Exhibit 10.3


 


TRANSITION SERVICES AGREEMENT


 


THIS
TRANSITION SERVICES AGREEMENT, dated as of September 9, 2005, is between Forest
Oil Corporation, a New York corporation (“Forest”), and SML Wellhead
Corporation, a Delaware corporation and a wholly owned subsidiary of Forest (“Spinco”).


 


WHEREAS, Forest,
Spinco, Mariner Energy, Inc., a Delaware corporation (the “Company”), and
MEI Sub, Inc., a Delaware corporation and wholly owned subsidiary of the
Company (“Merger Sub”), have entered into an Agreement and Plan of Merger,
dated as of September 9, 2005 (the “Merger Agreement”), pursuant to which,
at the Effective Time (as such term and other capitalized terms not defined
herein are defined in the Merger Agreement), Merger Sub will merge with and
into Spinco, with Spinco being the surviving corporation, and Spinco becoming a
wholly owned subsidiary of the Company (the “Merger”);


 


WHEREAS, this
Agreement and the other Transaction Agreements set forth certain transactions
that are conditions to consummation of the Merger;


 


WHEREAS,
Spinco and the Company have requested that Forest and one or more of Forest’s
Affiliates continue to provide certain services to Spinco and Spinco’s
Affiliates in order to assist it in the transition of the Spinco Business for a
period described herein following the Effective Time, and Forest has agreed to
provide the services described in this Agreement according to its terms and
conditions;


 


NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound hereby, agree as follows:


 


SECTION 1.  SERVICES PROVIDED BY FOREST TO SPINCO


 


In order to
continue the operation of the Spinco Business and to facilitate the orderly and
effective transition of the Spinco Business from Forest to Spinco, Forest and
its Affiliates shall use commercially reasonable efforts to provide Spinco and
its Affiliates with certain services (collectively, the “Services”) to the
extent such Services may be requested by Spinco from time to time for the term
of this Agreement.


 


The Services
are set forth in Exhibit A, a copy of which is attached to and made
a part of this Agreement.  The applicable
rates, fees and charges associated with each Service are also set forth in Exhibit A.  The provision by Forest of services not
specifically detailed in Exhibit A shall be mutually agreed upon by
the parties.


 


SECTION 2.  PERFORMANCE OF SERVICES


 


2.1                                 Manner of Performance.  Forest agrees that it shall use commercially
reasonable efforts to cause its personnel who previously provided the services
being requested herein to the Spinco Business prior to the Effective Time to perform
the Services with the same degree of care, 


 





















 


skill,
confidentiality and diligence with which such personnel perform similar
services for Forest and its Affiliates, but in no event less than in
conformance with industry standards.  Forest
shall insure that Forest’s personnel occupying positions related to the support
of the Spinco Business shall devote sufficient time and effort as reasonably
required to perform the Services.  If a
dispute arises over the nature or quality of the Services, the prior practice
of Forest with respect to the Services, as determined from the books and
records of Forest relating to the Spinco Business, shall be conclusive as to
the nature and quality of the Services.


 


2.2                                 Provision of Information.  Any data, information, equipment or general
directions necessary for Forest or any of its Affiliates to perform the
Services shall be submitted by Spinco or its Affiliates in a timely manner.


 


2.3                                 Termination of Any Service.  The termination of any one or more of the
specific Services shall have no impact on Forest’s obligation to continue to
provide any other Services.


 


2.4                                 Laws and Regulations.  Spinco represents and agrees that it and its
Affiliates will use the Services provided hereunder only in accordance with all
applicable federal, state and local laws and regulations, and in accordance
with the conditions, rules, regulations and specifications which may be set
forth in any manuals, materials, documents or instructions provided to Spinco
and the Company on or prior to the date of this Agreement.


 


2.5                                 Modification of Service Levels.  Prior to the end of the first calendar month
following the Effective Time and prior to the end of every other calendar month
thereafter, the parties will review the Services provided to discuss whether
the Services will remain at the same level or decrease during the next
immediately succeeding month.  Spinco
will notify Forest in writing of any Service reduction or termination of
Services pursuant to Section 8.


 


SECTION 3.  CHARGES FOR SERVICES


 


From and after
the date of this Agreement and throughout the term of this Agreement, Spinco
agrees to pay to Forest on a monthly basis the service fees set forth on Exhibit A.  The parties agree that the amounts to be paid
for Services rendered hereunder are intended to both reasonably cover Forest’s
and its Affiliates’ costs in providing the Services
and be competitive with the amount charged by third parties for similar
services.  Monthly charges for a month
that includes the Effective Time or the termination date for this Agreement or
any individual Service shall be prorated, based on the number of days such
Services are provided in such partial month.


 


SECTION 4.  PAYMENT OF CHARGES AND REIMBURSEMENTS


 


On or before
the 15th day of each month during the term of this Agreement, Forest shall
submit to Spinco (or its designee) an invoice for the Services provided
hereunder during the immediately preceding calendar month representing amounts
determined in accordance with Section 3 above, if any.  Subject to Section 5.2, Spinco shall
remit payment within fifteen days after its receipt of such invoice.  Unless otherwise agreed to in writing, Spinco
shall remit all funds due under this Agreement to Forest (or its designee) by
wire transfer in immediately available 


 


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funds based on
the instructions set forth in Exhibit B, a copy of which is
attached to and made a part of this Agreement.


 


SECTION 5.  RECORDS AND AUDITS


 


5.1                                 Records Maintenance and Audits.  All records and other information generated,
gathered or maintained by Forest in connection with its provision of the
Services pursuant to this Agreement shall be the proprietary material of
Spinco.  Forest shall provide Spinco the
originals of such records and other information, and any copies kept by Forest
with Spinco’s consent shall remain subject to the Confidentiality Agreement,
without regard to the termination or expiration date thereof.  Forest shall, for two years after the
termination of this Agreement, maintain records and other evidence sufficient
to accurately and properly calculate the amounts due determined in accordance
with Section 3 hereof.  Spinco or
its representatives shall have reasonable access, after requesting such access
in writing, during normal business hours to such records for the purpose of
auditing and verifying the accuracy of the invoices submitted regarding such
amounts due.  Any such audits performed
by or on behalf of Spinco shall be at Spinco’s sole cost and expense.  Forest shall fully cooperate with the
auditing party’s representatives to accomplish the audit.  Spinco shall have the right to audit Forest’s
books for a period of two years after the month in which the Services were
rendered.


 


5.2                                 Disputed Amounts.  In the event of a good-faith dispute as to
the amount and/or propriety of any invoices or any portions thereof submitted
pursuant to Sections 3 and 4, Spinco shall pay all charges on such invoice and
shall promptly notify Forest in writing of such disputed amounts.  So long as the parties are attempting in good
faith to resolve the dispute, neither party shall be entitled to terminate the
Services related to, or that are the cause of, the disputed amounts.


 


5.3                                 Undisputed Amounts.  Any statement or payment not disputed in
writing by Spinco within six months of the date of such statement shall be
considered final and no longer subject to adjustment.


 


SECTION 6.  CONFIDENTIALITY


 


Each party
acknowledges that in connection with its performance under this Agreement, it
may gain access to confidential material and information that is of a
proprietary, technical or business nature to the other party.  Therefore, each party agrees that the terms
of the Confidentiality Agreement shall apply, without regard to the termination
or expiration date thereof, to all such confidential material and information.


 


Following
termination of the Services hereunder, upon written request at any time by
either party, the parties shall account for and return to the other party or
destroy all papers, books, records and electronic records containing any such
confidential, technical, business or proprietary information.


 


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SECTION 7.  TERM OF AGREEMENT


 


Unless sooner
terminated pursuant to Section 8 hereof, this Agreement shall be for a
term commencing on the date on which the Effective Time occurs and ending on
the last day of the sixth calendar month following the month in which the
Effective Time occurs.


 


SECTION 8.  TERMINATION


 


8.1                                 Termination of Agreement.  At any time, Spinco may terminate this
Agreement for any reason whatsoever by giving Forest at least thirty days’
prior written notice to that effect. 
Spinco shall pay Forest for all charges determined pursuant to Section 3
and incurred up to the date of such termination.  Subject to Section 5, Forest may also
terminate this Agreement if Spinco does not tender payment for the Services
within fifteen days after Spinco is given written notice of a failure to pay.


 


8.2                                 Termination of Services.  At any time or from time to time, Spinco may
terminate any one or more of the specific Services provided hereunder by giving
Forest at least thirty days’ prior written notice to that effect.  Either party may terminate any one or more of
the specific Services if the providing of such Service would violate any
applicable regulation, statute, ordinance or other law; provided,
however, that Forest shall give Spinco at least thirty business
days’ prior written notice when it intends to terminate any specific Services
for this reason.


 


SECTION 9.  MISCELLANEOUS


 


9.1                                 Force Majeure.  Forest shall not have any obligation to
perform any specific Service hereunder if its failure to do so is caused by or
results from any act of God, governmental action, natural disaster, strike,
terrorism, war, insurrection or other cause or circumstances beyond its
control, which acts or occurrences make it impossible for Forest to carry out
its obligations under this Agreement. 
During the term of the force majeure, Spinco shall not have an
obligation to pay for the specific Service that Forest does not provide as a
result of the force majeure.


 


9.2                                 Limitation of Liability.  EXCEPT FOR FAILURE TO COMPLY WITH THE
CONFIDENTIALITY PROVISIONS HEREIN AND FOR FRAUD, GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR INTENTIONAL BREACH, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL LOSSES OR
DAMAGES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING LOST PROFITS AND GOODWILL.  IN NO EVENT SHALL FOREST’S LIABILITY
HEREUNDER EXCEED THE TOTAL AMOUNT OF CASH COMPENSATION THAT FOREST IS PAID
UNDER THIS AGREEMENT.


 


9.3                                 Indemnification.  Each party shall release, defend (upon the
other party’s request), protect, indemnify and save the other party, its employees,
contractors, subcontractors (of any tier) and agents harmless from and against
all liability, claims, costs, expenses, demands, suits and causes of action of
every kind and character arising in favor of or against the first party, its
employees, contractors, subcontractors (of any tier) or agents, on account of
personal injuries to or death of any person, or damages to or the loss or
destruction of property, in anywise incident to or 


 


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in connection
with or arising out of:  (a) the
presence of any of such party’s employees, contractors, subcontractors (of any
tier) or agents on the other party’s premises or (b) the negligent act or
omission of such party or its employees, contractors, subcontractors (of any
tier) or agents.  The foregoing shall not
be interpreted to require either party to indemnify the other party against the
gross negligence or willful misconduct of a party, its employees, contractors
or agents.


 


9.4                                 Independent Contractor:  The parties hereto agree that the Services
rendered by Forest or any of its Affiliates in the fulfillment of the terms and
obligations of this Agreement shall be as an independent contractor and not as
an employee, and with respect thereto, Forest, Forest’s Affiliates and their
respective employees, contractors or agents are not entitled to the benefits
provided by Spinco to its employees including, but not limited to, its group
insurance and participation in any employee benefit and pension plans
maintained by Spinco or any of its Affiliates. Further, nothing stated in this
Agreement shall be construed to make Forest or any of its Affiliates an agent,
partner or joint venturer of or with Spinco or any of its Affiliates.  No employee, contractor or agent of either Forest
or any of its Affiliates shall represent himself to third persons to be other
than an independent contractor of Spinco or any of its Affiliates, nor shall he
permit himself to offer or agree to incur or assume any obligations or
commitments in the name of Spinco or for Spinco without the prior consent and
authorization of Spinco.


 


9.5                                 Complete Agreement.  This Agreement and the Exhibits hereto, the
other Transaction Agreements and other documents referred to herein and therein
shall constitute the entire agreement between the parties hereto with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter.


 


9.6                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to its conflicts of laws principles.


 


9.7                                 Notices.  All notices and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed given
upon (a) a transmitter’s confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard
overnight courier the following business day or if delivered by hand the
following business day), (b) confirmed delivery of a standard overnight
courier or when delivered by hand or (c) the expiration of five
business days after the date mailed by certified or registered mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice):


 


If to Forest
or any member of the Forest Group, to:


 


Forest Oil Corporation


1600 Broadway, Suite 2200


Denver, Colorado 80202

Attention:  General Counsel

Facsimile:  (303) 812-1510


 


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with a copy
(which shall not constitute effective notice) to:


 


Vinson & Elkins L.L.P.


666 Fifth Avenue, 26th Floor

New York, NY 10103-0040

Attention:  Alan P. Baden

Facsimile:  (917) 849-5337


 


If to Spinco
or any member of the Spinco Group prior to the Distribution Date, to:


 


SML Wellhead Corporation


c/o Forest Oil Corporation


1600 Broadway, Suite 2200


Denver, Colorado 80202

Attention:  General Counsel

Facsimile:  (303) 812-1510


 


If to Spinco
or any member of the Spinco Group after the Distribution Date, to:


 


SML Wellhead Corporation


c/o Mariner Energy, Inc.


2101 CityWest Blvd.


Building 4, Suite 900


Houston, TX 77042

Attention:  General Counsel

Facsimile:  (713) 954-5555


 


with a copy
(which shall not constitute effective notice) to:


 


Baker Botts L.L.P.


910 Louisiana Street


Houston, Texas 77002

Attn:  Kelly B. Rose

Facsimile:  (713) 229-7996


 


or to such other address
as any party hereto may have furnished to the other parties by a notice in
writing in accordance with this Section.


 


9.8                                 Amendment and Modification.  This Agreement may be amended, modified or
supplemented only by a written agreement signed by all of the parties hereto,
with a Company Consent.


 


9.9                                 Successors and Assigns; No Third-Party Beneficiaries.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their successors and permitted assigns, but neither this Agreement nor any of
the rights, interests and obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party and Company
Consent.  Except for the provisions of Section 9.3,
which are also for the benefit of the indemnitees, this Agreement is solely for
the benefit of Forest, Spinco 


 


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and the
Company and their respective Subsidiaries, Affiliates, successors and assigns,
and is not intended to confer upon any other Persons any rights or remedies
hereunder.  For the avoidance of doubt,
the parties agree that the Company shall be a third party beneficiary of this
Agreement.


 


9.10                           Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


9.11                           Interpretation.  The Article and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties hereto and shall not in any way affect the
meaning or interpretation of this Agreement.


 


9.12                           Severability.  If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.


 


9.13                           References; Construction.  References to any “Article,” “Exhibit,” “Schedule”
or “Section,” without more, are to Articles, Exhibits, Schedules and
Sections to or of this Agreement. 
Unless otherwise expressly stated, clauses beginning with the term “including”
or similar words set forth examples only and in no way limit the generality of
the matters thus exemplified.


 


9.14                           Termination.  Notwithstanding any provision hereof,
following termination of the Merger Agreement, this Agreement may be terminated
at any time prior to the Distribution Date by and in the sole discretion of the
Board of Directors of Forest.  In the
event of such termination, no party hereto or to any other Transaction
Agreement (other than the Merger Agreement) shall have any Liability to any
Person by reason of this Agreement or any other Transaction Agreement (other
than the Merger Agreement).


 


9.15                           Consent to Jurisdiction and Service of Process.  Each of the parties to this Agreement hereby
irrevocably and unconditionally (i) agrees to be subject to, and hereby
consent and submits to, the jurisdiction of the courts of the State of Delaware
and of the federal courts sitting in the State of Delaware, (ii) to the
extent such party is not otherwise subject to service of process in the State
of Delaware, hereby appoints the Corporation Trust Company as such party’s
agent in the State of Delaware for acceptance of legal process and (iii) agrees
that service made on any such agent set forth in (ii) above shall have the
same legal force and effect as if served upon such party personally within the
State of Delaware.


 


9.16                           Waivers.  Except as provided in this Agreement, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement.  The waiver 


 


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by any party
hereto of a breach of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.


 


9.17                           Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or in equity.


 


9.18                           Waiver of Jury Trial.  Each of the parties hereto irrevocably and
unconditionally waives all right to trial by jury in any litigation, claim, action,
suit, arbitration, inquiry, proceeding, investigation or counterclaim (whether
based in contract, tort or otherwise) arising out of or relating to this
Agreement or the actions of the parties hereto in the negotiation,
administration, performance and enforcement thereof.


 


[Signature page follows]


 


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The parties
hereto have executed this Agreement on the date first above written, to be
effective as of the Effective Time.


 


 


	
   

  	
  FOREST OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SML WELLHEAD CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  



 


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EXHIBIT A


 


SERVICES
PROVIDED BY FOREST TO SPINCO


AND


APPLICABLE
RATES, FEES AND CHARGES


 


Forest shall perform or assist Spinco in performing, under the
direction of Spinco or the Company, any services requested by Spinco related to
the transition of the Spinco Business from Forest and its Affiliates to Spinco,
including but not limited to the following functions (the “Services”):


 


Accounting


 


•                  Forest agrees to provide the
necessary manpower, systems and other resources necessary to account for the
Spinco assets in the same manner and with the same level of diligence as when
the Spinco assets were owned by Forest.  Forest
shall perform all accounting responsibilities necessary to provide monthly
lease operating statements (LOS) by field (or lower classification down to the
well level if currently available) and summarized at the Spinco level both by
accounting date (Accounting Date LOS), activity date (Activity Date LOS).  Specifically, the accounting services to be
provided by Forest shall include, but not be limited to:


 


•                  General


 


•                  Assist in the transfer of all
pertinent electronic or computer system files, master files and historical
records as well as related physical files and source documents from Forest to
the Company


 


•                  Provide accounting output information
and reports (Accounting Date LOS, Activity Date LOS and related reports) in a
timely manner but no later than [the 25th day following the end of the calendar
month]


 


•                  Revenue Accounting


 


•                  Calculation and recording of monthly
accrued revenues to the well level and/or field level as appropriate


 


•                  Calculation and recording of monthly
accrued severance/production taxes as appropriate


 


•                  Calculation and recording of
associated state and federal royalty obligations and reconciliation of royalty
payable accounts


 


•                  Filing of all state and federal
regulatory reports, including MMS 2014 reports, OGAR reports, etc.


 


•                  Recording of actual revenue receipts
from purchasers against accounts receivables and reconciliation of all
receivables accounts


 





















 


•                  Update gas imbalance and pay-out
schedules every other month


 


•                  Maintenance of all revenue, royalty
and division of interest master files


 


•                  Property and Joint Interest
Accounting


 


•                  Calculation and recording of monthly
accrued net lease operating expenses, work over costs, and ad valorem taxes to
the appropriate account code and well level and/or field level as appropriate


 


•                  Calculation and recording of monthly
accrued capital costs to the appropriate account code and well level and/or
field level as appropriate


 


•                  Preparation and transmission of joint
interest billings to partners on operated properties


 


•                  Recording of actual payments to
vendors and partners against accounts payable and reconciliation of all
payables accounts


 


•                  Handle and reconcile cash calls,
prepayments, JIB netting, AFE reporting and ancillary
accounting tasks associated with the Spinco Assets


 


•                  Maintenance of all working interest master
files


 


•                  Marketing


 


•                  Prepare and invoice purchasers for
sale of product


 


•                  Make gas nominations to purchasers


 


Information Technology


 


•                  Provide telecommunications and scada
support to remote sites (e.g., platforms)


 


•                  Provide network / systems
support to Metairie and Lafayette field offices


 


•                  Provide network / systems
support to corporate personnel supporting Gulf operations (e.g., accounting,
G&G, engineering, drilling, land, etc.)


 


•                  Provide electronic data files for
Gulf related data (e.g., production, A/P, A/R, suspense, DOI’s, G&G, etc.)


 


Real Property


 


•                  Maintenance and management of fee
property/lease file system, and administration of lease
payment/expiration/renewal system


 


•                  Document recordation


 


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•                  MMS coordination, correspondence and
reporting


 


•                  Preparation of division orders


 


•                  List of pending transactions (e.g.,
Unocal)


 


Legal


 


•                  Investigation, negotiation,
settlement, preparation of releases and drafts relating to operations, environmental,
personal injury and other claims


 


•                  Coordination of property damage based
small claims actions resulting from operations


 


•                  Contract review and preparation


 


•                  Assistance with land, title and
regulatory matters


 


Operations/Reservoir Engineering


 


•                  Assistance in transitioning drilling
and workover operations and contracts


 


•                  Assistance with year end reserve
evaluation for purposes of preparation of Ryder Scott reserve report


 


•                  Assistance in reconciliation of
reserves for quarterly and bank reports


 


•                  Assistance with reconciliation of
reserves


 


The applicable rates, fees and charges to be paid to Forest shall be as
follows:


 


Spinco shall pay Forest for services provided under this Agreement
based on the time-writing of the Forest employees who perform the
services.  Time-writing shall be done
according to the hourly rates stated below. 
In addition to the hourly charges, Spinco shall reimburse Forest for all
out-of-pocket expenses (including without limitation reasonable travel
expenses) that Forest incurs in performing under this Agreement.


 


Accounting:


Clerk – Clerks and other administrative personnel will be billed at a
base rate of $19.28/hour plus a burden of 46.8% or $28.30/hour.  


Accountant – Accountants
will be billed at a base rate of $29.24/hour plus a burden of 52.0% or
$44.45/hour


Accounting Manager –
Accounting managers will be billed at a base rate of $38.11/hour plus a burden
of 54.7% or $58.95/hour.


Control Management – Control management will be billed at a base rate
of $55.53/hour plus a burden of 65% or $91.65/hour.


 


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Marketing:


Clerk – Clerks and other administrative personnel will be billed at a
base rate of $24.33/hour plus a burden of 48.0% or $36.00/hour.


Marketing Representative
– Marketing representatives will be billed at a base rate of $69.74/hour plus a
burden of 64.4% or $114.70/hour.


 


Information Technology:


Support Specialist/Network Administrator – Support specialists and
network administrators will be billed at a base rate of $36.00/hour plus a
burden of 50.3% or $54.10/hour. 


Programmer – Programmers will be billed at a base rate of $41.80/hour
plus a burden of 50.8% or $63.05/hour. 


IT Manager – IT managers will be billed at a base rate of $58.08/hour
plus a burden of 65.4% or $96.05/hour. 


Records Management – will be billed at a base rate of $24.08/hour plus
a burden of 49.1% or $35.90/hour.  


 


Real Property:


Analyst – Analysts and administrative personnel will be billed at a
base rate of $29.44/hour plus a burden of 49.1% or $43.90/hour.


Landman – Landmen will be billed at a base rate of $57.53/hour plus a
burden of 70.0% or $97.80/hour. 


Land Manager – Land Managers will be billed at a base rate of
$77.74/hour plus a burden of 70.0% or $132.15/hour. 


 


Legal:


Paralegal – Paralegals will be billed at a base rate of $29.85/hour
plus a burden of 50.0% or $44.80/hour.  


Lawyer – Lawyers will be billed at a base rate of $83.04/hour plus a
burden of 70.2% or $141.35/hour. 


 


Operations/Reservoir Engineering:


Clerk – Clerks and other administrative personnel will be billed at a
base rate of $23.00/hour plus a burden of 46.9% or $33.78/hour. 


Engineering Technician – Engineering technicians will be billed at a
base rate of $36.06/hour plus a burden of 49.5% or $53.90/hour. 


Engineer – Engineers will be billed at a base rate of $64.90/hour plus
a burden of 64.6% or $106.80/hour. 


Engineering Manager – Engineering Managers will be billed at a base
rate of $83.29/hour plus a burden of 71.3% or $142.65/hour.


 


Executives:  All Functional Areas:  Base of $115.00/hour plus burden of 82.6% or
$210.00/hour.


 


In all instances, but subject to the availability of particular
employees and Forest’s need to conduct its own business in a prudent and
cost-effective manner, Forest shall utilize among 


 


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personnel who are competent to perform the transition service in
question those employees who bill at the lowest rate.


 


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EXHIBIT B


 


PAYMENT
INSTRUCTIONS


 


Until further notice, the following are wire transfer/ACH payment
instructions for payment to Forest (or its designee) owing under the terms of
the Transition Services Agreement:


 


Bank Name: 


Bank ABA #:


Account Name: 


Account #:  


Reference:  


 


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