Exhibit 10.2

U.S. DEPARTMENT OF THE INTERIOR

SETTLEMENT AGREEMENT

This Settlement Agreement (this “Agreement”) is made by and between ATP Oil &
Gas Corporation (“ATP” or “Debtor”) and the U.S. Department of the Interior
(“Interior”), through the Bureau of Ocean Energy Management (“BOEM”) and the
Bureau of Safety and Environmental Enforcement (“BSEE”). BOEM and BSEE are
herein sometimes called the “Agencies.” Interior and ATP are collectively
referred to herein as the “Parties” and individually as a “Party.”

RECITALS

A. Interior contends its entry into this Agreement is pursuant to its authority
under the Outer Continental Shelf Lands Act (“OCSLA” or “the “Act”), 43 U.S.C.
§§1301, et seq. and its implementing regulations. ATP contends Interior’s
authority arises under the oil and gas leases (“OGLs”) and rights-of-use
easements (“RUEs”) themselves.

B. ATP is a corporation engaged in, among other things, the acquisition,
development, and production of oil and natural gas properties on the Outer
Continental Shelf (“OCS”) in the Gulf of Mexico. On August 17, 2012 (“Petition
Date”), ATP filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code, commencing Case No. 12-36187 (“Bankruptcy Case”) in the United
States Bankruptcy Court for the Southern District of Texas (“Court”).

C. As of the Petition Date, ATP has interests in various federal oil and gas
leases (“OGLs”) and rights-of-use and easements (“RUEs”) on the OCS
(collectively, “Federal Leases”).

D. The OGLs and RUEs that are the subject of this Agreement are listed in
Exhibit A, Schedule for Decommissioning attached to this Agreement, and are
referred to hereinafter for purposes of this Agreement as “Idle Iron Blocks.”
ATP has accrued decommissioning obligations pursuant to its interests in the
Idle Iron Blocks and certain applicable federal regulations requiring ATP to
return the OGLs and RUEs covered by the Idle Iron Blocks to a condition that
meets certain proscribed requirements, e.g., those conditions described in 30
C.F.R. §§ 250.1700 to 250.1754 (“Decommissioning Obligations”). The Idle Iron
Blocks are comprised of the following OGLs and RUEs, including all OCS
facilities and obstructions located thereon and constructed pursuant to the
terms of such OGLs and RUEs, and all wells with bottom hole locations on such
OGLs:

Leases OCS-G 10226 (BA 544); 10444 (DC 133); 05391 (EC 299); 09574 (EI 30);
12906 (EI 71); 21348 (HI 74); 09790 (MC 217); 16333 (SMI 90); 12955 (SS 321);
04827 (ST 77); 04460 (ST 76); 15197 (VR 260); 02833 (WC 237); 14336 (WC 461);
22555 (WC 462); and RUEs OCS-G 30039 (WC 479) and 30006 (WC 557).

 

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E. The Parties have negotiated this Agreement to compromise, in part, the
August 17, 2012 Order issued by Interior, through BOEM and BSEE (the “August
17th Order”), and such negotiations have been in good faith, and at arm’s
length, as a means of ensuring the performance of, ATP’s Decommissioning
Obligations, as described herein, without the costs, delays, and uncertainties
of litigation.

F. The Debtor is willing to perform all of the work associated with the
Decommissioning Obligations for the Idle Iron Blocks in accordance with the
schedule and statement of work attached as Exhibit A to this Agreement. Interior
asserts that ATP’s timely and complete compliance with its Decommissioning
Obligations pertaining to the Idle Iron Blocks is of paramount concern to the
Agencies, as the Federal authorities and stewards charged with protection of the
marine, coastal and human environment on the OCS.

G. The Parties have agreed to resolve certain of their respective disputes
arising out of the August 17th Order and relating to the Decommissioning
Obligations for the Idle Iron Blocks as provided herein and, upon execution of
this Agreement, Debtor has filed a Motion for Approval and Compromise and
Settlement (“9019 Motion”) with the Court, seeking the Court’s approval of this
Agreement and the terms and conditions contained herein and requesting that the
Court hold an expedited hearing on the 9019 Motion by November 30, 2012.

AGREEMENT

NOW, THEREFORE, for and in consideration of the premises set forth above and
below, the receipt and sufficiency of which is hereby acknowledged by the
Parties, the Parties hereby agree as follows:

1. Effective Date. Notwithstanding the date of execution, this Agreement shall
not be effective until the date of entry of the Court’s order approving this
Agreement (“Effective Date”).

2. Specific Performance. ATP shall conduct the work described on Exhibit A in
order to complete the Decommissioning Obligations pertaining to the Idle Iron
Blocks. The Debtor’s performance of the Decommissioning Obligations must be in
accordance with the requirements of the OGLs and RUEs and OCSLA and its
implementing regulations, including 30 C.F.R. §§ 250.1700 to 250.1754
(“Decommissioning Standards”). The Debtor’s completion of the Decommissioning
Obligations in accordance with this Agreement is in lieu of posting supplemental
bonds or providing alternative financial security for the Idle Iron Blocks.
ATP’s failure to comply with the Decommissioning Obligations in accordance with
this Agreement, including the schedule and statement of work attached as Exhibit
A, would constitute a breach of this Agreement and the Decommissioning
Standards; provided, however, if there is a minor delay in the completion of any
particular line item in Exhibit A based upon weather events, equipment failures
or problems, unforeseen technical complications, or some other event or
situation beyond the control of ATP, ATP will be granted an automatic 5 day
extension to complete such line item, reserving further to ATP the right to
request expedited consideration by

 

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BSEE of individual line item extensions beyond said 5 days if circumstances
should warrant. The Parties recognize that the Permit Submittal Dates and the
Completion Dates shown in Exhibit A are estimates based on current information,
and due to various factors, including weather events, equipment failures,
unforeseen technical complications or some other event beyond the control of
ATP, such estimated dates may need to be revised over time. Thus, Debtor will
submit to BSEE a replacement Exhibit A on a quarterly basis, commencing
January 1, 2013, which replacement Exhibit A will become effective upon approval
of BSEE; dates on Exhibit A may also be modified in the interim with approval of
BSEE. BSEE retains all discretion in determining whether to modify and/or
replace Exhibit A in any respect. For the avoidance of doubt, the dates
specified in Exhibit A attached to this settlement agreement as of its execution
by the parties are binding and in effect unless modifications are either
approved by BSEE or affected by an order of the Court in the Bankruptcy Case
approving this Agreement. Nothing in this Agreement shall preclude or prevent
Interior from moving before the Court for all forms of relief, including actions
to require injunctive relief under 43 U.S.C. Section 1350, to address any
violation of this Agreement and to require the Debtor’s specific performance of
the work described on Exhibit A. The Debtor agrees that it will not oppose or
otherwise object to specific performance as an available form of relief or
remedy under this Agreement, if the Court determines the Debtor has failed to
perform the Decommissioning Obligations in accordance with this Agreement.

3. Budget Availability. To meet its Decommissioning Obligations for the Idle
Iron Blocks, the Debtor will use a portion of the funds provided in the 18-month
budget (as amended from time to time, the “Budget”), attached as Exhibit B and
incorporated into the final DIP financing and cash collateral order (Docket
No. 440 in the Bankruptcy Case), as such order may be amended and revised from
time to time, provided the amount budgeted for such work shall not be less the
total assessed amount set forth on Exhibit A, less amounts expended from time to
time in performing the Decommissioning Obligations for the Idle Iron Blocks and
less amounts for any Idle Iron Blocks sold or otherwise transferred with
Interior’s consent for which the acquiring entity assumes or otherwise agrees to
accept liability for the corresponding Decommissioning Obligations. The funds to
be used to complete the Decommissioning Obligations for the Idle Iron Blocks
(the “Idle Iron Funds”) are included in the line item in the Budget designated
for “Total Plugging & Abandonment,” along with funds intended for other
purposes. ATP shall ensure that the Idle Iron Funds available for completing the
Decommissioning Obligations pertaining to the Idle Iron Blocks will be not less
than the total of assessed amounts shown on Exhibit A, less amounts expended
from time to time in completing such Decommissioning Obligations and less
amounts for any Idle Iron Blocks sold or otherwise transferred with Interior’s
consent for which the acquiring entity assumes or otherwise agrees to accept
liability for the corresponding Decommissioning Obligations. Prior to the
completion in full of all of the Decommissioning Obligations pertaining to the
Idle Iron Blocks, ATP agrees not to redirect the Idle Iron Funds as allocated in
the Budget for a purpose other than completion of the Decommissioning
Obligations or to amend the Budget with respect to “Total Plugging &
Abandonment” funds to provide for amounts less than that set forth on Exhibit A
(as may be reduced by funds expended pursuant to Exhibit A), without the express
written approval of BOEM and BSEE.

 

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4. Exclusions and Reservations. This Agreement does not address disputes between
Interior and Debtor as to any issue other than Decommissioning Obligations
pertaining to the Idle Iron Blocks, including without limitation Debtor’s
bonding and other decommissioning obligations under its other Federal Leases,
and it is not the Parties’ intent to impact, compromise or release such other
rights, claims and arguments. Therefore, Interior and ATP each hereby expressly
reserves any and all other rights, claims and arguments as to all other
disputes. Further, this Agreement does not preclude Interior from seeking
further financial bonding or guarantee from ATP as may be required to secure its
Decommissioning Obligations in the event of a material change in condition
hereunder. Interior and Debtor specifically reserve any and all other rights to
seek relief from co-lessees or former lessees on all Idle Iron Blocks for any
reason. Interior reserves all rights as to modifying Decommissioning Obligations
in the event of a material change in condition hereunder.

5. Authority. Each Party warrants and represents that the person(s) executing
this Agreement on its behalf of has the authority to sign this Agreement. Such
representation and warranty shall survive any performance, termination, and
expiration of this Agreement.

6. Entire Agreement and Modification. This Agreement and its Exhibits constitute
the entire agreement between the Parties with respect to the settlement of those
specific matters addressed herein. This Agreement may be amended or modified
only by written agreement that expressly amends or modifies this Agreement and
that is executed by an authorized representative of each Party.

7. Forum Selection. The Court shall retain jurisdiction to interpret and enforce
the Agreement and to resolve any disputes that may arise between the Parties
related to the Agreement. ATP asserts that such jurisdiction shall be exclusive
until the “effective date” of any Plan of Reorganization of ATP.

8. Choice of Law. This Agreement shall be governed by federal law.

9. Headings. Headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not control or affect the meaning,
construction or effect of this Agreement or any of the provisions hereof.

10. Waiver of Trial by Jury. The Parties each waive any right to trial by jury
with respect to any matter arising under this Agreement. This waiver covers each
instance and each issue as to which the right to a jury trial would otherwise
accrue.

11. Interpretation. Through counsel, each Party has participated in the
preparation of this Agreement and, therefore, waives the benefit of any rule of
interpretation by reason of one Party’s preparation of the Agreement.

12. Severability. Wherever possible, each provision of this Agreement shall be
interpreted as valid under applicable law. If any provision in this Agreement or
in any instrument or document delivered pursuant to this Agreement is invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions herein and therein shall not be affected or impaired.

 

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13. Counterparts. This Agreement may be executed and delivered by the Parties by
electronic means, including facsimile or electronic mail, and in multiple
counterparts, all of which will be deemed an original and all of which shall
constitute one and the same instrument.

14. No Third-Party Beneficiaries. No person or entity who is not a Party to this
Agreement shall have or enjoy any rights hereunder.

15. Acknowledgement of Sufficiency of Consideration. The Parties acknowledge the
promises and covenants herein constitute a full and reasonable compromise and
settlement of Decommissioning Obligations for the Idle Iron Blocks, and
represents good and valuable consideration.

16. Condition Precedent. This Agreement is subject to and conditioned on
(a) Debtor obtaining written consent of the Agent for the DIP Lenders, and
(b) the occurrence of the Effective Date.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto as of
the dates indicated under the signatures below.

 

ATP OIL & GAS CORPORATION By:   /s/ George R. Morris Date: November 28, 2012

 

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U. S. DEPARTMENT OF THE INTERIOR

 

BUREAU OF SAFETY AND

ENVIRONMENTAL ENFORCEMENT

By:   /s/ Lars Herbst Date: November 28, 2012

LARS HERBST

Regional Director

BSEE Gulf of Mexico Region

1201 Elmwood Park Blvd.

New Orleans, LA 70125-2394

 

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BUREAU OF OCEAN ENERGY MANAGEMENT

By:

  /s/ John Rodi Date: November 28, 2012

 

JOHN RODI

Regional Director

BOEM Gulf of Mexico Region

1201 Elmwood Park Blvd.

New Orleans, LA 70125-2394

 

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Exhibit A

Idle Iron Blocks and Schedule of Decommissioning Work

[see attached]

 

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Exhibit B

18 Month Budget

[see attached]

 

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