Document:

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EXHIBIT 10.48

                                     ISDA(R) International Swap Dealers
                  Association. Inc.
                                MASTER AGREEMENT
                                   dated as of
                                November 30, 2006
                                     BETWEEN
J.                                    ARON & COMPANY PACIFIC ENERGY RESOURCES
                                      LTD. AND

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:-

1. INTERPRETATION

(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2. OBLIGATIONS

(a) GENERAL CONDITIONS.

         (i) Each party will make each payment or delivery specified in each
         Confirmation to be made by it, subject to the other provisions of this
         Agreement.

         (ii) Payments under this Agreement will be made on the due date for
         value on that date in the place of the account specified in the
         relevant Confirmation or otherwise pursuant to this Agreement, in
         freely transferable funds and in the manner customary for payments in
         the required currency. Where settlement is by delivery (that is, other
         than by payment), such delivery will be made for receipt on the due
         date in the manner customary for the relevant obligation unless
         otherwise specified in the relevant Confirmation or elsewhere in this
         Agreement.

         (iii) Each obligation of each party under Section 2(a)(i) is subject to
         (1) the condition precedent that no Event of Default or Potential Event
         of Default with respect to the other party has occurred and is
         continuing, (2) the condition precedent that no Early Termination Date
         in respect of the relevant Transaction has occurred or been effectively
         designated and (3) each other applicable condition precedent specified
         in this Agreement.

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(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c) NETTING. If on any date amounts would otherwise be payable:--

         (i) in the same currency; and

         (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d) DEDUCTION OR WITHHOLDING FOR TAX.

         (i) GROSS-UP. All payments under this Agreement will be made without
         any deduction or withholding for or on account of any Tax unless such
         deduction or withholding is required by any applicable law, as modified
         by the practice of any relevant governmental revenue authority, then in
         effect. If a party is so required to deduct or withhold, then that
         party ("X") will:-

                  (1) promptly notify the other party ("Y") of such requirement;

                  (2) pay to the relevant authorities the full amount required
                  to be deducted or withheld (including the full amount required
                  to be deducted or withheld from any additional amount paid by
                  X to Y under this Section 2(d)) promptly upon the earlier of
                  determining that such deduction or withholding is required or
                  receiving notice that such amount has been assessed against Y;

                  (3) promptly forward to Y an official receipt (or a certified
                  copy), or other documentation reasonably acceptable to Y,
                  evidencing such payment to such authorities; and

                  (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
                  to the payment to which Y is otherwise entitled under this
                  Agreement, such additional amount as is necessary to ensure
                  that the net amount actually received by Y (free and clear of
                  Indemnifiable Taxes, whether assessed against X or Y) will
                  equal the full amount Y would have received had no such
                  deduction or withholding been required. However, X will not be
                  required to pay any additional amount to Y to the extent that
                  it would not be required to be paid but for:--

                           (A) the failure by Y to comply with or perform any
                           agreement contained in Section 4(a)(i), 4(a)(iii) or
                           4(d); or

                           (B) the failure of a representation made by Y
                           pursuant to Section 3(f) to be accurate and true
                           unless such failure would not have occurred but for
                           (I) any action taken by a taxing authority, or
                           brought in a court of competent jurisdiction, on or
                           after the date on which a Transaction is entered into
                           (regardless of whether such action is taken or
                           brought with respect to a party to this Agreement) or
                           (II) a Change in Tax Law.

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         (ii) LIABILITY. If:-

                  (1) X is required by any applicable law, as modified by the
                  practice of any relevant governmental revenue authority, to
                  make any deduction or withholding in respect of which X would
                  not be required to pay an additional amount to Y under Section
                  2(d)(i)(4);

                  (2) X does not so deduct or withhold; and

                  (3) a liability resulting from such Tax is assessed directly
                  against X,

         then, except to the extent Y has satisfied or then satisfies the
         liability resulting from such Tax, Y will promptly pay to X the amount
         of such liability (including any related liability for interest, but
         including any related liability for penalties only if Y has failed to
         comply with or perform any agreement contained in Section 4(a)(i),
         4(a)(iii) or 4(d)).

(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3. REPRESENTATIONS

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--

(a) BASIC REPRESENTATIONS.

         (i) STATUS. It is duly organised and validly existing under the laws of
         the jurisdiction of its organisation or incorporation and, if relevant
         under such laws, in good standing;

         (ii) POWERS. It has the power to execute this Agreement and any other
         documentation relating to this Agreement to which it is a party, to
         deliver this Agreement and any other documentation relating to this
         Agreement that it is required by this Agreement to deliver and to
         perform its obligations under this Agreement and any obligations it has
         under any Credit Support Document to which it is a party and has taken
         all necessary action to authorise such execution, delivery and
         performance;

         (iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
         performance do not violate or conflict with any law applicable to it,
         any provision of its constitutional documents, any order or judgment of
         any court or other agency of government applicable to it or any of its
         assets or any contractual restriction binding on or affecting it or any
         of its assets;

         (iv) CONSENTS. All governmental and other consents that are required to
         have been obtained by it with respect to this Agreement or any Credit
         Support Document to which it is a party have been obtained and are in
         full force and effect and all conditions of any such consents have been
         complied with; and

         (v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
         Credit Support Document to which it is a party constitute its legal,
         valid and binding obligations, enforceable in accordance with their
         respective terms (subject to applicable bankruptcy, reorganisation,
         insolvency, moratorium or similar laws affecting creditors' rights
         generally and subject, as to enforceability, to equitable principles of
         general application (regardless of whether enforcement is sought in a
         proceeding in equity or at law)).

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(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.

(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.

(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4. AGREEMENTS

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-

(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

         (i) any forms, documents or certificates relating to taxation specified
         in the Schedule or any Confirmation;

         (ii) any other documents specified in the Schedule or any Confirmation;
         and

         (iii) upon reasonable demand by such other party, any form or document
         that may be required or reasonably requested in writing in order to
         allow such other party or its Credit Support Provider to make a payment
         under this Agreement or any applicable Credit Support Document without
         any deduction or withholding for or on account of any Tax or with such
         deduction or withholding at a reduced rate (so long as the completion,
         execution or submission of such form or document would not materially
         prejudice the legal or commercial position of the party in receipt of
         such demand), with any such form or document to be accurate and
         completed in a manner reasonably satisfactory to such other party and
         to be executed and to be delivered with any reasonably required
         certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5. EVENTS OF DEFAULT AND TERMINATION EVENTS

(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--

         (i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
         any payment under this Agreement or delivery under Section 2(a)(i) or
         2(e) required to be made by it if such failure is not remedied on or
         before the third Local Business Day after notice of such failure is
         given to the party;

         (ii) BREACH OF AGREEMENT. Failure by the party to comply with or
         perform any agreement or obligation (other than an obligation to make
         any payment under this Agreement or delivery under Section 2(a)(i) or
         2(e) or to give notice of a Termination Event or any agreement or
         obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
         with or performed by the party in accordance with this Agreement if
         such failure is not remedied on or before the thirtieth day after
         notice of such failure is given to the party;

         (iii) CREDIT SUPPORT DEFAULT.

                  (1) Failure by the party or any Credit Support Provider of
                  such party to comply with or perform any agreement or
                  obligation to be complied with or performed by it in
                  accordance with any Credit Support Document if such failure is
                  continuing after any applicable grace period has elapsed;

                  (2) the expiration or termination of such Credit Support
                  Document or the failing or ceasing of such Credit Support
                  Document to be in full force and effect for the purpose of
                  this Agreement (in either case other than in accordance with
                  its terms) prior to the satisfaction of all obligations of
                  such party under each Transaction to which such Credit Support
                  Document relates without the written consent of the other
                  party; or

                  (3) the party or such Credit Support Provider disaffirms,
                  disclaims, repudiates or rejects, in whole or in part, or
                  challenges the validity of, such Credit Support Document;

         (iv) MISREPRESENTATION. A representation (other than a representation
         under Section 3(e) or (f)) made or repeated or deemed to have been made
         or repeated by the party or any Credit Support Provider of such party
         in this Agreement or any Credit Support Document proves to have been
         incorrect or misleading in any material respect when made or repeated
         or deemed to have been made or repeated;

         (v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
         Provider of such party or any applicable Specified Entity of such party
         (1) defaults under a Specified Transaction and, after giving effect to
         any applicable notice requirement or grace period, there occurs a
         liquidation of, an acceleration of obligations under, or an early
         termination of, that Specified Transaction, (2) defaults, after giving
         effect to any applicable notice requirement or grace period, in making
         any payment or delivery due on the last payment, delivery or exchange
         date of, or any payment on early termination of, a Specified
         Transaction (or such default continues for at least three Local
         Business Days if there is no applicable notice requirement or grace
         period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
         or in part, a Specified Transaction (or such action is taken by any
         person or entity appointed or empowered to operate it or act on its
         behalf);

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         (vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
         applying to the party, the occurrence or existence of (1) a default,
         event of default or other similar condition or event (however
         described) in respect of such party, any Credit Support Provider of
         such party or any applicable Specified Entity of such party under one
         or more agreements or instruments relating to Specified Indebtedness of
         any of them (individually or collectively) in an aggregate amount of
         not less than the applicable Threshold Amount (as specified in the
         Schedule) which has resulted in such Specified Indebtedness becoming,
         or becoming capable at such time of being declared, due and payable
         under such agreements or instruments, before it would otherwise have
         been due and payable or (2) a default by such party, such Credit
         Support Provider or such Specified Entity (individually or
         collectively) in making one or more payments on the due date thereof in
         an aggregate amount of not less than the applicable Threshold Amount
         under such agreements or instruments (after giving effect to any
         applicable notice requirement or grace period);

         (vii) BANKRUPTCY. The party, any Credit Support Provider of such party
         or any applicable Specified Entity of such party:--

                  (1) is dissolved (other than pursuant to a consolidation,
                  amalgamation or merger); (2) becomes insolvent or is unable to
                  pay its debts or fails or admits in writing its inability
                  generally to pay its debts as they become due; (3) makes a
                  general assignment, arrangement or composition with or for the
                  benefit of its creditors; (4) institutes or has instituted
                  against it a proceeding seeking a judgment of insolvency or
                  bankruptcy or any other relief under any bankruptcy or
                  insolvency law or other similar law affecting creditors'
                  rights, or a petition is presented for its winding-up or
                  liquidation, and, in the case of any such proceeding or
                  petition instituted or presented against it, such proceeding
                  or petition (A) results in a judgment of insolvency or
                  bankruptcy or the entry of an order for relief or the making
                  of an order for its winding-up or liquidation or (B) is not
                  dismissed, discharged, stayed or restrained in each case
                  within 30 days of the institution or presentation thereof; (5)
                  has a resolution passed for its winding-up, official
                  management or liquidation (other than pursuant to a
                  consolidation, amalgamation or merger); (6) seeks or becomes
                  subject to the appointment of an administrator, provisional
                  liquidator, conservator, receiver, trustee, custodian or other
                  similar official for it or for all or substantially all its
                  assets; (7) has a secured party take possession of all or
                  substantially all its assets or has a distress, execution,
                  attachment, sequestration or other legal process levied,
                  enforced or sued on or against all or substantially all its
                  assets and such secured party maintains possession, or any
                  such process is not dismissed, discharged, stayed or
                  restrained, in each case within 30 days thereafter; (8) causes
                  or is subject to any event with respect to it which, under the
                  applicable laws of any jurisdiction, has an analogous effect
                  to any of the events specified in clauses (1) to (7)
                  (inclusive); or (9) takes any action in furtherance of, or
                  indicating its consent to, approval of, or acquiescence in,
                  any of the foregoing acts; or

         (viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
         Provider of such party consolidates or amalgamates with, or merges with
         or into, or transfers all or substantially all its assets to, another
         entity and, at the time of such consolidation, amalgamation, merger or
         transfer:-

                  (1) the resulting, surviving or transferee entity fails to
                  assume all the obligations of such party or such Credit
                  Support Provider under this Agreement or any Credit Support
                  Document to which it or its predecessor was a party by
                  operation of law or pursuant to an agreement reasonably
                  satisfactory to the other party to this Agreement; or

                  (2) the benefits of any Credit Support Document fail to extend
                  (without the consent of the other party) to the performance by
                  such resulting, surviving or transferee entity of its
                  obligations under this Agreement.

(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--

         (i) ILLEGALITY. Due to the adoption of, or any change in, any
         applicable law after the date on which a Transaction is entered into,
         or due to the promulgation of, or any change in, the interpretation by
         any court, tribunal or regulatory authority with competent jurisdiction
         of any applicable law after such date, it becomes unlawful (other than
         as a result of a breach by the party of Section 4(b)) for such party
         (which will be the Affected Party):--

                  (1) to perform any absolute or contingent obligation to make a
                  payment or delivery or to receive a payment or delivery in
                  respect of such Transaction or to comply with any other
                  material provision of this Agreement relating to such
                  Transaction; or

                  (2) to perform, or for any Credit Support Provider of such
                  party to perform, any contingent or other obligation which the
                  party (or such Credit Support Provider) has under any Credit
                  Support Document relating to such Transaction;

         (ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
         brought in a court of competent jurisdiction, on or after the date on
         which a Transaction is entered into (regardless of whether such action
         is taken or brought with respect to a party to this Agreement) or (y) a
         Change in Tax Law, the party (which will be the Affected Party) will,
         or there is a substantial likelihood that it will, on the next
         succeeding Scheduled Payment Date (1) be required to pay to the other
         party an additional amount in respect of an Indemnifiable Tax under
         Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
         6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
         required to be deducted or withheld for or on account of a Tax (except
         in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
         additional amount is required to be paid in respect of such Tax under
         Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
         (B));

         (iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
         next succeeding Scheduled Payment Date will either (1) be required to
         pay an additional amount in respect of an Indemnifiable Tax under
         Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
         6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
         been deducted or withheld for or on account of any Indemnifiable Tax in
         respect of which the other party is not required to pay an additional
         amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
         either case as a result of a party consolidating or amalgamating with,
         or merging with or into, or transferring all or substantially all its
         assets to, another entity (which will be the Affected Party) where such
         action does not constitute an event described in Section 5(a)(viii);

         (iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
         specified in the Schedule as applying to the party, such party ("X"),
         any Credit Support Provider of X or any applicable Specified Entity of
         X consolidates or amalgamates with, or merges with or into, or
         transfers all or substantially all its assets to, another entity and
         such action does not constitute an event described in Section
         5(a)(viii) but the creditworthiness of the resulting, surviving or
         transferee entity is materially weaker than that of X, such Credit
         Support Provider or such Specified Entity, as the case may be,
         immediately prior to such action (and, in such event, X or its
         successor or transferee, as appropriate, will be the Affected Party);
         or

         (v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
         is specified in the Schedule or any Confirmation as applying, the
         occurrence of such event (and, in such event, the Affected Party or
         Affected Parties shall be as specified for such Additional Termination
         Event in the Schedule or such Confirmation).

(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

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6. EARLY TERMINATION

(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

         (i) NOTICE. If a Termination Event occurs, an Affected Party will,
         promptly upon becoming aware of it, notify the other party, specifying
         the nature of that Termination Event and each Affected Transaction and
         will also give such other information about that Termination Event as
         the other party may reasonably require.

         (ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
         Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
         Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
         the Affected Party, the Affected Party will, as a condition to its
         right to designate an Early Termination Date under Section 6(b)(iv),
         use all reasonable efforts (which will not require such party to incur
         a loss, excluding immaterial, incidental expenses) to transfer within
         20 days after it gives notice under Section 6(b)(i) all its rights and
         obligations under this Agreement in respect of the Affected
         Transactions to another of its Offices or Affiliates so that such
         Termination Event ceases to exist.

         If the Affected Party is not able to make such a transfer it will give
         notice to the other party to that effect within such 20 day period,
         whereupon the other party may effect such a transfer within 30 days
         after notice is given under Section 6(b)(i).

         Any such transfer by a party under this Section 6(b)(ii) will be
         subject to and conditional upon the prior written consent of the other
         party, which consent will not be withheld if such other party's
         policies in effect at such time would permit it to enter into
         transactions with the transferee on the terms proposed.

         (iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
         or a Tax Event occurs and there are two Affected Parties, each party
         will use all reasonable efforts to reach agreement within 30 days after
         notice thereof is given under Section 6(b)(i) on action to avoid that
         Termination Event.

         (iv) RIGHT TO TERMINATE. If:-

                  (1) a transfer under Section 6(b)(ii) or an agreement under
                  Section 6(b)(iii), as the case may be, has not been effected
                  with respect to all Affected Transactions within 30 days after
                  an Affected Party gives notice under Section 6(b)(i); or

                  (2) an Illegality under Section 5(b)(i)(2), a Credit Event
                  Upon Merger or an Additional Termination Event occurs, or a
                  Tax Event Upon Merger occurs and the Burdened Party is not the
                  Affected Party.

         either party in the case of an Illegality, the Burdened Party in the
         case of a Tax Event Upon Merger, any Affected Party in the case of a
         Tax Event or an Additional Termination Event if there is more than one
         Affected Party, or the party which is not the Affected Party in the
         case of a Credit Event Upon Merger or an Additional Termination Event
         if there is only one Affected Party may, by not more than 20 days
         notice to the other party and provided that the relevant Termination
         Event is then

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         continuing, designate a day not earlier than the day such notice is
         effective as an Early Termination Date in respect of all Affected
         Transactions.

(c) EFFECT OF DESIGNATION.

         (i) If notice designating an Early Termination Date is given under
         Section 6(a) or (b), the Early Termination Date will occur on the date
         so designated, whether or not the relevant Event of Default or
         Termination Event is then continuing.

         (ii) Upon the occurrence or effective designation of an Early
         Termination Date, no further payments or deliveries under Section
         2(a)(i) or 2(e) in respect of the Terminated Transactions will be
         required to be made, but without prejudice to the other provisions of
         this Agreement. The amount if any, payable in respect of an Early
         Termination Date shall be determined pursuant to Section 6(e).

(d) CALCULATIONS.

         (i) STATEMENT. On or as soon as reasonably practicable following the
         occurrence of an Early Termination Date, each party will make the
         calculations on its part, if any, contemplated by Section 6(e) and will
         provide to the other party a statement (1) showing, in reasonable
         detail, such calculations (including all relevant quotations and
         specifying any amount payable under Section 6(e)) and (2) giving
         details of the relevant account to which any amount payable to it is to
         be paid. In the absence of written confirmation from the source of a
         quotation obtained in determining a Market Quotation, the records of
         the party obtaining such quotation will be conclusive evidence of the
         existence and accuracy of such quotation.

         (ii) PAYMENT DATE. An amount calculated as being due in respect of any
         Early Termination Date under Section 6(e) will be payable on the day
         that notice of the amount payable is effective (in the case of an Early
         Termination Date which is designated or occurs as a result of an Event
         of Default) and on the day which is two Local Business Days after the
         day on which notice of the amount payable is effective (in the case of
         an Early Termination Date which is designated as a result of a
         Termination Event). Such amount will be paid together with (to the
         extent permitted under applicable law) interest thereon (before as well
         as after judgment) in the Termination Currency, from (and including)
         the relevant Early Termination Date to (but excluding) the date such
         amount is paid, at the Applicable Rate. Such interest will be
         calculated on the basis of daily compounding and the actual number of
         days elapsed.

(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs. the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

         (i) EVENTS OF DEFAULT. If the Early Termination Date results from an
         Event of Default:-

                  (1) FIRST METHOD AND MARKET QUOTATION. If the First Method and
                  Market Quotation apply, the Defaulting Party will pay to the
                  Non-defaulting Party the excess, if a positive number, of (A)
                  the sum of the Settlement Amount (determined by the
                  Non-defaulting Party) in respect of the Terminated
                  Transactions and the Termination Currency Equivalent of the
                  Unpaid Amounts owing to the Non-defaulting Party over (B) the
                  Termination Currency Equivalent of the Unpaid Amounts owing to
                  the Defaulting Party.

                  (2) FIRST METHOD AND LOSS. If the First Method and Loss apply,
                  the Defaulting Party will pay to the Non-defaulting Party, if
                  a positive number, the Non-defaulting Party's Loss in respect
                  of this Agreement.

                  (3) SECOND METHOD AND MARKET QUOTATION. If the Second Method
                  and Market Quotation apply, an amount will be payable equal to
                  (A) the sum of the Settlement Amount (determined by the

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                  Non-defaulting Party) in respect of the Terminated
                  Transactions and the Termination Currency Equivalent of the
                  Unpaid Amounts owing to the Non-defaulting Party less (B) the
                  Termination Currency Equivalent of the Unpaid Amounts owing to
                  the Defaulting Party. If that amount is a positive number, the
                  Defaulting Party will pay it to the Non-defaulting Party; if
                  it is a negative number, the Non-defaulting Party will pay the
                  absolute value of that amount to the Defaulting Party.

                  (4) SECOND METHOD AND LOSS. If the Second Method and Loss
                  apply, an amount will be payable equal to the Non-defaulting
                  Party's Loss in respect of this Agreement. If that amount is a
                  positive number, the Defaulting Party will pay it to the
                  Non-defaulting Party; if it is a negative number, the
                  Non-defaulting Party will pay the absolute value of that
                  amount to the Defaulting Party.

         (ii) TERMINATION EVENTS. If the Early Termination Date results from a
         Termination Event:-

                  (1) ONE AFFECTED PARTY. If there is one Affected Party, the
                  amount payable will be determined in accordance with Section
                  6(e)(i)(3), if Market Quotation applies, or Section
                  6(e)(i)(4), if Loss applies, except that, in either case,
                  references to the Defaulting Party and to the Non-defaulting
                  Party will be deemed to be references to the Affected Party
                  and the party which is not the Affected Party, respectively,
                  and, if Loss applies and fewer than all the Transactions are
                  being terminated, Loss shall be calculated in respect of all
                  Terminated Transactions.

                  (2) TWO AFFECTED PARTIES. If there are two Affected Parties:--

                  (A) if Market Quotation applies, each party will determine a
                  Settlement Amount in respect of the Terminated Transactions,
                  and an amount will be payable equal to (I) the sum of (a)
                  one-half of the difference between the Settlement Amount of
                  the party with the higher Settlement Amount ("X") and the
                  Settlement Amount of the party with the lower Settlement
                  Amount ("Y") and (b) the Termination Currency Equivalent of
                  the Unpaid Amounts owing to X less (II) the Termination
                  Currency Equivalent of the Unpaid Amounts owing to Y; and

                  (B) if Loss applies, each party will determine its Loss in
                  respect of this Agreement (or, if fewer than all the
                  Transactions are being terminated, in respect of all
                  Terminated Transactions) and an amount will be payable equal
                  to one-half of the difference between the Loss of the party
                  with the higher Loss ("X") and the Loss of the party with the
                  lower Loss ("Y").

                  If the amount payable is a positive number, Y will pay it to
                  X; if it is a negative number, X will pay the absolute value
                  of that amount to Y.

         (iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
         Termination Date occurs because "Automatic Early Termination" applies
         in respect of a party, the amount determined under this Section 6(e)
         will be subject to such adjustments as are appropriate and permitted by
         law to reflect any payments or deliveries made by one party to the
         other under this Agreement (and retained by such other party) during
         the period from the relevant Early Termination Date to the date for
         payment determined under Section 6(d)(ii).

         (iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
         an amount recoverable under this Section 6(e) is a reasonable
         pre-estimate of loss and not a penalty. Such amount is payable for the
         loss of bargain and the loss of protection against future risks and
         except as otherwise provided in this Agreement neither party will be
         entitled to recover any additional damages as a consequence of such
         losses.

                                       10

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7. TRANSFER

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. CONTRACTUAL CURRENCY

(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into this Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

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9. MISCELLANEOUS

(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e) COUNTERPARTS AND CONFIRMATIONS.

         (i) This Agreement (and each amendment, modification and waiver in
         respect of it) may be executed and delivered in counterparts (including
         by facsimile transmission), each of which will be deemed an original.

         (ii) The parties intend that they are legally bound by the terms of
         each Transaction from the moment they agree to those terms (whether
         orally or otherwise). A Confirmation shall be entered into as soon as
         practicable and may be executed and delivered in counterparts
         (including by facsimile transmission) or be created by an exchange of
         telexes or by an exchange of electronic messages on an electronic
         messaging system, which in each case will be sufficient for all
         purposes to evidence a binding supplement to this Agreement. The
         parties will specify therein or through another effective means that
         any such counterpart, telex or electronic message constitutes a
         Confirmation.

(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10. OFFICES; MULTIBRANCH PARTIES

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

                                       12

<page>

12. NOTICES

(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-

         (i) if in writing and delivered in person or by courier, on the date it
         is delivered;

         (ii) if sent by telex, on the date the recipient's answerback is
         received;

         (iii) if sent by facsimile transmission, on the date that transmission
         is received by a responsible employee of the recipient in legible form
         (it being agreed that the burden of proving receipt will be on the
         sender and will not be met by a transmission report generated by the
         sender's facsimile machine);

         (iv) if sent by certified or registered mail (airmail, if overseas) or
         the equivalent (return receipt requested), on the date that mail is
         delivered or its delivery is attempted; or

         (v) if sent by electronic messaging system, on the date that electronic
         message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13. GOVERNING LAW AND JURISDICTION

(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-

         (i) submits to the jurisdiction of the English courts, if this
         Agreement is expressed to be governed by English law, or to the
         non-exclusive jurisdiction of the courts of the State of New York and
         the United States District Court located in the Borough of Manhattan in
         New York City, if this Agreement is expressed to be governed by the
         laws of the State of New York; and

         (ii) waives any objection which it may have at any time to the laying
         of venue of any Proceedings brought in any such court, waives any claim
         that such Proceedings have been brought in an inconvenient forum and
         further waives the right to object, with respect to such Proceedings,
         that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

                                       13

<page>

(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14. DEFINITIONS As used in this Agreement:-

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

"AFFECTED PARTY" has the meaning specified in Section 5(b).

"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"APPLICABLE RATE" means:-

(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

(d) in all other cases, the Termination Rate.

"BURDENED PARTY" has the meaning specified in Section 5(b).

"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                       14

<page>

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"ILLEGALITY" has the meaning specified in Section 5(b).

"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.

"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have

                                       15

<page>

been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.

"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

"OFFICE" means a branch or office of a party, which may be such party's head or
home office.

"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--

(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"SPECIFIED ENTITY" has the meaning specified in the Schedule.

                                       16

<page>

"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"STAMP TAX" means any stamp, registration, documentation or similar tax.

"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"TAX EVENT" has the meaning specified in Section 5(b).

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market

                                       17

<page>

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

J. ARON & COMPANY PACIFIC ENERGY RESOURCES LTD.

By: /s/ Colleen Foster                  By: /s/ Darren Katic
    ----------------------------            -------------------------------
    Name: Colleen Foster                    Name: Darren Katic
    Title: Managing Director                Title: President
    Date:                                   Date:<PAGE>

EXHIBIT 10.49

                                    SCHEDULE
                                     TO THE
                              ISDA MASTER AGREEMENT
                                   DATED AS OF
                                NOVEMBER 30, 2006

                                     BETWEEN

                               J. ARON & COMPANY,
     A GENERAL PARTNERSHIP ORGANIZED UNDER THE LAWS OF THE STATE OF NEW YORK
                                    ("ARON"),

                                       AND

                          PACIFIC ENERGY RESOURCES LTD.
                             A DELAWARE CORPORATION
                                ("COUNTERPARTY").

PART 1. TERMINATION PROVISIONS

(a) "SPECIFIED ENTITY"

       (i)    means, in relation to Aron, Goldman, Sachs & Co., Goldman Sachs
              Capital Markets, L.P., Goldman Sachs International, Goldman Sachs
              (Japan) Ltd., Goldman Sachs International Bank, Goldman Sachs
              (Asia) Finance, Goldman Sachs Financial Markets, L.P., Goldman
              Sachs Paris Inc. et Cie, Goldman Sachs Mitsui Marine Derivative
              Products, L.P., Goldman, Sachs & Co. oHG, J. Aron & Company
              (Singapore) Pte., and J. Aron & Company (U.K.) for the purpose of
              Section 5(a)(v), and shall not apply for purposes of Sections
              5(a)(vi), 5(a)(vii) and 5(b)(iv); and

       (ii)   means, in relation to Counterparty, all Affiliates of Counterparty
              for the purpose of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and
              5(b)(iv).

(b)    "SPECIFIED TRANSACTION". The term "Specified Transaction" in Section 14
       of the Agreement is amended in its entirety as follows:

       "SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any
       transaction (including an agreement with respect thereto) now existing or
       hereafter entered into between one party to this Agreement (or any Credit
       Support Provider of such party or any applicable Specified Entity of such
       party) and the other party to this Agreement (or any Credit Support
       Provider of such other party or any applicable Specified Entity of such
       other party) (i) which is a rate swap transaction, swap option, basis
       swap, forward rate transaction, commodity swap, commodity option,
       commodity spot transaction, equity or equity index swap, equity or equity
       index option, bond option, interest rate option, foreign exchange
       transaction, cap transaction, floor transaction, collar transaction,
       currency swap transaction, cross-currency rate swap transaction, currency
       option, weather swap, weather derivative, weather option, credit
       protection transaction, credit swap, credit default swap, credit default
       option, total return swap, credit spread transaction, repurchase
       transaction, reverse repurchase transaction, buy/sell-back transaction,
       securities lending transaction, or forward purchase or sale of a
       security, commodity or other financial instrument or interest (including
       any option with respect to any of these transactions) or (ii) which is a

                                        1

<page>

       type of transaction that is similar to any transaction referred to in
       clause (i) that is currently, or in the future becomes, recurrently
       entered into the financial markets (including terms and conditions
       incorporated by reference in such agreement) and that is a forward, swap,
       future, option or other derivative on one or more rates, currencies,
       commodities, equity securities or other equity instruments, debt
       securities or other debt instruments, or economic indices or measures of
       economic risk or value, (b) any combination of these transactions and (c)
       any other transaction identified as a Specified Transaction in this
       agreement or the relevant confirmation."

(c)    The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Aron and
       will apply to Counterparty, provided that with respect to Aron only, (i)
       the phrase "or becoming capable at such time of being declared" shall be
       deleted from clause (1) of such Section 5(a)(vi); and (ii) the following
       language shall be added to the end thereof: "Notwithstanding the
       foregoing, a default under subsection (2) hereof shall not constitute an
       Event of Default if (i) the default was caused solely by error or
       omission of an administrative or operational nature; (ii) funds were
       available to enable the party to make the payment when due; and (iii) the
       payment is made within two Local Business Days of such party's receipt of
       written notice of its failure to pay."

       "SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14 of
       the Agreement.

       "THRESHOLD AMOUNT" means in relation to Aron, US$50,000,000 (or its
       equivalent in another currency) and in relation to Counterparty,
       US$1,000,000 (or its equivalent in another currency).

(d)    The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply
       to Aron and will apply to Counterparty.

(e)    The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
       apply to Aron and will not apply to Counterparty.

(f)    PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):

       (i) Loss will apply.

       (ii) The Second Method will apply.

(g) "TERMINATION CURRENCY" means United States Dollars.

(h)    The parties agree to amend the following subsections of Section 5(a) as
       follows:

       (i)    clause (i): in the third line of this clause, delete the word
              "third" and insert the word "first;"

       (ii)   clause (ii): in the fifth line of this clause, delete the word
              "thirtieth" and insert the word "fifth;" and

       (iii)  clause (vii)(4): delete, following the word "liquidation" in line
              9, the clause beginning with "and, in the case of and ending with
              the word "thereof' in line 13; and in Clause (vii)(7): delete,
              following the word "assets" in line 19, the clause beginning with
              "and such secured party" and ending with the word "thereafter" in
              line 21, to eliminate the 30- day grace period.

                                        2

<page>

       (iv) The parties also agree to add a new clause (ix) as follows:

              (ix)   ADEQUATE ASSURANCE. A party ("X") fails to provide adequate
                     assurance of its ability to perform all of its outstanding
                     obligations hereunder to the other party ("Y") on or before
                     48 hours after a request for such assurance is made by Y
                     when Y has reasonable grounds for insecurity.

(i)    ADDITIONAL TERMINATION EVENT will apply. It will constitute an Additional
       Termination Event hereunder upon the occurrence of any of the following
       events:

       (i)    Any of the following occurs with respect to Counterparty's
              obligations to Aron under this Agreement:

              (A) such obligations shall cease to be subject to a perfected
              first priority Lien (as defined in the Senior Credit Agreement) on
              the Collateral (as defined in the Senior Credit Agreement)
              pursuant to and in accordance with the Senior Credit Agreement and
              the Security Documents (as defined in the Senior Credit
              Agreement);

              (B) such obligations shall cease to be equally and ratably secured
              with Counterparty's obligations to the Secured Parties holding a
              first priority Lien pursuant to and in accordance with the Senior
              Credit Agreement and the Security Documents;

              (C) such obligations shall cease to rank at least pari passu with
              Counterparty's obligations to the Secured Parties holding a first
              priority Lien pursuant to and in accordance with the Senior Credit
              Agreement and the Security Documents; or

              (D) such obligations shall cease to be guaranteed pursuant to the
              guarantees from each of the Guarantors in favor of the Secured
              Parties pursuant to and in accordance with the Senior Credit
              Agreement;

       (iv)   Any collateral under the Security Documents is released at any
              time, unless Aron shall have consented in writing prior to such
              release as set forth in the Security Documents; or

       (v)    The Senior Credit Agreement is replaced by another credit
              facility, or amended and/or amended and restated to increase the
              funded indebtedness (from such amount as of the date of this
              Agreement) or commitments or to add borrowing tranches or Aron or
              its affiliates is not a lender under such facility, and Aron or
              its affiliates indicated its agreement to be such a lender but
              such agreement was declined by Counterparty or any Affiliate of
              Counterparty or by any administrative agent, syndication agent,
              documentation agent, bookrunner or any comparable party with the
              right to decline participation in such facility; provided,
              however, that any such event shall not constitute an Additional
              Termination Event if such terms are acceptable to Aron in its sole
              discretion.

For the purpose of the foregoing Termination Events, the Affected Party shall be
Counterparty.

                                        3

<page>

As used herein and throughout this Agreement, the following terms shall have the
following meanings:

       "SENIOR CREDIT AGREEMENT" means that certain Credit and Guaranty
       Agreement, dated as of the date hereof, by and among Counterparty and
       certain Subsidiaries of Counterparty, as Borrower, various Lenders party
       thereto, J. Aron & Company, as Lead Arranger and Syndication Agent and J.
       Aron & Company, as Administrative Agent, as such Senior Credit Agreement
       is in effect on the date hereof and without giving effect to any further
       amendments, modifications or supplements thereto, or waiver or
       termination thereof, after the date hereof, PROVIDED that if Aron (in its
       sole discretion) consents to any such amendment, modification, supplement
       or waiver expressly for purposes this Agreement, then the term "Senior
       Credit Agreement" shall refer to the Senior Credit Agreement as so
       amended, modified, supplemented or waived.

(j)    EARLY TERMINATION. Notwithstanding anything to the contrary in Section
       6(a) or Section 6(b), the parties agree that, except with respect to
       Transactions (if any) that are subject to Automatic Early Termination
       under Section 6(a), the Non-defaulting Party or the party that is not the
       Affected Party (in a case where a Termination Event under Section
       5(b)(iv) , or an Additional Termination Event for which there is a single
       Affected Party, has occurred) is not required to terminate the
       Transactions on a single day, but rather may terminate the Transactions
       over a commercially reasonable period of time (not to exceed ten days)
       (the "Early Termination Period"). The last day of the Early Termination
       Period shall be the Early Termination Date for purposes of Section 6;
       provided, however, that interest shall accrue on the Transactions
       terminated during the Early Termination Period prior to the Early
       Termination Date at the Non- default Rate.

(k)    Each of the Events of Default (as such term is defined in the Senior
       Credit Agreement) contained in Section 8 (together with the relevant
       provisions of any other Section or Sections to which they refer,
       including definitions) of the Senior Credit Agreement is hereby
       incorporated herein by this reference and made a part of this Agreement
       to the same extent as if the Senior Credit Agreement were set forth in
       full herein, provided that any reference in such Events of Default to the
       "Agent", "Bank", "Administrative Agent", "Lender(s)", or the "Required
       Lenders", or other like term, shall be deemed to be a reference to Aron.
       The occurrence at any time of any such Event of Default under the Senior
       Credit Agreement will constitute an Event of Default with respect to
       Counterparty for the purposes of Section 5(a) of the Agreement. If for
       any reason such Senior Credit Agreement should for any reason terminate,
       such Events of Default will be incorporated herein as they existed
       immediately prior to such event.

PART 2. TAX REPRESENTATIONS

(a)    PAYER TAX REPRESENTATIONS. For the purposes of Section 3(e), Aron and
       Counterparty make the following representation:

       It is not required by any applicable law, as modified by the practice of
       any relevant governmental revenue authority, of any Relevant Jurisdiction
       to make any deduction or withholding for or on account of any Tax from
       any payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of
       this Agreement) to be made by it to the other party under this Agreement.
       In making this

                                        4

<page>

       representation, it may rely on (i) the accuracy of any representations
       made by the other party pursuant to Section 3(f) of this Agreement, (ii)
       the satisfaction of the agreement contained in Section 4(a)(i) or
       4(a)(iii) of this Agreement, and the accuracy and effectiveness of any
       document provided by the other party pursuant to Section 4(a)(i) or
       4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement
       of the other party contained in Section 4(d) of this Agreement, provided
       that it shall not be a breach of this representation where reliance is
       placed on clause (ii) and the other party does not deliver a form or
       document under Section 4(a)(iii) by reason of material prejudice to its
       legal or commercial position.

(b)    PAYEE TAX REPRESENTATIONS. For the purposes of Section 3(f), Counterparty
       makes the following representations:

       (i)    It is not acting as an agent or intermediary for any foreign
              person with respect to the payments received or to be received by
              it in connection with this Agreement.

       (ii)   It is a United States person within the meaning of Section
              7701(a)(30) of the Internal Revenue Code of 1986, as amended.

PART 3. AGREEMENT TO DELIVER DOCUMENTS

(a)    For the purpose of Section 4(a), Tax forms, documents, or certificates to
       be delivered are:

       TAX FORMS, DOCUMENTS, OR CERTIFICATES TO BE DELIVERED ARE:

<TABLE>
<S>            <C>
 PARTY REQUIRED TO         FORMS/DOCUMENTS/CERTIFICATES               DATE BY WHICH
 DELIVER DOCUMENT                                                     TO BE DELIVERED
-------------------------------------------------------------------------------------------------------------
Counterparty               United States Internal Revenue             (i) On a date which is before the first
                           Service Form W-9, or any successor         Scheduled Payment Date under this
                           form.                                      Agreement, (ii) promptly upon
                                                                      reasonable
                                                                      demand by
                                                                      Aron, and
                                                                      (iii)
                                                                      promptly
                                                                      upon
                                                                      learning
                                                                      that any
                                                                      such form
                                                                      previously
                                                                      provided
                                                                      by
                                                                      Counterparty
                                                                      has become
                                                                      obsolete,
                                                                      incorrect,
                                                                      or
                                                                      ineffective.
--------------------------------------------------------------------------------------------------------------

(b) Other documents to be delivered are:

                                                                                          COVERED BY
PARTY REQUIRED             FORM/DOCUMENT/CERTIFICATE         DATE BY WHICH TO BE          SECTION 3(d)
TO DELIVER                                                   DELIVERED                    REPRESENTATION
--------------------------------------------------------------------------------------------------------------
Aron and                   Evidence of authority of          Upon or promptly             Yes
Counterparty               signatories                       following execution of
                                                                  this Agreement
--------------------------------------------------------------------------------------------------------------
Aron                       Any Credit Support Document       Within three (3)             No
                           specified in Part 4(f) herein     Business Days
                                                             following execution of
                                                                  this Agreement
--------------------------------------------------------------------------------------------------------------

                                        5

<page>

                                                                                            COVERED BY
PARTY REQUIRED      FORM/DOCUMENT/CERTIFICATE                  DATE BY WHICH TO BE          SECTION 3(d)
TO DELIVER                                                     DELIVERED                    REPRESENTATION
--------------------------------------------------------------------------------------------------------------

Counterparty        Any Credit Support Document                On the date of               No
                    specified in Part 4(f) herein              execution of this
                                                                       Agreement
--------------------------------------------------------------------------------------------------------------
Aron and            Most recent annual audited and             Promptly following           Yes
Counterparty        quarterly financial statements of the      reasonable demand by
                    party or, with respect to Aron, its        the other party
                    Credit Support Provider
--------------------------------------------------------------------------------------------------------------
Counterparty        Certified resolutions of its board of      Upon execution of this       Yes
                    directors or other governing body          Agreement
--------------------------------------------------------------------------------------------------------------
Counterparty        Such documents, reports and                At such times such           Yes
                    certificates as the Counterparty shall     documents, reports or
                    be required to provide to the Lender       certificates, as the
                    under the Senior Credit Agreement          case may be, are
                                                               required to be
                                                               delivered by the
                                                               Counterparty under the
                                                                   Senior Credit
                                                                       Agreement
--------------------------------------------------------------------------------------------------------------
Counterparty        Legal opinion with respect to              Upon execution of this       Yes
                    Counterparty                               Agreement
--------------------------------------------------------------------------------------------------------------
</TABLE>

PART 4. MISCELLANEOUS

(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):

       (i) Address for notices or communications to Aron:

              Address:    J. Aron & Company
                          85 Broad Street
                          New York, New York 10004
                          Attention: Energy Operations
                          Telephone: (212) 902-8986
                          Facsimile: (212) 493-9849

       (ii) Address for notices or communications to Counterparty:

              Address:
              Attention:

                                        6

<page>

              Telephone:

              Facsimile:

(b) PROCESS AGENT. For the purpose of Section 13(c):

       Aron appoints as its Process Agent, not applicable.

       Counterparty appoints as its Process Agent: in the Borough of Manhattan,
       City, County and State of New York:

       C. T. CORPORATION SYSTEM 111 EIGHTH AVENUE
       13TH FLOOR
       NEW YORK, NEW YORK 10011

(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.

(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):

       Aron is not a Multibranch Party.

       Counterparty is not a Multibranch Party.

(e)    CALCULATION AGENT. The Calculation Agent is Aron.

(f)    CREDIT SUPPORT DOCUMENT. Any guaranty or other form of credit support
       provided on behalf of Counterparty at any time shall constitute a Credit
       Support Document with respect to the obligations of Counterparty. Details
       of any other Credit Support Document, each of which is incorporated by
       reference in, and made part of, this Agreement and each Confirmation
       (unless provided otherwise in a Confirmation) as if set forth in full in
       this Agreement or such Confirmation:

       (i)    Guaranty by The Goldman Sachs Group, Inc. ("Goldman Group") in
              favor of Counterparty as beneficiary thereof shall constitute a
              Credit Support Document with respect to the obligations of Aron.

       (ii)   the Senior Credit Agreement and the Security Documents.

       (iii)  each of the Guaranties (as defined in the Senior Credit
              Agreement).

(g) CREDIT SUPPORT PROVIDER.

       Credit Support Provider means in relation to Aron, Goldman Group.

       Credit Support Provider means in relation to Counterparty, the Guarantors
       (as defined in the Senior Credit Agreement) and any party that at any
       time provides a guaranty or other form of credit support on behalf of
       Counterparty.

                                        7

<page>

(h) GOVERNING LAW. Section 13(a) is hereby replaced with the following:

       (a)    GOVERNING LAW. This Agreement and each Transaction entered into
              hereunder will be governed by, and construed and enforced in
              accordance with, the law of the State of New York without
              reference to its choice of law doctrine.

(i) JURISDICTION. Section 13(b) is hereby amended by:

       (i)    deleting in the second line of subparagraph (i) thereof the word
              "non-"; and

       (ii) deleting the final paragraph thereof.

(j)    NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) will not apply to
       Transactions. Notwithstanding anything to the contrary in Section 2(c),
       unless otherwise expressly agreed by the parties, the netting provided
       for in Section 2(c) will not apply separately to any pairings of branches
       or Offices through which the parties make and receive payments or
       deliveries.

PART 5. OTHER PROVISIONS

(a)    ACCURACY OF SPECIFIED INFORMATION. Section 3(d) is hereby amended by
       adding in the third line thereof after the word "respect" and before the
       period, the phrase "or, in the case of audited or unaudited financial
       statements, a fair presentation of the financial condition of the
       relevant person."

(b)    SCOPE OF AGREEMENT. Any transaction outstanding between the parties at
       the date this Agreement comes into force or entered into by the parties
       at or after the date this Agreement comes into force that is: (1) an FX
       Transaction or a Currency Option Transaction as defined in the 1998 FX
       and Currency Option Definitions (the "FX Definitions"), as published by
       the International Swaps and Derivatives Association, Inc. ("ISDA"), the
       Emerging Markets Traders Association, and the Foreign Exchange Committee,
       unless otherwise specified in the relevant confirmation, and (2) a
       transaction between the parties of the type set forth in the definition
       of "Specified Transaction" herein unless otherwise specified in the
       relevant confirmation relating to such Specified Transaction or unless
       otherwise agreed by the parties, will constitute a "Transaction" for the
       purposes of this Agreement. Transactions of the type set forth in (1)
       above will be deemed to incorporate the FX Definitions.

(c)    ADDITIONAL REPRESENTATIONS. The parties agree to amend Section 3 by
       adding new Sections 3(g), (h), (i), and (j) as follows:

       (g)    ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract
              participant" as defined in the U.S. Commodity Exchange Act.

       (h)    NON-RELIANCE. It is acting for its own account, and it has made
              its own independent decisions to enter into that Transaction and
              as to whether that Transaction is appropriate or proper for it
              based upon its own judgment and upon advice from such advisers as
              it has deemed necessary. It is not relying on any communication
              (written or oral) of the other party as investment advice or as a
              recommendation to enter into that Transaction; it being understood
              that information and explanations related to the terms and
              conditions of a Transaction shall not be considered investment
              advice or a recommendation to enter into that Transaction. No
              communication (written or oral) received from the other party
              shall be deemed to be an assurance or guarantee as to the expected
              results of that Transaction.

                                        8

<page>

       (i)    ASSESSMENT AND UNDERSTANDING. It is capable of assessing the
              merits of and understanding (on its own behalf or through
              independent professional advice), and understands and accepts, the
              terms, conditions and risks of that Transaction. It is also
              capable of assuming, and assumes, the risks of that Transaction.

       (j)    STATUS OF PARTIES. The other party is not acting as a fiduciary
              for or an adviser to it in respect of that Transaction.

(d) TRANSFER. The following amendments are hereby made to Section 7:

       (i)    In the third line, insert the words "which consent will not be
              arbitrarily withheld or delayed," immediately before the word
              "except"; and

       (ii)   in clause (a), insert the words "or reorganization, incorporation,
              reincorporation, or reconstitution into or as," immediately before
              the word "another."

(e)    CONSENT TO RECORDING. Each party consents to the recording of telephone
       conversations between the trading, marketing and other relevant personnel
       of the parties, with or without the use of a warning tone, and their
       Affiliates in connection with this Agreement or any potential
       Transaction.

(f) DEFINITIONS. The following amendments are hereby made to Section 14:

       (i)    The definition of "TERMINATION CURRENCY EQUIVALENT" in Section 14
              is hereby amended by deleting in its entirety the text after the
              first three lines thereof and replacing it with the following:

              "by the party making the relevant determination in any
              commercially reasonable manner as being required to purchase such
              amount of such Other Currency as at the relevant Early Termination
              Date, or, if the relevant amount determined in accordance with
              Section 6(e) is determined as of a later date, that later date,
              for value on the date the payment or settlement payment is due."

(g)    SET-OFF. The parties agree to amend Section 6 by adding a new Section
       6(f) as follows:

       "(f) Upon the occurrence of an Event of Default or Termination Event
       under Section 5(b)(iv) with respect to a party ("X"), the other party
       ("Y") will have the right (but not be obliged) without prior notice to X
       or any other person to set-off or apply any obligation of X owed to Y (or
       any Affiliate of Y) (whether or not matured or contingent and whether or
       not arising under this Agreement, and regardless of the currency, place
       of payment or booking office of the obligation) against any obligation of
       Y (or any Affiliate of Y) owed to X (whether or not matured or contingent
       and whether or not arising under this Agreement, and regardless of the
       currency, place of payment or booking office of the obligation). Y will
       give notice to the other party of any setoff effected under this Section
       6(f).

       Amounts (or the relevant portion of such amounts) subject to set-off may
       be converted by Y into the Termination Currency at the rate of exchange
       at which such party would be able, acting in a reasonable manner and in
       good faith, to purchase the relevant amount of such currency.

       If any obligation is unascertained, Y may in good faith estimate that
       obligation and set-off in respect of the estimate, subject to the
       relevant party accounting to the other when the obligation is
       ascertained.

                                        9

<page>

       Nothing in this Section 6(f) shall be effective to create a charge or
       other security interest. This Section 6(f) shall be without prejudice and
       in addition to any right of set-off, combination of accounts, lien or
       other right to which any party is at any time otherwise entitled (whether
       by operation of law, contract or otherwise)."

(h)    DEFINITIONS. This Agreement, each Confirmation and each Transaction is
       subject to the 1993 ISDA Commodity Derivatives Definitions as
       supplemented by the 2000 Supplement to the 1993 ISDA Commodity
       Derivatives Definitions, as published by ISDA (together, the
       "Definitions"), and will be governed in all respects by the Definitions
       (except that references to "Swap Transactions" in the Definitions will be
       deemed to be references to "Transactions"). The Definitions are
       incorporated by reference in, and made part of, this Agreement and each
       Confirmation as if set forth in full in this Agreement and such
       Confirmations. In the event of any inconsistency between the provisions
       of this Agreement and the Definitions, this Agreement will prevail.
       Subject to Section 1(b), in the event of any inconsistency between the
       provisions of any Confirmation, this Agreement, and the Definitions, such
       Confirmation will prevail for the purpose of the relevant Transaction.

(i)    INCORPORATION OF COVENANTS BY REFERENCE. Each of the covenants contained
       in Sections 5 and 6 (together with the relevant provisions of any other
       Section or Sections to which they refer, including definitions) of the
       Senior Credit Agreement is hereby incorporated herein by this reference
       and made a part of this Agreement to the same extent as if the Senior
       Credit Agreement were set forth in full herein, provided that any
       reference in such provisions to, "Bank", "Deposit Bank", the
       "Administrative Agent," the "Agent", the "Required Lenders" and the
       "Lenders" shall be deemed to be a reference to Aron. If for any reason
       such Senior Credit Agreement should for any reason terminate, such
       covenants will be incorporated herein as they existed immediately prior
       to such event. Each such incorporated covenant will be deemed an
       agreement or obligation for the purposes of Section 5(a)(ii) of the
       Agreement.

(j)    WAIVER OF TRIAL BY JURY. Each party hereby irrevocably waives any and all
       right to trial by jury in any Proceeding.

(k)    CONFIRMATIONS. Counterparty shall be deemed to have agreed to the terms
       contained in any Confirmation (as amended and revised) sent by Aron to
       Counterparty unless Counterparty objects to such terms within three (3)
       Business Days of receipt.

PART 6. DISRUPTION FALLBACKS

       The following "DISRUPTION FALLBACKS" specified in Section 7.5(c) of the
       Definitions shall apply, in the following order, except as otherwise
       specified in the relevant Confirmation:

       (i)    "Fallback Reference Price";

       (ii)   "Postponement", with two (2) Commodity Business Days as the
              Maximum Days of Disruption;

       (iii)  Negotiated Fallback;

       (iv)   "Fallback Reference Dealers"; and

       (v)    "Calculation Agent Determination".

                                       10

<page>

IN WITNESS WHEREOF, the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

J. ARON & COMPANY PACIFIC ENERGY RESOURCES LTD.,

/s/ Colleen Foster                      /s/ Darren Katic
-------------------------------         ---------------------------------
Name: Colleen Foster                    Name: Darren Katic
Title: Managing Director                Title: President
Date:                                   Date:

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