Document:

exh4-1.htm

    
      
        

        

      

      EXHIBIT
        4.1

      
        

        

        

        

        

        

        

      

      
        ADVANCE
          DISPLAY TECHNOLOGIES, INC.

        

        

        

        

        

        _________________________________

        

        Series
          G Preferred Stock

        SUBSCRIPTION
          AGREEMENT

        _________________________________

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

      

      
        

      

      
        
                

                              #774606.2              
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       ADVANCE
        DISPLAY TECHNOLOGIES, INC.

      

      Series
        G Preferred Stock

      SUBSCRIPTION
        AGREEMENT

      

      

      THIS
        SUBSCRIPTION AGREEMENT (this
“Agreement”) is executed and delivered, as of the date set forth on the
        signature page hereof, by and between Advance Display Technologies, Inc.,
        a
        Colorado corporation (the “Company”), and the undersigned subscriber (the
“Subscriber”).

      

      1.  Subscription.  Subject
        to the terms and conditions set forth in this Agreement, the Subscriber hereby
        agrees to subscribe for the number of shares of Series G Preferred Stock
        of the
        Company for the total capital commitment (the “Total Capital Commitment”) as set
        forth in the subscription schedule on the signature page (the “Subscription
        Schedule”).

       

      2.  Acceptance.  The
        Company, in consideration of and in reliance on the representations, warranties,
        covenants, and the Subscriber’s agreements and payment of the capital
        commitment, hereby accepts the subscription of the Subscriber and agrees
        to
        issue Series G Preferred Stock to the Subscriber, subject to the terms and
        conditions of this Agreement.

       

      3.  Issuance
        of shares.  The Company shall have no obligation to issue any
        shares of Series G Preferred Stock to the Subscriber unless and until the
        Subscriber has made to the Company, and the Company has accepted, full payment
        of the Subscriber’s Total Capital Commitment as set forth in the Subscription
        Schedule.

       

      4.  Termination
        of Subscription.  The Company may terminate its obligations under
        this Agreement at any time prior to the Company’s acceptance of full payment of
        the Total Capital Commitment and be relieved of all further obligations under
        this Agreement without thereby waiving any other rights the Company may
        have.  In addition, the Company may, at its election, do one of the
        following:

       

      (a)           Accept
        all or any part of the Total Capital Commitment which the Subscriber has
        made to
        the Company and issue the related shares of Series G Preferred Stock;
        or

       

      (b)           Reject
        all or any part of the Total Capital Commitment which the Subscriber has
        made to
        the Company and have no obligation to issue to Subscriber any shares of Series
        G
        Preferred Stock.

       

      5.  Restrictions
        on Transfer.

       

      5.1  The
        certificates representing the Series G Preferred Stock will bear a legend
        in
        substantially the following form:

       

      THESE
        SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED, OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED
        FOR SALE, PLEDGED OR

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      HYPOTHECATED
        IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
        SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
        THAT SUCH REGISTRATION IS NOT REQUIRED.

      

      5.2  No
        holder
        of Series G Preferred Stock may sell, transfer or dispose of any Series G
        Preferred Stock (except pursuant to an effective registration statement under
        the Securities Act) without first delivering to the Company an opinion of
        counsel (reasonably acceptable in form and substance to the Company) that
        neither registration nor qualification under the Securities Act and applicable
        state securities laws is required in connection with such transfer.

       

      6.  Subscriber’s
        Representations, Warranties, Covenants and Agreements.  The
        Subscriber hereby represents and warrants to, and covenants and agrees with,
        the
        Company as follows:

       

      6.1  The
        Subscriber has been given adequate access to all information about the Company
        and its investment in the Company that was material to its decision to invest
        therein.  The Subscriber has reviewed the Certificate of Incorporation
        of the Company.  The Subscriber acknowledges that it is fully informed
        and knowledgeable about the Company, its business (the “Business”), management
        and personnel; that it has had discussions with the Company concerning the
        Business and has obtained information from the Company; and that the Company
        has
        answered all questions that the undersigned had concerning the
        Business.  The Subscriber has been furnished materials relating to the
        Company, the Business and the financial condition of the Company and the
        offering of the Series G Preferred Stock that it has requested and has been
        afforded the opportunity to ask questions and receive answers concerning
        an
        investment in the Company.  The Subscriber acknowledges that it has
        had the opportunity to request such additional information from the President
        of
        the Company.

       

      6.2  The
        Subscriber acknowledges that investment in the Company involves a substantial
        degree of risk and is suitable only for persons with adequate means who have
        no
        need for liquidity in their investments.

       

      6.3  The
        Subscriber acknowledges that no market for the Series G Preferred Stock exists
        nor is anticipated to develop and that, therefore, investment in the Company
        will not be liquid.

       

      6.4  The
        Subscriber has knowledge and experience in financial and business matters
        and is
        capable of evaluating the merits and risks of an investment in the Company
        and
        the suitability of the investment for Subscriber.

       

      6.5  The
        Subscriber is making this capital contribution for investment purposes only
        and
        has no present intention to sell or exchange the Series G Preferred Stock;
        the
        Subscriber has adequate means for providing for its current needs in any
        foreseeable contingency; and the Subscriber has no need to sell the Series
        G
        Preferred Stock in the foreseeable future.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      6.6  The
        Subscriber, if a corporation, partnership, trust or other entity, is duly
        organized, and is authorized and otherwise duly qualified to purchase and
        hold
        the Series G Preferred Stock, and such entity has its principal place of
        business at the address set forth on the signature page hereof.

       

      6.7  The
        Subscriber, if an individual, is at least 21 years of age, has the legal
        capacity to execute, deliver and perform this Agreement, and has his or her
        residence at the address set forth on the signature page hereof.

       

      6.8  The
        Subscriber is an “accredited investor” as that term is defined in Rule 501 of
        Regulation D promulgated under the Securities Act of 1933, as
        amended.

       

      6.9  All
        information which the Subscriber has provided to the Company concerning
        Subscriber, his or her financial position and knowledge of financial and
        business matters, or, in the case of a corporation, partnership, trust or
        other
        entity, the knowledge of financial and business matters of the person making
        the
        investment decision on behalf of such entity, including all information
        contained herein, is true and complete as of the date set forth at the end
        hereof, and if there should be any adverse change in such information prior
        to
        this subscription being accepted, the Subscriber will immediately provide
        the
        Company with accurate and complete information concerning any such
        change.

       

      6.10  The
        Subscriber acknowledges that no federal or state agency has made any finding
        or
        determination as to the fairness of this investment, nor any recommendation
        or
        endorsement, of the investment in the Series G Preferred Stock.

       

      6.11  The
        Subscriber acknowledges that the Series G Preferred Stock has not been
        registered under the Securities Act of 1933, as amended (the “Act”), or the blue
        sky laws of any state.

       

      6.12  The
        Subscriber understands that the Company has relied upon an exemption from
        registration provided in the Act and upon all of the foregoing representations
        and warranties of the Subscriber.

       

      6.13  The
        Subscriber certifies, under penalties of perjury, (i) that the social security
        or Federal taxpayer identification number shown on the signature page of
        this
        Agreement is true and complete and (ii) that the Subscriber is not subject
        to
        backup withholding either because Subscriber has not been notified that he
        or
        she is subject to backup withholding as a result of a failure to report all
        interest or dividends, or the Internal Revenue Service has notified Subscriber
        that he or she is no longer subject to backup withholding.

       

      7.  Confidential
        Information.  The Subscriber acknowledges that the information,
        observations and data obtained by him or her during the course of his or
        her
        ownership of any interest in the Company concerning the business and affairs
        of
        the Company are the property of the Company, including information concerning
        acquisition opportunities in or reasonably related to the Business of which
        Subscriber becomes aware during such period.  Therefore, the
        Subscriber agrees that he or she will not disclose to any unauthorized person
        or
        use for his or her

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       own
        account any of such information, observations or data without the written
        consent of the President of the Company unless and to the extent that the
        aforementioned matters become generally known to and available for use by
        the
        public other than as a result of the Subscriber’s acts or
        omissions.  The Subscriber agrees to deliver to the Company on the
        date of disposition of the Series G Preferred Stock held by him or her, or
        at
        any other time the Company may request in writing, all memoranda, notes,
        plans,
        records, reports and other documents (and copies thereof) relating to the
        Business (including, without limitation, all acquisition prospects, lists
        and
        contact information) which he or she may then possess or have under his or
        her
        control.

       

      8.  Indemnification.  The
        Subscriber agrees to indemnify and hold harmless the Company, its directors,
        officers, employees, stockholders and affiliates, and any person acting on
        behalf of the Company, from and against any and all damage, loss, liability,
        cost and expense (including attorneys’ fees) which any of them may incur by
        reason of the failure by the Subscriber to fulfill any of the terms or
        conditions of this Agreement, or by reason of any breach of the representations
        and warranties made by the Subscriber herein, or in any other document provided
        by the Subscriber to the Company.  All representations, warranties and
        covenants contained in this Agreement, and the indemnification contained
        in this
        paragraph, shall survive the acceptance of this subscription.

       

      9.  Headings.  The
        headings throughout this Agreement are for convenience of reference only,
        and
        shall in no way be deemed to define, limit, or add to the meaning of any
        of the
        provisions of this Agreement.

       

      10.  Counterparts.  This
        Agreement may be executed in counterparts, both of which when taken together
        shall be deemed one original.

       

      11.  No
        Waiver.  Notwithstanding any of the representations, warranties,
        acknowledg­ments or agreements made herein by the Subscriber, the Subscriber
        does not thereby or in any other manner waive any of the rights granted to
        him
        or her under federal or state securities laws.

       

      12.  Entire
        Agreement; Modification.  This Agreement constitutes the entire
        agreement among the parties hereto with respect to the subject matter hereof,
        and neither this Agreement nor any of the provisions hereof shall be waived,
        changed, discharged or terminated except by an instrument in writing signed
        by
        the party against whom any waiver, change, discharge or termination is
        sought.

       

      13.  Notice.  Notices
        required or permitted to be given under this Agreement shall be in writing
        and
        shall be deemed to be sufficiently given when sent by registered or certified
        mail, postage prepaid, addressed to the other party at the address of such
        party
        set forth on the signature page to this agreement, or to such other address
        furnished by notice given in accordance with this paragraph.

       

      Successors
        / Binding Effect.  Except as otherwise provided herein, this
        Agreement shall be irrevocable and binding upon and inure to the benefit
        of the
        parties hereto and their respective heirs, executors, administrators,
        successors, legal representatives and assigns.  If the Subscriber is
        more than one person, the obligations of the Subscriber shall be joint and
        several and the agreements, representations, warranties and acknowledgments
        herein

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      contained
        shall be deemed to be made by and be binding upon each such person and his
        or
        her respective heirs, executors, administrators, successors, legal
        representatives and assigns.

       

      14.  Assignment.  Subscriber
        agrees not to transfer or assign this Agreement, or any of Subscriber’s interest
        herein without the written consent of the Company, which consent may be withheld
        in its sole discretion, and any such transfer or assignment in violation
        of this
        Agreement shall be null and void
ab initio.  Further, the Subscriber agrees that the
        transfer or assignment of the Series G Preferred Stock shall be made only
        in
        accordance with this Agreement, the Company’s Certificate of Incorporation and
        applicable laws.

       

      15.  Applicable
        Law.  This Agreement and all rights and remedies hereunder shall
        be governed by and construed in accordance with the laws of the State of
        Colorado, without regard to the conflicts of laws thereof.

       

      

       

      [Remainder
        of page intentionally left blank.]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the undersigned Subscriber does represent and certify under
        penalty of perjury that the foregoing statements are true and correct and
        that
        it has, by the following signature, originally executed this Agreement as
        of
        April 4, 2007.

      

      SUBSCRIBER:

      New
        Iplan
        AR LLC

      
        	
                 

                By:  /s/
                  Lawrence F. DeGeorge

                Name:  Lawrence
                  F. DeGeorge

                Title:    General
                  Partner

                 

              	
                Address
                  for Notices:

                ________________________

                ________________________

                ________________________

                 

              
	
                Taxpayer
                  Identification or Social Security Number of Subscriber:

                            

                 ______________________

              	
                Telephone:

                 

                ________________________

              

      

      

      Subscription
        Schedule

       

      
        	
                Number
                  of shares subscribed for

              	
                Capital
                  Commitment per share

              	
                Total
                  Capital Commitment

              
	
                8,400

              	
                $100

              	
                $840,000

              

      

      

      

      

      

      Subscription
        accepted on

      April
        4,
        2007.

      

      ADVANCE
        DISPLAY TECHNOLOGIES, INC.

      7334
        South Alton Way, Suite F

      Centennial,
        CO  80112

      (303)
        267-0111

      

      By:  /s/
        Matthew W.
        Shankle                                                                                     

                   
        Matthew W. Shankle, Presidentexhibit4_2.htm

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      4.2

     

    EXECUTION
      COPY

     

    
      

       

      

    

    PLAINS
      EXPLORATION & PRODUCTION COMPANY

     

    

     

    as
      the Company

     

    

     

    THE
      GUARANTOR PARTIES NAMED HEREIN

     

    

     

    as
      Guarantors

     

    

     

    and

     

    

     

    WELLS
      FARGO BANK, N. A.

     

    

     

    as
      Trustee

     

    

     

    THIRD
      SUPPLEMENTAL INDENTURE

     

    

     

    Dated
      as of June 19, 2007

     

    

     

    To

     

    INDENTURE

     

    Dated
      as of March 13, 2007

     

    

     

    73⁄4%
      SENIOR NOTES DUE 2015

     

    
      

       

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  TABLE
            OF CONTENTS      

                

                            Page

        

      

    

    
      	
              ARTICLE
                1   Relation
                to Indenture; Definitions

            	
              1

            
	
              SECTION
                1.01.

            	 	
              Relation
                to Indenture.

            	
              1

            
	
              SECTION
                1.02.

            	 	
              Definitions.

            	
              1

            
	
              SECTION
                1.03.

            	 	
              General
                References.

            	
              1

            
	
              ARTICLE
                2   The
                Series of Securities

            	
              2

            
	
              SECTION
                2.01.

            	 	
              The
                Form and Title of the Securities.

            	
              2

            
	
              SECTION
                2.02.

            	 	
              Amount.

            	
              2

            
	
              SECTION
                2.03.

            	 	
              Stated
                Maturity.

            	
              2

            
	
              SECTION
                2.04.

            	 	
              Interest
                and Interest Rates.

            	
              2

            
	
              SECTION
                2.05.

            	 	
              Place
                of Payment.

            	
              2

            
	
              SECTION
                2.06.

            	 	
              Optional
                Redemption.

            	
              3

            
	
              SECTION
                2.07.

            	 	
              Defeasance
                and Discharge; Covenant Defeasance.

            	
              3

            
	
              SECTION
                2.08.

            	 	
              Global
                Securities.

            	
              3

            
	
              SECTION
                2.09.

            	 	
              Subsidiary
                Guarantees.

            	
              3

            
	
              ARTICLE
                3   Amendments
                to Original Indenture

            	
              3

            
	
              SECTION
                3.01.

            	 	
              Defined
                Terms.

            	
              3

            
	
              SECTION
                3.02.

            	 	
              Defaults
                and Remedies.

            	
              30

            
	
              SECTION
                3.03.

            	 	
              Notice
                of Defaults.

            	
              33

            
	
              SECTION
                3.04.

            	 	
              Compensation
                and Reimbursement.

            	
              33

            
	
              SECTION
                3.05.

            	 	
              Merger,
                Consolidation or Sale of Substantially All Assets.

            	
              33

            
	
              SECTION
                3.06.

            	 	
              Selection
                for and Notice of Redemption.

            	
              35

            
	
              SECTION
                3.07.

            	 	
              Redemption
                Upon Equity Offering.

            	
              37

            
	
              SECTION
                3.08.

            	 	
              Covenant
                Defeasance.

            	
              37

            
	
              SECTION
                3.09.

            	 	
              Subsidiary
                Guarantees.

            	
              37

            
	
              SECTION
                3.10.

            	 	
              Repurchase
                Offers.

            	
              39

            
	
              ARTICLE
                4   Additional
                Covenants

            	
              40

            
	
              SECTION
                4.01.

            	 	
              Reports.

            	
              41

            
	
              SECTION
                4.02.

            	 	
              Taxes.

            	
              41

            
	
              SECTION
                4.03.

            	 	
              Restricted
                Payments.

            	
              42

            
	
              SECTION
                4.04.

            	 	
              Dividend
                and Other Payment Restrictions Affecting Restricted
                Subsidiaries.

            	
              46

            
	
              SECTION
                4.05.

            	 	
              Incurrence
                of Indebtedness and Issuance of Preferred Stock.

            	
              48

            
	
              SECTION
                4.06.

            	 	
              Asset
                Sales.

            	
              51

            
	
              SECTION
                4.07.

            	 	
              Transactions
                with Affiliates.

            	
              53

            
	
              SECTION
                4.08.

            	 	
              Limitation
                on Liens.

            	
              55

            
	
              SECTION
                4.09.

            	 	
              Offer
                to Repurchase upon a Change of Control.

            	
              55

            
	
              SECTION
                4.10.

            	 	
              Designation
                of Restricted and Unrestricted Subsidiaries.

            	
              57

            
	
              SECTION
                4.11.

            	 	
              Future
                Guarantors.

            	
              57

            
	
              SECTION
                4.12.

            	 	
              Covenant
                Termination.

            	
              58

            
	
              ARTICLE
                5   Miscellaneous

            	
              58

            
	
              SECTION
                5.01.

            	 	
              Certain
                Trustee Matters.

            	
              58

            
	
              SECTION
                5.02.

            	 	
              Continued
                Effect.

            	
              58

            
	
              SECTION
                5.03.

            	 	
              Governing
                Law.

            	
              58

            
	
              SECTION
                5.04.

            	 	
              Counterparts.

            	
              59

            

    

    

    EXHIBITS

    
      	
              Exhibit
                A:

            	
              Form
                of Note

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THIRD
      SUPPLEMENTAL INDENTURE, dated as of June 19, 2007 (this “Supplemental
      Indenture”), by and among PLAINS EXPLORATION & PRODUCTION
      COMPANY, a corporation duly organized and existing under the laws of
      the State of Delaware (the “Company”), each of the Guarantor parties named on
      the signature pages hereof (collectively, the “Guarantors”) and WELLS
      FARGO BANK, N. A., a nationally chartered banking association, as
      trustee under the Indenture referred to below (in such capacity, the
“Trustee”).

     

    RECITALS
      OF THE COMPANY

     

    WHEREAS,
      the Company and the Trustee have heretofore entered into an Indenture, dated
      as
      of March 13, 2007 (the “Original Indenture”) (the Original Indenture, as
      supplemented from time to time, including without limitation pursuant to this
      Supplemental Indenture, being referred to herein as the “Indenture”);
      and

     

    WHEREAS,
      under the Original Indenture, a new series of Securities may at any time be
      established by the Board of Directors of the Company, in accordance with the
      provisions of the Original Indenture, and the terms of such series may be
      established by an indenture supplemental to the Original Indenture;
      and

     

    WHEREAS,
      the Company proposes to create under the Indenture a new series of Securities;
      and

     

    WHEREAS,
      the Company proposes that its obligations under such new series of Securities
      and under the Indenture to the extent applicable to such new series of
      Securities be guaranteed by each of the Guarantors in accordance with the
      provisions of the Indenture (including without limitation Article Fourteen
      of
      the Original Indenture and the provisions of this Supplemental Indenture);
      and

     

    NOW,
      THEREFORE, in consideration of the premises, agreements and obligations set
      forth herein and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
      for the equal and proportionate benefit of all Holders of the Notes (as defined
      below), as follows:

     

    ARTICLE
      1

    Relation
      to Indenture; Definitions

     

    SECTION
      1.01.  Relation
      to Indenture.

     

    With
      respect to the Notes, this Supplemental Indenture constitutes an integral part
      of the Indenture.

     

    SECTION
      1.02.  Definitions.

     

    For
      all
      purposes of this Supplemental Indenture, capitalized terms used herein and
      not
      otherwise defined herein shall have the meanings assigned thereto in the
      Original Indenture.

     

    SECTION
      1.03.  General
      References.

     

    Unless
      otherwise specified or unless the context otherwise requires, (i) all references
      in this Supplemental Indenture to Articles and Sections refer to the
      corresponding Articles and Sections of this Supplemental Indenture and (ii)
      the
      terms “herein”, “hereof”, “hereunder” and any other
      word of similar import refers to this Supplemental Indenture.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      ARTICLE
        2

      The
        Series of Securities

    

     

    SECTION
      2.01.  The
      Form and Title of the Securities.

     

    There
      is
      hereby established a new series of Securities to be issued under the Indenture
      and to be designated as the Company’s 73⁄4% Senior Notes due 2015 (the
“Notes”).  The Notes shall be substantially in the form attached as
Exhibit A hereto, in each case with such appropriate insertions,
      omissions, substitutions and other variations as are required or permitted
      by
      the Indenture, and may have such letters, numbers or other marks of
      identification and such legends or endorsements placed thereon as the Company
      may deem appropriate or as may be required or appropriate to comply with any
      laws or with any rules made pursuant thereto or with the rules of any securities
      exchange or automated quotation system on which the Notes may be listed or
      traded, or to conform to general usage, or as may, consistently with the
      Indenture, be determined by the Officers executing such Notes, as evidenced
      by
      their execution thereof.

     

    The
      Notes
      shall be executed, authenticated and delivered in accordance with the provisions
      of, and shall in all respects be subject to, the terms, conditions and covenants
      of the Original Indenture as supplemented by this Supplemental Indenture
      (including the form of Note attached as Exhibit A hereto (the terms
      of which are incorporated in and made a part of this Supplemental Indenture
      for
      all intents and purposes)).

     

    SECTION
      2.02.  Amount.

     

    Subject
      to compliance with Section 10.11 of the Indenture, the aggregate principal
      amount of the Notes that may be authenticated and delivered pursuant hereto
      is
      unlimited.  The Trustee shall initially authenticate and deliver Notes
      for original issue in an initial aggregate principal amount of up to
      $600,000,000, upon delivery to the Trustee of a Company Order for the
      authentication and delivery of such Notes.  The aggregate principal
      amount of the Notes to be issued hereunder may be increased at any time
      hereafter and the series may be reopened for issuances of Additional Notes,
      upon
      Company Order without the consent of any Holder and without any further
      supplement or amendment to the Original Indenture or this Supplemental
      Indenture.  The Notes issued on the date hereof and any such
      Additional Notes that may be issued hereafter shall be part of the same series
      of Securities for all purposes under the Indenture.

     

    SECTION
      2.03.  Stated
      Maturity.

     

    The
      Notes
      may be issued on any Business Day on or after June 19, 2007, and the Stated
      Maturity of the Notes shall be June 15, 2015.

     

    SECTION
      2.04.  Interest
      and Interest Rates.

     

    The
      rate
      or rates at which the Notes shall bear interest, the date or dates from which
      such interest shall accrue, the Interest Payment Dates on which any such
      interest shall be payable and the Regular Record Date for any interest payable
      on any Interest Payment Date, in each case, shall be as set forth in the form
      of
      Note attached as Exhibit A hereto.

     

    SECTION
      2.05.  Place
      of Payment.

     

    As
      long
      as any Notes are Outstanding, the Company shall maintain an office or agency
      in
      the United States where Notes may be presented for payment.  Such
      office or agency shall initially be the office or agency of the Trustee in
      Dallas, Texas.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SECTION
      2.06.  Optional
      Redemption.

     

    At
      its
      option, the Company may redeem the Notes, in whole or in part, in principal
      amounts of $1,000 or any integral multiple thereof, at any time or from time
      to
      time, at the applicable Redemption Prices determined as set forth in the form
      of
      Note attached hereto as Exhibit A, in accordance with the terms set forth
      in the Notes and in accordance with Article Eleven of the Original Indenture
      (as
      amended and supplemented by this Supplemental Indenture, including without
      limitation Section 3.06. hereof).

     

    SECTION
      2.07.  Defeasance
      and Discharge; Covenant Defeasance.

     

    Article
      Thirteen of the Original Indenture (as amended and supplemented by this
      Supplemental Indenture) shall apply to the Notes.  Furthermore, each
      of the following shall constitute Additional Defeasible Provisions (as such
      term
      is defined in the Original Indenture):

     

    (a)           the
      covenants set forth in ARTICLE 4 of this
      Supplemental Indenture; and

     

    (b)           the
      limitation imposed by clause (iv) of Section 8.1(a) of the Indenture (as a
      result of this Supplemental Indenture).

     

    SECTION
      2.08.  Global
      Securities.

     

    The
      Notes
      shall initially be issuable in whole or in part in the form of one or more
      Global Securities.  Such Global Securities (i)  shall be
      deposited with, or on behalf of, The Depository Trust Company, New York, New
      York, which shall act as Depositary with respect to the Notes, (ii) shall bear
      the legends applicable to Global Securities set forth in Sections 2.2 and 2.4
      of
      the Original Indenture, (iii) may be exchanged in whole or in part for
      Securities in definitive form upon the terms and subject to the conditions
      provided in Section 3.5 of the Original Indenture and in this Supplemental
      Indenture and (iv) shall otherwise be subject to the applicable provisions
      of the Indenture.

     

    SECTION
      2.09.  Subsidiary
      Guarantees.

     

    Article
      Fourteen of the Original Indenture (as amended and supplemented by this
      Supplemental Indenture, including without limitation Section 3.09. hereof) shall apply to the
      Notes.  For the purposes of this Supplemental Indenture and the Notes
      (including without limitation the provisions of the Original Indenture to the
      extent applicable thereto), the term “Guarantor” shall mean each of the
      Guarantor parties named on the signature pages of this Supplemental
      Indenture.

     

    ARTICLE
      3

    Amendments
      to Original Indenture

     

    With
      respect to the Notes, the Original Indenture is hereby amended as set forth
      below in this ARTICLE 3; provided,
however, that each such amendment
      shall apply only to the Notes and not
      to any other series of Securities issued under the Indenture.

     

    SECTION
      3.01.  Defined
      Terms.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Section 1.1 of the Original Indenture
      is
      hereby amended by inserting or restating, as the case may be, each of the
      following defined terms in its appropriate alphabetical position:

     

    “Acquired
      Debt” means, with respect to any specified Person:

     

    (1)           Indebtedness
      of any other Person existing at the time such other Person is merged with or
      into or became a Subsidiary of such specified Person, regardless of

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    whether
      such Indebtedness is incurred in connection with, or in contemplation of, such
      other Person merging with or into, or becoming a Restricted Subsidiary of,
      such
      specified Person, but excluding Indebtedness which is extinguished, retired
      or
      repaid in connection with such Person merging with or becoming a Subsidiary
      of
      such specified Person; and

     

    (2)           Indebtedness
      secured by a Lien encumbering any asset acquired by such specified
      Person.

     

    “Acquired
      Subordinated Indebtedness” means Subordinated Debt of the Company or any of its
      Restricted Subsidiaries, that is Acquired Debt and was not incurred in
      connection with, or in contemplation of, another Person merging with or into,
      or
      becoming a Restricted Subsidiary of, the Company or any of its
      Subsidiaries.

     

    “Additional
      Assets” means:

     

    (1)           any
      property or assets (other than Indebtedness and Capital Stock) to be used by
      the
      Company or a Restricted Subsidiary in a Related Business;

     

    (2)           the
      Capital Stock of a Person that becomes a Restricted Subsidiary as a result
      of
      the acquisition of such Capital Stock by the Company or a Restricted
      Subsidiary;

     

    (3)           Capital
      Stock constituting a minority interest in any Person that at such time is a
      Restricted Subsidiary; or

     

    (4)           Capital
      Stock of any Subsidiary of the Company; provided that all the Capital
      Stock of such Subsidiary held by the Company or any of its Restricted
      Subsidiaries shall entitle the Company or such Restricted Subsidiary to not
      less
      than a pro rata portion of all dividends or other distributions made by such
      Subsidiary upon any of such Capital Stock;

     

    providedfurther,
      however, that in the case of clauses (2), (3) and (4), such Subsidiary is
      primarily engaged in a Related Business.

     

    “Additional
      Notes” means an unlimited maximum aggregate principal amount of Notes (other
      than the Notes issued on the date hereof) issued under the Indenture pursuant
      to
Section 2.02. of this Supplemental
      Indenture.

     

    “Adjusted
      Consolidated Net Tangible Assets” means (without duplication), as of the date of
      determination, the remainder of:

     

    (a)           the
      sum of:

     

    (i)           discounted
      future net revenues from proved oil and gas reserves of the Company and its
      Restricted Subsidiaries calculated in accordance with SEC guidelines before
      any
      provincial, territorial, state, Federal or foreign income taxes, as estimated
      by
      the Company in a reserve report prepared as of the end of the Company’s most
      recently completed fiscal year for which audited financial statements are
      available and giving effect to applicable Oil and Natural Gas Hedging Contracts,
      as increased by, as of the date of determination, the estimated discounted
      future net revenues from:

     

    (A)           estimated
      proved oil and gas reserves acquired since such year end, which reserves were
      not reflected in such year end reserve report, and

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (B)           estimated
      oil and gas reserves attributable to upward revisions of estimates of proved
      oil
      and gas reserves (including previously estimated development costs incurred
      during the period and the accretion of discount since the prior period end)
      since such year end due to exploration, development, exploitation or other
      activities, in each case calculated in accordance with SEC
      guidelines,

     

    and
      decreased by, as of the date of determination, the estimated discounted future
      net revenues from:

     

    (C)           estimated
      proved oil and gas reserves reflected in such reserve report produced or
      disposed of since such year end, and

     

    (D)           estimated
      oil and gas reserves attributable to downward revisions of estimates of proved
      oil and gas reserves reflected in such reserve report since such year end due
      to
      changes in geological conditions or other factors which would, in accordance
      with standard industry practice, cause such revisions, in each case calculated
      substantially in accordance with SEC guidelines,

     

    in
      each
      case as estimated by the Company’s petroleum engineers or any independent
      petroleum engineers engaged by the Company for that purpose;

     

    (ii)           the
      capitalized costs that are attributable to oil and gas properties of the Company
      and its Restricted Subsidiaries to which no proved oil and gas reserves are
      attributable, based on the Company’s books and records as of a date no earlier
      than the date of the Company’s latest available annual or quarterly financial
      statements;

     

    (iii)           the
      Net Working Capital (excluding, to the extent included in the determination
      of
      discounted future net revenues under clause (i)(A) above, any adjustments made
      pursuant to FAS 143) on a date no earlier than the date of the Company’s latest
      annual or quarterly financial statements; and

     

    (iv)           the
      greater of:

     

    (A)           the
      net book value of other tangible assets of the Company and its Restricted
      Subsidiaries, as of a date no earlier than the date of the Company’s latest
      annual or quarterly financial statement, and

     

    (B)           the
      appraised value, as estimated by independent appraisers, of other tangible
      assets of the Company and its Restricted Subsidiaries, as of a date no earlier
      than the date of the Company’s latest audited financial statements
      (provided that the Company shall not be required to obtain such
      appraisal solely for the purpose of determining this value);
minus

     

    (b)           the
      sum of:

     

    (i)           the
      net book value of shares of stock of any class of Capital Stock of a Restricted
      Subsidiary that are not owned by the Company or a Restricted
      Subsidiary;

     

    (ii)           any
      net gas balancing liabilities of the Company and its Restricted Subsidiaries
      reflected in the Company’s latest audited financial statements;

     

    (iii)           to
      the extent included in (a)(i) above, the discounted future net revenues,
      calculated in accordance with SEC guidelines (utilizing the prices utilized
      in
      the 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Company’s
      year end reserve report), attributable to reserves which are required to be
      delivered to third parties to fully satisfy the obligations of the Company
      and
      its Restricted Subsidiaries with respect to Volumetric Production Payments
      (determined, if applicable, using the schedules specified with respect thereto);
      and

     

    (iv)           the
      discounted future net revenues, calculated in accordance with SEC guidelines,
      attributable to reserves subject to Dollar-Denominated Production Payments
      which, based on the estimates of production and price assumptions included
      in
      determining the discounted future net revenues specified in (a)(i) above, would
      be necessary to fully satisfy the payment obligations of the Company and its
      Subsidiaries with respect to Dollar-Denominated Production Payments (determined,
      if applicable, using the schedules specified with respect thereto).

     

    If
      the
      Company changes its method of accounting from the full cost or a similar method
      to the successful efforts method of accounting, “Adjusted Consolidated Net
      Tangible Assets” will continue to be calculated as if the Company were still
      using the full cost or a similar method of accounting.

     

    “Asset
      Sale” means:

     

    (1)           the
      sale, lease, conveyance or other disposition of any assets or rights (including
      by way of a Production Payment or a sale and leaseback transaction);
provided that the sale, lease, conveyance or other disposition of all
      or substantially all of the assets of the Company or the Company and its
      Restricted Subsidiaries taken as a whole will be governed by the provisions
      of
      Article Eight and/or Section 10.15 of this Indenture and not by the provisions
      of the Asset Sale covenant set forth in Section 10.12 of this Indenture;
      and

     

    (2)           the
      issuance of Equity Interests in any of the Company’s Restricted Subsidiaries
      (other than directors’ qualifying shares) or the sale of Equity Interests held
      by the Company or its Subsidiaries in any of its Subsidiaries.

     

    Notwithstanding
      the preceding, none of the following items will be deemed to be an Asset
      Sale:

     

    (1)           any
      single transaction or series of related transactions that involves assets having
      a Fair Market Value of less than $20.0 million;

     

    (2)           a
      transfer of assets between or among the Company and its Restricted
      Subsidiaries;

     

    (3)           an
      issuance of Equity Interests by a Restricted Subsidiary to the Company or to
      a
      Restricted Subsidiary;

     

    (4)           the
      sale or lease of equipment, inventory, products, services, accounts receivable
      or other assets in the ordinary course of business, and any sale or other
      disposition of damaged, worn-out or obsolete assets or assets that are no longer
      useful in the conduct of the business of the Company and its Restricted
      Subsidiaries;

     

    (5)           the
      sale or other disposition of cash or Cash Equivalents;

     

    (6)           a
      Restricted Payment that does not violate Section 10.9 of this
      Indenture;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (7)           the
      consummation of a Permitted Investment, including, without limitation, unwinding
      any Hedging Obligations;

     

    (8)           a
      disposition of Hydrocarbons or mineral products inventory in the ordinary course
      of business;

     

    (9)           the
      sale or transfer (regardless of whether in the ordinary course of business)
      of
      crude oil and natural gas properties or direct or indirect interests in real
      property; provided that at the time of such sale or transfer such
      properties do not have associated with them any proved reserves;

     

    (10)           the
      farm-out, lease or sublease of developed or undeveloped crude oil or natural
      gas
      properties owned or held by the Company or such Restricted Subsidiary in
      exchange for crude oil and natural gas properties owned or held by another
      Person;

     

    (11)           any
      trade or exchange by the Company or any Restricted Subsidiaries of oil and
      gas
      properties or other properties or assets for oil and gas properties or other
      properties or assets owned or held by another Person, provided that the
      fair market value of the properties or assets traded or exchanged by the Company
      or such Restricted Subsidiary (together with any cash) is reasonably equivalent
      to the fair market value of the properties or assets (together with any cash)
      to
      be received by the Company or such Restricted Subsidiary, and provided
      further that any net cash received must be applied in accordance with the
      provisions of Section 10.12 of this Indenture;

     

    (12)           the
      creation or perfection of a Lien (but not, except to the extent contemplated
      in
      clause (13) below, the sale or other disposition of the properties or assets
      subject to such Lien);

     

    (13)           the
      creation or perfection of a Permitted Lien and the exercise by any Person in
      whose favor a Permitted Lien is granted of any of its rights in respect of
      that
      Permitted Lien;

     

    (14)           the
      licensing or sublicensing of intellectual property, including, without
      limitation, licenses for seismic data, in the ordinary course of business and
      which do not materially interfere with the business of the Company and its
      Restricted Subsidiaries;

     

    (15)           surrender
      or waiver of contract rights or the settlement, release or surrender of
      contract, tort or other claims of any kind; and

     

    (16)           the
      disposition of oil and natural gas properties in connection with tax credit
      transactions complying with Section 29 of the Code or any successor or analogous
      provisions of the Code.

     

    “Board
      of
      Directors” means, as to any Person, the board of directors of such Person or any
      duly authorized committee thereof.

     

    “Capital
      Stock” means:

     

    (1)           in
      the case of a corporation, corporate stock;

     

    (2)           in
      the case of an association or business entity, any and all shares, interests,
      participations, rights or other equivalents (however designated) of corporate
      stock;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (3)           in
      the case of a partnership or limited liability company, partnership interests
      (whether general or limited) or membership interests; and

     

    (4)           any
      other interest or participation that confers on a Person the right to receive
      a
      share of the profits and losses of, or distributions of assets of, the issuing
      Person, but excluding from all of the foregoing any debt securities convertible
      into Capital Stock, regardless of whether such debt securities include any
      right
      of participation with Capital Stock.

     

    “Capital
      Lease Obligation” means, at the time any determination is to be made, the amount
      of the liability in respect of a capital lease that would at that time be
      required to be capitalized on a balance sheet in accordance with GAAP, and
      the
      Stated Maturity thereof shall be the date of the last payment of rent or any
      other amount due under such lease prior to the first date upon which such lease
      may be prepaid by the lessee without payment of a penalty.

     

    “Cash
      Equivalents” means:

     

    (1)           United
      States dollars;

     

    (2)           securities
      issued or directly and fully guaranteed or insured by the United States
      government or any agency or instrumentality of the United States government
      (provided that the full faith and credit of the United States is
      pledged in support of those securities) having maturities of not more than
      one
      year from the date of acquisition;

     

    (3)           marketable
      general obligations issued by any state of the United States of America or
      any
      political subdivision of any such state or any public instrumentality thereof
      maturing within one year from the date of acquisition thereof and, at the time
      of acquisition thereof, having a credit rating of “A” or better from either
      S&P or Moody’s;

     

    (4)           certificates
      of deposit, demand deposit accounts and eurodollar time deposits with maturities
      of one year or less from the date of acquisition, bankers’ acceptances with
      maturities not exceeding one year and overnight bank deposits, in each case,
      with any domestic commercial bank having capital and surplus in excess of $500.0
      million and a Thomson Bank Watch Rating of “B” or better;

     

    (5)           repurchase
      obligations with a term of not more than seven days for underlying securities
      of
      the types described in clauses (2), (3) and (4) above entered into with any
      financial institution meeting the qualifications specified in clause (4)
      above;

     

    (6)           commercial
      paper having one of the two highest ratings obtainable from Moody’s or S&P
      and, in each case, maturing within one year after the date of acquisition;
      and

     

    (7)           money
      market funds at least 95% of the assets of which constitute Cash Equivalents
      of
      the kinds described in clauses (1) through (6) of this definition;
      and

     

    (8)           deposits
      in any currency available for withdrawal on demand with any commercial bank
      that
      is organized under the laws of any country in which the Company or any
      Restricted Subsidiary maintains its chief executive office or is engaged in
      the
      Related Business, provided that all such deposits are made in such
      accounts in the ordinary course of business.

     

    “Change
      of Control” means:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (1)           any
      “person” or “group” of related persons (as such terms are used in Sections 13(d)
      and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes
      the
      beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
      except that such person or group shall be deemed to have “beneficial ownership”
of all shares that any such person or group has the right to acquire, whether
      such right is exercisable immediately or only after the passage of time),
      directly or indirectly, of more than 50% of the total voting power of the Voting
      Stock of the Company (or its successor by merger, consolidation or purchase
      of
      all or substantially all of its assets) (for the purposes of this clause, such
      person or group shall be deemed to beneficially own any Voting Stock of the
      Company held by an entity, if such person or group “beneficially owns” (as
      defined above), directly or indirectly, more than 50% of the voting power of
      the
      Voting Stock of such entity);

     

    (2)           the
      first day on which a majority of the members of the Board of Directors of the
      Company are not Continuing Directors;

     

    (3)           the
      sale, lease, transfer, conveyance or other disposition (other than by way of
      merger or consolidation), in one or a series of related transactions, of all
      or
      substantially all of the assets of the Company and its Restricted Subsidiaries
      taken as a whole to any “person” (as such term is used in Sections 13(d) and
      14(d) of the Exchange Act); or

     

    (4)           the
      adoption of a plan or proposal for the liquidation or dissolution of the
      Company.

     

    “Change
      of Control Triggering Event” means the occurrence of both a Change of Control
      and a Rating Decline with respect to the Notes.

     

    “Consolidated
      Cash Flow” means, with respect to any specified Person for any period, the
      Consolidated Net Income of such Person for such period plus, without
      duplication:

     

    (1)           an
      amount equal to any extraordinary loss plus any net loss realized by such Person
      or any of its Restricted Subsidiaries in connection with an Asset Sale (together
      with any related provision for taxes and any related non-recurring charges
      relating to any premium or penalty paid, write-off of deferred financing costs
      or other financial recapitalization charges in connection with redeeming or
      retiring any Indebtedness prior to its Stated Maturity), to the extent such
      losses were deducted in computing such Consolidated Net Income;
plus

     

    (2)           provision
      for taxes based on income or profits of such Person and its Restricted
      Subsidiaries for such period, to the extent that such provision for taxes was
      deducted in computing such Consolidated Net Income; plus

     

    (3)           the
      Fixed Charges of such Person and its Restricted Subsidiaries for such period,
      to
      the extent that such Fixed Charges were deducted in computing such Consolidated
      Net Income; plus

     

    (4)           exploration
      and abandonment expense (if applicable) to the extent deducted in calculating
      Consolidated Net Income; plus

     

    (5)           depreciation,
      depletion, amortization (including amortization of intangibles but excluding
      amortization of prepaid cash expenses that were paid in a prior period),
      impairment, other non-cash expenses and other non-cash items (excluding any
      

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        
such
        non-cash expense to the extent that it represents an accrual of or reserve
        for
        cash expenses in any future period or amortization of a prepaid cash expense
        that was paid in a prior period) of such Person and its Restricted Subsidiaries
        for such period to the extent that such depreciation, depletion, amortization,
        impairment and other non-cash expenses were deducted in computing such
        Consolidated Net Income; plus

    

     

    (6)           any
      interest expense attributable to any Oil and Natural Gas Hedging Contract,
      to
      the extent that such interest expense was deducted in computing such
      Consolidated Net Income; plus

     

    (7)           the
      accretion of interest charges on future plugging and abandonment obligations
      and
      future retirement benefits, to the extent such charges were deducted in
      computing such Consolidated Net Income; minus

     

    (8)           non-cash
      items increasing such Consolidated Net Income for such period, other than items
      that were accrued in the ordinary course of business, and
minus

     

    (9)           the
      sum of (a) the amount of deferred revenues that are amortized during such period
      and are attributable to reserves that are subject to Volumetric Production
      Payments and (b) amounts recorded in accordance with GAAP as repayments of
      principal and interest pursuant to Dollar-Denominated Production
      Payments;

     

    in
      each
      case, on a consolidated basis and determined in accordance with
      GAAP.

     

    Notwithstanding
      the foregoing, the provision for taxes on the income or profits of, and the
      depreciation, depletion and amortization and other non-cash charges and expenses
      of, a Restricted Subsidiary of the referent Person shall be added to
      Consolidated Net Income to compute Consolidated Cash Flow only to the extent
      (and in the same proportion) that the Net Income of such Restricted Subsidiary
      was included in calculating the Consolidated Net Income of such Person and
      only
      if a corresponding amount would be permitted at the date of determination to
      be
      dividended to the referent Person by such Restricted Subsidiary without prior
      governmental approval (that has not been obtained), and without direct or
      indirect restriction pursuant to the terms of its charter and all agreements,
      instruments, judgments, decrees, orders, statutes, rules and governmental
      regulations applicable to that Restricted Subsidiary or its
      stockholders.  Furthermore, solely for the purpose of calculating
      Consolidated Cash Flow, any expenses attributable to stock appreciation rights
      will not be deducted in computing Consolidated Net Income prior to payment
      of
      such expenses in cash.

     

    “Consolidated
      Net Income” means, with respect to any specified Person for any period, the
      aggregate of the Net Income of such Person and its Restricted Subsidiaries
      for
      such period, on a consolidated basis, determined in accordance with GAAP;
provided that:

     

    (1)           the
      Net Income (but not loss) of any Person that is not a Restricted Subsidiary
      or
      that is accounted for by the equity method of accounting will be included only
      to the extent of the amount of dividends or similar distributions paid in cash
      to the specified Person or a Restricted Subsidiary of the Person;

     

    (2)           the
      Net Income of any Restricted Subsidiary will be excluded to the extent that
      the
      declaration or payment of dividends or similar distributions by that Restricted
      Subsidiary of that Net Income is not at the date of determination permitted
      without any prior governmental approval (that has not been obtained) or,
      directly or indirectly, by operation of the terms of its charter or any
      agreement, instrument, judgment, decree, order, statute, rule or governmental
      regulation applicable to that 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        
Restricted
        Subsidiary or its stockholders; provided, however that the
        operation of this clause (2) shall be suspended with respect to any Restricted
        Subsidiary that is acquired by the Company or any of its Subsidiaries
        (regardless of whether such acquisition is effected pursuant to a merger
        or
        otherwise) (such Restricted Subsidiary being referred to as a “Newly Acquired
        Restricted Subsidiary”), but such suspension shall cease immediately after the
        first six months following such acquisition; provided further,
however that the Net Income for such period of any Newly Acquired
        Restricted Subsidiary that is acquired by the Company or any of its Restricted
        Subsidiaries during such period, shall be included;

    

     

    (3)           the
      cumulative effect of a change in accounting principles will be
      excluded;

     

    (4)           any
      gain (loss) realized upon the sale or other disposition of any property, plant
      or equipment of such Person or its consolidated Restricted Subsidiaries
      (including pursuant to any sale or leaseback transaction) which is not sold
      or
      otherwise disposed of in the ordinary course of business and any gain (loss)
      realized upon the sale or other disposition of any Capital Stock of any Person
      will be excluded;

     

    (5)           any
      asset impairment write-downs on Oil and Gas Properties under GAAP or SEC
      guidelines will be excluded;

     

    (6)           any
      non-cash mark-to-market adjustments to assets or liabilities resulting in
      unrealized gains or losses in respect of Hedging Obligations (including those
      resulting from the application of SFAS 133) shall be excluded;

     

    (7)           to
      the extent deducted in the calculation of Net Income, any non-cash or
      nonrecurring charges associated with any premium or penalty paid, write-off
      of
      deferred financing costs or other financial recapitalization charges in
      connection with redeeming or retiring any Indebtedness will be excluded;
      and

     

    (8)           any
      net losses or expenses associated with the Pre-Issue Date Hedge Buyouts and/or
      the Oil and Natural Gas Hedging Contracts mentioned in the definition of
“Pre-Issue Date Hedge Buyouts” will be excluded.

     

    “Consolidated
      Net Worth” means, with respect to any specified Person as of any date, the sum
      of:

     

    (1)           the
      consolidated equity of the common stockholders of such Person and its
      consolidated Subsidiaries as of such date; plus

     

    (2)           the
      respective amounts reported on such Person’s balance sheet as of such date with
      respect to any series of preferred stock (other than Disqualified Stock) that
      by
      its terms is not entitled to the payment of dividends unless such dividends
      may
      be declared and paid only out of net earnings in respect of the year of such
      declaration and payment, but only to the extent of any cash received by such
      Person upon issuance of such preferred stock.

     

    “Continuing
      Directors” means, as of any date of determination, any member of the Board of
      Directors of the Company who:

     

    (1)           was
      a member of such Board of Directors on March 13, 2007; or

     

    
      
        
        

      

      
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    (2)           was
      nominated for election or elected to such Board of Directors with the approval
      of a majority of the Continuing Directors who were members of such Board of
      Directors at the time of such nomination or election.

     

    “Credit
      Facilities” means, with respect to the Company or any of its Restricted
      Subsidiaries, one or more debt facilities (including, without limitation, the
      Senior Credit Agreement), commercial paper facilities or Debt Issuances
      providing for revolving credit loans, term loans, receivables financing
      (including through the sale of receivables to any lenders, other financiers
      or
      to special purpose entities formed to borrow from (or sell such receivables
      to)
      any lenders or other financiers against such receivables), letters of credit,
      bankers’ acceptances, other borrowings or Debt Issuances, in each case, as
      amended, restated, modified, renewed, extended, refunded, replaced or refinanced
      (in each case, without limitation as to amount), in whole or in part, from
      time
      to time (including through one or more Debt Issuances) and any agreements and
      related documents governing Indebtedness or obligations incurred to refinance
      amounts then outstanding or permitted to be outstanding, whether provided under
      the original agreement, indenture or other documentation relating
      thereto).

     

    “Currency
      Agreement” means in respect of a Person any foreign exchange contract, currency
      swap agreement or other similar agreement as to which such Person is a party
      or
      a beneficiary.

     

    “Debt
      Issuances” means, with respect to the Company or any Restricted Subsidiary, one
      or more issuances after March 13, 2007 of Indebtedness evidenced by notes,
      debentures, bonds or other similar securities or instruments.

     

    “Default”
      means any event which is, or after notice or passage of time or both would
      be,
      an Event of Default.

     

    “Disqualified
      Stock” means any Capital Stock that, by its terms (or by the terms of any
      security into which it is convertible, or for which it is exchangeable, in
      each
      case at the option of the holder of the Capital Stock), or upon the happening
      of
      any event, matures or is mandatorily redeemable, pursuant to a sinking fund
      obligation or otherwise, or redeemable at the option of the holder of the
      Capital Stock, in whole or in part, on or prior to the date that is 91 days
      after the date on which the Notes mature. Notwithstanding the preceding
      sentence, any Capital Stock that would constitute Disqualified Stock solely
      because the holders of the Capital Stock have the right to require the Company
      to repurchase such Capital Stock upon the occurrence of a change of control
      or
      an asset sale will not constitute Disqualified Stock if the terms of such
      Capital Stock provide that the Company may not repurchase or redeem any such
      Capital Stock pursuant to such provisions unless such repurchase or redemption
      complies with Section 10.9 of this Indenture.  The amount of
      Disqualified Stock deemed to be outstanding at any time for purposes of this
      Indenture will be the maximum amount that the Company and its Restricted
      Subsidiaries may become obligated to pay upon the maturity of, or pursuant
      to
      any mandatory redemption provisions of, such Disqualified Stock, exclusive
      of
      accrued dividends.

     

    “Dollar-Denominated
      Production Payments” means production payment obligations recorded as
      liabilities in accordance with GAAP, together with all undertakings and
      obligations in connection therewith.

     

    “Domestic
      Restricted Subsidiary” means any Restricted Subsidiary that was formed under the
      laws of the United States or any state of the United States or the District
      of
      Columbia or that Guarantees or otherwise provides direct credit support for
      any
      Indebtedness of the Company or any Guarantor.

     

    
      
        
        

      

      
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    “Equity
      Interests” means Capital Stock and all warrants, options or other rights to
      acquire Capital Stock (but excluding any debt security that is convertible
      into,
      or exchangeable for, Capital Stock).

     

    “Equity
      Offering” means (i) an offering for cash by the Company of its Capital Stock
      (other than Disqualified Stock), or options, warrants or rights with respect
      to
      its Capital Stock or (ii) a contribution of cash to the Company in exchange
      for
      its Capital Stock (other than Disqualified Stock).

     

    “Existing
      Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than
      Indebtedness under the Credit Agreement) in existence on March 13, 2007
      (including the $500,000,000 aggregate principal amount of 7% Senior Notes due
      2017 issued by the Company on March 13, 2007 and all related Guarantees of
      such
      notes by its Subsidiaries), until such amounts are repaid.

     

    “Fair
      Market Value” means the value that would be paid by a willing buyer to an
      unaffiliated willing seller in a transaction not involving distress or necessity
      of either party, determined in good faith by the Board of Directors or
      management of the Company (unless otherwise provided in this Indenture), which
      determination will be conclusive for all purposes under this
      Indenture.

     

    “Farm-In
      Agreement” means an agreement whereby a Person agrees to pay all or a share of
      the drilling, completion or other expenses of an exploratory or development
      well
      (which agreement may be subject to a maximum payment obligation, after which
      expenses are shared in accordance with the working or participation interest
      therein or in accordance with the agreement of the parties) or perform the
      drilling, completion or other operation on such well in exchange for an
      ownership interest in an oil or gas property.

     

    “Farm-Out
      Agreement” means a Farm-In Agreement, viewed from the standpoint of the party
      that transfers an ownership interest to another.

     

    “Fixed
      Charge Coverage Ratio” means with respect to any specified Person for any
      period, the ratio of the Consolidated Cash Flow of such Person for such period
      to the Fixed Charges of such Person for such period.  In the event
      that the specified Person or any of its Restricted Subsidiaries incurs, assumes,
      guarantees, repays, repurchases, redeems, defeases or otherwise discharges
      any
      Indebtedness (other than ordinary working capital borrowings) or issues,
      repurchases or redeems preferred stock subsequent to the commencement of the
      period for which the Fixed Charge Coverage Ratio is being calculated and on
      or
      prior to the date on which the event for which the calculation of the Fixed
      Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
      Coverage Ratio will be calculated giving pro forma effect to such incurrence,
      assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
      discharge of Indebtedness, or such issuance, repurchase or redemption of
      preferred stock, and the use of the proceeds therefrom, as if the same had
      occurred at the beginning of the applicable four-quarter reference
      period.

     

    In
      addition, for purposes of calculating the Fixed Charge Coverage
      Ratio:

     

    (1)           acquisitions
      that have been made by the specified Person or any of its Restricted
      Subsidiaries, including through mergers, consolidations or otherwise (including
      acquisitions of assets used or useful in a Related Business), or any Person
      or
      any of its Restricted Subsidiaries acquired by the specified Person or any
      of
      its Restricted Subsidiaries, and including any related financing transactions
      and including increases in ownership of Restricted Subsidiaries, during the
      four-quarter reference period or 

     

    
      
        
        

      

      
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    subsequent
      to such reference period and on or prior to the Calculation Date, shall be
      deemed to have occurred on the first day of the four-quarter reference period
      and the Consolidated Cash Flow for such reference period will be calculated
      giving pro forma effect to any expense and cost reductions that have occurred
      or, in the reasonable judgment of the chief accounting or chief financial
      officer of the Company, are reasonably expected to occur (regardless of whether
      those operating improvements or cost savings could then be reflected in pro
      forma financial statements prepared in accordance with Regulation S-X under
      the
      Securities Act or any other regulation or policy of the SEC related
      thereto);

     

    (2)           the
      Consolidated Cash Flow attributable to discontinued operations, as determined
      in
      accordance with GAAP, and operations or businesses (and ownership interests
      therein) disposed of prior to the Calculation Date, will be
      excluded;

     

    (3)           the
      Fixed Charges attributable to discontinued operations, as determined in
      accordance with GAAP, and operations or businesses (and ownership interests
      therein) disposed of prior to the Calculation Date, will be excluded, but only
      to the extent that the obligations giving rise to such Fixed Charges will not
      be
      obligations of the specified Person or any of its Restricted Subsidiaries
      following the Calculation Date;

     

    (4)           any
      Person that is a Restricted Subsidiary on the Calculation Date will be deemed
      to
      have been a Restricted Subsidiary at all times during such four-quarter
      period;

     

    (5)           any
      Person that is not a Restricted Subsidiary on the Calculation Date will be
      deemed not to have been a Restricted Subsidiary at any time during such
      four-quarter period; and

     

    (6)           if
      any Indebtedness bears a floating rate of interest, the interest expense on
      such
      Indebtedness will be calculated as if the rate in effect on the Calculation
      Date
      had been the applicable rate for the entire period (taking into account any
      Hedging Obligation applicable to such Indebtedness if such Hedging Obligation
      has a remaining term as at the Calculation Date in excess of 12
      months).

     

    “Fixed
      Charges” means, with respect to any specified Person for any period, the sum,
      without duplication, of:

     

    (1)           the
      consolidated interest expense of such Person and its Restricted Subsidiaries
      for
      such period, whether paid or accrued (excluding (i) any interest attributable
      to
      Production Payments and Reserve Sales, (ii) write-off of deferred financing
      costs and (iii) accretion of interest charges on future plugging and abandonment
      obligations, future retirement benefits and other obligations that do not
      constitute Indebtedness, but including, without limitation, amortization of
      debt
      issuance costs and original issue discount, noncash interest payments, the
      interest component of any deferred payment obligations other than that
      attributable to any Oil and Natural Gas Hedging Contract, the interest component
      of all payments associated with Capital Lease Obligations, commissions,
      discounts and other fees and charges incurred in respect of letter of credit
      or
      bankers’ acceptance financings), and net of the effect of all payments made or
      received pursuant to Interest Rate Agreements; plus

     

    (2)           the
      consolidated interest expense of such Person and its Restricted Subsidiaries
      that was capitalized during such period; plus

     

    
      
        
        

      

      
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    (3)           any
      interest on Indebtedness of another Person (other than a Restricted Subsidiary
      of such specified Person) that is guaranteed by the specified Person or one
      or
      more of its Restricted Subsidiaries or secured by a Lien on assets of such
      specified Person or one or more of its Restricted Subsidiaries, regardless
      of
      whether such Guarantee or Lien is called upon; plus

     

    (4)           all
      dividends, whether paid or accrued and regardless of whether in cash, on any
      series of preferred stock of such Person or any of its Restricted Subsidiaries,
      other than dividends on Equity Interests payable solely in Equity Interests
      of
      the Company (other than Disqualified Stock) or to the Company or a Restricted
      Subsidiary.

     

    “Guarantee”
      means a guarantee other than by endorsement of negotiable instruments for
      collection in the ordinary course of business, direct or indirect, in any manner
      including, without limitation, by way of a pledge of assets or through letters
      of credit or reimbursement agreements in respect thereof, of all or any part
      of
      any Indebtedness (whether arising by virtue of partnership arrangements, or
      by
      agreements to keep-well, to maintain financial statement conditions or
      otherwise), or entered into for purposes of assuring in any other manner the
      obligee of such Indebtedness of the payment thereof or to protect such obligee
      against loss in respect thereof (in whole or in part).

     

    “Guarantor”
      means each Restricted Subsidiary that has become obligated under a Subsidiary
      Guarantee, in accordance with the terms of the guarantee provisions of this
      Indenture, but only for so long as such Subsidiary remains so obligated pursuant
      to the terms of this Indenture.

     

    “Hedging
      Obligations” of any Person means the obligations of such Person pursuant to any
      Interest Rate and Currency Hedges and any Oil and Natural Gas Hedging
      Contracts.

     

    “Hydrocarbons”
      means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
      distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents,
      elements or compounds thereof and products refined or processed
      therefrom.

     

    “Indebtedness”
      means, with respect to any specified Person, without duplication, any
      indebtedness of such Person, regardless of whether contingent:

     

    (1)           in
      respect of borrowed money;

     

    (2)           evidenced
      by bonds, notes, debentures or similar instruments or letters of credit (or
      reimbursement agreements in respect thereof);

     

    (3)           in
      respect of banker’s acceptances;

     

    (4)           representing
      Capital Lease Obligations;

     

    (5)           in
      respect of any Guarantee by such Person of production or payment with respect
      to
      a Production Payment (but not any other contractual obligation in respect of
      such Production Payment);

     

    (6)           representing
      the balance deferred and unpaid of the purchase price of any property or
      services due more than six months after such property is acquired or such
      services are completed, except any such balance that constitutes an accrued
      expense or a trade payable; or

     

    (7)           representing
      any Interest Rate and Currency Hedges,

     

    
      
        
        

      

      
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    if
      and to
      the extent any of the preceding items (other than letters of credit and Interest
      Rate and Currency Hedges) would appear as a liability upon a balance sheet
      of
      the specified Person prepared in accordance with GAAP.  In addition,
      the term “Indebtedness” includes (a) all indebtedness of any other Person, of
      the types described above in clauses (1) through (7), secured by a Lien on
      any
      asset of the specified Person (regardless of whether such indebtedness is
      assumed by the specified Person), provided that the amount of such
      indebtedness will be the lesser of (i) the Fair Market Value of such asset
      at
      such date of determination and (ii) the amount of such indebtedness of such
      other Person, and (b) to the extent not otherwise included, the Guarantee by
      the
      specified Person of any indebtedness of any other Person, of the types described
      above in clauses (1) through (7).

     

    Notwithstanding
      the foregoing, the following shall not constitute “Indebtedness:”

     

    (i)           accrued
      expenses and trade accounts payable arising in the ordinary course of
      business;

     

    (ii)           except
      as provided in clause (5) of the first paragraph of this definition, any
      obligation in respect of any Production Payment and Reserve Sales;

     

    (iii)           any
      obligation in respect of any Farm-In Agreement;

     

    (iv)           any
      indebtedness which has been defeased in accordance with GAAP or defeased
      pursuant to the deposit of cash or Government Securities (in an amount
      sufficient to satisfy all such indebtedness obligations at maturity or
      redemption, as applicable, and all payments of interest and premium, if any)
      in
      a trust or account created or pledged for the sole benefit of the holders of
      such indebtedness, and subject to no other Liens, and the other applicable
      terms
      of the instrument governing such indebtedness;

     

    (v)           oil
      or natural gas balancing liabilities incurred in the ordinary course of business
      and consistent with past practice;

     

    (vi)           any
      obligation in respect of any Oil and Natural Gas Hedging Contract;

     

    (vii)           any
      unrealized losses or charges in respect of Hedging Obligations (including those
      resulting from the application of FAS 133);

     

    (viii)           any
      obligations in respect of (a) bid, performance, completion, surety, appeal
      and
      similar bonds, (b) obligations in respect of bankers’ acceptances, (c) insurance
      obligations or bonds and other similar bonds and obligations and (d) any
      guaranties or letters of credit functioning as or supporting any of the
      foregoing bonds or obligations; provided, however that such
      bonds or obligations  mentioned in subclause (a), (b), (c) or (d) of
      this clause (viii), are incurred in the ordinary course of the business of
      the
      Company and its Restricted Subsidiaries and do not relate to obligations for
      borrowed money;

     

    (ix)           any
      obligations in respect of completion bonds, performance bonds, bid bonds, appeal
      bonds, surety bonds, bankers acceptances, letters of credit, insurance
      obligations or bonds and other similar bonds and obligations incurred by the
      Company or any Restricted Subsidiary in the ordinary course of business and
      any
      guaranties and obligations of the Company or any Restricted Subsidiary with
      respect to or letters of credit functioning as or supporting any of the
      foregoing bonds or obligations;

     

    (x)           any
      obligation arising from any agreement providing for indemnities, guarantees,
      purchase price adjustments, holdbacks, contingency payment obligations

     

    
      
        
        

      

      
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    based
      on
      the performance of the acquired or disposed assets or similar obligations (other
      than guaranties of Indebtedness) incurred by any Person in connection with
      the
      acquisition or disposition of assets; and

     

    (xi)           all
      contracts and other obligations, agreements instruments or arrangements
      described in clauses (21), (22), (23) and (24) of the definition of “Permitted
      Liens.”

     

    “Interest
      Rate Agreement” means with respect to any Person any interest rate protection
      agreement, interest rate future agreement, interest rate option agreement,
      interest rate swap agreement, interest rate cap agreement, interest rate collar
      agreement, interest rate hedge agreement or other similar agreement or
      arrangement as to which such Person is party or a beneficiary.

     

    “Interest
      Rate and Currency Hedges” of any Person means the obligations of such Person
      pursuant to any Interest Rate Agreement or Currency Agreement.

     

    “Investment
      Grade Rating” means a rating equal to or higher than:

     

    (1)           Baa3
      (or the equivalent) by Moody’s; or

     

    (2)           BBB-
      (or the equivalent) by S&P,

     

    or,
      if
      either such entity ceases to rate the Notes for reasons outside of the Company’s
      control, the equivalent investment grade credit rating from any other Rating
      Agency.

     

    “Investment
      Grade Rating Event” means the first day on which the Notes have an Investment
      Grade Rating from a Rating Agency and no Default has occurred and is then
      continuing under this Indenture.

     

    “Investments”
      means, with respect to any Person, all direct or indirect investments by such
      Person in other Persons (including Affiliates) in the forms of loans (including
      Guarantees or other obligations, advances or capital contributions (excluding
      endorsements of negotiable instruments and documents in the ordinary course
      of
      business, and commission, travel and similar advances to officers, employees
      and
      consultants made in the ordinary course of business), purchases or other
      acquisitions for consideration of Indebtedness, Equity Interests or other
      securities, together with all items that are or would be classified as
      investments on a balance sheet prepared in accordance with GAAP.  If
      the Company or any Restricted Subsidiary sells or otherwise disposes of any
      Equity Interests of any direct or indirect Restricted Subsidiary of the Company
      such that, after giving effect to any such sale or disposition, such Person
      is
      no longer a Restricted Subsidiary, the Company will be deemed to have made
      an
      Investment on the date of any such sale or disposition equal to the Fair Market
      Value of the Company’s Investments in such Restricted Subsidiary that were not
      sold or disposed of in an amount determined as provided in Section 10.9(d)
      of
      this Indenture. The acquisition by the Company or any Subsidiary of the Company
      of a Person that holds an Investment in a third Person will be deemed to be
      an
      Investment by the Company or such Subsidiary in such third Person in an amount
      equal to the Fair Market Value of the Investments held by the acquired Person
      in
      such third Person in an amount determined as provided in Section 10.9(d) of
      this
      Indenture. Except as otherwise provided in this Indenture, the amount of an
      Investment will be determined at the time the Investment is made and without
      giving effect to subsequent changes in value.

     

    “Issue
      Date” means the first date on which Notes are issued under this
      Indenture.

     

    
      
        
        

      

      
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    “Leverage
      Ratio” means, with respect to any Person as of any date of determination, the
      ratio of (x) the total consolidated Indebtedness of such Person and its
      Restricted Subsidiaries as of the end of the most recent fiscal quarter for
      which internal financial statements are available, which would be reflected
      as a
      liability on a consolidated balance sheet of such Person and its Restricted
      Subsidiaries prepared as of such date in accordance with GAAP, to (y) the
      aggregate amount of Consolidated Cash Flow of such Person for the then most
      recent four fiscal quarters for which internal financial statements are
      available, in each case with such pro forma adjustments to the amount of
      consolidated Indebtedness and Consolidated Cash Flow as are appropriate and
      consistent with the pro forma adjustment provisions set forth in the definition
      of Fixed Charge Coverage Ratio.

     

    “Lien”
      means any mortgage, pledge, security interest, encumbrance, lien or charge
      of
      any kind (including any conditional sale or other title retention agreement
      or
      lease in the nature thereof).

     

    “Moody’s”
      means Moody’s Investors Service, Inc. or any successor to the rating agency
      business thereof.

     

    “Net
      Income” means, with respect to any specified Person, the net income (loss) of
      such Person, determined in accordance with GAAP and before any reduction in
      respect of preferred stock dividends, excluding, however:

     

    (1)           any
      gain or loss, together with any related provision for taxes on such gain or
      loss, realized in connection with: (a) any Asset Sale; or (b) the disposition
      of
      any securities by such Person or any of its Restricted Subsidiaries or the
      extinguishment of any Indebtedness of such Person or any of its Restricted
      Subsidiaries; and

     

    (2)           any
      extraordinary or nonrecurring gain or loss, together with any related provision
      for taxes on such extraordinary or nonrecurring gain or loss.

     

    “Net
      Proceeds” means the aggregate cash proceeds received by the Company or any of
      its Restricted Subsidiaries in respect of any Asset Sale (including, without
      limitation, any cash received upon the sale or other disposition of any non-cash
      consideration received in any Asset Sale), net of:

     

    (1)           all
      legal, accounting, investment banking, title and recording tax expenses,
      commissions and other fees and expense incurred, and all Federal, state,
      provincial, foreign and local taxes required to be paid or accrued as a
      liability under GAAP (after taking into account any available tax credits or
      deductions and any tax sharing agreements), as a consequence of such Asset
      Sale;

     

    (2)           all
      payments made on any Indebtedness which is secured by any assets subject to
      such
      Asset Sale, in accordance with the terms of any Lien upon such assets, or which
      must by its terms, or in order to obtain a necessary consent to such Asset
      Sale,
      or by applicable law be repaid out of the proceeds from such Asset
      Sale;

     

    (3)           all
      distributions and other payments required to be made to holders of minority
      interests in Subsidiaries or joint ventures as a result of such Asset Sale;
      and

     

    (4)           the
      deduction of appropriate amounts to be provided by the seller as a reserve,
      in
      accordance with GAAP, or held in escrow, in either case for adjustment in
      respect of the sale price or for any liabilities associated with the assets
      disposed of in such 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Asset
      Sale and retained by the Company or any Restricted Subsidiary after such Asset
      Sale.

     

    “Net
      Working Capital” means (a) all current assets of the Company and its Restricted
      Subsidiaries except current assets from Oil and Natural Gas Hedging Contracts,
      less (b) all current liabilities of the Company and its Restricted Subsidiaries,
      except current liabilities included in Indebtedness and any current liabilities
      from Oil and Natural Gas Hedging Contracts, in each case as set forth in the
      consolidated financial statements of the Company prepared in accordance with
      GAAP (excluding any adjustments made pursuant to FAS 133).

     

    “Non-Recourse
      Debt” means Indebtedness:

     

    (1)           as
      to which neither the Company nor any Restricted Subsidiary (a) provides any
      Guarantee or credit support of any kind (including any undertaking, guarantee,
      indemnity, agreement or instrument that would constitute Indebtedness) or (b)
      is
      directly or indirectly liable (as a guarantor or otherwise), in each case other
      than Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
      or any joint venture owned by the Company or any Restricted Subsidiary to the
      extent securing otherwise Non-Recourse Debt of such Unrestricted Subsidiary
      or
      joint venture; and

     

    (2)           no
      default with respect to which (including any rights that the holders thereof
      may
      have to take enforcement action against an Unrestricted Subsidiary) would permit
      (upon notice, lapse of time or both) any holder of any other Indebtedness of
      the
      Company or any Restricted Subsidiary to declare a default under such other
      Indebtedness or cause the payment thereof to be accelerated or payable prior
      to
      its stated maturity.

     

    “Notes”
      means a series of Securities designated as the Company’s 73⁄4% Senior Notes due
      2015, issued pursuant to this Indenture, as amended and supplemented by the
      Third Supplemental Indenture hereto dated as of June 19, 2007.

     

    “Notice
      of Default” means a written notice of the kind specified in Section 5.1(a)(iv)
      or Section 5.1(a)(v) of this Indenture.

     

    “Officer”
      means, in the case of the Company, the Chairman of the Board, the Chief
      Executive Officer, the President, the Chief Financial Officer, any Vice
      President, the Treasurer or the Secretary of the Company and, in the case of
      any
      Guarantor, the Chairman of the Board, the Chief Executive Officer, the
      President, the Chief Financial Officer, any Vice President, the Treasurer or
      the
      Secretary of such Guarantor.

     

    “Officers’
      Certificate” means, in the case of the Company, a certificate signed by two
      Officers or by an Officer and either an Assistant Treasurer or an Assistant
      Secretary of the Company and, in the case of any Guarantor, a certificate signed
      by two Officers or by an Officer and either an Assistant Treasurer or an
      Assistant Secretary of such Guarantor.

     

    “Oil
      and
      Gas Properties” means all Properties, including equity or other ownership
      interests therein, owned by such Person which contain “proved oil and gas
      reserves” as defined in Rule 4-10 of Regulation S-X of the Securities
      Act.

     

    “Oil
      and
      Natural Gas Hedging Contract” means any oil and natural gas hedging agreements
      and other agreements or arrangements entered into in the ordinary course of
      business in the oil and gas industry for the purpose of protecting against
      fluctuations in oil or natural gas prices.

     

    
      
        
        

      

      
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    “Permitted
      Acquisition Indebtedness” means Indebtedness or Disqualified Stock of the
      Company or any of the Company’s Restricted Subsidiaries to the extent such
      Indebtedness or Disqualified Stock was Indebtedness or Disqualified Stock
      of:

     

    (1)           a
      Subsidiary prior to the date on which such Subsidiary became a Restricted
      Subsidiary; or

     

    (2)           a
      Person that was merged, consolidated or amalgamated into the Company or a
      Restricted Subsidiary,

     

    provided
      that on the date such Subsidiary became a Restricted Subsidiary or the date
      such
      Person was merged, consolidated and amalgamated into the Company or a Restricted
      Subsidiary, as applicable, after giving pro forma effect thereto,

     

    (a)           the
      Restricted Subsidiary or the Company, as applicable, would be permitted to
      incur
      at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
      Ratio test set forth in Section 10.11 of this Indenture,

     

    (b)           the
      Fixed Charge Coverage Ratio for the Restricted Subsidiary or the Company, as
      applicable, would be greater than the Fixed Charge Coverage Ratio for such
      Restricted Subsidiary or the Company immediately prior to such transaction,
      or

     

    (c)           the
      Consolidated Net Worth of the Restricted Subsidiary or the Company, as
      applicable, would be greater than the Consolidated Net Worth of such Restricted
      Subsidiary or the Company immediately prior to such transaction.

     

    “Permitted
      Business Investments” means Investments and expenditures made in the ordinary
      course of, and of a nature that is or shall have become customary in, a Related
      Business as means of actively exploiting, exploring for, acquiring, developing,
      processing, gathering, marketing or transporting oil, natural gas, other
      hydrocarbons and minerals (including with respect to plugging and abandonment)
      through agreements, transactions, interests or arrangements that permit one
      to
      share risks or costs, comply with regulatory requirements regarding local
      ownership or satisfy other objectives customarily achieved through the conduct
      of a Related Business jointly with third parties, including without limitation,
      (i) ownership interests in oil, natural gas, other hydrocarbons and minerals
      properties or gathering, transportation, processing, storage or related systems
      and (ii) any operating agreements, joint ventures, partnership agreements,
      working interests, royalty interests, mineral leases, processing agreements,
      Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation
      or exchange of oil, natural gas and other hydrocarbons, unitization agreements,
      pooling arrangements, joint bidding agreements, service contracts, partnership
      agreements, limited liability company agreements, subscription agreements,
      stock
      purchase agreements, stockholder agreements, area of mutual interest agreements,
      production sharing agreements or other similar or customary agreements,
      transactions, properties, interests, or arrangements, and Investments and
      expenditures in connection therewith or pursuant thereto.

     

    “Permitted
      Holders” means (i) James C. Flores and his spouse and lineal descendants, their
      respective estates or legal representatives, (ii) trusts created for the benefit
      of such Persons and (iii) entities 80% or more of the Voting Stock of which
      is
      directly or indirectly owned by any of the preceding Persons.

     

    “Permitted
      Investments” means:

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (1)           any
      Investment in the Company or in a Restricted Subsidiary;

     

    (2)           any
      Investment in Cash Equivalents;

     

    (3)           any
      Investment by Company or any Restricted Subsidiary in a Person, if as a result
      of such Investment:

     

    (a)           such
      Person becomes a Restricted Subsidiary; or

     

    (b)           such
      Person is merged, consolidated or amalgamated with or into, or transfers or
      conveys substantially all of its assets to, or is liquidated into, Company
      or a
      Restricted Subsidiary;

     

    (4)           any
      Investment made as a result of the receipt of non-cash consideration from an
      Asset Sale that was made pursuant to and in compliance with Section 10.12 of
      this Indenture;

     

    (5)           any
      Investments received in compromise or resolution of (A) obligations of trade
      creditors or customers that were incurred in the ordinary course of business
      of
      the Company or any of its Restricted Subsidiaries, including pursuant to any
      plan of reorganization or similar arrangement upon the bankruptcy or insolvency
      of any trade creditor or customer; or (B) litigation, arbitration or other
      disputes with Persons who are not Affiliates;

     

    (6)           Investments
      represented by Hedging Obligations;

     

    (7)           advances
      to or reimbursements of employees for moving, entertainment and travel expenses,
      drawing accounts and similar expenditures in the ordinary course of
      business;

     

    (8)           loans
      or advances to employees in the ordinary course of business or consistent with
      past practice;

     

    (9)           advances
      and prepayments for asset purchases in the ordinary course of business in a
      Related Business of the Company or any of its Restricted
      Subsidiaries;

     

    (10)           receivables
      owing to Company or any Restricted Subsidiary created or acquired in the
      ordinary course of business and payable or dischargeable in accordance with
      customary trade terms; provided, however, that such trade
      terms may include such concessionary trade terms as the Company or any such
      Restricted Subsidiary deems reasonable under the circumstances;

     

    (11)           surety
      and performance bonds and workers’ compensation, utility, lease, tax,
      performance and similar deposits and prepaid expenses in the ordinary course
      of
      business;

     

    (12)           Guarantees
      of Indebtedness permitted under Section 10.11 of this Indenture;

     

    (13)           guarantees
      by the Company or any of its Restricted Subsidiaries of operating leases (other
      than Capital Lease Obligations) or of other obligations that do not constitute
      Indebtedness, in each case entered into by any Restricted Subsidiary in the
      ordinary course of business;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (14)           Investments
      of a Restricted Subsidiary acquired after March 13, 2007 or of any entity merged
      into the Company or merged into or consolidated or amalgamated with a Restricted
      Subsidiary in accordance with Article Eight or Section 14.4 (as applicable)
      of
      this Indenture to the extent that such Investments were not made in
      contemplation of or in connection with such acquisition, merger, consolidation
      or amalgamation and were in existence on the date of such acquisition, merger
      or
      consolidation;

     

    (15)           Permitted
      Business Investments;

     

    (16)           Investments
      received as a result of a foreclosure by the Company or any of its Restricted
      Subsidiaries with respect to any secured Investment in default;

     

    (17)           any
      Investment in any Person solely (except to the extent of cash payments in lieu
      of fractional shares) in exchange for the issuance of Equity Interests (other
      than Disqualified Stock) of the Company or any of its Subsidiaries

     

    (18)           Investments
      in any units of any oil and gas royalty trust;

     

    (19)           Investments
      existing on March 13, 2007, and any extension, modification or renewal of any
      such Investments existing on March 13, 2007, but only to the extent not
      involving additional advances, contributions or other Investments of cash or
      other assets or other increases of such Investments (other than as a result
      of
      the accrual or accretion of interest or original issue discount or the issuance
      of pay-in-kind securities, in each case, pursuant to the terms of such
      Investments as in effect on March 13, 2007);

     

    (20)           repurchases
      of or other Investments in the Notes; and

     

    (21)           other
      Investments in any Person having an aggregate Fair Market Value (measured on
      the
      date each such Investment was made and without giving effect to subsequent
      changes in value), when taken together with all other Investments made pursuant
      to this clause (21) that are at the time outstanding not to exceed the greater
      of (a) 1.0% of Adjusted Consolidated Net Tangible Assets or (b) $50.0
      million.

     

    “Permitted
      Liens” means, with respect to any Person:

     

    (1)           Liens
      securing Indebtedness incurred under Credit Facilities pursuant to Section
      10.11
      of this Indenture;

     

    (2)           Liens
      to secure Indebtedness (including Capital Lease Obligations) permitted by clause
      (4) of Section 10.11(b) of this Indenture covering only the assets acquired
      with
      or financed by such Indebtedness;

     

    (3)           pledges
      or deposits by such Person under workmen’s compensation laws, unemployment
      insurance laws or similar legislation, or good faith deposits in connection
      with
      bids, tenders, contracts (other than for the payment of Indebtedness) or leases
      to which such Person is a party, or deposits to secure public or statutory
      obligations of such Person or deposits or cash or United States government
      bonds
      to secure surety or appeal bonds to which such Person is a party, or deposits
      as
      security for contested taxes or import or customs duties or for the payment
      of
      rent, in each case incurred in the ordinary course of business;

     

    (4)           landlords’,
      carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or similar
      Liens arising by contract or statute in the ordinary course of 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    business
      and with respect to amounts which are not yet delinquent or are being contested
      in good faith by appropriate proceedings;

     

    (5)           Liens
      for taxes, assessments or other governmental charges not yet subject to
      penalties for non-payment or which are being contested in good faith by
      appropriate proceedings provided appropriate reserves required pursuant to
      GAAP
      have been made in respect thereof;

     

    (6)           Liens
      in favor of the issuers of surety or performance bonds or letters of credit
      or
      bankers’ acceptances issued pursuant to the request of and for the account of
      such Person in the ordinary course of its business; provided,
however, that such letters of credit do not constitute
      Indebtedness;

     

    (7)           encumbrances,
      easements or reservations of, or rights of others for, licenses, rights of
      way,
      sewers, electric lines, telegraph and telephone lines and other similar
      purposes, or zoning or other restrictions as to the use of real properties
      or
      Liens incidental to the conduct of the business of such Person or to the
      ownership of its properties which do not in the aggregate materially adversely
      affect the value of said properties or materially impair their use in the
      operation of the business of such Person;

     

    (8)           Liens
      securing Hedging Obligations, so long as the related Indebtedness, if any,
      is,
      and is permitted under this Indenture to be, secured by a Lien on the same
      property securing such Hedging Obligation;

     

    (9)           leases
      and subleases of real property which do not materially interfere with the
      ordinary conduct of the business of the Company and its Restricted Subsidiaries,
      taken as a whole;

     

    (10)           any
      attachment or judgment Liens not giving rise to an Event of
      Default;

     

    (11)           Liens
      for the purpose of securing the payment of all or a part of the purchase price
      of, or Capitalized Lease Obligations with respect to, or the repair, improvement
      or construction cost of, assets or property acquired or repaired, improved
      or
      constructed in the ordinary course of business; provided
      that:

     

    (a)           the
      aggregate principal amount of Indebtedness secured by such Liens is otherwise
      permitted to be incurred under this Indenture and does not exceed the cost
      of
      the assets or property so acquired or repaired, improved or constructed plus
      fees and expenses in connection therewith; and

     

    (b)           such
      Liens are created within 180 days of repair, improvement or construction or
      acquisition of such assets or property and do not encumber any other assets
      or
      property of the Company or any Restricted Subsidiary other than such assets
      or
      property and assets affixed or appurtenant thereto (including
      improvements);

     

    (12)           Liens
      arising solely by virtue of any statutory or common law provisions relating
      to
      banker’s Liens, rights of set-off or similar rights and remedies as to deposit
      accounts or other funds maintained or deposited with a depositary institution;
      provided that:

     

    (a)           such
      deposit account is not a dedicated cash collateral account and is not subject
      to
      restrictions against access by the Company in excess of those set forth by
      regulations promulgated by the Federal Reserve Board; and

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (b)           such
      deposit account is not intended by the Company or any Restricted Subsidiary
      to
      provide collateral to the depository institution;

     

    (13)           Liens
      arising from Uniform Commercial Code financing statement filings regarding
      operating leases entered into by the Company and its Restricted Subsidiaries
      in
      the ordinary course of business;

     

    (14)           Liens
      existing on March 13, 2007;

     

    (15)           Liens
      on property at the time the Company or a Restricted Subsidiary acquired the
      property, including any acquisition by means of a merger or consolidation with
      or into Company or a Restricted Subsidiary; provided, however,
      that such Liens are not created, incurred or assumed in connection with, or
      in
      contemplation of, such acquisition; provided further, however,
      that such Liens may not extend to any other property owned by the Company or
      any
      Restricted Subsidiary other than those of the Person merged or consolidated
      with
      the Company or the Restricted Subsidiary;

     

    (16)           Liens
      on property or shares of stock of a Person at the time such Person becomes
      a
      Restricted Subsidiary; provided, however, that such Liens are
      not created, incurred or assumed in connection with, or in contemplation of,
      such other Person becoming a Restricted Subsidiary; provided further,
however, that such Liens may not extend to any other property
      owned by
      the Company or any Restricted Subsidiary;

     

    (17)           Liens
      securing Indebtedness or other obligations of a Restricted Subsidiary owing
      to
      the Company or a Guarantor;

     

    (18)           Liens
      securing the Notes, the Subsidiary Guarantees and other obligations arising
      under this Indenture;

     

    (19)           Liens
      securing Permitted Refinancing Indebtedness of the Company or a Restricted
      Subsidiary incurred to refinance Indebtedness of the Company or a Restricted
      Subsidiary that was previously so secured; provided that any such Lien
      is limited to all or part of the same property or assets (plus improvements,
      accessions, proceeds or dividends or distributions in respect thereof) that
      secured (or, under the written arrangements under which the original Lien arose,
      could secure) the Indebtedness being refinanced or is in respect of property
      or
      assets that is the security for a Permitted Lien hereunder;

     

    (20)           Liens
      in respect of Production Payments and Reserve Sales;

     

    (21)           Liens
      on pipelines and pipeline facilities that arise by operation of
      law;

     

    (22)           Liens
      arising under joint venture agreements, partnership agreements, oil and gas
      leases or subleases, assignments, purchase and sale agreements, division orders,
      contracts for the sale, purchasing, processing, transportation or exchange
      of
      oil or natural gas, unitization and pooling declarations and agreements,
      development agreements, area of mutual interest agreements, licenses,
      sublicenses, net profits interests, participation agreements, Farm-Out
      Agreements, Farm-In Agreements, carried working interest, joint operating,
      unitization, royalty, sales and similar agreements relating to the exploration
      or development of, or production from, oil and gas properties entered into
      in
      the ordinary course of business in a Related Business;

     

    (23)           Liens
      reserved in oil and gas mineral leases for bonus, royalty or rental payments
      and
      for compliance with the terms of such leases;

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (24)           Liens
      on, or related to, properties or assets to secure all or part of the costs
      incurred in the ordinary course of a Related Business for exploration, drilling,
      development, production, processing, transportation, marketing, storage,
      abandonment or operation;

     

    (25)           Liens
      arising under this Indenture in favor of the Trustee for its own benefit and
      similar Liens in favor of other trustees, agents and representatives arising
      under instruments governing Indebtedness permitted to be incurred under this
      Indenture, provided that such Liens are solely for the benefit of the
      trustees, agents or representatives in their capacities as such and not for
      the
      benefit of the holders of the Indebtedness;

     

    (26)           Liens
      securing obligations of the Company and its Restricted Subsidiaries under
      Hedging Obligations;

     

    (27)           Liens
      on and pledges of the Equity Interests of any Unrestricted Subsidiary or any
      joint venture owned by the Company or any Restricted Subsidiary to the extent
      securing Non-Recourse Debt of such Unrestricted Subsidiary or joint venture;
      and

     

    (28)           Liens
      incurred in the ordinary course of business of the Company or any Restricted
      Subsidiary with respect to obligations that, at any one time outstanding, do
      not
      exceed the greater of $20.0 million and 0.5% of Adjusted Consolidated Net
      Tangible Assets.

     

    “Permitted
      Refinancing Indebtedness” means any Indebtedness of the Company or any of its
      Restricted Subsidiaries, any Disqualified Stock of the Company or any preferred
      stock of any Restricted Subsidiary issued (a) in exchange for, or the net
      proceeds of which are used to extend, renew, refund, refinance, replace,
      defease, discharge or otherwise retire for value, in whole or in part, or (b)
      constituting an amendment, modification or supplement to or a deferral or
      renewal of ((a) and (b) above, collectively, a “Refinancing”), any other
      Indebtedness of the Company any of its Restricted Subsidiaries (other than
      intercompany Indebtedness), any Disqualified Stock of the Company or any
      preferred stock of a Restricted Subsidiary in a principal amount or, in the
      case
      of Disqualified Stock of the Company or preferred stock of a Restricted
      Subsidiary, liquidation preference, not to exceed (after deduction of reasonable
      and customary fees and expenses incurred in connection with the Refinancing)
      the
      lesser of:

     

    (1)           the
      principal amount or, in the case of Disqualified Stock or preferred stock,
      liquidation preference, of the Indebtedness, Disqualified Stock or preferred
      stock so Refinanced (plus, in the case of Indebtedness, the amount of
      premium, if any paid in connection therewith), and

     

    (2)           if
      the Indebtedness being Refinanced was issued with any original issue discount,
      the accreted value of such Indebtedness (as determined in accordance with GAAP)
      at the time of such Refinancing.

     

    Notwithstanding
      the preceding, no Indebtedness, Disqualified Stock or preferred stock will
      be
      deemed to be Permitted Refinancing Indebtedness, unless:

     

    (1)           such
      Indebtedness, Disqualified Stock or preferred stock has a final maturity date
      or
      redemption date, as applicable, later than the final maturity date or redemption
      date, as applicable, of, and has a Weighted Average Life to Maturity equal
      to

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    or
      greater than the Weighted Average Life to Maturity of, the Indebtedness,
      Disqualified Stock or preferred stock being Refinanced;

     

    (2)           if
      the Indebtedness, Disqualified Stock or preferred stock being Refinanced is
      contractually subordinated or otherwise junior in right of payment to the Notes,
      such Indebtedness, Disqualified Stock or preferred stock has a final maturity
      date or redemption date, as applicable, later than the final maturity date
      or
      redemption date, as applicable, of, and is contractually subordinated or
      otherwise junior in right of payment to, the Notes, on terms at least as
      favorable to the Holders of Notes as those contained in the documentation
      governing the Indebtedness, Disqualified Stock or preferred stock being
      Refinanced at the time of the Refinancing; and

     

    (3)           such
      Indebtedness or Disqualified Stock is incurred or issued by the Company or
      such
      Indebtedness, Disqualified Stock or preferred stock is incurred or issued by
      the
      Restricted Subsidiary who is the obligor on the Indebtedness being Refinanced
      or
      the issuer of the Disqualified Stock or preferred stock being Refinanced;
provided that a Restricted Subsidiary that is also a Guarantor may
      guarantee Permitted Refinancing Indebtedness incurred by the Company, whether
      or
      not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness
      being renewed, refunded, refinanced, replaced, defeased or
      discharged.

     

    “Person”
      means any individual, corporation, partnership, joint venture, association,
      joint-stock company, trust, unincorporated organization, limited liability
      company, government or any agency or political subdivision hereof or any other
      entity.

     

    “Point
      Arguello Partnerships” means the following partnerships of which Arguello Inc.
      is a managing general partner: (a) Gaviota Gas Plant Company, (b) Point Arguello
      Natural Gas Line Company, (c) Point Arguello Pipeline Company and (d) Point
      Arguello Terminal Company.

     

    “Pre-Issue
      Date Hedge Buyouts” means the series of transactions consummated prior to March
      13, 2007 to terminate or unwind, and the associated settlement and accounting
      of, Oil and Natural Gas Hedging Contracts pertaining to (i) 2006 crude oil
      price
      swaps for 15,000 barrels of oil per day at an average price of $25.28 per
      barrel, (ii) 2006 crude oil price collars for 22,000 barrels per day with a
      floor price of $25.00 and an average ceiling price of $34.76, (iii) 2007 crude
      oil price collars for 22,000 barrels of oil per day with a floor price of $25.00
      per barrel and an average ceiling price of $34.76 per barrel and (iv) 2008
      crude
      oil price collars for 22,000 barrels of oil per day with a floor price of $25.00
      per barrel and an average ceiling price of $34.76 per barrel.

     

    “Principal
      Property” means any property owned or leased by the Company or any Subsidiary of
      the Company, the gross book value of which exceeds one percent of Consolidated
      Net Worth of the Company.

     

    “Production
      Payments” means Dollar-Denominated Production Payments and Volumetric Production
      Payments, collectively.

     

    “Production
      Payments and Reserve Sales” means the grant or transfer by the Company or a
      Subsidiary of the Company to any Person of a royalty, overriding royalty, net
      profits interest, Production Payment, partnership or other interest in oil
      and
      gas properties, reserves or the right to receive all or a portion of the
      production or the proceeds from the sale of production attributable to such
      properties, including any such grants or transfers pursuant to incentive
      compensation programs on terms that are reasonably customary in the oil and
      gas
      business for geologists, 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    geophysicists
      and other providers of technical services to the Company or a Subsidiary of
      the
      Company.

     

    “Rating
      Agency” means each of S&P and Moody’s, or if S&P or Moody’s or both
      shall not make a rating on the Notes publicly available, a nationally recognized
      statistical rating agency or agencies, as the case may be, selected by the
      Company which shall be substituted for S&P or Moody’s, or both, as the case
      may be.

     

    “Rating
      Decline” means the occurrence of:

     

    (1)           a
      decrease of one or more gradations (including gradations within rating
      categories as well as between rating categories) in the rating of the Notes
      by
      either Rating Agency; or

     

    (2)           a
      withdrawal of the rating of the Notes by either Rating Agency;

     

    provided,
      however, that such decrease or withdrawal occurs on, or within 90 days
      before or after the earlier of (a) a Change of Control, (b) the date of public
      notice of the occurrence of a Change of Control or (c) public notice of the
      intention by the Company to effect a Change of Control (which period shall
      be
      extended so long as the rating of the Notes is under publicly announced
      consideration for downgrade by either Rating Agency).

     

    “Related
      Business” means any business which is the same as or related, ancillary or
      complementary to any of the businesses of the Company and its Restricted
      Subsidiaries on March 13, 2007, which includes (a) the acquisition, exploration,
      exploitation, development, production, operation and disposition of interests
      in
      oil, gas and other hydrocarbon properties, and the utilization of the Company’s
      and its Restricted Subsidiaries’ properties, (b) the gathering, marketing,
      treating, processing, storage, refining, selling and transporting of any
      production from such interests or properties and products produced in
      association therewith, (c) any power generation and electrical transmission
      business, (d) oil field sales and services and related activities, (e)
      development, purchase and sale of real estate and interests therein, and (f)
      any
      business or activity relating to, arising from, or necessary, appropriate or
      incidental to the activities described in the foregoing clauses (a) through
      (e)
      of this definition.

     

    “Restricted
      Investment” means any Investment other than a Permitted Investment.

     

    “Restricted
      Subsidiary” means any Subsidiary of the Company other than an Unrestricted
      Subsidiary.

     

    “S&P”
      means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Inc.

     

    “Securities
      Act” means the Securities Act of 1933, as amended.

     

    “Senior
      Credit Agreement” means, with respect to the Company, one or more debt
      facilities (including, without limitation, the Amended and Restated Credit
      Agreement, dated as of May 16, 2005, as amended by the First Amendment dated
      as
      of November 1, 2005, and the Second Amendment and Waiver, dated as of September
      28, 2006, among the Company, JPMorgan Chase Bank, N.A., as administrative agent,
      and the lenders and agents parties thereto from time to time) as provided for
      in
      one or more agreements or instruments in each case, as amended, restated,
      modified, supplemented, increased, renewed, refunded, replaced (including
      replacement after the termination of such credit facility), supplemented,
      restructured or refinanced in whole or in part from time to time in one or
      more
      agreements or instruments.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    “Senior
      Debt” means:

     

    (1)           all
      Indebtedness of the Company or any of its Restricted Subsidiaries outstanding
      under Credit Facilities and all Hedging Obligations with respect
      thereto;

     

    (2)           any
      other Indebtedness of the Company or any of its Restricted Subsidiaries
      permitted to be incurred under the terms of this Indenture, unless the
      instrument under which such Indebtedness is incurred expressly provides that
      it
      is subordinated in right of payment to the Notes or any Subsidiary Guarantee;
      and

     

    (3)           all
      Obligations with respect to the items listed in the preceding clauses (1) and
      (2).

     

    Notwithstanding
      anything to the contrary in the preceding sentence, Senior Debt will not
      include:

     

    (a)           any
      intercompany Indebtedness of the Company or any of its Subsidiaries to the
      Company or any of its Affiliates;

     

    (b)           any
      Indebtedness that is incurred in violation of this Indenture; or

     

    (c)           any
      trade payables or taxes owed or owing by the Company or any Restricted
      Subsidiary.

     

    “Significant
      Subsidiary” means any Restricted Subsidiary that would be a “Significant
      Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X
      promulgated by the SEC.

     

    “Stated
      Maturity” means, with respect to any installment of interest or principal on any
      series of Indebtedness, the date on which the payment of interest or principal
      was scheduled to be paid in the documentation governing such Indebtedness as
      of
      the date of this Indenture, and will not include any contingent obligations
      to
      repay, redeem or repurchase any such interest or principal prior to the date
      originally scheduled for the payment thereof.

     

    “Subordinated
      Debt” means Indebtedness of the Company or a Guarantor that is contractually
      subordinated in right of payment, in any respect (by its terms or the terms
      of
      any document or instrument relating thereto), to the Notes or the Subsidiary
      Guarantee of such Guarantor, as applicable.

     

    “Subsidiary”
      means, with respect to any specified Person:

     

    (1)           any
      corporation, association or other business entity of which more than 50% of
      the
      total voting power of shares of Capital Stock entitled (without regard to the
      occurrence of any contingency and after giving effect to any voting agreement
      or
      stockholders’ agreement that effectively transfers voting power) to vote in the
      election of directors, managers or trustees of the corporation, association
      or
      other business entity is at the time owned or controlled, directly or
      indirectly, by that Person or one or more of the other Subsidiaries of that
      Person (or a combination thereof); and

     

    (2)           any
      partnership (a) the sole general partner or the managing general partner of
      which is such Person or a Subsidiary of such Person or (b) the only general
      partners of which are that Person or one or more Subsidiaries of that Person
      (or
      any combination thereof);

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    provided,
      that the Point Arguello Partnerships, Sepulveda Oil and Gas Company and Nuevo
      Energy Company are not Subsidiaries of the Company.

     

    “Subsidiary
      Guarantee” means any guarantee of the Notes by any Guarantor in accordance with
      Article Fourteen of this Indenture.

     

    “Unrestricted
      Subsidiary” means any Subsidiary of the Company that is designated by the Board
      of Directors of the Company as an Unrestricted Subsidiary pursuant to a
      resolution of such Board of Directors, but only to the extent that such
      Subsidiary:

     

    (1)           has
      no Indebtedness other than Non-Recourse Debt;

     

    (2)           except
      as permitted by Section 10.13 of this Indenture, is not party to any agreement,
      contract, arrangement or understanding with the Company or any Restricted
      Subsidiary unless the terms of any such agreement, contract, arrangement or
      understanding are no less favorable to the Company or such Restricted Subsidiary
      than those that might be obtained at the time from Persons who are not
      Affiliates of the Company;

     

    (3)           is
      a Person with respect to which neither the Company nor any of its Restricted
      Subsidiaries has any direct or indirect obligation (a) to subscribe for
      additional Equity Interests or (b) to maintain or preserve such Person’s
      financial condition or to cause such Person to achieve any specified levels
      of
      operating results; and

     

    (4)           has
      not guaranteed or otherwise directly or indirectly provided credit support
      for
      any Indebtedness of the Company or any of its Restricted Subsidiaries, other
      than pursuant to a Subsidiary Guarantee.

     

    As
      of the
      Issue Date, each of the following entities has been designated as an
      Unrestricted Subsidiary:  Arroyo Grande Land Company, LLC, Lompoc Land
      Company LLC and Montebello Land Company LLC.

     

    “Volumetric
      Production Payments” means production payment obligations recorded as deferred
      revenue in accordance with GAAP, together with all related undertakings and
      obligations.

     

    “Voting
      Stock” of any specified Person as of any date means the Capital Stock of such
      Person that is at the time entitled to vote in the election of the Board of
      Directors of such Person.

     

    “Weighted
      Average Life to Maturity” means, when applied to any Indebtedness at any date,
      the number of years obtained by dividing:

     

    (1)           the
      sum of the products obtained by multiplying (a) the amount of each then
      remaining installment, sinking fund, serial maturity or other required payments
      of principal, including payment at final maturity, in respect of the
      Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
      that will elapse between such date and the making of such payment;
by

     

    (2)           the
      then outstanding principal amount of such Indebtedness.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    SECTION
      3.02.  Defaults
      and Remedies.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Sections 5.1 and 5.2 of the Original
      Indenture are hereby amended and restated in their entirety to read as
      follows:

     

    Section
      5.1                                Events
      of Default.

     

    (a)           Each
      of the following is an “Event of Default”:

     

    (i)           default
      in any payment of interest on any Note under this Indenture when due, continued
      for 30 days;

     

    (ii)           default
      in the payment of principal of or premium, if any, on any Note under this
      Indenture when due at its Stated Maturity, upon optional redemption, upon
      required repurchase, upon declaration or otherwise;

     

    (iii)           failure
      by the Company to comply with its obligations under Article Eight of this
      Indenture or to consummate a purchase of Notes when required pursuant to Section
      10.12 or Section 10.15 of this Indenture;

     

    (iv)           failure
      by the Company or any of its Restricted Subsidiaries for 30 days after receipt
      of a written notice (sent by registered or certified mail, specifying such
      failure, requiring it to be remedied and stating that such notice is a “Notice
      of Default” under this Indenture) from the Trustee or the Holders of at least
      25% in aggregate principal amount of the then Outstanding Notes to comply with
      Section 10.9 or Section 10.11 of this Indenture or to comply with the provisions
      described under Section 10.12 or Section 10.15 of this Indenture to the extent
      not described in clause (iii) of this Section 5.1(a);

     

    (v)           (A)
      except as addressed in subclause (B) of this clause (v), failure by the Company
      or any of its Restricted Subsidiaries for 60 days after receipt of a written
      notice (sent by registered or certified mail, specifying such failure, requiring
      it to be remedied and stating that such notice is a “Notice of Default” under
      this Indenture) from the Trustee or the Holders of at least 25% in aggregate
      principal amount of the then Outstanding Notes to comply with any of the other
      agreements in this Indenture or the Notes or (B) failure by the Company for
      180
      days after such notice from the Trustee or the Holders of at least 25% in
      aggregate principal amount of the then Outstanding Notes to comply with Section
      10.7 of this Indenture;

     

    (vi)           default
      under any mortgage, indenture or instrument under which there may be issued
      or
      by which there may be secured or evidenced any Indebtedness for money borrowed
      by the Company or any of its Restricted Subsidiaries (or the payment of which
      is
      guaranteed by the Company or any of its Restricted Subsidiaries), other than
      Indebtedness owed to the Company or a Restricted Subsidiary, whether such
      Indebtedness or guarantee now exists, or is created after the Issue Date, which
      default:

     

    (A)           is
      caused by a failure to pay principal of, or interest or premium, if any, on
      such
      Indebtedness prior to the expiration of the grace period provided in such
      Indebtedness (“payment default”); or

     

    (B)           results
      in the acceleration of such Indebtedness prior to its maturity (the “cross
      acceleration provision”);

     

    
      
        
        

      

      
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    and,
      in
      each case, the principal amount of any such Indebtedness, together with the
      principal amount of any other such Indebtedness under which there has been
      a
      payment default or the maturity of which has been so accelerated, aggregates
      $50.0 million or more;

     

    (vii)           failure
      by the Company or any Significant Subsidiary or group of Restricted Subsidiaries
      that, taken together (as of the latest audited consolidated financial statements
      for the Company and its Restricted Subsidiaries), would constitute a Significant
      Subsidiary to pay final judgments aggregating in excess of $50.0 million (net
      of
      any amounts that a reputable and creditworthy insurance company has acknowledged
      liability for in writing), which judgments are not paid, discharged or stayed
      for a period of 60 days;

     

    (viii)           any
      Subsidiary Guarantee shall be held in a judicial proceeding to be, or be
      asserted by the Company or any Guarantor, as applicable, not to be, enforceable
      or valid or shall cease to be in full force and effect (except pursuant to
      the
      release or termination of any such Subsidiary Guarantee in accordance with
      this
      Indenture);

     

    (ix)           the
      Company, any Significant Subsidiary of the Company or any group of Restricted
      Subsidiaries of the Company that, taken together (as of the latest audited
      consolidated financial statements for the Company and its Restricted
      Subsidiaries), would constitute a Significant Subsidiary of the Company,
      pursuant to or within the meaning of Bankruptcy Law:

     

    (A)           commences
      a voluntary case,

     

    (B)           consents
      to the entry of an order for relief against it in an involuntary
      case,

     

    (C)           makes
      a general assignment for the benefit of its creditors, or

     

    (D)           generally
      is not paying its debts as they become due; and

     

    (x)           a
      court of competent jurisdiction enters an order or decree under any Bankruptcy
      Law that:

     

    (A)           is
      for relief against the Company, any Significant Subsidiary of the Company or
      any
      group of Restricted Subsidiaries of the Company that, taken together (as of
      the
      latest audited consolidated financial statements for the Company and its
      Restricted Subsidiaries), would constitute a Significant Subsidiary of the
      Company, in an involuntary case; or

     

    (B)           appoints
      a custodian of the Company, any Significant Subsidiary of the Company or any
      group of Restricted Subsidiaries of the Company that, taken together (as of
      the
      latest audited consolidated financial statements for the Company and its
      Restricted Subsidiaries), would constitute a Significant Subsidiary of the
      Company, or for all or substantially all of the property of the Company, any
      Significant Subsidiary of the Company or any group of Restricted Subsidiaries
      of
      the Company that, taken together (as of the latest audited consolidated
      financial statements for the Company and its Restricted Subsidiaries), would
      constitute a Significant Subsidiary of the Company; or

     

    (C)           orders
      the liquidation of the Company, any Significant Subsidiary of the Company or
      any
      group of Restricted Subsidiaries of the 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    Company
      that, taken together (as of the latest audited consolidated financial statements
      for the Company and its Restricted Subsidiaries), would constitute a Significant
      Subsidiary of the Company;

     

    and
      the
      order or decree remains unstayed and in effect for 60 consecutive
      days.

     

    (b)           The
      Company shall, so long as any of the Notes are Outstanding, deliver to the
      Trustee, within five Business Days after any Officer becomes aware of any
      Default or Event of Default, an Officers’ Certificate specifying such Default or
      Event of Default and what action the Company is taking or proposes to take
      with
      respect thereto.

     

    
      	
              Section
                5.2

            	
              Acceleration
                of Maturity; Rescission and Annulment; Interest Rate
                Increase.

            

    

     

    (a)           To
      the extent permitted by applicable law, in the case of an Event of Default
      specified in clause (ix) or clause (x) of Section 5.1(a) of this Indenture,
      all
      then Outstanding Notes will become due and payable immediately without further
      action or notice.  If any other Event of Default occurs and is
      continuing, the Trustee or the Holders of at least 25% in aggregate principal
      amount of the then Outstanding Notes may declare all the Notes to be due and
      payable immediately by notice in writing to the Company and, in case of a notice
      by Holders, also to the Trustee specifying the respective Event of Default
      and
      that it is a notice of acceleration.  Upon any such declaration, the
      Notes shall become due and payable immediately.

     

    (b)           At
      any time after such a declaration of acceleration with respect to the Notes
      has
      been made and before a judgment or decree for payment of the money due has
      been
      obtained by the Trustee as hereinafter in this Article Five provided, the
      Holders of a majority in principal amount of the Outstanding Notes, by written
      notice to the Company and the Trustee, may rescind and annul such declaration
      and its consequences if:

     

    (i)           the
      Company or one or more of the Guarantors has paid or deposited with the Trustee
      a sum sufficient to pay:

     

    (A)           all
      overdue interest on all Notes,

     

    (B)           the
      principal of (and premium, if any, on) any Notes which have become due otherwise
      than by such declaration of acceleration and any interest thereon at the rate
      or
      rates prescribed therefor in such Notes,

     

    (C)           to
      the extent that payment of such interest is lawful, interest upon overdue
      interest at the rate or rates prescribed therefor in such Notes,
      and

     

    (D)           all
      sums paid or advanced by the Trustee hereunder and the reasonable compensation,
      expenses, disbursements and advances of the Trustee, its agents and counsel;
      and

     

    (ii)           all
      Events of Default with respect to the Notes, other than the non-payment of
      the
      principal of the Notes which have become due solely by such declaration of
      acceleration, have been cured or waived as provided in Section 5.13 of this
      Indenture.

     

    (iii)           No
      such rescission shall affect any subsequent default or impair any right
      consequent thereon.

     

    (c)           Notwithstanding
      the foregoing Section 5.2(b), if an Event of Default specified in clause (vi)
      of
      Section 5.1(a) above shall have occurred and be continuing, such Event of
      Default and any consequential acceleration shall be automatically rescinded
      if
      (i) the Indebtedness that is 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    the
      subject of such Event of Default has been repaid, or (ii) if the default
      relating to such Indebtedness is waived or cured and if such Indebtedness has
      been accelerated, then the holders thereof have rescinded their declaration
      of
      acceleration in respect of such Indebtedness.

     

    (d)           Upon
      any failure by the Company for 60 days to comply with Section 10.7 of this
      Indenture, the interest rate on the Notes will increase by 50 basis points
      (0.5%) and remain at such increased rate thereafter but only for so long as
      there is a Default under such Section 10.7, and upon resumption of compliance
      by
      the Company with such Section 10.7, the interest rate on the Notes will be
      reset
      at the initial rate applicable on the Issue Date.

     

    SECTION
      3.03.  Notice
      of Defaults.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Section 6.2 of the Original Indenture
      is
      hereby amended and restated in its entirety to read as follows:

     

    Section
      6.2                                Notice
      of Defaults.

     

    Within
      90
      days after the occurrence of any Default hereunder with respect to the Notes,
      the Trustee shall transmit by mail to all Holders of Notes, as their names
      and
      addresses appear in the Security Register, notice of such Default hereunder
      known to the Trustee, unless such Default shall have been cured or waived;
      provided, however, that, except in the case of a Default in
      the payment of the principal of or any premium or interest on any Note, the
      Trustee may withhold from Holders of Notes notice of any continuing Default
      or
      Event of Default if the Trustee in good faith determines that the withholding
      of
      such notice is in the interest of the Holders of Notes; and, provided,
further, that (i) in the case of any Default of the character
      specified
      in Section 5.1(a)(iv), no such notice to Holders shall be given until at least
      30 days after the occurrence thereof, (ii) in the case of any Default of the
      character specified in Section 5.1(a)(v)(A), no such notice to Holders shall
      be
      given until at least 60 days after the occurrence thereof and (iii) in the
      case
      of any Default of the character specified in Section 5.1(a)(v)(B), no such
      notice to Holders shall be given until at least 180 days after the occurrence
      thereof.

     

    SECTION
      3.04.  Compensation
      and Reimbursement.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, the third paragraph of Section 6.7 of
      the
      Original Indenture is hereby amended and restated in its entirety to read as
      follows:

     

    Without
      limiting any rights available to the Trustee under applicable law, when the
      Trustee incurs expenses or renders services in connection with an Event of
      Default specified in Section 5.1(a)(ix) or Section 5.1(a)(x), the expenses
      (including the reasonable charges and expenses of its counsel) and the
      compensation for the services of the Trustee are intended to constitute expenses
      of administration under any applicable Bankruptcy Law.

     

    SECTION
      3.05.  Merger,
      Consolidation or Sale of Substantially All Assets.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Article Eight of the Original Indenture
      is
      hereby amended and restated in its entirety to read as follows:

     

    ARTICLE
      EIGHT

     

    MERGER,
      CONSOLIDATION OR SALE OF SUBSTANTIALLY ALL ASSETS

     

    Section
      8.1                                Company
      May Consolidate, Etc., Only on Certain Terms.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    (a)           The
      Company will not, directly or indirectly, consolidate, amalgamate or merge
      with
      or into another Person (regardless of whether the Company is the surviving
      corporation), convert into another form of entity or continue in another
      jurisdiction; or sell, assign, transfer, lease, convey or otherwise dispose
      of
      all or substantially all of its properties or assets, in one or more related
      transactions, to another Person, unless:

     

    (i)           either:
      (A) the Company is the surviving corporation; or (B) the Person formed by or
      surviving any such consolidation, amalgamation or merger or resulting from
      such
      conversion (if other than the Company) or to which such sale, assignment,
      transfer, conveyance or other disposition has been made is a corporation,
      limited liability company or limited partnership organized or existing under
      the
      laws of the United States, any state of the United States or the District of
      Columbia;

     

    (ii)           the
      Person formed by or surviving any such conversion, consolidation, amalgamation
      or merger (if other than the Company) or the Person to which such sale,
      assignment, transfer, conveyance or other disposition has been made assumes
      all
      the obligations of the Company under the Notes and this Indenture pursuant
      to
      agreements reasonably satisfactory to the Trustee; provided that,
      unless such Person is a corporation, a corporate co-issuer of the Notes will
      be
      added to this Indenture by agreements reasonably satisfactory to the
      Trustee;

     

    (iii)           immediately
      after such transaction or transactions, no Default or Event of Default
      exists;

     

    (iv)           the
      Company or the Person formed by or surviving any such consolidation,
      amalgamation or merger (if other than the Company), or to which such sale,
      assignment, transfer, conveyance or other disposition has been
      made:

     

    (A)           would
      have Consolidated Net Worth immediately after the transaction equal to or
      greater than the Consolidated Net Worth of the Company immediately preceding
      the
      transaction;

     

    (B)           would,
      on the date of such transaction after giving pro forma effect thereto and any
      related financing transactions as if the same had occurred at the beginning
      of
      the applicable four-quarter period, be permitted to incur at least $1.00 of
      additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
      forth in Section 10.11(a) of this Indenture; or

     

    (C)           would,
      on the date of such transaction after giving pro forma effect thereto and any
      related financing transactions as if the same had occurred at the beginning
      of
      the applicable four-quarter period, have a Fixed Charge Coverage Ratio that
      is
      not less than the Fixed Charged Coverage Ratio of the Company and its Restricted
      Subsidiaries immediately prior to such transaction; and

     

    (v)           the
      Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
      Counsel, each stating that such consolidation, amalgamation, merger, conveyance,
      sale, transfer or lease and such supplemental indenture, if any, comply with
      this Article Eight and that all conditions precedent herein provided for
      relating to such transaction have been complied with.

     

    (b)           For
      purposes of this Section 8.1, the sale, lease, conveyance, assignment, transfer,
      or other disposition of all or substantially all of the properties and assets
      of
      one or more 

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    Subsidiaries
      of the Company, which properties and assets, if held by the Company instead
      of
      such Subsidiaries, would constitute all or substantially all of the properties
      and assets of the Company on a consolidated basis, shall be deemed to be the
      transfer of all or substantially all of the assets of the Company.

     

    (c)           Notwithstanding
      the restrictions described in the foregoing clause (a)(iv), any Restricted
      Subsidiary may consolidate with, merge into or transfer all or part of its
      properties and assets to the Company, the Company may merge into a Restricted
      Subsidiary for the purpose of reincorporating the Company in another
      jurisdiction, and any Restricted Subsidiary may consolidate with, merge into
      or
      transfer all or part of its properties and assets to another Restricted
      Subsidiary.

     

    Section
      8.2                                Successor
      Substituted.

     

    Upon
      any
      merger or consolidation, or any sale, transfer, assignment, conveyance or other
      disposition of all or substantially all of the properties or assets of the
      Company and its Restricted Subsidiaries in accordance with Section 8.1 of this
      Indenture, the successor Person formed by such consolidation or into which
      the
      Company is merged or to which such sale, transfer, assignment, conveyance or
      other disposition is made, shall succeed to, and be substituted for the Company
      (so that from and after the date of such consolidation, merger, sale, conveyance
      or other disposition, the provisions of this Indenture referring to the
“Company” shall refer instead to the successor corporation and not to the
      Company), and may exercise every right and power of the Company under this
      Indenture with the same effect as if such successor Person had been named as
      the
      Company herein.  When the successor assumes all of the Company’s
      obligations under this Indenture, the Company shall be discharged from those
      obligations; provided, however, that the Company will not be
      released from the obligation to pay the principal of and interest on the Notes
      except in the case of a sale of all of the Company’s assets in a transaction
      that is subject to, and that complies with the provisions of, this Article
      Eight.

     

    SECTION
      3.06.  Selection
      for and Notice of Redemption.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Sections 11.3 and 11.4 of the Original
      Indenture are hereby amended and restated in their entirety to read as
      follows:

     

    Section
      11.3                                Selection
      by Trustee of Securities to be Redeemed.

     

    (a)           If
      less than all of the Notes are to be redeemed at any time, the Trustee shall
      select the Notes to be redeemed among the Holders of the Notes in compliance
      with the requirements of the principal national securities exchange, if any,
      on
      which the Notes are listed or, if the Notes are not so listed, on a pro rata
      basis, by lot or in accordance with any other method the Trustee shall deem
      fair
      and appropriate.  In the event of partial redemption by lot, the
      particular Notes to be redeemed shall be selected, unless otherwise provided
      herein, not less than 30 nor more than 60 days prior to the Redemption Date
      by
      the Trustee from the Outstanding Notes not previously called for
      redemption.

     

    (b)           The
      Trustee shall promptly notify the Company in writing of the Notes selected
      for
      redemption and, in the case of any Note selected for partial redemption, the
      principal amount at maturity thereof to be redeemed.  No Notes in
      amounts of $1,000 or less shall be redeemed in part.  Notes and
      portions of Notes selected shall be in amounts of $1,000 and integral multiples
      thereof; except that if all of the Notes of a Holder are to be redeemed, the
      entire Outstanding amount of Notes held by such Holder, even if not a multiple
      of $1,000, shall be redeemed.  Except as provided in the preceding
      sentence, provisions of this Indenture that apply to Notes called for redemption
      also apply to portions of Notes called for redemption.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    (c)           For
      all purposes of this Indenture, unless the context otherwise requires, all
      provisions relating to the redemption of Notes shall relate, in the case of
      any
      Notes redeemed or to be redeemed only in part, to the portion of the principal
      amount of such Notes which has been or is to be redeemed.

     

    Section
      11.4                                Notice
      of Redemption.

     

    (a)           At
      least 30 days but not more than 60 days before a Redemption Date, the Company
      shall mail or cause to be mailed, by first class mail, a notice of redemption
      to
      each Holder whose Notes are to be redeemed at its registered address;
provided, however, that in the case of a redemption with the
      net cash proceeds of an Equity Offering, such notice may be given prior to
      the
      completion of the related Equity Offering.

     

    The
      notice shall identify the Notes to be redeemed and shall state:

     

    (i)           the
      Redemption Date;

     

    (ii)           the
      Redemption Price;

     

    (iii)           if
      any Note is being redeemed in part, the portion of the principal amount of
      such
      Note to be redeemed and that, after the Redemption Date upon surrender of such
      Note, a new Note or Notes in principal amount equal to the unredeemed portion
      of
      the original Note shall be issued in the name of the Holder thereof upon
      cancellation of the original Note;

     

    (iv)           the
      name and address of the Paying Agent;

     

    (v)           that
      Notes called for redemption must be surrendered to the Paying Agent to collect
      the Redemption Price and become due on the date fixed for
      redemption;

     

    (vi)           that,
      unless the Company defaults in making such redemption payment, interest, if
      any,
      on Notes called for redemption ceases to accrue on and after the Redemption
      Date;

     

    (vii)           the
      paragraph of the Notes and/or Section of this Indenture pursuant to which the
      Notes called for redemption are being redeemed;

     

    (viii)           that
      no representation is made as to the correctness or accuracy of the CUSIP number,
      if any, listed in such notice or printed on the Notes; and

     

    (ix)           any
      conditions that must be satisfied prior to the Company becoming obligated to
      consummate such redemption.

     

    (b)           At
      the Company’s request, the Trustee shall give the notice of redemption in the
      Company’s name and at the Company’s expense; provided,
however, that the Company shall have delivered to the Trustee,
      at least
      45 days prior to the Redemption Date (or such shorter period of time as may
      be
      acceptable to the Trustee), an Officers’ Certificate requesting that the Trustee
      give such notice and setting forth the information to be stated in such notice
      as provided in the preceding paragraph.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    SECTION
      3.07.  Redemption
      Upon Equity Offering.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Section 11.6 of the Original Indenture
      is
      hereby amended by adding the following paragraph as the last paragraph of such
      Section:

     

    Notwithstanding
      the preceding provisions of this Section 11.6, notice of any redemption upon
      an
      Equity Offering may be given prior to the completion of the related Equity
      Offering, and any such redemption or notice may at the Company’s discretion, be
      subject to one or more conditions precedent, including, but not limited to
      completion of the related Equity Offering.

     

    SECTION
      3.08.  Covenant
      Defeasance.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, the last sentence of Section 13.3 of the
      Original Indenture is hereby amended and restated in its entirety to read as
      follows:

     

    In
      addition, upon the Company’s exercise under Section 13.1 hereof of the option
      applicable to this Section 13.3, subject to the satisfaction of the conditions
      set forth in Section 13.4 hereof, the following will no longer constitute an
      Event of Default: (a) clauses (iii), (iv), (v), (vi) and (vii) of Section 5.1(a)
      of this Indenture, (b) clause (ix) (but only with respect to Subsidiaries of
      the
      Company) of Section 5.1(a) of this Indenture and (c) clause (x) (but only with
      respect to Subsidiaries of the Company) of Section 5.1(a) of this
      Indenture.

     

    SECTION
      3.09.  Subsidiary
      Guarantees.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, Article Fourteen of the Original Indenture
      is hereby amended by adding the following Sections 14.4 and 14.5
      thereto:

     

    Section
      14.4                                Guarantors
      May Consolidate, etc., on Certain Terms.

     

    Except
      as
      otherwise provided in Section 14.5 of this Indenture, no Guarantor may sell
      or
      otherwise dispose of all or substantially all of its assets to, or consolidate
      with or merge with or into (regardless of whether such Guarantor is the
      surviving Person) another Person, other than the Company or another Guarantor,
      unless:

     

    (a)           immediately
      after giving effect to such transaction, no Default or Event of Default exists;
      and

     

    (b)           either:

     

    (i)           subject
      to Section 14.5 hereof, if it is not such Guarantor, the Person acquiring the
      property in any such sale or disposition or the Person formed by or surviving
      any such consolidation or merger assumes all the obligations of that Guarantor
      under this Indenture (including its Subsidiary Guarantee), on the terms set
      forth herein, pursuant to a supplemental indenture in form and substance
      reasonably satisfactory to the Trustee, in which case the Subsidiary Guarantee
      of such Guarantor will be released as contemplated by Section 14.5 of this
      Indenture; or

     

    (ii)           the
      Net Proceeds of such sale or other disposition are applied in accordance with
      the applicable provisions of this Indenture, including without limitation
      Section 10.12.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    In
      case
      of any such consolidation, merger, sale or conveyance and upon the assumption
      by
      the successor Person, by supplemental indenture, executed and delivered to
      the
      Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
      of
      such Guarantor and the due and punctual performance of all of the covenants
      and
      conditions of this Indenture to be performed by the Guarantor, such successor
      Person will succeed to and be substituted for the Guarantor with the same effect
      as if it had been named herein as a Guarantor.  Such successor Person
      thereupon may cause to be signed any or all of the Subsidiary Guarantee
      notations to be endorsed upon all of the Notes issuable hereunder which
      theretofore shall not have been signed by the Company and delivered to the
      Trustee.  All the Subsidiary Guarantees so issued will in all respects
      have the same legal rank and benefit under this Indenture as the Subsidiary
      Guarantees theretofore and thereafter issued in accordance with the terms of
      this Indenture as though all of such Subsidiary Guarantees had been issued
      at
      the date of the execution hereof.

     

    Except
      as
      set forth in Articles Eight and Ten of this Indenture, and notwithstanding
      clauses (i) and (ii) above, nothing contained in this Indenture or in any of
      the
      Notes will prevent any consolidation or merger of a Guarantor with or into
      the
      Company or another Guarantor, or will prevent any sale or conveyance of the
      property of a Guarantor as an entirety or substantially as an entirety to the
      Company or another Guarantor.

     

    Section
      14.5                                Releases.

     

    (a)           In
      the event of any sale or other disposition of all or substantially all of the
      assets of any Guarantor, by way of merger, consolidation or otherwise, or a
      sale
      or other disposition of all of the Capital Stock of any Guarantor, in each
      case
      to a Person that is not (either before or after giving effect to such
      transactions) the Company or a Restricted Subsidiary of the Company, then such
      Guarantor (in the event of a sale or other disposition, by way of merger,
      consolidation or otherwise, of all of the Capital Stock of such Guarantor)
      or
      the corporation acquiring the property (in the event of a sale or other
      disposition of all or substantially all of the assets of such Guarantor) will
      be
      released and relieved of any obligations under its Subsidiary Guarantee,
provided that the Net Proceeds of such sale or other disposition are
      applied in accordance with the applicable provisions of this Indenture,
      including without limitation Section 10.12.  Upon delivery by the
      Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to
      the effect that such sale or other disposition was made by the Company in
      accordance with the provisions of this Indenture, including without limitation
      Section 10.12, the Trustee will execute any documents reasonably required in
      order to evidence the release of any Guarantor from its obligations under its
      Subsidiary Guarantee.

     

    (b)           In
      addition, each Guarantor will be released and relieved of any obligations under
      its Subsidiary Guarantee:

     

    (i)           upon
      designation of such Guarantor as an Unrestricted Subsidiary in accordance with
      the terms of this Indenture;

     

    (ii)           upon
      Legal Defeasance in accordance with Article Thirteen of this Indenture or
      satisfaction and discharge of this Indenture in accordance with Article Four
      of
      this Indenture;

     

    (iii)           upon
      the liquidation or dissolution of such Guarantor, provided that no
      Default or Event of Default shall have occurred and is continuing;
      or

     

    (iv)           at
      such time as such Guarantor does not have outstanding any Guarantee of any
      Indebtedness (other than the Notes) of the Company or any Guarantor in excess
      of
      $10.0 million in aggregate principal amount.

     

    
      
        
        

      

      
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    (c)           Any
      Guarantor not released from its obligations under its Subsidiary Guarantee
      as
      provided in this Section 14.5 will remain liable for the full amount of
      principal of and interest and premium, if any, on the Notes and for the other
      obligations of any Guarantor under this Indenture as provided in this Article
      Fourteen.

     

    SECTION
      3.10.  Repurchase
      Offers.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      3 of this Supplemental Indenture, the Original Indenture is hereby amended
      by adding the following Article Fifteen thereto:

     

    ARTICLE
      FIFTEEN

     

    REPURCHASE
      OFFERS

     

    Section
      15.1                                Generally.

     

    In
      the
      event that, pursuant to Section 10.12 or Section 10.15 of this Indenture, the
      Company shall be required to commence an offer to all Holders of Notes to
      purchase all or a portion of their respective Notes (a “Repurchase Offer”), it
      shall follow the procedures specified in such Sections and, to the extent not
      inconsistent therewith, the procedures specified in Section 15.2
      below.

     

    Section
      15.2                                Repurchase
      Offer Procedures.

     

    (a)           A
      Repurchase Offer shall remain open for a period of no less than 30 days and
      no
      more than 60 days following its commencement, except to the extent that a longer
      period is required by applicable law (the “Offer Period”).  No later
      than three Business Days after the termination of the Offer Period (the
“Purchase Date”), the Company shall purchase the principal amount of Notes
      required to be purchased pursuant to Section 10.12 or 10.15 of this Indenture
      (the “Offer Amount”) or, if less than the Offer Amount has been tendered, all
      Notes tendered in response to the Repurchase Offer.  Payment for any
      Notes so purchased shall be made in the same manner as interest payments are
      made.

     

    (b)           If
      the Purchase Date is on or after an interest record date and on or before the
      related Interest Payment Date, any accrued and unpaid interest shall be paid
      to
      the Person in whose name a Note is registered at the close of business on such
      record date, and no additional interest shall be payable to Holders who tender
      Notes pursuant to the Repurchase Offer.

     

    (c)           Upon
      the commencement of a Repurchase Offer, the Company shall send, by first class
      mail, a notice to the Trustee and each of the Holders of Notes.  The
      notice shall contain all instructions and materials necessary to enable such
      Holders to tender Notes pursuant to the Repurchase Offer.  The
      Repurchase Offer shall be made to all Holders of Notes.  The notice,
      which shall govern the terms of the Repurchase Offer, shall state:

     

    (i)           that
      the Repurchase Offer is being made pursuant to this Article Fifteen and Section
      10.12 or Section 10.15 of this Indenture, and the length of time the Repurchase
      Offer shall remain open;

     

    (ii)           the
      Offer Amount, the purchase price and the Purchase Date;

     

    (iii)           that
      any Note not tendered or accepted for payment shall continue to accrue
      interest;

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (iv)           that,
      unless the Company defaults in making such payment, any Note (or portion
      thereof) accepted for payment pursuant to the Repurchase Offer shall cease
      to
      accrue interest after the Purchase Date;

     

    (v)           that
      Holders electing to have a Note purchased pursuant to a Repurchase Offer may
      elect to have Notes purchased equal to $1,000 and integral multiples
      thereof;

     

    (vi)           that
      Holders electing to have a Note purchased pursuant to any Repurchase Offer
      shall
      be required to surrender the Note, with the form entitled “Option of Holder to
      Elect Purchase” on the reverse of the Note completed, or transfer by book entry
      transfer, to the Company, the Depositary, if appointed by the Company, or a
      Paying Agent at the address specified in the notice at least three days before
      the Purchase Date;

     

    (vii)           that
      Holders shall be entitled to withdraw their election if the Company, the
      Depositary or the Paying Agent, as the case may be, receives, not later than
      the
      expiration of the Offer Period, a telegram, telex, facsimile transmission or
      letter setting forth the name of the Holder, the principal amount of the Note
      the Holder delivered for purchase and a statement that such Holder is
      withdrawing his election to have such Note purchased;

     

    (viii)           that,
      if the aggregate amount of Notes surrendered by Holders exceeds the Offer
      Amount, the Trustee shall select the Notes to be purchased on a pro rata basis
      (with such adjustments as may be deemed appropriate by the Trustee so that
      only
      Notes in denominations of $1,000, or and integral multiples thereof, shall
      be
      purchased); and

     

    (ix)           that
      Holders whose Notes were purchased only in part shall be issued new Notes equal
      in principal amount to the unpurchased portion of the Notes surrendered (or
      transferred by book entry transfer).

     

    (d)           On
      the Purchase Date, the Company shall, to the extent lawful, accept for payment
      on a pro rata basis to the extent necessary, the Offer Amount of Notes (or
      portions thereof) tendered pursuant to the Repurchase Offer, or if less than
      the
      Offer Amount has been tendered, all Notes tendered, and shall deliver to the
      Trustee an Officers’ Certificate stating that such Notes (or portions thereof)
      were accepted for payment by the Company in accordance with the terms of this
      Article Fifteen.  The Company, the Depositary or the Paying Agent, as
      the case may be, shall promptly (but in any case not later than three days
      after
      the Purchase Date) mail or deliver to each tendering Holder an amount equal
      to
      the purchase price of Notes tendered by such Holder, as the case may be, and
      accepted by the Company for purchase, and the Company shall promptly issue
      a new
      Note.  The Trustee, upon written request from the Company shall
      authenticate and mail or deliver such new Note to such Holder, in a principal
      amount equal to any unpurchased portion of the Note surrendered.  Any
      Note not so accepted shall be promptly mailed or delivered by the Company to
      the
      respective Holder thereof.  The Company shall publicly announce the
      results of the Repurchase Offer on the Purchase Date.

     

    ARTICLE
      4

    Additional
      Covenants

     

    With
      respect to the Notes, Article Ten of the Original Indenture is hereby amended
      as
      set forth below in this ARTICLE 4;
provided, however, that each such amendment
      shall apply only
      to the Notes and not to any other series of Securities issued under the
      Indenture.

     

    
      
        
        

      

      
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    SECTION
      4.01.  Reports.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.7
      thereto:

     

    Section
      10.7                                Reports.

     

    (a)           Regardless
      of whether required by the rules and regulations of the SEC, so long as any
      Notes are Outstanding, the Company will file with the SEC for public
      availability, within the time periods specified in the SEC’s rules and
      regulations (unless the SEC will not accept such a filing, in which case the
      Company will furnish to the Holders of Notes or cause the Trustee to furnish
      to
      the Holders of Notes, within the time periods specified in the SEC’s rules and
      regulations):

     

    (i)           all
      quarterly and annual reports that would be required to be filed with the SEC
      on
      Forms 10-Q and 10-K under the Exchange Act if the Company were required to
      file
      such reports; and

     

    (ii)           all
      current reports that would be required to be filed with the SEC on Form 8-K
      under the Exchange Act if the Company were required to file such
      reports.

     

    (b)           All
      such reports will be prepared in all material respects in accordance with all
      of
      the rules and regulations applicable to such reports. Each annual report on
      Form
      10-K will include a report on the Company’s consolidated financial statements by
      the Company’s certified independent accountants.

     

    (c)           If,
      at any time, the Company is no longer subject to the periodic reporting
      requirements of the Exchange Act for any reason, the Company will nevertheless
      continue filing the reports specified in Section 10.7(a) with the SEC within
      the
      time periods specified above unless the SEC will not accept such a filing.
      The
      Company will not take any action for the purpose of causing the SEC not to
      accept any such filings. If, notwithstanding the foregoing, the SEC will not
      accept the Company’s filings for any reason, the Company will post the reports
      referred to in the preceding paragraphs on its website within the time periods
      that would apply if the Company were required to file those reports with the
      SEC.

     

    (d)           If
      the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
      then, to the extent material, the quarterly and annual financial information
      required by the preceding paragraphs of this Section 10.7 will include a
      reasonably detailed presentation, either on the face of the financial statements
      or in the footnotes thereto, and in “Management’s Discussion and Analysis of
      Financial Condition and Results of Operations,” of the financial condition and
      results of operations of the Company and its Restricted Subsidiaries separate
      from the financial condition and results of operations of the Unrestricted
      Subsidiaries of the Company.

     

    SECTION
      4.02.  Taxes.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.8
      thereto:

     

    Section
      10.8                                Taxes.

     

    The
      Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
      delinquency, any taxes, assessments, and governmental levies except such as
      are
      contested in 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    good
      faith and by appropriate proceedings or where the failure to effect such payment
      is not adverse in any material respect to the Holders of the Notes.

     

    SECTION
      4.03.  Restricted
      Payments.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.9
      thereto:

     

    Section
      10.9                                Restricted
      Payments.

     

    (a)           The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly:

     

    (1)           declare
      or pay any dividend or make any other payment or distribution on account of
      the
      Company’s or any of its Restricted Subsidiaries’ Equity Interests or to the
      direct or indirect holders of the Company’s or any of its Restricted
      Subsidiaries’ Equity Interests in their capacity as such (other than dividends
      or distributions payable in Equity Interests (other than Disqualified Stock)
      of
      the Company and other than dividends or distributions payable to the Company
      or
      a Restricted Subsidiary);

     

    (2)           purchase,
      redeem or otherwise acquire or retire for value (including, without limitation,
      any such purchase, redemption, acquisition or retirement made in connection
      with
      any merger or consolidation involving the Company) any Equity Interests of
      the
      Company or any direct or indirect parent or other Affiliate of the Company
      that
      is not a Restricted Subsidiary;

     

    (3)           make
      any payment on or with respect to, or purchase, redeem, defease or otherwise
      acquire or retire for value any Subordinated Debt, except a payment of interest
      or principal at the Stated Maturity thereof (excluding (a) any intercompany
      Indebtedness between or among the Company and any of its Restricted Subsidiaries
      or (b) the purchase, repurchase or other acquisition of Subordinated Debt
      purchased in anticipation of satisfying a sinking fund obligation, principal
      installment or final maturity, in each case due within one year of the date
      of
      purchase, repurchase or acquisition); or

     

    (4)           make
      any Restricted Investment;

     

    (all
      such
      payments and other actions set forth in clauses (1) through (4) above being
      collectively referred to as “Restricted Payments”),

     

    unless,
      at the time of and after giving effect to such Restricted Payment:

     

    (i)           no
      Default or Event of Default has occurred and is continuing or would occur as
      a
      consequence of such Restricted Payment;

     

    (ii)           the
      Company would, at the time of such Restricted Payment and after giving pro
      forma
      effect thereto as if such Restricted Payment had been made at the beginning
      of
      the applicable four-quarter period, have been permitted to incur at least $1.00
      of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
      set
      forth in Section 10.11(a) of this Indenture; and

     

    (iii)           such
      Restricted Payment, together with the aggregate amount of all other Restricted
      Payments made by the Company and its Restricted Subsidiaries since March 13,
      2007 (excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
      (v),
      (vi), 

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    (vii),
      (viii), (ix), (x) and (xiv) of Section 10.9(b) of this Indenture), is equal
      to
      or less than the sum, without duplication, of:

     

    (A)           50%
      of the Consolidated Net Income of the Company for the period (taken as one
      accounting period) from July 1, 2006 to the end of the Company’s most recently
      ended fiscal quarter for which internal financial statements are available
      at
      the time of such Restricted Payment (or, if such Consolidated Net Income for
      such period is a deficit, less 100% of such deficit); plus

     

    (B)           100%
      of (1)(a) the aggregate net cash proceeds and (b) the Fair Market Value of
      (x)
      marketable securities (other than marketable securities of the Company), (y)
      Capital Stock of a Person (other than the Company or an Affiliate of the
      Company) engaged primarily in any Related Business and (z) other assets used
      or
      useful in any Related Business, in the case of clauses (a) and (b), received
      by
      the Company since July 3, 2002 as a contribution to its common equity capital
      or
      from the issue or sale of Equity Interests of the Company (other than
      Disqualified Stock) or from the issue or sale of convertible or exchangeable
      Disqualified Stock or convertible or exchangeable debt securities of the Company
      that have been converted into or exchanged for such Equity Interests (other
      than
      Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary
      of the Company); provided, however, that the aggregate amount
      calculated pursuant to this clause (1) shall not include $731.6 million
      (representing the Fair Market Value of the common stock of Nuevo Energy Company
      and shares of common stock of 3TEC Energy Corporation, in each case, received
      by
      the Company during the years 2003 and 2004 in exchange for shares of its common
      stock), (2) the amount by which Indebtedness of the Company or any Restricted
      Subsidiary is reduced on the Company’s consolidated balance sheet upon the
      conversion or exchange after March 13, 2007 of any such Indebtedness into or
      for
      Equity Interests of the Company (other than Disqualified Stock or Subordinated
      Debt), and (3) the aggregate net cash proceeds, if any, received by the Company
      or any of its Restricted Subsidiaries upon any conversion or exchange described
      in clause (1) or (2) above; plus

     

    (C)           the
      amount equal to the net reduction in Restricted Investments made by the Company
      or any of its Restricted Subsidiaries in any Person resulting from repurchases
      or redemptions of such Restricted Investments by such Person, proceeds realized
      upon the sale of such Restricted Investment to a purchaser other than the
      Company or a Subsidiary of the Company, repayments of loans or advances or
      other
      transfers of assets (including by way of dividend or distribution) by such
      Person to the Company or any Restricted Subsidiary; provided,
however, that no amount will be included under this clause (C)
      to the
      extent it is already included in Consolidated Net Income;
plus

     

    (D)           to
      the extent that any Unrestricted Subsidiary is redesignated as a Restricted
      Subsidiary after March 13, 2007, the Fair Market Value of the Company’s
      Investment in such Subsidiary as of the date of such redesignation.

     

    (b)           So
      long as no Default has occurred and is continuing or would be caused thereby,
      Section 10.9(a) of this Indenture will not prohibit:

     

    (i)           the
      payment of any dividend or the consummation of any irrevocable redemption within
      60 days after the date of declaration of the dividend or giving of the

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    redemption
      notice, as the case may be, if at the date of declaration or notice, the
      dividend or redemption payment would have complied with the provisions of this
      Indenture;

     

    (ii)           the
      making of any Restricted Payment in exchange for, or out of the net cash
      proceeds from the substantially concurrent sale (other than to a Restricted
      Subsidiary of the Company) of, Equity Interests of the Company (other than
      Disqualified Stock and other than Equity Interests issued or sold to an employee
      stock ownership plan, option plan or similar trust to the extent such sale
      to an
      employee stock ownership plan, option plan or similar trust is financed by
      loans
      from or guaranteed by the Company or any of its Restricted Subsidiaries unless
      such loans have been repaid with cash on or prior to the date of determination)
      or from the substantially concurrent contribution of common equity capital
      to
      the Company; provided that the amount of any such net cash proceeds
      that are utilized for any such Restricted Payment will be excluded from clause
      (iii)(B) of Section 10.9(a);

     

    (iii)           the
      repurchase, redemption, defeasance or other acquisition or retirement for value
      of Subordinated Debt (including the payment of any required premium and any
      fees
      and expenses incurred in connection with such repurchase, redemption, defeasance
      or other acquisition) with the net cash proceeds from a substantially concurrent
      incurrence of Permitted Refinancing Indebtedness;

     

    (iv)           the
      defeasance, repurchase, redemption or other acquisition or retirement for value
      of any Equity Interests of the Company or any Restricted Subsidiary held by
      any
      of the Company’s (or any of its Restricted Subsidiaries’) current or former
      directors or employees in connection with the exercise or vesting of any equity
      compensation (including, without limitation, stock options, restricted stock
      and
      phantom stock) in order to satisfy the Company’s or such Restricted Subsidiary’s
      tax withholding obligation with respect to such exercise or
      vesting;

     

    (v)           repurchases
      of Capital Stock deemed to occur upon the exercise of stock options if such
      Capital Stock represents a portion of the exercise price thereof;

     

    (vi)           payments
      to fund the purchase, redemption or other acquisition for value by the Company
      of fractional shares arising out of stock dividends, splits or combinations,
      business combinations or other transactions permitted by this
      Indenture;

     

    (vii)           any
      transfer to an Unrestricted Subsidiary of any direct or indirect interest of
      the
      Company and its Restricted Subsidiaries in real property so long as such
      interests at the time of such sale or transfer (A) do not include any material
      proved Hydrocarbons and (B) include a surface interest, and any disposition
      (by
      dividend or distribution in respect of Equity Interests of the Company or
      otherwise) of any such Unrestricted Subsidiary;

     

    (viii)           the
      defeasance, repurchase, redemption or other acquisition or retirement for value
      of any Equity Interests of the Company or any Restricted Subsidiary held by
      any
      of the Company’s (or any of its Restricted Subsidiaries’) current or former
      directors or employees; provided that the aggregate price paid for all
      such repurchased, redeemed, acquired or retired Equity Interests may not exceed
      $3.0 million in any twelve-month period (with unused amounts in any 12-month
      period being permitted to be carried over into succeeding 12-month periods);
      provided, further, that the amounts in any 12-month period may
      be increased by an amount not to exceed (A) the cash proceeds received by the
      Company or any of its Restricted Subsidiaries from the sale of the Company’s
      Equity Interests (other than Disqualified Stock) to any such directors or
      employees that occurs 

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    after
      March 13, 2007 (provided that the amount of such cash proceeds utilized
      for any such repurchase, retirement or other acquisition or retirement will
      not
      increase the amount available for Restricted Payments under clause (iii) of
      Section 10.9(a) and to the extent such proceeds have not otherwise been applied
      to the payment of Restricted Payments) plus (B) the cash proceeds of
      key man life insurance policies received by the Company and its Restricted
      Subsidiaries after March 13, 2007;

     

    (ix)           the
      declaration and payment of regularly scheduled or accrued dividends to holders
      of any class or series of Disqualified Stock of the Company or any Restricted
      Subsidiary issued on or after March 13, 2007 in accordance with the Fixed Charge
      Coverage Ratio test set forth in Section 10.11(a) below;

     

    (x)           the
      payment of any dividend (or, in the case of any partnership or limited liability
      company, any similar distribution) by a Restricted Subsidiary to the holders
      (other than the Company or any Restricted Subsidiary) of Equity Interests (other
      than Disqualified Stock) of such Restricted Subsidiary; provided that
      such dividend or similar distribution is paid to all holders of such Equity
      Interests on a pro rata basis based their respective holdings of such Equity
      Interests;

     

    (xi)           any
      Restricted Payment as long as on the date of such Restricted Payment, after
      giving pro forma effect thereto and to any related financing transactions as
      if
      the same had occurred at the beginning of the Company’s most recently ended four
      full fiscal quarters for which internal financial statements are available,
      the
      Company’s Leverage Ratio would not have exceeded 2.5 to 1;

     

    (xii)           the
      purchase or redemption of any Acquired Subordinated Indebtedness of the Company
      or any of its Restricted Subsidiaries, by application of (A) cash provided
      from
      operations in the ordinary course of business or (B) proceeds from borrowings
      under the revolving portion of the Senior Credit Agreement (so long as within
      30
      days prior to such purchase or redemption, a corresponding amount of borrowings
      under the revolving portion of the Senior Credit Agreement was repaid from
      cash
      provided from operations in the ordinary course of business); provided,
      in any such case, that the Company is able to incur an additional $1.00 of
      Indebtedness pursuant to Section 10.11(a) after giving effect to such purchase
      or redemption; providedfurther, that this clause (xii) shall
      not permit the application any proceeds from any other borrowings under any
      Credit Facility to effect any such purchase or redemption;

     

    (xiii)           repurchases
      of Subordinated Debt at a purchase price not greater than (x) 101% of the
      principal amount of such Subordinated Debt and accrued and unpaid interest
      thereon in the event of a Change of Control or (y) 100% of the principal amount
      of such Subordinated Debt and accrued and unpaid interest thereon in the event
      of an Asset Sale, in each case plus accrued interest, in connection with any
      change of control offer or asset sale offer required by the terms of such
      Subordinated Debt, but only if:

     

    (A)           in
      the case of a Change of Control Triggering Event, the Company has first complied
      with and fully satisfied its obligations under Section 10.15; or

     

    (B)           in
      the case of an Asset Sale, the Company has complied with and fully satisfied
      its
      obligations under Section 10.12; or

     

    (xiv)           other
      Restricted Payments in an amount not to exceed $50.0 million.

     

    
      
        
        

      

      
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    (c)           The
      amount of all Restricted Payments (other than cash) shall be the Fair Market
      Value on the date of such Restricted Payment of the asset(s) or securities
      proposed to be paid, transferred or issued by the Company or such Restricted
      Subsidiary, as the case may be, pursuant to such Restricted
      Payment.

     

    (d)           The
      Fair Market Value of any cash Restricted Payment shall be its face amount,
      and
      the Fair Market Value of any non-cash Restricted Payment exceeding $15.0 million
      shall be determined conclusively by two Officers of the Company acting in good
      faith whose conclusions with respect thereto shall be set forth in an Officers’
Certificate delivered to the Trustee, provided, however, that
      if the Fair Market Value of any non-cash Restricted Payment exceeds $40.0
      million, such Fair Market Value shall be determined conclusively by the Board
      of
      Directors of the Company and set forth in a Board Resolution, and a certified
      copy of such Board Resolution shall be delivered to the Trustee.  For
      purposes of determining compliance with this covenant, in the event that a
      Restricted Payment meets the criteria of more than one of the exceptions
      described in clauses (i) through (xiv) of Section 10.9(b) or is entitled to
      be
      made pursuant to Section 10.9(a), the Company shall, in its sole discretion,
      classify such Restricted Payment, or later classify, reclassify or re-divide
      all
      or a portion of such Restricted Payment, in any manner that complies with this
      Section 10.9.

     

    SECTION
      4.04.  Dividend
      and Other Payment Restrictions Affecting Restricted
      Subsidiaries.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.10
      thereto:

     

    Section
      10.10                                Dividend
      and Other Payment Restrictions Affecting Restricted
      Subsidiaries.

     

    (a)           The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, create or permit to exist or become effective any
      consensual encumbrance or restriction on the ability of any Restricted
      Subsidiary to:

     

    (i)           pay
      dividends or make any other distributions on its Capital Stock to the Company
      or
      any of its Restricted Subsidiaries, or with respect to any other interest or
      participation in, or measured by, its profits, or pay any indebtedness owed
      to
      the Company or any of its Restricted Subsidiaries;

     

    (ii)           make
      loans or advances to the Company or any of its Restricted Subsidiaries;
      or

     

    (iii)           sell,
      lease or transfer any of its properties or assets to the Company or any of
      its
      Restricted Subsidiaries.

     

    (b)           However,
      the preceding restrictions in Section 10.10(a) will not apply to encumbrances
      or
      restrictions existing under or by reason of:

     

    (i)           agreements
      governing Existing Indebtedness and Credit Facilities as in effect on March
      13,
      2007 and any amendments, restatements, modifications, renewals, supplements,
      increases, refundings, replacements or refinancings of those agreements;
provided that the amendments, restatements, modifications, renewals,
      supplements, increases, refundings, replacements or refinancings are no more
      restrictive, taken as a whole, with respect to such dividend and other payment
      restrictions than those contained in those agreements on March 13,
      2007;

     

    (ii)           this
      Indenture, the Notes and the Subsidiary Guarantees;

     

    
      
        
        

      

      
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    (iii)           applicable
      law, rule, regulation, order, approval, permit or similar
      restriction;

     

    (iv)           any
      instrument governing Indebtedness or Capital Stock of a Person acquired by
      the
      Company or any of its Restricted Subsidiaries as in effect at the time of such
      acquisition (except to the extent such Indebtedness or Capital Stock was
      incurred in connection with or in contemplation of such acquisition), which
      encumbrance or restriction is not applicable to any Person, or the properties
      or
      assets of any Person, other than the Person, or the property or assets of the
      Person, so acquired; provided that, in the case of Indebtedness, such
      Indebtedness was permitted by the terms of this Indenture to be
      incurred;

     

    (v)           customary
      non-assignment provisions in contracts, leases and licenses (including, without
      limitation, licenses of intellectual property) entered into in the ordinary
      course of business;

     

    (vi)           any
      agreement for the sale or other disposition of assets, including without
      limitation an agreement for the sale or other disposition of the Capital Stock
      or assets of a Restricted Subsidiary, that restricts distributions by the
      applicable Restricted Subsidiary pending the sale or other
      disposition;

     

    (vii)           Permitted
      Refinancing Indebtedness; provided that the restrictions contained in
      the agreements governing such Permitted Refinancing Indebtedness are not
      materially more restrictive, taken as a whole, than those contained in the
      agreements governing the Indebtedness being refinanced;

     

    (viii)           Liens
      permitted to be incurred under the provisions of Section 10.14 that limit the
      right of the debtor to dispose of the assets subject to such Liens;

     

    (ix)           the
      issuance of preferred stock by a Restricted Subsidiary or the payment of
      dividends thereon in accordance with the terms thereof; provided that
      issuance of such preferred stock is permitted pursuant to Section 10.11 and
      the
      terms of such preferred stock do not expressly restrict the ability of a
      Restricted Subsidiary to pay dividends or make any other distributions on its
      Capital Stock (other than requirements to pay dividends or liquidation
      preferences on such preferred stock prior to paying any dividends or making
      any
      other distributions on such other Capital Stock);

     

    (x)           other
      Indebtedness of the Company or any of its Restricted Subsidiaries permitted
      to
      be incurred pursuant to an agreement entered into subsequent to March 13, 2007
      in accordance with Section 10.11; provided that the provisions relating
      to such encumbrance or restriction contained in such Indebtedness are not
      materially less favorable to the Company and its Restricted Subsidiaries taken
      as a whole, as determined by the Company in good faith, than the provisions
      contained in the Credit Facilities and in this Indenture as in effect on March
      13, 2007;

     

    (xi)           customary
      provisions restricting subletting or assignment of any lease governing a
      leasehold interest;

     

    (xii)           Hedging
      Obligations permitted from time to time under this Indenture;

     

    (xiii)           restrictions
      on cash or other deposits or net worth imposed by customers under contracts
      entered into in the ordinary course of business ; and

     

    
      
        
        

      

      
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    (xiv)           with
      respect only to encumbrances or restrictions of the type referred to in clause
      (iii) of Section 10.10(a):

     

    (A)           customary
      nonassignment provisions (including provisions forbidding subletting) in leases
      governing leasehold interests or Farm-In Agreements or Farm-Out Agreements
      relating to leasehold interests in oil and gas properties to the extent such
      provisions restrict the transfer of the lease, the property leased thereunder
      or
      the other interests therein;

     

    (B)           provisions
      limiting the disposition or distribution of assets or property in, or transfer
      of Capital Stock of, joint venture agreements, asset sale agreements,
      sale-leaseback agreements, stock sale agreements and other similar agreements
      entered into (1) in the ordinary course of business, consistent with past
      practice or (2) with the approval of the Company’s Board of Directors, which
      limitations are applicable only to the assets, property or Capital Stock that
      are the subject of such agreements; and

     

    (C)           Capital
      Lease Obligations, security agreements, mortgages, purchase money agreements
      or
      similar instruments to the extent such encumbrance or restriction restricts
      the
      transfer of the property (including Capital Stock) subject to such Capital Lease
      Obligations, security agreements, mortgages, purchase money agreements or
      similar instruments.

     

    SECTION
      4.05.  Incurrence
      of Indebtedness and Issuance of Preferred Stock.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.11
      thereto:

     

    Section
      10.11                                Incurrence
      of Indebtedness and Issuance of Preferred Stock.

     

    (a)           The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, create, incur, issue, assume, guarantee or otherwise
      become directly or indirectly liable, contingently or otherwise, with respect
      to
      (collectively, “incur;” with “incurrence” having a correlative meaning) any
      Indebtedness (including Acquired Debt), and the Company will not issue any
      Disqualified Stock and will not permit any of its Restricted Subsidiaries to
      issue any shares of preferred stock; provided, however, that
      the Company may incur Indebtedness (including Acquired Debt) and issue
      Disqualified Stock, and Restricted Subsidiaries may incur Indebtedness
      (including Acquired Debt) and issue preferred stock, if the Fixed Charge
      Coverage Ratio for the Company’s most recently ended four full fiscal quarters
      for which internal financial statements are available immediately preceding
      the
      date on which such additional Indebtedness is incurred or such Disqualified
      Stock or preferred stock is issued, as the case may be, would have been at
      least
      2.25 to 1.0, determined on a pro forma basis (including a pro forma application
      of the net proceeds therefrom), as if the additional Indebtedness had been
      incurred or the Disqualified Stock or preferred stock had been issued, as the
      case may be, at the beginning of such four-quarter period.

     

    (b)           Notwithstanding
      the foregoing, Section 10.11(a) will not prohibit the incurrence of any of
      the
      following (the items of Indebtedness described below in this Section 10.11(b)
      being referred to collectively as “Permitted Debt”):

     

    (i)           the
      incurrence by the Company and any Restricted Subsidiary of Indebtedness and
      letters of credit under Credit Facilities in an aggregate principal amount
      

     

    
      
        
        

      

      
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    at
      any
      one time outstanding under this clause (i) (with letters of credit being deemed
      to have a principal amount equal to the maximum potential liability of the
      Company and its Restricted Subsidiaries thereunder) not to exceed the greater
      of
      (x) $1.1 billion and (y) 20% of Adjusted Consolidated Net Tangible Assets,
      determined as of the date of the incurrence of such Indebtedness after giving
      pro forma effect to such incurrence and the application of the proceeds
      therefrom;

     

    (ii)           the
      incurrence by the Company and its Restricted Subsidiaries of the Existing
      Indebtedness;

     

    (iii)           the
      incurrence by the Company and the Guarantors of Indebtedness represented by
      the
      Notes or the Guarantees of the Notes, to be incurred by the Company and the
      Guarantors on the Issue Date of the Notes;

     

    (iv)           the
      incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
      represented by Capital Lease Obligations, mortgage financings or purchase money
      obligations, in each case, incurred for the purpose of financing all or any
      part
      of the purchase price or cost of design, construction, installation or
      improvement of property, plant or equipment used in the business of the Company
      or any of its Restricted Subsidiaries, in an aggregate principal amount,
      including all Permitted Refinancing Indebtedness incurred to renew, refund,
      refinance, replace, defease or discharge any Indebtedness incurred pursuant
      to
      this clause (iv), not to exceed $50.0 million at any time
      outstanding;

     

    (v)           the
      incurrence by the Company or any of its Restricted Subsidiaries of Permitted
      Refinancing Indebtedness in exchange for, or the net proceeds of which are
      used
      to refund, refinance, replace, defease or discharge Indebtedness (other than
      intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness
      (other than intercompany Indebtedness) or preferred stock of a Restricted
      Subsidiary, in each case that was permitted by this Indenture to be incurred
      or
      issued under Section 10.11(a) or clauses (ii), (iii), (iv), (v) or (x) of this
      Section 10.11(b);

     

    (vi)           the
      incurrence by the Company or any of its Restricted Subsidiaries of intercompany
      Indebtedness between or among the Company and any of its Restricted
      Subsidiaries; provided, however, that (A) any subsequent
      issuance or transfer of Equity Interests that results in any such Indebtedness
      being held by a Person other than the Company or a Restricted Subsidiary and
      (B)
      any sale or other transfer of any such Indebtedness to a Person that is not
      either the Company or a Restricted Subsidiary will be deemed, in each case,
      to
      constitute an incurrence of such Indebtedness by the Company or such Restricted
      Subsidiary, as the case may be, that was not permitted by this clause
      (vi);

     

    (vii)           the
      issuance by any of the Company’s Restricted Subsidiaries to the Company or to
      any of its Restricted Subsidiaries of shares of preferred stock;
provided, however, that:

     

    (A)           any
      subsequent issuance or transfer of Equity Interests that results in any such
      preferred stock being held by a Person other than the Company or a Restricted
      Subsidiary; and

     

    (B)           any
      sale or other transfer of any such preferred stock to a Person that is not
      either the Company or a Restricted Subsidiary,

     

    
      
        
        

      

      
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    will
      be
      deemed, in each case, to constitute an issuance of such preferred stock by
      such
      Restricted Subsidiary that was not permitted by this clause (vii);

     

    (viii)           the
      incurrence of obligations of the Company or a Restricted Subsidiary pursuant
      to
      Interest Rate and Currency Hedges, in each case entered into in the ordinary
      course of business for the purpose of limiting risks that arise in the ordinary
      course of business of the Company and its Restricted Subsidiaries;

     

    (ix)           the
      guarantee by the Company or any of the Guarantors of Indebtedness of the Company
      or a Restricted Subsidiary that was permitted to be incurred by another
      provision of this covenant; provided that if the Indebtedness being
      guaranteed is subordinated to or pari passu with the Notes, then the
      guarantee shall be subordinated or pari passu, as applicable, to the
      same extent as the Indebtedness guaranteed;

     

    (x)           Permitted
      Acquisition Indebtedness;

     

    (xi)           the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
      from the honoring by a bank or other financial institution of a check, draft
      or
      similar instrument inadvertently drawn against insufficient funds, so long
      as
      such Indebtedness is covered within five Business Days;

     

    (xii)           Indebtedness
      consisting of the financing of insurance premiums in customary amounts
      consistent with the operations and business of the Company and the Restricted
      Subsidiaries;

     

    (xiii)           the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
      from agreements of the Company or any of its Restricted Subsidiaries providing
      for indemnification, adjustment of purchase price or similar obligations, in
      each case, incurred or assumed in connection with the disposition of any
      business, assets or Capital Stock of a Subsidiary, provided that the
      maximum aggregate liability in respect of all such Indebtedness shall at no
      time
      exceed the gross proceeds actually received by the Company and its Restricted
      Subsidiaries in connection with such disposition;

     

    (xiv)           the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
      from Guarantees of Indebtedness of joint ventures at any time outstanding not
      to
      exceed the greater of $50.0 million and 1.0% of Adjusted Consolidated Net
      Tangible Assets determined as of the date of incurrence of such Indebtedness
      after giving pro forma effect to such incurrence and the application of proceeds
      thereof; and

     

    (xv)           the
      incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
      in an aggregate principal amount (or accreted value, as applicable) that, when
      taken together with all other Indebtedness of the Company outstanding on the
      date of such incurrence (other than Indebtedness permitted by clauses (i)
      through (xiv) above or Section 10.11(a)) does not exceed the greater of (x)
      2.5%
      of Adjusted Consolidated Net Tangible Assets determined as of the date of
      incurrence of such Indebtedness and (y) $125.0 million.

     

    (c)           For
      purposes of determining compliance with this Section 10.11, in the event that
      an
      item of proposed Indebtedness meets the criteria of more than one of the
      categories of Permitted Debt described in clauses (i) through (xv) of Section
      10.11(b), or is entitled to be incurred pursuant to Section 10.11(a), the
      Company will be permitted to divide and classify such item of Indebtedness
      on
      the date of its incurrence, or later divide and reclassify all or a portion
      

     

    
      
        
        

      

      
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    of
      such
      item of Indebtedness, in any manner that complies with this Section
      10.11.  The accrual of interest, the accretion or amortization of
      original issue discount, the payment of interest on any Indebtedness in the
      form
      of additional Indebtedness with the same terms, the reclassification of
      preferred stock as Indebtedness due to a change in accounting principles, and
      the payment of dividends on Disqualified Stock in the form of additional shares
      of the same class of Disqualified Stock will be deemed not to be an incurrence
      of Indebtedness or an issuance of Disqualified Stock for purposes of this
      covenant; provided, in each such case, that the amount of any such
      accrual, accretion or payment is included in Fixed Charges of the Company as
      accrued.

     

    (d)           For
      purposes of determining compliance with any U.S. dollar-denominated restriction
      on the incurrence of Indebtedness and issuance of preferred stock, the U.S.
      dollar-equivalent principal amount of Indebtedness denominated in a foreign
      currency shall be calculated based on the relevant currency exchange rate in
      effect on the date such Indebtedness was incurred, in the case of term
      Indebtedness, or first committed, in the case of revolving credit Indebtedness;
      provided that if such Indebtedness is incurred to refinance other
      Indebtedness denominated in a foreign currency, and such refinancing would
      cause
      the applicable U.S. dollar-denominated restriction to be exceeded if calculated
      at the relevant currency exchange rate in effect on the date of such
      refinancing, such U.S. dollar-denominated restriction shall be deemed not to
      have been exceeded so long as the principal amount of such refinancing
      Indebtedness does not exceed the principal amount of such Indebtedness being
      refinanced.  Notwithstanding any other provision of this Section
      10.11, the maximum amount of Indebtedness that the Company may incur pursuant
      to
      this Section 10.11 shall not be deemed to be exceeded solely as a result of
      fluctuations in the exchange rate of currencies.  The principal amount
      of any Permitted Refinancing Indebtedness incurred to refinance other
      Indebtedness, if incurred in a different currency from the Indebtedness being
      refinanced, shall be calculated based on the currency exchange rate applicable
      to the currencies in which such Permitted Refinancing Indebtedness is
      denominated that is in effect on the date of such refinancing.

     

    SECTION
      4.06.  Asset
      Sales.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.12
      thereto:

     

    Section
      10.12                                Asset
      Sales.

     

    (a)           The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      consummate an Asset Sale unless:

     

    (i)           the
      Company (or the Restricted Subsidiary, as the case may be) receives
      consideration at least equal to the Fair Market Value of the assets or Equity
      Interests issued or sold or otherwise disposed of; and

     

    (ii)           either
      (x) at least 75% of the consideration received in the Asset Sale by the Company
      or such Restricted Subsidiary is in the form of cash or Cash Equivalents or
      (y)
      the Fair Market Value of all forms of consideration other than cash and Cash
      Equivalents received for all Asset Sales since March 13, 2007 does not exceed in
      the aggregate 10% of the Adjusted Consolidated Net Tangible Assets of the
      Company at the time each determination is made.  For purposes of this
      provision, each of the following will be deemed to be cash:

     

    (A)           any
      liabilities, as shown on the Company’s most recent consolidated balance sheet,
      of the Company or any Restricted Subsidiary (other 

     

    
      
        
        

      

      
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    than
      contingent liabilities and liabilities that are by their terms subordinated
      to
      the Notes or any Subsidiary Guarantee) that are assumed by the transferee of
      any
      such assets pursuant to a customary novation agreement that releases the Company
      or such Restricted Subsidiary from further liability;

     

    (B)           any
      securities, notes or other obligations received by the Company or any such
      Restricted Subsidiary from such transferee that are converted by the Company
      or
      such Restricted Subsidiary into cash within 180 days after the date of the
      Asset
      Sale, to the extent of the cash received in that conversion;

     

    (C)           any
      stock or assets of the kind referred to in clauses (ii) or (iv) of Section
      10.12(b) below; and

     

    (D)           accounts
      receivable of a business retained by the Company or any Restricted Subsidiary,
      as the case may be, following the sale of such business, provided that
      such accounts receivable are not (1) past due more than 90 days and (2) do
      not
      have a payment date greater than 120 days from the date of the invoice creating
      such accounts receivable.

     

    (b)           Within
      360 days after the receipt of any Net Proceeds from an Asset Sale, the Company
      (or the applicable Restricted Subsidiary, as the case may be) may apply such
      Net
      Proceeds:

     

    (i)           to
      repay Senior Debt;

     

    (ii)           to
      invest in Additional Assets;

     

    (iii)           to
      make capital expenditures in respect of a Related Business of the Company or
      any
      of its Restricted Subsidiaries; or

     

    (iv)           enter
      into a bona fide binding contract with a Person other than an Affiliate of
      the
      Company to apply the Net Proceeds pursuant to clauses (ii) or (iii) above,
      provided that such binding contract shall be treated as a permitted
      application of the Net Proceeds from the date of such contract until the earlier
      of:

     

    (A)           the
      date on which such acquisition or expenditure is consummated, and

     

    (B)           the
      180th day following the expiration of the aforementioned 360-day
      period.

     

    Any
      Net
      Proceeds from Asset Sales that are not applied or invested as provided in
      clauses (i) through (iv) above will constitute “Excess Proceeds.”

     

    (c)           On
      the 361st day (or upon the failure to close the contract referred to in clause
      (iv) of Section 10.12(b) above within the 180 day time period thereafter) after
      the Asset Sale (or, at the Company’s option, any earlier date), if the aggregate
      amount of Excess Proceeds then exceeds $40.0 million, the Company will make
      an
      offer (the “Asset Sale Offer”) to all Holders of Notes and all holders of other
      Indebtedness that is pari passu with the Notes containing provisions
      similar to those set forth in this Indenture with respect to offers to purchase
      or redeem with the proceeds of sales of assets, to purchase the maximum
      principal amount of Notes and such other pari passu Indebtedness that
      may be purchased out of the Excess Proceeds.  The offer price in any
      Asset Sale Offer will be equal to 100% of the principal amount plus accrued
      

     

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    and
      unpaid interest, to the date of purchase, and will be payable in
      cash.  If any Excess Proceeds remain after consummation of an Asset
      Sale Offer, the Company may use those Excess Proceeds for any purpose not
      otherwise prohibited by this Indenture.  If the aggregate principal
      amount of Notes and other pari passu Indebtedness tendered into such
      Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select
      the Notes to be purchased on a pro rata basis.  Upon completion of
      each Asset Sale Offer, the amount of Excess Proceeds will be reset at
      zero.

     

    (d)           Notwithstanding
      the foregoing, the sale, conveyance or other disposition of all or substantially
      all of the assets of the Company, or of the Company and its Restricted
      Subsidiaries, taken as a whole, will be governed by Sections 8.1 and/or 10.15
      of
      this Indenture, as applicable, and not by this Section 10.12.

     

    (e)           The
      Company will comply with the requirements of Rule 14e-1 under the Exchange
      Act
      and any other securities laws and regulations thereunder to the extent those
      laws and regulations are applicable in connection with each repurchase of Notes
      pursuant to an Asset Sale Offer.  To the extent that the provisions of
      any securities laws or regulations conflict with the Asset Sale provisions
      of
      this Indenture, the Company will comply with the applicable securities laws
      and
      regulations and will not be deemed to have breached its obligations under the
      Asset Sale provisions of this Indenture by virtue of such
      compliance.

     

    SECTION
      4.07.  Transactions
      with Affiliates.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.13
      thereto:

     

    Section
      10.13                                Transactions
      with Affiliates.

     

    (a)           The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      make any payment to, or sell, lease, transfer or otherwise dispose of any of
      its
      properties or assets to, or purchase any property or assets from, or enter
      into
      or make or amend any transaction, contract, agreement, understanding, loan,
      advance or guarantee with, or for the benefit of, any Affiliate of the Company
      (each, an “Affiliate Transaction”), unless:

     

    (i)           the
      Affiliate Transaction is on terms that are no less favorable to the Company
      or
      the relevant Restricted Subsidiary than those that would have been obtained
      in a
      comparable transaction by the Company or such Restricted Subsidiary with an
      unrelated Person; and

     

    (ii)           the
      Company delivers to the Trustee:

     

    (A)           with
      respect to any Affiliate Transaction or series of related Affiliate Transactions
      involving aggregate consideration in excess of $20.0 million, a Board Resolution
      of the Company set forth in an Officers’ Certificate certifying that such
      Affiliate Transaction complies with this Section 10.13 and that such Affiliate
      Transaction has been approved by a majority of the disinterested members of
      the
      Board of Directors of the Company; and

     

    (B)           with
      respect to any Affiliate Transaction or series of related Affiliate Transactions
      involving aggregate consideration in excess of $40.0 million, an opinion as
      to
      the fairness to the Company or such Subsidiary of such Affiliate Transaction
      from a financial point of view issued by an accounting, appraisal or investment
      banking firm of national standing.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    (b)           The
      following items will not be deemed to be Affiliate Transactions and, therefore,
      will not be subject to the provisions of the prior paragraph:

     

    (i)           any
      employment, consulting or similar agreement or other compensation, or
      arrangement, stock option or stock ownership plan, employee benefit plan,
      officer or director indemnification agreement, restricted stock agreement,
      severance agreement or other compensation plan or arrangement entered into
      by
      the Company or any of its Restricted Subsidiaries in the ordinary course of
      business and payments, awards, grants or issuances of securities pursuant
      thereto;

     

    (ii)           transactions
      between or among the Company and/or its Restricted Subsidiaries;

     

    (iii)           transactions
      with a Person that is an Affiliate of the Company solely because the Company
      owns, directly or through a Subsidiary, an Equity Interest in, or controls,
      such
      Person;

     

    (iv)           reasonable
      fees and expenses and compensation paid to, and indemnity or insurance provided
      on behalf of, officers, directors or employees of the Company or any Restricted
      Subsidiaries;

     

    (v)           any
      issuance of Equity Interests (other than Disqualified Stock) of the Company
      to,
      or receipt of a capital contribution from, Affiliates (or a Person that becomes
      an Affiliate) of the Company;

     

    (vi)           any
      Permitted Investments or Restricted Payments that do not violate Section 10.9
      of
      this Indenture;

     

    (vii)           loans
      or advances to employees in the ordinary course of business or consistent with
      past practice;

     

    (viii)           advances
      to or reimbursements of employees for moving, entertainment and travel expenses,
      drawing accounts and similar expenditures in the ordinary course of
      business;

     

    (ix)           the
      performance of obligations of the Company or any of its Restricted Subsidiaries
      under the terms of any written agreement to which the Company or any of its
      Restricted Subsidiaries was a party on March 13, 2007, as these agreements
      may
      be amended, modified or supplemented from time to time; provided,
however, that any future amendment, modification or supplement
      entered
      into after March 13, 2007 will be permitted to the extent that its terms do
      not
      materially and adversely affect the rights of any Holders of the Notes (as
      determined in good faith by the Board of Directors of the Company) as compared
      to the terms of the agreements in effect on March 13, 2007;

     

    (x)           (A)
      guarantees of performance by the Company and its Restricted Subsidiaries of
      the
      Company’s Unrestricted Subsidiaries in the ordinary course of business, except
      for guarantees of Indebtedness in respect of borrowed money, and (B) pledges
      of
      Equity Interests of the Company’s Unrestricted Subsidiaries for the benefit of
      lenders of the Company’s Unrestricted Subsidiaries; and

     

    (xi)           transactions
      between the Company and any person, a director of which is also a director
      of
      the Company; provided, however, that such director abstains
      from voting as a director of the Company on any matter involving such other
      Person.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    SECTION
      4.08.  Limitation
      on Liens.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.14
      thereto:

     

    Section
      10.14                                Limitation
      on Liens.

     

    The
      Company will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, create, incur or permit to exist any Lien (other than
      Permitted Liens) upon any Principal Property or any shares of stock or
      Indebtedness of any Restricted Subsidiary that owns or leases any Principal
      Property (whether such Principal Property, shares of stock or Indebtedness
      are
      now owned or hereafter acquired), securing any Subordinated Debt or other
      Indebtedness, unless:

     

    (a)           in
      the case of Liens securing Subordinated Debt of the Company or a Guarantor,
      the
      Notes or Subsidiary Guarantee, as applicable, are secured by a Lien on such
      Principal Property or such shares of stock or Indebtedness on a senior basis
      to
      the Subordinated Debt so secured with the same priority as the Notes or such
      Subsidiary Guarantee, as applicable, has to such Subordinated Debt until such
      time as such Subordinated Debt is no longer so secured by a Lien;
      and

     

    (b)           in
      the case of Liens securing other Indebtedness of the Company or a Guarantor,
      the
      Notes or Subsidiary Guarantees, as applicable, are secured by a Lien on such
      Principal Property or such shares of stock or Indebtedness on an equal and
      ratable basis with the other Indebtedness so secured until such time as such
      other Indebtedness is no longer so secured by a Lien.

     

    SECTION
      4.09.  Offer
      to Repurchase upon a Change of Control.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.15
      thereto:

     

    Section
      10.15                                Offer
      to Repurchase upon a Change of Control.

     

    (a)           If
      a Change of Control Triggering Event occurs, each Holder of Notes will have
      the
      right to require the Company to repurchase all or any part (equal to $1,000
      or
      an integral multiple thereof) of that Holder’s Notes pursuant to an offer
      (“Change of Control Offer”) on the terms set forth in this
      Indenture.  In the Change of Control Offer, the Company will offer a
      payment in cash (the “Change of Control Payment”) equal to 101% of the aggregate
      principal amount of Notes repurchased plus accrued and unpaid interest on the
      Notes repurchased to the date of purchase (the “Change of Control Payment
      Date”), subject to the rights of Holders of Notes on the relevant record date to
      receive interest due on the relevant Interest Payment Date.  Within 30
      days following any Change of Control Triggering Event, the Company will mail
      a
      notice to each Holder of Notes describing the transaction or transactions that
      constitute the Change of Control Triggering Event and offering to repurchase
      Notes on the Change of Control Payment Date specified in the notice, which
      date
      will be no earlier than 30 days and no later than 60 days from the date such
      notice is mailed, pursuant to the procedures described in Article Fifteen of
      this Indenture (including the notice required thereby) and described in such
      notice.  The Company will comply with the requirements of Rule 14e-1
      under the Exchange Act and any other securities laws and regulations thereunder
      to the extent those laws and regulations are applicable in connection with
      the
      repurchase of the Notes as a result of a Change of Control Triggering

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    Event.  To
      the extent that the provisions of any securities laws or regulations conflict
      with the Change of Control Triggering Event provisions of this Indenture, the
      Company will comply with the applicable securities laws and regulations and
      will
      not be deemed to have breached its obligations under the Change of Control
      Triggering Event provisions of this Indenture by virtue of such
      compliance.

     

    (b)           On
      the Change of Control Payment Date, the Company will, to the extent
      lawful:

     

    (i)           accept
      for payment all Notes or portions of Notes properly tendered pursuant to the
      Change of Control Offer;

     

    (ii)           deposit
      with the Paying Agent an amount equal to the Change of Control Payment in
      respect of all Notes or portions of Notes properly tendered; and

     

    (iii)           deliver
      or cause to be delivered to the Trustee the Notes properly accepted together
      with an Officers’ Certificate stating the aggregate principal amount of Notes or
      portions of Notes being purchased by the Company.

     

    (c)           The
      Paying Agent will promptly mail to each Holder of Notes properly tendered the
      Change of Control Payment for such Notes (or, if all the Notes are then in
      global form, make such payment through the facilities of the Depositary), and
      the Trustee will promptly authenticate and mail (or cause to be transferred
      by
      book entry) to each Holder a new Note equal in principal amount to any
      unpurchased portion of the Notes surrendered, if any; provided that
      each such new Note will be in a principal amount of $1,000 or an integral
      multiple thereof.  Any Note so accepted for payment will cease to
      accrue interest on and after the Change of Control Payment Date unless the
      Company defaults in making the Change of Control Payment.

     

    (d)           The
      Company will publicly announce the results of the Change of Control Offer on
      or
      as soon as practicable after the Change of Control Payment Date.

     

    (e)           Notwithstanding
      anything to the contrary in this Section 10.15, the Company will not be required
      to make a Change of Control Offer upon a Change of Control Triggering Event
      if
      (i) a third party makes the Change of Control Offer in the manner, at the times
      and otherwise in compliance with the requirements set forth in this Indenture
      applicable to a Change of Control Offer made by the Company and purchases all
      Notes properly tendered and not withdrawn under the Change of Control Offer,
      or
      (ii) notice of redemption with respect to the Notes has been given pursuant
      to
      this Indenture, unless and until there is a default in payment of the applicable
      Redemption Price.

     

    (f)           A
      Change of Control Offer may be made in advance of a Change of Control Triggering
      Event, and conditioned upon the occurrence of such Change of Control Triggering
      Event, if a definitive agreement is in place for the Change of Control
      Triggering Event at the time of making the Change of Control
      Offer.  Notes repurchased by the Company pursuant to a Change of
      Control Offer will have the status of Notes issued but not Outstanding or will
      be retired and cancelled, at the Company’s option.  Notes purchased by
      a third party pursuant to clause (e) of this Section 10.15 will have the status
      of Notes issued and Outstanding.

     

    (g)           In
      the event that Holders of at least 90% of the aggregate principal amount of
      the
      Outstanding Notes accept a Change of Control Offer and the Company purchases
      all
      of the Notes held by such Holders, the Company will have the right, upon not
      less than 30 nor more than 60 days’ prior notice, given not more than 30 days
      following the purchase pursuant to the Change of Control Offer described above,
      to redeem all of the Notes that remain Outstanding following such purchase
      at a
      Redemption Price equal to the Change of Control Payment plus, to the
      extent not 

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    included
      in the Change of Control Payment, accrued and unpaid interest on the Notes
      that
      remain Outstanding, to the date of redemption (subject to the right of Holders
      on the relevant record date to receive interest due on the relevant Interest
      Payment Date).

     

    SECTION
      4.10.  Designation
      of Restricted and Unrestricted Subsidiaries.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.16
      thereto:

     

    Section
      10.16                                Designation
      of Restricted and Unrestricted Subsidiaries.

     

    (a)           The
      Board of Directors of the Company may designate any Restricted Subsidiary to
      be
      an Unrestricted Subsidiary if that designation would not cause a Default. If
      a
      Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
      Fair Market Value of all outstanding Investments owned by the Company and its
      Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
      deemed to be an Investment made as of the time of the designation and will
      reduce the amount available for Restricted Payments under Section 10.9 of this
      Indenture or under one or more clauses of the definition of Permitted
      Investments, as determined by the Company.  That designation will only
      be permitted if the Investment would be permitted at that time and if the
      Restricted Subsidiary otherwise meets the definition of an Unrestricted
      Subsidiary.

     

    (b)           Any
      designation of a Subsidiary of the Company as an Unrestricted Subsidiary will
      be
      evidenced to the Trustee by filing with the Trustee a certified copy of a Board
      Resolution of the Company giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the preceding
      conditions and was permitted by Section 10.9. If, at any time, any Unrestricted
      Subsidiary would fail to meet the preceding requirements as an Unrestricted
      Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
      purposes of this Indenture and any Indebtedness of such Subsidiary will be
      deemed to be incurred by a Restricted Subsidiary as of such date and, if such
      Indebtedness is not permitted to be incurred as of such date under Section
      10.11, the Company will be in Default of such covenant. The Board of Directors
      of the Company may at any time designate any Unrestricted Subsidiary to be
      a
      Restricted Subsidiary; provided that such designation will be deemed to
      be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
      Indebtedness of such Unrestricted Subsidiary, and such designation will only
      be
      permitted if (i) such Indebtedness is permitted under Section 10.11, calculated
      on a pro forma basis as if such designation had occurred at the beginning of
      the
      four-quarter reference period; and (ii) no Default or Event of Default would
      be
      in existence following such designation.

     

    SECTION
      4.11.  Future
      Guarantors.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.17
      thereto:

     

    Section
      10.17                                Future
      Guarantors.

     

    If
      any
      Domestic Restricted Subsidiary that is not a Guarantor is or becomes obligated
      under any Indebtedness pursuant to a Guarantee of Indebtedness of the Company
      or
      any Guarantor (other than the Notes), and the maximum principal amount of
      Indebtedness of such Domestic Restricted Subsidiary under such Guarantee exceeds
      $10.0 million, then the Company shall cause that Domestic Restricted Subsidiary
      to Guarantee the Notes and become a Guarantor, 

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    pursuant
      to the Subsidiary Guarantee provisions of this Indenture, by executing a
      supplemental indenture and delivering it to the Trustee within 30 days after
      the
      date on which such Domestic Restricted Subsidiary Guaranteed such Indebtedness
      of the Company or a Guarantor; provided, however, that the
      Company shall not be required to cause such Domestic Restricted Subsidiary
      to so
      Guarantee the Notes and become a Guarantor prior to the 180th day after the
      consummation of any transaction (including without limitation any merger,
      consolidation or purchase) pursuant to which such Domestic Restricted Subsidiary
      becomes a Subsidiary of the Company.

     

    SECTION
      4.12.  Covenant
      Termination.

     

    Subject
      to the limitations set forth in the preamble to ARTICLE
      4 of this Supplemental Indenture, Article Ten of the Original Indenture
      is
      hereby further amended by adding the following Section 10.18
      thereto:

     

    Section
      10.18                                Covenant
      Termination.

     

    Notwithstanding
      any provision of this Indenture or of the Notes to the contrary, from and after
      the occurrence of an Investment Grade Rating Event, the Company and its
      Restricted Subsidiaries will cease to be subject to Sections 10.9, 10.10, 10.11,
      10.12, 10.13, 10.15 and 10.16 and 8.1(a)(iv) of this Indenture and no Default
      or
      Event of Default shall result from any failure to comply with any of the
      provisions of such Sections.

     

    ARTICLE
      5

    Miscellaneous

     

    SECTION
      5.01.  Certain
      Trustee Matters.

     

    The
      recitals contained herein shall be taken as the statements of the Company,
      and
      the Trustee assumes no responsibility for their correctness.

     

    The
      Trustee makes no representations as to the validity or sufficiency of this
      Supplemental Indenture or the Notes or the proper authorization or the due
      execution hereof or thereof by the Company.

     

    Except
      as
      expressly set forth herein, nothing in this Supplemental Indenture shall alter
      the duties, rights or obligations of the Trustee set forth in the Original
      Indenture.

     

    The
      Trustee makes no representation or warranty as to the validity or sufficiency
      of
      the information contained in the prospectus supplement related to the Notes,
      except such information which specifically pertains to the Trustee itself,
      or
      any information incorporated therein by reference.

     

    SECTION
      5.02.  Continued
      Effect.

     

    Except
      as
      expressly supplemented and amended by this Supplemental Indenture, the Original
      Indenture shall continue in full force and effect in accordance with the
      provisions thereof, and the Original Indenture (as supplemented and amended
      by
      this Supplemental Indenture) is in all respects hereby ratified and
      confirmed.  This Supplemental Indenture and all its provisions shall
      be deemed a part of the Original Indenture in the manner and to the extent
      herein and therein provided.

     

    SECTION
      5.03.  Governing
      Law.

     

    This
      Supplemental Indenture and the Notes shall be governed by and construed in
      accordance with the laws of the State of New York.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    SECTION
      5.04.  Counterparts.

     

    This
      instrument may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all such counterparts shall together constitute
      but one and the same instrument.

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
      to
      be duly executed and delivered, all as of the day and year first above
      written.

     

    

      
        	 	
                THE
                  COMPANY:

              
	 	 
	 	
                PLAINS
                  EXPLORATION & PRODUCTION COMPANY

              
	 	 
	 	
                By:

              	
                /s/  Winston
                  M. Talbert

              
	 	
                Name:

              	
                Winston
                  M. Talbert

              
	 	
                Title:

              	
                Executive
                  Vice President & Chief Financial
                  Officer

              

      

      
        	 	
                GUARANTORS:

              
	 	 
	 	
                ARGUELLO
                  INC.

              
	 	
                BROWN
                  PXP PROPERTIES, LLC

              
	 	
                NUEVO
                  GHANA INC.

              
	 	
                NUEVO
                  INTERNATIONAL INC.

              
	 	
                NUEVO
                  OFFSHORE COMPANY

              
	 	
                NUEVO
                  RESOURCES INC.

              
	 	
                PACIFIC
                  INTERSTATE OFFSHORE COMPANY

              
	 	
                PLAINS
                  ACQUISITION CORPORATION

              
	 	
                PLAINS
                  LOUISIANA INC.

              
	 	
                PLAINS
                  RESOURCES INC.

              
	 	
                PLAINS
                  RESOURCES INTERNATIONAL INC.

              
	 	
                PXP
                  BRUSH CREEK LLC

              
	 	 	
                   By:

              	
                Plains
                  Resources Inc., its sole member

              	 
	 	
                PXP
                  CV PIPELINE LLC

              
	 	 	
                   By:

              	
                Plains
                  Resources Inc., its sole member

              	 
	 	
                PXP
                  EAST PLATEAU LLC

              
	 	 	
                   By:

              	
                Plains
                  Resources Inc., its sole member

              	 
	 	
                PXP
                  GULF COAST INC.

              
	 	
                PXP
                  HELL’S GULCH LLC

              
	 	 	
                   By:

              	
                Plains
                  Resources Inc., its sole member

              	 
	 	
                PXP
                  LOUISIANA L.L.C.

              
	 	 	
                   By:

              	
                Plains
                  Louisiana Inc., its sole member

              	 
	 	
                PXP
                  PERMIAN INC.

              
	 	
                PXP
                  PICEANCE LLC

              
	 	 	
                   By:

              	
                Plains
                  Resources Inc., its sole member

              	 
	 	
                PXP
                  TEXAS INC.

              
	 	
                PXP
                  TEXAS LIMITED PARTNERSHIP

              
	 	 	
                   By:

              	
                PXP
                  Texas Inc., its general partner

              	 
	 	 
	 	 	
                   By:

              	
                /s/  Winston
                  M. Talbert

              	 
	 	 	
                   Name:

              	
                Winston
                  M. Talbert

              	 
	 	 	
                   Title:

              	
                Vice
                  President & Treasurer

              	 
	 	 
	 	
                PXP
                  DEEPWATER L.L.C.

              
	 	 	
                   By:

              	
                Plains
                  Exploration & Production Company, its sole member

              	 
	 	 
	 	 	
                   By:

              	
                /s/  Winston
                  M. Talbert

              	 
	 	 	
                   Name:

              	
                Winston
                  M. Talbert

              	 
	 	 	
                   Title:

              	
                Vice
                  President & Treasurer

              	 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 	
                TRUSTEE:

              
	 	 	 
	 	 	
                WELLS
                  FARGO BANK, N. A.

              
	 	 	 
	 	 	
                By:

              	
                /s/
                  Nancye Patterson

              
	 	 	
                Name:     Nancye
                  Patterson

              
	 	 	
                Title:      
                  Authorized Officer

              

      

    
      	 	 
	 	 
	 	 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    [FORM
      OF FACE OF NOTE]

     

    [If
      a Global Security, insert—THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
      MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
      OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE
      TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE
      NAME
      OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH
      TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
      THE
      INDENTURE.]

     

    [If
      a Global Security, insert—EVERY SECURITY AUTHENTICATED AND DELIVERED UPON
      REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY
      SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
      CIRCUMSTANCES.]

     

    [If
      a Global Security, insert—UNLESS THIS SECURITY IS PRESENTED BY AN
      AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
      CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
      OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
      DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
      OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
      BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]

     

    PLAINS
      EXPLORATION & PRODUCTION COMPANY

     

    73⁄4%
      Senior Notes due
      2015

     

    
      	
              No.
                _________

            	
              U.S.$_____________

            
	
              CUSIP
                No. 726505 AD 2

            	 

    

    PLAINS
      EXPLORATION & PRODUCTION COMPANY, a company duly incorporated under the laws
      of the State of Delaware (herein called the “Company”, which term includes any
      successor or resulting Person under the Indenture hereinafter referred to),
      for
      value received, hereby promises to pay to _________________________, or
      registered assigns, the principal sum of _________________________ United States
      Dollars on June 15, 2015, and to pay interest thereon from June 19, 2007 or
      from
      the most recent Interest Payment Date to which interest has been paid or duly
      provided for, semi-annually on June 15 and December 15 in each year, commencing
      December 15, 2007, at the rate of 73⁄4% per annum, until the principal hereof is
      paid or made available for payment; provided, however, that
      upon any failure by the Company for 60 days to comply with Section 10.7 of
      such
      Indenture, the interest rate on the Securities of this series will increase
      by
      50 basis points (0.5%) and remain at such increased rate thereafter but only
      for
      so long as there is a Default under such Section 10.7, and upon resumption
      of
      compliance by the Company with such Section 10.7, the interest rate on the
      Securities of this series will be reset at the initial rate applicable on the
      Issue Date.  Interest on overdue principal and interest on overdue
      interest, if any, will accrue at the applicable interest rate on the Securities
      of this series.  The interest so payable, and punctually paid or duly
      provided for, on any Interest Payment Date will, as provided in such Indenture,
      be paid to the Person in whose name this Security (or one or more Predecessor
      Securities) is registered at the close of business on the Regular Record Date
      for such interest, which shall be the June 1 or December 1 (regardless of
      whether a Business Day), as the case may be, next preceding such Interest
      Payment Date.  Any such interest not so punctually paid or duly
      provided for will forthwith cease to be payable to the Holder on such Regular
      Record Date and may either be paid to the Person in whose name this Security
      (or
      one or more Predecessor Securities) is registered at the close of business
      on a
      Special Record Date for the payment of such Defaulted Interest to be fixed
      by
      the Trustee, notice whereof shall be given to Holders of Securities of this
      series not less than 10 days prior to such Special Record Date, or be paid
      at
      any time in any other lawful manner not inconsistent with the requirements
      of
      any securities exchange on which the Securities of this series may be listed,
      and upon such notice as may be required by such exchange, all as more fully
      provided in said Indenture.  Interest on the Securities of this series
      will be computed on the basis of a 360-day year comprised of twelve 30-day
      months.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    [If
      a Global Security, insert—Payment of the principal of (and
      premium, if any) and any such interest on this Security will be made by transfer
      of immediately available funds to a bank account in the United States designated
      by the Holder in such coin or currency of the United States of America as at
      the
      time of payment is legal tender for payment of public and private
      debts.]

     

    [If
      a Definitive Security, insert—Payment of the principal of (and
      premium, if any) and any such interest on this Security will be made at the
      office or agency of the Company maintained for that purpose in the United States
      of America, in such coin or currency of the United States of America as at
      the
      time of payment is legal tender for payment of public and private debts or
      subject to any laws or regulations applicable thereto and to the right of the
      Company (as provided in the Indenture) to rescind the designation of any such
      Paying Agent, at the offices of ________________ in ________________, or at
      such
      other offices or agencies as the Company may designate, by United States Dollar
      check drawn on, or transfer to a United States Dollar account maintained by
      the
      payee with, a bank in The City of New York (so long as the applicable Paying
      Agency has received proper transfer instructions in writing at least 10 days
      prior to the payment date); provided, however, that payment of
      interest may be made at the option of the Company by United States Dollar check
      mailed to the addresses of the Persons entitled thereto as such addresses shall
      appear in the Security Register or by transfer to a United States Dollar account
      maintained by the payee with a bank in The City of New York (so long as the
      applicable Paying Agent has received proper transfer instructions in writing
      by
      the record date prior to the applicable Interest Payment Date).]

     

    Reference
      is hereby made to the further provisions of this Security set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

    Unless
      the certificate of authentication hereon has been executed by the Trustee
      referred to on the reverse hereof by manual signature, this Security shall
      not
      be entitled to any benefit under the Indenture or be valid or obligatory for
      any
      purpose.

     

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly
      executed.

     

    Dated:  ____________,
      ____

    

      
        	 
	 	
                PLAINS
                  EXPLORATION AND PRODUCTION COMPANY

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 

      

    

     

    TRUSTEE’S
      CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Securities of the series designated 73⁄4% Senior Notes due 2015
      referred to in the within-mentioned Indenture.

     

    

      
        	 
	 	
                 WELLS
                  FARGO BANK, N.A.,

                as Trustee

              
	 	 	 
	 	 By:	 
	 	 	 Authorized
                Signatory

      

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    [FORM
      OF REVERSE OF NOTE]

     

    PLAINS
      EXPLORATION & PRODUCTION COMPANY

     

    73⁄4%
      Senior Notes due
      2015

     

    This
      Security is one of a duly authorized issue of senior securities of the Company
      (herein called the “Securities”), issued and to be issued in one or more series
      under an Indenture, dated as of March 13, 2007 (the “Original Indenture”),
      between the Company and Wells Fargo Bank, N.A., as Trustee (herein called the
      “Trustee”, which term includes any successor trustee under the Indenture), as
      amended and supplemented by the Third Supplemental Indenture thereto dated
      as of
      June 19, 2007 (the “Supplemental Indenture”), by and among the Company, the
      Trustee and the Guarantors named therein (such Original Indenture, as so amended
      and supplemented being herein called the “Indenture”), to which Indenture and
      all indentures supplemental thereto reference is hereby made for a statement,
      of
      the respective rights, limitations of rights, duties and immunities thereunder
      of the Company, the Guarantors, the Trustee and the Holders of the Securities
      and of the terms upon which the Securities are, and are to be, authenticated
      and
      delivered.  As provided in the Indenture, the Securities may be issued
      in one or more series, which different series may be issued in various aggregate
      principal amounts, may mature at different times, may bear interest, if any,
      at
      different rates, may be subject to different redemption provisions, if any,
      may
      be subject to different sinking, purchase or analogous funds, if any, may be
      subject to different covenants and Events of Default and may otherwise vary
      as
      in the Indenture provided or permitted.  This Security is one of the
      series designated on the face hereof.

     

    This
      security is the general, unsecured, senior obligation of the Company and is
      guaranteed pursuant to a guarantee (the “Subsidiary Guarantee”) by each of the
      persons named as Guarantors in the Supplemental Indenture (the
“Guarantors”).  The Subsidiary Guarantee is the general, unsecured,
      senior obligation of each Guarantor.

     

    Except
      as
      described below, and except as provided in Section 10.15(g) of the Indenture,
      the Securities of this series are not redeemable until June 15,
      2011.  On and after June 15, 2011, the Company may redeem all or a
      part of the Securities of this series, from time to time upon not less than
      30
      nor more than 60 days’ notice, at the following Redemption Prices (expressed as
      a percentage of principal amount) plus accrued and unpaid interest on
      the Securities of this series to be redeemed to the applicable Redemption Date
      (subject to the right of Holders of record on the relevant record date to
      receive interest due on the relevant Interest Payment Date), if redeemed during
      the twelve-month period beginning on June 15 of the years indicated
      below:

     

    
      	
              Year                    

            	 	
              Redemption
                Price

            
	 	 
	
              2011

            	
              103.875%

            
	
              2012

            	
              101.938%

            
	
              2013
                and thereafter

            	
              100.000%

            

    

    

    The
      Securities of this series will also be redeemable, in whole or in part, at
      the
      Company’s option at any time or from time to time, prior to June 15, 2011, at
      the applicable Make-Whole Price (as defined below), in accordance with the
      provisions of the Indenture.

     

    “Make-Whole
      Price” with respect to any Securities of this series to be redeemed, means
      an amount equal to the greater of:

     

    (1)         100%
      of the principal amount of such Securities; and

     

    (2)         the
      sum of the present values of (a) the Redemption Price of such Securities at
      June
      15, 2011 (as set forth above) and (b) the remaining scheduled payments of
      interest from the Redemption Date to June 15, 2011 (not including any portion
      of
      such payments of interest accrued as of the Redemption Date) discounted back
      to
      the Redemption Date on a semi-annual basis (assuming a 360-day year consisting
      of twelve 30-day months) at the Treasury Rate (as defined below) plus
      50 basis points;

     

    plus,
      in the case of both (1) and (2), accrued and unpaid interest on such Securities
      to the Redemption Date.  Unless the Company defaults in payment of the
      Make-Whole Price, on and after the applicable Redemption Date, interest will
      cease to accrue on the Securities of this series to be redeemed.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    “Comparable
      Treasury Issue” means, with respect to Securities of this series to be
      redeemed, the U.S. Treasury security selected by an Independent Investment
      Banker as having a maturity most nearly equal to the period from the Redemption
      Date to June 15, 2011, at the time of selection and in accordance with customary
      financial practice, in pricing new issues of corporate debt securities;
provided if such period is less than one year, then the U.S. Treasury
      security having a maturity of one year shall be used.

     

    “Comparable
      Treasury Price” means, with respect to any Redemption Date, (1) the average
      of four Reference Treasury Dealer Quotations for such Redemption Date, after
      excluding the highest and lowest of such Reference Treasury Dealer Quotations,
      or (2) if the Trustee obtains fewer than four such Reference Treasury Dealer
      Quotations, the average of all such Reference Treasury Dealer
      Quotations.

     

    “Independent
      Investment Banker” means JPMorgan Securities Inc. or Lehman Brothers Inc.
      and their respective successors, at the Company’s option, or, if such firms or
      the successors, if any, to such firms, as the case may be, are unwilling or
      unable to select the Comparable Treasury Issue, an independent investment
      banking institution of national standing appointed by the Company.

     

    “Reference
      Treasury Dealer” means JPMorgan Securities Inc. or Lehman Brothers Inc. at
      the Company’s option, and three additional primary U.S. government securities
      dealers in New York City (each a “Primary Treasury Dealer”) selected by
      the Company, and its successors (provided, however, that if
      any such firm or any such successor, as the case may be, shall cease to be
      a
      primary U.S. government securities dealer in New York City, the Company shall
      substitute therefor another Primary Treasury Dealer).

     

    “Reference
      Treasury Dealer Quotations” means, with respect to each Reference Treasury
      Dealer and any Redemption Date, the average, as determined by the Trustee,
      of
      the bid and asked prices for the Comparable Treasury Issue (expressed in each
      case as a percentage of its principal amount) quoted in writing to the Trustee
      by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the
      third
      Business Day preceding such Redemption Date.

     

    “Treasury
      Rate” means, with respect to any Redemption Date, (1) the yield, under the
      heading which represents the average for the immediately preceding week,
      appearing in the most recently published statistical release designated
“H.15(159)” or any successor publication that is published weekly by the Board
      of Governors of the Federal Reserve System and that establishes yields on
      actively traded U.S. Treasury securities adjusted to constant maturity under
      the
      caption “Treasury Constant Maturities,” for the maturity corresponding to the
      Comparable Treasury Issue (if no maturity is within three months before or
      after
      the stated maturity, yields for the two published maturities most closely
      corresponding to the Comparable Treasury Issue shall be determined, and the
      Treasury Rate shall be interpolated or extrapolated from such yields on a
      straight-line basis, rounding to the nearest month) or (2) if such release
      (or
      any successor release) is not published during the week preceding the
      calculation date or does not contain such yields, the rate per annum equal
      to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      calculated using a price for the Comparable Treasury Issue (expressed as a
      percentage of its principal amount) equal to the Comparable Treasury Price
      for
      such Redemption Date.  The Treasury Rate shall be calculated on the
      third Business Day preceding the Redemption Date.

     

    The
      notice of redemption with respect to the foregoing redemption need not set
      forth
      the Make-Whole Price but only the manner of calculation thereof.  The
      Company will notify the Trustee of the Make-Whole Price with respect to any
      redemption promptly after the calculation, and the Trustee shall not be
      responsible for such calculation.

     

    Prior
      to
      June 15, 2010, the Company may on any one or more occasions redeem up to 35%
      of
      the principal amount of the Securities of this series, which may include
      Additional Notes (as defined in the Supplemental Indenture), with all or a
      portion of the net cash proceeds of one or more Equity Offerings at a Redemption
      Price equal to 107.750% of the principal amount thereof, plus accrued
      and unpaid interest on the Securities of this series to be redeemed to the
      Redemption Date (subject to the right of Holders of record on the relevant
      record date to receive interest due on the relevant Interest Payment Date);
      provided that:

     

    (1)         at
      least 65% of the aggregate principal amount of the Securities of this series
      issued and Outstanding on the Issue Date, remains Outstanding after each such
      redemption; and

     

    (2)         the
      redemption occurs within 180 days after the closing of such Equity
      Offering.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    Notice
      of
      any redemption upon an Equity Offering may be given prior to the completion
      of
      the related Equity Offering, and any such redemption or notice may at the
      Company’s discretion, be subject to one or more conditions precedent, including,
      but not limited to completion of the related Equity Offering.

     

    In
      the
      event of redemption of this Security in part only, a new Security or Securities
      of this series and of like tenor for the unredeemed portion hereof will be
      issued in the name of the Holder hereof upon the cancellation
      hereof.

     

    If
      an
      Event of Default with respect to Securities of this series shall occur and
      be
      continuing, the principal of the Securities of this series may be declared
      due
      and payable in the manner and with the effect provided in the
      Indenture.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Company and
      the Guarantors and the rights of the Holders of the Securities of each series
      to
      be affected under the Indenture at any time by the Company and the Guarantors
      and the Trustee with the consent of the Holders of a majority in principal
      amount of the Securities at the time Outstanding of each series to be affected
      (with each series voting as a separate class).  The Indenture also
      contains provisions permitting the Holders of specified percentages in principal
      amount of the Securities of each series at the time Outstanding, on behalf
      of
      the Holders of all Securities of such series, to waive compliance by the Company
      and the Guarantors with certain provisions of the Indenture and certain past
      defaults under the Indenture and their consequences.  Any such consent
      or waiver by the Holder of this Security shall be conclusive and binding upon
      such Holder and upon all future Holders of this Security and of any Security
      issued upon the registration of transfer hereof or in exchange herefor or in
      lieu hereof, regardless of whether notation of such consent or waiver is made
      upon this Security.

     

    No
      reference herein to the Indenture and no provision of this Security or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of (and premium, if any) and interest
      on
      this Security at the times, place(s) and rate, and in the coin or currency,
      herein prescribed.

     

    [If
      a Global Security, insert—This Global Security or portion hereof
      may not be exchanged for Definitive Securities of this series except in the
      limited circumstances provided in the Indenture.  The holders of
      beneficial interests in this Global Security will not be entitled to receive
      physical delivery of Definitive Securities except as described in the Indenture
      and will not be considered the Holders thereof for any purpose under the
      Indenture.]

     

    [If
      a Definitive Security, insert—As provided in the Indenture and
      subject to certain limitations therein set forth, the transfer of this Security
      is registerable in the Security Register, upon surrender of this Security for
      registration of transfer at the office or agency of the Company, or, subject
      to
      any laws or regulations applicable thereto and to the right of the Company
      (limited as provided in the Indenture) to rescind the designation of any such
      transfer agent, at the offices of _______________ in ________________, or at
      such other offices or agencies as the Company may designate, duly endorsed
      by,
      or accompanied by a written instrument of transfer in form satisfactory to
      the
      Company and the Security Registrar duly executed by, the Holder hereof or his
      attorney duly authorized in writing, and thereupon one or more new Securities
      of
      this series and of like tenor, of authorized denominations and for the same
      aggregate principal amount, will be issued to the designated transferee or
      transferees.]

     

    The
      Securities of this series are issuable only in registered form without coupons
      in denominations of U.S. $2,000 and any integral multiple of $1,000 in excess
      thereof.  As provided in the Indenture and subject to certain
      limitations therein set forth, Securities of this series are exchangeable for
      a
      like aggregate principal amount of Securities of this series and of like tenor
      of a different authorized denomination, as requested by the Holder surrendering
      the same.

     

    No
      service charge shall be made for any such registration of transfer or exchange,
      but the Company may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

     

    Prior
      to
      due presentment of this Security for registration of transfer, the Company,
      any
      Guarantor, the Trustee and any agent of the Company, a Guarantor or the Trustee
      may treat the Person in whose name this Security is registered as the owner
      hereof for all purposes, regardless of whether this Security be overdue, and
      none of the Company, the Guarantors, the Trustee nor any such agent shall be
      affected by notice to the contrary.

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    No
      recourse under or upon any obligation, covenant or agreement of or contained
      in
      the Indenture or of or contained in any Security, or the Subsidiary Guarantee
      endorsed thereon, or for any claim based thereon or otherwise in respect
      thereof, or in any Security or in the Subsidiary Guarantee, or because of the
      creation of any indebtedness represented thereby, shall be had against any
      incorporator, shareholder, member, officer, manager or director, as such, past,
      present or future, of the Company or any Guarantor or of any successor Person,
      either directly or through the Company or any Guarantor or any successor Person,
      whether by virtue of any constitution, statute or rule of law, or by the
      enforcement of any assessment, penalty or otherwise; it being expressly
      understood that all such liability is hereby expressly waived and released
      by
      the acceptance hereof and as a condition of, and as part of the consideration
      for, the execution of the Indenture and the issuance of the
      Securities.

     

    The
      Indenture provides that the Company and the Guarantors (a) will be discharged
      from any and all obligations in respect of the Securities (except for certain
      obligations described in the Indenture), or (b) need not comply with
      certain restrictive covenants of the Indenture, in each case if the Company
      or a
      Guarantor deposits, in trust, with the Trustee money or U.S. Government
      Obligations (or a combination thereof) which through the payment of interest
      thereon and principal thereof in accordance with their terms will provide money,
      in an amount sufficient to pay all the principal of and interest on the
      Securities, but such money need not be segregated from other funds except to
      the
      extent required by law.

     

    Except
      as
      otherwise defined herein, all terms used in this Security which are defined
      in
      the Indenture shall have the meanings assigned to them in the
      Indenture.

     

    This
      Security shall be governed by and construed in accordance with the laws of
      the
      State of New York.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    [If
      a Definitive Security, insert as a separate
      page—

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
      _______________________________________________________________ (Please Print
      or
      Typewrite Name and Address of Assignee) the within instrument of PLAINS
      EXPLORATION & PRODUCTION COMPANY and does hereby irrevocably constitute and
      appoint ___________________ Attorney to transfer said instrument on the books
      of
      the within-named Company, with full power of substitution in the
      premises.

     

    
      	
              Please
                Insert Social Security or Other Identifying Number of
                Assignee:

            
	 	 	 
	 	 	 
	 	 	 	 
	
              Dated:

            	 	 	 
	 	
              (Signature)

            
	 	 
	
              Signature
                Guarantee:

            	 
	 	
              (Participant
                in a Recognized Signature

              Guaranty
                Medallion Program)

            

    

    

     

    NOTICE:
      The signature to this assignment must correspond with the name as written upon
      the face of the within instrument in every particular, without alteration or
      enlargement or any change whatever.]

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

    OPTION
      OF
      HOLDER TO ELECT REPURCHASE

     

    If
      you
      want to elect to have this Security purchased by the Company pursuant to Section
      10.12 or 10.15 of the Indenture, check the appropriate box below:

     

     Section
      10.12                                      
Section 10.15

     

    If
      you
      want to elect to have only part of the Security purchased by the Company
      pursuant to Section 10.12 or Section 10.15 of the Indenture, state the amount
      you elect to have purchased:

     

    $_________________

     

    
      	
              Date:

            	 

    

    

     

    
      	
              Your
                Signature:

            	 
	 	
              (Sign
                exactly as your name appears on the face of this
                Security)

            
	
               

              Tax
                Identification No.:

            	 

    

    

     

    
      	
              Signature
                Guarantee*:

            	 

    

    

     

    
      	
              *

            	
              Participant
                in a recognized Signature Guarantee Medallion Program (or other signature
                guarantor acceptable to the
                Trustee).

            

    

     

    
      
        A-8

      

      
        
        

        
          

        

      

      
        
        

      

    

    [If
      a Global Security, insert as a separate page—

     

    SCHEDULE
      OF INCREASES OR DECREASES

     

    IN
      GLOBAL SECURITY

     

    The
      following increases or decreases in this Global Security have been
      made:

     

    
      	
               

               

               

               

              Date
                of Exchange

            	
              Amount
                of Decrease in Principal Amount of this Global
                Security

            	
              Amount
                of Increase in Principal Amount of this

              Global
                Security

            	
              Principal
                Amount of this Global Security following such
                decrease

              (or
                increase)

            	
               

              Signature
                of authorized officer of Trustee or
                Depositary]

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

    

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    SUBSIDIARY
      GUARANTEE NOTATION

     

    Each
      of
      the Guarantors (which term includes any successor Person in such capacity under
      the Indenture), has fully, unconditionally and absolutely guaranteed, to the
      extent set forth in the Indenture and subject to the provisions in the
      Indenture, the due and punctual payment of the principal of, and premium, if
      any, and interest on the Securities of this series and all other amounts due
      and
      payable under the Indenture and the Securities of this series by the
      Company.

     

    The
      obligations of the Guarantors to the Holders of Securities of this series and
      to
      the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
      set forth in Article Fourteen of the Indenture and reference is hereby made
      to
      the Indenture for the precise terms of the Subsidiary Guarantee.

     

    

      
        	 	
                Guarantors:

              
	 	 
	 	
                ARGUELLO
                  INC.

              
	 	
                BROWN
                  PXP PROPERTIES, LLC

              
	 	
                NUEVO
                  GHANA INC.

              
	 	
                NUEVO
                  INTERNATIONAL INC.

              
	 	
                NUEVO
                  OFFSHORE COMPANY

              
	 	
                NUEVO
                  RESOURCES INC.

              
	 	
                PACIFIC
                  INTERSTATE OFFSHORE COMPANY

              
	 	
                PLAINS
                  ACQUISITION CORPORATION

              
	 	
                PLAINS
                  LOUISIANA INC.

              
	 	
                PLAINS
                  RESOURCES INC.

              
	 	
                PLAINS
                  RESOURCES INTERNATIONAL INC.

              
	 	
                PXP
                  BRUSH CREEK LLC

              
	 	 	
                By:

              	
                Plains
                  Resources Inc., its sole member

              
	 	
                PXP
                  CV PIPELINE LLC

              
	 	 	
                By:

              	
                Plains
                  Resources Inc., its sole member

              
	 	
                PXP
                  EAST PLATEAU LLC

              
	 	 	
                By:

              	
                Plains
                  Resources Inc., its sole member

              
	 	
                PXP
                  GULF COAST INC.

              
	 	
                PXP
                  HELL’S GULCH LLC

              
	 	 	
                By:

              	
                Plains
                  Resources Inc., its sole member

              
	 	
                PXP
                  LOUISIANA L.L.C.

              
	 	 	
                By:

              	
                Plains
                  Louisiana Inc., its sole member

              
	 	
                PXP
                  PERMIAN INC.

              
	 	
                PXP
                  PICEANCE LLC

              
	 	 	
                By:

              	
                Plains
                  Resources Inc., its sole member

              
	 	
                PXP
                  TEXAS INC.

              
	 	
                PXP
                  TEXAS LIMITED PARTNERSHIP

              
	 	 	
                By:

              	
                PXP
                  Texas Inc., its general partner

              
	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	 	 
	 	
                PXP
                  DEEPWATER L.L.C.

              
	 	 	
                By:

              	
                Plains
                  Exploration & Production Company, its sole member

              
	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 

      

    

     

    
      
        
        

      

      
        A-10

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