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Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 1 of 9 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION IN RE: Case No. 12-36187 ATP OIL & GAS CORPORATION Chapter 11 DEBTOR. BRISTOW U.S., LLC Plaintiff, Adversary No. 12- v. ATP Oil & GAS CORPORATION, Defendant. PLAINTIFF S ORIGINAL COMPLAINT NOW INTO COURT, through undersigned counsel, comes Bristow U.S., LLC, (f/k/a Air Logistics, L.L.C.) ( Bristow ), a creditor and party in interest, who files this Original Complaint (the Complaint ) against ATP Oil & Gas Corporation (the Debtor ) as follows: I. PARTIES 1. Plaintiff Bristow U.S., LLC is a Delaware limited liability company with its principal place of business located at Houston, Texas 2. Defendant is the Debtor, and a debtor-in-possession, in the above-captioned matter (the Bankruptcy Case ) by virtue of having filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code on August 17, 2012 (the Petition Date ). The Debtor may be served with process by mailing a copy of the summons and this Complaint to the Debtor at the address shown in the petition: 4600 Post Oak Place, Suite 100, Houston, Texas 77027, Attn: Albert L. Reese, Jr. Pursuant to Federal Rule of Bankruptcy Procedure 7004(g), {N2523929.6} 1

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 2 of 9 service is also being made on the following counsel of record for the Debtor: Mayer Brown LLP, c/o Charles S. Kelly, 700 Louisiana Street, Suite 3400, Houston, Texas 77002. {N2523929.6} II. JURISDICTION AND VENUE 3. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334 because this is a proceeding arising in, arising under, and relating to Debtor s chapter 11 bankruptcy filings. 4. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). 5. Venue is proper in this district pursuant to 28 U.S.C. 1409(a) because the chapter 11 case to which this proceeding relates is pending in this district. III. FACTUAL BACKGROUND A. In May 2009, the Debtor Conveyed to Bristow an Overriding Royalty Interest in Certain Oil and Gas Leases Covering Property in the Gulf of Mexico. 6. Prior to the Petition Date, the Debtor and Bristow entered into the following agreements: (i) Farmout Agreement (the Bristow Farmout ) and (ii) Conveyance of Overriding Royalty Interest (the Bristow ORRI Agreement ). Both of these agreements were executed on October 28, 2009, but were each effective as of May 25, 2009. 7. A true and correct copy of the Bristow Farmout is attached hereto and incorporated herein for all purposes as Exhibit A. Section 2.1 of the Bristow Farmout provides in part as follows: [Debtor] agrees to make, contemporaneously with the execution of this Agreement, a present unequivocal and absolute conveyance of an overriding royalty interest to [Bristow] which entitles [Bristow] to receive a limited net profits interest in the [oil and gas produced] from the Farmout Lands 1 as provided 1 Farmout Lands are those lands identified in Exhibit 1 to the Bristow Farmout and are as follows: (1) OCS-G 13198, covering Atwater Valley Block 63; (2) OCS-G 16661 covering Mississippi Canyon Block 941; (3) OCS-G 24130 covering Mississippi Canyon Block 942; and (4) OCS-G 14016 covering Mississippi Canyon Block 711. Each of these properties are located on the Outer Continental Shelf adjacent to Louisiana. 2

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 3 of 9 in the [Bristow ORRI Agreement].... [Bristow] agrees to contribute to the development of the Farmout Lands the Farmout Related Services 2 and to look solely to the Net Profit Amounts 3 for satisfaction and discharge of the Monthly Contribution Amounts attributable to such Farmout Related Services, and, thus, bear the risk of whether Net Profit Amounts will satisfy and discharge the Monthly Contribution Amounts attributable to such Farmout Related Services; provided that in no event shall the total amount of the Monthly Contribution Amounts that may be recovered by [Bristow] out of the Net Profit Amounts exceed, in the aggregate, $10,000,000. 8. In accordance with the terms of the Bristow Farmout, the Debtor conveyed to Bristow a term overriding royalty interest by way of the Bristow ORRI Agreement. The Bristow ORRI Agreement was recorded in Plaquemines Parish, Louisiana, Terrebonne Parish, Louisiana, Lafourche Parish, Louisiana, and St. Bernard Parish, Louisiana, and with the Minerals Management Service. True and correct file-stamped copies of the Bristow ORRI Agreement recorded in each of the foregoing jurisdictions are attached hereto and incorporated herein for all purposes collectively as Exhibit B. 9. Pursuant to the Bristow ORRI Agreement, the Debtor conveyed to Bristow an overriding royalty interest in and to the Subject Hydrocarbons in and under and that may be produced and saved from the Subject Interests (the Bristow ORRI ). (Bristow ORRI Agreement 2.1). The Subject Interests are defined to include the oil and gas interests identified in Exhibit A to the Bristow ORRI Agreement (which encompass the Farmout Lands identified in the Bristow Farmout) and any unit in which one of these leases is included. (Bristow ORRI Agreement 2.1). Subject Hydrocarbons are defined to include the gross amount of oil and gas produced from the Subject Interests (Bristow ORRI Agreement 2.1). 2 Farmout Related Services is a defined term in the Bristow Farmout. 3 Net Profits Amount is defined in the Bristow ORRI Agreement and that definition is incorporated into the Bristow Farmout Agreement. {N2523929.6} 3

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 4 of 9 10. The Bristow ORRI is a non-operating, non-expense-bearing limited overriding royalty interest in and to the Subject Interests (being a real property interest) free of all cost, risk and expense of exploration, development, improvement, production, operation, repair, maintenance, plugging and abandonment, remediation, treatment, processing, gathering, transportation, delivery, marketing and other handling of the Subject Interests or the Hydrocarbons attributable thereto. (Bristow ORRI Agreement 1.2). The Bristow ORRI Agreement further provides that the conveyance of the Bristow ORRI is an absolute conveyance of a real property interest. The provisions and conditions contained in [the Bristow ORRI Agreement] are covenants running with and burdening the land. (Bristow ORRI Agreement 6.3(a)). 11. The Bristow ORRI, as an interest in the OCS Leases identified in both the Bristow Farmout and the Bristow ORRI Agreement, entitles Bristow to receive an overriding royalty payment on oil and gas production from the Subject Interests and the Farmout Lands equal to the Net Profit Amounts (Bristow ORRI Agreement 1.1; Subject Interests, Farmout Lands and Net Profit Amounts are defined in the Bristow ORRI Agreement). The Net Profit Amounts are calculated in accordance with Article 3 of the Bristow ORRI Agreement, and in general represent the difference between the NP Percentage (defined in 2.1 of the Bristow ORRI Agreement as 1.5%) of gross proceeds from oil and gas production from the Subject Interests/Farmout Lands, and the NP Percentage of certain lease operating expenses attributable to the operation of the Subject Interests/Farmout Lands. Id. at 2.1, 3.1, 3.2. Monthly, the Debtor is required to remit to Bristow the overriding royalty interest as calculated under the terms of the Bristow ORRI Agreement. {N2523929.6} 4

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 5 of 9 B. The Interests of Credit Suisse are Subordinate to those of Bristow. {N2523929.6} 12. In addition to the above agreements, Bristow is the beneficiary of an Act of Subordination of Lien executed on or about October 28, 2009, but effective as of May 25, 2009 (the Bristow Subordination of Lien ), under which Credit Suisse, as Collateral Agent, and on behalf of certain other lenders, subordinated all rights under the terms of that certain Act of Mortgage, Security Agreement, Financing Statement, Fixture Filing and Assignment of Production effective June 27, 2008, as follows: [Credit Suisse, as Collateral Agent/Mortgagee]... does hereby agree that the lien, security interest and other rights created by the [Collateral Documents/Mortgage] against the Subject Properties shall be and are hereby made subordinate, subject and inferior to the rights of [Bristow] as to the Subject Properties under the [Bristow ORRI Agreement] up to the aggregate amount, and in the event of foreclosure and the sale of the real or immovable and personal or movable property and fixtures... it is agreed that the rights of [Bristow] as to the Subject Properties under the [Bristow ORRI Agreement], up the Aggregate Amount, shall in no way be affected thereby. The Aggregate Amount under the Bristow Subordination of Lien is defined as $10 million in cumulative amount paid or due to be paid or attributable to Bristow under the Bristow ORRI Agreement. 13. The Bristow Subordination of Lien was recorded in Plaquemines Parish, Louisiana, Terrebonne Parish, Louisiana, Lafourche Parish, Louisiana, and St. Bernard Parish, Louisiana, and with the Minerals Management Service. True and correct file-stamped copies of the Bristow Subordination of Lien recorded in each of the foregoing jurisdictions are attached hereto collectively as Exhibit C. This Court, in prior Orders, confirmed that the DIP Financing Order does not prime the Bristow ORRI Agreement. IV. CAUSE OF ACTION DECLARATORY JUDGMENT 14. Bristow states the following claim and incorporates all prior paragraphs into this section to the extent not inconsistent as if fully set forth herein. 5

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 6 of 9 15. Under the Uniform Declaratory Judgment Act, this Court has the power to declare rights, status and other legal relations whether or not further relief could be claimed. See 28 U.S.C. 2201 et seq. 16. Bristow seeks a declaratory judgment from this Court under 28 U.S.C. 2201 et seq. that the Bristow ORRI are (a) property of Bristow and not property of the Debtor s estate, and (b) not executory contract or lease interests that the Debtor may reject under 11 U.S.C. 365. A. The Bristow ORRI are Real Property Interests Owned by Bristow that Were Conveyed to Bristow Prior to the Petition Date. 17. Property of the estate is property in which the debtor held an interest at the time of the commencement of the bankruptcy case, as determined by non-bankruptcy law. Endeavour GP, LLC v. Endeavour Highrise, L.P. (In re Endeavour Highrise, L.P.), 432 B.R. 583 (Bankr. S.D. Tex. 2010); In re Kalil Mktg., 2008 Bankr. LEXIS 5030, 3 (Bankr. S.D. Tex. July 22, 2008) (noting that [w]hen the petition was filed, all property in which [the] Debtor held an interest became property of the estate ). The Bristow ORRI and the proceeds thereof are not property of the Debtor s estate because the Bristow ORRI is a real property interest that was conveyed prepetition by the Debtor to Bristow. 18. The Bristow ORRI relates to operations conducted on certain Outer Continental Shelf leases (the OCS Leases ) that are identified in the Bristow ORRI Agreement. Pursuant to the Outer Continental Shelf Lands Act, 28 U.S.C. 1331, et seq. (the OCSLA ), the laws of the state located adjacent to the OCS Leases, in this case, Louisiana, apply to determine the rights of the parties to the extent those laws are not inconsistent with the OCSLA or with other Federal laws. See 43 U.S.C. 1333(a)(2)(A); Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043, 1050 (5th Cir. 1990) ( We find it beyond any doubt that OCSLA is itself a Congressionally mandated choice of law provision requiring that the substantive law of the {N2523929.6} 6

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 7 of 9 adjacent state is to apply even in the presence of a choice of law provision in the contract to the contrary. ); Cutting Underwater Technologies USA, Inc. v. Eni U.S. Operating Co., 671 F.3d 512, 517 (5th Cir. 2012) ( Congress declared that [t]o the extent that they are applicable and not inconsistent with [federal law], the laws of the adjacent states are the law[s] of the United States on the OCS. ) (citing 43 U.S.C. 1333(a)(2)(A)). 19. Royalty interests, overriding royalty interests, and net profit interests are real property interests under Louisiana law. See for example, La. Min. Code arts. 16, 18 and 171; La. R.S. 10:9-102(d)(4). Accordingly, under Louisiana law, the Debtor s pre-petition conveyance of the Bristow ORRI was a conveyance of a real property right (defined as incorporeal immovable property under Louisiana law) to Bristow. 20. To the extent Debtor disputes whether Louisiana or Texas law applies to the OCS Leases, the Bristow ORRI is also a real property interest under Texas law. Accordingly, under Texas law, the Debtor s pre-petition conveyance of the Bristow ORRI was a conveyance of real property to Bristow. 21. The Bristow ORRI Agreement unambiguously provides that (1) an overriding royalty interest in oil and gas interests was conveyed from the Debtor to Bristow; and (2) the Debtor and Bristow intended for the conveyance to be a conveyance of a real property interest. In addition, the transfer was effective, and the conveyance was recorded, prior to the Petition Date. 22. Accordingly, the conveyance of the Bristow ORRI constitutes an absolute unequivocable conveyance of a vested real property interest and is not property of the estate. The Bristow ORRI and all proceeds attributable to that interest are property of Bristow. {N2523929.6} 7

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 8 of 9 23. Prior to the Petition Date, Debtor failed to pay Bristow amounts due to Bristow under the Bristow ORRI Agreement for the periods ending June 20 and July 31, 2012 in the amounts of $438,044.54 and $139,875.73, respectively. Additionally, Debtor has not paid Bristow the full amount which was due to be paid to Bristow on August 31, 2012. 24. By letter dated August 17, 2012, sent to Debtor before learning that it had filed its Petition, Bristow made demand for all past due overriding royalty payments. B. The Bristow ORRI Cannot Be Rejected by the Debtor Under 365. 25. The Bristow ORRI cannot be rejected by the Debtor because it is property of Bristow, and the instrument conveying that interest, the Bristow ORRI Agreement, is not an executory contract under 365(a) of the Bankruptcy Code. See Foothills Texas, Inc. v. MTGLQ Investors, L.P. (In re Foothills Texas, Inc.), 2012 Bankr. LEXIS 3322 (Bankr. D. Del. July 20, 2012) (holding that an instrument conveying an overriding royalty interest was not an executory contract subject to rejection under 365(a)). 26. Section 365(a) only permits a debtor to reject executory contracts. 11 U.S.C. 365(a). The Bankruptcy Code does not define executory contract, but the relevant inquiry is whether performance remains due to some extent on both sides of the agreement. See Phoenix Exploration v. Yaquinto (In re Murexco Petroleum), 15 F.3d 60, 62 (5th Cir. 1994); In re Mirant Corp., 378 F.3d 511, 518 n.3 (5th Cir. 2004) ( the legislative history of section [365(a)] indicates that the term [executory contract] means a contract on which performance is due to some extent on both sides ) (citations omitted). Courts applying 365(a) have also indicated that an agreement is executory if at the time of the bankruptcy filing, the failure of either party to complete performance would constitute a material breach of the contract, thereby excusing the performance of the other party. See In re Murexco Petroleum, 15 F.3d at 62. {N2523929.6} 8

Case 12-36187 Document 618 Filed in TXSB on 10/15/12 Page 9 of 9 27. Although there are continuing obligations and covenants owed by the Debtor to Bristow, the Bristow ORRI Agreement is not an executory contract because Bristow does not owe any remaining performance obligations to the Debtor under this instrument. following: V. PRAYER WHEREFORE, in accordance with the pleadings set forth herein, Bristow requests the (1) that this Court declare that the Bristow ORRI is (a) property of Bristow and not property of the Debtor s estate, and (b) not executory contract or lease interests that the Debtor may reject under 11 U.S.C. 365; and (2) all other and further relief to which Bristow is entitled at law and in equity. Respectfully submitted, /s/ Mark A. Mintz MARK A. MINTZ (SD Tex. 1140193) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P. 201 St. Charles Avenue, 49th Floor New Orleans, Louisiana 70170 Telephone: (504) 582-8368 Fax: (504) 589-8368 Email: mmintz@joneswalker.com AND JOHN KOLWE (La. Bar 20903)(admitted SD Tex.) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P. 600 Jefferson Street, Suite 1600 Lafayette, Louisiana 70170 Telephone: (504) 582-8368 Fax: (504) 589-8368 Email: jkolwe@joneswalker.com Attorneys for Bristow U.S., LLC {N2523929.6} 9

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