 
          Developer   Grading to include line and grade for wells and associated
permanent infrastructure    
900,000
  17 weeks   P   Nuevo   Raise/Lower Wellheads of All Phase II Accommodated
Wells (21 Wells) (Reference Well Work Listing -    
 
              chedule B)    
85,000
  4 wwks   M,O   Nuevo   Final Abandonment of Phase II Wells (14 Idle,
Re-Abandonments & Active WellsX Reference Well Work    
 
              Listing - Schedule B)   CALDOGGR
1,018,000
  17 weeks   L,H   Nuevo   Accommodation for Phase II Accommodated Wells (21
wells) ( Reference Well Work Listing - Schedule B)    
100,000
  4 weeks   I,R   Nuevo   Removal of Infrastructure and Initial Abandonment of
Active Wells (3 wells) for Phase III Reference    
 
              Well Work Listing - Schedule B)   CALDOGGR
PHASE III
                   
 
          Developer   Grading to include line and grade for wells and associated
permanent infrastructure    
92,000
  1 week   M,O   Nuevo   Final Abandonment of Phase III Wells (4 idle and active
wells) (Reference Well    
 
              Work Listing - Schedule B)   CALDOGGR
84,000
  4 weeks   S   Nuevo   Seismic Sensor Installation   BLDGDEPT

 

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Schedule A

Accommodation Categories

              Activity   Brea     Code

--------------------------------------------------------------------------------

  Accommodation Costs

--------------------------------------------------------------------------------

  ($M)

--------------------------------------------------------------------------------

 
  Infrastructure        
A
  Water flood     695  
B
  Production Gathering     2,822  
C
  Gas Collection     2,296  
D
  Electrical     5,247  
E
  Taxes / Freight     1,060  
F
  Misc.(NDE&Cathodic Protection)     300  
G
  Engineering     2,000  
 
       

--------------------------------------------------------------------------------

   
 
  Total Infrastructure     14,420  
 
       

--------------------------------------------------------------------------------

   
 
  Other        
H
  Noise Control, Fencing, & Screens     600  
I
  Demolition     1,000  
J
  New Warehouse     76  
L
  PCP or SPS Units (46)     2,875  
M
  Well Abandonments (46)     2,760  
O
  Well Reabandonments (10)     1,000  
P
  Raise / Lower Wellheads (74)     3,039  
R
  Soil Remediation     3,850  
S
  Seismic     80  
T
  Permits     300  
 
       

--------------------------------------------------------------------------------

   
 
  Total - Other     15,580  
 
       

--------------------------------------------------------------------------------

   
 
  Grand Total     30,000  
 
       

--------------------------------------------------------------------------------

   

 

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Schedule B

Well Work Listing

                          Abandonments         Development  

--------------------------------------------------------------------------------

  Vaulted   Peripheral Phase

--------------------------------------------------------------------------------

  Idle Wells

--------------------------------------------------------------------------------

  Active Wells

--------------------------------------------------------------------------------

  Reabandonments *

--------------------------------------------------------------------------------

  Wells

--------------------------------------------------------------------------------

  Wells

--------------------------------------------------------------------------------

1
  EN 17   EN 16   EN 1   EN 26   36 RD
1
  EN 18   32 RD   EN 2   46   52
1
  33   34   35   79   52 A
1
  40   51 A   39   89   55
1
  50   75 RD   92   90   55 A
1
  51   91       147   73
1
  152   144       148   160
1
  199   165       150   163
1
  215   207       151   173
1
  216   208       153   174
1
  257   218       171   196
1
  268   244       198   206
1
  284   258       221   209
1
      283       232   210
1
      301       256   213
1
      304       269   222
1
      309       285   223
1
              287   224
1
              288   225
1
              292   249
1
              294   282
1
              159   302
1
              217 RD2    
1
              247    
2
  145   80   17   87   37
2
  146   81 RD   41   134   74
2
      88   42   180   133
2
      100   44   211   141
2
      164       230   168
2
      178       259   176
2
      203       276   177
2
      251       281   181
2
              293   190
2
                  219
2
                  220
2
                  241
2
                   
2
                   
2
                   
2
                   
2
                   
2
                   
2
                   
2
                   
3
  197   130            
3
      192            
3
      194            
 
 

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

 
Total Wells
  16   28   9   33   34
 
 

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

 

* Reabandonments subject to verification of need

 

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Schedule C

Drawing List

      Drawing Number

--------------------------------------------------------------------------------

  Drawing Title

--------------------------------------------------------------------------------

BO-200-2001
  Conceptual Pipeline/Electrical Corridor
BO-200-2003
  Existing Oil Gathering System for Real Estate Development
BO-200-2004
  Existing Gas Gathering System for Real Estate Development
BO-200-2005
  Existing Water Injection System for Real Estate Development

 

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(MAP) [h12901h1290154.gif]

 

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(MAP) [h12901h1290155.gif]

 

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(MAP) [h12901h1290156.gif]

 

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(MAP) [h12901h1290157.gif]

 

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Schedule D

Remediation Required By EIR (Nuevo)

As set out in the approved Remedial Action Plan
submitted December 16, 1999, as amended
October 3, 2001, December 27, 2001 and January 13, 2003

 

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Schedule E

Re-Vegetation Of Open Space

As set out in the Biological Assessment included within the
Biological Opinion dated December 30, 2002 as used by
the US Army Corps of Engineers in its Section 404 Permit

 

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PURCHASE AND SALE AGREEMENT

BETWEEN

NUEVO ENERGY COMPANY

AND

BLACKSAND PARTNERS, L.P.

 

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TABLE OF CONTENTS

REVISED 2/27/03
2:15 P.M.

PURCHASE AND SALE AGREEMENT

BETWEEN

NUEVO ENERGY COMPANY

AND

BLACKSAND PARTNERS, L.P.

 

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TABLE OF CONTENTS

              Page

--------------------------------------------------------------------------------

ARTICLE 1 DEFINITIONS, APPROVALS AND CONSIDERATION
    1  
1.1 Definitions
    1  
1.2 Governmental Approvals
    8  
1.3 Consideration
    8  
ARTICLE 2 PURCHASE PRICE
    8  
2.1 Purchase of the Property Interests
    8  
2.2 Purchase Price
    8  
2.3 Intentionally Omitted
    11  
2.4 Intentionally Omitted
    11  
2.5 Buyer’s DD Period; Return of Documents
    11  
2.6 Conditions to Close
    13  
ARTICLE 3 REPRESENTATIONS AND WARRANTIES; AS IS PURCHASE; DISCLAIMERS AND
REQUIRED DISCLOSURES; GOVERNMENTAL APPROVALS AND COMPLIANCE; DEVELOPMENT COSTS,
TAXES AND ASSESSMENTS; INSURANCE; INDEMNITIES
    13  
3.1 A. Authorization of Buyer
    13  
3.2 Covenants by Buyer; “AS IS” Purchase
    19  
3.3 Development Costs, Taxes and Assessments
    22  
3.4 Insurance
    22  
3.5 Release and Indemnity
    25  
3.6 Seller’s Indemnity
    31  
ARTICLE 4 FURTHER DOCUMENTATION
    32  
4.1 Grant Deed
    32  
4.2 Natural Hazard Zones
    32  
4.3 Development Declaration, PAPA, and Nuevo Grant of Easements to Buyer
    32  
4.4 Non-Exclusive Assignment of Contract Rights and Bill of Sale
    32  
4.5 Repository Instructions to Buyer’s General Partner’s Counsel
    32  
4.6 Development Declaration Covering the Development Areas and Remainder
Parcels.
    32  
ARTICLE 5 GENERAL PROVISIONS
    33  
5.1 Notices
    33  
5.2 Payments; Interest; Liens
    34  
5.3 Intentionally Omitted
    35  
5.4 Signing of Documents
    35  
5.5 Captions
    35  
5.6 Governing Law and Venue
    35  
5.7 Time of the Essence; Successors and Assigns
    35  
5.8 Remedies
    35  
5.9 Arbitration/Attorneys’ Fees
    36  
5.10 Severability
    37  
5.11 Gender and Number
    37  
5.12 Brokerage Commission
    37  
5.13 Waiver of Jury Trial
    37  

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5.14 Survival of Certain Covenants
    37  
5.15 Recording
    38  
5.16 Conflicts
    38  
5.17 Retained Obligations Under Hover Agreement
    38  
5.18 Assignment of Agreement
    38  
5.19 No Partnership or Agency
    39  
5.20 Resolution of Contractual Uncertainties
    39  
5.21 Assignment of License Agreements/Leases
    39  
5.22 Notice on Approved Transfer
    39  
5.23 Entire Agreement; Exhibits
    39  
5.24 Stand-Alone Insurance
    40  
5.25 Further Assurances and Cooperation
    41  
5.26 Intent of Definitions
    41  
5.27 Intentionally Omitted
    41  
5.28 Continuing Seller Interests
    41  
5.29 Unocal Asset Purchase Agreement
    42  
5.30 Like-Kind Exchange
    42  
5.31 Oil Well Exhibit
    42  
5.32 Intentionally Omitted
    43  
5.33 Oil Price Hedge
    43  
5.34 Waiver, Release and Indemnities: Limitations under the PAPA
    43  
5.35 Buyer’s Counsel as Closing Repository
    43  

 

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                  Page

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DESCRIPTION

--------------------------------------------------------------------------------

       
EXHIBIT “A”
  LEGAL DESCRIPTION OF THE PROPERTY INTERESTS    
EXHIBIT “B”
  REPOSITORY INSTRUCTIONS TO BUYER’S GENERAL PARTNER’S COUNSEL    
EXHIBIT “C”
  NON-EXCLUSIVE ASSIGNMENT OF NUEVO’S CONTRACT RIGHTS AND BILL OF SALE    
EXHIBIT “D”
  GRANT DEED    
EXHIBIT “E”
  NATURAL HAZARD ZONES    
EXHIBIT “F”
  EXCLUDED INTERESTS AND RETAINED OBLIGATIONS    
EXHIBIT “G”
  RIGHTS-OF-WAY AND CONTRACTS    
EXHIBIT “H”
  LIST OF KNOWN OIL WELLS AND DEPICTION OF RETAINED PROPERTIES    
EXHIBIT “I”
  PAYMENT AND PERFORMANCE AGREEMENT INCLUDING ACCOMMODATION AND REMEDIATION
PROGRAM    
EXHIBIT “J”
  ASSUMPTION OF OBLIGATIONS    
EXHIBIT “K”
  EASEMENT AGREEMENT (NUEVO TO BUYER)    
EXHIBIT “L”
  DEVELOPMENT DECLARATION    
EXHIBIT 2.2.2.
  2002 HISTORICAL COSTS AND EXPENSES    

 

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PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made this 28th day of
February, 2003, by and between NUEVO ENERGY COMPANY, a Delaware corporation
(“Nuevo” of “Seller”), and BLACKSAND PARTNERS, L.P., a Texas limited partnership
(“Buyer”), upon the following terms and conditions:

RECITALS

     A. Seller is the owner of those certain parcels of real property (“Land” or
“Property” as defined in 1.1.29), consisting of approximately 810 acres, located
in the County of Orange, State of California, and all the mineral interests
therein (“Property Minerals” as defined in Section 1.1.44) more fully described
in Exhibit “Al,” and is also the owner of (i) certain mineral interests in the
Adjacent Property (defined in Section 1.1.4) as more fully described in Exhibit
“A2,” (ii) certain mineral interests in the District Property (defined in
Section 1.1.13) as more fully described in Exhibit “A3” and (iii) certain
interests in other fee minerals as more fully described in Exhibit A4. The
Property Minerals and the interests described in (i) through (iii) above, are
collectively referred to herein as “Minerals” (as defined in 1.1.33). A
depiction of the Land is attached as Exhibit “A5.”

     B. Seller has already taken steps toward the preparation of a portion of
the surface of the Property for development (“Project” as defined in 1.1.42),
including the submission of certain governmental approval documents for approval
of the Project. Upon the execution hereof, Seller and/or the purchaser of the
Project (“Developer”), shall retain all rights and responsibilities for the
continued processing of such governmental approval documents, subject only to
any right of Buyer contained in the Payment and Performance Agreement (“PAPA”)
attached hereto as Exhibit “I.”

     C. Buyer desires to purchase the Property Interests (defined in Section
1.1.43) from Seller and Seller desires to sell the Property Interests to Buyer
on the terms and conditions hereinafter set forth, including the repository
instructions to Buyer’s general partner’s counsel (“Repository Instructions”)
attached hereto as Exhibit “B.”

ARTICLE 1
DEFINITIONS, APPROVALS AND CONSIDERATION

1.1   Definitions.

     1.1.1 “A Final Map” or “Level A Final Map” shall mean a final tract map of
the Property, showing the Development Areas, Retained Properties and Remainder
Parcels as separate, legal parcels under the Map Act. Level B Final Map shall
mean a “final map” of a Development Area as defined in the Map Act and a Level B
Tentative Map shall mean a “tentative map” of a Development Area as defined in
the Map Act (commonly referred to as subdivision maps).

1

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     1.1.2 “Adjacent Grant Deed” shall mean the grant deed from Seller to Brea
Walden, LLC, dated October 3, 2001, and recorded with the County on October 9,
2001 as Instrument No. 20010710856.

     1.1.3 “Adjacent Minerals” shall mean the items described in Reservations A
and B of the Adjacent Grant Deed.

     1.1.4 “Adjacent Property” shall mean the real property described in
Attachment 1 to the Adjacent Grant Deed (and exclusive of the property described
in Reservations A through E to the Adjacent Grant Deed).

     1.1.5 “Appurtenant Interests” shall mean the following:

          1.1.5.1 All of Seller’s mineral fee interests, royalties, rights to
receive royalties under existing oil, gas and/or mineral leases, rights to take
royalties, and overriding royalties, and working interests in kind and all other
types of interests, whether vested, contingent, reversionary or otherwise, in
oil, gas and all other minerals of any nature whatsoever lying on, at or near
the surface or at any depths or intervals below the surface, in the Property
(collectively, the “Property Minerals”).

          1.1.5.2 All of Seller’s rights, title and interest in rights-of-way,
easements, permits, plans, franchises, licenses, servitudes, surface leases, and
real estate use and occupancy rights and agreements of every kind and character
in, on, across, adjoining or abutting or in any other way relating to the
Property and Adjacent Property in connection with, relating to or arising out of
Oil Operations (collectively, the “Rights-of-Way”), specifically including,
without limitation, those certain rights-of-way (a) listed in Exhibit “G,” which
to the best of Seller’s knowledge (as defined in Section 3. IB) include all of
the material rights-of-way pertaining to the Oil Operations, and (b) granted in
the Easement Agreement. Certain of the Rights-of-Way pertain to operations and
activities affecting both the Property Interests and the surface estate of the
Land. In those instances, Buyer shall be conveyed a non-exclusive interest in
any such Right- of-Way as designated on Exhibit “G”.

          1.1.5.3 All of Seller’s rights, title and interest in all contracts
and agreements relating to the Minerals and Oil Operations, as amended from time
to time (collectively “Contracts”), specifically including without limitation,
those certain Contracts listed in Exhibit “G,” which to the best of Seller’s
knowledge (as defined in Section 3.IB) include all of the Contracts pertaining
to the Minerals.

          1.1.5.4 All of Seller’s fixtures, equipment (including but not limited
to gas turbines, gas processing equipment and oil blending equipment) and
personal property associated with the Minerals and Oil Operations (collectively,
the “Equipment”).

          1.1.5.5 All claims and causes of action in favor of Seller, now
existing or hereafter arising, from or in any way pertaining to Minerals, or in
any way pertaining to, arising from or attributable to the development,
production and/or sale of oil, gas and/or other minerals from the Minerals or
Oil Operations, to the extent such claims or causes of action arise from factors
occurring on or subsequent to the Effective Date (collectively, “Claims”). All
Claims,

2

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including Claims for refunds, adjustments, income or contribution arising prior
to the Effective Date shall, unless otherwise specified in this Agreement, be
retained by Seller.

          1.1.5.6 All of Seller’s interest in (i) licenses, permits,
authorizations, and approvals issued by Governmental Agencies respecting and
relating to the Minerals or Oil Operations; and (ii) plans and third party
reports, specifications and surveys of the Minerals (collectively, “Rights”).

     1.1.6 “Close” or “Closing” shall mean the contemporaneous payment of the
Purchase Price from Buyer to Seller and the recordation of documents with the
County Recorder, as described in the Repository Instructions.

     1.1.7 “County of Orange” or “County” shall mean Orange County, California,
and any City within the County, as applicable. “City” shall mean Brea,
California.

     1.1.8 “Developer” shall mean Seller as the initial applicant to
Governmental Agencies for development of the Project or any entity (or entities,
collectively and individually) which subsequently acquires all or any portion of
the surface fee interest in the Land for the purpose of developing all or part
of the Project.

     1.1.9 “Development Areas” shall mean those portions of the Property
designated for improvements by Developer in connection with the Project, all as
shown in the final Area Plan, the A Final Map or any Level B Final Map.

     1.1.10 “Development Declaration” shall mean the Development Declaration
attached as Exhibit “L.”

     1.1.11 “Development Documents” as used in this Agreement or in any of the
documents described in the Article hereof entitled “Further Documentation” shall
mean this Agreement (with all its exhibits), together with each and every
document described in such Article and shall include without limitation the (a)
Non-Exclusive Assignment of Nuevo’s Contract Rights and Bill of Sale, (b) Grant
Deed, (c) PAPA, (d) Easement Agreement, (e) Development Declaration and (f)
Repository Instructions. All of the definitions contained in any of the
Development Documents, unless stated otherwise in this Agreement, are
incorporated herein by reference.

     1.1.12 “DD Period” shall mean that certain DD period during which Buyer
satisfied itself as to the suitability of the Oil Operations and Property
Interests for their intended purpose and use.

     1.1.13 “District Property” shall mean the real property conveyed to the
Brea-Olinda Unified School District (“District”) pursuant to that certain Impact
Mitigation Agreement between Seller and the District, dated as of October 28,
2002, as described in the grant deed (the “District Deed”) from Seller to the
District, a copy of which has been provided to Buyer. “District Minerals” shall
mean the items described in Reservations A and B of the District Deed.

     1.1.14 “Effective Date” shall mean January 1, 2003.

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     1.1.15 “Environmental Laws” shall mean “Environmental Laws” as defined in
Section 3.5.7.

     1.1.16 “Excluded Interests” shall mean those interests more fully described
in Exhibit “F1.”

     1.1.17 Subject to Exhibit “I,” “Exclusive Use Areas” for individual wells,
including injector wells, shall mean those areas within the Development Areas
around and immediately contiguous to Oil Wells (including newly drilled wells
after the Close) which are for the exclusive use of Buyer for its Oil
Operations, including, but not limited to, operating, pulling and reworking of
Buyer’s Oil Wells and for the repair, maintenance or other operations on any
pipeline, electrical facilities or any other Facility used in connection with
Buyer’s Oil Operations. Said Exclusive Use Areas are each anticipated to be
approximately (a) ten feet (10’) by ten feet (10’) in the Development Areas and
(b) sixty feet (60’) by ninety feet (90’) in the Open Space Areas.

     1.1.18 “Retained Obligations” shall mean (a) any obligations or duties
under the Hover Agreement as set forth on Exhibit “F2,” including the obligation
to plug or abandon wells or perform other remedial work, (b) the obligations and
liabilities relating to or arising from the matters set forth on Exhibit “F3,”
and (c) the obligations and liabilities relating to or arising from that certain
Impact Mitigation Agreement described in 1.1.13.

     1.1.19 “Finished Grading” shall mean the grading of the Property, from time
to time, in accordance with the Level B Tentative Maps, which will have been
approved by the appropriate Governmental Agency.

     1.1.20 Intentionally Omitted.

     1.1.21 “Governmental Agency” or “Governmental Body” shall mean the State of
California (“State”) and any governmental body of the State, and shall also
include all “public” and “quasi-governmental” entities within the State and any
federal agency or body with jurisdiction over the Land, Property Interests
and/or Oil Operations, or any portion thereof, for any reason or purpose.

     1.1.22 “Governmental Approval Documents” shall mean any and all agreements,
documents, applications, requests, submissions, correspondence and/or writings
of any nature submitted to, approved and/or engendered or prepared by a
Governmental Agency in connection with the Governmental Approval(s).

     1.1.23 “Governmental Approvals” means any and all governmental approvals,
permits, rights and/or entitlements of any nature whatsoever requested from or
granted by any Governmental Agency in connection with, relating to or arising
out of Oil Operations.

     1.1.24 “Grant Deed” shall mean the executed and recordable deed conveying
the Minerals and Rights-of-Way to Buyer, generally in the form attached as
Exhibit “D.”

     1.1.25 “Hazardous Substance” shall mean “Hazardous Substance” as described
in Section 3.5.

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     1.1.26 “Hover Agreement” shall mean that certain agreement for the purchase
and sale of the Adjacent Property between Seller and Brea Walden, LLC dated
September 28, 2001, as amended, including without limitation, the escrow
instructions and other exhibits contained therein.

     1.1.27 “Information” shall mean those items of information and materials
described in Section 2.5.1.

     1.1.28 Subject to Exhibit “I,” “Joint Use Areas” for individual wells shall
mean those areas in the Development Areas around and immediately contiguous to
the Exclusive Use Areas which are for the joint use of Buyer, or Buyer’s
successors in interest, and Developer and which may be used by Buyer for its Oil
Operations e.g., among other things, to pull and rework Buyer’s Oil Wells, lay,
construct, maintain, operate, repair, renew, change the size of and remove
pipelines and electrical and other Facilities, together with valves and other
necessary appurtenances, for the transportation of oil, petroleum, gas,
gasoline, water and other substances, over, across, along, through, in and under
the Property. Said Joint Use Areas are each anticipated to be approximately
sixty feet (60’) by ninety feet (90’).

     1.1.29 “Land” or “Property” shall mean the real property, consisting of
approximately 810 acres, located in the County, depicted in Exhibit “A5.”

     1.1.30 “Map Act” shall mean the California Subdivision Map Act (Cal. Gov.
Code §§66410 et seq.).

     1.1.31 “Grading” shall mean the rough excavation of the Property, as
required by Developer’s development of the Project (including temporary water
and power, fencing, demolition, clearing and grubbing, and erosion, dust and
vector control during the period of such grading work). Grading will include
bringing the lots to blue top staked rough grade elevations and street sections
to the established rough grade sections, ready for utilities. “Grading Plan”
shall mean the rough grading plan approved for the Project by the appropriate
Governmental Agencies.

     1.1.32 “Material,” as used in Sections 3.1.9, 3.1.17, 3.1.18, and 3.1.19
respectively, shall mean an aggregate amount in excess of $500,000 for the
matters set forth in each such section individually.

     1.1.33 “Minerals” shall mean the Property Minerals, Adjacent Minerals,
District Minerals and Other Minerals, collectively.

     1.1.34 “Oil Operations” shall mean “to operate and service” each of
Seller’s present and future oil wells and related oil field Facilities on the
Land, as defined in Section D2 of Exhibit “K.”

     1.1.35 “Oil Wells” shall mean the Oil Wells shown on Exhibit “H,” and any
newly drilled wells after the Close.

     1.1.36 “Open Space Areas” shall mean those portions of the Property
designated for open space within the Remainder Parcel(s), in the final Area Plan
or the Level A Final Map.

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     1.1.37 “Operator” shall have meaning prescribed in the PAPA which is
attached at Exhibit “I.”

     1.1.38 “Other Minerals” shall mean those mineral interests, more fully
described in Exhibit “A4.”

     1.1.39 “PAPA” shall mean the Payment and Performance Agreement attached as
Exhibit “I.”

     1.1.40 Intentionally Omitted.

     1.1.41 “Party” or “party” shall mean Seller or Buyer.

     1.1.42 “Project” shall mean that certain project (a) described in the
following documents: (i) EIR No. 581, SCH No. 2001031137, for the Tonner Hills
Planned Community, dated April, 2002, approved by the County as lead Agency on
November 19, 2002, as amended and/or modified from time to time (“EIR”), (ii)
Planned Community 2001-01, (iii) Development Agreement ZC01-01, (iv) Tonner
Hills Area Plan and (v) Biological Opinion dated December 30, 2002, as used by
the U.S. Army Corps of Engineers in its Section 404 Permit and/or (b) all of
Seller’s rights, title and interest therein as of the Close, as the context in
this Agreement requires.

     1.1.43 “Property Interests” shall mean, collectively, all of Seller’s
rights, title and interest in the Minerals and the Appurtenant Interests (and
any and all of Seller’s duties and obligations in connection therewith) EXCEPT
for (a) those rights, title and interests which Seller is prohibited or
restricted, in whole or in part, by (i) any statute, law, ordinance, rule,
regulation, order or notice of any Governmental Agency or (ii) any contractual
arrangement or agreement, from transferring, selling or conveying, or (b) the
Excluded Interests. The Excluded Interests are described in Exhibit “F.”

     1.1.44 “Property Minerals” shall mean all oil, oil rights, minerals,
mineral rights, natural gas rights and other hydrocarbons, of every type and
nature, by whatsoever name known, geothermal steam and all products derived from
any of the foregoing, that may be within or under the Land as set forth as the
Grant Deed.

     1.1.45 “Purchase Price” shall mean the purchase price described in
Section 2.2.

     1.1.46 “Release” shall mean and include any accidental or intentional
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, dumping or disposing into the air, land, surface
water, ground water or the environment of any Hazardous Substance (including,
without limitation, the abandonment or discarding of receptacles containing any
Hazardous Substance).

     1.1.47 “Remainder Parcels” shall mean all those portions of the surface fee
interest in the Land (exclusive of that portion of the Property Minerals lying
therein or thereunder) not shown as Development Areas on the final Area Plan or
the Level A Final Map.

     1.1.48 “Retained Properties” shall mean those surface fee parcels
(exclusive of that portion of the Property Minerals lying therein or thereunder)
to be used for continuing Oil

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Operations (defined in Exhibit “K”) within the Remainder Parcel(s), all as
depicted on Exhibit “H,” which shall be shown on the final Area Plan or Level A
Final Map.

     1.1.49 “Torch” shall mean collectively Torch Energy Advisors, Incorporated,
and Torch Operating Company, Novistar, Inc. and Torch Energy Marketing, Inc., or
any affiliate thereof or successor thereto.

     1.1.50 “Transaction” shall mean the transaction between Seller and Buyer
contemplated by this Agreement.

     1.1.51 “Transaction Documents” shall mean all written, printed and tangible
materials contained within the Information.

     1.1.52 “Transfer” shall mean any Sale or Transfer by Buyer, whether
voluntary or involuntary, of any portion of any Property Interest or interest in
Oil Operations or this Agreement.

     1.1.53 “Sale or Transfer” shall include any indirect transfer by way of
merger, consolidation, stock sale, assignment, corporate reorganization or other
conveyance by business arrangement of any ownership interest, of any sort
whatsoever, in the Property Interests, Oil Operations, this Agreement, the
Development Documents described herein and/or in any entity with an ownership
interest herein or therein, including the sale, assignment, or other conveyance
of any partnership or limited liability company interests or membership.

     1.1.54 “Unocal” shall mean Union Oil Company of California and/or Unocal
California Pipeline Company.

     1.1.55 “Unocal Asset Purchase Agreement” shall mean that certain agreement
for the purchase and sale of the assets of Union Oil Company of California and
Union California Pipeline Company, between Seller and Unocal, dated February 16,
1996.

     1.1.56 “Well Abandonment and Oil Field Accommodation Program” or “Program”
shall mean the oil well abandonment and oil well/facilities accommodation plan
contained in the PAPA which specifies the Work in respect thereof that shall be
performed by Seller and/or Buyer on the Property, whether currently or in the
future, in accordance with California Division of Oil, Gas and Geothermal
Resources (“CDOGGR”) and other Governmental Agency regulations, as set forth in
Exhibit “I.”

     1.1.57 “Work” means all work, construction and/or improvements required of,
or authorized to be done or constructed by, the Party identified as responsible
therefor, or any other work initiated and/or completed by a Party.

     Unless defined to the contrary therein, all terms defined in this Agreement
shall have the same meaning in all the Development Documents, and vice-versa.

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1.2   Governmental Approvals.

     Prior to the Close, Seller agrees, at Seller’s cost and expense, all as
described elsewhere herein, to continue processing any Governmental Approval
Documents necessary for continued Oil Operations.

1.3   Consideration.

     Buyer hereby acknowledges that Buyer is a sophisticated purchaser of
minerals and properties for use in oil and gas operations, has sought advice
from legal and environmental professionals on the terms herein, and has agreed
to each and every provision hereof.

ARTICLE 2
PURCHASE PRICE

2.1   Purchase of the Property Interests.

     Seller agrees to sell and Buyer agrees to purchase the Property Interests
and to Close this Transaction according to all the terms of this Agreement,
including the Repository Instructions, or as otherwise agreed in writing by
Seller and Buyer.

2.2   Purchase Price.

     The Purchase Price shall consist of:

     2.2.1 Basic Purchase Price.

                    The Basic Purchase Price shall be Fifty-Nine Million Dollars
($59,000,000) in cash to be paid to Seller by Buyer at the Close.

     2.2.2 Adjustment Amount.

     Notwithstanding anything to the contrary in this Agreement, Seller and
Buyer agree that the Purchase Price shall be adjusted up or down as provided in
this Section 2.2.2 as follows:

                    Increase. The Purchase Price shall be increased by the
following amounts (without duplication):

                    (a) An amount equal to all of Seller’s customary and normal
costs and expenses (the categories of costs and expenses for which adjustments
shall be made are reflected in the 2002 historical cost and expense summary
attached hereto as Exhibit 2.2.2.), including overhead, that are attributable to
the Property Interests and/or Oil Operations for the period from the Effective
Date to the Closing Date (the “Closing Period”), whether paid before or after
the Effective Date, including those paid by Seller for bond and insurance
premiums attributable to coverage during the Closing Period; and

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                    (b) An amount equal to all proceeds received by Buyer from
whatever source derived that relate to the Property Interests or Oil Operations
and are attributable to periods on or before the Effective Date.

                    Decrease. The Purchase Price shall be decreased by the
following amounts (without duplication):

                    (a) An amount equal to the proceeds received by Seller for
the sale of oil and/or gas production from the Minerals or otherwise from Oil
Operations on or after the Effective Date, net of all applicable royalties and
taxes not reimbursed to Seller by a purchaser of such production.

                    (b) An amount equal to all proceeds received by Seller from
whatever source derived that relate to the Property Interests or Oil Operations
and are attributable to periods on or after the Effective Date.

                    (c) An amount equal to the costs and expenses attributable
to the Property Interests or Oil Operations that accrued prior to the Effective
Date, if paid or assumed by Buyer. This amount shall be based upon the same
categories as are set forth above under “Increase” in this Section 2.2.2.

                    As further guidance and instruction to Seller and Buyer
regarding the Adjustment Amount, the Parties have agreed as follows:

                    2.2.2.1 Disposition of Accounts Receivable and Other
Revenues. Revenue associated with the Property Interests, to the extent that
such revenue is attributable to times prior to the Effective Date, and oil in
tanks above the pipeline connections and oil and gas produced prior to such date
shall not be sold to Buyer but shall remain the property of Seller. All storage
tanks, if any, at the Property Interests shall be gauged as of 8:00 a.m. local
time on the Effective Date to determine the amount of oil that is allocable to
either Seller or Buyer. Buyer shall be deemed to have accepted the gauging as to
quantity and gravity set at the gauging, as reflected in Seller’s records. Such
gauging shall deduct reasonable and customary amounts for line-fill and tank
bottoms necessary for operations. Seller shall sell to Buyer all oil and gas not
otherwise sold to Buyer herein, including the oil deemed from such gauging to
belong to Buyer, based on the price received by Seller in January 2003. To the
extent Seller has sold its interest in any hydrocarbon production after the
Effective Date and the Purchase Price is not adjusted therefor, Seller shall
deliver the proceeds to Buyer promptly upon receipt.

                    2.2.2.2 Proration of Taxes. All taxes including but not
limited to occupation, personal property, severance and other taxes and charges
on any of the Property Interests, with the exception of the real estate and ad
valorem taxes for periods prior to the Effective Date which are the sole
responsibility of the Seller, shall be prorated as of the Effective Date. Seller
shall pay all such items for all periods prior to such date and shall be
entitled to all refunds and rebates with regard to such periods. In the event
Buyer pays additional taxes or charges which are assessed upon or levied against
any of the Property Interests after Closing with respect to the period prior to
the Effective Date, Seller shall promptly reimburse Buyer the amount thereof
upon presentation of a receipt of payment therefor. If Seller elects to
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such assessment or levy, or any portion thereof, Buyer shall extend reasonable
cooperation to Seller in such efforts, at no commercially unreasonable expense
to Buyer.

                    Buyer shall be responsible for the determination and payment
of any Transaction, sales, use and transfer tax, if any due, on the sale and
purchase of the Property Interests and/or any tangible personal property
hereunder, and for any increase in any taxes as a result of the Transaction and
for any interest and/or penalties thereon, not the fault of Seller, as more
fully described below.

                    To the extent Seller has sold its interest in any
hydrocarbon production at or after the Effective Date and the Purchase Price is
not adjusted therefor, Seller shall deliver the proceeds to Buyer promptly upon
receipt.

                    2.2.2.3 Proration of Credits and Payment Obligations. All
credits and payment obligations associated with the Property Interests,
including but not limited to royalties, lease rentals, and other forms of
contractual payments shall be prorated between Seller and Buyer as of the
Effective Date. Seller shall be responsible for all such items accrued and owing
prior to the Effective Date, and Buyer shall be responsible for and shall pay
for all such items accrued and owing on and after such date.

                    2.2.2.4 Sales Tax and Use Taxes. Buyer shall be responsible
for all sales, use, and similar taxes arising out of the sale of the Property
Interests, if any. Buyer shall hold harmless and shall indemnify Seller for any
sales or use taxes assessed against Seller by any taxing authority in respect of
this Transaction, including the amounts of any penalties and interest as
provided in Sections 3.5 and 5.2. After consultation with Buyer, any reasonable
legal expenses incurred by Seller to reduce or avoid any of the aforementioned
taxes, shall be paid or reimbursed by Buyer. Buyer shall make timely payment of
any taxes required to be paid by it hereunder subject to any dispute or contest
by Buyer with any taxing authority related to such taxes.

                    Should this Transaction constitute an isolated or occasional
sale and not be subject to sales or use tax with any of the taxing authorities
having jurisdiction over this Transaction, Seller agrees to cooperate with Buyer
in demonstrating that the requirements for an isolated or occasional sale or any
other sales tax exemption have been met, at no commercially unreasonable expense
to Seller.

                    2.2.2.5 Closing Statement. Seller shall deliver to Buyer not
less than five (5) Business Days before the Closing a statement (the “Closing
Statement”) setting forth the adjustments to the Purchase Price provided in this
Section 2.2.2 and using estimates where actual amounts are not known before
Closing. The Closing Statement shall be prepared in accordance with customary
accounting principles used in the oil and gas industry. Such Closing Statement
shall be preliminary in nature and is subject to revision in accordance with the
Audit described below. As used herein, the term “Business Day” shall mean a day
other than Saturday or Sunday or any legal holiday for commercial banking
institutions under the laws of the State of California.

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                    2.2.2.6 Payment of Adjustment Amount. The Adjustment Amount,
determined pursuant to Section 2.2.2, shall be paid to Seller by Buyer in cash
at the Closing.

                    2.2.2.7 Audit. The Adjustment Amount shall be subject to a
final reconciliation by agreement of the Parties within ninety (90) days after
the Close based upon a mutual audit (“Audit”) of the relevant books and records
of Seller as of the Effective Date and the Closing Date, as described in
Section 2.2.2.8 below. Any overpayment or underpayment determined pursuant to
the Audit shall be disbursed by the appropriate Party to the other in cash
within ten (10) Business Days after completion of the Audit.

                    2.2.2.8 Audit: Final Accounting.

                    (a) Settlement Statement. As soon as practical after
completion of the Audit and, in any event, no later than ninety (90) calendar
days after the Closing Date, Seller shall prepare and deliver to Buyer a
statement (the “Final Settlement Statement”) setting forth the adjustments to
the Purchase Price and the final Adjustment Amount. The Final Settlement
Statement shall be prepared in accordance with customary accounting principles
used in the oil and gas industry, and shall reflect all amounts shown on the
Closing Statement. Within thirty (30) calendar days after Buyer’s receipt of the
Final Settlement Statement, Buyer and Seller shall agree on the final
accounting.

                    (b) Arbitration of Final Settlement. If Seller and Buyer
cannot agree upon the Final Settlement Statement, the Los Angeles Office of a
mutually-agreed accounting firm shall be designated to act as an arbitrator and
to decide all points of disagreement with respect to the Final Settlement
Statement, such decision to be binding on both parties. If such firm is
unwilling or unable to serve in such capacity, Seller and Buyer shall attempt
to, in good faith, designate another acceptable person as the sole arbitrator
under this Section. If the parties are unable to agree upon the designation of a
person as substitute arbitrator, then Seller or Buyer, or both of them, may in
writing request the Judge of the United States District Court for the Central
District of California senior in term of service to appoint the substitute
arbitrator. The arbitration shall be conducted pursuant to the terms of
Section 5.9.

                    (c) Payment. Upon the payment of any amounts due pursuant to
the Final Settlement Statement, neither Seller nor Buyer shall have any further
claims based on the division of ownership or division of expenses as set forth
in this Section 2.2.2.

2.3   Intentionally Omitted.   2.4   Intentionally Omitted.   2.5   Buyer’s DD
Period; Return of Documents.

     2.5.1 Seller has previously delivered or made reasonably available to Buyer
written and other oral, printed and tangible materials relating to the Project,
the Property Interests and Oil Operations (collectively, “Information”),
including those located at (a) its Brea Data Room, 500 North Kraemer Boulevard,
Brea, California, (b) its regional headquarters at 1200 Discovery Drive,
Bakersfield, California, and other, related facilities in Bakersfield (including
Information from its field office at 201 South Broadway, Orcutt, California, and
other related facilities in

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Orcutt) and (c) its company headquarters at 1021 Main Street, Houston, Texas.
Except as otherwise provided herein, Seller makes no representation or warranty
regarding the accuracy or effectiveness of the Information so provided to Buyer.
Except as otherwise provided herein, Buyer has previously satisfied itself with
respect to, and has approved, the Information.

     2.5.2 Buyer had the DD Period to determine whether the Property Interests
(and all matters pertaining thereto, including the use of all or a portion
thereof) and Oil Operations are suitable for the uses for which they are
contemplated to be used, and to obtain any final approval from Buyer’s board of
directors, any partner, co-venturer, parent, affiliated entity, financial
institution or the like (“Feasibility Matters”). Buyer has approved the
Feasibility Matters. Among other things, during the DD Period, Buyer entered
upon the Land and Property Interests from time to time for the purposes of its
inspection and testing thereof and of the Oil Operations (“Inspection and
Investigation”) described as follows:

                    (a) to inspect the Land to satisfy itself that the Land is
satisfactory for use in Oil Operations,

                    (b) to inspect the condition of the Property Interests and
Oil Operations by conducting customary soil, Mineral, geological, seismic,
archaeological, biological, hydrological, drainage and other engineering,
operations, and/or environmental or other physical tests,

                    (c) to review the title to the Property Interests and any
underlying documents appearing of record against such title and to investigate
all other portions of the Property Interests and Oil Operations, and/or

                    (d) to interview any other relevant sources of information
about the Property Interests and Oil Operations, including Governmental
Agencies.

Buyer was required to (a) defend and indemnify Seller for its Inspection and
Investigation, and (b) vacate the Property Interests in substantially the same
condition, without defects, as they existed prior to its entrance thereon. The
Inspection and Investigation were conducted in lieu of any notice required by
Section 25359.7 of the California Health and Safety Code, and Buyer hereby
waives any requirement for a notice pursuant to that provision.

                    Buyer has approved the Inspection and Investigation,
including without limitation, all soil and other physical and ALL OTHER
CONDITIONS comprising the Feasibility Matters pertaining to the Land and all
portions of the Property Interests and Oil Operations and the intended
development of the Project with respect to Buyer’s use for Oil Operations.

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     2.5.3 If this Transaction fails to Close for any reason, to the extent in
Buyer’s possession, the Information shall be returned to Seller within ten
(10) days of the Transaction’s failure to Close.

2.6   Conditions to Close.

     Unless waived by Seller or otherwise provided herein, Buyer must meet all
of the following conditions prior to the Close:

     2.6.1 Buyer must pay to Seller in cash (i) the Basic Purchase Price as set
forth herein; and (ii) the Adjustment Amount, if any, as set forth in Section
2.2.2.

     2.6.2 Buyer shall have executed, acknowledged and deposited all other
documentation required by this Agreement as follows: (a) the PAPA in the form of
Exhibit “I,” (b) Development Declaration, in the form of Exhibit “L,” (c) the
Repository Instructions in the form of Exhibit “B” with the counsel for Buyer’s
General Partner, Kent G. Snyder, at the address for Notices shown in
Section 5.1., (d) Grant Deed, in the form of Exhibit “D,” (e) Easement Agreement
in the form of Exhibit “K,” and (f) the Non-Exclusive Assignment of Contract
Rights and Bill of Sale in the form of Exhibit “C.”

                    Unless waived by Buyer or otherwise provided herein, Seller
must meet all of the following conditions at the Close:

     2.6.3 Seller shall have (a) executed and acknowledged the Development
Declaration in the form of Exhibit “L” and Grant Deed in the form of Exhibit “D”
and (b) executed the Repository Instructions, the Non-Exclusive Assignment of
Contract Rights and Bill of Sale in the form of Exhibit “C,” the PAPA in the
form of Exhibit “I,” and the Easement Agreement in the form of Exhibit “K,” and
deposited them all with Kent G. Snyder at his address for Notices shown in
Section 5.1.

     2.6.4 Seller is not in material default under the Development Documents.

ARTICLE 3

      REPRESENTATIONS AND WARRANTIES; AS IS PURCHASE; DISCLAIMERS AND REQUIRED
DISCLOSURES; GOVERNMENTAL APPROVALS AND COMPLIANCE; DEVELOPMENT COSTS, TAXES AND
ASSESSMENTS; INSURANCE; INDEMNITIES

3.1   A. Authorization of Buyer.

                    Buyer shall provide Seller with a written instrument
executed by an officer of Buyer and certified by its secretary or assistant
secretary that (1) Buyer is in “good standing” and authorized to conduct its
business in California, (2) the Transaction contemplated by this Agreement has
been duly authorized by its Board of Directors, partners or constituent members
in accordance with its Articles and By-Laws, Partnership Agreement and/or
organizational documents, (3) the undersigned have the duly constituted
authority to execute, deliver and perform this Agreement on behalf of Buyer; and
(4) all information provided by Buyer to Seller as required herein, is accurate
and correct as of the Close.

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     B. Seller Representations and Warranties.

                    Except for the Information or as otherwise disclosed to
Buyer, for which no representation or warranty is made, Seller makes the
following representations and warranties which shall be true and correct as of
the Close and for a period of one (1) year. As used herein, the phrase “to the
best of Seller’s knowledge” or “actual knowledge” means the actual knowledge of
George Nilsen, Bruce Laverty, Phillip Gobe, David Leach, Phillip Sorbet, Brian
Garber, Thomas Calhoun and/or Rufus Estis, without any independent
investigation.

     3.1.1 Authorization.

                    Seller has full power and authority to enter into this
Agreement and to perform all of its obligations hereunder, and has taken all
action required by law and its governing instruments to authorize the
performance of this Agreement by Seller. Each individual who has executed this
Agreement on behalf of Seller has the right, power, legal capacity and authority
to execute, deliver and perform this Agreement on behalf of Seller. To the best
of Seller’s knowledge, no material consent, approval, order, or authorization
of, or declaration, filing, or registration with, any court or Governmental
Agency is required to be obtained or made by Seller in connection with the
execution, delivery, or performance by Seller of this Agreement, each other
agreement, instrument, or document executed or to be executed by Seller in
connection with the Transaction.

     3.1.2 Conflicting Agreements.

                    To the best of Seller’s knowledge, neither the execution or
delivery of this Agreement, nor the consummation of the Transaction contemplated
herein, will materially conflict with, or result in a significant breach of any
material contract, license, lease, easement, document, instrument, undertaking
or order to which Seller is a party or by which Seller is bound, or constitute a
default thereunder, or except as contemplated herein, result in the creation of
any lien or encumbrance upon the Property Interests.

     3.1.3 Violation of Law.

                    To the best of Seller’s knowledge, there is no condition
affecting the Property Interests in material violation of any applicable law,
statute or ordinance, nor will the Property Interests be in material violation
at the Close.

     3.1.4 Property Interests.

                    To the best of Seller’s knowledge, Seller is not prohibited
or restricted, in whole or in part, by statute, law, ordinance, rule,
regulation, order or by notice of any Governmental Agency or any material
contractual arrangement, except as to the Excluded Interests described in
Exhibit “F,” from transferring its Property Interests.

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     3.1.5 Required Work.

                    To the best of its knowledge, Seller has not received, nor
is Seller aware of, any written notification from any city, county, or state
Governmental Agency having jurisdiction over the Property Interests requiring
any work to be done on or affecting the Property Interests.

     3.1.6 Transaction Documents.

                    To the best of Seller’s knowledge, the Transaction Documents
are true and correct copies and there are no other material documents or
instruments which would constitute Transaction Documents that have not been made
available to Buyer by Seller. To the best of Seller’s knowledge, the Transaction
Documents contain all written, printed and tangible information within its
possession which is material to the ownership of the Property Interests and the
conduct of the Oil Operations thereon. Seller does not warrant or make any
representation as to their accuracy or effectiveness for the purposes of Buyer’s
use of or operation of the Property Interests or for Oil Operations or for any
other purpose (or, consistent with Section 3.2, warrant the merchantability or
fitness of the Property Interests for any purpose).

     3.1.7 Litigation.

                    To the best of Seller’s knowledge, there is no litigation or
legal proceeding pending or threatened against Seller or the Property Interests
except for Hills For Everyone vs. Orange County, Superior Court of the County,
Case No. 02CC18652, filed December 18, 2002, which, among other things, seeks to
invalidate certain Project governmental approvals. However, not withstanding the
foregoing, to the best of Seller’s knowledge, there is no litigation or legal
proceeding pending or threatened against Seller or the Property Interests which
would materially and adversely affect Seller’s or Buyer’s ability to perform
their respective obligations hereunder or Buyer’s use of the Property Interests
or proposed conduct of the Oil Operations.

     3.1.8 Property Interests Defects.

                    To the best of Seller’s knowledge, there are no material,
adverse latent defects or conditions, including, without limitation any
environmental conditions, wetlands or endangered species on or about the
Property Interests which would cause injury or damage to persons or property, or
which would have a material adverse effect on Buyer’s use of the Property
Interests or conduct of Oil Operations.

     3.1.9 No Hazardous Substance Activity.

                    To the best of Seller’s knowledge, no Material Hazardous
Substance Activity, as defined in Section 3.5.7, except in connection with
normal Oil Operations, has occurred on the Property Interests.

     3.1.10 No Created Rights to Acquire Property.

                    To the best of Seller’s knowledge, Seller has not created
any rights in or right to acquire the Property Interests or any part thereof, in
any person, firm or entity except to the extent of Buyer’s rights pursuant to
this Agreement, and except as may be otherwise provided in

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this Agreement, as long as this Agreement remains in force, Seller will not,
without Buyer’s prior written consent, lease, transfer, option, mortgage,
pledge, or convey its interest in the Property Interests or any portion thereof.

     3.1.11 Access.

                    To the best of Seller’s knowledge, there are no facts or
conditions which would prevent access to and from the Property Interests on
existing highways and roads.

     3.1.12 Production Sales Contracts.

                    Subject to Section 5.33, to the best of Seller’s knowledge,
there are no agreements or arrangements for the sale of production from the
Minerals (including calls on, or other rights to purchase or production, whether
or not the same are currently being exercised) other than contracts identified
in Section 1.1.5.3 hereof and Seller is presently receiving a price for all oil
production from (or attributable to) the Minerals covered by a contract as
computed in accordance with the terms of such contract, and deliveries of
production from the Minerals subject to such contracts are not curtailed
substantially below the delivery capacity of such Minerals.

     3.1.13 Area of Mutual Interest and Other Agreements; Tax Partnerships.

                    To the best of Seller’s knowledge, the Minerals are not
subject to (nor have related to them) (a) any area of mutual interest
agreements, (b) any farm-out or farm-in agreements under which any party thereto
is entitled to receive assignments not yet made, or could earn additional
assignments after the Effective Date, and/or (c) any tax partnership.

     3.1.14 Payment of Expenses.

                    To the best of Seller’s knowledge, all expenses (including
all bills for labor, materials and supplies used or furnished for use in
connection with the Property Interests, and all severance, production, ad
valorem, windfall profit and other similar taxes) relating to the ownership or
operation of the Property Interests (and Oil Operations), have been, and are
being, paid in the ordinary course of business by Seller, except such expenses
and taxes as are disputed in good faith by Seller.

     3.1.15 Government Permits.

                    To the best of Seller’s knowledge, Seller has all material
governmental licenses and permits necessary to own and operate the Property
Interests (and conduct Oil Operations) as presently being owned and operated,
and such licenses, permits and filings are in full force and effect and Seller
has not received written notices of any material violations that have not been
satisfied or addressed to Seller’s satisfaction in respect of any such licenses
or permits.

     3.1-16 Reserve Report Information.

                    To the best of Seller’s knowledge, the information furnished
by Seller to Buyer (at the time given) and to Ryder-Scott Company (at the time
given) in connection with the

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preparation of the reserve report, dated as of December 31, 2001, does not
contain inaccuracies or misrepresentations that would have a material adverse
impact on the value of the Minerals as a whole.

     3.1.17 No Alienation.

     Within 120 days of the date hereof, Seller has not sold, assigned,
conveyed, or transferred or contracted to sell, assign, convey or transfer any
right or title to, or interest in, any Material leases of any Property
Interests.

     3.1.18 No Oral Contracts.

                    To the best of Seller’s knowledge, Seller has not entered
into any Material oral contracts with respect to a Property Interest which is
still in force and effect.

     3.1.19 Preferential Rights and Consents to Assign.

                    To the best of Seller’s knowledge, there are no Material
consents to assignment or waivers of preferential rights to purchase that must
be obtained from third parties in order for Seller to consummate the Transaction
without violating or breaching a material duty or obligation of Seller.

     3.1.20 Intentionally Omitted.

     3.1.21 Remediation Obligations.

                    With respect only to the Property Interests, each of Unocal
and Seller has performed all its obligations under the Unocal Asset Purchase
Agreement to perform Remedial Work and has performed all of the obligations
assumed by it under the Unocal Asset Purchase Agreement in connection with
Seller Environmental Liabilities, Buyer Environmental Liabilities, Environmental
Claims and Environmental Permits, or any other environmental matters,
conditions, or concerns relating to the Property Interests. Capitalized terms in
this Section 3.1.21 shall have the meaning set forth in the Unocal Asset
Purchase Agreement.

     3.1.22 Environmental Permits.

                    Exhibit “G” lists certain permits, licenses, approvals, or
other authorizations by federal, state or local executive, legislative,
judicial, regulatory or administrative, agency, board, or authority (including
without limitation Governmental Agencies) with respect to activities, operations
or businesses conducted on or in relation to the Property Interests under any
Environmental Laws or otherwise.

     3.1.23 Information.

                    To the best of Seller’s knowledge, the Information is not
materially false or misleading.

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     3.1.24 Organization.

                    Seller is a corporation validly existing under the laws of
the State of Delaware. Seller owns the Property Interests and Seller has no
actual knowledge of any claims of others to ownership thereof.

                    C. Buyer’s Representations and Warranties.

                              Buyer represents and warrants to Seller the
following, as of the execution of this Agreement and at the Closing:

     3.1.25 Buyer is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Texas and has all requisite
powers to carry on its business as it is now being conducted.

     3.1.26 Buyer has the power and authority to make and carry out this
Agreement and to be bound by any and all terms and conditions hereof. All
necessary partnership action on the part of Buyer required for the authorization
of the Transaction provided for herein has been duly taken.

     3.1.27 Buyer is qualified to do business in the State of California.

     3.1.28 Buyer is not a “foreign person” as such term is used in Section 1445
of the Internal Revenue Code (“IRC 1445”).

     3.1.29 Notwithstanding anything to the contrary herein, Buyer has
sufficient, non- contingent financial resources to pay the Purchase Price and to
fulfill its obligations as specified in the Development Documents as of the
Closing.

     3.1.30 Buyer is and has been since its inception engaged primarily in the
business of Oil Operations.

     3.1.31 Buyer and its constituent partners are experienced and knowledgeable
investors in the oil and gas business. Prior to entering into this Agreement,
Buyer and its constituent partners were advised by their own legal, tax and
other professional counsel and other consultants concerning this Agreement, the
Property Interests, the Oil Operations and the value thereof. Buyer is aware of
the risks and uncertainties of an investment in the oil and gas business.

     3.1.32 Buyer is aware of no litigation or legal proceeding pending or
threatened against Buyer, or any of its partners, which would materially and
adversely affect their ability to perform their respective obligations under
this Agreement.

     D. Covenants by Seller.

     3.1.33 Prior to the Close, Seller will continue processing any Governmental
Approvals for the conduct of the Oil Operations at Seller’s sole cost and
expense. In no event shall Seller’s

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failure to obtain any such approvals entitle Buyer to the refund of any payments
or expenses incurred pursuant to this Agreement, including taxes, assessments,
costs, expenses and/or fees.

     3.1.34 Without Buyer’s consent, Seller shall not intentionally waive,
release or otherwise discharge the Construction Entities as defined in Section
3.2.4 from liability resulting from their negligence, gross negligence, or
willful misconduct. In connection with this Agreement, including Section 3.5.5,
Seller shall use commercially reasonable efforts not to enter into contracts
with Construction Entities that waive Seller’s claims for negligence against
such Construction Entities.

     3.1.35 Prior to Closing, Seller will not without the Buyer’s consent which
shall not be unreasonably withheld: (a) enter into any contract, other than in
the ordinary course of business, that will have a material adverse effect on the
value of the Property Interests, (b) incur additional operating expenses
materially greater than those presently being incurred to operate the Property
Interests in a prudent business manner, in the ordinary course of business
(provided however, Seller may incur expenses related to emergency responses or
Governmental Agency compliance with normal Oil Operations excluding Development
Plan), and (c) commit to any material capital expenditures other than those to
which it has already committed with respect to the Property Interests.

3.2   Covenants by Buyer; “AS IS” Purchase.

     3.2.1 As of the execution of this Agreement, Buyer is familiar with the
Land, Property Interests and Oil Operations and has made such independent
investigations as Buyer deems necessary or appropriate concerning the Oil
Operations, the Property Interests and the use of the Land for Oil Operations,
the Information, the Inspection and Investigation, the Governmental Approval
Documents, Governmental Approvals, the use, and/or suitability of all or a
portion of the Land, Property Interests for the conduct of the Oil Operations,
including but not limited to any desired investigations or analyses of present
or future laws, statutes, rules, regulations, ordinances, notices or orders by
Governmental Agencies, limitations, restrictions or requirements concerning the
use, location or suitability of all or a portion of the Property Interests for
Oil Operations or any existing or proposed use, or condition thereof for Oil
Operations (collectively “Regulations”), including but not limited to
environmental or other such Regulations; the necessity or availability for the
Land, Property Interests and Oil Operations of any general or specific plan
amendments, rezoning, zone variances, conditional use permits, environmental
impact reports, or any other permits, approvals or acts by Governmental Agencies
for the Property Interests and Oil Operations (collectively, the “Permits”); the
necessity or existence for the Property Interests and the Oil Operations of any
dedications, fees, charges, costs or assessments that may be imposed in
connection with any Regulations or the obtaining of any required Permits for Oil
Operations; the existence of contaminants, naturally occurring radioactive
material (“NORM”) or Hazardous Substances on or in all or a portion of the Land,
Property Interests or in the ground water; pesticides, weed killer and other
chemicals may have been used thereon and that storage tanks (including
underground storage tanks) have been installed on the Land; the effect of and
limitations imposed by any city, County or other Governmental Agency resolution;
the economic value of the Property Interests and Oil Operations; the
availability or adequacy of access to all or a portion of the Property Interests
and Oil Operations, or of water, sewage or any other utilities serving the
Property Interests and Oil

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Operations; and the extent or condition, use, or disposition of all or a portion
of the Property Interests. Buyer acknowledges that the Land and Adjacent
Property have been producing/operating oil fields. Except as otherwise provided
in the PAPA or Development Documents and in this Agreement, (i) Buyer expressly
agrees that it is solely responsible for having determined the existence or
non-existence of any such materials, tanks and lines, and (ii) if Buyer
purchases the Property Interests for dealing with the existence of any such
materials, tanks and lines and all consequences arising in connection therewith.
Except as otherwise provided in the PAPA or Development Documents and in this
Agreement, Buyer agrees that Seller has not warranted and will not warrant the
accuracy or completeness of any reports, plans and specifications referred to in
the Development Documents, including without limitation, the Information or
other materials required to be delivered or made available to Buyer and Buyer
agrees it has independently verified and established the accuracy and
completeness thereof to Buyer’s own satisfaction.

     3.2.2 Unless and except as otherwise specifically provided to the contrary
in this Agreement, Buyer is relying upon its own Inspection and Investigation
and analyses of the foregoing matters and review of the Information in entering
into this Agreement and is not otherwise relying in any way upon any
representations, statements, agreements, warranties, studies, reports,
descriptions, guidelines or other Information or materials furnished by Seller
or its representatives, whether oral or written, express or implied, of any
nature whatsoever regarding any such matters, including without limitation,
anything provided in connection with (a) the Information and Feasibility
Matters, (b) the Oil Operations, Property Interests and the use of the Land
therefor and relating to the Project, and/or (c) the Adjacent Property, Property
Mineral, District Minerals, Other Minerals and Adjacent Minerals.

     3.2.3 Unless and except as otherwise specifically provided to the contrary
in this Agreement, Buyer expressly acknowledges that Seller has not made and
will not make any representations or warranties regarding the results or
enforceability of any Governmental Approval Documents and/or Governmental
Approvals.

     3.2.4 Unless and except as otherwise specifically provided to the contrary
in this Agreement, Buyer will acquire the Oil Operations and Property Interests
“AS IS,” without representation by Seller or its representatives as to any
matter, not expressly mentioned herein. Except as otherwise provided herein or
the Development Documents, no patent or latent condition affecting the Oil
Operations and Property Interests in any way, such as but not limited to the
matters listed above in this Section 3.2, whether or not known or discoverable
or hereafter discovered, shall affect Buyer’s obligations contained in this
Agreement, nor shall give rise to any right of damages, rescission or otherwise
against Seller. Notwithstanding the above, Buyer may, in its reasonable
discretion, maintain a lawsuit or other action against construction entities
hired by Seller to perform work on the Land pursuant to a written contract
(“Construction Entities”), to obtain damages for losses suffered as a result of
the matters described in Section 3.5 to the extent caused by such Construction
Entities. In that regard, to the extent it possesses and may assign same, Seller
hereby conveys to Buyer a non-exclusive assignment of its rights and interests
in and to any relevant contracts or subcontracts, for the limited purposes
stated herein, without any obligation by Seller to participate in such lawsuit
or action, as a party or otherwise, and without any responsibility, warranty,
representation or liability for any outcome pursuant thereto or damages awarded
therein. Construction Entities include contractors,

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subcontractors, materialmen or other independent entities, but not Seller and/or
Torch, or their partners, officers, employees or any other related entities.
Upon ten (10) days written request, Seller will provide Buyer with a list of
such Construction Entities which have supplied Seller with the Preliminary
Notice prescribed by the California Civil Code for the maintenance of mechanic’s
lien rights.

     3.2.5 Without in any way limiting the generality of the foregoing
provisions of this Section 3.2, Buyer expressly acknowledges the following:

                    3.2.5.1 The Land contains open space with special habitat
species and vegetation which may be adversely affected by human intrusion or
mismanagement.

                    3.2.5.2 The Land is subject to, and has been designated as
subject to certain hazard zones (“Zones”). The Zones are listed on Exhibit “E.”

                    3.2.5.3 The Olinda/Olinda Alpha landfill operates near the
northeastern boundary of the Land.

     3.2.6 Without in any way limiting the generality of the foregoing
provisions of this Section 3.2, Buyer expressly acknowledges it is aware of and
has satisfied itself with respect to the following:

                    3.2.6.1 Unocal Gas Plant. That (a) the Land contains certain
real property that was formerly used by Unocal as a gas plant for the commercial
production of natural gas, (b) the Unocal gas plant has been shut down and its
operations discontinued, (c) Seller has caused the areas surrounding the Unocal
gas plant to be cleaned up and remediated (“clean-up”) pursuant to a remedial
action plan established by Orange County Health Care Agency (“OCHCA”) which has
issued a Closure Letter indicating its inspection and acceptance of such
remediation efforts, (d) Buyer has received and reviewed to its satisfaction the
Closure Letter and other written materials concerning the Unocal gas plant, its
operation and the clean-up as part of the Information and (e) Seller does not
warrant, represent or guarantee that the Unocal gas plant or surrounding areas
are free from contamination or any other conditions whatsoever, as a result of
its operations or otherwise. Notwithstanding the above, this acknowledgement is
not meant to alter (or obviate) in any way the duties, obligations and/or
liability of Developer under the PAPA with regard to the Unocal gas plant, to
the extent such gas plant site is within the Development Areas.

                    3.2.6.2 Faults. Buyer acknowledges that Seller has made
Buyer aware that there are earthquake and other faults which exist on, under, in
or near the Land. Further, Buyer acknowledges that there may be faults, unknown
to Seller, which exist on, under, in or near the Land.

                    3-2.6.3 Lessees on the Property. Buyer acknowledges that
there are (a) surface leases on a portion of the Land between Seller, as
successor to Unocal, and Brea Green Recycling, Inc., dated February 1, 1997, and
with Haynes Apiaries, dated December 29, 1992 for the keeping of bees, (b) an
oil and gas lease bordering a portion of the Property Minerals between Seller
and Aera Energy LLC, commonly referred to as the Indenture, as amended, by and
between Unocal and Columbia Oil Producing Company, dated February 26, 1901
(Buyer has

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been provided copies of such leases), (c) that other, permanent easements may be
granted in connection with the Project and (d) that other temporary and
permanent easements may be granted to Aera Energy for development infrastructure
and pipelines.

     3.2.7 Compliance with Project Requirements. Buyer understands and agrees
that it must and shall, (a) conduct its Oil Operations, complete the Program (at
no cost to Buyer), and use the Property Interests, and (b) otherwise hold, own,
possess, use, and conduct its Oil Operations in cooperation and conjunction with
the Developer’s ownership, use, possession and conduct of operations and work
upon and in connection with the Land, Development Areas and Project; and, in
strict compliance with any governmental approvals or entitlements for the Land
and Project by any Governmental Agency, and all laws, statutes, ordinances,
orders, regulations, rules and notices therefrom and/or relating to such
approvals or entitlements.

3.3   Development Costs, Taxes and Assessments.

     Except as specifically provided to the contrary in the PAPA regarding the
Program or elsewhere in the Development Documents, after the Effective Date,
Buyer shall, at its sole cost and expense, pay and be responsible for all costs
and expenses, of every nature whatsoever, incurred in the use of the Property
Interests and in conducting the Oil Operations as follows:

     3.3.1 Only as same may apply to the Minerals and Oil Operations, Buyer
shall be responsible for all costs and expenses incurred in and associated with
the processing and maintenance of the Governmental Approval Documents and
Governmental Approvals described in this Agreement.

3.4   Insurance.

     3.4.1 Insurance Types.

     From and after the date hereof and continuing after the Close, Buyer shall,
at its sole cost and expense, as required by this Agreement, maintain in full
force and effect with companies satisfying the requirements specified below, the
following insurance:

                    3.4.1.1 Comprehensive General Liability Insurance. Buyer
shall maintain Comprehensive or Commercial General Liability Insurance on an
“occurrence” basis, and excess umbrella coverage, with a combined single limit
for bodily injury and property damage of at least Fifteen Million Dollars
($15,000,000), covering the following:

                              3.4.1.1.1 Operations, Independent Contractors and
Products and Completed Operations (which Buyer shall maintain in effect on at
least an annual renewal basis) for as long as Buyer or its assignees own said
Property Interests;

                              3.4.1.1.2 Owners’ and Contractors’ Protective
Liability;

                              3.4.1.1.3 Severability of Interest and Cross
Liability clauses;

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                              3.4.1.1.4 Contractual Liability covering all the
provisions, rights and obligations under the Development Documents, including
without limitation, coverage for Buyer’s contractual indemnities in this
Agreement;

                              3.4.1.1.5 Personal Injury and Explosions, Collapse
and Underground Hazards (X, C, U);

                              3.4.1.1.6 Broad Form Property Damage Liability,
including completed operations.

     The limits of liability of the insurance coverage specified in this
subsection may be provided by any combination of primary and excess liability
insurance policies.

                    3.4.1.2 Automobile Liability Insurance. Buyer shall maintain
owned, hired and non-owed automobile liability insurance covering all use of all
automobiles, trucks and other motor vehicles utilized by Buyer in connection
with the requirements or obligations specified in any Development Document with
a combined single limit for bodily injury and property damage of Five Million
Dollars ($5,000,000.00).

     3.4.2 Waiver of Subrogation.

     Buyer hereby waives all rights against Seller and the Indemnitees (as that
term is defined below in Section 3.5.1), but not the Developer, for damages
caused by fire and other perils and any other risk.

     3.4.3 Additional Insured.

     Seller shall be included as an additional insured under the coverage
specified in Section 3.4.1 above with the following provisions included within
each applicable policy: “It is understood and agreed that coverage afforded by
this Policy shall also apply to Nuevo Energy Company (“Seller”) and Torch Energy
Advisors Inc. and Torch Operating Company (collectively, “Torch”), and their
members, partners and their constituent members, their parent companies,
subsidiaries, and all of their respective officers, directors, shareholders,
agents, representatives, employees and professional consultants, and all of
their respective successors and assigns, as additional insureds, but only with
respect to legal liability or claims caused by, arising out of or resulting from
the acts or omissions of the named insured or others performing acts on behalf
of the named insured in connection with their ownership and use of the Property
Interests and the conduct of Oil Operations. This insurance is primary and any
other insurance by such additional insureds is non-contributing with this
insurance as respects claims or liability arising out of or resulting from the
acts or omissions of the named insured, or of others performing on behalf of the
named insured.”

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     3.4.4 Insurance Policies.

     Each insurance policy required under this Section shall:

                    3.4.4.1 Be issued by insurance carriers licensed and
approved to do business in California, having a general rating of not less than
an “A-” and financial rating of not less than “VIII” in the most current Best’s
Insurance Report;

                    3.4.4.2 Contain a provision that the policy shall not be
subject to material alteration to the detriment of Seller or Buyer or
cancellation without at least thirty (30) days prior written notice given to
Seller by registered mail;

                    3.4.4.3 Provide that such policy or policies and the
coverage evidenced thereby are primary and Seller’s insurance is noncontributing
with such primary coverage; and,

                    3.4.4.4 Contain severability of interest and cross liability
clauses.

                              Buyer may provide the insurance described in this
Section in whole or in part through a policy or policies covering other
liabilities and projects of Buyer; provided, however, that any such policy or
policies shall (a) specifically allocate to this Agreement the full amount of
insurance required hereunder and (b) be subject to, without limitation, and
contain, permit or otherwise unconditionally authorize the waiver contained in
subsection above; and provided further that any such policy or policies shall
not otherwise dilute or impair the rights of Seller or in any way negate the
requirements of this Agreement.

     3.4.5 Evidence of Insurance.

                    As confirmation and evidence of each type of insurance
coverage required by Section 3.4.1 and Section 5.24 of this Agreement, Buyer
shall satisfy the following requirements:

                    3.4.5.1 Buyer shall provide Seller with policy binder
letters (with cost quotes) by the Close for each type of insurance coverage,
confirming the subject coverage is in place and effective as of the Close;

                    3.4.5.2 Buyer shall comply with all payment obligations of
each type of insurance, as specified in the subject policy quote/binder;

                    3.4.5.3 Buyer shall comply with all terms and conditions of
each subject quote/binder that require additional information be provided to the
insurer prior to binding;

                    3.4.5.4 In addition to binder letters, Seller shall be
provided with certificates issued by Buyer’s insurance carrier acceptable to
Seller showing such policies in force for the specified period. Such evidence
shall be delivered to Seller promptly upon execution of this Agreement. Seller
has the right to review certified policies as it may deem necessary with respect
to that insurance provided for in Section 5.24. Evidence of any renewal
insurance including specifically without limitation, the products and completed
operations insurance, shall be delivered to Seller not less than thirty (30)
days after the expiration date on the term of the policy. The policy certificate
for the insurance provided for in Section 5.24 shall be subject to

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reasonable approval by Seller. Should any policy expire or be cancelled before
the expiration of this Agreement, or such later period as Buyer is required to
carry such insurance as set forth herein, and Buyer fails immediately to procure
other insurance as specified, Seller, upon ten (10) days written notice to
Buyer, shall have the right, but shall have no obligation, to procure such
insurance and to charge Buyer with one hundred percent (100%) of the cost to
Seller of procuring such insurance. Buyer shall pay Seller any such amount
within ten (10) days of written demand therefor.

     3.4.6 Damages.

     Nothing contained in these insurance requirements is to be construed as
limiting the type, quality or quantity of insurance Buyer should maintain or the
extent of Buyer’s responsibility for payment of damages or discharging other
Buyer obligations arising under the Development Documents.

     3.4.7 Seller’s Election to Insure.

     Should Buyer fail to do so, Seller reserves the right, but shall have no
obligation, to procure the insurance, or any portion thereof. As provided above,
Seller shall notify Buyer if Seller exercises its right, whereupon Buyer’s
responsibility to carry such duplicative insurance shall cease. Seller further
reserves the right at any time, with thirty (30) days notice to Buyer, to
require that Buyer resume the maintenance of any insurance for which Seller has
elected to become responsible pursuant to this Section 3.4.7.

     3.4.8 Contractors.

     Buyer shall not permit any architect, engineer, contractor, subcontractor
or materialmen to commence work on or relating to the Property Interests (and
Oil Operations) until such parties have complied with Buyer’s customary
insurance requirements. Buyer shall use “commercially reasonable” efforts to
cause each such party to name Seller and Torch as additional insureds to such
party’s general liability insurance policies. Buyer shall also include Seller
and Torch in any indemnity provisions with such parties for defense and
indemnification to the same extent Buyer is defended and indemnified.

3.5   Release and Indemnity.

     3.5.1. Buyer’s Indemnity.

     Except as specifically provided to the contrary in the PAPA and in
Sections 3.5.3 and 3.5.5 below, to the maximum extent permitted by law, Seller,
Torch and their members, partners and their constituent members, their parent
companies and subsidiaries and their employees, officers, directors,
shareholders, and respective successors and assigns, other than subsequent
Developers of the Development Areas whose indemnity obligations are governed by
the Development Declaration and the PAPA, (collectively, the “Indemnitees”)
shall not be liable for any Losses (as defined in Section 3.5.7 below) arising
out of, caused by, relating to or alleged to have arisen from, been caused by or
related to:

     (a) the Activities (as defined in Section 3.5.7 below), including:

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(i)   the use of the Property Interests by Buyer, or Buyer’s Representatives,
including for Oil Operations,   (ii)   a defect in the design or construction of
or any material in any structure or other improvement at, relating to or in
connection with the Property Interests or Oil Operations, or in any Work
performed by Buyer or Buyer’s Representatives,   (iii)   the condition of the
Property Interests including any earthquake or other faults, or other natural
hazards, disclosed or undisclosed, and any defect in soils or the preparation of
soils prior to the date hereof by any entity,   (iv)   the presence or existence
of any Hazardous (or toxic) Substances (including any methane gas and/or tar
seeps), materials or waste (including any landfill) in, or on the soil or
groundwater at, relating to or in connection with the Property Interests, and
including the release, use, generation, discharge, storage, disposal or clean-up
of any Hazardous Substance to, on, in or from the Property Interests or in
connection with Oil Operations, or any residual contamination therefrom
affecting any natural resource or the environment, including any Environmental
Law or other law,   (v)   claims made by third parties for matters at, relating
to or in connection with the Activities,   (vi)   any act or omission of Buyer
or Buyer’s Representatives,   (vii)   any accident or casualty at, relating to
or in connection with the Activities,   (viii)   any material breach of a
representation of Buyer in Section 3.1C, hereof,   (ix)   a violation or alleged
violation by Buyer or Buyer’s Representatives of any law now or hereinafter
enacted including any breach by Buyer or Buyer’s Representatives of an
Environmental Law or the assertion of any Hazardous Substance Claim not caused
by, or the responsibility of, Developer as described in the PAPA, including the
violation, or alleged violation by Buyer or Buyer’s Representatives of any
statute, ordinance, notice, order, rule, regulation, permit, judgment or license
relating to the use, generation, release, discharge, storage, disposal or
transportation of any Hazardous Substance in, on, under or about, to or from the
Property Interests or in connection with Oil Operations, and   (x)   any other
cause whatsoever at, relating to or in connection with the Property Interests or
Oil Operations, Buyer’s use of the Property Interests or conduct of Oil
Operations or Buyer’s performance under the Development Documents (including its
covenants, representations and warranties made pursuant thereto);

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     (b) The negligence or willful misconduct of Buyer (or any of Buyer’s
Representatives) in connection with the Activities, as specified in (a), above;

     (c) The default by Buyer of any of its obligations under the Development
Documents, including those matters specified in Section 3.2.7 of this Agreement,
and/or any material breach of the representation(s) and warranties made therein;

     (d) The application of the principles of strict liability with respect to
any act or omission of Buyer or Buyer’s Representatives or any Indemnitee at,
relating to or in connection with the Activities, as specified in (a), above.

     3.5.2 Releases and Indemnity.

     As a material part of the consideration of this Agreement, Buyer hereby
releases the Indemnitees from and waives on its behalf, and on behalf of its
successors and assigns, all the Losses described in Section 3.5.1, and agrees to
indemnify, defend and hold harmless Seller and all of the Indemnitees and their
property from all such Losses whether incurred or made by Buyer, Seller, any
Indemnitee (or any third parties/person(s)). The foregoing release, waiver,
indemnity and obligation to defend and hold harmless shall apply to any claim or
action brought by a private party or by a Governmental Agency or entity under
any statute or common law now or hereinafter in effect and is intended to apply
with respect to the Losses described in Section 3.5.1, whenever they may occur.
The foregoing release, waiver, indemnity and obligation to defend and hold
harmless, and any similar covenants by Buyer elsewhere in the Development
Documents, are intended to apply to the Losses described in Section 3.5.1,
incurred directly by Seller or any Indemnitee, or their property, as well as by
Buyer, or any third party, or their property.

     3.5.3 Limitation on Indemnity-Seller’s Actions.

     Notwithstanding anything to the contrary above, nothing contained in this
Section shall operate to relieve any Indemnitee to the extent of any Losses
found by a court of competent jurisdiction to have been caused solely by the
reckless or willful behavior, gross negligence or the intentional misconduct of
such Indemnitee.

     3.5.4 Buyer’s Acknowledgment.

     BUYER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:

                    “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.”

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     BUYER BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHT
IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTE OR COMMON LAW
PRINCIPLE OF SIMILAR EFFECT.

  BUYER’S INITIALS   SELLER’S INITIALS

     3.5.5 Limit on Buyer’s Indemnity.

     The indemnity and the release contained in this Section 3.5 shall not apply
to the extent arising from or related to:

(a)   any material breach by Seller of its representations set forth in
Section 3.1 B and its covenants set forth in Section 3.1 D,   (b)   civil or
criminal penalties imposed upon Seller for Activities before the Close, but not
paid,   (c)   taxes delinquent before the Close, but not paid,   (d)   royalty
payments owed before the Close, but not paid,   (e)   any Losses or obligations
of Seller resulting from or relating to the employment relationship between
Seller and any of Seller’s present or former employees or the termination of any
such employment relationship, including without limitation personal injury,
matters relating to employee health, severance pay and other similar benefits,
if any, and any claims on behalf of any such present or former employee relating
to the employment or termination of employment of any such employee by Seller
prior to the Closing, including without limitation any claim for wrongful
discharge, breach of contract, unfair labor practice, employment discrimination,
unemployment compensation, or workers’ compensation or any Losses or obligation
of Seller in respect of any agreement, trust, plan, fund, or other arrangement
under which benefits or employment is provided for any of Seller’s present or
former employees,   (f)   any Losses to the extent incurred by Buyer or third
parties as a result of Seller’s negligence or willful misconduct in the
performance of its Work under the Program or PAPA prior to Final Acceptance,  
(g)   any Losses arising from or related to matters which arise from or are
related to the duty or obligation of the Developer under the PAPA,   (h)   any
Losses arising from or related to the Development Areas except those resulting
from Oil Operations and the Activities of Buyer’s Representatives,   (i)   any
Losses (less the applicable deductible) to the extent Seller’s preexisting
insurance policy provides a legal defense and coverage of a

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    claim; Seller shall assert and pursue the claim for payment under the policy
in a commercially reasonable manner irrespective of whether the insurance
company initially denies it and any recovery shall reduce the extent of Buyer’s
Indemnity (provided however that Seller shall only be required to initiate
litigation, arbitration or other formal controversy after written notice from
Buyer, and only (x) to the extent of a “good faith” claim and (y) if all costs
and expenses are paid by Buyer); and,   (j)   any Losses relating to Seller’s
offsite disposal of Hazardous Substances.

     3.5.6 Construction Entities.

     Notwithstanding the above, nothing contained herein shall obviate or
nullify in any way Buyer’s rights granted in Section 3.2.4 to assert claims
against the construction entities hired by Seller to perform Work at, relating
to, or in connection with the Property Interests, Oil Operations, or under the
Development Documents and affecting or relating to the Property Interests or Oil
Operations pursuant to a written contract (“Construction Entities”).

     3.5.7 Definitions.

     As used in this Agreement, the terms listed below shall have the following
meanings:

     “Activities” for purposes of this Section 3.5 shall mean and include Oil
Operations, the Property Interests, the development or use of the Property
Interests or Oil Operations, the performance of any Work at, relating to or in
connection with the Property Interests or Oil Operations, the construction, use,
sale or other conveyance of improvements at, relating to or in connection with
the Property Interests or Oil Operations, and/or any defect in any such Work, or
the Property Interests, or the conduct of Oil Operations.

     “Buyer’s Representatives” for the purposes of this Section 3.5 shall mean
Buyer’s contractors, or their respective subcontractors, agents, employees,
licensees, invitees or representatives, or any other parties directly or
indirectly employed by any one of the foregoing or reasonably under the control
of any of the foregoing or for whose acts any of the foregoing may be liable
(collectively, “Buyer’s Representatives”), but excluding Seller’s Work under the
Program prior to Final Acceptances and/or Developer’s Work under the Program or
otherwise.

     “Losses” for the purposes of this Section 3.5 shall mean any and all
claims, demands, actions, suits, proceedings, causes of action, loss, liability,
damage (including sickness, disease and/or death and other consequential
damage), cost (including cleanup costs), expense, injury, deficiency, fine,
penalty, punitive damage or expense, of any kind or character, to any person or
property (including third parties), tangible or intangible, fixed or contingent,
presently known or unknown, whether resulting from occurrences prior to, on the
date of or after the Closing, including compensation for lost wages, business
income, profits or other economic loss, damage to natural resources or the
environment, nuisance, pollution, contamination, leak, spill, release or other
adverse effect on the environment, court costs and attorneys’ fees
(collectively, “Losses”).

     “Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601, et seq., the
Resource

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Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq.. the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.. the Hazardous
Materials Transportation Act, 49 U.S.C. 1801 et seq., the Clean Water Act, 33
U.S.C. Section 1251 et seq., the Safe Drinking Water and Toxic Enforcement Act
of 1986 (Cal. H&S Code Sections 25249.5-25249.13), the Carpenter-Presley-Tanner
Hazardous Substance Account Act (Cal. H&S Code Sections 25300 et seq.). and the
Porter-Cologne Water Quality Control Act, California Water Code Sections 13000,
et seq., the California Health and Safety Code generally and any and all other
present and future federal, state or local laws (whether under common law,
statute, ordinance, rule, regulation or otherwise), permits, orders,
determinations, notices and any other requirements of Governmental Agencies
relating to the environment or to any Release, Hazardous Substance or Hazardous
Substance Activity, as heretofore or hereafter amended from time to time.

     “Hazardous Substance” means (a) any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, or otherwise
classified pursuant to, any Environmental Law as a “hazardous substance,”
“hazardous material,” “hazardous waste,” “extremely hazardous waste,”
“infectious waste,” “toxic substance,” “toxic pollutant” or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or “EP toxicity” and (b) ash
produced by a resource recovery facility utilizing a municipal solid waste
stream. Oil and natural gas are expressly excluded from the definition of
Hazardous Substances.

     “Hazardous Substance Activity” means any actual, proposed or threatened
storage, use, holding, existence, Release, emission, discharge, generation,
processing, abatement, removal, disposition, handling, transportation or
clean-up of any Hazardous Substance from, under, into or on the Property
Interests or surrounding property or in connection with the Oil Operations;
provided, however, that the use, installation, storage and maintenance, in
compliance with all applicable laws, ordinances, orders, regulations and notices
of Governmental Agencies, of materials reasonably necessary and normally used in
the development or use of the Property Interests or in connection with the Oil
Operations in the ordinary course of its business as contemplated in the
Development Documents, shall not be considered a Hazardous Substance Activity.

     “Hazardous Substance Claims” shall mean any and all enforcement,
investigation, cleanup, removal or other Governmental Agency notices, actions,
proceedings of any kind or nature, or orders threatened, instituted or completed
pursuant to any Environmental Law, together with all claims made or threatened
by any third party against Buyer, Developer (to the extent arising out of,
relating to or in connection with Developer’s activities and work regarding the
Program), Seller, the other Indemnitees or the Property Interests or Oil
Operations, relating to damage, construction, cost recovery compensation, loss
or injury resulting from any Hazardous Substance.

     3.5.8. Notice.

                    Each party shall promptly notify the other in writing of
claims arising out of any of the matters described in this Section 3. If the
claim is a Hazardous Substance Claim, the

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notifying party shall provide the other with copies of all communications with
federal, state and local governments or Governmental Agencies.

3.6   Seller’s Indemnity.

     To the maximum extent permitted by law, Buyer and its members, partners and
its constituent members, parent companies and subsidiaries and their employees,
officers, directors, shareholders, and all of their respective successors and
assigns, (collectively, the “Buyer-Indemnitees”) shall not be liable for, and
Seller indemnifies and agrees to defend Buyer-Indemnitees for, any Losses (as
defined in Section 3.5) to the extent arising from and/or relating to the
Retained Obligations listed on Exhibit “F3”; provided, however, should the East
Naranjal Tank Farm not be demolished within ten (10) years, this provision shall
not apply as to the East Naranjal Tank Farm.

     Notwithstanding anything to the contrary above, nothing contained in this
Section shall operate to relieve any Buyer-Indemnitee to the extent of any such
Losses found by a court of competent jurisdiction to have been caused solely by
the reckless or willful behavior, gross negligence or the intentional misconduct
of such Buyer-Indemnitee.

3.7   Survival of Covenants.

     3.7.1 All of Buyer’s indemnification, defense and hold harmless covenants
and limitations on Buyer’s obligations in any of the Development Documents,
including without limitation the covenants in the Section hereof entitled
“Release and Indemnity” and Buyer’s obligation to maintain completed operations
insurance pursuant to the Section hereof entitled “Insurance” shall survive the
Sale or Transfer of Seller or of the Property Interests and/or Oil Operations
pursuant to Section 5.18.

     3.7.2 All of a party’s indemnification, defense and hold harmless covenants
shall be binding on such party (or any permitted assignee) until the last to
occur of (a) such date as any action against the indemnified party is absolutely
barred by the applicable statute of limitations or (b) such date as any action
asserted prior to limitations for which indemnification is claimed under said
Section is fully and finally resolved. Neither payment nor a finding of
liability or of an obligation to defend shall be a condition precedent to the
enforcement of any indemnity or duty to defend provision herein or elsewhere in
any Development Document.

     If any action or proceeding shall be brought against any indemnified party
alleging any fact or circumstances for which a party is to provide
indemnification, such party, upon notice from such indemnified party, shall
defend the same at its sole cost and expense.

     3.7.3 Neither Buyer nor Seller shall assert a statute of limitations
defense to its obligation to defend and indemnify an indemnified party hereunder
(or as otherwise required by the Development Documents) until after three years
from the assertion of any claim, so long as the indemnified party notifies the
indemnifying party of any such known claim within three years of discovery of
the claim.

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ARTICLE 4
FURTHER DOCUMENTATION

4.1   Grant Deed.

     Upon the Close, Seller shall convey title to the Property Interests to
Buyer by means of a Grant Deed in the form of Exhibit “D,” and to other portions
of the Property Interests pursuant to the Non-Exclusive Assignment of Contract
Rights and Bill of Sale in the form of Exhibit “C,” and the Easement Agreement
described in Exhibit “K.”

4.2   Natural Hazard Zones.

     Seller has submitted to Buyer and Buyer acknowledges that it has received,
read and approved the natural hazard zones (“Natural Hazard Zones”) disclosure
materials attached as Exhibit “E.” Buyer agrees that Seller has thereby fully
discharged all of its obligations to Buyer, if any, under California law with
respect to Natural Hazards Zones disclosures.

4.3   Development Declaration, PAPA, and Nuevo Grant of Easements to Buyer.

     At the Close (a) Seller will record the Development Declaration in the form
of Exhibit “L” against the Minerals and (b) Seller will record (in favor of
Buyer) against the surface fee interest in the Land an Easement Agreement in the
form of Exhibit “K.” Each Party hereto acknowledges that it has received and
read a copy of the Development Declaration, PAPA, and Easement Agreement and
agrees to abide by each and every provision thereof. Each Party’s agreement to
abide by the Development Declaration, PAPA, and Easement Agreement is a material
consideration for the execution of this Agreement by the other.

4.4   Non-Exclusive Assignment of Contract Rights and Bill of Sale.

     Buyer has received, read and approved the Non-Exclusive Assignment of
Contract Rights and Bill of Sale in the form attached as Exhibit “C” and hereby
accepts and assumes all of Seller’s obligations referenced therein.

4.5   Repository Instructions to Buyer’s General Partner’s Counsel.

     Buyer and Seller have received, read and approved the Repository
Instructions and agrees to abide by each and every provision thereof.

4.6   Development Declaration Covering the Development Areas and Remainder
Parcels.

     4.6.1 Seller agrees, prior to any conveyance of the surface fee interest in
the Land, or portion thereof, to a Developer, to record against such surface fee
interest a development declaration consistent with and comparable to the
Development Declaration.

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ARTICLE 5
GENERAL PROVISIONS

          5.1   Notices.
 
            If to Seller:
 
       

      Nuevo Energy Company

      1021 Main, Suite 2100

      Houston, Texas 77002

      Attn: David A. Leach

      Fax: (713) 374-4899

      Phone: (713) 374-4802

      Email: leachd@nuevoenergy.com
 
       

      and
 
       

      Attn: George B. Nilsen

      Fax: (713) 374-4981

      Phone: (713) 374-4973

      Email: nilseng@nuevoenergv.com
 
            Copy to:
 
       

      Ullom Associates

      16149 Redmond Way, Suite 401

      Redmond, Washington 98052

      Fax: (425) 836-2870

      Phone: (425) 836-2728

      Email: ullomjw@aol.com
 
       

      Nossaman, Guthner, Knox & Elliott, LLP

      18101 Von Karman Avenue, Suite 1800

      Irvine, California 92612-1047

      Attn: William P. Tanner, III

      Fax: (949) 833-7878

      Phone: (949) 833-7800

      Email: wtanner@nossaman.com

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              If to Buyer:
 
       

      BlackSand Energy, Inc. or

      BlackSand Partners, L.P.

      1801 Broadway, Suite 600

      Denver, Colorado 80202

      Attn: Tim Collins

      Fax: (303) 296-0329

      Phone: (303) 296-1908

      Email: timdenver@aol.com
 
            Copy to:
 
       

      Kent G. Snyder, Esq.

      2212 Dupont Drive, Suite B

      Irvine, California 92612

      Fax: (949) 833-8209

      Phone: (949) 833-9078

      Email: ksnyder@winstarmail.com

     Notice may also be given by facsimile transmission (“Fax”) to any party at
the respective Fax number given above or by email, provided receipt of such
transmission shall be confirmed by follow-up notice within seventy-two (72)
hours by another method authorized above. Any party hereto may from time to
time, by written notice to the other, designate a different address which shall
be substituted for the one above specified. If any notice or other document is
sent by mail as aforesaid, the same shall be deemed served or delivered
seventy-two (72) hours after the mailing thereof as above provided. Notice by
any other method shall be deemed served or delivered upon actual receipt at the
address or Fax number listed above.

5.2   Payments; Interest; Liens.

     Any amounts which are due and owing to Seller or Buyer pursuant to the
various terms of this Agreement or any other Development Document shall be paid
in cash, bank cashier’s check or wire transfer and, if to Seller, to the Seller
account, as follows: JP Morgan Bank, Bank No. 113000609, Account No.
00103291226, Payee, Nuevo Energy Company, Reference, Brea Olinda Field.

     If any amounts are not paid when due: (a) all such amounts shall bear
interest as specified in the particular Section requiring such payment or, if
not so specified, then at the rate of the lesser of ten percent (10%) per annum
or the maximum allowable rate under then existing California law, from the due
date until fully paid and (b) if such amounts are owed to Seller, Seller shall
be entitled to record a lien against the Property Interests to enforce and/or
secure payment of such amounts, with right of foreclosure by “power of sale”
thereon only to the extent necessary to preserve the validity and/or priority of
such lien as a matter of law.

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5.3   Intentionally Omitted.   5.4   Signing of Documents.

     Subject to the provisions of this Agreement, Seller and Buyer agree to sign
any and all documents relating to the Land, Property Interests and/or Oil
Operations as necessary to fulfill the intent of the Development Documents.

5.5   Captions.

     The captions used herein are for convenience only and are not a part of
this Agreement and do not in any way limit or amplify the terms and provisions
hereof.

5.6   Governing Law and Venue.

This Agreement and the documents in the forms attached as exhibits hereto shall
be governed by and construed under the laws of the State of California. Subject
to Section 5.9, below, in the event of any legal action to enforce or interpret
this Agreement (including any of the documents in the forms attached as exhibits
hereto), the sole and exclusive venue shall be a court of competent jurisdiction
located in Orange County, California; and the parties hereto agree to and do
hereby submit to the jurisdiction of such court.

5.7   Time of the Essence: Successors and Assigns.

     Time is of the essence of each and every provision of this Agreement. Each
and all of the covenants and conditions of this Agreement shall inure to the
benefit of and shall be binding upon the successors in interest of Seller, and,
subject to the restrictions on transfers herein provided, the successors, heirs,
representatives and assigns of Buyer. As used in the foregoing, “successors”
shall refer to the successors in interest in this Agreement, the Property
Interests, successors to all or substantially all of their assets and successors
by merger, consolidation or other business transaction or arrangement.

5.8   Remedies.

     Subject to any limitation on damages contained elsewhere in this Agreement:

                    5.8.1 Any breach of this Agreement shall be a default
hereunder.

                    5.8.2 Intentionally Omitted.

                    5.8.3 All rights, options and remedies contained in this
Agreement shall be construed and held to be cumulative, and no one of them shall
be exclusive of the other, and the parties shall have the right, except as
limited elsewhere in this Agreement, to pursue any one or all of such remedies
or to seek damages, specific performance in the event of any default hereunder
by the other or to pursue any other remedy or relief which may be provided by
law or equity, whether or not stated in this Agreement.

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                    5.8.4 No waiver by a party of a breach of any of the terms,
covenants or conditions of this Agreement shall be construed or held to be a
waiver of any succeeding or preceding breach of the same or any other term,
covenant or condition herein contained. No waiver of any default by a party
hereunder shall be implied from any omission by the other to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect the default other than as specified in such waiver. No
consent or approval obtained from a party shall be deemed to waive or render
unnecessary the further consent or approval to any subsequent similar acts by
the other.

5.9   Arbitration/Attorneys’ Fees.

     Except for the right of either party to apply to a court of competent
jurisdiction for temporary restraining orders, preliminary injunctions, writs of
attachment, writs of possession or other equitable or provisional relief, any
controversy, dispute or claim of any kind or nature arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement (including the indemnity obligations contained herein), any
Development Document and/or the use or development of the Land, Property
Interests or Oil Operations, including, without limitation, any claim based on
contract, tort or statute, shall be settled by final and binding arbitration by
three (3) arbitrators in accordance with the Rules of the American Arbitration
Association then in effect (the “Rules”). Each party shall, in accordance with
the Rules, nominate one (1) arbitrator to the arbitrational tribunal and the two
(2) arbitrators so appointed shall appoint the third arbitrator in accordance
with the Rules, the three (3) arbitrators constituting the arbitration tribunal.
The arbitration shall be held in Orange County, California. Reasonable discovery
shall be allowed in connection with such arbitration. At the request of a party,
the arbitration tribunal may issue orders for interim relief as deemed necessary
to safeguard property that is the subject of the arbitration or in order to
accomplish the objectives of this Agreement. Such interim measures may also be
sought from judicial authority having jurisdiction. The decision of the majority
of the arbitrators shall be reduced to writing, shall be the sole and exclusive
remedy between the parties regarding any and all such disputes or differences,
and shall be final and binding on all parties to the arbitration; and,
application may be made to any court of competent jurisdiction for an order of
enforcement and shall be enforceable in any court of competent jurisdiction. The
parties agree to exclude any right of application or appeal to the courts of any
jurisdiction in connection with any questions of law arising in the course of
arbitration or with respect to any award made, except for enforcement purposes.
Consequential, punitive, or incidental or other similar damages shall not be
allowed.

     In the event any such arbitration (or other proceeding) is brought to
enforce or interpret any of the covenants, terms or provisions of this
Agreement, any Development Document and/or use or development of the Land,
Property Interests or Oil Operations, the prevailing party in any and all such
arbitration(s) or other proceeding(s), including any bankruptcy proceedings,
shall be entitled to recover from the non-prevailing party all of the attorneys’
fees and costs incurred by such party in each and every such arbitration or
other proceeding, including any and all appeals or petitions therefrom. As used
in this Agreement, attorneys’ fees shall be deemed, to the extent allowed by
law, to mean the full and actual costs of any legal services actually performed
in connection with the matters involved, calculated on the basis of the usual
fee charged by the attorneys performing such services, and shall not be limited
to “reasonable attorneys’ fees” as defined in any statute or rule of court.

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5.10   Severability.

     If any portion of this Agreement is or becomes illegal, null or void or
against the public policy of the State of California, for any reason, or shall
be held by any court of competent jurisdiction to be illegal, null or void or
against the public policy of the State of California, the remaining portions, of
this Agreement shall remain in force and effect to the fullest extent
permissible by law and the Agreement, as a whole, shall then be interpreted in
the manner fairest to both Parties taking into consideration the “bargained for
exchange” contemplated by each of them in executing the Agreement, including
without limitation, as described in Section 1.3 of this Agreement.

5.11   Gender and Number.

     Agreement (unless the context requires otherwise), the masculine, feminine
and neuter genders and the singular and the plural include one another, as
appropriate.

5.12   Brokerage Commission.

     Neither Seller nor Buyer is obligated to pay any real estate, brokerage or
other commission or fee in connection with the matters contained in this
Agreement or the conveyance of the Property Interests to Buyer. The parties
hereby indemnify and hold each other free and harmless from and against any and
all costs and liabilities including, without limitation attorneys’ fees, for
causes of action or proceedings which may be instituted by any broker, agent or
finder, licensed or otherwise, claiming through, under or by reason of the
conduct of the other in connection with this Transaction. The foregoing
representation and indemnity shall survive the delivery of Seller’s Grant Deed.

5.13   Waiver of Jury Trial.

     Seller and Buyer each acknowledges that it has had the advice of counsel of
its choice with respect to rights to trial by jury under the Constitutions of
the United States and the State of California. Each party expressly and
knowingly waives and releases all such rights to trial by jury in any action,
proceeding or claim brought by either party against the other on any matters
arising out of or in any way connected with this Agreement or any other
Development Document, Buyer’s use or development of the Property Interests or
Oil Operations, and/or any claim for injury or damage.

5.14   Survival of Certain Covenants.

     Those covenants of the parties which are not capable of being performed
before the conveyance of the Property Interests to Buyer or which may be capable
of or require performance after such conveyance shall survive such conveyance
and the delivery of Seller’s Grant Deed. The foregoing shall apply whether or
not such covenant is expressly stated to survive.

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5.15   Recording.

     Neither this Agreement, nor any Memorandum hereof shall be recorded against
the Property Interests.

5.16   Conflicts.

     EXCEPT AS PROVIDED IN SECTION 5.34, if there is a conflict among the
provisions of the Development Documents, the interpretation thereof shall be
conclusively determined by reference to the following documents in the order
listed below:

     (a) Agreement (including only Exhibits A, C, F, G, I and L);

     (b) Grant Deed;

     (c) Repository Instructions;

     (d) The remainder of the Development Documents, including the remaining
Exhibits to the Agreement.

5.17   Retained Obligations Under Hover Agreement

     Seller shall, notwithstanding the sale to Buyer of the Property Interests
hereunder, continue to be responsible for and bear the cost of implementing
those Retained Obligations that impact the Property Interests or the Oil
Operations (set forth under Exhibit “F2”) under the Hover Agreement. Buyer
shall, among other matters, make its Property Interests reasonably available to
permit Seller to plug and abandon the wells and make the modifications of the
facilities set out in Exhibit “F2.” Buyer shall cooperate fully with Seller’s
efforts to implement the Retained Obligations at no out-of-pocket expense to
Buyer.

5.18   Assignment of Agreement.

     Subject to Section 5.22, either Seller or Buyer may assign its rights and
interests under this Agreement, with the exception that Buyer may only assign
the entire Agreement or effect the Sale or Transfer of all of (or undivided
interests in) the Property Interests, and, Seller, without the written consent
of Buyer, may not assign its rights under Exhibit “I” with respect to the
Program. In the event of any assignment authorized by this Section 5.18, Seller
and Buyer expressly agree that (a) any such assignee shall assume in writing all
of assignor’s obligations under this Agreement which are the subject of the
assignment, as more fully described in Section 5.22, and (b) the assignor will
reimburse the non-assigning party for all reasonable costs and expenses it
incurred in connection with any such assignment including all reasonable
attorneys’ fees and other costs incurred in preparing and/or reviewing
assignment documentation.

ANY ATTEMPTED ASSIGNMENT MADE IN VIOLATION OF THIS SECTION SHALL BE VOID.

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5.19   No Partnership or Agency.

     5.19.1 Buyer and Seller expressly acknowledge and agree that they are not
joint venturers, partners, or agents of each other and do not have fiduciary
duties with respect to one another, in any manner whatsoever, in the acquisition
or conveyance of the Property Interests or Oil Operations. Neither anything in
this Agreement or in any other Development Document, nor any communication or
other action between the parties relating to the Property Interests or Oil
Operations, is intended or shall be construed to create a joint venture,
partnership, agency or fiduciary relationship between Buyer and Seller or their
respective owners, regardless of any common identity of ownership in Seller and
Buyer.

     5.19.2 This Agreement does not create any third party beneficiary status.

5.20   Resolution of Contractual Uncertainties.

     Seller and Buyer waive the effect of California Civil Code Section 1654
which interprets uncertainties in a contract against the party which drafted the
contract.

5.21   Assignment of License Agreements/Leases.

     Except for the Excluded Interests, as of the Close, Seller, to the extent
of its ability to do so without incurring liability therefor, materially
breaching any contract or agreement, or violating any law, ordinance, rule or
regulation of a Governmental Agency, hereby (i) assigns exclusively to Buyer all
of its right, title and interest in and to those leases, agreements and licenses
listed on Exhibit “G” (“Exclusive Assignments”) pertaining to the Property
Interests and Oil Operations and (ii) assigns non-exclusively to Buyer its
right, title and interest in and to those leases, agreements and licenses listed
on Exhibit “G-l” (“Non-Exclusive Assignments”), and Buyer hereby assumes and
agrees to discharge pursuant to the terms of both the Exclusive Assignments and
Non-Exclusive Assignments all obligations of Seller thereunder. To the best of
Seller’s knowledge (as defined in Section 3.IB), all unrecorded leases and
licenses pertaining to the Property Interests or Oil Operations are listed in
Exhibit “G” and Exhibit “G-l.•

5.22   Notice on Approved Transfer.

     Buyer shall notify Seller in writing ten (10) days prior to any Transfer
permitted by Section 5.18 hereof, by (a) identifying the transferee; (b)
specifying its relation to Buyer and/or Buyer’s parent or related entity and
Buyer’s ownership interest therein; if any, and (c) by providing Seller with
such Transferee’s written Assumption of Obligations (in the form attached to
this Agreement as Exhibit “J”) of all Buyer’s obligations hereunder relating to
the portion of the Property Interests being transferred.

5.23   Entire Agreement: Exhibits.

     This Agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and all prior and contemporaneous
agreements, representations, negotiations and understandings of the parties
hereto, oral or written, are hereby superseded and merged herein. The foregoing
sentence shall in no way affect the validity of any instruments executed by the
parties in the form of exhibits attached to this Agreement which, although

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independently executed by the parties, are, nonetheless, a part of this
Agreement as though fully set forth herein. All of the exhibits attached hereto
are incorporated herein by this reference (except for the limited purposes
stated in Section 5.16 “Conflicts”).

5.24   Stand-Alone Insurance.

     5.24.1 Policy Requirements.

     As a separate and distinct matter, not covered by the insurance
requirements assumed by Buyer and contained elsewhere in this Agreement, Buyer
shall obtain a single premium, ten-year term, “stand-alone” environmental
insurance policy (“SA Insurance”) to cover a portion of the risks described in
Section 3.5 hereof having a combined total limit of Twenty Million Dollars
($20,000,000), with a self-insurance retention of Two Hundred Fifty Thousand
Dollars ($250,000); and, at least the following:

     (a) The insurance company is rated at least A- VIII in the latest Best’s
Report;

     (b) Buyer, Seller and Developer (and all the Indemnitees) are Named
Insureds;

     (c) First party clean-up and third party claims, both on-site and off-site,
are covered on a “claims made” basis, to the extent “occurrence” based insurance
is not available in the marketplace;

     (d) Personal and bodily injury, property damage, health, nuisance (e.g..
from odor) and diminished property value on and off the Property Interests are
covered;

     (e) Unknown (“Unknown”), pre-existing conditions are covered, including
underground storage tanks;

     (f) No third party claim is necessary to trigger coverage for occurrences
arising from Unknown, pre-existing conditions; and, defense and indemnity is
available therefor, including coverage for the assertions of Governmental
Agencies, any Developer and any Home Owners’ Association (including internal
costs, bonds to release liens and attachments, appeal bonds, pre and post
judgment interest);

     (g) There is no “retroactive” time limitation on coverage;

     (h) Cancellation may be effected only to the limited extent of specific
Named Insured non-compliance; and

     Buyer and Seller shall pay the premium for such policy at the time of
issuance as follows:

         
Seller
    50 %
Buyer
    50 %

     To the extent any insurance payment under such a policy of SA Insurance is
applied to reduce any liability imposed as a result of such a risk (or Buyer’s
indemnity in Section 3.5),

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Buyer’s payment obligations pursuant to Section 3.5 shall be reduced
proportionately; provided however, that such SA Insurance and/or payment shall
not otherwise dilute Buyer’s obligations under such Section 3.5, or the
Indemnities specified therein.

     5.24.2 Documentation.

                    Any person or entity that is obligated to perform
remediation work under the PAPA shall use commercially reasonable efforts to
obtain a No Further Action Letter or such other, comparable documentation from
the appropriate Governmental Agency as is necessary to avoid any exclusion for
known pollution conditions under the SA Insurance Policy. As soon as such
documentation is obtained, such person or entity shall promptly furnish same to
the insurer under the SA Insurance Policy.

5.25   Further Assurances and Cooperation.

     Each of the Parties shall execute and deliver all additional papers,
documents and other reasonable assurances, and shall do all acts and things
reasonably necessary in connection with the performance of its obligations
hereunder to carry out the intent of this Agreement, including Seller’s
obligation to make the Contingent Payment as defined in Section 5.29, and shall
cooperate with the other Party after the Close, to ensure a smooth transition
from Seller to Buyer regarding the ownership, possession and use of the Property
Interests and for Oil Operations, including without limitation, the following:
(a) Buyer shall provide access and make available to Seller, during normal
business hours, upon forty-eight (48) hours notice, for copying of the
Knowledge, but only including financial and accounting documents and information
relating to Seller’s prior ownership, use and possession of the Property
Interests and Oil Operations, among other things, in order to (i) submit any
reports to or filings with any Governmental Agency (including taxing
authorities), (ii) wind up its business activities with respect to the Property
Interests and Oil Operations and (iii) continue its general, corporate
operations in the ordinary course of its business, and (b) Seller shall provide
reasonable assistance to Buyer in assuming the Oil Operations, without however,
being required to spend money, participate in any formal controversy including
litigation or arbitration or spend excessive employee or consultant time and
effort in so doing.

5.26   Intent of Definitions.

     The limitations, prohibitions, restrictions, requirements and obligations
of Buyer in this Agreement, when expressed in respect of, in connection with or
in relation to a defined term, shall mean, include and apply to all or any part
or portion of such defined term. Use of the word “including” herein shall mean
“including without limitation.”

5.27   Intentionally Omitted.   5.28   Continuing Seller Interests

     To ensure the performance by Buyer (and its successors and assigns to all
or an undivided interest in the Property Interests), of its obligations under
this Agreement, any Sale or Transfer (including hypothecation) of all or a
portion of the Property Interests or recording of claims against the Property
Interests shall be made expressly subject to the rights of Seller under

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this Agreement, including the Development Declaration. This provision shall be
included in the Grant Deed and any subsequent deed or conveyancing instrument
for any of the Property Interests, in perpetuity.

5.29   Unocal Asset Purchase Agreement.

     With the exception of the payment of the “Contingent Payment” to Unocal as
set forth below, Buyer hereby accepts and assumes all of Seller’s rights, duties
and obligations, of every nature and type whatsoever, under, in or relating to
the Unocal Asset Purchase Agreement to the extent they relate to the Property
Interests. The obligation to pay to Unocal the “Contingent Payment” (referenced
and defined at Section 2.1 of the Unocal Asset Purchase Agreement) is
specifically retained by Seller; provided, however, that Buyer hereby covenants
and agrees to provide necessary information to Seller in a timely fashion so
that it may calculate the amount of the Contingent Payment. The information to
be provided to Seller shall consist of and shall be submitted as follows:

     (a) The information is set forth in Section 2.1 of the. Unocal Asset
Purchase Agreement and shall be calculated based upon data from the Brea Olinda
field only.

     (b) The information shall relate to the following calendar years: 2003 and
2004. Buyer shall provide such information to Seller, within ten (10) days of a
written request therefor. Furthermore, within two (2) days of a Seller request,
Buyer shall make its relevant records available for inspection by Seller during
normal business hours at Buyer’s office. The matters contained in the preceding
sentence are in addition to, and not in limitation of, the provisions of
Section 5.25.

5.30   Like-Kind Exchange.

     Seller shall have the right, on ten days written notice to Buyer, to
consummate the Transaction by means of a “like-kind exchange” (“Exchange”)
pursuant to Section 1031 of the United States Internal Revenue Code, so long as
the Exchange does not delay the Close. Buyer will cooperate with Seller in such
endeavor as described in Section 5.25 of this Agreement.

5.31   Oil Well Exhibit.

     As a convenience to Buyer, Seller has attached as Exhibit “H” a list of oil
wells (“Oil Wells”) which to the best of its knowledge (as defined in Section 3.
1B) is a complete list of Oil Wells in the Property Interests. Buyer
specifically understands and agrees that all matters pertaining to the Wells are
included within the Buyer Indemnities granted herein in Section 3.5. (without
limitation, including any plugging, abandonment, reabandonment and the like), as
well as being covered by all other provisions of this Agreement pertaining to
the Property Interests and Oil Operations.

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5.32 Intentionally Omitted.

5.33 Oil Price Hedge.

     The parties agree to use commercially reasonable efforts to secure the
consent (“Consent”) of Morgan Stanley Capital Group, Inc. (“Stanley”) to the
assignment to Buyer of that certain oil price hedge (Commodity Swap) contract
between Seller and Stanley, dated January 30, 2003, which assignment will be
effected at the Close, if the Consent is received. Should such consent be
obtained, Seller is obligated to make any assignment within thirty (30) days of
such consent and Buyer must accept such assignment.

5.34 Waiver, Release and Indemnities: Limitations under the PAPA.

     The waiver, release and indemnities given by Buyer herein with respect to
Losses and Environmental Losses are subject to any contrary provisions regarding
Seller Work to be performed under the PAPA (but as also limited by such contrary
provisions). The provisions of the PAPA shall prevail in the event of any
conflict between that agreement and the indemnity provisions in Section 3.5 of
this Agreement.

5.35 Buyer’s Counsel as Closing Repository.

     Buyer will ensure that Buyer’s General Partner’s counsel identified in
Section 2.6.2 shall act as the Closing Repository for the Transaction in
compliance in all respects with the Repository Instructions.

     IN WITNESS WHEREOF, this Agreement is executed as of the day and year first
above written.

                  NUEVO ENERGY COMPANY,   BLACKSAND PARTNERS, L.P., a Delaware
corporation   a Texas limited partnership
 
                        By:   Blacksand Energy, Inc., a Delaware
Corporation By:   -s- George B. Nilsen

--------------------------------------------------------------------------------

George B. Nilsen   Title:   General Partner
Title:
  Senior Vice President       By:   -s- Tim Collins

             

--------------------------------------------------------------------------------

 

              Tim Collins
By:
  -s- Phillip A. Gobe

--------------------------------------------------------------------------------

Phillip A. Gobe       Title:   President
Title:
  Chief Operating Officer            
 
               

  “SELLER”       “BUYER”    

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EXHIBIT A

(Description of the Property Interests)

Exhibit A

 

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EXHIBIT A1

(Property Minerals)

Exhibit A1

 

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EXHIBIT ‘A1’

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2"× 4" POST MARKED
62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2' × 4"
POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A 4"
× 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO A 2" × 4"
POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST 55.48 CHAINS TO
A 2" × 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30' EAST 20.00
CHAINS TO A 2" × 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45" EAST 134.63
CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION
OIL COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY
OF THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA
TO GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK
44, PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF
THE AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER
LINE OF CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET
AND BREA CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73°
32' 24" WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE
AT SAID POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16"
EAST), A DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0°
10' 11" EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE
OF 500 FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE
SOUTH 0° 10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A
DISTANCE OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10 ' 50" WEST ALONG SAID LINE
3131.98 FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING
BEING MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" × 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2"× 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

      THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

Page 3 of 5

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      THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE
NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “N10°33'18"E 381.48'”;

      THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE
TRUE POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

      THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “N10°33'18"E 381.48'";

      THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE
TRUE POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM

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      THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING
MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" × 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “  ‘A1’ SITE DEPICTION”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     

  PREPARED BY: THE KEITH COMPANIES
(Seal) [h12901h1290152.gif]
  UNDER THE DIRECTION OF:
 
 

-s- Kathleen Susan Tetreault [h12901h1290153.gif]

KATHLEEN SUSAN TETREAULT P.L.S.7297

MY LICENSE EXPIRES 12/31/2004
 
 

January 31, 2003

JN: 13207.00

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EXHIBIT A2

(Adjacent Minerals)

Exhibit A2

 

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EXHIBIT A2

Description of Adjacent Minerals

     All of that real property, and all real property rights and interests,
described in those certain Exceptions and Reservations unto Grantor, Paragraphs
A through E, appearing on pages 1 and 2 of, and in all the Attachments to, the
grant deed (“Walden Deed”) from Grantor to BREA WALDEN, LLC, a California
limited liability company, as grantee, dated October 3, 2001, and recorded in
the Official Records of Orange County, California on October 9, 2001 as
Instrument No. 20010710856. A conformed copy of the Walden Deed is appended
hereto for convenience only, as Attachment 1 to Exhibit A2.

Exhibit A2

 

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ATTACHMENT 1 TO
EXHIBIT A2

Attachment 1
Exhibit A2

 

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ATTACHMENT 1 TO EXHIBIT A2

RECORDING REQUESTED BY:

Brea Walden, LLC
c/o Hover Development Company, Inc.
3501 Jamboree Boulevard. Suite 200
Newport Beach, California 92660
Attn: Tom Hover

WHEN RECORDED MAIL TO:

Brea Walden, LLC
c/o Hover Development Company, Inc.
3501 Jamboree Boulevard, Suite 200
Newport Peach, California 92660
Attn: Tom Hover

MAIL TAX STATEMENTS TO ADDRESS ABOVE

GRANT DEED

     FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
NUEVO ENERGY COMPANY, a Delaware corporation (“Grantor”), hereby grants to BREA
WALDEN, LLC, a California limited liability company (“Grantee”), the following
described real property (“Land” or “Property”) in the County of Orange, Stale of
California:

     See Attachment No. 1 which is incorporated herein by this reference.

     EXCEPTING AND RESERVING UNTO GRANTOR, its successors and assigns together
with the right to grant and transfer all or a portion of the same, as follows:

     A. All oil, oil rights, minerals, mineral rights, natural gas rights and
other hydrocarbons, of every type and nature, by whatsoever name known,
geothermal steam and all products derived from any of the foregoing, that may be
within or under the Land, together with the perpetual right of drilling, mining,
exploring and operating therefor and producing, storing in, injecting water,
gases and/or other substances (for secondary and/or tertiary recovery
operations) into, or to use other techniques, whether now known or unknown, and
removing, taking, treating and selling the same from said Land or any other land
(including the Adjacent Parcel, as shown on Attachment “2”), and including the
right to whipstock or directionally drill and mine from lands other than the
Land (including the Adjacent Parcel, as shown on Attachment “2”), oil or gas
wells, mines, tunnels and shafts into, through or across the subsurface of the
Land, and to bottom such whipstocked or directionally drilled wells, mines,
tunnels and shafts under and beneath or beyond the exterior limits thereof, and
to relocate, replace, redrill, retunnel, work, rework, complete, recomplete,
equip, maintain, repair, remove, change the size of, increase the number of,
deepen and operate any such wells or mines; but, except as set forth irl C, D
and E below, without the

1

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right to drill, mine, store, explore or operate through the surface or the upper
500 feet of the subsurface of the Land.

     B. Any and all water, water rights or interests therein appurtenant or
relating to the Land or owned or used by Grantor in connection with or with
respect to the Land (no matter how acquired by Grantor), whether such water
rights shall be riparian, overlying, appropriative, littoral, percolating,
prescriptive, adjudicated, statutory, contractual or otherwise derived, together
with the right and power to explore, drill, redrill, remove and store the same
from or in the Land or to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by Grantor; but without, however
any right to enter upon the surface of the Land in the exercise of such rights.

     C. An exclusive, subsurface easement and nonexclusive surface easement
(“Corridor Easement”) on, over and under the Land for ingress, egress and access
to and from, and the construction, installation, maintenance, replacement,
repair, removal, reconstruction and other uses (collectively, “uses”) of
(a) electric, gas, telephone, water, sewer, drainage, and all other wet and dry
utilities, (b) cable television and other telecommunications and/or data
transmission lines and facilities, and (c) pipelines and other uses and
facilities in connection with its operating/non- operating oil and gas wells and
mines and other development of the adjacent parcel (“Adjacent Parcel”) as a
master-planned community (the location of the Corridor Easement and a
description of the Adjacent Parcel are shown on Attachment “2”); provided that
the construction and installation of such facilities shall not unreasonably
interfere with Grantee’s development of the Land, and after Mass Grading thereof
has been completed, Grantor shall repair any damage to the surface of the Land
caused by its activity thereon; and provided further that Grantee shall
construct and maintain landscaping on and over the surface of the Corridor
Easement compatible with its development of the Land and Grantor’s development
of the Adjacent Parcel.

     D. A non-exclusive easement (“Street Easement”) on, over and under the
streets on the Land for ingress, egress and access to and from, and the
construction, installation, maintenance, replacement, repair, removal,
reconstruction and other uses of (a) electric, gas, telephone, water, sewer,
drainage, and all other wet and dry utilities, (b) cable television and other
telecommunications and/or data transmission lines and facilities, and
(c) pipelines and other facilities in connection with its
operating/non-operating oil and gas wells and mines and other development of the
Adjacent Parcel as a -master-planned community (the location of the Street
Easement is shown on Attachment “2”); provided that the use of such facilities
shall not unreasonably interfere with Grantee’s development of the Land, and
after Mass Grading thereof has been completed, Grantor shall repair any damage
to the Streets and surface of the Land caused by its activity thereon.

     E. A non-exclusive easement on, over and under the Land for drainage
purposes from the Adjacent Parcel, as shown on Attachment “3,” as well as the
right to connect to and discharge and drain through, any water, sewer and other
facilities constructed by Grantee on, over and under the Land.

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All defined terms in the Agreement and other Development Documents referenced
therein are incorporated herein by this reference. The provisions of this Grant
Deed shall prevail in the event of a conflict with the provisions of any other
Development Document.

SUBJECT TO:

     1. General and special real property taxes and assessments and supplemental
assessments, if any which are not delinquent.

     2. That certain Agreement between Adjacent Landowners, dated October 9,
2001, between Grantor and Grantee, regarding the construction and location of
slopes and the disposition and use of export spoils, recorded concurrently
herewith.

     3. That certain Temporary Easement and Transfer Agreement between Grantor
and Brea Olinda Venture, LLC, dated June 6, 2001, whether a matter of record or
not.

     4. All other covenants, conditions, restrictions, reservations, rights,
rights-of-way, dedications, offers of dedication, easements and other matters of
record or apparent.

     IN WITNESS WHEREOF, Grantor has executed this Grant Deed on the day and
year hereafter written.

          Dated: October 3, 2001   NUEVO ENERGY COMPANY, a Delaware    
corporation
 
       

  By:   -s- Mike Darden

     

--------------------------------------------------------------------------------

 

      MIKE DARDEN
 
       

  Title:   VICE PRESIDENT
 
       

  By:   -s- David A Leach

     

--------------------------------------------------------------------------------

 

      DAVID A LEACH
 
       

  Title:   ASST. SECRETARY

     

--------------------------------------------------------------------------------

 

      “Grantor”

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ACCEPTANCE: Grantee hereby accepts this-Grant Deed on the terms and conditions
herein stated.

          Dated: October 3, 2001   BREA WALDEN, LLC, a California limited
liability company
 
       

  By:   HOVER DEVELOPMENT COMPANY, INC., a California corporation, its sole
managing member
 
       

  By:   /s/ Tom Hover

     

--------------------------------------------------------------------------------

      Tom Hover, President
 
       

  By:    

     

--------------------------------------------------------------------------------

 
 
       

  Its:    

     

--------------------------------------------------------------------------------

 

      “Grantee”

4

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State of Texas
    )  

    )  
County of Harris
    )  

     On _________________________________ before me,
___________________________________________ , personally appeared
______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
   

 

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State of Texas
    )  

    )  
County of Harris
    )  

     On October 4, 2001 before me, Judy Vidrine, personally appeared Mike Darden
and David A. Leach, personally known to me to be the person(s) whose name(s) are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

         
Signature
  /s/ Judy Vidrine

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  [Stamp]

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State of California
    )  

    )  
County of Orange
    )  

     On _________________________ before me, _______________________________,
personally appeared _______________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
   

 

--------------------------------------------------------------------------------

         
State of California
    )  

    )  
County of Orange
    )  

     On October 3, 2001 before me, Donna Fritz, personally appeared Tom Hover,
personally known to me to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

         
Signature
  -s- Donna Fritz

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ATTACHMENT NO. 1

TO

GRANT DEED

LEGAL DESCRIPTION OF LAND

 

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Preliminary Report
   

   

DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF BREA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 2 AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT LL-2000-054- RECORDED ON
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 IN THE OFFICIAL RECORDS OF ORANGE
COUNTY, CALIFORNIA.

PAGE 4

 

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(MAP) [h12901h1290158.gif]

First American Title Insurance Company

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ATTACHMENT NO. 2

TO

GRANT DEED

CORRIDOR EASEMENT

STREET EASEMENT

ADJACENT PARCEL

 

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CORRIDOR EASEMENT

(Metes and Bounds Description Of
Easement Area)

 

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(MAP) [h12901h1290159.gif]

 

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ATTACHMENT “2”
TENTATIVE TRACT NO. 16047
LOTS “A” & “F”

THOSE PORTIONS OF THE SOUTHEAST QUARTER OF SECTION 7, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE CITY OF BREA, STATE OF CALIFORNIA AS SHOWN ON RECORD
OF SURVEY NO. 91-1007 FILED IN BOOK 133 PAGES 41 THROUGH 46 INCLUSIVE OF RECORDS
OF SURVEY IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, ALSO DESCRIBED AS
A PORTION OF THE LAND DESCRIBED IN A, BILL OF SALE AND ASSIGNMENT, RECORDED
APRIL 10,1996 AS INSTRUMENT NO. 19960175928 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER. MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL A (TENTATIVE TRACT NO. 16047 LOT“F”)

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7:

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH
00°10'32" WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED JUNE 28.1977.
IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF SAID COUNTY
RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89°53'53"W 466.40 FEET
TO THE POINT OF BEGINNING;

THENCE SOUTH 6.05 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
SOUTHERLY, AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE THROUGH SAID POINT
BEARS NORTH 00°50'30" WEST, SAID POINT BEING ON THE RIGHT-OF-WAY OF PROPOSED
STREET “A”;

THENCE WESTERLY ALONG SAID CURVE AND RIGHT-OF-WAY 26.65 FEET THROUGH A CENTRAL
ANGLE OF 33°55'32";

THENCE NORTH 14.12 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53'53" EAST 25.00 FEET TO THE POINT OF
BEGINNING.

PARCEL B (TENTATIVE TRACT NO. 16047 LOT “A” )

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7;

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH
00°10'32" WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED

Page 1 of 2

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JUNE 28, 1977, IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF
SAID COUNTY RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89°53'53"W 723.50 FEET
TO THE POINT OF BEGINNING;

THENCE SOUTH 07°50'05" EAST 87.46 FEET TO A POINT ON THE RIGHT-OF-WAY OF
PROPOSED STREET “A”;

THENCE ALONG SAID RIGHT-OF-WAY SOUTH 81°51'01" WEST 25.00 FEET;

THENCE NORTH 07°50'05" WEST 91.09 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53'53" EAST 25.24 FEET TO THE POINT OF
BEGINNING.

ALSO AS SHOWN ON EXHIBIT “B”, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

THIS DESCRIPTION HAS BEEN PREPARED FOR “LAND OWNER AGREEMENT” PURPOSES AND MAY
NOT BE USED FOR THE CONVEYANCE, FINANCING OR LEASING OF LAND, EXCEPT AS PROVIDED
FOR IN LOCAL ORDINANCE AND THE SUBDIVISION MAP ACT, A DIVISION OF THE GOVERNMENT
CODE OF THE STATE OF CALIFORNIA

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

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STREET EASEMENT

(Current depiction of Streets,
to be automatically replaced
by the recorded version
of TTM 16047, showing
the final alignment
and location thereof and
connection points to the
Corridor Easement)

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(ATTACHMENT 2B MAP) [h12901h1290160.gif]

 

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(ATTACHMENT 2B MAP) [h12901h1290161.gif]

 

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(ATTACHMENT 2B MAP) [h12901h1290162.gif]

 

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EXHIBIT A3

(District Minerals)

Exhibit A3

 

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EXHIBIT A3

THAT PORTION OF PARCEL 1 OF LOT LINE ADJUSTMENT NO. LL 2000-054, IN THE
UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED
AUGUST 13, 2001, AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, ALSO AS
SHOWN ON RECORD OF SURVEY NO. 2001-1007 FILED IN BOOK 187, PAGES 02 THROUGH 07
INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “N10°33'18"E 381.48' ”; THENCE SOUTHERLY ALONG SAID
COURSE SOUTH 10°33'18' WEST 381.48 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING 0.425 ACRES, MORE OR LESS.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(STAMP) [h12901h1290163.gif]
  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:       -s- KATHLEEN SUSAN TETREAULT [h12901h1290164.gif]
  KATHLEEN SUSAN TETREAULT P.L.S. 7297
MY LICENSE EXPIRES 12/31/2004       November 04, 2002   JN: 13207.00.034

 

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EXHIBIT A4

(Other Minerals)

Exhibit A4

 

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EXHIBIT A4

     
Property Name:
  BREA RESIDENTIAL LOTS MINERAL FEE
Nuevo Property #:
  CA12096

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 of Deeds.

     
Property Name:
  HOLE MINERAL FEE
Nuevo Property #:
  CA12451

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10, in
Book 194, Page 55, of Deeds; EXCEPTING THEREFROM, any portions of such real
property which is located in Section 22, Section 23, Section 24, or the South
Half of Section 14, Township 3 South, Range 10 West, S.B.B.&M.

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Quitclaim Deed dated 4/29/46, between David R.
Wagner, as Grantor, and Union Oil Company of California, as Grantee, recorded
4/30/46 in Book 1332 at Page 421 of Official Records; EXCEPTING THEREFROM, any
portions of such real property which is located in Section 22, Section 23,
Section 24, or the South Half of Section 14, Township 3 South, Range 10 West,
S.B.B.&M.

     
Property Name:
  SIEVERS (J.) MINERAL FEE
Nuevo Property #:
  CA12097

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 11/30/26, from John D. Sievers, as
Grantor, to Union Oil Company of California, as Grantee, recorded 12/9/26 in
Book 690 at Page 149 of Deeds.

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Property Name:
  TOWNSEND & DAMON MINERAL FEE
Nuevo Property #:
  CA12445

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 8/1/10, from J. S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 of Deeds.

     
Property Name:
  NARANJAL MINERAL FEE A & B
Nuevo Property #:
  CA12453

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 3/24/10 from Stearns Ranchos Company,
as Grantor, to Union Oil Company of California, as Grantee, recorded 4/22/21 in
Book 385 at Page 394 of Deeds Orange County and recorded on 5/25/21 in Book 211,
Page 268 Official Records Los Angeles County; EXCEPTING THEREFROM that portion
described as follows:

    That portion of the Northerly one-half of Section 2, Township 3 South, Range
10 West, in the Rancho San Juan Cajon de Santa Ana, in the unincorporated
territory of the County of Orange, State of California, as shown on the Map
recorded in Book 51, Page 7 of Miscellaneous Maps in the Office of the County
Recorded, described as follows:       Beginning at the Southeasterly corner of
Tract No. 12743, recorded in Book 585, Pages 39 through 44 of Miscellaneous Maps
in the Office of said county recorder; thence along the Easterly line of said
Tract No. 12743, North 1°31'03" West 1099.63 feet to the Northeasterly corner of
said Tract No. 12743, said corner also being the beginning of a non-tangent
curve, concave Northeasterly having a radius of 795.00 feet, a radial line to
said point bears South 4°39'12" East; thence Northwesterly 484.67 feet along
said curve and the Northerly line of said Tract No. 12743, through a central
angle of 34°55'49"; thence North 59°43'23" West 104.97 feet along said Northerly
line to an angle point in said Northeasterly line, said angle point being the
beginning of a non-tangent curve, concave Southeasterly having a radius of
1450.00 feet, a radial line to said point bears North 59°31'24" West; thence
Northeasterly 54.73 feet along said Northeasterly line through a central angle
of 2°09'15"; thence along said Northeasterly line North 57°22'09" West 50.00
feet to the most Northerly corner of said Tract No. 12743, said corner also the
beginning of a non-tangent curve, concave Southeasterly having a radius of
1500.00 feet, a radial line to said point bears North 57°22'09" West; thence
leaving said Northeasterly

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    line and following along the Easterly line of future Tract No. 13728, the
following courses:       Northeasterly 390.15 feet along said curve through a
central angle of 14°54'09" to the beginning of a reverse curve, concave
Northwesterly having a radius of 1500.00 feet, a radial line to said curve bears
South 42°28'00" East, Northeasterly 190.20 feet along said curve through a
central angle of 7°12'55"; North 4°32'00" West 149.18 feet, West 208.00 feet,
North 45°00'00" West 45.00 feet, North 60.00 feet, North 86°40'00" West 66.00
feet, and North 13°00'22" East 215.00 feet to the Northerly line of said Rancho
San Juan Cajon de Santa Ana as shown on Record of Survey no. 88-1035, filed in
Book 119, Pages 33 and 34 in the Office of the County Recorder; thence South
76°59'28" East 1527.95 feet along said Northerly line to the Northwesterly
corner of the land described in the deed to the Exxon Education Foundation,
recorded December 29, 1983 as File/Page No. 83-587995 of Official Records in the
Office of the County Recorder; thence South 1°18'55" West 1851.58 feet along the
Westerly line of said deed to the Southwesterly corner of said deed; thence
South 88°31'06" West 961.07 feet along the Northerly line of the South one-half
of said Section 2 to the Point of Beginning.            All oil, gas, and other
hydrocarbon substances and minerals on, in, under and that may be extracted,
produced, and saved from that certain real property which was granted,
quitclaimed, assigned or conveyed to Union Oil Company of California in that
certain Indenture dated 5/17/27 between Stearns Ranchos Company and Union Oil
Company of California, recorded 5/25/27 in Book 47 at Page 363 Official Records;
EXCEPTING THEREFROM that portion described as follows:

    That portion of the Northerly one-half of Section 2, Township 3 South, Range
10 West, in the Rancho San Juan Cajon de Santa Ana, in the unincorporated
territory of the County of Orange, State of California, as shown on the Map
recorded in Book 51, Page 7 of Miscellaneous Maps in the Office of the County
Recorded, described as follows:       Beginning at the Southeasterly corner of
Tract No. 12743, recorded in Book 585, Pages 39 through 44 of the Miscellaneous
Maps in the Office of said county recorder; thence along the Easterly line of
said Tract No. 12743, North 1º31'03" West 1099.63 feet to the Northeasterly
corner of said Tract No. 12743, said corner also being the beginning of a
non-tangent curve, concave Northeasterly having a radius of 795.00 feet, a
radial line to said point bears South 4°39'12" East; thence Northwesterly 484.67
feet along said curve and the Northerly line of said Tract No. 12743, through a
central angle of 34°55'49"; thence North 59°43'23" West 104.97 feet along said
Northerly line to an angle point in said Northeasterly line, said angle point
being the beginning of a non-tangent curve, concave Southeasterly having a
radius of 1450.00 feet, a radial line to said point bears North 59º31'24" West;
thence Northeasterly 54.73 feet along said Northeasterly line through a central
angle of 2°09'15"; thence along said Northeasterly line North 57°22'09" West
50.00 feet to the most Northerly corner of said Tract No. 12743, said corner
also the beginning of a non-tangent curve, concave Southeasterly having a radius
of 1500.00 feet, a radial line to said point bears North 57°22'09" West; thence
leaving said Northeasterly

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    line and following along the Easterly line of future Tract No. 13728, the
following courses:       Northeasterly 390.15 feet along said curve through a
central angle of 14°54'09" to the beginning of a reverse curve, concave
Northwesterly having a radius of 1500.00 feet, a radial line to said curve bears
South 42°28'00" East, Northeasterly 190.20 feet along said curve through a
central angle of 7°12'55"; North 4°32'00" West 149.18 feet, West 208.00 feet,
North 45º00'00" West 45.00 feet, North 60.00 feet, North 86°40'00" West 66.00
feet, and North 13°00'22" East 215.00 feet to the Northerly line of said Rancho
San Juan Cajon de Santa Ana as shown on Record of Survey No. 88-1035, filed in
Book 119, Pages 33 and 34 in the Office of the County Recorder; thence South
76°59'28" East 1527.95 feet along said Northerly line to the Northwesterly
corner of the land described in the deed to the Exxon Education Foundation,
recorded December 29, 1983 as File/Page No. 83-587995 of Official Records in the
Office of the County Recorder, thence South 1°18'55" West 1851.58 feet along the
Westerly line of said deed to the Southwesterly corner of said deed; thence
South 88°31'06" West 961.07 feet along the Northerly line of the South one-half
of said Section 2 to the Point of Beginning.       EXCEPTING THEREFROM that
portion of the above described property which was conveyed to Brea Walden L.L.C.
by Grant Deed dated October 3, 2001 and recorded on October 9, 2001 as
Instrument No. 20010710856 in the Official Records of Orange County, California,
described as follows:       Parcel 2 as shown on Exhibit “B” of Lot Line
Adjustment LL-2000-054 recorded on August 13, 2001, as Instrument
No. 20010557229 in the Official Records of Orange County, California.       Also
EXCEPTING THEREFROM the land described as follows:       Being a portion of the
Southwest one-quarter of fractional Section 8, Township 3 South, Range 9 West,
lying West of the Easterly boundary of the Rancho San Juan Cajon de Santa Ana,
in the County of Orange, State of California as shown on map recorded in Book
51, Page 7 of the Miscellaneous Maps in the Office of the County Recorder of
said County and also show on record of Survey 81-1149 filed in Book 103, Page 19
of Record of Survey in the said Office of the County Recorder being more
particularly described as follows:       Beginning at the Southwest corner of
said Record of Survey 81-1149, thence North 0°11'29" East along the Westerly
line of said Record of Survey a distance of 776.93 feet to the Northwest corner
of said Record of Survey; thence South 89°45'41" East along the Northerly line
and its Easterly prolongation of said Record of Survey a distance of 2406.20
feet of the Easterly boundary line of said Rancho San Juan Cajon de Santa Ana;
thence South 03°24'35" East along said Easterly boundary a distance of 772.60
feet to a point on the Easterly prolongation of the Southerly line of said
Record of Survey; thence North 89°53'56" West along said Southerly line and its
prolongation of distance of 2454.72 feet to the point of beginning.

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    ALSO EXCEPTING THEREFROM the land described as follows:       Those portions
of sections 33 and 34, Township 2 South, Range 10 West, San Bernardino Base and
Meridian, in the Rancho San Juan Cajon De Santa Ana, in the County of Los
Angeles, State of California, described as follows:       Beginning at the
Northwest corner of Section 3, Township 3 South, Range 10 West; thence North 00
degrees 03" 08' West, along the Westerly lines of Lots 3 and 4 of Tract
No. 30081, as per map recorded in Book 751 Pages 71 and 72 of maps. 225.57 feet
to a line that is parallel with and 350.00 feet Easterly, measured at right
angles, from the Westerly boundary line of said Rancho San Juan Cajon De Santa
Ana, the Southerly terminus of said line is also the most Northeasterly corner
of Lot 3 of said Tract No. 30081 and the True Point of Beginning of this
description; thence leaving said corner, along the Northerly lines of Lots 2 and
3 of said Tract No. 30081, North 70 degrees 57" 17' West, 350.00 feet of the
Westerly boundary line of said Rancho; thence Northeasterly along the Westerly
boundary of said Rancho, 785.00 feet more or less to the Northwest corner of
said Rancho, being corner Station No. 22 of said Rancho; then Southeasterly
along the Northerly boundary line of said Rancho, South 76 degrees 59" 00' East
1212.62 feet to a Point of Intersection of the Northwesterly prolongation of the
Easterly line of that certain parcel of land, as Parcel 1, conveyed to Southern
California Edison Company, by deed recorded May 5, 1965, as Instrument No. 1001
of Official Records; thence Southeasterly along said Northwesterly prolongation,
South 21 degrees 22" 20' East 50 feet to the Northerly corner of said Parcel 1;
thence Southwesterly along the Northwesterly line of said Parcel 1, to the
Westerly corner of said Parcel 1, said corner is also a point in the Northerly
line of a certain corporation Grant Deed Recorded December 22, 1962, as
Instrument No. 834, in book D1865 page 873 of Official Records, records of said
county, said mentioned point being North 76 degrees 59" 00' West, 465.00 feet,
measured along said Northerly line from a certain point “A” referred to in the
last mentioned corporation grant deed; thence along said Northerly line, North
76 degrees 59" 00' West, 472.38 feet to the Intersection of the Northeasterly
prolongation of the Westerly line of said Parcel 1, that has a bearing and a
distance of North 19 degrees 02" 43' East, 484.66 feet; thence Southwesterly
along said Westerly line South 19 degrees 02" 43' West 484.66 feet to the True
Point of Beginning.       Indenture dated 5/17/27 between Stearns Ranchos
Company and Union Oil Company of California, recorded 5/25/27 in Book 47 at Page
363 Official Records, more particularly described as follows: [204-15]      
Those portions of sections 33 and 34, Township 2 South, Range 10 West, San
Bernardino Base and Meridian, in the Rancho San Juan Cajon De Santa Ana, in the
County of Los Angeles, State of California, described as follows:      
Beginning at the Northwest corner of Section 3, Township 3 South, Range 10 West;
thence North 00 degrees 03" 08' West, along the Westerly lines of Lots 3 and 4
of Tract No. 30081, as per map recorded in Book 751 Pages 71 and 72 of maps.
225.57 feet to a line that is parallel with and 350.00 feet Easterly, measured
at right angles, from the Westerly boundary line of said Rancho San Juan Cajon
De Santa Ana, the Southerly

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    terminus of said line is also the most Northeasterly corner of Lot 3 of said
Tract No. 30081 and the True Point of Beginning of this description; thence
leaving said corner, along the Northerly lines of Lots 2 and 3 of said Tract
No. 30081, North 70 degrees 70 degrees 57" 71' West, 350.00 feet of the Westerly
boundary line of said Rancho; thence Northeasterly along the Westerly boundary
of said Rancho, 785.00 feet more or less to the Northwest corner of said Rancho,
being corner Station No. 22 of said Rancho; then Southeasterly along the
Northerly boundary line of said Rancho, South 76 degrees 59" 00' East 1212.62
feet to a Point of Intersection of the Northwesterly prolongation of the
Easterly line of that certain parcel of land, as Parcel 1, conveyed to Southern
California Edison Company, by deed recorded May 5, 1965, as Instrument No. 1001
of Official Records; thence Southeasterly along said Northwesterly prolongation,
South 21 degrees 22" 20' East 50 feet to the Northerly corner of said Parcel 1;
thence Southwesterly along the Northwesterly line of said Parcel 1, to the
Westerly corner of said Parcel 1, said comer is also a point in the Northerly
line of a certain corporation Grant Deed Recorded December 22, 1962, as
Instrument No. 834, in book D1865, page 873 of Official Records, records of said
county, said mentioned point being North 76 degrees 59" 00' West, 465.00 feet,
measured along said Northerly line from a certain point “A” referred to in the
last mentioned corporation grant deed; thence along said Northerly line, North
76 degrees 59" 00' West, 472.38 feet to the Intersection of the Northeasterly
prolongation of the Westerly line of said Parcel 1, that has a bearing and
distance of North 19 degrees 02" 43' East, 484.66 feet; thence Southwesterly
along said Westerly line South 19 degrees 02" 43' West 484.66 feet to the True
Point of Beginning.

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Property Name:
  STEARNS MINERAL FEE
Nuevo Property #:
  CA12593

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California by:

1)   Deed dated 12/4/1896, from Stearns Ranches Company, as Grantor, to Union
Oil Company of California, as Grantee, recorded 1/13/1897 as Document No. 839 in
Book 30 at Page 11 of Deeds.   2)   Grant Deed dated 8/31/1899, between Stearns
Ranches Company, as Grantor, and Union Oil Company of California, as Grantee,
recorded 9/21/1899 in Book 44 at Page 250 of Deeds, more particularly described
as follows:

    Those portions of Sections 1 and 12, Township 3 South, Range 10 West and
Sections 5, 6, 7 and 8 Township 3 South, Range 9 West, in the Rancho San Juan
Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
      Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, North 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S.A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" × 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" × 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.       Excepting the Westerly 200 acres of the above described tract.
      Also excepting any portion of the above described property which lies
north of the agreed boundary line and bounded Westerly by line running North
28°30' East from the Western terminus of said line as established by agreement
between the Union Oil Company of

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    California and the Graham-Loftus Oil Company, recorded June 10, 1905 in Book
120, Page 223 of Deeds, records of said Orange County.       Also excepting
therefrom that portion included within Parcel 1 of a County of Orange Lot Line
Adjustment No. LL 2000-054, recorded August 13, 2001 as Instrument
No. 20010557229 of the Official Records, in the office of said Count Recorder.  
    Also excepting therefrom the land conveyed to Brea Chemicals, Inc., by Deed
recorded June 10,1957 in Book 3936, page 314 of said Official Records, described
as follows:       Beginning at a point in the Southerly line of the land
described in Deed from the Steams Ranchos Company, a Corporation, to Union Oil
Company of California, a Corporation, dated August 31, 1899, recorded
September 2,1899 in Book 44, Page 250 of said Deeds, distant South 89°10'50"
West along said line 3131.98 feet from the Southeast corner of said land, said
point of beginning being monumented by Union Oil Company Monument 11B; thence
North 9°48'11" West 529.60 feet to a 2" × 2" stake and the true point of
beginning for this description; thence North 85°48'16" West, 380.00 feet to a 2"
× 2" stake; thence North 4°11'44" East 1750.00 feet to a 2" × 2" stake thence
South 85°48'16" East 380.00 feet to a 2" × 2" stake; thence South 4°11'44" West
1750.00 feet to a 2" × 2" stake and the true point of beginning.       Also
excepting therefrom those portions of Sections 1 and 12, Township 3 South, Range
10 West and Sections 5, 6, 7 and 8 Township 3 South, Range 9 West, in the Rancho
San Juan Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
      Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, North 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S.A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" × 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" × 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.

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    Excepting the Westerly 200 acres of the above described tract.       Also
excepting any portion of the above described property which lies north of the
agreed boundary line and bounded Westerly by line running North 28°30' East from
the Western terminus of said line as established by agreement between the Union
Oil Company of California and the Graham-Loftus Oil Company, recorded June 10,
1905 in Book 120, Page 223 of Deeds, records of said Orange County.       Also
excepting from said tract of land the land conveyed to the Metropolitan Water
District of Southern California by Deed Recorded June 28, 1940 in Book 1051,
Page 301 of Official Records of said Orange County, described as follows:      
Beginning at a point on the Westerly boundary of said lands owned by Union Oil
Company of California, which Westerly boundary is also the Easterly boundary of
that certain 200-acre tract conveyed by said Union Oil Company of California to
George Chaffey by Deed dated April 25, 1899, recorded June 20, 1899 in Book 44,
Page 79 of said deeds, which point of beginning is the point of intersection of
the aforesaid Westerly boundary with the Easterly Prolongation of the center
line of Central Avenue as the same existed on May 23, 1940 between Berry Street
and Brea Canyon Road; thence Northeasterly along a line forming an angle of
73°32'24" with the Easterly prolongation of the center line of said Central
Avenue at said point of intersection (assumed and taken to bear North 15011'16"
East), a distance of 839.60 feet to the true point of beginning; thence North
0°10'11" East a distance of 1250 feet; thence South 89°49'49" East a distance of
500 feet; thence South 65°23'11" East a distance of 604.15 feet; thence South
0°10'11" West a distance of 1000 feet; thence North 89°49'49" West a distance of
1050 feet to the true point of beginning.       Also excepting therefrom that
portion described in deed to the Metropolitan Water District of Southern
California recorded February 10, 1967 in Book 8173, Page 641 of said Official
Records.       Also excepting therefrom that portion described in deed to the
Metropolitan Water District of Southern California recorded February 10, 1967 in
Book 8173, Page 647 of said Official Records.       Also excepting therefrom the
land described in deed to the Brea-Olinda Unified School District of Orange
County, California, recorded September 11, 1968, page 437 of said Official
Records.       Also excepting therefrom that portion described in Parcel 1 of
deed to the City of Brea recorded January 16, 1969 in Book 8846, Page 971 of
said Official Records.       Also excepting therefrom that portion described in
Parcels A6471-4, A6471-5, A6471-6 and A6471-7 of that certain final order of
condemnation, Superior Court Case No. 156220, a certified copy of which was
recorded September 29, 1970 in Book 9417, Page 364 of said Official Records.

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86-243,  as shown on a map filed in Book 214, Pages 28 to 31 inclusive, of
Parcel Maps, in the Office of the County Recorder of Orange County, California,
together with the West Half of associated road, 80.00 feet wide, as shown on
said Parcel Map, adjoining said Parcels 1 and 2 on the East, and being bounded
Northeasterly by the Northeasterly line of said Parcel Map and being bounded
Southerly by the centerline of Lambert Road, as shown on said Parcel Map.      
Also excepting therefrom that portion, if any, included within Parcel 1 of
Parcel Map No. 83-1179, as shown on a map filed in Book 218, Page 1 to 4
inclusive, of Parcel Maps, in the Office of the County Recorder of Orange
County, California.       Also excepting therefrom that portion included within
Tract No. 12562, as shown on a map recorded in Book 579, Pages 4 to 9 inclusive,
of said Miscellaneous Maps.       Also excepting therefrom that portion included
with Tract No. 12563, as shown on a map recorded in Book 579, Pages 10 to 15
inclusive, of said Miscellaneous Maps.       Also excepting therefrom the land
described in the Deed to the City of Brea recorded Marcj 29, 1996 as Instrument
No. 19960153320 of the Official Records in the Office of said County Recorder.

            Also excepting therefrom that portion included within Parcel 1 of a
County of Orange Lot Line Adjustment No. LL 2000-054, recorded August 13, 2001
as Instrument No. 20010557229 of the Official Records, in the office of said
County Recorder.

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EXHIBIT A5

(Depiction of the Land)

Exhibit A5

 

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(MAP) [h12901h1290165.gif]

 

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(MAP) [h12901h1290166.gif]

 

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(MAP) [h12901h1290167.gif]

 

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(MAP) [h12901h1290168.gif]

 

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MINERAL AGREEMENT

EXHIBIT “B”

REPOSITORY INSTRUCTIONS TO BUYER’S GENERAL PARTNER’S COUNSEL

(WITHOUT ATTACHMENTS)

Exhibit “B”
Repository Instructions

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REPOSITORY INSTRUCTIONS (“Instructions”)

          TO:   Kent G. Snyder, Esq.     2212 Dupont Drive, Suite B     Irvine,
California 92612

  Fax:
Phone:   (949)833-8209
(949)833-9078     ksnyder@winstarmail.com     Buyer’s General Partner’s counsel
as Repository Agent (“Agent”)
 
        Seller:   Nuevo Energy Company
 
        Seller’s Address:   1021 Main Street     Suite 2100     Houston, Texas
77002

  Attn:
Fax:
Phone:
Email:
Email:   David A. Leach and George B. Nilsen
(713)374-4899
(713)374-4802
Leachd@nuevoenergy.com
Nilseng@nuevoenergy.com
 
        Buyer:   BlackSand Partners, L.P.
 
        Buyer’s Address:   320 Leyden Street     Denver, Colorado 80220

  Attn:
Fax:
Phone:
Email:   Tim Collins
(303) 388-5117
(303) 296-9830
timdenver@aol.com
 
       
Subject Property or Land:
In the County of Orange,

    State of California, described as:

    (See legal description in

    the Agreement, at Attachment “8”)
 
      Date:   February 28, 2003

1

Exhibit “B”
Repository Instructions

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     1. Purchase Price. Agent shall hold, record and disburse all documents and
disburse all those certain funds to be held by Agent (which do not include the
Purchase Price), as described herein. The Purchase Price for the Subject
Property is as stated in the Purchase and Sale agreement (“Agreement”) between
Seller and Buyer of even date herewith and shall consist of the following:

(a)   Fifty-Nine Million Dollars ($59,000,000) in cash to be paid by Buyer
directly to Nuevo by wire transfer by Buyer directly to Nuevo’s account
referenced in Section 5.2 of the Agreement (“Account”).   (b)   A negative
Adjustment Amount of Nine Hundred Sixty-Four Thousand Eight Hundred Twenty-Five
Dollars ($964,825), on account of the matters described in Section 2.2.2 of the
Agreement, which shall be deducted from the cash amount required in (a), above,
so that the amount in cash to be paid by Buyer is $58,035,175.

The Purchase Price shall be paid as described above and receipt of such Purchase
Price into the Account shall be confirmed by Agent with Seller prior to any
recordation of documents described below.

Buyer shall deposit with Agent all documents and those other funds required by
the Agent, at least one (1) day before the date set for the Close. If necessary,
Buyer and Seller will execute supplemental instructions to Agent specifying the
final amounts to be deposited by Buyer pursuant to l(a) and (b) above.

     2. Close of Transaction: The Transaction shall Close not later than
February 28, 2003.

     3. Other Conditions to Close: The conditions of the Section of the
Agreement entitled “Conditions to Close” may be satisfied in any one or a
combination of the following methods:

(a)   Agent is entitled to rely on Seller’s statement that any such conditions
relating to Buyer have been satisfied and Buyer’s statement that any such
conditions relating to Seller have been satisfied.   (b)   Agent is entitled to
rely on Seller’s and/or Buyer’s statement that any of such conditions have been
waived on its part, and the other party’s consent to such waiver is not
required.

The statements in (a) and (b) may be given verbally.

     4. Prorations. Buyer and Seller are to make the following prorations in
writing as of January 1, 2003, the date specified in the Agreement, not the date
on which the Grant Deed to Buyer is recorded; and deliver such writing to Agent
prior to the Close. Prorations are to be made on the basis of a thirty-day
month.

2

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    Taxes. All current general and special taxes and assessments on the Subject
Property and other taxes, assessments, levies and the like, including without
limitation, Transaction taxes, if any, are to be paid/discharged as described in
Section 2.2.2 of the Agreement based upon the latest available tax information.
Any discrepancy in the allocations required hereunder discovered after the Close
shall be adjusted fairly by Buyer and Seller.

     5. Documents to be Delivered or Recorded. Buyer and Seller will deposit
with Agent the following executed documents which are to be recorded and/or
delivered at the Close immediately after receipt of the Purchase Price into the
Account, as confirmed by Agent. Any such documents which are executed by Seller
and Buyer or are an attachment to these Instructions, shall be deemed approved
by Buyer and Seller and no further approval will be required.

(a)   PAPA. Buyer and Seller shall deposit with Agent three (3) fully executed
originals of the PAPA in the form of Attachment “9.” At the Close, two
(2) copies of the PAPA shall be delivered to Seller and one (1) copy to Buyer.  
(b)   Development Declaration. A condition to the Close in the Agreement is that
Buyer shall take title subject to the Development Declaration which is to be the
first document recorded upon the Close (prior to the Grant Deed). Seller shall
deposit with Agent an executed and acknowledged, original Development
Declaration, in the form of Attachment “1” and two (2) copies thereof. The
original shall be recorded prior to the recording of any other documents and
thereafter forwarded to Seller. Conformed copies shall be sent to Buyer and
Seller at the Close.   (c)   Easement Agreement. Buyer and Seller shall deposit
with Agent three (3) fully executed and acknowledged originals of the Easement
Agreement in the form of Attachment “5.” Upon the Close, one copy shall be
recorded immediately after the Grant Deed and forwarded to Seller, and two (2)
copies conformed and forwarded, one each to Buyer and Seller.   (d)   Grant
Deed. Seller shall deposit with Agent one (1) fully executed and acknowledged
Grant Deed in the form of Attachment “4,” to be recorded at the Close
immediately after the Reconveyance and forwarded to Buyer, and two (2) copies to
be conformed and forwarded, one each to Buyer and Seller.   (e)   Non-Exclusive
Assignment of Contract Rights. Seller and Buyer shall deposit with Agent three
(3) fully executed copies of the Non-Exclusive Assignment of Contract Rights in
the form of Attachment “6.” One executed copy shall be delivered to Buyer and
the remaining copies delivered to Seller at the Close.

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(f)   Withholding Exemption Certificate. Seller shall deliver to Agent written
certificates evidencing that no withholding is required pursuant to § 1445 of
the Internal Revenue Code and §§ 18662 and 18668 of California Revenue and
Taxation Code in the form appended hereto as Attachment “7.”   (g)   Agreement.
Seller and Buyer shall deliver to Agent one (1) fully executed copy of the
Agreement appended hereto in the form of Attachment “8.”   (h)   Reconveyance.
Seller shall deliver to Agent one (1), fully executed and acknowledged original
Reconveyance of Mortgage (“Reconveyance”) in the form of Attachment “3” to be
recorded at the Close immediately after the Substitution of Trustee and
forwarded to Buyer, and two (2) copies to be conformed and forwarded, one
(I) each to Seller and Buyer.   (i)   Substitution of Trustee. Seller shall
deliver to Agent one (1) fully executed and acknowledged original Substitution
of Trustee in the form of Attachment “2” to be recorded at the Close immediately
after the Development Declaration and forwarded to Buyer, and two (2) copies to
be conformed and forwarded, one (1) each to Seller and Buyer.

The documents to be recorded shall be recorded in the following order of
priority: Development Declaration, first, then Substitution of Trustee, then
Reconveyance, Grant Deed and Easement Agreement.

     6. Buyer’s Costs. Buyer shall deposit with Agent, in addition to the
Purchase Price specified in 1 (a) through (c) above, any other sum required
hereunder and any additional sum required to pay the following:

(a)   The cost of recording the Grant Deed and the Easement Agreement, and
one-half (1/2) the documentary transfer tax;   (b)   General, special and other
taxes, assessments levies and the like covering the Subject Property that are
due and owing from Buyer as set forth in Paragraph 4 above;   (c)   Any other
cost not specified herein that may be authorized by Buyer in a separate writing.

     7. Seller’s Costs: From Seller’s proceeds, Agent is authorized and
instructed to pay/withhold the following:

(a)   The cost of recording the Development Declaration, Substitution of Trustee
and Reconveyance;   (b)   One-half (1 /2) the documentary transfer tax;

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(c)   The cost or charge of any other item not specified herein that may be
authorized by Seller in a separate writing.

     8. Time of the Essence.

(a)   Time is of the essence hereof.   (b)   If the Close does not occur as
scheduled, all documents deposited with Agent which have been executed by Seller
shall be returned to Seller whether or not such papers have been executed by
Buyer as well, and all documents executed by Buyer alone shall be returned to
Buyer.

     9. Closing Statement. Prior to the Close, Agent shall provide Buyer and
Seller with a notice in writing (“Agent’s Notice”) to deposit with Agent the
cash amounts called for in Sections 6(a) and (c) and 7(a), (b) and (c),
respectively. At the Close, Seller and Buyer shall provide Agent with a Closing
Statement and cash necessary to comply with Agent’s Notice and Buyer shall also
deposit the amounts in the Closing Statement on account of the items referenced
in Section 6(b), which Agent shall promptly remit to the appropriate taxing
authority.

     10. Notices. See Section 5.1 of the Agreement.

     11. Agreement. These Instructions are entered into pursuant to the
Agreement and shall not supersede, replace or modify the provisions of the
Agreement. A default by either party under these Instructions shall be a default
under the Agreement and a default under the Agreement shall be a default
hereunder. Defined terms in the Agreement shall have the same meaning if used in
these Instructions unless specifically indicated to the contrary herein.

5

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     IN WITNESS WHEREOF, the parties have executed these Instructions upon the
day and year first above written.

                  NUEVO ENERGY COMPANY, a
Delaware corporation   BLACKSAND PARTNERS, L.P., a Texas
limited partnership
 
                By:       By:   BLACKSAND ENERGY, INC., a    

--------------------------------------------------------------------------------

 George B. Nilsen       Delaware corporation Title: Senior Vice President      
              Title: General Partner
 
               

          By:    

             

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              Timothy Collins             Title: President
 
                “Seller”   “Buyer”

6

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ATTACHMENTS

    “1”     Development Declaration       “2”     Substitution of Trustee      
“3”     Reconveyance       “4”     Grant Deed       “5”     Easement Agreement  
    “6”     Non-Exclusive Assignment of Contract Rights       “7”     Seller
Certificate of Non-Foreign Status       “8”     Agreement       “9”     PAPA

    By agreement of Seller and Buyer, the Attachments 1 through 9, above, are
incorporated into these Repository Instructions by this reference, and will not
be individually attached.

7

Exhibit “B”
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ATTACHMENT “1”

Development Declaration

Exhibit “B”
Repository Instructions

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ATTACHMENT “2”

Substitution of Trustee

Exhibit “B”
Repository Instructions

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SUBSTITUTION OF TRUSTEE

The undersigned BANK OF AMERICA, N.A., Agent as the owner and holder of the Note
secured by Deed of Trust, dated June 30, 1999, made by NUEVO ENERGY COMPANY, a
Delaware corporation, as Trustor, to MARCIA BATEMAN as Trustee, for the benefit
of BANK OF AMERICA, N.A., Agent, as Beneficiary(s), which Deed of Trust was
recorded on September 17, 1999, as Instrument No. 19990670880, Official Records
of the County of ORANGE, State of California, hereby substitutes RONALD E.
MCKAIG as Trustee in lieu of the Trustee therein.

RONALD E. McKAIG hereby accepts said appointment as Trustee under said Deed of
Trust.

IN WITNESS WHEREOF, the owner and holder above named BANK OF AMERICA, N.A.,
AGENT, has caused this instrument to be executed, each in its respective
interest.

     
Document Dated: February 10, 2003
  Dated: February 10, 2003
 
   
STATE OF Texas )
  OWNER
                               )s.s
   
COUNTY OF Harris )
  BANK OF AMERICA, N.A.
AGENT
 
   
On Feb 10, 2003 before me,
  /s/ Michael J. Dillon

 

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Caria D. Murray
  By: Michael J. Dillon

  Its: Managing Director
 
   
a Notary Public in and for said County and State, personally appeared Michael J.
Dillon Ronald E. McKaig, and Janet F. Clark personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacity(ies) and that by their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
  SUCCESSOR TRUSTEE:

/s/ Ronald E. McKaig

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Ronald E. McKaig

NUEVO ENERGY COMPANY, a
Delaware Corporation

/s/ Janet F. Clark

--------------------------------------------------------------------------------

By: Janet F. Clark

  Its: Chief Financial Officer

WITNESS my hand and official seal.

Signature /s/ Carla D. Murray

 

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My Commission Expires: 2-22-04

 

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ATTACHMENT “3”

Reconveyance

Exhibit “B”
Repository Instructions

 

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PARTIAL RECONVEYANCE

Bank of America, N.A., Agent, Trustee, or Substituted Trustee, under Deed of
Trust, Assignment, Security Agreement, Fixture Filing and Financing Statement
dated June 30, 1999,

EXECUTED BY Nuevo Energy Company, a Delaware corporation, Trustor, and recorded
as Instrument No. 19990670880.

On September 17, 1999, of Official Records in the Office of the Recorder of
Orange County, California, having been requested in writing by the holder of the
obligation secured by said Deed of Trust, to reconvey a portion of the estate
granted to Trustee under said Deed of Trust, DOES HEREBY RECONVEY TO THE PERSON
OR PERSONS LEGALLY ENTITLED THERETO, WITHOUT WARRANTY, ALL THE ESTATE, TITLE AND
INTEREST acquired by Trustee under said Deed of Trust, in and to the that
portion of the property described as follows:

See Exhibit A attached hereto and made a part hereof.

The remaining property described in the Deed of Trust shall continue to be held
by said Trustee under the terms thereof. As provided in said Deed of Trust this
Partial Reconveyance is made without affecting the personal liability of any
person or the corporate liability of any corporation for the payment of the
Indebtedness mentioned as secured thereby or the unpaid portion thereof, nor
shall it affect any rights or obligations of any of the parties to said Deed of
Trust.

Dated: February 10, 2003

     
STATE OF Texas          )s.s
  BANK OF AMERICA N.A., AGENT
 
   
COUNTY OF Harris}
  /s/ Michael J. Dillon

 

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On Feb 10, 2003 before me,
  By: Michael J. Dillon
Carla D. Murray
  Its: Managing Director
 
   
a Notary Public in and for said County and State, personally appeared Michel J.
Dillon Ronald E. Mckaig and Jinet F. Clark personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged me that they
executed the same in their authorized capacity (ies) and that by their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
  SUBSTITUTE TRUSTEE
/s/ Ronald E. Mckaig

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Ronald E. Mckaig

NUEVO ENERGY COMPANY, a Delaware
Corporation

/s/ Janet F. Clark

 

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  By: Janet F. Clark
WITNESS my hand and official seal.
  Its: CFO + SVP
 
   
Signature /s/ Carla D. Murray
  (This area for official notorial seal)

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ATTACHMENT “4”

Grant Deed

Exhibit “B”
Repository Instructions

 

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ATTACHMENT “5”

Easement Agreement

Exhibit “B”
Repository Instructions

 

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ATTACHMENT “6”

Non-Exclusive Assignment of Contract Rights

Exhibit “B”
Repository Instructions

 

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ATTACHMENT “7”

Seller Certificate of Non-Foreign Status

Exhibit “B”
Repository Instructions

 

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ATTACHMENT “8”

Agreement

Exhibit “B”
Repository Instructions

 

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ATTACHMENT “9”

PAPA

Exhibit “B”
Repository Instructions

 

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EXHIBIT C

NON-EXCLUSIVE ASSIGNMENT OF CONTRACTS AND BILL OF SALE

          For valuable consideration, the receipt and adequacy of which are
hereby acknowledged, NUEVO ENERGY COMPANY, A DELAWARE CORPORATION (“Assignor”),
to the fullest extent legally permissible (and only to the extent legally
permissible), hereby sells, assigns, transfers, grants, sets over and delivers
unto BLACKSAND PARTNERS, L.P., a Texas limited partnership (“Assignee”), all of
Assignor’s right, title, interest, estate, power and privilege in and to the
title, interest, estate, power and privilege in and to (i) all of Assignor’s
fixtures, equipment (including but not limited to gas turbines, gas processing
equipment and oil blending equipment) and personal property associated with the
Minerals and Oil Operations, expressly exclusive, however, of any and all
equipment associated with Assignor’s offshore oil operations; (ii) all those
certain vehicles listed in Attachment 2; and (iii) all those certain major
components of the equipment described on Attachment 3 (collectively the
“Personalty”). Vehicle Nos. 5610-L and 5492-L are leased vehicles and are
subject to a “lessor consent to assign” clause for such leases(s) and Assignor
shall cooperate, at no cost to Assignor, with Assignee in Assignee’s efforts to
obtain such consents. THE PERSONALTY IS CONVEYED IN “AS IS,” “WHERE IS”
CONDITION, WITH ALL FAULTS AND DEFECTS, WITHOUT WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, OF ANY KIND, INCLUDING WITHOUT LIMITATION, WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY, MERCHANTABILITY, SUITABILITY OR
QUALITY, EXCEPT THOSE EXPRESSLY SET FORTH IN THE CERTAIN PURCHASE AND SALE
AGREEMENT BETWEEN ASSIGNOR AND ASSIGNEE DATED              , 2003 (the
“Agreement”) FOR CERTAIN PROPERTY INTERESTS, AND SUBJECT TO THE PERMITTED
EXCEPTIONS DESCRIBED IN THE AGREEMENT.

Capitalized terms used herein shall have the meaning given in the Agreement,
unless otherwise defined herein. Assignee warrants, represents and acknowledges
it is hereby acquiring the Personalty and Contracts based solely upon Assignee’s
own independent investigations and inspections of the Personalty and not in
reliance on any information provided by Assignor or Assignor’s agents or
contractors. Assignee further expressly acknowledges (1) that the Agreement
specifically reserves to Assignor and excludes from the definition of Land and
Property all surface rights; and (2) that the term “Property Interests,” as used
herein and in the Agreement, is limited to oil, gas and other minerals from the
real property, as more particularly set forth in the Agreement.

          2. Assignor hereby assigns non-exclusively to Assignee all of
Assignor’s rights, title and interest to those contracts and agreements listed
in Attachment 1 insofar and only insofar as they relate to the Property
Interests and Oil Operations, (collectively “Contracts” or “Contract Rights”);
which to the best of Assignor’s knowledge include all of the remaining Contract
Rights pertaining to the Property Interests and Oil Operations, which were not
otherwise exclusively assigned in the Grant Deed. Assignee expressly
acknowledges that this section shall not assign any Contract Rights which
pertain to surface interests in the Land. The non-exclusive Contract Rights
assigned by this section and this Assignment specifically pertain

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to only non-surface (mineral) rights of the Land, as more particularly set forth
in the Agreement, and are expressly assigned on a non-exclusive basis to
Assignee.

          3. Assignee hereby expressly assumes and agrees to perform all of”
Assignor’s obligations under the Contracts arising from and after the date
hereof, and shall defend, indemnify and hold harmless Assignor from any claim,
cause of action, liability, demand, expense or cost (including reasonable
attorneys’ fees) relating to the Contracts arising from and after the date
hereof. Assignor shall defend, indemnify and hold harmless Assignee from any
claim, cause of action, liability, demand, expense or cost (including reasonable
attorneys’ fees) relating to the Contracts arising prior to the date hereof.

          4. This Non-Exclusive Assignment of Contracts and Bill of Sale shall
bind and inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns.

          5. This Non-Exclusive Assignment of Contracts and Bill of Sale may be
executed in counterparts with the same force and effect as if the parties hereto
had executed one instrument and each such counterpart shall constitute an
original hereof.

Executed this                      day of            , 2003.

              “ASSIGNOR”   NUEVO ENERGY COMPANY, a Delaware
corporation
 
           

  By:                

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    Name:   George B. Nilsen     Title:   Senior Vice President
 
            “ASSIGNEE”   BLACKSAND PARTNERS, L.P., a Texas limited partnership
 
                By:   BLACKSAND ENERGY, INC., a Delaware corporation     Title:
  General Partner
 
           

      By:    

         

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          Timothy Collins

      Title:   President

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ATTACHMENT 1

Non-Exclusive Rights-of-Way, Contracts and License Agreements

                                              Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

  Document Type

--------------------------------------------------------------------------------

  Dated

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Order #

--------------------------------------------------------------------------------

  #’s

--------------------------------------------------------------------------------

57534
  ASSIGN BILL   5/12/71   5/13/75   Waste Water     119       504  

  OF SALE       11410/1929 OR   Disposal Company                
 
                               
57862.2
  Easement Agree.       8/7/89   Kraemer Imperial     130       507  

          60/368 OR   Associates to                

              UNOCAL                
 
                               
65186
  ROW   10/14/92   12/18/1996 Doc.   UNOCAL to     A       506  

          No. 19960637286   NUEVO                

          (1) Agreement between adjacent Landowners dated effective as of
October 9, 2001 by and between Nuevo and Brea Walden, LLC.

          (2) “Asset Purchase Agreement” dated February 16, 1996 by and among
Union Oil Company of California, Union California Pipeline Company and Nuevo
Energy Company, to the extent previously described in the Agreement at
Section 5.32.

          (3) “Acquisition and Settlement Agreement” entered into as of July 23,
2002, by and between Union Oil Company of California and Nuevo, together with
all subsequent agreements required thereunder, insofar as such Acquisition and
Settlement Agreement pertains to the Property Interests.

          (4) “Acquisition Agreement” entered into July 29, 2002, by and between
Union Oil Company of California and Nuevo, together with all subsequent
agreements required thereunder, insofar as such Acquisition Agreement pertains
to the Property Interests.

          (5) That certain “Corridor Easement” described in Item C and that
certain “Street Easement” described in Item D in that certain Grant Deed dated
October 3, 2001 by and between Nuevo and Brea Walden, LLC, recorded October 9,
2001 as Instrument No. 20010710856 in the Official Records of Orange County,
California.

Attachment 1 to Exhibit “C”

 

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     (6) Waste Water Line Agreements:

                                      Waste                         Water      
                  Co.                         File       Document         Dated

--------------------------------------------------------------------------------

  Recorded

--------------------------------------------------------------------------------

  No.

--------------------------------------------------------------------------------

  Book/Page

--------------------------------------------------------------------------------

  Number

--------------------------------------------------------------------------------

  Doc. Type

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

5/1/1974
  11/5/1974       11280/1845     3078     Assign &   Waste

                      Bill of Sale   Water

                          Disposal

                          Company
 
                           
10/1/1995
  4/10/1996           Recorder No.   Deed & Bill   Unocal

                19960175928     of Sale and    

                      Assign.    
 
                           
11/2/1955
  3/8/1956   U-11   3430/504   Unocal File No.   ROW   Unocal

                61987.3-          

              Recorder No.        

                35165          
 
                           
4/25/1956
  5/1/1956       3493/528   Unocal File No.   Q.C. Deed   Waste

                61987.47         Water

                          Disposal

                          Company
 
                           
10/15/1996
              Unocal File No.   ROW   Unocal

                65186          
 
                           
8/7/1989
  8/17/1989           Recorder No.   Easement   Kraemer

                89-437991-     Agreement   Imperial

              Unocal File No.       Associates

                56862.2          
 
                           
4/2/1971
       No   U-13       Unocal File No.   ROW   Unocal

                68869.3          
 
                           
5/10/1928
       No   U-14               ROW   West Coast Oil Co.
 
                           
8/1/1978
              Unocal File No.   ROW   E.H.

              57635 -ROW       Associates

              Green Map No.        

                633          

Attachment 1 to Exhibit “C”

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ATTACHMENT 2

List Of Vehicles

Brea Olinda Vehicle List

              Vehicle   Type   Description   Location
#
           
9752
  VEHICLE, TRUCK   5S60159 1998 FORD F-250 - VIN# 3FTHF25H7VMA46893   BREA
 
           
9742
  VEHICLE, TRUCK   5R29453 1997 FORD F-250 VIN. #3FTHF25H6VMA57948   BREA
9886
  VEHICLE, TRUCK   5U24281 1998 FORD F-250   BREA

      VIN. #1 FTNF20LOXEA77605    
9883
  VEHICLE, TRUCK   5U24284 1998 FORD F-250 VIN. #1FTNF20L1XEA51076   BREA
9887
  VEHICLE, TRUCK   5U24285 1998 FORD F-250   BREA

      VIN. #1 FTNF20L2XEA77606    
9706
  VEHICLE, TRUCK   5N21488 1997 FORD F-250 VIN# 1FTHF25H7VEB69339   BREA
 
           
9881
  VEHICLE, TRUCK   5U24283 1998 FORD F-250 VIN# 1FTNF20L8XEA51074   BREA
 
           
9882
  VEHICLE, TRUCK   5U24288 1998 FORD F-250 - VIN# 1FTNF20LXXEA51075   BREA
 
           
9884
  VEHICLE, TRUCK   5V08517 1998 FORD F-250 VIN# 1FTNF20L3XEA51077   BREA
 
           
2511
  VEHICLE, STINGER CRN   4K89100 1992 FORD F-700G - VIN# 1FDNF70JONVA10264  
BREA
 
           
0287
  VEHICLE, AUTO   5A11881 1994 CHEVY 1500 VIN lGCEC19HXRE313794   BREA SPARE
 
           
1667
  VEHICLE, TRUCK   3V56249 1989 CHEV C-30 - VIN# 1GBHR34K3KF300237   BREA,
GREASE
TRUCK
 
           
6095
  VEHICLE, TRUCK   2D45638 1983 CHEVY C-30 - VIN# lGBGC34M7DJ155878   BREA,
SPARE
9746
  VEHICLE, TRUCK   5P79474 1998 FORD F-I50 - VIN# lFTZX1767WNA14640   BREA,
SPARE
5610-L
  VEHICLE, MECH 1 TON   2002 SILVERADO 3500 2WD, MONTHLY PAYMENT $770.23,   BREA

      DURAMAX DIESEL 6600 V8 ENGINE, SUMMIT WHITE,    

      GRAPHITE CLOTH, ALLISON 5 SPD AUTOMATIC TRANS,    

Attachment 2 to Exhibit “C”

 

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      UNLADEN WEIGHT 08360, VEH TYPE Y31, BODY TYPE UT, FEE    

      $587- LIC# 6W00293 - VIN# 1 GBJC34122F115610    
5492-L
  VEHICLE, MECH 1 TON   2002 SILVERADO 3500 2WD, MONTHLY PAYMENT $844.83,   BREA

      DURAMAX DIESEL 6600 V8 ENGINE, SUMMIT WHITE,    

      GRAPHITE CLOTH, ALLISON 5 SPD AUTOMATIC TRANS,    

      UNLADEN/G/GW 15000, FEE $611, BODY TYPE UT, VEH CLASS    

      LH - LIC.# 6U70209 - VIN# 1 GBJC34102F115492    

Attachment 2 to Exhibit “C”

 

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ATTACHMENT 3

List of Major Components

BREA - Major
Components

              Tonner Tank Farm

    1     3000 bbl tank

    3     2000 bbl tanks

    1     100 bbl tank

    1     Lact

    1     VRU

          Various test vessels, pumps and headers East Naranjal Tank Farm

    1     5000 bbl tank

    2     2000 bbl tanks

    5     1000 bbl tanks

    1     Lact

    1     VRU

          Various test vessels, pumps and headers West Naranjal Tank Farm

    1     3000 bbl tank

    3     1000 bbl tank

    1     Lact

    1     VRU

          Various test vessels, pumps and headers Stearns Gas Plant

    1     Gas Dehydration equipment

          1 high-pressure vessel and related pumps

    1     De-propanizer plant

          3 high-pressure vessels and related pumps

    1     1500 bbl propane storage tank and loading rack Stearns Plant
Compressor

    1     1000 hp compressor C-300 Compressor Station C-150 Compressor Station
Field Vacuum Compressor West Naranjal Compressor Turbines
      2 Solar Turbines

    1     Aqueous Ammonia Plant Water Injection System

Attachment 3 to Exhibit “C”

 

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    4     High-pressure injection pump skids Various filters and meters

                         
Pipelines
                       
Brea Olinda to
  East Coyote Gas   4"   Gas     4.0     In service.
Brea Olinda to
  Richfield Gas   4"   Gas     3.8     In service.
Brea Olinda to
  Sansinena Gas   1"   Gas     1.1     In service.

Attachment 3 to Exhibit “C”

 

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MINERAL GRANT DEED

  I.   FOR VALUABLE CONSIDERATION, receipt of which this hereby acknowledged,
NUEVO ENERGY COMPANY, a Delaware corporation “Nuevo” or “Grantor”), hereby
grants to BLACKSAND PARTNERS, L.P, a Texas limited partnership (“BlackSand” or
“Grantee”), subject to the conditions (ILLEGIBLE) contained, the following
described real property situated in the County of Orange, State of California
(“Property”):

  A.   ATTACHMENT 1 (Property Minerals):         Any and all oil, oil rights,
minerals, mineral rights, natural gas rights and other hydrocarbons by
whatsoever name known, geothermal steam and all products derived from any of the
foregoing (here in after collectively referred to as, the “Minerals”) described
in Attachment Nos 1 (“Property Minerals”), attached hereto and incorporated
herein by this reference; together with the perpetual right, as limited herein,
of drilling, exploring: and operating thereof and storing in and removing the
same;

      EXCEPTING AND RESERVING UNTO (ILLEGIBLE) its successors and assigns, the
Minerals lying from the surface to five hundred feet (500') below the surface of
the Property Minerals and Grantee shall have no rights to drill for, explore,
operate, store or remove the Minerals from said reserved interval. Provided,
however, Grantee shall have the right of subsurface entry through said interval
to explore, operate, store or remove the Minerals lying below five hundred feet
(500') from the surface of the Property Minerals;

 

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EXHIBIT D

MINERAL GRANT DEED

       Documentary Transfer Tax is set forth in a separate statement that is not
part of the public record.

  I.   FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
NUEVO ENERGY COMPANY, a Delaware corporation (“Nuevo” or “Grantor”), hereby
grants to BLACKSAND PARTNERS, L.P, a Texas limited partnership (“BlackSand” or
“Grantee”), subject to the conditions herein contained, the following described
real property situated in the County of Orange, State of California
(“Property”):

  A.   ATTACHMENT 1 (Property Minerals):         Any and all oil, oil rights,
minerals, mineral rights, natural gas rights and other hydrocarbons by
whatsoever name known, geothermal steam and all products derived from any of the
foregoing (hereinafter collectively referred to as, the “Minerals”) described in
Attachment No. 1 (“Property Minerals”), attached hereto and incorporated herein
by this reference; together with the perpetual right, as limited herein, of
drilling, exploring and operating thereof and storing in and removing the same;

      EXCEPTING AND RESERVING UNTO GRANTOR, its successors and assigns, the
Minerals lying from the surface to five hundred feet (500') below the surface of
the Property Minerals and Grantee shall have no rights to drill for, explore,
operate, store or remove the Minerals from said reserved interval. Provided,
however, Grantee shall have the right of subsurface entry

 

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      through said interval to explore, operate, store or remove the Minerals
lying below five hundred feet (500') from the surface of the Property Minerals;

      SUBJECT TO those certain conditions and restrictions for surface use set
forth in the Environmental Impact Report No. 518, SCH No. 2001031137 for the
Tonner Hills Planned Community, dated April 2002, approved by the Board of
Supervisors for Orange County, California as the lead agency on November 19,
2002; Planned Community ZC-01; Development Agreement 2001-01; Tonner Hills Area
Plan; and that certain Biological Opinion dated December 30, 2002, as used by
the U.S. Army Corps of Engineers in its Section 404 Permit. The foregoing
documents, inclusive of any amendments thereto, are collectively referred to
herein as the “Project”; and subject to that certain oil and gas lease titled
“Indenture” dated February 26, 1901, as amended, by and between Union Oil
Company of California and Columbia Oil Producing Company;         IT IS FURTHER
PROVIDED, THAT Grantee shall limit its operations within Planning Areas Number 1
through 8 (as the same is defined and described in the Project) to be in
accordance with the Project and the provisions of that certain Payment and
Performance Agreement of even date herewith by and between Grantor and Grantee.
In said Payment and Performance Agreement, Grantee’s producing operations in the
aforedescribed Planning Areas shall be limited to the following existing wells,
to wit: East Naranjal Wells Numbered 26, 46, 79, 89, 90, 147, 148, 150, 151,
153, 221, 232, 285, 288, 292, 294, 217 RD2, 247, 87, 180, 211, 230, 259, 276,
281 and 293.     B.   ATTACHMENT 2 (Adjacent Minerals):         All Minerals
described in Attachment No. 2 (“Adjacent Minerals”), attached hereto and
incorporated herein by this reference;         EXCEPTING THEREFROM, the right to
drill, mine, store, explore or operate on the surface or through the upper five
hundred feet (500') of the subsurface of the property described on Attachment 2;
        SUBJECT TO, the provisions and conditions set forth on that certain
Grant Deed dated October 3, 2001 by and between Grantor and Brea Walden, LLC,
recorded on October 9, 2001 as Instrument No. 20010710856 in the Official
Records of Orange County, California.     C.   ATTACHMENT 3 (District Minerals):
        All Minerals described in Attachment No. 3 (“District Minerals”),
attached hereto and incorporated herein by this reference;

2.

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      EXCEPTING THEREFROM, the right to drill, mine, store, explore or operate
through the surface or the upper 500 feet of the subsurface of the property
described in Attachment 3;         SUBJECT TO, the provisions and conditions set
forth in that certain Gift Deed dated January 30, 2003, by and between Grantor
and Brea-Olinda Unified School District and recorded on February 25, 2003, as
Instrument No. 2003000207265 in the Official Records of Orange County,
California.     D.   ATTACHMENT 4 (Other Minerals):         All Minerals lying
below the surface of the real property described in Attachment No. 4 (“Other
Minerals”), attached hereto and incorporated herein by this reference.     E.  
ATTACHMENT 5 (Rights of Way):         All the rights, title and interest to
those certain contract and other rights described in Attachment 5
(“Rights-of-Way”) attached hereto and incorporated herein by this reference.

      For purposes of this Section I, the term “Minerals” shall include the
perpetual right of drilling, mining, exploring and operating therefor and
producing, storing in, injecting water, gases and/or other substances (for
secondary and/or tertiary recovery operations) into, or to use other techniques,
whether now known or unknown, and removing, taking, treating and selling the
same from said Property or any other land, and including the right to whipstock
or directionally drill and mine from lands other than the Property, oil or gas
wells, mines, tunnels and shafts into, through or across the subsurface of the
Property, and to bottom such whipstocked or directionally drilled wells, mines,
tunnels and shafts under and beneath or beyond the exterior limits thereof, and
to relocate, replace, redrill, retunnel, work, rework, complete, recomplete,
equip, maintain, repair, remove, change the size of, increase the number of,
deepen and operate any such wells or mines; and         Any and all water, water
rights or interests therein appurtenant or relating to the Property or owned or
used by Grantor in connection with or with respect to the Property (no matter
how acquired by Grantor), whether such water rights shall be riparian,
overlying, appropriative, littoral, percolating, prescriptive, adjudicated,
statutory, contractual or otherwise derived, together with the right and power
to explore, drill, redrill, remove and store the same from or in the Property or
to divert or otherwise utilize such water, rights or interests on any other
property owned or leased by Grantor.

3.

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  II.   Grantee’s Obligations: Grantee and its successors and assigns shall, as
of the Closing Date, assume and be responsible for and comply with, all the
duties and obligations, including without limitation, all those indemnities,
provided for and set forth in that certain Declaration of Development Covenants,
Conditions and Restrictions of even date herewith and recorded on such date
immediately prior to this Mineral Grant Deed. “Closing Date” shall mean that
date first set forth below next to Grantor’s signature.     III.   THIS
CONVEYANCE IS SUBJECT TO:

  A.   General and special real property taxes and assessments and supplemental
taxes and assessments, if any, which are not delinquent, including those
assessed as a result of this conveyance.     B.   That certain Declaration of
Development Covenants, Conditions and Restrictions of even date herewith and
recorded on such date immediately prior to this Mineral Grant Deed.     C.   AH
other covenants, conditions, restrictions, encumbrances, limitations (including
limitations on Grantee’s surface use above the Property), reservations, charges,
rights, rights-of-way, equitable servitudes, dedications, offers of dedication,
easements, obligations, requirements, leases and other matters of record or
apparent, including those contained in that certain Easement Agreement of even
date herewith between Grantor and Grantee containing all the rights granted and
limitations imposed, respectively, upon Grantee’s use of the surface of the land
above the Property for its operations.     D.   All easements, licenses, rights
and rights-of-way regarding the Property herein conveyed and all contracts and
other documents/materials relating thereto (“Third Party Easements, Contracts
and License Agreements”), described in Attachment No. 6. attached hereto and
incorporated herein by reference, whether or not any of such Third Party
Easements, Contracts and License Agreements are a matter of record.     E.   All
the terms, conditions and covenants provided herein shall run with the Property
and shall be forever binding upon Grantee’s successors and assigns hereto.

  IV.   THERE IS HEREBY EXCEPTED FROM THIS CONVEYANCE AND RESERVED UNTO GRANTOR
those certain rights, credits, benefits and assets (“Excluded Assets”) described
in Attachment No. 7, attached hereto and incorporated herein by reference.

4.

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     IN WITNESS WHEREOF, Grantor has executed this Mineral Grant Deed as of the
1st day of January, 2003 (the “Effective Date”).

              Dated: February 28, 2003   NUEVO ENERGY COMPANY, a Delaware    
corporation
 
                By:        

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          George B. Nilsen
 
                Title: Senior Vice President
 
           

          GRANTOR

ACCEPTANCE: Grantee hereby accepts this Mineral Grant Deed on, and agrees to,
the terms and conditions herein stated.

                  Dated: February      ,2003   BLACKSAND PARTNERS, L.P., a Texas
limited         partnership    
 
                    By:   BLACKSAND ENERGY, INC., a Delaware         corporation
 
                    Title:   General Partner
 
                        By:

         

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          Timothy Collins    
 
                        Title: President
 
               

          GRANTEE    

5.

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State of                    )

                                )

County of                )

     On                      before me,                       , personally
appeared                               , personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
     

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State of                      )

                                   )

County of                   )

     On                    before me,                     , personally
appeared                    , personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
     

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6.

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State of                       )

                                    )

County of                   )

     On                    before me,                    personally
appeared                              , personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
     

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State of                       )

                                    )

County of                   )

     On                    before me,                    , personally
appeared                                   , personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
     

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7.

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ATTACHMENT NO. 1
TO
MINERAL GRANT DEED

LEGAL DESCRIPTION OF PROPERTY MINERALS

Executable Grant Deed

 

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ATTACHMENT “1”

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2" X 4" POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A
4" X 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST 55.48 CHAINS
TO A 2" X 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30' EAST 20.00
CHAINS TO A 2" X 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45" EAST 134.63
CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30’ EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION
OIL COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY
OF THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA
TO GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK
44, PAGE 79 OP DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF
THE AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER
LINE OF CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET
AND BREA CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73°
32' 24" WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE
AT SAID POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16"
EAST), A DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0°
10' 11" EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE
OF 500 FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE
SOUTH 0° 10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A
DISTANCE OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING
BEING MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" X 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION. SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;    
    THENCE NORTH 10°42'00" EAST 141.00 FEET         THENCE NORTH 15°02'00" EAST
103.00 FEET         THENCE NORTH 26°29'00" EAST 105.00 FEET

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      THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL HAP NO. 86-243, SAID POINT ALSO BEING THE
NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “ N10°33'18"E 381.48" ”;        
THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48'” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243 SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;      
  THENCE NORTH 10°42'00" EAST 141.00 FEET         THENCE NORTH 15°02'00" EAST
103.00 FEET         THENCE NORTH 26°29'00" EAST 105.00 FEET         THENCE NORTH
46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY         BOUNDARY OF PARCEL
1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS OF SAID
COURSE SHOWN AS “ N10°33'18"E 381.48' ”       THENCE SOUTHERLY ALONG SAID COURSE
SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM

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    THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED
BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST 529.60 FEET TO A
2” X 2” STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE NORTH
85° 48’ 16” WEST, 380.00 FEET TO A 2” X 2” STAKE; THENCE NORTH 4° 11' 44" EAST
1750.00 FEET TO A 2” X 2” STAKE; THENCE SOUTH 85° 48' 16" EAST 380.00 FEET TO A
2” X 2” STAKE; THENCE SOUTH 4° 11' 44" WEST 1750.00 FEET TO A 2” X 2” STAKE AND
THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘A1’ SITE DEPICTION ”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(stamp) [h12901h1290152.gif]
  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:       (SIGNATURE) [h12901h1290164.gif]   KATHLEEN SUSAN
TETREAULT P.L.S.7297   MY LICENSE EXPIRES 12/31/2004       January 31, 2003  
JN: 13207.00

Page 5 of 5

 

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ATTACHMENT NO.2
TO
MINERAL GRANT DEED

LEGAL DESCRIPTION OF ADJACENT MINERALS

Executable Grant Deed

 

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ATTACHMENT 2

Description of Adjacent Interests

     All of that real property, and all real property rights and interests,
described in those certain Exceptions and Reservations unto Grantor, Paragraphs
A through E, appearing on pages 1 and 2 of, and in all the Attachments to, the
grant deed (“Walden Deed”) from Grantor to BREA WALDEN, LLC, a California
limited liability company, as grantee, dated October 3, 2001, and recorded in
the Official Records of Orange County, California on October 9, 2001 as
Instrument No. 20010710856. A conformed copy of the Walden Deed is appended
hereto for convenience only, as Schedule 1 to Attachment 2.

Attachment 2

 

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SCHEDULE 1 TO

ATTACHMENT 2

Schedule 1 to Attachment 2

 

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RECORDING REQUESTED BY:

Brea Walden, LLC

c/o Hover Development Company, Inc.
3501 Jamboree Boulevard. Suite 200
Newport Beach, California 92660
Attn: Tom Hover

WHEN RECORDED MAIL TO:

Brea Walden, LLC
c/o Hover Development Company, Inc.
3501 Jamboree Boulevard, Suite 200
Newport Beach, California 92660
Attn: Tom Hover

     
MAIL TAX STATEMENTS TO ADDRESS ABOVE
   

GRANT DEED

     FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged.
NUEVO ENERGY COMPANY, a Delaware corporation (“Grantor”), hereby grants to BREA
WALDEN, LLC. a California limited liability company (“Grantee”), the following
described real property (“Land” or “Property”) in the County of Orange, State of
California:

     See Attachment No. 1 which is incorporated herein by this reference.

     EXCEPTING AND RESERVING UNTO GRANTOR, its successors and assigns together
with the right to grant and transfer all or a portion of the same, as follows:

     A.     All oil, oil rights, minerals, mineral rights, natural gas rights
and other hydrocarbons, of every type and nature, by whatsoever name known,
geothermal steam and all products derived from any of the foregoing, that may be
within or under the Land, together with the perpetual right of drilling, mining,
exploring and operating therefor and producing, storing in, injecting water,
gases and/or other substances (for secondary and/or tertiary recovery
operations) into, or to use other techniques, whether now known or unknown, and
removing, taking, treating and selling the same from said Land or any other land
(including the Adjacent Parcel, as shown on Attachment “2”), and including the
right to whipstock or directionally drill and mine from lands other than the
Land (including the Adjacent Parcel, as shown on Attachment “2”), oil or gas
wells, mines, tunnels and shafts into, through or across the subsurface of the
Land, and to bottom such whipstocked or directionally drilled wells, mines,
tunnels and shafts under and beneath or beyond the exterior limits thereof, and
to relocate, replace, redrill, retunnel, work, rework, complete, recomplete.
equip, maintain, repair, remove, change the size of, increase the number of,
deepen and operate any such wells or mines; but, except as set forth in C, D and
E below, without the

Executable Grant Deed

1

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right to drill, mine, store, explore or operate through the surface or the upper
500 feet of the subsurface of the Land.

     B.     Any and all water, water rights or interests therein appurtenant or
relating to the Land or owned or used by Grantor in connection with or with
respect to the Land (no matter how acquired by Grantor), whether such water
rights shall be riparian, overlying, appropriative, littoral, percolating,
prescriptive, adjudicated, statutory, contractual or otherwise derived, together
with the right and power to explore, drill, redrill, remove and store the same
from or in the Land or to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by Grantor; but without, however
any right to enter upon the surface of the Land in the exercise of such rights.

     C.     An exclusive, subsurface easement and nonexclusive surface easement
(“Corridor Easement”) on, over and under the Land for ingress, egress and access
to and from, and the construction, installation, maintenance, replacement,
repair, removal, reconstruction and other uses (collectively, “uses”) of
(a) electric, gas, telephone, water, sewer, drainage, and all other wet and dry
utilities, (b) cable television and other telecommunications and/or data
transmission lines and facilities, and (c) pipelines and other uses and
facilities in connection with its operating/non-operating oil and gas wells and
mines and other development of the adjacent parcel (“Adjacent Parcel”) as a
master-planned community (the location of the Corridor Easement and a
description of the Adjacent Parcel are shown on Attachment “2”); provided that
the construction and installation of such facilities shall not unreasonably
interfere with Grantee’s development of the Land, and after Mass Grading thereof
has been completed, Grantor shall repair any damage to the surface of the Land
caused by its activity thereon; and provided further that Grantee shall
construct and maintain landscaping on and over the surface of the Corridor
Easement compatible with its development of the Land and Grantor’s development
of the Adjacent Parcel.

     D.     A non-exclusive easement (“Street Easement”) on, over and under the
streets on the Land for ingress, egress and access to and from, and the
construction, installation, maintenance, replacement, repair, removal,
reconstruction and other uses of (a) electric, gas, telephone, water, sewer,
drainage, and all other wet and dry utilities, (b) cable television and other
telecommunications and/or data transmission lines and facilities, and
(c) pipelines and other facilities in connection with its
operating/non-operating oil and gas wells and mines and other development of the
Adjacent Parcel as a master-planned community (the location of the Street
Easement is shown on Attachment “2”); provided that the use of such facilities
shall not unreasonably interfere with Grantee’s development of the Land, and
after Mass Grading thereof has been completed, Grantor shall repair any damage
to the Streets and surface of the Land caused by its activity thereon.

     E.     A non-exclusive easement on, over and under the Land for drainage
purposes from the Adjacent Parcel, as shown on Attachment “3,” as well as the
right to connect to and discharge and drain through, any water, sewer and other
facilities constructed by Grantee on, over and under the Land.

Executable Grant Deed

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All defined terms in the Agreement and other Development Documents referenced
therein are incorporated herein by this reference. The provisions of this Grant
Deed shall prevail in the event of a conflict with the provisions of any other
Development Document.

SUBJECT TO:

     1.     General and special real property taxes and assessments and
supplemental assessments, if any, which are not delinquent.

     2.     That certain Agreement between Adjacent Landowners, dated October 9,
2001, between Grantor and Grantee, regarding the construction and location of
slopes and the disposition and use of export spoils, recorded concurrently
herewith.

     3.     That certain Temporary Easement and Transfer Agreement between
Grantor and Brea Olinda Venture, LLC, dated June 6, 2001, whether a matter of
record or not.

     4.     All other covenants, conditions, restrictions, reservations, rights,
rights-of-way, dedications, offers of dedication, easements and other matters of
record or apparent.

     IN WITNESS WHEREOF, Grantor has executed this Grant Deed on the day and
year hereafter written.

          Dated: October 3, 2001   NUEVO ENERGY COMPANY, a Delaware corporation
 
       

  By :   /s/ Mike Darden

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      MIKE DARDEN

  Title :   VICE PRESIDENT
 
       

  By :   /s/ David A. Leach

--------------------------------------------------------------------------------

      DAVID A. LEACH

  Title :   ASST. SECRETARY

      “Grantor”

Executable Grant Deed

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ACCEPTANCE: Grantee hereby accepts this Grant Deed on the terms and conditions
herein stated.

              Dated: October 3, 2001   BREA WALDEN, LLC, a California limited
liability company
 
                By:   HOVER DEVELOPMENT COMPANY, INC., a California corporation,
its sole managing member
 
           

      By :   /s/ Tom Hover

         

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Tom Hover, President
 
           

      By :    

         

--------------------------------------------------------------------------------

      Its:    

         

--------------------------------------------------------------------------------

“Grantor”

Executable Grant Deed

4

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State of Texas
    )  

    )  
County of Harris
    )  

     On                              before me,                             ,
personally appeared,                             , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
       

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State of Texas
    )  

    )  
County of Harris
    )  

     On October 4, 2001 before me, Judy Vidrine, personally appeared Mike Darden
and David A. Leach, personally known to me to be the person(s) whose name(s) are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
  /s/ Judy Vidrine

 

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State of California
    )  

    )  
County of Orange
    )  

     On                             before me,                              ,
personally appeared                              , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
   
 
 

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State of California
    )  

    )  
County of Orange
    )  

     On October 4, 2001 before me, Donna Fritz, personally appeared [ILLEGIBLE],
personally known to me to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
  /s/ Donna Fritz

 

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6

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ATTACHMENT NO. 1

TO

GRANT DEED

LEGAL DESCRIPTION OF LAND

 

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Preliminary Report
  OR-2126186

  TITLE OFFICER- RONALD I. GOMEZ

DESCRIPTION

THIS LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTRY OF
ORANGE, CITY OF BREA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 2 AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT LL-2000-054-RECORDED ON
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 IN THE OFFICIAL RECORDS OF ORANGE
COUNTRY, CALIFORNIA.

 

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(MAP) [h12901h1290169.gif]

First American Title Insurance Company

 

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ATTACHMENT NO. 2

TO

GRANT DEED

CORRIDOR EASEMENT

STREET EASEMENT

ADJACENT PARCEL

 

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CORRIDOR EASEMENT

(Metes and Bounds Description Of
Easement Area)

 

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(MAP) [h12901h1290170.gif]

 

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ATTACHMENT “2”
TENTATIVE TRACT NO. 16047
LOTS “A” & “F”

THOSE PORTIONS OF THE SOUTHEAST QUARTER OF SECTION 7, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE CITY OF BREA, STATE OF CALIFORNIA AS SHOWN ON RECORD
OF SURVEY NO. 91-1007 FILED IN BOOK 133 PAGES 41 THROUGH 46 INCLUSIVE OF RECORDS
OF SURVEY IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, ALSO DESCRIBED AS
A PORTION OF THE LAND DESCRIBED IN A, BILL OF SALE AND ASSIGNMENT, RECORDED
APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF OFFICIAL RECORDS. IN THE OFFICE
OF SAID COUNTY RECORDER, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL A (TENTATIVE TRACT NO. 16047 LOT “F”)

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7;

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH
00’10°32” WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED JUNE 28,
1977, IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF SAID COUNTY
RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89°53’53”W 466.40 FEET
TO THE POINT OF BEGINNING;

THENCE SOUTH 6.05 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
SOUTHERLY, AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE THROUGH SAID POINT
BEARS NORTH OO°50’ 30” WEST, SAID POINT BEING ON THE RIGHT-OF-WAY OF PROPOSED
STREET “A”;

THENCE WESTERLY ALONG SAID CURVE AND RIGHT-OF-WAY 26.65 FEET THROUGH A CENTRAL
ANGLE OF 33°55’32”;

THENCE NORTH 14.12 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53’53” EAST 25.00 FEET TO THE POINT OF
BEGINNING.

PARCEL B (TENTATIVE TRACT NO. 16047 LOT “A” )

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7;

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH
00°10’32” WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED

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JUNE 28, 1977. IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF
SAID COUNTY RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89°53’53”W 723.50 FEET
TO THE POINT OF BEGINNING;

THENCE SOUTH 07°50’05” EAST 87.46 FEET TO A POINT ON THE RIGHT-OF-WAY OF
PROPOSED STREET “A”;

THENCE ALONG SAID RIGHT-OF-WAY SOUTH 81°51’01” WEST 25.00 FEET;

THENCE NORTH 07“5O’05” WEST 91.09 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53’53” EAST 25.24 FEET TO THE POINT OF
BEGINNING.

ALSO AS SHOWN ON EXHIBIT “B”, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

THIS DESCRIPTION HAS BEEN PREPARED FOR“LAND OWNER AGREEMENT” PURPOSES AND MAY
NOT BE USED FOR THE CONVEYANCE, FINANCING OR LEASING OF LAND, EXCEPT AS PROVIDED
FOR IN LOCAL ORDINANCE AND THE SUBDIVISION MAP ACT. A DIVISION OF THE GOVERNMENT
CODE OF THE STATE OF CALIFORNIA

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

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STREET EASEMENT

(Current depiction of Streets,
to be automatically replaced
by the recorded version
of TTM 16047, showing
the final alignment
and location thereof and
connection points to the
Corridor Easement)

 

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(STREET EASEMENT MAP) [h12901h1290171.gif]

 

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(STREET EASEMENT MAP) [h12901h1290172.gif]

 

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(STREET EASEMENT MAP) [h12901h1290173.gif]

 

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ATTACHMENT NO. 3

TO

MINERAL GRANT DEED

LEGAL DESCRIPTION OF DISTRICT MINERALS

Executable Grant Deed

 

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ATTACHMENT   3

THAT PORTION OF PARCEL 1 OF LOT LINE ADJUSTMENT NO. LL 2000-054, IN THE
UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED
AUGUST 13, 2001, AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, ALSO AS
SHOWN ON RECORD OF SURVEY NO. 2001-1007 FILED IN BOOK 187, PAGES 02 THROUGH 07
INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33”18“E 381.48’ * ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42’49” EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

THENCE NORTH 10°42’00” EAST 141.00 FEET
THENCE NORTH 15°02’00” EAST 103.00 FEET
THENCE NORTH 26°29’00” EAST 105.00 FEET
THENCE NORTH 46°26’07” WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33’18”E 381.48’ ”; THENCE SOUTHERLY ALONG SAID
COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING 0.425 ACRES, MORE OR LESS.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     

  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:

  -s- Kathleen susan [h12901h1290164.gif]

  KATHLEEN SUSAN TETREAULT P.L. S. 7297
(LICENSED LAND SURVEYOR STAMP) [h12901h1290163.gif]
   

  MY LICENSE EXPIRES 12/31/2004
 
   

  November 04, 2002

  JN: 13207.00.034

 

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(MAP) [h12901h1290174.gif]

 

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ATTACHMENT NO. 4
TO
MINERAL GRANT DEED

LEGAL DESCRIPTION OF OTHER MINERALS

Executable Grant Deed

 

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ATTACHMENT 4

     
Property Name:
  BREA RESIDENTIAL LOTS MINERAL FEE
Nuevo Property #:
  CA12096

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 of Deeds.

     
Property Name:
  HOLE MINERAL FEE
Nuevo Property #:
  CA12451

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10, in
Book 194, Page 55, of Deeds; EXCEPTING THEREFROM, any portions of such real
property which is located in Section 22, Section 23, Section 24, or the South
Half of Section 14, Township 3 South, Range 10 West, S.B.B.&M.

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Quitclaim Deed dated 4/29/46, between David R.
Wagner, as Grantor, and Union Oil Company of California, as Grantee, recorded
4/30/46 in Book 1332 at Page 421 of Official Records; EXCEPTING THEREFROM, any
portions of such real property which is located in Section 22, Section 23,
Section 24, or the South Half of Section 14, Township 3 South, Range 10 West,
S.B.B.&M.

     
Property Name:
  SIEVERS (J.) MINERAL FEE
Nuevo Property #:
  CA12097

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 11/30/26, from John D. Sievers, as
Grantor, to Union Oil Company of California, as Grantee, recorded 12/9/26 in
Book 690 at Page 149 of Deeds.

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Property Name:
  TOWNSEND & DAMON MINERAL FEE
Nuevo Property #:
  CA12445

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California hi that certain Indenture dated 8/1/10, from J. S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 .of Deeds.

     
Property Name:
  NARANJAL MINERAL FEE A & B
Nuevo Property #:
  CA12453

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 3/24/10 from Stearns Ranchos Company,
as Grantor, to Union Oil Company of California, as Grantee, recorded 4/22/21 in
Book 385 at Page 394 of Deeds Orange County and recorded on 5/25/21 in Book 211,
Page 268 Official Records Los Angeles County; EXCEPTING THEREFROM that portion
described as follows:

      That portion of the Northerly one-half of Section 2, Township 3 South,
Range 10 West, in the Rancho San Juan Cajon de Santa Ana, in the unincorporated
territory of the County of Orange, State of California, as shown on the Map
recorded in Book 51, Page 7 of Miscellaneous Maps in the Office of the County
Recorded, described as follows:         Beginning at the Southeasterly corner of
Tract No. 12743, recorded in Book 585, Pages 39 through 44 of Miscellaneous Maps
in the Office of said county recorder; thence along the Easterly line of said
Tract No. 12743, North 1°31'03" West 1099.63 feet to the Northeasterly corner of
said Tract No. 12743, said comer also being the beginning of a non-tangent
curve, concave Northeasterly having a radius of 795.00 feet, a radial line to
said point bears South 4°39'12" East; thence Northwesterly 484.67 feet along
said curve and the Northerly line of said Tract No. 12743, through a central
angle of 34°55'49"; thence North 59°43'23" West 104.97 feet along said Northerly
line to an angle point in said Northeasterly line, said angle point being the
beginning of a non-tangent curve, concave Southeasterly having a radius of
1450.00 feet, a radial line to said point bears North 59°31'24" West; thence
Northeasterly 54.73 feet along said Northeasterly line through a central angle
of 2°09'15"; thence along said Northeasterly line North 57°22'09" West 50.00
feet to the most Northerly corner of said Tract No. 12743, said corner also the
beginning of a non-tangent curve, concave Southeasterly having a radius of
1500.00 feet, a radial line to said point bears North 57°22'09" West; thence
leaving said Northeasterly

2

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      line and following along the Easterly line of future Tract No. 13728, the
following courses:         Northeasterly 390.15 feet along said curve through a
central angle of 14°54'09" to the beginning of a reverse curve, concave
Northwesterly having a radius of 1500.00 feet, a radial line to said curve bears
South 42°28'00" East, Northeasterly 190.20 feet along said curve through a
central angle of 7°12'55"; North 4°32'00" West 149.18 feet, West 208.00 feet,
North 45°00'00" West 45.00 feet, North 60.00 feet, North 86°40'00" West 66.00
feet, and North 13°00'22" East 215.00 feet to the Northerly line of said Rancho
San Juan Cajon de Santa Ana as shown on Record of Survey no. 88-1035, filed in
Book 119, Pages 33 and 34 in the Office of the County Recorder; thence South
76°59'28" East 1527.95 feet along said Northerly line to the Northwesterly
corner of the land described in the deed to the Exxon Education Foundation,
recorded December 29,1983 as File/Page No. 83-587995 of Official Records in the
Office of the County Recorder, thence South 1°18'55" West 1851.58 feet along the
Westerly line of said deed to the Southwesterly corner of said deed; thence
South 88°31'06" West 961.07 feet along the Northerly line of the South one-half
of said Section 2 to the Point of Beginning.              All oil, gas, and
other hydrocarbon substances and minerals on, in, under and that may be
extracted, produced, and saved from that certain real property which was
granted, quitclaimed, assigned or conveyed to Union Oil Company of California in
that certain Indenture dated 5/17/27 between Stearns Ranchos Company and Union
Oil Company of California, recorded 5/25/27 in Book 47 at Page 363 Official
Records; EXCEPTING THEREFROM that portion described as follows:         That
portion of the Northerly one-half of Section 2, Township 3 South, Range 10 West,
in the Rancho San Juan Cajon de Santa Ana, in the unincorporated territory of
the County of Orange, State of California, as shown on the Map recorded in Book
51, Page 7 of Miscellaneous Maps in the Office of the County Recorded, described
as follows:         Beginning at the Southeasterly corner of Tract No. 12743,
recorded in Book 585, Pages 39 through 44 of the Miscellaneous Maps in the
Office of said county recorder; thence along the Easterly line of said Tract
No. 12743, North 1°31'03" West 1099.63 feet to the Northeasterly corner of said
Tract No. 12743, said corner also being the beginning of a non-tangent curve,
concave Northeasterly having a radius of 795.00 feet, a radial line to said
point bears South 4°39'12" East; thence Northwesterly 484.67 feet along said
curve and the Northerly line of said Tract No. 12743, through a central angle of
34°55'49"; thence North 59°43'23" West 104.97 feet along said Northerly line to
an angle point in said Northeasterly line, said angle point being the beginning
of a non-tangent curve, concave Southeasterly having a radius of 1450.00 feet, a
radial line to said point bears North 59°31'24" West; thence Northeasterly 54.73
feet along said Northeasterly line through a central angle of 2°09'15"; thence
along said Northeasterly line North 57°22'09" West 50.00 feet to the most
Northerly corner of said Tract No. 12743, said corner also the beginning of a
non-tangent curve, concave Southeasterly having a radius of 1500.00 feet, a
radial line to said point bears North 57°22'09" West; thence leaving said
Northeasterly

3

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      line and following along the Easterly line of future Tract No. 13728, the
following courses:         Northeasterly 390.15 feet along said curve through a
central angle of 14°54'09" to the beginning of a reverse curve, concave
Northwesterly having a radius of 1500.00 feet, a radial line to said curve bears
South 42°28'00" East, Northeasterly 190.20 feet along said curve through a
central angle of 7°12'55"; North 4°32'00" West 149.18 feet, West 208.00 feet,
North 45°00'00" West 45.00 feet, North 60.00 feet, North 86°40'00" West 66.00
feet, and North 13°00'22" East 215.00 feet to the Northerly line of said Rancho
San Juan Cajon de Santa Ana as shown on Record of Survey No. 88-1035, filed in
Book 119, Pages 33 and 34 in the Office of the County Recorder; thence South
76°59'28" East 1527.95 feet along said Northerly line to the Northwesterly
corner of the land described in the deed to the Exxon Education Foundation,
recorded December 29, 1983 as File/Page No. 83-587995 of Official Records in the
Office of the County Recorder, thence South 1°18'55" West 1851.58 feet along the
Westerly line of said deed to the Southwesterly corner of said deed; thence
South 88°31'06" West 961.07 feet along the Northerly line of the South one-half
of said Section 2 to the Point of Beginning.         EXCEPTING THEREFROM that
portion of the above described property which was conveyed to Brea Walden L.L.C.
by Grant Deed dated October 3, 2001 and recorded on October 9, 2001 as
Instrument No. 20010710856 in the Official Records of Orange County, California,
described as follows:         Parcel 2 as shown, on Exhibit “B” of Lot Line
Adjustment LL-2000-054 recorded on August 13, 2001, as Instrument
No. 20010557229 in the Official Records of Orange County, California.        
Also EXCEPTING THEREFROM the land described as follows:         Being a portion
of the Southwest one-quarter of fractional Section 8, Township 3 South, Range 9
West, lying West of the Easterly boundary of the Rancho San Juan Cajon de Santa
Ana, in the County of Orange, State of California as shown on map recorded in
Book 51, Page 7 of the Miscellaneous Maps in the Office of the County Recorder
of said County and also show on record of Survey 81-1149 filed in Book 103, Page
19 of Record of Survey in the said Office of the County Recorder being more
particularly described as follows:         Beginning at the Southwest corner of
said Record of Survey 81-1149, thence North 0°11'29" East along the Westerly
line of said Record of Survey a distance of 776.93 feet to the Northwest corner
of said Record of Survey; thence South 89°45'41" East along the Northerly line
and its Easterly prolongation of said Record of Survey a distance of 2406.20
feet of the Easterly boundary line of said Rancho San Juan Cajon de Santa Ana;
thence South 03°24'35" East along said Easterly boundary a distance of 772.60
feet to a point on the Easterly prolongation of the Southerly line of said
Record of Survey; thence North 89°53'56" West along said Southerly line and its
prolongation of distance of 2454.72 feet to the point of beginning.

4

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Property Name:
  STEARNS MINERAL FEE
Nuevo Property #:
  CA12593

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California by:

  1)   Deed dated 12/4/1896, from Stearns Ranchos Company, as Grantor, to Union
Oil Company of California, as Grantee, recorded 1/13/1897 as Document No. 839 in
Book 30 at Page 11 of Deeds.     2)   Grant Deed dated 8/31/1899, between
Stearns Ranchos Company, as Grantor, and Union Oil Company of California, as
Grantee, recorded 9/21/1899 in Book 44 at Page 250 of Deeds, more particularly
described as follows:

      Those portions of Sections 1 and 12, Township 3 South, Range 10 West and
Sections 5, 6,7 and 8 Township 3 South, Range 9 West, in the Rancho San Juan
Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
        Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of ‘the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, North 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S.A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" x 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" x 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.         Excepting the Westerly 200 acres of the above described
tract.         Also excepting any portion of the above described property which
lies north of the agreed boundary line and bounded Westerly by line running
North 28°30' East from the Western terminus of said line as established by
agreement between the Union Oil Company of

5

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      California and the Graham-Loftus Oil Company, recorded June 10, 1905 in
Book 120, Page 223 of Deeds, records of said Orange County.         Also
excepting therefrom that portion included within Parcel 1 of a County of Orange
Lot Line Adjustment No. LL 2000-054, recorded August 13, 2001 as Instrument
No. 20010557229 of the Official Records, in the office of said Count Recorder.  
      Also excepting therefrom the land conveyed to Brea Chemicals, Inc., by
Deed recorded June 10,1957 in Book 3936, page 314 of said Official Records,
described as follows:         Beginning at a point in the Southerly line of the
land described in Deed from the Stearns Ranchos Company, a Corporation, to Union
Oil Company of California, a Corporation, dated August 31,1899, recorded
September 2,1899 in Book 44, Page 250 of said Deeds, distant South 89°10'50"
West along said line 3131.98 feet from the Southeast corner of said land, said
point of beginning being monumented by Union Oil Company Monument 11B; thence
North 9°48'11 West 529.60 feet to a 2" × 2" stake and the true point of
beginning for this description; thence North 85°48'16" West, 380.00 feet to a 2"
× 2" stake; thence North 4°11'44" East 1750.00 feet to a 2" × 2" stake thence
South 85°48'16" East 380.00 feet to a 2" × 2" stake; thence South 4°11'44" West
1750.00 feet to a 2" × 2" stake and the true point of beginning.         Also
excepting therefrom those portions of Sections 1 and 12, Township 3 South, Range
10 West and Sections 5,6,7 and 8 Township 3 South, Range 9 West, in the Rancho
San Juan Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
        Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, North 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S.A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" × 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" × 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.

6

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TABLE OF CONTENTS

      Excepting the Westerly 200 acres of the above described tract.        
Also excepting any portion of the above described property which lies north of
the agreed boundary line and bounded Westerly by line running North 28°30' East
from the Western terminus of said line as established by agreement between the
Union Oil Company of California and the Graham-Loftus Oil Company, recorded
June 10, 1905 in Book 120, Page 223 of Deeds, records of said Orange County.    
    Also excepting from said tract of land the land conveyed to the Metropolitan
Water District of Southern California by Deed Recorded June 28,1940 in Book
1051, Page 301 of Official Records of said Orange County, described as follows:
        Beginning at a point on the Westerly boundary of said lands owned by
Union Oil Company of California, which Westerly boundary is also the Easterly
boundary of that certain 200-acre tract conveyed by said Union Oil Company of
California to George Chaffey by Deed dated April 25, 1899, recorded June 20,
1899 in Book 44, Page 79 of said deeds, which point of beginning is the point of
intersection of the aforesaid Westerly boundary with the Easterly Prolongation
of the center line of Central Avenue as the same existed on May 23, 1940 between
Berry Street and Brea Canyon Road; thence Northeasterly along a line forming an
angle of 73°32'24" with the Easterly prolongation of the center line of said
Central Avenue at said point of intersection (assumed and taken to bear North
15°11'16" East), a distance of 839.60 feet to the true point of beginning;
thence North 0°10'11" East a distance of 1250 feet; thence South 89°49'49"t East
a distance of 500 feet; thence South 65°23'11" East a distance of 604.15 feet;
thence South 0°10'11" West a distance of 1000 feet; thence North 89°49'49" West
a distance of 1050 feet to the true point of beginning.         Also excepting
therefrom that portion described in deed to the Metropolitan Water District of
Southern California recorded February 10, 1967 in Book 8173, Page 641 of said
Official Records.         Also excepting therefrom that portion described in
deed to the Metropolitan Water District of Southern California recorded
February 10, 1967 in Book 8173, Page 647 of said Official Records.         Also
excepting therefrom the land described in deed to the Brea-Olinda Unified School
District of Orange County, California, recorded September 11, 1968, page 437 of
said Official Records.         Also excepting therefrom that portion described
in Parcel 1 of deed to the City of Brea recorded January 16, 1969 in Book 8846,
Page 971 of said Official Records.         Also excepting therefrom that portion
described in Parcels A6471-4, A6471-5, A6471-6 and A6471-7 of that certain final
order of condemnation, Superior Court Case No. 156220, a certified copy of which
was recorded September 29, 1970 in Book 9417, Page 364 of said Official Records.

7

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TABLE OF CONTENTS

      Also excepting therefrom Parcels 1 and 2 of Parcel Map No. 86-243, as
shown on a map filed in Book 214, Pages 28 to 31 inclusive, of Parcel Maps, in
the Office of the County Recorder of Orange County, California, together with
the West Half of associated road, 80.00 feet wide, as shown on said Parcel Map,
adjoining said Parcels 1 and 2 on the East, and being bounded Northeasterly by
the Northeasterly line of said Parcel Map and being bounded Southerly by the
centerline of Lambert Road, as shown on said Parcel Map.         Also excepting
therefrom that portion, if any, included within Parcel 1 of Parcel Map
No. 83-1179, as shown on a map filed in Book 218, Page 1 to 4 inclusive, of
Parcel Maps, in the Office of the County Recorder of Orange County, California.
        Also excepting therefrom that portion included within Tract No. 12562,
as shown on a map recorded in Book 579, Pages 4 to 9 inclusive, of said
Miscellaneous Maps.         Also excepting therefrom that portion included with
Tract No. 12563, as shown on a map recorded in Book 579, Pages 10 to 15
inclusive, of said Miscellaneous Maps.         Also excepting therefrom the land
described in the Deed to the City of Brea recorded March 29,1996 as Instrument
No. 19960153320 of the Official Records in the Office of said County Recorder.

               Also excepting therefrom that portion included within Parcel 1 of
a County of Orange Lot Line Adjustment No. LL 2000-054, recorded August 13,2001
as Instrument No. 20010557229 of the Official Records, in the office of said
County Recorder.

8

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TABLE OF CONTENTS

ATTACHMENT NO. 5
TO
MINERAL GRANT DEED

RIGHTS-OF-WAY

Executable Grant Deed

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

ATTACHMENT 5

List of Rights of Way and Contracts

Attachment 5

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Rights of Way and Contracts

Easements, Licenses, Rights-of-Way, etc.

                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

  Document Type

--------------------------------------------------------------------------------

  Dated

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Order #

--------------------------------------------------------------------------------

  #’s

--------------------------------------------------------------------------------

51956.28
  Agreement       7/13/53 42131/15 OR   Louise A. Weisel, et al.                
 
                                   
51956.28A
  Amendment       7/11/79 79-759179 DOC   Mary Weisel Newton, et al.            
   
 
                                   
51956.51
  ROW       5/18/64 M1523/9 Torrens   J. B. Hickey, et al.                
 
                                   
52024.224
  License         8/11/69     Southern California
Edison                
 
                                   
502
  ROW   2/22/08     39795     Industrial Oil CO     5       601  
 
                                   
52538
  License   11/9/23   11/10/27 UNREC   Associated Oil     21          
 
                                   

  ROW   4/8/63     4/19/63 6515/482     Pacific Lighting
Gas Supply Co.     7       N/A (31.7)
 
                                   

  ROW   2/13/65     2/23/65 7422/249     Pacific Lighting
Gas Supply Co.     8       317  
 
                                   
5254
  ROW       5/17/2001 58/365 Deeds   Brea Canon Oil CO.     22       602  
 
                                   
5254A
  ROW       4/28/1930 382/44 OR   Brea Canon Oil CO.     23       602  
 
                                   
52589
  ROW       11/10/1927 104/65 OR   Gaston A Bastanchury     30          
 
                                   
52854
  ROW       7/12/1928 172/314 OR   Crown of the Valley Oil Company     34      
609  
 
                                   
52885
  Consent   4/7/25     4/7/25     Shell Oil CO.     35       610  
 
                                   
52885.1
  License   7/10/51   7/11/55 UNREC   Shell Oil CO.     36       610  
 
                                   
52956
  ROW       2/13/1929 243/294 OR   Crown of the Valley Oil Company     40      
611  
 
                                   
52956.1
  ROW       4/13/1988 3030/34 OR   Crown of the Valley Oil Company     41      
611  
 
                                   
52956.2
  Consent   7/10/51     7/10/51     Shell Oil CO     42       611  
 
                                   
52980
  License   4/7/25   4/8/1929 UNREC   WB Scott Investment
Company     43       612  
 
                                   
52980.1
  ROW       4/28/1955 3047/183 OR   W B Scott
Investment Company     44       612  

Attachment 5

Page 1 of 13

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TABLE OF CONTENTS

                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

  Document Type

--------------------------------------------------------------------------------

  Dated

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Order #

--------------------------------------------------------------------------------

  #’s

--------------------------------------------------------------------------------

52980.2
  Consent   7/10/51   7/11/1955 UNREC   Shell Oil CO.     45       612  
 
                                   
53486
  ROW       3/16/32 547/78 OR   Bernard Arroues,
Et ux     46          
 
                                   
5363
  ROW       1/7/1900 49/49 Deeds   Steams Ranchs Co     47          
 
                                   
53641.101
  Permit   10/18/61     22572     Pacific Telephone &
Telegraph Company     48       613  
 
                                   
53641.113
  Permit   3/8/72     26366     Pacific Telephone &
Telegraph Company     50       613  
 
                                   
53755
  Easement       9/27/43 1215/34 OR   Anaheim Union Water
Company     52          
 
                                   
53755.2
  Mod.       6/7/49 1855/8 OR   Anaheim Union Water
Company     53          
 
                                   
53755.3
  Mod.       9/23/66 8057/221 OR   Anaheim Union Water
Company     54          
 
                                   
53755.4
  Easement       1/7/71 9512/924 OR   State of California     55          
 
                                   
53755.5
  Easement       11/18/71 9892/217 OR   State of California     56          
 
                                   
53755.6
  QC       5/22/72 10136/654 OR   UNOCAL     57          
 
                                   
53755.7
  ROW       9/26/72 10343/735 OR   Anaheim Union Water
Company     58          
 
                                   
53755.8
  Assignment       11/29/72 10465/69 OR   Continental Mobile Housing, Inc.    
59          
 
                                   
53755.9
  QC       11/1/73 10974/92 OR   UNOCAL     60          
 
                                   
54088.31
  License   12/1/62     22981     Shell Oil CO.     62       615  
 
                                   
54186.3 
  Replacement
ROW       9/25/72 10431/871 OR   Meredith Co. Et al     63          
54261.7
  ROW       11/12/70 9458/915 OR   Galy Construction
Corp     64          
 
                                   
54287
  Deed       8/16/43 1200/396 OR   Everett M Reese,
ET UX     66          
 
                                   
54326.2
  ROW       7/24/47 1533/390 OR   Hubert C. Ferry     67          
 
                                   
54327.46
  License         12/15/76     General Telephone Co.                
 
                                   
54339
  ROW       3/2/43 1183/525 OR   Tide Water
Associated Oil
Company     69          

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                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

  Document Type

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  Grantor

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--------------------------------------------------------------------------------

  #’s

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54342
  AGRMT   2/17/39   2718/43 UNREC   General Petroleum     70       617  
 
                                   
54344
  Easement   4/1/39     14336     USA, Department
of WAR     71          
 
                                   
54345
  ROW       3/1/43 1148/489 OR   Anaheim Union Water
Company     72          
 
                                   
54368
  ROW       8/11/44 1266/313 OR   H M Bergen, ET AL     73          
 
                                   
54480
  Deed       1/5/46 283/496 OR   Everett M Reese,
ET UX     74          
 
                                   
54499
  ROW       4/17/46 1424/3 OR   Brea Homes Inc.     75          
 
                                   
54507
  ROW       1/23/11 195/212 Deeds   Pacific Electric
Land C     76          
 
                                   
54605
  License   8/20/43     15938     Shell Oil     77       618  
 
                                   
54779
  ROW       12/15/49 1945/23 OR   M J Jackson     78          
 
                                   
54779.1
  ROW       4/2/47 1517/196 OR   Brea Homes Inc.     79          
 
                                   
54779.2
  ROW       1/4/60 5044/483 OR   M K Rivtcel     80          
 
                                   
54779.3
  ROW       4/2/47 1517/196 OR   Brea Homes Inc.     81          
 
                                   
54855
  ROW   7/23/46     17006     Stern Realty Company     82          
 
                                   
54855.4
  License   9/21/61     22545     Stern Realty Company     83          
 
                                   
55088
  ROW       8/13/52 2369/185 OR   City of Brea     84          
 
                                   
55156
  ROW       7/3/53 42131/30 OR   W. R. Rowland Land Co.                
 
                                   
55251
  ROW       1/28/54 2659/60 OR   Continental
Mausoleum Company     85          
 
                                   
553.3
  ROW       2/26/49 Unrecorded   Tide Water Associated Oil Co.                
 
                                   
55468
  ROW       2/1/1955 3261/312 OR   City of Fullerton     87          
 
                                   
56267
  License   3/29/53   3-30-57 UNREC   Tide Water
Associated Oil
Company     89          
 
                                   
56365
  ROW   6/21/55     20261     Roseglen Construction Inc.     90          
 
                                   
56627
  License   7/5/71     22467     Humble Oil &
Refining     93       620  
 
                                   
56671
  Sales & Assign.       4/19/63 6515/482 OR   Pacific Lighting Gas Supply Co.  
  94       621  

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                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

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56672
  ROW       3/24/37 872/421 OR   Brea Canon Oil     95       622  
 
                                   
56673
  ROW       10/16/40 1048/369 OR   Brea Canon Oil     96       623  
 
                                   
56674
  ROW       3/4/63 6451/794 OR   Brea Canon Oil     97       624  
 
                                   
56712
  Easement       4/21/64 7012/89 OR   State of California, Dept. of Parks and
Recreation                
 
                                   
56712.1
  Amendment       6/25/64 7104/498 OR   State of California, Dept. of Parks and
Recreation                
 
                                   
56726.9
  Amendment of Lease         5/1/95     City of Huntington Beach                
 
                                   
56764
  License         3/19/65     Southern California
Edison                
 
                                   
56806
  ROW       5/26/65 7533/988 OR   G. A. Ryness & V.K. Smith Partners            
   
 
                                   
56807
  ROW       3/23/65 7455/829 OR   UNOCAL     104       629  
 
                                   
56916.1
  Permit   8/10/62   8/11/66 UNREC   Orange County Flood
Control District     107          
 
                                   
57030
  ROW       1/29/66 8532/241 OR   Loma Vista Memorial
Park     108          
 
                                   
57136
  ROW       5/26/69 8968/184 OR   Sterling Homes     109       725  
 
                                   
57193
  ROW       1/15/70 9194/391 OR   Rancho Mesa
Fullerton     110          
 
                                   
57241
  Easement       9/30/70 451/102 OR   State of California     112       630  
 
                                   
57349.1
  ROW       5/11/93 10692/660 OR   Albertson’s Inc.     113          
 
                                   
57353
  ROW       7/27/72 10290/314 OR   D V Home, ET AL     115          
 
                                   
57354
  ROW       7/20/72 10290/314 OR   A A McLern, et ux     116          
 
                                   
57438
  ROW       6/20/74 11189/1214 OR   David V. & Mary W. Homme     118          
 
                                   
57595
  ROW       3/16/77 12106/802 OR   Moreland Develop C     123          
 
                                   
57595.1
  ROW       6/8/77 12233/501 OR   Moreland Develop C     124          
 
                                   
57633.1
  ROW       7/24/78 1269/1868 OR   IPS, A General
Partnshp     125          
 
                                   
57667
  ROW       12/14/79 13437/789 OR   Moreland Develop C     126          
 
                                   
57696
  ROW       10/2/75 11527/1604 OR   Kaiser Aetna     127          

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                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

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57848
  Grant of Easement       11/24/86 86/619178 OR   Fairway Associates     129    
     
 
                                   
57875
  AGRMT         30888     William Lyon C     131          
 
                                   
57876.1
  ROW       4/23/90 90/211415 DOC   R D Battaglia     132          
 
                                   
57879 
  Encroach
License   10/9/84   10/10/88 UNREC   City of Fullerton     133          
57879.2 
  EXT. of License   6/10/89   6/11/93 UNREC   City of Fullerton     134        
 
57981
  ROW       11/2/89 80-59276 DOC   Sanitation, Inc.     136       500  
 
                                   
58049
  ROW       1/25/93 93-054367 DOC   Sanitation, Inc     137       500  
 
                                   
61407.2
  Easement       3/27/63 6483/844 OR   UNOCAL     138          
 
                                   
61407.3
  Easement       3/11/64 6958/820 OR   UNOCAL     139          
 
                                   
62528
          6/23/54 2755/502 OR   UNOCAL     140          
 
                                   
62606
          4/30/58 4263/530 OR   UNOCAL     141          
 
                                   
63219
  Easement       2/26/60 5119/488 OR   UNOCAL     142          
 
                                   
63283.2
  Easement       10/10/62 6279/75 OR   UNOCAL     143          
 
                                   
63510.1
  Easement       6/22/64 7098/211 OR   UNOCAL     144          
 
                                   
68244.1
  Easement       5/4/61 5712/97 OR   UNOCAL     146          
 
                                   
68809
  Consent       6/23/27 60/371 OR   UNOCAL     149       729  
 
                                   
68810
  Consent       6/23/27 57/412 OR   UNOCAL     150       730  
 
                                   
68853
  ROW       8/24/45 1331/351 OR   UNOCAL     151          
 
                                   
68853.1
  ROAD DEED       1/25/44 1232/308 OR   UNOCAL     152          
 
                                   
68853.2
  ROAD DEED       11/12/48 1728/222 OR   UNOCAL     153          
 
                                   
7048.3(B)
  Deed       8/18/64 7182/490 OR   UNOCAL     154          
 
                                   
7048.3(C)
  Deed       8/18/64 7182/484 OR   UNOCAL     155          
 
                                   
7048.3(E)
  Mod.       10/19/64 7264/496 OR   UNOCAL     156          
 
                                   
7048.3(F)
  Mod.       10/19/64 7264/500 OR   UNOCAL     157          
 
                                   
7070.35
  Deed       5/21/58 4291/396 OR   UNOCAL     159          

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                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

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7070.44
  ROW       1/17/64 6886/922 OR   UNOCAL     160          
 
                                   
7070.45
  ROW       12/31/63 6866/922 OR   UNOCAL     161          
 
                                   
7070.55
  Deed       4/23/73 10657/211 OR   UNOCAL     162          
 
                                   
7070.57
  Deed       10/31/73 10989/880 OR   UNOCAL     163          
 
                                   
7070.63
  Grant Deed       4/1/75 11368/841 OR   UNOCAL     165          
 
                                   
7070.72
  Deed       12/5/80 13861/1303 OR   UNOCAL     166          
 
                                   
7176.19
  Deed       12728/73 11044/678 OR   UNOCAL     168          
 
                                   
7176.2
  Deed       11/15/47 1599/131 OR   UNOCAL     169          
 
                                   
XR7390-R1
  AGRMT   8/28/51     18868     Shell Oil to West Coast Refining     172      
640  
 
                                   
XR7390-R11
  ROW   10/11/56     20739     Chanslor- Western to West Coast Refining     173
      641  
 
                                   
XR7390-R11
  ROW   8/25/55     20326     Shell Oil C to West Coast Refining     174      
642  
 
                                   
XR7390-R20
  License   7/31/51     18840     UNOCAL     177       643  
 
                                   
XR7390-R5
  License   3/27/26     9583     Pacific Electric
Railway     185          
 
                                   

  ROW       5-15-97
Document No. 19970226200   UNOCAL to NUEVO     A       666  
 
                                   

  Deed   8/9/98     8-14-98 1998-
0533265     UNOCAL to NUEVO     A       736  
 
                                   
105919
  Deed   12/20/98   2-11-99 Doc. No. 105919   CALPAC REMEDIATION CO & UNOCAL
etal to NUEVO     A       737  
 
                                   
105919
  Deed   12/20/98   2-11-99 Doc. No. 105919   CALPAC REMEDIATION CO & UNOCAL
etal to NUEVO     A       737  
 
                                   
19990774980
  Easement & Agreement       11/5/1999 Doc. No. 19990774980   Unocal and Nuevo  
  A       402  
 
                                   
20020255188
  Easement Agree.   4/11/97   3/27/2002 -Document # 20020255188   VD/FULLERTON
91/AFX & Nuevo     A       403  

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                                                  Date                        
Recording       Schedule 1.1 (c)   Green Map File Number

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20020255188
  Accommodation Agrmt.   11/19/96   11/20/2000-UNRECORDE D   UNOCAL,
VD/FULLERTON
104/AF X & Nuevo     A       403.01  
 
                                   
20020365857
  Pipe Line & Powerline Maintenance Easement Agrmt.   4/11/97   5/1/02 Doc. No.
20020365857   City of Fullerton, Brietburn, VD/FULLERTON 91/AF X & Nuevo     A  
    403.1  
 
                                   
57995
  Amended
Easement   7-20-1994   Unrecorded   Sec. of the Army to NUEVO     A       404  
 
                                   

  Easement   1/15/51     3/15/51 2158/495     UNOCAL                
 
                                   

  Pipeline PSA   4/8/63     4/19/63 6515/482     Pacific Lighting
Gas Supply Company                
 
                                   

  ROW   2/13/65     2/23/65 7422/249     Pacific Lighting
Gas Supply Company                
 
                                   

  Easement   8/23/88     5/9/89
89-243784     UNOCAL                

Franchises

                                                  Date       Brea   Schedule    
    Document       Recording       ROW   1.1 (c)   Green Map File Number

--------------------------------------------------------------------------------

  Type

--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  List No.

--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------

922
  Franchise   03/17/1993   unrecorded   Brea City Franchise     4           600
 
 
                                   
99-O-119
  Franchise   06/01/1999   unrecorded   Placentia City
Franchise     4     A     700  
 
                                   
**57976
  Franchise   06/18/1999   unrecorded   Orange County     4     A     900.1  

**This Franchise is partially assigned insofar and only insofar as it pertains
to the “Richfield Gathering System.”

Contracts

     (1) The Crude Oil Purchase Agreement between Nuevo Energy Company and Tosco
Corp., d/b/a Tosco Refining Co., dated January 1, 2000; INSOFAR AND ONLY INSOFAR
AS IT APPLIES TO THE PROPERTY INTERESTS.

     (2) Electricity: The Automated Power Exchange Master Service and
Participation Agreement dated June 15, 2000 by and between Automated Power
Exchange, Inc. and Nuevo Energy Company;

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      (3) The Indenture, as amended, by and between Union Oil Company of
California and Columbia Oil Producing Company dated February 26, 1901;

      (4) The Surplus Produced Water Agreement between Nuevo Energy Company and
Aera Energy LLC dated December 11, 2001;

      (5) The Water Line Agreement between Union Oil Company of California and
Thompson Drilling Company dated March 29, 1988, as amended;

      (6) The Royalty-Free Oil and Gas Lease between Union Oil Company of
California (“Lessor) and Nuevo Energy Company (“Lessee”) dated effective October
1, 1995;

      (7) The Propane Sales: Contract dated March 1, 2002 by and between Nuevo
and EOTT Energy Operating Limited Partnership.

      (8) Pipeline Easement Agreement dated September 13, 2002 by and between
Union Oil of California and Nuevo Energy Company.

Gas Purchases. Gas Handling and Gas Sales Contracts

      Gas Purchase, Gas Handling and Gas Sales Contracts

      As of September 27, 2002, Nuevo is presently taking gas under the
following three contracts:

  (i)   Gas Handling and Disposal Agreement dated effective August 1, 2000 by
and between Aera Energy LLC and Nuevo Energy Company.     (ii)   Gas Compression
and Gathering Agreement dated effective September 1, 2000 by and between
Bridgemark Corporation and Nuevo Energy Company.     (iii)   Gas Handling
Agreement dated effective August 1, 1998 by and between Crimson Resource
Management Corp. and Torch Energy Marketing, Inc. (note the preferential right
to purchase gas at Section 6).

The following contracts appear to be active as of September 27, 2002. However,
Nuevo is not presently taking gas under these contracts.

  (iv)   Gas Purchase Agreement dated effective July 1, 1989 by and between Brea
Canon Oil Company and Union Oil Company of California (predecessor-in-interest
to Nuevo Energy Company), as amended October 10, 1994.     (v)   Gas Purchase
Agreement dated May 17, 1966 by and between T&T Oil Company and Union Oil
Company of California (predecessor-in-interest to Nuevo Energy Company), as
amended July 12, 1994.

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  (vi)   Gas Handling Agreement dated effective October 1, 1998 by and between
Union Oil Company of California and Torch Energy Marketing, Inc.     (vii)   Gas
Handling Agreement dated effective February 1, 1994 by and between Saba
Petroleum Inc. and Union Oil Company of California (predecessor-in-interest to
Nuevo Energy Company), as amended October 1, 1997.     (viii)   Gas Handling
Agreement and Bill of Sale dated effective December 29, 1992 by and between
Plegel Oil Company and Union Oil Company of California (predecessor-in-interest
to Nuevo Energy Company), as amended July 1, 1993.     (ix)   Gas Purchase
Agreement dated effective August 1, 1998 by and between Texaco Producing Inc.
and Union Oil of California (predecessor-in-interest to Nuevo Energy Company),
as amended by letter dated July 8, 1993.     (x)   Gas Purchase Agreement dated
effective August 1, 1989 by and between Santa Fe Energy Operating Partners, L.P.
and Union Oil Company of California (predecessor-in-interest to Nuevo Energy
Company), as amended April 20, 1994.

      The following contract provides for selling gas.

  (xi)   Gas Purchase Contract dated effective August 1, 1998 by and between
Torch Energy Marketing, Inc. (“Seller”) and Crimson Resource Management Corp.
(“Buyer”).

Miscellaneous Service Contracts: (Immediately Follows)

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MISCELLANEOUS
SERVICE
CONTRACTS

                      VENDOR   ADDRESS   PHONE #   ACCT. OR CUST. #   TYPE OF
SERVICE
Allied Commercial
Cleaning
  1775 E. Lincoln Ave., #104, Anaheim, CA 92805   714-284-1178          
Janitorial Service
 
                   
Brea Disposal
  1131 North Blue Gum St., Anaheim, CA 92815   714-238-3300     104828     Trash
Service
 
                   
Yosemite Waters
  601 W. Valencia Dr., Fullerton, CA 92832   714-870-4022     133008     Water &
Cooler Service
 
                   
Ionics
  7777 Industry Ave., Pico Rivera, CA 90660   562-942-2200     46516     R/O
Water System Rental
 
                   
Aramark
  P.O. Box 5206, Santa Ana, CA 92704   714-545-4877     2903002/2903000     Mat
& Rag Service
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449   OA338   Cylinder Rental
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449   CF812   Cylinder Rental
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449   BV665   Cylinder Rental
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449   OA341   Cylinder Rental
 
                   
Scott Specialty Gases
  6141 Easton Rd., Plumsteadville, PA 18949   215-766-8861     83276900    
Cylinder Rental
 
                   
Underground Service Alert
  P.O. Box 77070, Corona, CA 92877   909-808-8100   NUEVOBRE   USA - Dig Alerts
 
                   
Portosan Company
  P.O. Box 6006, El Monte, CA 91734   800-638-1233     75261     Septic Rental &
Disposal
 
                   
Kenneth R. Starr
  7701 11th St., Buena Park, Ca   714-522-6550           A/C & Refrigeration
Maint.
 
                   
Schumann Communications
  731 South Highway 101 #1C, Solana Beach, CA 92075   858-794-0794     E87129  
  Answering Service
 
                   
Critco Flow Measurement
  P.O. Box 1639, Houston, TX 77251   713-463-7773           Gas Chart
Calculations
 
                   
Federl Express
  P.O. Box 1140, Dept. A, Memphis, TN 38101   800-622-1147     2001-3867-8    
Courier Service
 
                   
Ace Pump
  848-A W. Century, Santa Maria, CA 93455   805-925-7570     5500     Bailer
Rental

Exhibit G
Page 10 of 13

 

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                      VENDOR   ADDRESS   PHONE #   ACCT. OR CUST. #   TYPE OF
SERVICE
Coast To Coast
  8 Vanderbilt, Irvine, Ca 92619   949-457-7300     S/N     Fax & Copier Service

            96010212,96010215,     Agreements

          EA621378 & JE643420    
 
                   
Southwest Environments
  P. O. Box 1741, Costa Mesa, CA 92628   949-642-2257   NV&RB   Gardening
Service
 
                   
United Parcel
  P. O. Box 894820, Los Angeles, Ca 90189   800-811-1648     X97774     Courier
Service
 
                   
Sims Welding Supply
  18903 South Main St., Gardena, CA 90248   310-327-6650     274153001    
Cylinder Rental
 
                   
Culligan Water
  502 S. Lyon St., Santa Ana, CA 92701   800-756-6300     893425     Soft Water
Service
 
                   
Culligan Water
  502 S. Lyon St., Santa Ana, CA 92701   800-756-6300     893420     Soft Water
Service
 
                   
Pitney Bowes Credit Co.
  P. O. Box 856460, Louisville, TX 40285   800-572-2624     1749598     Monthly
Postage
Equipment Rental
 
                   
Pitney Bowes Inc.
  P.O. Box 856390, Louisville, TX 40285   800-331-7641     1642-0723-86-4    
Softguard Rate Protection
Plan
 
                   
Pitney Bowes Credit Co.
  P.O. Box 856390, Louisville, TX 40285   800-331-7641     1642-0723-86-4    
Yearly Equip. & Maint.
Services
 
                   
UTILITIES
                   
 
                   
Pacific Bell
  Payment Center, Van Nuys, Ca 91388   800-750-2355     714-257-1600-291-S-
3182     Phone Service
 
                   
Pacific Bell
  Payment Center, Van Nuys, Ca 91388   800-750-2355     714-529-2118-411-S-
2182     Phone Service
 
                   
City of Brea
  1 Civic Center Circle, Brea, CA 92821   714-990-7687     22215551     Fresh
Water
 
                   
Cable & Wireless
  46020 Manekin Plaza, Sterling, VA
20166   800-486-8686   ECA8001224   Long Distance
 
                   
Express Tel
  P. 31475, Salt Lake City, UT 84131   800-748-4020     4-17123-8     Long
Distance
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91771   800-990-7788     2-05-020-3389    
Electricity
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91772   800-990-7789     2-20-253-3527    
Electricity
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91773   800-990-7790     3-020-0006-69    
Electricity
 
                   

Exhibit G
Page 11 of 13

 

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Permits and Plans for Brea Olinda Field:

  •   South Coast Air Quality Management District Facility Permit ID#109198

      Facility Description Covered in Permit

    Process 1 : Crude Oil/Gas/Water Separation
Tonner Canyon Tank Farm
East Naranjal Tank Farm
Crude Oil/Gas/Water Separation
      Process 2 : Natural Gas Processing – Stearns Gas Plant
Field Compression
Compression Unit
Process Unit
Process Heating System
Refrigeration Unit
Glycol Regeneration and Stabilization
Odorant system – Sales Gas
Propane Extraction System
      Process 3 : Internal Combustion Engines       Process 4 : Storage and
Loading       Process 5 : Flare System       Process 6 : Vapor Recovery and
Drain System       Process 7 : Fugitive Emission Sources       Process 8 : R219
Exempt Equipment Subject to a Source Specific Rule       Title V  

  •   Industrial Wastewater Discharge Permit No. 2-1-181

  Permit good until December 31, 2002 at which time it needs to be renewed.

  •   Spill Prevention Control and Countermeasure Plan (SPCC) for Stearns Plant.
    •   Spill Prevention Control and Countermeasure Plan (SPCC) for Brea Olinda
Field.     •   Business Emergency Plan and Hazardous Materials Disclosure – Brea
Lease     •   Miscellaneous Pressure Vessels located in the Field and Plant
Permits     •   Pending Permits for the H2S Scrubber and to move the East
Naranjal Tank Farm.

Exhibit G
Page 12 of 13

 

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  •   Emergency Response Plans for the following systems:

      East Coyote Gas Gathering Pipeline
Richfield to East Coyote Gas Gathering Pipeline
Sansinena Gas Gathering Pipeline

Exhibit G
Page 13 of 13

 

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ATTACHMENT NO. 6
TO
MINERAL GRANT DEED

THIRD PARTY EASEMENTS, CONTRACTS AND LICENSE AGREEMENTS

Executable Grant Deed

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TABLE OF CONTENTS

ATTACHMENT 6

RELATED THIRD-PARTY EASEMENTS,
CONTRACTS AND LICENSE AGREEMENTS

(Oil Field Related Third Party Easements and License – TPEL)

                                  Recording Document Type

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Grantee

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

Right-of-Way
  1/26/82   Union Oil Company of California   Mobil Oil Corporation   82-340271
Los Angeles
County
 
               
License
  8/21/67   Union Oil Company of California   Shell Oil Company   Unrecorded
 
               
License PSA
  11/10/88   Union Oil Company of California   Shell Western E&P Inc.  
Unrecorded
 
               
Easement
  7/27/62   Union Oil Company of California   Boy Scouts of America, Los Angeles
Area Council   8/1/62
6245/654
 
               
Easement
  9/13/84   Union Oil Company of California   City of Brea   10/11/84
84-421551
 
               
Easement
  9/10/85   Union Oil Company of California   City of Brea   10/7/85
85-382994
 
               
Easement
  9/2/86   Union Oil Company of California   Brea H.O.P.E. Inc.   10/1/86
86-459482
 
               
Easement
  3/18/96   Union Oil Company of California   City of Brea   3/29/96
Inst.
19960153323
 
               
Easement
  3/18/96   Union Oil Company of California   City of Brea   3/29/96
Inst.
19960153324
 
               
Easement
  1/26/82   Union Oil Company of California   Mobil Oil Corporation   3/31/82
Inst. 82-340271
[Los Angeles County]
 
               
Easement
  8/21/67   Union Oil Company of California   Shell Oil Company   N/A
 
               
Easement
  11/10/88   Union Oil Company of California   Shell Western E&P Inc.   N/A
 
               
Easement
  4/1/58   Union Oil Company of California   The Metropolitan Water District of
Southern California   5/21/58
4291/400
 
               
Easement for Oil Wells
  10/16/58   Collier Carbon and Chemical Corporation   Union Oil Company of  
11/3/58
4470/10

1

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ATTACHMENT 6

                                  Recording Document Type   Date   Grantor  
Grantee   Information

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

            California                       Non-Exclusive Easement and
Right-of-Way   7/27/62   Union Oil Company of California   Boy Scouts of
America, Los Angeles Area Council   8/1/62
6245/654                   Right-of-Way   10/2/62   Union Oil Company of
California   Southern California
Edison Company   1/18/63
6399/705                   Grant of Easement   9/18/78   Union Oil Company of
California   Southern California
Edison Company   2/5/79
13024/1157                   Grant of Easement   5/17/88   Union Oil Company of
California, dba UNOCA1   Southern California
Edison Company   6/7/88
Inst. 88-268095                   Easement   9/15/95   Union Oil Company of
California, dba UNOCA1   UNOCAL California
Pipeline Company   10/25/95
Inst. 19950473641                   Grant of Easement   12/11/95   Union Oil
Company of California, dba UNOCA1   Southern California
Edison Company   1/4/96
Inst. 19960004773                   Easement PSA   3/18/96   Union Oil Company
of California   City of Brea   3/29/96 Inst. 19960153322                  
Easement PSA   3/18/96   Union Oil Company of California   City of Brea  
3/29/96
Inst. 19960153323                   Easement PSA   3/18/96   Union Oil Company
of California   City of Brea   3/29/96
Inst. 19960153324                   Easement   5/7/96   Nuevo Energy Company  
Union Oil Company of California dba UNOCA1   5/26/96
Inst. 19960254739                   Pipeline
Right-Of-Way   5/12/02   The Stems Ranchos
Company   Pacific Coast Oil
Company   6/25/02
Do not have recording info.                   License   5/1/59   Union Oil
Company of California   Shell Oil Company   Do not have recording info.

Any other Third Party Easement or License disclosed in Preliminary Title Report
#OR-2252674,dated September 13, 2002, First American Title Company.

2

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ATTACHMENT 6

ADDITIONAL CONTRACTS AND GIFT DEED

1.   Memorandum of Understanding between Nuevo, County of Orange and City of
Brea dated December 10,2002 regarding pre-annexation.   2.   Development
Agreement dated December 19, 2002, between Nuevo and County of Orange.   3.  
Impact Mitigation Agreement between Brea Olinda Unified School District and
Nuevo dated as of October 28,2002.   4.   Gift Deed dated January 30,2003 from
Nuevo to the Brea-Olinda Unified School District Conveying 0.425 acres, recorded
on February 25, 2003 as Instrument No. 2003000207265 in the official records of
Orange County.

3

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ATTACHMENT NO. 7
TO
MINERAL GRANT DEED

EXCLUDED ASSETS

 

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TABLE OF CONTENTS

ATTACHMENT 7

List of Excluded Interests

          SPECIFICALLY EXCEPTED AND RESERVED from this Transaction are the
following described interests (hereinafter referred to as, the “Excluded
Interests”):

          (a) Any of Seller’s economic analyses, pricing forecasts, legal
opinions or analyses, or information considered by Seller as confidential or
protected by “Attorney-Client Privilege”;

          (b) All rights and claims arising, occurring, or existing in favor of
Seller prior to the Effective Date including, but not limited to, any and all
contract rights, adjustments, mispayments, erroneous payments, personal injury,
property damage, royalty or other rights and claims of any nature in favor of
Seller relating to any time period prior to the Effective Date;

          (c) All corporate, financial, and tax records of Seller; however,
Buyer shall be entitled to receive copies of any financial and tax records which
directly relate to the Property Interests, or which are necessary for Buyer’s
ownership, administration, or operation of the Property Interests;

          (d) All rights, titles, claims and interests of Seller related to the
Property Interests for all periods prior to the Effective Date, subject to
Section 3.2.4 in the Agreement and to any other contrary provisions of the
Agreement: (i) under any policy or agreement of insurance or indemnity,
(ii) under any bond, or (iii) to any insurance or condemnation proceeds or
awards;

          (e) All hydrocarbons produced from or attributable to the Property
Interests with respect to all periods prior to the Effective Date together with
all proceeds from or of such hydrocarbons;

          (f) Claims of Seller for refund of or loss carry forwards with respect
to (i) production, windfall profit, severance, ad valorem or any other taxes
attributable to the Property Interests for any period prior to the Effective
Date, and (ii) income or franchise taxes attributable to the Property Interests
for any period prior to the Effective Date;

          (g) All amounts due or payable to Seller as adjustments or refunds
under any contracts or agreements affecting the Property Interests for all
periods prior to the Effective Date;

          (h) All amounts due or payable to Seller as adjustments to insurance
premiums related to the Property Interests for all periods prior to the
Effective Date;

          (i) Subject to the terms of the Agreement, all monies, proceeds,
benefits, receipts, credits, income or revenues (and any security or other
deposits made) attributable to the Property Interests prior to the Effective
Date;

          (j) All of Seller’s patents, trade secrets, copyrights, names, marks
and logos;

1

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          (k) All of Seller’s Emission Reduction Credits, as defined in the
California Health and Safety Code, except as to those credits that apply to the
Property Interests;

          (l) All of Seller’s right, title and interest in and to that Federal
Communications Commission license having a Call Sign of KMG618, said license
having an expiration date of March 8, 2005.

          (m) Any portion of the Property Interests which Seller is prohibited
or restricted in whole or in part, by any statute, law, ordinance, rule,
regulation, order or notice of any Governmental Agency or by any contractual
arrangement or agreement, from transferring, selling or conveying; and

          (n) Any and all of Seller’s equipment presently being stored on the
Land or otherwise within the Brea Olinda field that relates to Seller’s offshore
operations.

          (o) All well samples and cores located in the building; within Parcel
3 described on Exhibit A-1 to the Agreement, and all those buildings located
within Parcel 3.

          (p) Real Estate and Surface Related Interests:

               1. The Commercial Lease and Agreement between Nuevo Energy
Company, as Lessor, and Brea Green Recycling, Inc., as Lessee, dated February 1,
1997.

               2. The Letter Agreement between Haynes Apiaries and Union Oil
Company of California dated December 29, 1992, as amended.

               3. The Easement Agreement for Storm Drain Improvement between
Nuevo Energy Company and Brea Olinda Venture L. L. C. dated November 3, 2000.

               4. Letter Agreements dated March 19, 2001 and October 1, 2002, by
and between Deborah Linn Associates and Nuevo.

               5. Contract dated February 8, 2001, by and between Culbertson,
Adams & Associates and Nuevo, as amended by letter dated July 16, 2002.

               6. Proposal dated June 18, 2002, from Earth Consultants
International to Nuevo.

               7. Professional Service Agreement dated April 17, 2001, by and
between The Keith Companies, Inc. and Nuevo.

               8. Professional Services Agreement dated June 15, 1998, by and
between QST Environmental, Inc. and Nuevo, as amended February 27, 2002.

          (q) Additional Easements:

               1. Stearns Rancho Company to UNOCAL dated December 14, 1896,
recorded on July 10,1897 as Doc. # 30/11.

2

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               2. Stearns Ranchos Company to Pacific Coast Oil Company dated May
12, 1902, recorded on June 25, 1902 as Doc. # 75/254.

               3. UNOCAL to Brea Chemical, Inc. dated June 7, 1957, recorded
June 10, 1957 as Doc. # 3936/324.

               4. Collier Carbon and Chemical Corp. to UNOCAL dated October 16,
1958, recorded November 3, 1958 as Doc. # 4470/10.

               5. UNOCAL to UNOCAL California Pipeline Co. dated September 25,
1995, recorded December 19, 1995 as Doc. # 19950565134.

               6. Nuevo to UNOCAL dated May 7, 1996, recorded May 21, 1996 as
Doc. # 19960254739.

               7. Brea Canon Oil Company to General Petroleum Corporation dated
May 1921.

3

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Property Address: SEE ADDENDUM BREA CA 92821

EXHIBIT E
Natural Hazard Zones

     Natural Hazard Zones For more information regarding a particular Airport or
the specified Public Record, please contact your local office of the U.S.
Department of Transportation, Federal Aviation Administration.

      B-4.   Megan’s Law (California Civil Code §2079.10a)

The following notice is provided as an accommodation. California Civil Code
Section 2079.10a (commonly referred to as “Megan’s Law”) requires the following
notice be provided as part of the purchase agreement to a buyer or lessee of
residential property:

Notice: The California Department of Justice, sheriffs departments, police
EXHIBIT G

PDR® INFORMATION PAGE
PDR is a registered trademark

THE COMPANY

PROPERTY DATA SERVICES, INC.
A Subsidiary of The First American Corporation
(the “Company”)
5601 E. La Palma Avenue, Anaheim, CA 92807

PROPERTY IDENTIFICATION & PDR DATE

       PLEASE VERIFY THAT THE PROPERTY INFORMATION BELOW IS CORRECT.

Property Address: SEE ADDENDUM, BREA, CA 92821

Property Assessor’s Parcel Number: SEE ADDENDUM

PDR Date: Monday, July 29, 2002

ADDRESSEE

FIRST AMERICAN TITLE
ATTENTION: RON GOMEZ
2 FIRST AMERICAN WAY
SANTA ANA, CA 92707

Exhibit E
Page 1 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

NOTICE

The Company is pleased to provide Recipient with this Property Disclosure Report
(“PDR”) for the Property identified above. Please note that this PDR is a
contract subject to the Terms, Conditions, and Limitations on Liability set
forth herein which should be reviewed carefully.

The information contained in this PDR is derived as of the PDR Date from certain
specified Public Records within the control of the governmental entities
described in Schedule A (“Natural Hazard Disclosure Summary”) and Schedule B
(“Summary of Additional Disclosures”). The information set forth in Schedule A
(a) relates to the natural hazard zones specified in California Civil Code §
1103.2, and (b) is provided by the Company in accordance with the requirements
of Civil Code § 1103.4(c). The information set forth in Schedule B is provided
by the Company to facilitate compliance with those disclosures specified in
Schedule B. Please note that this PDR is NOT based upon a physical inspection of
the Property.

THE “NATURAL HAZARD DISCLOSURE STATEMENT” FORM REQUIRED BY CALIFORNIA CIVIL CODE
§1 103.2(a) (“THE LAW”) HAS BEEN COMPLETED AS OF THE PDR DATE IN ACCORDANCE WITH
THE TERMS OF THIS PDR AND IS PROVIDED WITH THIS PDR AS AN ACCOMMODATION ONLY AND
IS NOT PART OF THE PDR. PLEASE NOTE THAT THE LAW REQUIRES THAT THE STATUTORY
FORM BE COMPLETED, EXECUTED, AND DELIVERED BY THE SELLER AND RESPECTIVE REAL
ESTATE AGENTS TO THE BUYER. IN ADDITION TO THESE STATUTORY NATURAL HAZARD
DISCLOSURES, CERTAIN OTHER INFORMATION IS ALSO PROVIDED IN THIS PDR FOR THE
BENEFIT OF THE RECIPIENTS.

     If you have any questions or comments regarding this PDR,
please contact the Company’s Customer Service Department at (800) 200-2561.

     THIS PDR IS A CONTRACT. PLEASE READ IT CAREFULLY.
THIS PDR IS A REPORT PRODUCT AND IS NOT AN INSURANCE POLICY.

©2002 Property Data Services, Inc.

Exhibit E
Page 2 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

Addendum to
PDR No. 02PDS1669 (Control/File No. 318379)
Property Identification - Assessor Parcel Numbers

     This Addendum pertains solely to PDR No. 02PDS 1669 (Control/File # 318379)
dated 29 July 2002 for disclosure information about twenty-three (23) parcels
located in County of Orange, State of California as provided to Property Data
Services, Inc. These parcels constitute the Property for the purpose of this
PDR. The accompanying PDR is hereby issued for disclosures pursuant to a
Transaction involving Property as provided by Customer as identified by the
following assessor parcel numbers:

          304-171-02   306-031-05   319-142-08 306-011-02   306-031-06  
319-142-10 306-012-22   306-031-07   320-281-02 306-012-32   306-031-08  
320-281-05 306-012-33   306-031-09   320-281-09 306-012-34   306-031-11  
320-073-02 306-031-02   306-031-12   320-073-06 306-031-03   306-031-17    

     This PDR applies only to the Property as identified by those parcel numbers
specified above and to no others pursuant to the Transaction. Responses
contained in this PDR apply only to the Property identified by those parcels
described above and to no others pursuant to the Transaction. This Addendum is
attached hereto and made a part of PDR No. 02PDS1669 (Control/File # 318379) as
of this reference and is subject to the Terms, Conditions, and Limitations on
Liability contained herein.

Exhibit E
Page 3 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

SCHEDULE A
NATURAL HAZARD DISCLOSURE SUMMARY

SPECIAL FLOOD HAZARD AREA

Is any portion of the Property located within a Special Flood Hazard Area
(“SFHA”) according to the Public Record specified below as of the PDR Date?

Yes [   ] No [X ] Do not know / information not available from local
jurisdiction [   ]

Public Record: Official Flood Insurance Rate Maps (“FIRM”) compiled and issued
by FEMA pursuant to 42 United States Code §4001, et seq.

Note: If the Property is subject to either a Letter of Map Amendment (“LOMA”) or
Letter of Map Revision (“LOMR”) issued by the Federal Emergency Management
Agency (“FEMA”), a copy of the LOMA or the LOMR must be attached to the Natural
Hazard Disclosure Statement (“NHDS”) or appropriate disclosure statement. The
Company is not always able to determine if the Property is subject to a LOMA or
a LOMR. Even if such information is available to the Company, the Company is
unable to attach a copy of the LOMA or LOMR to the NHDS. If Seller is aware that
the Property is subject to a LOMR or a LOMA, the Seller shall attach a copy to
the NHDS and notify the Company.

AREA OF POTENTIAL FLOODING

Is any portion of the Property located within an Area of Potential Flooding
according to the Public Record specified below as of the PDR Date?

Yes [X] No [   ] Do not know / information not available from local jurisdiction
[   ]

Public Record: Official dam inundation maps issued by the California Office of
Emergency Services (“OES”) pursuant to California Government Code §8589.5.

VERY HIGH FIRE HAZARD SEVERITY ZONE

Is any portion of the Property located within a Very High Fire Hazard Severity
Zone according to the Public Record specified below as of the PDR Date?

Yes [   ] No [X]

Public Record: Official maps issued by the California Department of Forestry and
Fire Protection (“CDF”) pursuant to California Government Code §51178. NOTE
Publicly available data provided by local agencies responsible for fire
prevention and suppression in this county pursuant to Government Code §§51179
and 65302(g) may be used to supplement CDF data. For more information, please
contact the Company’s Customer Service Department.

Exhibit E
Page 4 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

WILDLAND - STATE RESPONSIBILITY AREA

Is any portion of the Property located within a Wildland - State Responsibility
Area according to the Public Record specified below as of the PDR Date?

Yes [X] No [   ]

Public Record: Official maps issued by the California Department of Forestry and
Fire Protection (“CDF”) pursuant to California Public Resources Code §4125.

EARTHQUAKE FAULT ZONE

Is any portion of the Property located within an Earthquake Fault Zone according
to the Public Record specified below as of the PDR Date?

Yes [X] No [   ]

Public Record: Official earthquake fault zone or special study zone maps
approved by the State Geologist and issued by the California Department of
Conservation, California Geological Survey pursuant to California Public
Resources Code §2622.

SEISMIC HAZARD ZONE

Is any portion of the Property located within a Seismic Hazard Zone (Area of
Potential Liquefaction) according to the Public Record specified below as of the
PDR Date?

Yes [X] No [   ] Maps not yet released by state [   ]

Is any portion of the Property located within a Seismic Hazard Zone (Area of
Potential Landslide) according to the Public Record specified below as of the
PDR Date?

Yes [X] No [   ] Maps not yet released by state [   ]

Public Record: Official seismic hazard zone maps approved by the State Geologist
and issued by the California Department of Conservation, California Geological
Survey pursuant to California Public Resources Code §2696.

Exhibit E
Page 5 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

SCHEDULE B
SUMMARY OR ADDITIONAL DISCLOSURES

B-l.       Mello-Roos C.F.D. Act of 1982 & Improvement Bond Act of 1915
Assessments

Is the Property (1) located within one or more Mello-Roos Community Facilities
District(s) as defined in California Government Code §53311 et seq. according to
the Public Record specified below as of the PDR Date and/or (2) subject to one
or more fixed lien assessment(s) collected in installments to secure bonds
issued pursuant to the Improvement Bond Act of 1915 as set forth in California
Streets and Highways Code §8500 et seq. according to the Public Record specified
below as of the PDR Date?

[   ] YES, the Property IS subject to one or more of the specified special
assessments.

[X] NO, the Property IS NOT subject to the specified special assessments.

Public Record: Latest equalized assessment roll for real property taxes for the
Property (“Assessment Roll”).

IMPORTANT NOTE ON CURRENT AND FUTURE ASSESSMENTS

     The following information is provided to facilitate a good faith effort to
obtain information for the required disclosures. Company has made a good faith
effort to obtain information from available Public Records; however, some local
agencies have not made such Public Records available to Company. Company
recommends that each party review the statutory guidelines and Public Records
and obtain advice from an attorney if concerned about meeting the statutory
requirements.     

     The information above is derived from the Assessment Roll as of the PDR
Date. Such information will NOT appear on the Assessment Roll if a district or
assessment (a) is in the process of being formed as of the PDR Date, (b) has
been stripped from the Assessment Roll as of the PDR Date due to delinquency, or
(c) has been stripped from or zeroed out from the Assessment Roll as of the PDR
Date as a result of judicial foreclosure 1, or an exemption granted to the
current property owner. For more information, please review a current
preliminary title report or title commitment for the Property for possible
additional assessment information that has been recorded in the official records
of the county where the Property is located. Buyer should ask the Seller if
he/she has received any notices of intent or has any information regarding the
formation of assessment districts or other assessments which may affect the
property.

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1 As used herein, the term “foreclosure” refers to foreclosure due to delinquent
assessment liens or delinquent ad valorem property taxes.

Exhibit E
Page 6 of 25

 

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STATUTORY DISCLOSURE OBLIGATIONS

     California Civil Code §I 102.6(b) requires that a seller make a good faith
effort to obtain a disclosure notice (“Notice of Special Tax”) concerning any
special tax from the applicable local agency and to deliver such Notice to the
buyer. To promote compliance, California Government Code §53340.2 and §53754 set
forth a statutory form for this Notice and provide that the legislative body
levying the special tax shall designate an office, department, or bureau of the
local agency which shall set procedures to promptly respond to inquiries
regarding current and future estimated tax liability. This Notice shall be
furnished to an individual or an owner of property subject to a special tax
levied by the local agency within five (5) working days of receiving a request
for such Notice. The local agency may charge a reasonable fee for this service
not to exceed ten dollars ($10.00). After a seller receives said Notice from the
agency, said Notice must be provided to the buyer. THE COMPANY DOES NOT OBTAIN
SUCH NOTICE AS A PART OF THIS PDR.

     MELLO-ROOS C.F.D. ACT OF 1982 & THE IMPROVEMENT BOND ACT OF 1915

     California Civil Code § 1102.6(b) requires a Seller of real property to
make a good faith effort to obtain and to deliver to the Buyer a “Notice of
Special Tax” from each local agency which levies a special tax pursuant to:

     The Mello-Roos Community Facilities Act of 1982 authorizes the
establishment of Mello-Roos Community Facilities District(s) (“CFD”), a special
taxing authority allowing certain local governmental entities to finance certain
designated public services and capital facilities including, but not limited to,
police and fire protection services, ambulance and paramedic services,
elementary and secondary schools, libraries, cultural facilities, and museums.
This special tax is a lien on the property. For more details, please consult
California Government Code §53311 et seq.

     The Improvement Bond Act of 1915 authorizes the legislative body of any
city to issue special bonds to pay the cost of any work or improvement in any of
the streets, avenues, lanes, alleys, courts, places, or public ways of the city,
or in, over, or through any property or rights-of-way owned by the city
authorized by the Improvement Act of 1911 (Division 7 (commencing with §5000)),
or by the Municipal Improvement Act of 1913 (Division 12 (commencing with
§10000)), or to pay the cost of any other work or improvement charged and
assessed upon real property pursuant to any other law. For more details, please
consult Caifonia Streets and Highways Code §8500 et seq.

B-2.         Former Ordnance Locations (California Civil Code §1102.15)

As of the PDR Date, are there any Former Ordnance Locations within one (1) mile
Radius of the Property according to the Public Record specified below?

      [X]   NO, the Property IS NOT located within a one (1) mile Radius of a
Former Ordnance Location according to the Public Record.       [   ]   YES, the
Property IS located within a one (1) mile Radius of Former Ordnance Location
according to the Public Record as follows:

Exhibit E
Page 7 of 25

 

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Public Record: “DERP-FUDS Projects in California” Reports, Project Information
Retrieval System, United States Army Corps of Engineers (“USACE”)
(http://pirs.mvr.usace.armv.mil/) supplemented by “OE Project Fact Sheets -
California,” USACE Engineering and Support Center, Huntsville, AL
(www.hnd.usace.army.mil/oew/factsbts/states/cafact)

SCHEDULE B-2 DEFINITIONS AND REPORTING STANDARDS

       This Schedule uses the following definitions in addition to those
specified in Section 1 of the “Terms, Conditions and Limitations on Liability”:

      TERM   DEFINITION

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Boundary -Approximate   The boundary of the specified Former Ordnance Location
is an approximation only. Location map(s) and legal description(s) in the Public
Record is not of adequate scale or clarity to define a distinct geographic
boundary.       Boundary -Defined   The boundary of the specified Former
Ordnance Location set forth in the location map(s) or legal description(s) in
the Public Record is of adequate scale or clarity to define a distinct
geographic boundary.       Former Ordnance Locations   Former state or federal
ordnance locations which have been identified by an agency or instrumentality of
the federal or state government as an area once used for military training
purposes which may contain potentially explosive munitions.       Radius   A
distance of one (1) mile in any direction using the Property as the origin.
NOTE: The Property is mapped as a geocoded point based on information provided
to the Company. Former Ordnance Locations are mapped as polygons as represented
in size, shape, and position in the Public Record. The Boundary of a Former
Ordnance Locations is factored into the calculation of the Radius; however, the
physical boundary of the Property is not.

     This Schedule uses the following Reporting Standards in addition to those
specified in Section 6 of the “Terms, Conditions and Limitations on Liability”;

  •   The following information is NOT disclosed in this Schedule:

o   Former Ordnance Locations listed in inventories of other states or located
in other states.   o   Properties currently operated or managed by the
Department of Defense (including Base Realignment and Closure projects, unless
specifically identified as eligible for investigation within the Public Record).

  •   If the Public Record has identified potential or confirmed ordnance
presence on any portion of a Former Ordnance Location, the entire site is so
designated for purpose of disclosure in this Schedule.     •   Former Ordnance
Locations consisting of multiple geographic locations are treated as a single
site in this Schedule.     •   Former Ordnance Locations only include locations
which were previously utilized for military training purposes; however, the
Public Record includes sites used for other purposes.     •   Privately operated
sites such as gun ranges are not included in this Schedule.

Exhibit E
Page 8 of 25

 

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STATUTORY DISCLOSURE OBLIGATIONS AND DATA SOURCE

     California Civil Code §1102.15 requires the seller of residential real
property who has actual knowledge of any Former Ordnance Locations within the
“neighborhood area” (which is defined as being within one (1) mile of the
residential real property) to give written notice of that knowledge to buyer as
soon as practicable before transfer of title.

     The Formerly Utilized Defense Sites program was established to coordinate
environmental cleanup of properties formerly controlled by the Department of
Defense. In 1985, USACE assumed program management responsibilities. One of the
goals of risk assessment is to detect the potential or confirmed presence of
unexploded ordnance. At least a portion of project sites identified in the
Public Record have been determined to have potential and/or confirmed ordnance
presence subject to this risk assessment. Some of these project sites may be
subject to further investigative and clean-up action. For more information about
a particular project, please contact the Los Angeles or Sacramento office of the
United States Army Corps of Engineers.

      B-3.   Airport Locations (California Civil Code §1102.17)

As of the PDR Date, are there any Airports identified in the specified Public
Record located within a five (5) mile Radius of the Property?

      [X]   NO, an Airport IS NOT located within a five (5) mile Radius of the
Property.       [   ]   YES, the following Airport(s) IS located within a five
(5) mile Radius of the Property:

Public Record: “Sectional Aeronautical Charts” published by the United States
Department of Transportation, Federal Aviation Administration, National
Aeronautical Charting Office.

SCHEDULE B-3 DEFINITIONS AND REPORTING STANDARDS

     This Schedule uses the following definitions in addition to those specified
in Section 1 of the “Perms, Conditions and Limitations on Liability”:

      TERM   DEFINITION

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Airport   Defined in the specified Public Record as (1) “Hard-surfaced runways
1500 ft. to 8069 ft. in length”; (2) “Hard surfaced runways greater than 8069
ft. in length or some multiple runways less than 8069 ft. in length”; or (3)
“Open dot within hard-surfaced runway configuration indicates approximate VOR,
VOR-DME, or VORTAC location.” The location of an Airport is based on a polygon,
the position of which is based on the approximate location of that Airport’s
runway(s), not upon the physical property boundary of that Airport.

Exhibit E
Page 9 of 25

 

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      TERM   DEFINITION

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Radius   A distance of five (5) miles in any direction using the Property as the
origin. NOTE: The Property is mapped as a geocoded point based on information
provided to the Company. Airports are mapped as polygons as represented in size,
shape, and position in the Public Record. The physical property boundary of
neither any Airport nor the Property is factored into the calculation of the
Radius.

     This Schedule uses the following Reporting Standards in addition to those
specified in Section 6 of the “Terms, Conditions and Limitations on Liability”:

  •   The following information is NOT disclosed in this Schedule: o Airports
located outside California.

•   Airports defined in the Public Record as “Other than hard-surfaced runways”
(which may include dirt landing strips or roads).   •   Airports identified in
the Public Record as “Abandoned - paved having landmark value, 3000 ft. or
greater.”   •   Standard instrument departure routes, standard terminal arrival
routes, or airways which may be located within the Radius.

STATUTORY DISCLOSURE REQUIREMENTS

     California Civil Code § 1102.17 requires the seller of residential real
property who has “actual knowledge” that the property “is affected by or zoned
to allow an industrial use described in §73la of the Code of Civil Procedure” to
give written notice of that knowledge as soon as practicable before transfer of
title. California Code of Civil Procedure §731 (a) states:

“Whenever any city, city and county, or county shall have established zones or
districts under authority of law wherein certain manufacturing or commercial or
airport uses are expressly permitted, except in an action to abate a public
nuisance brought in the name of the people of the State of California, no person
or persons, firm or corporation shall be enjoined or restrained by the
injunctive process from the reasonable and necessary operation in any such
industrial or commercial zone or airport of any use expressly permitted therein,
nor shall such use be deemed a nuisance without evidence of the employment of
unnecessary and injurious methods of operation. Nothing in this act shall be
deemed to apply to the regulation and working hours of canneries, fertilizing
plants, refineries and other similar establishments whose operation produce
offensive odors.“departments serving jurisdictions of 200,000 or more and many
other local law enforcement authorities maintain for public access a data base
of the locations of persons required to register pursuant to paragraph (1) of
subdivision (a) of Section 290.4 of the Penal Code. The data base is updated on
a quarterly basis and a source of information about the presence of these
individuals in any neighborhood. The Department of Justice also maintains a Sex
Offender Identification Line through which inquiries about individuals may be
made. This is a “900” telephone service. Callers must have specific information
about individuals they are checking. Information regarding neighborhoods is not
available through the “900” telephone service.

Exhibit E
Page 10 of 25

 

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Additional Information: Megan’s Law does not require that the seller or seller’s
agent to investigate or review the data base. However, this Notice does not
exempt a seller or seller’s agent from complying with California Civil Code
Sections 1102 and 2079 which require disclosure of any fact materially affecting
the value and desirability of the Property.

     For more information regarding Megan’s Law, please visit the California
Office of the Attorney General, Department of Justice website at:
http://caag.state.ca.us/megan/index.htm.

INFORMATION ON NATURAL HAZARD DISCLOSURE

The following information is a summary of the most basic aspects of natural
hazard disclosure requirements as set forth by the Residential Natural Hazard
Disclosure Law. Please note that a property owner and his/her agent may still be
subject to additional disclosures required by other State laws or county, city,
or local ordinances.

Residential Natural Hazard Disclosure Law

     The Residential Natural Hazard Disclosure Law (California Civil Code §1103
et seq.) requires the location of residential real property (defined as property
containing 1-4 family dwelling units) in relation to six (6) natural hazard
zones/areas be disclosed to a “transferee” of such property. A “transferee” is
anyone acquiring an interest in residential real property whether by sale,
exchange, installment land contract, lease with option to purchase, option to
purchase, or ground lease coupled with the improvements. Certain specific types
of transactions set forth in Civil Code § 1103.1 are exempt, such as transfers
ordered by a probate court, etc. Other than the excluded transactions, the
specified disclosures are mandatory and can not be waived. Any such waiver is
void as against public policy. The disclosures are to be made on the statutory
form which is to be executed by the parties and agents.

     The Residential Natural Hazard Disclosure Law states that the required
disclosures under this particular statute do not limit or abridge any obligation
for disclosure created by any other provision of law or that may exist in order
to avoid fraud, misrepresentation, or deceit in the transfer transaction and
shall not change the duty of a real estate-broker or salesperson pursuant to
Civil Code §2079.

     Neither the transferor nor his/her agent is responsible for any error,
inaccuracy, or omission of any information delivered pursuant to the law
provided that such error, inaccuracy, or omission was not within their personal
knowledge and was based on a report prepared by a licensed engineer, land
surveyor, geologist, or expert in natural hazard discovery dealing with matters
within the scope of the professional’s license or expertise. In the event that
the information provided becomes inaccurate due to changes caused by
governmental action, map revisions, changed information, or other act of
occurrence, the inaccuracy is not a violation of the Residential Natural Hazard
Disclosure Law unless the transferor or agent has actual knowledge that the
information has become inaccurate.

     Any person who fails to perform any duty prescribed by any provision of the
Residential Natural Hazard Disclosure Law shall be liable in the amount of
actual damages suffered by the transferee.

Exhibit E
Page 11 of 25

 

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The Six Natural Hazard Zones/Areas

       California’s Residential Natural Hazard Disclosure Law requires the
transferor (if acting alone) or the transferor’s agent to disclose to a
prospective transferee if any portion of residential real property is located
within any one of six designated natural hazard zones according to maps issued
by the appropriate governmental agency:

                  Code Section (§) Natural Hazard   Defining the Zone/Area

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1.   SPECIAL FLOOD HAZARD AREA   California Government Code §8589.3           2.
  AREA OF POTENTIAL FLOODING   California Government Code §8589.4/.5          
3.   VERY HIGH FIRE HAZARD SEVERITY ZONE   California Government Code §51178    
      4.   WILDLAND -STATE RESPONSIBILITY AREA   California Public Resources
Code §4125           5.   EARTHQUAKE FAULT ZONE   California Public Resources
Code §2622           6.   SEISMIC HAZARD ZONE   California Public Resources Code
§2696

     For more detailed information regarding these zones/areas, please see the
section below entitled “The Six Natural Hazard Areas/Zones.”

Statutory Disclosure Form(s)

The Residential Natural Hazard Disclosure Law specifies the required disclosures
are to be made pursuant to a specific form set forth in Civil Code §1103.2(a).
This form is commonly referred to the “Natural Hazard Disclosure Statement.”
This form is to be completed and executed by the property transferor, the
transferee, and their respective agents. Another statutory form, “Local Option
Real Estate Transfer Disclosure Statement,” should be completed and executed by
the same parties with respect to certain disclosures if and when mandated by
local ordinance.

For more information, copies of applicable statutes may be obtained at your
local law library
or on the Internet at http://www.leginfo.ca.gov/calaw.html.

THE SIX NATURAL HAZARD AREAS/ZONES

Special Flood Hazard Area (California Government Code §8589.3; 42 U.S.C. §4001
etseq.)

     Federal law requires the Federal Emergency Management Agency (“FEMA”) to
compile Flood Insurance Rate Maps (“FIRM”) identifying areas of potential
flooding from natural sources. Property located with a special flood hazard area
(“SFHA”), designated as any Zone “A” or “V” on such maps, is subject to a one
percent (1%) or greater chance of complete or partial flooding in any given
year. FEMA defines this type of flood as the “base flood” which is more commonly
known as a “100 year flood.” A 100 year flood has a 26% chance of occurring
during any 30 year period.

Exhibit E
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•   Civil Code § 1103.2(c) states that a transferor or transferor’s agent MAY
mark “No” on the SFHA component of the NHDS if FEMA has issued a Letter of Map
Amendment (“LOMA”)confirming that the property is no longer within a SFHA, even
if the FIRM has not yet been updated. Seller must attach a copy of the LOMA to
the NHDS.   •   Civil Code § 1103.2(d) states that a transferor or transferor’s
agent MUST mark “Yes” on the SFHA component of the NHDS if FEMA has issued a
Letter of Map Revision (“LOMR”) confirming that the property is within a SFHA
and the location of the LOMR has been posted by appropriate local agencies, even
if the FIRM has not yet been updated. Seller must attach a copy of the LOMR to
the NHDS.   •   Federal law (42 United States Code 4001 et seq.) requires
lienholders of structures determined to be within a SFHA have adequate flood
insurance coverage in place from either (1) the National Flood Insurance Program
(“NFIP”) which is administered by the Federal Insurance Administration (“FIA”),
or (2) any licensed property/casualty insurance agent or any private insurance
company that are writing flood insurance agreements with the FIA. In communities
that participate in the NFIP, federally insured or regulated lenders require
flood insurance for mortgages and other loans secured by structures located in a
SFHA.   •   A parcel of property located outside a SFHA may still be subject to
severe flooding. FEMA reports that 20% to 25% of all flood insurance claims come
from owners of property located outside of a SFHA.   •   In both NFIP and
non-participating communities, a lender has the discretion to require the
purchase of flood insurance even if a property is not located within a SFHA.   •
  For ways to protect a house from flooding, refer to FEMA Publication 312,
“Homeowner’s Guide to Retrofitting.”

For more information, please contact FFMA or visit their official website at
www.fema.Qov

Area of Potential Flooding (California Government Code §8585.4/.5)

     Local governmental agencies, utilities, and owners of a designated dam are
required to prepare and submit inundation maps for review and approval by the
California Office of Emergency Services (“OES”). These maps show areas of
potential flooding in the event of sudden or total failure of any dam, failure
of which would result in death or personal injury; however, these maps do not
identify areas of potential flooding resulting from storms and other causes. The
OES is required to review and approve maps that have been prepared and submitted
to ensure that the maps meet all requirements before providing approved copies
to appropriate public safety agencies of any local jurisdiction likely to be
affected so that emergency procedures can be adopted for the evacuation and
control of populated areas.

•   OES has yet to review and submit approved maps for numerous dams to local
authorities.   •   Dam inundation maps depict a best estimate of water flow in
the event of dam failure. Projected water flow is based on a scenario in which a
full reservoir completely empties itself and does not account for run-off from
other sources. These maps, most of which were created in the 1970’s, do not
employ newer assumptions and map-making methods.   •   A property located
outside an area of potential flooding may still be subject to severe flooding
from other causes.

Exhibit E
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For more information, please contact the OES in Sacramento or visit their
official website at
www.oes.ca.gov

Very High Fire Hazard Severity Zone (California Government Code §51178)

     Designated by the Director of the California Department of Forestry and
Fire Protection (“CDFFP”), a Very High Fire Hazard Severity Zone (“VHFHS Zone”)
is defined as real property not deemed to be a state responsibility pursuant to
Public Resources Code §4125 et seq. Based on consistent statewide criteria and
the severity of the fire hazard expected to prevail, VHFHS Zones are designated
by fuel loading, slope, fire weather, and other factors. Designation allows
identification and implementation of measures to retard the rate of spread and
reduce the potential intensity of uncontrolled fires.

  • Government Code §51179 allows a “local agency” (defined as a city, county,
city and county, or district responsible for fire protection within a VHFHS
Zone), at its discretion, to make changes to the VHFHS Zone boundaries that may
not be reflected on maps released by the CDFFP. For more information on this
provision, please contact your local agency.   •   Any person who owns, leases,
controls, operates, or maintains any occupied dwelling or occupied structure in,
upon, or adjoining any land that is covered with flammable material and located
within a VHFHS Zone has certain statutory duties of property maintenance. Please
refer to Government Code §51182 et seq. for more information.

For more information, contact your local fire protection agency, the CDFFP, or
visit the
official CDFFP website at www.fire.ca.gov

Wildland - State Responsibility Area (California Public Resources Code §4125 et
seq.)

     The State Board of Forestry classifies all lands within the State of
California based on factors such as cover, beneficial use of water from
watersheds, probable damage from erosion, and fire risks and hazards to
determine those areas for which the financial responsibility of fire prevention
and suppression is primarily the responsibility of the State. Fire prevention
and suppression in all areas which are not within a Wildland - State
Responsibility Area (“WSRA”) is primarily the responsibility of the local or
federal agencies, as applicable.

For property located within a WSRA, a transferor must also disclose that:

1.   there may be substantial forest fire risks and hazards;   2.   except for
property located within a county which has assumed responsibility for prevention
and suppression of all fires (California Public Resources Code §4129), it is NOT
the state’s responsibility to provide fire protection services to any building
or structure located within wildlands unless the Department has entered into a
cooperative agreement with a local agency (California Public Resources Code
§4142); and   3.   the property owner is subject to the imposition of fire
mitigation measures which may substantially impact and limit construction and
remodeling of improvements and landscaping (California Public Resources Code
§4291).

WSRAs include lands which are:

•   covered wholly or in part by forests or by trees producing or capable of
producing forest products.

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•   covered wholly or in part by timber, brush, undergrowth, or grass, whether
of commercial value or not, which protect the soil from excessive erosion,
retard runoff of water or accelerate water percolation, if such lands are
sources of water which is available for irrigation or for domestic or industrial
use.   •   in areas principally used or useful for range or forage purposes and
are contiguous to the lands described above.

WSRAs do not include lands which are:

•   owned or controlled by the federal government or any agency of the federal
government.   •   within the exterior boundaries of any city, except a city and
county with a population of less than 25,000 if, at the time the city and county
government is established, the county contains no municipal corporations.   •  
located within the State but do not come within any of the classes specifically
described as being included.

For more information, contact your local fire protection agency, contact the
CDFFP, or visit the
official CDFFP website at www.dre.ca.gov

Earthquake Fault Zone (California Public Resources Code §2622)

     The Alquist-Priolo Special Studies Zones Act of 1972, renamed the
“Alquist-Priolo Earthquake Fault Zoning Act” in 1994 (“A-P Act”), regulates
development and construction of buildings intended for human occupancy so as to
mitigate hazards associated with surface fault rupture and/or fault creep. State
law requires the disclosure of only active faults known to date and delineated
on Earthquake Fault Zone (“EF Zone”) (also know as “Special Study Zone”) maps
approved by the State Geologist. “Active” faults are classified by the State
Mining and Geology Board as those having surface displacement within about the
last 11,000 years. EF Zones vary in size, but average one-quarter mile in width
(i.e., the “typical” zone boundaries are set back approximately 660 feet on
either side of the fault trace)

•   California Public Resources Code §2624 allows cities and counties to
establish policies and criteria stricter than those set by the State respecting,
but not limited to, permitting, development, and mapping of EF Zones.   •   A
property that lies partially or entirely within a designated EF Zone may be
subject to requirements for site-specific geologic studies and mitigation before
any new or additional construction may take place. If an active fault is found
on a property, structures generally will not be allowed to be constructed within
50 feet of the fault trace.   •   Information on EF Zone maps is not a
sufficient substitute for geologic and geotechnical site investigations.   •  
The A-P Act applies to new or renewed construction and development projects,
including all divisions of land as well as most structures intended for human
occupancy. Certain types of structures and developments are excluded, and
exemptions may be granted, but such an exclusion or exemption does not excuse or
limit disclosure obligations.

For more information, contact the California Department of Conservation,
California
Geological Survey in Sacrarnento, San Francisco, or Los Angeles, or visit their
official
website at www. consrv. ca.gov

Exhibit E
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Seismic Hazard Zone (California Public Resources Code §2696)

     The Seismic Hazards Mapping Act (SHM Act”) requires the State Geologist to
map areas subject to seismic hazards such as strong ground shaking,
liquefaction, landslides, or other ground failure or other seismic hazards
caused by earthquakes. The location and severity of seismic hazards resulting
from earthquakes are based on technical evidence subject to debate among
specialists. An earthquake capable of causing liquefaction or triggering a
landslide may not uniformly affect all areas within a Seismic Hazard Zone (“SH
Zone”).

•   California Public Resources Code §2698 allows cities and counties to
establish policies and criteria stricter than those set by the State respecting,
but not limited to, permitting, development, and mapping of SH Zones.   •   A
property that lies partially or entirely within a designated SH Zone may be
subject to requirements for site-specific geologic studies and mitigation before
any new or additional construction may take place.   •   Information on SH Zone
maps is not a sufficient substitute for geologic and geotechnical site
investigations.   •   Although property within a SH Zone should not be
automatically excluded from development, a SH Zone is an area where the
potential for damage from seismic hazards is great enough to make it prudent to
conduct geologic investigations to identify and mitigate hazards prior to
development.

For more information, contact the California Department of Conservation,
California
Geological Survey in Sacramento, San Francisco, or Los Angeles, or visit their
official website
at www. consrv.ca.gov

Exhibit E
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TERMS, CONDITIONS, AND LIMITATIONS ON LIABILITY

SECTION 1. Definition of Terms

      TERM   DEFINITION

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Buyer   The party acquiring the interest in the Property directly from the
Seller as a result of the Transaction (“Original Buyer”). The term “Buyer” shall
also be deemed to include, as applicable, (a) anyone who receives the Property
as a result of the death of the Original Buyer by operation of law, and (b) the
trustee or successor trustee of a trust in Which the Original Buyer is the
trustor/settlor to whom the Property is transferred by the Original Buyer after
the Effective Date.       Company   The Company as specified (with its address)
on the information Page of this PDR.       Damages Limit   The limitation on
liability under this PDR as defined in Section 7 (“Limitation on Damages”)
below.       Effective Date   The date on which the Transaction is consummated.
      Information Page   The first page of this PDR which (a) identifies the
Company; the PDR Date; and the Property; and (b) contains the name a and address
of who received this PDR.       PDR   This Property Disclosure Report (“PDR”)
which consists of (a) Information Page, (b) Schedule A (“Natural Hazard
Disclosure Summary”), (c) Schedule B (“Summary of Additional Disclosures”), (d)
“Information on Natural Hazard Disclosures,” and (e) these “Terms, Conditions,
and Limitations “on Liability.       PDR Date   The date specified on the
Information Page as of which the information in the PDR Summaries was obtained
from the Public Records.       PDR Summaries   Schedule A (“Natural Hazard
Disclosure Summary”) and Schedule B (“Summary of Additional Disclosures”), both
(of which contain information about the specified Risk Elements for the Property
as disclosed by the Public Records as of the PDR Date in compliance with the
Reporting Standards.       Property   The real property identified on the
Information Page provided either (i) a residential structure consisting of not
more than four dwelling units is located on such real property, or (ii) the real
property is zoned as of the PDR Date for residential use for not more than four
dwelling units. The term “Property” does not include any interests beyond the
lines described or referred to on the Information Page, nor any right, title,
interest, estate or easement in abutting streets, alleys, or other rights of
way, or water, watercourses, or waterways. The term “Property” may consist of
more than one legal parcel if (1) each individual parcel is assigned an
assessor’s parcel number that is identified on the Information Page or on an
addendum to this PDR; (2) parcels are contiguous; and (3) parcels are
transferred between the same Buyer and same Seller in the same Transaction.

Exhibit E
Page 17 of 25

 

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      TERM   DEFINITION

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Public Record(s)   The records, data, or maps specified by the applicable
governmental agency and which are publicly available as of the PDR Date and
specified in the PDR Summaries.       Recipient   The Seller, Buyer, and each of
their respective licensed real estate agents and brokers involved in the
Transaction. This term does not include any third party.       Reporting
Standards   The standards set forth in Section 6 below which are used for the
reporting of the Risk Elements for the Property.       Residential Natural
Hazard
Disclosure Law   California Civil Code § 1 103 et seq.       Risk Element   Each
specified risk element disclosed by the Public Records identified in the PDR
Summaries which was reported in accordance with the Reporting Standards.      
Seller   The owner of the Property interest involved in the Transaction on the
PDR Date.       Transaction   The transaction between the Seller and the Buyer
whereby on the Effective Date the Buyer acquires an interest in the Property as
a result of the sale, exchange, installment land contract, lease with option to
purchase, option to purchase, or ground lease coupled with the improvements.

SECTION 2. PDR Assurances and When the PDR is Effective.

     As of the PDR Date, this PDR accurately discloses the Risk Elements in the
PDR Summaries for the Property in compliance with the Reporting Standards. This
PDR shall be effective as of the Effective Date provided that (1) the fee for
this PDR has been paid to the Company, and (2) the Transaction was consummated
within three (3) months of the PDR Date.

SECTION 3 This PDR is NOT an Insurance Policy.

     This PDR is NOT AN INSURANCE POLICY. THIS PDR IS NOT A SUBSTITUTE FOR THE
BUYER OBTAINING PROPERTY & CASUALTY INSURANCE POLICIES which will provide
coverage against losses incurred as a result of earthquakes, fires, flooding,
environmental hazards, or any other kind of risks associated with the Property.
If Recipient wishes to obtain insurance for physical risks to the Property,
various forms of coverage are available from private and public sources, such as
fire or environmental insurance through private insurance carriers, flood
insurance through the National Flood Insurance Program, and earthquake insurance
through the California Earthquake Authority.

SECTION 4. No Third-Party Reliance.

     This PDR may be relied upon only by the Recipient within the limitations
specified herein. This PDR may not be relied upon by any person or entity other
than Recipient without

Exhibit E
Page 18 of 25

 

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the express written consent of the Company. Recipient shall not take any action
that may induce a third party to rely on the information in this PDR.

SECTION 5. Other Information Within the Knowledge of the Company.

     The recipient recognizes that while it is possible the Company may have
knowledge of other facts concerning the Property, the Company is under no duty
or responsibility to disclose such information to the Recipient.

SECTION 6. PDR REPORTING STANDARDS.

      6.1   This PDR is a Public Records Disclosure Report ONLY.

     This PDR is a Public Records disclosure report designed to assist 1 he
Seller of the Property and the Sellers’ agent to comply with those disclosure
requirements as specified in the Residential Natural Hazard Disclosure Law and
other specified laws. This PDR (a) may not satisfy disclosure obligations under
other laws applicable to the transfer of the Property, and (b) does not disclose
the specific or actual condition or character of the Property.

      6.2   This PDR is NOT Based Upon an Inspection of the Property.

     This PDR is NOT based upon an inspection of the Property and should not be
used as a substitute for (1) appropriate inspection(s) conducted by a qualified
professional, (2) geologic, geotechnical, or other reports required by
governmental agencies, or (3) any other inspections or reports required by
applicable laws in connection with the transfer of residential real property.

      6.3   Maps Are NOT a Part of this PDR.

     Maps that may be attached to this PDR are provided as an accommodation only
and are NOT a part of this PDR. The locations of zones, areas, districts, the
Property, and other information depicted on any maps, are APPROXIMATIONS ONLY.
Recipient should rely only upon the reporting of the Risk Elements for the
Property as set forth in the PDR Summaries.

      6.4   Public Records Used as the Basis for this PDR-and Disclosure as to
the Property.

     This PDR was prepared based upon a review of ONLY those Public Records
specifically cited in the PDR Summaries. The Company makes no representation or
warranty regarding the accuracy, completeness, validity, reliability, integrity,
or accessibility of any Public Records used to prepare this PDR, nor does the
Company assume any responsibility for any other information provided or not
provided by the Seller, third parties or the Public Records.

Exhibit E
Page 19 of 25

 

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      6.5   The Public Records MAY Change After the PDR Date.

     From time to time the Public Records released and made publicly available
by appropriate authorities are modified and, therefore, information regarding
the location of the Property with respect to the Risk Element may change. The
Company has no obligation to advise Recipient(s) of a change in the Public
Records or to update the information in this PDR after the PDR Date. The
Residential Natural Hazard Disclosure Law states that a transferor or
transferor’s agent acting in compliance with California Civil Code § 1103.2 is
not required to notify to a transferee if the information provided subsequently
becomes inaccurate as a result of governmental action, map revision, changed
information, or other act of occurrence, unless the transferor or agent has
actual knowledge of the inaccuracy.

      6.6   NATURAL HAZARD DISCLOSURES.       A.   “Property-Specific” versus
“Structure-Specific” Reporting Standard.

     California’s Residential Natural Hazard Disclosure Law is
“property-specific.” Therefore, if any portion of the Property is located within
a specified natural hazard zone/area, then the entire Property is regarded as
being located in that zone/area. This is different from the “structure-specific”
standard for flood zone determinations under the National Flood Insurance
Program which only identifies if the structure or mobile home on the Property is
located within a special flood hazard area.

      B.   Reporting of Risk Elements for Condominium Projects, Planned Unit
Developments, and Other Properties with Common or Undivided Interests.

     Because California’s Residential Natural Hazard Disclosure Law requires
disclosure if any portion of the Property is located within a specified natural
hazard area/zone, “Yes” must be marked on the natural hazard disclosure
statement if any portion of such a condominium project, planned unit
development, or common area is located within a specified hazard area/zone, even
if the primary lot comprising the Property is not directly affected by or
located within the same hazard area/zone.

      C.   Reporting of Risk Elements for Multiple, Parcel Transactions.

     A PDR may be issued for a Property with multiple legal parcels so long as
all parcels (1) are assigned a valid assessor’s parcel number that is identified
on the Information Page or on an addendum to this PDR; (2) are contiguous; and
(3) are transferred between the same Buyer and same Seller in the same
Transaction. Therefore, if one or more of said parcels constituting the Property
is located within a specified Risk Element, then all parcels identified shall be
considered to be affected by this Risk Element.

      D.   Location of a Property Relative to a Specified Natural-Hazard Zone.

     The fact that the Property is located outside of a natural hazard area/zone
according to the Public Records does not necessarily mean that the Property may
not be subject to the effects of that natural hazard. Regardless of the
Property’s location with respect to a given natural hazard area/zone, the
potential risk associated with such a natural hazard should be assessed and

Exhibit E
Page 20 of 25

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Property Address: SEE ADDENDUM BREA CA 92821

appropriate measures should be considered to minimize the impact of that natural
hazard on the Property.

      E.   Specific Reporting Practices regarding the Risk Element Information.

     A. Special Flood Hazard Area (California Government Code §8589.3)      
Federal law established the Federal Emergency Management Agency (“FEMA”) to
compile Flood Insurance Rate Maps (“FIRM”) identifying areas of potential
flooding from natural sources. FIRMs specify certain “zones” and are commonly
used to determine requirements for flood insurance. Any type of zone “A” or “V”
is classified by FEMA as a special flood hazard area (“SFHA”). Federal law
mandates flood insurance if any part of the structure is located within a SFHA.
However, the Residential Natural Hazard Disclosure Law mandates disclosure if
any portion of the residential property is located within a SFHA. Therefore,
even though a property may not be deemed to be located within a SFHA for federal
flood insurance purposes, it may be within a SFHA for disclosure purposes under
the Residential Natural Hazard Disclosure Law.       If the Property has been
(a) excluded from the applicable FIRM due to a Letter of Map Revision (“LOMR”);
or (b) included in the applicable FIRM due to a Letter of Map Amendment
(“LOMA”), and the LOMR or LOMA has been provided to the Company, then this PDR
will indicate the appropriate answer on Schedule A (“Natural Hazard Disclosure
Summary”). Please note: The Company does not attach the LOMR or the LOMA to the
statutory form. A copy of the LOMR or LOMA must be attached to the statutory
disclosure form by the Seller or the Buyer must request that it be provided by
the Seller.        B. Area of Potential Flooding (California Government Code
§8589.5)       The California Office of Emergency Services (“OES”) provides the
official maps with respect to areas of potential flooding under California
Government Code §8589.4 but has yet to review and submit approved maps for
numerous dams. Please note: (1) although dams may exist, if maps regarding a
specific dam are not a part of the OES information, then this PDR may not
reference all dams within an area of potential inundation for the Property;
(2) if a map in the OES records shows areas of potential flooding, whether or
not the map has been formally marked “approved” by the OES, the area is reported
in this PDR as being within a potential flood area; and (3) although federal
dams are not subject to state laws, the federal authorities have voluntarily
provided maps or information for some dams and to the extent such information is
part of the OES official records, the information on those dams is reported in
this PDR.        C. Earthquake Fault Zone (California Public Resources Code
§2622)       California’s Residential Natural Hazard Disclosure Law requires the
disclosure of only those faults known to date that are classified as “active” by
the State Geologist and delineated on Earthquake Fault Zone or Special Study
Zone maps issued by the California Department of Conservation, California
Geological Survey (“CGS,” formerly known as “Division of Mines and Geology”).
However, such maps have only been created and approved for a portion of
California. Therefore, if there is no official map for the area of the Property,
the Earthquake Fault Zone element of the Schedule A (“Natural Hazard Disclosure
Summary”) will be marked “No.”        D. Seismic Hazard Zone (California Public
Resources Code §2696)       California’s Residential Natural Hazard Disclosure
Law also requires the disclosure of seismic hazard zones identified on official
seismic hazard zone maps issued by the CGS as

Exhibit E
Page 21 of 25

 

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Property Address: SEE ADDENDUM BREA CA 92821

  compiled by the State Geologist in compliance with California Public Resources
Code §2696. These maps identify areas of potential liquefaction and areas of
potential earthquake-induced landslides. Please note: (1) because official
seismic hazard zone maps are currently available only for selected portions of
the Bay Area and Southern California, the Seismic Hazard Zone element of the
Schedule A (“Natural Hazard Disclosure Summary”) will be marked “Maps Not
Available” for the Property if it is located in an area for which there is no
official map; and (2) currently available official maps that include coastal
communities do not identify potential areas of tsunami or seiche.

      6.7   Additional Disclosures.

     Any additional disclosures contained in the Schedule B are subject to the
Reporting Standards set forth in Schedule B with that specific disclosure.

SECTION 7. Limitation on Damages – PLEASE READ CAREFULLY.

     Recipient recognizes that the fee charged for this PDR is not of a
magnitude or in the nature of an insurance premium and does not cover the
potential liability associated with any such risks. Therefore, as part of the
consideration for this PDR, each Recipient understands and agrees to the
following damage limitations (“Damages Limit”):

       (a)    the Company’s liability to the Recipient shall only be for losses
and damages suffered by that Recipient which are a direct result of any material
error or omission contained in this PDR and shall be limited to the LESSER OF:
(1) actual provable damages measured by diminution in the fair market value or
fair rental value of the Property as of the Effective Date suffered by the
Recipient as a result of such error, or (2) the fair market value or fair rental
value of the Property as of Effective Date as established by the Transaction;
and          (b)     the Company shall not be liable for indirect, special,
consequential, multiple, exemplary, or punitive damages (including but not
limited to, personal injury, property damage, etc.) or other type of damage not
listed and described in subparagraph (a) of this provision.

The Damages Limit shall apply to any and all claims, actions, or proceedings by
Recipient(s) regardless of whether (i) this PDR contains multiple errors or
omissions, (ii) the Property identified in this PDR consists of more than one
parcel, and/or (iii) there is more than one Recipient. In no event shall the
Company be liable for more than the Damages Limit on a cumulative basis for any
and all claims made by any or all Recipients under this PDR. Each Recipient
acknowledges that the Company shall have no responsibility or liability to the
Recipient for any matters known to the Recipient (including errors in this PDR)
and not disclosed to all other Recipients and the Company in writing prior to
the Effective Date. The Company’s obligations under this PDR shall not be
affected or reduced as to the Recipient who has no knowledge of any such
information which is not disclosed by another Recipient. The Company shall also
not be liable for loss or damages (a) incurred by reason of the delay Recipient
to file a claim to the extent that such delay prejudices the right of the
Company or increases the amount of damages; and (b) voluntarily assumed by the
Recipient in settling any claim or suit without the prior written consent of the
Company. The Company shall be

Exhibit E
Page 22 of 25

 

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subrogated to any and all rights that the Recipient may have against any other
person or entity (including any other Recipient) and such Recipient shall be
obligated to cooperate with the Company in pursuing such rights.

SECTION 8. No Duty to Defend Recipient.

     In the event of any omission or inaccuracy in this PDR, the Company shall
have NO DUTY TO DEFEND RECIPIENT or pay any costs or expenses incurred by a
Recipient in defense of a claim by reason of any omission or inaccuracy in this
PDR. Each Recipient acknowledges that Company has no obligation to defend
Recipient based upon California Civil Code §2778 or any other law. The Company
shall not be responsible or otherwise liable for any attorneys’ fees, expenses,
and costs incurred in connection with any lawsuit, action, or proceeding based
upon this PDR or a Recipient’s failure to comply with any state or federal
disclosure requirements.

SECTION 9. Claims and Notices to the Company.

     All claims and notices shall be sent by Recipient as soon as practicable to
the Company, Attn.: Legal Department. All claims must be initiated in a timely
and efficient manner but, in no event, more than six (6) months after the
discovery by the Recipient of the alleged error, claim, breach, or omission.
Failure to make such claim within this period constitutes an absolute bar to the
institution of any proceeding. claim, or action against the Company.

SECTION 10. Arbitration.

     Unless prohibited by applicable law, either the Company or the Recipient
may require the other party to submit to binding arbitration pursuant to the
commercial arbitration rules of the American Arbitration Association. Arbitrable
matters may include, but are not limited to, any controversy or claim between
the Company and the Recipient arising out of or relating to this PDR or arising
from any service of the Company performed in connection with its issuance of
this PDR. Arbitration shall be governed by the commercial arbitration rules in
effect on the date the demand for arbitration is made and the parties shall be
entitled to discovery as permitted by applicable law. Arbitration shall be
binding. In no event shall the arbitration award (a) exceed the Damages Limit
(defined in Section 7 above), or (b) include attorneys’ fees. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction. California law shall apply to an arbitration under this PDR. Under
no circumstances shall the parties’ arbitration rights constitute a waiver of,
or diminish in any way, the Damages Limit

END OF “TERMS, CONDITIONS, AND LIMITATIONS ON LIABILITY.”
END OF PDR.

Exhibit E
Page 23 of 25

 

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NATURAL HAZARD DISCLOSURE STATEMENT

This statement applies to the following property:

      Property Address:   SEE ADDENDUM, BREA CA 92821 APN Number:   SEE ADDENDUM

The transferor and his or her agent(s) disclose the following information with
the knowledge that even though this is not a warranty, prospective transferees
may rely on this information in deciding whether and on what terms to purchase
the subject property. Transferor hereby authorizes any agent(s) representing any
principal(s) in this action to provide a copy of this statement to any person or
entity in connection with any actual or anticipated sale of the property. The
following are representations made by the transferor and his or her agent(s)
based on their knowledge and maps drawn by the state and federal governments.
This information is a disclosure and is not intended to be part of any contract
between the transferee and the transferor. THIS REAL PROPERTY LIES WITHIN THE
FOLLOWING HAZARDOUS AREA(S):

A SPECIAL FLOOD HAZARD AREA (Any type Zone “A” or “V”) designated by the Federal
Emergency Management Agency.

Yes[   ] No [X] Do not know and information not available from local
jurisdiction

AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to
Section 8589.5 of the Government Code.

Yes[  ] No [X] Do not know and information not available from local jurisdiction

A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the
Government Code. The owner of this property is subject to the maintenance
requirements of Section 51 182 of the Government Code.

Yes[   ] No [X]

A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISKS AND HAZARDS
pursuant to Section 4125 of the Public Resources Code. The owner of this
property is subject to the maintenance requirements of Section 4291 of the
Public Resources Code. Additionally, it is not the state’s responsibility to
provide fire protection services to any building or structure located within the
wildlands unless the Department of Forestry and Fire Protection has entered into
a cooperative agreement with a local agency for those purposes pursuant to
Section 4142 of the Public Resources Code.

Yes [X] No[   ]

AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code.

Yes [X] No [   ]

Exhibit E
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A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code.

Yes [X] (Landslide Zone) Yes [X] (Liquefaction Zone)

No [   ] Maps not yet released by state

THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN
INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE
DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT
DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL
DISASTER. TRANSFEREE(S) AND TRANSFERORS(S) MAY WISH TO OBTAIN PROFESSIONAL
ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY.

“The representations made in this Natural Hazard Disclosure Statement and the
report are based upon information provided by a third party report as a
substituted disclosure pursuant to California’s Civil Code Section 1103.4.
Neither the transferor nor the transferor’s agent has (1) independently verified
the information contained in this form and report, or (2) is personally aware of
any inaccuracies in the information contained on the form.”

Transferor represents that the information herein is true and correct to the
best of the transferor’s knowledge as of the date signed by the transferor.

        Signature of Transferor   Date    

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Agent represents that the information herein is true and correct to the best of
the agent’s knowledge as of the date signed by the agent. Agent hereby
represents that he or she has received a copy of the Property Disclosure Report
(PDR No. 02PDS1669/Control No. 318379) issued by the Company.

        Signature of Agent   Date    

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        Signature of Agent   Date    

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Transferee represents that he or she has read and understands this document and
has received a copy of the Property Disclosure Report (PDR No. 02PDS
1669/Control No. 318379) issued by the Company.

        Signature of Transferee   Date    

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Based on Public Record data as of the PDR Date: Monday, July 29, 2002

Escrow No: 2252674

Exhibit E
Page 25 of 25

 

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EXHIBIT “Fl”

List of Excluded Interests

          SPECIFICALLY EXCEPTED AND RESERVED from this Transaction are the
following described interests (hereinafter referred to as, the “Excluded
Interests”):

          (a) Any of Seller’s economic analyses, pricing forecasts, legal
opinions or analyses, or information considered by Seller as confidential or
protected by “Attorney-Client Privilege”;

          (b) All rights and claims arising, occurring, or existing in favor of
Seller prior to the Effective Date including, but not limited to, any and all
contract rights, adjustments, mispayments, erroneous payments, personal injury,
property damage, royalty or other rights and claims of any nature in favor of
Seller relating to any time period prior to the Effective Date;

          (c) All corporate, financial, and tax records of Seller; however,
Buyer shall be entitled to receive copies of any financial and tax records which
directly relate to the Property Interests, or which are necessary for Buyer’s
ownership, administration, or operation of the Property Interests;

          (d) All rights, titles, claims and interests of Seller related to the
Property Interests for all periods prior to the Effective Date, subject to
Section 3.2.4 in the Agreement and to any other contrary provisions of the
Agreement: (i) under any policy or agreement of insurance or indemnity,
(ii) under any bond, or (iii) to any insurance or condemnation proceeds or
awards;

          (e) All hydrocarbons produced from or attributable to the Property
Interests with respect to all periods prior to the Effective Date together with
all proceeds from or of such hydrocarbons;

          (f) Claims of Seller for refund of or loss carry forwards with respect
to (i) production, windfall profit, severance, ad valorem or any other taxes
attributable to the Property Interests for any period prior to the Effective
Date, and (ii) income or franchise taxes attributable to the Property Interests
for any period prior to the Effective Date;

          (g) All amounts due or payable to Seller as adjustments or refunds
under any contracts or agreements affecting the Property Interests for all
periods prior to the Effective Date;

          (h) All amounts due or payable to Seller as adjustments to insurance
premiums related to the Property Interests for all periods prior to the
Effective Date;

          (i) Subject to the terms of the Agreement, all monies, proceeds,
benefits, receipts, credits, income or revenues (and any security or other
deposits made) attributable to the Property Interests prior to the Effective
Date;

          (j) All of Seller’s patents, trade secrets, copyrights, names, marks
and logos;

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          (k) All of Seller’Emission Reduction Credits, as defined in the
California Health and Safety Code, except as to those credits that apply to the
Property Interests;

          (l) All of Seller’s right, title and interest in and to that Federal
Communications Commission license having a Call Sign of KMG618, said license
having an expiration date of March 8,  2005.

          (m) Any portion of the Property Interests which Seller is prohibited
or restricted in whole or in part, by any statute, law, ordinance, rule,
regulation, order or notice of any Governmental Agency or by any contractual
arrangement or agreement, from transferring, selling or conveying; and

          (n) Any and all of Seller’s equipment presently being stored on the
Land or otherwise within the Brea Olinda field that relates to Seller’s offshore
operations.

          (o) All well samples and cores located in the buildings within Parcel
3 described on Exhibit A-l to the Agreement, and all those buildings located
within Parcel 3.

          (p) Real Estate and Surface Related Interests:

               1. The Commercial Lease and Agreement between Nuevo Energy
Company, as Lessor, and Brea Green Recycling, Inc., as Lessee, dated
February 1, 1997.

               2. The Letter Agreement between Haynes Apiaries and Union Oil
Company of California dated December 29, 1992, as amended.

               3. The Easement Agreement for Storm Drain Improvement between
Nuevo Energy Company and Brea Olinda Venture L. L. C. dated November 3, 2000.

               4. Letter Agreements dated March 19, 2001 and October 1, 2002, by
and between Deborah Linn Associates and Nuevo.

               5. Contract dated February 8, 2001, by and between Culbertson,
Adams & Associates and Nuevo, as amended by letter dated July 16, 2002.

               6. Proposal dated June 18, 2002, from Earth Consultants
International to Nuevo.

               7. Professional Service Agreement dated April 17, 2001, by and
between The Keith Companies, Inc. and Nuevo.

               8. Professional Services Agreement dated June 15, 1998, by and
between QST Environmental, Inc. and Nuevo, as amended February 27, 2002.

          (q) Additional Easements:

               1. Stearns Rancho Company to UNOCAL dated December 14, 1896,
recorded on July 10, 1897 as Doc. # 30/11..

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                2. Stearns Ranchos Company to Pacific Coast Oil Company dated
May 12, 1902, recorded on June 25, 1902 as Doc. # 75/254.

               3. UNOCAL to Brea Chemical, Inc. dated June 7, 1957, recorded
June 10, 1957 as Doc. # 3936/324.

               4. Collier Carbon and Chemical Corp. to UNOCAL dated October 16,
1958, recorded November 3, 1958 as Doc. # 4470/10.

               5. UNOCAL to UNOCAL California Pipeline Co. dated
September 25, 1995, recorded December 19, 1995 as Doc. # 19950565134.

               6. Nuevo to UNOCAL dated May 7, 1996, recorded May 21, 1996 as
Doc. #19960254739.

               7. Brea Canon Oil Company to General Petroleum Corporation dated
May 1921.

3

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Exhibit “F2”

Retained Obligations Under Hover Agreement

The following obligations found in Exhibit “G2” to the Purchase and Sale
Agreement dated September 28, 2001, by and between Seller and Hover development
Company, Inc. (assigned to Brea Walden, LLC):

  I.   Well Abandonment Plan (“WAP”).     II.   Remedial Action Plan (“RAP”).  
  III.   Corridor Easement, Street Easement, Drainage Easement and other
Non-Exclusive Easements (includes dismantling two (2) water tanks and relocation
on a temporary basis one (1) water tank at the East Naranjal Tank Farm.

The following obligations found in the Agreement Between Adjacent Landowners
dated October 9, 2001, by and between Seller and Brea Walden, LLC:

  I.   Grant of Slope Easements     II.   Grant of Retention Basin Easements
(includes possible relocation of oil field pipelines in Section 2.7 at Hover’s
expense up to $25,000).     III.   Spoils Export Easement (includes possible
relocation of oil field pipelines in Section 3.4 at Hover’s expense up to
$50,000).

 

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          (EXCELLENCE INTEGRITY SERVICE LOGO) [h12901h1290175.gif]
         (EXCELLENCE INTEGRITY SERVICE LOGO) [h12901h1290176.gif]   COUNTY OF
ORANGE
HEALTH CARE AGENCY

REGULATORY HEALTH SERVICES
ENVIRONMENTAL HEALTH   JULIETTE A. POULSON, RN, MN
DIRECTOR

MIKE SPURGEON
DEPUTY AGENCY DIRECTOR
REGULATORY HEALTH SERVICES

STEVEN K. WONG, REHS, MPH
DIRECTOR
ENVIRONMENTAL HEALTH

MAILING ADDRESS:
2009 EAST EDINGER AVENUE
SANTA ANA, CA 92705-4720

TELEPHONE: (714) 667-3800
FAX: (714) 972-0749
E-MAIL enviranhealth@hca.co.orange.ca.u»

February 3, 2004

David Leach
Nuevo Energy Company
1021 Main Street, Suite 2100
Houston, TX 77002

Subject: Completion of Remedial Excavations     Re: Nuevo Energy Stearns
Property   Sump 36B, Pipeyard Area and Drainage 5   2601 Lambert Road   Brea, CA
92821   OCHCA Case #99IC46

Dear Mr. Leach:

This letter confirms the completion of remedial excavations at the
above-referenced locations. With the provision that the information provided to
this Agency was accurate and representative of existing conditions, it is the
position of this office that no further remedial action is required for the
three above-referenced sites at this time.

This confirmation of completion is limited in scope. It is limited to site
conditions made known to this Agency under the above-referenced case number. It
is based on an evaluation of the health threat presented by the inhalation,
ingestion, or dermal absorption of the residual contaminants.

It is this Agency’s understanding that the excavated soils from Sump 36B and
Drainage 5 stockpiled on nearby locations within the Stearns property are to be
appropriately disposed of in accordance with the approved remedial action plan
and with the express approval of the Santa Ana Regional Water Quality Control
Board. Final site closure will be considered upon demonstration of the
successful completion of this final phase of site remediation.

Please be advised that this letter does not relieve you of any liability under
the California Health and Safety Code or Water Code for past, present or future
operations at the site. Nor does it relieve you of the responsibility to clean
up existing, additional or previously unidentified conditions at the site, which
cause or threaten to cause pollution or nuisance or otherwise pose a

 

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David Leach
February 3, 2004
Page 2 of 2

threat to water quality or public health. It is the property owner’s
responsibility to notify this Agency of any changes in future contamination
findings.

If you have any questions regarding this matter, please contact the undersigned
at (714) 667-3717.

Sincerely,

-s- Luis Lodrigueza
Luis Lodrigueza
Hazardous Waste Specialist
Hazardous Materials Mitigation Section
Environmental Health Division

LL:

      cc:   Ann Sturdivant, Santa Ana Regional Water Quality Control Board
Anthony Marino, Tetra Tech, Incorporated

IC: NuevoStearns:36B.pipeyard.drainage5\lal

 

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EXHIBIT “F3”

RETAINED OBLIGATIONS

The following EIR Remediation (defined in Section 2.1.1.2 of Exhibit“ I”)
obligations:

  •   Drainage Area 5     •   Sump 36B     •   Sump 211     •   Dump Area 154  
  •   East Naranjal Tank Farm – However, should the East Naranjal Tank Farm not
be demolished within ten (10) years, this provision shall not apply as to the
East Naranjal Tank Farm.

 

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EXHIBIT G

List of Rights of Way and Contracts

Exhibit G

 

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TABLE OF CONTENTS

Rights of Way and Contracts

     Easements, Licenses, Rights-of-Way, etc.

                                      Date                         Recording    
  Schedule 1.1 (c)   Green Map File Number   Document Type   Dated   Information
  Grantor   Order #   #’s

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51956.28   Agreement       7/13/53 42131/15 OR   Louise A. Weisel,
et al.                                   51956.28A   Amendment       7/11/79
79-759179
DOC   Mary Weisel Newton,
et al.                                   51956.51   ROW       5/18/64 M1523/9
Torrens   J. B. Hickey, et al.                                   52024.224  
License       8/11/69   Southern California
Edison                                   502   ROW   2/22/08   39795  
Industrial Oil CO   5   601                           52538   License   11/9/23
  11/10/27 UNREC   Associated Oil   21                                   ROW  
4/8/63   4/19/63 6515/482   Pacific Lighting
Gas Supply Co.   7   N/A (31.7)                               ROW   2/13/65  
2/23/65 7422/249   Pacific Lighting
Gas Supply Co.   8   317                           5254   ROW       5/17/2001
58/365
Deeds   Brea Canon Oil CO.   22   602                           5254A   ROW    
  4/28/1930 382/44 OR   Brea Canon Oil CO.   23   602                          
52589   ROW       11/10/1927 104/65 OR   Gaston A Bastanchury   30              
                52854   ROW       7/12/1928 172/314 OR   Crown of the Valley
Oil Company   34   609                           52885   Consent   4/7/25  
4/7/25   Shell Oil CO.   35   610                           52885.1   License  
7/10/51   7/11/55 UNREC   Shell Oil CO.   36   610                          
52956   ROW       2/13/1929 243/294 OR   Crown of the Valley
Oil Company   40   611                           52956.1   ROW       4/13/1988
3030/34 OR   Crown of the Valley
Oil Company   41   611                           52956.2   Consent   7/10/51  
7/10/51   Shell Oil CO   42   611                           52980   License  
4/7/25   4/8/1929 UNREC   W B Scott
Investment Company   43   612                           52980.1   ROW      
4/28/1955 3047/183
OR   W B Scott
Investment Company   44   612

Exhibit G
Page 1 of 13

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                                          Date                            
Recording         Schedule 1.1 (c)     Green Map File Number   Document Type  
Dated   Information   Grantor     Order #     #’s

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52980.2   Consent   7/10/51   7/11/1955 UNREC   Shell Oil CO.     45     612    
                          53486   ROW       3/16/32 547/78 OR   Bernard Arroues,
Et ux     46                                     5363   ROW       1/7/1900 49/49
Deeds   Stearns Ranchos Co     47                                     53641.101
  Permit   10/18/61   22572   Pacific Telephone &
Telegraph Company     48     613                               53641.113  
Permit   3/8/72   26366   Pacific Telephone &
Telegraph Company     50     613                               53755   Easement
      9/27/43 1215/34 OR   Anaheim Union Water
Company     52                                     53755.2   Mod.       6/7/49
1855/8 OR   Anaheim Union Water
Company     53                                     53755.3   Mod.       9/23/66
8057/221 OR   Anaheim Union Water
Company     54                                     53755.4   Easement      
1/7/71 9512/924 OR   State of California     55                                
    53755.5   Easement       11/18/71 9892/217 OR   State of California     56  
                                  53755.6   QC       5/22/72 10136/654 OR  
UNOCAL     57                                     53755.7   ROW       9/26/72
10343/735 OR   Anaheim Union Water
Company     58                                     53755.8   Assignment      
11/29/72 10465/69 OR   Continental Mobile
Housing, Inc.     59                                     53755.9   QC      
11/1/73 10974/92 OR   UNOCAL     60                                     54088.31
  License   12/1/62   22981   Shell Oil CO.     62     615                      
        54186.3   Replacement ROW       9/25/72 10431/871 OR   Meredith Co. Et
al     63                                     54261.7   ROW       11/12/70
9458/915 OR   Galy Construction
Corp     64                                     54287   Deed       8/16/43
1200/396 OR   Everett M Reese,
ET UX     66                                     54326.2   ROW       7/24/47
1533/390 OR   Hubert C. Ferry     67                                    
54327.46   License       12/15/76   General Telephone
Co.                                           54339   ROW       3/2/43 1183/525
OR   Tide Water
Associated Oil
Company     69      

Exhibit G
Page 2 of 13

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TABLE OF CONTENTS

                                          Date                            
Recording         Schedule 1.1 (c)     Green Map File Number   Document Type  
Dated   Information   Grantor     Order#     #’s

--------------------------------------------------------------------------------

 

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54342   AGRMT   2/17/39   2/18/43 UNREC   General Petroleum     70     617      
                        54344   Easement   4/1/39   14336   USA, Department
of WAR     71                                     54345   ROW       3/1/43
1148/489 OR   Anaheim Union Water
Company     72                                     54368   ROW       8/11/44
1266/313 OR   HM Bergen, ET AL     73                                     54480
  Deed       1/5/46 283/496 OR   Everett M Reese,
ET UX     74                                     54499   ROW       4/17/46
1424/3 OR   Brea Homes Inc.     75                                     54507  
ROW       1/23/11 195/212
Deeds   Pacific Electric
Land C     76                                     54605   License   8/20/43  
15938   Shell Oil     77     618                               54779   ROW      
12/15/49 1945/23 OR   M J Jackson     78                                    
54779.1   ROW       4/2/47 1517/196 OR   Brea Homes Inc.     79                
                    54779.2   ROW       1/4/60 5044/483 OR   M K Rivtcel     80
                                    54779.3   ROW       4/2/47 1517/196 OR  
Brea Homes Inc.     81                                     54855   ROW   7/23/46
  17006   Stem Realty Company     82                                     54855.4
  License   9/21/61   22545   Stem Realty Company     83                        
            55088   ROW       8/13/52 2369/185 OR   City of Brea     84        
                            55156   ROW       7/3/53 42131/30 OR   W. R. Rowland
Land
Co.                                           55251   ROW       1/28/54 2659/60
OR   Continental
Mausoleum Company     85                                     553.3   ROW      
2/26/49 Unrecorded   Tide Water
Associated Oil Co.                                           55468   ROW      
2/1/1955 3261/312 OR   City of Fullerton     87                                
    56267   License   3/29/53   3-30-57 UNREC   Tide Water
Associated Oil
Company     89                                     56365   ROW   6/21/55   20261
  Roseglen
Construction Inc.     90                                     56627   License  
7/5/71   22467   Humble Oil &
Refining     93     620                               56671   Sales & Assign.  
    4/19/63 6515/482 OR   Pacific Lighting
Gas Supply Co.     94     621

Exhibit G
Page 3 of 13

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TABLE OF CONTENTS

                                          Date                            
Recording         Schedule 1.1 (c)     Green Map File Number   Document Type  
Dated   Information   Grantor     Order#     #’s

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56672   ROW       3/24/37 872/421 OR   Brea Canon Oil     95     622            
                  56673   ROW       10/16/40 1048/369 OR   Brea Canon Oil     96
    623                               56674   ROW       3/4/63 6451/794 OR  
Brea Canon Oil     97     624                               56712   Easement    
  4/21/64 7012/89 OR   State of
California, Dept.
of Parks and
Recreation                                           56712.1   Amendment      
6/25/64 7104/498 OR   State of
California, Dept.
of Parks and
Recreation                                           56726.9   Amendment of
Lease       5/1/95   City of Huntington
Beach                                           56764   License       3/19/65  
Southern California
Edison                                           56806   ROW       5/26/65
7533/988 OR   G. A. Ryness & V.K.
Smith Partners                                           56807   ROW      
3/23/65 7455/829 OR   UNOCAL     104     629                              
56916.1   Permit   8/10/62   8/11/66 UNREC   Orange County Flood
Control District     107                                     57030   ROW      
1/29/66 8532/241 OR   Loma Vista Memorial
Park     108                                     57136   ROW       5/26/69
8968/184 OR   Sterling Homes     109     725                               57193
  ROW       1/15/70 9194/391 OR   Rancho Mesa
Fullerton     110                                     57241   Easement      
9/30/70 451/102 OR   State of California     112     630                        
      57349.1   ROW       5/11/93 10692/660 OR   Albertson’s Inc.     113      
                              57353   ROW       7/27/72 10290/314 OR   D V Home,
ET AL     115                                     57354   ROW       7/20/72
10290/314 OR   A A McLern, et ux     116                                    
57438   ROW       6/20/74 11189/1214
OR   David V. & Mary W.
Homme     118                                     57595   ROW       3/16/77
12106/802 OR   Moreland Develop C     123                                    
57595.1   ROW       6/8/77 12233/501 OR   Moreland Develop C     124            
                        57633.1   ROW       7/24/78 1269/1868 OR   IPS, A
General
Partnshp     125                                     57667   ROW       12/14/79
13437/789
OR   Moreland Develop C     126                                     57696   ROW
      10/2/75 11527/1604
OR   Kaiser Aetna     127      

Exhibit G
Page 4 of 13

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TABLE OF CONTENTS

                                          Date                            
Recording         Schedule 1.1 (c)     Green Map File Number   Document Type  
Dated   Information   Grantor     Order#     #’s

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57848   Grant of Easement       11/24/86 86/619178
OR   Fairway Associates     129                                     57875  
AGRMT       30888   William Lyon C     131                                    
57876.1   ROW       4/23/90 90/211415
DOC   R D Battaglia     132                                     57879   Encroach
License   10/9/84   10/10/88 UNREC   City of Fullerton     133                  
                  57879.2   EXT. of License   6/10/89   6/11/93 UNREC   City of
Fullerton     134                                     57981   ROW       11/2/89
80-59276 DOC   Sanitation, Inc.     136     500                              
58049   ROW       1/25/93 93-054367
DOC   Sanitation, Inc     137     500                               61407.2  
Easement       3/27/63 6483/844 OR   UNOCAL     138                            
        61407.3   Easement       3/11/64 6958/820 OR   UNOCAL     139          
                          62528           6/23/54 2755/502 OR   UNOCAL     140  
                                  62606           4/30/58 4263/530 OR   UNOCAL  
  141                                     63219   Easement       2/26/60
5119/488 OR   UNOCAL     142                                     63283.2  
Easement       10/10/62 6279/75 OR   UNOCAL     143                            
        63510.1   Easement       6/22/64 7098/211 OR   UNOCAL     144          
                          68244.1   Easement       5/4/61 5712/97 OR   UNOCAL  
  146                                     68809   Consent       6/23/27 60/371
OR   UNOCAL     149     729                               68810   Consent      
6/23/27 57/412 OR   UNOCAL     150     730                               68853  
ROW       8/24/45 1331/351 OR   UNOCAL     151                                  
  68853.1   ROAD DEED       1/25/44 1232/308 OR   UNOCAL     152                
                    68853.2   ROAD DEED       11/12/48 1728/222 OR   UNOCAL    
153                                     7048.3(B)   Deed       8/18/64 7182/490
OR   UNOCAL     154                                     70483(C)   Deed      
8/18/64 7182/484 OR   UNOCAL     155                                    
7048.3(E)   Mod.       10/19/64 7264/496 OR   UNOCAL     156                    
                7048.3(F)   Mod.       10/19/64 7264/500 OR   UNOCAL     157    
                                7070.35   Deed       5/21/58 4291/396 OR  
UNOCAL     159      

Exhibit G
Page 5 of 13

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TABLE OF CONTENTS

                                          Date                            
Recording         Schedule 1.1 (c)     Green Map File Number   Document Type  
Dated   Information   Grantor     Order#     #’s

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7070.44   ROW       1/17/64
6886/922 OR   UNOCAL     160                                     7070.45   ROW  
    12/31/63 6866/922 OR   UNOCAL     161                                    
7070.55   Deed       4/23/73 10657/211 OR   UNOCAL     162                      
              7070.57   Deed       10/31/73 10989/880 OR   UNOCAL     163      
7070.63   Grant Deed       4/1/75
11368/841 OR   UNOCAL     165                                     7070.72   Deed
      12/5/80 13861/1303 OR   UNOCAL     166                                    
7176.19   Deed       12/28/73 11044/678 OR   UNOCAL     168                    
                7176.2   Deed       11/15/47 1599/131 OR   UNOCAL     169      
                              XR7390-R1   AGRMT   8/28/51   18868   Shell Oil to
West
Coast Refining     172     640                               XR7390-R11   ROW  
10/11/56   20739   Chanslor-Western to West Coast Refining     173     641      
                        XR7390-R11   ROW   8/25/55   20326   Shell Oil C to West
Coast Refining     174     642                               XR7390-R20  
License   7/31/51   18840   UNOCAL     177     643                              
XR7390-R5   License   3/27/26   9583   Pacific Electric
Railway     185                                         ROW       5-15-97
Document No.
19970226200   UNOCAL to NUEVO     A     666                                  
Deed   8/9/98   8-14-98 1998-0533265   UNOCAL to NUEVO     A     736            
                  105919   Deed   12/20/98   2-11-99 Doc. No.
105919   CALPAC REMEDIATION
CO & UNOCAL etal to NUEVO     A     737                               105919  
Deed   12/20/98   2-11-99 Doc. No.
105919   CALPAC REMEDIATION
CO & UNOCAL etal to NUEVO     A     737                              
19990774980   Easement & Agreement       11/5/1 999 Doc. No.
19990774980   Unocal and Nuevo     A     402                              
20020255188   Easement Agree.   4/11/97   3/27/2002 -Document
# 20020255188   VD/FULLERTON
91/AF X & Nuevo     A     403

Exhibit G
Page 6 of 13

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TABLE OF CONTENTS

                                      Date                         Recording    
  Schedule 1.1 (c)   Green Map File Number   Document Type   Dated   Information
  Grantor   Order#   #’s

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

20020255188   Accommodation Agrmt.   11/19/96   11/20/2000-UNRECORDED   UNOCAL,
VD/FULLERTON
104/AF X & Nuevo   A   403.01                           20020365857   Pipe Line
&
Powerline
Maintenance
Easement Agrmt   4/11/97   5/1/02 Doc. No.
20020365857   City of Fullerton,
Brietbum,
VD/FULLERTON 91/AF X & Nuevo   A   403.1                           57995  
Amended Easement   7-20-1994   Unrecorded   Sec. of the Army to NUEVO   A   404
                              Easement   1/15/51   3/15/51 2158/495   UNOCAL    
                                  Pipeline PSA   4/8/63   4/19/63 6515/482  
Pacific Lighting
Gas Supply Company                                       ROW   2/13/65   2/23/65
7422/249   Pacific Lighting
Gas Supply Company                                       Easement   8/23/88  
5/9/89
89-243784   UNOCAL        

Franchises

                                                      Date                      
                  Recording               Schedule l.l(c)   Green Map File
Number   Document Type   Dated   Information   Grantor   Brea ROW List No.    
Order #     #’s

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

922   Franchise   03/17/1993   unrecorded   Brea City Franchise     4          
    600                                             99-0-119   Franchise  
06/01/1999   unrecorded   Placentia City
Franchise     4         A     700                                            
**57976   Franchise   06/18/1999   unrecorded   Orange County     4         A  
  900.1  

**This Franchise is partially assigned insofar and only insofar as it pertains
to the “Richfield Gathering System.”

Contracts

     (1) The Crude Oil Purchase Agreement between Nuevo Energy Company and Tosco
Corp., d/b/a Tosco Refining Co., dated January 1, 2000; INSOFAR AND ONLY INSOFAR
AS IT APPLIES TO THE PROPERTY INTERESTS.

     (2) Electricity: The Automated Power Exchange Master Service and
Participation Agreement dated June 15, 2000 by and between Automated Power
Exchange, Inc. and Nuevo Energy Company;

Exhibit G
Page 7 of 13

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TABLE OF CONTENTS

     (3) The Indenture, as amended, by and between Union Oil Company of
California and Columbia Oil Producing Company dated February 26, 1901;

     (4) The Surplus Produced Water Agreement between Nuevo Energy Company and
Aera Energy LLC dated December 11, 2001;

     (5) The Water Line Agreement between Union Oil Company of California and
Thompson Drilling Company dated March 29, 1988, as amended;

     (6) The Royalty-Free Oil and Gas Lease between Union Oil Company of
California (“Lessor) and Nuevo Energy Company (“Lessee”) dated effective October
1, 1995;

     (7) The Propane Sales: Contract dated March 1, 2002 by and between Nuevo
and EOTT Energy Operating Limited Partnership.

     (8) Pipeline Easement Agreement dated September 13, 2002 by and between
Union Oil of California and Nuevo Energy Company.

Gas Purchases, Gas Handling and Gas Sales Contracts

    Gas Purchase, Gas Handling and Gas Sales Contracts       As of September 27,
2002, Nuevo is presently taking gas under the following three contracts:

(i)   Gas Handling and Disposal Agreement dated effective August 1, 2000 by and
between Aera Energy LLC and Nuevo Energy Company.   (ii)   Gas Compression and
Gathering Agreement dated effective September 1, 2000 by and between Bridgemark
Corporation and Nuevo Energy Company.   (iii)   Gas Handling Agreement dated
effective August 1, 1998 by and between Crimson Resource Management Corp. and
Torch Energy Marketing, Inc. (note the preferential right to purchase gas at
Section 6).

     The following contracts appear to be active as of September 27, 2002.
However, Nuevo is not presently taking gas under these contracts.

(iv)   Gas Purchase Agreement dated effective July 1, 1989 by and between Brea
Canon Oil Company and Union Oil Company of California (predecessor-in-interest
to Nuevo Energy Company), as amended October 10, 1994.   (v)   Gas Purchase
Agreement dated May 17, 1966 by and between T&T Oil Company and Union Oil
Company of California (predecessor-in-interest to Nuevo Energy Company), as
amended July 12, 1994.

Exhibit G

Page 8 of 13

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TABLE OF CONTENTS

(vi)   Gas Handling Agreement dated effective October 1, 1998 by and between
Union Oil Company of California and Torch Energy Marketing, Inc.   (vii)   Gas
Handling Agreement dated effective February 1, 1994 by and between Saba
Petroleum Inc. and Union Oil Company of California (predecessor-in-interest to
Nuevo Energy Company), as amended October 1, 1997.   (viii)   Gas Handling
Agreement and Bill of Sale dated effective December 29, 1992 by and between
Plegel Oil Company and Union Oil Company of California (predecessor-in-interest
to Nuevo Energy Company), as amended July 1, 1993.   (ix)   Gas Purchase
Agreement dated effective August 1, 1998 by and between Texaco Producing Inc.
and Union Oil of California (predecessor-in-interest to Nuevo Energy Company),
as amended by letter dated July 8, 1993.   (x)   Gas Purchase Agreement dated
effective August 1, 1989 by and between Santa Fe Energy Operating Partners, L.P.
and Union Oil Company of California (predecessor-in-interest to Nuevo Energy
Company), as amended April 20, 1994.

    The following contract provides for selling gas.

(xi)   Gas Purchase Contract dated effective August 1, 1998 by and between Torch
Energy Marketing, Inc. (“Seller”) and Crimson Resource Management Corp.
(“Buyer”).

Miscellaneous Service Contracts: (Immediately Follows)

Exhibit G

Page 9 of 13

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MISCELLANEOUS SERVICE CONTRACTS

                      VENDOR

--------------------------------------------------------------------------------

  ADDRESS

--------------------------------------------------------------------------------

  PHONE #

--------------------------------------------------------------------------------

  ACCT.OR CUST.#

--------------------------------------------------------------------------------

  TYPE OF SERVICE

--------------------------------------------------------------------------------

Allied Commercial Cleaning
  1775 E. Lincoln Ave., #104, Anaheim, CA 92805   714-284-1178          
Janitorial Service
 
                   
Brea Disposal
  1131 North Blue Gum St., Anaheim, CA 92815   714-238-3300     104828     Trash
Service
 
                   
Yosemite Waters
  601 W. Valencia Dr., Fullerton, CA 92832   714-870-4022     133008     Water &
Cooler Service
 
                   
Ionics
  7777 Industry Ave., Pico Rivera, CA 90660   562-942-2200     46516     R/O
Water System Rental
 
                   
Aramark
  P.O. Box 5206, Santa Ana, CA 92704   714-545-4877     2903002/2903000     Mat
& Rag Service
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449     OA338   Cylinder Rental
 
                   
Praxair
  Dept. LA 2151 I.Pasadena, CA 91185   800-229-4449     CF812   Cylinder Rental
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449     BV665   Cylinder Rental
 
                   
Praxair
  Dept. LA 21511, Pasadena, CA 91185   800-229-4449     OA341   Cylinder Rental
 
                   
Scott Specialty Gases
  6141 Easton Rd., Plumsteadville, PA 18949   215-766-8861     83276900    
Cylinder Rental
 
                   
Underground Service Alert
  P.O. Box 77070, Corona, CA 92877   909-808-8100     NUEVOBRE   USA - Dig
Alerts
 
                   
Portosan Company
  P.O. Box 6006, El Monte, CA 91734   800-638-1233     75261     Septic Rental &
Disposal
 
                   
Kenneth R. Starr
  7701 11th St., Buena Park, Ca   714-522-6550           A/C & Refrigeration
Maint.
 
                   
Schumann Communications
  731 South Highway 101 #1C, Solana
Beach, CA 92075   858-794-0794     E87129     Answering Service
 
                   
Critco Flow Measurement
  P.O. Box 1639, Houston, TX 77251   713-463-7773           Gas Chart
Calculations
 
                   
Federl Express
  P.O. Box 1140, Dept. A, Memphis, TN 38101   800-622-1147     2001-3867-8    
Courier Service
 
                   
Ace Pump
  848-A W. Century, Santa Maria, CA 93455   805-925-7570     5500     Bailer
Rental

Exhibit G

Page 10 of 13

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TABLE OF CONTENTS

                      VENDOR

--------------------------------------------------------------------------------

  ADDRESS

--------------------------------------------------------------------------------

  PHONE #

--------------------------------------------------------------------------------

  ACCT. OR CUST.#

--------------------------------------------------------------------------------

  TYPE OF SERVICE

--------------------------------------------------------------------------------

Coast To Coast
  8 Vanderbilt, Irvine, Ca 92619   949-457-7300   S/N
96010212,96010215,
EA621378&JE643420   Fax & Copier Service
Agreements
 
                   
Southwest Environments
  P. O. Box 1741, Costa Mesa, CA 92628   949-642-2257   NV  &  RB   Gardening
Service
 
                   
United Parcel
  P. O. Box 894820, Los Angeles, Ca 90189   800-811-1648     X97774     Courier
Service
 
                   
Sims Welding Supply
  18903 South Main St., Gardena, CA 90248   310-327-6650     274153001    
Cylinder Rental
 
                   
Culligan Water
  502 S. Lyon St., Santa Ana, CA 92701   800-756-6300     893425     Soft Water
Service
 
                   
Culligan Water
  502 S. Lyon St., Santa Ana, CA 92701   800-756-6300     893420     Soft Water
Service
 
                   
Pitney Bowes Credit Co.
  P. O. Box 856460, Louisville, TX 40285   800-572-2624     1749598     Monthly
Postage Equipment Rental
 
                   
Pitney Bowes Inc.
  P.O. Box 856390, Louisville, TX 40285   800-331-7641     1642-0723-86-4    
Softguard Rate Protection Plan
 
                   
Pitney Bowes Credit Co.
  P.O. Box 856390, Louisville, TX 40285   800-331-7641     1642-0723-86-4    
Yearly Equip. & Maint. Services
 
                   
UTILITIES
                   
 
                   
Pacific Bell
  Payment Center, Van Nuys, Ca 91388   800-750-2355   714-257-1600-291-S-3182  
Phone Service
 
                   
Pacific Bell
  Payment Center, Van Nuys, Ca 91388   800-750-2355   714-529-2118-411-S-2182  
Phone Service
 
                   
City of Brea
  1 Civic Center Circle, Brea, CA 92821   714-990-7687     22215551     Fresh
Water
 
                   
Cable & Wireless
  46020 Manekin Plaza, Sterling, VA 20166   800-486-8686   ECA8001224   Long
Distance
 
                   
Express Tel
  P. 31475, Salt Lake City, UT 84131   800-748-4020     4-17123-8     Long
Distance
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91771   800-990-7788     2-05-020-3389    
Electricity
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91772   800-990-7789     2-20-253-3527    
Electricity
 
                   
Southern California
Edison
  P. O. Box 600, Rosemead, Ca 91773   800-990-7790     3-020-0006-69    
Electricity

Exhibit G

Page 11 of 13

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Permits and Plans for Brea Olinda Field:

•   South Coast Air Quality Management District Facility Permit ID#109198

    Facility Description Covered in Permit

              Process 1: Crude Oil/Gas/Water Separation

      Tonner Canyon Tank Farm

      East Naranjal Tank Farm

      Crude Oil/Gas/Water Separation
 
            Process 2: Natural Gas Processing – Stearns Gas Plant

      Field Compression

      Compression Unit

      Process Unit

      Process Heating System

      Refrigeration Unit

      Glycol Regeneration and Stabilization

      Odorant system – Sales Gas

      Propane Extraction System
 
            Process 3: Internal Combustion Engines     Process 4: Storage and
Loading     Process 5: Flare System     Process 6: Vapor Recovery and Drain
System     Process 7: Fugitive Emission Sources     Process 8: R219 Exempt
Equipment Subject to a Source Specific Rule

       

  Title V    

•   Industrial Wastewater Discharge Permit No. 2-1-181
     Permit good until December 31, 2002 at which time it needs to be renewed.  
•   Spill Prevention Control and Countermeasure Plan (SPCC) for Stearns Plant.  
•   Spill Prevention Control and Countermeasure Plan (SPCC) for Brea Olinda
Field.   •   Business Emergency Plan and Hazardous Materials Disclosure – Brea
Lease   •   Miscellaneous Pressure Vessels located in the Field and Plant
Permits   •   Pending Permits for the H2S Scrubber and to move the East Naranjai
Tank Farm.

Exhibit G

Page 12 of 13

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TABLE OF CONTENTS

•   Emergency Response Plans for the following systems:
     East Coyote Gas Gathering Pipeline
     Richfield to East Coyote Gas Gathering Pipeline
     Sansinena Gas Gathering Pipeline

Exhibit G

Page 13 of 13

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EXHIBIT G-l

NON-EXCLUSIVE RIGHTS-OF-WAY AND CONTRACTS

                                              Date                        
Recording       Schedule 1.1 ( c )   Green Map File Number

--------------------------------------------------------------------------------

  Document Type

--------------------------------------------------------------------------------

  Dated

--------------------------------------------------------------------------------

  Information

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

  Order #

--------------------------------------------------------------------------------

  #’s

--------------------------------------------------------------------------------

57534
  ASSIGN BILL
OF SALE   5/12/71   5/13/75
11410/1929
OR   Waste “Water
Disposal Company     119       504  
 
                               
57862.2
  Easement Agree.       8/7/89
60/368 OR   Kjaemer Imperial Associates to UNOCAL     130       507  
 
                               
65186
  ROW   10/14/92   12/18/1996 Doc. No. 19960637286   UNOCAL to NUEVO     A      
506  

     (1) Agreement between adjacent Landowners dated effective as of October 9,
2001 by and between Nuevo and Brea Walden, LLC.

     (2) “Asset Purchase Agreement” dated February 16, 1996 by and among Union
Oil Company of California, Union California Pipeline Company and Nuevo Energy
Company, to the extent previously described in the Agreement at Section 5.32.

     (3) “Acquisition and Settlement Agreement” entered into as of July 23,
2002, by and between Union Oil Company of California and Nuevo, together with
all subsequent agreements required thereunder, insofar as such Acquisition and
Settlement Agreement pertains to the Property Interests.

     (4) “Acquisition Agreement” entered into July 29, 2002, by and between
Union Oil Company of California and Nuevo, together with all subsequent
agreements required thereunder, insofar as such Acquisition Agreement pertains
to the Property Interests.

     (5) That certain “Corridor Easement” described in Item C and that certain
“Street Easement” described in Item D in that certain Grant Deed dated October
3, 2001 by and between Nuevo and Brea Walden, LLC, recorded October 9, 2001 as
Instrument No. 20010710856 in the Official Records of Orange County, California.

1

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TABLE OF CONTENTS

     (6) Waste Water Line Agreements:

                                      Waste                         Water      
                  Co.                         File       Document         Dated

--------------------------------------------------------------------------------

  Recorded

--------------------------------------------------------------------------------

  No.

--------------------------------------------------------------------------------

  Book/Page

--------------------------------------------------------------------------------

  Number

--------------------------------------------------------------------------------

  Doc. Type

--------------------------------------------------------------------------------

  Grantor

--------------------------------------------------------------------------------

5/1/1974
  11/5/1974       11280/1845     3078     Assign & Bill of Sale   Waste Water
Disposal Company
 
                           
10/1/1995
  4/10/1996           Recorder No.
19960175928   Deed & Bill of Sale and Assign.   Unocal
 
                           
11/2/1955
  3/8/1956   U-ll   3430/504   Unocal File No.61987.3-
Recorder No. 35165   ROW   Unocal
 
                           
4/25/1956
  5/1/1956       3493/528   Unocal File No.
61987.47   Q.C. Deed   Waste Water
Disposal Company
 
                           
10/15/1996
              Unocal File No. 65186   ROW   Unocal
 
                           
8/7/1989
  8/17/1989           Recorder No.
89-437991-
Unocal File No.
 56862.2   Easement Agreement   Kraemer Imperial
Associates
 
                           
4/2/1971
  No   U-13       Unocal File No. 68869.3   ROW   Unocal
 
                           
5/10/1928
  No   U-14               ROW   West Coast Oil Co.
 
                           
8/1/1978
              Unocal File No.
57635 – ROW Green Map No. 
633   ROW   E.H. Associates

2

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TABLE OF CONTENTS

EXHIBIT H

Brea - Olinda Field: Well Information

                                              Spud

--------------------------------------------------------------------------------

  Compl.

--------------------------------------------------------------------------------

  Status

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

STEARNS
                               
Stearns 9
    059-06952       7/24/00       7/9/01     SI
Stearns 12
    059-06955       6/4/00       8/10/01     Prod
Stearns 13
    059-06956       1/26/01       7/17/01     Prod
Stearns 14
    059-06957       11/8/00       1/1/01     SI
Stearns 15
    059-06958       1/3/01       3/8/01     SI
Stearns 18
    059-06961       8/1/01       10/18/01     SI
Stearns 21
    059-06964       5/22/01       7/15/01     SI
Stearns 26
    059-06969       9/25/02       8/9/03     SI
Stearns 27
    059-06970       4/23/03       7/10/03     SI
Stearns 28
    059-06971       7/18/03       8/21/03     SI
Stearns 29
    059-06972       8/16/03       10/22/03     SI
Stearns 32RD
    Same       5/2/57       5/19/57     Prod
Stearns 33
    059-07121       8/15/06       9/2/07     SI
Stearns 34
    059-07122       9/4/06       3/2/08     Prod
Stearns 36
    059-07124       7/27/14       8/22/14     SI
Stearns 37
    059-07125       7/23/07       8/20/08     Prod
Stearns 38
    059-07682       9/23/08       7/27/09     SI
Stearns 39
    059-07683       11/5/07       5/19/09     SI
Stearns 40
    059-07684       4/23/08       4/26/09     SI
Stearns 45
    059-07689       1/16/09       11/1/56     SI
Stearns 46
    059-07690       2/22/09       12/5/09     Prod
Stearns 50
    059-07695       8/20/09       4/10/10     SI
Stearns 51
    059-07696       2/9/10       4/23/12     SI
Stearns 51A
    059-00931       9/4/64       9/17/64     Prod
Stearns 52
    059-07697       2/25/10       2/15/13     Prod
Stearns 52A
    059-00932       7/13/64       7/29/64     SI
Stearns 53
    059-07698       8/15/12       1/28/14     Prod
Stearns 54
    059-07699       6/17/14       12/17/15     SI
Stearns 55
    059-07700       3/30/18       11/2/19     SI
Stearns 55A
    059-00933       6/1/63       6/13/63     SI
Stearns 57
    059-07702       11/14/21       5/11/21     SI
Stearns 58
    059-07703       10/14/20       1/31/21     Prod
Stearns 59
    059-07704       6/9/20       10/3/20     Prod

Exhibit H

Page 1 of 14

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Brea - Olinda Field: Well Information

                                              Spud

--------------------------------------------------------------------------------

  Compl.

--------------------------------------------------------------------------------

  Status

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 60
    059-07705       5/29/20       11/25/20     Prod
Stearns 61
    059- 07706       6/16/20       2/17/21     RD
Stearns 61 RD
    Same       9/7/20       9/18/20     SI
Stearns 62
    059-07707       7/1/20       9/30/20     RD
Stearns 62RD
    Same       6/2/48       6/26/48     SI
Stearns 63A
    059-07709       3/21/49       4/16/49     Prod
Stearns 64
    059-07710       12/20/20       3/9/21     Prod
Stearns 65A
    059-07713       9/11/26       12/30/26     Prod
Stearns 66
    059-07712       1/15/26       8/31/26     SI
Stearns 68
    059-07715       4/22/26       8/29/26     SI
Stearns 69
    059-07716       1/25/27       9/27/27     Prod
Stearns 71
    059-07718       12/20/27       7/8/28     Prod
Stearns 72
    059-06831       6/22/42       7/16/42     SI
Stearns 73
    059-06832       8/8/42       8/27/42     SI
Stearns 74
    059-07719       9/13/42       10/9/42     Prod
Stearns 75
    059-06833       12/30/42       3/12/43     RD
Stearns 75RD
    Same       10/11/93       10/23/93     Prod
Stearns 76
    059-06834       1/28/43       4/24/43     SI
Stearns 77
    059-06835       3/28/43       5/3/43     SI
Stearns 78
    059-06836       5/30/43       6/16/43     Inject
Stearns 79
    059-06837       4/4/57       4/12/57     Prod
Stearns 80
    059-06838       11/25/46       12/27/46     Prod
Stearns 81
    059-06839       5/31/44       6/13/46     RD
Stearns 81 RD
    Same       12/10/63       12/19/63     Prod
Stearns 83
    059-06841       8/21/43       9/25/43     Prod
Stearns 84
    059-06842       12/23/43         NC     RD
Stearns 84RD
    Same       N/A       3/18/44     SI
Stearns 85
    059-06843       2/8/45       7/14/45     SI
Stearns 86
    059-06844       5/26/44       7/7/44     Prod
Stearns 87
    059-06845       6/23/44       9/4/46     Prod
Stearns 88
    059-06846       6/11/44       9/30/46     Prod
Stearns 89
    059-00044       10/4/46       10/24/46     Prod
Stearns 90
    059-06847       12/5/60       12/17/60     Prod
Stearns 91
    059-06848       10/28/46       11/21/46     Prod
Stearns 93
                            N.D.  
Stearns 94
                            N.D.  

Exhibit H

Page 2 of 14

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                                              Spud

--------------------------------------------------------------------------------

  Compl.

--------------------------------------------------------------------------------

  Status

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Well

--------------------------------------------------------------------------------

  API No.

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  Date

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  Date

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  As of 8/8/02

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Stearns 95
    059-06849       1/2/47       1/12/47     SI
Stearns 96
    059-06850       12/18/46       12/30/46     SI
Stearns 97
    059-06855       1/15/47       1/23/47     SI
Stearns 98
    059-06856       11/8/46       11/22/46     SI
Stearns 99
    059-06857       7/30/47       8/17/47     Inject
Stearns 100
    059-06858       10/27/47       11/23/47     Prod
Stearns 101
    059-06859       3/12/48       4/9/48     Prod
Stearns 102
    059-06860       7/29/48       8/27/48     SI
Stearns 103
    059-07672       9/21/47       11/11/47     SI
Stearns 104
    059-06861       3/23/48       4/16/48     SI
Stearns 105
    059-06862       12/10/47       1/18/48     SI
Stearns 106
    059-06863       2/11/48       4/3/48     Prod
Stearns 107
    059-06864       4/17/48       5/21/48     SI
Stearns 108
    059-06865       5/27/48       6/16/48     Prod
Stearns 109
    059-06866       3/29/49       6/7/49     SI
Stearns 110
    059-06867       9/10/48       10/12/48     SI
Stearns 111
    059-06868       10/30/48       11/29/48     Prod
Stearns 112
    059-06869       10/24/48       11/17/48     Prod
Stearns 113
    059-07673       12/12/48       2/4/49     Prod
Stearns 114
    059-06870       12/12/48       1/8/49     Prod
Stearns 116
    059-06872       6/4/49       6/24/49     Prod
Stearns 117
    059-06873       7/4/49       8/11/49     SI
Stearns 118
    059-06874       4/22/51       5/19/51     Prod
Stearns 119
    059-06875       2/16/52       3/20/52     Prod
Stearns 120
    059-06901       7/9/51       8/5/51     Prod
Stearns 121
    059-06902       9/25/51       10/19/51     Prod
Stearns 122
    059-06903       10/26/51       11/10/51     Prod
Stearns 123
    059-06904       11/29/51       1/10/52     Prod
Stearns 124
    059-06905       3/29/52       4/27/52     SI
Stearns 125
    059-06906       4/29/52       5/18/52     SI
Stearns 127
    059-06908       2/15/53       3/10/53     Prod
Stearns 128
    059-06909       11/14/51       11/24/51     Prod
Stearns 129
    059-06876       5/2/53       5/25/53     Prod
Stearns 130
    059-06877       8/9/53       9/5/53     Prod
Stearns 131
    059-06878       9/9/53       9/14/53     Prod
Stearns 132
    059-06879       8/26/53       9/9/53     Prod

Exhibit H

Page 3 of 14

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TABLE OF CONTENTS

Brea - Olinda Field: Well Information

                                              Spud

--------------------------------------------------------------------------------

  Compl.

--------------------------------------------------------------------------------

  Status

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 133
    059-06880       2/12/54       2/20/54     Prod
Stearns 134
    059-06881       1/24/54       2/11/54     Prod
Stearns 135
    059-06882       9/16/53       9/26/53     Prod
Stearns 136
    059-06883       3/16/54       3/25/54     Prod
Stearns 137
    059-06884       2/23/54       3/11/54     Prod
Stearns 138
    059-06885       3/30/54       4/28/54     SI
Stearns 139
    059-06886       11/6/56       11/19/56     Prod
Stearns 140 OH
    059-06887       11/26/56       NC     RD
Stearns 140RD1
    Same       N/A       NC     RD
Stearns 140RD2
    Same       1/10/57       1/14/57     SI
Stearns 141
    059-06888       12/7/54       12/24/54     Inject
Stearns 142
    059-06889       12/28/54       1/14/55     Prod
Stearns 143
    059-06890       1/16/55       1/23/55     SI
Stearns 144
    059-06891       10/18/56       10/31/56     Prod
Stearns 145
    059-06892       2/14/57       2/23/57     SI
Stearns 146
    059-06893       3/7/57       3/17/57     SI
Stearns 147
    059-06894       3/23/57       3/30/57     Prod
Stearns 148
    059-06895       10/6/57       10/11/57     SI
Stearns 149
    059-06896       1/16/57       2/9/57     Prod
Stearns 150
    059-06897       4/18/57       4/30/57     Prod
Stearns 151
    059-06898       10/29/57       11/9/57     Prod
Stearns 152
    059-06899       5/19/57       5/27/57     SI
Stearns 153
    059-06900       6/23/57       6/30/57     Prod
Stearns 154
    059-06910       6/13/57       6/20/57     Prod
Stearns 155
    059-06911       5/31/57       6/12/57     Prod
Stearns 156
    059-06912       7/22/57       8/1/57     Prod
Stearns 157
    059-06913       7/5/57       7/17/57     SI
Stearns 158
    059-06914       8/24/57       9/3/57     SI
Stearns 159
    059-06915       9/8/57       9/18/57     Prod
Stearns 160
    059-06916       9/20/57       10/8/57     Prod
Stearns 161
    059-06917       8/6/57       8/22/57     Prod
Stearns 162 OH
    059-00934       11/10/57       11/19/57     RD
Stearns 162RD
    Same       9/17/64       10/1/64     SI
Stearns 163
    059-06918       10/16/57       10/24/57     Prod
Stearns 164
    059-06919       3/8/60       3/16/60     Prod
Stearns 165
    059-06920       3/21/60       4/2/60     Prod

Exhibit H

Page 4 of 14

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TABLE OF CONTENTS

Brea - Olinda Field: Well Information

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 166
  059-06921     5/16/60       5/24/60     Prod
Stearns 167
  059-06922     11/21/57       11/29/57     Prod
Stearns 168
  059-06923     2/20/60       3/2/60     Inject
Stearns 169
  059-06924     12/12/57       1/12/58     Prod
Stearns 170
  059-06925     6/13/60       6/28/60     Prod
Stearns 171
  059-06926     12/19/60       12/29/60     Prod
Stearns 172
  059-06927     5/2/60       5/12/60     Prod
Stearns 173
  059-06928     5/28/60       6/12/60     Prod
Stearns 174
  059-06929     4/6/60       4/26/60     Prod
Stearns 175
  059-06930     2/26/60       4/24/60     Prod
Stearns 176
  059-06931     7/5/60       7/27/60     Prod
Stearns 177
  059-06932     8/1/60       8/23/60     Prod
Stearns 178
  059-06933     8/24/60       9/5/60     Prod
Stearns 179
  059-06934     1/10/61       1/23/61     Prod
Stearns 180
  059-06935     9/6/60       9/20/60     Prod
Stearns 181
  059-06936     11/1/60       11/13/60     Prod
Stearns 182
  059-06937     10/18/60       10/31/60     Prod
Stearns 183
  059-06938     10/6/60       10/17/60     Prod
Stearns 184
  059-06939     9/23/60       10/5/60     Prod
Stearns 185
  059-06940     8/6/60       9/1/60     Prod
Stearns 186
  059-06941     2/21/61       3/7/61     Prod
Stearns 187 OH
  059-06942     3/13/61       3/24/61     N/A
Stearns 187RD
  Same     3/25/61       4/5/61     SI
Stearns 188
  059-06943     12/30/60       1/9/61     Prod
Stearns 189
  059-06944     12/25/63       1/9/64     Prod
Stearns 190
  059-06945     11/19/63       12/2/63     Prod
Stearns 191
  059-06946     1/30/61       2/20/61     Prod
Stearns 192
  059-06947     10/14/61       11/3/61     Prod
Stearns 193 OH
  059-06948     11/14/60       12/4/60     RD
Stearns 193RD
  Same     7/28/73       8/7/73     SI
Stearns 194
  059-06949     4/13/61       5/6/61     Prod
Stearns 195
                      N.D.
Stearns 196
  059-06950     1/2/62       1/15/62     Prod
Stearns 197
  059-07674     3/7/64       3/15/64     SI
Stearns 198
  059-07675     7/1/63       7/21/63     Prod
Stearns 199
  059-07853     10/12/63       10/27/63     SI

Exhibit H

Page 5 of 14

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TABLE OF CONTENTS

Brea - Olinda Field: Well Information

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 200
  059-00926     12/6/63       12/17/63     SI
Stearns 201
  059-07676     10/28/63       11/11/63     SI
Stearns 202
  059-07852     11/14/64       1/5/65     SI
Stearns 203
  059-07677     1/10/64       2/2/64     Prod
Stearns 204
                      N.D.
Stearns 205
                      N.D.
Stearns 206
  059-07678     6/13/64       7/1/64     Prod
Stearns 207
  059-00935     3/16/64       4/3/64     Prod
Stearns 208
  059-07114     8/8/64       9/2/64     Prod
Stearns 209
  059-07115     10/2/64       10/22/64     Prod
Stearns 210
  059-00936     11/11/64       11/26/64     Prod
Stearns 211
  059-07116     12/24/63       1/27/64     Prod
Stearns 212
                      N.D.
Stearns 213
  059-07117     7/30/64       9/12/64     Prod
Stearns 214
  059-07118     11/28/64       12/19/64     SI
Stearns 215
  059-07119     12/21/64       1/15/65     Prod
Stearns 216
  059-00045     5/13/65       5/23/65     SI
Stearns 217 OH
  059-00937     5/1/65       5/13/65     RD
Stearns 217RD1
  Same     1/17/73       1/25/73     RD
Stearns 217RD2
  Same     11/21/88       12/10/88     Prod
Stearns 218
  059-07120     4/6/65       5/1/65     Prod
Stearns 219
  059-00046     12/13/66       1/6/67     SI
Stearns 220
  059-20072     10/7/67       10/21/67     Prod
Stearns 221
  059-20073     7/25/67       8/8/67     Prod
Stearns 222
  059-20080     8/8/67       8/18/67     Prod
Stearns 223
  059-20081     8/19/67       8/30/67     Prod
Stearns 224
  059-20088     9/1/67       9/12/67     Prod
Stearns 225
  059-20107     10/24/67       11/4/67     Prod
Stearns 226
  059-20133     2/21/68       3/5/68     Prod
Stearns 227
  059-20134     12/21/68       1/7/69     Prod
Stearns 228
  059-20135     3/6/68       3/21/68     Prod
Stearns 229
  059-20136     4/8/68       4/23/68     Prod
Stearns 230
  059-20275     9/16/69       10/14/69     Prod
Stearns 231
  059-20276     1/31/69       2/16/69     Prod
Stearns 232
  059-20277     11/3/69       12/9/69     Prod
Stearns 233
  059-20274     1/7/69       1/28/69     Prod

Exhibit H

Page 6 of 14

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TABLE OF CONTENTS

Brea - Olinda Field: Well Information

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 234
  059-20160     3/22/68       4/7/68     Prod
Stearns 235
  059-20235     10/25/68       11/1/68     Prod
Stearns 236 OH
  059-20310     3/21/69       3/28/69     RD
Stearns 236RD
  Same     3/21/69       4/12/69     Prod
Stearns 237
  059-20278     5/28/69       6/12/69     Prod
Stearns 238
  059-20314     4/15/69       5/5/69     Prod
Stearns 239
  059-20315     5/7/69       5/27/69     Prod
Stearns 240
  059-20303     3/4/69       3/19/69     Prod
Stearns 241
  059-20321     6/13/69       6/25/69     Prod
Stearns 242
  059-20322     6/26/69       7/13/69     Prod
Stearns 243
  059-20323     7/14/69       7/29/69     Prod
Stearns 244
  059-20370     10/28/69       11/1/69     Prod
Stearns 245
                      N.D.
Stearns 246
  059-20360     8/11/69       8/29/69     SI
Stearns 247
  059-20361     9/2/69       9/14/69     Prod
Stearns 248
  059-20362     7/31/69       8/8/69     Prod
Stearns 249
  059-20371     10/15/69       10/24/69     Prod
Stearns 250
                      N.D.
Stearns 251
  059-20455     7/11/70       7/27/70     Prod
Stearns 252
                      N.D.
Stearns 253
                      N.D.
Stearns 254 OH
  059-20457     7/28/70       9/4/70     RD
Stearns 254RD
  Same     9/5/70       9/12/70     Prod
Stearns 255
  059-20436     4/21/70       4/24/70     Prod
Stearns 256
  059-20437     4/15/70       4/20/70     Prod
Stearns 257
  059-20438     5/1/70       5/5/70     SI
Stearns 258
  059-20439     4/28/70       5/1/70     Prod
Stearns 259
  059-20450     5/27/70       6/9/70     Prod
Stearns 260
  059-20451     5/6/70       5/26/70     Prod
Stearns 261
  059-20454     6/11/70       6/30/70     Prod
Stearns 262
  059-20521     9/11/71       9/15/71     Prod
Stearns 263
  059-20522     8/31/71       9/3/71     Prod
Stearns 264
  059-20523     8/28/71       8/31/71     SI
Stearns 265
  059-20524     9/3/71       9/7/71     SI
Stearns 266
  059-20525     9/7/71       9/11/71     SI
Stearns 267
  059-20537     9/7/71       9/16/71     SI

Exhibit H

Page 7 of 14

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TABLE OF CONTENTS

Brea - Olinda Field: Well Information

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

Stearns 268
  059-20643     8/12/73       8/21/73     Prod
Stearns 269
  059-20843     8/13/76       8/26/76     SI
Stearns 270
                      N.D.
Stearns 271
                      N.D.
Stearns 273
  059-21402     12/12/88       1/15/89     Prod
Stearns 274
  059-21406     8/15/89       10/12/89     Prod
Stearns 275
                      N.D.
Stearns 276
  059-21407     7/22/89       8/21/89     Prod
Stearns 277
                      N.D.
Stearns 278
                      N.D.
Stearns 279 OH
  059-21497     3/31/93       4/13/93     RD
Stearns 279RD
  Same     4/16/93       4/23/93     SI
Stearns 280
  059-21529     10/25/96       12/7/96     Prod
Stearns 281
  059-21530     10/4/96       10/23/96     Prod
Stearns 282
  059-21534     2/11/97       2/26/97     Prod
Stearns 283
  059-21531     12/28/96       1/7/97     Inject
Stearns 284
  059-21532     1/9/97       1/21/97     Inject
Stearns 285
  059-21533     12/14/96       12/25/96     Prod
Stearns 286
  059-21535     1/25/97       2/8/97     Prod
Stearns 287
  059-21536     3/22/97       4/3/97     Inject
Stearns 288
  059-21537     4/7/97       4/17/97     Prod
Stearns 289
  059-21538     3/1/97       3/12/97     Prod
Stearns 290
  059-21540     5/24/97       6/11/97     Inject
Stearns 291
  059-21539     3/15/97       3/25/97     Inject
Stearns 292
  059-21541     4/23/97       5/2/97     Inject
Stearns 293
  059-21542     3/27/97       4/15/97     Inject
Stearns 294
  059-21543     5/7/97       5/21/97     Inject
Stearns 295
  059-21544     6/15/97       8/30/97     Prod
Stearns 296
  059-21545     7/2/97       7/17/97     Prod
Stearns 297
  059-21550     1/24/98       3/11/98     Prod
Stearns 298
  059-21551     1/5/98       2/13/98     Prod
Stearns 299
  059-21549     12/15/97       1/17/98     Prod
Stearns 301
  059-21627     11/30/01       1/5/02     Inject
Stearns 302
  059-21629     11/19/01       1/5/02     Inject
Stearns 304
  059-21628     10/29/01       12/3/01     Prod
Stearns 309
  059-21630     11/8/01       12/3/01     Inject

Exhibit H

Page 8 of 14

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TABLE OF CONTENTS

P & A LIST

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

[ILLEGIBLE]
                       
Stearns 1
  059-07018     2/8/00       2/10/01     Abd
Stearns 2
  059-07019     3/20/00       8/10/00     Abd
Stearns 3
  059-07020     3/16/00       6/10/00     Abd
Stearns 4
  059-07021     5/30/02       9/4/02     Abd
Stearns 5
  059-07022     6/26/00       5/18/01     Abd
Stearns 6
  059-07023     5/25/00       4/24/01     Abd
Stearns 7
  059-07024     5/25/00       11/5/00     Abd
Stearns 8
  059-07025     10/22/00       6/28/01     Abd
Stearns 10
  059-06953     1/14/00       8/4/00     Abd
Stearns 11
  059-06954     9/19/00       2/3/01     Abd
Stearns 16
  059-06959     3/19/01       4/30/01     Abd
Stearns 17
  059-06960     3/7/01       10/17/01     Abd
Stearns 19
  059-06962     3/15/01       8/22/01     Abd
Stearns 20
  059-06963     10/3/01       5/16/02     Abd
Stearns 22
  059-06965     4/27/01       9/15/01     Abd
Stearns 23
  059-06966     7/1/01       10/1/01     Abd
Stearns 24
  059-06967             7/25/01     Abd
Stearns 25
  059-06968             2/15/02     Abd
Stearns 30
  059-06973     11/20/03       4/3/04     Abd
Stearns 31
  059-06974     11/13/03       7/23/04     Abd
Stearns 32
  059-06975     8/28/05       12/14/07     Abd
Stearns 35
  059-07123     12/1/06       6/13/07     Abd
Stearns 41
  059-07685     3/30/08       6/7/10     Abd
Stearns 42
  059-07686     6/12/08       9/14/12     Abd
Stearns 43
  059-07687     1/4/09       5/9/11     Abd
Stearns 44
  059-07688     8/27/08       8/19/09     Abd
Stearns 47A
  059-07691     5/3/09       10/11/09     Abd
Stearns 47B
  059-07692     10/20/09       12/31/14     Abd
Stearns 48
  059-07693     5/24/09       7/18/10     Abd
Stearns 49
  059-07694     3/17/10       12/31/14     Abd
Stearns 56
  059-07701     5/14/21       11/18/26     Abd
Stearns 63
  059-07708     11/1/20       12/31/20     Abd
Stearns 65
  059-07711     2/21/21       5/18/21     Abd
Stearns 67
  059-07714     1/27/26       11/24/26     Abd

Exhibit H

Page 9 of 14

--------------------------------------------------------------------------------

TABLE OF CONTENTS

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

[ILLEGIBLE]
                       
Stearns 70
  059-07717     2/3/27       6/19/27     Abd
Stearns 82
  059-06840     3/22/21       Abdn   Abd
Stearns 92
  059-01918     1/2/47       1/23/47     Abd
Stearns 115
  059-06871     5/1/49       5/26/49     Abd
Stearns 126 OH
  059-06907     3/16/53 NC             Abd
Stearns 126RD
  Same     N/A       5/1/53     Abd
Stearns 272
  059-20893     12/8/77       12/17/77     Abd
[ILLEGIBLE]
                       
Naranjal 1
  059-07083     7/25/10       2/29/11     Abd
Naranjal 2
  059-07084     11/21/10       11/4/11     Abd
Naranjal 4
  059-07086     4/9/14       8/26/14     Abd
Naranjal 8
  059-07090     2/7/17       10/12/18     Abd
Naranjal 10
                      Abd
Naranjal 10A
  059-07092                   Abd
Naranjal 11
  059-07093                   Abd
Naranjal 12
                      Abd
Naranjal 12A
  059-07094                   Abd
Naranjal 42
  059-07101     8/13/48       8/20/48     Abd
Naranjal 42A
  059-00005     9/23/48       9/30/48     Abd
Naranjal 44
  059-07103     8/13/51       9/18/51     Abd
Naranjal 50
  059-07108     11/4/54       11/30/54     Abd
Naranjal 56
  059-20292                   Abd
Naranjal 57
        9/16/71       9/26/71     Abd
[ILLEGIBLE]
                       
Naranjal 3
  059-07085     10/2/12       6/18/15     Abd
Naranjal 13
  059-07096     4/13/28             Abd
Naranjal 31-2
  059-05593     10/15/47       11/15/47     Abd
Naranjal 33-3
  059-05595     2/2/48       3/2/48     Abd
Naranjal 38-3
  059-05599     6/20/48       7/14/48     Abd
Naranjal 40-34
  037-16460                   Abd
Naranjal 40-34RD
  Same     10/22/54       11/9/54     Abd
Naranjal 43-2
  059-07102     1/12/49       3/7/49     Abd
Naranjal 45-2
  059-07104     9/21/51       10/7/51     Abd

Exhibit H

Page 10 of 14

--------------------------------------------------------------------------------

TABLE OF CONTENTS

                                  Spud   Compl.   Status        

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Well

--------------------------------------------------------------------------------

  API No.

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  Date

--------------------------------------------------------------------------------

  As of 8/8/02

--------------------------------------------------------------------------------

[ILLEGIBLE]
                       
Naranjal 52-3
  059-07110     7/19/60       7/31/60     Abd
Naranjal 54-3
  059-07112     7/12/61       9/4/61     Abd
Naranjal 67-2
  059-20924     9/27/78       10/3/78     Abd

Exhibit H

Page 11 of 14

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TABLE OF CONTENTS

OBO WELLS

Wells operated by AERA         **Data As of August 1, 2002

This list does not contain well status as we do not operate these wells and we
do not have access to them.
Royalty Interest Only - Subject to Oil & Gas Lease

                                      Columbia                             Well
No.   API Number   Spud Date   Comp Date       Sec.   Twnship   Range
1
  059-07585     4/1/01       2/11/02     647.0   8   3S   9W
2
  059-07586     6/4/01       5/27/02     652.0   8   3S   9W
3
  059-07587     10/29/01       2/7/02     638.0   8   3S   9W
4
  059-07588     12/24/01       2/8/02     589.0   8   3S   9W
5
  059-07589     12/31/02       2/7/03     650.0   8   3S   9W
6
  059-07590     1/28/03       5/2/03     697.0   8   3S   9W
7
  059-07591     2/8/03       7/24/03     624.0   8   3S   9W
8
  059-07592     9/14/03       1903     670.0   8   3S   9W
9
  059-07593     10/10/03       7/30/04         8   3S   9W
10
  059-07594     10/3/03       1/8/04     674.0   8   3S   9W
11
  059-07595     1/8/04       6/8/04     701.0   8   3S   9W
12
  059-07596     9/8/04       1/31/05     656.0   8   3S   9W
13
  059-07597     10/20/05       12/1/06     536.0   8   3S   9W
14
  059-07598     12/20/06       5/12/08     598.0   8   3S   9W
15
  059-07599     11/30/06       2/10/08     551.5   8   3S   9W
16
  059-07600     1/1/08       6/1/09     535.7   8   3S   9W
17
  059-07626     4/24/08       6/22/12     521.0   8   3S   9W
18
  059-07627     1/1/08       12/7/09     521.0   8   3S   9W
19
  059-07628     1/1/09       3/29/11     523.0   8   3S   9W
20
  059-07629     8/12/09       1/11/11     523.0   8   3S   9W
21
  059-07630     12/28/08       3/23/12     533.0   8   3S   9W
21 RD
  059-07630     4/1/13       2/3/14     533.0   8   3S   9W
22
  059-07631     1/19/10       9/1/12     588.0   8   3S   9W
23
  059-07632     6/29/12       11/4/12     547.0   8   3S   9W
23 RD
  059-07632     11/18/12       2/23/14     547.0   8   3S   9W
24
  059-07633                       8   3S   9W
25
  059-17634     5/8/14       9/3/15     592.3   8   3S   9W
26
  059-07635     10/1/15       7/31/17     644.0   8   3S   9W
27
  059-07636     2/29/16       2/7/17     588.0   8   3S   9W
28
  059-07637     8/16/16       9/14/19     586.0   8   3S   9W
29
  059-07638     2/22/17       4/6/18     537.0   8   3S   9W
30
  059-07639     9/29/17       12/30/18     574.0   8   3S   9W
31
  059-07640     10/8/18       4/20/20     652.0   8   3S   9W

Exhibit H

Page 12 of 14

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TABLE OF CONTENTS

Wells operated by AERA         **Data As of August 1, 2002

This list does not contain well status as we do not operate these wells and we
not have access to them.
Royalty Interest Only - Subject to Oil & Gas Lease

                                      Columbia                                  
  Well No.   API Number   Spud Date   Comp Date       Sec.   Twnship   Range
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
46RD
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
  059-07641
059-07642
059-07643
059-07644
059-07645
059-07646
059-07647
059-07648
059-07649
059-07775
059-07776
059-07777
059-07778
059-07779
059-07780
059-07780
059-07781
059-07782
059-07783
059-07784
059-07785
059-07786
059-07787
059-07788
059-07789
059-07790
059-00419
059-07791
059-00420
059-07792
059-00015
059-07793
059-07794
059-00203     4/4/19
1/12/20
4/23/20
7/31/20
9/20/20

3/19/59
4/2/59
4/16/59
8/26/59
10/14/59
5/24/60
N/A
4/20/60
10/4/60
6/22/60
10/22/60
11/9/60
6/27/61
6/14/61
6/30/66
6/25/66
7/26/66
12/30/66
6/9/66
8/2/66
8/7/66
1/18/67
6/19/66
8/16/66
1/5/67       12/16/19
5/8/21
11/20/20
4/7/21
5/7/21

4/1/59
4/16/59
4/29/59
10/11/59
10/28/59
6/20/60
6/24/60
5/22/60
10/25/60
7/4/60
11/17/60
11/17/60
7/17/61
7/5/61
7/10/66
7/10/66
8/9/66
1/11/67
6/30/66
8/6/66
8/23/66
1/28/67
7/1/66
9/3/66
1/16/67     660.0
666.0
693.0
709.0
717.0

652.0
533.0
553.0
701.0
656.0
535.0
567.0
567.0
632.0
565.0
542.0
565.0
584.0
524.0
527.0
528.0
537.0
533.0
539.0
553.0
568.0
629.4
629.5
590.0
566.0
574.0   8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8   3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S
3S   9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W
9W

Exhibit H

Page 13 of 14

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TABLE OF CONTENTS

Wells operated by AERA        **Data As of August 1, 2002

This list does not contain well status as we do not operate these wells and we
do not have access to them.
Royalty Interest Only - Subject to Oil & Gas Lease

                                      Columbia                             Well
No.   API Number   Spud Date   Comp Date       Sec.   Twnship   Range
65
  059-07656     7/20/66       8/2/66     561.0   8   3S   9W
66
  059-00016     1/11/67       1/24/67     564.1   8   3S   9W
68
  059-20461     9/14/70       10/6/70     525.3   8   3S   9W
69
  059-20492     1/28/71       2/9/71     570.0   8   3S   9W
70
  059-20518     6/7/71       6/24/71     570.0   8   3S   9W
72
  059-21280     3/19/85       4/1/85     545.0   8   3S   9W
73
  059-21319     11/23/85       1/9/86     579.0   8   3S   9W
74
  059-21320     12/8/85       1/18/86     594.0   8   3S   9W
75
  059-21321     12/18/85       1/23/86     588.0   8   3S   9W

Exhibit H

Page 14 of 14

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TABLE OF CONTENTS

(SITE BOUNDARY MAP) [h12901h1290177.gif]

--------------------------------------------------------------------------------

TABLE OF CONTENTS

REVISED 2/27/03
2:20 PM

EXHIBIT I TO
PURCHASE AND SALE AGREEMENT
BETWEEN NUEVO AND BLACKSAND PARTNERS, L.P.

MINERAL

PAYMENT AND PERFORMANCE AGREEMENT

WELL ABANDONMENT AND OIL FIELD
ACCOMMODATION PROGRAM AND
OPERATOR/NUEVO IMPROVEMENTS

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

TABLE OF CONTENTS

                                                                      PAGE NO.

--------------------------------------------------------------------------------

1.
      DEFINITIONS     1  

    1.1         PSA     1  

    1.2         DEVELOPER     1  

    1.3         DEVELOPMENT DECLARATION     2  

    1.4         DEVELOPMENT DOCUMENTS     2  

    1.4         DEVELOPMENT DOCUMENTS     2  

    1.5         REIMBURSEMENT AMOUNTS     2  

    1.6         DRE     2  

    1.7         PARCEL     2  

    1.8         PROGRAM     2  

    1.9         UNAVOIDABLE DELAY     2  
2.
      WELL ABANDONMENT AND OIL FIELD ACCOMMODATION PROGRAM AND IMPROVEMENTS   2
 

    2.1         PROGRAM     2  

      2.1.1       Operator’ Surface Facilities     3  

              2.1.1.1   Removal of Surface Facilities     3  

              2.1.1.2   Remediation Responsibilities     3  

      2.1.2.       Third Party Easements and Licenses     4  

      2.1.3.       On-Site Representative     5  

      2.1.4.       Reimbursement     5  

              2.1.4.1.   Reimbursement Plan     5  

              2.1.4.2.   Program Segments and Notices to Proceed     5  

      2.1.5.       Anchor Points and Pulling Pads     8  

      2.1.6.       Well Vaulting     8  

      2.1.7.       Insurance     8  

      2.1.8.       Completion of the Program     8  

              2.1.8.1.   Performance by Each Party     8  

              2.1.8.2.   Final Acceptance     9  

              2.1.8.3.   Liability Allocation     9  

              2.1.8.4.   Construction Easement     10  

      2.1.9.       Developer Option to Purchase Wells     10  

    2.2.         THE PROGRAM AND PARTY RESPONSIBILITIES     11  

                I.   Post closure-Pre Grading Events     11  

                II.   Site Clearing and Site Grading Events Within the
Development Areas     14  

                III.   Post-Grading Events     18  

    2.3         DEVELOPER IMPROVEMENTS AND ADDITIONAL PAYMENTS     20  

      2.3.1       Processing Costs – Employee Costs     20  

      2.3.2       Operator Improvements     21  

      2.3.3.       Governmental Modifications     21  

    2.4         MISCELLANEOUS     21  

      2.4.1       Remedies     21  

i

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                                                                      PAGE NO.

--------------------------------------------------------------------------------

                    2.4.1.1     Default/Cure     21  

                    2.4.1.2     Remedies Cumulative     21  

                    2.4.1.3     Waiver     22  

            2.4.2. Continuous Operation     22  

            2.4.3. Assignment     23  

            2.4.4 Subdivision Maps and Applications     23  

            2.4.5. Captions     23  

            2.4.6. Invalidity of a Provision     23  

            2.4.7. Notices     23  

            2.4.8. Binding Effect     25  

            2.4.9. Further Assurances     25  

            2.4.10. Time of Essence     25  

            2.4.12. Attorneys’ Fees     26  

            2.4.13 Payments     26  

            2.4.14 Applicable Law     26  

ii

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TABLE OF CONTENTS

ATTACHMENTS

     
Attachment 1
  LEGAL DESCRIPTION OF LAND
Attachment 2
  LIST OF ENGINEERING FIRMS PER SECTION 2.1.9
Attachment 3
  OIL FIELD RELATED THIRD PARTY EASEMENTS AND LICENSE – TPEL
Attachment 4
  BREA FIELD DEVELOPMENT ACCOMMODATION PROGRAM

i

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TABLE OF CONTENTS

MINERAL

PAYMENT AND PERFORMANCE AGREEMENT

     This Payment and Performance Agreement (“Agreement” or “PAPA”) is made this
     day of      , 2003, by and between NUEVO ENERGY COMPANY, a Delaware
corporation (“Nuevo”) and BLACKSAND PARTNERS, L.P., a Texas Limited Partnership
(“Operator”). Such entities are hereinafter individually or collectively
referred to as a “Party” or the “Parties.”

PREAMBLE:

     A. Concurrently herewith, Operator has acquired from Nuevo that certain
real property consisting of mineral interests located in Orange County,
California, more particularly described on Attachment “1” which is appended
hereto and incorporated herein by this reference (“Minerals”).

     B. In accordance with the Purchase and Sale Agreement of even date
herewith, pursuant to which Operator is acquiring the Minerals, the Parties wish
to set forth herein certain obligations of Operator, Nuevo and Developer
(defined below in Section 1.2) regarding the Program (defined below in
Section 2.1) and the construction of other improvements.

     C. As described herein and in the Development Declaration (defined in
Section 1.3), Operator has assumed certain obligations with respect to the
Program, which, pursuant to this Agreement, Nuevo is required to perform.

     NOW, THEREFORE, in consideration of the PREAMBLE and the covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, including without
limitation the conveyance of the Minerals to Operator by Nuevo, the Parties
hereby covenant and agree as follows:

     1. Definitions. Unless otherwise expressly provided herein, the following
words and phrases when used in this Agreement shall have the following meanings;
all terms not specifically defined herein shall have the meaning prescribed for
them in the PSA or elsewhere in the Development Documents.

          1.1 PSA. “PSA” or “Purchase and Sale Agreement” shall mean that
certain agreement described in Paragraph “B” of the Preamble to this Agreement.

          1.2 Developer. “Developer” shall mean Nuevo as the initial applicant
to Governmental Agencies for development of the Project or any entity (or
entities collectively or individually) which subsequently acquires all or any
portion of the surface fee interest in the Parcel for the purpose of developing
all or a portion of the Project, from and after the effective date of such
acquisition.

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          1.3 Development Declaration. “Development Declaration” shall mean that
certain Declaration of Development Covenants, Conditions and Restrictions
encumbering the Parcel between Nuevo and Operator and recorded as described in
the Repository Instructions.

          1.4 Development Documents. “Development Documents” shall have the
meaning prescribed in the PSA.

          1.5 Final Acceptance. “Final Acceptance” means the date on which
Developer or Operator has delivered an Acceptance Confirmation for those
activities in each Program Segment set forth in Section 2.1.4.2, after it has
conducted a final inspection of all work performed by the other or Nuevo in
connection with the activity.

          1.6 Reimbursement Amounts. “Reimbursement Amounts” shall have the
meaning given in Section 2.1.4.1. of this Agreement.

          1.7 ORE. “DRE” shall mean the California Department of Real Estate or
such other governmental agency of the State of California which administers the
sale of subdivided lands pursuant to Sections 11000 et seq. of the California
Business and Professions Code, or any similar California statute hereinafter
enacted.

          1.8 Parcel. “Parcel” shall mean all that certain real property
described on Attachment “1” which is appended hereto and incorporated herein by
this reference, less and except the Minerals acquired by Operator.

          1.9 Program. “Program” has the meaning set forth in Section 2.1.

          1.10 Unavoidable Delay. “Unavoidable Delay” shall mean any prevention,
delay or stoppage in the completion of a Party’s Work as defined herein caused
by fire, explosion, unavailability or breakdown of machinery or equipment or by
acts of God, war, riot, civil insurrection, labor disputes, inability to obtain
labor or materials or reasonable substitutes therefor, any order, regulation,
request or recommendation of a Governmental Agency, or other similar matters or
causes beyond the reasonable control of the responsible party other than for the
payment of money; provided, however, that nothing in this Section shall excuse
the performance of any act rendered difficult solely because of the financial
condition of a party.

     2. Well Abandonment and Oil Field Accommodation Program and Improvements.

          2.1 Program. Nuevo, at no cost and expense to Operator except as may
be expressly provided in this Agreement, shall conduct a well abandonment and
oil field accommodation program for the Parcel composed of those tasks and
activities which are described in this Section 2 and are specifically set out in
Attachment 4 hereto, which, together with those tasks and activities of
Developer described in this Section 2 and specifically set out in Attachment 4
are hereinafter referred to as the “Program.” In connection with the performance
of the Program, Nuevo shall, in the event of conveyance of the Parcel, enter
into an agreement with any successor Developer which will provide for the
performance by Developer of those tasks and activities described in this
Section 2 as Developer’s responsibility. The Program shall

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be undertaken with Operator’s cooperation, and in accordance with standards
promulgated at the time of such work by the California Department of
Conservation, Division of Oil, Gas and Geothermal Resources (“CDOGGR”) or such
other governmental agency having jurisdiction over the activity, other legal and
regulatory requirements, as amended from time to time (but such amendment
applicable only to those activities for which Final Acceptance has not been
received), and good oil field practices, all subject to the terms of this
Agreement. Generally, the Program will be accomplished as follows:

               2.1.1 Operator’s Surface Facilities.

                    2.1.1.1 Removal of Surface Facilities and Subsurface
Pipelines. Nuevo shall remove certain of Operator’s surface equipment as
specified in Attachment 4, to the extent and when necessary in accordance with
the applicable Developer Notice to Proceed within the Development Areas and
lands adjacent thereto, including those areas designated for continued oil and
gas operations, to accommodate Developer’s Grading Plan. This will include, but
not be limited to, pumping units, concrete cellars and concrete pads immediately
contiguous to the wellheads, power poles, transformers, manifolds, test bubbles,
compressors, tanks, vessels and above ground pipelines. In addition, Nuevo shall
drain, flush and cap subsurface pipelines, to the extent and when necessary in
accordance with the applicable Developer Notice to Proceed within the
Development Areas and lands adjacent thereto to accommodate Developer’s Grading
Plan. Removal of subsurface pipelines to the extent deemed necessary or
desirable shall be the responsibility of Developer. Prior to Nuevo’s
commencement of work, Operator shall isolate and cease operation of all
equipment and facilities to be removed and shall take such other steps as are
reasonably necessary to allow such removal to be conducted in accordance with
all applicable regulatory requirements and consistent with good oil field
practices. The surface equipment will be removed from such wells, not just those
to be abandoned, to facilitate the grading. Each wellhead will be surveyed and
marked by Operator one (1) time only and Nuevo and Developer will inspect and
approve the markings. After inspection and approval of the well markings,
Developer will be responsible for grading around the well casings without
damaging them. Upon approval of the well markings, Developer shall proceed in a
timely manner and be responsible to pay, and shall be solely liable for, any and
all damage to any wells caused by Developer’s grading operations.

     The acts or omissions of Developer or Nuevo in accordance with the terms of
this Agreement may not be imputed to Operator unless expressly stated herein.
Developer and Nuevo are each performing their obligations hereunder as
independent contractors and not as a subcontractor or agent of Operator.
Furthermore, the actions or omissions of Operator must be based upon a specific
duty imposed by this Agreement or law upon Operator, and not delegated to Nuevo.

          2.1.1.2 Remediation Responsibilities. Should Developer encounter soil
that appears to be crude oil or oil well production impacted (evidenced by
staining or odor), Developer shall immediately notify Operator’s field
operations person and Nuevo’s on-site representative. Developer shall be fully
responsible for funding, implementing and completing all environmental testing,
assessment, remediation, monitoring, reporting or other requirements (with the
assistance of Operator or Nuevo if the absence of such assistance would prevent
Developer from properly performing such responsibilities) with respect to such
crude oil or oil

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well production impacts. To the extent that such crude oil impact or oil well
production impact is associated with active and producing wells or operational
pipelines or facilities, Operator shall be responsible for completion of any
required well, pipeline or facility repairs. Notwithstanding the foregoing,
Nuevo at its sole cost and expense shall be and remain responsible for (i) those
remediation activities described in the approved Remedial Action Plan submitted
December 16, 1999, as amended October 3, 2001, December 27, 2001 and January 13,
2003 (“EIR Remediation”) and (ii) crude oil or other oil well production
releases that result from work and activities undertaken by Nuevo in furtherance
of this Agreement. Upon discovery of crude oil or oil well production
contamination in the vicinity of a well identified in Schedule B of Attachment 4
or temporary or permanent pipeline or facility, Operator’s field operations
person, Nuevo’s onsite representative and Developer’s on site representative
shall determine as soon as reasonably practical if the soil is crude oil
impacted as a result of a leak caused by (i) Operator’s ongoing production
activity in which event costs associated with cleanup and remediation to oil
field standards shall be the responsibility of Operator, (ii) the activities of
Nuevo in performance of the Program including EIR Remediation in which event
costs associated with cleanup and remediation shall be the responsibility of
Nuevo or (iii) from any other causes in which event the costs associated with
cleanup and remediation, including costs to bring cleanup associated with
ongoing production activities from oil field standards to residential standards,
together with clean up and remediation of all contamination other than the EIR
Remediation, shall be Developer’s responsibility. The Parties agree that if
Operator’s field operations person and Developer’s and Nuevo’s on site
representatives cannot make such a determination or cannot agree on the source
of the apparent soil contamination within seven (7) business days, Nuevo,
Developer and Operator will designate a representative from a reputable, soils
engineering firm that routinely does soils work (“Soil Firm”) who is familiar
with soil contamination issues to designate the source of the apparent soil
contamination. If the parties are unable to select a Soils Firm, any party to
this Agreement may make application to the Superior Court of Orange County for
the timely appointment of a Soil Firm. The Soil Firm’s representative shall take
a sufficient number of samples to permit initial and follow-up testing and such
representative’s determination as to all matters, including the allocation of
costs, including its fees, shall be final and binding on the parties hereto. The
parties shall use their commercially reasonable efforts to secure the
determination by the Soil Firm’s representative of the source of the apparent
soil contamination shall be made as soon as practicable after notification to
the Soil Firm. If the Soil Firm’s representative cannot make a conclusive
determination as to the source of the apparent soil contamination, the soil
contamination shall be presumed to have been from other than ongoing production
activity. The party whose actions are found to have created the contamination
shall in addition to the clean up and remediation cost, pay for the Soil Firm’s
work; and if more than one party is found to have created such contamination,
the costs of the Soil Firm’s work will be prorated by such firm among the
parties creating the contamination in proportion to that Parties’ contribution
to such contamination.

               2.1.2. Third Party Easements and Licenses. Nuevo and Operator
will cooperate with Developer in attempting to remove and/or relocate from the
Development Areas oil field related easements and licenses for pipelines
(“TPEL”) belonging to other entities, including those of Southern California
Edison. Nuevo is not aware, to the best of its knowledge, of any other TPEL on
or affecting the Parcel except as described in Attachment “3,” hereto. Nuevo and
Operator shall not be required to incur any costs, in their efforts to cooperate
in the removal and/or relocation of the TPEL. Temporary pipelines may be
required in some areas

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while the grading is in progress. Operator and Nuevo will use commercially
reasonable efforts, at no cost to Operator and Nuevo, to assist Developer at
Developer’s expense in causing these pipelines to be reinstalled by the
respective companies in permanent easements after the grading is complete.
Operator agrees that upon Developer’s written notice, Operator will assist
Developer in giving notice to the third party companies in an attempt to have
the pipelines removed and replaced. Operator and Developer acknowledge receipt
of copies of the easement documents, both recorded and unrecorded, listed on
Attachment “3” hereto and incorporated herein by this reference.

               2.1.3. On-Site Representative. Nuevo, Operator and Developer
shall each have the right to have representatives on-site both before the
grading begins and during the grading operations on the Parcel to observe such
grading operations. Developer agrees to give Operator sufficient notice prior to
commencement of grading to allow Operator to arrange to have a representative
on-site at Operator’s cost, if Operator so elects.

               2.1.4. Reimbursement.

                    2.1.4.1. Reimbursement Plan. Operator and Nuevo agree that
the costs to implement the Program (“Reimbursement Amounts”) shall not be borne
by Operator, unless otherwise provided herein. Notwithstanding any term in the
Agreement to the contrary, Operator shall only be responsible for the cost of
incremental work, if any, requested by Operator under Section 2.3.2. The parties
recognize that the Project may be modified as a result of new or additional
governmental requirements or as a result of the mutual agreement of the
Developer and Operator or among Developer, Operator and Nuevo as specified
herein. In no event shall any modification requested by Developer or any
additional or new governmental requirements prior to Final Acceptance result in
costs, expenditures or commitments by Operator.

                    2.1.4.2. Program Segments and Notices to Proceed. The
Program shall be implemented into segments as shown below, and each Program
Segment shall commence upon proper receipt of a written notice issued by
Developer and delivered to Nuevo and Operator specifying the Program Segment to
be performed (“NTP”), as follows:

              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Pre-Phase I Initial Activity   NTP will be issued as mutually agreed between
Nuevo and Developer.    
 
         
•
  Preliminary and detailed engineering and design       Not Applicable
 
           
•
  Permitting       Not Applicable
 
           
•
  Remediation required by EIR       Developer

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              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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•
  Initial abandonment of 25 idle and reabandoned wells       Not Applicable
 
            Pre-Phase I Intermediate Activity   NTP will not issue prior to
receipt of all required Operator permits or, to the extent certain activity can
be commenced without permits, as mutually agreed between Nuevo and Developer.  
 
 
         
•
  Begin procurement of all required materials and equipment     Not Applicable
 
         
•
  Remove infrastructure and initial abandonment of active wells       Not
Applicable
 
           
•
  Begin construction of tank farm and field infrastructure       Not Applicable
 
            Pre-Phase I Final Activity   NTP will not issue prior to receipt of
all required Operator permits or, to the extent certain activity can be
commenced without permits, as mutually agreed between Nuevo and Developer.    
 
         
•
  Complete construction of tank farm and field infrastructure     Operator
 
         
•
  Construct power system       Operator
 
           
•
  Temporary removal of equipment       Not Applicable
 
            Phase 1   NTP will not issue prior to receipt of all required
Operator permits or, to the extent certain activity can be commenced without
permits, as mutually agreed between Nuevo and Developer.    
 
         
•
  Raise/lower Phase I well heads     Operator
 
         
•
  Final abandonment of Phase 1 wells       Developer
 
           
•
  Accommodation of retained wells       Operator (and Developer for limited
purpose of design compliance)
 
           
•
  Remove infrastructure and initial abandonment of Phase 11 wells       Not
Applicable
 
           
•
  Temporarily remove Phase II retained
well equipment       Not Applicable

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              Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Phase II   NTP will not issue prior to receipt of all required Operator permits
or, to the extent certain activity can be commenced without permits, as mutually
agreed between Nuevo and Developer.    
 
         
•
  Raise/lower Phase II well heads     Operator
 
         
•
  Final abandonment of Phase II wells       Developer
 
           
•
  Accommodation of retained wells (21 wells)       Operator (and Developer for
limited purpose of design compliance)
 
           
•
  Remove infrastructure and initial abandonment of Phase III wells (8 wells)    
  Not Applicable
 
           
•
  Temporarily remove Phase II
retained well equipment       Not Applicable
 
            Phase III   NTP will not issue prior to receipt of all required
Operator permits or, to the extent certain activity can be commenced without
permits, as mutually agreed between Nuevo and Developer.    
 
         
•
  Raise/lower Phase III well heads     Operator
 
         
•
  Final abandonment of Phase III wells       Developer
 
           
•
  Seismic Sensor installation       Developer

     Upon receipt of the NTP for any Program Segment specified above, Nuevo
shall be obligated to commence the required work within forty-five (45) days and
complete the work within the time duration specified in Attachment 4. Operator
shall cooperate in good faith with Nuevo and Developer in the implementation of
the Program. Operator shall (i) promptly process all permit requests; (ii) at
its cost comment on all submittals of specifications or plans within ten
(10) business days of receipt thereof; and (iii) at its cost make all facilities
available for accommodation under the Program such that Nuevo may commence the
Program Segment within 45 days of receipt of a NTP. To the extent that Operator
fails to fully and timely cooperate with Nuevo, and Nuevo, as a result of
Operator’s acts or omissions, incurs penalties, damages or incremental costs in
performing the Program, such penalty, damage or cost shall be the responsibility
of Operator and Operator hereby agrees to defend, indemnify and hold Nuevo
harmless therefrom. Operator shall also be liable to Developer for any and all
incremental reasonable cost or expense incurred by Developer in the development
of the Development Areas as a result of Operator’s failure to comply with the
provisions of this Section. Operator expressly agrees to pay such incremental
Developer costs and defend, indemnify and hold Nuevo harmless therefrom. In
addition to the foregoing, should Operator fail to temporarily or permanently
shut in any well in accordance with the Program, Nuevo shall have the right, but
not the obligation to shut-in such well at Operator’s sole risk and expense. In
the event Developer abandons or

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suspends the Program other than as a result of Unavoidable Delay, and does not
resume Program activity within the time period specified in Section 2.4.1.1
after receiving written notice from Operator, Nuevo shall restore such wells to
production at Developer’s risk and sole expense provided that Nuevo has been
prepaid by Developer an amount adequate to restore such wells. To the extent
Nuevo acts as the Developer hereunder and fails properly to carry out the
responsibilities and obligations allocated to Developer in this Section 2,
Operator, after ten (10) days written notice to Nuevo, may take over and
discharge such responsibilities and obligations at the sole cost and expense of
Nuevo, to be reimbursed in cash to Operator within thirty (30) days of proper
completion of such Work by Operator, fully in compliance with this PAPA and all
plans and specifications for such Work.

               2.1.5. Anchor Points and Pulling Pads. As part of the Program,
Nuevo shall be responsible for construction of the anchor points and pulling
pads necessary for Operator’s continuing Oil Operations within the Exclusive Use
Areas and Joint Use Areas within the Development Areas and graded areas adjacent
thereto.

               2.1.6. Well Accommodation. As part of the Program, Nuevo will
relocate below the surface of the Parcel, all operating wellheads in the
Development Areas, and those required wells within the adjacent grading areas
and Public Park areas, and as required by appropriate Governmental Agency rules
as more particularly set out in Attachment 4, Schedule B..

               2.1.7. Insurance. Each Party shall use commercially reasonable
efforts to name the other parties as Additional Insureds, on each Party’s
standard blanket insurance policy covering its activities related to the
Minerals or in connection with the Program Improvements, for the duration of
their construction or their activities on the Minerals and any portion of the
Parcel.

                2.1.8.Completion of the Program.

                    2.1.8.1. Performance by Each Party. Nuevo shall timely
commence and complete each Program Segment within the time duration specified in
Attachment 4 after receipt of all required permits for such Segment. Phase I, II
and III Segments will not commence until after completion of Developer’s grading
for that Segment. In no event shall Nuevo or Operator be obligated to design,
construct or install any improvements nor undertake work or activities other
than those specified in Attachment 4. Should Developer or Operator’s failure to
perform, including, without limitation, pursuant to Section 2.1.4, other than
for the payment of money, or should Nuevo’s failure to complete any aspect of
the work or any Program Segment result from an Unavoidable Delay, such required
performance shall be excused for the period of time that the Unavoidable Delay
prevents performance and the time duration for the Program Segment shall be
extended by the length of time performance is delayed. Provided, however, that
nothing in this Section shall excuse the performance of any act rendered
difficult solely because of the financial condition of a party. In the event
that any delay due to Unavoidable Delay is anticipated by a Party, such Party
shall promptly notify the other parties of such delay, its cause and the
estimated duration of the delay. Each Party shall exercise due diligence to
shorten, mitigate and avoid the effects of the delay and shall keep all Parties
informed as to its efforts.

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                    2.1.8.2. Final Acceptance. Developer and Operator shall
respectively conduct a final inspection of those activities in each Program
Segment as set forth in Section 2.1.4.2 as to the items by their name in the
“Acceptance Confirmation” in such section within fifteen (15) days of written
notice of completion. In addition Operator shall have the right, but not the
obligation, to perform a final inspection of the Developer’s work and comment on
the same. Developer and Operator shall deliver to Nuevo (with a copy to the
other) (i) its written confirmation of “Final Acceptance of all matters” (each
an “Acceptance Confirmation”) for each activity in a Program Segment designated
for its Acceptance or (ii) an Acceptance Confirmation of all matters it
considers as completed and a detailed description of any items in the Program
Segment designated for its Acceptance which it in good faith cannot give “Final
Acceptance” together with its requirements therefor. The issuance of an
Acceptance Confirmation of each completed activity within the Program Segment
and of all matters shall be contingent upon acceptance of the work by the
appropriate governmental authority to the extent required. If the parties cannot
resolve any item for which an Acceptance Confirmation has not been given within
30 days, such unresolved item shall be submitted to arbitration in accordance
with this Agreement. Upon completion of any outstanding items, Operator or
Developer shall deliver an Acceptance Confirmation thereof to Nuevo and the
other within 10 days of such completion. After Final Acceptance, Developer shall
be responsible for and shall release, hold harmless and indemnify Operator and
Nuevo from all claims, demands, losses or damages, of any sort whatsoever,
relating to the design, engineering, permitting, maintenance, repair,
replacement, relocation, removal and reinstallation of any abandoned wells,
pipelines or facilities located within or adjacent to the Development Areas and
all other matters for which it has given an Acceptance Confirmation and,
together with all other work performed hereunder shall be referred to as
“Developer Liability”. After Final Acceptance, Operator shall be responsible for
and shall release, hold harmless and indemnify Developer and Nuevo from all
claims, demands, losses or damages of any sort whatsoever, relating to the
design, engineering, permitting, installation, repair, relocation, removal and
reinstallation of all active wells, pipelines or facilities and all other
matters for which it has given Final Acceptance (“Operator Liability”). It is
the intention of the Parties that upon Final Acceptance, Nuevo shall have no
further liability or obligation with respect to the Program and the wells,
equipment and facilities accommodated under the Program. Upon Final Acceptance,
Nuevo and Operator shall be relieved of any and all liability directly or
indirectly related to Developer Liability; provided that notwithstanding the
foregoing, so long as Nuevo is Developer, Nuevo shall not be relieved of
Developer Liability. Upon Final Acceptance, as between Nuevo and Operator, Nuevo
shall be relieved of further liability or obligation and Operator shall
indemnify, release and hold Nuevo harmless from any and all claims, including
third party claims, related to Operator Liability. Notwithstanding anything to
the contrary contained herein, Operator, prior to Final Acceptance, shall not be
liable or responsible for any increased costs which result from governmental
requirements to obtain additional permits or remediate or restore the Parcel to
a higher standard resulting from the real estate development and all such
incremental or increased costs shall be the responsibility of Developer.

                    2.1.8.3. Liability Allocation. Notwithstanding the above or
the Indemnities Developer gives in its agreement to purchase the Parcel, at any
time prior to Final Acceptance, Developer may, in its reasonable discretion,
seek arbitration as provided in

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Section 2.1.4.3 against Nuevo to obtain damages for losses suffered as a result
of the failure of Nuevo to timely or properly complete the Program Segment or
work thereunder. All disputes between any of the Parties herein shall be
resolved through arbitration. Any award in such arbitration shall be limited to
the recovery of actual direct damages incurred by Developer. Developer shall not
be entitled to indirect, consequential, special, exemplary or punitive damages.
After Final Acceptance by Developer, Developer shall have no cause of action
with respect to Developer’s Liability against Operator or Nuevo, or their
successors or assigns. After Final Acceptance by Operator, Operator shall have
no cause of action against Developer or Nuevo or their successors or assigns for
Operator’s Liability but Operator or Developer may, in its reasonable
discretion, maintain a lawsuit, arbitration or other action against any
construction entities hired by Nuevo (but not Nuevo itself) to perform work on
the Parcel pursuant to a written contract (“Construction Entities”), to obtain
damages for losses suffered as a result of Nuevo’s failure to timely or properly
construct the completed work, to the extent caused by such Construction
Entities. In that regard, to the extent it possesses and may assign same, Nuevo
hereby conveys, transfers and assigns (and, if necessary, will convey, transfer
and assign at such time as such cause of action arises) to Operator and
Developer a non-exclusive assignment of its rights and interests in and to any
relevant contracts or subcontracts, for the limited purposes stated herein,
without any obligation by Nuevo to participate in such lawsuit or action, as a
party or otherwise, and without any responsibility, warranty, representation or
liability for any outcome pursuant thereto or damages awarded therein.
Construction Entities include contractors, subcontractors, materialmen or other
independent entities, but not Operator or Nuevo, their respective constituent
partners, officers, employees or any other related entities. Upon ten (10) days
written request, Nuevo will provide Operator and Developer with a list of such
Construction Entities which have supplied Operator and/or Nuevo with the
Preliminary Notice prescribed by the California Civil Code for the maintenance
of mechanic’s lien rights (See Exhibit “F” to the PSA). Nuevo further agrees to
not enter into any contract with a Construction Entity that waives the liability
for such entity’s negligence.

                    2.1.8.4. Construction Easement. Operator and Developer,
their respective successors and assigns, hereby grant to Nuevo together with the
right to partition, grant and transfer the same, a nonexclusive easement in
gross over the Parcel to the extent necessary to complete all work required by
the Program.

               2.1.9. Developer Option to Purchase Wells. Developer may at any
time prior to commencement of grading, elect to purchase any or all of
Operator’s active wells lying within the Development Areas solely for the
purpose of well abandonment by giving notice by certified mail of such well
designation. The value of a producing oil well or an injection well shall be
determined by mutual agreement of the parties taking into consideration the
current condition of the well, the reserves assigned to the well, the well’s
production, operating cost, plugging and abandonment cost, for an injector well,
the replacement cost, and any other matter deemed relevant. For purposes of this
Section 2.1.9, the value of a well shall be equal to the average of the values
determined by the reserve engineers, one to be selected by each party from the
list attached as Attachment 2. Each party shall select one company from such
list by providing written notice thereof within ten days of the certification
date of Operator’s notice. The value, once determined, shall be final. Prior to
grading, the determined value shall be paid by Developer to Operator, and such
costs to Developer shall not be considered as costs to

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implement the Program. Developer shall notify Operator within ten (10) days of
receipt of the determination of values which wells it elects to purchase.
Developer shall pay the amount to Operator within twenty (20) days of such
notice. Upon receipt of such payment, Operator shall promptly (i) shut in any
applicable wells, if active, and (ii) deliver to Developer a Bill of Sale for
any such well and transfer operatorship to Developer. Developer shall (iii)
assume operatorship and obtain all necessary permits and governmental approvals
to act as Operator, (iv) not return any well it purchases to production, and
(iv) cause such wells to be plugged and abandoned and all gathering lines and
facilities abandoned and, if above ground, removed all in accordance with all
Governmental Agency regulatory requirements at Developer’s sole cost and expense
in the same time and manner required of Operator under the Program. Any
ancillary costs associated with the purchase and plugging and abandonment of any
such wells and removal of facilities therefor shall not be considered as
Reimbursement Amounts.

          2.2. The Program and Party Responsibilities. Except as otherwise
provided herein, Operator, Nuevo and Developer shall cooperate in the completion
of the Program and each Party shall perform its obligations in a commercially
reasonable manner, and in good faith, as described below and elsewhere herein:

     I. Post closure-Pre Grading Events

          A. Operator and Nuevo have mutually agreed or, if so indicated, shall
mutually agree, in a manner consistent with Attachment 4 hereto, to the
following matters as more specifically set out in Attachment 4 and schedules
thereto:

  i.   the location and size of the area for the expansion of the existing
Tonner Canyon Tank Farm (“Tank Farm”), which will be required prior to the
decommissioning of the existing East Naranjal Tank Farm (“EN Tank Farm”).    
ii.   the general alignment and grade for service lines to the Tank Farm and
plan facilities to accommodate the operating wells previously served by the East
Naranjal Tank Farm. (References to grade within this Agreement refer only to
those lines for which burial is required.) The final alignment and grade will be
mutually agreed to so as to avoid conflict with future development to the extent
possible and to avoid future interruption of service.     iii.   the general
alignment and grade for the surface and subsurface installation of the 12KV
service line from the existing electrical substation to the new site and to the
existing Steams gas plant location (“Gas Plant”). The final alignment and grade
have been selected as to minimize conflict with future development and avoid
future interruption of service.     iv.   INTENTIONALLY OMITTED

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  v.   shall mutually agree upon the location, alignment and grade of the “sales
point” for the ConocoPhillips (formerly Tosco) pipeline to serve the Tank Farm.
    vi.   shall mutually agree upon the location, alignment and grade of the gas
gathering system and associated facilities, and service lines between the Gas
Plant and the Tank Farm.     vii.   shall mutually agree upon the final grade
elevations for each existing well remaining in the Development Areas, or
impacted by grading for the Development Areas.     viii.   shall mutually agree
upon access plans to provide for interim and final access to accommodate the
Program work and all future oilfield-related activities.

  B.   Developer, at Developer’s cost and expense, shall:

  i.   Prepare the Grading Plan and process it through the appropriate
Governmental Agency. The Grading Plan shall be designed to be completed in three
phases to correspond to the work set out in Attachment 2, all as approved by the
appropriate Governmental Agency.     ii.   Prepare a soils and geological review
of the Grading Plan.     iii.   Satisfy, or cause to be satisfied, all
mitigation measures precedent to grading found in the Final Tenner Hills EIR.  
  iv.   Prepare a preliminary utility master plan (“Street and Utility
Improvement Plans”) to serve as a basis for the Facilities Plan (see C.v.,
below) and to be submitted to, and approved by, the appropriate Governmental
Agency.     v.   Provide grade elevations for all wells to be retained or
abandoned within the Development Areas or impacted by grading required for the
Development Areas.     vii.   Obtain coverage under the National Pollutant
Discharge Eliminating System (NPDES) statewide General Construction Activity
Stormwater Permit from the State Water Quality Control Board.     viii.   Cause
a Remedial Action Plan to be completed and processed through the County of
Orange Health Care Agency, Division of Environmental Health, or such agency as
may have current jurisdiction of any identified contaminants.

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  C.   Nuevo at Developer’s cost and expense shall:

  i.   Complete construction drawings for the expanded Tank Farm and facilities
related thereto and process them through the appropriate Governmental Agencies
(including, if necessary, the South Coast Air Quality Management District).    
ii.   Complete improvement and relocation plans and process them through the
appropriate Governmental Agencies (as necessary) for the relocation of the Tank
Farm service lines, the East Naranjal Tank Farm service lines, the Gas Plant
service lines, natural gas gathering lines and 12KV power lines.     iii.  
Prepare and submit the well abandonment program, as set out in Attachment 4, for
permitting through CDOGGR.     iv.   Prepare schematic facilities plans for
pipelines and facilities (“Facilities Plan”) to service the wells to be
accommodated within and adjacent to the Development Areas.     v.   Construct
the Tank Farm improvements.     vi.   Remediate the identified contaminated
soils associated with the EN Tank Farm. Exhumed soils will be isolated and
stockpiled for placement by Developer with the grading of the first phase of
development in accordance with the approved Remedial Action Plan. Exhumed soils
not meeting the criteria for placement on site will be removed from the site for
appropriate disposal.     vii.   Decommission the EN Tank Farm once the service
lines are connected to the improved Tank Farm.     viii.   Construct the new
service lines as required to the Tank Farm, rerouting lines currently serving
the East Naranjal Tank Farm, and prepare as-built plans for those service lines
which are permanent.     ix.   Drain, flush and mark for grading any identified
abandoned EN Tank Farm and Tank Farm pipelines.     x.   Construct the temporary
or permanent (as applicable) gas gathering lines and facilities to the Gas
Plant.     xi.   Flush and mark any identified abandoned below ground pipelines
and facilities for grading.     xii.   Relocate the 12KV line from the existing
electrical substation to the existing Gas Plant and Tank Farm as necessary.

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  xiii.   Locate and mark all identified pipelines and facilities within the
area to be graded.     xiv.   Relocate the point of sale for the ConocoPhillips
(formerly Tosco) pipeline to the relocated ConocoPhillips (formerly Tosco)
pipeline to connect to such new point of sale.     xv.   Complete the design
drawing for all service-related facilities not otherwise contemplated herein.  
  xvi.   Prepare and submit fire and seismic protection plans for accommodated
facilities.

  II.   Site Clearing and Site Grading Events Within the Development Areas.

               A. Upon notice from Developer of the issuance of a grading
permit, and prior to site clearing, Nuevo, with the cooperation of Operator,
shall, after the receipt of the NTP on a Segment-by-Segment basis, in accordance
with the work associated with the Program Segment as further set out in
Attachment 4:

  i.   “Shut in” the appropriate wells as necessary; and all appurtenant service
lines and pipelines for such wells will be drained, flushed and marked in place.
    ii.   Disassemble and remove the surface facilities for such wells (test
bubbles, manifolds, valves, etc.).     iii.   Remove all well site equipment
associated with such wells.     iv.   Remove all of Operator’s surface and
subsurface power lines and transformers.     v.   Relocate, as necessary, power
lines, pipelines and facilities to service wells located outside of the
Development Areas.     vi.   Cause all identified wells impacted by grading to
be clearly marked.     vii.   Commence well abandonment operations for those
wells that are to be permanently abandoned. Identify and isolate any
contaminated soils associated with the wells for remediation as called for in
the approved Remedial Action Plan. Soils not meeting the criteria for placement
in deep fills, if any, will be removed from the site for appropriate disposal.

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  viii.   Remove and crush all well cellars associated with the wells to be
abandoned and accommodated; the concrete will be crushed, and stockpiled for
later placement by Developer.     ix.   Maintain full authority over the cleanup
and remediation operations for any crude oil released as a result of Developer’s
performance. All such costs shall be for the account of Developer.     x.  
Provide Developer with copies of all inspection records and reports and test
results for any contaminated soils associated with the well work.

               B. Upon the issuance of a grading permit, Developer at
Developer’s cost shall, on a Segment-by-Segment basis, in accordance with the
work associated with the applicable Program Segment as further set out in
Attachment 4:

  i.   Provide construction staking to define the limits of the area to be
cleared and developed.     ii.   If not previously commenced, notify the
appropriate Governmental Agencies and all interested parties of the commencement
of the soils remediation program as required under the approved Remedial Action
Plan. (This assumes that the majority of the soils remediation efforts will
occur during the grading operations, and will utilize a modified direct burial
approach.)     iii.   Coordinate grading with Nuevo, such that the scheduled
sequence of wells to be shut-in or abandoned, as appropriate, is consistent with
Developer’s grading program.     iv.   Provide notice to the grading contractor
as to the well locations and the necessity of avoiding wells during the clearing
and grading operation(s).     v.   Cause a comprehensive health and safety plan
to be prepared and submitted to Nuevo and Operator and all the appropriate
Governmental Agencies prior to commencement. The plan shall cover both grading
and remediation activities.     vi.   If not previously remediated by Nuevo
during the soils remediation process of those sites that are set out in
Attachment 4 as Developer’s responsibility, remediate (at Developer’s cost)
those specific sites requiring remediation identified in the approved Remedial
Action Plan that lie within Development Areas or within the grading area
adjacent to the Development Areas including

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      exhuming and remediating the contaminated soils which it shall also
isolate and stockpile for placement by the Developer in deep fills during the
phased grading operation in accordance with the approved Remedial Action Plan.
Soils not meeting the criteria for placement in deep fills, if any, will be
removed by Developer (at Developer’s cost) from the site for appropriate
disposal.

  vii.   At all times comply with the mitigation measures of the Final Tonner
Hills EIR, and the requirements, as applicable, of the USF&WS Resource
Management Plan.

          C. During grading, Nuevo shall, on a Segment-by-Segment basis, in
accordance with the Work associated with the applicable Program Segment as
further set out in Attachment 4:

  i.   Identify and isolate any contaminated soils associated with the wells for
remediation as called for in the approved Remedial Action Plan. Isolated soils
meeting the criteria of the approved Remedial Action Plan will be stockpiled for
placement in deep fills by Nuevo. Soils not meeting the criteria will be removed
from the site for appropriate disposal.     ii.   Provide Developer with copies
of well abandonment reports for all well abandonment activities completed as
provided to and from CDOGGR.     iii.   Design the final Facilities Plan in
accordance with the Street and Utility Improvement Plans provided by Developer.
    iv.   Relocate temporary service lines serving the oil operations as may be
necessary.

          D. During grading, on a Segment-by-segment basis, in accordance with
the phasing plan, Developer shall:

  i.   Prepare and process the Precise Area Plans and Level B Tentative Maps
through the appropriate Governmental Agencies, showing the final lot layout and
the Joint Use and Exclusive Use Areas to be retained around the wells remaining
in operation. The Precise Area Plans will clearly identify all wells to be
abandoned, and identify all abandoned wells that will require methane venting in
accordance with the requirements of the Orange County Fire Authority and other
appropriate Governmental Agencies.

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  ii.   Grade the Development Areas in accordance with the approved Grading
Plan.     iii.   Immediately notify Nuevo and Operator in the event Developer
excavates any unidentified previously abandoned wells. Developer shall promptly
reabandon such wells in accordance with the requirements of all appropriate
Governmental Agencies.     iv.   Place soils stockpiled as a result of
Developer’s remediation activities within deep fills in accordance with the
criteria established within the approved Remedial Action Plan. The location and
constituency components of these soils will be detailed and reported in the
final grading report prepared by the Developer.     v.   Install all required
erosion control devices in accordance with the approved Grading Plan, ensuring
that storm runoff will be diverted from the area(s) affected by the Program.    
vi.   At all times comply with the General Construction Activity Stormwater
Permit.     vii.   Based upon the approved Precise Area Plans, provide Nuevo and
Operator with grade elevations and staking for all wells.     viii.   Prepare
the grading plans (“Grading Plans”) and process them for approval by the
appropriate Governmental Agencies.     ix.   Prepare the final Street and
Utility Improvement Plans and process them for approval by the appropriate
Governmental Agencies. The Street and Utility Improvement Plans will identify
the oil production service facilities as provided by Operator’s Facilities Plan.
    x.   Prepare the Level B Final Maps and process them for approval by the
appropriate Governmental Agencies, and record such maps at the County Recorder’s
office. The Level B Final Maps will identify all Exclusive and Joint Use Areas.
    xi.   Identify and dispose of any previously unidentified oil production
facilities or third party facilities uncovered during the course of the grading
operation.     xii.   Cleanup and remediate any crude oil released during the
course of the grading operations according to standards approved by the
appropriate Governmental Agency.

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  xiii.   Prepare a final soils and geological report on the Development Areas
and obtain from the appropriate Governmental Agency, a final compaction
certificate relating thereto, within sixty (60) days of completion of grading
for each phase.     xiv.   Reabandon or otherwise accommodate, if necessary, any
unidentified wells or facilities within the Development Area in accordance with
CDOGGR specifications and requirements.

          E. During grading, Developer and Nuevo shall cooperate with each other
in the implementation of the Program, as follows:

  i.   Design of the Precise Area Plans, Level B Tentative and Final Maps and
final Street and Utility Improvement Plans to avoid conflicts between the oil
production service facilities and the utilities required to service the
Development Areas; Nuevo shall have the reasonable right of approval in event of
design conflicts.     ii.   Design the Precise Area Plans to ensure that all
Joint and Exclusive Use Areas necessary for the wells and facilities are shown
to the Parties and meet all Parties’ joint satisfaction.     iii.  
Identification and differentiation of naturally-occurring tar seep or
oil-bearing sands from crude oil released as a result of oil operations;
provided that unless Developer and Nuevo can conclusively determine that such
contamination resulted from ongoing production activity, such contamination
shall be presumed to be from naturally-occurring tar seep or oil-bearing sands.

     III. Post-Grading Events:

          A. Upon completion of Grading within the Development Areas, on a
Segment-by-Segment basis in accordance with the approved phasing plan, Nuevo
shall:

  i.   Cause all abandoned wells within the Development Areas to be capped below
those grades provided by Developer in accordance with CDOGGR and the
requirements of the EIR, Planned Community Text and Area Plan. Final inspections
of such wells shall be conducted by CDOGGR.     ii.   Cause all appropriate
pumping equipment to be installed within the Exclusive Use Areas.

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  iii.   Complete all oil production service facilities to be installed to
service the producing and injection wells. Service lines will be connected to
the new site and Tank Farm.     iv.   Install permanent pipelines and facilities
as determined by Nuevo in its discretion as required for Operator’s continued
operations in accordance with grading operations.     v.   Provide as-built
drawings to Developer and Operator showing the line and grade for all installed
facilities.     vi.   Install seismic monitoring devices as required by the
mitigation measures in the Final Tonner Hills Environmental Impact Report.

          B. Upon completion of the GRADING within the Development Areas, on a
phase-by-phase basis in accordance with the approved phasing plan, Developer
shall:

  i.   Install the utility systems in accordance with the approved Street and
Utility Improvement Plans.     ii.   Install the street improvements in
accordance with the approved Street and Utility Improvement Plans. Such Plans
shall make provision for oil field related facilities to the extent deemed
necessary by Nuevo to operate wells in the Development Areas. The utility and
street improvements are anticipated to take four months beyond the completion of
grading.     iii.   Install oil facility screening devices in accordance with
the requirements of, and plans approved by, the appropriate Governmental
Agencies.     iv.   Provide construction staking for the installation of
Operator’s wells, pipelines and facilities within the Development Areas.     v.
  Construct methane gas vents over abandoned oil wells as may be necessary to
accommodate the housing development.     vi.   Construct all required active and
passive methane mitigations as required by the Final Tonner Hills Environmental
Impact Report, the Orange County Fire Authority or other Governmental Agency.

          C. Upon completion of grading within the Development Areas, Developer
and Nuevo shall cooperate with each other to:

  i.   Develop Homebuyer notification language to be supplied by Developer to
future surface purchasers with respect to the past and

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      continuing oil operations. State Proposition 65 language will be included
in any Homebuyer notification.     ii.   Develop Homebuyer notification language
for inclusion within the Division of Real Estate Public Report, Grant Deed or
Covenants, Conditions and Restrictions, as may be appropriate or required as to
the placement of remedial soils within the deep fills.     iii.   Satisfy any
EIR mitigation measures regarding the past and continuing oil operations.    
iv.   Obtain a conditional case closure letter from the County of Orange Health
Care Agency, Division of Environmental Health for the approved Remedial Action
Plan.

          2.3 Developer Improvements and Additional Payments. It is understood
and agreed that Developer shall have the primary responsibility for and shall,
at its sole cost and expense, complete all work required to accomplish the
“Developer Improvements” including: (a) soil remediation, (b) relocation of
third party easements and licenses (TPEL), (c) all matters to the extent
allocated to Developer in Sections 2.1 and 2.2, hereof, (d) Mass/Grading
operations in the best commercial manner and completion of such operations in
the shortest time but, in all cases, within the time duration set out for the
activity in Attachment 4, so as to minimize the disruption of Operator’s
remaining Oil Operations, (e) after Final Acceptance by Developer of the
completed work, Developer shall be solely responsible for all maintenance,
repair, replacement, removal, and reinstallation of such completed work for
which Developer assumes Developer’s Liability and for any liability as a result
thereof or pertaining thereto. Developer shall bear the cost of future
relocation of such work requested by Developer and performed by Operator.
Developer shall fully cooperate with Nuevo and Operator in the implementation of
the Program. Developer shall (i) timely process all of its permit requests;
(ii) comment on all applicable submittals of specifications or plans within five
business days; and (iii) make all facilities available for accommodation under
the Program such that Nuevo may commence the Project Segment. To the extent that
Developer fails to fully and timely cooperate with Nuevo and Nuevo incurs
penalties, damages or incremental costs in performing the Program, such penalty,
damage or cost shall be the responsibility of Developer and Developer hereby
agrees to indemnify and hold Nuevo harmless therefrom. Developer shall also be
liable to Operator for any and all incremental cost or expense incurred by
Operator in the performance of its work in the Program as a result of
Developer’s (or Nuevo’s, if acting on behalf of Developer) failure to fully and
timely perform and complete Developer’s Improvements. Developer shall use good
faith, commercially reasonable efforts to timely and expeditiously perform its
obligations and rights under this Agreement in a manner that minimizes the
interruption or curtailment of production and shall be liable to and indemnify
Operator for all losses resulting from the failure to do so.

               2.3.1 Processing Costs — Employee Costs. Operator and Nuevo agree
not to charge Developer for their employees or overhead costs allocable to such
employees in the processing of the Governmental Approvals.

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               2.3.2 Operator Improvements. Nuevo shall submit to Operator the
preliminary and final detailed design and engineering of all facilities,
pipelines and well accommodation plans (“Operator Improvements”) when completed.
Operator shall have ten (10) business days to review and comment on the plans.
All final decisions with respect to the plans including pipeline and facility
locations, use of new, refurbished or salvaged equipment and materials and the
staging of the work to be performed shall be made by Nuevo in the exercise of
its reasonable discretion and in a manner consistent with customary oil field
practices. Should Operator request changes or modifications to the design and
engineering of Operator Improvements other than changes or modifications
required by applicable law or governmental regulations and should Nuevo
determine that such modifications can be incorporated into the Program within
the time duration specified in Attachment 4, Nuevo shall make such modification
provided that Operator prepays all incremental costs associated with such
modification. Operator shall not request a modification to the wells or well
classifications set out in Schedule B to Attachment 4 without first obtaining
the written approval of Developer. Incremental costs associated with such well
changes, if any, shall be pre-paid by Operator.

               2.3.3. Governmental Modifications. Should the Program be modified
to reflect changes that result from decisions of Governmental Entities, court
orders or settlement of litigation or by agreement such that fewer wells are
accommodated, abandoned, or less infrastructure is removed or altered, then
Nuevo shall have no obligation or duty of any kind or character with respect to
such wells or facilities that are removed from the Program.

          2.4 Miscellaneous.

               2.4.1 Remedies.

                    2.4.1.1 Default/Cure. Each of the terms, conditions,
covenants and provisions of the Development Documents is a material
consideration for this Agreement, the breach of which shall be deemed a default
hereunder. Said default shall be deemed to have occurred if a Party has not
effected a cure within ten (10) days for payment of money hereunder and thirty
(30) days for all other defaults of receipt of notice specifying the breach in
the case of any of the obligations hereunder; provided, however, except as
otherwise specified herein, in the case of a breach of any of Nuevo’s
obligations hereunder, other than for the payment of money, which is not capable
of being cured within said thirty (30) day period, no default shall be deemed to
have occurred so long as Nuevo commences to cure such default within ten
(10) days of Notice and thereafter diligently and continuously prosecutes the
same to completion; provided however, that any such cure shall be accomplished
within ninety (90) days of the event giving rise to the Notice.

                    2.4.1.2 Remedies Cumulative. All rights, options and
remedies of either Party contained in this Agreement shall be construed and held
to be cumulative, and none of them shall be exclusive of the other, and either
Party shall have the right to pursue any one or all of such remedies or any
other remedy or relief which may be provided by law or equity, whether or not
stated in this Agreement. Further, either Party may exercise

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hereunder, any of the rights, options and remedies, as and to the extent,
described in Sections 5 and 13 of the Development Declaration.

                    2.4.1.3 Arbitration. Except for the right of either party to
apply to a court of competent jurisdiction for temporary restraining orders,
preliminary injunctions, writs of attachment, writs of possession or other
equitable or provisional relief, any controversy, dispute or claim of any kind
or nature arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement, without limitation, any
claim based on contract, tort or statute, shall be settled by final and binding
arbitration by three (3) arbitrators in accordance with the Rules of the
American Arbitration Association then in effect (the “Rules”). Each party to the
arbitration shall, in accordance with the Rules, nominate one (1) arbitrator to
the arbitrational tribunal and the two (2) arbitrators so appointed shall
appoint the third arbitrator in accordance with the Rules, the three
(3) arbitrators constituting the arbitration tribunal. The arbitration shall be
held in Orange County, California. Reasonable discovery shall be allowed in
connection with such arbitration. At the request of a party, the arbitration
tribunal may issue orders for interim relief as deemed necessary to safeguard
property that is the subject of the arbitration or in order to accomplish the
objectives of this Agreement. Such interim measures may also be sought from
judicial authority having jurisdiction. The decision of the majority of the
arbitrators shall be reduced to writing, shall be the sole and exclusive remedy
between the parties regarding any and all such disputes or differences, and
shall be final and binding on all parties to the arbitration; and, application
may be made to any court of competent jurisdiction for an order of enforcement
and shall be enforceable in any court of competent jurisdiction. The parties
agree to exclude any right of application or appeal to the courts of any
jurisdiction in connection with any questions of law arising in the course of
arbitration or with respect to any award made, except for enforcement purposes.
Consequential, punitive, or incidental or other similar damages shall not be
allowed.

     In the event any such arbitration (or other proceeding) is brought to
enforce or interpret any of the covenants, terms or provisions of this
Agreement, the prevailing party in any and all such arbitration(s) or other
proceeding(s), including any bankruptcy proceedings, shall be entitled to
recover from the non-prevailing party all of the attorneys’ fees and costs
incurred by such party in each and every such arbitration or other proceeding,
including any and all appeals or petitions therefrom. As used in this Agreement,
attorneys’ fees shall be deemed, to the extent allowed by law, to mean the full
and actual costs of any legal services actually performed in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services, and shall not be limited to “reasonable
attorneys’ fees” as defined in any statute or rule of court.

                    2.4.1.4 Waiver. No waiver by either party of a default under
any of the terms of this Agreement by the other, and no delay or failure to
enforce any of the terms of this Agreement shall be a waiver of or shall affect
a default other than as specified in such waiver. The consent or approval of
either party to any act by the other requiring consent or approval shall not be
deemed to waive or render unnecessary consent or approval to or of any
subsequent similar acts.

               2.4.2. Continuous Operation. Operator agrees to use good faith,
commercially reasonable efforts to cooperate with Nuevo so that Nuevo can
proceed

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continuously, diligently and in a timely manner in accordance with the terms and
conditions of this Agreement and in accordance with and as required under the
Development Documents, and except where mutual agreement is expressly required,
if Nuevo cannot proceed continuously and diligently due to Operator’s unexcused
failure to cooperate the same shall, at the option of Nuevo, be considered as an
event of default herein, except as such failure to so proceed is excused by
reason of any Unavoidable Delay.

               2.4.3. Assignment. Nuevo may assign its rights hereunder at any
time without the consent of Developer.

               2.4.4 Subdivision Maps and Applications. Subject to the
provisions of the Development Documents, if required to do so, and provided
there exists no default thereunder, Operator agrees, without cost to Operator
and Nuevo, to execute any and all Developer approved Level B Final Maps,
applications and petitions pertaining to the development of any portion of the
Parcel.

               2.4.5. Captions. The captions used herein are for convenience
only, are not part of this Agreement and do not in any way limit or amplify the
scope or intent of the terms and provisions hereof.

               2.4.6. Invalidity of a Provision. If any provision of this
Agreement shall be adjudged by a court in a final and non-appealable judgment to
be void, invalid, illegal or unenforceable for any reason, the same shall in no
way affect (to the maximum extent permissible by law) any other provision of
this Agreement, the application of any such provision under circumstances
different from those adjudicated by the court, or the validity or enforceability
of this Agreement as a whole, but only to the extent that performance of such
remaining provisions would not be inconsistent with the intent and purposes of
this Agreement.

               2.4.7. Notices. Any notice to be given or other document to be
delivered by any Party to the other or others hereunder, and any payments
between parties, may be delivered in person to an officer of any party, or may
be delivered by Federal Express, private commercial delivery or courier service
for next business day delivery, or may be deposited in the United States mail,
duly certified or registered, return receipt requested, with postage prepaid,
and addressed to the party for whom intended, as follows:

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If to Nuevo (“Nuevo”):
       
 
            Nuevo Energy Company     1021 Main, Suite 2100     Houston, Texas
77002

  Attn:   Phillip A. Gobe

  Phone:   713-374-4832

  Fax:   713-374-4817

  Email:   gobep@nuevoenergy.com
 
       

  and    
 
       

  Attn:   Phillip E. Sorbet

  Phone:   661-395-5431

  Fax:   661-395-5294

  Email:   sorbetpp@nuevoenergy.com
Copy to:
            Ullom Associates     16149 Redmond Way, Ste. 401     Redmond,
Washington 98052

  Fax:   (425) 836-2870

  Phone:   (425) 836-2728

  Email:   ullomjw@aol.com
 
            Nossaman, Guthner, Knox & Elliott, LLP     18101 Von Karman Avenue,
Suite 1800     Irvine, California 92612-1047

  Attn:   William P. Tanner, III

  Fax:   (949) 833-7878

  Phone:   (949) 833-7800

  Email:   wtanner@nossaman.com
 
        To Operator:   BlackSand Partners, L.P.

  Attn:   Tim Collins     1801 Broadway, Suite 600     Denver, Colorado 80202

  Fax:   (303) 296-0329

  Phone:   (303) 296-1908

  Email:   timdenver@aol.com

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Copy to:
            Arthur Wright, Esq.     Thompson & Knight LLP     1700 Pacific
Avenue, Suite 3300     Dallas, Texas 75201

  Fax:   (214)999-1695

  Phone:   (214) 969-1409

  Email:   arthur.wright@tklaw.com

           To Developer:

                         To be added upon execution of this Agreement by any
Developer.

          Notice may also be given by facsimile transmission (“Fax”) to any
party at the respective Fax number given above or by email, provided receipt of
such transmission shall be confirmed by follow-up notice within seventy-two (72)
hours by another method authorized above. Any party hereto may from time to
time, by written notice to the other, designate a different address which shall
be substituted for the one above specified. If any notice or other document is
sent by mail as aforesaid, the same shall be deemed served or delivered
seventy-two (72) hours after the mailing thereof as above provided. Notice by
any other method shall be deemed served or delivered upon actual receipt at the
address or Fax number listed above.

               2.4.8. Binding Effect. Subject to Section 2.3.3 concerning
assignments, it is the intent of the Parties that the covenants, conditions, and
agreements imposed by this Agreement (i) shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs and assigns to all
or any portion of the Minerals or to a Developer and (ii) all of the obligations
of Nuevo as stated herein shall be binding upon and enforceable against Nuevo by
any successor to Buyer.

               2.4.9. Further Assurances. Each of the Parties shall execute and
deliver all additional papers, documents and other assurances, and shall do all
acts and things reasonably necessary in connection with the performance of its
obligations hereunder and to carry out the intent of the Parties.

               2.4.10. Time of Essence. Time is of the essence of each provision
of this Agreement of which time is an element. Any reference in this Agreement
to time for performance of obligations or to elapsed time shall mean consecutive
calendar days, months or years, as applicable, unless otherwise explicitly
indicated herein.

               2.4.11. Term. This Agreement shall remain in effect from the date
first shown above until Final Acceptance or the Expiration of the Development
Agreement between Nuevo and Orange County dated December 19, 2002. Expiration of
this Agreement shall not terminate any payment obligation, indemnity obligation
or assumption of liability all of which shall survive this Agreement and remain
in full force and effect.

25

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               2.4.12. Attorneys’ Fees. If any action or proceeding is
instituted to enforce or interpret any provision of this Agreement the
prevailing party shall by entitled to recover such amounts as the court may
judge to be reasonable as costs incurred in such action, including, without
limitation, court costs and attorneys’ fees.

               2.4.13 Payments. Any amounts which are due and owing to Nuevo or
Operator pursuant to the various terms of the Development Documents shall be
paid as specified. If any of these amounts are not paid when due, such amounts
shall bear interest as specified in the particular Section of the Development
Document requiring such payment or, if not so specified, then at the maximum
nonusurious rate which may be charged by a nonexempt lender.

               2.4.14 Applicable Law. This Agreement and the documents in the
forms attached as exhibits hereto shall be governed by and construed under the
laws of the State of California.

     The Parties have executed this Agreement on the date first set forth above.

              BLACKSAND PARTNERS, L.P.,
a Texas Limited Partnership NUEVO ENERGY COMPANY,
a Delaware corporation

         
 
           
By:
  BlackSand Energy, Inc.,   By:    

  a Delaware corporation      

--------------------------------------------------------------------------------

          George B. Nilsen
Its:
  General Partner   Its:   Senior Vice President
 
           
By:
      By:    

 

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

  Tim Collins       Phillip A. Gobe
Its:
  President   Its:   Chief Operating Officer

26

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PAYMENT AND PERFORMANCE AGREEMENT

ATTACHMENT “1”

LEGAL DESCRIPTION OF LAND

 

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ATTACHMENT
TABLE OF CONTENTS

1st Amendment to Shareholder Rights Plan [h12901exv4w9.htm] Purchase and Sale
Agreement [h12901exv10w36.htm] Purchase and Sale Agreement [h12901exv10w37.htm]
Computation of Earnings to Fixed Charges [h12901exv12w1.htm] Subsidiaries of the
Registrant [h12901exv21.htm] Consent of KPMG LLP [h12901exv23w1.htm] Consent of
Ryder Scott Company L.P. [h12901exv23w2.htm] Certification of CEO Pursuant to
Section 302 [h12901exv31w1.htm] Certification of CFO Pursuant to Section 302
[h12901exv31w2.htm] Certification of CEO Pursuant to Section 906
[h12901exv32w1.htm] Certification of CFO Pursuant to Section 906
[h12901exv32w2.htm]

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"1"

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2" X 4" POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A
4" X 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST 55.48 CHAINS
TO A 2* X 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30' EAST 20.00
CHAINS TO A 2" X 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45' EAST 134.63
CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION
OIL COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY
OF THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA
TO GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK
44, PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF
THE AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER
LINE OF CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET
AND BREA CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73°
32' 24" WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE
AT SAID POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16"
EAST), A DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0°
10' 11" EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE
OF 500 FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE
SOUTH 0° 10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A
DISTANCE OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING
BEING MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" X 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

      THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

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      THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE
NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “ N10°33'18"E 381.48' ”;        
THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18" E 381.48' ” ON SAID RECORD OF SURVEY NO.
2001-1007; THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF
PARCEL MAP NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF
BEGINNING;

      THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO
BEING THE NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “ N10°33'18";E 381.48' ”;  
      THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE
TRUE POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS. IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM

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      THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING
MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2"; X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" X 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘Al’ SITE DEPICTION ”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     

  PREPARED BY: THE KEITH COMPANIES

  UNDER THE DIRECTION OF:
 
   
(SEAL) [h12901h1290152.gif]
  -s- KATHLEEN SUSAN TETREAULT [h12901h1290153.gif]
KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004

January 31, 2003
JN: 13207.00

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ATTACHMENT “2”

LIST OF ENGINEERING FIRMS PER SECTION 2.1.9

Cawley, Gillespie & Associates, Inc.

DeGolyer & McNaughton, Inc.

Netherland, Sewell & Associates, Inc.

Ryder Scott Company

 

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ATTACHMENT 3 TO EXHIBIT “I”
RELATED THIRD-PARTY EASEMENTS,
CONTRACTS AND LICENSE AGREEMENTS

(Oil Field Related Third Party Easements and License – TPEL)

                                  Recording Document Type   Date   Grantor  
Grantee   Information

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Right-of-Way   1/26/82   Union Oil Company of California   Mobil Oil
Corporation   82-340271
Los Angeles County                   License   8/21/67   Union Oil Company of
California   Shell Oil
Company   Unrecorded                   License PSA   11/10/88   Union Oil
Company of California   Shell Western
E&P Inc.   Unrecorded                   Easement   7/27/62   Union Oil Company
of California   Boy Scouts of America, Los Angeles Area Council   8/1/62
6245/654                   Easement   9/13/84   Union Oil Company of California
  City of Brea   10/11/84
84-421551                   Easement   9/10/85   Union Oil Company of California
  City of Brea   10/7/85
85-382994                   Easement   9/2/86   Union Oil Company of California
  Brea H.O.P.E.
Inc.   10/1/86
86-459482                   Easement   3/18/96   Union Oil Company of California
  City of Brea   3/29/96
Inst. 19960153323                   Easement   3/18/96   Union Oil Company of
California   City of Brea   3/29/96
Inst. 19960153324                   Easement   1/26/82   Union Oil Company of
California   Mobil Oil
Corporation   3/31/82
Inst. 82-340271
[Los Angeles County]                   Easement   8/21/67   Union Oil Company of
California   Shell Oil
Company   N/A                   Easement   11/10/88   Union Oil Company of
California   Shell Western
E&P Inc.   N/A                   Easement   4/1/58   Union Oil Company of
California   The Metropolitan Water District of Southern California   5/21/58
4291/400                   Easement for Oil   10/16/58   Collier Carbon and  
Union Oil   11/3/58

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                                  Recording Document Type   Date   Grantor  
Grantee   Information

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Wells       Chemical Corporation   Company of California   4470/10              
    Non-Exclusive Easement and Right-of-Way   7/27/62   Union Oil Company of
California   Boy Scouts of America, Los Angeles Area Council   8/1/62 6245/654  
                Right-of-Way   10/2/62   Union Oil Company of California  
Southern California
Edison Company   1/18/63 6399/705                   Grant of Easement   9/18/78
  Union Oil Company of California   Southern California
Edison Company   2/5/79 13024/1157                   Grant of Easement   5/17/88
  Union Oil Company of California, dba UNOCAI   Southern California
Edison Company   6/7/88 Inst. 88-268095                   Easement   9/15/95  
Union Oil Company of California, dba UNOCAI   UNOCAL California
Pipeline Company   10/25/95 Inst. 19950473641                   Grant of
Easement   12/11/95   Union Oil Company of California, dba UNOCAI   Southern
California
Edison Company   1/4/96 Inst. 19960004773                   Easement PSA  
3/18/96   Union Oil Company of California   City of Brea   3/29/96 Inst.
19960153322                   Easement PSA   3/18/96   Union Oil Company of
California   City of Brea   3/29/96 Inst. 19960153323                   Easement
PSA   3/18/96   Union Oil Company of California   City of Brea   3/29/96 Inst.
19960153324                   Easement   5/7/96   Nuevo Energy Company   Union
Oil Company of California dba UNOCAI   5/26/96 Inst. 19960254739                
  Pipeline
Right-Of-Way   5/12/02   The Sterns Ranchos
Company   Pacific Coast Oil
Company   6/25/02 Do not have recording info.                   License   5/1/59
  Union Oil Company of California   Shell
Oil Company   Do not have recording info.

Any other Third Party Easement or License disclosed in Preliminary Title Report
#OR-2252674, dated September 13, 2002, First American Title Company.

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ADDITIONAL CONTRACTS AND GIFT DEED

1.   Memorandum of Understanding between Nuevo, County of Orange and City of
Brea dated December 10, 2002 regarding pre-annexation.   2.   Development
Agreement dated December 4, 2002, between Nuevo and County of Orange.   3.  
Impact Mitigation Agreement between Brea Olinda Unified School District and
Nuevo dated as of October 28, 2002.   4.   Gift Deed dated January 30, 2003 from
Nuevo to the Brea-Olinda Unified School District Conveying 0.425 acres, recorded
on February      , 2003 as Instrument No.     .

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Attachment 4

Brea Field Development Accommodation Program

                                          Agency         Category   Responsible
      Approval Cost ($)   Duration   Activity   Party   Action   Required

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PRE-PHASE I Initial Activity                               170,000   7 weeks  
G,T   Nuevo   Preliminary Engineering Design: Pipelines, Tank Farms, Utilities,
Power System                           300,000   7 weeks   T   Nuevo   SCAQMD
Permitting: Tank Farm(s), Compressors, Pumps, Vessel, etc   SCAQMD              
            3 months   R   Developer   Re-vegetation of Open Space (Reference
Schedule E)   USA COE                       3,061,500   36 weeks   A,B,C,D,E  
Nuevo   Begin Procurement: Tanks, Vessels, Pipe, Transformers, Pumps            
              1,830,000   20 weeks   G   Nuevo   Detailed Engineering Design    
                      2,080,000   20 weeks   M,O   Nuevo   Initial Abandonment
of Idle Wells & Re-Abandonments (25 Total) Covering All Phases of Project
(Reference Well Work Listing - Schedule B)   CALDOGGR                      
PRE-PHASE I Intermediate Activity                           3,061,500   36 weeks
  A,B,C,D,E   Nuevo   Continue Procurement: Tanks, Vessels, Pipe, Transformers,
Pumps                           1,908,200   4 months   R   Nuevo   Remediation
Required by EIR (Reference Schedule D)   OCHCA                           4 weeks
  G   Nuevo   Building Permits: Tanks, Power System, Vessels   BLDGDEPT        
              1,150,000   13 weeks   I,M   Nuevo   Removal of Infrastructure
within Development Area (Reference Drawings BO-200-2003, 2004, 2005) and Initial
Abandonment of Active Wells (17 wells) for Phase I (Reference Well Work Listing
- Schedule B)   OCHCA                       1,000,000   30 weeks   A,C,F   Nuevo
  Begin Construction of Field Infrastructure                           1,000,000
  30 weeks   D   Nuevo   Begin Construction of Power System                    
      456,000   19 weeks   B   Nuevo   Construct Expanded Tonner Canyon Tank
Facility   SCAQMD                                   Developer   Tentative Map
(needed prior to grading)                           PRE-PHASE I Final Activity  
                                        1,661,000   30 weeks   A,C,F   Nuevo  
Construct Field Infrastructure                                       Developer  
Corehouse Demolition                           1,840,000   30 weeks   D   Nuevo
  Construct Power System                           500,000   4 weeks   L   Nuevo
  Temporary Removal of Equipment for Accommodated Wells (46 wells) for Phase I
in Development and Grading Areas (Reference Well Work Listing - Schedule B)    
                      3,417,936   9 months   I,R   Nuevo   East Naranjal Tank
Farm Demolition 4 Remediation   OCHCA                       PHASE I            
                                          Developer   Grading to include line
and grade for wells and associated permanent infrastructure                    
      2,135,000   17 weeks   P   Nuevo   Raise/Lower Wellheads of All Phase I
Accommodated Wells (46 Wells) (Reference Well Work Listing-Schedule B)          
                165,000   4 weeks   M,O   Nuevo   Final Abandonment of Phase I
Wells (35 Idle, Re-Abandonments & Active Wells)( Reference Well Work Listing -
Schedule B)   CALDOGGR                       1,941,000   17 wwks   L   Nuevo  
Accommodation for Phase I Accommodated Wells (46 Wells) ( Reference Well Work
Listing- Schedule B)                           225,000   13 weeks   I,R   Nuevo
  Removal of Infrastructure (Reference Drawings BO-200-2003, 2004, 2005) within
Development Area and Initial Abandonments of Active Wells (8 wells) for Phase II
(Reference Well Work Listing - Schedule B)   CALDOGGR                      
200,000   4 weeks   I,L   Nuevo   Temporary Removal of Equipment for
Accommodated Wells (21 wells) for Phase II (Reference Well Work Listing
-Schedule B)                           PHASE II                                
                      Developer   Grading to include line and grade for wells
and associated permanent infrastructure                           900,000  
17 weeks   P   Nuevo   Raise/Lower Wellheads of All Phase II Accommodated Wells
(21 Wells) (Reference Well Work Listing - Schedule B)                          
85,000   4 wwks   M,O   Nuevo   Final Abandonment of Phase II Wells (14 Idle,
Re-Abandonments & Active Wells)( Reference Well Work Listing -Schedule B)  
CALDOGGR                       1,018,000   17 weeks   L,H   Nuevo  
Accommodation for Phase II Accommodated Wells (21 wells) ( Reference Well Work
Listing - Schedule B)                           100,000   4 weeks   I,R   Nuevo
  Removal of Infrastructure and Initial Abandonment of Active Wells (3 wells)
for Phase III Reference Well Work Listing - Schedule B)   CALDOGGR              
        PHASE III                                                      
Developer   Grading to include line and grade for wells and associated permanent
infrastructure                           92,000   1 week   M,O   Nuevo   Final
Abandonment of Phase III Wells (4 idle and active wells) (Reference Well Work
Listing - Schedule B)   CALDOGGR                       84,000   4 weeks   S  
Nuevo   Seismic Sensor Installation   BLDGDEPT                      

revised 1-30-03 by mgh

 

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Schedule A

Accommodation Categories

                  Activity   Brea         Code   Accommodation Costs   ($M)

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  Infrastructure        
A
  Water flood     695  
B
  Production Gathering     2,822  
C
  Gas Collection     2,296  
D
  Electrical     5,247  
E
  Taxes / Freight     1,060  
F
  Misc.(NDE&Cathodic Protection)     300  
G
  Engineering     2,000  
 
           

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  Total Infrastructure     14,420  
 
           

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  Other        
 
           

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H
  Noise Control, Fencing, & Screens     600  
I
  Demolition     1,000  
J
  New Warehouse     76  
L
  PCP or SPS Units (46)     2,875  
M
  Well Abandonments (46)     2,760  
0
  Well Reabandonments (10)     1,000  
P
  Raise / Lower Wellheads (74)     3,039  
R
  Soil Remediation     3,850  
S
  Seismic     80  
T
  Permits     300  
 
           

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  Total - Other     15,580  
 
           

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  Grand Total     30,000  
 
           

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Revised 1-29-03 mgh

 

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Schedule B

Well Work Listing

                                                  Abandonments                
Development  

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  Vaulted   Peripheral Phase   Idle Wells   Active Wells   Reabandonments*  
Wells   Wells

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1
  EN 17   EN 16   EN 1   EN 26   36 RD  
1
  EN 18   32 RD   EN 2     46       52    
1
    33       34       35       79       52 A    
1
    40       51 A       39       89       55    
1
    50     75 RD     92       90       55 A    
1
    51       91               147       73    
1
    152       144               148       160    
1
    199       165               150       163    
1
    215       207               151       173    
1
    216       208               153       174    
1
    257       218               171       196    
1
    268       244               198       206    
1
    284       258               221       209    
1
            283               232       210    
1
            301               256       213    
1
            304               269       222    
1
            309               285       223    
1
                            287       224    
1
                            288       225    
1
                            292       249    
1
                            294       282    
1
                            159       302    
1
                          217 RD2          
1
                            247            
2
    145       80       17       87       37    
2
    146     81 RD     41       134       74    
2
            88       42       180       133    
2
            100       44       211       141    
2
            164               230       168    
2
            178               259       176    
2
            203               276       177    
2
            251               281       181    
2
                            293       190    
2
                                    219    
2
                                    220    
2
                                    241    
2
                                         
2
                                         
2
                                         
2
                                         
2
                                         
2
                                         
2
                                         
2
                                         
3
    197       130                            
3
            192                            
3
            194                          
Total Wells
    16       28       9       33       34  

*     Reabandonments subject to verification of need

Schedule B

 

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Schedule C

Drawing List

      Drawing Number   Drawing Title

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BO-200-2001   Conceptual Pipeline/Electrical Corridor       BO-200-2003  
Existing Oil Gathering System for Real Estate Development       BO-200-2004  
Existing Gas Gathering System for Real Estate Development       BO-200-2005  
Existing Water Injection System for Real Estate Development

 

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Schedule D

Remediation Required By EIR (Nuevo)

As set out in the approved Remedial Action Plan

submitted December 16, 1999, as amended

October 3, 2001, December 27, 2001 and January 13, 2003

 

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Schedule E

Re-Vegetation Of Open Space

As set out in the Biological Assessment included within the

Biological Opinion dated December 30, 2002 as used by

the US Army Corps of Engineers in its Section 404 Permit

 

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EXHIBIT “J”

ASSUMPTION OF OBLIGATIONS

     The undersigned acknowledge and agree that they have received valuable
consideration for executing this Assumption of Obligations and assuming all the
obligations of Buyer under the Agreement (including specifically without
limitation those obligations in Sections 3.2, 3.4, 3.5, 3.7, 5.28 and 5.29
thereof) as the beneficiary of (a) the further transfer of Property Interests,
(b) the assignment provisions in Section 5.18 and (c) otherwise in connection
with the recitals, covenants and promises between Seller and Buyer in the
Agreement, and in exchange therefor, hereby assume, in addition to and not in
lieu of the assumption by Buyer of all its duties and obligations under the
Agreement, all of Buyer’s duties and obligations under the Agreement; provided,
however, that each of the undersigned’s potential liability to Seller pursuant
to this Assumption of Obligations shall be limited, to the value and extent of
the Property Interests held by such undersigned entity, except to the extent of
any insurance, surety or other third party proceeds, contributions and/or
liability from which they may benefit relating thereto and which they hereby
agree to pursue in each instance with best efforts on behalf of Seller.

     This assumption of obligations shall not apply to an undersigned which does
not actually come into possession of any Property Interests; however, the
assumption shall specifically apply to any successor in interest, assignee, or
grantee. To the extent an undersigned conveys or assigns any of its prospective
or actual interests or rights in or to the Property Interests, the undersigned
shall require any such successor in interest or assignee to agree in writing to
the assumptions of obligations set forth herein.

     Without in any way limiting the effect of the Indemnity Sections or of any
other obligation, liability, responsibility or indemnity of Buyer under the
Agreement, the following shall apply with respect to this Assumption of
Obligations by the undersigned (jointly and severally, “Undersigned”) regarding
the Indemnities of Buyer in favor of Seller against Losses in Section 3 of the
Agreement (“Indemnity Section”):

     (1) In the event of any mediation, arbitration, reference proceeding,
litigation or any other dispute resolution method, procedure and/or endeavor
(“Indemnity Controversy”) for which defense and indemnity may be claimed by
Seller against Buyer, Seller may demand defense and indemnity from any or all of
the Undersigned, at Seller’s sole discretion. Upon such demand, the Undersigned
to whom such demand is made shall immediately tender to Seller defense and
indemnity pursuant to the terms of the Agreement.

     (2) In any Indemnity Controversy, Buyer and/or any or all of the
Undersigned may make a written request of any trier of fact (“Trier”) therein
for a specific, special finding (“Finding”) that any liability of Seller for
which defense and indemnity applies under the Agreement shall be identified and
allocated in whole or in part by such Trier, in its sole discretion, to all or
any of the Undersigned and Buyer. For purposes of this Assumption of
Obligations, a “Finding” does not occur and is not effective until there is a
final judgment or other final, non-appealable resolution of the dispute
concerning the Allocation.

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     (3) In the event a Finding is made pursuant to this Assumption of
Obligations, Buyer and the Undersigned shall have the responsibility to Seller,
from the date of the Finding forward, for only their portion of the Allocation.
In the absence of a Finding or prior to the effectiveness of a Finding, Buyer
and the Undersigned shall be jointly and severally responsible for the full
amount of liability of Seller for which defense and indemnity applies under the
Agreement. In no event shall Buyer or the Undersigned have the right to recover
from Seller any defense and/or indemnity payments made to Seller under this
Assumption of Obligations or the Agreement.

     (4) To the extent any disputes arise between or among Buyer, the
Undersigned, or any of them, regarding the matters described in this Assumption
of Obligations, Buyer and the Undersigned shall resolve such disputes among
themselves. Any such disputes shall not be a matter for which Seller shall be
concerned or in which Seller shall be a party or participant, or have any
liability whatsoever.

                  , a       , a

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By:
      By:      

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By:
      By:      

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By:
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EASEMENT AGREEMENT

     THIS EASEMENT AGREEMENT (“Agreement” or “Easement Agreement”), is made this
28th day of February, 2003, by and between NUEVO ENERGY COMPANY, a Delaware
corporation (“Grantor”), its successors in interest and assigns and BLACKSAND
PARTNERS, L.P., a Texas limited partnership (“Grantee”).

RECITALS

     I. Grantor is the owner of that certain real property consisting of
approximately 810 acres, located in the Sphere of Influence of the City of Brea,
County of Orange, State of California, more fully described on Attachment A
(“Property”). The Property includes the Development Areas on which the Project
will be developed by Developer.

     II. Contemporaneously herewith, Grantor sold the Minerals and Appurtenant
Interests, including the Property Minerals (lying in, under and through the
Property), to Grantee pursuant to that certain Purchase and Sale Agreement dated
February 28, 2003 (“Purchase and Sale Agreement” or “PSA”).

     III. The parties now desire to enter into this Easement Agreement upon such
terms and conditions as are hereinafter set forth, with the understanding that
all rights granted herein by Grantor to Grantee are in addition to, and not in
limitation of, the rights enjoyed by Grantee as the Owner of the Minerals,
including the Property Minerals.

     IV. Initially capitalized terms not otherwise defined herein shall have the
meanings given in the Purchase and Sale Agreement. The word “including” as used
in this Easement Agreement shall mean “including without limitation.”

     NOW THEREFORE, in consideration of the Recitals, mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor and Grantee hereby agree
as follows:

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AGREEMENT

EXHIBIT “K”
EASEMENT AGREEMENT

GRANTING EASEMENTS TO MINERAL BUYER FOR,
OIL OPERATIONS

 

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Escrow No. 225674JC

WHEN RECORDED RETURN TO:

BlackSand Partners, L.P.
320 Leyden Street
Denver, Colorado 80220
Attn: Tim Collins

EASEMENT AGREEMENT

     THIS EASEMENT AGREEMENT (“Agreement” or “Easement Agreement”), is made this
28th day of February, 2003, by and between NUEVO ENERGY COMPANY, a Delaware
corporation (“Grantor”), its successors in interest and assigns and BLACKSAND
PARTNERS, L.P., a Texas limited partnership (“Grantee”).

RECITALS

     I. Grantor is the owner of that certain real property consisting of
approximately 810 acres, located in the Sphere of Influence of the City of Brea,
County of Orange, State of California, more fully described on Attachment A
(“Property”). The Property includes the Development Areas on which the Project
will be developed by Developer.

     II. Contemporaneously herewith, Grantor sold the Minerals and Appurtenant
Interests, including the Property Minerals (lying in, under and through the
Property), to Grantee pursuant to that certain Purchase and Sale Agreement dated
February 28, 2003 (“Purchase and Sale Agreement” or “PSA”).

     III. The parties now desire to enter into this Easement Agreement upon such
terms and conditions as are hereinafter set forth, with the understanding that
all rights granted herein by Grantor to Grantee are in addition to, and not in
limitation of, the rights enjoyed by Grantee as the Owner of the Minerals,
including the Property Minerals.

     IV. Initially capitalized terms not otherwise defined herein shall have the
meanings given in the Purchase and Sale Agreement. The word “including” as used
in this Easement Agreement shall mean “including without limitation.”

     NOW THEREFORE, in consideration of the Recitals, mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor and Grantee hereby agree
as follows:

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A.   GRANT OF EASEMENTS

     GRANTOR HEREBY GRANTS TO GRANTEE, ITS SUCCESSORS AND ASSIGNS, THE FOLLOWING
EASEMENTS:

     1. Temporary Easement.

          1.1 A temporary blanket, non-exclusive surface and subsurface easement
and right-of-way over the currently existing roads and currently used areas for
the use for Oil Operations located in and through the Property described on
Attachment A for access, ingress and egress to operate and service each and all
of Grantee’s Oil Assets and all Facilities now and in the future on the Property
(the “Property Minerals Temporary Easement”).

     This Property Minerals Temporary Easement shall terminate and be
quitclaimed by Grantee to Grantor when replaced by the permanent non-exclusive
easement set forth below in Section 2.2.3, which such permanent easement shall
be determined and configured from the Governmental Approvals of the Level A
Final Map or any Level B Final Map.

     2. Permanent Easements. Grantor hereby grants to Grantee the following
described permanent easements, to be effective automatically upon the receipt by
Grantor of the Governmental Approvals described in Section 1.1 above. No such
permanent easement shall be subordinated to any right, entitlement, debt
instrument, or instrument of any kind for any purpose. The Grantor and Grantee
shall cooperate in good faith in determining the exact location of the permanent
easements.

          2.1 Exclusive Easements.

               2.1.1 Exclusive surface easements for the individual wells within
the Development Areas and the Open Space Areas, as more particularly set forth
in the Purchase and Sale Agreement, including the upper five hundred feet (500’)
of the land measured downward from the surface to a depth of five hundred feet
(500’) below the surface thereof, around and immediately contiguous to the said
individual wells within the Exclusive Use Area of the existing wells within the
Development Areas and existing and future wells within Open Space Areas. As more
particularly set forth in the PSA: (i) the Development Areas shall mean those
portions of the Property that are designated by Developer for improvements in
connection with the Project, which will be shown in the Level A Final Map or any
Level B Final Map and (ii) the Open Space Areas shall mean those portions of the
Property that are designated for open space within the Remainder Parcels in the
final Area Plan or the Level A Final Map. The said immediately contiguous
Exclusive Use Areas for these wells are anticipated to be approximately (i) ten
feet (10’) by ten feet (10’) immediately contiguous to the individual wells
within the Development Areas and (ii) sixty feet (60’) by ninety feet (90’)
immediately contiguous to the individual wells within the Open Space Areas; the
exact configuration of which shall each be determined by Developer at a later
date in consultation with Grantee. Provided, however, when an existing well
lying within the Development Areas is plugged and abandoned, the easement rights
granted hereunder with respect to such existing well shall automatically cease,
terminate and be of no further effect, except for Grantee’s required access to
promptly remove equipment and facilities therefrom, and to remediate such well
site.

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               2.1.2 Exclusive easements for all well bores for wells drilled in
the future from the surface of the real property described on Attachment B to a
depth of five hundred feet (500’) below the surface (“Tonner Tank Farm and Main
Oil Operations Area”).

          2.2 Non-Exclusive Easements.

               2.2.1 A surface and subsurface easement on, over, under, in and
through the Joint Use Areas as more particularly described in Section 1.1.28 of
the PSA for the purposes of Oil Operations for the existing wells which are for
the joint use of Grantor (or Grantor’s successors in interest, including
Developer) and Grantee, and which may be used by Grantee to operate, pull, and
rework Grantee’s existing wells, lay, construct, maintain, operate, repair,
renew, change the size of and remove pipelines and electrical facilities,
together with valves, meters and other necessary appurtenances, for the
transportation of oil, petroleum, gas, water and other substances, over, across,
along, through in and under the Property. The Joint Use Areas for the said
individual wells shall be those areas immediately contiguous to the Exclusive
Use Areas and are anticipated to be approximately sixty feet (60’) by ninety
feet (90’), the exact configuration of which will each be determined by
Developer at a later date in consultation with Grantee. Provided, however, when
an existing well lying within the Joint Use Areas is plugged and abandoned, the
easement granted hereunder shall automatically cease, terminate and be of no
further effect with respect to such existing well, except for Grantee’s required
access to promptly remove equipment and facilities therefrom, and to restore and
remediate such well site.

               2.2.2 A non-exclusive easement for all existing well bores and
for wells drilled in the future from the surface of the real property described
on Attachment C to a depth of five hundred feet (500’) below the surface
(“Corridor Oil Operations”).

               2.2.3 A surface and subsurface easement and right-of-way on,
over, under, in and through all the Property described on Attachment A as
necessary to provide Grantee with vehicular and pedestrian access, ingress and
egress to each and every Exclusive Use Area, Joint Use Area, Oil Asset, Facility
and the Retained Properties, now and in the future on the Property so Grantee
may conduct Oil Operations within the Joint Use and Exclusive Use Areas as
described herein. Said easements shall be on, over or within, respectively,
public streets, where practical, and if not, then on, over or within any area of
the Property described on Attachment A necessary to give reasonable and
convenient access, ingress and egress so Grantee may conduct such Oil Operations
on the land described on Attachments B and C. Said easement shall be of a size
reasonably necessary to accommodate all Facilities and turn-arounds therefor,
necessary so Grantee may “operate and service” such Facilities on the land
described on Attachments B and C in a reasonably convenient fashion.

     B. NO SUBORDINATION

     GRANTOR AGREES THAT THIS EASEMENT AGREEMENT SHALL NOT BE SUBORDINATED TO
ANY DEBT INSTRUMENT, OR INSTRUMENT OF ANY KIND FOR ANY PURPOSE.

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     C. COVENANTS AND ENVIRONMENTAL USE RESTRICTIONS RUNNING WITH THE PROPERTY

     GRANTEE AGREES WITH GRANTOR AS FOLLOWS :

     1. Performance.

          1.1 Access Road. Grantee shall be responsible for construction of an
access road, twenty feet (20') in width, engineered, constructed, sloped for
drainage and surfaced in such a manner and with such materials as is necessary
to withstand eighty thousand (80,000) pounds of well servicing equipment, to the
outer perimeter of each of Grantee’s Retained Properties, generally as described
on Attachment C.

          1.2 Access for Grantee to Wells. Grantor shall at all times in the
future grant Grantee twenty-four (24) hour access to Grantee’s Facilities on the
Property described on Attachment A. Grantee and its agents, successors and
assigns, shall be provided at all times with access to any gates, and keys to
any locks on said gates, that may be constructed on the Property on Attachment
A.

     Grantee shall be responsible to Grantor for its proportionate share of all
costs for maintenance of or for the ordinary “wear and tear” on streets used by
Grantee for access to the Facilities and/or caused by its oil field service
vehicles and/or equipment of any kind determined by agreement of the parties, or
failing such agreement within thirty (30) days, by Arbitration pursuant to
Section 5.9 of the PSA.

     None of Grantee’s easements shall be blocked or otherwise unreasonably
interfered with by any person or thing at any time. No vehicles or other items
may be placed or stored by Grantor or by a homebuyer or third party (purchaser
or otherwise) on any of said easements so as to block access and use of said
easements by Grantee. Grantee shall have the right, at all times in the future,
to immediately tow any vehicle or other item blocking any of said easements at
the owner’s expense.

          1.3 Requirement for Construction of Certain Streets. In construction
of the Project Grantor or Developer shall ensure that all of those portions of
the streets over which Grantee requires easements for access, ingress and egress
to the Facilities shall be engineered, constructed, sloped for drainage and
surfaced in such a manner and with such materials as is necessary to withstand
eighty thousand (80,000) pounds of well servicing equipment and have a minimum
width of clearance of twelve feet (12') and shall otherwise meet all applicable
Governmental Agency requirements.

          1.4 Maintenance and Landscaping. Grantee shall be responsible for the
maintenance and upkeep inside the fences on all areas of the Property described
on Attachment A including the Exclusive Use Areas and Retained Properties. Such
maintenance shall include, without limitation, all streets, other access roads,
walls, fences, gates and landscaping surrounding the Exclusive Use Areas and
Retained Properties. In the event Governmental Agency regulations conflict with
the provisions of this Easement Agreement, Grantee shall comply with said
Governmental Agency regulations; otherwise, the terms and conditions of this
Easement Agreement shall control.

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          1.5 No Structures on Joint Use Areas: No underground or above ground
structure of any kind, including walls and fences, shall be allowed within the
Joint Use Areas unless approved by Grantor in writing as to design, materials
and construction techniques, which approval shall not be unreasonably withheld.

D. MISCELLANEOUS PROVISIONS

     1. Incorporation of Recitals and Attachments. Grantor and Grantee hereby
incorporate into the terms of this Agreement each and every one of the Recitals
contained in paragraphs I through IV, inclusive, and all the Attachments (with
their attachments and exhibits), as though fully set forth herein.

     2. The parties hereto agree that all defined terms in this Easement
Agreement shall be as defined in the Purchase and Sale Agreement between the
parties, to which this Easement Agreement is Exhibit “K,” unless specifically
defined otherwise herein. As used in this Easement Agreement, the term “to
operate and service” each of Grantee’s oil wells and related oil field
facilities or words of comparable meaning shall include, without limitation, now
and in the future, the right to drill for, explore, re-drill, work, rework
and/or complete or re-complete wells for oil, gas and other hydrocarbon
substances, water and minerals, of every type and nature (collectively, “Oil
Assets” or “Property Minerals”), together with the right to produce, store and
inject water and other substances for secondary and/or tertiary recovery
operations or to use other techniques, whether now known or unknown, and to
produce, take, treat, store and sell oil, gas and other hydrocarbon substances
from the Property together with the right to permanently place, locate,
relocate, construct, reconstruct, maintain, operate, use, repair, replace,
remove, move, change the size of, increase the number of and remove: all wells,
pipelines, utilities (including without limitation water lines and power lines),
buildings, facilities, equipment and fixtures necessary or desirable for
Seller’s continued operation of the oil and gas field (collectively,
“Facilities”), on, over, under, in and through the Property, together with the
right of ingress and egress from the Property to all Exclusive and Joint Use
Areas, Retained Properties and all Facilities wheresoever located on the
Property.

     3. Attorneys’ Fees. In the event of any dispute between the parties hereto
or the institution of any action or proceeding to interpret or enforce this
Easement Agreement, or arising out of the subject matter of this Easement
Agreement, the prevailing party shall be entitled to recover its actual
expenses, attorneys’ fees and costs, including professional or expert
consultation or testimony and paralegal fees, both at trial and on any appeal
and in any administrative proceeding, including any bankruptcy proceeding.

     4. Notices. Any notice to be given or other document to be delivered by any
Party to the other or others hereunder, and any payments from Grantor to
Grantee, may be delivered in person to an officer of any party, or may be
delivered by Federal Express, private commercial delivery or courier service for
next business day delivery, or may be deposited in the United States mail, duly
certified or registered, return receipt requested, with postage prepaid, and
addressed to the party for whom intended, as follows:

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  If to Grantor:                 Nuevo Energy Company         1021 Main,
Suite 2100         Houston, Texas 77002

      Attn:   Phillip A. Gobe

      Fax:   (713) 374-4817

      Phone:   (713) 374-4832

      Email:   gobep@nuevoenergy.com
 
           

      and    
 
           

      Attn:   Phil Sorbet

          1200 Discovery Drive, Suite 500

          Bakersfield, CA 93309

      Fax:   (661) 395-5294

      Phone:   (661) 395-5431

      Email:   sorbetp@nuevoenergy.com
 
           

  Copy to:                 Ullom Associates         16149 Redmond Way, Ste. 401
        Redmond, Washington 98052

      Fax:   (425) 836-2870

      Phone:   (425) 836-2728

      Email:   ullomjw@aol.com
 
            To Grantee:       BlackSand Partners, L.P.         BlackSand Energy,
Inc.         1801 Broadway, Suite 600         Denver, Colorado 80202

      Attn:   Tim Collins

      Fax:   (303) 296-0329

      Phone:   (303) 296-1908

      Email:   timdenver@aol.com
 
           

      and    
 
                    Thompson & Knight LLP         1700 Pacific Avenue,
Suite 3300         Dallas, Texas 75201

      Attn:   Arthur Wright, Esq.

      Fax:   (214) 969-1751

      Phone:   (214) 969-1409

      Email:   arthur.wright@tklaw.com

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Copy to:
   
 
   

  Kent G. Snyder, Esq.
2212 Dupont Drive, Suite B
Irvine, California 92612
Fax:   (949) 833-8209
Phone:   (949) 833-9078
Email:   ksnyder@winstarmail.com

     Notice may also be given by facsimile transmission (“Fax”) to any party at
the respective Fax number given above or by email, provided receipt of such
transmission shall be confirmed by follow-up notice within seventy-two (72)
hours by another method authorized above. Any party hereto may from time to
time, by written notice to the other, designate a different address which shall
be substituted for the one above specified. If any notice or other document is
sent by mail as aforesaid, the same shall be deemed served or delivered
seventy-two (72) hours after the mailing thereof as above provided. Notice by
any other method shall be deemed served or delivered upon actual receipt at the
address or Fax number listed above.

     5.     Interpretation: Governing Law. This Easement Agreement shall be
construed according to its fair meaning and as if prepared by both parties
hereto. This Easement Agreement shall be construed in accordance with the laws
of the State of California. Any action shall be brought in a court of competent
jurisdiction located in Orange County, California. The parties understand and
agree that the rights granted herein are “private” and may be restricted,
modified or nullified (collectively, “Nullification”) by the actions of
Governmental Agencies; and that Grantor makes no representation, promise or
covenant that Nullification will not occur.

     6.     No Waiver. No delay or omission by either party hereto in exercising
any right or power accruing upon the compliance or failure of performance by the
other party hereto under the provisions of this Easement Agreement shall impair
any such right or power or to be construed to be a waiver thereof. A waiver by
either party hereto of a breach of any of the covenants, conditions or
agreements hereto to be performed by the other party shall not be construed as a
waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions hereof.

     7.     Modifications. Any alteration, change or modification of or to this
Easement Agreement, in order to become effective, shall be made by written
instrument, and in each such instance executed on behalf of each party hereto,
and duly recorded by the Orange County recorder.

     8.     Severability. If any term, provision, condition or covenant of this
Easement Agreement or the application thereof to any party or circumstance
shall, to any extent, be held invalid or unenforceable, the remainder of this
instrument, or the application of such term, provision, condition or covenant to
persons or circumstances other than those as to whom or which it is held invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Easement Agreement shall be valid and enforceable to the fullest extent
permitted by law.

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     9.     Time is of the Essence. Time is hereby expressly made of the essence
in this Easement Agreement and each term and provision hereof, and Grantor and
Grantee specifically agree to strictly comply and perform their obligations
herein in the time and manner specified and waive any and all rights to claim
such compliance by mere substantial compliance with the terms of this Easement
Agreement.

     10.     Authority and Capacity. Each of the persons signing this Easement
Agreement represents and warrants that he or she is authorized to execute and
deliver this Easement Agreement and that this Easement Agreement will be binding
upon the party for whom such person has signed, and that the signature of no
other party or person is required in order to bind such party. Each person
executing this Easement Agreement on behalf of a corporation or other entity
represents and warrants that he or she is duly authorized to execute and deliver
this Easement Agreement on behalf of such corporation or other entity in
accordance with authority granted under the formation documents of such entity,
that all conditions to the exercise of such authority have been satisfied, and
that this Easement Agreement will be binding upon such entity in accordance with
its terms.

     11.     Titles and Captions. Titles and captions are for convenience only
and shall not constitute a portion of this Easement Agreement.

     12.     Gender. As used in this Easement Agreement, masculine, feminine or
neuter gender and the singular or plural number shall each be deemed to include
the others wherever and whenever the context so dictates.

     13.     Execution in Counterparts. This Easement Agreement may be executed
in several counterparts, and all so executed shall constitute one agreement
binding on all parties hereto, notwithstanding that all parties are not
signatories to the original or the same counterpart.

     14.     Binding Effect; Runs with the Property. This Easement Agreement and
all its provisions shall bind and inure to the benefit of the respective heirs,
personal representatives, successors and assigns of the parties hereto and/or to
the Property and/or any portion thereof. Every person or entity who now or
hereafter owns or acquires any right, title or interest in or to any portion of
the Property, shall be deemed to have consented and agreed to each and all of
the provisions hereof, whether or not any reference to this Easement Agreement
is contained in the instrument by which such person or entity acquired an
interest therein.

     15.     Conflicts. This Easement Agreement is granted subject to the terms
and provisions of the Purchase and Sale Agreement and the Grant Deed. If there
is a conflict between the terms of this Easement Agreement, the Purchase and
Sale Agreement and the Grant Deed, the interpretation thereof shall be
conclusively determined by reference to the following documents in the order
listed below:

  (a)   Purchase and Sale Agreement     (b)   Grant Deed     (c)   Easement
Agreement

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.

                 

  “Grantor”
 
               

  NUEVO ENERGY COMPANY, a Delaware
corporation
 
               

  By:            

     

--------------------------------------------------------------------------------

      George Nilsen

  Title: Senior Vice President
 
               

  By:            

     

--------------------------------------------------------------------------------

      Bruce Murchinson

  Title: Senior Vice President and General Counsel
 
               

  “Grantee”
 
               

  BLACKSAND PARTNERS, L.P., a Texas limited
partnership
 
               

  By:            

     

--------------------------------------------------------------------------------

 
               

  Title: General Partner
 
               

          By:    

             

--------------------------------------------------------------------------------

          Title:    

             

--------------------------------------------------------------------------------

          By:    

             

--------------------------------------------------------------------------------

          Title:    

             

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State of California
    )  

    )  
County of Orange
    )  

     On                  before me,
                                                 , personally appeared,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
   

--------------------------------------------------------------------------------

 

         
State of California
    )  

    )  
County of Orange
    )  

     On                  before me,                                        ,
personally appeared, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
   

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ATTACHMENT A

LEGAL DESCRIPTION OF THE PROPERTY

Attachment A

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TABLE OF CONTENTS

ATTACHMENT “A”

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5,6,7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2" X 4" POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" ×
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A
4" × 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO A 2" ×
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST 55.48 CHAINS
TO A 2" × 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30' EAST 20.00
CHAINS TO A 2" × 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45" EAST 134.63
CHAINS TO A 2" × 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION OIL
COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY OF
THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA TO
GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK 44,
PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF THE
AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF
CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET AND BREA
CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73° 32' 24"
WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE AT SAID
POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16" EAST), A
DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0° 10' 11"
EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE OF 500
FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE SOUTH 0°
10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A DISTANCE
OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF CALIFORNIA,
A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44,
PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE 3131.98
FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING
MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" × 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" × 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471–4, A6471–5, A6471–6 AND A6471–7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579. PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18“E 381.48' “ ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

 
THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

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THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE-NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18“E 381.48' “;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18“E 381.48' “ ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

 
THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18“E 381.48' ”;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33' 18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF CALIFORNIA,
A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44,
PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE 3131.98
FEET FROM

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THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED BY
UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST 529.60 FEET TO A 2"
× 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE NORTH
85° 48' 16" WEST, 380.00 FEET TO A 2" × 2” STAKE; THENCE NORTH 4° 11' 44" EAST
1750.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 85° 48' 16" EAST 380.00 FEET TO A
2" × 2" STAKE; THENCE SOOTH 4° 11' 44" WEST 1750.00 FEET TO A 2" × 2" STAKE AND
THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘A1’ SITE DEPICTION ”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     

  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:
 
   
(STAMP) [h12901h1290152.gif]
  -s- KATHLEEN SUSAN TETREAULT [h12901h1290153.gif]

KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004
 
 

January 31, 2003
JN: 13207.00

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ATTACHMENT B

LEGAL DESCRIPTION AND DEPICTION OF THE RETAINED PROPERTY

(Tonner Tank Farm and Main Oil Operations Area)

(Attached)

Attachment B

 

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ATTACHMENT B

Main Operations Area

THAT PORTION OF PARCEL 1 OF LOT LINE ADJUSTMENT NO. LL 2000-054, IN THE
UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED
AUGUST 13, 2001, AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, ALSO AS
SHOWN ON RECORD OF SURVEY NO. 2001-1007 FILED IN BOOK 187, PAGES 02 THROUGH 07
INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEASTERLY CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA,
SAID POINT ALSO BE THE EASTERLY TERMINUS OF A COURSE SHOWN AS “ N 85° 05' 11" W
7072.20' ”, ALL AS SHOWN ON SAID RECORD OF SURVEY;

THENCE SOUTH 80°59' 00" WEST 1400.50 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 87°13' 00" WEST 55.00 FEET;
THENCE SOUTH 05°07' 00" WEST 166.50 FEET;
THENCE SOUTH 04°43' 00" WEST 147.00 FEET;
THENCE SOUTH 59°48' 00" WEST 445.00 FEET;
THENCE SOUTH 79°51' 00" WEST 184.00 FEET;
THENCE NORTH 58°19' 00" WEST 182.00 FEET;
THENCE NORTH 01°18' 00" WEST 59.00 FEET;
THENCE NORTH 70°00' 00" WEST 539.50 FEET;
THENCE NORTH 20°43' 00" WEST 65.00 FEET;
THENCE NORTH 07°13' 00" EAST 107.50 FEET;
THENCE NORTH 42°37' 00" EAST 113.50 FEET;
THENCE NORTH 43.00 FEET;
THENCE NORTH 76°51' 00" EAST 126.00 FEET;
THENCE SOUTH 61°35' 00" EAST 167.00 FEET;
THENCE SOUTH 77°57' 00" EAST 142.00 FEET;
THENCE NORTH 61°12' 00" EAST 185.00 FEET;
THENCE EAST 139.00 FEET;
THENCE NORTH 51°53' 00" EAST 295.00 FEET;
THENCE NORTH 72°10' 00" EAST 123.00 FEET;
THENCE SOUTH 60°44' 00" EAST 108.50 FEET;
THENCE SOUTH 43°15' 00" EAST 91.94 FEET;
THENCE SOUTH 08°45' 00" EAST 177.62 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING 15.062 ACRES, MORE OR LESS.

ALSO AS SHOWN ON DEPICTION, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

      (STAMP) [h12901h1290178.gif]   PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:       (-s- KATHLEEN SUSAN TETREAULT)
[h12901h1290179.gif]   KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004       February 11, 2003   JN: 13209.00.042

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(MAIN OPERATIONS AREA MAP) [h12901h1290180.gif]

 

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ATTACHMENT B

Tonner Tank Farm

THAT PORTION OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, IN THE UNINCORPORATED
TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA AS SHOWN ON RECORD OF
SURVEY NO. 2001-1007, FILED IN BOOK 187, PAGES 2 THROUGH 7 INCLUSIVE, AND RECORD
OF SURVEY NO. 91-1007, FILED IN BOOK 133, PAGES 41 THROUGH 46 INCLUSIVE, BOTH OF
RECORDS OF SURVEY IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT “STEARNS NO. 6”, SAID CORNER BEING AN ANGLE POINT ON THE NORTHERLY
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA, SAID POINT ALSO BEING THE
NORTHWESTERLY TERMINUS OF A COURSE SHOWN AS “ N 57°15'12" W 644.58' ”, ALL AS
SHOWN ON SAID RECORD OF SURVEY NO. 2001-1007;

THENCE SOUTH 62°27'00" WEST 562.00 FEET TO THE TRUE POINT OF BEGINNING;
THENCE SOUTH 60°43'00" EAST 380.00 FEET;
THENCE SOUTH 29’17'00" WEST 150.00 FEET;
THENCE NORTH 60°43'00" WEST 380.00 FEET;
THENCE NORTH 29°17'00" EAST 150.00 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING 1.308 ACRES, MORE OR LESS.

ALSO AS SHOWN ON DEPICTION, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

      (STAMP) [h12901h1290181.gif]   PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:       -s- KATHLEEN SUSAN TETREAULT [h12901h1290182.gif]
  KATHLEEN SUSAN TETREAULT, P.L.S.7297
MY LICENSE EXPIRES 12/31/2004       February 11, 2003   JN: 13209.00.042

Page 1 of 1

 

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(TONNER TANK FARM MAP) [h12901h1290183.gif]

 

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ATTACHMENT C

LEGAL DESCRIPTION AND DEPICTION OF THE CORRIDOR OIL OPERATIONS
AREA WITHIN THE DEVELOPMENT AREA

(Attached)

Attachment C

 

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ATTACHMENT C

Corridor Oil Operations Area

THAT PORTION OF PARCEL 1 OF LOT LINE ADJUSTMENT NO. LL 2000-054, IN THE
UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED
AUGUST 13, 2001, AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, ALSO AS
SHOWN ON RECORD OF SURVEY NO. 2001-1007 FILED IN BOOK 187, PAGES 02 THROUGH 07
INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEASTERLY CORNER OF SOUTHEAST QUARTER OF SECTION 7,
TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, SAID POINT ALSO BEING THE EASTERLY TERMINUS OF A COURSE
SHOWN AS “N 89°47'12" W 2289.20' ”, ALL AS SHOWN ON SAID RECORD OF SURVEY;

THENCE NORTH 03°22'00" EAST 1080.00 FEET TO THE TRUE POINT OF BEGINNING;

THENCE NORTH 22°00'00" WEST 106.00 FEET;
THENCE NORTH 46°00'00" EAST 86.00 FEET;
THENCE NORTH 38°00'00" EAST 185.00 FEET;
THENCE NORTH 84°00'00" EAST 267.00 FEET;
THENCE NORTH 72°00'00" EAST 204.00 FEET;
THENCE NORTH 79°00'00" EAST 178.00 FEET;
THENCE SOUTH 03°00'00" EAST 100.00 FEET;
THENCE SOUTH 79°00'00" WEST 159.00 FEET;
THENCE SOUTH 72°00'00" WEST 208.00 FEET;
THENCE SOUTH 84°00'00" WEST 236.00 FEET;
THENCE SOUTH 38°00'00" WEST 150.00 FEET;
THENCE SOUTH 46°00'00" WEST 131.53 FEET; TO THE TRUE POINT OF BEGINNING.

CONTAINING 2.045 ACRES, MORE OR LESS.

ALSO AS SHOWN ON DEPICTION, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(SEAL) [h12901h1290184.gif]
  PREPARED BY: THE KEITH COMPANIES   UNDER THE DIRECTION OF:   -s- KATHLEEN
SUSAN TETREAULT [h12901h1290185.gif]   KATHLEEN SUSAN TETREAULT P.L.S.7297   MY
LICENSE EXPIRES 12/31/2004       February 11, 2003   JN: 13209.00.042

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(CORRIDOR OIL OPERATIONS AREA MAP) [h12901h12901a1.gif]

 

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MINERAL AGREEMENT

DECLARATION OF DEVELOPMENT COVENANTS,

CONDITIONS AND RESTRICTIONS

 

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MINERAL AGREEMENT

EXHIBIT “L”

DECLARATION OF DEVELOPMENT COVENANTS

CONDITIONS AND RESTRICTIONS

 

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TABLE OF CONTENTS FOR

DECLARATION OF DEVELOPMENT COVENANTS,

CONDITIONS AND RESTRICTIONS

              DESCRIPTION

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      PAGE

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Section 1.
  Definitions     2  
Section 2.
  Nuevo (or Seller) Improvements, Including Program     3  

       I. Post closure-Pre Grading Events     12  

       II. Site Clearing and Site Grading Events Within the Development Areas  
  15  

       III. Post-Grading Events     19  
2.3           Developer Improvements and Additional Payments
    21  
Section 3.
  Condition of the Property (Disclosures); Compliance with Project Requirements;
Development Costs, Taxes and Assessments; Insurance; Indemnities; Retained
Obligations     22  
Section 4.
  Natural Hazard Zones     32  
Section 5.
  Release     33  
Section 6.
  Enforcement: Assignment By Declarant     33  
Section 7.
  Amendments     33  
Section 8.
  Captions     33  
Section 9.
  Governing Law     33  
Section 10.
  Arbitration/Attorneys’Fees     34  
Section 11.
  Severability     34  
Section 12.
  Gender and Number     34  
Section 13.
  Covenants to Run with the Land; Term; Unilateral Amendment for Program     35
 
Section 14.
  Notices     36  
Section 15.
  Effect of Declaration     37  
Section 16.
  Rights of Mortgagees     37  
Section 17.
  Waiver of Jury Trial     38  
Section 18.
  No Agency or Partnership     38  
Section 19.
  Assignment of Agreement     38  
Section 20.
  Stand Alone Insurance     38  
Section 21.
  Further Assurances and Cooperation     39  
Section 22
  Continuing Seller Interests     40  
Section 23
  Unocal Asset Purchase Agreement     40  
Section 24.
  Unavoidable Delay     40  
Section 25
  Waiver, Release, and Indemnities: Limitations Under the PAPA     41  
Section 26
  Notice on Approved Transfer     41  
Section 27
  Assumption of Obligations     41  

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ATTACHMENT “1”
  –   DESCRIPTION OF LAND
 
       
ATTACHMENT “2”
  –   DESCRIPTION OF COVERED PROPERTY (MINERALS)
 
       
ATTACHMENT “3”
  –   DESCRIPTION OF BENEFITED PROPERTY

      (SURFACE FEE INTEREST IN THE LAND)
 
       
ATTACHMENT “4”
  –   TPEL

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DECLARATION OF DEVELOPMENT COVENANTS,

CONDITIONS AND RESTRICTIONS

     THIS DECLARATION OF DEVELOPMENT COVENANTS, CONDITIONS AND RESTRICTIONS
(hereinafter “Declaration” or “Development Declaration”) is made this _____ day
of __________, 2003, by NUEVO ENERGY COMPANY, a Delaware corporation
(“Declarant,” “Seller” or “Nuevo”). Declarant shall include any of its
successors and assigns.

RECITALS

     A. Declarant is the owner of that certain real property, consisting of
approximately 810 acres, located in the County of Orange, State of California
(“Land” or “Property”). Declarant is selling the mineral fee interests lying in
and under the Land and other mineral fee interests owned by Declarant
(collectively, “Minerals” or “Covered Property”) to Buyer immediately after the
recordation hereof with the county recorder of the Country.

     B. Declarant has already taken steps toward the preparation of portions
(“Development Areas”) of the surface fee interest in the Land (“Surface”) for
development, including the submission of certain governmental approval documents
and applications for the Project to governmental Agencies. Buyer and Declarant
agree that the completion of the Well Abandonment and Oil Field Accommodation
Program (“Program”) for the Covered Property and the Development Areas will be
accomplished by Buyer and Declarant as provided in the PAPA and as specified
herein, in conjunction with Developer’s development of the Project.

     C. Buyer is purchasing the Covered Property from Declarant on the terms,
covenants, conditions and restrictions (collectively, “Restrictions”) set forth
in this Declaration, as well as the provisions contained in the Agreement and
other Development Documents.

DECLARATION

     Purpose of Restrictions. Declarant is the owner of a large and unique
landholding which in the past has been used primarily as an operating oil field.
Declarant has completed the planning for, and is in the process of (a) obtaining
land use entitlements from the County for a coexisting master-planned
residential, retail and recreational community (“Community”) within the
boundaries of the Development Areas and (b) selling the Development Areas to a
Developer.

     The Community will provide much needed residential housing product for all
economic levels within the region (“Region”), County and City sphere of
influence pursuant to guideline requirements for housing from the Southern
California Association of Governments and extensive recommendations from the
City, and in accordance with and allocating great weight to environmental
preservation recommendations (and techniques, including significant land areas
remaining in open space and open space with oil operations) from various public
and private agencies. The Community, in the form conditionally endorsed by the
City and approved by the County on November 19, 2002, is a finely balanced,
coexisting, multiple-use development that should remain essentially as planned
and approved without the introduction of other significantly

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different uses which might over-burden the Development Areas (and the Surface),
cause harm to the delicate environmental and economic balance within the
Community, and/or controversy within the City, County and/or Region. The Surface
(including the Development Areas) will be owned and operated separately from the
Covered Property and shall be a benefited estate to the terms set forth herein.
It is for this reason that the following Restrictions are imposed.

     Imposition of Restrictions. Declarant hereby covenants, agrees and declares
that all of its interest as the same may from time to time exist in the Covered
Property shall be held and conveyed subject to the Restrictions contained
herein. These Restrictions shall run with the Covered Property or any portions
into which it may be divided until released as provided herein and shall be
binding upon all parties having or acquiring any right, title or interest in the
Covered Property or any part thereof shall inure to the benefit of the fee
owners of the Benefitted Property and are imposed upon the Covered Property and
every part thereof as a servitude in favor of the Benefitted Property and every
portion thereof as the dominant tenement or tenements to the extent provided
herein.

     Section 1. Definitions. All of the definitions contained in the Development
Documents (as such term is hereinafter defined) are, unless stated otherwise in
this document, incorporated herein by reference. The following terms shall have
the following meaning whenever used in this Development Declaration (or in any
other Development Document, except where inconsistently defined therein):

     1.1 “Agreement” shall mean that certain purchase and sale agreement for the
Covered Property, between Declarant and Buyer, dated February 28, 2003.

     1.2 “Benefitted Property” shall mean and refer to all of the real property
in Orange County, California described in Attachment “3.”

     1.3 “Covered Property” or “Minerals” shall mean and refer to all of the
real property described in Attachment “2.”

     1.4 “Declarant” or “Seller” shall mean and refer to Nuevo and/or its
Successors (as defined in Section 13).

     1.5 “Buyer” shall mean and refer to BlackSand Partners, L.P., a Texas
limited partnership, and all of its successors and assigns as to the Covered
Property and/or any part or portion thereof, and all persons or entities who or
which, after the date hereof, hold any right, title or interest therein. If
Buyer leases all or any of its interest in the Covered Property, the lessee
thereunder shall also be deemed to be Buyer and both the lessor and the lessee
under such lease shall be responsible as principals (and not sureties) for
compliance with all of the terms and provisions of this Development Declaration
and the Development Documents.

     1.6 “Development Documents” shall mean and refer collectively to all of the
written agreements between Declarant and Buyer, recorded and unrecorded,
concerning the ownership, possession and use of the Covered Property, and shall
include all of the instruments listed in Section 1.1.11 of the Agreement.

     1.7 “Exhibits” shall mean Exhibits to the Agreement, as specifically
identified.

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     1.8 “Improvements” or “improvements” shall mean Buyer’s or Seller’s
Improvements as defined in the PAPA, as the context requires.

     1.9 “Land” shall mean and refer to all of the real property described in
Attachment “1.”

     1.10 “PAPA” shall have the meaning prescribed in the Agreement.

     1.11 “Party” and/or “party” shall have the meaning prescribed in Section
1.1.41 of the Agreement.

     1.12 “Project” shall have the meaning prescribed in Section 1.1.42 of the
Agreement.

Provisions of the Agreement referenced in this Declaration shall automatically
include, incorporate and refer to corresponding Sections of this Declaration
whether or not such Sections are specifically identified.

     Section 2. Nuevo (or Seller) Improvements. Including Program.

     2.1 Program. Nuevo, at no cost and expense to Operator except as may be
expressly provided in the PAPA, shall conduct a well abandonment and oil field
accommodation program for the Parcel composed of those tasks and activities
which are described in this Section 2 and are specifically set out in Attachment
4 to the PAPA, which, together with those tasks and activities of Developer
described in this Section 2 and specifically set out in Attachment 4 are
hereinafter referred to as the “Program.” In connection with the performance of
the Program, Nuevo shall, in the event of conveyance of the Parcel, enter into
an agreement with any successor Developer which will provide for the performance
by Developer of those tasks and activities described in this Section 2 as
Developer’s responsibility. The Program shall be undertaken with Operator’s
cooperation, and in accordance with standards promulgated at the time of such
work by the California Department of Conservation, Division of Oil, Gas and
Geothermal Resources (“CDOGGR”) or such other governmental agency having
jurisdiction over the activity, other legal and regulatory requirements, as
amended from time to time (but such amendment applicable only to those
activities for which Final Acceptance has not been received), and good oil field
practices, all subject to the terms of the PAPA. Generally, the Program will be
accomplished as follows:

          2.1.1 Operator’s Surface Facilities.

                    2.1.1.1 Removal of Surface Facilities and Subsurface
Pipelines. Nuevo shall remove certain of Operator’s surface equipment as
specified in Attachment 4 to the PAPA, to the extent and when necessary in
accordance with the applicable Developer Notice to Proceed within the
Development Areas and lands adjacent thereto, including those areas designated
for continued oil and gas operations, to accommodate Developer’s Grading Plan.
This will include, but not be limited to, pumping units, concrete cellars and
concrete pads immediately contiguous to the wellheads, power poles,
transformers, manifolds, test bubbles, compressors, tanks, vessels and above
ground pipelines. In addition, Nuevo shall drain, flush and cap subsurface
pipelines, to the extent and when necessary in accordance with the applicable

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Developer Notice to Proceed within the Development Areas and lands adjacent
thereto to accommodate Developer’s Grading Plan. Removal of subsurface pipelines
to the extent deemed necessary or desirable shall be the responsibility of
Developer. Prior to Nuevo’s commencement of work, Operator shall isolate and
cease operation of all equipment and facilities to be removed and shall take
such other steps as are reasonably necessary to allow such removal to be
conducted in accordance with all applicable regulatory requirements and
consistent with good oil field practices. The surface equipment will be removed
from such wells, not just those to be abandoned, to facilitate the grading. Each
wellhead will be surveyed and marked by Operator one (1) time only and Nuevo and
Developer will inspect and approve the markings. After inspection and approval
of the well markings, Developer will be responsible for grading around the well
casings without damaging them. Upon approval of the well markings, Developer
shall proceed in a timely manner and be responsible to pay, and shall be solely
liable for, any and all damage to any wells caused by Developer’s grading
operations.

          The acts or omissions of Developer or Nuevo in accordance with the
terms of the PAPA may not be imputed to Operator unless expressly stated herein.
Developer and Nuevo are each performing their obligations hereunder as
independent contracts and not as a subcontractor or agent of Operator.
Furthermore, the actions or omissions of Operator must be based upon a specific
duty imposed by the PAPA or law upon Operator, and not delegated to Nuevo.

                    2.1.1.2 Remediation Responsibilities. Should Developer
encounter soil that appears to be crude oil or oil well production impacted
(evidenced by staining or odor), Developer shall immediately notify Operator’s
field operations person and Nuevo’s on-site representative. Developer shall be
fully responsible for funding, implementing and completing all environmental
testing, assessment, remediation, monitoring, reporting or other requirements
(with the assistance of Operator or Nuevo if the absence of such assistance
would prevent Developer from properly performing such responsibilities) with
respect to such crude oil or oil well production impacts. To the extent that
such crude oil impact or oil well production impact is associated with active
and producing wells or operational pipelines or facilities, Operator shall be
responsible for completion of any required well, pipeline or facility repairs.
Notwithstanding the foregoing, Nuevo at its sole cost and expense shall be and
remain responsible for (i) those remediation activities described in the
approved Remedial Action Plan submitted December 16, 1999, as amended October 3,
2001, December 27, 2001 and January 13, 2003 (“EIR Remediation”) and (ii) crude
oil or other oil well production releases that result from work and activities
undertaken by Nuevo in furtherance of the PAPA. Upon discovery of crude oil or
oil well production contamination in the vicinity of a well identified in
Schedule B of Attachment 4 to the PAPA or temporary or permanent pipeline or
facility, Operator’s field operations person, Nuevo’s onsite representative and
Developer’s on site representative shall determine as soon as reasonably
practical if the soil is crude oil impacted as a result of a leak caused by (i)
Operator’s ongoing production activity in which event costs associated with
cleanup and remediation to oil field standards shall be the responsibility of
Operator, (ii) the activities of Nuevo in performance of the Program including
EIR Remediation in which event costs associated with cleanup and remediation
shall be the responsibility of Nuevo or (iii) from any other causes in which
event the costs associated with cleanup and remediation, including costs to
bring cleanup associated with ongoing production activities from oil field
standards to residential standards, together with clean up and remediation of
all contamination other than the EIR Remediation, shall be Developer’s

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responsibility. The Parties agree that if Operator’s field operations person and
Developer’s and Nuevo’s on site representatives cannot make such a determination
or cannot agree on the source of the apparent soil contamination within seven
(7) business days, Nuevo, Developer and Operator will designate a representative
from a reputable, soils engineering firm that routinely does soils work (“Soil
Firm”) who is familiar with soil contamination issues to designate the source of
the apparent soil contamination. If the parties are unable to select a Soils
Firm, any party to the PAPA may make application to the Superior Court of Orange
Country for the timely appointment of a Soil Firm. The Soil Firm’s
representative shall take a sufficient number of samples to permit initial and
follow-up testing and such representative’s determination as to all matters,
including the allocation of costs, including its fees, shall be final and
binding on the parties hereto. The parties shall use their commercially
reasonable efforts to secure the determination by the Soil Firm’s representative
of the source of the apparent soil contamination shall be made as soon as
practicable after notification to the Soil Firm. If the Soil Firm’s
representative cannot make a conclusive determination as to the source of the
apparent soil contamination, the soil contamination shall be presumed to have
been from other than ongoing production activity. The party whose actions are
found to have created the contamination shall in addition to the clean up and
remediation cost, pay for the Soil Firm’s work; and if more than one party is
found to have created such contamination, the costs of the Soil Firm’s work will
be prorated by such firm among the parties creating the contamination in
proportion to that Parties’ contribution to such contamination.

          2.1.2. Third Party Easements and Licenses. Nuevo and Operator will
cooperate with Developer in attempting to remove and/or relocate from the
Development Areas oil field related easements and licenses for pipelines
(“TPEL”) belonging to other entities, including those of Southern California
Edison. Nuevo is not aware, to the best of its knowledge, of any other TPEL on
or affecting the Parcel except as described in Attachment 3 to the PAPA. Nuevo
and Operator shall not be required to incur any costs, in their efforts to
cooperate in the removal and/or relocation of the TPEL. Temporary pipelines may
be required in some areas while the grading is in progress. Operator and Nuevo
will use commercially reasonable efforts, at no cost to Operator and Nuevo, to
assist Developer at Developer’s expense in causing these pipelines to be
reinstalled by the respective companies in permanent easements after the grading
is complete. Operator agrees that upon Developer’s written notice, Operator will
assist Developer in giving notice to the third party companies in an attempt to
have the pipelines removed and replaced. Operator and Developer acknowledge
receipt of copies of the easement documents, both recorded and unrecorded,
listed on Attachment 3 to the PAPA and incorporated herein by this reference.

          2.1.3. On-Site Representative. Nuevo, Operator and Developer shall
each have the right to have representatives on-site both before the grading
begins and during the grading operations on the Parcel to observe such grading
operations. Developer agrees to give Operator sufficient notice prior to
commencement of grading to allow Operator to arrange to have a representative
on-site at Operator’s cost, if Operator so elects.

          2.1.4. Reimbursement.

                    2.1.4.1. Reimbursement Plan. Operator and Nuevo agree that
the costs to implement the Program (“Reimbursement Amounts”) shall not be borne
by Operator, unless

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otherwise provided herein. Notwithstanding any term in the Agreement to the
contrary, Operator shall only be responsible for the cost of incremental work,
if any, requested by Operator under Section 2.3.2. The parties recognize that
the Project may be modified as a result of new or additional governmental
requirements or as a result of the mutual agreement of the Developer and
Operator or among Developer, Operator and Nuevo as specified herein. In no event
shall any modification requested by Developer or any additional or new
governmental requirements prior to Final Acceptance result in costs,
expenditures or commitments by Operator.

                    2.1.4.2. Program Segments and Notices to Proceed. The
Program shall be implemented into segments as shown below, and each Program
Segment shall commence upon proper receipt of a written notice issued by
Developer and delivered to Nuevo and Operator specifying the Program Segment to
be performed (“NTP”), as follows:

          Program Segment

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  Notice to Proceed (“NTP”)

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  Acceptance Confirmation

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Pre-Phase I Initial Activity
  NTP will be issued as mutually agreed between Nuevo and Developer.    
 
       
• Preliminary and detailed engineering and design
      Not Applicable
 
       
• Permitting
      No Applicable
 
       
• Remediation required by EIR
      Developer
 
       
• Initial abandonment of 25 idle and reabandoned wells
      No Applicable
 
        Pre-Phase I Intermediate Activity

• Begin procurement of all required materials and
   equipment   NTP will not issue prior to receipt of all required Operator
permits or, to the extent certain activity can be commenced without permits, as
mutually agreed between Nuevo and Developer.   No Applicable
 
       
• Remove infrastructure and initial abandonment of active wells
      No Applicable
 
       
• Begin construction of tank farm and field infrastructure
      No Applicable

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          Pre-Phase I Final Activity

• Complete construction of tank farm and field
    infrastructure   NTP will not issue prior to receipt of all required
Operator permits or, to the extent certain activity can be commenced without
permits, as mutually agreed between Nuevo and Developer.   Operator

 
       
• Construct power system
      Operator
 
       
• Temporary removal of equipment
      Not Applicable
 
       
Phase I

• Raise/lower Phase I well heads

  NTP will not issue prior to receipt of all required Operator permits or, to
the extent certain activity can be commenced without permits, as mutually agreed
between Nuevo and Developer.   Operator

 
       
• Final abandonment of Phase I wells
      Developer
 
       
• Accommodation of retained wells
      Operator (and Developer for limited purpose of design compliance)
 
       
• Remove infrastructure and initial abandonment of Phase II wells
      Not Applicable
 
       
• Temporarily remove Phase II retained
well equipment
      Not Applicable
 
       
Phase II

• Raise/lower Phase II well heads
  NTP will not issue prior to receipt of all required Operator permits or, to
the extent certain activity can be commenced without permits, as mutually agreed
between Nuevo and Developer   Operator

 
       
• Final abandonment of Phase II wells
      Developer
 
       
• Accommodation of retained wells (21 wells)
      Operator (and Developer for limited purpose of design compliance)
 
       
• Remove infrastructure and initial abandonment of Phase III wells (8 wells)
      Not Applicable
 
       
• Temporarily remove Phase II retained
well equipment
      Not Applicable

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Phase III

• Raise/lower Phase III well heads
  NTP will not issue prior to receipt of all required Operator permits or, to
the extent certain activity can be commenced without permits, as mutually agreed
between Nuevo and Developer.   Operator

 
       
• Final abandonment of Phase III wells
      Developer
 
       
• Seismic Sensor installation
      Developer

                    Upon receipt of the NTP for any Program Segment specified
above, Nuevo shall be obligated to commence the required work within forty-five
(45) days and complete the work within the time duration specified in Attachment
4 to the PAPA. Operator shall cooperate in good faith with Nuevo and Developer
in the implementation of the Program. Operator shall (i) promptly process all
permit requests; (ii) at its cost comment on all submittals of specifications or
plans within ten (10) business days of receipt thereof; and (iii) at its cost
make all facilities available for accommodation under the Program such that
Nuevo may commence the Program Segment within 45 days of receipt of a NTP. To
the extent that Operator fails to fully and timely cooperate with Nuevo, and
Nuevo, as a result of Operator’s acts or omissions, incurs penalties, damages or
incremental costs in performing the Program, such penalty, damage or cost shall
be the responsibility of Operator and Operator hereby agrees to defend,
indemnify and hold Nuevo harmless therefrom. Operator shall also be liable to
Developer for any and all incremental reasonable cost or expense incurred by
Developer in the development of the Development Areas as a result of Operator’s
failure to comply with the provisions of this Section. Operator expressly agrees
to pay such incremental Developer costs and defend, indemnify and hold Nuevo
harmless therefrom. In addition to the foregoing, should Operator fail to
temporarily or permanently shut in any well in accordance with the Program,
Nuevo shall have the right, but not the obligation to shut-in such well at
Operator’s sole risk and expense. In the event Developer abandons or suspends
the Program other than as a result of Unavoidable Delay, and does not resume
Program activity within the time period specified in Section 2.4.1.1 after
receiving written notice from Operator, Nuevo shall restore such wells to
production at Developer’s rink and sole expense provided that Nuevo has been
prepaid by Developer an amount adequate to restore such wells. To the extent
Nuevo acts as the Developer hereunder and fails properly to carry out the
responsibilities and obligations allocated to Developer in this Section 2,
Operator, after ten (10) days written notice to Nuevo, may take over and
discharge such responsibilities and obligations at the sole cost and expense of
Nuevo, to be reimbursed in cash to Operator within thirty (30) days of proper
completion of such Work by Operator, fully in compliance with the PAPA and all
plans and specifications for such Work.

          2.1.5. Anchor Points and Pulling Pads. As part of the Program, Nuevo
shall be responsible for construction of the anchor points and pulling pads
necessary for Operator’s continuing Oil Operations within the Exclusive Use
Areas and Joint Use Areas within the Development Areas and graded areas adjacent
thereto.

          2.1.6. Well Accommodation. As part of the Program, Nuevo will relocate
below the surface of the Parcel, all operating wellheads in the Development
Areas, and those required

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wells within the adjacent grading areas and Public Park areas, and as required
by appropriate Governmental Agency rules as more particularly set out in
Attachment 4, Schedule B to the PAPA.

          2.1.7. Insurance. Each Party shall use commercially reasonable efforts
to name the other parties as Additional Insureds, on each Party’s standard
blanket insurance policy covering its activities related to the Minerals or in
connection with the Program Improvements, for the duration of their construction
or their activities on the Minerals and any portion of the Parcel.

          2.1.8. Completion of the Program.

                    2.1.8.1. Performance by Each Party. Nuevo shall timely
commence and complete each Program Segment within the time duration specified in
Attachment 4 to the PAPA after receipt of all required permits for such Segment.
Phase I, II and III Segments will not commence until after completion of
Developer’s grading for that Segment. In no event shall Nuevo or Operator be
obligated to design, construct or install any improvements nor undertake work or
activities other than those specified in Attachment 4 to the PAPA. Should
Developer or Operator’s failure to perform, including, without limitation,
pursuant to Section 2.1.4, other than for the payment of money, or should
Nuevo’s failure to complete any aspect of the work or any Program Segment result
from an Unavoidable Delay, such required performance shall be excused for the
period of time that the Unavoidable Delay prevents performance and the time
duration for the Program Segment shall be extended by the length of time
performance is delayed. Provided, however, that nothing in this Section shall
excuse the performance of any act rendered difficult solely because of the
financial condition of a party. In the event that any delay due to Unavoidable
Delay is anticipated by a Party, such Party shall promptly notify the other
parties of such delay, its cause and the estimated duration of the delay. Each
Party shall exercise due diligence to shorten, mitigate and avoid the effects of
the delay and shall keep all Parties informed as to its efforts.

                    2.1.8.2. Final Acceptance. Developer and Operator shall
respectively conduct a final inspection of those activities in each Program
Segment as set forth in Section 2.1.4.2 as to the items by their name in the
“Acceptance Confirmation” in such section within fifteen (15) days of written
notice of completion. In addition Operator shall have the right, but not the
obligation, to perform a final inspection of the Developer’s work and comment on
the same. Developer and Operator shall deliver to Nuevo (with a copy to the
other) (i) its written confirmation of “Final Acceptance of all matters” (each
an “Acceptance Confirmation”) for each activity in a Program Segment designated
for its Acceptance or (ii) an Acceptance Confirmation of all matters it
considers as completed and a detailed description of any items in the Program
Segment designated for its Acceptance which it in good faith cannot give “Final
Acceptance” together with its requirements therefor. The issuance of an
Acceptance Confirmation of each completed activity within the Program Segment
and of all matters shall be contingent upon acceptance of the work by the
appropriate governmental authority to the extent required. If the parties cannot
resolve any item for which an Acceptance Confirmation has not been given within
30 days, such unresolved item shall be submitted to arbitration in accordance
with the PAPA. Upon completion of any outstanding items, Operator or Developer
shall deliver an Acceptance Confirmation thereof to Nuevo and the other within
10 days of such completion. After Final

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Acceptance, Developer shall be responsible for and shall release, hold harmless
and indemnify Operator and Nuevo from all claims, demands, losses or damages, of
any sort whatsoever, relating to the design, engineering, permitting,
maintenance, repair, replacement, relocation, removal and reinstallation of any
abandoned wells, pipelines or facilities located within or adjacent to the
Development Areas and all other matters for which it has given an Acceptance
Confirmation and, together with all other work performed hereunder shall be
referred to as “Developer Liability”. After Final Acceptance, Operator shall be
responsible for and shall release, hold harmless and indemnify Developer and
Nuevo from all claims, demands, losses or damages of any sort whatsoever,
relating to the design, engineering, permitting, installation, repair,
relocation, removal and reinstallation of all active wells, pipelines or
facilities and all other matters for which it has given Final Acceptance
(“Operator Liability”). It is the intention of the Parties that upon Final
Acceptance, Nuevo shall have no further liability or obligation with respect to
the Program and the wells, equipment and facilities accommodated under the
Program. Upon Final Acceptance, Nuevo and Operator shall be relieved of any and
all liability directly or indirectly related to Developer Liability; provided
that notwithstanding the foregoing, so long as Nuevo is Developer, Nuevo shall
not be relieved of Developer Liability. Upon Final Acceptance, as between Nuevo
and Operator, Nuevo shall be relieved of further liability or obligation and
Operator shall indemnify, release and hold Nuevo harmless from any and all
claims, including third party claims, related to Operator Liability.
Notwithstanding anything to the contrary contained herein, Operator, prior to
Final Acceptance, shall not be liable or responsible for any increased costs
which result from governmental requirements to obtain additional permits or
remediate or restore the Parcel to a higher standard resulting from the real
estate development and all such incremental or increased costs shall be the
responsibility of Developer.

                    2.1.8.3. Liability Allocation. Notwithstanding the above or
the Indemnities Developer gives in its agreement to purchase the Parcel, at any
time prior to Final Acceptance, Developer may, in its reasonable discretion,
seek arbitration as provided in Section 2.1.4.3 against Nuevo to obtain damages
for losses suffered as a result of the failure of Nuevo to timely or properly
complete the Program Segment or work thereunder. All disputes between any of the
Parties herein shall be resolved through arbitration. Any award in such
arbitration shall be limited to the recovery of actual direct damages incurred
by Developer. Developer shall not be entitled to indirect, consequential,
special, exemplary or punitive damages. After Final Acceptance by Developer,
Developer shall have no cause of action with respect to Developer’s Liability
against Operator or Nuevo, or their successors or assigns. After Final
Acceptance by Operator, Operator shall have no cause of action against Developer
or Nuevo or their successors or assigns for Operator’s Liability but Operator or
Developer may, in its reasonable discretion, maintain a lawsuit, arbitration or
other action against any construction entities hired by Nuevo (but not Nuevo
itself) to perform work on the Parcel pursuant to a written contract
(“Construction Entities”), to obtain damages for losses suffered as a result of
Nuevo’s failure to timely or properly construct the completed work, to the
extent caused by such Construction Entities. In that regard, to the extent it
possesses and may assign same, Nuevo hereby conveys, transfers and assigns (and,
if necessary, will convey, transfer and assign a such time as such cause of
action arises) to Operator and Developer a non-exclusive assignment of its
rights and interests in and to any relevant contracts or subcontracts, for the
limited purposes stated herein, without any obligation by Nuevo to participate
in such lawsuit or action, as a party or otherwise,

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and without any responsibility, warranty, representation or liability for any
outcome pursuant thereto or damages awarded therein. Construction Entities
include contractors, subcontractors, materialmen or other independent entities,
but not Operator or Nuevo, their respective constituent partners, officers,
employees or any other related entities. Upon ten (10) days written request,
Nuevo will provide Operator and Developer with a list of such Construction
Entities which have supplied Operator and/or Nuevo with the Preliminary Notice
prescribed by the California Civil Code for the maintenance of mechanic’s lien
rights (See Exhibit “F” to the Agreement). Nuevo further agrees to not enter
into any contract with a Construction Entity that waives the liability for such
entity’s negligence.

                    2.1.8.4. Construction Easement. Operator and Developer,
their respective successors and assigns, hereby grant to Nuevo together with the
right to partition, grant and transfer the same, a nonexclusive easement in
gross over the Parcel to the extent necessary to complete all work required by
the Program.

          2.1.9. Developer Option to Purchase Wells. Developer may at any time
prior to commencement of grading, elect to purchase any or all of Operator’s
active wells lying within the Development Areas solely for the purpose of well
abandonment by giving notice by certified mail of such well designation. The
value of a producing oil well or an injection well shall be determined by mutual
agreement of the parties taking into consideration the current condition of the
well, the reserves assigned to the well, the well’s production, operating cost,
plugging and abandonment cost, for an injector well, the replacement cost, and
any other matter deemed relevant. For purposes of this Section 2.1.9, the value
of a well shall be equal to the average of the values determined by the reserve
engineers, one to be selected by each party from the list attached as Attachment
2 to the PAPA. Each party shall select one company from such list by providing
written notice thereof within ten days of the certification date of Operator’s
notice. The value, once determined, shall be final. Prior to grading, the
determined value shall be paid by Developer to Operator, and such costs to
Developer shall not be considered as costs to implement the Program. Developer
shall notify Operator within ten (10) days of receipt of the determination of
values which wells it elects to purchase. Developer shall pay the amount to
Operator within twenty (20) days of such notice. Upon receipt of such payment,
Operator shall promptly (i) shut in any applicable wells, if active, and
(ii) deliver to Developer a Bill of Sale for any such well and transfer
operatorship to Developer. Developer shall (iii) assume operatorship and obtain
all necessary permits and governmental approvals to act as Operator, (iv) not
return any well it purchases to production, and (iv) cause such wells to be
plugged and abandoned and all gathering lines and facilities abandoned and, if
above ground, removed all in accordance with all Governmental Agency regulatory
requirements at Developer’s sole cost and expense in the same time and manner
required of Operator under the Program. Any ancillary costs associated with the
purchase and plugging and abandonment of any such wells and removal of
facilities therefor shall not be considered as Reimbursement Amounts.

     2.2. The Program and Party Responsibilities. Except as otherwise provided
herein, Operator, Nuevo and Developer shall cooperate in the completion of the
Program and each Party shall perform its obligations in a commercially
reasonable manner, and in good faith, as described below and elsewhere herein:

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     I. Post closure-Pre Grading Events

        A. Operator and Nuevo have mutually agreed or, if so indicated, shall
mutually agree, in a manner consistent with Attachment 4 to the PAPA, to the
following matters as more specifically set out in Attachment 4 to the PAPA and
schedules thereto:

i.   the location and size of the area for the expansion of the existing Tonner
Canyon Tank Farm (“Tank Farm”), which will be required prior to the
decommissioning of the existing East Naranjal Tank Farm (“EN Tank Farm”).   ii.
  the general alignment and grade for service lines to the Tank Farm and plan
facilities to accommodate the operating wells previously served by the East
Naranjal Tank Farm. (References to grade within the PAPA refer only to those
lines for which burial is required.) The final alignment and grade will be
mutually agreed to so as to avoid conflict with future development to the extent
possible and to avoid future interruption of service.   iii.   the general
alignment and grade for the surface and subsurface installation of the 12KV
service line from the existing electrical substation to the new site and to the
existing Stearns gas plant location (“Gas Plant”). The final alignment and grade
have been selected as to minimize conflict with future development and avoid
future interruption of service.   iv.   INTENTIONALLY OMITTED   v.   shall
mutually agree upon the location, alignment and grade of the “sales point” for
the ConocoPhillips (formerly Tosco) pipeline to serve the Tank Farm.   vi.  
shall mutually agree upon the location, alignment and grade of the gas gathering
system and associated facilities, and service lines between the Gas Plant and
the Tank Farm.   vii.   shall mutually agree upon the final grade elevations for
each existing well remaining in the Development Areas, or impacted by grading
for the Development Areas.   viii.   shall mutually agree upon access plans to
provide for interim and final access to accommodate the Program work and all
future oilfield-related activities.

          B. Developer, at Developer’s cost and expense, shall:

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i.   Prepare the Grading Plan and process it through the appropriate
Governmental Agency. The Grading Plan shall be designed to be completed in three
phases to correspond to the work set out in Attachment 2 to the PAPA, all as
approved by the appropriate Governmental Agency.   ii.   Prepare a soils and
geological review of the Grading Plan.   iii.   Satisfy, or cause to be
satisfied, all mitigation measures precedent to grading found in the Final
Tonner Hills EIR.   iv.   Prepare a preliminary utility master plan (“Street and
Utility Improvement Plans”) to serve as a basis for the Facilities Plan (see
C.v., below) and to be submitted to, and approved by, the appropriate
Governmental Agency.   v.   Provide grade elevations for all wells to be
retained or abandoned within the Development Areas or impacted by grading
required for the Development Areas.   vii.   Obtain coverage under the National
Pollutant Discharge Eliminating System (NPDES) statewide General Construction
Activity Stormwater Permit from the State Water Quality Control Board.   viii.  
Cause a Remedial Action Plan to be completed and processed through the County of
Orange Health Care Agency, Division of Environmental Health, or such agency as
may have current jurisdiction of any identified contaminants.

     C. Nuevo at Developer’s cost and expense shall:

i.   Complete construction drawings for the expanded Tank Farm and facilities
related thereto and process them through the appropriate Governmental Agencies
(including, if necessary, the South Coast Air Quality Management District).  
ii.   Complete improvement and relocation plans and process them through the
appropriate Governmental Agencies (as necessary) for the relocation of the Tank
Farm service lines, the East Naranjal Tank Farm service lines, the Gas Plant
service lines, natural gas gathering lines and 12KV power lines.   iii.  
Prepare and submit the well abandonment program, as set out in Attachment 4 to
the PAPA, for permitting through CDOGGR.

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iv.   Prepare schematic facilities plans for pipelines and facilities
(“Facilities Plan”) to service the wells to be accommodated within and adjacent
to the Development Areas.   v.   Construct the Tank Farm improvements.   vi.  
Remediate the identified contaminated soils associated with the EN Tank Farm.
Exhumed soils will be isolated and stockpiled for placement by Developer with
the grading of the first phase of development in accordance with the approved
Remedial Action Plan. Exhumed soils not meeting the criteria for placement on
site will be removed from the site for appropriate disposal.   vii.  
Decommission the EN Tank Farm once the service lines are connected to the
improved Tank Farm.   viii.   Construct the new service lines as required to the
Tank Farm, rerouting lines currently serving the East Naranjal Tank Farm, and
prepare as-built plans for those service lines which are permanent.   ix.  
Drain, flush and mark for grading any identified abandoned EN Tank Farm and Tank
Farm pipelines.   x.   Construct the temporary or permanent (as applicable) gas
gathering lines and facilities to the Gas Plant.   xi.   Flush and mark any
identified abandoned below ground pipelines and facilities for grading.   xii.  
Relocate the 12KV line from the existing electrical substation to the existing
Gas Plant and Tank Farm as necessary.   xiii.   Locate and mark all identified
pipelines and facilities within the area to be graded.   xiv.   Relocate the
point of sale for the ConocoPhillips (formerly Tosco) pipeline to the relocated
ConocoPhillips (formerly Tosco) pipeline to connect to such new point of sale.  
xv.   Complete the design drawing for all service-related facilities not
otherwise contemplated herein.   xvi.   Prepare and submit fire and seismic
protection plans for accommodated facilities.

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     II. Site Clearing and Site Grading Events Within the Development Areas.

          A. Upon notice from Developer of the issuance of a grading permit, and
prior to site clearing, Nuevo, with the cooperation of Operator, shall, after
the receipt of the NTP on a Segment-by-Segment basis, in accordance with the
work associated with the Program Segment as further set out in Attachment 4 to
the PAPA:

i.   “Shut in” the appropriate wells as necessary; and all appurtenant service
lines and pipelines for such wells will be drained, flushed and marked in place.
  ii.   Disassemble and remove the surface facilities for such wells (test
bubbles, manifolds, valves, etc.).   iii.   Remove all well site equipment
associated with such wells.   iv.   Remove all of Operator’s surface and
subsurface power lines and transformers.   v.   Relocate, as necessary, power
lines, pipelines and facilities to service wells located outside of the
Development Areas.   vi.   Cause all identified wells impacted by grading to be
clearly marked.   vii.   Commence well abandonment operations for those wells
that are to be permanently abandoned. Identify and isolate any contaminated
soils associated with the wells for remediation as called for in the approved
Remedial Action Plan. Soils not meeting the criteria for placement in deep
fills, if any, will be removed from the site for appropriate disposal.   viii.  
Remove and crush all well cellars associated with the wells to be abandoned and
accommodated; the concrete will be crushed, and stockpiled for later placement
by Developer.   ix.   Maintain full authority over the cleanup and remediation
operations for any crude oil released as a result of Developer’s performance.
All such costs shall be for the account of Developer.   x.   Provide Developer
with copies of all inspection records and reports and test results for any
contaminated soils associated with the well work.

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          B. Upon the issuance of a grading permit, Developer at Developer’s
cost shall, on a Segment-by-Segment basis, in accordance with the work
associated with the applicable Program Segment as further set out in Attachment
4 to the PAPA:

i.   Provide construction staking to define the limits of the area to be cleared
and developed.   ii.   If not previously commenced, notify the appropriate
Governmental Agencies and all interested parties of the commencement of the
soils remediation program as required under the approved Remedial Action Plan.
(This assumes that the majority of the soils remediation efforts will occur
during the grading operations, and will utilize a modified direct burial
approach.)   iii.   Coordinate grading with Nuevo, such that the scheduled
sequence of wells to be shut-in or abandoned, as appropriate, is consistent with
Developer’s grading program.   iv.   Provide notice to the grading contractor as
to the well locations and the necessity of avoiding wells during the clearing
and grading operation(s).   v.   Cause a comprehensive health and safety plan to
be prepared and submitted to Nuevo and Operator and all the appropriate
Governmental Agencies prior to commencement. The plan shall cover both grading
and remediation activities.   vi.   If not previously remediated by Nuevo during
the soils remediation process of those sites that are set out in Attachment 4 to
the PAPA as Developer’s responsibility, remediate (at Developer’s cost) those
specific sites requiring remediation identified in the approved Remedial Action
Plan that lie within Development Areas or within the grading area adjacent to
the Development Areas including exhuming and remediating the contaminated soils
which it shall also isolate and stockpile for placement by the Developer in deep
fills during the phased grading operation in accordance with the approved
Remedial Action Plan. Soils not me meeting the criteria for placement in deep
fills, if any, will be removed by Developer (at Developer’s cost) from the site
for appropriate disposal.   vii.   At all times comply with the mitigation
measures of the Final Tonner Hills EIR, and the requirements, as applicable, of
the USF&WS Resource Management Plan.

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          C. During grading, Nuevo shall, on a Segment-by-Segment basis, in
accordance with the Work associated with the applicable Program Segment as
further set out in Attachment 4 to the PAPA:

i.   Identify and isolate any contaminated soils associated with the wells for
remediation as called for in the approved Remedial Action Plan. Isolated soils
meeting the criteria of the approved Remedial Action Plan will be stockpiled for
placement in deep fills by Nuevo. Soils not meeting the criteria will be removed
from the site for appropriate disposal.   ii.   Provide Developer with copies of
well abandonment reports for all well abandonment activities completed as
provided to and from CDOGGR.   iii.   Design the final Facilities Plan in
accordance with the Street and Utility Improvement Plans provided by Developer.
  iv.   Relocate temporary service lines serving the oil operations as may be
necessary.

          D. During grading, on a Segment-by-Segment basis, in accordance with
the phasing plan, Developer shall:

i.   Prepare and process the Precise Area Plans and Level B Tentative Maps
through the appropriate Governmental Agencies, showing the final lot layout and
the Joint Use and Exclusive Use Areas to be retained around the wells remaining
in operation. The Precise Area Plans will clearly identify all wells to be
abandoned, and identify all abandoned wells that will require methane venting in
accordance with the requirements of the Orange County Fire Authority and other
appropriate Governmental Agencies.   ii.   Grade the Development Areas in
accordance with the approved Grading Plan.   iii.   Immediately notify Nuevo and
Operator in the event Developer excavates any unidentified previously abandoned
wells. Developer shall promptly reabandon such wells in accordance with the
requirements of all appropriate Governmental Agencies.   iv.   Place soils
stockpiled as a result of Developer’s remediation activities within deep fills
in accordance with the criteria established within the approved Remedial Action
Plan. The location and constituency components of these soils will be

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    detailed and reported in the final grading report prepared by the Developer.
  v.   Install all required erosion control devices in accordance with the
approved Grading Plan, ensuring that storm runoff will be diverted from the
area(s) affected by the Program.   vi.   At all times comply with the General
Construction Activity Stormwater Permit.   vii.   Based upon the approved
Precise Area Plans, provide Nuevo and Operator with grade elevations and staking
for all wells.   viii.   Prepare the grading plans (“Grading Plans”) and process
them for approval by the appropriate Governmental Agencies.   ix.   Prepare the
final Street and Utility Improvement Plans and process them for approval by the
appropriate Governmental Agencies. The Street and Utility Improvement Plans will
identify the oil production service facilities as provided by Operator’s
Facilities Plan.   x.   Prepare the Level B Final Maps and process them for
approval by the appropriate Governmental Agencies, and record such maps at the
County Recorder’s office. The Level B Final Maps will identify all Exclusive and
Joint Use Areas.   xi.   Identify and dispose of any previously unidenified oil
production facilities or third party facilities uncovered during the course of
the grading operation.   xii.   Cleanup and remediate any crude oil released
during the course of the grading operations according to standards approved by
the appropriate Governmental Agency.   xiii.   Prepare a final soils and
geological report on the Development Areas and obtain from the appropriate
Governmental Agency, a final compaction certificate relating thereto, within
sixty (60) days of completion of grading for each phase.   xiv.   Reabandon or
otherwise accommodate, if necessary, any unidentified wells or facilities within
the Development Area in accordance with CDOGGR specifications and requirements.

     E. During grading, Developer and Nuevo shall cooperate with each other in
the implementation of the Program, as follows:

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i.   Design of the Precise Area Plans, Level B Tentative and Final Maps and
final Street and Utility Improvement Plans to avoid conflicts between the oil
production service facilities and the utilities required to service the
Development Areas; Nuevo shall have the reasonable right of approval in event of
design conflicts.   ii.   Design the Precise Area Plans to ensure that all Joint
and Exclusive Use Areas necessary for the wells and facilities are shown to the
Parties and meet all Parties’ joint satisfaction.   iii.   Identification and
differentiation of naturally-occurring tar seep or oil-bearing sands from crude
oil released as a result of oil operations; provided that unless Developer and
Nuevo can conclusively determine that such contamination resulted from ongoing
production activity, such contamination shall be presumed to be from
naturally-occurring tar seep or oil-bearing sands.

     III. Post-Grading Events:

          A. Upon completion of Grading within the Development Areas, on a
Segment-by-Segment basis in accordance with the approved phasing plan, Nuevo
shall:

i.   Cause all abandoned wells within the Development Areas to be capped below
those grades provided by Developer in accordance with CDOGGR and the
requirements of the EIR, Planned Community Text and Area Plan. Final inspections
of such wells shall be conducted by CDOGGR.   ii.   Cause all appropriate
pumping equipment to be installed within the Exclusive Use Areas.   iii.  
Complete all oil production service facilities to be installed to service the
producing and injection wells. Service lines will be connected to the new site
and Tank Farm.   iv.   Install permanent pipelines and facilities as determined
by Nuevo in its discretion as required for Operator’s continued operations in
accordance with grading operations.   v.   Provide as-built drawings to
Developer and Operator showing the line and grade for all installed facilities.
  vi.   Install seismic monitoring devices as required by the mitigation
measures in the Final Tonner Hills Environmental Impact Report.

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          B. Upon completion of the GRADING within the Development Areas, on a
phase-by-phase basis in accordance with the approved phasing plan, Developer
shall:

i.   Install the utility systems in accordance with the approved Street and
Utility Improvement Plans.   ii.   Install the street improvements in accordance
with the approved Street and Utility Improvement Plans. Such Plans shall make
provision for oil field related facilities to the extent deemed necessary by
Nuevo to operate wells in the Development Areas. The utility and street
improvements are anticipated to take four months beyond the completion of
grading.   iii.   Install oil facility screening devices in accordance with the
requirements of, and plans approved by, the appropriate Governmental Agencies.  
iv.   Provide construction staking for the installation of Operator’s wells,
pipelines and facilities within the Development Areas.   v.   Construct methane
gas vents over abandoned oil wells as may be necessary to accommodate the
housing development.   vi.   Construct all required active and passive methane
mitigations as required by the Final Tonner Hills Environmental Impact Report,
the Orange County Fire Authority or other Governmental Agency.

          C. Upon completion of grading within the Development Areas, Developer
and Nuevo shall cooperate with each other to:

i.   Develop Homebuyer notification language to be supplied by Developer to
future surface purchasers with respect to the past and continuing oil
operations. State Proposition 65 language will be included in any Homebuyer
notification.   ii.   Develop Homebuyer notification language for inclusion
within the Division of Real Estate Public Report, Grant Deed or Covenants,
Conditions and Restrictions, as may be appropriate or required as to the
placement of remedial soils within the deep fills.   iii.   Satisfy any EIR
mitigation measures regarding the past and continuing oil operations.   iv.  
Obtain a conditional case closure letter from the County of Orange Health Care
Agency, Division of Environmental Health for the approved Remedial Action Plan.

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     2.3 Developer Improvements and Additional Payments. It is understood and
agreed that Developer shall have the primary responsibility for and shall, at
its sole cost and expense, complete all work required to accomplish the
“Developer Improvements” including: (a) soil remediation, (b) relocation of
third party easements and licenses (TPEL), (c) all matters to the extent
allocated to Developer in Sections 2.1 and 2.2, hereof, (d) Mass/Grading
operations in the best commercial manner and completion of such operations in
the shortest time but, in all cases, within the time duration set out for the
activity in Attachment 4 to the PAPA, so as to minimize the disruption of
Operator’s remaining Oil Operations, (e) after Final Acceptance by Developer of
the completed work, Developer shall be solely responsible for all maintenance,
repair, replacement, removal, and reinstallation of such completed work for
which Developer assumes Developer’s Liability and for any liability as a result
thereof or pertaining thereto. Developer shall bear the cost of future
relocation of such work requested by Developer and performed by Operator.
Developer shall fully cooperate with Nuevo and Operator in the implementation of
the Program. Developer shall (i) timely process all of its permit requests;
(ii) comment on all applicable submittals of specifications or plans within five
business days; and (iii) make all facilities available for accommodation under
the Program such that Nuevo may commence the Project Segment. To the extent that
Developer fails to fully and timely cooperate with Nuevo and Nuevo incurs
penalties, damages or incremental costs in performing the Program, such penalty,
damage or cost shall be the responsibility of Developer and Developer hereby
agrees to indemnify and hold Nuevo harmless therefrom. Developer shall also be
liable to Operator for any and all incremental cost or expense incurred by
Operator in the performance of its work in the Program as a result of
Developer’s (or Nuevo’s, if acting on behalf of Developer) failure to fully and
timely perform and complete Developer’s Improvements. Developer shall use good
faith, commercially reasonable efforts to timely and expeditiously perform its
obligations and rights under the PAPA in a manner that minimizes the
interruption or curtailment of production and shall be liable to and indemnify
Operator for all losses resulting from the failure to do so.

          2.3.1 Processing Costs – Employee Costs. Operator and Nuevo agree not
to charge Developer for their employees or overhead costs allocable to such
employees in the processing of the Governmental Approvals.

          2.3.2 Operator Improvements. Nuevo shall submit to Operator the
preliminary and final detailed design and engineering of all facilities,
pipelines and well accommodation plans (“Operator Improvements”) when completed.
Operator shall have ten (10) business days to review and comment on the plans.
All final decisions with respect to the plans including pipeline and facility
locations, use of new, refurbished or salvaged equipment and materials and the
staging of the work to be performed shall be made by Nuevo in the exercise of
its reasonable discretion and in a manner consistent with customary oil field
practices. Should Operator request changes or modifications to the design and
engineering of Operator Improvements other than changes or modifications
required by applicable law or governmental regulations and should Nuevo
determine that such modifications can be incorporated into the Program within
the time duration specified in Attachment 4 to the PAPA, Nuevo shall make such
modification provided that Operator prepays all incremental costs associated
with such modification. Operator shall not request a modification to the wells
or well classifications set out in Schedule B

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to Attachment 4 to the PAPA without first obtaining the written approval of
Developer. Incremental costs associated with such well changes, if any, shall be
pre-paid by Operator.

          2.3.3. Governmental Modifications. Should the Program be modified to
reflect changes that result from decisions of Governmental Entities, court
orders or settlement of litigation or by agreement such that fewer wells are
accommodated, abandoned, or less infrastructure is removed or altered, then
Nuevo shall have no obligation or duty of any kind or character with respect to
such wells or facilities that are removed from the Program.

     Section 3. Condition of the Property (Disclosures); Compliance with Project
Requirements; Development Costs, Taxes and Assessments; Insurance; Indemnities;
Retained Obligations.

     3.1 Disclosures. Buyer expressly acknowledges the following:

          3.1.1 The Land contains open space with special habitat species and
vegetation which may be adversely affected by human intrusion or mismanagement.

          3.1.2 The Land is subject to, and has been designated as subject to
certain hazard zones (“Zones”). The Zones are listed on Exhibit “E” of the
Agreement.

          3.1.3 The Olinda/Olinda Alpha landfill operates near the northeastern
boundary of the Land.

          3.1.4 Unocal Gas Plant. That (a) the Land contains certain real
property that was formerly used by Unocal as a gas plant for the commercial
production of natural gas, (b) the Unocal gas plant has been shut down and its
operations discontinued, (c) Seller has caused the areas surrounding the Unocal
gas plant to be cleaned up and remediated (“clean-up”) pursuant to a remedial
action plan established by Orange County Health Care Agency (“OCHCA”) which has
issued a Closure Letter indicating its inspection and acceptance of such
remediation efforts, (d) Buyer has received and reviewed to its satisfaction the
Closure Letter and other written materials concerning the Unocal gas plant, its
operation and the clean-up as part of the Information and (e) Seller does not
warrant, represent or guarantee that the Unocal gas plant or surrounding areas
are free from contamination or any other conditions whatsoever, as a result of
its operations or otherwise. Notwithstanding the above, this acknowledgement is
not meant to alter (or obviate) in any way the duties, obligations and/or
liability of Developer under the PAPA with regard to the Unocal gas plant, to
the extent such gas plant site is within the Development Areas.

          3.1.5 Faults. Buyer acknowledges that Seller has made Buyer aware that
there are earthquake and other faults which exist on, under, in or near the
Land. Further, Buyer acknowledges that there may be faults, unknown to Seller,
which exist on, under, in or near the Land.

          3.1.6 Lessees on the Property. Buyer acknowledges that there are (a)
surface leases on a portion of the Land between Seller, as successor to Unocal,
and Brea Green Recycling, Inc., dated February 1, 1997, and with Haynes
Apiaries, dated December 29, 1992 for the keeping of bees, (b) an oil and gas
lease bordering a portion of the Property Minerals

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between Seller and Aera Energy LLC, commonly referred to as the Indenture, as
amended, by and between Unocal and Columbia Oil Producing Company, dated
February 26, 1901 (Buyer has been provided copies of such leases), (c) that
other, permanent easements may be granted in connection with the Project and
(d) that other temporary and permanent easements may be granted to Aera Energy
for development infrastructure and pipelines.

     3.2 Compliance with Project Requirements. Buyer understands and agrees that
it must and shall (a) subject to the PAPA, conduct its Oil Operations, complete
the Program (at no cost to Buyer), and use the Property Interests, and
(b) subject to the PAPA, hold, own, possess, use, and conduct its Oil Operations
in cooperation and conjunction with the Developer’s ownership, use, possession
and conduct of operations and work upon and in connection with the Land,
Development Areas and Project; and, in any event, with respect to (a) and (b),
in strict compliance with any governmental approvals or entitlements for the
Land and Project by any Governmental Agency, and all laws, statutes, ordinances,
orders, regulations, rules and notices therefrom and/or relating to such
approvals or entitlements.

     3.3 Development Costs, Taxes and Assessments. Except as specifically
provided to the contrary in the PAPA regarding the Program or elsewhere in the
Development Documents, after the Effective Date, Buyer shall, at its sole cost
and expense, pay and be responsible for all costs and expenses, of every nature
whatsoever, incurred in the use of the Property Interests and in conducting the
Oil Operations as follows:

          3.3.1 Only as same may apply to the Minerals and Oil Operations, Buyer
shall be responsible for all costs and expenses incurred in and associated with
he processing and maintenance of the Governmental Approval Documents and
Governmental Approvals described in the Agreement.

     3.4 Insurance.

          3.4.1 Insurance Types. From and after the date hereof and continuing
after the Close, Buyer shall, at its sole cost and expense, as required by the
Agreement, maintain in full force and effect with companies satisfying the
requirements specified below, the following insurance:

                    3.4.1.1 Comprehensive General Liability Insurance. Buyer
shall maintain Comprehensive or Commercial General Liability Insurance on an
“occurrence” basis, and excess umbrella coverage, with a combined single limit
for bodily injury and property damage of at least Fifteen Million Dollars
($15,000,000), covering the following:

                              3.4.1.1.1 Operations, Independent Contractors and
Products and Completed Operations (which Buyer shall maintain in effect on at
least an annual renewal basis) for as long as Buyer or its assignees own said
Property Interests;

                              3.4.1.1.2 Owners’ and Contractors’ Protective
Liability;

                              3.4.1.1.3 Severability of Interest and Cross
Liability clauses;

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                              3.4.1.1.4 Contractual Liability covering all the
provisions, rights and obligations under the Development Documents, including
without limitation, coverage for Buyer’s contractual indemnities in the
Agreement;

                              3.4.1.1.5 Personal Injury and Explosions, Collapse
and Underground Hazards (X, C, U);

                              3.4.1.1.6 Broad Form Property Damage Liability,
including completed operations.

     The limits of liability of the insurance coverage specified in this
subsection may be provided by any combination of primary and excess liability
insurance policies.

                    3.4.1.2 Automobile Liability Insurance. Buyer shall maintain
owned, hired and non-owed automobile liability insurance covering all use of all
automobiles, trucks and other motor vehicles utilized by Buyer in connection
with the requirements or obligations specified in any Development Document with
a combined single limit for bodily injury and property damage of Five Million
Dollars ($5,000,000.00).

          3.4.2 Waiver of Subrogation. Buyer hereby waives all rights against
Seller and the Indemnitees (as that term is defined below in Section 3.5.1), but
not the Developer, for damages caused by fire and other perils and any other
risk.

          3.4.3 Additional Insured. Seller shall be included as an additional
insured under the coverage specified in Section 3.4.1 above with the following
provisions included within each applicable policy: “It is understood and agreed
that coverage afforded by this Policy shall also apply to Nuevo Energy Company
(“Seller”) and Torch Energy Advisors Inc. and Torch Operating Company
(collectively, “Torch”), and their members, partners and their constituent
members, their parent companies, subsidiaries, and all of their respective
officers, directors, shareholders, agents, representatives, employees and
professional consultants, and all of their respective successors and assigns, as
additional insureds, but only with respect to legal liability or claims caused
by, arising out of or resulting from the acts or omissions of the named insured
or others performing acts on behalf of the named insured in connection with
their ownership and use of the Property Interests and the conduct of Oil
Operations. This insurance is primary and any other insurance by such additional
insureds is non-contributing with this insurance as respects claims or liability
arising out of or resulting from the acts or omissions of the named insured, or
of others performing on behalf of the named insured.”

          3.4.4 Insurance Policies. Each insurance policy required under this
Section shall:

                    3.4.4.1 Be issued by insurance carriers licensed and
approved to do business in California, having a general rating of not less than
an “A-” and financial rating of not less than “VIII” in the most current Best’s
Insurance Report;

                    3.4.4.2 Contain a provision that the policy shall not be
subject to material alteration to the detriment of Seller or Buyer or
cancellation without at least thirty (30) days prior written notice given to
Seller by registered mail;

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                    3.4.4.3 Provide that such policy or policies and the
coverage evidenced thereby are primary and Seller’s insurance is noncontributing
with such primary coverage; and,

                    3.4.4.4 Contain severability of interest and cross liability
clauses.

     Buyer may provide the insurance described in this Section in whole or in
part through a policy or policies covering other liabilities and projects of
Buyer; provided, however, that any such policy or policies shall (a)
specifically allocate to the Agreement the full amount of insurance required
hereunder and (b) be subject to, without limitation, and contain, permit or
otherwise unconditionally authorize the waiver contained in subsection above;
and provided further that any such policy or policies shall not otherwise dilute
or impair the rights of Seller or in any way negate the requirements of the
Agreement.

          3.4.5 Evidence of Insurance. As confirmation and evidence of each type
of insurance coverage required by Section 3.4.1 and Section 20 hereof, Buyer
shall satisfy the following requirements:

                    3.4.5.1 Buyer shall provide Seller with policy binder
letters (with cost quotes) by the Close for each type of insurance coverage,
confirming the subject coverage is in place and effective as of the Close;

                    3.4.5.2 Buyer shall comply with all payment obligations of
each type of insurance, as specified in the subject policy quote/binder;

                    3.4.5.3 Buyer shall comply with all terms and conditions of
each subject quote/binder that require additional information be provided to he
insurer prior to binding;

                    3.4.5.4 In addition to binder letters, Seller shall be
provided with certificates issued by Buyer’s insurance carrier acceptable to
Seller showing such policies in force for the specified period. Such evidence
shall be delivered to Seller promptly upon execution of the Agreement. Seller
has the right to review certified policies as it may deem necessary with respect
to that insurance provided for in Section 20. Evidence of any renewal insurance
including specifically without limitation, the products and completed operations
insurance, shall be delivered to Seller not less than thirty (30) days after the
expiration date on the term of the policy. The policy certificate for the
insurance provided for in Section 20 shall be subject to reasonable approval by
Seller. Should any policy expire or be cancelled before the expiration of the
Agreement, or such later period as Buyer is required to carry such insurance as
set forth herein, and Buyer fails immediately to procure other insurance as
specified, Seller, upon ten (10) days written notice to Buyer, shall have the
right, but shall have no obligation, to procure such insurance and to charge
Buyer with one hundred percent (100%) of the cost to Seller of procuring such
insurance. Buyer shall pay Seller any such amount within ten (10) days of
written demand therefor.

          3.4.6 Damages. Nothing contained in these insurance requirements is to
be construed as limiting the type, quality or quantity of insurance Buyer should
maintain or the extent of Buyer’s responsibility for payment of damages or
discharging other Buyer obligations arising under the Development Documents.

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          3.4.7 Seller’s Election to Insure. Should Buyer fail to do so, Seller
reserves the right, but shall have no obligation, to procure the insurance, or
any portion thereof. As provided above, Seller shall notify Buyer if Seller
exercises its right, whereupon Buyer’s responsibility to carry such duplicative
insurance shall cease. Seller further reserves the right at any time, with
thirty (30) days notice to Buyer, to require that Buyer resume the maintenance
of any insurance for which Seller has elected to become responsible pursuant to
this Section 3.4.7.

          3.4.8 Contractors. Buyer shall not permit any architect, engineer,
contractor, subcontractor or materialmen to commence work on or relating to the
Property Interests (and Oil Operations) until such parties have complied with
Buyer’s customary insurance requirements. Buyer shall use “commercially
reasonable” efforts to cause each such party to name Seller and Torch as
additional insureds to such party’s general liability insurance policies. Buyer
shall also include Seller and Torch in any indemnity provisions with such
parties for defense and indemnification to the same extent Buyer is defended and
indemnified.

     3.5 Release and Indemnity.

          3.5.1. Buyer’s Indemnity. Except as specifically provided to the
contrary in the PAPA and in Sections 3.5.3 and 3.5.5 below, to the maximum
extent permitted by law, Seller, Torch and their members, partners and their
constituent members, their parent companies and subsidiaries and their
employees, officers, directors, shareholders, and respective successors and
assigns, other than subsequent Developers of the Development Areas whose
indemnity obligations are governed by the Development Declaration and the PAPA,
(collectively, the “Indemnitees”) shall not be liable for any Losses (as defined
in Section 3.5.7 below) arising out of, caused by, relating to or alleged to
have arisen from, been caused by or related to:

  (a)   the Activities (as defined in Section 3.5.7 below), including:

  (i)   the use of the Property Interests by Buyer, or Buyer’s Representatives,
including for Oil Operations,     (ii)   a defect in the design or construction
of or any material in any structure or other improvement at, relating to or in
connection with the Property Interests or Oil Operations, or in any Work
performed by Buyer or Buyer’s Representatives,     (iii)   the condition of the
Property Interests including any earthquake or other faults, or other natural
hazards, disclosed or undisclosed, and any defect in soils or the preparation of
soils prior to the date hereof by any entity,     (iv)   the presence or
existence of any Hazardous (or toxic) Substances (including any methane gas
and/or tar seeps), materials or waste (including any landfill) in, or on the
soil or groundwater at, relating to or in connection with the Property
Interests, and including the release, use,

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      generation, discharge, storage, disposal or clean-up of any Hazardous
Substance to, on, in or from the Property Interests or in connection with Oil
Operations, or any residual contamination therefrom affecting any natural
resource or the environment, including any Environmental Law or other law,    
(v)   claims made by third parties for matters at, relating to or in connection
with the Activities,     (vi)   any act or omission of Buyer or Buyer’s
Representatives,     (vii)   any accident or casualty at, relating to or in
connection with the Activities,     (viii)   any material breach of a
representation of Buyer in Section 3.1C, of the Agreement,     (ix)   a
violation or alleged violation by Buyer or Buyer’s Representatives of any law
now or hereinafter enacted including any breach by Buyer or Buyer’s
Representatives of an Environmental Law or the assertion of any Hazardous
Substance Claim not caused by, or the responsibility of, Developer as described
in the PAPA, including the violation, or alleged violation by Buyer or Buyer’s
Representatives of any statute, ordinance, notice, order, rule, regulation,
permit, judgment or license relating to the use, generation, release, discharge,
storage, disposal or transportation of any Hazardous Substance in, on, under or
about, to or from the Property Interests or in connection with Oil Operations,
and     (x)   any other cause whatsoever at, relating to or in connection with
the Property Interests or Oil Operations, Buyer’s use of the Property Interests
or conduct of Oil Operations or Buyer’s performance under the Development
Documents (including its covenants, representations and warranties made pursuant
thereto);

  (b)   The negligence or willful misconduct of Buyer (or any of Buyer’s
Representatives) in connection with the Activities, as specified in (a), above;
    (c)   The default by Buyer of any of its obligations under the Development
Documents, including those matters specified in Section 3.2 hereof, and/or any
material breach of the representation(s) and warranties made therein;

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  (d)   The application of the principles of strict liability with respect to
any act or omission of Buyer or Buyer’s Representatives or any Indemnitee at,
relating to or in connection with the Activities, as specified in (a), above.

          3.5.2 Releases and Indemnity. As a material part of the consideration
of the Agreement, Buyer hereby releases the Indemnitees from and waives on its
behalf, and on behalf of its successors and assigns, all the Losses described in
Section 3.5.1, and agrees to indemnify, defend and hold harmless Seller and all
of the Indemnitees and their property from all such Losses whether incurred or
made by Buyer, Seller, any Indemnitee (or any third parties/person(s)). The
foregoing release, waiver, indemnity and obligation to defend and hold harmless
shall apply to any claim or action brought by a private party or by a
Governmental Agency or entity under any statute or common law now or hereinafter
in effect and is intended to apply with respect to the Losses described in
Section 3.5.1, whenever they may occur. The foregoing release, waiver, indemnity
and obligation to defend and hold harmless, and any similar covenants by Buyer
elsewhere in the Development Documents, are intended to apply to the Losses
described in Section 3.5.1, incurred directly by Seller or any Indemnitee, or
their property, as well as by Buyer, or any third party, or their property.

          3.5.3 Limitation on Indemnity-Seller’s Actions. Notwithstanding
anything to the contrary above, nothing contained in this Section shall operate
to relieve any Indemnitee to the extent of any Losses found by a court of
competent jurisdiction to have been caused solely by the reckless or willful
behavior, gross negligence or the intentional misconduct of such Indemnitee.

          3.5.4 Buyer’s Acknowledgment. BUYER ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY ITS LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

     BUYER BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHT
IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTE OR COMMON LAW
PRINCIPLE OF SIMILAR EFFECT.

BUYER’S INITIALS             SELLER’S INITIALS

          3.5.5 Limit on Buyer’s Indemnity. The indemnity and the release
contained in this Section 3.5 shall not apply to the extent arising from or
related to:

  (a)   any material breach by Seller of its representations set forth in
Section 3.1 B and its covenants set forth in Section 3.1 D of the Agreement,

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  (b)   civil or criminal penalties imposed upon Seller for Activities before
the Close, but not paid,     (c)   taxes delinquent before the Close, but not
paid,     (d)   royalty payments owed before the Close, but not paid,     (e)  
any Losses or obligations of Seller resulting from or relating to the employment
relationship between Seller and any of Seller’s present or former employees or
the termination of any such employment relationship, including without
limitation personal injury, matters relating to employee health, severance pay
and other similar benefits, if any, and any claims on behalf of any such present
or former employee relating to the employment or termination of employment of
any such employee by Seller prior to the Closing, including without limitation
any claim for wrongful discharge, breach of contract, unfair labor practice,
employment discrimination, unemployment compensation, or workers’ compensation
or any Losses or obligation of Seller in respect of any agreement, trust, plan,
fund, or other arrangement under which benefits or employment is provided for
any of Seller’s present or former employees,     (f)   any Losses to the extent
incurred by Buyer or third parties as a result of Seller’s negligence or willful
misconduct in the performance of its Work under the Program or PAPA prior to
Final Acceptance,     (g)   any Losses arising from or related to matters which
arise from or are related to the duty or obligation of the Developer under the
PAPA,     (h)   any Losses arising from or related to the Development Areas
except those resulting from Oil Operations and the Activities of Buyer’s
Representatives,     (i)   any Losses (less the applicable deductible) to the
extent Seller’s preexisting insurance policy provides a legal defense and
coverage of a claim; Seller shall assert and pursue the claim for payment under
the policy in a commercially reasonable manner irrespective of whether the
insurance company initially denies it and any recovery shall reduce the extent
of Buyer’s Indemnity (provided however that Seller shall only be required to
initiate litigation, arbitration or other formal controversy after written
notice from Buyer, and only (x) to the extent of a “good faith” claim and (y) if
all costs and expenses are paid by Buyer); and,

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  (j)   any Losses relating to Seller’s offsite disposal of Hazardous
Substances.

          3.5.6 Construction Entities. Notwithstanding the above, nothing
contained herein shall obviate or nullify in any way Buyer’s rights granted in
Section 3.2 to assert claims against the construction entities hired by Seller
to perform Work at, relating to, or in connection with the Property Interests,
Oil Operations, or under the Development Documents and affecting or relating to
the Property Interests or Oil Operations pursuant to a written contract
(“Construction Entities”).

          3.5.7 Definitions. As used in the Agreement, the terms listed below
shall have the following meanings:

                    “Activities” for purposes of this Section 3.5 shall mean and
include Oil Operations, the Property Interests, the development or use of the
Property Interests or Oil Operations, the performance of any Work at, relating
to or in connection with the Property Interests or Oil Operations, the
construction, use, sale or other conveyance of improvements at, relating to or
in connection with the Property Interests or Oil Operations, and/or any defect
in any such Work, or the Property Interests, or the conduct of Oil Operations.

                    “Buyer’s Representatives” for the purposes of this
Section 3.5 shall mean Buyer’s contractors, or their respective subcontractors,
agents, employees, licensees, invitees or representatives, or any other parties
directly or indirectly employed by any one of the foregoing or reasonably under
the control of any of the foregoing or for whose acts any of the foregoing may
be liable (collectively, “Buyer’s Representatives”), but excluding Seller’s Work
under the Program prior to Final Acceptances and/or Developer’s Work under the
Program or otherwise.

                    “Losses” for the purposes of this Section 3.5 shall mean any
and all claims, demands, actions, suits, proceedings, causes of action, loss,
liability, damage (including sickness, disease and/or death and other
consequential damage), cost (including cleanup costs), expense, injury,
deficiency, fine, penalty, punitive damage or expense, of any kind or character,
to any person or property (including third parties), tangible or intangible,
fixed or contingent, presently known or unknown, whether resulting from
occurrences prior to, on the date of or after the Closing, including
compensation for lost wages, business income, profits or other economic loss,
damage to natural resources or the environment, nuisance, pollution,
contamination, leak, spill, release or other adverse effect on the environment,
court costs and attorneys’ fees (collectively, “Losses”).

                    “Environmental Laws” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601, et
seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6901, et seq., the Toxic Substances Control Act, 15 U.S.C.
Sections 2601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
1801 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Safe
Drinking Water and Toxic Enforcement Act of 1986 (Cal. H&S Code
Sections 25249.5-25249.13), the Carpenter-Presley-Tanner Hazardous Substance
Account Act (Cal. H&S Code Sections 25300 et seq.), and the Porter-Cologne Water
Quality Control Act, California Water Code Sections 13000, et seq., the
California Health and Safety Code generally and any and all

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other present and future federal, state or local laws (whether under common law,
statute, ordinance, rule, regulation or otherwise), permits, orders,
determinations, notices and any other requirements of Governmental Agencies
relating to the environment or to any Release, Hazardous Substance or Hazardous
Substance Activity, as heretofore or hereafter amended from time to time.

                    “Hazardous Substance” means (a) any chemical, compound,
material, mixture or substance that is now or hereafter defined or listed in, or
otherwise classified pursuant to, any Environmental Law as a “hazardous
substance,” “hazardous material,” “hazardous waste,” “extremely hazardous
waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or “EP toxicity” and (b) ash
produced by a resource recovery facility utilizing a municipal solid waste
stream. Oil and natural gas are expressly excluded from the definition of
Hazardous Substances.

                    “Hazardous Substance Activity” means any actual, proposed or
threatened storage, use, holding, existence, Release, emission, discharge,
generation, processing, abatement, removal, disposition, handling,
transportation or clean-up of any Hazardous Substance from, under, into or on
the Property Interests or surrounding property or in connection with the Oil
Operations; provided, however, that the use, installation, storage and
maintenance, in compliance with all applicable laws, ordinances, orders,
regulations and notices of Governmental Agencies, of materials reasonably
necessary and normally used in the development or use of the Property Interests
or in connection with the Oil Operations in the ordinary course of its business
as contemplated in the Development Documents, shall not be considered a
Hazardous Substance Activity.

                    “Hazardous Substance Claims” shall mean any and all
enforcement, investigation, clean-up, removal or other Governmental Agency
notices, actions, proceedings of any kind or nature, or orders threatened,
instituted or completed pursuant to any Environmental Law, together with all
claims made or threatened by any third party against Buyer, Developer (to the
extent arising out of, relating to or in connection with Developer’s activities
and work regarding the Program), Seller, the other Indemnitees or the Property
Interests or Oil Operations, relating to damage, construction, cost recovery
compensation, loss or injury resulting from any Hazardous Substance.

          3.5.8. Notice. Each party shall promptly notify the other in writing
of claims arising out of any of the matters described in this Section 3.5. If
the claim is a Hazardous Substance Claim, the notifying party shall provide the
other with copies of all communications with federal, state and local
governments or Governmental Agencies.

     3.6 Seller’s Indemnity. To the maximum extent permitted by law, Buyer and
its members, partners and its constituent members, parent companies and
subsidiaries and their employees, officers, directors, shareholders, and all of
their respective successors and assigns, (collectively, the “Buyer-Indemnitees”)
shall not be liable for, and Seller indemnifies and agrees to defend
Buyer-Indemnitees for, any Losses (as defined in Section 3.5) to the extent
arising from and/or relating to the Retained Obligations listed on Exhibit “F3”
to the Agreement;

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provided, however, should the East Naranjal Tank Farm not be demolished within
ten (10) years, this provision shall not apply as to the East Naranjal Tank
Farm.

                    Notwithstanding anything to the contrary above, nothing
contained in this Section shall operate to relieve any Buyer-Indemnitee to the
extent of any such Losses found by a court of competent jurisdiction to have
been caused solely by the reckless or willful behavior, gross negligence or the
intentional misconduct of such Buyer-Indemnitee.

     3.7 Survival of Covenants.

          3.7.1 All of Buyer’s indemnification, defense and hold harmless
covenants and limitations on Buyer’s obligations in any of the Development
Documents, including without limitation the covenants in the Section hereof
entitled “Release and Indemnity” and Buyer’s obligation to maintain completed
operations insurance pursuant to the Section hereof entitled “Insurance” shall
survive the Sale or Transfer of Seller or of the Property Interests and/or Oil
Operations pursuant to Section 19 hereof.

          3.7.2 All of a party’s indemnification, defense and hold harmless
covenants shall be binding on such party (or any permitted assignee) until the
last to occur of (a) such date as any action against the indemnified party is
absolutely barred by the applicable statute of limitations or (b) such date as
any action asserted prior to limitations for which indemnification is claimed
under said Section is fully and finally resolved. Neither payment nor a finding
of liability or of an obligation to defend shall be a condition precedent to the
enforcement of any indemnity or duty to defend provision herein or elsewhere in
any Development Document.

          If any action or proceeding shall be brought against any indemnified
party alleging any fact or circumstances for which a party is to provide
indemnification, Buyer such party, upon notice from such indemnified party,
shall defend the same at Buyer’s its sole cost and expense.

          3.7.3 Neither Buyer nor Seller shall assert a statute of limitations
defense to its obligation to defend and indemnify an indemnified party hereunder
(or as otherwise required by the Development Documents) until after three years
from the assertion of any claim, so long as the indemnified party notifies the
indemnifying party of any such known claim within three years of discovery of
the claim.

     3.8 Retained Obligations Under Hover Agreement. Seller shall,
notwithstanding the sale to Buyer of the Property Interests hereunder, continue
to be responsible for and bear the cost of implementing those Retained
Obligations that impact the Property Interests or the Oil Operations (set forth
under Exhibit “F2”) under the Hover Agreement. Buyer shall, among other matters,
make its Property Interests reasonably available to permit Seller to plug and
abandon the wells and make the modifications of the facilities set out in
Exhibit “F2.” Buyer shall cooperate fully with Seller’s efforts to implement the
Retained Obligations at no out-of-pocket expense to Buyer.

     Section 4. Natural Hazard Zones. Seller has submitted to Buyer and Buyer
acknowledges that it has received, read and approved the natural hazard zones
(“Natural Hazard Zones”) disclosure materials attached as Exhibit “E,” which
have been provided by First American Title Company. Buyer agrees that Seller has
thereby fully discharged all of its

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obligations to Buyer, if any, under California law with respect to Natural
Hazards Zones disclosures.

     Section 5. Release. Declarant may release any portion of the Covered
Property from this Development Declaration at any time and for any reason with
the prior approval of Buyer, not unreasonably withheld.

     Section 6. Enforcement: Assignment By Declarant.

     (a) A default under any Development Document shall be a default hereunder.
Declarant shall have all rights and remedies herein as prescribed in the
Development Documents including the sole right to enforce by proceedings at law
or in equity, all Restrictions now or hereafter imposed by the provisions of
this Development Declaration or any amendment hereto, specifically including the
right to prevent the violation of any such Restrictions and the right to recover
damages or other compensation for such violation. Failure by Declarant to
enforce any Restriction herein contained in any certain instance or on any
particular occasion shall not be deemed a waiver of such right on any future
breach of the same or any other Restriction by Buyer. All rights, options and
remedies of Declarant specified in the Development Documents and this
Development Declaration are cumulative, and no one of them shall be exclusive of
any other, and Declarant shall have the right to pursue any one or all of such
rights, options and remedies or any other remedy or relief which may be provided
by law, whether or not stated in this Development Declaration.

     (b) In addition to and without limiting the foregoing, Declarant may assign
any of its rights and powers under this Development Declaration to any Successor
(as that term is defined in Subsection 13(d) below) so long as such person or
entity agrees in writing to assume the duties of Declarant pertaining to the
particular rights and powers assigned. Upon the recordation of such writing
accepting such assignment and assuming such duties, such assignee (“Successor”),
to the extent of such assignment, shall have the same rights and powers and be
subject to the same obligations and duties as are given to and assumed by
Declarant herein. Without limiting the generality of the foregoing, Declarant
may make such assignments as to the entire Covered Property or to any portion
thereof.

     Section 7. Amendments. Except as provided in this Development Declaration
concerning (a) assignment by Declarant of its rights under this Development
Declaration, (b) reacquisition of the Covered Property by Declarant, and (c)
addition of descriptions and/or depictions of Benefitted Property (all for
which, Declarant may unilaterally amend this Development Declaration), this
Development Declaration may only be amended by a writing executed by Declarant
and Buyer, which amendment shall be recorded against the Covered Property.

     Section 8. Captions. The captions used herein are for convenience only and
are not a part of this Development Declaration and do not in any way limit or
amplify the terms and provisions hereof.

     Section 9. Governing Law. This Development Declaration shall be governed by
and construed under the laws of the State of California.

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     Section 10. Arbitration/Attorneys’ Fees. Except for the right of either
party to apply to a court of competent jurisdiction for temporary restraining
orders, preliminary injunctions, writs of attachment, writs of possession or
other equitable or provisional relief, any controversy, dispute or claim of any
kind or nature arising out of, in connection with, or in relation to the
interpretation, performance or breach of the Agreement (including the indemnity
obligations contained herein), any Development Document and/or the use or
development of the Land, Property Interests or Oil Operations, including,
without limitation, any claim based on contract, tort or statute, shall be
settled by final and binding arbitration by three (3) arbitrators in accordance
with the Rules of the American Arbitration Association then in effect (the
“Rules”). Each party shall, in accordance with the Rules, nominate one (1)
arbitrator to the arbitrational tribunal and the two (2) arbitrators so
appointed shall appoint the third arbitrator in accordance with the Rules, the
three (3) arbitrators constituting the arbitration tribunal. The arbitration
shall be held in Orange County, California. Reasonable discovery shall be
allowed in connection with such arbitration. At the request of a party, the
arbitration tribunal may issue orders for interim relief as deemed necessary to
safeguard property that is the subject of the arbitration or in order to
accomplish the objectives of the Agreement. Such interim measures may also be
sought from judicial authority having jurisdiction. The decision of the majority
of the arbitrators shall be reduced to writing, shall be the sole and exclusive
remedy between the parties regarding any and all such disputes or differences,
and shall be final and binding on all parties to the arbitration; and,
application may be made to any court of competent jurisdiction for an order of
enforcement and shall be enforceable in any court of competent jurisdiction. The
parties agree to exclude any right of application or appeal to the courts of any
jurisdiction in connection with any questions of law arising in the course of
arbitration or with respect to any award made, except for enforcement purposes.
Consequential, punitive, or incidental or other similar damages shall not be
allowed.

     In the event any such arbitration (or other proceeding) is brought to
enforce or interpret any of the covenants, terms or provisions of the Agreement,
any Development Document and/or use or development of the Land, Property
Interests or Oil Operations, the prevailing party in any and all such
arbitration(s) or other proceeding(s), including any bankruptcy proceedings,
shall be entitled to recover from the non-prevailing party all of the attorneys’
fees and costs incurred by such party in each and every such arbitration or
other proceeding, including any and all appeals or petitions therefrom. As used
in the Agreement, attorneys’ fees shall be deemed, to the extent allowed by law,
to mean the full and actual costs of any legal services actually performed in
connection with the matters involved, calculated on the basis of the usual fee
charged by the attorneys performing such services, and shall not be limited to
“reasonable attorneys’ fees” as defined in any statute or rule of court.

     Section 11. Severability. In the event that any portion of this Development
Declaration shall become illegal, null or void or against public policy, for any
reason, or shall be held by any court of competent jurisdiction to be illegal,
null or void or against public policy, the remaining portions of this
Development Declaration shall not be affected thereby and shall remain in force
and effect to the full extent permissible by law.

     Section 12. Gender and Number. In this Development Declaration (unless the
context requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.

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     Section 13. Covenants to Run with the Land: Term; Unilateral Amendment for
Program.

     (a) The Covered Property shall be held, developed, conveyed, hypothecated,
encumbered, leased, rented, used and occupied subject to the Restrictions. The
Restrictions are intended and shall be construed as covenants and conditions
running with and binding the Covered Property and servitudes upon the Covered
Property and every part thereof, and all and each of the Restrictions shall be
binding upon and burden all persons having or acquiring any right, title or
interest in the Covered Property (during their ownership of such interest), or
any part thereof, and their successors and assigns. The Restrictions shall inure
to the benefit of the Benefitted Property and the owners of the Benefitted
Property, and their successors and assigns; and the Restrictions shall be
enforceable by Declarant and its Successors, all upon the terms, provisions and
conditions set forth herein.

     (b) This Development Declaration shall continue in full force and effect
for a term of sixty (60) years from the date it is recorded in the Office of the
County Recorder of Orange County, California.

     (c) This Development Declaration shall, upon recordation in the Office of
the County Recorder of Orange County, California of a notice of termination
executed by Declarant, automatically terminate and be of no further force or
effect as to any portion of the Covered Property reacquired by Declarant (as to
which Declarant has not assigned its rights and obligations hereunder to a
Successor), whether by grant deed, lot line adjustment or otherwise, but the
Restrictions shall continue to apply as to the remainder of the Covered
Property.

     (d) In the event that any portion of the Benefitted Property is conveyed by
Declarant to a third party which acquires such portion, as a Developer, for the
purpose of developing it as a part of the Project (each parcel of the Benefitted
Property so transferred is hereinafter referred to as a “Transferred Parcel”),
the Restrictions shall continue to benefit such Transferred Parcel unless the
deed conveying the Transferred Parcel from Declarant to the transferee or a
separate recorded document executed by Declarant, with the prior written
approval of Buyer not unreasonably withheld, expressly states that the benefits
of the Restrictions do not run with the Transferred Parcel (by specific
reference to this Development Declaration). Any portion of the Benefitted
Property which is conveyed for other purposes shall not continue to benefit from
the Restrictions unless the deed or other instrument of conveyance expressly so
states. Any owner of any Transferred Parcel hereunder is referred to herein as a
“Successor.” Any merger of Declarant with or into another entity or any
acquisition of all or a portion of the stock or equity of Declarant by a third
party will not be deemed a transfer of the Benefitted Property triggering the
applicability of this Subsection 13(d).

     (e) Buyer’s reasonable approval with respect to the matters contained in
this Section 13 and in Section 7 (Amendments), hereof (for example, for the
purpose of making the Program compatible with the well abandonment and
accommodation program to be agreed to by Declarant in its transfers of its
interests in the Benefitted Property, from time-to-time, referenced in Section
4.6 of the Agreement), shall be given prior to the issuance of the last Final
Acceptance in the Program so long as any such conveyance of a Transferred Parcel
or amendment or modification does not (i) materially, adversely affect Buyer’s
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account Buyer’s prior agreement to, and acceptance of, the Program and/or (ii)
cause a material diminution in Buyer’s “bargained for exchange” in the
Transaction, as evidenced in the Development Documents, including with
specificity, those matters set forth in the PAPA regarding the Program.

     Section 14. Notices.

     If to Nuevo:

         

  Nuevo Energy Company    

  1021 Main, Suite 2100    

  Houston, Texas 77002    

  Attn:   David A. Leach

  Fax:   (713) 374-4899

  Phone:   (713) 374-4802

  Email:   leachd@nuevoenergy.com
 
       

  and    
 
       

  Attn:
Fax:
Phone:
Email:   George B. Nilsen
(713) 374-4981
(713) 374-4973
nilseng@nuevoenergy.com

     Copy to:

         

  Ullom Associates    

  16149 Redmond Way, Suite 401    

  Redmond, Washington 98052    

  Fax:   (425) 836-2870

  Phone:   (425) 836-2728

  Email:   ullomjw@aol.com
 
       

  Nossaman, Guthner, Knox & Elliott, LLP    

  18101 Von Karman Avenue, Suite 1800    

  Irvine, California 92612-1047    

  Attn:   William P. Tanner, III

  Fax:   (949) 833-7878

  Phone:   (949) 833-7800

  Email:   wtanner@nossaman.com

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     If to Buyer:

     
BlackSand Energy, Inc.
or
BlackSand Partners, L.P.
1801 Broadway, Suite 600
Denver, Colorado 80202

   
Attn:
  Tim Collins
Fax:
  (303) 296-0329
Phone:
  (303) 296-1908
Email:
  timdenver@aol.com

     Copy to:

     
Kent G. Snyder, Esq.
2212 Dupont Drive, Suite B
Irvine, California 92612

   
Fax:
  (949) 833-8209
Phone:
  (949) 833-9078
Email:
  ksnyder@winstarmail.com

     Notice may also be given by facsimile transmission (“Fax”) to any party at
the respective Fax number given above or by email, provided receipt of such
transmission shall be confirmed by follow-up notice within seventy-two (72)
hours by another method authorized above. Any party hereto may from time to
time, by written notice to the other, designate a different address which shall
be substituted for the one above specified. If any notice or other document is
sent by mail as aforesaid, the same shall be deemed served or delivered
seventy-two (72) hours after the mailing thereof as above provided. Notice by
any other method shall be deemed served or delivered upon actual receipt at the
address or Fax number listed above.

     Section 15. Effect of Declaration. This Development Declaration is made
solely for the purposes set forth herein and in the Development Documents.
Declarant makes no warranties or representations, express or implied, as to the
binding effect or enforceability of all or any portion of this Development
Declaration, or as to the compliance of any of these provisions with public
laws, ordinances and regulations applicable thereto.

     Section 16. Rights of Mortgagees. The breach of any Restrictions shall not
defeat, invalidate nor impair the obligation or priority of any mortgage or deed
of trust now or hereafter executed and constituting a lien upon the Covered
Property or any portion thereof, which is made in good faith and for value;
provided, however, that any party, including the holder or beneficiary of the
mortgage or deed of trust (except for Declarant), which acquires title through
private or judicial foreclosure, trustee’s sale or deed in lieu of foreclosure
(a “Foreclosure-Purchaser”) and all successors and assigns of such Foreclosure-
Purchaser shall take title subject to all of the Restrictions contained in this
Development Declaration. Such Foreclosure-Purchaser shall not be liable for
damages arising from the breach of any Restrictions performed or which were to
have been performed prior to the time such Foreclosure-Purchaser acquires title
to all or any portion of the Covered Property, and the Foreclosure-Purchaser
shall

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have until six (6) months after acquisition of title to all or a portion of the
Covered Property to correct any default under, or violation of a provision of,
the Development Documents.

     Section 17. Waiver of Jury Trial. As set forth in the Agreement, Declarant
and Buyer have each acknowledged that it has had the advice of counsel of its
choice with respect to rights to trial by jury under the constitutions of the
United States and the State of California. Both Declarant and Buyer expressly
and knowingly waive and release all such rights to trial by jury in any action,
proceeding or cross or counterclaim brought by either party against the other on
any matters arising out of or in any way connected with this Development
Declaration, the Development Documents, Buyer’s use or development of the
Covered Property and/or any claim for injury or damage.

     Section 18. No Agency or Partnership.

     18.1 Buyer and Seller expressly acknowledge and agree that they are not
joint venturers, partners, or agents of each other and do not have fiduciary
duties with respect to one another, in any manner whatsoever, in the acquisition
or conveyance of the Property Interests or Oil Operations. Neither anything in
the Agreement or in any other Development Document, nor any communication or
other action between the parties relating to the Property Interests or Oil
Operations, is intended or shall be construed to create a joint venture,
partnership, agency or fiduciary relationship between Buyer and Seller or their
respective owners, regardless of any common identity of ownership in Seller and
Buyer.

     18.2 The Agreement does not create any third party beneficiary status.

     Section 19. Assignment of Agreement. Subject to Section 26, either Seller
or Buyer may assign its rights and interests under the Agreement, with the
exception that Buyer may only assign the entire Agreement or effect the Sale or
Transfer of all of (or undivided interests in) the Property Interests, and,
Seller, without the written consent of Buyer, may not assign its rights under
Exhibit “I” with respect to the Program. In the event of any assignment
authorized by this Section 19, Seller and Buyer expressly agree that (a) any
such assignee shall assume in writing all of assignor’s obligations under the
Agreement which are the subject of the assignment, as more fully described in
Section 26, and (b) the assignor will reimburse the non-assigning party for all
reasonable costs and expenses it incurred in connection with any such assignment
including all reasonable attorneys’ fees and other costs incurred in preparing
and/or reviewing assignment documentation.

     ANY ATTEMPTED ASSIGNMENT MADE IN VIOLATION OF THIS SECTION SHALL BE VOID.

     Section 20. Stand Alone Insurance.

          20.1 Policy Requirements. As a separate and distinct matter, not
covered by the insurance requirements assumed by Buyer and contained elsewhere
in the Agreement, Buyer shall obtain a single premium, ten-year term,
“stand-alone” environmental insurance policy (“SA Insurance”) to cover a portion
of the risks described in Section 3.5 hereof having a combined total limit of
Twenty Million Dollars ($20,000,000), with a self-insurance retention of Two
Hundred Fifty Thousand Dollars ($250,000); and, at least the following:

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                    (a) The insurance company is rated at least A- VIII in the
latest Best’s Report;

                    (b) Buyer, Seller and Developer (and all the Indemnitees)
are Named Insureds;

                    (c) First party clean-up and third party claims, both
on-site and off- site, are covered on a “claims made” basis, to the extent
“occurrence” based insurance is not available in the marketplace;

                    (d) Personal and bodily injury, property damage, health,
nuisance (e.g., from odor) and diminished property value on and off the Property
Interests are covered;

                    (e) Unknown (“Unknown”), pre-existing conditions are
covered, including underground storage tanks;

                    (f) No third party claim is necessary to trigger coverage
for occurrences arising from Unknown, pre-existing conditions; and, defense and
indemnity is available therefor, including coverage for the assertions of
Governmental Agencies, any Developer and any Home Owners’ Association (including
internal costs, bonds to release liens and attachments, appeal bonds, pre and
post judgment interest);

                    (g) There is no “retroactive” time limitation on coverage;

                    (h) Cancellation may be effected only to the limited extent
of specific Named Insured non-compliance; and

                    Buyer and Seller shall pay the premium for such policy at
the time of issuance, as follows:

         
Seller
    50 %
Buyer
    50 %

                    To the extent any insurance payment under such a policy of
SA Insurance is applied to reduce any liability imposed as a result of such a
risk (or Buyer’s indemnity in Section 3.5), Buyer’s payment obligations pursuant
to Section 3.5 shall be reduced proportionately; provided however, that such SA
Insurance and/or payment shall not otherwise dilute Buyer’s obligations under
such Section 3.5, or the Indemnities specified therein.

          20.2 Documentation. Any person or entity that is obligated to perform
remediation work under the PAPA shall use commercially reasonable efforts to
obtain a No Further Action Letter or such other, comparable documentation from
the appropriate Governmental Agency as is necessary to avoid any exclusion for
known pollution conditions under the SA Insurance Policy. As soon as such
documentation is obtained, such person or entity shall promptly furnish same to
the insurer under the SA Insurance Policy.

     Section 21. Further Assurances and Cooperation. Each of the Parties shall
execute and deliver all additional papers, documents and other reasonable
assurances, and shall do all

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acts and things reasonably necessary in connection with the performance of its
obligations hereunder to carry out the intent of the Agreement, including
Seller’s obligation to make the Contingent Payment as defined in Section 23, and
shall cooperate with the other Party after the Close, to ensure a smooth
transition from Seller to Buyer regarding the ownership, possession and use of
the Property Interests and for Oil Operations, including without limitation, the
following: (a) Buyer shall provide access and make available to Seller, during
normal business hours, upon forty-eight (48) hours notice, for copying of the
Knowledge, but only including financial and accounting documents and information
relating to Seller’s prior ownership, use and possession of the Property
Interests and Oil Operations, among other things, in order to (i) submit any
reports to or filings with any Governmental Agency (including taxing
authorities), (ii) wind up its business activities with respect to the Property
Interests and Oil Operations and (iii) continue its general, corporate
operations in the ordinary course of its business, and (b) Seller shall provide
reasonable assistance to Buyer in assuming the Oil Operations, without however,
being required to spend money, participate in any formal controversy including
litigation or arbitration or spend excessive employee or consultant time and
effort in so doing.

     Section 22. Continuing Seller Interests. To ensure the performance by Buyer
(and its successors and assigns to all or an undivided interest in the Property
Interests), of its obligations under the Agreement, any Sale or Transfer
(including hypothecation) of all or a portion of the Property Interests or
recording of claims against the Property Interests shall be made expressly
subject to the rights of Seller under the Agreement, including the Development
Declaration. THIS PROVISION SHALL BE INCLUDED IN THE GRANT DEED AND ANY
SUBSEQUENT DEED OR CONVEYANCING INSTRUMENT FOR ANY OF THE PROPERTY INTERESTS, IN
PERPETUITY.

     Section 23. Unocal Asset Purchase Agreement. With the exception of the
payment of the “Contingent Payment” to Unocal as set forth below, Buyer hereby
accepts and assumes all of Seller’s rights, duties and obligations, of every
nature and type whatsoever, under, in or relating to the Unocal Asset Purchase
Agreement to the extent they relate to the Property Interests. The obligation to
pay to Unocal the “Contingent Payment” (referenced and defined at Section 2.1 of
the Unocal Asset Purchase Agreement) is specifically retained by Seller;
provided, however, that Buyer hereby covenants and agrees to provide necessary
information to Seller in a timely fashion so that it may calculate the amount of
the Contingent Payment. The information to be provided to Seller shall consist
of and shall be submitted as follows:

          (a) The information is set forth in Section 2.1 of the Unocal Asset
Purchase Agreement and shall be calculated based upon data from the Brea Olinda
field only.

          (b) The information shall relate to the following calendar years: 2003
and 2004. Buyer shall provide such information to Seller, within ten (10) days
of a written request therefor. Furthermore, within two (2) days of a Seller
request, Buyer shall make its relevant records available for inspection by
Seller during normal business hours at Buyer’s office. The matters contained in
the preceding sentence are in addition to, and not in limitation of, the
provisions of Section 21.

     Section 24. Unavoidable Delay. Any prevention, delay or stoppage in the
completion of Declarant’s or Buyer’s Improvements as defined in Exhibit “I”
caused by Force Majeure as

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defined therein in Section 2.1.8.1 or by acts of God, war, riot, civil
insurrection, inability to obtain labor or materials or reasonable substitutes
therefor, or other similar matters or causes beyond the reasonable control of
the responsible party (“Unavoidable Delay”) shall extend the time within which
the Development Documents require certain acts to be performed for a period or
periods equal to any period of such Unavoidable Delay, but not to exceed in the
aggregate eighteen (18) months; provided, however, that nothing in this Section
shall excuse the performance of any act rendered difficult solely because of the
financial condition of a party. Furthermore, in no event shall any extension of
any period of time be deemed to have occurred unless a party shall have given
written notice to the other within fifteen (15) days following the commencement
of any such delay, setting forth the facts giving rise to such extension.

     Section 25. Waiver. Release, and Indemnities: Limitations Under the PAPA.
The waiver, release and indemnities given by Buyer herein with respect to Losses
and Environmental Losses are subject to any contrary provisions regarding Seller
Work to be performed under the PAPA (but as also limited by such contrary
provisions). The provisions of the PAPA shall prevail in the event of any
conflict between that agreement and the indemnity provisions in Section 3.5 of
the Agreement.

     Section 26. Notice on Approved Transfer . Buyer shall notify Seller in
writing ten (10) days prior to any Transfer permitted by Section 19 hereof, by
(a) identifying the transferee; (b) specifying its relation to Buyer and/or
Buyer’s parent or related entity and Buyer’s ownership interest therein; if any,
and (c) by providing Seller with such Transferee’s written Assumption of
Obligations (in the form attached to the Agreement as Exhibit “J”) of all
Buyer’s obligations hereunder relating to the portion of the Property Interests
being transferred.

     Section 27. Assumption of Obligations. The undersigned acknowledge and
agree that they have received valuable consideration for executing the
Assumption of Obligations and assuming all the obligations of Buyer under the
Agreement (including specifically without limitation those obligations in
Sections 3.2, 3.4, 3.5, 3.7, 5.28 and 5.29 thereof) as the beneficiary of (a)
the further transfer of Property Interests, (b) the assignment provisions in
Section 19 and (c) otherwise in connection with the recitals, covenants and
promises between Seller and Buyer in the Agreement, and in exchange therefor,
hereby assume, in addition to and not in lieu of the assumption by Buyer of all
its duties and obligations under the Agreement, all of Buyer’s duties and
obligations under the Agreement; provided, however, that each of the
undersigned’s potential liability to Seller pursuant to the Assumption of
Obligations shall be limited, to the value and extent of the Property Interests
held by such undersigned entity, except to the extent of any insurance, surety
or other third party proceeds, contributions and/or liability from which they
may benefit relating thereto and which they hereby agree to pursue in each
instance with best efforts on behalf of Seller.

     This assumption of obligations shall not apply to an undersigned which does
not actually come into possession of any Property Interests; however, the
assumption shall specifically apply to any successor in interest, assignee, or
grantee. To the extent an undersigned conveys or assigns any of its prospective
or actual interests or rights in or to the Property Interests, the undersigned
shall require any such successor in interest or assignee to agree in writing to
the assumptions of obligations set forth herein.

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     Without in any way limiting the effect of the Indemnity Sections or of any
other obligation, liability, responsibility or indemnity of Buyer under the
Agreement, the following shall apply with respect to the Assumption of
Obligations by the undersigned (jointly and severally, “Undersigned”) regarding
the Indemnities of Buyer in favor of Seller against Losses in Section 3.5 of the
Agreement (“Release and Indemnity Section”):

     (1) In the event of any mediation, arbitration, reference proceeding,
litigation or any other dispute resolution method, procedure and/or endeavor
(“Indemnity Controversy”) for which defense and indemnity may be claimed by
Seller against Buyer, Seller may demand defense and indemnity from any or all of
the Undersigned, at Seller’s sole discretion. Upon such demand, the Undersigned
to whom such demand is made shall immediately tender to Seller defense and
indemnity pursuant to the terms of the Agreement.

     (2) In any Indemnity Controversy, Buyer and/or any or all of the
Undersigned may make a written request of any trier of fact (“Trier”) therein
for a specific, special finding (“Finding”) that any liability of Seller for
which defense and indemnity applies under the Agreement shall be identified and
allocated in whole or in part by such Trier, in its sole discretion, to all or
any of the Undersigned and Buyer. For purposes of the Assumption of Obligations,
a “Finding” does not occur and is not effective until there is a final judgment
or other final, non-appealable resolution of the dispute concerning the
Allocation.

     (3) In the event a Finding is made pursuant to the Assumption of
Obligations, Buyer and the Undersigned shall have the responsibility to Seller,
from the date of the Finding forward, for only their portion of the Allocation.
In the absence of a Finding or prior to the effectiveness of a Finding, Buyer
and the Undersigned shall be jointly and severally responsible for the full
amount of liability of Seller for which defense and indemnity applies under the
Agreement. In no event shall Buyer or the Undersigned have the right to recover
from Seller any defense and/or indemnity payments made to Seller under the
Assumption of Obligations or the Agreement.

     To the extent any disputes arise between or among Buyer, the Undersigned,
or any of them, regarding the matters described in the Assumption of
Obligations, Buyer and the Undersigned shall resolve such disputes among
themselves. Any such disputes shall not be a matter for which Seller shall be
concerned or in which Seller shall be a party or participant, or have any
liability whatsoever.

     IN WITNESS WHEREOF, Declarant has executed this instrument the day and year
first hereinabove written.

              NUEVO ENERGY COMPANY, a Delaware
corporation
 
       

  By:  

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      George B. Nilsen

  Title: Senior Vice President

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              BLACKSAND PARTNERS, L.P., a Texas limited partnership
 
       

  By: BLACKSAND ENERGY, INC., a Delaware corporation 
 
       

  Title:  General Partner   
 
       

    By:

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      Timothy Collins

    Title:  President

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State of California
    )  
 
    )  
 
       
County of Orange
    )  

     On _______________ before me, ____________________, personally appeared
______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
 

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State of California
    )  
 
    )  
 
       
County of Orange
    )  

     On _______________ before me, ____________________, personally appeared
______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
 

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DEVELOPMENT DECLARATION

ATTACHMENT “1”

LEGAL DESCRIPTION OF THE LAND

 

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DEVELOPMENT DECLARATION

ATTACHMENT “2”

LEGAL DESCRIPTION OF THE COVERED PROPERTY (MINERALS)

 

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DEVELOPMENT DECLARATION

ATTACHMENT “3”

LEGAL DESCRIPTION OF THE BENEFITTED PROPERTY
(SURFACE FEE INTEREST IN THE LAND)

 

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DEVELOPMENT DECLARATION

ATTACHMENT “4”

TPEL

 

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DEVELOPMENT DECLARATION

ATTACHMENT “1”

LEGAL DESCRIPTION OF THE LAND

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THOSE PORTIONS OF SECTIONS 1 AND 12. TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOOTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2'' X 4'' POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2''
X 4'' POST MARKED 20.60. IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS
TO A 4'' X 4'' POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO
A 2'' X 4'' POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST
55.48 CHAINS TO A 2'' X 4'' POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0°
30' EAST 20.00 CHAINS TO A 2'' X 4'' POST IN MOUND WITH PITS; THENCE NORTH 89°
45'' EAST 134.63 CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS UPON
THE EASTERN BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG
SAME NORTH 4° WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION OIL
COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY OF
THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA TO
GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK 44,
PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF THE
AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF
CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET AND BREA
CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73° 32' 24''
WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE AT SAID
POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16'' EAST), A
DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0° 10' 11''
EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49'' EAST A DISTANCE OF 500
FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE SOUTH 0°
10' 11'' WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49'' WEST A DISTANCE
OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION TO UNION OIL COMPANY OF CALIFORNIA, A
CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44, PAGE
250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50'' WEST ALONG SAID LINE 3131.98 FEET
FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED
BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11'' WEST 529.60 FEET TO
A 2'' X 2'' STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE
NORTH 85° 48' 16'' WEST, 380.00 FEET TO A 2'' X 2'' STAKE; THENCE NORTH 4° 11'
44'' EAST 1750.00 FEET TO A 2'' X 2'' STAKE; THENCE SOUTH 85° 48' 16'' EAST
380.00 FEET TO A 2'' X 2'' STAKE; THENCE SOUTH 4° 11' 44'' WEST 1750.00 FEET TO
A 2'' X 2'' STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18" E 381.48' ” ON SAID RECORD OF SURVEY NO.
2001-1007; THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF
PARCEL MAP NO. 86-243, SOUTH 60°42'49'' EAST 43.00 FEET TO THE TRUE POINT OF
BEGINNING;

THENCE NORTH l0°42'00'' EAST 141.00 FEET
THENCE NORTH 15°02'00'' EAST 103.00 FEET
THENCE NORTH 26°29'00'' EAST 105.00 FEET

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THENCE NORTH 46°26'07'' WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18'' E 381.48' ”;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18'' E 381.48' ” ON SAID RECORD OF SURVEY NO.
2001-1007; THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF
PARCEL MAP NO. 86-243, SOUTH 60°42'49'' EAST 43.00 FEET TO THE TRUE POINT OF
BEGINNING;

THENCE NORTH 10°42'00'' EAST 141.00 FEET
THENCE NORTH 15°02'00'' EAST 103.00 FEET
THENCE NORTH 26°29'00'' EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE
NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “ N10°33'18'' E 381.48' ”;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF CALIFORNIA,
A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44,
PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50'' WEST ALONG SAID LINE 3131.98
FEET FROM

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THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED BY
UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11'' WEST 529.60 FEET TO A
2'' X 2'' STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE
NORTH 85° 48' 16'' WEST, 380.00 FEET TO A 2'' X 2'' STAKE; THENCE NORTH 4° 11'
44'' EAST 1750.00 FEET TO A 2'' X 2'' STAKE; THENCE SOUTH 85° 48' 16'' EAST
380.00 FEET TO A 2'' X 2'' STAKE; THENCE SOUTH 4° 11' 44'' WEST 1750.00 FEET TO
A 2'' X 2'' STAKE AND THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘Al’ SITE DEPICTION ”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(SEAL) [h12901h1290152.gif]
  PREPARED BY: THE KEITH COMPANIES UNDER
THE DIRECTION OF:   -s- KATHLEEN SUSAN TETREAULT [h12901h1290153.gif]
 
   

KATHLEEN SUSAN TETREAULT P.L.S. 7297
MY LICENSE EXPIRES 12/31/2004  
 
January 31, 2003

  JN: 13207.00

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ATTACHMENT 2

TO EXHIBIT L

(Description of Covered Property/Minerals)

The following described real property situated in the County of Orange, State of
California (“Property”):

  A.   SCHEDULE 1 (Property Minerals):         Any and all oil, oil rights,
minerals, mineral rights, natural gas rights and other hydrocarbons by
whatsoever name known, geothermal steam and all products derived from any of the
foregoing (hereinafter collectively referred to as, the “Minerals”) described in
Schedule No. 1 (“Property Minerals”), attached hereto and incorporated herein by
this reference; together with the perpetual right, as limited herein, of
drilling, exploring and operating thereof and storing in and removing the same;
        EXCEPTING AND RESERVING, the Minerals lying from the surface to five
hundred feet (500’) below the surface of the Property Minerals and Buyer shall
have no rights to drill for, explore, operate, store or remove the Minerals from
said reserved interval. Provided, however, Buyer shall have the right of
subsurface entry through said interval to explore, operate, store or remove the
Minerals lying below five hundred feet (500’) from the surface of the Property
Minerals;         SUBJECT TO those certain conditions and restrictions for
surface use set forth in the Environmental Impact Report No. 518, SCH No.
2001031137 for the Tonner Hills Planned Community, dated April 2002, approved by
the Board of Supervisors for Orange County, California as the lead agency on
November 19, 2002; Planned Community ZC-01; Development Agreement 2001-01;
Tonner Hills Area Plan; and that certain Biological Opinion dated December 30,
2002, as used by the U.S. Army Corps of Engineers in its Section 404 Permit. The
foregoing documents, inclusive of any amendments thereto, are collectively
referred to herein as the “Project”; and subject to that certain oil and gas
lease titled “Indenture” dated February 26, 1901, as amended, by and between
Union Oil Company of California and Columbia Oil Producing Company;         IT
IS FURTHER PROVIDED, THAT Buyer shall limit its operations within Planning Areas
Number 1 through 8 (as the same is defined and described in the Project) to be
in accordance with the Project and the provisions of that certain Payment and
Performance Agreement of even date herewith by and between Seller and Buyer. In
said Payment and Performance Agreement,

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      Buyer’s producing operations in the aforedescribed Planning Areas shall be
limited to the following existing wells, to wit: East Naranjal Wells Numbered
26, 46, 79, 89, 90, 147, 148, 150, 151, 153, 221, 232, 285, 288, 292, 294, 217
RD2, 247, 87, 180, 211, 230, 259, 276, 281 and 293.     B.   SCHEDULE 2
(Adjacent Minerals):         All Minerals described in Schedule No. 2 (“Adjacent
Minerals”), attached hereto and incorporated herein by this reference;        
EXCEPTING THEREFROM, the right to drill, mine, store, explore or operate on the
surface or through the upper five hundred feet (500’) of the subsurface of the
property described on Attachment 2:         SUBJECT TO, the provisions and
conditions set forth on that certain Grant Deed dated October 3, 2001 by and
between Seller and Brea Walden, LLC, recorded on October 9, 2001 as Instrument
No. 20010710856 in the Official Records of Orange County, California.     C.  
SCHEDULE 3 (District Minerals):         All Minerals described in Schedule No. 3
(“District Minerals”), attached hereto and incorporated herein by this
reference;         EXCEPTING THEREFROM, the right to drill, mine, store, explore
or operate through the surface or the upper 500 feet of the subsurface of the
property described in Attachment 3;         SUBJECT TO, the provisions and
conditions set forth in that certain Gift Deed dated January 30, 2003, by and
between Seller and Brea-Olinda Unified School District and recorded on
February 25, 2003, as Instrument No. 2003000207265 in the Official Records of
Orange County, California.     D.   SCHEDULE 4 (Other Minerals):         All
Minerals lying below the surface of the real property described in
Schedule No. 4 (“Other Minerals”), attached hereto and incorporated herein by
this reference.

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SCHEDULE NO. 1
TO
ATTACHMENT 2

LEGAL DESCRIPTION OF PROPERTY MINERALS

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SCHEDULE “1”

THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40, RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133. PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE. ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2" X 4" POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO A
4" X 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 20.00 CHAINS TO A 2" X
4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39" EAST 55.48 CHAINS
TO A 2" X 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30" EAST 20.00
CHAINS TO A 2" X 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45" EAST 134.63
CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION OIL
COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY OF
THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA TO
GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899. RECORDED JUNE 20, 1899 IN BOOK 44,
PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF THE
AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF
CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET AND BREA
CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73° 32' 24"
WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE AT SAID
POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16" EAST), A
DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0° 10' 11"
EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE OF 500
FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE SOUTH 0°
10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A DISTANCE
OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF CALIFORNIA,
A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44.
PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE 3131.98
FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING
MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST
529.60 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48' 16" WEST, 380.00 FEET TO A 2" X 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716. PAGE 437 OF OFFICIAL RECORDS. IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579. PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214. PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' ” ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;

THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

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THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OP PARCEL MAP-NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18"E 381.48' ”;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18" E 381.48’ ” ON SAID RECORD OF SURVEY NO.
2001-1007; THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF
PARCEL MAP NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF
BEGINNING;

THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18"E 381.48' ”;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33' 18" WEST 381.48 FEET TO THE TRUE
POINT OP BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED FROM
THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF CALIFORNIA,
A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN BOOK 44,
PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE 3131.98
FEET FROM

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THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED BY
UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° .48' 11" WEST 529.60 FEET TO A
2" X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE NORTH
85° 48' 16" WEST, 380.00 FEET TO A 2" X 2" STAKE; THENCE NORTH 4° 11' 44" EAST
1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85° 48' 16" EAST 380.00 FEET TO A
2" X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST 1750.00 FEET TO A 2" X 2" STAKE AND
THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘A1’ SITE DEPICTION “, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(SEAL) [h12901h1290152.gif]
  PREPARED BY: THE KEITH COMPANIES UNDER
THE DIRECTION OF:

(-s- KATHLEEN SUSAN TETREAULT) [h12901h1290153.gif]

KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004
 
 

January 31, 2003
JN: 13207.00

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SCHEDULE NO. 2
TO
ATTACHMENT 2

LEGAL DESCRIPTION OF ADJACENT MINERALS

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SCHEDULE 2

Description of Adjacent Interests

     All of that real property, and all real property rights and interests,
described in those certain Exceptions and Reservations unto Grantor, Paragraphs
A through E, appearing on pages 1 and 2 of, and in all the Attachments to, the
grant deed (“Walden Deed”) from Grantor to BREA WALDEN, LLC, a California
limited liability company, as grantee, dated October 3, 2001, and recorded in
the Official Records of Orange County, California on October 9, 2001 as
Instrument No. 20010710856. A conformed copy of the Walden Deed is appended
hereto for convenience only, as Attachment 1 to Schedule 2.

Attachment 2

 

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ATTACHMENT 1 TO

SCHEDULE 2

Schedule 1 to Attachment 2

 

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GRANT DEED

     FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
NUEVO ENERGY COMPANY, a Delaware corporation (“Grantor”), hereby grants to BREA
WALDEN, LLC, a California limited liability company (“Grantee”), the following
described real property (“Land” or “Property”) in the County of Orange, State of
California:

     See Attachment No. 1 which is incorporated herein by this reference.

     EXCEPTING AND RESERVING UNTO GRANTOR, its successors and assigns together
with the right to grant and transfer all or a portion of the same, as follows:

     A. All oil, oil rights, minerals, mineral rights, natural gas rights and
other hydrocarbons, of every type and nature, by whatsoever name known,
geothermal steam and all products derived from any of the foregoing, that may be
within or under the Land, together with the perpetual right of drilling, mining,
exploring and operating therefor and producing, storing in, injecting water,
gases and/or other substances (for secondary and/or tertiary recovery
operations) into, or to use other techniques, whether now known or unknown, and
removing, taking, treating and selling the same from said Land or any other land
(including the Adjacent Parcel, as shown on Attachment “2”), and including the
right to whipstock or directionally drill and mine from lands other than the
Land (including the Adjacent Parcel, as shown on Attachment “2”), oil or gas
wells, mines, tunnels and shafts into, through or across the subsurface of the
Land, and to bottom such whipstocked or directionally drilled wells, mines,
tunnels and shafts under and beneath or beyond the exterior limits thereof, and
to relocate, replace, redrill, retunnel, work, rework, complete, recomplete,
equip, maintain, repair, remove, change the size of, increase the number of,
deepen and operate any such wells or mines; but, except as set forth id C, D and
E below, without the

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right to drill, mine, store, explore or operate through the surface or the upper
500 feet of the subsurface of the Land.

     B. Any and all water, water rights or interests therein appurtenant or
relating to the Land or owned or used by Grantor in connection with or with
respect to the Land (no matter how acquired by Grantor), whether such water
rights shall be riparian, overlying, appropriative, littoral, percolating,
prescriptive, adjudicated, statutory, contractual or otherwise derived, together
with the right and power to explore, drill, redrill, remove and store the same
from or in the Land or to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by Grantor; but without, however
any right to enter upon the surface of the Land in the exercise of such rights.

     C. An exclusive, subsurface easement and nonexclusive surface easement
(“Corridor Easement”) on, over and under the Land for ingress, egress and access
to and from, and the construction, installation, maintenance, replacement,
repair, removal, reconstruction and other uses (collectively, “uses”) of
(a) electric, gas, telephone, water, sewer, drainage, and all other wet and dry
utilities, (b) cable television and other telecommunications and/or data
transmission lines and facilities, and (c) pipelines and other uses and
facilities in connection with its operating/non-operating oil and gas wells and
mines and other development of the adjacent parcel (“Adjacent Parcel”) as a
master-planned community (the location of the Corridor Easement and a
description of the Adjacent Parcel are shown on Attachment “2”); provided that
the construction and installation of such facilities shall not unreasonably
interfere with Grantee’s development of the Land, and after Mass Grading thereof
has been completed, Grantor shall repair any damage to the surface of the Land
caused by its activity thereon; and provided further that Grantee shall
construct and maintain landscaping on and over the surface of the Corridor
Easement compatible with its development of the Land and Grantor’s development
of the Adjacent Parcel.

     D. A non-exclusive easement (“Street Easement”) on, over and under the
streets on the Land for ingress; egress and access to and from, and the
construction, installation, maintenance, replacement, repair, removal,
reconstruction and other uses of (a) electric, gas, telephone, water, sewer,
drainage, and all other wet and dry utilities, (b) cable television and other
telecommunications and/or data transmission lines and facilities, and
(c) pipelines and other facilities in connection with its
operating/non-operating oil and gas wells and mines and other development of the
Adjacent Parcel as a master-planned community (the location of the Street
Easement is shown on Attachment “2”); provided that the use of such facilities
shall not unreasonably interfere with Grantee’s development of the Land, and
after Mass Grading thereof has been completed, Grantor shall repair any damage
to the Streets and surface of the Land caused by its activity thereon.

     E. A non-exclusive easement on, over and under the Land for drainage
purposes from the Adjacent Parcel, as shown on Attachment “3,” as well as the
right to connect to and discharge and drain through, any water, sewer and other
facilities constructed by Grantee on, over and under the Land.

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All defined terms in the Agreement and other Development Documents referenced
therein are incorporated herein by this reference. The provisions of this Grant
Deed shall prevail in the event of a conflict with the provisions of any other
Development Document.

SUBJECT TO:

     1. General and special real property taxes and assessments and supplemental
assessments, if any, which are not delinquent.

     2. That certain Agreement between Adjacent Landowners, dated October 9,
2001, between Grantor and Grantee, regarding the construction and location of
slopes and the disposition and use of export spoils, recorded concurrently
herewith.

     3. That certain Temporary Easement and Transfer Agreement between Grantor
and Brea Olinda Venture, LLC, dated June 6, 2001, whether a matter of record or
not.

     4. All other covenants, conditions, restrictions, reservations, rights,
rights-of-way, dedications, offers of dedication, easements and other matters of
record or apparent.

     IN WITNESS WHEREOF, Grantor has executed this Grant Deed on the day and
year hereafter written.

          Dated: October 3, 2001   NUEVO ENERGY COMPANY, a Delaware corporation
    By:   -s- MIKE DARDEN

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MIKE DARDEN     Title:   VICE PRESIDENT     By:   -s- DAVID A. LEACH

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DAVID A. LEACH     Title:   ASST. SECRETARY

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                “Grantor”

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ACCEPTANCE: Grantee hereby accepts this Grant Deed on the terms and conditions
herein stated.

          Dated: October 3, 2001   BREA WALDEN, LLC, a California limited
liability company     By:   HOVER DEVELOPMENT COMPANY, INC., a
California corporation, its sole
managing member

              By:   -s- Tom Hover

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Tom Hover, President     By:  

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    Its:  

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          “Grantee”

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State of Texas
  )

  )
County of Harris
  )

     On       before me,                 , personally appeared
                          , personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
 

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State of Texas
  )

  )
County of Harris
  )

     On October 4, 2001 before me, Judy Vidrine, personally appeared Mike Darden
and David A. Leach, personally known to me to be the person(s) whose name(s) are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

         
Signature
  /s/ Judy Vidrine    
 
 

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State of California
  )

  )
County of Orange
  )

     On _______________ before me, _________________________ , personally
appeared _________________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

     WITNESS my hand and official seal.

     
Signature
 

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State of California
  )

  )
County of Orange
  )

     On October 3, 2001 before me, Donna Fritz, personally appeared [ILLEGIBLE],
personally known to me to be the person whose name subscribed to the within
instrument and acknowledged to me that he executed same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

         
Signature
  [ILLEGIBLE]    
 
 

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TABLE OF CONTENTS

ATTACHMENT NO. 1

TO

GRANT DEED

LEGAL DESCRIPTION OF LAND

 

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TABLE OF CONTENTS

     
Preliminary Report
  OR-2126186

  TITLE OFFICER- RONALD I. GOMEZ

DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF BREA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 2 AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT LL-2000-054 RECORDED ON
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 IN THE OFFICIAL RECORDS OF ORANGE
COUNTY, CALIFORNIA.

 

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TABLE OF CONTENTS

(LOT LINE ADJUSTMENT MAP) [h12901h1290187.gif]

 

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TABLE OF CONTENTS

ATTACHMENT NO. 2

TO

GRANT DEED

CORRIDOR EASEMENT

STREET EASEMENT

ADJACENT PARCEL

 

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TABLE OF CONTENTS

CORRIDOR EASEMENT

(Metes and Bounds Description Of Easement Area)

 

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TABLE OF CONTENTS

(GRANT DEED MAP) [h12901h1290188.gif]

 

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TABLE OF CONTENTS

ATTACHMENT “2”
TENTATIVE TRACT NO. 16047
LOTS “A” & “F”

THOSE PORTIONS OF THE SOUTHEAST QUARTER OF SECTION 7, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE CITY OF BREA, STATE OF CALIFORNIA AS SHOWN ON RECORD
OF SURVEY NO. 91-1007 FILED IN BOOK 133 PAGES 41 THROUGH 46 INCLUSIVE OF RECORDS
OF SURVEY IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ALSO DESCRIBED AS
A PORTION OF THE LAND DESCRIBED IN A, BILL OF SALE AND ASSIGNMENT, RECORDED
APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL A (TENTATIVE TRACT NO. 16047 LOT “F”)

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7;

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH 00°
10'32" WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED JUNE 28,
1977, IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF SAID COUNTY
RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89°53'53"W 466.40 FEET
TO THE POINT OF BEGINNING;

THENCE SOUTH 6.05 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
SOUTHERLY, AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE THROUGH SAID POINT
BEARS NORTH 00° 50'30" WEST, SAID POINT BEING ON THE RIGHT-OF-WAY OF PROPOSED
STREET “A”;

THENCE WESTERLY ALONG SAID CURVE AND RIGHT-OF-WAY 26.65 FEET THROUGH A CENTRAL
ANGLE OF 33°55'2";

THENCE NORTH 14.12 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53' 53" EAST 25.00 FEET TO THE POINT
OF BEGINNING.

PARCEL B (TENTATIVE TRACT NO. 16047 LOT “A” )

COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 7;

THENCE ALONG THE EASTERLY LINE OF SAID SOUTHEAST QUARTER OF SECTION 7 SOUTH
00°10'32" WEST 543.66 FEET TO A POINT ON THE NORTHERLY LINE OF THE CITY OF BREA
ANNEXATION NO. 3-76, AS DESCRIBED IN RESOLUTION NO. 77-45 RECORDED

 

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TABLE OF CONTENTS

JUNE 28, 1977, IN BOOK 12265, PAGE 1781 OF OFFICIAL RECORDS IN THE OFFICE OF
SAID COUNTY RECORDER;

THENCE ALONG SAID NORTHERLY LINE OF SAID ANNEXATION NORTH 89° 53' 53"W 723.50
FEET TO THE POINT OF BEGINNING:

THENCE SOUTH 07°50'05" EAST 87.46 FEET TO A POINT ON THE RIGHT-OF-WAY OF
PROPOSED STREET “A”;

THENCE ALONG SAID RIGHT-OF-WAY SOUTH 81°51'01" WEST 25.00 FEET;

THENCE NORTH 07°50'05" WEST 91.09 FEET TO SAID NORTHERLY LINE;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89°53'53" EAST 25.24 FEET TO THE POINT OF
BEGINNING.

ALSO AS SHOWN ON EXHIBIT “B”, ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
HEREOF.

THIS DESCRIPTION HAS BEEN PREPARED FOR “LAND OWNER AGREEMENT” PURPOSES AND MAY
NOT BE USED FOR THE CONVEYANCE, FINANCING OR LEASING OF LAND, EXCEPT AS PROVIDED
FOR IN LOCAL ORDINANCE AND THE SUBDIVISION MAP ACT, A DIVISION OF THE GOVERNMENT
CODE OF THE STATE OF CALIFORNIA

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

 

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TABLE OF CONTENTS

STREET EASEMENT

(Current depiction of Streets,
to be automatically replaced
by the recorded version
of TTM 16047, showing
the final alignment
and location thereof and
connection points to the
Corridor Easement)

 

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TABLE OF CONTENTS

(MAP) [h12901h1290189.gif]

 

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TABLE OF CONTENTS

(MAP) [h12901h1290190.gif]

 

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TABLE OF CONTENTS

(MAP) [h12901h1290191.gif]

 

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TABLE OF CONTENTS

SCHEDULE NO. 3
TO
ATTACHMENT 2

LEGAL DESCRIPTION OF DISTRICT MINERALS

1

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TABLE OF CONTENTS

SCHEDULE “3”

THAT PORTION OF PARCEL 1 OF LOT LINE ADJUSTMENT NO. LL 2000-054, IN THE
UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED
AUGUST 13, 2001, AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, ALSO AS
SHOWN ON RECORD OF SURVEY NO. 2001-1007 FILED IN BOOK 187, PAGES 02 THROUGH 07
INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP NO.
86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18" E 381.48' “ ON SAID RECORD OF SURVEY NO.
2001-1007; THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF
PARCEL MAP NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF
BEGINNING;

THENCE NORTH 10°42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET

THENCE NORTH 26°29'00" EAST 105.00 FEET

THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33'18" E 381.48' “;

THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33'18" WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

CONTAINING 0.425 ACRES, MORE OR LESS.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     
(SEAL) [h12901h1290163.gif]
  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:
 
   

  -s- KATHLEEN SUSAN TETREAULT [h12901h1290164.gif]
 
   

  KATHLEEN SUSAN TETREAULT P.L.S. 7297
MY LICENSE EXPIRES 12/31/2004
 
   

  November 04, 2002
JN: 13207.00.034

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TABLE OF CONTENTS

(MAP) [h12901h1290192.gif]

 

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TABLE OF CONTENTS

SCHEDULE NO. 4
TO
ATTACHMENT 2

LEGAL DESCRIPTION OF OTHER MINERALS

1

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TABLE OF CONTENTS

SCHEDULE “4”

     
Property Name:
  BREA RESIDENTIAL LOTS MINERAL FEE
Nuevo Property #:
  CA12096

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 of Deeds.

     
Property Name:
  HOLE MINERAL FEE
Nuevo Property #:
  CA12451

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 8/1/10, from J.S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10, in
Book 194, Page 55, of Deeds; EXCEPTING THEREFROM, any portions of such real
property which is located in Section 22, Section 23, Section 24, or the South
Half of Section 14, Township 3 South, Range 10 West, S.B.B.&M.

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Quitclaim Deed dated 4/29/46, between David R.
Wagner, as Grantor, and Union Oil Company of California, as Grantee, recorded
4/30/46 in Book 1332 at Page 421 of Official Records; EXCEPTING THEREFROM, any
portions of such real property which is located in Section 22, Section 23,
Section 24, or the South Half of Section 14, Township 3 South, Range 10 West,
S.B.B.&M.

     
Property Name:
  SIEVERS (J.) MINERAL FEE
Nuevo Property #:
  CA12097

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Grant Deed dated 11/30/26, from John D. Sievers, as
Grantor, to Union Oil Company of California, as Grantee, recorded 12/9/26 in
Book 690 at Page 149 of Deeds.

1

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Property Name:
  TOWNSEND & DAMON MINERAL FEE
Nuevo Property #:
  CA12445

All oil, gas and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 8/1/10, from J. S. Torrance, as
Grantor, to Union Oil Company of California, as Grantee, recorded 10/25/10 in
Book 194 at Page 55 of Deeds.

     
Property Name:
  NARANJAL MINERAL FEE A & B
Nuevo Property #:
  CA12453

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced, and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 3/24/10 from Steams Ranches Company,
as Grantor, to Union Oil Company of California, as Grantee, recorded 4/22/21 in
Book 385 at Page 394 of Deeds Orange County and recorded on 5/25/21 in Book 211,
Page 268 Official Records Los Angeles County; EXCEPTING THEREFROM that portion
described as follows:

That portion of the Northerly one-half of Section 2, Township 3 South, Range 10
West, in the Rancho San Juan Cajon de Santa Ana, in the unincorporated territory
of the County of Orange, State of California, as shown on the Map recorded in
Book 51, Page 7 of Miscellaneous Maps in the Office of the County Recorded,
described as follows:

Beginning at the Southeasterly corner of Tract No. 12743, recorded in Book 585,
Pages 39 through 44 of Miscellaneous Maps in the Office of said county recorder;
thence along the Easterly line of said Tract No. 12743, North l°31'03" West
1099.63 feet to the Northeasterly corner of said Tract No. 12743, said corner
also being the beginning of a non-tangent curve, concave Northeasterly having a
radius of 795.00 feet, a radial line to said point bears South 4°39'12" East;
thence Northwesterly 484.67 feet along said curve and the Northerly line of said
Tract No. 12743, through a central angle of 34°55' 49"; thence North 59°43' 23"
West 104.97 feet along said Northerly line to an angle point in said
Northeasterly line, said angle point being the beginning of a non-tangent curve,
concave Southeasterly having a radius of 1450.00 feet, a radial line to said
point bears North 59°31'24" West; thence Northeasterly 54.73 feet along said
Northeasterly line through a central angle of 2° 09' 15"; thence along said
Northeasterly line North 57°22' 09" West 50.00 feet to the most Northerly corner
of said Tract No. 12743, said corner also the beginning of a non-tangent curve,
concave Southeasterly having a radius of 1500.00 feet, a radial line to said
point bears North 57°22' 09" West; thence leaving said Northeasterly

2

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line and following along the Easterly line of future Tract No. 13728, the
following courses:

Northeasterly 390.15 feet along said curve through a central angle of 14°54'09"
to the beginning of a reverse curve, concave Northwesterly having a radius of
1500.00 feet, a radial line to said curve bears South 42°28'00" East,
Northeasterly 190.20 feet along said curve through a central angle of 7°12'55";
North 4°32'00" West 149.18 feet, West 208.00 feet, North 45°00'00" West 45.00
feet, North 60.00 feet, North 86º40'00" West 66.00 feet, and North 13°00'22"
East 215.00 feet to the Northerly line of said Rancho San Juan Cajon de Santa
Ana as shown on Record of Survey no. 88-1035, filed in Book 119, Pages 33 and 34
in the Office of the County Recorder, thence South 76º59'28" East 1527.95 feet
along said Northerly line to the Northwesterly corner of the land described in
the deed to the Exxon Education Foundation, recorded December 29, 1983 as
File/Page No. 83-587995 of Official Records in the Office of the County Recorder
thence South 1°18'55" West 1851.58 feet along the Westerly line of said deed to
the Southwesterly corner of said deed; thence South 88°31'06" West 961.07 feet
along the Northerly line of the South one-half of said Section 2 to the Point of
Beginning.

     All oil, gas, and other hydrocarbon substances and minerals on, in, under
and that may be extracted, produced, and saved from that certain real property
which was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California in that certain Indenture dated 5/17/27 between Stearns Ranchos
Company and Union Oil Company of California, recorded 5/25/27 in Book 47 at Page
363 Official Records; EXCEPTING THEREFROM that portion described as follows:

That portion of the Northerly one-half of Section 2, Township 3 South, Range 10
West, in the Rancho San Juan Cajon de Santa Ana, in the unincorporated territory
of the County of Orange, State of California, as shown on the Map recorded in
Book 51, Page 7 of Miscellaneous Maps in the Office of the County Recorded,
described as follows:

Beginning at the Southeasterly corner of Tract No. 12743, recorded in Book 585,
Pages 39 through 44 of the Miscellaneous Maps in the Office of said county
recorder; thence along the Easterly line of said Tract No. 12743, North 1°31'03"
West 1099.63 feet to the Northeasterly corner of said Tract No. 12743, said
corner also being the beginning of a non-tangent curve, concave Northeasterly
having a radius of 795.00 feet, a radial line to said point bears South 4°39'12"
East; thence Northwesterly 484.67 feet along said curve and the Northerly line
of said Tract No. 12743, through a central angle of 34°55'49"; thence North
59°43'23" West 104.97 feet along said Northerly line to an angle point in said
Northeasterly line, said angle point being the beginning of a non-tangent curve,
concave Southeasterly having a radius of 1450.00 feet, a radial line to said
point bears North 59°31'24" West; thence Northeasterly 54.73 feet along said
Northeasterly line through a central angle of 2°09'15"; thence along said
Northeasterly line North 57°22'09" West 50.00 feet to the most Northerly corner
of said Tract No. 12743, said corner also the beginning of a non-tangent curve,
concave Southeasterly having a radius of 1500.00 feet, a radial line to said
point bears North 57°22'09" West; thence leaving said Northeasterly

3

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line and following along the Easterly line of future Tract No. 13728, the
following courses:

Northeasterly 390.15 feet along said curve through a central angle of 14º54'09"
to the beginning of a reverse curve, concave Northwesterly having a radius of
1500.00 feet, a radial line to said curve bears South 42°28'00" East,
Northeasterly 190.20 feet along said curve through a central angle of 7°12'55";
North 4°32'00" West 149.18 feet, West 208.00 feet, North 45°00'00" West 45.00
feet, North 60.00 feet, North 86°40'00" West 66.00 feet, and North 13°00'22"
East 215.00 feet to the Northerly line of said Rancho San Juan Cajon de Santa
Ana as shown on Record of Survey No. 88-1035, filed in Book 119, Pages 33 and 34
in the Office of the County Recorder, thence South 76°59'28" East 1527.95 feet
along said Northerly line to the Northwesterly corner of the land described in
the deed to the Exxon Education Foundation, recorded December 29, 1983 as
File/Page No. 83-587995 of Official Records in the Office of the County
Recorder, thence South 1°18'55" West 1851.58 feet along the Westerly line of
said deed to the Southwesterly corner of said deed; thence South 88°31'06" West
961.07 feet along the Northerly line of the South one-half of said Section 2 to
the Point of Beginning.

EXCEPTING THEREFROM that portion of the above described property which was
conveyed to Brea Walden L.L.C. by Grant Deed dated October 3,2001 and recorded
on October 9, 2001 as Instrument No. 20010710856 in the Official Records of
Orange County, California, described as follows:

Parcel 2 as shown, on Exhibit “B” of Lot Line Adjustment LL-2000-054 recorded on
August 13, 2001, as Instrument No. 20010557229 in the Official Records of Orange
County, California.

Also EXCEPTING THEREFROM the land described as follows:

Being a portion of the Southwest one-quarter of fractional Section 8, Township 3
South, Range 9 West, lying West of the Easterly boundary of the Rancho San Juan
Cajon de Santa Ana, in the County of Orange, State of California as shown on map
recorded in Book 51, Page 7 of the Miscellaneous Maps in the Office of the
County Recorder of said County and also show on record of Survey 81-1149 filed
in Book 103, Page 19 of Record of Survey in the said Office of the County
Recorder being more particularly described as follows:

Beginning at the Southwest corner of said Record of Survey 81-1149, thence North
0°11'29" East along the Westerly line of said Record of Survey a distance of
776.93 feet to the Northwest corner of said Record of Survey; thence South
89°45'41" East along the Northerly line and its Easterly prolongation of said
Record of Survey a distance of 2406.20 feet of the Easterly boundary line of
said Rancho San Juan Cajon de Santa Ana; thence South 03°24'35" East along said
Easterly boundary a distance of 772.60 feet to a point on the Easterly
prolongation of the Southerly line of said Record of Survey; thence North
89°53'56" West along said Southerly line and its prolongation of distance of
2454.72 feet to the point of beginning.

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Property Name:
  STEARNS MINERAL FEE
Nuevo Property #:
  CA12593

All oil, gas, and other hydrocarbon substances and minerals on, in, under and
that may be extracted, produced and saved from that certain real property which
was granted, quitclaimed, assigned or conveyed to Union Oil Company of
California by:

  1)   Deed dated 12/4/1896, from Steams Ranches Company, as Grantor, to Union
Oil Company of California, as Grantee, recorded 1/13/1897 as Document No. 839 in
Book 30 at Page 11 of Deeds.     2)   Grant Deed dated 8/31/1899, between
Stearns Ranches Company, as Grantor, and Union Oil Company of California, as
Grantee, recorded 9/21/1899 in Book 44 at Page 250 of Deeds, more particularly
described as follows:

      Those portions of Sections 1 and 12, Township 3 South, Range 10 West and
Sections 5, 6,7 and 8 Township 3 South, Range 9 West, in the Rancho San Juan
Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
        Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of ‘the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, Norm 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" × 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" × 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.         Excepting the Westerly 200 acres of the above described tract
        Also excepting any portion of the above described property which lies
north of the agreed boundary line and bounded Westerly by line running North
28°30' East from the Western terminus of said line as established by agreement
between the Union Oil Company of

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      California and the Graham-Loftus Oil Company, recorded June 10, 1905 in
Book 120, Page 223 of Deeds, records of said Orange County.         Also
excepting therefrom that portion included within Parcel 1 of a County of Orange
Lot Line Adjustment No. LL 2000-054, recorded August 13, 2001 as Instrument
No. 20010557229 of the Official Records, in the office of said Count Recorder.  
      Also excepting therefrom the land conveyed to Brea Chemicals, Inc., by
Deed recorded June 10, 1957 in Book 3936, page 314 of said Official Records,
described as follows:         Beginning at a point in the Southerly line of the
land described in Deed from the Stearns Ranches Company, a Corporation, to Union
Oil Company of California, a Corporation, dated August 31, 1899, recorded
September 2, 1899 in Book 44, Page 250 of said Deeds, distant South 89°10'50"
West along said line 3131.98 feet from the Southeast corner of said land, said
point of beginning being monumented by Union Oil Company Monument 11B; thence
North 9°48'11" West 529.60 feet to a 2" × 2" stake and the true point of
beginning for this description; thence North 85°48'16" West, 380.00 feet to a 2"
× 2" stake; thence North 4°ll'44" East 1750.00 feet to a 2" × 2" stake thence
South 85°48'16" East 380.00 feet to a 2" × 2" stake; thence South 4°11'44" West
1750.00 feet to a 2" × 2" stake and the true point of beginning.         Also
excepting therefrom those portions of Sections 1 and 12, Township 3 South, Range
10 West and Sections 5,6,7 and 8 Township 3 South, Range 9 West, in the Rancho
San Juan Cajon de Santa Ana, as shown on a map recorded in Book 51, Page 7 of
Miscellaneous Maps, Records of Orange County, California, described as follows:
        Beginning at a white post 4 inches square in mound with pits at the
Northeast corner of the Rancho San Juan de Santa Ana being also the Southeast
corner of the Rancho Rincon De la Brea; thence along the patent boundary of said
Rancho Rincon de La Brea; thence along the patent boundary of said Rancho Rincon
de La Brea, North 84° West 107.51 chains to a sand stone marked R.B. in mound
with pits; thence along said patent boundary North 57°42' West 43.67 chains to a
white post 4 inches square in mound of stone marked S.J.C.S.A. at intersection
of the patent lines of said Rancho San Juan Cajon de Santa Ana and Rincon De La
Brea; thence along the patent line of said Rancho San Juan Cajon de Santa Ana,
North 78°25' West 62.67 chains to a 2" × 4" post marked 62.67 in mound with
pits; thence South 1°45' West 58.96 chains to a 2" × 4" post marked 20.60 in
mound with pits, thence North 89° East 20.00 chains to a 4" × 4" post in mound
with pits; thence South 1°45" West 20.00 chains to a 2" × 4" post marked 20.60
mounds with pits; thence North 88°39' East 55.48 chains to a 2" × 4" post marked
20 in mound with pits; thence South 0°30' East 20.00 chains to a 2" × 4" post in
mound with pits; thence North 89°45" East 134.63 chains to a 2" × 4" post marked
40.10 in mound with pits upon the Eastern Boundary of said Rancho San Juan Cajon
de Santa Ana; thence along same North 4° West 47.51 chains to the place of
beginning.

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      Excepting the Westerly 200 .acres of the above described tract.        
Also excepting any portion of the above described property which lies north of
the agreed boundary line and bounded Westerly by line running North 28°30' East
from the Western terminus of said line as established by agreement between the
Union Oil Company of California and the Graham-Loftus Oil Company, recorded
June 10, 1905 in Book 120, Page 223 of Deeds, records of said Orange County.    
    Also excepting from said tract of land the land conveyed to the Metropolitan
Water District of Southern California by Deed Recorded June 28, 1940 in Book
1051, Page 301 of Official Records of said Orange County, described as follows:
        Beginning at a point on the Westerly boundary of said lands owned by
Union Oil Company of California, which Westerly boundary is also the Easterly
boundary of that certain 200-acre tract conveyed by said Union Oil Company of
California to George Chaffey by Deed dated April 25, 1899, recorded June 20,
1899 in Book 44, Page 79 of said deeds, which point of beginning is the point of
intersection of the aforesaid Westerly boundary with the Easterly Prolongation
of the center line of Central Avenue as the same existed on May 23, 1940 between
Berry Street and Brea Canyon Road; thence Northeasterly along a line forming an
angle of 73°32'74" with the Easterly prolongation of the center line of said
Central Avenue at said point of intersection (assumed and taken to bear North
15º11'16" East), a distance of 839.60 feet to the true point of beginning;
thence North 0°10'11" East a distance of 1250 feet; thence South 89°49'49" East
a distance of 500 feet; thence South 65°23'11" East a distance of 604.15 feet;
thence South 0°10'11" West a distance of 1000 feet; thence North 89°49'49" West
a distance of 1050 feet to the true point of beginning.         Also excepting
therefrom that portion described in deed to the Metropolitan Water District of
Southern California recorded February 10, 1967 in Book 8173, Page 641 of said
Official Records.         Also excepting therefrom that portion described in
deed to the Metropolitan Water District of Southern California recorded
February 10, 1967 in Book 8173, Page 647 of said Official Records.         Also
excepting therefrom the land described in deed to the Brea-Olinda Unified School
District of Orange County, California, recorded September 11, 1968, page 437 of
said Official Records.         Also excepting therefrom that portion described
in Parcel 1 of deed to the City of Brea recorded January 16, 1969 in Book 8846,
Page 971 of said Official Records.         Also excepting therefrom that portion
described in Parcels A6471-4, A6471-5, A6471-6 and A6471-7 of that certain final
order of condemnation, Superior Court Case No. 156220, a certified copy of which
was recorded September 29, 1970 in Book 9417, Page 364 of said Official Records.

7

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DEVELOPMENT DECLARATION

ATTACHMENT “3”

LEGAL DESCRIPTION OF THE BENEFITTED PROPERTY
(SURFACE FEE INTEREST IN THE LAND)

 

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THOSE PORTIONS OF SECTIONS 1 AND 12, TOWNSHIP 3 SOUTH, RANGE 10 WEST AND
SECTIONS 5, 6, 7 AND 8, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN
CAJON DE SANTA ANA, IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, AND
IN THE CITY OF BREA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A
MAP FILED IN BOOK 51, PAGE 7 OF MISCELLANEOUS MAPS, AND RECORD OF SURVEY FILED
IN BOOK 12 PAGE 40. RECORD OF SURVEY NO. 91-1007 FILED IN BOOK 133, PAGES 41
THROUGH 46 INCLUSIVE AND RECORD OF SURVEY NO. 2001-1007, FILED IN BOOK 187,
PAGES 02 THROUGH 07 INCLUSIVE, ALL OF RECORDS OF SURVEY, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY RECORDER, ALSO BEING DESCRIBED IN A DEED, BILL OF
SALE AND ASSIGNMENT, RECORDED APRIL 10, 1996 AS INSTRUMENT NO. 19960175928 OF
OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

PARCEL 1

BEGINNING AT A WHITE POST 4 INCHES SQUARE IN MOUND WITH PITS AT THE NORTHEAST
CORNER OF THE RANCHO SAN JUAN CAJON DE SANTA ANA, BEING ALSO THE SOUTHEAST
CORNER OF THE RANCHO RINCON DE LA BREA; THENCE ALONG THE PATENT BOUNDARY OF SAID
RANCHO RINCON DE LA BREA, NORTH 84° WEST 107.51 CHAINS TO A SAND STONE MARKED R.
B. IN MOUND WITH PITS; THENCE ALONG SAID PATENT BOUNDARY NORTH 57° 42' WEST
43.67 CHAINS TO A WHITE POST 4 INCHES SQUARE IN MOUND OF STONE MARKED S. J. C.
S. A. AT INTERSECTION OF THE PATENT LINES OF SAID RANCHOS SAN JUAN CAJON DE
SANTA ANA AND RINCON DE LA BREA; THENCE ALONG THE PATENT LINE OF SAID RANCHO SAN
JUAN CAJON DE SANTA ANA, NORTH 76° 25' WEST 62.67 CHAINS TO A 2' X 4" POST
MARKED 62.67 IN MOUND WITH PITS; THENCE SOUTH 1° 45' WEST 58.96 CHAINS TO A 2" X
4" POST MARKED 20.60. IN MOUND WITH PITS; THENCE NORTH 89° EAST 20.00 CHAINS TO
A 4" X 4" POST IN MOUND WITH PITS; THENCE SOUTH 1° 45" WEST 20.00 CHAINS TO A 2"
X 4" POST MARKED 20.60 IN MOUND WITH PITS; THENCE NORTH 88° 39' EAST 55.48
CHAINS TO A 2" X 4" POST MARKED 20 IN MOUND WITH PITS; THENCE SOUTH 0° 30' EAST
20.00 CHAINS TO A 2" X 4" POST IN MOUND WITH PITS; THENCE NORTH 89° 45' EAST
134.63 CHAINS TO A 2" X 4" POST MARKED 40.10 IN MOUND WITH PITS“UPON THE EASTERN
BOUNDARY OF SAID RANCHO SAN JUAN CAJON DE SANTA ANA; THENCE ALONG SAME NORTH 4°
WEST 47.51 CHAINS TO THE PLACE OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 200 ACRES OF THE ABOVE DESCRIBED TRACT.

ALSO EXCEPTING THEREFROM ANY PORTION LYING NORTHERLY OF THE AGREED BOUNDARY LINE
AND BOUNDED WESTERLY BY LINE, RUNNING NORTH 28° 30' EAST FROM THE WESTERN
TERMINUS OF SAID LINE AS ESTABLISHED BY AGREEMENT BETWEEN THE UNION OIL COMPANY
OF CALIFORNIA AND THE GRAHAM-LOFTUS OIL COMPANY, RECORDED JUNE 10, 1905 IN BOOK
120, PAGE 223 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO THE METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA BY DEED RECORDED JUNE 28, 1940 IN BOOK

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1051, PAGE 301 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER,
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT ON THE WESTERLY BOUNDARY OF SAID LANDS OWNED BY UNION
OIL COMPANY OF CALIFORNIA, WHICH WESTERLY BOUNDARY IS ALSO THE EASTERLY BOUNDARY
OF THAT CERTAIN 200-ACRE TRACT CONVEYED BY SAID UNION OIL COMPANY OF CALIFORNIA
TO GEORGE CHAFFEY BY DEED DATED APRIL 25, 1899, RECORDED JUNE 20, 1899 IN BOOK
44, PAGE 79 OF DEEDS, WHICH POINT OF BEGINNING IS THE POINT OF INTERSECTION OF
THE AFORESAID WESTERLY BOUNDARY WITH THE EASTERLY PROLONGATION OF THE CENTER
LINE OF CENTRAL AVENUE AS THE SAME EXISTED ON MAY 23, 1940 BETWEEN BERRY STREET
AND BREA CANYON ROAD; THENCE NORTHEASTERLY ALONG A LINE FORMING AN ANGLE OF 73°
32' 24" WITH THE EASTERLY PROLONGATION OF THE CENTER LINE OF SAID CENTRAL AVENUE
AT SAID POINT OF INTERSECTION (ASSUMED AND TAKEN TO BEAR NORTH 15° 11' 16"
EAST), A DISTANCE OF 839.60 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 0°
10' 11" EAST A DISTANCE OF 1250 FEET; THENCE SOUTH 89° 49' 49" EAST A DISTANCE
OF 500 FEET; THENCE SOUTH 65° 23' 11" EAST A DISTANCE OF 604.15 FEET; THENCE
SOUTH 0° 10' 11" WEST A DISTANCE OF 1000 FEET; THENCE NORTH 89° 49' 49" WEST A
DISTANCE OF 1050 FEET TO THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED
RECORDED JUNE 10, 1957 IN BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING
BEING MONUMENTED BY UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 4' 11" WEST
529.60 FEET TO A 2” X 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS
DESCRIPTION; THENCE NORTH 85° 48" 16" WEST, 380.00 FEET TO A 2" X 2" STAKE;
THENCE NORTH 4° 11' 44" EAST 1750.00 FEET TO A 2" X 2" STAKE; THENCE SOUTH 85°
48' 16" EAST 380.00 FEET TO A 2” X 2" STAKE; THENCE SOUTH 4° 11' 44" WEST
1750.00 FEET TO A 2" X 2" STAKE AND THE TRUE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 641 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA RECORDED FEBRUARY 10, 1967 IN BOOK 8173,
PAGE 647 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN DEED TO THE BREA-OLINDA UNIFIED
SCHOOL DISTRICT OF ORANGE COUNTY, CALIFORNIA, RECORDED SEPTEMBER 11, 1968 IN
BOOK 8716, PAGE 437 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

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ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL 1 OF THE DEED TO THE
CITY OF BREA RECORDED JANUARY 16, 1969 IN BOOK 8846, PAGE 971 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS A6471-4, A6471-5, A6471-6 AND A6471-7 OF THAT
CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO. 156220, A CERTIFIED
COPY OF WHICH WAS RECORDED SEPTEMBER 29, 1970 IN BOOK 9417, PAGE 364 OF OFFICIAL
RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM PARCELS 1 AND 2 AS SHOWN ON PARCEL MAP NO. 86-243,
FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE
OF SAID COUNTY RECORDER, TOGETHER WITH THE WEST HALF OF ASSOCIATED ROAD, 80.00
FEET WIDE, AS SHOWN SAID PARCEL MAP NO. 86-243, ADJOINING SAID PARCELS 1 AND 2
ON THE EAST, AND BOUND NORTHEASTERLY BY THE NORTHEASTERLY LINE OF SAID PARCEL
MAP NO. 86-243, AND BOUND SOUTHERLY BY THE CENTERLINE OF LAMBERT ROAD AS SHOWN
ON SAID PARCEL MAP NO. 86-243.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF PARCEL MAP NO.
83-1179, AS SHOWN ON A MAP FILED IN BOOK 218, PAGES 1 THROUGH 4 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12562, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 4 THROUGH 9 INCLUSIVE OF MISCELLANEOUS MAPS,
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 12563, AS SHOWN
ON A MAP FILED IN BOOK 579, PAGES 10 THROUGH 15 INCLUSIVE OF MISCELLANEOUS MAPS
IN THE OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THE LAND DESCRIBED IN THE DEED TO THE CITY OF BREA
RECORDED MARCH 29, 1996 AS INSTRUMENT NO. 19960153320 OF OFFICIAL RECORDS IN THE
OFFICE OF SAID COUNTY RECORDER.

ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN PARCEL 1 OF A COUNTY OF
ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED AUGUST 13, 2001 AS
INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY
RECORDER.

ALSO EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18“E 381.48' “ ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;    
    THENCE NORTH 10º42'00" EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET

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      THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY
BOUNDARY OF PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE
NORTHERLY TERMINUS OF SAID COURSE SHOWN AS “ N10°33'18"E 381.48' ”;        
THENCE SOUTHERLY ALONG SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 2

PARCEL 1 OF A COUNTY OF ORANGE LOT LINE ADJUSTMENT NO. LL 2000-054, RECORDED
AUGUST 13, 2001 AS INSTRUMENT NO. 20010557229 OF OFFICIAL RECORDS, IN THE OFFICE
OF SAID COUNTY RECORDER.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL OF LAND:

      BEGINNING AT A POINT ON THE EASTERLY BOUNDARY OF PARCEL 1 OF PARCEL MAP
NO. 86-243, FILED IN BOOK 214, PAGES 28 THROUGH 31 INCLUSIVE OF PARCEL MAPS, IN
THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING THE SOUTHERLY TERMINUS OF A
COURSE SHOWN AS “ N 10°33'18"E 381.48' “ ON SAID RECORD OF SURVEY NO. 2001-1007;
THENCE SOUTHEASTERLY ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 1 OF PARCEL MAP
NO. 86-243, SOUTH 60°42'49" EAST 43.00 FEET TO THE TRUE POINT OF BEGINNING;    
    THENCE NORTH 10°42'00’ EAST 141.00 FEET
THENCE NORTH 15°02'00" EAST 103.00 FEET
THENCE NORTH 26°29'00" EAST 105.00 FEET
THENCE NORTH 46°26'07" WEST 92.94 FEET TO A POINT ON SAID EASTERLY BOUNDARY OF
PARCEL 1 OF PARCEL MAP NO. 86-243, SAID POINT ALSO BEING THE NORTHERLY TERMINUS
OF SAID COURSE SHOWN AS “ N10°33’18“E 381.48' ”;         THENCE SOUTHERLY ALONG
SAID COURSE SOUTH 10°33’18” WEST 381.48 FEET TO 8HE TRUE POINT OF BEGINNING.

PARCEL 3

THE LAND CONVEYED TO BREA CHEMICALS, INC., BY DEED RECORDED JUNE 10, 1957 IN
BOOK 3936, PAGE 314 OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER
DESCRIBED AS FOLLOWS:

      BEGINNING AT A POINT IN THE SOUTHERLY LINE OF THE LAND DESCRIBED IN DEED
FROM THE STEARNS RANCHOS COMPANY, A CORPORATION, TO UNION OIL COMPANY OF
CALIFORNIA, A CORPORATION, DATED AUGUST 31, 1899, RECORDED SEPTEMBER 2, 1899 IN
BOOK 44, PAGE 250 OF SAID DEEDS, DISTANT SOUTH 89° 10' 50" WEST ALONG SAID LINE
3131.98 FEET FROM

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THE SOUTHEAST CORNER OF SAID LAND, SAID POINT OF BEGINNING BEING MONUMENTED BY
UNION OIL COMPANY MONUMENT 11B; THENCE NORTH 9° 48' 11" WEST 529.60 FEET TO A 2"
× 2" STAKE AND THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE NORTH
85° 48' 16" WEST, 380.00 FEET TO A 2" × 2" STAKE; THENCE NORTH 4° 11' 44" EAST
1750.00 FEET TO A 2" × 2" STAKE; THENCE SOUTH 85° 48' 16" EAST 380.00 FEET TO A
2" × 2" STAKE; THENCE SOUTH 4° 11' 44" WEST 1750.00 FEET TO A 2" × 2" STAKE AND
THE TRUE POINT OF BEGINNING.

THE ABOVE DESCRIPTION WAS COMPILED FROM INFORMATION SUPPLIED BY FIRST AMERICAN
TITLE COMPANY PRELIMINARY REPORT NO. 2033601, DATED JUNE 15, 2000 AND
PRELIMINARY REPORT NO. 2033661, DATED JUNE 21, 2002.

EXHIBIT “ ‘A1’ SITE DEPICTION ”, IS FOR INFORMATIONAL PURPOSES ONLY.

SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, EASEMENTS AND
RIGHTS-OF-WAY OF RECORD, IF ANY.

     

  PREPARED BY: THE KEITH COMPANIES
UNDER THE DIRECTION OF:
 
   
(SEAL) [h12901h1290152.gif]
  -s- KATHLEEN SUSAN TETREAULT [h12901h1290153.gif]
KATHLEEN SUSAN TETREAULT P.L.S.7297
MY LICENSE EXPIRES 12/31/2004

  January 31, 2003
JN: 13207.00

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DEVELOPMENT DECLARATION

ATTACHMENT “4”

TPEL

 

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TABLE OF CONTENTS

ATTACHMENT 4

RELATED THIRD-PARTY EASEMENTS,
CONTRACTS AND LICENSE AGREEMENTS

(Oil Field Related Third Party Easements and License — TPEL)

                                  Recording Document Type   Date   Grantor  
Grantee   Information

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Right-of-Way   1/26/82   Union Oil Company of California   Mobil Oil
Corporation   82-340271
Los Angeles
County                   License   8/21/67   Union Oil Company of California  
Shell Oil Company   Unrecorded                   License PSA   11/10/88   Union
Oil Company of California   Shell Western E&P Inc.   Unrecorded                
  Easement   7/27/62   Union Oil Company of California   Boy Scouts of America,
Los Angeles Area Council   8/1/62
6245/654                   Easement   9/13/84   Union Oil Company of California
  City of Brea   10/11/84
84-421551                   Easement   9/10/85   Union Oil Company of California
  City of Brea   10/7/85
85-382994                   Easement   9/2/86   Union Oil Company of California
  Brea H.O.P.E. Inc.   10/1/86
86-459482                   Easement   3/18/96   Union Oil Company of California
  City of Brea   3/29/96 Inst.
19960153323                   Easement   3/18/96   Union Oil Company of
California   City of Brea   3/29/96 Inst. 19960153324                   Easement
  1/26/82   Union Oil Company of California   Mobil Oil
Corporation   3/31/82 Inst. 82-340271 [Los Angeles County]                  
Easement   8/21/67   Union Oil Company of California   Shell Oil Company   N/A  
                Easement   11/10/88   Union Oil Company of California   Shell
Western E&P Inc.   N/A                   Easement   4/1/58   Union Oil Company
of California   The Metropolitan Water District of Southern California   5/21/58
4291/400                   Easement for Oil
Wells   10/16/58   Collier Carbon and Chemical Corporation   Union Oil Company
of   11/3/58
4470/10

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ATTACHMENT 4

                                  Recording Document Type   Date   Grantor  
Grantee   Information

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            California                       Non-Exclusive Easement and
Right-of-Way   7/27/62   Union Oil Company of California   Boy Scouts of
America, Los Angeles Area Council   8/1/62
6245/654                   Right-of-Way   10/2/62   Union Oil Company of
California   Southern California
Edison Company   1/18/63
6399/705                   Grant of Easement   9/18/78   Union Oil Company of
California   Southern California
Edison Company   2/5/79
13024/1157                   Grant of Easement   5/17/88   Union Oil Company of
California, dba UNOCAL   Southern California
Edison Company   6/7/88 Inst. 88-268095                   Easement   9/15/95  
Union Oil Company of California, dba UNOCA1   UNOCAL California
Pipeline Company   10/25/95 Inst. 19950473641                   Grant of
Easement   12/11/95   Union Oil Company of California, dba UNOCA1   Southern
California
Edison Company   1/4/96 Inst.
19960004773                   Easement PSA   3/18/96   Union Oil Company of
California   City of Brea   3/29/96 Inst. 19960153322                   Easement
PSA   3/18/96   Union Oil Company of California   City of Brea   3/29/96 Inst.
19960153323                   Easement PSA   3/18/96   Union Oil Company of
California   City of Brea   3/29/96 Inst. 19960153324                   Easement
  5/7/96   Nuevo Energy Company   Union Oil Company of California dba UNOCA1  
5/26/96 Inst. 19960254739                   Pipeline
Right-Of-Way   5/12/02   The Sterns Ranchos
Company   Pacific Coast Oil
Company   6/25/02 Do not have recording info.                   License   5/1/59
  Union Oil Company of California   Shell Oil Company   Do not have recording
info.

Any other Third Party Easement or License disclosed in Preliminary Title Report
#OR-2252674, dated September 13, 2002, First American Title Company.

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ATTACHMENT 4

ADDITIONAL CONTRACTS AND GIFT DEED

1.   Memorandum of Understanding between Nuevo, County of Orange and City of
Brea dated December 10, 2002 regarding pre-annexation.   2.   Development
Agreement dated December 19, 2002, between Nuevo and County of Orange.   3.  
Impact Mitigation Agreement between Brea Olinda Unified School District and
Nuevo dated as of October 28, 2002.   4.   Gift Deed dated January 30, 2003 from
Nuevo to the Brea-Olinda Unified School District Conveying 0.425 acres, recorded
on February 25, 2003 as Instrument No. 2003000207265 in the official records of
Orange County.

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EXHIBIT 2.2.2
Brea Olinda Field
Lease Operating Expense For The Year 2002

                                                                      Stearns  
Brea   Naranjal   Stearns   Naranjal   Columbia                 Plant #2  
Turbines   Brea   Lease   Lease East   #35   Total        

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Controllable Expense
                                                           
Company Labor
    74,262       106,275       38,275       323,911       0       0      
542,723      
Contract Labor
    44,832       71,232       26,088       228,583       0       0       370,735
     
Payroll Taxes
    5,752       8,203       2,875       23,344       0       0       40,174    
 
Benefits
    17,048       23,607       8,838       72,589       0       0       122,082  
   
R/M Equipment
    101,253       206,812       43,652       361,479       0       0      
713,196      
Chemicals, Lube
    9,916       32,022       49,794       175,855       0       0       267,587
     
Rental Equipment
    8,878       5,232       290       2,710       0       0       17,110      
Environmental
    12,894       163,541       27,438       231,358       0       0      
435,231      
Well Service and Wireline
    (192 )     0       27,582       557,820       0       0       585,210      
Salt Water Disposal
    0       0       (3,754 )     (31,235 )     0       0       (34,989 )    
Delay Rental
    0       0       0       0                       0      
Fuel, Water, Electric
    (688,126 )     (802,255 )     133,896       137,013       0       0      
(1,219,472 )    
Other
    123,735       607,124       62,255       668,506       0       0      
1,461,620    
 
   

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Sub-total Controllable
    (289,748 )     421,793       417,229       2,751,933       0       0      
3,301,207  
Non Controllable Expense
                                                           
Workover
    0       0       0       0       0       0       0      
Major Maintenance
    2,615       0       5,267       50,274       0       0       58,156      
Storm
    0       0       0       0       0       0       0      
Pipeline Expense
    (263 )     0       0       0       0       0       (263 )    
Overhead
    0       0       0       0       0       0       0      
Insurance
    217       0       26,649       134,155       0       0       161,021      
Legal
    133       0       250       5,146       0       0       5,529      
Ad Valorem Taxes
    539       0       110,170       814,264       0       1,724       926,697  
   
Non-op Billings
    0       0       0       0       0       0       0    
 
   

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Sub-total Non Controllable
    3,241       0       142,336       1,003,839       0       1,724      
1,151,140    
 
   

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Total Operating Expense
    (286,507 )     421,793       559,565       3,755,772       0       1,724    
  4,452,347    
 
   

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