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    In Re:: Fee Auditor'S Final Report - Page 1

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    Chapter 11 Dockets
    The fee auditor reviewed the fee application submitted by Jensen Lunny MacInnes Law Corporation for legal services provided to the debtors from March 9, 2009 through May 31, 2009. The auditor recommends approving fees of $61,954 and expenses of $12,570.81 after reductions for photocopying and facsimile charges that exceeded local guidelines. The auditor also recommends approving fees of $25,000 and expenses of $1,250 for services provided by Todd McMahon Inc. during the same period.

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    In Re:: Fee Auditor'S Final Report - Page 1

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    Chapter 11 Dockets
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    The fee auditor reviewed the fee application submitted by Jensen Lunny MacInnes Law Corporation for legal services provided to the debtors from March 9, 2009 through May 31, 2009. The auditor recommends approving fees of $61,954 and expenses of $12,570.81 after reductions for photocopying and facsimile charges that exceeded local guidelines. The auditor also recommends approving fees of $25,000 and expenses of $1,250 for services provided by Todd McMahon Inc. during the same period.

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    The fee auditor reviewed the fee application submitted by Jensen Lunny MacInnes Law Corporation for legal services provided to the debtors from March 9, 2009 through May 31, 2009. The auditor recommends approving fees of $61,954 and expenses of $12,570.81 after reductions for photocopying and facsimile charges that exceeded local guidelines. The auditor also recommends approving fees of $25,000 and expenses of $1,250 for services provided by Todd McMahon Inc. during the same period.

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    26 views8 pages

    In Re:: Fee Auditor'S Final Report - Page 1

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    Chapter 11 Dockets
    The fee auditor reviewed the fee application submitted by Jensen Lunny MacInnes Law Corporation for legal services provided to the debtors from March 9, 2009 through May 31, 2009. The auditor recommends approving fees of $61,954 and expenses of $12,570.81 after reductions for photocopying and facsimile charges that exceeded local guidelines. The auditor also recommends approving fees of $25,000 and expenses of $1,250 for services provided by Todd McMahon Inc. during the same period.

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    of 8

    UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

    In Re: PACIFIC ENERGY RESOURCES LTD., et al.,

    Debtors.

    ) ) ) ) ) ) )

    Chapter 11 Case No. 09-10785 (KJC) (Jointly Administered)

    FEE AUDITORS FINAL REPORT REGARDING FEE APPLICATION OF JENSEN LUNNY MACINNES LAW CORPORATION FOR THE FIRST 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 Jensen Lunny MacInnes Law Corporation, for the First Interim Period (the Application). BACKGROUND 1. Jensen Lunny MacInnes Law Corporation (Jensen),was retained as Canadian

    counsel to the debtors. In the Application, Jensen seeks approval of fees totaling $62,954.00, and costs totaling $16,826.21 for its services from March 9, 2009 through May 31, 2009 (the Application Period)1. Jensen also seeks approval of fees totaling $25,000.002 plus applicable expenses in the amount of $1,250.00 for Todd McMahon, Inc.3 for the Application Period. 2. In conducting this audit and reaching the conclusions and recommendations

    All fees and expenses requested for the Application Period, both by Jensen and Todd McMahon, Inc. are expressed in Canadian dollars.
    2

    See paragraph 6 for further discussion.

    Todd McMahon Inc. is the court appointed monitor in this case, appointed by the British Columbia Supreme Court.
    FEE AUDITORS FINAL REPORT - Page 1 pac FR Jensen 1st int 3-5.09.wpd

    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 February 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 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 Jensen an initial report based on our review, and received a response from Jensen, portions of which response are quoted herein. DISCUSSION 3. We noted that Jensen also seeks a monthly allowance of compensation, plus expenses

    for Todd McMahon, Inc., the British Columbia Supreme Court appointed monitor in this case. We asked Jensen to further clarify Todd McMahon, Inc.s requested fees and expenses. Jensen responded as follows: With respect to paragraph 3, JLM seeks compensation for Todd McMahon Inc. for $25,000.00 fees plus Goods and Services Tax of $1,250.00 for a total of $26,250.00. The amount of time spent by the Court Appointed Monitor, multiplied by its usual hourly rate, is a total of $26,505.00 not including taxes. The Court Appointed Monitor seeks compensation of only $25,000.00 not the full amount of its time charges, such that the amount of compensation sought is $26,250.00 including taxes. We appreciate Jensens response. Further we note that Todd McMahon, Inc.s invoice for these fees and expenses was attached (and thus filed) to Jensens May, 2009 monthly fee application. Upon review of Todd McMahon, Inc.s monthly invoice and noting the voluntary reduction in fees, we have no objection to these fees or expenses. 4. We further noted that Jensen charges $.35 per page for photocopying expenses and

    FEE AUDITORS FINAL REPORT - Page 2 pac FR Jensen 1st int 3-5.09.wpd

    $2.00 per page for out-going facsimile transmissions. Pursuant to Delaware Local Rule 20162(e)(iii), [t]he motion shall state the requested rate for copying charges (which shall not exceed $.10 per page), .... Further, Delaware Local Rule 2016-2(e)(iii) states, [t]he motion shall state the requested rate for .... out-going facsimile transmission charges (which shall not exceed $1 per page, with no charge for incoming facsimile charges). We asked Jensen to provide further explanation regarding these charges and it stated as follows: With respect to photocopying and outgoing facsimiles, on the March 9th through April 30th, 2009 First Monthly Fee Application, at $0.35 per page, charges have been incurred for 16,823 copies. At $0.10 per page there should be a reduction of $4,205.95 for a balance for photocopies at $0.10 per page of $1,682.10. On the Second Monthly Fee Application for the period of May 1st through May 31st, 2009, at $0.35 per page, 92 copies were charged for. At $0.10 per page, there should be a reduction of $23.00 for a balance due and owing of $9.20. At $0.10 per page, the total allowable amount on both accounts would be $1,691.30. An argument can be made that British Columbia counsel, acting in British Columbia with respect to British Columbia court proceedings should be compensated in accordance with the practice found in British Columbia. Insofar as facsimiles are concerned, $52.95 is charged on the First Monthly Fee Application from March 9th through April 30th, 2009. There is no facsimile/telecopier expense on the Second Monthly Fee Application from May 1st through May 31st, 2009. The facsimile charge is at $2.00 per page for outgoing faxes and no charge for incoming faxes. The total includes long distance charges applicable to long distance faxes. It is very difficult to go back and break those charges out. It is suggested that the facsimile expense be reduced from $2.00 to $1.00 per outgoing fax, that is to say, cut in half, for a total of $26.50, with a reduction of $26.45. We appreciate Jensens response and thus, recommend a reduction of $4,228.954 in photocopying expenses and $26.45 in facsimile expenses. Thus, for this paragraph 5, we recommend a total reduction of $4,255.40 in expenses.

    $4,205.95 plus $23.00.

    FEE AUDITORS FINAL REPORT - Page 3 pac FR Jensen 1st int 3-5.09.wpd

    5.

    We noted that there are numerous expense charges stating simply documentation.

    We asked Jensen to further describe these charges and it responded: With respect to paragraph 5, documentation refers to photocopying done either inhouse or through the Courthouse Library in Vancouver and the charges are discussed above. We appreciate Jensens response and note that a reduction has been taken in paragraph 4 above which addresses these expenses. 6. We further noted that there are numerous expense charges stating simply Mike

    Bike. We asked Jensen to further describe these charges and it responded: With respect to paragraph 6, Mike Bike is a court filing and courier service employed by JLM, amongst other law firms. Electronic filing is not permitted in British Columbia and, accordingly, law firms make use of filing services, which file original documents, pay the filing fees and then invoice for the court filing fees, filing agents fees and taxes. We appreciate Jensens response, and thus have no objection to these expenses. 7. 05-Mar-09 We noted the following pre-petition time entry: 426348 HRC Revise Order and Affidavit; $400.00 Review Documents 2.50 $1,000.00

    We asked Jensen to provide further explanation as to why the estate should compensate for work prior to the filing of the petition. Jensen responded as follows: With respect to paragraph 7, the time indicated was, due to error, late posted. It is the practice in Canada to permit debtors to pay accounts for services rendered immediately prior to the filing if they are incurred in preparation of the material to be filed, as these hours were. We appreciate Jensens response. However, we note that in the U.S. neither pre-petition fees or expenses are allowed as administrative expenses. Thus, we recommend a reduction of $1,000.00 in fees.
    FEE AUDITORS FINAL REPORT - Page 4 pac FR Jensen 1st int 3-5.09.wpd

    CONCLUSION 8. Thus we recommend approval of fees totaling $61,954.00 ($62,954.00 minus

    $1,000.00) and expenses totaling $12,570.81 ($16,826.21 minus $4,255.40), for Jensens services for the Application Period. Further, we also recommend approval of fees totaling $25,000.00 and expenses totaling $1,250.00 for the services of Todd McMahon, Inc. for the Application Period.

    Respectfully submitted, WARREN H. SMITH & ASSOCIATES, P.C.

    By: Warren H. Smith Texas State Bar No. 18757050 325 N. St. Paul Street, Suite 1275 Republic Center Dallas, Texas 75201 214-698-3868 214-722-0081 (fax) [email protected] FEE AUDITOR

    FEE AUDITORS FINAL REPORT - Page 5 pac FR Jensen 1st int 3-5.09.wpd

    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 6th day of November, 2009.

    Warren H. Smith

    FEE AUDITORS FINAL REPORT - Page 6 pac FR Jensen 1st int 3-5.09.wpd

    SERVICE LIST The Applicant H.C. Ritchie Clark, Q.C. Jensen Lunny MacInnes Law Corporation P.O. Box 12077 Suite 2550 555 West Hastings Street Vancouver, BC V6B 4N5 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. James E. ONeill, Esq. Kathleen P. Makowski, Esq. Pachulski Stang Ziehl & LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington DE 19899 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 14th Floor Costa Mesa, CA 92626 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, 61st Floor New York, NY 10020

    Canadian Counsel to the Debtors


    FEE AUDITORS FINAL REPORT - Page 7 pac FR Jensen 1st int 3-5.09.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

    FEE AUDITORS FINAL REPORT - Page 8 pac FR Jensen 1st int 3-5.09.wpd

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