FEE AUDITORS FINAL REPORT - Page 1

pac FR Pepper 2nd int 6-8.09.wpd

UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In Re: ) Chapter 11
)
PACIFIC ENERGY RESOURCES, ) Case No. 09-10785 (KJC)
LTD., et al., )
) (Jointly Administered)
Debtors. )
FEE AUDITORS FINAL REPORT REGARDING
INTERIM FEE APPLICATION OF PEPPER HAMILTON LLP
FOR THE SECOND INTERIM PERIOD
This is the final report of Warren H. Smith & Associates, P.C., acting in its capacity as fee
auditor in the above-captioned bankruptcy proceedings, regarding the Fee Application of Pepper
Hamilton LLP, for the Second Interim Period (the Application).
BACKGROUND
1. Pepper Hamilton LLP (Pepper), was retained as counsel to the Official Committee
of Unsecured Creditors. In the Application, Pepper seeks approval of fees totaling $42,241.50, and
costs totaling $4,077.59 for its services from June 1, 2009 through August 31, 2009 (the
Application Period).
2. In conducting this audit and reaching the conclusions and recommendations
contained herein, we reviewed in detail the Application in its entirety, including each of the time and
expense entries included in the exhibits to the Application, for compliance with Local Rule 2016-2
of the Local Rules of the United States Bankruptcy Court for the District of Delaware, Amended
Effective December 1, 2009, and the United States Trustee Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. 330, Issued January 30,
1996 (the Guidelines), as well as for consistency with precedent established in the United States
FEE AUDITORS FINAL REPORT - Page 2
pac FR Pepper 2nd int 6-8.09.wpd
Bankruptcy Court for the District of Delaware, the United States District Court for the District of
Delaware, and the Third Circuit Court of Appeals. We served on Pepper an initial report based on
our review, and received a response from Pepper, portions of which response are quoted herein.
DISCUSSION
3. In our initial report we noted that the Application encompasses a total of $42,241.50
in requested fees, of which $7,529.00 are classified as relating to Fees. Thus, Pepper seeks
$34,712.50 in fees for substantive work performed for the debtors. The fees relating to the
preparation of Peppers fee applications constitute 18% (the normal standard is 5%) of that total,
a percentage far beyond what is typical. We asked Pepper to explain why these fees should be
considered reasonable. Peppers response is provided below and in the attached Response Exhibit
1.
The reason the time spent on fee applications exceeds the standard 5% is because the
time was incurred with respect to five applications (as opposed to only one). That
is, time was billed with respect to March, April, May, June and July 2009
applications. Of the $7,529 total billed to fees, only $5,601 relates to preparing,
reviewing, revising and filing applications. This is approximately 13% of the total
fees, and again, relates to multiple fee applications. I have attached the itemized
statements related to fees and as you can see, the largest time entries relate to
actually preparing the applications and for each of those entries, the billing
professional was a paralegal who bills at a lower rate. The remainder of the "fees"
time was spent on preparing ancillary documents such as certificates of no objection,
conferring with debtors' counsel regarding transfers of payments, and responding to
your earlier requests. Another fact you should consider is that Pepper is acting as
local counsel in these proceedings. Since the bulk of the substantive work is being
performed by lead counsel, and because Pepper naturally takes the lead on handling
its own applications, the ratio of time related to fee applications as against other
work is, of course, going to be greater than if Pepper was lead counsel (in which case
the "substantive" side of the equation would be much greater). If you look at the
attached itemized entries, I think you'll see that the time spent on each respective task
is entirely reasonable and there is no duplication of effort.
We appreciate Peppers response. Further, we note that Pepper has charged a total amount
FEE AUDITORS FINAL REPORT - Page 3
pac FR Pepper 2nd int 6-8.09.wpd
$110,514.50 in fees since the inception of the case, with $7,529.00 in fees relating to its own fee
application preparation. Since this brings the total amount of fees charged for fee application
preparation into a more acceptable range of 7%, we do not intend to recommend a reduction on this
issue for the current Application Period. However, we will continue to monitor the issue in the
firms future fee applications.
4. We noted the following meals charges which require further explanation:
06/08/09 CON Meals - URBAN CAF CATERING 6/3/09 $165.80
6/15/09 CON Meals - URBAN CAF WILLAUER-CATERING $142.50
6/10/09
We asked Pepper to provide additional information regarding these charges. Pepper responded as
follows:
Both of the entries you identify were for lunch. Urban Caf is a cafeteria in the
lobby of Pepper's building (certainly nothing fancy). We ordered lunch for out of
town professionals who were here for the sale and DIP hearings. I can't remember
the exact number of diners but these meals were only sandwiches, chips, sodas and
so forth. Certainly no more than $15 - 20 per person.
We appreciate Peppers response and have no objection to these expenses.
5. We noted the following travel charge which requires further explanation:
06/19/09 TRV Travel Expense - AMERICAN EXPRESS - LOGAN $551.18
HOTEL ACCOMODATIONS FOR CLIENT 6/2-3/09
We asked Pepper to provide further information regarding these charges. Peppers response is
provided below.
This entry is for two nights, to accommodate counsel from California attending the
sale / dip hearings.
We appreciate Peppers response and have no objection to these expenses.
6. We noted the following car charge which seems high and requires further
1
As procuring taxi service in Wilmington is more difficult, we believe a car service is justified
when traveling from Wilmington to the Philadelphia Airport.
2
$198.06 minus $100 minus $75.
FEE AUDITORS FINAL REPORT - Page 4
pac FR Pepper 2nd int 6-8.09.wpd
explanation:
06/24/09 TRV Travel Expense - EAGLE LIMOUSINE I. ROBBIN $198.06
6/2 & 6/3/09 CAR SERVICE
We asked Pepper to provide additional information for this charge.
This was to transport out-of-town counsel from the Philadelphia airport to our offices
in Wilmington (and then back to the airport). Though the company's name is "Eagle
Limousine," the vehicle wasn't actually a limousine. It is a large sedan. We arrange
to have out of town counsel picked up at the airport so they don't have to rent a car.
Eagle Limousine charges about $100 for this ride. Those taxis that are willing to
make the trip from the airport to Delaware would charge about $75 (I checked with
PHL Taxi today).
We appreciate Peppers response. We note that taxi service is readily available for a trip from the
Philadelphia Airport to Wilmington, Delaware
1
. We appreciate Peppers response that a taxi ride
for this trip would cost approximately $75.00. Thus, we recommend a reduction for the cost of a
one way trip from the Philadelphia Airport to Wilmington, Delaware, for a reduction of $23.06
2
in
expenses.
CONCLUSION
7. Thus, we recommend approval of fees totaling $42,241.50 and expenses totaling
$4,054.53 ($4,077.59 minus $23.06) for Peppers services for the Application Period.
FEE AUDITORS FINAL REPORT - Page 5
pac FR Pepper 2nd int 6-8.09.wpd
Respectfully submitted,
WARREN H. SMITH & ASSOCIATES, P.C.
By:
Warren H. Smith
Texas State Bar No. 18757050
325 N. St. Paul Street, Suite 1250
Republic Center
Dallas, Texas 75201
214-698-3868
214-722-0081 (fax)
whsmith@whsmithlaw.com
FEE AUDITOR
CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document has been served
via First-Class United States mail to the attached service list on this 5
th
day of February, 2010.

Warren H. Smith
FEE AUDITORS FINAL REPORT - Page 6
pac FR Pepper 2nd int 6-8.09.wpd
SERVICE LIST
Notice Parties
The Applicant
David B. Stratton, Esq.
James C. Carignan, Esq.
Pepper Hamilton, LLP
Hercules Plaza, Suite 5100
1313 N. Market Street
P.O. Box 1709
Wilmington, DE 19899-1709
United States Trustee
Office of the United States Trustee
844 N. King Street, Room 2207
Lock Box 35
Wilmington, DE 19801
Counsel to the Debtors
Laura Davis Jones, Esq.
Ira D. Kharasch, Esq.
Scotta E. McFarland, Esq.
Robert M. Saunders, Esq.
James E. ONeill, Esq.
Kathleen P. Makowski, Esq.
Pachulski Stang Ziehl & LLP
919 North Market Street, 17
th
Floor
P.O. Box 8705
Wilmington DE 19899-8705
Counsel to the Debtors
Ian S. Fredericks, Esq.
Skadden Arps, Slate, Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, DE 19899
Special Counsel to the Debtors
Penelope Parmes, Esq.
Rutan & Tucker, LLP
611 Anton Boulevard
14
th
Floor
Costa Mesa, CA 92626
Canadian Counsel to the Debtors
Jensen Lunny MacInnes Law
Corporation
H.C. Ritchie Clark, Q.C.
P.O. Box 12077
Suite 2550
555 West Hastings Street
Vancouver, BC V6B 4N5
Engineering Consultant to the Debtors
Mark A. Clemans
Millstream Energy, LLC
4918 Menlo Park Drive
Sugarland, TX 77479
Special Oil and Gas Transactional
Counsel to the Debtors
Anthony C. Marino, Esq.
Schully, Roberts, Slattery & Marino PLC
Energy Centre
1100 Poydras Street, Suite 1800,
New Orleans, LA 70163
Financial Advisor to the Debtors
Curtis A. McClam
Deloitte Financial Advisory Services LLP
350 South Grand Ave, Ste. 200
Los Angeles, CA 90071
Financial Advisor to the Debtors
John Rutherford
Lazard Freres & Co. LLC
30 Rockefeller Plaza, 61
st
Floor
New York, NY 10020
FEE AUDITORS FINAL REPORT - Page 7
pac FR Pepper 2nd int 6-8.09.wpd
Co-Counsel to the Official Committee of
Unsecured Creditors
David B. Stratton, Esq.
James C. Carignan, Esq.
Pepper Hamilton LLP
Hercules Plaza, Suite 1500
1313 Market Street
Wilmington, DE 19899
Co-Counsel to the Official Committee of
Unsecured Creditors
Filiberto Agusti, Esq.
Steven Reed, Esq.
Joshua Taylor, Esq.
Steptoe & Johnson LLP
1330 Connecticut Avenue NW
Washington, DC 20036
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientJMatter Number: 136019.00002
July 21, 2009
Invoice: 10567368
Page 24
TASK: B160 Fees
Name
Lawall, F.
Carignan, 1.
Cook, J.H.
Matour,1.
Shields, A.
Total B160
Title
Partner
Associate
Paralegal
Paralegal
Bankruptcy Asst
Hours
0.20
0.70
0.20
9.60
1.00
11.70
Rate
595.00
375.00
215.00
220.00
55.00
Fees
119.00
262.50
43.00
2,112.00
55.00
2,591.50
C'.S K h t,-J 11'0 Jr "th'\.b I revt C \,\J I 1\ '1
\ I "--9 d\ rli t (( % ""'1 V\. '-.;;> It 0,,::,
D
(-h0L.e \ 3 L_.c ') - $' ST;,
i
'5 O. oD
c+ c r +< C - VL \ h d h' I'-LC - ,J
( j ":3 (\ r cL_ d ')
I ,t. P t"t_ pc' I
( N C:s) JLL(){l; h:" \ j
IlJ.)t-r.... t-c. s)ee;. r<:: V t 'C' \Aj I ;d'-.).:1 I. \1.:, I
)
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number: 136019.00002
July 21, 2009
TASK CODE: B160 Fees

Date Name Services
06/01109 J. Carignan Review and revise exhibits
to Pepper Hamilton 4/09 Fee
Application.
06/05/09 J. Matour Receive and review filed
copy of PH 1st monthly fee
application and forward to
bankruptcy assistant.
Monitor docket re responses
Matour
to PH lst monthly
application.
06/18/09 J. Matour Draft PH April 2009
monthly fee application and
__----""-0
related documents.
Draft certificate ofno

objection re PH 1 st monthly
application and forward to F.

Lawall for signature.
Review docket re Pepper
e)H.COOk
Hamilton Fee Application
and email to 1. Matour and S.
Henry re same.
06/20/09 J. Matour Finalize PH April 2009
monthly fee application and
forward to F. J. Lawall for
signature.
06/20/09 1. Matour Begin work on PH May
2009 monthly fee
application.
06/22109 F. Lawall Review fee application.
,
J. Matour - Prepare certificate ofno
-"------_/
objection re PH 1 st monthly
fee application for efiling.
Time Rate

375.00
G' 220.00
0.10 220.00
@o""\,
/
220.00
0.70 220.00
0.20 215.00
E;
220.00
Ei
220.00
@ 595.00
0.30 220.00
Invoice: 10567368
Page 10
Fees
150.00
22.00
22.00
704.00
154.00
43.00
88.00
88.00
119.00
66.00
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientJMatter Number:
July 21, 2009

A. Shields
06/22/09 A. Shields
Carignan
06/23/09 J. Matour
06/23/09 J. Matour
06/23/09 A. Shields
... ------
/ ,
( 06/28/09 ,/ J. Matour
'---_...-----/
06/28/09 J. Matour
06129/09 J. Matour
Total B160 Fees
136019.00002
Arrange for efiling and
service of certificate of no
objection re PH 1st monthly
fee application for efiling.
Prepared for and service of
certificate of no objection re
1 st monthly fee application
of Pepper Hamilton for
period 3119 to 3/31109.
Prepared for service of fee
application.
Review revised proposed
order re fee auditor.
Prepare PH 2nd monthly fee
application and related
documents for efiling.
Arrange for efiling and
service of PH 2nd monthly
fee application.
Service of Pepper's 2nd
monthly fee application for
period of5-1 to 4-30-09 .
Receive and review filed
copy of CNO re PH 1 st
monthly fee application.
Receive and review filed coy
of PH 2nd monthly fee
application.
Continue drafting PH 2nd
monthly fee application.
0.20 220.00
0.30 55.00

55.00

0.30 375.00

0.10 220.00
8220000
220.00
11.70
Invoice: 10567368
Page 11
44.00
16.50
11.00
112.50
484.00
66.00
27.50
22.00
22.00
330.00
2,591.50
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number: 1360] 9.00002
August] 9, 2009
Invoice: 10572586
Page 23
TASK: B]60 Fees
Name
Lawall, F.
Carignan, J.
Cook, J.H.
Matour, J.
Shields, A.
Tota1 B]60
Title
Partner
Associate
Paralegal
Paralegal
Bankruptcy Asst
Hours
0.20
0.40
0.20
]4.10
0.60
]5.50
Rate
595.00
375.00
2]5.00
220.00
55.00
Fees
1] 9.00
]50.00
43.00
3,]02.00
33.00
3,447.00
<t 3'1 \ 5T)
o I( fL<.-l:? --h K.z Lt
\ S S ,,:rc..I.:J) 1(.-6 h
I . -e . (oCr\ f)\ un' C c) h '-V l'tt
L
L D-!!\..)l.'C \ 1L:
5fM-<2
(. \U 0 5 h_-\ ;.'tCJ s'ts) ere.? 1--
r c'-u c T rc v \ c" \.1..) )
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientfMatter Number: 136019.00002
August 19,2009
TASK CODE: B160 Fees
Date Name Services
07/01/09 J. Matour Finalize PH 3rd interim fee
application and related
documents and forward to J.
Carignan forreview.
07/02/09 J. Carignan Review and revise Pepper
Hamilton 5109 monthly fee
application.
07/02/09 J. Matour Continue work on PH 3rd
monthly fee application and
forward to F. Lawall for
signature.
07/06/09 F. Lawall Review and execute fee
application.
07/06/09 J. Matour Finalize PH 3rd monthly fee
application and prepare for
efi1ing.
07/06/09 J. Matour Arrange for efiling and
service of PH 3rd monthly
fee application.
07/06/09 A. Shields Prepared for & service of
Pepper's 3rd Monthly Fee
Application.
07/08/09 J. Matour Receive and review fiIed
copy of PH 3rd monthly fee
application and forward to
bankruptcy assistant.
07112/09 J. Matour Draft PH 1 st quarterly fee
application request.
07113/09 J. Matour Finalize PH 1 st interim fee
request and forward to F.
~ ,
//-' //
Lawall for review.
"\\
Email debtors' counsel re
( ~ : : J J. Carignan
Time Rate
1.50 ) 220.00
e-
G 375.00
B220.00
GJ
595.00
220.00
~
220.00
~
G
55.00
0.10 \ 220.00
G2
G
220.00
Gv
220.00
0.10 375.00
Invoice: 10572586
Page 9
Fees
330.00
112.50
66.00
119.00
176.00
66.00
22.00
22.00
396.00
176.00
37.50
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number:
August 19, 2009
....,
07114/09 J.H. Cook
.'
( 07/14/09 Matour

07/14/09 J. Matour
07114109 1. Matour
07/14/09 J. Matour
..
1. Matour
07/15/09 1. Matour
07115109 J. Matour

07/15/09
'\. Matour
1
07118/09 J. Matour
.
07/27/09 J. Matour
136019.00002
payment of professional fees.
Phone call with 1. Matour re
fee issues and follow-up re
same.
Draft certificate of no
objection re PH 2nd monthly
fee application and forward
to F. Lawall for review.
Arrange for efiling and
service of PH 2nd monthly
fee application.
Update PH 1st interim fee
application and forward to F.
Lawall for signature.
Prepare PH 1 st monthly fee
application for efiling.
Email copies of certificates
of no objection re PH 1st and
2nd monthly fee applications
to debtor for payment.
Finalize PH 1st interim fee
application and prepare for
efiling.
Arrange for efiling and
service of PH 1st interim fee
application.
Arrange for reformatting of
previously filed monthly fee
applications for fee auditor.
Begin June 2009 monthly fee
application.
Arrange for March, April
and May monthly
applications to be converted
into Excel spreadsheets for
fee creditor.
Invoice: 10572586
Page 10
0.20 215.00 43.00
0.30 220.00 66.00

44.00
220.00
/'

.
110.00
0.50
220.00
//- .-"'\
220.00 44.00

0.20 220.00 44.00
/'--.

88.00
L.i 220.00
220.00 66.00

0.20 220.00 44.00
8
0.30) 220.00 66.00
0.50 220.00 110.00
-----
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number:
August 19,2009
136019.00002
Draft notice of filing of
amended notices of filing of
1st interim fee applications
and forward to 1. Code and J.
Carignan for comment.
Arrange for spreadsheets of
fee and expense detail for
monthly fee applications for
March, April and May 2009.
Draft coversheets for PH 4th
monthly fee application.
Email spreadsheets with fee
and expense detail to fee
auditor and receive
telephone call to confirm
receipt.
Draft certificate of no
objection re PH 3rd monthly
fee application and arrange
for service of same.
Arrange for efiling of
certificate ofno objection re
PH 3rd monthly fee
application.
Prepared for & service of
Certificate of No Objection
Re: 3rd Monthly Fee
Application for Pepper
Hami1ton for period 5/1 to
5/31/09.
Continue to draft PH 4th
monthly fee app1ication and
related documents and
forward to J. Carignan for
review.
Email debtor with
certificates of no objection re
PH 2nd and 3rd monthly fee
07/27/09

\
07/28/09



07/29/09

/"


07/30/09
J. Matour
J. Matour
1. Matour
J. Matour
J. Matour
1. Matour
A. Shields
J. Matour
07/31109 J. Matour
/---.
G)220.00
0.90 220.00
i,--- -",
220.00

/
0.40 220.00
0.40 220.00
0.20 220.00
0.20 55.00
8
220 00
.
0.30 220.00
Invoice: 10572586
Page 11
110.00
198.00
132.00
88.00
88.00
44.00
11.00
462.00
66.00
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientfMatter Number: 136019.00002
August 19,2009
Invoice: 10572586
Page 12
applications for payment.
Total B160 Fees 15.50 3,447.00
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number: 136019.00002
September 15, 2009
Invoice: 10575601
Page 19
TASK: B 160 Fees
Name
Carignan, J.
Cook, J.H.
Matour, J.
Shields, A.
Total B160
Title
Associate
Paralegal
Paralegal
Bankruptcy Asst
Hours
0.40
0.30
5.70
0.40
6.80
Rate
375.00
215.00
220.00
55.00
Fees
150.00
64.50
1,254.00
22.00
1,490.50
rt. \ 2 t. d +0 j r ) IV. Vl C ''\'6 J W
Lc'\. -'j) 0'\ cI V d...... tb C...a.. "c"I) <YVJ
( h \S ( r L J,) _ $' <{ l, S

LS C r ( d ')
\ \ C'. ( D (()l\t V t'" C2 h o'to l..-1,+t
1
C00'1
SC
\ N:
( Lvt h l N03 J {) /--j,
r.:-:(o..4.1J)) 1-1...:>+-c {';.e \ .5
t"
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
Client/Matter Number: 136019.00002
September 15,2009
TASK CODE: B160 Fees
Name Services
/ '"'\

Email to K. Piper re
June/July fees.
08/04/09 J. Carignan Review and revise monthly
fee application.
/
108/04/09 J. Matour Email to K. Piper with final

totals for July 2009 fees and
expenses.
J. Matour Email total fees and

expenses to K. Piper for July
2009.
08/09/09 J. Matour Finalize PH 4th monthly fee
application and forward to F.
/"-:.-:.-
Lawal1 for signature.
, '\

J. Matour Create chart summarizing
status of pending fee
applications.
08/09/09 J. Matour Begin work on PH 5th
monthly fee application.
J. Matour Draft certificate of no
objection re PH I st interim
fee application and forward
to F. Lawall for review.

08111/09 J. Matour Finalize PH 4th monthly fee
application and prepare for

efiling.
,/"'/ -----.....,..,,,
( 08111 /09 '). Matour
Monitor docket re responses
to PH 1 st interim fee

application and Deloitte 1 st
interim fee application.
08111109 J. Matour Arrange for efiling and
service of PH 4th monthly
fee application.
Time Rate
0.10 220.00
0.30 375.00
0.20 220.00
0.20 220.00
E0220.00
0.50 220.00
..---------:"\
220.00

0.40 220.00
B
220.00
0.10 220.00
0.40 ) 220.00
E
Invoice: 10575601
Page 7
Fees
22.00
112.50
44.00
44.00
66.00
110.00
88.00
88.00
154.00
22.00
88.00
Pacific Energy Resources Ltd. Official Committee
Of Unsecured Creditors
ClientlMatter Number:
September 15,2009
//' ..- ......... "

1. Matour
08111/09 A. Shields
(
\ 08/14/09 1. Matour

(

\
. \


08/31/09 J. Matour
Total B 160 Fees
136019.00002
Finalize certificate of no
objection re PH 1st interim
fee application and forward
to J. Carignan for signature.
Email to fee auditor with
time and expense detail on
spreadsheets and related fee
information.
Prepared and served of
Fourth Monthly Fee
Application of Pepper
Hamilton.
Arrange for efiling of
certificate of no objection re
PH 1 st interim fee
application.
Receive and review filed
copies of certificates of no
objection re PH and Deloitte
1 st interim fee applications.
Preparation of package of fee
applications for fee auditor.
Email from fee auditor re
Pepper Hamilton quarterly
fees.
Continue work on PH 5th
monthly fee application.
0.20 220.00
0.30 220.00
0.20
0.10
0.30
0.10
/_...

6.80
220.00
220.00
215.00
375.00
220.00
Invoice: 10575601
Page 8
44.00
66.00 .
22.00
44.00
22.00
64.50
37.50
352.00
1,490.50