PURCHASE AGREEMENT

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Exhibit 10.2

$150,000,000

VENOCO, INC.

8.75% Senior Notes due 2011

PURCHASE AGREEMENT

December 15, 2004

LEHMAN BROTHERS INC.,
HARRIS NESBITT CORP.
c/o Lehman Brothers Inc.
745 Seventh Avenue, Third Floor
New York, New York 10019

Ladies and Gentlemen:

        Venoco, Inc., a Delaware corporation (the " Company "), proposes, upon the terms and considerations set forth herein, to issue and sell to you, as the initial purchasers (the " Initial Purchasers "), $150,000,000 in aggregate principal amount of its 8.75% Senior Notes due 2011 (the " Notes "). The Notes will (i) have terms and provisions that are summarized in the Offering Memorandum (as defined below) and (ii) are to be issued pursuant to an Indenture (the " Indenture ") to be dated as of December 20, 2004, among the Company, the Guarantors (as defined below) and U.S. Bank, N.A., as trustee (the " Trustee "). The Company's obligations under the Notes, including the due and punctual payment of interest on the Notes, will be unconditionally guaranteed (the " Guarantees ") by BMC, Ltd., Whittier Pipeline Corp. and 217 State Street, Inc. (together the " Guarantors "). As used herein, the term "Notes" shall include the Guarantees, unless the context otherwise requires. This is to confirm the agreement concerning the purchase of the Notes from the Company by the Initial Purchasers.

        1.     Preliminary Offering Memorandum and Offering Memorandum.     The Notes will be offered and sold to the Initial Purchasers without registration under the Securities Act of 1933, as amended (the " Securities Act "), in reliance on an exemption pursuant to Section 4(2) under the Securities Act. The Company has prepared a preliminary offering memorandum, dated December 6, 2004 (the " Preliminary Offering Memorandum "), and an offering memorandum, dated December 15, 2004 (the " Offering Memorandum "), setting forth information regarding the Company, the Guarantors, the Notes and the Exchange Notes (as defined herein), the Guarantees and the Exchange Guarantees (as defined herein). The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Notes by the Initial Purchasers in the manner contemplated by the Offering Memorandum.

        It is understood and acknowledged that upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Notes (and all securities issued in exchange therefor or in substitution thereof) shall bear the following legend (along with such other legends as the Initial Purchasers and their counsel deem necessary):

"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF

SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THE NOTE IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."

        Pursuant to Section 3(b) hereof, you have represented to the Company that you will make offers and sales (the " Exempt Resales ") of the Notes purchased by you hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom you reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act (" QIBs ") and (ii) outside the United States to certain persons in offshore transactions in reliance on, and otherwise in compliance with, Regulation S under the Securities Act (" Regulation S "). Those persons specified in clauses (i) and (ii) are referred to herein as the " Eligible Purchasers ". You will offer the Notes to Eligible Purchasers initially at a price equal to 99.362% of the principal amount thereof. Such price may be changed at any time without notice.

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        Holders (including subsequent transferees) of the Notes will have the registration rights set forth in the form of registration rights agreement attached hereto as Exhibit A (the " Registration Rights Agreement ") among the Company, the Guarantors and the Initial Purchasers to be dated December 20, 2004 (the " Closing Date "), for so long as such Notes constitute Transfer Restricted Securities (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the " Commission ") under the circumstances set forth therein, a registration statement under the Securities Act (the " Exchange Offer Registration Statement ") relating to the Company's 8.75% Senior Notes due 2011 (the " Exchange Notes ") and the Guarantors' Exchange Guarantees (the " Exchange Guarantees ") to be offered in exchange for the Notes and the Guarantees (such offer to exchange being referred to as the " Exchange Offer ").

        2.     Representations, Warranties and Agreements of the Company.     The Company and each of the Guarantors, jointly and severally, represent, warrant and agree as follows:

        (a)   When the Notes are issued and delivered pursuant to this Agreement, such Notes will not be of the same class (within the meaning of Rule 144A under the Securities Act) as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or that are quoted in a United States automated inter-dealer quotation system.

        (b)   Neither the Company nor any of its Subsidiaries (as hereinafter defined) is, or after giving effect to the offering and sale of the Notes and upon application of the proceeds as described under the caption "Use of Proceeds" in the Offering Memorandum will be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

        (c)   Assuming that the Initial Purchasers' representations and warranties in Section 3(b) are true, the purchase and resale of the Notes pursuant hereto (including pursuant to the Exempt Resales) is exempt from the registration requirements of the Securities Act. No form of general solicitation or general advertising within the meaning of Regulation D (including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising) was used by the Company, the Guarantors or any of their respective affiliates and representatives (other than you and your affiliates and representatives, as to whom the Company and the Guarantors make no representation) in connection with the offer and sale of the Notes.

        (d)   No form of general solicitation or general advertising was used by the Company, the Guarantors or any of their respective affiliates and representatives (other than you and your affiliates and representatives, as to whom the Company and the Guarantors make no representation) with respect to Notes sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Securities Act), by means of any directed selling efforts within the meaning of Rule 902 under the Securities Act, and the Company, any affiliate of the Company and any person acting on its or their behalf (other than you and your affiliates and representatives, as to whom the Company and the Guarantors make no representation) has complied with and will implement the "offering restrictions" required by Rule 902.

        (e)   Set forth on Exhibit B hereto is a list of each employee pension or benefit plan with respect to which the Company or any corporation considered an affiliate of the Company within the meaning of Section 407(d)(7) of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (" ERISA ") is a party in interest or disqualified person.

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        (f)    Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date, contains all the information specified in, and meeting the requirements of Rule 144A(d)(4) under the Securities Act.

        (g)   The Preliminary Offering Memorandum and Offering Memorandum have been prepared by the Company and the Guarantors for use by the Initial Purchasers in connection with the Exempt Resales. No order or decree preventing the use of the Preliminary Offering Memorandum or the Offering Memorandum, or any order asserting that the transactions contemplated by this Agreement are subject to the registration requirements of the Securities Act has been issued and no proceeding for that purpose has commenced or is pending or, to the knowledge of the Company or any of the Guarantors, is contemplated.

        (h)   The Preliminary Offering Memorandum and the Offering Memorandum as of their respective dates and the Offering Memorandum as of the Closing Date, did not or will not at any time contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that this representation and warranty does not apply to statements in or omissions from the Preliminary Offering Memorandum and Offering Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of the Initial Purchasers expressly for use therein, it being understood that such information consists solely of (A) the italicized language in the penultimate paragraph on the front cover page of the Offering Memorandum concerning the terms of the offering by the Initial Purchasers and (B) the statements concerning the Initial Purchasers contained in the fourth paragraph, the second sentence of the seventh paragraph and the fourth sentence of the ninth paragraph and the tenth paragraph under the heading "Plan of Distribution."

        (i)    Each of the Guarantors, Ellwood Pipeline, Inc. and 6267 Carpinteria Avenue, LLC (collectively, the " Subsidiaries ") and the Company have been duly incorporated or formed and are validly existing as corporations, limited partnerships or limited liability companies, as applicable, in good standing under the laws of their respective jurisdictions of incorporation or formation, are duly qualified to do business and are in good standing as foreign corporations, limited partnerships or limited liability companies in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification (except such failures to qualify or to be in good standing as are not, either individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole), and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged. The Subsidiaries are the only "subsidiaries" of the Company. For purposes of this Agreement, a "subsidiary" of the Company is any corporation, partnership, limited liability company or other business entity in which the Company owns, directly or indirectly, more than 50% of the voting or economic equity interest. A list of all entities in which the Company directly or indirectly holds an equity interest, including the amount of such interest and the jurisdiction of formation or organization of each such entity is set forth in Schedule 2(i).

        (j)    The authorized, issued and outstanding common stock of the Company is as set forth in the Offering Memorandum, and there is no other class of equity securities of the Company issued or outstanding. All of the issued shares of capital stock, partnership interests and limited liability company member interests of each corporate, partnership and limited liability company Subsidiary (as applicable) of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by the Company free and clear of all liens, encumbrances, equities or claims.

        (k)   The Company and each Guarantor have all requisite corporate, partnership or limited liability company power and authority, as applicable, to enter into the Indenture. The Indenture

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has been duly and validly authorized by the Company and each Guarantor, and upon its execution and delivery and, assuming due authorization, execution and delivery by the Trustee, will constitute the valid and binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles; no qualification of the Indenture under the Trust Indenture Act of 1939 (the " 1939 Act ") is required in connection with the offer and sale of the Notes contemplated hereby or in connection with the Exempt Resales.

        (l)    The Indenture will conform to the description thereof in the Offering Memorandum.

        (m)  The Company has all requisite corporate power and authority to issue and sell the Notes. The Notes have been duly authorized by the Company and, when duly executed by the Company in accordance with the terms of the Indenture, assuming due authentication of the Notes by the Trustee, upon delivery to the Initial Purchasers against payment therefor in accordance with the terms hereof, will be validly issued and delivered, and will constitute valid and binding obligations of the Company and each Guarantor, as guarantor, entitled to the benefits of the Indenture, enforceable against the Company and each Guarantor, as guarantor, in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles.

        (n)   The Notes will conform to the description thereof in the Offering Memorandum.

        (o)   The Company has all requisite corporate power and authority to issue the Exchange Notes. The Exchange Notes have been duly and validly authorized by the Company and if and when duly issued and authenticated in accordance with the terms of the Indenture and delivered in accordance with the Exchange Offer provided for in the Registration Rights Agreement, will constitute valid and binding obligations of the Company and each Guarantor, as guarantor, entitled to the benefits of the Indenture, enforceable against the Company and each Guarantor, as guarantor, in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles.

        (p)   Each Guarantor has all requisite corporate, partnership or limited liability company power and authority, as applicable, to issue the Guarantees. The Guarantees have been duly and validly authorized by each Guarantor and when duly executed and delivered by each Guarantor in accordance with the terms of the Indenture and upon the due execution, authentication and delivery of the Notes in accordance with the Indenture and the issuance of the Notes in the sale to the Initial Purchasers contemplated by this Agreement, will constitute valid and binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles.

        (q)   The Guarantees will conform to the description thereof in the Offering Memorandum.

        (r)   Each Guarantor has all requisite corporate, partnership or limited liability company power and authority, as applicable, to issue the Exchange Guarantees. The Exchange Guarantees have been duly and validly authorized by each Guarantor and if and when duly executed and delivered by each Guarantor in accordance with the terms of the Indenture and upon the due execution and authentication of the Exchange Notes in accordance with the Indenture and the issuance and delivery of the Exchange Notes in the Exchange Offer contemplated by the

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Registration Rights Agreement, will constitute valid and binding obligations of such Guarantor, entitled to the benefits of the Indenture, enforceable against such Guarantor in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights generally and by general equitable principles.

        (s)   The Company and each Guarantor have all requisite corporate, partnership or limited liability company power and authority, as applicable, to enter into the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Company and each Guarantor and, when executed and delivered by the Company and each Guarantor in accordance with the terms hereof and thereof, will be validly executed and delivered and (assuming the due authorization, execution and delivery thereof by the Initial Purchasers) will be the legally valid and binding obligation of the Company and such Guarantor in accordance with the terms thereof, enforceable against the Company and such Guarantor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditor's rights generally, by general equitable principles and, as to rights of indemnification and contribution, by principles of public policy.

        (t)    The Registration Rights Agreement will conform to the description thereof in the Offering Memorandum.

        (u)   The Company and each Guarantor have all requisite corporate, partnership or limited liability company power and authority, as applicable, to enter into this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors.

        (v)   The issue and sale of the Notes and the Guarantees and the compliance by the Company and the Guarantors with all of the provisions of the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the Indenture, the Registration Rights Agreement and this Agreement and the consummation of the transactions contemplated hereby and thereby (i) will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the property or assets of the Company or any Subsidiary is subject, (ii) will not result in any violation of the provisions of the charter or by-laws of the Company or the charter, by-laws, partnership agreement, limited liability company agreement or similar organizational documents of any Subsidiary or (iii) will not violate any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any Subsidiary or any of their properties or assets, except, in the case of clauses (i) and (iii), as would not reasonably be expected to cause, individually or in the aggregate, a material adverse change with respect to the management, condition, financial or otherwise, stockholders' equity, results of operations or business of the Company and its Subsidiaries, taken as a whole (a " Material Adverse Effect "). No consent, approval, authorization or order of, or filing, registration or qualification with any such court or governmental agency or body (each, a " Consent ") is required for the issue and sale of the Notes and the Guarantees pursuant to this Agreement or the consummation by the Company and the Guarantors of the transactions contemplated by this Agreement, the Registration Rights Agreement or the Indenture, except for (i) the filing of registration statements by the Company with the Commission pursuant to the Securities Act as required by the Registration Rights Agreement, (ii) qualification of the Indenture under the 1939 Act, (iii) such Consents as may be required under state securities or Blue Sky laws or foreign laws in connection with the purchase and distribution of the Notes by the Initial Purchasers and (iv) Consents that have been made or obtained on or prior to the Closing Date.

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        (w)  As of the date hereof, there are no contracts, agreements or understandings between the Company, any Guarantor and any person granting such person the right to require the Company or any Guarantor to file a registration statement under the Securities Act with respect to any securities of the Company or any Guarantor (other than the Registration Rights Agreement) owned or to be owned by such person or to require the Company or any Guarantor to include such securities in the securities registered pursuant to the Registration Rights Agreement or in any securities being registered pursuant to any other registration statement filed by the Company or any Guarantor under the Securities Act, nor will there be any such contract, agreement or understanding in effect on the Closing Date or at any time between the date hereof and the Closing Date.

        (x)   During the six-month period preceding the date of the Offering Memorandum, none of the Company, the Guarantors or any other person acting on behalf of the Company or any Guarantor has offered or sold to any person any Notes or Guarantees, or any securities of the same or a similar class as the Notes or Guarantees, other than Notes or Guarantees offered or sold to the Initial Purchasers hereunder. The Company and the Guarantors will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Securities Act), of any Notes or any substantially similar security issued by the Company or any Guarantor, within six months subsequent to the date on which the distribution of the Notes has been completed (as notified to the Company by the Initial Purchasers), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Notes in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Securities Act; including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act.

        (y)   Except as fairly set forth in the Offering Memorandum, the Company and its Subsidiaries, taken as a whole, have not sustained, since the date of the latest audited financial statements included in the Offering Memorandum, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, and, since such date, no event or events have occurred that, nor has any circumstance become known that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

        (z)   The financial statements (including the related notes and supporting schedules) included in the Offering Memorandum present fairly, in all material respects, the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved.

        (aa) Deloitte & Touche LLP, who have certified certain financial statements of the Company, whose report appears in the Offering Memorandum and who have delivered the initial letter referred to in Section 7(e) hereof, are independent public accountants as required by the Securities Act and the rules and regulations promulgated thereunder (the " Rules and Regulations ") during the periods covered by the financial statements on which they reported contained in the Offering Memorandum.

        (bb) Ryder Scott Company, L.P. ("Ryder Scott"), whose reports are referenced in the Offering Memorandum (collectively, the "Reserve Reports") was, as of the date of each of the Reserve Reports, the Company's independent reserve engineer. As of the date hereof, Netherland Sewell & Associates, Inc. is the Company's independent reserve engineer. No information has come to the attention of the Company or, to the Company's knowledge, to Ryder Scott, that could reasonably be expected to cause Ryder Scott to withdraw its Reserve Reports. In October 2004, the Company

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provided Ryder Scott with supplemental information regarding two of its fields, but, to the knowledge of the Company, Ryder Scott has not undertaken a review or made any analysis of such information or its potential impact, if any, on the Reserve Reports.

        (cc) The statistical, customer-related and market-related data included in the Offering Memorandum are based on or derived from sources which the Company and the Guarantors believe (without independent investigation of any data received from third party sources) to be reliable and accurate in all material respects.

        (dd) The Company and each of its Subsidiaries has good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Offering Memorandum and such as do not materially affect the value of the property of the Company and its Subsidiaries taken as a whole and do not materially interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries; and all real property (including oil and natural gas fields in which they hold an interest) and buildings held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as do not materially affect the value of the property of the Company and its Subsidiaries taken as a whole and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

        (ee) Except as disclosed in the Offering Memorandum, the Company and its Subsidiaries have insurance covering the properties, operations, personnel and businesses of the Company and its Subsidiaries, which insurance is in amounts and insures against such losses and risks as are customary in the oil and gas industry; and neither the Company nor any of its Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

        (ff)  The Company and each of its Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses necessary for the conduct of their respective businesses as presently conducted and have no reason to believe that the conduct of their respective businesses will in any material respect conflict with, and have not received any notice of any claim of conflict with, any such rights of others.

        (gg) Except as described in the Offering Memorandum, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property or assets of the Company or any of its Subsidiaries is the subject that would reasonably be likely to have a Material Adverse Effect, and to the best of the Company's and each Subsidiary's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others that would reasonably be likely to have a Material Adverse Effect.

        (hh) Schedule B to Exhibit C hereto identifies all contracts or other documents that would be required to be filed as exhibits to a Company registration statement pursuant to item 601(10) of Regulation S-K.

        (ii)   No relationship, direct or indirect, that would be required to be described in a Company registration statement pursuant to Item 404 of Regulation S-K, exists between or among the Company or any Guarantor, on the one hand, and the directors, officers, stockholders, customers

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or suppliers of the Company or any Guarantor, on the other hand, that has not been described in the Offering Memorandum.

        (jj)   No labor disturbance by the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company or any of its Subsidiaries, is imminent that could reasonably be expected to have a Material Adverse Effect.

        (kk) The Company is in compliance in all material respects with all presently applicable provisions of ERISA; no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company or any Guarantor would have any material liability; neither the Company nor any Guarantor has incurred or expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the " Code "); and each "pension plan" for which the Company or any Guarantor would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

        (ll)   The Company and its Subsidiaries have filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company or any of its Subsidiaries that has had (nor does the Company or any Guarantor have any knowledge of any tax deficiency that is reasonably likely to result in) a Material Adverse Effect.

        (mm) Since the date as of which information is given in the Preliminary Offering Memorandum through the date hereof, and except as may otherwise be disclosed in the Offering Memorandum, neither the Company nor any Guarantor has (i) issued or granted any securities, (ii) incurred any liability or obligation, direct or contingent, other than liabilities and obligations that were incurred in the ordinary course of business, (iii) entered into any transaction not in the ordinary course of business or (iv) declared or paid any dividend on its capital stock.

        (nn) Neither the Company nor any of its Subsidiaries (i) is in violation of its charter or by-laws or similar organizational documents, (ii) is in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant, condition or other obligation contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain or maintain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, except with respect to matters set forth in the Offering Memorandum and, in the cases of clauses (ii) and (iii), except for such matters as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

        (oo) Neither the Company nor any of its Subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its Subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

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        (pp) On and immediately after the Closing Date, the Company and each Guarantor (after giving effect to the issuance of the Notes and the other transactions related thereto as described in the Offering Memorandum) will be Solvent. As used in this paragraph, the term " Solvent " means, with respect to a particular date and a particular person, that on such date (i) the present fair market value (or present fair saleable value) of the assets of such person and its subsidiaries, taken as a whole, is not less than the total amount required to pay the liabilities of such person on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) such person and its subsidiaries, taken as a whole, are able to realize upon their assets and pay their debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance of the Notes as contemplated by this Agreement and the Offering Memorandum, the Company and each Guarantor are not incurring debts or liabilities beyond their ability to pay as such debts and liabilities mature; (iv) such person is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such person is engaged and (v) such person is not a defendant in any civil action that is reasonably likely to result in a judgment that the person and its subsidiaries, taken as a whole, is or would become unable to satisfy.

        (qq) Except as disclosed in the Offering Memorandum, no Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's properties or assets to the Company or any other Subsidiary of the Company.

        (rr)  Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Notes or Exchange Notes.

        (ss)  Except for such matters as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect and such matters as are set forth in the Offering Memorandum, the Company and its Subsidiaries (and, to the knowledge of the Company or any of its Subsidiaries, their respective predecessors in interest) (1) are conducting and have conducted their respective businesses, operations and facilities in compliance with Environmental Laws (as defined below); (2) have duly obtained, possess, maintain in full force and effect, and have fulfilled and performed all of their obligations under any and all permits, licenses or registrations required under Environmental Law (" Environmental Permits "); (3) are not party to, or otherwise bound by, any contract under which the Company or any of its Subsidiaries is obligated by any representation, warranty, indemnification, covenant, restriction or other undertaking concerning any material liability under Environmental Law or related to the remediation of any Hazardous Substances (as defined below) (4) have not received any notice from a governmental authority or