Document:

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EXHIBIT 10.28

                          PACIFIC ENERGY RESOURCES LTD.
                             1065 WEST PIER E STREET
                            LONG BEACH, CA 90802-1015

                                  June 29, 2006

Laurus Master Fund, Ltd.
c/o M&C Corporate Services Limited
P.O. Box 309 GT
Ugland House
George Town
South Church Street
Grand Cayman, Cayman Islands

Gentlemen:

             Laurus Master Fund, Ltd. ("Laurus") has agreed to provide certain
financial accommodations to Carneros Energy, Inc., a Delaware corporation
("Carneros"), and Gotland Oil, Inc., a Texas corporation ("Gotland", and
collectively with Carneros, the "Companies" and each a "Company"), pursuant to a
Securities Purchase Agreement, dated as of May 31, 2006 (as amended, restated or
otherwise modified from time to time, the "Purchase Agreement"), among the
Companies, Carneros Acquisition Corp., a Delaware corporation ("Holdings"), and
Laurus. As a condition to Laurus' agreement to fund the transactions
contemplated by the Purchase Agreement notwithstanding the existence of certain
defects and irregularities of title relating to the oil and gas properties owned
by the Companies as more specifically set forth in EXHIBIT A hereto (the "Title
Exceptions"), Pacific Energy Resources Ltd. ("Pacific"), the indirect parent of
the Companies, has agreed to enter into this letter agreement (as amended,
modified and supplemented from time to time, this "Agreement") providing, among
other things, for certain indemnification rights to Laurus as more specifically
set forth herein.

             In consideration of Laurus' agreement to fund the transactions
contemplated by the Purchase Agreement notwithstanding the existence of the
Title Exceptions, Pacific hereby agrees to indemnify, protect, defend and hold
harmless Laurus from and against any and all Claims (as defined below) relating
in any manner whatsoever to the Title Exceptions. Pacific hereby acknowledges
that the Companies are indirect subsidiaries of Pacific, and as consideration
for entering into this Agreement, Pacific shall derive substantial direct and
indirect benefits from the transactions contemplated by the Purchase Agreement.

             In connection with the foregoing, the parties hereto agree as
follows:

         1. As used herein, "Claim" shall mean any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, actions, proceedings, costs, disbursements and/or expenses
(including, without limitation, reasonable attorneys', consultants' and experts'
fees, expenses and disbursements) of any kind or nature whatsoever by whomsoever
asserted which may now or at any time hereafter be imposed upon, incurred by or
asserted against Laurus and/or the properties, in each case, to which the Title
Exceptions relate (the "Properties").

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         2. Pacific hereby agrees, but only to the extent of $6,188,995 or such
lesser amount as would be required to indefeasibly pay in full all obligations
and liabilities (the "Obligations") of Holdings and the Companies to Laurus
under the Purchase Agreement and the Related Agreements (as defined in the
Purchase Agreement), in each case together with all fees and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
relating or incidental to the enforcement or protection of Laurus' rights
hereunder (the "Indemnification Cap"), to indemnify, protect, defend and hold
harmless Laurus from and against any and all Claims.

         3. If any of the Title Exceptions shall at any time be cured to the
satisfaction of Laurus, then the Indemnification Cap shall be reduced by an
amount equal to the value attributed to the Title Exception which has been so
cured as set forth on EXHIBIT A hereto.

         4. (a) Promptly after Laurus learns of any Claim or the commencement of
any action, suit or proceeding in respect of any Claim, Laurus shall notify
Pacific thereof in writing; but the failure by Laurus promptly to give such
notice shall not relieve Pacific of any liability which it may have to Laurus
hereunder.

             (b) If a Claim arises or is in existence at a time during which
Laurus is not exercising its rights as a secured creditor with respect to any of
the properties set forth on Exhibit B hereto (the "Secured Creditor Remedies"),
within sixty (60) days of its receipt of the notice of such Claim as specified
in clause (a), then Pacific shall deposit into an escrow account held by Laurus'
attorneys for the benefit of Laurus, pursuant to an escrow agreement
satisfactory to the escrow agent, the amount attributable to such Claim as set
forth on EXHIBIT B hereto (or such lesser amount as may be agreed to in writing
by Laurus) (the "Escrow Amount"). Upon the issuance of a final non-appealable
judgment of a court of competent jurisdiction with respect to the validity of
such Claim or disposition of such Claim by a bona fide settlement or compromise
of such Claim (or other resolution satisfactory to and agreed to in writing by
Laurus), the Escrow Amount shall be released from escrow as follows: (i) if such
Claim is found to be valid or such Claim is decided to be valid by a bona fide
settlement or compromise, then the Escrow Amount shall be paid to Laurus or (ii)
if such Claim is found to be invalid, the Escrow Amount shall be returned to
Pacific, but such return to Pacific shall not relieve Pacific of its
indemnification obligations hereunder unless and until the Title Exceptions
shall be cured to Laurus' satisfaction. All amounts received by Laurus in
respect of the aforementioned Claims shall be applied by Laurus to the
obligations and liabilities owing by Holdings and the Companies to Laurus (the
"Obligations") in such order as Laurus shall elect.

             (c) If a Claim arises or is in existence at a time during which
Laurus is exercising its Secured Creditor Remedies, then notwithstanding the
provisions of clause (b), Pacific shall immediately pay to Laurus upon demand by
Laurus the amount attributable to such Claim as set forth on EXHIBIT B hereto.
All amounts received by Laurus in respect of the aforementioned Claims shall be
applied by Laurus to the Obligations in such order as Laurus shall elect.

         5. (a) Pacific acknowledges that Laurus, Holdings and the Companies may
at any time and from time to time, either before or after the maturity thereof;
without notice to or further consent of Pacific, extend the time of payment of,
exchange or surrender any collateral for, or renew or extend any of, the
Obligations owing by Holdings and the Companies to Laurus or increase or
decrease the interest rate thereon, and Laurus may also make any agreement with
Holdings, the Companies or any other person or entity liable on any of the
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement among Laurus, Holdings,
the Companies or any such other person or entity, or make any election of rights
Laurus may deem desirable under the United States Bankruptcy Code, as amended
(the "Code"), or any other federal or state bankruptcy, reorganization,
moratorium or insolvency law relating to or affecting the enforcement of
creditors' rights generally (each of the Code and any of the foregoing, an
"Insolvency Law") without in any way impairing or affecting this Agreement.

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             (b) To the extent any right of subrogation may exist, Pacific
hereby waives such right to be subrogated to any of the rights of Laurus against
Holdings or any Company or any collateral security held by Laurus for the
payment of the Obligations and Pacific shall not seek or be entitled to any
contribution or reimbursement from Holdings and/or any Company until such time
as all Obligations shall have been indefeasibly paid in full.

             (c) The obligations of Pacific under this Agreement shall be
absolute and unconditional under any and all circumstances, and shall not be to
any extent or in any way released, discharged, terminated, impaired or otherwise
affected except by performance in full. Pacific hereby knowingly accepts the
full range of risk encompassed within this Agreement. Pacific hereby irrevocably
waives any and all suretyship defenses and any rights or benefits it may possess
under Sections 365(b)(1), 365(c)(2) and 365(e)(2) of the Code in the event a
court of competent jurisdiction were to find in any insolvency, bankruptcy,
liquidation, reorganization, readjustment, composition, arrangement, compromise,
plan or similar proceeding relating to Holdings and/or any Company that this
Agreement is an executory contract within the meaning of Section 365 of the Code
(and Pacific hereby acknowledges that this Agreement shall constitute an
executory contract for purposes of Section 365 of the Code). Notwithstanding the
foregoing, Pacific shall not be precluded from asserting as a defense against
any claim made against it upon hereunder that it has fully performed such
obligation in accordance with the terms of this Agreement.

         6. This Agreement shall continue to be effective, or be reinstated
automatically, as the case may be, if at any time payment, in whole or in part,
of any of the obligations indemnified against hereby is rescinded or otherwise
must be restored or returned by Laurus (whether as a preference, fraudulent
conveyance or otherwise) upon or in connection with the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pacific or any other person, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, Pacific or any other person or for a
substantial part of Pacific's or any of such other person's property, as the
case may be, or otherwise, all as though such payment had not been made. Pacific
further agrees that in the event any such payment is rescinded or must be
restored or returned, all costs and expenses (including, without limitation,
legal fees and expenses) incurred by or on behalf of Laurus in defending or
enforcing such continuance or reinstatement, as the case may be, shall
constitute costs of enforcement which are covered by Pacific's indemnification
obligations under this Agreement

         7. Each of Pacific and Petrocal Acquisition Corp. ("Petrocal")
acknowledges, ratifies and confirms that the defined term "Obligations" under
the Master Security Agreement, dated as of December 23, 2005 (as amended,
modified or supplemented from time to time), among Pacific, Petrocal and Laurus,
and the defined term "Indebtedness" under the Pledge Agreement, dated as of
December 23, 2005 (as amended, modified, or supplemented from time to time),
between Pacific and Laurus, include, without limitation, all obligations and
liabilities of Pacific to Laurus under this Agreement and all other obligations
and liabilities of Pacific to Laurus (including interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, whether or not a claim for post-filing or
post-petition interest is allowed or allowable in such proceeding), whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent (collectively, the "Obligations").

         8. Each of Pacific and Petrocal acknowledges, ratifies and confirms (i)
its grant to Laurus of a security interest and lien in its personal property
assets as more specifically set forth in the Securities Purchase Agreement,
dated as of December 23, 2005 (as amended, restated or otherwise modified from
time to time, the "Pacific Purchase Agreement"), between Pacific and Laurus, and
the Related Agreements (as defined in the Pacific Purchase Agreement) (the
"Security Interest Grants") and (ii) that the Security Interest Grants secure
all Obligations.

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         9. Except as herein provided, this Agreement shall be binding upon and
inure to the benefit of Pacific, Laurus and their respective heirs,
representatives, successors and assigns. Notwithstanding the foregoing, Pacific,
without the prior written consent of Laurus in each instance, may not assign,
transfer or set over to another, in whole or in part, all or any part of its
benefits, rights, duties and obligations hereunder.

         10. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO NEW
YORK'S PRINCIPLES OF CONFLICTS OF LAW).

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                  This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original. Said counterparts shall constitute
but one and the same instrument and shall be binding upon, and shall inure to
the benefit of, each of the undersigned individually as fully and completely as
if all had signed but one agreement.

                                        Very truly yours,

                                        PACIFIC ENERGY RESOURCES LTD.

                                        By: /S/ DARREN KATIC
                                            ------------------------------------
                                            Name: Darren Katic
                                            Title: President

The foregoing is hereby accepted and
agreed to as of the date set forth above:

LAURUS MASTER FUND, LTD.

By: /S/ EUGENE GRIN
    --------------------------------
    Name: Eugene Grin
    Title: Director

PETROCAL ACQUISITION CORP.

By: /S/ DARREN KATIC
    --------------------------------
    Name: Darren Katic
    Title: President

                                      -5-<PAGE>

EXHIBIT 10.29

________________________________________________________________________________

                                                      OCS-P 0300; 0301; AND 0306

                                                 CHANNEL ISLANDS AREA MAP NO. 6C

                                            BLOCKS 33N 37W; 33N 36W; AND 32N 36W

                                                         RIGHT-OF-WAY OCS-P 0547

                SUPPLEMENTAL BOND FOR DECOMMISSIONING LIABILITIES
                                 TRUST AGREEMENT
                               (per 30 CFR 256.52)

         This Supplemental Bond For Decommissioning Liabilities Trust Agreement
(as amended, supplemented, or restated from time to time, this "AGREEMENT"), is
dated effective as of March 1, 2007, and is entered into among the following
parties:

         U.S. BANK NATIONAL ASSOCIATION (in its capacity as trustee, together
with its successors and substitutes in trust pursuant to the terms hereof, the
"TRUSTEE");

         PACIFIC ENERGY RESOURCES LTD. (the "SETTLOR"); and

         The United States of America, acting by and through the MINERALS
MANAGEMENT SERVICE OF THE UNITED STATES DEPARTMENT OF THE INTERIOR (the
"BENEFICIARY").

         WHEREAS, in order to fulfill certain obligations and conditions
described below, the Settlor and the Beneficiary have entered into this
Agreement;

         WHEREAS, the Beneficiary has determined that the estimate of
abandonment liability for those oil and gas leases bearing Serial Nos. OCS-P
0300, 0301 and 0306 (the "OCS LEASES") and associated platforms, wells,
equipment and pipelines, specifically Platforms Elly, Ellen and Eureka, and
Pipeline Right-of-Way OCS-P 0547, is $126,691,000.00 (the "BETA ABANDONMENT
LIABILITY");

         WHEREAS, those certain record title interests in the OCS Leases that
have been acquired by the Settlor are referred to herein as the "BETA
INTERESTS";

         WHEREAS, the interest in the federal pipeline right-of-way bearing
Serial No. OCS-P 0547 now held by the San Pedro Bay Pipeline Company ("SPBPC")
is referred to herein as the "SPBPCO INTEREST";

         WHEREAS, the Settlor has agreed to deliver to the Trustee a U.S.
Treasury Note in the original principal amount of $90,000,000.00, which with
reinvestment of the earnings from the Note, its replacement Notes and if
necessary additional capital contributions shall be equal to $126,700,000.00 on

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March 31, 2014,which is deemed by the Beneficiary as sufficient to serve as
security for the Beta Abandonment Liability (the "SUPPLEMENTAL BOND TREASURY
NOTE");

         WHEREAS, the Settlor has established a trust account designated as
"Pacific Energy Resources Ltd. Decommissioning Liabilities Trust Account,"
having account number 104821002 maintained with the Trustee (the "TRUST
ACCOUNT"), which is a lease specific abandonment account pursuant to the
Beneficiary's rules and regulations.

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                  DEFINED TERMS

         1.1 TERMS DEFINED ABOVE. As used in this Agreement, the terms
"Agreement", "Beneficiary", "Beta Abandonment Liability", "Beta Interests",
"SPBPCo Interests", "Supplemental Bond Treasury Note", "Settlor", "Trust
Account", and "Trustee" and those other terms or words in the recitals of this
Agreement are defined above.

         1.2 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings, unless the context otherwise requires:

         "TRUST FUNDS" shall mean the Trust Account, the Supplemental Bond
Treasury Note and all other funds that may be, from time to time, deposited into
the Trust Account by the Settlor, including any interest earned on such funds
and other property in the Trust Account, and all certificates, instruments, and
documents representing, evidencing, or issued in connection therewith, and all
proceeds thereof.

         "PREDECESSORS" shall have the meaning given to it in SECTION 2.6(c) of
this Agreement.

         "PROPERTY" or "PROPERTIES" shall mean the OCS Leases and associated
platforms, wells, equipment and pipelines, specifically, Platforms Elly, Ellen
and Eureka and, including without limitation, the Pipeline Right-of-Way bearing
Serial No. OCS-P 0547.

         "MMS COMPLIANCE DOCUMENTS" shall mean all assignments of the OCS Leases
to the Settlor comprising the Beta Interests and such other forms and documents
required by the Beneficiary in connection therewith.

         1.3 OTHER DEFINITIONAL PROVISIONS.

         (a) The words "hereby", "herein", "herein after", "herein above",
"herein below", "hereof", "hereto" and "hereunder" when used in this Agreement
shall refer to this Agreement as a whole and not to any particular article,
section or provision of this Agreement.

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         (b) References to any article, section or exhibit refer to, this
Agreement unless otherwise specified.

                                   ARTICLE II

                              DECLARATION OF TRUST

         2.1 APPOINTMENT OF TRUSTEE. The Settlor and the Beneficiary hereby
appoint U.S. BANK NATIONAL ASSOCIATION as the trustee under this Agreement, and
the Trustee hereby accepts such appointment.

         2.2 TRANSFER OF FUNDS. The Settlor shall, on the date of approval of
the MMS Compliance Documents and the acceptance by the Beneficiary approving the
Settlor as the designated unit operator for the Beta Unit, or immediately
thereafter, deposit the Supplemental Bond Treasury Note into the Trust Account.
Any and all funds so transferred into the Trust Account are deemed to be Trust
Funds, are subject to this Agreement, and shall be held by the Trustee pursuant
to the terms of this Agreement.

         2.3 DECLARATION OF TRUST. The Trustee declares that it will hold the
Trust Funds in trust on behalf of the Beneficiary and for the use and benefit of
the Beneficiary pursuant to the terms of this Agreement.

         2.4 CONTROL AND ADMINISTRATION OF TRUST FUNDS.

         (a) Except as expressly provided in this Agreement (including upon
termination of this Agreement pursuant to SECTION 5.11), the Trustee shall not
permit the Settlor to withdraw or transfer any of the Trust Funds from the Trust
Account. The Trustee shall not permit the Beneficiary to withdraw or transfer
from the Trust Account any of the Trust Funds other than as expressly provided
for herein. The Trustee shall comply with all orders and directions with respect
to the Trust Funds from the Beneficiary and the Predecessors without further
consent from the Settlor; PROVIDED that the Trustee shall not comply with any
orders or direction from the Predecessors unless the Beneficiary consents
thereto.

         (b) The Supplemental Bond Treasury Note shall remain invested in such
form in accordance with the terms thereof. The Settlor and the Beneficiary
direct the Trustee to invest all other Trust Funds in interest bearing cash
equivalents. In the absence of written, joint instructions, such interest and
any other Trust Funds will be placed in a U.S. Bank National Association FDIC
Insured Money Market Account. For tax reporting and withholding purposes, all
income earned on investments of the Trust Funds shall be allocable to the
Settlor.

         2.5 PERIODIC ACCOUNT STATEMENTS; FURTHER INFORMATION. The Trustee shall
provide to the Settlor and the Beneficiary monthly statements detailing all
transactions affecting the Trust Funds and, promptly following the written
request of the Settlor and the Beneficiary for any information regarding the
Trust Funds that the Settlor and the Beneficiary may reasonably request.

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         2.6 REPRESENTATIONS AND WARRANTIES.

         (a) The Trustee represents and warrants to the Settlor and the
Beneficiary that the Trustee has not received any prior notice of any assignment
of, grant of security interest in, pledge of or claim against any of, the Trust
Funds, except as set forth in SECTION 2.6(c).

         (b) The Settlor represents and warrants to the Trustee and the
Beneficiary that the Settlor has not received any prior notice of any
assignment, grant of security interest in, pledge of or claim against any of the
Trust Funds, except as set forth in SECTION 2.6(c).

         (c) The Settlor has granted security interests in the Supplemental Bond
Treasury Note to Aera Energy LLC ("AERA"), the former operator of the Beta
Interests, a former working interest owner of the OCS Leases and the former
lessee of the SPBPCo Interests, and to SWEPI LP ("SWEPI"; together with Aera,
collectively called the "PREDECESSORS"), a former working interest owner of the
OCS Leases, in each case to secure payment and performance of the Beta
Abandonment Liability, which security interests are expressly subordinate in all
respects to the interests of the Beneficiary under this Agreement.

         2.7 WAIVER OF RIGHT TO SET-OFF. The Trustee hereby waives all claims
and rights of set-off and banker's and other possessory liens against the Trust
Funds. The Trustee agrees not to set-off or reduce the amounts to be paid on the
Trust Funds by reason of any liability or obligation that the Settlor or any
other person or entity may have to the Trustee and acknowledges and agrees that
its obligation to transfer all amounts owing with respect to the Trust Funds in
accordance with the this Agreement and the instructions of the Beneficiary and
the Settlor not in conflict with the terms hereof is absolute and unconditional.

         2.8 FEES OF TRUSTEE. All usual and customary fees, expenses and other
charges as set forth on SCHEDULE "A" attached hereto shall be the responsibility
of the Settlor, and the Trustee shall have no priority with respect to the Trust
Funds for such purposes and shall not be entitled to any compensation from the
Beneficiary in performing this Agreement.

         2.9 BOOKS, RECORDS AND TAX RETURNS. The Trustee shall maintain
appropriate books and records relating to the receipt and disbursement of all
Trust Fund monies. The Trustee agrees to sign and/or file all returns with
respect to taxes as the Settlor may cause to be prepared with respect to the
Trust Funds and direct the Trustee to sign and/or file. The Trustee shall have
no liability for any tax due and payable in connection with this Agreement
except for taxes based upon or measured by amounts paid to the Trustee as fees
or compensation under this Agreement. All taxes due on interest earned with
respect to the Trust Funds are the responsibility of the Settlor, and shall not
be paid from the Trust Funds.

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         2.10 SCOPE OF UNDERTAKING. The duties and responsibilities of the
Trustee in connection with this Agreement will be purely ministerial and limited
to the duties and responsibilities expressly set forth in this Agreement. The
Trustee is not a principal, participant or beneficiary in any transaction
underlying this Agreement and will have no duty to inquire beyond the terms and
provisions hereof. The Trustee will not be required to exercise any discretion
hereunder and will have no responsibility with respect to investment or
management of Trust Funds other than to act in accordance with the written
instructions (including SECTION 2.4(b) above). The Trustee will never be
required to use, advance, or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or the exercise of any of its
rights and powers hereunder.

         The Trustee may rely on, and will not be liable for acting or
refraining from acting upon, any written notice, instruction, request, or other
communication furnished to it pursuant to this Agreement and believed by it to
have been signed or presented by the proper party or parties.

         The Trustee is authorized, in its sole discretion, to disregard any and
all notices or instructions given by any other party hereto or by any other
person, firm or corporation, which is not a party to this Agreement, except only
(a) such notices or instructions as are herein provided for in this Agreement
and (b) orders or process of any federal court entered or issued with or without
jurisdiction.

         If any property or Trust Funds subject hereto are at any time attached,
garnished, or levied upon under any federal court order or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by a federal court order, or in case of any federal order,
judgment or decree shall be made or entered by federal court affecting such
property or any part hereof, then and in any of such events the Trustee is
authorized, in its sole discretion, to rely upon and comply with any such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it, PROVIDED that (unless otherwise ordered in such
order, writ, judgment or decree) the Trustee shall not take any action until
eleven (11) days after entry of such order, writ, judgment or decree, and if it
complies with any such order, writ, judgment or decree it shall not be liable to
any other party hereto or to any other person, firm or corporation by reason of
such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated; unless the
Trustee has received written notice that such order, writ, judgment or decree
has been stayed by court order pending appeal.

         The Trustee may rely, and shall be protected in acting or refraining
from acting, upon any instrument furnished to it hereunder and reasonably
believed by it to be genuine and reasonably believed by it to have been signed
or presented by the appropriate party or parties (including without limitation,
with respect to any party which is a corporation, any instrument purporting to
have been signed on its behalf by an authorized officer).

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         The Trustee shall make a reasonable effort to verify the validity and
genuineness of any documents mentioned in this SECTION 2.10. If the Trustee has
made such a reasonable effort, the Trustee shall not be responsible for the
sufficiency or accuracy, or the form, execution, validity or genuineness, of
documents or securities presented to it, nor shall it be responsible or liable
in any respect on account of the identity, authority or rights of any person
executing, depositing or delivering, or purporting to execute, deposit or
deliver any such document, security or endorsement or this Agreement, or on
account of or by reason of forgeries, false representations, or the exercise of
its discretion in any particular manner.

         The Trustee shall not be liable for any damage, loss, liability, or
delay caused by accidents, strikes, fire, flood, war, riot, equipment breakdown,
electrical or mechanical failure, acts of God or any cause which is reasonably
unavoidable or beyond its reasonable control.

         The Trustee may consult with Shipman & Goodwin or with other legal
counsel of its own choosing reasonably acceptable to the Settlor and the
Beneficiary who will not unreasonably withhold their consent to counsel, and
shall be entitled to advice of such legal counsel concerning all matters of this
Trust Agreement. The Trustee may act upon the opinion or advice of such legal
counsel in the exercise of its reasonable care.

         The Settlor hereby agrees to protect, defend, indemnify and hold
harmless the Trustee against and from any and all costs, losses, liabilities,
expenses (including counsel fees and expenses) and claims imposed upon or
asserted against the Trustee on account of any action taken or omitted to be
taken in connection with its acceptance of or performance of its duties and
obligations under this Agreement, except as a result of its gross negligence or
willful malfeasance, as well as the costs and expenses of defending itself
against any claim or liability arising out of or relating to this Agreement.
This indemnification shall survive the release, discharge, termination and/or
satisfaction of the Agreement. If the Settlor is required to make payment to the
Trustee with respect to any claims asserted under this SECTION 2.10, such
payment shall not be deducted from the Trust Funds, but shall be paid from the
Settlor's corporate resources.

         The Settlor and the Trustee acknowledge and agree that neither the
Beneficiary nor the Predecessors shall have any obligation to pay any fees,
costs or expenses of the Trustee or the Settlor under this Agreement, and
neither the Beneficiary nor the Predecessors has any obligation to indemnify or
hold harmless the Settlor or the Trustee under this Agreement.

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                                   ARTICLE III

                       RESIGNATION AND REMOVAL OF TRUSTEE:
                            APPOINTMENT OF SUCCESSORS

         3.1 RESIGNATION; REMOVAL; SUCCESSOR TRUSTEE. The Trustee or any
successor thereto may, with respect to the trust created hereby, resign at any
time without cause by giving at least ten (10) days' prior written notice to the
Settlor and the Beneficiary such resignation to be effective on the date of
appointment of a successor Trustee as hereinafter provided. In the case of the
resignation of the Trustee, the Settlor and the Beneficiary will appoint a
successor Trustee by written instrument signed by the Settlor and the
Beneficiary.

         In the event the Settlor and the Beneficiary shall not have appointed a
successor Trustee within ten (10) days after such resignation by the Trustee,
the Trustee will continue as Trustee and may, at the sole expense of the
Settlor, apply to a state or federal court in the State of California, having
jurisdiction (the "COURT"), to appoint a successor Trustee to act effective as
of the date specified by the Court until such time, if any, as a successor is
appointed by the Settlor and the Beneficiary as above provided. Any successor
Trustee so appointed by such Court will immediately and without further act be
superseded by any successor Trustee thereafter appointed by the Settlor and the
Beneficiary. In addition, the Settlor and the Beneficiary may at any time remove
the Trustee with or without cause by written notice to the Trustee signed by the
Settlor and the Beneficiary designating the effective date of any such removal
and the party to serve as successor Trustee. A successor Trustee hereunder will
be deemed the Trustee for all purposes hereof, and each reference herein to the
Trustee will thereafter be deemed to refer to such successor.

         3.2 ACCEPTANCE OF APPOINTMENT. Any successor Trustee, whether appointed
by the Court or by the Settlor and the Beneficiary, will execute and deliver to
its predecessor Trustee an instrument reasonably satisfactory to such
predecessor Trustee accepting the appointment, and thereupon such successor
Trustee, without further act, will become vested with all the estates,
properties, rights, powers, duties and trusts of the predecessor Trustee under
this Agreement with like effect as if the successor had been originally named as
the Trustee in this Agreement.

         Upon the written request of such successor Trustee, such predecessor
Trustee will execute and deliver an instrument reasonably satisfactory to such
successor Trustee transferring to the successor Trustee, all the estates,
properties, rights, powers and trusts of such predecessor Trustee, and such
predecessor Trustee will duly assign, transfer, deliver and pay over to such
successor Trustee any property or monies then held by such predecessor Trustee
which are subject to this Agreement.

         3.3 QUALIFICATIONS OF SUCCESSOR TRUSTEE. Any successor to the Trustee,
however appointed, will be a bank or trust company organized under the laws of
the United States or any jurisdiction thereof having (or, in the case of a
subsidiary or a bank holding company, its corporate parent shall have) a
combined capital and surplus of at least $500,000,000 and will be able to
perform the duties of the Trustee hereunder upon commercially reasonably or
customary terms.

                                       7

<page>

         3.4 MERGER OF TRUSTEE. Any corporation into which the Trustee may be
merged, consolidated, or converted or any successor by merger, conversion or
consolidation or any corporation to which the Trustee may transfer all or
substantially all of its corporate trust business (including the administration
of the trust created by this Agreement) may be the Trustee under this Agreement
without any further act.

         3.5 STATUS OF SUCCESSOR TRUSTEE. A successor Trustee will have the same
duties, powers and discretion as conferred on its predecessor Trustee. A
successor Trustee may accept the assets of the trusts delivered to it by its
predecessor Trustee as constituting the entire assets of the trust created under
this Agreement and will not be required to investigate whether or not the
entirety has been delivered to it or to investigate any acts, omissions, or
misconduct of its predecessor Trustee.

                                   ARTICLE IV

                                  DISBURSEMENTS

         4.1 LEASE OBLIGATIONS. In accordance with all applicable federal laws
and regulations, the Settlor will commence to perform all lease obligations
pertaining to the Beta Interests on the date of approval of the MMS Compliance
Documents and the acceptance by the Beneficiary thereof.

         4.2 NOTICE AFTER PLUGGING. Upon completion of all plugging and
abandonment operations pertaining to all wells now existing or hereafter drilled
and completed, and all wells hereafter redrilled and recompleted on the OCS
Leases or the Beta Interests, the Settlor will provide the Beneficiary and the
Trustee a certificate executed by an officer of the Settlor verifying that the
operation was conducted in compliance with (a) applicable federal laws and
regulations, (b) the OCS Leases, affected by such operation, and (c) the
applicable operating agreement(s) pertaining to such leases. At the same time,
the Settlor shall furnish a copy of such certificate to the Predecessors, and
such certificate shall state that a copy is being furnished to the Predecessors.

         The Settlor will be entitled, with the written concurrence of the
Beneficiary and the Predecessors, to a disbursement of the amount incurred in
such plugging and abandonment operations, which shall be released from the Trust
Funds to the Settlor, as provided in SECTION 4.3. Prior to release of funds,
proof of payment of all royalties, penalties, and other lease obligations, and
proof of full payment to all vendors may be required. Should the Beneficiary and
the Predecessors agree to release such funds for any work performed by a
subcontractor(s), the check(s) for payment may be issued jointly in the name of
the Settlor and the vendor(s).

         4.3 FINAL NOTICE. When all wells, equipment, facilities and structures
associated with or attributable to the Beta Interests have been properly and
prudently plugged, abandoned and restored in compliance with (a) applicable
Federal laws and regulations, (b) the OCS Leases, and (c) the applicable

                                       8

<page>

operating agreement(s), then the Settlor will deliver to the Beneficiary and the
Trustee a certificate, executed by an officer of the Settlor, certifying that
such matters have been completed and listing all invoices and confirm that all
invoices associated with such work have been fully paid and discharged. At the
same time, the Settlor shall furnish a copy of such certificate to the
Predecessors, and such certificate shall state that a copy is being furnished to
the Predecessors. Upon the Beneficiary's and the Predecessors' written
concurrence to release of all or a portion of the Trust Funds (which concurrence
will be promptly given if the Settlor has complied with the terms of this
Agreement), the Trustee shall be authorized to immediately release to the
Settlor all or such portion of all funds, including principal and interest,
remaining in the Trust Funds, as set forth in a joint certificate of the
Settlor, the Beneficiary and the Predecessors delivered to the Trustee. The
Beneficiary will furnish its written concurrence (if the Settlor has complied
with the terms of this Agreement) by executing and delivering such joint
certificate within thirty (30) days after the Beneficiary's receipt of the
Settlor's certificate referenced above. The Predecessors will furnish their
written concurrence (if the Settlor has complied with the terms of this
Agreement) by executing and delivering such joint certificate within five (5)
business days after the Predecessors' receipt of the joint certificate, executed
by the Settlor and the Beneficiary, referenced above, and unless the
Predecessors have notified the Trustee in writing within such five (5) business
days objecting to such release of the Trust Funds to the Settlor, the
Predecessors shall be deemed to have given their written concurrence.

         4.4 DEFAULTS. Any one of the following events shall be an event of
default attributed to the Settlor:

         (a) if the Beneficiary has not received a true copy of the
documentation submitted by the Settlor which demonstrates that the Settlor has
satisfied the plugging, abandonment, and restoration obligations with respect to
the Beta Interests no later than thirty (30) days after the obligation accrues
in accordance with federal laws and regulations;

         (b) the Beta Abandonment Liabilities are not performed and completed in
a timely and faithful manner;

         (c) in the Settlor's insolvency, application for adjudication in
bankruptcy, application by or against the Settlor for assignment, composition,
extension or receivership, or

         (d) the Settlor's failure to comply with any material obligation or
covenant of this Agreement, subject to the Settlor's cure rights in SECTION 4.5
below.

         If the Trustee receives from the Beneficiary a certificate to the
effect that an event of default has occurred, on which certificate the Trustee
may rely, without inquiry, then it shall be lawful for, and the Settlor does
hereby authorize the Trustee to, without notice to the Settlor, assign, transfer
and deliver the all or any portion of the Trust Funds and any other amounts

                                       9

<page>

herein pledged and deposited, without recourse to judicial proceedings and
without either demand, appraisal, advertisement or notice of any kind, all of
which are hereby expressly waived by the Settlor, to the Beneficiary. The
Trustee shall give notice to the Predecessors that the Trust Funds and all other
amounts pledged or deposited under this Agreement have been transferred to the
Beneficiary.

         4.5 PAYMENTS TO THE BENEFICIARY. If the Settlor fails to comply with
any term or provision of this Agreement, the Beneficiary will notify the Settlor
of such noncompliance. If the Settlor has not made the necessary corrections to
comply with this Agreement within five (5) business days after such
notification, then the Beneficiary may remedy such noncompliance, without
prejudice to the Beneficiary's rights against the Settlor, and direct the
Trustee to distribute to the Beneficiary funds from the Trust Funds to pay or
reimburse the Beneficiary for the expenses incurred or to be incurred in
remedying the noncompliance. The Trustee shall within three (3) business days of
its receipt of notice and documentation of the expense incurred or to be
incurred by the Beneficiary, distribute funds to the Beneficiary, or as
otherwise directed by the Beneficiary, to pay or reimburse to the Beneficiary
for expenses incurred or to be incurred to remedy the noncompliance. The Trustee
may rely on documents delivered to it pursuant to this SECTION 4.5 without
inquiry. The Trustee shall give notice to the Predecessors that such portion of
the Trust Funds have been transferred to the Beneficiary.

         4.6 AUDIT BY THE BENEFICIARY. The Beneficiary shall have the right, at
its own costs and expense, to audit the Settlor's records relating to the
plugging, abandonment and restoration of the wells, equipment, facilities and
structures associated with or attributable to the Properties in order to satisfy
itself that the Settlor has complied with all of its obligations under this
Agreement.

                                    ARTICLE V

                                  MISCELLANEOUS

         5.1 AMENDMENT. The parties hereto agree and acknowledge that they shall
not amend, modify or waive any term or condition of this Agreement in any
respect without the prior written consent of the Predecessors.

         5.2 NO LIENS. The Settlor represents and warrants that the funds to be
deposited into the Trust Account shall be unencumbered and free and clear of
liens, encumbrances, security interest or other burdens, except as described in
SECTION 2.6(c). The Settlor and the Beneficiary further agree to execute any
such further documents as may be reasonably required to have the Trust Funds
which are pledged to the Beneficiary paid and delivered to the Trustee.

         5.3 PARTIES TO AGREEMENT. The Trustee, the Beneficiary and the Settlor
are parties to this Agreement. The Predecessors are an intended third party
beneficiary of this Agreement.

                                       10

<page>

         5.4 NOTICES. All notices, requests, demands, and other communications
to the respective parties of this Agreement and others shall be in writing
(including telecopy), and shall be deemed to have been duly given or made when
delivered by hand, on the date shown on the receipt by a recognized overnight
courier delivery service, or, in the case of delivery by mail, two (2) business
days after the day deposited postage prepaid in the United States mail,
certified mail with return receipt requested and postage prepaid, or, in the
case of telecopy notice, when receipt thereof is acknowledged orally or by
written confirmation report by the party to whom it was addressed. The addresses
for all notices are as follows:

         Trustee:                  U.S. Bank National Association
                                   633 West Fifth Street, 24th Floor
                                   Los Angeles, California 90071
                                   Attention: Corporate Trust Services (Pacific
                                   Energy Resources Ltd. Decommissioning
                                   Liabilities Trust  Agreement)
                                   Telephone:   (213) 615-6051
                                   Telecopy:    (213) 615-6199

         Settlor:                  Pacific Energy Resources Ltd.
                                   111 West Ocean Boulevard
                                   Suite 1240
                                   Long Beach, CA 90802
                                   Attention:  Mr. Vladimir Katic
                                   Telephone:  (661) 665-5200
                                   Facsimile:  (661) 665-5490

         Beneficiary:              United States of America
                                   Department of the Interior
                                   Minerals Management Service
                                   Pacific OCS Region
                                   770 Paseo Camarillo
                                   Camarillo, CA 93010
                                   Attention:  Ms. Ellen Aronson,
                                               Regional Manager
                                   Telecopy: 805-389-7526
                                   Telephone: 805-389-7502

         Predecessors:

                                   Aera Energy LLC
                                   Attn:  Strategic Development Group
                                   10000 Ming Avenue
                                   Bakersfield, CA  93311-1164
                                   Telephone:  661-665-5200
                                   Telecopy:   661-665-5490

                                       11

<page>

         - and -
                                   SWEPI LP
                                   Attn:  Brad Eubanks
                                   P.O. Box 576
                                   Houston, Texas 77001-0576
                                   Telephone: 281-544-3473
                                   Telecopy:  281-544-4006

Any person may, by proper notice complying with this SECTION 5.4, change any and
all parts of its addresses. All notices shall be effective only upon actual
receipt.

         5.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Trustee, the Settlor, and the Beneficiary and their
respective legal representatives, successors and assigns. The rights, duties,
and obligations of the Trustee hereunder may not be transferred, assigned, or
delegated by the Trustee except as expressly provided in this Agreement. The
rights, duties and obligations of the Settlor hereunder may not be transferred,
assigned or delegated by the Settlor without the prior written consent of the
Beneficiary.

         5.6 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Trust Agreement in any number of separate counterparts, and all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.

         5.7 NUMBER AND GENDER. Whenever the context requires, reference made to
the singular shall be understood to include the plural; and likewise, the plural
shall be understood to include the singular. Words denoting gender shall be
construed to include the masculine, feminine, and neuter, when such construction
is appropriate; and specific enumeration shall not exclude the general but shall
be construed as cumulative. Definitions of terms defined in the singular and
plural shall be equally applicable to the plural or singular, as the case may
be, unless otherwise indicated.

         5.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter and shall supersede any
prior agreements, whether written or oral, among the parties.

         5.9 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement.

         5.10 TITLES OF ARTICLES AND SECTIONS. All titles or headings to
articles or sections of this Agreement are only for the convenience of the
parties and shall not be used to interpret or construe this Agreement.

         5.11 TERMINATION. This Agreement shall terminate upon the occurrence of
any of the following conditions: The Settlor's compliance with all plugging and
abandonment obligations and other lease obligations and all other Beta
Abandonment Liabilities and as evidenced by certification by the Beneficiary. In
such case, the Trustee shall transfer the Trust Funds as directed by the

                                       12

<page>

Settlor, and shall furnish the Predecessors with a copy of such certification by
the Beneficiary and shall notify the Predecessors that the Trust Funds have been
transferred.

         5.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO
THAT STATE'S CONFLICTS OF LAWS RULES.

         5.13 USA PATRIOT ACT INFORMATION. The Settlor, the Beneficiary and each
other party to this Agreement shall provide to the Trustee such information as
the Trustee may reasonably require to permit the Trustee to comply with its
obligations under the federal USA Patriot Act. The Trustee shall not credit any
amount of interest or investment proceeds earned on the Trust Funds pursuant to
SECTION 2.4(b), or make any payment of all or a portion of monies held by it in
escrow pursuant to this Agreement, to any person unless and until such person
has provided to the Trustee such documents as the Trustee may require to permit
the Trustee to comply with its obligations under such Act.

         5.14 TAX REPORTING DOCUMENTATION. Within thirty (30) days after the
execution of this Agreement, the Settlor shall provide to the Trustee its
certified tax identification number on Form W-9 (or Form W-8 if such Party is a
non-U.S. person) and such other forms and documents as the Trustee may
reasonably request (collectively, "TAX REPORTING DOCUMENTATION"). The parties to
this Agreement understand that, notwithstanding the provisions of SECTION
2.4(b), if such Tax Reporting Documentation is not so certified to the Trustee,
the Trustee may be required by the Internal Revenue Code of 1986, as it may be
amended from time to time, to withhold a portion of any interest or other income
earned on the investment of monies or other property held by the Trustee
pursuant to this Agreement.

                      [SIGNATURES BEGIN ON FOLLOWING PAGE]

                                       13

<page>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.

                                                TRUSTEE:
                                                --------

                                                U.S. Bank National Association

                                                BY: /s/ Daniel Norwick
                                                   ----------------------------
                                                Printed Name: Daniel Norwick
                                                Title: V.P.

                                                SETTLOR:
                                                --------

                                                Pacific Energy Resources Ltd.

                                                BY: /s/ Darren Katic
                                                    ----------------------------
                                                Printed Name: Darren Katic
                                                Title: President

                                                BENEFICIARY:
                                                ------------

                                                THE UNITED STATES OF AMERICA,
                                                ACTING BY AND THROUGH THE
                                                MINERALS MANAGEMENT SERVICE
                                                UNITED STATES DEPARTMENT OF THE
                                                INTERIOR

                                                BY: /s/ Ellen Aronson
                                                   ----------------------------
                                                Printed Name: Ellen Aronson
                                                Title:        Regional Manager
                                                              Pacific OCS Region

                                       14

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