<PAGE>   1

                                                                   EXHIBIT 10.20

                      COMPROMISE AND SETTLEMENT AGREEMENT

     This Compromise and Settlement Agreement (the "Agreement") is made and
entered into by and between Remington Oil and Gas Corporation, a Delaware
corporation with an operating office in Dallas, Texas, on its own behalf and as
successor under the Farmout (as hereinafter defined) to Box Energy Corporation,
OKC Limited Partnership and OKC Corp. (hereinafter collectively referred to as
"Remington") on the one hand, and Phillips Petroleum Company, a Delaware
corporation with an operating office in Bartlesville, Oklahoma, on its own
behalf and as successor under the Farmout (as hereinafter defined) to Phillips
Oil Company and Aminoil USA, Inc. (hereinafter collectively referred to as
"Phillips") on the other:

                                  WITNESSETH:

     WHEREAS, since on or about June 14, 1977, Remington and Phillips have been
parties to that certain Farmout Agreement bearing the typed date May 9, 1977,
between OKC Corporation and Aminoil USA, Inc. covering an interest in OCS Lease
No. G-1618, which lease covers all of Block 89, South Pass Area, Offshore
Louisiana (hereinafter the "Farmout"); and

     WHEREAS, Remington and Phillips are the opposite parties in two lawsuits,
one currently pending as Phillips Petroleum Company v. OKC Limited Partnership
a/k/a Remington Oil and Gas Corporation, No. 01-C-0065 in the Supreme Court of
Louisiana (also numbered as No. 99-CA-0502 in the Court of Appeal for the Fourth
Circuit of Louisiana and No. 91-13779 in the Civil District Court, Parish of
Orleans, Louisiana) (hereinafter the "Louisiana Action"), and the second
currently pending as Remington Oil and Gas Corporation, successor-in-interest to
Box Energy Corporation and OKC Limited Partnership v. Phillips Petroleum
Company, No. 401-01736-98 in the 401st District Court, Collin County, Texas
(formerly No. 366-01736-98 in the 366th District Court, Collin County, Texas)
(hereinafter the "Texas Action"); and

     WHEREAS, Remington and Phillips have asserted numerous claims and
counterclaims in the Louisiana and Texas Actions against each other, and both
Remington and Phillips have each denied and continue to deny the other party's
claims and have asserted affirmative defenses thereto; and

     WHEREAS, in order to buy peace and avoid the expense, risk, and disruption
of continuing the Louisiana and Texas Actions and to prevent future litigation
between them, both Remington and Phillips desire to enter into this Agreement
for the purpose of compromising and settling the claims, disputes, and potential
claims between them as more fully set forth in this Agreement, below,

     NOW THEREFORE, in consideration of this Agreement, the releases, assignment
of interest, releases of judgment and judicial mortgages, dismissals with
prejudice of the Louisiana and Texas Actions, and the other agreements and
consideration set forth herein, which both Remington and Phillips irrevocably
accept and acknowledge as being sufficient consideration for this Agreement,
Remington and Phillips agree as follows:

          1. Remington agrees to pay to Phillips, in the manner set forth below,
     the settlement sum of forty-two million, five hundred thousand U.S. dollars
     ($42,500,000). Remington agrees to pay this settlement sum by doing both of
     (A) and (B) below:

             A. Not later than two (2) business days after both parties have
        executed this Agreement, Remington shall wire transfer twenty-one
        million, two hundred fifty thousand U.S. dollars ($21,250,000) in
        immediately available funds to Phillips' Account No. 144-0-32570 in the
        Chase Manhattan Bank, NY, ABA No. 021000021, Credit: Phillips Petroleum
        Company. The term "business day" as used herein means any day except (i)
        a Saturday, (ii) a Sunday, or (iii) a day on which commercial banks in
        Texas and New York or the national securities exchanges in the United
        States are closed in accordance with applicable law.

             B. (1) The remaining twenty-one million, two hundred fifty thousand
        U.S. dollars ($21,250,000) shall be paid through Remington's transfer to
        Phillips of shares of Remington
<PAGE>   2

        Common Stock, registered under the Securities Act of 1933 on
        Registration Statement Number 333-57456 and related prospectus (which
        prospectus will be supplemented in accordance with applicable securities
        regulations so as to cover the shares to be issued to Phillips) and
        listed on the Nasdaq Stock Market (the "Nasdaq"), sufficient to enable
        Phillips to realize net sale proceeds of $21,250,000 (which shall be
        defined as gross sales proceeds minus total commissions and fees not to
        exceed $425,000) through market sales of such shares, in compliance with
        any applicable trading and volume limitations, during the period
        commencing on the date of delivery of the Initial Shares (as hereinafter
        defined) to Phillips and concluding on the corresponding date of the
        sixth following month (the "Liquidation Period").

             (2) The number of such shares to be initially delivered by
        Remington to Phillips (the "Initial Shares") shall be determined by
        dividing the average of the daily average of high and low sale price for
        such shares on the Nasdaq for the five trading days immediately
        preceding the date on which both parties have executed this Agreement
        (the "Floor Price") into $21,250,000. Remington shall deliver the
        Initial Shares to Phillips by sending electronically to J.P. Morgan
        Securities Inc., DTC #060, for the benefit of Phillips Petroleum
        Company, Account #30352470, with such delivery to be made as soon as
        practicable, but in no event shall Remington be required to deliver the
        Initial Shares to Phillips before Phillips has complied with the
        requirements of Paragraph 3 of this Agreement, below. In the event
        Remington for any reason does not deliver the Initial Shares to Phillips
        before the expiration of five (5) business days from the date on which
        Phillips furnishes to Remington written notice certifying that releases
        of judicial mortgage have been sent or hand delivered in compliance with
        Paragraph 3 of this Agreement, then Remington will, upon written demand
        by Phillips, wire transfer to Phillips, within five (5) business days of
        such demand, $21,250,000 in immediately available funds at the bank
        wiring address shown in Paragraph 1A above; and, in that event, upon
        receipt of such funds by Phillips, Remington's obligations under this
        Paragraph 1B shall terminate.

             (3) Subject to the limitations set forth in the immediately
        succeeding paragraphs, Phillips will at its sole discretion, subject to
        compliance with any applicable trading and volume limitations, sell the
        Initial Shares with the objective of realizing net sales proceeds of
        $21,250,000 during the Liquidation Period. Remington shall (a) keep
        effective its Registration Statement covering the shares, (b) timely
        make all required filings under the Securities Act of 1933 and the
        Securities Exchange Act of 1934, (c) not make any untrue statement of a
        material fact or omit to state a material fact required to be stated or
        necessary to make any statement not misleading, and (d) not enter into
        any transaction or make any commitment to issue, sell or deliver any
        shares of Remington Common Stock to any person other than the issue of
        (i) shares of Remington Common Stock covered by an effective
        Registration Statement in connection with any currently-existing
        Remington employee or director benefit plan or arrangement, including
        without limitation, shares of Remington Common Stock issued or issuable
        upon the exercise of stock options by Remington employees or directors,
        shares of Remington Common Stock issued or issuable to directors under
        Remington's Non-Employee Director Stock Purchase Plan, shares of
        Remington Common Stock issued or issuable in connection with employee
        and director stock grants; (ii) shares of Remington Common Stock covered
        by an effective Registration Statement and issued or issuable in
        connection with the conversion of Remington's 8 1/4% Convertible
        Subordinated Notes Due 2002; and (iii) shares of Remington Common Stock
        in connection with the exercise of warrants owned by S-Sixteen Limited
        Partnership, J.R. Simplot or their affiliates or designees.

             (4) During the Liquidation Period, Phillips shall not sell any
        Initial Shares at a price below the Floor Price. Beginning thirty-one
        (31) days after the date on which both Remington and Phillips have
        signed this Agreement and for the remainder of the Liquidation Period,
        on any day on which Phillips desires to sell shares, and on which the
        Nasdaq sales price does not exceed the Floor Price for sufficient shares
        to enable Phillips to sell the number of shares it desires to sell,
        Phillips may sell back to Remington, and Remington agrees to buy on the
        next trading day at the Floor Price per share, the Initial Shares that
        could not be sold for at least such Floor Price on the previous trading

                                        2
<PAGE>   3

        day. Remington shall not, however, be required to purchase more than
        100,000 shares during any calendar week and, except as set forth in this
        Paragraph 1B(4), and in Paragraph 1B(6) below, Remington shall not be
        required to purchase or deliver to Phillips any shares after the
        expiration of the Liquidation Period; provided that if Phillips is
        prevented from selling all or any portion of the Initial Shares during
        the Liquidation Period by order or requirement of a court, the United
        States Securities and Exchange Commission or other governmental
        authority, action of Nasdaq or Remington, or any other cause that is
        beyond Phillips' reasonable control, then Remington's obligation to buy
        Initial Shares at the Floor Price, as stated above, shall be extended
        beyond the Liquidation Period for the same amount of time that Phillips
        was prevented or restricted from selling such shares.

             (5) It is further agreed that, during the Liquidation Period or any
        extension thereof, Phillips shall not acquire any shares of Remington
        Common Stock other than Initial Shares and Additional Shares (as
        hereinafter defined).

             (6) Phillips will provide Remington a detailed accounting on a
        weekly basis of shares sold and of gross and net proceeds. In the event
        that Phillips realizes net sale proceeds of $21,250,000 through sale of
        Initial Shares prior to completion of the Liquidation Period, Phillips
        shall immediately notify Remington when the realized amount reaches
        $21,250,000, discontinue such sales, and redeliver to Remington any
        Initial Shares remaining unsold. If Phillips sells all of the Initial
        Shares but does not realize aggregate net sales proceeds of $21,250,000,
        then Remington shall as soon as practicable and in no event later than
        five (5) business days following receipt of written demand from Phillips
        deliver to Phillips the number of additional shares computed by dividing
        the average of the daily average of high and low sales prices for such
        shares on the Nasdaq for the five trading days prior to the date of the
        demand into the difference between $21,250,000 and the actual aggregate
        net sales proceeds realized from the sale of all of the Initial Shares
        (the "Additional Shares").

             (7) Notwithstanding the above, Remington may at any time during the
        Liquidation Period tender to Phillips in immediately available funds an
        amount equal to the difference between $21,250,000 and the actual
        aggregate net sales proceeds Phillips has realized from the sale of
        Initial Shares through the previous trading day, and Phillips will, upon
        receipt of such funds, discontinue such sales and redeliver to Remington
        any Initial Shares remaining unsold.

          2. Concurrently with the execution of this Agreement, both Remington
     and Phillips shall execute the original of the Assignment, a copy of which
     is attached as Exhibit A to this Agreement. Phillips shall retain custody
     of such fully-executed Assignment, but shall deliver said fully-executed
     Assignment to Remington at Remington Oil and Gas Corporation, 8201 Preston
     Road, Suite 600, Dallas, Texas 75225, Attn: Mr. James A. Watt, President,
     within two (2) business days after Phillips' Bank has received the wire
     transfer of funds described in Paragraph 1A, above.

          3. Within five (5) business days after both parties have executed this
     Agreement, Phillips shall: (a) execute and send by Federal Express,
     overnight delivery or, at Phillips' option, hand deliver, for recording, to
     the clerk of each Louisiana Parish in which Phillips has previously filed a
     judgment arising from the Louisiana Action, a Release of Judicial Mortgage
     in the form attached as Exhibit B to this Agreement and (b) execute and
     hand deliver to the United States Minerals Management Service in New
     Orleans, Louisiana, a Release of Judicial Mortgage in the form attached as
     Exhibit C to this Agreement.

          4. Remington agrees to defend, indemnify, and hold Phillips harmless
     from any and all claims, demands, actions, and causes of action, if any, of
     whatsoever nature or kind, whenever made, that arise from or relate to the
     making of this Agreement or any aspect of Paragraph 1B, above, or Phillips'
     sale of the shares contemplated by Paragraph 1B above , EVEN IF THE PERSON,
     PERSONS, OR ENTITY MAKING SUCH A CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
     ASSERTS THAT PHILLIPS WAS NEGLIGENT OR STRICTLY LIABLE. It is provided,
     however, that the indemnity and hold harmless in this Paragraph 4 shall not
     apply to or cover: (a) claims, demands, actions, or causes of action
     asserted by persons in their capacity as Phillips' shareholders, or (b)
     claims, demands, actions, or causes of action asserted by persons to whom
     Phillips

                                        3
<PAGE>   4

     has offered or sold Remington Common Stock based on the allegation that
     Phillips made statements about Remington's Common Stock that were not also
     made or approved by Remington.

          5. In addition to the requirements set forth in the Assignment
     attached as Exhibit A, Remington agrees to bear, and to defend, indemnify,
     and hold Phillips harmless from, any and all claims, demands, actions,
     administrative proceedings, costs, liability, and causes of action of every
     kind or character whatsoever, whenever made, arising from or related to OCS
     Lease No. G-1618, which covers Block 89, South Pass Area, Offshore
     Louisiana, operations or the cessation of operations thereon, or the
     transportation or sale of products therefrom, including, but not limited
     to, plugging and abandonment liabilities and costs; dismantlement or
     removal of offshore platforms and any facilities related to the above
     referenced Block 89 and OCS Lease No. G-1618; injuries or death of persons;
     damage to property of any kind; pollution, contamination, or other
     environmental cost, harm or liability of any kind; breach of contract,
     tort, or statutory liability; or violation of any law, rule or regulation,
     including without limitation, all claims, demands, actions, administrative
     or regulatory proceedings, and causes of action for damages, punitive or
     exemplary damages, fines, penalties, plugging, cleanup or other costs or
     expenses, and attorneys' fees. REMINGTON EXPRESSLY AGREES THAT THIS
     OBLIGATION TO INDEMNIFY AND HOLD HARMLESS APPLIES EVEN IF THE PERSON,
     PERSONS, OR ENTITY MAKING SUCH A CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
     ASSERTS THAT PHILLIPS IS OR WAS NEGLIGENT OR STRICTLY LIABLE.

          6. Phillips (on behalf of itself, its predecessors, successors, and
     assigns) hereby generally releases, relinquishes, and forever discharges
     any and all claims, demands, actions, and causes of action, known and
     unknown, legal and equitable, of every kind and character whatsoever, that
     it has or may have against Remington that arise out of or pertain to OCS
     Lease No. G-1618, the Farmout, interests assigned or reserved by Phillips
     therein, the Farmout's net profits account for all time periods, the
     Louisiana Action, or the Texas Action.

          7. Remington (on behalf of itself, its predecessors, successors and
     assigns) hereby generally releases, relinquishes, and forever discharges
     any and all claims, demands, actions, and causes of action, known and
     unknown, legal and equitable, of every kind and character whatsoever, that
     it has or may have against Phillips that arise out of or pertain to OCS
     Lease No. G-1618, the Farmout, interests assigned or reserved by Phillips
     therein, any claim for reimbursement to Remington or the net profits
     account, the Louisiana Action, or the Texas Action. Without limiting the
     generality of the foregoing, Remington expressly releases Phillips from any
     and all claims, demands, actions, or causes of action of every kind or
     character whatsoever that Remington has or may have arising out of or
     related to Phillips' efforts to collect any judgment in the Louisiana
     Action, including without limitation, Phillips' filing or recording of
     judgments, liens, judicial mortgages, or lis pendens, and any actions,
     proceedings, or suits to record or register judgments in the Louisiana
     Action in other States, and any claim for payment or reimbursement of any
     part of either of the settlements Remington agreed to pay the Minerals
     Management Service that are described in Note 9 to the Consolidated
     Financial Statements included in Remington's Annual Report (SEC Form 10-K)
     for the year 2000, dated on or about March 16, 2001.

          8. In addition to the settlement sum specified in Paragraph 1 of this
     Agreement, above, Remington agrees to pay Phillips the additional sum of
     three hundred ninety-eight thousand, two hundred nine U.S. dollars
     ($398,209). Remington and Phillips agree that the additional sum that
     Remington is required to pay Phillips by this Paragraph 8 is in lieu of the
     following: (i) any net profits payments for April and May 2001, and (ii)
     any audit or claims by Phillips related to the net profits account. Within
     two (2) business days after the date on which Remington receives the
     Assignment described in Paragraph 2 of this Agreement, above, Remington
     will wire transfer the additional payment required by this Paragraph 8 in
     immediately available funds to Phillips at the wiring address specified in
     Paragraph 1A of this Agreement, above.

          9. Remington and Phillips agree to instruct their attorneys promptly
     to have both the Louisiana and Texas Actions dismissed, including all
     claims and counterclaims therein, with prejudice to the refiling of same,
     and with each party to bear its own costs and attorneys' fees.

                                        4
<PAGE>   5

          10. Both Remington and Phillips acknowledge that both of them are
     entering into this Agreement, and doing all of the acts provided for by
     this Agreement, for the sole purposes of compromising and settling disputed
     claims, buying peace, and bringing an end to costly, unpleasant, and
     disruptive litigation. Neither this Agreement, nor anything done by either
     party pursuant to this Agreement, is, or shall ever be deemed, any evidence
     or admission that any claim, counterclaim, or defense of the other party
     has any validity. Indeed, both parties have denied, and continue to deny,
     all claims, counterclaims, and defenses asserted by the opposite party in
     the Louisiana and Texas Actions.

          11. This Agreement, the exhibits hereto, and the other documents
     expressly referred to herein constitute and contain the complete agreement
     between these parties as to this compromise and settlement and all other
     matters referred to or encompassed herein. There are no representations,
     statements, agreements, or warranties other than those expressly set forth
     herein or in the exhibits or other documents referred to herein, and each
     party to this Agreement conclusively represents and acknowledges that it is
     not relying on anything any opposing party or the opposing party's
     officers, attorneys, or other agents may have said, except those matters
     expressly set forth herein.

          12. Notwithstanding anything in this Agreement to the contrary, the
     releases contained herein are not intended to, and do not, release either
     party hereto from liability in the future, if any, for any breaches of this
     Agreement or any of the documents attached as exhibits hereto.

          13. This Agreement may not be amended or modified except in writing
     signed by both Remington and Phillips. A breach of this Agreement may be
     waived only by a written waiver by the party granting the waiver. The
     waiver of any breach shall neither operate nor be construed as a waiver of
     any other breach of this Agreement or as a continuing waiver.

          14. All releases, indemnities, defense obligations, and hold harmless
     agreements contained in this Agreement shall extend, inure to the benefit
     of, and cover the released, indemnified, or held harmless party's current
     and former directors, officers, employees, agents, attorneys,
     predecessors-in-interest under the Farmout, partners, co-venturers,
     subsidiaries, and affiliated corporations. This Agreement and the terms,
     provisions, obligations, indemnities, hold harmless agreements, and other
     rights and benefits hereof shall be binding on, and shall inure to the
     benefit of, Remington and Phillips and their respective successors and
     assigns.

          15. This Agreement shall be construed and enforced under the laws of
     the State of Texas.

          16. Remington and Phillips agree: (a) not to make any press release
     about this Agreement or settlement of the Louisiana or Texas Actions that
     has not been approved in advance by the other party and (b) not to make any
     press release about this Agreement or settlement of the Louisiana or Texas
     Actions until this Agreement has been signed by both parties.

          17. Any dispute or complaint relating to or arising from this
     Agreement or any obligation, covenant, or indemnity herein or exhibit
     hereto shall be resolved pursuant to the dispute resolution procedures set
     forth in this Paragraph 17. Either party desiring to initiate such dispute
     resolution procedures shall do so by sending written notice and a
     description of the complaint or grievance to the other party. Mr. James A.
     Watt, President of Remington, and Mr. J. L. Bowles, Vice President of
     Phillips, or their successors in office, shall meet at the receiving
     party's office within fourteen (14) days after receipt of the notice and
     shall meet thereafter as they may mutually agree to attempt to resolve the
     dispute; provided, however, if the dispute has not been resolved within
     sixty (60) days after the date when the receiving party received the notice
     of the complaint or grievance, then either party may require that the
     controversy be settled by binding arbitration in accordance with the CPR
     Institute for Dispute Resolution Rules for Non-Administered Arbitration, by
     three arbitrators who shall be neutral, independent, and generally
     knowledgeable about the type of transaction which gave rise to the dispute.
     The arbitration shall be governed by the United States Arbitration Act, 9
     U.S.C. sec.sec. 1-16. The arbitrators may award injunctive, declaratory, or
     other equitable relief, as well as monetary relief, but the arbitrators may
     not award punitive or exemplary damages except by way of enforcement of
     indemnities and hold harmless obligations set forth herein. The party who
     is successful in arbitration shall recover its reasonable attorneys' fee
     from the other

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<PAGE>   6

     party, with the arbitrators to determine the amount of such fee. The place
     of arbitration shall be Dallas, Texas. Judgment upon the award rendered by
     the arbitrators may be entered by any court having jurisdiction thereof.

          18. No provision of this Agreement or the Exhibits hereto shall be
     construed against, or interpreted to the disadvantage of, either party by
     reason of such party's having, or being deemed to have, drafted, devised,
     or imposed such provision.

          19. Except as otherwise expressly set forth above, all notices,
     demands, and other communications pertaining to this Agreement shall be
     sent in writing and either (a) personally served on the persons designated
     at the addresses below, or (b) served by overnight courier guaranteeing
     overnight or second day delivery, or (c) served by telecopier during normal
     business hours with the original then forwarded by certified or registered
     United States Mail, to the following addresses:

<TABLE>
<S>                                             <C>
          If to Phillips:
          Mailing Address:                      Physical Address:
          Phillips Petroleum Company            Phillips Petroleum Company
          Post Office Box 1967                  6330 West Loop South
          Houston, TX 77251-1967                Bellaire, TX 77401-2901
          Attn: David C. Gill,                  Attn: David C. Gill,
                Central Region Manager                Central Region Manager
                Americas Division                     Americas Division
          Facsimile Number: (713) 669-7553
          with a copy to:
          Phillips Petroleum Company
          1217 Adams Building
          411 Southwest Keeler
          Bartlesville, OK 74004
          Attn: Mr. Kenneth E. Rogers
                Associate General Counsel
          Facsimile Number: (918) 662-1081
          If to Remington:
          Address:
          Remington Oil and Gas Corporation
          8201 Preston Road
          Suite 600
          Dallas, Texas 75225
          Attn: Mr. James A. Watt
          Facsimile Number: (214) 210-2682
</TABLE>

Notices, demands, and other communications are not effective until actually
received by the receiving party. Either party may change its addresses and/or
telecopier numbers upon written notice to the other party.

                                        6
<PAGE>   7

     IN WITNESS HEREOF, the parties have caused this Agreement to be executed by
their duly authorized agents, in the State of Texas, on May 22, 2001.

                                          REMINGTON OIL AND GAS CORPORATION

                                          By:       /s/ JAMES A. WATT
                                            ------------------------------------
                                                      James A. Watt
                                          President and Chief Executive Officer

                                          PHILLIPS PETROLEUM COMPANY

                                          By:       /s/ J. L. BOWLES
                                            ------------------------------------
                                                      J. L. Bowles,
                                                      Vice President

                                        7
<PAGE>   8

                                   EXHIBIT A
                     TO COMPROMISE AND SETTLEMENT AGREEMENT

                                   ASSIGNMENT

     This Assignment is made and executed by Phillips Petroleum Company, a
Delaware corporation with an operating office in Bartlesville, Oklahoma,
hereinafter referred to as "Assignor," in favor of Remington Oil and Gas
Corporation, a Delaware corporation with an operating office in Dallas, Texas,
hereinafter referred to as "Assignee."

     For and in consideration of Ten ($10.00) Dollars cash in hand paid, and in
exchange for other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, Assignor does hereby transfer, set over, grant,
assign, convey and deliver unto Assignee, all of Assignor's right, title,
interest and estate in and to those certain net profits and overriding royalty
interests reserved in the following instruments:

          (i) that certain Assignment of Interest in Oil and Gas Lease dated May
     26, 1977 between Aminoil USA, Inc. and OKC Corp. that reserved and
     transferred interests in that certain oil and gas lease dated July 1, 1967
     between the United States of America, as lessor, and Signal Oil and Gas
     Company, The Louisiana Land and Exploration Company, Marathon Oil Company
     and Amerada Petroleum Corporation, as lessees, being OCS Lease No. G-1618,
     covering all of Block 89, South Pass Area, Offshore Louisiana (the
     "Lease"); and

          (ii) that certain Farmout Agreement dated May 9, 1977, as amended,
     between Aminoil USA, Inc. and OKC Corporation and covering and affecting
     the Lease.

(collectively, the "Interests").

     This Assignment is subject to the following terms, covenants and
conditions:

                                       I.

     Assignor warrants its title to the Interests as to and against claims,
clouds, and encumbrances arising by, through, and under Assignor, but not
otherwise.

                                      II.

     Assignee shall be responsible for obtaining any necessary waivers and/or
releases of preferential or preemptive purchase rights, lessors' approvals, and
any other consents to transfer the Interests and agrees to indemnify and hold
Assignor harmless from any and all claims and liability arising out of or in
connection therewith.

                                      III.

     1. Assignee, at its sole cost, risk and expense, assumes and is responsible
for all obligations arising in connection with the ownership, operation of, or
production from, the Interests and all liabilities associated therewith,
regardless of when and how such liabilities and obligations arose or may arise,
including, without limitation, those arising under or by virtue of (a) any
federal, state or local laws, rules, orders and regulations (collectively,
"Laws") applicable to plugging and abandoning all wells now and hereafter
located on the Lease and to dismantling or removing therefrom all platforms and
equipment, all in full compliance with all such applicable Laws and the terms
and conditions of the Lease and applicable agreements; and (b) any settlements
made with, and any claims, whether for royalties or otherwise asserted by, the
lessor of the Lease, or the Minerals Management Service, that relate in any way
to the Interests.

     2. ASSIGNEE HEREBY AGREES AS OF THE EFFECTIVE TIME TO ASSUME, BE BOUND BY
AND SUBJECT TO, AND PERFORM EACH AND EVERY OF ASSIGNOR'S EXPRESS AND IMPLIED
COVENANTS AND OBLIGATIONS, IF ANY, WITH RESPECT TO THE INTERESTS.
<PAGE>   9

ASSIGNEE SHALL PROTECT AND DEFEND ASSIGNOR FROM AND INDEMNIFY AND HOLD HARMLESS
ASSIGNOR AGAINST ANY AND ALL CLAIMS, DEMANDS, LOSSES, DAMAGES, PUNITIVE DAMAGES,
FINES, PENALTIES, COSTS, EXPENSES (INCLUDING COST OF DEFENSE AND ATTORNEYS'
FEES) OR LIABILITIES OF ANY KIND, ON ACCOUNT OF INJURIES TO OR DEATH OF PERSONS,
DAMAGE TO PROPERTY OF ANY KIND, POLLUTION OR OTHER ENVIRONMENTAL HARM OF ANY
KIND OR THE VIOLATION OF ANY LAW, RULE OR REGULATION ARISING WHOLLY OR IN PART
FROM OR IN CONNECTION WITH OR RESULTING FROM THE OWNERSHIP OR OPERATION OF, OR
PRODUCTION FROM, THE INTERESTS OR ANY AND ALL OF THE OBLIGATIONS OR LIABILITIES
ASSUMED BY ASSIGNEE TO ASSIGNOR UNDER THIS INSTRUMENT, AND/OR ASSIGNEE'S FAILURE
TO DISCHARGE ANY OF THE SAME, WITHOUT REGARD TO ANY NEGLIGENCE, STRICT OR
ABSOLUTE LIABILITY OR OTHER FAULT OF ASSIGNOR.

     3. If any release, assumption of obligation or liability, or indemnity is
held to be invalid or unenforceable, then the parties intend and agree that the
remaining portion of such release, assumption or indemnity shall remain in force
and effect, modified to the minimum extent required to comply with applicable
law for enforceability.

                                      IV.

     Any dispute or complaint relating to or arising from this Assignment and
the obligations and covenants herein shall be resolved pursuant to the dispute
resolution procedures set forth in this section IV. Either party desiring to
initiate such dispute resolution procedures shall send written notice and a
description of a complaint or grievance to the other party. The parties'
designated representatives having authority to settle the dispute shall meet at
the receiving party's offices within fourteen (14) days after receipt of the
notice and shall meet thereafter as they may mutually agree; provided, however,
that if the dispute has not been resolved within sixty (60) days after the date
when the receiving party received the notice of complaint, then either party may
require that the controversy be settled by binding arbitration in accordance
with the CPR Institute for Dispute Resolution Rules for Non-Administered
Arbitration, by three arbitrators who shall be neutral, independent, and
generally knowledgeable about the type of transaction which gave rise to the
dispute. The arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. 1-16. Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction thereof. The place of arbitration shall be
Dallas, Texas.

                                       V.

     The parties agree to execute all such other and additional instruments and
other documents as may be necessary to effectuate the terms of this agreement.

                                      VI.

     The provisions hereof shall be covenants running with the land affected by
the Lease and shall be binding upon and inure to the benefit of the parties
hereto, their respective successors and assigns. Any conveyance or transfer of
the Interests shall provide that the transferee or assignee expressly assumes
all of Assignee's obligations hereunder.

                                       A-2
<PAGE>   10

     IN WITNESS WHEREOF, this instrument is signed and executed in multiple
counterparts as of the date(s) set forth on the acknowledgments hereto, but,
shall be effective for all purposes as of 12:01 o'clock a.m., local time, June
1, 2001 (the "Effective Time").

<TABLE>
<S>                                                         <C>
WITNESSES:                                                  ASSIGNOR:

                                                            PHILLIPS PETROLEUM COMPANY
-----------------------------------------------------

                                                            By: -------------------------------------------------
-----------------------------------------------------

                                                            ASSIGNEE:

-----------------------------------------------------       REMINGTON OIL AND GAS CORPORATION

-----------------------------------------------------
                                                            By: -------------------------------------------------
</TABLE>

                                       A-3
<PAGE>   11

                                ACKNOWLEDGMENTS

STATE OF TEXAS

COUNTY OF HARRIS

     On this           day of             , 2001, before me appeared           ,
to me personally known, who being by me duly sworn, did say that he is the
          of PHILLIPS PETROLEUM COMPANY, a Delaware corporation, and that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors, and said appearer acknowledged that he executed the same as the free
act and deed of said corporation.

                                            ------------------------------------
                                            NOTARY PUBLIC

STATE OF TEXAS

COUNTY OF

     On this           day of             , 2001, before me appeared           ,
to me personally known, who being by me duly sworn, did say that he is the
          of REMINGTON OIL AND GAS CORPORATION, a Delaware corporation, and that
said instrument was signed on behalf of said corporation by authority of its
Board of Directors, and said appearer acknowledged that he executed the same as
the free act and deed of said corporation.

                                            ------------------------------------
                                            NOTARY PUBLIC

                                       A-4
<PAGE>   12

                                   EXHIBIT B
                     TO COMPROMISE AND SETTLEMENT AGREEMENT

                 CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

                               STATE OF LOUISIANA

NUMBER 91-13779                   SECTION "13"                      DIVISION "J"

                           PHILLIPS PETROLEUM COMPANY

                                     VERSUS

                    REMINGTON OIL AND GAS CORPORATION, F/K/A
                            OKC LIMITED PARTNERSHIP

FILED:
--------------------------------------------
------------------------------------------------------
                                            DEPUTY CLERK

                          RELEASE OF JUDICIAL MORTGAGE

UNITED STATES OF AMERICA

STATE OF TEXAS

HARRIS COUNTY

CITY OF BELLAIRE

     BE IT KNOWN, that on this           day of             , 2001, before me,
the undersigned Notary Public duly commissioned and qualified, personally came
and appeared:

                    (hereinafter referred to as "APPEARER")

a duly authorized representative of and agent and attorney-in-fact for the
Phillips Petroleum Company (hereafter referred to as "PHILLIPS"), who is the
judgment creditor of the following:

          (i) That certain judgment of the Fourth Circuit Court of Appeal of the
     State of Louisiana, dated January 5, 2000, in favor of Phillips Petroleum
     Company and against Remington Oil and Gas Corporation, f/k/a OKC Limited
     Partnership, rendered in connection with the matter styled, "Phillips
     Petroleum Company v. Remington Oil and Gas Corporation," on the docket of
     the Fourth Circuit Court of Appeal, State of Louisiana, bearing case number
     99-CA-0502, recorded on           , at instrument number           , MOB
               , folio           , mortgage records of the Parish of           ,
     State of Louisiana (hereinafter the "FIRST JUDICIAL MORTGAGE"); and

          (ii) That certain judgment of the Fourth Circuit Court of Appeal dated
     December 15, 2000 in favor of Phillips Petroleum Company and against
     Remington Oil and Gas Corporation f/k/a OKC Limited Partnership rendered in
     connection with the matter styled "Phillips Petroleum Company v. Remington
     Oil and Gas Corporation" on the docket of the Fourth Circuit Court of
     Appeal, State of Louisiana, bearing case number 99-CA-0502 recorded on
               at instrument number           , MOB           , folio
               , mortgage records of the Parish of           , State of
     Louisiana (hereinafter the "SECOND JUDICIAL MORTGAGE").

     The said Appearer declares that Phillips is the last judgment creditor and
owner of all rights and privileges contained in the First and Second Judicial
Mortgages, that Phillips acknowledges that the judgments referenced in said
First and Second Judicial Mortgages have been fully settled and compromised in
<PAGE>   13

accordance with agreement of the parties, and that Phillips desires to grant
releases of said First and Second Judicial Mortgages, and that it authorizes and
requires the Clerk of Court, and/or recorder of mortgages for the Parish of
          to cancel and erase from the record of his office the inscription of
said First Judicial Mortgage made in mortgage instrument           , MOB
          , folio           and Second Judicial Mortgage made in mortgage
instrument           , MOB           , folio           .

     This done and passed at my offices at Bellaire, Texas, in the presence of
the witnesses hereunto and attesting both competent, who signed these presents
with said Appearer and me, notary, on the date and year stated above.

WITNESSES:

<TABLE>
<S>                                             <C>
---------------------------------------------   ---------------------------------------------
                                                AUTHORIZED REPRESENTATIVE AND
                                                ATTORNEY-IN-FACT
                                                OF PHILLIPS PETROLEUM COMPANY
---------------------------------------------
SWORN TO AND SUBSCRIBED
BEFORE ME THIS      DAY OF
          , 2001.

---------------------------------------------
NOTARY PUBLIC
</TABLE>

                                       B-2
<PAGE>   14

                                   EXHIBIT C
                     TO COMPROMISE AND SETTLEMENT AGREEMENT

                 CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

                               STATE OF LOUISIANA

NUMBER 91-13779                   SECTION "13"                      DIVISION "J"

                           PHILLIPS PETROLEUM COMPANY

                                     VERSUS

                    REMINGTON OIL AND GAS CORPORATION, F/K/A
                            OKC LIMITED PARTNERSHIP

FILED:
--------------------------------------------
------------------------------------------------------
                                            DEPUTY CLERK

                          RELEASE OF JUDICIAL MORTGAGE

UNITED STATES OF AMERICA

STATE OF TEXAS

HARRIS COUNTY

CITY OF BELLAIRE

     BE IT KNOWN, that on this           day of             , 2001, before me,
the undersigned Notary Public duly commissioned and qualified, personally came
and appeared:

                    (hereinafter referred to as "APPEARER")

a duly authorized representative of and agent and attorney-in-fact for the
Phillips Petroleum Company (hereafter referred to as "PHILLIPS"), who is the
judgment creditor of the following:

          (i) That certain judgment of the Fourth Circuit Court of Appeal of the
     State of Louisiana, dated January 5, 2000, in favor of Phillips Petroleum
     Company and against Remington Oil and Gas Corporation, f/k/a OKC Limited
     Partnership, rendered in connection with the matter styled, "Phillips
     Petroleum Company v. Remington Oil and Gas Corporation," on the docket of
     the Fourth Circuit Court of Appeal, State of Louisiana, bearing case number
     99-CA-0502 (hereinafter the "FIRST JUDICIAL MORTGAGE"); and

          (ii) That certain judgment of the Fourth Circuit Court of Appeal dated
     December 15, 2000 in favor of Phillips Petroleum Company and against
     Remington Oil and Gas Corporation f/k/a OKC Limited Partnership rendered in
     connection with the matter styled "Phillips Petroleum Company v. Remington
     Oil and Gas Corporation" on the docket of the Fourth Circuit Court of
     Appeal, State of Louisiana, bearing case number 99-CA-0502 (hereinafter the
     "SECOND JUDICIAL MORTGAGE").

     The said Appearer declares that Phillips is the last judgment creditor and
owner of all rights and privileges contained in the First and Second Judicial
Mortgages, that Phillips acknowledges that the judgments referenced in said
First and Second Judicial Mortgages have been fully settled and compromised in
accordance with agreement of the parties, and that Phillips desires to grant
releases of said First and Second Judicial Mortgages, and that it has authorized
and required the Clerks of Court, and/or recorder of mortgages for the Parishes
of Orleans, Jefferson, Cameron, St. Mary, Iberia, Vermilion, Plaquemines, St.
Bernard and
<PAGE>   15

Terrebonne to cancel and erase from the record of their offices the inscriptions
of said First and Second Judicial Mortgages.

     Appearer further declares and requests that this Release of Judicial
Mortgage be accepted by the United States Department of Interior, Mineral
Management Service and filed by it in the files maintained by the MMS with
respect to those certain oil and gas leases described on Exhibit "A" attached
hereto.

     Thus done and passed at my offices at Bellaire, Texas, in the presence of
the witnesses hereunto and attesting both competent, who signed these presents
with said Appearer and me, notary, on the date and year stated above.

WITNESSES:

<TABLE>
<S>                                                         <C>

-----------------------------------------------------       -----------------------------------------------------------
                                                            AUTHORIZED REPRESENTATIVE AND ATTORNEY-IN-FACT
                                                            OF PHILLIPS PETROLEUM COMPANY
-----------------------------------------------------
</TABLE>

SWORN TO AND SUBSCRIBED
BEFORE ME THIS           DAY OF
            , 2001.

------------------------------------------------------
NOTARY PUBLIC

                                       C-2
<PAGE>   16

                  EXHIBIT "A" TO RELEASE OF JUDICIAL MORTGAGE

<TABLE>
       <S>                                       <C>
                        G01618                                    G16397
                        G02426                                    G16402
                        G02706                                    G16436
                        G02739                                    G16447
                        G04225                                    G17130
                        G04996                                    G17131
                        G05687                                    G17179
                        G06104                                    G17826
                        G07799                                    G17975
                        G13620                                    G17976
                        G14155                                    G18055
                        G14194                                    G19752
                        G14467                                    G21080
                        G15084                                    G21578
                        G15186                                    G21579
                        G15334                                    G21581
                        G15744                                    G21583
                        G15745                                    G21614
                        G15747                                    G21617
                        G15750                                    G21618
                        G16385                                    G21642
</TABLE>

                                       C-3