EP Energy Brazil, L.L.C. (Form: S-4, Received: 09/11/2012 06:04:54)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on September 11, 2012

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

EP ENERGY LLC
(Exact name of registrant as specified in its charter)


DELAWARE (State or other jurisdiction of Incorporation or organization)		1311 (Primary Standard Industrial Classification Code Number)		45-4871021 (I.R.S. Employer Identification No.)

1001 Louisiana Street
Houston, Texas 77002
713-997-1200
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

EVEREST ACQUISITION FINANCE INC.
(Exact name of registrant as specified in its charter)


DELAWARE (State or other jurisdiction of Incorporation or organization)		1311 (Primary Standard Industrial Classification Code Number)		45-4870996 (I.R.S. Employer Identification No.)

1001 Louisiana Street
Houston, Texas 77002
(713) 997-1200
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

GUARANTORS LISTED ON SCHEDULE A HERETO
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Marguerite N. Woung-Chapman, Esq.
General Counsel
EP Energy LLC
1001 Louisiana Street
Houston, Texas 77002
(713) 997-1200
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:
Monica K. Thurmond, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000

Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o

CALCULATION OF REGISTRATION FEE

Title of each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee(2)




6.875% Senior Secured Notes due 2019	$750,000,000	100%	$750,000,000	$85,950

Guarantee of 6.875% Senior Secured Notes due 2019(3)	—	—	—	(4)

9.375% Senior Notes due 2020	$2,000,000,000	100%	$2,000,000,000	$229,200

Guarantee of 9.375% Senior Notes due 2020(3)	—	—	—	(4)

7.750% Senior Notes due 2022	$350,000,000	100%	$350,000,000	$40,110

Guarantee of 7.750% Senior Notes due 2022(3)	—	—	—	(4)

(1): Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the "Securities Act"). The proposed maximum offering price is estimated solely for purpose of calculating the registration fee.
(2): Calculated pursuant to Rule 457(f) of the rules and regulations of the Security Act. Paid by wire transfer on September 6, 2012
(3): Each of EP Energy LLC's wholly-owned domestic subsidiaries jointly, severally and unconditionally guarantees, the 6.875% Senior Secured Notes due 2019 on a senior secured basis, the 9.375% Senior Notes due 2020 on a senior unsecured basis and the 7.750% Senior Notes due 2022 on a senior unsecured basis.
(4): See Schedule A on the inside facing page for table of additional registrant guarantors. Pursuant to Rule 457(n) of the rules and regulations under the Securities Act, no separate fee for the guarantee is payable.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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SCHEDULE A

Guarantor	State or Other Jurisdiction of Incorporation or Organization	Address of Registrants' Principal Executive Offices	IRS Employer Identification Number

EP Energy Global LLC	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy Brazil, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy Preferred Holdings Company, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
MBOW Four Star, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy Management, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy Resale Company, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy Gathering Company, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EP Energy E&P Company, L.P.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable
EPE Nominee Corp.	Delaware	1001 Louisiana Street Houston, Texas 77002	80-0817606
Crystal E&P Company, L.L.C.	Delaware	1001 Louisiana Street Houston, Texas 77002	Not Applicable

The primary standard industrial classification code number for each of the additional registrants is 1311.

Subject to completion, dated September [ ], 2012

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

EP Energy LLC
Everest Acquisition Finance Inc.

Exchange Offer for

$750,000,000 6.875% Senior Secured Notes due 2019
$2,000,000,000 9.375% Senior Notes due 2020 and
$350,000,000 7.750% Senior Notes due 2022

The Notes and the Guarantees

•: We are offering to exchange $750,000,000 of our outstanding 6.875% Senior Secured Notes due 2019 and certain related guarantees, which we refer to collectively as the "initial senior secured notes," for a like aggregate amount of our registered 6.875% Senior Secured Notes due 2019 and certain related guarantees, which we refer to collectively as the "senior secured exchange notes." The senior secured exchange notes will be issued under an indenture dated as of April 24, 2012. We refer to the initial senior secured notes and the senior secured exchange notes collectively as the "senior secured notes."
•: We are offering to exchange $2,000,000,000 of our outstanding 9.375% Senior Notes due 2020 and certain related guarantees, which we refer to collectively as the "initial 2020 senior notes," for a like aggregate amount of our registered 9.375% Senior Notes due 2020 and certain related guarantees, which we refer to collectively as the "senior 2020 exchange notes." The senior 2020 exchange notes will be issued under an indenture dated as of April 24, 2012. We refer to the initial 2020 senior notes and the senior 2020 exchange notes collectively as the "senior 2020 notes."
•: We are offering to exchange $350,000,000 of our outstanding 7.750% Senior Notes due 2022 and certain related guarantees, which we refer to collectively as the "initial 2022 senior notes," for a like aggregate amount of our registered 7.750% Senior Notes due 2022 and certain related guarantees, which we refer to collectively as the "senior 2022 exchange notes." The senior 2022 exchange notes will be issued under an indenture dated as of August 13, 2012. We refer to the initial 2022 senior notes and the senior 2022 exchange notes collectively as the "senior 2022 notes."
•: We refer to the senior 2020 notes and the senior 2022 notes collectively or individually, as the context requires, as the "senior notes."
•: We refer to the initial senior secured notes, the initial 2020 senior notes and the initial 2022 senior notes collectively or individually, as the context requires, as the "initial notes." We refer to the senior secured exchange notes, the senior 2020 exchange notes and the senior 2022 exchange notes collectively or individually, as the context requires, as the "exchange notes." We refer to the initial notes and the exchange notes collectively as the "notes."
•: The senior secured exchange notes will mature on May 1, 2019. We will pay interest on the senior secured exchange notes semi-annually on May 1 and November 1 of each year, commencing on November 1, 2012, at a rate of 6.875% per annum, to holders of record on the April 15 or October 15 immediately preceding the interest payment date.
•: The senior 2020 exchange notes will mature on May 1, 2020. We will pay interest on the senior 2020 exchange notes semi-annually on May 1 and November 1 of each year, commencing on November 1, 2012, at a rate of 9.375% per annum, to holders of record on the April 15 or October 15 immediately preceding the interest payment date.
•: The senior 2022 exchange notes will mature on September 1, 2022. We will pay interest on the senior 2022 exchange notes semi-annually on March 1 and September 1 of each year, commencing on March 1, 2013, at a rate of 7.750% per annum, to holders of record on the February 15 or August 15 immediately preceding the interest payment date.
•: The exchange notes will be guaranteed, jointly and severally, by our present and future direct or indirect wholly owned material domestic subsidiaries that guarantee our new senior secured reserve-based revolving credit facility (the "RBL Facility").
•: The senior secured exchange notes and the related guarantees will be secured (i) on a first-priority basis by a perfected pledge of the capital stock of all first-tier foreign subsidiaries of EP Energy LLC (the "Issuer"), Everest Acquisition Finance Inc. (the "Co-Issuer" and, together with the Issuer, the "Issuers") and each of the guarantors (which pledge will be limited to 65% of the voting capital stock and 100% of the non-voting capital stock of each such subsidiary) (the "Secured Notes/Term Loan Priority Collateral"); and (ii) on a second-priority basis by all of the other assets securing the RBL Facility (including a perfected pledge of all of the capital stock of each direct, wholly owned, domestic, material restricted subsidiary of each of the Issuers and the guarantors), subject to exceptions described herein.

Terms of the Exchange Offer

•: The exchange offer will expire at midnight, New York City time, on , 2012, unless we extend it.
•: If all the conditions to this exchange offer are satisfied, we will exchange all of our initial notes that are validly tendered and not withdrawn for the exchange notes.
•: You may withdraw your tender of initial notes at any time before the expiration of this exchange offer.
•: The exchange notes that we will issue you in exchange for your initial notes will be substantially identical to your initial notes except that, unlike your initial notes, the exchange notes will have no transfer restrictions or registration rights.
•: The exchange notes that we will issue you in exchange for your initial notes are new securities with no established market for trading.

Before participating in this exchange offer, please refer to the section in this prospectus entitled "Risk Factors" beginning on page 34.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We have not applied, and do not intend to apply, for listing the notes on any national securities exchange or automated quotation system.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for initial notes where those initial notes were acquired by that broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

The date of this prospectus is , 2012.

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TABLE OF CONTENTS

		Page

Summary			1
Risk Factors			34
Market and Industry Data and Forecast			73
Cautionary Statements Concerning Forward-Looking Statements			74
Use of Proceeds			75
Capitalization			76
Unaudited Pro Forma Condensed Consolidated Financial Data			77
Selected Historical Consolidated Financial Data			83
Management's Discussion and Analysis of Financial Condition and Results of Operations			86
Business			112
Management			139
Security Ownership of Certain Beneficial Owners and Management			166
Certain Relationships and Related Party Transactions			168
Description of Other Indebtedness			170
The Exchange Offer			174
Description of Senior Secured Exchange Notes			185
Description of Senior 2020 Exchange Notes			271
Description of Senior 2022 Exchange Notes			341
Book-Entry; Delivery and Form			411
Certain U.S. Federal Income Tax Considerations			413
Plan of Distribution			420
Legal Matters			421
Experts			421
Glossary of Oil and Natural Gas Terms			A-1
Index to Consolidated Financial Statements			F-1

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PRESENTATION OF FINANCIAL INFORMATION

EP Energy LLC (the "Issuer" and "Successor" and formerly known as Everest Acquisition LLC) was formed as a Delaware limited liability company on March 23, 2012 by Apollo Global Management LLC (Apollo) and other private equity investors (collectively, the Sponsors). On May 24, 2012, the Sponsors acquired EP Energy Global LLC, (the "Predecessor" and formerly known as EP Energy Corporation and EP Energy, L.L.C. after its conversion into a Delaware limited liability company) and subsidiaries for approximately $7.2 billion in cash as contemplated by the merger agreement among El Paso Corporation ("El Paso") and Kinder Morgan, Inc. ("KMI"). The entities acquired are engaged in the exploration for and the acquisition, development, and production of oil, natural gas and NGL primarily in the United States, with other international activities in Brazil and Egypt (Egypt was sold in June 2012) and together constituted the oil and natural gas operations of El Paso.

We present historical financial information prior to May 24, 2012, relating to EP Energy Global LLC and its consolidated subsidiaries in this prospectus. Following the acquisition, EP Energy Global LLC is a wholly owned subsidiary of the Issuer and is the predecessor of the Issuer for accounting purposes. Accordingly, its financial statements are presented for the historical periods prior to the Acquisition Transactions (as defined herein). The Issuer conducts all of its operations through EP Energy Global LLC and other subsidiaries that were subsidiaries of EP Energy Global LLC at the time of the historical financial statements presented in this prospectus and that were spun out of EP Energy Global LLC prior to the closing of the Acquisition Transactions.

Historical financial results in this prospectus for the periods before and after the Acquisition on May 24, 2012, have been presented separately for the predecessor and successor in accordance with required GAAP presentation. Despite this separate GAAP presentation, the successor had no independent oil and gas operations prior to the acquisition and accordingly there were no operational exploration and production activities changed as a result of the acquisition of the Predecessor. Consequently, given the continuity of operations, when assessing certain sections in our Management's Discussion and Analysis (e.g. variance analysis, operating statistics) and pro forma financial information for the periods presented throughout this prospectus, we have presented a combined analysis of the pre-acquisition results of operations of the Predecessor and the post-acquisition results of operations of the Successor. We believe that reflecting this combined information and analysis, while non-GAAP, facilitates the most meaningful comparison and understanding of our operating performance in 2012 over the same period in the prior year and the pro forma results of our operations.

USE OF NON-GAAP FINANCIAL INFORMATION

We use the non-GAAP financial measures of Reported EBITDA, Adjusted EBITDAX, Cash Operating Costs /Adjusted Cash Operating Costs, Reserve Replacement Costs / Reserve Replacement Ratio, and PV-10. We believe these are supplemental measures and provide meaningful information to our investors; however, due to the limitations of these measures as analytical tools, we rely primarily on our GAAP results. Each of these non-GAAP measures is further described below or as further noted.

Reported EBITDA and Adjusted EBITDAX. Reported EBITDA is defined as net income plus interest and debt expense, income taxes and depreciation, depletion and amortization. Adjusted EBITDAX is defined as Reported EBITDA, adjusted as applicable in the relevant period, for the net change in the fair value of derivatives (mark to market effects, net of cash settlements and premiums related to these derivatives), ceiling test charges or other impairments, adjustments to reflect cash distributions of the earnings from our unconsolidated affiliates, non-cash equity based compensation expenses, transition and restructuring costs we expect not to recur, advisory fees paid to our sponsors and exploration expenses.

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We believe that the presentation of Reported EBITDA and Adjusted EBITDAX is important to provide management and investors with (i) additional information to evaluate our ability to service debt adjusting for items required or permitted in calculating covenant compliance under our debt agreements, (ii) an important supplemental indicator of the operational performance of our business, (iii) an additional criterion for evaluating our performance relative to our peers, (iv) additional information to measure our liquidity (before cash capital requirements and working capital needs) (v) and supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future.

Reported EBITDA and Adjusted EBITDAX have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP or as an alternative to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. For example, our presentation of Reported EBITDA and Adjusted EBITDAX may not be comparable to similarly titled measures used by other companies in our industry. Furthermore, our presentation of Reported EBITDA and Adjusted EBITDAX should not be construed as an inference that our future results will be unaffected by the items noted above or what we believe to be other unusual or non-recurring items or that in the future we may not incur expenses that are the same as or similar to some of the adjustments in this presentation.

Cash Operating Costs / Adjusted Cash Operating Costs. We monitor cash operating costs required to produce our oil and natural gas production volumes. Cash operating costs is a non-GAAP measure calculated on a per Mcfe basis and includes total operating expenses less depreciation, depletion and amortization expense, ceiling test and other impairment charges, exploration expense, and transportation costs and costs of products. Adjusted cash operating costs reflects cash operating costs adjusted for non-recurring transition and restructuring costs, advisory fees paid to our sponsors and non-cash equity based compensation expense. We believe cash operating costs and adjusted cash operating costs per unit are valuable measures to provide management and investors reflecting operating performance and efficiency; however, these measures may not be comparable to similarly titled measures used by other companies and are subject to several of the same limitations as analytical tools as noted in the paragraphs above.

Reserve Replacement Ratio/Reserve Replacement Costs. We calculate two primary metrics, (i) a reserve replacement ratio and (ii) reserve replacement costs, to measure our ability to establish a long-term trend of adding reserves at a reasonable cost in our key asset areas. The reserve replacement ratio is an indicator of our ability to replenish annual production volumes and grow our reserves. It is important for us to economically find and develop new reserves that will more than offset produced volumes and provide for future production given the inherent decline of hydrocarbon reserves. In addition, we calculate reserve replacement costs to assess the cost of adding reserves, which is ultimately included in depreciation, depletion and amortization expense. For a further discussion of these measures, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

PV-10. PV-10 is considered a non-GAAP measure and is derived from the standardized measure of discounted future net cash flows of our oil and natural gas properties, which is the most directly comparable GAAP financial measure. PV-10 is equal to the standardized measure of discounted future net cash flows at the applicable date, before deducting future taxes, discounted at 10%. We believe that the presentation of PV-10 is relevant and useful to investors because it presents the relative monetary significance of our oil and natural gas properties regardless of tax structure. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. PV-10, however, is not a substitute for the standardized measure of

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discounted future net cash flows. Our PV-10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of our oil, natural gas and NGL reserves.

PRESENTATION OF RESERVES INFORMATION

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only estimated proved, probable and possible reserves that meet the SEC's definitions of such terms. We disclose estimated proved reserves in this prospectus. Our estimates of proved reserves contained in this prospectus were estimated by our internal staff of engineers and comply with the rules and definitions promulgated by the SEC. For the year ended December 31, 2011, we engaged Ryder Scott Company, L.P., an independent petroleum engineering firm, to perform reserve audit services with respect to a substantial portion of our proved reserves.

EQUIVALENCY

This prospectus presents certain production and reserves-related information on an "equivalency" basis. Equivalent volumes are computed with oil and natural gas liquids quantities converted to Mcfe at a ratio of one Bbl to six Mcf, and natural gas converted to Boe at a ratio of six Mcf to one Bbl. These conversions are based on energy equivalency conversion methods primarily applicable at the burner tip and do not represent value equivalencies at the wellhead. Although these conversion factors are industry accepted norms, they are not reflective of price or market value differentials between product types.

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SUMMARY

This summary highlights information appearing elsewhere in this prospectus. This summary is not complete and does not contain all of the information that may be important to you. You should carefully read the entire prospectus, including the information presented under "Risk Factors" and "Unaudited Pro Forma Condensed Consolidated Financial Data" and the historical financial statements and related notes presented elsewhere in this prospectus.

Unless otherwise indicated or the context otherwise requires, references in this prospectus to "we," "our," "us," and the "Company" refer to EP Energy LLC (formerly known as Everest Acquisition LLC) (the "Issuer") and each of its consolidated subsidiaries, including Everest Acquisition Finance Inc. (the "Co-Issuer" and, together with the Issuer, the "Issuers"). References in this prospectus to the "Sponsors" refer to the entities described under "—Our Sponsors" and their respective affiliates. You should carefully consider all information in this prospectus, including the matters discussed in "Risk Factors." Financial information identified in this prospectus as "pro forma" gives effect to the closing of the Acquisition and Refinancing Transactions, which are described in this prospectus summary under "—The Acquisition Transactions" and "—The Refinancing Transactions." Certain oil and gas industry terms used in this prospectus are defined in the "Glossary of Oil and Natural Gas Terms" beginning on page A-1 of this prospectus.

Our Company

We are one of North America's leading independent oil and natural gas producers. We have a large and diverse base of producing assets that provides cash flow to fund the development of our key programs, which at this time are primarily oil-focused. Over the last several years, we have high-graded our future drilling inventory by establishing large acreage positions with repeatable drilling opportunities and more favorable return characteristics. Domestically, we currently operate through three divisions: Central, Eagle Ford and Southern, and have a strategic presence in well-known oil resource areas, including the Eagle Ford Shale, the Altamont Field, the Wolfcamp Shale and the South Louisiana Wilcox area. Our large and diverse producing gas assets include our Haynesville Shale position, substantially all of which is held by production, which gives us a significant presence in unconventional natural gas. We also have a small international presence in Brazil.

Our management team, which has been with us since at least 2007, has an average of 22 years of experience in the oil and gas industry and technical and operating expertise across our geographic regions. Our management team has a track record of identifying, acquiring and developing low-risk, repeatable resource opportunities and has executed a multi-year effort to add assets that fit our competencies. Today, our substantial key program drilling inventory encompasses approximately 4,500 locations and more than 20 years of drilling activity at our current pace. We have operational control over approximately 77% of our producing wells and 88% of our key program drilling inventory as of December 31, 2011. This control has allowed us to continually improve our capital and operating efficiencies. In 2011, we drilled 233 gross wells domestically (182 net to our ownership interests ("net")) with a success rate of 100%, adding approximately 1,100 Bcfe of proved reserves at a replacement cost of $1.43 per Mcfe, the majority of which was oil.

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of December 2011 was approximately 24,000 Bbls/d, which contributed to our approximate 50% year-over-year growth in oil production for the fourth quarter of 2011. We anticipate that approximately 91% of our capital expenditures for 2012 will be allocated to oil-focused key programs. For the six month period ended June 30, 2012, 57% of our revenues (excluding realized and unrealized gains on financial derivatives) were contributed by oil and NGLs, versus 35% during the same period in 2011. For the month of June 2012, our oil production was approximately 27,000 Bbls/d.

For the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, we generated Adjusted EBITDAX of $655 million on average daily production of 906 MMcfe/d. See "—Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" for our definition of Adjusted EBITDAX and a reconciliation of Adjusted EBITDAX to amounts reported under GAAP.

The following table provides summary data for each of our areas of operation:

	As of December 31, 2011									As of June 30, 2012

	Proved Reserves (Bcfe)		% Proved Developed			PV-10		Net Acres		Average Daily Production (MMcfe/d)
	(dollars in millions)
United States
Central
Haynesville Shale		903		34	%	$	719		41,000		317
South Louisiana Wilcox		31		48			143		183,000		16
Altamont Field		551		37			1,479		176,000		62
Other Central		1,117		75			998		1,339,000		208
Eagle Ford
Eagle Ford Shale		642		18			2,283		157,000		91
Southern
Wolfcamp Shale		148		12			337		138,000		10
Other Southern(1)		326		94			536		314,000		110

Total United States		3,718		48			6,495		2,348,000		814
International
Brazil		95		100			210		132,000		36
Egypt(2)		—		—			—		774,000		—

Total Consolidated		3,813		50			6,705		3,254,000		850

Unconsolidated Affiliate(3)		174		86			311				56

Total Combined		3,987		51		$	7,016				906

(1): Gulf of Mexico assets were sold in July 2012 and comprised reserves of 90 Bcfe, PV-10 of $150 million, net acres of 233,000 and average daily production of 45 Mcfe/d.
(2): Sold in June 2012.
(3): Represents our approximate 49% equity interest in Four Star Oil & Gas Company ("Four Star").

Key Programs

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Altamont Field and South Louisiana Wilcox. We are redeploying the capital allocated to the Haynesville Shale to our oil programs. The technical and operating experience gained from our successful Haynesville program has been employed in our other key programs, including the Eagle Ford Shale.

Haynesville Shale

The initial execution of our strategy of repeatable drilling programs was in the Haynesville Shale, where we had existing conventional production as a result of historical development activities in east Texas and north Louisiana. Our operations in the Haynesville Shale are primarily focused in DeSoto Parish and Caddo Parish, Louisiana. We acquired additional leasehold interests through the acquisition of Peoples Energy Production Company in 2007. We piloted horizontally drilled wells in the Haynesville Shale, experimenting with different horizontal lateral lengths and fracture stimulation staging, with the objective of delivering optimal capital efficiency, finding costs and returns. High production rates in our Haynesville program combined with very low operating and development costs create competitive returns for us even at low natural gas prices. In addition, our acreage in the Haynesville Shale is predominately held by production, giving us the flexibility to pace our development and optimize our returns. Furthermore, our operations are surrounded by existing infrastructure, providing strong take-away access to markets. As of June 30, 2012, we had 66 net operated wells in this area. During the first quarter of 2012, although we had a very efficient drilling program in the Haynesville Shale, we suspended the program and released all rigs due to low natural gas prices.

Eagle Ford Shale

Beginning in late 2008, we were an early entrant in the Eagle Ford Shale, acquiring our interests through leasehold acquisitions for less than $1,000 per acre on average. Our operations in the Eagle Ford Shale are focused in LaSalle, Dimmit, Atascosa and Webb counties of south Texas. Overall, we hold rights to approximately 157,000 net acres across all Eagle Ford areas, where approximately 77,000 net acres are under development in our central Eagle Ford area. During 2010 and 2011, we improved the efficiency and productivity of our development program, reducing per-well capital costs by approximately 16% and drilling cycle time by more than 35% year over year. Most of our wells have had initial production rates that range from 600 to over 1,000 Boe/d, and our oil production in this area has grown significantly since the beginning of 2011. The Eagle Ford Shale currently provides the highest economic returns in our portfolio. Significant strengths of the Eagle Ford Shale also currently include a multi-year future drilling location inventory, favorable crude oil pricing relative to the West Texas Intermediate ("WTI") index and a newly constructed midstream infrastructure with ample take-away capacity. As a result, the Eagle Ford Shale has become one of our key programs and a contributor to the increase in our oil reserves and production. As of December 31, 2011, we had 1,246 future drilling locations in the Eagle Ford Shale. As of June 30, 2012 we had 98 net operated wells and are currently running four rigs in the Eagle Ford Shale. We plan to add a fifth rig and drill 79 gross wells in 2012 based on our capital budget.

Wolfcamp Shale

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future drilling location inventory and favorable lease owner dynamics with the Texas University Land system as the predominant landowner. As of December 31, 2011, we had 983 future drilling locations in the Wolfcamp Shale. As of June 30, 2012, we had 26 net operated wells and are currently running one rig in the Wolfcamp Shale. We plan to drill 15 gross wells in 2012 based on our capital budget.

Altamont Field

In 2007, we commenced a reengineering effort in the Altamont Field in Utah, a legacy oil asset. Our operations in the Altamont Field are focused in the Uinta Basin. Altamont was initially developed in the 1970s, and we are applying current drilling and stimulation technology to vertically drill and develop this prolific oil area. We have enhanced the value of this field through infill drilling, for which we received regulatory approval in 2008. The Altamont Field has a multi-year inventory of future drilling locations, giving us a substantial opportunity for growth in oil production. Since our acreage is predominantly held by production, we have greater flexibility to improve both our costs and technical understanding of this area, while also growing returns. As of December 31, 2011, we had 1,336 future drilling locations in the Altamont Field. As of June 30, 2012, we had 307 net operated wells and are currently running two rigs in the Altamont Field. We plan to drill 21 gross wells in 2012 based on our capital budget.

South Louisiana Wilcox

In south Louisiana, we are developing our emerging South Louisiana Wilcox play. This is a relatively new oil-focused play that we have added to our drilling program. Our activity is located primarily in Beauregard Parish and is focused on the Wilcox Sands. We have over 1,000 square miles of 3-D seismic data in South Louisiana Wilcox, providing valuable information in selecting drilling locations. South Louisiana Wilcox is a conventional vertical well play that produces both oil and natural gas from a series of completed sands. A significant strength of South Louisiana Wilcox is its access to Louisiana Light Sweet Crude and Gulf Coast NGL pricing, which trade at a premium relative to the WTI index. In addition, the resource does not compete for horizontal drilling and completion services due to vertical drilling and completion design. As of December 31, 2011, we had 260 future drilling locations in South Louisiana Wilcox. As of June 30, 2012, we had 19 net operated wells and are currently running one rig in South Louisiana Wilcox. We plan to drill 15 gross wells in 2012 based on our capital budget.

Other Gas Assets

We have a large and diverse base of other domestic producing assets that provides cash flow to fund the development of our key programs. We do not anticipate a material portion of our 2012 capital expenditure budget to be spent on these assets.

Arklatex/Unconventional

Our Arklatex land positions comprise 104,470 total net acres focused on tight gas sands production. We have approximately 449,000 net acres in our unconventional plays. Our production is from vertical CBM wells development in Alabama, vertical and horizontal CBM wells in the Hartshorne coals in Oklahoma and the New Albany Shale in Indiana (sold in July 2012). We have high average working interests and long life reserves in these areas. For the six months ended June 30, 2012 we had average daily production of 119 MMcfe/d.

Texas Gulf Coast/Gulf of Mexico

We have significant assets in fields throughout the Texas Gulf Coast. In addition, prior to selling our Gulf of Mexico assets in July 2012, this area included interests in 69 Blocks offshore of the

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Louisiana, Texas and Alabama coastlines focused on deep targets (greater than 12,000 feet) in relatively shallow water depths (less than 400 feet). In these areas, we licensed over 8,700 square miles of 3D seismic data onshore and over 61,000 square miles of 3D seismic data offshore. As of December 31, 2011, these operations included 314,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 111 MMcfe/d.

Raton Basin

Our operations in the Raton Basin of northern New Mexico and southern Colorado, where we own the minerals beneath the Vermejo Park Ranch, are primarily focused on coal bed methane production. As of December 31, 2011, these operations included 606,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 81 MMcfe/d.

Rocky Mountains

We have a non-operated working interest in the County Line coal bed methane property in Wyoming, with additional non-producing acreage in Colorado, Wyoming, North Dakota and Utah. As of December 31, 2011, these operations included 179,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 9 MMcfe/d.

Four Star

We have an approximate 49% equity interest in Four Star. Production is from high quality conventional and coal bed methane assets in the San Juan, Permian, Hugoton and South Alabama basins and the Gulf of Mexico. For the first six months of 2012, our equity interest in Four Star's daily equivalent natural gas production averaged approximately 56 MMcfe/d.

2012 Capital Expenditures

We have approved a capital expenditure budget between $1.5 billion and $1.6 billion for 2012, of which about $1.2 billion will be spent on drilling and completion activities. Our total oil and natural gas capital expenditures were $762 million for the six months ended June 30, 2012, of which $758 million were domestic capital expenditures. Our spending will be heavily weighted toward oil-focused reservoirs, which are forecasted to comprise 91% of our capital expenditures; our key programs will comprise 97% of our spending. A substantial portion of our capital expenditure budget is expected to be funded from operating cash flows, which should enable us to grow reserves and production while maintaining sufficient liquidity. We expect to periodically review our capital spending plans versus commodity prices and well performance and adjust spending as necessary. For example, the portion of

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our budget dedicated to gas-weighted resources has declined significantly in 2012, due primarily to reductions in Haynesville Shale activity as a result of low current natural gas prices.


2012 Capex Budget $1.5 Billion-$1.6 Billion(1)	Key Drilling Locations(2) 4,498 Locations	2012 Gross Wells Expected to Complete in Key Programs 144 Gross Well

(1): Includes approximately $100 million of capitalized interest, information technology and capitalized direct labor costs.
(2): As of December 31, 2011 (includes proved undeveloped ("PUD") locations shown on a risked basis).

Competitive Strengths

We believe the following strengths provide us with significant competitive advantages:

Large and Diverse Producing Asset Base

Our vast resource base consists of approximately 4.0 Tcfe of proved reserves as of December 31, 2011 and are located on 3.3 million net acres. Approximately 1.7 Tcfe, or 42%, of our proved reserves are proved developed producing assets, and we generated an average of 838 MMcfe/d in 2011 from approximately 6,000 wells. During the first half of 2012, we generated an average of 906 MMcfe/d. Our existing assets are geographically diversified among many of the major basins of North America, insulating us to some extent from regional commodity pricing and costs dislocations that occur from time to time. Our producing assets provide a diverse source of cash flow to fund the development of our key programs, significantly reducing our reliance on outside sources of capital and improving our ability to replace and grow production in the future. While our existing producing assets are well diversified, we maintain a focused and concentrated approach that enables us to drive efficiencies, benefit from economies of scale, remain flexible in allocating capital to our most profitable projects and leverage our knowledge base from one project to the next.

Extensive Inventory of Low-Risk Drilling Opportunities

We have established a substantial resource base in unconventional oil plays to supplement our already significant inventory of unconventional natural gas resources. With our Eagle Ford and Wolfcamp shales, the ongoing development of our Altamont Field and the recent addition of South Louisiana Wilcox, we estimate we have more than 20 years of drilling inventory in approximately 4,500 drilling locations across our key programs, 85% of which are located in oil-focused reservoirs. The move to oil-focused reservoirs has allowed us to take advantage of higher oil prices and has improved cash flow through commodity diversity. The development of these assets will generate accelerated growth in oil production and reserves and provide us the flexibility to take advantage of strength in either gas or oil commodity price environments. We expect that the oil composition of our production will continue to increase as we develop our key oil programs over the next several years.

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Strong Financial Profile

Our large and diverse portfolio produced 906 MMcfe/d in the six months ended June 30, 2012, which generated Adjusted EBITDAX of $655 million for the six months ended June 30, 2012. Pro forma for the Refinancing Transactions, as of June 30, 2012, we would have had approximately $1.6 billion of liquidity. Additionally, we maintain a robust hedging program that protects cash flows to fund development plans through the commodity cycle. As of August 20, 2012, our hedged volumes for 2012, 2013, 2014 and 2015 represent 85%, 79%, 38% and 16%, respectively, based on our total 2011 equivalent production.

Low Cost and Efficient Operations

We maintain a significant degree of operational control over our portfolio, operating approximately 77% of our producing wells and 88% of our key program drilling inventory as of December 31, 2011. Our operational efficiency has resulted in leading well cost performance in our key programs. Our three-year average reserve replacement cost of $1.55 per Mcfe ranks among the lowest among our peer group. Based on our operating efficiency, we believe our ability to generate significant cash flow in a variety of commodity price environments is enhanced, especially as our production profile becomes increasingly oil-focused. We have reduced our domestic unit operating costs over the last several years by approximately $0.21 per Mcfe by lowering lifting costs, reducing subsurface, compression and disposal costs and divesting of high cost production areas. From 2007 to 2011, we reduced our unit lifting costs by approximately 28%. A lower cost structure should allow us to preserve returns and margins throughout the commodity cycle. Given our proven ability to find and develop reserves economically, we believe we should be able to convert our sizeable drilling portfolio at similar or better rates of return going forward.

High Caliber Management Team with Proven Track Record

Our senior management team, with an average of 22 years of experience, has a strong track record both at El Paso Corporation and in former leadership roles with Burlington Resources, ConocoPhillips and other leading producers. In addition, our operational team has significant experience in horizontal drilling and developing shales. We have an organizational structure that allows for greater ownership and accountability at the asset level through multi-disciplined asset teams organized around our key geographic areas. Through a combination of invested equity and incentive programs, we believe our management and operational teams are motivated to deliver high returns and increase long-term value. We employ a centralized operational structure to accelerate the knowledge transfer around the execution of our drilling and completion programs and to continually enhance our field operations and base production performance. Our management and operational teams are focused on increasing our drilling opportunities and capital management and are motivated to ensure safe and reliable operations while delivering improved capital and operating efficiency. In addition, our supply chain management group enables us to partner with suppliers in order to improve the cost efficiency of services across the entire operation.

Business Strategy

Our strategy is to use our strengths to generate competitive returns from our capital investment programs by growing proved reserves, production volumes, and future drilling opportunities while optimizing our existing asset base. The key elements of this strategy are:

Grow Our Production and Reserves with a Near-Term Focus on Oil

Our primary focus is developing our key oil programs. We have a strategic presence in well-known oil resource areas, including the Eagle Ford Shale, the Altamont Field, the Wolfcamp Shale and South

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Louisiana Wilcox, and 85% of our key future drilling locations are in oil-focused areas. Our overall oil production volumes grew approximately 58% in the first six months of 2012 compared to the first six months of 2011, and our 2012 capital expenditure budget is heavily weighted toward oil-focused reservoirs, which comprise 91% of our capital expenditures.

Continue to Leverage Technical and Operating Expertise to Develop Repeatable, Low-Risk Plays

We plan to continue to evaluate new opportunities to gain scale and optimize our operating performance while leveraging our past experience to establish repeatable, low-risk plays in the future. Since our initial entry into the Haynesville Shale in 2007, we have drilled some of the most efficient wells in the area, and our production per well is among the best in the areas in which we operate. We entered the Eagle Ford and Wolfcamp shales through grassroots leasing efforts in late 2008 and applied the expertise gained from horizontal drilling in the Haynesville. We have subsequently leased large acreage positions in the Wolfcamp Shale, developed additional zones within our other key programs and have significantly improved the quality and number of our drilling opportunities.

Continuously Improve Capital and Operating Efficiency

We maintain a disciplined approach to spending that directs capital in a manner that seeks to maximize returns. Our large and diverse portfolio provides sufficient scale and diversity to conduct operations in a cost-efficient manner and reallocate capital as appropriate to maintain attractive returns. We have developed particular expertise as an operator of unconventional oil and natural gas plays. In each of our key programs, we have realized substantial reductions in drilling and completion costs and large improvements in cycle times by applying expertise from prior activities. For example, in the Eagle Ford Shale, we have quickly improved our efficiency and productivity, reducing capital costs by 16% and cycle time by more than 35% since the beginning of 2010.

Maintain Financial Strength and Flexibility

We intend to fund growth predominantly with internally generated funds while maintaining ample liquidity. As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, we would have had approximately $1.6 billion of liquidity. Our hedging program should further protect cash flows to provide sufficient funding levels for our capital program. In addition, consistent with past practices, we intend to continue to high-grade our asset base and remain opportunistic with respect to divesting other gas assets. As we pursue our strategy of developing high-return opportunities in our key programs, we expect our reserves to grow, thereby enhancing our liquidity and financial strength.

Manage Commodity Price Volatility

We maintain a robust hedging program designed to mitigate volatility in commodity prices and protect our enterprise cash flows. As of August 20, 2012, we have hedged for the remainder of 2012 a total of 4.6 MMBbls of oil at a weighted average price of $97.11 per Bbl and 103 TBtu of natural gas at a weighted average price of $4.47 per MMBtu. As of August 20, 2012, our hedged volumes for 2012, 2013, 2014 and 2015 represent 85%, 79%, 38% and 16%, respectively, based on our total 2011 equivalent production.

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Recent Events

The Acquisition Transactions

The Acquisition

On February 24, 2012, EPE Acquisition, LLC, the indirect parent of the Company ("Parent" or "EPE Acquisition"), entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") with EP Energy Corporation, EP Energy Holding Company and El Paso Brazil, L.L.C. (collectively, the "Sellers"). Parent and the Issuers are controlled by investments funds affiliated with and controlled by Apollo Global Management, LLC, Riverstone Holdings LLC, Access Industries and Korea National Oil Corporation (collectively, the "Sponsors"). Pursuant to the Purchase and Sale Agreement, the Sellers agreed to sell, and Parent agreed to purchase: (i) all of the issued and outstanding membership interests of EP Energy Global LLC, a limited liability company resulting from the conversion of EP Energy Corporation into a limited liability company, which was renamed EP Energy Global LLC upon completion of the Acquisition Transactions ("EP Energy"); (ii) all of the issued and outstanding shares of El Paso E&P S. Alamein Cayman Company; (iii) all of the issued and outstanding quotas of UnoPaso Exploracao e Producao de Petroleo e Gas Ltda. and El Paso Oleo e Gas do Brasil Ltda.; and (iv) all of the issued and outstanding shares of El Paso Brazil Holdings Company (collectively, the "Acquired Business"). The Acquired Business includes all of El Paso Corporation's exploration and production assets. As of the date of the Purchase and Sale Agreement, EP Energy Corporation owned all of the entities described in the preceding clauses (ii), (iii) and (iv). In connection with the Acquisition, a restructuring was completed, the result of which was that the entity described in clause (ii) above, together with its subsidiaries, shares common owners with EP Energy rather than being part of EP Energy. On May 24, 2012, we acquired the Acquired Business for a purchase price of approximately $7.2 billion, and the Issuer was renamed EP Energy LLC. The Acquired Business and the Co-Issuer comprise all of the assets of the Issuer. A portion of the Acquisition consideration was used by the Sellers to retire the Acquired Business's existing reserve-based credit facility and outstanding indebtedness. We refer to the purchase of the Acquired Business as the "Acquisition."

The Sponsors, certain co-investors and certain members of management directly or indirectly own all of the equity interests of Parent.

The Financing

The Acquisition was financed with the following:

•: a cash equity investment by the Sponsors and their co-investors in Parent of approximately $3,300 million;
•: the net proceeds from the incurrence by the Issuers of $750 million of the initial senior secured notes;
•: the net proceeds from the incurrence by the Issuers of $2,000 million of the initial 2020 senior notes;
•: borrowing of $750 million by the Issuer under its new $750 million senior secured term loan facility; and
•: borrowings of $750 million by the Issuer under its new $2,000 million senior secured reserve-based revolving credit facility.

Throughout this prospectus, we collectively refer to the Acquisition, the investment in Parent's equity, the consummation of the offering of the initial senior secured notes and the initial 2020 senior

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notes and the entry into the RBL Facility and the senior secured term facility and the borrowings thereunder, as the "Acquisition Transactions."

The Refinancing Transactions

7.750% Senior Notes due 2022

On August 13, 2012, the Issuers issued $350.0 million aggregate principal amount of 7.750% senior notes due 2022 (the "initial 2022 senior notes") through a private placement. We used the proceeds of the notes to repay a portion of our borrowings under the RBL Facility.

Term Loan Repricing

On August 21, 2012, we completed a repricing amendment of our senior secured term loan that reduced the LIBOR floor to 1.00% and the applicable margin applicable to the loans to 4.00%. In connection with the repricing amendment, we paid the lenders a fee equal to 1.00% of the principal amount of the loans affected by such amendment.

Throughout this prospectus, we collectively refer to the offering of the initial 2022 senior notes and the repricing of the senior secured term loan as the "Refinancing Transactions."

RBL Facility Amendment

On August 17, 2012, we received requisite lenders' consent and amended the RBL Facility to increase the general lien basket by $350 million in order to make the lien capacity thereunder consistent with the lien capacity under the notes and our other indebtedness, including the senior secured term loan.

Sale of Egypt, Gulf of Mexico and Indiana Assets

In June 2012, we completed the sale of our Egyptian operations, which were comprised of 774,000 net acres of non-producing properties, for approximately $22 million in proceeds, representing an exit of our Egyptian exploration activities. In July 2012, we completed the sale of our Gulf of Mexico assets for approximately $79 million in proceeds, (a gross sales price of $103 million, less $24 million of purchase price adjustments.) The Gulf of Mexico assets had average daily production of approximately 45 MMcfe/d. At year end 2011, the Gulf of Mexico assets comprised approximately 2% or 90 Bcfe of our proved reserves. In addition, in July 2012, we sold our Indiana assets for approximately $6 million in proceeds.

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Corporate Structure

The diagram below sets forth a simplified version of our organizational structure and our principal indebtedness following the exchange offer. This chart is provided for illustrative purposes only and does not represent all legal entities affiliated with, or all obligations of, the Issuers.

(1): EPE Holdings LLC has made a non-recourse pledge of the equity of the Issuer to secure the RBL Facility.
(2): As of September 1, 2012, $350 million was drawn and outstanding under the RBL Facility and our borrowings are limited to $1,913 million due to borrowing-base restrictions under the agreement. See "Capitalization" for more information regarding borrowings and availability under the RBL Facility.
(3): All wholly owned material domestic subsidiaries of the Issuer guarantee and pledge certain assets under the RBL Facility, our senior secured term loan and the senior secured notes. These subsidiaries also guarantee the senior notes on a senior unsecured basis.
(4): As of June 30 2012, on a pro forma basis after giving effect to the Refinancing Transactions, non-wholly owned subsidiaries, foreign subsidiaries and other subsidiaries of the Issuer that do not

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guarantee the notes hold approximately 2% of our consolidated assets and had no outstanding indebtedness, excluding intercompany obligations. During the six months ended June 30, 2012, on a pro forma basis after giving effect to Refinancing Transactions, these non-guarantor subsidiaries generated approximately 5% of our total revenue and 2% of our Adjusted EBITDAX.

(5): Includes our foreign operations in Brazil.

Our Sponsors

Apollo Global Management, LLC (together with its subsidiaries, "Apollo"), founded in 1990, is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. As of June 30, 2012, Apollo had assets under management of approximately $105 billion in private equity, credit-oriented capital markets and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. Apollo's team of more than 200 seasoned investment professionals possesses a broad range of transactional, financial, managerial and investment skills, which has enabled the firm to deliver strong long-term investment performance throughout expansionary and recessionary economic cycles.

Riverstone Holdings LLC ("Riverstone"), founded in 2000, is an energy and power-focused private equity firm with over $22 billion of equity capital raised across seven investment funds and co-investments, including the world's largest renewable energy fund. Riverstone conducts buyout and growth capital investments in the midstream, exploration & production, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London and Houston, the firm has committed approximately $19.4 billion to 91 investments in North America, Latin America, Europe and Asia.

Access Industries ("Access") is a privately held, U.S.-based industrial group with long-term holdings worldwide. Founded by industrialist Len Blavatnik, Access' focus spans three key sectors: natural resources and chemicals; telecommunications and media; and real estate.

Korea National Oil Corporation ("KNOC") was incorporated in 1979 to engage in the development of oil fields, distribution of crude oil, maintenance of petroleum reserve stock and improvement of the petroleum distribution structure under the Korea National Oil Corporation Act. KNOC is wholly owned by the Korean government and located in Anyang, Gyeonggi-do in Korea. KNOC also has nine petroleum stockpile offices, one domestic gas field management office, 13 overseas offices in Vietnam and other countries and numerous overseas subsidiaries and affiliates in the United States and other countries.

In addition to our Sponsors, other co-investors participated in the Acquisition.

Corporate Information

Our principal executive offices are located at 1001 Louisiana Street, Houston, Texas 77002.

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Summary of the Exchange Offer

In connection with the closing of the offering of the initial notes, we entered into registration rights agreements (as more fully described below) with the initial purchasers of the initial notes. You are entitled to exchange in the exchange offer your initial notes for exchange notes, which are identical in all material respects to the initial notes except that:

•: the exchange notes have been registered under the Securities Act and will be freely tradable by persons who are not affiliated with us;
•: the exchange notes are not entitled to the registration rights applicable to the initial notes under the registration rights agreements; and
•: our obligation to pay additional interest on the initial notes due to the failure to consummate the exchange offer by a prior date does not apply to the exchange notes.


Exchange Offer		We are offering to exchange up to $750,000,000 aggregate principal amount of our senior secured exchange notes, up to $2,000,000,000 aggregate principal amount of our senior 2020 exchange notes and up to $350,000,000 aggregate principal amount of our senior 2022 exchange notes for a like aggregate principal amount of our initial senior secured notes, initial 2020 senior notes and initial 2022 senior notes, respectively.
		In order to exchange your initial notes, you must properly tender them and we must accept your tender. We will exchange all outstanding initial notes that are validly tendered and not validly withdrawn. Initial notes may be exchanged only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Expiration Date		This exchange offer will expire at midnight, New York City time, on , 2012, unless we decide to extend it. We do not currently intend to extend the expiration date.
Conditions to the Exchange Offer		The exchange offer is subject to customary conditions, some of which we may waive, that include the following conditions:
		• there is no change in the laws and regulations which would impair our ability to proceed with this exchange offer,
		• there is no change in the current interpretation of the staff of the SEC permitting resales of the exchange notes,
		• there is no stop order issued by the SEC which would suspend the effectiveness of the registration statement which includes this prospectus or the qualification of the exchange notes under the Trust Indenture Act of 1939,
		• there is no litigation or threatened litigation which would impair our ability to proceed with this exchange offer, and
		• we obtain all the governmental approvals we deem necessary to complete this exchange offer.
		Please refer to the section in this prospectus entitled "The Exchange Offer—Conditions to the Exchange Offer."

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Procedures for Tendering Initial Notes		To participate in this exchange offer, you must complete, sign and date the letter of transmittal or its facsimile and transmit it, together with your initial notes to be exchanged and all other documents required by the letter of transmittal, to Wilmington Trust, National Association, as exchange agent, at its address indicated under "The Exchange Offer—Exchange Agent." In the alternative, you can tender your initial notes by book-entry delivery following the procedures described in this prospectus. For more information on tendering your initial notes, please refer to the section in this prospectus entitled "The Exchange Offer—Procedures for Tendering Initial Notes."
Special Procedures for Beneficial Owners		If you are a beneficial owner of initial notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your initial notes in the exchange offer, you should contact the registered holder promptly and instruct that person to tender on your behalf.
Guaranteed Delivery Procedures		If you wish to tender your initial notes and you cannot get the required documents to the exchange agent on time, you may tender your initial notes by using the guaranteed delivery procedures described under the section of this prospectus entitled "The Exchange Offer—Procedures for Tendering Initial Notes—Guaranteed Delivery Procedure."
Withdrawal Rights		You may withdraw the tender of your initial notes at any time before midnight, New York City time, on the expiration date of the exchange offer. To withdraw, you must send a written or facsimile transmission notice of withdrawal to the exchange agent at its address indicated under "The Exchange Offer—Exchange Agent" before midnight, New York City time, on the expiration date of the exchange offer.
Acceptance of Initial Notes and Delivery of Exchange Notes		If all the conditions to the completion of this exchange offer are satisfied, we will accept any and all initial notes that are properly tendered in this exchange offer on or before midnight, New York City time, on the expiration date. We will return any initial note that we do not accept for exchange to you without expense promptly after the expiration date. We will deliver the exchange notes to you promptly after the expiration date and acceptance of your initial notes for exchange. Please refer to the section in this prospectus entitled "The Exchange Offer—Acceptance of Initial Notes for Exchange; Delivery of Exchange Notes."

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Federal Income Tax Considerations Relating to the Exchange Offer		Exchanging your initial notes for exchange notes should not be a taxable event to you for United States federal income tax purposes. Please refer to the section of this prospectus entitled "Certain U.S. Federal Income Tax Considerations."
Exchange Agent		Wilmington Trust, National Association is serving as exchange agent in the exchange offer.
Fees and Expenses		We will pay all expenses related to this exchange offer. Please refer to the section of this prospectus entitled "The Exchange Offer—Fees and Expenses."
Use of Proceeds		We will not receive any proceeds from the issuance of the exchange notes. We are making this exchange offer solely to satisfy certain of our obligations under our registration rights agreements entered into in connection with the offering of the initial notes.
Consequences to Holders Who Do Not Participate in the Exchange Offer		All untendered initial notes will continue to be subject to the restrictions on transfer provided for in the initial notes and in the applicable indenture. In general, the initial notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register under the Securities Act any initial notes that remain outstanding after completion of the exchange offer.
		Please refer to the section of this prospectus entitled "The Exchange Offer—Your Failure to Participate in the Exchange Offer Will Have Adverse Consequences."
Resales of the Exchange Notes		Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange offers in exchange for original notes may be offered for resale, resold and otherwise transferred by you (unless you are our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that you:
		• are acquiring the exchange notes in the ordinary course of business; and
		• have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person or entity, including any of the Issuers' affiliates, to participate in, a distribution of the exchange notes.

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		In addition, each participating broker-dealer that receives exchange notes for its own account pursuant to the exchange offers in exchange for initial notes that were acquired as a result of market-making or other trading activity must also acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. For more information, see "Plan of Distribution." Any holder of initial notes, including any broker-dealer, who
		• is our affiliate,
		• does not acquire the exchange notes in the ordinary course of its business, or
		• tenders in the exchange offers with the intention to participate, or for the purpose of participating, in a distribution of exchange notes,
		cannot rely on the position of the staff of the SEC expressed in Exxon Capital Holdings Corporation, Morgan Stanley & Co., Incorporated or similar no-action letters and, in the absence of an exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the exchange notes.
		Please refer to the sections of this prospectus entitled "The Exchange Offer—Procedures for Tendering Initial Notes—Proper Execution and Delivery of Letters of Transmittal," "Risk Factors—Risks Relating to the Exchange Offer—Some persons who participate in the exchange offer must deliver a prospectus in connection with resales of the exchange notes" and "Plan of Distribution."

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Summary of Terms of the Exchange Notes

The summary below describes the principal terms of the exchange notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The "Description of Senior Secured Exchange Notes," the "Description of Senior 2020 Exchange Notes" and the "Description of Senior 2022 Exchange Notes" sections of this prospectus contain more detailed descriptions of the terms and conditions of the exchange notes.

Senior Secured Exchange Notes


Issuers		EP Energy LLC (formerly known as Everest Acquisition LLC) and Everest Acquisition Finance Inc.
Notes Offered		$750,000,000 aggregate principal amount of 6.875% Senior Secured Notes due 2019.
Maturity Date		May 1, 2019.
Interest Rate		Interest on the senior secured exchange notes will accrue from April 24, 2012 at a rate of 6.875% per annum and will be payable in cash.
Interest Payment Dates		May 1 and November 1 of each year, commencing November 1, 2012.
Denominations		Minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof; provided that notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by a DTC participant in denominations of less than $2,000.
Guarantees		Our obligations under the senior secured exchange notes will be fully and unconditionally guaranteed, jointly and severally, by the Issuers' present and future direct or indirect wholly owned material domestic subsidiaries that guarantee the RBL Facility.
Ranking		The senior secured exchange notes will be our senior secured obligations and will:
		• rank senior in right of payment to all of our existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior secured exchange notes;
		• be effectively senior in right of payment to all of our existing and future unsecured indebtedness (including the senior notes) to the extent of the value of the collateral securing the senior secured exchange notes;
		• be effectively subordinated to all of our existing and future secured debt that is secured on a first-priority basis (including obligations under the RBL Facility), to the extent of the value of the RBL Facility Priority Collateral (as defined below);

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		• be equal to our senior secured term loan, which is secured on a pari passu basis with the senior secured exchange notes; and
		• be structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the senior secured exchange notes.
		As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, the senior secured notes ranked (1) effectively junior to $400 million of first-priority senior secured indebtedness under the RBL Facility to the extent of the RBL Facility Priority Collateral, (2) equally to $750 million of senior secured indebtedness under our new senior secured term loan, (3) effectively senior to $2,350 million of unsecured indebtedness represented by the senior notes and (4) effectively junior to no indebtedness of our non-guarantor subsidiaries. Further, we had approximately $1.5 billion available for additional borrowing under the RBL Facility, all of which would be secured on a first-priority basis by a lien on the RBL Facility Priority Collateral.
		As of June 30, 2012, non-wholly owned subsidiaries, foreign subsidiaries and other subsidiaries of the Issuer that do not guarantee the senior secured notes hold approximately 2% of our consolidated assets and have no outstanding indebtedness, excluding intercompany obligations. For the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, these non-guarantor subsidiaries generated approximately 5% of our revenue and 2% of our Adjusted EBITDAX.
Security		The senior secured exchange notes will be secured:
		• on a first-priority basis by a perfected pledge of the capital stock of all first-tier foreign subsidiaries of the Issuers and each of the guarantors (which pledge will be limited to 65% of the voting capital stock and 100% of the non-voting capital stock of each such subsidiary) (the "Secured Notes/Term Loan Priority Collateral");
		• on a second-priority basis by all of the other collateral securing the RBL Facility other than the capital stock of the Issuer and as set forth below, which includes:
		• a perfected pledge of all of the capital stock of each material domestic restricted subsidiary held by the Issuers and each of the guarantors;
		• perfected real property mortgages on oil and gas reserves of the Issuers and the guarantors located in the United States that are included in the reserve reports most recently delivered to the lenders under the RBL Facility; and

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		• substantially all other tangible (other than real property and other oil and gas properties) and intangible assets of the Issuers and the guarantors.
		In this prospectus, we refer to the foregoing collateral that secures the RBL Facility on a first-priority basis and the senior secured notes on a second-priority basis as the "RBL Facility Priority Collateral." For a further description of the RBL Facility Priority Collateral, see "Description of Other Indebtedness—The RBL Facility—Guarantees and Security."
		While the senior secured exchange notes will initially be secured by the pledge of the capital stock of the subsidiaries of the Issuers and the Guarantors as described above, these pledges will be released to the extent that separate financial statements pursuant to Rule 3-16 of Regulation S-X would be required in connection with the filing of the registration statement related to the senior secured exchange notes of which this prospectus forms a part. See "Description of Senior Secured Exchange Notes—Security—Limitations on Stock Collateral."
		The RBL Facility Priority Collateral and the Secured Notes/Term Loan Priority Collateral excludes: (i) any property or assets owned by any foreign subsidiaries, (ii) certain real property and oil and gas properties, (iii) motor vehicles, (iv) subject to limited exceptions, any assets or any right, title or interest in any license, contract or agreement to the extent that taking a security interest in any of them would violate any applicable law or regulation or any enforceable contractual obligation binding on the assets that existed at the time of the acquisition thereof and not created in connection with such acquisition (except in the case of assets owned on the date the initial senior secured notes are issued or that are subject to certain purchase money liens permitted under the indenture governing the senior secured notes) or would violate the terms of any such license, contract or agreement and (v) certain other limited assets.
		For more information on the security granted, see "Description of Senior Secured Exchange Notes—Security." The security interests in the assets securing the senior secured notes may be released under certain circumstances. See "Risk Factors—Additional Risks Related to the Senior Secured Notes," "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements" and "Description of Senior Secured Exchange Notes—Security—Release of Collateral."

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Intercreditor Agreements		The security granted in the RBL Facility Priority Collateral to secure the senior secured notes and the senior secured term loan on a second-priority basis is also granted to secure, on a first-priority basis, indebtedness under the RBL Facility, and the security granted in the Secured Notes/Term Loan Priority Collateral to secure the senior secured notes and the senior secured term loan on a first-priority basis will also be granted to secure, on a second-priority basis, indebtedness under the RBL Facility. In addition, the indenture governing the senior secured notes permits us to secure additional indebtedness with liens on the RBL Facility Priority Collateral and the Secured Notes/Term Loan Priority Collateral under certain circumstances. The lenders under the RBL Facility and the holders of certain debt (including certain hedging and cash management counterparties) will receive priority treatment with respect to the proceeds of an enforcement of the security interest in or other recoveries from the RBL Facility Priority Collateral. These intercreditor relationships will be governed by an intercreditor agreement as described in more detail under the caption "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements—Senior Lien Intercreditor Agreement." In addition, the agent for the senior secured term loan and the trustee for the senior secured notes entered into an intercreditor agreement governing the relationship between the lenders under our new senior secured term loan and holders of the senior secured notes as well as holders of any other indebtedness secured on a pari passu basis with the senior secured notes and the senior secured term loan. See "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements—Pari Passu Intercreditor Agreement."
Optional Redemption		Prior to May 1, 2015, we may redeem some or all of the senior secured exchange notes at a redemption price equal to 100% of the principal amount of the senior secured exchange notes plus accrued and unpaid interest and additional interest, if any, to (but not including) the applicable redemption date plus the applicable "make-whole" premium. On or after May 1, 2015, we may redeem some or all of the senior secured exchange notes at the redemption prices set forth in this prospectus. Additionally, on or prior to May 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior secured exchange notes with the net proceeds of specified equity offerings at the redemption price set forth in this prospectus. See "Description of Senior Secured Exchange Notes—Optional Redemption."
Certain Covenants		The indenture governing the senior secured exchange notes, among other things, limits our ability and the ability of our restricted subsidiaries to:
		• incur or guarantee additional indebtedness;

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		• pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments;
		• make investments;
		• consummate certain asset sales;
		• engage in transactions with affiliates;
		• grant or assume liens; and
		• consolidate, merge or transfer all or substantially all of our assets.
		These limitations are subject to a number of important qualifications and exceptions as described under "Description of Senior Secured Exchange Notes—Certain Covenants." Parent will not be subject to any of the covenants in the indenture governing the senior secured exchange notes.
Book-Entry Form		The senior secured exchange notes will be issued in registered book-entry form represented by one or more global notes to be deposited with or on behalf of DTC or its nominee. Transfers of the senior secured exchange notes will only be effected through facilities of DTC. Beneficial interests in the global notes may not be exchanged for certificated notes except in limited circumstances. See "Book-Entry; Delivery and Form."
Risk Factors		You should consider all of the information contained in this prospectus before making an investment in the senior secured exchange notes. In particular, you should consider the risks described under "Risk Factors."

Senior 2020 Exchange Notes


Issuers		EP Energy LLC (formerly known as Everest Acquisition LLC) and Everest Acquisition Finance Inc.
Notes Offered		$2,000,000,000 aggregate principal amount of 9.375% Senior Notes due 2020.
Maturity Date		May 1, 2020.
Interest Rate		Interest on the senior 2020 exchange notes will accrue from April 24, 2012 at a rate of 9.375% per annum and will be payable in cash.
Interest Payment Dates		May 1 and November 1 of each year, commencing November 1, 2012.
Denominations		Minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof; provided that notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by a DTC participant in denominations of less than $2,000.

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Guarantees		Our obligations under the senior 2020 exchange notes will be fully and unconditionally guaranteed, jointly and severally, by the Issuers' present and future direct or indirect wholly owned material domestic subsidiaries that guarantee the RBL Facility.
Ranking		The senior 2020 exchange notes will be our senior unsecured obligations and will:
		• rank equally in right of payment with all of our existing and future senior debt;
		• rank senior in right of payment to all of our existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior 2020 exchange notes;
		• be effectively subordinated to all of our existing and future secured debt (including obligations under the RBL Facility, our senior secured term loan and the senior secured notes), to the extent of the value of the assets securing such indebtedness, and
		• be structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the notes.
		As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, the senior 2020 exchange notes ranked (1) effectively junior to $1,900 million of senior secured indebtedness, consisting of indebtedness outstanding under the RBL Facility, the senior secured term loan and the senior secured notes, (2) equally to $350 million of our senior 2022 notes and (3) effectively junior to no indebtedness of our non-guarantor subsidiaries. Further, we had approximately $1.5 billion available for additional borrowing under the RBL Facility, all of which would be secured.
		As of June 30, 2012, non-wholly owned subsidiaries, foreign subsidiaries and other subsidiaries of the Issuer that do not guarantee the senior 2020 exchange notes hold approximately 2% of our consolidated assets and have no outstanding indebtedness, excluding intercompany obligations. For the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, these non-guarantor subsidiaries generated approximately 5% of our total revenue and 2% of our Adjusted EBITDAX.

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Optional Redemption		Prior to May 1, 2016, we may redeem some or all of the senior 2020 exchange notes at a redemption price equal to 100% of the principal amount of the senior 2020 exchange notes plus accrued and unpaid interest and additional interest, if any, to (but not including) the applicable redemption date plus the applicable "make-whole" premium. On or after May 1, 2016, we may redeem some or all of the senior 2020 exchange notes at the redemption prices set forth in this prospectus. Additionally, on or prior to May 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior 2020 exchange notes with the net proceeds of specified equity offerings at the redemption price set forth in this prospectus. See "Description of Senior 2020 Exchange Notes—Optional Redemption."
Certain Covenants		The indenture governing the senior 2020 exchange notes, among other things, limits our ability and the ability of our restricted subsidiaries to:
		• incur or guarantee additional indebtedness;
		• pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments;
		• make investments;
		• consummate certain asset sales;
		• engage in transactions with affiliates;
		• grant or assume liens; and
		• consolidate, merge or transfer all or substantially all of our assets.
		These limitations are subject to a number of important qualifications and exceptions as described under "Description of Senior 2020 Exchange Notes—Certain Covenants." Parent will not be subject to any of the covenants in the indenture governing the senior 2020 exchange notes.
Book-Entry Form		The senior 2020 exchange notes will be issued in registered book-entry form represented by one or more global notes to be deposited with or on behalf of DTC or its nominee. Transfers of the senior 2020 exchange notes will only be effected through facilities of DTC. Beneficial interests in the global notes may not be exchanged for certificated notes except in limited circumstances. See "Book-Entry; Delivery and Form."
Risk Factors		You should consider all of the information contained in this prospectus before making an investment in the senior 2020 exchange notes. In particular, you should consider the risks described under "Risk Factors."

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Senior 2022 Exchange Notes


Issuers		EP Energy LLC and Everest Acquisition Finance Inc.
Notes Offered		$350,000,000 aggregate principal amount of 7.750% Senior Notes due 2022.
Maturity Date		September 1, 2022.
Interest Rate		Interest on the senior 2022 exchange notes will accrue from August 13, 2012 at a rate of 7.750% per annum and will be payable in cash.
Interest Payment Dates		March 1 and September 1 of each year, commencing March 1, 2013.
Denominations		Minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof; provided that notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by a DTC participant in denominations of less than $2,000.
Guarantees		Our obligations under the senior 2022 exchange notes will be fully and unconditionally guaranteed, jointly and severally, by the Issuers' present and future direct or indirect wholly owned material domestic subsidiaries that guarantee the RBL Facility.
Ranking		The senior 2022 exchange notes will be our senior unsecured obligations and will:
		• rank equally in right of payment with all of our existing and future senior debt;
		• rank senior in right of payment to all of our existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior 2022 exchange notes;
		• be effectively subordinated to all of our existing and future secured debt (including obligations under the RBL Facility, our senior secured term loan and the senior secured notes), to the extent of the value of the assets securing such indebtedness, and
		• be structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the notes.
		As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, the senior 2022 exchange notes ranked (1) effectively junior to $1,900 million of senior secured indebtedness, consisting of indebtedness outstanding under the RBL Facility, the senior secured term loan and the senior secured notes, (2) equally to $2,000 million of our senior 2020 notes and (3) effectively junior to no indebtedness of our non-guarantor subsidiaries. Further, we had approximately $1.5 billion available for additional borrowing under the RBL Facility, all of which would be secured.

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		As of June 30, 2012, non-wholly owned subsidiaries, foreign subsidiaries and other subsidiaries of the Issuer that do not guarantee the senior 2022 exchange notes hold approximately 2% of our consolidated assets and have no outstanding indebtedness, excluding intercompany obligations. For the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, these non-guarantor subsidiaries generated approximately 5% of our total revenue and 2% of our Adjusted EBITDAX.
Optional Redemption		Prior to September 1, 2017, we may redeem some or all of the senior 2022 exchange notes at a redemption price equal to 100% of the principal amount of the senior 2022 exchange notes plus accrued and unpaid interest and additional interest, if any, to (but not including) the applicable redemption date plus the applicable "make-whole" premium. On or after September 1, 2017, we may redeem some or all of the senior 2022 exchange notes at the redemption prices set forth in this prospectus. Additionally, on or prior to September 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior 2022 exchange notes with the net proceeds of specified equity offerings at the redemption price set forth in this prospectus. See "Description of Senior 2022 Exchange Notes—Optional Redemption."
Certain Covenants		The indenture governing the senior 2022 exchange notes, among other things, limits our ability and the ability of our restricted subsidiaries to:
		• incur or guarantee additional indebtedness;
		• pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments;
		• make investments;
		• consummate certain asset sales;
		• engage in transactions with affiliates;
		• grant or assume liens; and
		• consolidate, merge or transfer all or substantially all of our assets.
		These limitations are subject to a number of important qualifications and exceptions as described under "Description of Senior 2022 Exchange Notes—Certain Covenants." Parent will not be subject to any of the covenants in the indenture governing the senior 2022 exchange notes.

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Book-Entry Form		The senior 2022 exchange notes will be issued in registered book-entry form represented by one or more global notes to be deposited with or on behalf of DTC or its nominee. Transfers of the senior 2022 exchange notes will only be effected through facilities of DTC. Beneficial interests in the global notes may not be exchanged for certificated notes except in limited circumstances. See "Book-Entry; Delivery and Form."
Risk Factors		You should consider all of the information contained in this prospectus before making an investment in the senior 2022 exchange notes. In particular, you should consider the risks described under "Risk Factors."

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Summary Historical and Pro Forma Consolidated Financial
and Other Operating Data

Set forth below is the summary historical consolidated financial and other operating data of EP Energy Global LLC (formerly known as EP Energy Corporation and EP Energy, L.L.C.). See "Presentation of Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements and the notes to those statements included elsewhere in this prospectus.

The following table sets forth summary historical financial and other data for the periods and as of the dates indicated. We have derived the consolidated statement of income and statement of cash flows data for the years ended December 31, 2011, 2010 and 2009 and the consolidated balance sheet data as of December 31, 2011 and 2010 from EP Energy Corporation's audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated balance sheet data as of December 31, 2009 has been derived from EP Energy Corporation's audited consolidated financial statements not included herein.

The table below also includes the Issuer's unaudited pro forma condensed consolidated statement of income data, giving pro forma effect to the Acquisition and Refinancing Transactions as described in "—Recent Events" if they had occurred on January 1, 2011. The unaudited pro forma condensed consolidated balance sheet has been prepared as if the Refinancing Transactions occurred on June 30, 2012. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. The summary unaudited pro forma condensed consolidated financial data are for informational purposes only and do not purport to represent what our results of operations or financial position actually would have been if the Acquisition and Refinancing Transactions had occurred at any other date, and such data does not purport to project our results of operations for any future period.

The Acquisition was accounted for as a business combination using the acquisition method of accounting. Accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based upon management's estimates of fair value. The unaudited pro forma condensed consolidated data are based upon available information and certain assumptions that management believes are factually supportable and that are reasonable under the circumstance. Because the determination of fair value is dependent upon valuations as of the Acquisition date, the unaudited pro forma condensed consolidated financial data may be revised and any such adjustments to the estimates of fair value may be material.

The following summary historical and pro forma financial and other data should be read in conjunction with the information included under the headings "—Recent Events," "Unaudited Pro Forma Condensed Consolidated Financial Data," "Selected Historical Consolidated Financial Data," "Use of Proceeds," "Capitalization" and "Management's Discussion and Analysis of Financial

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Condition and Results of Operations" and EP Energy Corporation's audited consolidated financial statements and the related notes included elsewhere in this prospectus.

							EP Energy Corporation Historical

	EP Energy LLC Pro Forma						EP Energy Corporation Historical
	EP Energy LLC Pro Forma						Year ended December 31,
	Six Months ended June 30, 2012
				Year ended December 31, 2011
				Year ended December 31, 2011			2011			2010			2009
	(dollars in millions)
Statement of income data
Operating revenues:
Third parties	$	756		$	1,582		$	948		$	634		$	552
Affiliates		—			—			634			746			545
Realized and unrealized gains on financial derivatives(1)		422			284			284			390			687
Other		—			1			1			19			44

Total operating revenues		1,178			1,867			1,867			1,789			1,828
Operating expenses:
Cost of products		—			—			—			15			31
Transportation costs		59			85			85			73			66
Lease operating expenses		117			217			217			193			197
General and administrative expenses		294			226			201			190			195
Depreciation, depletion and amortization		153			262			612			477			440
Impairments/Ceiling test charges		—			6			158			25			2,148
Exploration expense		105			249			—			—			—
Taxes, other than income taxes		57			91			91			85			68

Total operating expenses		785			1,136			1,364			1,058			3,145

Operating income (loss)		393			731			503			731			(1,317	)
Income (loss) from unconsolidated affiliates(2)		—			5			(7	)		(7	)		(30	)
Other income (expense)		(2	)		(2	)		(2	)		3			(1	)
Interest expense, net of capitalized interest:
Third parties		(155	)		(310	)		(9	)		(16	)		(21	)
Affiliates		—			—			(3	)		(5	)		(4	)

Income (loss) before income taxes		236			424			482			706			(1,373	)
Income tax expense (benefit)		1			(7	)		220			263			(462	)

Net income (loss)	$	235		$	431		$	262		$	443		$	(911	)

Balance sheet data (at period end)
Cash and cash equivalents	$	41					$	25		$	74		$	183
Total assets		8,157						5,099			4,942			4,457
Total debt		4,243						851			301			835
Members'/stockholder's equity		3,149						3,100			3,067			2,529
Statement of cash flows data
Net cash provided by (used in):
Operating activities							$	1,426		$	1,067		$	1,573
Investing activities								(1,237	)		(1,130	)		(1,156	)
Financing activities								(238	)		(46	)		(336	)
Other financial data
Capital expenditures(3)	$	762					$	1,644		$	1,318		$	1,129
Adjusted EBITDAX(4)		655			1,391			1,391			1,205			1,491
Cash interest expense(5)		147			313

(1): Includes $11 million, $11 million and $406 million for the years ended December 31, 2011, 2010 and 2009 and $5 million for the six months ended June 30, 2012, reclassified from accumulated other comprehensive income associated with accounting hedges. During 2008, we removed the hedging designation on all of our commodity-based derivative contracts related to our hedged oil and natural gas production volumes.

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(2): Income (loss) from unconsolidated affiliates includes equity earnings from Four Star Oil & Gas Company ("Four Star"), our unconsolidated affiliate, net of amortization of our purchase cost in excess of our equity interest in the underlying net assets.
(3): Represent accrual based capital expenditures including acquisitions capital, and excludes asset retirement obligation.
(4): The Adjusted EBITDAX measure presented in this prospectus is a non-GAAP measure and is not a measurement of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with GAAP. These measures may not be comparable to similarly titled measures of other companies. See further discussion in "Use of Non-GAAP Financial Information."

The following table provides an unaudited reconciliation of net income to Adjusted EBITDAX:

							EP Energy Corporation Historical

	EP Energy LLC Pro forma						EP Energy Corporation Historical
	EP Energy LLC Pro forma						Year ended December 31,
	Six Months ended June 30, 2012
				Year ended December 31, 2011
				Year ended December 31, 2011			2011		2010			2009
	(in millions)
Net income (loss)	$	235		$	431		$	262	$	443		$	(911	)
Income tax expense (benefit)		1			(7	)		220		263			(462	)
Interest expense, net of capitalized interest		155			310			12		21			25
Depreciation, depletion and amortization		153			262			612		477			440

Reported EBITDA		544			996			1,106		1,204			(908	)
Net impact of financial derivatives(a)		(214	)		47			47		(92	)		323
Impairments and ceiling test charges(b)		—			100			158		25			2,148
Transition and restructuring costs(c)		183			6			6		—			7
Dividends from unconsolidated affiliates(d)		8			46			46		50			45
Income (loss) from unconsolidated affiliates(e)		—			(5	)		7		7			30
Non-cash equity-based compensation expense(f)		16			21			21		18			19
Financial derivatives premiums(g)		—			—			—		(7	)		(173	)
Advisory fee(h)		13			25			—		—			—
Exploration expense(i)		105			155			—		—			—

Adjusted EBITDAX(j)	$	655		$	1,391		$	1,391	$	1,205		$	1,491

(a): Represents the non-cash net change in the fair value of derivatives, net of actual cash settlements received/(paid) in respect of derivatives.
(b): Impairments and ceiling test charges include inventory impairments of $6 million in 2011 and $16 million in 2009.
(c): Reflects the transaction costs paid as part of the acquisition in 2012, a non-recurring severance cost incurred in connection with the closure of our office in Denver in 2011 and a cost related to restructuring our organization in 2009.
(d): Represents cash dividends received from Four Star, our unconsolidated affiliate in which we hold an approximate 49% equity interest.
(e): Reflects the elimination of non-cash equity income (losses) recognized from Four Star, net of amortization of our purchase cost in excess of our equity interest in the underlying net assets.
(f): Represents non-cash equity-based compensation expense.
(g): Represents the net cash outflows related to premiums paid on the derivative contracts.
(h): Represents the pro-rata portion of the annual advisory fee to be paid to affiliates of the Sponsors and other investors. The annual advisory fee is $25 million.
(i): Represents exploration expense recorded due to applying the successful efforts method of accounting following the acquisition.

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(j): Includes net EBITDAX contribution of $31 million, $136 million, $136 million, $203 million and $206 million for each period, related to business divestitures including the divestiture of Gulf of Mexico in July 2012, the divestitures of our Blue Creek West, Minden and Powder River operations in 2011 and the divestitures of our Catapult operations and Altamont processing plant and related gathering systems in 2010.

(5): Represents cash interest expense for the six months ended June 30, 2012 and the year ended December 31, 2011, in each case calculated on a pro forma basis after giving effect to the Acquisition and Refinancing Transactions.

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Summary Operating and Reserve Information

Proved Reserves

The proved reserve estimates set forth below are for the Acquired Business and were prepared in accordance with SEC rules using the first day 12-month average price as of December 31, 2011.

The following table summarizes our historical proved reserves and related PV-10 as of the dates indicated. The proved reserves as of December 31, 2011 are based on our internal reserve report. The reserve data represents only estimates, which are often different from the quantities of oil and natural gas that are ultimately recovered. The risks and uncertainties associated with estimating proved oil and natural gas reserves are discussed further in "Risk Factors." Net proved reserves exclude royalties and interests owned by others and reflect contractual arrangements and royalty obligations in effect at December 31, 2011. You should refer to "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" in evaluating the material presented below. The information in the following table does not give any effect to or reflect our commodity hedges.

Ryder Scott Company, L.P. ("Ryder Scott") conducted an audit of the estimates of the proved reserves prepared by us as of December 31, 2011. In connection with its audit, Ryder Scott reviewed 86% of the properties associated with our proved reserves on a natural gas equivalent basis, representing 87% of the total discounted future net cash flows of these proved reserves. Ryder Scott also conducted an audit of the estimates we prepared of the proved reserves of Four Star as of December 31, 2011. In connection with the audit of these proved reserves, Ryder Scott reviewed 87% of the properties associated with Four Star's total proved reserves on a natural gas equivalent basis, representing 91% of the total discounted future net cash flows. For the reviewed properties, our overall proved reserves estimates, in the aggregate, are within 10% of Ryder Scott's estimates.

	As of December 31, 2011

Proved reserves(1):
Natural gas (MMcf)		2,781,904
Oil/Condensate (MBbls)		181,639
NGL (MBbls)		19,153
Total estimated net proved reserves (MMcfe)		3,986,658
Proved developed producing (MMcfe)		1,694,039
Proved developed non-producing (MMcfe)		350,274
Proved undeveloped (MMcfe)		1,942,345
Percent proved developed reserves (%)		51	%
PV-10 (in thousands)(2)	$	7,015,973

(1): Includes the net proved reserve amounts represented by our approximate 49% equity interest in Four Star. Specifically, net proved reserves represented by our approximate 49% interest in Four Star as of December 31, 2011 were 134,713 MMcf natural gas, 1,569 MBbls oil and condensate and 4,908 MBbls NGL, totaling 173,574 MMcfe total net proved reserves. Total net proved reserves were comprised of 144,248 MMcfe proved developed producing, 5,292 MMcfe proved developed non-producing, and 24,034 MMcfe proved undeveloped.
(2): PV-10 is considered a non-GAAP measure and is derived from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. PV-10 is equal to the standardized measure of discounted future net cash flows at the applicable date, before deducting future income taxes, discounted at 10%. We believe that the presentation of PV-10 is relevant and useful to investors

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because it presents the relative monetary significance of our oil, natural gas and NGL properties regardless of tax structure. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil, natural gas and NGL properties. PV-10, however, is not a substitute for the standardized measure of discounted future net cash flows. Our PV-10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of our oil (including NGLs) and natural gas reserves. The unweighted average of the historical first-day-of-the-month prices for the prior 12 months was $4.12 per MMBtu of natural gas and $96.19 per barrel of oil as of December 31, 2011.

The following table provides a reconciliation of PV-10 to the standardized measure of discounted future net cash flows (in millions):

	As of December 31, 2011

PV-10	$	7,016
Income taxes, discounted at 10%		(1,816	)
Discounting difference(a)		210

Standardized measure of discounted future net cash flows	$	5,410

(a): Discounting difference relates to differences in the manner in which discounted cash flows are determined for reserve calculations (monthly) versus the discount calculation for purposes of calculating the standardized measure (annually).

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Production, Revenues and Price History

The following table sets forth information regarding net production of the Acquired Business and certain price and cost information for each of the periods indicated.

	EP Energy Corporation Historical

	Year ended December 31,
	2011		2010		2009
Production data(1):
Natural gas (MMcf)		257,964		242,776		238,101
Oil/Condensate (MBbls)		6,340		5,111		4,497
NGL (MBbls)		1,624		1,996		2,248
Combined production (MMcfe)		305,748		285,418		278,571
Average combined daily production (MMcfe/d)		838		782		763
Average realized prices on physical sales(2):
Natural gas (Mcf)	$	4.04	$	4.32	$	3.80
Oil (Bbl)		91.40		72.83		52.48
NGL (Bbl)		53.50		42.38		33.75
Average realized prices, including financial derivative settlements(2)(3):
Natural gas (Mcf)	$	5.44	$	5.67	$	7.62
Oil (Bbl)		90.23		71.13		95.57
NGL (Bbl)		53.50		42.38		33.75
Average cash operating cost per Mcfe(4):
Lease operating expenses(5)	$	0.77	$	0.73	$	0.78
Production taxes		0.28		0.27		0.22
General and administrative expenses		0.70		0.72		0.77
Taxes other than production and income taxes		0.04		0.06		0.05

Total	$	1.79	$	1.78	$	1.82

Depreciation, depletion and amortization	$	2.16	$	1.82	$	1.74

(1): Includes the production amounts represented by our approximate 49% equity interest in Four Star. Specifically, production amounts represented by our approximate 49% equity interest in Four Star as of December 31, 2011 were 16,881 MMcf natural gas, 306 MBbls oil and condensate, 556 MBbls NGL, 22,052 MMcfe combined production and 61 MMcfe/d average combined daily production.
(2): Average prices shown in the table reflect prices both before and after the effects of financial derivative settlements.
(3): We had no cash premiums related to oil derivatives settled during the years ended December 31, 2011, 2010 and 2009. Premiums paid related to natural gas derivatives settled during the year ended December 31, 2010 were $157 million. Premiums paid related to natural gas derivatives settled during the year ended December 31, 2011 were $23 million. Had we included these premiums in our natural gas average realized prices in 2011 and 2010, our realized price, including financial derivatives settlements, would have decreased by $0.10 per Mcf and $0.70 per Mcf for the years ended December 31, 2011 and 2010.
(4): Total adjusted cash operating costs per unit for each period were $1.69/Mcfe, $1.71/Mcfe and $1.72/Mcfe.
(5): Includes approximately $14 million of start-up costs in Camarupim Field in 2009 or $3.08 per Mcfe for Brazil and $0.05 per Mcfe worldwide.

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RISK FACTORS

Investing in the exchange notes in this exchange offer involves a high degree of risk. You should carefully consider the risk factors set forth below, as well as the other information contained in this prospectus, before participating in the exchange offer. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. In addition, the risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us or those that we currently view to be immaterial could also materially and adversely affect our business, financial condition or results of operations. In any such case, you may lose all or a part of your original investment.

Risks Related to the Exchange Offer

If you do not properly tender your initial notes, you will continue to hold unregistered initial notes and be subject to the same limitations on your ability to transfer initial notes.

We will only issue exchange notes in exchange for initial notes that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the initial notes and you should carefully follow the instructions on how to tender your initial notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the initial notes. If you are eligible to participate in the exchange offer and do not tender your initial notes or if we do not accept your initial notes because you did not tender your initial notes properly, then, after we consummate the exchange offer, you will continue to hold initial notes that are subject to the existing transfer restrictions and will no longer have any registration rights or be entitled to any additional interest with respect to the initial notes. In addition:

•: if you tender your initial notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes; and
•: if you are a broker-dealer that receives exchange notes for your own account in exchange for initial notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you (i) have not entered into any arrangement or understanding with the Issuers or an affiliate of the Issuers to distribute those exchange notes and (ii) will deliver a prospectus in connection with any resale of those exchange notes.

We have agreed that, for a period of 180 days after the exchange offer is consummated, we will make this prospectus available to any broker-dealer for use in connection with any resales of the exchange notes.

After the exchange offer is consummated, if you continue to hold any initial notes, you may have difficulty selling them because there will be fewer initial notes outstanding.

The issuance of the exchange notes may adversely affect the market for the initial notes.

To the extent the initial notes are tendered and accepted in the exchange offer, the trading market for the untendered and tendered but unaccepted initial notes could be adversely affected. Because we anticipate that most holders of the initial notes will elect to exchange their initial notes for exchange notes due to the absence of restrictions on the resale of exchange notes under the Securities Act, we anticipate that the liquidity of the market for any initial notes remaining after the completion of this exchange offer may be substantially limited. Please refer to the section in this prospectus entitled "The Exchange Offer—Your Failure to Participate in the Exchange Offer Will Have Adverse Consequences."

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Some persons who participate in the exchange offer must deliver a prospectus in connection with resales of the exchange notes.

Based on interpretations of the staff of the SEC contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983), we believe that you may offer for resale, resell or otherwise transfer the exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act. However, in some instances described in this prospectus under "Plan of Distribution," you will remain obligated to comply with the registration and prospectus delivery requirements of the Securities Act to transfer your exchange notes. In these cases, if you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes under the Securities Act, you may incur liability under the Securities Act. We do not and will not assume, or indemnify you against, this liability.

Risks Related to Our Indebtedness and the Notes

Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the notes.

After giving pro forma effect to the Acquisition Transactions and the Refinancing Transactions, we are a highly leveraged company. As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, we would have had $4,250 million face value of outstanding indebtedness (in addition to approximately $1.5 billion of undrawn commitments under the RBL Facility), and for the six months ended June 30, 2012, we would have had total pro forma debt service payment obligations of $156 million.

Our substantial indebtedness could have important consequences for you as a holder of the notes. For example, it could:

•: limit our ability to borrow money for our working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes;
•: make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indentures governing the notes and the agreements governing other indebtedness;
•: require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for other purposes;
•: limit our flexibility in planning for, or reacting to, changes in our operations or business;
•: make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
•: make us more vulnerable to downturns in our business or the economy;
•: restrict us from making strategic acquisitions, engaging in development activities, introducing new technologies or exploiting business opportunities;
•: cause us to make non-strategic divestitures;
•: limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets;

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•: prevent us from raising the funds necessary to repurchase all notes tendered to us upon the occurrence of certain changes of control, which failure to repurchase would constitute a default under the indentures governing the notes; or
•: expose us to the risk of increased interest rates, as certain of our borrowings, including borrowings under the RBL Facility and the senior secured term loan, are at variable rates of interest.

In addition, the credit agreements governing the RBL Facility and our new senior secured term loan and the indentures governing the notes contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.

Despite our substantial indebtedness, we may still be able to incur significantly more debt, which could intensify the risks described above.

We and our subsidiaries may be able to incur substantial indebtedness in the future. Although the terms of the indentures governing the notes and the credit agreements governing the RBL Facility and the senior secured term loan contain restrictions on our and our subsidiaries' ability to incur additional indebtedness, including secured indebtedness that will be effectively senior to the senior notes and could be effectively senior to the senior secured notes, these restrictions are subject to a number of important qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. As of June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, we would have had approximately $1.5 billion available for additional borrowing under the RBL Facility, all of which would be secured. In addition to the notes and our borrowings under the RBL Facility and the senior secured term loan, the covenants under any other existing or future debt instruments could allow us to incur a significant amount of additional indebtedness. The more leveraged we become, the more we, and in turn our securityholders, will be exposed to certain risks described above under "—Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the notes."

We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful.

Our ability to pay principal and interest on the notes and to satisfy our other debt obligations will depend upon, among other things:

•: our future financial and operating performance (including the realization of any cost savings described herein), which will be affected by prevailing economic, industry and competitive conditions and financial, business, legislative, regulatory and other factors, many of which are beyond our control; and
•: our future ability to borrow under the RBL Facility, the availability of which depends on, among other things, our complying with the covenants in the credit agreement governing such facility.

We cannot assure you that our business will generate cash flow from operations, or that we will be able to draw under the RBL Facility or otherwise, in an amount sufficient to fund our liquidity needs, including the payment of principal and interest on the notes.

If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or

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refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, the terms of existing or future debt agreements, including the RBL Facility, the senior secured term loan and the indentures governing the notes, may restrict us from adopting some of these alternatives. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due. The Sponsors and their affiliates have no continuing obligation to provide us with debt or equity financing. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, could result in a material adverse effect on our business, results of operations and financial condition and could negatively impact our ability to satisfy our obligations under the notes.

If we cannot make scheduled payments on our indebtedness, we will be in default and holders of the notes could declare all outstanding principal and interest to be due and payable, the lenders under the RBL Facility could terminate their commitments to loan money, our secured lenders (including the lenders under the RBL Facility and the senior secured term loan and the holders of the senior secured notes) could foreclose against the assets securing their loans and the senior secured notes and we could be forced into bankruptcy or liquidation. All of these events could cause you to lose all or part of your investment in the notes.

Repayment of our debt, including the notes, is dependent on cash flow generated by our subsidiaries.

We are a holding company and have no direct operations other than holding the equity interests in our subsidiaries and activities directly related thereto. Accordingly, repayment of our indebtedness, including the notes, is dependent on the generation of cash flow by our subsidiaries and (if they are not guarantors of the notes) their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of the notes, our subsidiaries do not have any obligation to pay amounts due on the notes or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the notes. Each of our subsidiaries is a distinct legal entity, and under certain circumstances legal and contractual restrictions may limit our ability to obtain cash from them and we may be limited in our ability to cause any future joint ventures to distribute their earnings to us. While the indentures governing the notes and the credit agreements governing the RBL Facility and the senior secured term loan limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions. In the event that we do not receive distributions from our non-guarantor subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the notes.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

Any default under the agreements governing our indebtedness, including defaults under the RBL Facility and the senior secured term loan that are not waived by the required lenders, and the remedies sought by the holders of such indebtedness could leave us unable to pay principal, premium, if any, or interest on the notes and could substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required

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payments of principal, premium, if any, or interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including the RBL Facility and the senior secured term loan), we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to (i) declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, (ii) terminate their commitments and cease making further loans and (iii) institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.

If our operating performance declines, we may in the future need to seek waivers from the required lenders or holders under the RBL Facility, the senior secured term loan and the notes to avoid being in default. If we breach our covenants under the RBL Facility, the senior secured term loan and the notes and seek a waiver, we may not be able to obtain a waiver from the required lenders or holders, as applicable. If this occurs, we would be in default under these facilities, the lenders or holders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. See "Description of Other Indebtedness," "Description of Senior 2020 Exchange Notes," "Description of Senior 2022 Exchange Notes" and "Description of Senior Secured Exchange Notes."

Upon any such bankruptcy filing, we would be stayed from making any ongoing payments on the notes, and the holders of the notes would not be entitled to receive post-petition interest or applicable fees, costs or charges, or any "adequate protection" under Title 11 of the United States Code, as amended (the "Bankruptcy Code").

The notes will be structurally subordinated to all liabilities of our non-guarantor subsidiaries.

The notes will be structurally subordinated to indebtedness and other liabilities of our subsidiaries that are not guaranteeing the notes, and the claims of creditors of these subsidiaries, including trade creditors, will have priority as to the assets of these subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, these non-guarantor subsidiaries will pay the holders of their debts, holders of preferred equity interests and their trade creditors before they will be able to distribute any of their assets to us. During the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, these non-guarantor subsidiaries generated approximately 5% of our total revenue and 2% of our Adjusted EBITDAX. As of June 30, 2012, on a pro forma basis these non-guarantor subsidiaries held approximately 2% of our consolidated assets and had no outstanding indebtedness, excluding intercompany obligations.

In addition, the indentures governing the notes permit these subsidiaries to incur additional indebtedness, subject to some limitations, and do not contain any limitation on the amount of other liabilities, such as trade payables, that may be incurred by these subsidiaries.

The notes will not be guaranteed by any of our non-U.S. subsidiaries or any other subsidiaries that are not material or wholly owned. These non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the notes, or to make any funds available therefore, whether by dividends, loans, distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any of the non-guarantor subsidiaries upon the liquidation or reorganization of those subsidiaries, and the consequent rights of holders of notes to realize proceeds from the sale of any of those subsidiaries' assets, will be effectively subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of preferred equity interests of those subsidiaries.

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Our debt agreements contain restrictions that will limit our flexibility in operating our business.

The RBL Facility, the senior secured term loan and the indentures governing the notes contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries ability to, among other things:

•: incur additional debt, guarantee indebtedness or issue certain preferred shares;
•: pay dividends on or make distributions in respect of, or repurchase or redeem, our capital stock or make other restricted payments;
•: prepay, redeem or repurchase certain debt;
•: make loans or certain investments;
•: sell certain assets;
•: create liens on certain assets;
•: consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
•: enter into certain transactions with our affiliates;
•: alter the businesses we conduct;
•: enter into agreements restricting our subsidiaries' ability to pay dividends; and
•: designate our subsidiaries as unrestricted subsidiaries.

In addition, the RBL Facility requires us to comply with certain financial covenants. See "Description of Other Indebtedness—The RBL Facility."

As a result of these covenants, we will be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs.

A failure to comply with the covenants under the RBL Facility, the senior secured term loan, the notes or any of our other future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. In the event of any such default, the lenders thereunder:

•: will not be required to lend any additional amounts to us;
•: could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit;
•: could require us to apply all of our available cash to repay these borrowings; or
•: could effectively prevent us from making debt service payments on the notes (due to a cash sweep feature);

any of which could result in an event of default under the notes.

Such actions by the lenders could cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders or holders under the RBL Facility, the senior secured term loan and the notes could proceed against the collateral granted to them to secure that indebtedness. We pledged a significant portion of our assets as collateral under the RBL Facility, the senior secured term loan and the senior secured notes.

If any of our outstanding indebtedness under the RBL Facility, the senior secured term loan or our other indebtedness, including the notes, were to be accelerated, there can be no assurance that our

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assets would be sufficient to repay such indebtedness in full. See "Description of Other Indebtedness," "Description of Senior 2020 Exchange Notes," "Description of Senior 2022 Exchange Notes" and "Description of Senior Secured Exchange Notes."

Because each subsidiary guarantor's liability under its guarantee may be reduced to zero, avoided or released under certain circumstances, you may not receive any payments from some or all of the subsidiary guarantors.

You have the benefit of the guarantees of the guarantors. However, the guarantees by the subsidiary guarantors are limited to the maximum amount that such guarantors are permitted to guarantee under applicable law. As a result, any such guarantor's liability under its guarantee could be reduced to zero, depending on the amount of other obligations of such guarantor. Further, under the circumstances discussed more fully below, a court under federal or state fraudulent conveyance and transfer statutes could void the obligations under a guarantee or further subordinate it to all other obligations of the guarantor.

In addition, the subsidiary guarantors will be automatically released from their guarantees upon the occurrence of certain events, including the following:

•: the designation of a subsidiary guarantor as an unrestricted subsidiary;
•: the release or discharge of any guarantee or indebtedness that resulted in the creation of the guarantee of the notes by a subsidiary guarantor; or
•: the sale or other disposition, including the sale of substantially all the assets, of a subsidiary guarantor.

If the guarantee of any subsidiary guarantor is released, no holder of the notes will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities, including trade payables and preferred stock, if any, whether secured or unsecured, of that subsidiary will be structurally senior to the claim of any holders of the notes. See "Description of Senior 2020 Exchange Notes—Subsidiary Guarantees," "Description of Senior 2022 Exchange Notes—Subsidiary Guarantees" and "Description of Senior Secured Exchange Notes—Subsidiary Guarantees."

We may not be able to repurchase the notes upon a change of control.

Upon the occurrence of certain specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes and our senior secured term loan at 101% of the principal amount thereof plus, without duplication, accrued and unpaid interest and additional interest, if any, to the date of repurchase. Additionally, under the RBL Facility, a change of control constitutes an event of default that permits the lenders to accelerate the maturity of borrowings and terminate their commitments to lend. The source of funds for any repurchase of the notes and repayment of borrowings under the RBL Facility and the senior secured term loan would be our available cash or cash generated from our subsidiaries' operations or other sources, including borrowings, sales of assets or sales of equity. It is possible that we will not have sufficient funds at the time of a change of control to make the required repurchase of notes or that restrictions in the RBL Facility and the senior secured term loan will not allow such repurchases. We may require additional financing from third parties to fund any such repurchases, and we may be unable to obtain financing on satisfactory terms or at all. Further, our ability to repurchase the notes may be limited by law. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a change of control under the indentures governing the notes. See "Description of Senior 2020 Exchange Notes—Change of Control," "Description of Senior 2022 Exchange Notes—Change of Control" and "Description of Senior Secured Exchange Notes—Change of Control."

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Courts interpreting change of control provisions under New York law (which will be the governing law of the indentures governing the notes) have not provided clear and consistent meanings of such change of control provisions which leads to subjective judicial interpretation. In addition, a court case in Delaware has questioned whether a change of control provision contained in an indenture could be unenforceable on public policy grounds.

We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the notes.

Legal uncertainty regarding what constitutes a change of control and the provisions of the indentures governing the notes may allow us to enter into transactions, such as acquisitions, refinancing or recapitalizations, that would not constitute a change of control but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the notes. The definition of change of control for purposes of the notes includes a phrase relating to the transfer of "all or substantially all" of our assets taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require us to repurchase notes as a result of a transfer of less than all of our assets to another person may be uncertain.

Federal and state statutes allow courts, under specific circumstances, to void notes and guarantees and require noteholders to return payments received.

If we or any guarantor becomes a debtor in a case under the Bankruptcy Code or encounters other financial difficulty, under federal or state fraudulent transfer law a court may void or otherwise decline to enforce the notes or the guarantees. A court might do so if it found that when we issued the notes or the subsidiary guarantor entered into its guarantee, or in some states when payments became due under the notes or the guarantees, we or the subsidiary guarantor received less than reasonably equivalent value or fair consideration and:

•: was insolvent or rendered insolvent by reason of such incurrence;
•: was left with inadequate capital to conduct its business;
•: believed or reasonably should have believed that it would incur debts beyond its ability to pay; or
•: was a defendant in an action for money damages or had a judgment for money damages docketed against us or the subsidiary guarantor if, in either case, the judgment is unsatisfied after final judgment.

The court might also void an issuance of notes or a guarantee, without regard to the above factors, if the court found that we issued the notes or the applicable guarantor entered into its guarantee with actual intent to hinder, delay or defraud its creditors.

A court would likely find that we or a guarantor did not receive reasonably equivalent value or fair consideration for the notes or its guarantee if we or a guarantor did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void the issuance of the notes or any guarantee you would no longer have any claim against the issuer or the applicable guarantor. Sufficient funds to repay the notes may not be available from other sources, including the remaining obligors, if any. In addition, the court might direct you to repay any amounts that you already received from us or a guarantor. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the notes. Further, the avoidance of the notes could result in an event of default with respect to our and our subsidiaries' other debt, which could result in acceleration of that debt.

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The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

•: the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;
•: if the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
•: it could not pay its debts as they become due.

On the basis of historical financial information, recent operating history and other factors, we believe that each subsidiary guarantor, after giving effect to its guarantee of these notes, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. In addition, no subsidiary guarantor was a defendant in an action for money damages, or had a judgment for money damages docketed against it, for which the judgment was unsatisfied after final judgment. We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.

Although each guarantee entered into by a guarantor will contain a provision intended to limit that guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer, this provision may not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce that guarantor's obligation to an amount that effectively makes its guarantee worthless.

Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the notes to other claims against us under the principle of equitable subordination if the court determines that (a) the holder of notes engaged in some type of inequitable conduct, (b) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of notes and (c) equitable subordination is not inconsistent with the provisions of the Bankruptcy Code.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the RBL Facility and the senior secured term loan are at variable rates of interest and expose us to interest rate risk. Assuming the RBL Facility is fully drawn and the applicable LIBOR rate exceeds the term loan LIBOR floor, each 0.125% change in assumed blended interest rates would result in a $3.4 million change in annual interest expense on indebtedness under the RBL Facility and the senior secured term loan. In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk, may prove disadvantageous or may create additional risks.

Your ability to transfer the notes may be limited by the absence of an active trading market, and there is no assurance that any active trading market will develop, or if developed be maintained, for the notes.

The notes are new issues of securities for which there is no established public market. We do not intend to have the notes listed on a national securities exchange or included in any automated quotation system. Affiliates of the initial purchasers of the initial notes have advised us that they intend to make a market in the notes, as permitted by applicable laws and regulations; however, they are not obligated to make a market in any of the notes, and they may discontinue their market making

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activities at any time without notice. Therefore, an active market for any of the notes may not develop or, if developed, it may not continue. The liquidity of any market for the notes will depend upon the number of holders of the notes, our performance, the market for similar securities, the interest of securities dealers in making a market in the notes and other factors. A liquid trading market may not develop for the notes or any series of notes. If an active market does not develop or is not maintained, the price and liquidity of the notes may be adversely affected. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. The market, if any, for any of the notes may not be free from similar disruptions and any such disruptions may adversely affect the prices at which you may sell your notes. In addition, the notes may trade at a discount from their value on the date you acquired the notes, depending upon prevailing interest rates, the market for similar notes, our performance and other factors.

Many of the restrictive covenants contained in the indentures governing the notes will not apply during any period in which the notes are rated investment grade by both Moody's and S&P.

Many of the covenants contained in the indentures governing the notes will not apply to us during any period in which the notes are rated investment grade by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Group, provided that at such time no default or event of default has occurred and is continuing. Such covenants will include restrictions on, among other things, our ability to make certain distributions, incur indebtedness and enter into certain other transactions. There can be no assurance that the notes will ever be rated investment grade or that if the notes ever are rated investment grade they will maintain these ratings. However, suspension of these covenants would allow us to engage in certain transactions that would not be permitted while these covenants were in force. To the extent the covenants are subsequently reinstated, any such actions taken while the covenants were suspended would not result in an event of default under the indentures governing the notes. See "Description of Senior 2020 Exchange Notes—Certain Covenants," "Description of Senior 2022 Exchange Notes—Certain Covenants" and "Description of Senior Secured Exchange Notes—Certain Covenants."

Additional Risks Related to the Senior Secured Notes

The lien on the RBL Facility Priority Collateral securing the senior secured notes and the guarantees is junior and subordinate to the lien on the RBL Facility Priority Collateral securing the RBL Facility and certain other first lien obligations.

The senior secured notes and related guarantees will be secured by second-priority liens on the RBL Facility Priority Collateral, which secures on a first-priority basis obligations under our the RBL Facility and certain hedging and cash management obligations, subject to certain permitted liens, exceptions and encumbrances described in the indenture governing the senior secured notes and the security documents relating to the senior secured notes. As set out in more detail under "Description of Senior Secured Exchange Notes—Security," the lenders under the RBL Facility and holders of certain of our hedging and cash management obligations will be entitled to receive all proceeds from the realization of the RBL Facility Priority Collateral before the notes under certain circumstances, including upon default in payment on, or the acceleration of, any obligations under the RBL Facility, or in the event of our or any guarantor's bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding, to repay such obligations in full before the holders of the senior secured notes will be entitled to any recovery from the RBL Facility Priority Collateral. In addition, the indenture governing the senior secured notes will permit us and the guarantors to create additional liens under specified circumstances, including liens senior in priority to the liens on the RBL Facility Priority Collateral securing the senior secured notes. Any obligations secured by such liens may further limit the recovery from the realization of the RBL Facility Priority Collateral available to satisfy holders of the senior secured notes.

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Holders of the senior secured notes will not control decisions regarding the RBL Facility Priority Collateral.

The lenders under the RBL Facility, as holders of first priority-lien obligations, will control substantially all matters related to the RBL Facility Priority Collateral pursuant to the terms of the senior lien intercreditor agreement. The holders of the first-priority lien obligations may cause the collateral agent thereunder (the "first lien agent") to dispose of, release or foreclose on, or take other actions with respect to, the RBL Facility Priority Collateral (including amendments of and waivers under the security documents) with which holders of the senior secured notes may disagree or that may be contrary to the interests of holders of the senior secured notes, even after a default under the senior secured notes. To the extent RBL Facility Priority Collateral is released from securing the first-priority lien obligations, the senior lien intercreditor agreement will provide that, in certain circumstances, the second-priority liens securing the senior secured notes will also be released. In addition, the security documents related to the second-priority liens generally will provide that, so long as the first-priority lien obligations are in effect, the holders of the first-priority lien obligations may change, waive, modify or vary the security documents governing such first-priority liens without the consent of the holders of the senior secured notes (except under certain limited circumstances) and that the security documents governing the second-priority liens will be automatically be changed, waived and modified in the same manner. Further, the security documents governing the second-priority liens may not be amended in any manner adverse to the holders of the first-priority obligations without the consent of the first lien agent until the first priority lien obligations are paid in full. The security agreement governing the second-priority liens will prohibit second-priority lienholders from foreclosing on the RBL Facility Priority Collateral until payment in full of the first-priority lien obligations. We cannot assure you that in the event of a foreclosure by the holders of the first-priority lien obligations, the proceeds from the sale of collateral would be sufficient to satisfy all or any of the amounts outstanding under the senior secured notes after payment in full of the obligations secured by first-priority liens on the RBL Facility Priority Collateral. If such proceeds were not sufficient to repay amounts outstanding under the senior secured notes and the senior secured term loan, then holders of the senior secured notes (to the extent not repaid from the proceeds of the sale of the RBL Facility Priority Collateral and Secured Notes/Term Loan Priority Collateral) would only have an unsecured claim against our remaining assets, which claim will rank equal in priority to the unsecured claims with respect to any unsatisfied portion of the obligations secured by the first-priority liens or other second-priority liens and our other unsecured senior indebtedness (including the senior notes). See also "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements—Senior Lien Intercreditor Agreement."

Security interest in certain of the collateral may not be in place on the date of the consummation of the exchange offer for the senior secured notes.

Security interests may not be in place on the date of the consummation of the exchange offer for the senior secured notes. We are required to deliver real property mortgages only on certain oil and gas properties encumbering (x) not less than 50% of the PV-10 value of the proved oil and gas reserves included in the borrowing base under the RBL Facility no later than 90 days following the Acquisition and (y) not less than 80% of the PV-10 value of the proved oil and gas reserves included in the borrowing base under the RBL Facility no later than 120 days following the Acquisition, subject to extensions that may be granted in the discretion of the administrative agent under the RBL Facility. Any issues that we are not able to resolve in connection with the delivery and recordation of such mortgages and security interests may negatively impact the value of the collateral. To the extent a security interest in certain collateral is perfected following the date of issuance of the senior secured notes, it might be avoidable in bankruptcy. See "—Any future pledge of collateral might be avoidable in bankruptcy."

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The capital stock of each of our subsidiaries that has been pledged to secure the senior secured notes will be automatically released from the collateral for the senior secured notes to the extent that the pledge would require the preparation and filing of separate audited financial statements of such subsidiary under Rule 3-16 of Regulation S-X under the Securities Act.

Pursuant to the terms of the indenture governing the senior secured notes, a portion (or, if necessary, all) of the capital stock of each of our subsidiaries that has been pledged to secure the senior secured notes will be automatically released from the collateral for the senior secured notes to the extent that the pledge would require the preparation and filing of separate audited financial statements of such subsidiary under Rule 3-16 of Regulation S-X under the Securities Act. As a result, the collateral securing the senior secured notes will include the capital stock of each such subsidiary only to the extent that the applicable value of such capital stock (on a subsidiary-by-subsidiary basis) is less than 20% of the aggregate principal amount of the outstanding notes. See "Description of Senior Secured Exchange Notes—Security—Limitations on Stock Collateral." The senior secured term loan will be subject to the same limits described herein.

It may be difficult to realize the value of the collateral securing the senior secured notes.

The collateral securing the senior secured notes will be subject to any and all exceptions, defects, encumbrances, liens and other imperfections as may be accepted by the trustee for the senior secured notes and the collateral agent thereunder (the "second lien collateral agent") and any other creditors that have the benefit of first-priority liens on the collateral securing the senior secured notes from time to time, whether on or after the date the senior secured notes are issued. The existence of any such exceptions, defects, encumbrances, liens and other imperfections could adversely affect the value of the collateral securing the senior secured notes as well as the ability of the second lien collateral agent to realize or foreclose on such collateral.

The value of the collateral at any time will depend on market and other economic conditions, including the availability of suitable buyers. By their nature, some or all of the pledged assets may be illiquid and may have no readily ascertainable market value. We cannot assure you that the fair market value of the collateral as of the date of this prospectus exceeds the principal amount of the debt secured thereby. The value of the assets pledged as collateral for the senior secured notes could be impaired in the future as a result of changing economic conditions, our failure to implement our business strategy, competition, unforeseen liabilities and other future events. Accordingly, there may not be sufficient collateral to pay all or any of the amounts due on the senior secured notes. Any claim for the difference between the amount, if any, realized by holders of the senior secured notes from the sale of the collateral securing the senior secured notes and the obligations under the senior secured notes will rank equally in right of payment with all of our other unsecured unsubordinated indebtedness and other obligations, including trade payables. Additionally, in the event that a bankruptcy case is commenced by or against us, if the value of the collateral is less than the amount of principal and accrued and unpaid interest on the senior secured notes and all other senior secured obligations, interest may cease to accrue on the senior secured notes from and after the date the bankruptcy petition is filed.

In the future, the obligation to grant additional security over assets, or a particular type or class of assets, whether as a result of the acquisition or creation of future assets or subsidiaries, the designation of a previously unrestricted subsidiary or otherwise, is subject to the provisions of the intercreditor agreement. The intercreditor agreement sets out a number of limitations on the rights of the holders of the senior secured notes offered hereby to require security in certain circumstances, which may result in, among other things, the amount recoverable under any security provided by any subsidiary being limited and/or security not being granted over a particular type or class of assets. Accordingly, this may affect the value of the security provided by us and our subsidiaries. Furthermore, upon enforcement against any collateral or in insolvency, under the terms of the intercreditor agreement the claims of the

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holders of the senior secured notes offered hereby to the proceeds of such enforcement will rank behind the claims of the holders of obligations under the RBL facility, which are first-priority obligations, and holders of additional secured indebtedness (to the extent permitted to have priority by the indenture governing the senior secured notes).

The security interest of the second lien collateral agent will be subject to practical problems generally associated with the realization of security interests in collateral. For example, the second lien collateral agent may need to obtain the consent of a third party to obtain or enforce a security interest in a contract. We cannot assure you that the second lien collateral agent will be able to obtain any such consent. We also cannot assure you that the consents of any third parties will be given when required to facilitate a foreclosure on such assets. Accordingly, the second lien collateral agent may not have the ability to foreclose upon those assets and the value of the collateral may significantly decrease.

The value of the Secured Notes/Term Loan Priority Collateral will not be sufficient to repay the obligations under the senior secured notes and senior secured term loan.

The Secured Notes/Term Loan Priority Collateral is composed of 65% of the voting capital stock and 100% of the non-voting capital stock of all first-tier foreign subsidiaries of the Issuers and each of the guarantors. These foreign subsidiaries constitute approximately 2% of our consolidated assets and generated approximately 5% of our revenue and 2% of our Adjusted EBITDAX as of June 30, 2012 on a pro forma basis after giving effect to the Refinancing Transactions. In addition, the Secured Notes/Term Loan Priority Collateral will also secure our obligations under our new senior secured term loan on a first lien basis pari passu with the senior secured notes. No appraisals of any collateral have been prepared in connection with the offering of the senior secured notes. The value of the collateral securing the senior secured notes will depend on market and other economic conditions, including the availability of suitable buyers for the collateral. Accordingly, the value of the Secured Notes/Term Loan Priority Collateral will not be sufficient to repay any obligations under the senior secured notes and senior secured term loan, and holders of the senior secured notes would only have rights to their second-priority interest on the RBL Facility Priority Collateral and, to the extent such collateral is insufficient, would have an unsecured claim against our remaining assets, ranking equal to other unsecured claims.

Rights in the collateral may be adversely affected by the failure to perfect securities interests in collateral.

Applicable law provides that a security interest in certain tangible and intangible assets can only be properly perfected and its priority retained through certain actions undertaken by the secured party. The liens in the collateral securing the senior secured notes may not be perfected with respect to the claims of such senior secured notes if the collateral agent for the senior secured notes is not able to take the actions necessary to perfect any of these liens on or prior to the date of the indenture governing such senior secured notes. In addition, applicable law provides that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate and certain proceeds, can only be perfected at the time such property and rights are acquired and identified. We and the guarantors have limited obligations to perfect the senior secured noteholders' security interest in specified collateral. The collateral agent for the senior secured notes will not monitor, and there can be no assurance that we will inform the collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the senior secured notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest. Such failure may result in the loss of the security interest in the collateral or the priority of the security interest in favor of the collateral agent for the senior secured notes, as applicable, against third parties. The collateral agent for the senior secured notes will be the collateral agent under our new senior secured term loan.

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Bankruptcy laws may limit your ability to realize value from the collateral.

The right of the second lien collateral agent to repossess and dispose of the collateral upon the occurrence of an event of default under the indenture governing the senior secured notes is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us before the second lien collateral agent repossessed and disposed of the collateral. Upon the commencement of a case under the bankruptcy code, a secured creditor such as the second lien collateral agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval, which may not be given. Moreover, the bankruptcy code permits the debtor to continue to retain and use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral as of the commencement of the bankruptcy case and may include cash payments or the granting of additional security if and at such times as the bankruptcy court in its discretion determines that the value of the secured creditor's interest in the collateral is declining during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of its collateral if the value of the collateral exceeds the debt it secures.

In view of the lack of a precise definition of the term "adequate protection" and the broad discretionary power of a bankruptcy court it is impossible to predict:

•: how long payments under the senior secured notes could be delayed following commencement of a bankruptcy case;
•: whether or when the collateral agent could repossess or dispose of the collateral;
•: the value of the collateral at the time of the bankruptcy petition; or
•: whether or to what extent holders of the senior secured notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of "adequate protection."

In addition, the intercreditor agreement provides that, in the event of a bankruptcy, the trustee and the second lien collateral agent may not object to a number of important matters following the filing of a bankruptcy petition so long as any first priority lien obligations are outstanding. After such a filing, the value of the collateral securing the senior secured notes could materially deteriorate and the holders of the senior secured notes would be unable to raise an objection. The right of the holders of obligations secured by first priority liens on the collateral to foreclose upon and sell the collateral upon the occurrence of an event of default also would be subject to limitations under applicable bankruptcy laws if we or any of our subsidiaries become subject to a bankruptcy proceeding.

Any disposition of the collateral during a bankruptcy case would also require permission from the bankruptcy court. Furthermore, in the event a bankruptcy court determines the value of the collateral is not sufficient to repay all amounts due on first priority lien debt and, thereafter, the senior secured notes, the holders of the senior secured notes would hold a secured claim only to the extent of the value of the collateral to which the holders of the senior secured notes are entitled and unsecured claims with respect to such shortfall. The bankruptcy code only permits the payment and accrual of post-petition interest, costs and attorney's fees to a secured creditor during a debtor's bankruptcy case to the extent the value of its collateral is determined by the bankruptcy court to exceed the aggregate outstanding principal amount of the obligations secured by the collateral.

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A court could void the liens securing the guarantees or the senior secured notes under fraudulent transfer laws.

Although the senior secured notes and guarantees will be secured by the collateral owned by us and the guarantors, under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, a lien could be voided, or claims with respect to a lien could be subordinated to all other debts of that obligor. In addition, a bankruptcy court could require enforcement proceeds from the collateral to be returned to the obligor or to a fund for the benefit of the other creditors of the obligor. Each guarantee will contain a provision intended to limit the guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its senior secured notes and guarantee to be a fraudulent transfer. This provision may not be effective to protect the liens securing the senior secured notes and the guarantees from being voided under fraudulent transfer law.

The bankruptcy court might take these actions if it found, among other things, that when an obligor granted its lien:

•

such obligor received less than reasonably equivalent value or fair consideration for the granting of the lien; and

•

such obligor:

•: was (or was rendered) insolvent by the incurrence of the obligation;
•: was engaged or about to engage in a business or transaction for which its assets constituted unreasonably small capital to carry on its business;
•: intended to incur, or believed that it would incur, obligations beyond its ability to pay as those obligations matured; or
•: was a defendant in an action for money damages, or had a judgment for money damages docketed against it and, in either case, after final judgment, the judgment was unsatisfied.

A bankruptcy court would likely find that an obligor received less than fair consideration or reasonably equivalent value for its lien to the extent that it did not receive direct or indirect benefit from the issuance of the senior secured notes. A bankruptcy court could also void a lien if it found that the subsidiary issued its lien with actual intent to hinder, delay or defraud creditors.

Although courts in different jurisdictions measure solvency differently, in general, an entity would be deemed insolvent if the sum of its debts, including contingent and unliquidated debts, exceeds the fair value of its assets, or if the present fair salable value of its assets is less than the amount that would be required to pay the expected liability on its debts, including contingent and unliquidated debts, as they become due.

If a court voided a lien, it could require that noteholders return any enforcement proceeds from the collateral. If any lien were voided, noteholders would retain their rights against us and any guarantors, although there is no assurance that those entities' assets would be sufficient to pay the senior secured notes in full.

Any future pledge of collateral might be avoidable in bankruptcy.

Any future pledge of collateral in favor of the second lien collateral agent, including pursuant to mortgages and other security documents delivered after the date of the indenture governing the senior secured notes, might be avoidable by the pledgor (as debtor-in-possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits the holders of the senior secured notes to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in

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respect of the pledgor is commenced within 90 days following the pledge or, in certain circumstances, a longer period.

The collateral is subject to casualty risks.

We maintain insurance or otherwise insure against certain hazards. There are, however, losses that may be not be insured. If there is a total or partial loss of any of the pledged collateral, we cannot assure you that any insurance proceeds received by us will be sufficient to satisfy all the secured obligations, including the senior secured notes, our new senior secured term loan and related guarantees.

The representative of the lenders under the senior secured term loan will initially control actions with respect to the Secured Notes/Term Loan Priority Collateral. In addition, subject in all respects to the intercreditor agreement with the holders of obligations under the RBL Facility, the representative of the lenders under the senior secured term loan will also conduct all actions with respect to the RBL Facility Priority Collateral held by the holders of obligations having a second-priority security interest in such assets.

The rights of the holders of the senior secured notes with respect to the Secured Notes/Term Loan Priority Collateral and RBL Facility Priority Collateral will be subject to an intercreditor agreement with the lenders under the senior secured term loan and other pari passu obligations. Under that intercreditor agreement, any action that may be taken with respect to the collateral, including the ability to cause the commencement of enforcement proceedings against such collateral, will be at the direction of the authorized representative of the lenders under the senior secured term loan until (1) our obligations under the senior secured term loan are discharged or (2) (i) 180 days after the occurrence of an event of default under the senior secured notes indenture or the senior secured term loan and (ii) the acceleration of the obligations under the senior secured notes indenture or the senior secured term loan. In addition, the intercreditor agreement will provide that, so long as the senior secured term loan obligations are in effect, the holders of the senior secured notes may not contest, protest or object to any foreclosure proceeding or action brought by the authorized representative of the lenders under the senior secured term loan (subject to limited exceptions). The collateral will also be subject to any and all exceptions, defects, encumbrances, liens and other imperfections as may be accepted by the authorized representative of the lenders under the senior secured term loan. See "Description of Senior Secured Exchange Notes."

Additional Risks Related to the Senior Notes

The senior notes are unsecured, and the senior notes will be effectively subordinated to any existing and future secured debt.

The senior notes are unsecured and will rank equal in right of payment with our existing and future unsecured and unsubordinated senior debt. The senior notes will not be secured by any of our or the guarantors' assets. The senior notes will be effectively subordinated to the senior secured notes, the RBL Facility, the senior secured term loan and any future secured debt to the extent the value of the assets that secure the indebtedness. The effect of this subordination is that upon a default in payment on, or the acceleration of, any of our secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution or reorganization of us or the guarantors of the senior secured notes, the RBL Facility, the senior secured term loan or of other secured debt, the proceeds from the sale of assets securing our secured indebtedness will be available to pay obligations on the senior notes only after all indebtedness under the senior secured notes, the RBL Facility, the senior secured term loan and the other secured debt has been paid in full. As a result, the holders of the senior notes may receive less, ratably, than the holders of secured debt in the event of our or the guarantors' bankruptcy, insolvency, liquidation, dissolution or reorganization. As of June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions, there would have been secured debt consisting of

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$400 million under the RBL Facility (as well as approximately $1.5 billion of undrawn commitments), $750 million of the senior secured notes and $750 million under the senior secured term loan.

Risks Related to Our Business and Industry

The supply and demand for oil, natural gas and NGLs could be negatively impacted by many factors outside of our control, which could have a material adverse effect on our business, results of operations and financial condition.

Our success depends on the supply and demand for oil, natural gas and NGLs which will depend on many other factors outside of our control, which include, among others:

•: adverse changes in global, geopolitical and economic conditions, including changes that negatively impact general demand for oil and its refined products; power generation and industrial loads for natural gas; and petrochemical, refining and heating demand for NGLs;
•: the relative growth of natural gas-fired power generation, including the speed and level of existing coal-fired generation that is replaced by natural gas-fired generation, which could be offset by the growth of various renewable energy sources;
•: adverse changes in domestic regulations that could impact the supply of demand for natural gas, including potential restrictive regulations associated with hydraulic fracturing operations;
•: adoption of various energy efficiency and conservation measures;
•: increased prices of oil, natural gas or NGLs that could negatively impact the demand for these products;
•: perceptions of customers on the availability and price volatility of our products, particularly customers' perceptions on the volatility of natural gas and oil prices over the longer-term;
•: adverse changes in geopolitical factors, including the ability of the Organization of Petroleum Exporting Countries ("OPEC") to agree upon and maintain certain production levels, political unrest and changes in foreign governments in energy producing regions of the world and unexpected wars, terrorist activities and others acts of aggression;
•: technological advancements that may drive further increases in production from oil and natural gas shales;
•: the need of many producers to drill to maintain leasehold positions regardless of current commodity prices;
•: the oversupply of NGLs that may be caused by the wider spread between oil and natural gas prices;
•: competition from imported NGL and Canadian supplies and alternate fuels; and
•: increased costs to explore for, develop and produce oil, natural gas or NGLs, including increases in oil field service costs.

The prices for oil, natural gas and NGLs are highly volatile and could be negatively impacted by many factors outside of our control, which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Our success depends upon the prices we receive for our oil, natural gas and NGLs. Oil, natural gas and NGL prices historically have been highly volatile and are likely to continue to be volatile in the future, especially given current global geopolitical and economic conditions. There is a risk that commodity prices could remain depressed for sustained periods, especially natural gas prices, which are at historical ten year low levels at this time. Subject to our risk mitigation and hedging strategies, we are not likely to be impacted by short-term changes in commodity prices. However, we can be

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negatively impacted in the long-term by sustained depression in commodity prices for oil, natural gas or NGLs, including reductions in our drilling opportunities. The prices for oil, natural gas and NGLs are subject to a variety of additional factors that are outside of our control, which include, among others:

•: changes in regional, domestic and international supply of, and demand for, oil, natural gas and NGLs;
•: gas inventory levels in the United States;
•: political and economic conditions domestically and in other oil and natural gas producing countries, including, among others, countries in the Middle East, Africa and South America;
•: actions of OPEC and other state-controlled oil companies relating to oil price and production controls;
•: volatile trading patterns in capital and commodity-futures markets;
•: changes in the costs of exploring for, developing, producing, transporting, processing and marketing oil, natural gas and NGLs;
•: weather conditions;
•: technological advances affecting energy consumption and energy supply;
•: domestic and foreign governmental regulations and taxes, including administrative and/or agency actions;
•: commodity processing, gathering and transportation availability, proximity and cost, and the availability, proximity and cost of refining capacity;
•: the price and availability of supplies of alternative energy sources;
•: the effect of NGL deliveries to the United States;
•: the strengthening and weakening of the U.S. dollar relative to other currencies; and
•: variations between product prices at sales points and applicable index prices.

In addition to negatively impacting our cash flows, prolonged or substantial declines in these commodity prices could negatively impact our proven oil and natural gas reserves, which could cause us to incur non-cash charges to earnings. Approximately 70% of our proved reserves at December 31, 2011 were natural gas and approximately 84% of our production for the year ended December 31, 2011 was natural gas, and as a result we are substantially more sensitive to changes in natural gas prices than to changes in oil and NGL prices. Current natural gas prices are significantly below the 12-month average price used to determine our domestic proved reserves at December 31, 2011. Such decreases in commodity prices could negatively impact the amount of oil and natural gas production that we can produce economically in the future. A decrease in production could result in a shortfall in our expected cash flows and require us to reduce our capital spending or borrow funds to cover any such shortfall. Prices also affect our cash flow available for capital expenditures and our ability to access funds under the RBL Facility and through the capital markets. The amount available for borrowing under the RBL Facility is subject to a borrowing base, which is determined by our lenders taking into account our proved reserves, and is subject to periodic redeterminations based on pricing models determined by the lenders at such time. Declines in oil, natural gas and NGL prices may adversely impact the value of our proved reserves and, in turn, the bank pricing used by our lenders to determine our borrowing base. Any of these factors could negatively impact our liquidity, our ability to replace our production and our future rate of growth. On the other hand, increases in these commodity prices may be offset by increases in drilling costs, production taxes and lease operating costs that typically result from any increase in such commodity prices. Any of these outcomes could have a material adverse effect on our business, results of operations and financial condition.

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If oil and natural gas prices decrease, we may be required to take write-downs of the carrying values of our oil properties, which could result in a material adverse effect on our results of operations and financial condition.

Accounting rules require that we review periodically the carrying value of our oil and natural gas properties for impairment. Under the successful efforts method of accounting for oil and natural gas properties, we review our oil and natural gas properties periodically (at least annually) to determine if impairment of such properties is necessary. Significant undeveloped leasehold costs are assessed for impairment at a lease level or resource play based on our current exploration plans, while leasehold acquisition costs associated with prospective areas that have limited or no previous exploratory drilling are generally assessed for impairment by major prospect area. Proved oil and natural gas property values are reviewed when circumstances suggest the need for such a review and may occur if a field discovers lower than anticipated reserves, reservoirs produce below original estimates or if commodity prices fall below a level that significantly affects anticipated future cash flows on the property. If required, the proved properties are written down to their estimated fair market value based on proved reserves and other market factors.

We may incur additional impairment charges in the future depending on the value of our proved reserves, which are subject to change as a result of factors such as prices, costs and well performance. Finally, in light of the recent decline in natural gas prices, it is possible we could experience impairment charges for our domestic natural gas properties in the future. These impairment charges could have a material adverse effect on our results of operations and financial condition for the periods in which such charges are taken.

Our use of derivative financial instruments could result in financial losses or could reduce our income.

We use futures, over-the-counter options and swaps to mitigate our commodity price, basis and interest rate exposures. However, we do not typically hedge all of these exposures. For example, we do not typically hedge positions beyond several years with regard to commodity or basis risks. As a result, we are subject to commodity price and basis exposure since our business has multi-year drilling programs for our proved reserves and unproved resources.

The derivative contracts we enter into to mitigate commodity price risk are not designated as accounting hedges and are therefore marked to market. As a result, we still experience volatility in our revenues and net income as a result of changes in commodity prices, counterparty non-performance risks, correlation factors and changes in the liquidity of the market. Furthermore, the valuation of these financial instruments involves estimates that are based on assumptions that could prove to be incorrect and result in financial losses. Although we have internal controls in place that impose restrictions on the use of derivative instruments, there is a risk that such controls will not be complied with or will not be effective, and we could incur substantial losses on our derivative transactions. The use of derivatives, to the extent they require collateral posting with our counterparties, could impact our working capital and liquidity when commodity prices or interest rates change.

To the extent we enter into derivative contracts to manage our commodity price exposure, basis and interest rate exposures, we may forego the benefits we could otherwise experience if such prices, differentials or rates were to change favorably. In addition, when we enter into fixed price derivative contracts, we could experience losses and be required to pay cash to the extent that commodity prices, basis positions or interest rates were to increase above the fixed price.

In addition, these hedging arrangements also expose us to the risk of financial loss in the following circumstances, among others:

•: when production is less than expected;
•: when the counterparty to the hedging instrument defaults on its contractual obligations;

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•: when there is an increase in the differential between the underlying price in the hedging instrument and actual prices received; and
•: when there are issues with respect to legal enforceability of such instruments.

These types of hedging arrangements could also limit the benefit we would receive from increases in the prices for natural gas or oil.

Our counterparties are typically large financial institutions. The risk that a counterparty may default on its obligations is heightened by the recent financial sector crisis and losses incurred by many banks and other financial institutions, including our counterparties or their affiliates. These losses may affect the ability of the counterparties to meet their obligations to us on hedge transactions, which would reduce our revenue from hedges at a time when we are also receiving a lower price for our oil and natural gas sales, thereby triggering the hedge payments. As a result, our business, results of operations and financial condition could be materially adversely affected.

In addition, our commodity price risk management activities could have the effect of reducing our revenue and net income. For the year ended December 31, 2011 and the six months ended June 30, 2012, the net unrealized asset represented by our hedging contracts was $201 million and $460 million, respectively. We may continue to incur significant unrealized gains or losses in the future from our commodity price risk management activities to the extent market prices increase or decrease and our hedging arrangements remain in place.

The derivatives reform legislation adopted by the U.S. Congress could have a negative impact on our ability to hedge risks associated with our business.

On July 21, 2010, The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank") was signed into law. Title VII of Dodd-Frank ("Title VII") imposes comprehensive regulation on the over-the-counter ("OTC") derivatives marketplace and could affect the use of derivatives in hedging transactions. Among other things, Title VII subjects swap dealers and major swap participants to substantial supervision and regulation, including capital standards, margin requirements, business conduct standards and recordkeeping and reporting requirements. Title VII also requires central clearing for many transactions entered into between swap dealers, major swap participants and other entities unless an End-User Exemption is available. All swaps subject to the clearing requirement must be executed on a regulated exchange or a swap execution facility ("SEF"), unless no exchange or SEF makes it available for trading. For these purposes, it is expected that a major swap participant generally will be someone other than a dealer (i) who maintains a "substantial" net position in outstanding swaps, excluding swaps used for commercial hedging or for reducing or mitigating commercial risk or (ii) whose positions create substantial net counterparty exposure that could have material adverse effects on the financial stability of the U.S. banking system or financial markets. In addition, Title VII provides the Commodity Futures Trading Commission (the "CFTC") with express authority to impose aggregate position limits on derivatives related to energy commodities, including contracts traded on exchanges, SEFs, non-U.S. boards of trade and swaps that are not centrally cleared. The CFTC has proposed a large number of rules to implement Title VII in multiple rulemaking proceedings and has finalized a number of such rules, such as the rule on the end user exception to certain clearing, margin and reporting requirements applicable to derivatives transactions on July 10, 2012. Specifically, the CFTC has issued finance regulations to define the terms "swap," "swap dealer" and "major swap participant." In addition, the CFTC has issued final regulations regarding registration of swap dealers and major swap participants. The CFTC has also issued final regulations on position limits for futures and swaps, which became effective sixty days after the term "swap" was defined by the CFTC. The CFTC has also issued final regulations on real-time public reporting of swap transaction and pricing data, as well as final regulations regarding recordkeeping and reporting requirements. Under Dodd-Frank, the CFTC was generally given until July 16, 2011 to adopt

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final rules under Title VII, though some rules were required to be completed sooner. However, most of the contemplated rules were not adopted by such date. Since certain provisions of Dodd-Frank reference terms that required further definition or repeal provisions of current law, such provisions would not become effective until there was a final rulemaking with respect thereto. To address the consequences of this regulatory backlog and avoid "undue disruption" to current practices during the transition to the new regulatory regime, the CFTC issued a final order, effective December 23, 2011, which (i) delays the effectiveness of provisions which reference certain terms that require further definition until the earlier of the effective date of the final rule defining the referenced term or July 16, 2012 and (ii) adds provisions to account for the repeal and replacement (as of December 31, 2011) of part 35 of the CFTC's regulations. Part 35 provided a safe harbor from CFTC regulation for certain transactions between "eligible swap participants," until the earlier of the repeal, withdrawal or replacement of Part 35 or December 31, 2011. The CFTC continues to propose and finalize rules to implement Title VII in multiple rulemaking proceedings. It is not possible at this time to predict the outcome of these proceedings or, in the case of final rules, the impact that such rules will have on the new regulatory regime and the OTC derivatives marketplace. Any laws or regulations that may be adopted that subject us or our counterparties to additional capital or margin requirements and substantially increase the costs associated with hedging our equity production, potentially making it more expensive, or limiting our ability, to implement our hedging program. In addition, the position limits implemented under the new regulatory regime may effectively limit our ability to implement our hedging program.

We require substantial capital expenditures to conduct our operations, engage in acquisition activities and replace our production, and we may be unable to obtain needed financing on satisfactory terms necessary to execute our operating strategy.

We require substantial capital expenditures to conduct our exploration, development and production operations, engage in acquisition activities and replace our production. We have established a capital budget for 2012 between $1.5 billion and $1.6 billion. We plan to use cash flow from operating activities and borrowings under the RBL Facility to fund our capital expenditures in 2012.

We intend to rely on cash flow from operating activities and borrowings under the RBL Facility as our primary sources of liquidity. We also may engage in asset sale transactions to fund capital expenditures when market conditions permit us to complete transactions on terms we find acceptable. There can be no assurance that such sources will be sufficient to fund our exploration, development and acquisition activities. If our revenues and cash flows decrease in the future as a result of a decline in commodity prices or a reduction in production levels, however, and we are unable to obtain additional equity or debt financing in the private or public capital markets or access alternative sources of funds, we may be required to reduce the level of our capital expenditures and may lack the capital necessary to replace our reserves or maintain our production levels.

Our future revenues, cash flows and spending levels are subject to a number of factors, including commodity prices, the level of production from existing wells and our success in developing and producing new wells. Further, our ability to access funds under the RBL Facility is based on a borrowing base, which is subject to periodic redeterminations based on our proved reserves and prices that will be determined by our lenders using the bank pricing prevailing at such time. If the prices for oil and natural gas decline, or if we have a downward revision in estimates of our proved reserves, our borrowing base may be reduced.

Our ability to access the private and public equity and debt markets and complete future asset monetization transactions is also dependent upon oil, natural gas and NGL prices, in addition to a number of other factors, some of which are outside our control. These factors include, among others, domestic and global economic conditions and conditions in the domestic and global financial markets.

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Due to these factors, we cannot be certain that funding, if needed, will be available to the extent required, or on acceptable terms. If we are unable to access funding when needed on acceptable terms, we may not be able to fully implement our business plans, take advantage of business opportunities, respond to competitive pressures or refinance our debt obligations as they come due, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our business is subject to competition from third parties, which could negatively impact our ability to succeed.

The oil, natural gas and NGL businesses are highly competitive. We compete with third parties in the search for and acquisition of leases, properties and reserves, as well as the equipment, materials and services required to explore for and produce our reserves. There has been intense competition for the acquisition of leasehold positions, particularly in many of the oil and natural gas shale plays. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory prospects and producing oil properties. Similarly, we compete with many third parties in the sale of oil, natural gas and NGLs to customers, some of which have substantially larger market positions, marketing staff and financial resources than us. Our competitors include major and independent oil and natural gas companies, as well as financial services companies and investors, many of which have financial and other resources that are substantially greater than those available to us. Many of these companies not only explore for and produce oil and natural gas, but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices.

Furthermore, there is significant competition between the oil and natural gas industry and other industries producing energy and fuel, which may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the U.S. government. It is not possible to predict the nature of any such legislation or regulation that may ultimately be adopted or its effects upon our future operations. Such laws and regulations may substantially increase the costs of exploring for, developing or producing oil and natural gas and may prevent or delay the commencement or continuation of a given operation. Our larger competitors may be able to absorb the burden of existing, and any changes to, federal, state and local laws and regulations more easily than we can, which could negatively impact our competitive position.

Our industry is cyclical, and historically there have been shortages of drilling rigs, equipment, supplies or qualified personnel. During these periods, the cost of rigs, equipment, supplies and personnel are substantially greater and their availability may be limited. These services may not be available on commercially reasonable terms or at all. We cannot predict whether these conditions will exist in the future and, if so, what their timing and duration will be. The high cost or unavailability of drilling rigs, equipment, supplies, personnel and other oil field services could significantly decrease our profit margins, cash flows and operating results and could restrict our ability to drill the wells and conduct the operations that we currently have planned and budgeted or that we may plan in the future. Any of these outcomes could have a material adverse effect on our business, results of operations and financial condition.

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Our business is subject to operational hazards and uninsured risks that could have a material adverse effect on our business, results of operations and financial condition.

Our oil and natural gas exploration and production activities are subject to all of the inherent risks associated with drilling for and producing natural gas and oil, including the possibility of:

•: Adverse weather conditions, natural disasters, and/or other climate related matters —including extreme cold or heat, lightning and flooding, fires, earthquakes, hurricanes, tornadoes and other natural disasters. Although the potential effects of climate change on our operations (such as hurricanes, flooding, etc.) are uncertain at this time, changes in climate patterns as a result of global emissions of greenhouse gas (GHG) could also have a negative impact upon our operations in the future, particularly with regard to any of our facilities that are located in or near coastal regions;
•: Acts of aggression on critical energy infrastructure —including terrorist activity or "cyber security" events. We are subject to the ongoing risk that one of these incidents may occur which could significantly impact our business operations and/or financial results. Should one of these events occur in the future, it could impact our ability to operate our drilling and exploration processes, our operations could be disrupted, property could be damaged and/or customer information could be stolen resulting in substantial loss of revenues, increased costs to respond or other financial loss, damage to reputation, increased regulation and litigation and/or inaccurate information reported from our exploration and production operations to our financial applications, to our customers and to regulatory entities; and
•: Other hazards —including the collision of third-party equipment with our infrastructure (such as damage from collisions with vessels in our exploration and production operations); explosions, equipment malfunctions, mechanical and process safety failures, well blowouts, formations with abnormal pressures and collapses of wellbore casing or other tubulars; events causing our facilities to operate below expected levels of capacity or efficiency; uncontrollable flows of natural gas, oil, brine or well fluids, release of pollution or contaminants (including hydrocarbons) into the environment (including discharges of toxic gases or substances) and other environmental hazards.

Each of these risks could result in (i) damage to and destruction of our facilities, (ii) damage to and destruction of property, natural resources and equipment; (iii) injury or loss of life; (iv) business interruptions while damaged energy infrastructure is repaired or replaced; (v) pollution and other environmental damage; (vi) regulatory investigations and penalties; and (vii) repair and remediation costs. Any of these results could cause us to suffer substantial losses. Our offshore operations may encounter additional marine perils, including hurricanes and other adverse weather conditions, damage from collisions with vessels, and governmental regulations (including interruption or termination of drilling rights by governmental authorities based on environmental, safety and other considerations).

While we maintain insurance against some of these risks in amounts that we believe are reasonable, our insurance coverages have material deductibles, self-insurance levels and limits on our maximum recovery and do not cover all risks. For example, from time to time, we may not carry, or may be unable to obtain, on terms that we find acceptable and/or reasonable, insurance coverage for certain exposures, including, but not limited to certain environmental exposures (including potential environmental fines and penalties), business interruption and, named windstorm/hurricane exposures and, in limited circumstances, certain political risk exposures. The premiums and deductibles we pay for certain insurance policies are also subject to the risk of substantial increases over time that could negatively impact our financial results. In addition, we may not be able to renew existing insurance policies or procure desirable insurance on commercially reasonable terms. There is also a risk that our insurers may default on their insurance coverage obligations or that amounts for which we are insured, or that the proceeds of such insurance, will not compensate us fully for our losses. Any of these

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outcomes could have a material adverse effect on our business, results of operation and financial condition.

Some of our operations are subject to joint ventures or operations by third parties, which could negatively impact our control over these operations, and our inability to maintain these relationships and find appropriate partners for our operations in the future could have a material adverse effect on our business, results of operations, financial condition and prospects.

Some of our operations and interests are subject to joint ventures or are operated by other companies. The most significant joint venture is our approximate 49% equity interest in Four Star. Although we operate the substantial majority of the properties in our business, certain of the properties are operated by our joint venture partners or other third-party working interest owners. In certain cases, (a) we have limited ability to influence or control the day-to-day operation of such properties, including compliance with environmental, safety and other regulations, (b) we cannot control the amount of capital expenditures that we are required to fund with respect to properties, (c) we are dependent on third parties to fund their required share of capital expenditures and (d) we may have restrictions or limitations on our ability to sell our interests in these jointly owned assets.

The failure of an operator of our properties to adequately perform operations or an operator's breach of applicable agreements could reduce our production and revenue. As a result, the success and timing of our drilling and development activities on properties operated by others depends upon a number of factors outside of our control, including the operator's timing and amount of capital expenditures, expertise and financial resources, inclusion of other participants in drilling wells and use of technology.

We are subject to a complex set of laws and regulations that regulate the energy industry for which we have to incur substantial compliance and remediation costs.

Our operations, and the energy industry in general, are subject to a complex set of federal, state and local laws and regulations over the following activities, among others:

•: the location of wells;
•: methods of drilling and completing wells;
•: allowable production from wells;
•: unitization or pooling of oil and gas properties;
•: spill prevention plans;
•: limitations on venting or flaring of natural gas;
•: disposal of fluids used and wastes generated in connection with operations;
•: access to, and surface use and restoration of, well properties;
•: plugging and abandoning of wells;
•: air quality, noise levels and related permits;
•: gathering, transportation and marketing of natural gas (including NGLs) and oil;
•: taxation; and
•: competitive bidding rules on federal and state lands.

Generally, the regulations have become more stringent over time and impose more limitations on our operations and cause more costs to be incurred to comply with such increased regulation. Many

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required approvals are subject to considerable discretion by the regulatory agencies with respect to the timing and scope of approvals and permits issued. If permits are not issued, or if unfavorable restrictions or conditions are imposed on our drilling activities, we may not be able to conduct our operations as planned or at all. Delays in obtaining regulatory approvals or drilling permits, the failure to obtain a drilling permit for a well, or the receipt of a permit with excessive conditions or costs could have a material negative impact on our operations and financial results. We may also incur substantial costs in order to maintain compliance with these existing laws and regulations, including costs to comply with new and more extensive reporting and disclosure requirements. Failure to comply with such requirements may result in the suspension or termination of operations and may subject us to criminal as well as civil and administrative penalties. We are exposed to fines and penalties to the extent that we fail to comply with the applicable laws and regulations, as well as the potential for limitations to be imposed on our operations. In addition, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. Such costs could have a material adverse effect on our business, financial condition and results of operations.

Also, some of our assets are located and operate on federal, state, local or tribal lands and are typically regulated by one or more federal, state or local agencies. For example, we have drilling and production operations that are located on federal lands, which are regulated by the U.S. Department of the Interior ("DOI"), particularly by the Bureau of Land Management ("BLM") and the Bureau of Ocean Energy Management, Regulation and Enforcement. We also have operations on Native American tribal lands, which are regulated by the DOI, particularly by the Bureau of Indian Affairs ("BIA"), as well as local tribal authorities. Operations on these properties are often subject to additional regulations and compliance obligations, which can delay our access to such lands and impose additional compliance costs. There are also various laws and regulations that regulate various market practices in the industry, including antitrust laws and laws that prohibit fraud and manipulation in the markets in which we operate. The authority of the Federal Trade Commission ("FTC") and the Commodity Futures Trading Commission ("CFTC") to impose penalties for violations of laws or regulations has generally increased over the last few years.

We are exposed to the credit risk of our counterparties, and our credit risk management may not be adequate to protect against such risk.

We are subject to the risk that our counterparties may fail to make payments to us within the time required under our contracts or at all. Our current largest exposure is with some of our hedging transaction counterparties. Our credit procedures and policies may not be adequate to fully eliminate counterparty credit risk. In addition, in certain situations, we may assume certain additional credit risks for competitive reasons or otherwise. If our existing or future counterparties fail to pay and/or perform, our business, results of operation and financial condition could be materially adversely affected.

We are exposed to the credit and performance risk of our key contractors and suppliers.

As an owner of drilling and production facilities with significant capital expenditures in our business, we rely on contractors for certain construction, drilling and completion operations and we rely on suppliers for key materials, supplies and services, including steel mills, pipe and tubular manufacturers and oil field service providers. We also rely upon the services of other third parties to explore or analyze our prospects to determine a method in which the prospects may be developed in a cost-effective manner. There is a risk that such contractors and suppliers may experience credit and performance issues that could adversely impact their ability to perform their contractual obligations with us, including their performance and warranty obligations. This could result in delays or defaults in performing such contractual obligations and increased costs to seek replacement contractors, each of which could negatively impact us.

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Affiliates of the Sponsors and other investors own substantially all of the equity interests in us may have conflicts of interest with us and or the holders of the notes in the future.

As a result of the Acquisition Transactions, investment funds affiliated with, and one or more co-investment vehicles controlled by, the Sponsors and other investors collectively own substantially all of our equity interests and such persons or their designees hold substantially all of the seats on Parent's board of managers. As a result, affiliates of the Sponsors and such other investors have control over our decisions to enter into certain corporate transactions and have the ability to prevent any transaction that requires the approval of stockholders, regardless of whether holders of the notes believe that any such transactions are in their own best interests. For example, affiliates of the Sponsors and other investors could collectively cause us to make acquisitions that increase the amount of our indebtedness or to sell assets, or could cause us to issue additional capital stock or declare dividends. So long as investment funds affiliated with the Sponsors and other investors continue to indirectly own a significant amount of the outstanding shares of our equity interests or otherwise control a majority of Parent's board of managers, affiliates of the Sponsors and other investors will continue to be able to strongly influence or effectively control our decisions. The indentures governing the notes and the credit agreements governing the RBL Facility and our new senior secured term loan permit us, under certain circumstances, to pay advisory and other fees, pay dividends and make other restricted payments to the Sponsors and other investors, and the Sponsors and such other investors or their respective affiliates may have an interest in our doing so.

Additionally, the Sponsors and such other investors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or that supply us with goods and services. These persons may also pursue acquisition opportunities that may be complementary to (or competitive with) our business, and as a result those acquisition opportunities may not be available to us. In addition, the Sponsors' and other investors' interests in other portfolio companies could impact our ability to pursue acquisition opportunities. The holders of the notes should consider that the interests of the Sponsors and such other investors (or their respective affiliates) may differ from their interests in material respects. See "Summary—Our Sponsors" and "Certain Relationships and Related Party Transactions."

The loss of the services of key personnel could have a material adverse effect on our business.

The leadership of our executive officers and other members of our senior management has been a critical element of our success. These individuals have substantial experience and expertise in our business and have made significant contributions to our growth and success. We are not protected by key man or similar life insurance covering our executive officers and other members of senior management. We have entered into employment agreements with each of our executive officers, including Brent J. Smolik, our President and Chief Executive Officer, and Dane E. Whitehead, our Executive Vice President and Chief Financial Officer, but these agreements do not guarantee that these executives will remain with us. For information regarding these employment agreements, see "Management—Employment Agreements." The unexpected loss of services of one or more of these individuals could have a material adverse effect on our business.

Our business requires the retention and recruitment of a skilled workforce and the loss of employees could result in the inability to implement our business plans.

Our business requires the retention and recruitment of a skilled workforce including engineers, technical personnel, geoscientists and land personnel and other professionals. We compete with other companies in the energy industry for this skilled workforce. We have developed new firm-wide compensation and benefit programs that took effect following the Acquisition Transactions. These new programs are based on previous Company plans and are designed to be competitive among our industry peers and to reflect market-based metrics as well as incentives to create alignment with the

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Sponsors and other investors, but there is a risk that these new programs may not be successful in retaining and recruiting these professionals or that we could experience increased costs. If we are unable to (a) retain our current employees, (b) successfully complete our knowledge transfer and/or (c) recruit new employees of comparable knowledge and experience, our business, results of operations and financial condition could be negatively impacted. In addition, we could experience increased costs to retain and recruit these professionals.

Skilled labor shortages and increased labor costs could negatively impact our profitability.

We may be affected by skilled labor shortages of certain types of technical or qualified personnel, including engineers, geo-professionals, project managers, field supervisors and other technical or qualified personnel, which we have from time-to-time experienced, especially in North American regions where there are large unconventional shale resource plays. These shortages could negatively impact the productivity and profitability of certain projects. Our inability to bid on new and attractive projects, or maintain productivity and profitability on existing projects due to the limited supply of skilled workers and/or increased labor costs could have a material adverse effect on our business, results of operation and financial condition.

The success of our business depends upon our ability to find and replace reserves that we produce.

Similar to our competitors, we have a reserve base that is depleted as it is produced. Unless we successfully replace the reserves that we produce, our reserves will decline, which will eventually result in a decrease in oil and natural gas production and lower revenues and cash flows from operations. We historically have replaced reserves through both drilling and acquisitions. The business of exploring for, developing or acquiring reserves requires substantial capital expenditures. If we do not continue to make significant capital expenditures (such as if our access to capital resources becomes limited) or if our exploration, development and acquisition activities are unsuccessful, we may not be able to replace the reserves that we produce, which would negatively impact us. As a result, our future natural gas and oil reserves and production, and therefore our cash flow and results of operations, are highly dependent upon our success in efficiently developing and exploiting our current properties and economically finding or acquiring additional recoverable reserves. We may not be able to develop, find or acquire additional reserves to replace our current and future production at acceptable costs or at all. If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, results of operations and financial condition would be materially adversely affected.

In addition, we have certain areas in which we have incurred material costs to explore for and develop reserves. These unproved property costs include non-producing leasehold, geological and geophysical costs associated with unevaluated leasehold or drilling interests, and exploration drilling costs in investments in unproved properties and major development projects in which we own a direct interest. We have incurred unevaluated capitalized costs associated with development and exploration activities in Brazil. If costs are determined to be impaired, we record in our income statement the amount of any impairment.

Our oil and natural gas drilling and producing operations involve many risks, and our production forecasts may differ from actual results.

Our success will depend on our drilling results. Our drilling operations are subject to the risk that (i) we may not encounter commercially productive reservoirs or (ii) if we encounter commercially producible reservoirs, we either may not fully recover our investments or that our rates of return will be less than expected. We are also subject to the risk that we encounter unexpected drilling conditions. Our past performance should not be considered indicative of future drilling performance. For example, we have acquired acreage positions in two new domestic oil and natural gas shale areas for which we plan to incur substantial capital expenditures over the next several years. It remains uncertain whether

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we will be successful in exploring for the reserves in these regions or in developing the reserves that are found. Our success in such areas will depend in part on our ability to successfully transfer our experiences from existing areas into these new shale plays. As a result, there remains uncertainty on the results of our drilling programs, including our ability to realize proved reserves or to earn acceptable rates of return on our drilling programs. From time to time, we provide forecasts of expected quantities of future production. These forecasts are based on a number of estimates, including expectations of production from existing wells and the outcome of future drilling activity. Our forecasts could be different from actual results and such differences could be material.

Our decisions to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. In addition, the results of our exploratory drilling in new or emerging areas are more uncertain than drilling results in areas that are developed and have established production. Our cost of drilling, completing, equipping and operating wells is often uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project uneconomical or less economic than forecasted. Further, many factors may increase the cost of, or curtail, delay or cancel, drilling operations, including the following:

•: unexpected drilling conditions;
•: delays imposed by or resulting from compliance with regulatory and contractual requirements;
•: unexpected pressure or irregularities in geological formations;
•: equipment failures or accidents;
•: fracture stimulation accidents or failures;
•: adverse weather conditions;
•: declines in oil and natural gas prices;
•: surface access restrictions with respect to drilling or laying pipelines;
•: shortages (or increases in costs) of water used in hydraulic fracturing, especially in arid regions or regions that have been experiencing severe drought conditions;
•: shortages or delays in the availability of, increases in the cost of, or increased competition for, drilling rigs and crews, fracture stimulation crews, equipment, pipe, chemicals and supplies and transportation, gathering, processing, treating or other midstream services; and
•: limitations or reductions in the market for natural gas and oil.

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Additionally, the occurrence of certain of these events could impact third parties, including persons living in proximity to our operations, our employees and employees of our contractors, leading to possible injuries or death or significant property damage. As a result, we face the possibility of liabilities from these events that could materially adversely affect our business, results of operations and financial condition.

In addition, uncertainties associated with enhanced recovery methods may result in our inability to realize an acceptable return on our investments in such projects. The additional production and reserves, if any, attributable to the use of enhanced recovery methods are inherently difficult to predict. If our enhanced recovery methods do not allow for the extraction of natural gas and oil in a manner or to the extent that we anticipate, we may not realize an acceptable return on our investments in such projects. Further, 2-D and 3-D seismic data that we obtain is subject to interpretation and may not accurately identify the presence of natural gas, which could also negatively impact the results of our drilling operations.

Part of our strategy involves drilling in existing or emerging shale plays using some of the latest available horizontal drilling and completion techniques, the results of which are subject to drilling and completion technique risks, and drilling results may not meet our expectations for reserves or production.

Many of our operations involve utilizing the latest drilling and completion techniques as developed by us and our service providers in order to maximize cumulative recoveries and therefore generate the highest possible returns. Risks that we face while drilling include, but are not limited to, landing our well bore in the desired drilling zone, staying in the desired drilling zone while drilling horizontally through the formation, running our casing the entire length of the well bore and being able to run tools and other equipment consistently through the horizontal well bore. Risks that we face while completing our wells include, but are not limited to, being able to fracture stimulate the planned number of stages, being able to run tools the entire length of the well bore during completion operations and successfully cleaning out the well bore after completion of the final fracture stimulation stage.

Ultimately, the success of these drilling and completion techniques can only be evaluated over time as more wells are drilled and production profiles are established over a sufficiently long time period. If our drilling results are less than anticipated or we are unable to execute our drilling program because of capital constraints, lease expirations, limited access to gathering systems and takeaway capacity, and/or oil and natural gas prices decline, the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of unevaluated properties and the value of our undeveloped acreage could decline in the future.

Drilling locations that we decide to drill may not yield oil, natural gas or NGLs in commercially viable quantities.

We describe potential drilling locations and our plans to explore those potential drilling locations in this prospectus. These potential drilling locations are in various stages of evaluation, ranging from a location which is ready to drill to a location that will require substantial additional interpretation. There is no way to predict in advance of drilling and testing whether any particular location will yield oil, natural gas or NGLs in sufficient quantities to recover drilling or completion costs or to be economically viable. The use of technologies and the study of producing fields in the same area will not enable us to know conclusively, prior to drilling, whether oil, natural gas or NGLs will be present or, if present, whether oil, natural gas or NGLs will be present in sufficient quantities to be economically viable. Even if sufficient amounts of oil, natural gas or NGLs exist, we may damage the potentially productive hydrocarbon-bearing formation or experience mechanical difficulties while drilling or completing the well, resulting in a reduction in production from the well or abandonment of the well. We cannot assure you that the analogies we draw from available data from other wells, more fully

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explored locations or producing fields will be applicable to our other identified drilling locations. Further, initial production rates reported by us or other operators may not be indicative of future or long-term production rates. In summary, the cost of drilling, completing and operating any well is often uncertain, and new wells may not be productive.

Our drilling locations are scheduled to be drilled over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, we may not be able to raise the significant amount of capital that would be necessary to drill a substantial portion of our potential drilling locations.

Our management has identified and scheduled potential drilling locations as an estimate of our future multi-year drilling activities on our existing acreage. All of our potential drilling locations represent a significant part of our growth strategy. Our ability to drill and develop these locations is subject to a number of uncertainties, including the availability of capital, seasonal conditions, regulatory approvals, oil, natural gas and NGL prices, costs and drilling results. Because of these uncertainties, we do not know if the drilling locations we have identified will ever be drilled or if we will be able to produce oil, natural gas or NGLs from these or any other potential drilling locations. Pursuant to existing SEC rules and guidance, subject to limited exceptions, proved undeveloped reserves may only be booked if they relate to wells scheduled to be drilled within five years of the date of booking. These rules and guidance may limit our potential to book additional proved undeveloped reserves as we pursue our drilling program.

New technologies may cause our current exploration and drilling methods to become obsolete.

The oil and natural gas industry is subject to rapid and significant advancements in technology, including the introduction of new products and services using new technologies. As competitors use or develop new technologies, we may be placed at a competitive disadvantage, and competitive pressures may force us to implement new technologies at a substantial cost. In addition, competitors may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may in the future allow them to implement new technologies before we can. One or more of the technologies that we currently use or that we may implement in the future may become obsolete. We cannot be certain that we will be able to implement technologies on a timely basis or at a cost that is acceptable to us. If we are unable to maintain technological advancements consistent with industry standards, our business, results of operations and financial condition may be materially adversely affected.

Our business depends on access to oil, natural gas and NGL processing, gathering and transportation systems and facilities.

The marketability of our oil, natural gas and NGL production depends in large part on the operation, availability, proximity, capacity and expansion of processing, gathering and transportation facilities owned by third parties. We can provide no assurance that sufficient processing, gathering and/or transportation capacity will exist or that we will be able to obtain sufficient processing, gathering and/or transportation capacity on economic terms. A lack of available capacity on processing, gathering and transportation facilities or delays in their planned expansions could result in the shut-in of producing wells or the delay or discontinuance of drilling plans for properties. A lack of availability of these facilities for an extended period of time could negatively impact our revenues. In addition, we have entered into contracts for firm transportation and any failure to renew those contracts on the same or better commercial terms could increase our costs and our exposure to the risks described above.

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Our acquisition attempts may not be successful or may result in completed acquisitions that do not perform as anticipated.

We have made and may continue to make acquisitions of businesses and properties. However, suitable acquisition candidates may not continue to be available on terms and conditions we find acceptable or at all. Any acquisition, including any completed or future acquisition, involves potential risks, including, among others:

•: some of the acquired businesses or properties may not produce revenues, reserves, earnings or cash flow at anticipated levels or could have environmental, permitting or other problems for which contractual protections prove inadequate;
•: we may assume liabilities that were not disclosed to us and for which contractual protections prove inadequate or that exceed our estimates;
•: properties we acquire may be subject to burdens on title that we were not aware of at the time of acquisition, that interfere with our ability to hold the property for production and for which contractual protections prove inadequate;
•: we may be unable to integrate acquired businesses successfully and realize anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical or financial problems;
•: acquisitions could disrupt our ongoing business, distract management, divert resources and make it difficult to maintain our current business standards, controls and procedures;
•: we may issue (or assume) additional equity or debt securities or debt instruments in connection with future acquisitions, which may affect our liquidity or financial leverage;
•: we may make mistaken assumptions about costs, including synergies related to an acquired business;
•: we may encounter difficulties in complying with regulations, such as environmental regulations, and managing risks related to an acquired business;
•: an inability to implement uniform standards, controls, procedures and policies;
•: limitations on rights to indemnity from the seller;
•: we may make mistaken assumptions about the overall costs of equity or debt used to finance any such acquisition;
•: we may encounter difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger expertise and/or market positions;
•: potential loss of key customers; and
•: potential loss of key employees, including costly litigation resulting from the termination of those employees.
•: Any of the above risks could significantly impair our ability to manage our business and have a material adverse effect on our business, results of operations and financial condition.

Certain of our undeveloped leasehold acreage is subject to leases that will expire in several years unless production is established on units containing the acreage.

Although most of our reserves are located on leases that are held by production, we do have provisions in many of our leases that provide for the lease to expire unless certain conditions are met,

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such as drilling having commenced on the lease or production in paying quantities having been obtained within a defined time period. If commodity prices remain low or we are unable to fund our anticipated capital program there is a risk that some of our existing proved reserves and some of our unproved inventory could be subject to lease expiration or a requirement to incur additional leasehold costs to extend the lease. This could result in a reduction in our reserves and our growth opportunities (or the incurrence of significant costs) and therefore could have a material adverse effect on our financial results.

Estimating our reserves involves uncertainty, our actual reserves will likely vary from our estimates, and negative revisions to our reserve estimates in the future could result in decreased earnings, losses and impairments.

All estimates of proved reserves are determined according to the rules prescribed by the SEC. Our reserve information was prepared internally and was audited by an independent petroleum consultant. There are numerous uncertainties involved in estimating proved reserves, which may result in these estimates varying considerably from actual results. Estimating quantities of proved reserves is complex and involves significant interpretations and assumptions with respect to available geological, geophysical and engineering data, including data from nearby producing areas. It also requires us to estimate future economic factors, such as commodity prices, production costs, plugging and abandonment costs, severance, ad valorem and excise taxes, capital expenditures, workover and remedial costs, and the assumed effect of governmental regulation. Due to a lack of substantial production data, there are greater uncertainties in estimating proved undeveloped reserves and proved developed non-producing reserves. There is also greater uncertainty of estimating proved developed reserves that are early in their production life. As a result, our reserve estimates are inherently imprecise. Furthermore, estimates are subject to revision based upon a number of factors, including many factors beyond our control such as reservoir performance, prices (including commodity prices and the cost of oilfield services), economic conditions and government restrictions and regulations. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of that estimate. Therefore, our reserve information represents an estimate and is often different from the quantities of oil and natural gas that are ultimately recovered or proven recoverable.

The SEC rules require the use of a 10% discount factor for estimating the value of our future net cash flows from reserves and the use of a 12-month average price. This discount factor may not necessarily represent the most appropriate discount factor, given our costs of capital, actual interest rates and risks faced by our exploration and production business, and the average price will not generally represent the market prices for oil and natural gas over time. Any significant change in commodity prices could cause the estimated quantities and net present value of our reserves to differ and these differences could be material. You should not assume that the present values referred to in this prospectus represent the current market value of our estimated oil and natural gas reserves. Finally, the timing of the production and the expenses related to the development and production of oil and natural gas properties will affect both the timing of actual future net cash flows from our proved reserves and their present value.

We account for our activities under the successful efforts method of accounting. Changes in the present value of these reserves could result in a write-down in the carrying value of our oil and natural gas properties, which could be substantial and could have a material adverse effect on our net income and stockholder's equity. Changes in the present value of these reserves could also result in increasing our depreciation, depletion and amortization rates, which could decrease earnings.

A portion of our proved reserves are undeveloped. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling operations. In addition, as the portion of our proved reserve base that consists of unconventional resources increases, the costs of finding, developing and producing those reserves may require capital expenditures that are greater than more conventional

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resource plays. Our estimates of proved reserves assume that we can and will make these expenditures and conduct these operations successfully. However, future events, including commodity price changes and our ability to access capital markets, may cause these assumptions to change.

In addition, if our cash flows or the borrowing base under the RBL Facility decrease as a result of lower oil and natural gas prices, operating difficulties, declines in reserves or for any other reason, we may be required to seek additional debt or equity financing to sustain our operations at current levels. If we are unable to secure sufficient capital to meet our capital requirements, we may be required to curtail operations, which could lead to a possible decline in our reserves and could have a material adverse effect on our business, results of operations and financial condition.

Our operations are subject to governmental laws and regulations relating to environmental matters, which may expose us to significant costs and liabilities and could exceed current expectations. In addition, regulations relating to climate change and energy conservation may negatively impact our operations.

Our business is subject to laws and regulations that govern environmental matters. These regulations include compliance obligations for air emissions, water quality, wastewater discharge and solid and hazardous waste disposal, as well as regulations designed for the protection of threatened or endangered species. In some cases, our operations are subject to federal requirements for performing or preparing environmental assessments, environmental impact studies and/or plans of development before commencing exploration and production activities. In addition, our activities are subject to state regulations relating to conservation practices and protection of correlative rights. These regulations may negatively impact our operations and limit the quantity of natural gas and oil we produce and sell. We must take into account the cost of complying with such requirements in planning, designing, constructing, drilling, operating and abandoning wells and related surface facilities, including gathering, transportation, storage and waste disposal facilities. The regulatory frameworks govern, and often require permits for, the handling of drilling and production materials, water withdrawal, disposal of produced water, drilling and production wastes, operation of air emissions sources, and drilling activities, including those conducted on lands lying within wilderness, wetlands, Federal and Indian lands and other protected areas. Various governmental authorities, including the U.S. Environmental Protection Agency ("EPA"), the DOI, the BIA and analogous state agencies and tribal governments, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions, such as installing and maintaining pollution controls and maintaining measures to address personnel and process safety and protection of the environment and animal habitat near our operations. Failure to comply with these laws, regulations and permits may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, the imposition of stricter conditions on or revocation of permits, the issuance of injunctions limiting or preventing some or all of our operations, delays in granting permits and cancellation of leases. Our exploration and production operations in Brazil are subject to various types of regulations similar to those described above, which are imposed by the government of the country in which we operate (including political subdivisions in those countries), and which may affect our operations and costs within those countries. Liabilities, penalties, suspensions, terminations and increased costs resulting from any failure to comply with regulations and requirements of the type described above, or from the enactment of additional similar regulations or requirements in the future or a change in the interpretation or the enforcement of existing regulations or requirements of this type, could have a material adverse effect on our business, results of operations and financial condition.

In addition, there have been various legislative and regulatory proposals at the federal and state levels to address climate change and to regulate greenhouse gas ("GHG") emissions. The EPA and several state environmental agencies have already adopted regulations to regulate GHG emissions. Although natural gas as a fuel supply for power generation has the least GHG emissions of any fossil fuel, it is uncertain at this time what impact the existing and proposed regulations will have on the

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demand for natural gas and on our operations. This impact will largely depend on what regulations are ultimately adopted, including the level of any emission standards, the amount and costs of allowances, offsets and credits granted and any incentives and subsidies provided to other fossil fuels, nuclear power and renewable energy sources. In May 2010, the EPA adopted its "Tailoring Rule" concerning regulation of large emitters of GHGs under the Clean Air Act's Prevention of Significant Deterioration ("PSD") and Title V programs. This rule tailors these permitting programs to apply to certain stationary sources of GHG emissions in a multi-step process, with the largest sources subject to permitting first. Facilities required to obtain PSD permits for their GHG emissions will also be required to meet "best available control technology" standards, which will be established by states or, in some instances, the EPA on a case-by-case basis. The Tailoring Rule is not expected to materially impact our operations until 2016. There have also been various legislative and regulatory proposals at the federal and state levels to address various emissions from coal-fired power plants. Although such proposals will generally favor the use of natural gas-fired power plants over coal-fired power plants, it remains uncertain what regulations will ultimately be adopted and when they will be adopted. In addition, any regulations regulating GHG emissions would likely increase our costs of compliance by requiring us to monitor such emissions, to install additional equipment to reduce carbon emissions and possibly to purchase emission credits. Any such regulations also could potentially delay the receipt of permits and other regulatory approvals. While we may be able to include some or all of the costs associated with our environmental liabilities and environmental compliance in the prices at which we sell oil, natural gas and NGLs, our ability to recover such costs is uncertain and may depend on events beyond our control.

In addition to the EPA initiatives, the U.S. Congress has considered legislation that would establish a nationwide cap-and-trade system for GHGs. If enacted, such laws and regulations could require us to modify existing, or obtain new, permits, implement additional pollution control technology, curtail operations or increase significantly our operating costs.

Regulation of GHG emissions could also result in reduced demand for our products, as oil and natural gas consumers seek to reduce their own GHG emissions. Any regulation of GHG emissions, including through a cap-and-trade system, technology mandate, emissions tax, reporting requirement or other program, could have a material adverse effect on our business, results of operations and financial condition. In addition, to the extent climate change results in more severe weather and significant physical effects, such as increased frequency and severity of storms, floods, droughts and other climatic effects, our own, our counterparties' or our customers' operations may be disrupted, which could result in a decrease in our available products or reduce our customers' demand for our products.

Further, there have been various legislative and regulatory proposals at the federal and state levels to provide incentives and subsidies to (i) shift more power generation to renewable energy sources and (ii) support technological advances to drive less energy consumption. These incentives and subsidies could have a negative impact on oil, natural gas and NGL consumption and thus have negative impacts on our operations and financial results.

Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and health and safety laws and regulations applicable to our business and new legislation or regulation on safety procedures in exploration and production operations could require us to adopt expensive measures and adversely impact our results of operation.

There is inherent risk in our operations of incurring significant environmental costs and liabilities due to our generation and handling of petroleum hydrocarbons and wastes, because of our air emissions and wastewater discharges, and as a result of historical industry operations and waste disposal practices. Some of our owned and leased properties have been used for oil and natural gas exploration and production activities for a number of years, often by third parties not under our control. During that time, we and/or other owners and operators of these facilities may have generated or disposed of

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wastes that polluted the soil, surface water or groundwater at our facilities and adjacent properties. For our non-operated properties, we are dependent on the operator for operational and regulatory compliance. We could be subject to claims for personal injury and/or natural resource and property damage (including site clean-up and restoration costs) related to the environmental, health or safety impacts of our oil and natural gas production activities, and we have been from time to time, and currently are, named as a defendant in litigation related to such matters. Under certain laws, we also could be subject to joint and several and/or strict liability for the removal or remediation of contamination regardless of whether such contamination was the result of our activities, even if the operations were in compliance with all applicable laws at the time the contamination occurred. Private parties, including the owners of properties upon which our wells are drilled and facilities where our petroleum hydrocarbons or wastes are taken for reclamation or disposal, may also have the right to pursue legal actions to enforce compliance, as well as to seek damages for non-compliance, with environmental laws and regulations or for personal injury or property damage. We have been and continue to be responsible for remediating contamination, including at some of our current and former facilities or areas where we produce hydrocarbons. While to date none of these obligations or claims have involved costs that have materially adversely affected our business, we cannot predict with certainty whether future costs of newly discovered or new contamination might result in a materially adverse impact on our business or operations.

Partially as a result of a recent explosion on an offshore platform of a third party and subsequent release of oil into the Gulf of Mexico, there have been various regulations proposed and implemented that could materially impact the costs of exploration and production operations, as well as cause substantial delays in the receipt of regulatory approvals from both an environmental and safety perspective in the Gulf of Mexico. Although we have sold our Gulf of Mexico assets, it is also possible that similar, more stringent, regulations might be enacted or delays in receiving permits may occur in other areas, such as in offshore regions of other countries (such as Brazil) and in other onshore regions of the United States (including drilling operations on other federal or state lands).

Our operations could result in an equipment malfunction or oil spill that could expose us to significant liability.

Despite the existence of various procedures and plans, there is a risk that we could experience well control problems in our operations. As a result, we could be exposed to regulatory fines and penalties, as well as landowner lawsuits resulting from any spills or leaks that might occur. While we maintain insurance against some of these risks in amounts that we believe are reasonable, our insurance coverages have material deductibles, self-insurance levels and limits on our maximum recovery and do not cover all risks. For example, from time to time we may not carry, or may be unable to obtain on terms that we find acceptable and/or reasonable, insurance coverage for certain exposures including, but not limited to, certain environmental exposures (including potential environmental fines and penalties), business interruption and named windstorm/hurricane exposures and, in limited circumstances, certain political risk exposures. The premiums and deductibles we pay for certain insurance policies are also subject to the risk of substantial increases over time that could negatively impact our financial results. In addition, we may not be able to renew existing insurance policies or procure desirable insurance on commercially reasonable terms. There is also a risk that our insurers may default on their insurance coverage obligations or that amounts for which we are insured, or that the proceeds of such insurance, will not compensate us fully for our losses. Any of these outcomes could have a material adverse effect on our business, results of operation and financial condition.

Although we might also have remedies against our contractors or vendors or our joint working interest owners with regard to any losses associated with unintended spills or leaks the ability to recover from such parties will depend on the indemnity provisions in our contracts as well as the facts

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and circumstances associated with the causes of such spills or leaks. As a result, our ability to recover associated costs from insurance coverages or other third parties is uncertain.

Legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.

We currently use hydraulic fracturing extensively in all of our key programs. Hydraulic fracturing typically involves the injection of water, sand and additives under pressure into rock formations in order to stimulate hydrocarbon production. We find that the use of hydraulic fracturing is necessary to produce commercial quantities of oil and natural gas from many of the reservoirs in which we operate. Recently, there have been a number of initiatives and proposed initiatives at the federal, state and local level to ban or regulate hydraulic fracturing and to study the environmental impacts of hydraulic fracturing and the need for further regulation of the practice. For example, debate has intensified over whether certain of the chemical constituents in hydraulic fracturing fluids may contaminate drinking water supplies, with some members of Congress and others proposing to revisit the exemption of hydraulic fracturing from the permitting requirements of the Safe Drinking Water Act (the "SDWA"). Eliminating this exemption could establish an additional level of regulation and permitting at the federal level that could lead to operational delays or increased operating costs and could result in additional regulatory burdens that could make it more difficult to perform hydraulic fracturing and increase our costs of compliance and doing business. Even in the absence of new legislation, the EPA recently asserted the authority to regulate hydraulic fracturing involving the use of diesel additives under the SDWA's Underground Injection Control Program.

Scrutiny of hydraulic fracturing activities continues in other ways, with the EPA having commenced a multi-year study of the potential environmental impacts of hydraulic fracturing on drinking water, the initial results of which are anticipated to be available by late 2012. Hydraulic fracturing operations require the use of water and the disposal or recycling of water that has been used in operations. The federal Clean Water Act (the "CWA") restricts the discharge of produced waters and other pollutants into waters of the United States and requires permits before any pollutants may be discharged. The CWA and comparable state laws and regulations provide for penalties for unauthorized discharges of pollutants including produced water, oil, and other hazardous substances. Compliance with and future revisions to requirements and permits governing the use, discharge, and recycling of water used for hydraulic fracturing may increase our costs and cause delays, interruptions or terminations of our operations which cannot be predicted.

The EPA has also taken actions to regulate air emissions from hydraulic fracturing operations. On August 16, 2012, EPA published regulations in the Federal Register pursuant to the federal Clean Air Act to reduce various air pollutants from the oil and natural gas industry. These regulations will limit emissions from the hydraulic fracturing of certain natural gas wells and from certain equipment including compressors, storage vessels and natural gas processing plants. These regulations require reduction of flowback emissions from gas wells effective October 15, 2012 and use of "green completions" effective January 1, 2015. We have developed plans to meet the new regulations.

Several states have also adopted or are considering legislation requiring the disclosure of fracturing fluids and other restrictions on hydraulic fracturing operations, including states in which we operate. The DOI is also considering disclosure requirements or other mandates for hydraulic fracturing on federal land, which, if adopted, would affect our operations on federal lands. The Department of Energy (the "DOE") is also considering whether to implement actions to lessen the environmental impact associated with hydraulic fracturing operations. Initiatives by the EPA and other federal and state regulators to expand their regulation of hydraulic fracturing, together with the possible adoption of new federal or state laws or regulations that significantly restrict hydraulic fracturing, could result in delays, eliminate certain drilling and injection activities, make it more difficult or costly for us to perform hydraulic fracturing, increase our costs of compliance and doing business, and delay or prevent

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the development of unconventional hydrocarbon resources from shale and other formations that are not commercial without the use of hydraulic fracturing. In addition, there have been proposals by non-governmental organizations to restrict certain buyers from purchasing oil and natural gas produced from wells that have utilized hydraulic fracturing in their completion process, which could negatively impact our ability to sell our production from wells that utilized these fracturing processes.

Tax laws and regulations may change over time, including the elimination of federal income tax deductions currently available with respect to oil and gas exploration and development.

Tax laws and regulations are highly complex and subject to interpretation, and the tax laws and regulations to which we are subject may change over time. Our tax filings are based upon our interpretation of the tax laws in effect in various jurisdictions at the time that the filings were made. If these laws or regulations change, or if the taxing authorities do not agree with our interpretation of the effects of such laws and regulations, it could have a material adverse effect on our business and financial condition. Among the changes contained in President Obama's budget proposal for fiscal year 2013, released by the White House on February 13, 2012, is the elimination of certain U.S. federal income tax provisions currently available to oil and gas exploration and production companies. Such changes include, but are not limited to:

•: the repeal of the percentage depletion allowance for oil and gas properties;
•: the elimination of current expensing of intangible drilling and development costs;
•: the elimination of the deduction for certain U.S. production activities; and
•: an extension of the amortization period for certain geological and geophysical expenditures.

Members of Congress have introduced legislation with similar provisions in the current session. It is unclear whether any such changes will be enacted or how soon such changes could be effective. The elimination of such U.S. federal tax deductions, as well as any other changes to or the imposition of new federal, state, local or non-U.S. taxes (including the imposition of, or increases in production, severance or similar taxes) could have a material adverse effect on our business, results of operations and financial condition.

The Issuer is classified as an entity disregarded from Parent for U.S. federal income tax purposes, and Parent is classified as a partnership for U.S. federal and applicable state and local income tax purposes. As a result, neither the Issuer nor Parent pays U.S. federal, state or local income tax; rather, the direct and indirect owners of Parent must report and pay U.S. federal, state and local income tax on their distributive share of the income, gain, loss, deduction and credit recognized by Parent. Changes in U.S. federal and applicable state and local income tax law (such as the proposals listed above) may increase the U.S. federal and applicable state and local income tax liability of the direct and indirect owners of Parent and the Issuer may be obligated to distribute greater amounts indirectly to such owners on account of such increased U.S. federal and applicable state and local income tax liability.

Our foreign operations and investments involve special risks.

Our activities in Brazil are subject to the risks inherent in foreign operations and other additional risks not associated with assets located in the United States, which include, among others:

•: protracted delays in securing government consents, permits, licenses, customer authorizations or other regulatory approvals necessary to conduct our operations, including those required in Brazil for the Pinauna project;
•: loss of revenue, property and equipment as a result of hazards such as wars, insurrection, piracy or acts of terrorism;

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•: changes in laws, regulations and policies of foreign governments, including changes in the governing parties, nationalization, expropriation and unilateral renegotiation of contracts by government entities;
•: difficulties in enforcing rights against government agencies, including being subject to the jurisdiction of local courts in certain instances;
•: the effects of currency fluctuations and exchange controls, such as devaluation of foreign currencies, relative inflation risks, and the imposition of foreign exchange restrictions that may negatively impact convertibility and repatriation of our foreign earnings into U.S. dollars;
•: protracted delays in payments and collections of accounts receivables from state-owned energy companies;
•: transparency and corruption issues, including compliance issues with the U.S. Foreign Corrupt Practices Act, the United Kingdom bribery laws and other anti-corruption compliance issues; and
•: laws and policies of the United States that adversely affect foreign trade and taxation.

We have certain contingent liabilities that could exceed our estimates.

We have certain contingent liabilities associated with litigation, regulatory, environmental and tax matters. See Note 8 to our condensed consolidated financial statements and elsewhere in this prospectus. In addition, the positions taken in our federal, state, local and non-U.S. tax returns require significant judgments, use of estimates and interpretation of complex tax laws. Although we believe that we have established appropriate reserves for our litigation, regulatory, environmental and tax matters, we could be required to accrue additional amounts in the future and/or incur more actual cash expenditures than accrued for and these amounts could be material.

We have significant capital programs in our business that may require us to access capital markets, and any inability to obtain access to the capital markets in the future at competitive rates, or any negative developments in the capital markets, could have a material adverse effect on our business.

We have significant capital programs in our business, which may require us to access the capital markets. Since we are rated below investment grade, our ability to access the capital markets or the cost of capital could be negatively impacted in the future, which could require us to forego capital opportunities or could make us less competitive in our pursuit of growth opportunities, especially in relation to many of our competitors that are larger than us or have investment grade ratings.

In addition, the credit markets and the financial services industry have recently experienced a period of unprecedented turmoil and upheaval characterized by the bankruptcy, failure, collapse or sale of various financial institutions and an unprecedented level of intervention from the United States government. These circumstances and events led to reduced credit availability, tighter lending standards and higher interest rates on loans. While we cannot predict the future condition of the credit markets, future turmoil in the credit markets could have a material adverse effect on our business, liquidity, financial condition and cash flows, particularly if our ability to borrow money from lenders or access the capital markets to finance our operations were to be impaired.

Although we believe that the banks participating in the RBL Facility have adequate capital and resources, we can provide no assurance that all of those banks will continue to operate as a going concern in the future. If any of the banks in our lending group were to fail, it is possible that the borrowing capacity under the RBL Facility would be reduced. In the event of such reduction, we could be required to obtain capital from alternate sources in order to finance our capital needs. Our options for addressing such capital constraints would include, but not be limited to, obtaining commitments from the remaining banks in the lending group or from new banks to fund increased amounts under

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the terms of the RBL Facility, and accessing the public and private capital markets. In addition, we may delay certain capital expenditures to ensure that we maintain appropriate levels of liquidity. If it became necessary to access additional capital, any such alternatives could have terms less favorable than the terms under the RBL Facility, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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MARKET AND INDUSTRY DATA

We include statements regarding factors that have impacted our and our customers' industries, such as our customers' access to capital. Such statements regarding our and our customers' industries and market share or position are statements of belief and are based on market share and industry data and forecasts that we have obtained from industry publications and surveys, as well as internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. Although we believe that the third party sources are reliable, we have not independently verified any of the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. In addition, while we believe that the market share, market position and other industry information included herein is generally reliable, such information is inherently imprecise. While we are not aware of any misstatements regarding our industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under "Risk Factors" in this prospectus.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus and certain oral statements made from time to time by us and our representatives contain "forward-looking statements" within the meaning of the federal securities laws. You can identify forward-looking statements because they contain words such as "believes," "project," "might," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions that concern our strategy, plans or intentions. In addition, all statements herein about our 2012 capital expenditures, including our planned wells, and the characteristics of average future wells for our key areas, which are based on current internal engineering estimates as described under "Business—Operations—Key Program Profiles," are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore our actual results may differ materially from those that we expected. While we believe that the expectations reflected in such forward-looking statements are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect our actual results.

Important factors that could cause actual results to differ materially from our expectations ("cautionary statements") are disclosed under "Risk Factors" and elsewhere in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this prospectus. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include:

•: the supply and demand and the prices for oil, natural gas and NGLs;
•: our use of derivative financial instruments and derivatives reform legislation;
•: competition from third parties;
•: operational hazards and uninsured risks;
•: joint ventures and operations by third parties;
•: cost of, changes in, or the results of the complex set of laws and regulations (including climate change legislation and/or potential additional regulation of drilling and completion of wells, including hydraulic fracturing), to which we are subject;
•: credit and performance risk of our counterparties;
•: loss of services by key personnel and the retention and recruitment of a skilled workforce;
•: the potential conflict of interest between the Sponsors' and other investors' interests and our creditors' interests;
•: our ability to find and replace reserves that we produce;
•: risks associated with oil and natural gas drilling and producing operations;
•: unsuccessful acquisitions;
•: uncertainty with respect to our reserves;
•: risks associated with our foreign operations;
•: risks associated with negative developments in the capital markets; and
•: the other factors described under "Risk Factors."

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus or oral statements made by us or our representatives may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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USE OF PROCEEDS

We will not receive any cash proceeds from the issuance of the exchange notes in exchange for the outstanding initial notes. We are making this exchange solely to satisfy our obligations under the registration rights agreements entered into in connection with the offering of the initial notes. In consideration for issuing the exchange notes, we will receive initial notes in like aggregate principal amount.

The proceeds of the offering of the initial senior secured notes and initial 2020 senior notes were $2,750 million before the initial purchasers' discount and estimated fees and expenses. We used the net proceeds from the offering, together with proceeds from our senior secured term loan, investments in Parent's equity by funds affiliated with the Sponsors and other investors and borrowings under the RBL Facility to fund the Acquisition and to pay related transaction fees and expenses.

The proceeds of the offering of the initial 2022 senior notes were $350 million before initial purchasers' discount and estimated fees and expenses. We used the proceeds of the offering to repay a portion of the borrowings under our RBL Facility.

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CAPITALIZATION

The following table sets forth the cash and cash equivalents and capitalization as of June 30, 2012 for:

•: the Issuer on an actual basis; and
•: the Issuer on a pro forma basis after giving effect to the Refinancing Transactions.

You should read this table in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus, as well as the sections entitled "Summary—Summary Historical and Pro Forma Consolidated Financial and Other Operating Data," "Use of Proceeds," "Unaudited Pro Forma Condensed Consolidated Financial Data," "Selected Historical Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

	As of June 30, 2012

	Actual		Pro Forma for the Refinancing Transactions
	(in millions)
Cash and cash equivalents	$	55	$	41

Long-term debt:
The RBL Facility(1)(2)	$	750	$	400
Senior secured term loan(3)		750		750
Senior secured notes		750		750
9.375% senior notes		2,000		2,000
7.750% senior notes(2)		—		350

Total long-term debt	$	4,250	$	4,250
Total members' equity(4)		3,158		3,149

Total capitalization	$	7,408	$	7,399

(1): In connection with the Acquisition Transactions, we entered into the RBL Facility, which will mature in 2017. We borrowed $750.0 million under the RBL Facility at the closing of the Acquisition to fund a portion of the Acquisition Transactions and to pay related fees and expenses. As of September 1, 2012, $350 million was drawn and outstanding under the RBL Facility.
(2): As part of the Refinancing Transactions, we issued $350.0 million aggregate principal amount of 7.750% senior notes due 2022 and used the proceeds of the notes to repay a portion of our borrowings under the RBL Facility.
(3): In connection with the Acquisition Transactions, we entered into our senior secured term loan, which will mature in 2018.
(4): Total stockholder's/contributed equity primarily reflects the equity contribution by affiliates of the Sponsors and other investors of $3,324.0 million net of transaction fees of $175.0 million that were not capitalized as deferred financing fees.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

The unaudited pro forma condensed consolidated financial data of the Company presented below have been derived from the historical consolidated financial statements of EP Energy Corporation (the predecessor) included elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with "Presentation of Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements and the notes to those statements included elsewhere in this prospectus.

The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2011 and for the six months ended June 30, 2012 has been prepared as though the Acquisition and Refinancing Transactions occurred as of January 1, 2011. The unaudited pro forma condensed consolidated balance sheet at June 30, 2012 has been prepared as though the Refinancing Transactions occurred on June 30, 2012.

The unaudited pro forma adjustments include the following items:

•: changes in depreciation, depletion, and amortization resulting from the allocation of purchase price;
•: changes resulting from the application of the successful efforts method of accounting for our oil and gas activities;
•: the adjustment for an annual advisory fee to be paid to the Sponsors and other investors following the Acquisition;
•: the changes in interest expense resulting from additional indebtedness incurred in connection with the Acquisition and re-pricing of our term loan in connection with the Refinancing Transactions, including amortization of estimated deferred financing fees;
•: the adjustment associated with the change in tax status of EP Energy Corporation in conjunction with the Acquisition;
•: the proceeds from the issuance of the initial 7.750% senior notes and the related use of proceeds; and
•: the reclassification of intercompany transactions to third-party transactions.

The Acquisition is being accounted for as a business combination using the acquisition method of accounting. Accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based upon management's estimates of fair value. The unaudited pro forma adjustments are based upon available information and certain assumptions that management believes are factually supportable and that are reasonable under the circumstance. Assumptions underlying the unaudited pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma condensed consolidated financial data. We have made every effort to ensure our estimates are reasonable. Actual results can, and often do differ from estimates.

The unaudited pro forma condensed consolidated statement of income excludes non-recurring items, such as the write-off of debt issue costs and transaction costs associated with the Acquisition and Refinancing Transactions that are not capitalized as part of the Acquisition and Refinancing Transactions. The unaudited pro forma condensed consolidated financial data are presented for illustrative purposes only and do not purport to indicate the financial condition or results of operations of future periods or the financial condition or results of operations that actually would have been realized had the Acquisition and Refinancing Transactions been consummated on the dates or for the periods presented.

The unaudited pro forma condensed consolidated financial statements constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. See "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements."

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Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2012
(In millions)

	Historical EP Energy LLC		Pro Forma Adjustments			Pro Forma EP Energy LLC

Current Assets
Cash and cash equivalents	$	55	$	(14	)(a)	$	41
Accounts receivable
Customer, net of allowance of less than $1		163		—			163
Other		30		—			30
Assets from price risk management activities		278		—			278
Other		72		—			72

Total current assets		598		(14	)		584

Property, plant and equipment, net		6,982		—			6,982

Other assets
Investments in unconsolidated affiliates		236		—			236
Assets from price risk management activities		200		—			200
Unamortized debt issue cost		139		5	(a)		144
Other		11		—			11

		586		5			591

Total Assets	$	8,166	$	(9	)	$	8,157

Current Liabilities
Accounts payable
Trade	$	107	$	—		$	107
Other		268		—			268
Other		130		—			130

Total current liabilities		505		—			505

Long-term debt		4,243		(350	)(a)		4,243
				350	(a)
Other long-term liabilities		260		—			260

		4,503		—			4,503
Members' Equity
Members' equity		3,158		(9	)(a)		3,149

Total members' equity		3,158		(9	)		3,149

Total Liabilities and members' equity	$	8,166	$	(9	)	$	8,157

Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet

(a): Reflects the pro forma net adjustment of $14 million to cash and cash equivalents reflecting the sources and uses of cash as if the Refinancing Transactions occurred on June 30, 2012, as follows (in millions):

Sources of funds			Uses of funds

7.750% senior notes due 2022	$	350	RBL Facility	$	350
Cash and cash equivalents		14	Unamortized debt issue cost		5
			Transaction fees and expenses		9

Total sources	$	364	Total uses	$	364

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Unaudited Pro Forma Condensed Consolidated Statements of Income (Loss)
For the six months ended June 30, 2012
(In millions)

	Historical EP Energy LLC			Pro Forma Adjustments			Pro Forma EP Energy LLC

Operating revenues
Third parties	$	756		$	—		$	756
Derivatives		422			—			422

		1,178			—			1,178

Operating expenses
Transportation costs		59			—			59
Lease operating expenses		117			—			117
General and administrative expenses		284			10	(a)		294
Depreciation, depletion and amortization		353			(200)	(b)		153
Ceiling test charges		63			(63)	(c)		—
Exploration expense		6			99	(d)		105
Taxes, other than income taxes		57			—			57

		939			(154	)		785

Operating income		239			154			393
(Loss) earnings from unconsolidated affiliates		(6	)		6	(e)		—
Other expense		(2	)		—			(2	)
Interest expense, net of capitalized interest:
Third parties		(67	)		(88	)(f)		(155	)

Income before income taxes		164			72			236
Income tax expense (benefit)		136			(135	)(g)		1

Net income	$	28		$	207		$	235

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Unaudited Pro forma Condensed Consolidated Statement of Income
For the year ended December 31, 2011
(in millions)

	Historical(i) EP Energy Corporation			Pro Forma Adjustments			Pro Forma EP Energy LLC

Operating revenues
Third parties	$	948		$	634	(h)	$	1,582
Affiliates		634			(634	)(h)		—
Realized and unrealized gains on financial derivatives		284			—			284
Other		1			—			1

		1,867			—			1,867
Operating expenses
Transportation costs		85			—			85
Lease operating expenses		217			—			217
General and administrative expenses		201			25	(a)		226
Depreciation, depletion and amortization		612			(350)	(b)		262
Ceiling test charges/impairment		152			(58)	(c)		94
Impairment of inventory and other assets		6			—			6
Exploration expense					155	(d)		155
Taxes, other than income taxes		91			—			91

		1,364			(228	)		1,136

Operating income		503			228			731
(Loss) earnings from unconsolidated affiliates		(7	)		12	(e)		5
Other expense		(2	)		—			(2	)
Interest expense, net of capitalized interest:
Third parties		(9	)		(298	)(f)		(310	)
					(3	)(h)
Affiliates		(3	)		3	(h)		—

Income before income taxes		482			(58	)		424
Income tax expense (benefit)		220			(227	)(g)		(7	)

Net income	$	262		$	169		$	431

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Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income

(a): Reflects the pro-rata adjustment to record estimated annual advisory fees ($25 million annually) paid to affiliates of the Sponsors and other investors for management, consulting and financial services provided.
(b): Reflects the estimated adjustment to depreciation, depletion and amortization due to the fair value adjustments to our property, plant and equipment and the application of the successful efforts method of accounting. The pro forma depreciation, depletion and amortization rates were calculated using the year end 2011 proved reserves held constant throughout both periods in 2011 and 2012. It also assumes no reserve additions or changes in existing proved reserve categories beyond those existing at the balance sheet date. The pro forma depreciation, depletion and amortization rates were applied to production volumes in the respective periods.
(c): Reflects the removal of international ceiling test charges of $63 million for the six months ended June 30, 2012 and $152 million for the twelve months ended December 31, 2011 under the full cost method of accounting offset by impairment of $94 million due to the denial of a necessary environmental permit for a Brazilian development project under the successful efforts method of accounting for the twelve months ended December 31, 2011.
(d): Reflects exploratory dry hole costs, delay rentals, and seismic costs expensed under the successful efforts method of accounting.
(e): Reflects an estimated adjustment to (loss) earnings from unconsolidated affiliates due to the reduction of the amortization of the excess of our investment in Four Star Oil & Gas Company relative to the underlying equity in the net assets resulting from the fair value adjustment to our investment.
(f): Reflects the estimated adjustment to interest expense, net of capitalized interest, resulting from our new capital structure as follows (in millions):

	Six Months ended June 30, 2012			Year ended December 31, 2011

Interest on the RBL Facility, senior secured term loan, senior secured notes and senior notes(1)	$	156		$	313
Amortization of capitalized deferred financing fees and original issue discount(2)		16			30
Commitment fees(3)		3			6
Capitalized interest expense(4)		(20	)		(39	)

Total pro forma interest expense, net of capitalized interest		155			310
Less: historical interest expense, net of capitalized interest(5)		(67	)		(12	)

Pro forma net adjustment to interest expense, net of capitalized interest	$	88		$	298

(1): Represents interest on the RBL Facility, senior secured term loan, senior secured notes and senior notes, at a weighted average interest rate. A 0.125% change in interest rates under the RBL Facility and senior secured term loan would change pro forma interest expense by approximately $1.0 million for each period.
(2): Represents the estimated amortization of deferred financing fees, which are amortized over 5 years for the RBL Facility, 6 years for the senior secured term loan, 7 years for

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the senior secured notes and 8 years for the senior notes, and the amortization of the 1% original issue discount on the senior secured term loan over 6 years.

(3): Represents commitment fees of 0.375% on the estimated unused balance of the RBL Facility.
(4): Represents interest expense to be capitalized based on the weighted average borrowing rate and costs related to the unproven oil and gas properties being developed.
(5): Includes historical interest expense due to affiliates of approximately $3.0 million for the year ended December 31, 2011.

(g): Reflects an adjustment for EP Energy Corporation's change in tax status from a taxable entity to a non-taxable entity leaving only current tax benefits associated with our international operations.
(h): Reflects the reclassification of activity with El Paso Corporation from affiliate to third-party.
(i): Lease operating expenses and general and administrative expenses were presented in the aggregate as "operation and maintenance" in the historical audited financial statements included elsewhere herein.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table sets forth selected historical financial and other data for the periods and as of the dates indicated for EP Energy LLC (the "Successor" and formerly known as Everest Acquisition LLC) and EP Energy Global LLC (the "Predecessor" and formerly known as EP Energy Corporation and EP Energy, L.L.C.). See "Presentation of Financial Information." We have derived the consolidated statement of income and statement of cash flows data for the period from January 1, 2012 to May 24, 2012, and the six months ended June 30, 2011, from EP Energy Corporation's condensed unaudited consolidated financial statements included elsewhere in this prospectus. We have derived the consolidated statement of income and statement of cash flows data for the period from March 23, 2012 (inception) to June 30, 2012 and the consolidated balance sheet data as of June 30, 2012 from EP Energy LLC's condensed unaudited consolidated financial statements included elsewhere in this prospectus. We have derived the consolidated statement of income and cash flows data for the years ended December 31, 2011, 2010 and 2009 and the consolidated balance sheet data as of December 31, 2011 and 2010 from EP Energy Corporation's audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of income and cash flows data for the years ended December 31, 2009 and 2008 and the consolidated balance sheet data as of December 31, 2009, 2008 and 2007 have been derived from the audited consolidated financial statements of EP Energy Corporation, which are not included in this prospectus.

The following selected historical financial data should be read in conjunction with the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and the related notes included elsewhere in this prospectus.

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	Successor			Predecessor

							Six Months ended June 30, 2011
	March 23 (inception) to June 30, 2012									Year ended December 31,
				January 1, to May 24, 2012						Year ended December 31,
				January 1, to May 24, 2012						2011			2010			2009			2008			2007
				(dollars in millions)
Statement of income data
Operating revenues:
Third parties	$	143		$	470		$	439		$	948		$	634		$	552		$	1,078		$	1,093
Affiliates		—			143			322			634			746			545			1,423			1,169
Realized and unrealized gains on financial derivatives(1)		57			365			24			284			390			687			196			—
Other		—			—			—			1			19			44			65			38

Total operating revenues		200			978			785			1,867			1,789			1,828			2,762			2,300

Operating expenses:
Cost of products		—			—			—			—			15			31			38			20
Transportation costs		14			45			38			85			73			66			79			72
Lease operating expenses(2)		21			96			100			217			193			197			244			254
General and administrative expenses(2)		209			75			98			201			190			195			160			185
Depreciation, depletion and amortization		34			319			280			612			477			440			818			804
Impairments/Ceiling test charges		1			62			—			158			25			2,148			2,824			—
Exploration expense		6			—			—			—			—			—			—			—
Taxes, other than income taxes		12			45			49			91			85			68			132			103

Total operating expenses		297			642			565			1,364			1,058			3,145			4,295			1,438

Operating income (loss)		(97	)		336			220			503			731			(1,317	)		(1,533	)		862
Income (loss) from unconsolidated affiliates		(1	)		(5	)		(1	)		(7	)		(7	)		(30	)		(93	)		12
Other income (expense)		1			(3	)		—			(2	)		3			(1	)		7			17
Debt Extinguishment		—			—			—			—			—			—			—			(87	)
Interest expense, net:
Third parties		(53	)		(14	)		(2	)		(9	)		(16	)		(21	)		(24	)		(57	)
Affiliates		—			—			(4	)		(3	)		(5	)		(4	)		(33	)		(40	)

Income (loss) before income taxes		(150	)		314			213			482			706			(1,373	)		(1,676	)		707
Income tax expense (benefit)		—			136			61			220			263			(462	)		(413	)		243

Net income (loss)	$	(150	)	$	178		$	152		$	262		$	443		$	(911	)	$	(1,263	)	$	464

(1): Includes less than $1 million for the successor period, $5 million for the predecessor periods from January 1 to May 24, 2012, $6 million for the six months ended June 30, 2011 and $11 million, $11 million, ($406) million and $88 million for the years ended December 31, 2011, 2010, 2009 and 2008, respectively, reclassified from accumulated other comprehensive income associated with accounting hedges. During 2008, we removed the hedging designation on all of our commodity-based derivative contracts related to our hedged oil and natural gas production volumes.

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(2): Lease operating expenses and general and administrative expenses were presented in the aggregate as "operation and maintenance" in the historical predecessor audited financial statements of EP Energy Corporation for the years ended December 31, 2011, 2010, 2009, 2008 and 2007.

			Predecessor

	Successor		Predecessor
	Successor		Year ended December 31,
	As of June 30, 2012		Year ended December 31,
	As of June 30, 2012		2011		2010		2009		2008		2007
	(dollars in millions)
Balance sheet data (at period end):
Cash and cash equivalents	$	55	$	25	$	74	$	183	$	102	$	114
Total assets		8,166		5,099		4,942		4,457		6,384		8,872
Long-term debt		4,243		851		301		835		915		751
Members'/ Stockholder's equity		3,158		3,100		3,067		2,529		3,697		4,694
Other financial data:
Capital expenditures(1)	$	762	$	1,644	$	1,318	$	1,129	$	1,742	$	2,603

(1): Represents accrual based capital expenditures, including acquisitions capital, and excludes asset retirement obligation.

	Successor			Predecessor

							Six Months ended June 30, 2011
	March 23 (inception) to June 30, 2012									Year ended December 31,
				January 1, to May 24, 2012						Year ended December 31,
				January 1, to May 24, 2012						2011			2010			2009			2008			2007
				(dollars in millions)
Statement of cash flows data:
Net cash provided by (used in):
Operating activities	$	(93	)	$	580		$	663		$	1,426		$	1,067		$	1,573		$	2,218		$	1,179
Investing activities		(7,254	)		(628	)		(652	)		(1,237	)		(1,130	)		(1,156	)		(993	)		(2,479	)
Financing activities		7,402			110			(51	)		(238	)		(46	)		(336	)		(1,237	)		1,282
Other financial data:
Ratio of earnings to fixed charges(2)		—			18.0	x		19.6	x		21.1	x		25.3	x		—			—			6.4	x

(2): Earnings for the periods from March 23 to June 30, 2012 and for the years ended December 31, 2009 and 2008 were inadequate to cover fixed charges by $151 million, $1,305 million and $1,532 million, respectively. For purposes of computing these ratios, earnings means income (loss) before income taxes before (i) income or loss from equity investees, adjusted to reflect actual distributions from equity investments and (ii) fixed charges, less (a) capitalized interest. Fixed charges means the sum of the following: (i) interest costs, not including interest on tax liabilities which is included in income tax expense on our income statement; (ii) amortization of debt costs; and (iii) that portion of rental expense which we believe represents an interest factor.

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the information under the headings "Risk Factors," "Selected Historical Consolidated Financial Data" and "Business" and the financial statements and the accompanying footnotes included in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this registration statement. Actual results may differ materially from those contained in any forward-looking statements. Unless otherwise indicated or the context otherwise requires, references in this MD&A section to "we," "our," "us" and "the Company" refer to both EP Energy LLC (the Issuer) and EP Energy Global LLC (the "Predecessor" for accounting purposes), and each of its consolidated subsidiaries.

Overview

We are one of North America's leading independent oil and natural gas producers. We have a large and diverse base of producing assets that provides cash flow to fund the development of our key programs, which at this time are primarily oil-focused. Over the last several years, we have high-graded our future drilling inventory by establishing large acreage positions with repeatable drilling opportunities and more favorable return characteristics. As a result, we have a strategic presence in well-known oil resource areas, including the Eagle Ford Shale, the Altamont Field, the Wolfcamp Shale and South Louisiana Wilcox. Our large and diverse producing gas assets include our Haynesville Shale position, substantially all of which is held by production, which gives us a significant presence in unconventional natural gas. We also have a small international presence in Brazil and prior to selling our interests in Egypt in July 2012, we had an international presence in that country. Over the past five years, our strategy has been to focus on areas that offer repeatable drilling programs, enabling us to reduce development costs, and to grow our asset base and inventory size. We have consistently improved the quality and number of our drilling opportunities.

In June of 2012, we realigned our divisions based on our capital spending activities. The areas previously reported in the Western division will be reported under our Central division. In addition, Eagle Ford will be treated as a separate division. Prior to June 2012, we operated through three divisions: Central, Western and Southern. Domestically, we operate through three divisions: Central, Eagle Ford and Southern. The Central division includes operations in east Texas, Louisiana, Alabama, Indiana (Indiana assets sold in July 2012), eastern Oklahoma, in the Uintah Basin in Utah and the Raton Basin in New Mexico and Colorado. Our Eagle Ford division includes operations in south Texas. Our Southern division is located along the Gulf Coast, south and west areas of Texas and the Gulf of Mexico (sold in July 2012). Our key programs include the Haynesville Shale in northwest Louisiana and east Texas, the Altamont Field in Utah, the Eagle Ford Shale in south Texas and the Wolfcamp Shale which is located in the Permian Basin of west Texas.

Below is a description of each key program which are further described in "Business":

Eagle Ford Shale. The Eagle Ford Shale provides the highest economic returns in our portfolio. We currently are running four rigs.

Haynesville Shale. We operated approximately four rigs in the Haynesville Shale through 2011 and currently have no rigs running. Although we had a very efficient drilling program in the Haynesville Shale, we suspended the program at the end of the first quarter of 2012 due to low natural gas prices. We have released all rigs and redeployed the capital allocated to the Haynesville Shale to our oil programs.

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Altamont Field. In the Altamont Field, we are gaining operational efficiencies as we develop the field. We currently are running two rigs.

Wolfcamp Shale. In our Wolfcamp Shale program, which we entered in 2009 and 2010, we are focused on optimizing our drilling, completion and artificial lift systems. We currently are running one rig.

South Louisiana Wilcox. We are continuing to develop our emerging South Louisiana Wilcox play. This is a relatively new oil and NGL play that we have added to our drilling program. We are currently running one rig.

Internationally, our portfolio consists of producing fields along with exploration and development projects in offshore Brazil. Achieving success in our international programs in Brazil will require effective project management, strong partner relations and obtaining approvals from regulatory agencies. Previously we also had exploration activities in Egypt, but our interests were sold in June 2012.

We evaluate acquisition and growth opportunities that are focused on our core competencies and areas of competitive advantage. Strategic acquisitions can provide us greater opportunities to achieve our long-term goals by leveraging existing expertise in key operating areas, balancing our exposure to regions, basins and commodities, helping us to achieve risk-adjusted returns competitive with those available within our existing drilling programs and increasing our reserves.

Our exploration and production operations generate profits which are dependent on the prices for oil and natural gas, the costs to explore, develop, and produce oil and natural gas, and the volumes we are able to produce, among other factors. Our long-term profitability will be influenced primarily by the following factors:

•: growing our oil and natural gas proved reserve base and production volumes through the successful execution of our drilling programs;
•: finding and producing oil and natural gas at a reasonable cost; and
•: managing price risks to optimize realized prices on our oil and natural gas production.

In addition to these factors, our future profitability and performance will be affected by our ability to execute our strategy, the impacts of volatility in the financial and commodity markets, industry-wide changes in the cost of drilling and oilfield services which impact our daily production, operating and capital costs and our debt level and related interest costs. Additionally, we may be impacted by hurricanes and other weather events, or domestic or international regulatory issues or other actions outside of our control (e.g., oil spills). To the extent possible, we attempt to mitigate certain of these risks through actions such as entering into longer term contractual arrangements to control costs and entering into derivative contracts to reduce the financial impact of downward commodity price movements.

Results of Operations

Overview

The historical financial results for the periods before and after the Acquisition, which closed on May 24, 2012, in the tables that follow have been presented separately in accordance with required GAAP presentation. Periods prior to May 24, 2012 are referred to as predecessor periods and those entities as the Predecessor, while periods after May 24, 2012 are referred to as successor periods and those entities as the Successor. Despite this separate GAAP presentation, the successor had no independent oil and gas operations prior to the acquisition and accordingly there were no operational exploration and production activities changed as a result of the acquisition of the Predecessor.

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Consequently, given the continuity of operations, when assessing variance analysis of our historical results of operations and financial performance as well as in reviewing our operating statistics (e.g. volumes and per unit metrics and costs) in the tables and discussion that follows, we have evaluated the six month period ended June 30, 2011 of the predecessor to the combined six month period ended June 30, 2012. This presentation represents a combined analysis of the pre-acquisition results of operations of the Predecessor and the post-acquisition results of operations of the Successor in 2012. We believe that reflecting the combined information and analysis, while non-GAAP, facilitates the most meaningful comparison and understanding of our operating performance in 2012 over the same period in the prior year.

In connection with the Acquisition Transactions and Refinancing Transactions, we incurred $4,250 million of principal amount of total indebtedness outstanding. We have the ability to incur approximately $1.25 billion of additional indebtedness under the RBL Facility. We are and will continue to be highly leveraged and have significant additional liquidity requirements. As a result, we expect that our interest expense will be significantly higher in future periods than we have experienced in the predecessor periods. See "Unaudited Pro Forma Condensed Consolidated Financial Data" and "—Liquidity and Capital Resources" for more information regarding the pro forma effect of the Acquisition Transactions and Refinancing Transactions. Additionally, the financial results for the successor period presented includes the application of purchase accounting and the application of the successful efforts method of accounting for oil and natural gas properties. As a result, trends and results in future periods may look different than those that existed prior to the acquisition and under the full cost method of accounting. See "Risk Factors," "Unaudited Pro Forma Condensed Consolidated Financial Data" and "—Liquidity and Capital Resources."

Significant Operational Factors

Production. Below is an analysis of our production by division for the six months ended June 30 and three years ended December 31:

	Six Months ended June 30,				Years ended December 31,

	2012		2011		2011		2010		2009
	(MMcfe/d)
United States
Central		603		569		576		498		423
Eagle Ford		91		20		40		6		—
Southern		120		137		127		183		256
International
Brazil		36		34		34		33		12

Total consolidated		850		760		777		720		691
Unconsolidated affiliate		56		62		61		62		72

Total combined		906		822		838		782		763

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Volumes. Our volumes by commodity for the six months ended June 30 and three years ended December 31 were as follows:

	Six Months ended June 30,				Years ended December 31,

	2012		2011		2011		2010		2009
Natural Gas (MMcf/d)
Consolidated volumes		686		658		661		618		599
Unconsolidated affiliate volumes		43		47		46		47		54

Total Combined		729		705		707		665		653

Oil and condensate (MBbls/d)
Consolidated volumes		23		14		16		13		11
Unconsolidated affiliate volumes		1		1		1		1		1

Total Combined		24		15		17		14		12

NGL (MBbls/d)
Consolidated volumes		5		3		3		4		5
Unconsolidated affiliate volumes		1		2		1		2		2

Total Combined		6		5		4		6		7

Central division —Our 2012 Central division production volumes increased 34 MMcfe/d for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 primarily as a result of our drilling program in the Haynesville Shale and our successful drilling programs in our Altamont and Raton Basin areas. At June 30, 2012, we had 66 net operated wells in the Haynesville Shale and our total production was approximately 317 MMcfe/d. Although we had a very efficient capital program in the Haynesville Shale, we suspended the program at the end of the first quarter of 2012 due to low natural gas prices. We released all rigs and redeployed the capital allocated to the Haynesville Shale to our oil programs. In addition, a relatively new oil play, the South Louisiana Wilcox program had 19 net operated wells with total oil and NGL production of approximately 2 MBbls/d for the six months ended June 30, 2012. As of June 30, 2012, we had 307 net operated wells in our Altamont Field with total oil production of approximately 7 MBbls/d.

Eagle Ford division —Our 2012 Eagle Ford division production volumes increased 71 MMcfe/d for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 due to our successful drilling program in the area. During the six months ended June 30, 2012, we drilled 36 additional wells in our Eagle Ford Shale for a total of 98 net operated wells. With a majority of our acreage located in the oil and liquids rich area of the Eagle Ford Shale, our total oil and NGL production was approximately 12 MBbls/d for the six months ended June 30, 2012, an increase of over 350 percent from the same period of last year.

Southern division —Our 2012 Southern division production volumes decreased 17 MMcfe/d for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 primarily due to natural declines and lower levels of drilling activity in the Texas Gulf Coast and Gulf of Mexico, partially offset by our successful drilling in the Wolfcamp Shale. In our Wolfcamp Shale area, we drilled 10 additional wells during 2012, for a total of 26 net operated wells. We sold our Gulf of Mexico assets in July 2012, which during the six months ended June 30, 2012, and twelve months ended December 31, 2011, had equivalent production of 45 MMcfe/d and 46 MMcfe/d, respectively.

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International —Our 2012 production volumes in Brazil increased 2 MMcfe/d for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 primarily due to a fourth well coming on line in August 2011 and an oil offloading in March and June of 2012 from our Camarupim Field. We are still awaiting a response on our appeal filed in 2011, for our environmental permit request concerning the Pinauna Field which was denied by the Brazilian environmental regulatory agency. In June of 2012, we sold all our interests in Egypt. The sale represents an exit from our Egyptian exploration activities.

Cash Operating Costs and Adjusted Cash Operating Costs. We monitor cash operating costs required to produce our oil and natural gas production volumes. Cash operating costs is a non-GAAP measure calculated on a per Mcfe basis and includes total operating expenses less depreciation, depletion and amortization expense, exploration expense, ceiling test and other impairment charges, transportation costs and cost of products. Adjusted cash operating costs is a non-GAAP measure and is defined as cash operating costs less transition and restructuring costs and non-cash equity based compensation expense. Cash operating costs and adjusted cash operating costs per unit are a valuable measure of operating performance and efficiency; however, these measures may not be comparable to similarly titled measures used by other companies.

During the six months ended June 30, 2012, adjusted cash operating costs per unit decreased to $1.66/Mcfe as compared to $1.67/Mcfe during the same period in 2011, primarily due to higher production volumes offset by higher general and administrative costs and higher lease operating expenses.

The table below represents a reconciliation of our cash operating costs and adjusted cash operating costs for the six months ended June 30:

	Six Months ended June 30,

	2012						2011
	Total			Per unit			Total			Per unit
	(In millions, except per unit costs)
Total operating expenses	$	939		$	6.07		$	565		$	4.11
Depreciation, depletion and amortization		(353	)		(2.28	)		(280	)		(2.04	)
Transportation costs		(59	)		(0.38	)		(38	)		(0.27	)
Exploration expense		(6	)		(0.04	)		—			—
Ceiling test charges		(63	)		(0.41	)		—			—

Total cash operating costs and per-unit cash costs(1)		458			2.96			247			1.80
Transition/restructurings costs and non-cash equity based compensation expense(2)		(202	)		(1.30	)		(17	)		(0.13	)

Total adjusted cash operating costs and adjusted per-unit cash costs(1)	$	256		$	1.66		$	230		$	1.67

Total equivalent volumes (MMcfe)(1)		154,818						137,543

(1): Excludes volumes and costs associated with Four Star.
(2): Total amount in 2012 includes $183 million for transition and restructuring costs associated with the acquisition, $3 million of advisory fees and $16 million of non-cash equity-based compensation expense. Total amount in 2011 includes $6 million of restructuring costs associated with the closure of our Denver office and $11 million of non-cash equity-based compensation expense.

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The table below represents a reconciliation of our cash operating costs and adjusted cash operating costs for the three years ended December 31:

	Years ended December 31,

	2011						2010						2009
	Total			Per unit			Total			Per unit			Total			Per unit
	(dollars in millions, except per unit costs)
Total operating expenses	$	1,364		$	4.81		$	1,058		$	4.03		$	3,145		$	12.46
Depreciation, depletion and amortization		(612	)		(2.16	)		(477	)		(1.82	)		(440	)		(1.74	)
Transportation costs		(85	)		(0.30	)		(73	)		(0.28	)		(66	)		(0.26	)
Cost of products		—			—			(15	)		(0.05	)		(31	)		(0.13	)
Ceiling test charges		(152	)		(0.54	)		(25	)		(0.10	)		(2,123	)		(8.41	)
Impairments		(6	)		(0.02	)		—			—			(25	)		(0.10	)

Total cash operating costs and per-unit cash costs(1)		509			1.79			468			1.78			460			1.82
Restructuring costs and non-cash equity based compensation expense		(27	)		(0.10	)		(18	)		(0.07	)		(26	)		(0.10	)

Total adjusted cash operating costs and adjusted per-unit cash costs(1)		482			1.69			450			1.71			434			1.72

Total equivalent volumes (MMcfe)(1)		283,696						262,631						252,432

(1): Excludes volumes and costs associated with Four Star.

Reserve Replacement Ratio/Reserve Replacement Costs. We calculate two primary non-GAAP metrics associated with reserves performance: (i) a reserve replacement ratio and (ii) reserve replacement costs, to measure our ability to establish a long-term trend of adding reserves at a reasonable cost in our key asset areas. The reserve replacement ratio is an indicator of our ability to replenish annual production volumes and grow our reserves. It is important for us to economically find and develop new reserves that will more than offset produced volumes and provide for future production given the inherent decline of hydrocarbon reserves. In addition, we calculate reserve replacement costs to assess the cost of adding reserves, which is ultimately included in depreciation, depletion and amortization expense. We believe the ability to develop a competitive advantage over other oil and natural gas companies is dependent on adding reserves in our key asset areas at lower costs than our competition. We calculate these metrics as follows:


Reserve replacement ratio:		Sum of reserve additions(1) Actual production for the corresponding period
Reserve replacement costs per Mcfe:		Total oil and gas capital costs(2) Sum of reserve additions(1)

(1): Reserve additions include proved reserves and reflect reserve revisions for prices and performance, extensions, discoveries and other additions and acquisitions and do not include unproved reserve quantities or proved reserve additions attributable to investments accounted for using the equity method. We present these metrics separately, both including and excluding the impact of price revisions on reserves, to demonstrate the effectiveness of our drilling program exclusive of economic factors (such as price) outside of our control. All amounts are derived directly from the table presented in "Financial Statements and Supplementary Data—Supplemental Oil and Natural Gas Operations."

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(2): Total oil and natural gas capital costs include the costs of development, exploration and property acquisition activities conducted to add reserves and exclude asset retirement obligations. Amounts are derived directly from the table presented in "Financial Statements and Supplementary Data—Supplemental Oil and Natural Gas Operations."

The reserve replacement ratio and reserve replacement costs per unit are statistical indicators that have limitations, including their predictive and comparative value. As an annual measure, the reserve replacement ratio is limited because it typically varies widely based on the extent and timing of new discoveries, project sanctioning and property acquisitions. In addition, since the reserve replacement ratio does not consider the cost or timing of developing future production of new reserves, it cannot be used as a measure of value creation.

The exploration for and the acquisition and development of oil and natural gas reserves is inherently uncertain as further discussed in "Risk Factors—Risks Related to Our Business and Industry." One of these risks and uncertainties is our ability to spend sufficient capital to increase our reserves. While we currently expect to spend such amounts in the future, there are no assurances as to the timing and magnitude of these expenditures or the classification of the proved reserves as developed or undeveloped. At December 31, 2011, proved developed reserves represent approximately 50% of our total consolidated proved reserves. Proved developed reserves will generally begin producing within the year they are added, whereas proved undeveloped reserves generally require additional future expenditures.

The table below shows our reserve replacement ratio and reserve replacement costs for our domestic and worldwide operations, including and excluding the effect of price revisions on reserves for each of the years ended December 31:

	Including Price Revisions									Excluding Price Revisions

	2011			2010			2009			2011			2010			2009
	($/Mcfe)									($/Mcfe)
Reserve Replacement Ratios
*Domestic*
Including acquisitions		416	%		370	%		188	%		418	%		306	%		220	%
Excluding acquisitions		416			353			162			418			289			195
*Worldwide*
Including acquisitions		400			347			212			401			284			245
Excluding acquisitions		400			331			187			401			268			220
Reserve Replacement Costs(1)
*Domestic*
Including acquisitions	$	1.42		$	1.29		$	1.84		$	1.41		$	1.56		$	1.57
Excluding acquisitions		1.42			1.29			1.91			1.41			1.58			1.59
*Worldwide*
Including acquisitions		1.43			1.40			2.04			1.43			1.72			1.76
Excluding acquisitions		1.43			1.41			2.13			1.43			1.75			1.81

(1): Only proved property acquisition costs are excluded from these calculations. Leasehold or unproved acquisitions costs are included in all calculations.

We typically cite reserve replacement costs in the context of a multi-year trend, in recognition of its limitation as a single year measure, and also to demonstrate consistency and stability, which are

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essential to our business model. The table below shows our reserve replacement costs for our domestic and worldwide operations for the years ended December 31:

	Three Years Ended December 31, 2011

	Including Price Revisions		Excluding Price Revisions
	($/Mcfe)
Reserve Replacement Costs
*Domestic*
Including acquisitions	$	1.45	$	1.49
Excluding acquisitions		1.45		1.50
*Worldwide*
Including acquisitions		1.55		1.60
Excluding acquisitions		1.56		1.61

Capital Expenditures. Our oil and gas capital expenditures were as follows for the six months ended June 30 and three years ended December 31:

	Six Months ended June 30,				Years ended December 31,

	2012		2011		2011		2010		2009
	(in millions)
Total oil and gas capital costs, excluding proved property acquisitions	$	757	$	727	$	1,624	$	1,231	$	1,004
Proved property acquisitions		—		1		—		51		87

Total oil and gas capital costs, including acquisitions(1)		757		728		1,624		1,282		1,091
Non-oil and gas capital costs		5		8		20		36		38

Total capital expenditures	$	762	$	736	$	1,644	$	1,318	$	1,129

(1): Total oil and gas capital costs include the costs of development, exploration and property acquisition activities conducted to add reserves and exclude asset retirement obligations.

Capital expenditures for the six months ended June 30, 2012 and rig count by key program as of June 30, 2012 were:

	Capital Expenditures (In millions)

Eagle Ford	$	421	4
Haynesville		89	—
Altamont		77	2
Wolfcamp		111	1
South Louisiana Wilcox		55	1
Other, including International		9	—

Total capital expenditures	$	762	8

Price Risk Management Activities

We enter into derivative contracts on our oil and natural gas production primarily to stabilize cash flows and reduce the risk and financial impact of downward commodity price movements on

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commodity sales. Because we apply mark-to-market accounting on our financial derivative contracts and because we do not hedge all of our price risks, this strategy only partially reduces our commodity price exposure. Our reported results of operations, financial position and cash flows can be impacted significantly by commodity price movements from period to period. Adjustments to our strategy and the decision to enter into new positions or to alter existing positions are made based on the goals of the overall company. During the first six months of 2012, approximately 75 percent of our natural gas production and 90 percent of our crude oil production were hedged and settled at average floor prices of $4.85 per MMBtu and $95.22 per barrel, respectively.

The following table reflects the contracted volumes and the minimum, maximum and average prices we will receive under our derivative contracts as of June 30, 2012.

	2012				2013				2014				2015

	Volumes(1)		Average Price(1)		Volumes(1)		Average Price(1)		Volumes(1)		Average Price(1)		Volumes(1)		Average Price(1)
Natural Gas
Fixed Price Swaps		103	$	4.47		138	$	3.54		52	$	3.92		11	$	4.01
Oil
Fixed Price Swaps		1,654	$	105.12		8,225	$	104.72		8,760	$	98.64		5,502	$	95.42
Ceilings		736	$	95.00		—	$	—		1,095	$	100.00		1,095	$	100.00
Three Way Collars Ceiling		2,898	$	114.16		3,741	$	108.09		—	$	—		—	$	—
Three Way Collars Floors(2)		2,898	$	92.54		3,741	$	91.22		—	$	—		—	$	—

(1): Volumes presented are TBtu for natural gas and MBbl for oil. Prices presented are per MMBtu of natural gas and per Bbl of oil.
(2): If market prices settle at or below $67.54 and $69.15 for the years 2012 and 2013, respectively, our three-way collars-floors effectively "lock-in" a cash settlement of the market price plus $25.00 per Bbl for 2012 and plus $22.07 per Bbl for 2013.

In July and August of 2012, we added 730 MBbls of oil fixed price swaps at an average price of $90.00 per barrel and 1,829 MBbls of costless three-way oil collars for our anticipated 2013 oil production. For these collars, the transactions effectively provide an average ceiling price of $102.26 per barrel and an average floor price of $95.00 per barrel unless oil prices drop below $75.00 per barrel. If oil prices drop below $75.00 per barrel, the transactions effectively lock-in a cash settlement of the market price plus $20.00 per barrel. We also entered into 14 TBtu at an average price of $3.61 per MMBtu and 11 TBtu at an average price of $4.01 per MMBtu of natural gas fixed price swaps at for our anticipated 2013 and 2015 natural gas production, respectively.

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Operating Results

The information below provides the financial results for the Successor from March 23 (inception) to June 30 and for the Predecessor from January 1 to May 24 and for the six months ended June 30 and the three years ended December 31:



	Successor			Predecessor
	March 23 (inception) to June 30, 2012						Six Months ended June 30, 2011			Years ended December 31,
				January 1 to May 24, 2012						Years ended December 31,
				January 1 to May 24, 2012						2011			2010			2009
				(dollars in millions)
Physical sales :
Oil and condensate	$	77		$	322		$	236		$	552		$	346		$	214
Natural gas		61			262			497			973			974			830
NGL		5			29			28			57			60			53

Total physical sales		143			613			761			1,582			1,380			1,097
Realized and unrealized gains on financial derivatives(1)		57			365			24			284			390			687
Other revenues		—			—			—			1			19			44

Total operating revenues		200			978			785			1,867			1,789			1,828
Operating Expenses :
Cost of products		—			—			—			—			15			31
Transportation costs		14			45			38			85			73			66
Production costs(2)		32			136			143			298			264			252
Depreciation, depletion and amortization		34			319			280			612			477			440
General and administrative expenses		209			75			98			201			190			195
Exploration expenses		6			—			—			—			—			—
Impairments/Ceiling test charges		1			62			—			158			25			2,148
Other		1			5			6			10			14			13

Total operating expenses		297			642			565			1,364			1,058			3,145

Operating income (loss)		(97	)		336			220			503			731			(1,317	)
Loss from unconsolidated affiliates		(1	)		(5	)		(1	)		(7	)		(7	)		(30	)
Other income (expense)		1			(3	)		—			(2	)		3			(1	)
Interest expense		(53	)		(14	)		(6	)		(12	)		(21	)		(25	)

(Loss) income before income taxes		(150	)		314			213			482			706			(1,373	)
Income taxes (benefit)		—			136			61			220			263			(462	)

Net (loss) income	$	(150	)	$	178		$	152		$	262		$	443		$	(911	)

(1): Includes less than $1 million for the successor period and $5 million for the predecessor periods from January 1, 2012 to May 24, 2012 and $6 million for the six months ended June 30, 2011 and $11 million, $11 million and $406 million for the years ended December 31, 2011, 2010 and 2009, reclassified from accumulated other comprehensive income associated with accounting hedges. During 2008, we removed the hedging designation on all our commodity-based derivative contracts related to our hedged oil and natural gas production volumes.
(2): Includes domestic lease operating expenses of $16 million for the successor period and $80 million for the predecessor periods from January 1, 2012 to May 24, 2012 and $80 million for the six months ended June 30, 2011 for the six months ended June 30, 2012 and 2011 and $176 million, $156 million and $175 million, respectively for the years ended December 31, 2011, 2010 and 2009.

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The table below provides additional detail of our volumes, prices, and costs per unit. We present (i) average realized prices based on physical sales of natural gas, oil and condensate and NGL as well as (ii) average realized prices inclusive of the impacts of financial derivative settlements. Our average realized prices, including financial derivative settlements, reflect cash received and/or paid during the period on settled financial derivatives based on the period the contracted settlements were originally scheduled to occur; however, these prices do not reflect the impact of any associated premiums paid to enter into certain of our derivative contracts.

	Six months ended June 30,				Years ended December 31,

	2012		2011		2011		2010		2009
Volumes :
Oil and condensate
Consolidated volumes (MBbls)		4,138		2,543		6,034		4,747		4,078
Unconsolidated affiliate volumes (MBbls)		142		159		306		364		419
Natural gas
Consolidated volumes (MMcf)		124,819		119,052		241,083		225,611		218,544
Unconsolidated affiliate volumes (MMcf)		7,848		8,554		16,881		17,165		19,557
NGL
Consolidated volumes (MBbls)		862		538		1,068		1,423		1,570
Unconsolidated affiliate volumes (MBbls)		237		280		556		573		678
Equivalent volumes
Consolidated MMcfe		154,818		137,543		283,696		262,631		252,432
Unconsolidated affiliate MMcfe		10,126		11,186		22,052		22,787		26,139

Total combined MMcfe		164,944		148,729		305,748		285,418		278,571

Consolidated MMcfe/d		850		760		777		720		691
Unconsolidated affiliate MMcfe/d		56		62		61		62		72

Total Combined MMcfe/d		906		822		838		782		763

Consolidated prices and costs per unit:
Oil and condensate
Average realized price on physical sales ($/Bbl)	$	96.32	$	92.74	$	91.40	$	72.83	$	52.48
Average realized price, including financial derivative settlements ($/Bbl)(1)(2)		97.91		88.67		90.23		71.13		95.57
Average transportation costs ($/Bbl)		0.91		0.06		0.06		0.08		0.06
Natural gas
Average realized price on physical sales ($/Mcf)	$	2.59	$	4.18	$	4.04	$	4.32	$	3.80
Average realized prices, including financial derivative settlements ($/Mcf)(1)(2)		4.20		5.44		5.44		5.67		7.62
Average transportation costs ($/Mcf)		0.38		0.30		0.33		0.30		0.28
NGL
Average realized price on physical sales ($/Bbl)	$	39.89	$	52.41	$	53.50	$	42.38	$	33.75
Average transportation costs ($/Bbl)		6.57		4.88		3.83		3.16		2.61
Production costs and other cash operating costs ($/Mcfe)
Average lease operating expenses	$	0.75	$	0.73	$	0.77	$	0.73	$	0.78
Average production taxes(3)		0.33		0.31		0.28		0.27		0.22
Average general and administrative expenses		1.84		0.71		0.70		0.72		0.77
Average taxes, other than production and income taxes		0.04		0.05		0.04		0.06		0.05

Total cash operating costs(4)	$	2.96	$	1.80	$	1.79	$	1.78	$	1.82

Depreciation, depletion and amortization ($/Mcfe)(5)	$	2.29	$	2.04	$	2.16	$	1.82	$	1.74

(1): We had no cash premiums related to oil and natural gas derivatives settled during the six months ended June 30, 2012. Premiums related to natural gas derivatives settled during the six months ended June 30, 2011 were approximately $12 million. Had we included these premiums in our natural gas average realized prices

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in 2011, our realized price, including financial derivative settlements, would have decreased by $0.10/Mcf for the six months ended June 30, 2011. We had no cash premiums related to oil derivatives settled during the six months ended June 30, 2011. We had no cash premiums related to oil derivatives settled during the years ended December 31, 2011, 2010 and 2009. Premiums paid in 2009 related to natural gas derivatives settled during the year ended December 31, 2010 were $157 million. Premiums paid related to natural gas derivatives settled during the year ended December 31, 2011 were $23 million. Had we included these premiums in our natural gas average realized prices in 2010 and 2011, our realized price, including financial derivative settlements, would have decreased by $0.70/Mcf and $0.10/Mcf for the years ended December 31, 2010 and 2011.

(2): The six months ended June 30, 2012 and 2011 include approximately $201 million and $150 million, respectively, of cash receipts on settlements related to natural gas derivative contracts and approximately $7 million and $(10) million of cash receipts and cash paid, respectively, on settlements related to crude oil derivative contracts. The years ended December 31, 2011, 2010 and 2009 include approximately $338 million, $306 million and $834 million, respectively, of cash receipts for settlements of natural gas derivative contracts. The years ended December 31, 2010 and 2011, include approximately $8 million and $7 million, respectively, of cash paid for the settlement of crude oil derivative contracts. Additionally, the year ended December 31, 2009, includes approximately $176 million of cash receipts for the settlement of crude oil derivative contracts.
(3): Production taxes include ad valorem and severance taxes.
(4): Total adjusted cash operating costs per unit for each period were $1.66/Mcfe, $1.67/Mcfe, $1.69/Mcfe, $1.71/Mcfe and $1.72/Mcfe. See Cash Operating Costs and Adjusted Cash Operating costs section of MD&A for a reconciliation.
(5): Includes $0.05 per Mcfe and $0.06 per Mcfe for the six months ended June 30, 2012 and 2011, respectively, and $0.05 per Mcfe for the year ended December 31, 2011 and $0.06 per Mcfe for both years ended December 31, 2010 and 2009 related to accretion expense on asset retirement obligations.

Six Months Ended June 30, 2012 Compared with Six Months Ended June 30, 2011

Our net income for the six months ended June 30, 2012 decreased $124 million as compared to the same period in 2011. The discussion below reflects variances in our financial results for the six months ended June 30, 2012 as compared with the same period in 2011.

Physical sales. Physical sales represent accrual-based commodity sales transactions with customers. For the six months ended June 30, 2012, physical sales were $756 million compared to $761 million for the six months ended June 30, 2011. The overall decrease of $5 million, or 1 percent, was a result of the (i) favorable impact of $148 million, $24 million and $17 million related to higher production volumes of oil and condensate, natural gas and NGL, respectively, (ii) a favorable impact of $15 million related to the increase in realized oil and condensate prices and (iii) the unfavorable impact of $198 million and $11 million related to lower realized prices for natural gas and NGL, respectively. The increase in oil production is primarily attributable to our Eagle Ford and Altamont key programs which are up 9 MBbls/d year over year.

Realized and unrealized gains on financial derivatives. Realized and unrealized gains for the six months ended June 30, 2012 were $422 million compared to $24 million for the six months ended June 30, 2011. The increase of $398 million was due to changes in the fair value of our derivative contracts based on forward commodity prices relative to the prices in the underlying contracts.

Transportation costs. Transportation costs for the six months ended June 30, 2012 were $59 million compared to $38 million for the six months ended June 30, 2011. This increase of $21 million, or 55 percent, was due primarily to new transportation contracts entered into in 2012.

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Production costs. Production costs for the six months ended June 30, 2012 were $168 million compared to $143 million for the six months ended June 30, 2011. This increase of $25 million, or 17 percent, was due primarily to an increase of $17 million in lease operating expenses and an increase of $8 million in production taxes. Lease operating expenses are attributable to increased water disposal costs in our Eagle Ford and Central divisions and higher equipment, contract labor and chemical costs in our Eagle Ford division. Production taxes increased primarily due to higher production volumes.

Depreciation, depletion and amortization expense. Depreciation, depletion and amortization expense for the six months ended June 30, 2012 was $353 million compared to $280 million for the six months ended June 30, 2011. The increase of $73 million, or 26 percent, was a result of an increase of $39 million due to a higher depletion rate and an increase of $34 million due to higher production volumes compared to the same period in 2011. During the first half of 2012, we experienced an expected upward trend in our depletion rate relative to prior periods as we focused our capital expenditures on developing key oil programs and as we moved away from significant ceiling test charges in 2009. Due to the application of the successful efforts method of accounting for oil and natural gas properties after the acquisition, we expect our depletion rate will decrease during the second half of 2012 compared to the first six months of 2012.

General and administrative expenses. General and administrative expenses for the six months ended June 30, 2012 were $284 million compared to $98 million for the six months ended June 30, 2011. The increase of $186 million, or 190 percent, is primarily due to $186 million of transition and restructuring costs associated with the acquisition.

Exploration expense. Exploration expense for the six months ended June 30, 2012 was $6 million due to applying the successful efforts method of recording exploration costs compared to applying the full cost method prior to the acquisition.

Impairments/Ceiling test charges. Under the full cost method of accounting, each quarter we were required to evaluate our capitalized costs in each of our full cost pools. During the six months ended June 30, 2012 we recorded a non-cash charge of approximately $62 million as a result of our decision to end exploration and development activities in Egypt. In June of 2012, we sold all our interests in Egypt. No full cost ceiling test charges were recorded during the six months ended June 30, 2011. Additionally, no impairments were recorded of oil and natural gas properties in the successor period through June 30, 2012. Due to current natural gas prices, the fair value of our oil and natural gas properties could decline in the future and we may be required to record an impairment to the carrying value.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Our net income for 2011 was $262 million compared to net income for 2010 of $443 million. This represents a decrease of $181 million or 41% as compared to 2010. The discussion below reflects variances in our financial results in 2011 as compared to 2010.

Physical sales. Physical sales represent accrual-based commodity sales transactions with customers. Physical sales for 2011 were $1,582 million compared to $1,380 million for 2010. This represents an increase of $202 million or 15% for the twelve months ending December 31, 2011 as compared to the twelve months ended December 31, 2010. Of this increase, $112 million and $12 million were related to the change in realized prices for oil and condensate and NGL, respectively, and $94 million and $67 million were related to an increase in production volumes of oil and condensate and natural gas sold, respectively. These increases were partially offset by decreases of $68 million related to a reduction in realized prices for natural gas and $15 million related to a decrease in production volumes of NGL sold. The higher volumes are due to our focus on our key programs in the Haynesville and Eagle Ford shales.

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Realized and unrealized gains on financial derivatives. Realized and unrealized gains for 2011 were $284 million compared to $390 million for 2010. This represents a decrease of $106 million or 27% for the twelve months ending December 31, 2011 as compared to the twelve months ended December 31, 2010. This decrease was due to changes in the fair value of our derivative contracts based on forward commodity prices relative to the prices in the underlying contracts.

Production costs. Production costs for 2011 were $298 million compared to $264 million for 2010. This represents an increase of $34 million or 13% for the twelve months ending December 31, 2011 as compared to the twelve months ended December 31, 2010. This increase was due primarily to an increase of $24 million in lease operating expenses and an increase of $10 million in production taxes. Lease operating expenses increased due to higher maintenance, repair and power costs in our Central division, temporary higher costs in our Southern division due to early well testing and higher expenses in our International division. Production taxes increased primarily due to higher volumes.

Depreciation, depletion and amortization expense. Depreciation, depletion and amortization expense for 2011 was $612 million compared to $477 million for 2010. This represents an increase of $135 million or 28% for the twelve months ending December 31, 2011 as compared to the twelve months ended December 31, 2010. This increase was a result of an increase of $98 million due to a higher depletion rate and an increase of $37 million related to higher production volumes compared to the same period in 2010. Our depreciation, depletion and amortization rate increased in 2011 as we focused our capital on oil programs.

General and administrative expenses. General and administrative expenses for 2011 were $201 million compared to $190 million for 2010. This represents an increase of $11 million or 6% for the twelve months ending December 31, 2011 as compared to the twelve months ended December 31, 2010. This increase was due primarily to an increase of $5 million in severance costs related to an office closure and an increase of $6 million related to employee benefit costs.

Impairments/Ceiling test charges. We recorded a non-cash ceiling test charge in 2011 of $152 million compared to $25 million in 2010. This represents an increase of $127 million or 508% as compared to the year ended December 31, 2010. The 2011 ceiling test charge was driven by the release of costs into the Brazilian full cost pool substantially due to the denial of a necessary environmental permit on our Pinauna project as well as the completion of our evaluation of certain exploratory wells drilled in 2009 and 2010. We have filed an appeal with regard to the denial of the permit and are awaiting a response. During the year ended December 31, 2010, we recorded non-cash ceiling test charges of $25 million related to our Egyptian full cost pool as a result of acreage relinquishments in South Mariut and South Alamein and a dry hole drilled in the Tanta block.

Other. Our equity losses from Four Star for 2011 were $7 million, which is consistent with our 2010 equity losses. In addition, the fair value of our investment in Four Star could decline as a result of lower natural gas prices, and we may be required to record an impairment of the carrying value in the future.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Our net income for 2010 was $443 million compared to net loss for 2009 of $911 million. This represents an increase of $1,354 million or 148% as compared to 2009. The table below shows our operating revenue variances in our financial results in 2010 as compared to 2009:

Physical sales. Physical sales represent accrual-based commodity sales transactions with customers. Physical sales for 2010 were $1,380 million compared to $1,097 million for 2009. This represents an increase of $283 million or 26% for the twelve months ending December 31, 2010 as compared to the twelve months ended December 31, 2009. Of this increase $117 million, $97 million and $12 million

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were related to the change in realized prices, for natural gas, oil and condensate and NGL, respectively, and $35 million and $27 million were related to an increase in production volumes of oil and condensate and natural gas sold, respectively. These increases were partially offset by a decrease of $5 million related to a reduction in production volumes of NGL sold. During the year ended December 31, 2010, we also benefited from an increase in production volumes in our Central division and in Brazil.

Realized and unrealized gains on financial derivatives. Realized and unrealized gains on financial derivatives for 2010 were $390 million compared to $687 million for 2009. This represents a decrease of $297 million or 43% for the twelve months ending December 31, 2010 as compared to the twelve months ended December 31, 2009. This decrease was due to changes in the fair value of our derivative contracts based on forward commodity prices relative to the prices in the underlying contracts.

Production costs. Production costs for 2010 were $264 million compared to $252 million for 2009. This represents an increase of $12 million or 5% for the twelve months ending December 31, 2010 as compared to the twelve months ended December 31, 2009. This increase was due primarily to an increase of $16 million in production taxes, which resulted from higher production volumes.

Depreciation, depletion and amortization expense. Depreciation, depletion and amortization expense for 2010 was $477 million compared to $440 million for 2009. This represents an increase of $37 million or 8% for the twelve months ending December 31, 2010 as compared to the twelve months ended December 31, 2009. This increase was the result of an increase of $20 million due to a higher depletion rate and an increase of $17 million related to higher production volumes. The depletion rate for the year ended December 31, 2009 was impacted largely by the ceiling test charges recorded in the first quarter of 2009.

General and administrative expenses. General and administrative expenses for 2010 were $190 million compared to $195 million for 2009. This represents a decrease of $5 million or 3% for the twelve months ending December 31, 2010 as compared to the twelve months ended December 31, 2009. This was due primarily to a decrease related to payroll and administrative costs to support the business following reorganizations in 2009.

Impairments/Ceiling test charges. We recorded a non-cash ceiling test charges in 2010 of $25 million related to our Egyptian full cost pool compared to a full cost ceiling test charge of $2,123 million in 2009. This represents a decrease of $2,098 million or 99% as compared to the year ended December 31, 2009. The non-cash ceiling test charge in 2010 to our Egyptian full cost pool was a result of contractual acreage relinquishments in our blocks, and a dry hole drilled in the Tanta block. During the year ended December 31, 2009, we recorded non-cash ceiling test charges of $2.1 billion related to our domestic and Brazilian full cost pools as a result of low oil and natural gas prices and to our Egyptian full cost pool as a result of dry hole costs.

Other. Our equity loss from Four Star for 2010 was $7 million compared to equity loss of $30 million for 2009. This represents an increase of $23 million or 77% as compared to the year ended December 31, 2009. This increase is due primarily to an increase related to commodity prices partially offset by a decrease related to production volumes.

Supplemental Non-GAAP Measure. We use the non-GAAP measures "Reported EBITDA" and "Adjusted EBITDAX", among others as further described in Use of Non-GAAP Financial Information. We believe these supplemental measures provide meaningful information to our investors; however, due to the limitations of these measures as analytical tools, we rely primarily on our GAAP results. We define Reported EBITDA as net income plus interest and debt expense, income taxes and depreciation, depletion and amortization. Adjusted EBITDAX is defined as Reported EBITDA adjusted as applicable in the relevant period, for the net change in the fair value of derivatives (mark to market

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effects, net of cash settlements and premiums related to these derivatives), ceiling test charges or other impairments, adjustments to reflect cash distributions of the earnings from our unconsolidated affiliates, non-cash equity based compensation expenses, transition and restructuring costs we expect not to recur, advisory fees paid to our sponsors and exploration expenses. We believe that the presentation of Reported EBITDA and Adjusted EBITDAX is important to provide management and investors with (i) additional information to evaluate our ability to service debt adjusting for items required or permitted in calculating covenant compliance under our debt agreements, (ii) an important supplemental indicator of the operational performance of our business, (iii) an additional criterion for evaluating our performance relative to our peers, (iv) additional information to measure our liquidity (before cash capital requirements and working capital needs) (v) and supplemental information to investors about certain material non-cash and/or other items that may not continue at the same level in the future. Reported EBITDA and Adjusted EBITDAX have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP or as an alternative to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.

Below is a reconciliation of our Reported EBITDA and Adjusted EBITDAX to our consolidated net income (loss) for the six months ended June 30 and the three years ended December 31:

	Six Months ended June 30,					Years ended December 31,

	2012			2011		2011		2010			2009
	(in millions)
Net income (loss)	$	28		$	152	$	262	$	443		$	(911	)
Interest expense, net of capitalized interest(1)		67			6		12		21			25
Income tax expense (benefit)		136			61		220		263			(462	)
Depreciation, depletion and amortization		353			280		612		477			440

Reported EBITDA		584			499		1,106		1,204			(908	)
Net impact of financial derivatives		(214	)		117		47		(92	)		323
Impairments and ceiling test charges		63			—		158		25			2,148
Transition and restructuring costs		183			6		6		—			7
Dividends from unconsolidated affiliates		8			26		46		50			45
Income from unconsolidated affiliates		6			1		7		7			30
Non-cash equity-based compensation expense		16			11		21		18			19
Financial derivatives premiums		—			—		—		(7	)		(173	)
Advisory fee		3			—		—		—			—
Exploration expense		6			—		—		—			—

Adjusted EBITDAX(2)	$	655		$	660	$	1,391	$	1,205		$	1,491

(1): Includes less than $1 million and $4 million of affiliated interest for the six months ended June 30, 2012 and 2011, and $3 million, $5 million and $4 million of affiliated interest for the years ended December 31, 2011, 2010 and 2009, respectively.
(2): Includes net EBITDAX contribution related to business divestitures of $31 million and $53 million for the six months ended June 30, 2012 and 2011, and $136 million, $203 million and $206 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash generated by operations and borrowings under the RBL Facility. Our primary uses of cash are working capital requirements, debt service requirements and capital expenditures. Based on our current level of operations and available cash, we believe our cash flows from operations, combined with availability under the RBL Facility provides us sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements over the next twelve months and the foreseeable future. We cannot assure you, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under the RBL Facility in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs. Our ability to do so depends on prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness. We cannot assure you that we will be able to refinance any of our indebtedness, including the RBL Facility, the senior secured term loan, the senior secured notes and the senior notes, on commercially reasonable terms or at all. Any future acquisitions, joint ventures or other similar transactions will likely require additional capital, and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

We are highly leveraged and our liquidity requirements will be significant, primarily due to debt service requirements. As of June 30, 2012, our long-term debt is approximately $4.25 billion, with approximately $1.25 billion of additional borrowing capacity available under the RBL Facility. As of June 30, 2012, our debt was comprised of $2.75 billion in senior notes due in 2019 and 2020, a $750 million senior secured term loan with a six-year maturity, and $750 million outstanding under the RBL Facility with a five-year maturity. In August 2012, we issued an additional $350 million of the initial 2022 senior notes and used a substantial portion of the proceeds to reduce amounts outstanding under the RBL facility. Additionally, we repriced our $750 million senior secured term loan reducing the interest rate from 6.5% to 5.0%. Our net cash interest expense for the year ended December 31, 2011 and the twelve month period ended June 30, 2012 was $12 million and $73 million. However, on a pro forma basis including the effects of our financing transactions in conjunction with the Acquisition and subsequent issuances and repayments as discussed as well as repricing our senior secured term loan, our net cash interest expense for the year ended December 31, 2011 would have been approximately $313 million. Assuming the RBL Facility is fully drawn, each one eighth point change in assumed blended interest rates would result in a $3.4 million change in annual interest expense on indebtedness under the RBL Facility and our senior secured term loan.

The RBL Facility

In connection with the Acquisition Transactions, we entered into the RBL Facility, which provides for up to $2.0 billion of borrowings, of which we drew $750 million upon closing the Acquisition Transactions. The RBL Facility is available to fund working capital and for general corporate purposes. In August 2012, we repaid approximately $350 million of outstanding borrowings under the RBL Facility using the proceeds from the additional $350 million initial 2022 senior notes offering discussed above. With the notes issuance our borrowing base was reduced to approximately $1.9 billion. For a description of the RBL Facility, see "Description of Other Indebtedness—The RBL Facility."

The RBL Facility contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, asset sales, mergers and consolidations, prepayments of subordinated indebtedness, liens, transactions with affiliates, and dividends and other distributions. The RBL Facility also includes customary events of defaults including a change of control.

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Senior Secured Term Loan

We have a $750 million senior secured term loan facility that contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, asset sales, mergers and consolidations, prepayments of subordinated indebtedness, liens, transactions with affiliates, and dividends and other distributions, which are substantially similar to the covenants in the indenture governing the senior secured notes. In August 2012, we repriced our senior secured term loan reducing the interest rate from 6.5% to 5%. Our senior secured term loan also includes customary events of defaults.

The Senior Notes and the Senior Secured Notes

The indentures governing the notes contain covenants that, among other things, limit our ability, and the ability of our restricted subsidiaries, to:

•: incur additional indebtedness and guarantee indebtedness;
•: pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
•: prepay, redeem or repurchase certain debt;
•: make loans and investments;
•: sell or otherwise dispose of assets;
•: incur liens;
•: enter into transactions with affiliates;
•: enter into agreements restricting our subsidiaries' ability to pay dividends; and
•: consolidate, merge or sell all or substantially all of our assets.

These limitations are subject to a number of qualifications and exceptions that set forth in the indentures.

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Overview of Cash Flow Activities. During the period from March 23 (inception) to June 30, 2012, we used operating cash flow of approximately $92 million. During the period from January 1 to May 24, 2012, we generated operating cash flow of approximately $580 million. We utilized these amounts to fund our capital programs, repay amounts outstanding under our various credit facilities and other debt obligations. For the six months ended June 30, and the three years ended December 31, our cash flows from operations are summarized as follows:



	Successor			Predecessor
	March 23 (inception) to June 30, 2012									December 31,
				January 1 to May 24, 2012			June 30, 2011			December 31,
				January 1 to May 24, 2012			June 30, 2011			2011			2010			2009
	(in millions)
Cash Flow from Operations
Operating activities
Net (loss) income	$	(150	)	$	178		$	152		$	262		$	443		$	(911	)
Impairments/Ceiling test charges		1			62			—			152			25			2,123
Other income adjustments		48			537			368			979			859			(4	)
Change in other assets and liabilities		9			(197	)		143			33			(260	)		365

Total cash flow from operations	$	(92	)	$	580		$	663		$	1,426		$	1,067		$	1,573

Other Cash Inflows
Investing activities
Net proceeds from the sale of assets		22			9			24			612			155			93
Other		—			—			—			—			4			—

		22			9			24			612			159			93

Financing activities
Proceeds from long term debt		4,323			215			925			2,030			500			100
Contributions		3,300			960			—			—			—			—
Net change in note payable with parent company and affiliates		—			—			—			—			489			—

		7,623			1,175			925			2,030			989			100

Total cash inflows	$	7,645		$	1,184		$	949		$	2,642		$	1,148		$	193

Cash Outflows
Investing activities
Capital expenditures	$	150		$	636		$	675		$	1,591		$	1,238		$	1,115
Cash paid for acquisitions		7,126			1			1			22			51			131
Increase in note receivable with affiliate		—			—			—			236			—			—
Other		—			—			—			—			—			3

	$	7,276		$	637			676			1,849			1,289			1,249

Financing activities
Repayment of long term debt		80			1,065			825			1,480			1,034			180
Net change in note payable with parent company and affiliates		—			—			145			781			—			256
Debt issuance costs		142			—			—			—			—			—
Other		—			—			6			7			1			—

		222			1,065			976			2,268			1,035			436

Total cash outflows	$	7,498		$	1,702		$	1,652		$	4,117		$	2,324		$	1,685

Net change in cash and cash equivalents	$	55		$	62		$	(40	)	$	(49	)	$	(109	)	$	81

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Contractual Obligations

We are party to various contractual obligations. Some of these obligations are reflected in our financial statements, such as liabilities from commodity-based derivative contracts, while other obligations, such as operating leases and capital commitments, are not reflected on our balance sheet.

The following table and discussion summarizes our contractual cash obligations as of June 30, 2012, for each of the periods presented:

	2012		2013 - 2014		2015 - 2016		Thereafter		Total

	(in millions)
Long-term financing obligations:
Principal	$	—	$	—	$	—	$	4,250	$	4,250
Interest		155		618		618		818		2,209
Liabilities from price risk management activities		—		11		6		—		17
Operating leases		5		20		20		4		49
Other contractual commitments and purchase obligations:
Volume and transportation commitments		43		178		191		369		781
Other obligations		122		139		50		188		499

Total contractual obligations	$	325	$	966	$	885	$	5,629	$	7,805

Long-term Financing Obligations (Principal and Interest). Debt obligations included in the table above represent stated maturities. Interest payments are shown through the stated maturity date of the related debt based on (i) the contractual interest rate for fixed rate debt and (ii) current market interest rates and the contractual credit spread for variable rate debt.

Liabilities from Price Risk Management Activities. These amounts include the fair value of our price risk management liabilities. We have also excluded all margin and other deposits held associated with these contracts from these amounts.

Operating Leases. For a further discussion of these obligations, see Note 8 of our "Notes to Consolidated Financial Statements." In conjunction with the Transactions we entered into a new five year operating lease for office space.

Other Contractual Commitments and Purchase Obligations. Other contractual commitments and purchase obligations are legally enforceable agreements to purchase goods or services that have fixed or minimum quantities and fixed or minimum variable price provisions, and that detail approximate timing of the underlying obligations. Included are the following:

•: Volume and Transportation Commitments. Included in these amounts are commitments for volume deficiency contracts and demand charges for firm access to natural gas transportation and storage capacity.
•: Other Obligations. Included in these amounts are commitments for drilling, completions and seismic activities for our operations and various other maintenance, engineering, procurement and construction contracts. We have excluded asset retirement obligations and reserves for litigation and environmental remediation, as these liabilities are not contractually fixed as to timing and amount. Upon the closing of the Acquisition Transactions, affiliates of the Sponsors and other investors entered into a Management Fee Agreement with Parent and EP Energy Global LLC requiring an annual advisory fee of $25 million to be paid. The agreement terminates on the twelve-year anniversary of the acquisition date (May 24, 2012) if not terminated earlier by mutual agreement of the parties, or upon a change in control or specified IPO transaction.

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Off-Balance Sheet Arrangements

We enter into a variety of financing arrangements and contractual obligations, some of which are referred to as off-balance sheet arrangements. These include guarantees and letters of credit.

Guarantees

We periodically provide indemnification arrangements related to assets or businesses we have sold. These indemnification arrangements include, but are not limited to, indemnification for income taxes, the resolution of existing disputes, environmental matters, and necessary expenditures to ensure the safety and integrity of assets sold. As of June 30, 2012, we had no obligations related to our guarantee and indemnification arrangements.

Letters of Credit

We enter into letters of credit in the ordinary course of our operations as well as periodically in conjunction with sales of assets or businesses. As of June 30, 2012, we had outstanding letters of credit of approximately $8 million. For additional information on our counterparty credit and nonperformance risk, see Note 5 of our "Notes to Consolidated Financial Statements."

Critical Accounting Estimates

Our significant accounting policies are described in Note 1 of each of our consolidated financial statements included elsewhere in this prospectus. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expense and the disclosures of contingent assets and liabilities. We consider our critical accounting estimates to be those estimates that require judgments, complex or subjective judgment necessary to account for inherently uncertain matters and those that could significantly impact our financial results based on changes in those judgments. Changes in facts and circumstances may result in revised estimates and actual results may differ materially from those estimates. We have discussed the development and selection of the following critical accounting estimates and related disclosures with our Audit Committee.

Accounting for Oil and Natural Gas Producing Activities. Prior to its acquisition on May 24, 2012, our predecessor accounted for oil and natural gas producing activities in accordance with the full cost method. Subsequent to the acquisition, we follow the successful efforts method of accounting for our oil and natural gas properties.

Our estimates of proved reserves reflect quantities of oil, natural gas and NGL which geological and engineering data demonstrate, with reasonable certainty, will be recoverable in future years from known reservoirs under existing economic conditions. These estimates of proved oil and natural gas reserves primarily impact our property, plant and equipment amounts on our balance sheets and the depreciation, depletion and amortization amounts including any impairment test charges on our income statements, among other items.

The process of estimating oil and natural gas reserves is complex and requires significant judgment to evaluate of all available geological, geophysical engineering and economic data. Our proved reserves are estimated at a property level and compiled for reporting purposes by a centralized group of experienced reservoir engineers who work closely with the operating groups. These engineers interact with engineering and geoscience personnel in each of our operating areas and accounting and marketing personnel to obtain the necessary data for projecting future production, costs, net revenues and economic recoverable reserves. Reserves are reviewed internally with senior management quarterly and presented to our Board in summary form on an annual basis. Additionally, on an annual basis each property is reviewed in detail by our centralized and operating divisional engineers to ensure forecasts

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of operating expenses, netback prices, production trends and development timing are reasonable. Our proved reserves are reviewed by internal committees and the processes and controls used for estimating our proved reserves are reviewed by our internal auditors. In addition, a third-party reservoir engineering firm, which is appointed by and reports to the Audit Committee of our Board of Managers, conducts an audit of the estimates of a significant portion of our proved reserves. Ryder Scott conducted an audit of our predecessor's estimates of proved reserves as of December 31, 2011.

As of December 31, 2011, 50% of our predecessor's total consolidated proved reserves were undeveloped (49% including Four Star) and 9% were developed, but non-producing. The data for a given field may change substantially over time as a result of numerous factors, including additional development activity, evolving production history and a continual reassessment of the viability of production under changing economic conditions. As a result, material revisions to existing reserve estimates occur from time to time. In addition, the judgments based on available data for various fields increase the likelihood of significant changes in these estimates.

Full Cost. Under the full cost accounting method followed by our predecessor prior to the acquisition, substantially all of the costs incurred in connection with the acquisition, exploration and development of oil and natural gas reserves, including salaries, benefits and other internal costs directly related to these activities, asset retirement costs and interest on significant capital projects were capitalized. Capitalized costs were aggregated in full cost pools by country, regardless of whether reserves were actually discovered. Depletion expense of these capitalized amounts plus estimated future development costs over the life of the proved reserves was based on the unit of production method. If all other factors were held constant, a 10% increase in proved reserves would decrease the unit of production depletion rate by 9% and a 10% decrease in proved reserves would increase the unit of depletion rate by 11%..

Additionally, under the full cost method our predecessor conducted quarterly ceiling tests of capitalized costs for each of its full cost pools. Total capitalized costs, net of related deferred income taxes, were limited to a ceiling based on the present value of future net revenues from proved reserves less estimated future capital expenditures, discounted at 10%, plus the cost of unproved oil and natural gas properties not being amortized less related income tax effects. In calculating the ceiling test and estimating proved reserves, a first day 12-month average price was used. If the discounted future net cash flows were not greater than or equal to the total capitalized costs, capitalized costs were written-down to the level of discounted future net cash flows. Our predecessor recorded ceiling test charges of $62 million, $152 million, $25 million and $2,123 million for the period from January 1, 2012 through May 24, 2012 and for the years ended 2011, 2010, and 2009, respectively.

Finally, under the full cost method, oil and natural gas properties included unproved property costs that were excluded from costs being depleted. These unproved property costs included non-producing leasehold, geological and geophysical costs associated with unevaluated leasehold or drilling interests and exploration drilling costs in investments in unproved properties and directly owned major development projects. Costs were excluded on a country-by-country basis until proved reserves were found or until it was determined that the costs were impaired. All costs excluded were reviewed at least quarterly to determine if exclusion from the full-cost pool continued to be appropriate. If costs were determined to be impaired, the amount of any impairment was transferred to the full cost pool if a reserve base exists or is expensed if a reserve base had not yet been created. Impairments transferred to the full cost pool increased the depletion rate for that country.

Successful Efforts. Under the successful efforts method (which was used subsequent to the Acquisition), exploratory non-drilling costs and costs of carrying and retaining undeveloped properties are charged to expense as incurred while acquisition costs, development costs and the costs associated with drilling exploratory wells are capitalized pending the determination of proved oil and gas reserves. Therefore, at any point in time, we may have capitalized costs on our consolidated balance sheet

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associated with exploratory wells that could be charged to exploration expense in a future period. Costs of drilling exploratory wells that do not result in proved reserves are charged to expense. Depreciation, depletion, amortization and impairment of oil and natural gas properties are calculated on a depletable unit basis. Additionally, gain or loss is generally recognized on all sales of oil and natural gas properties. We capitalize salaries and benefits that we determine are directly attributable to our oil and natural gas activities.

Under the successful efforts method of accounting for oil and natural gas properties, we review our oil and natural gas properties periodically (at least annually) to determine if impairment of such properties is necessary. Significant proved undeveloped leasehold costs are assessed for impairment at a field level or resource play based on total future undiscounted net cash flows, while leasehold acquisition costs associated with prospective areas that have limited or no previous exploratory drilling are generally assessed for impairment by major prospect area based on our current drilling plans. Proved oil and natural gas property values are reviewed when circumstances suggest the need for such a review and may occur if a field discovers lower than anticipated reserves, reservoirs produce below original estimates or in a mix that is different than anticipated or if commodity prices fall below a level that significantly affects anticipated future cash flows on the property. If required, the proved properties are written down to their estimated fair market value based on proved reserves and other market factors. A majority of the Company's unproved property costs are associated with properties acquired in the Eagle Ford and Wolfcamp shales. Generally, economic recovery of unproved reserves in such areas is not yet supported by actual production or conclusive formation tests, but may be confirmed by our continuing exploration and development programs. Subsequent to the Acquisition (May 25, 2012) to June 30, 3012, we did not record any impairments.

Asset Retirement Obligations. The accounting guidance for future abandonment costs requires that a liability for the discounted fair value of an asset retirement obligation be recorded in the period in which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Future abandonment costs include costs to dismantle and relocate or dispose of our production platforms, gathering systems and related structures and restoration costs of land and seabed. We develop estimates of these costs for each of our properties based upon their geographic location, type of production structure, water depth, reservoir depth and characteristics, market demand for equipment, currently available procedures and ongoing consultations with construction and engineering consultants. Because these costs typically extend many years into the future, estimating these future costs is difficult and requires management to make judgments that are subject to future revisions based upon numerous factors, including changing technology and the political and regulatory environment. We review our assumptions and estimates of future development and abandonment costs on an annual basis, or more frequently if an event occurs or circumstances change that would affect our assumptions and estimates. Additionally, inherent in the present value calculations are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlements and changes in the legal, regulatory, environmental and political environments. As of June 30, 2012, our net asset retirement liability is approximately $235 million, including approximately $64 million related to the Gulf of Mexico oil and gas properties sold in July 2012.

Price Risk Management Activities. We record the derivative instruments used in our price risk management activities at their fair values. We estimate the fair value of our derivative instruments using exchange prices, third-party pricing data and valuation techniques that incorporate specific contractual terms, statistical and simulation analysis and present value concepts. One of the primary assumptions used to estimate the fair value of derivative instruments is pricing. Our pricing assumptions are based upon price curves derived from actual prices observed in the market, pricing information supplied by a third-party valuation specialist and independent pricing sources and models

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that rely on this forward pricing information. The extent to which we rely on pricing information received from third parties in developing these assumptions is based, in part, on whether the information considers the availability of observable data in the marketplace. For example, in relatively illiquid markets we may make adjustments to the pricing information we receive from third parties based on our evaluation of whether third party market participants would use pricing assumptions consistent with these sources.

The table below presents the hypothetical sensitivity of our commodity-based price risk management activities to changes in fair values arising from immediate selected potential changes in oil and natural gas prices at June 30, 2012:

			Change in Price

			10 Percent Increase					10 Percent Decrease
	Fair Value		Fair Value		Change			Fair Value		Change
	(in millions)
Production-related derivatives—net assets (liabilities)	$	460	$	102	$	(358	)	$	814	$	354

Other significant assumptions that we use in determining the fair value of our derivative instruments are those related to the credit and non-performance risk of our counterparties. We adjust the fair value of our derivative assets for the risk of non-performance of our counterparties considering the collateral posted for the derivative and changes in the counterparties' creditworthiness, which is in part based on changes in their bond yields, changes in actively traded credit default swap prices (if available) and other information about their credit standing. We adjust the fair value of our derivative liabilities for our creditworthiness utilizing similar inputs considering cash collateral we have posted with our counterparties.

Income taxes. EP Energy LLC is not subject to domestic income taxes and foreign tax amounts are not material to our financial results. However, prior to the settlement of domestic income tax balances (including deferred taxes) of our predecessor with El Paso in conjunction with the acquisition on May 24, 2012, our predecessor recorded deferred income tax assets and liabilities reflecting tax consequences deferred to future periods based on differences between the financial statement carrying value of assets and liabilities and the tax basis of assets and liabilities. The most significant judgments on tax related matters included matters such as valuation allowances, uncertain tax positions, and undistributed earnings of certain unconsolidated affiliates. For a further discussion of these items and other income tax matters, see of our consolidated financial statements included elsewhere in this prospectus.

Qualitative and Quantitative Disclosures About Market Risk

We are exposed to market risks in our normal business activities. Market risk is the potential loss that may result from market changes associated with an existing or forecasted financial or commodity transaction. The types of market risks we are exposed to and examples of each are:

Commodity Price Risk

•: changes in oil and natural gas prices impact the amounts at which we sell our oil and natural gas and affect the fair value of our oil and natural gas derivative contracts held; and
•: changes in natural gas locational price differences also affect amounts at which we sell our oil and natural gas production, and the fair values of any related derivative products; and

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Interest Rate Risk

•: changes in interest rates affect the interest expense we incur on our variable-rate debt and the fair value of fixed-rate debt;
•: changes in interest rates result in increases or decreases in the unrealized value of our derivative positions; and
•: changes in interest rates used to discount liabilities result in higher or lower accretion expense over time.

Where practical, we manage these risks by entering into contractual commitments involving physical or financial settlement that attempt to limit exposure related to future market movements. The timing and extent of our risk management activities are based on a number of factors, including our market outlook, risk tolerance and liquidity. Our risk management activities typically involve the use of the following types of contracts:

•: forward contracts, which commit us to purchase or sell energy commodities in the future;
•: futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument, or to make a cash settlement at a specific price and future date;
•: options, which convey the right to buy or sell a commodity, financial instrument or index at a predetermined price;
•: swaps, which require payments to or from counterparties based upon the differential between two prices or rates for a predetermined contractual (notional) quantity; and
•: structured contracts, which may involve a variety of the above characteristics.

Many of the contracts we use in our risk management activities qualify as derivative financial instruments. A discussion of our accounting policies for derivative instruments is included in Notes 1 and 5 of our "Notes to Consolidated Financial Statements."

Commodity Price Risk

Oil and Natural Gas Derivatives

We attempt to mitigate commodity price risk and stabilize cash flows associated with our forecasted sales of oil and natural gas production through the use of derivative oil and natural gas swaps, basis swaps and option contracts. These contracts impact our earnings as the fair value of these derivatives changes. Our derivatives do not mitigate all of the commodity price risks of our forecasted sales of oil and natural gas production and, as a result, we are subject to commodity price risks on our remaining forecasted production.

Sensitivity Analysis

			Oil and Natural Gas Derivatives

			10 Percent Increase					10 Percent Decrease
	Fair Value		Fair Value		Change			Fair Value		Change
	(in millions)
Price impact(1)	$	460	$	102	$	(358	)	$	814	$	354

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			Oil and Natural Gas Derivatives

			1 Percent Increase					1 Percent Decrease
	Fair Value		Fair Value		Change			Fair Value		Change
	(in millions)
Discount Rate(2)	$	460	$	454	$	(6	)	$	463	$	3
Credit rate(3)	$	460	$	456	$	(5	)	$	465	$	4

(1): Presents the hypothetical sensitivity of our commodity-based price risk management activities to changes in fair values arising from changes in oil and natural gas prices.
(2): Presents the hypothetical sensitivity of our commodity-based price risk management activities to changes in the discount rates we used to determine the fair value of our derivatives.
(3): Presents the hypothetical sensitivity of our commodity-based price risk management activities to changes in credit risk.

Interest Rate Risk

We had $4.25 billion of total debt outstanding at June 30, 2012, of which $1.5 billion under the RBL Facility and our new senior secured term loan was variable rate debt.

Assuming a hypothetical increase in our variable interest rate under our existing debt agreements of 100 basis points, our net income for the six months ended June 30, 2012 would have decreased by $2.0 million. For the year ended December 31, 2011, our net income would have decreased by $3.0 million.

During July 2012, we entered into interest rate swaps on $600 million related to our RBL Facility. These interest rate derivatives start in November 2012 extending through April 2017 and attempt to reduce our variable interest rate exposure.

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BUSINESS

Our Company

We are one of North America's leading independent oil and natural gas producers. We have a large and diverse base of producing assets that provides cash flow to fund the development of our key programs, which at this time are primarily oil-focused. Over the last several years, we have high-graded our future drilling inventory by establishing large acreage positions with repeatable drilling opportunities and more favorable return characteristics. Domestically, we currently operate through three divisions: Central, Eagle Ford and Southern, and have a strategic presence in well-known oil resource areas, including the Eagle Ford Shale, the Altamont Field, the Wolfcamp Shale and South Louisiana Wilcox. Our large and diverse production gas assets include our Haynesville Shale position, substantially all of which is held by production, which gives us a significant presence in unconventional natural gas. We also have a small international presence in Brazil.

Our management team, which has been with us since at least 2007, has an average of 22 years of experience in the oil and gas industry and technical and operating expertise across our geographic regions. Our management team has a track record of identifying, acquiring and developing low-risk, repeatable resource opportunities and has executed a multi-year effort to add assets that fit our competencies. Today, our substantial key program drilling inventory encompasses approximately 4,500 locations and more than 20 years of drilling activity at our current pace. We have operational control over approximately 77% of our producing wells and 88% of our key program drilling inventory as of December 31, 2011. This control has allowed us to continually improve our capital and operating efficiencies. In 2011, we drilled 233 gross wells domestically (182 net) with a success rate of 100%, adding approximately 1,100 Bcfe of proved reserves at a replacement cost of $1.43 per Mcfe, the majority of which was oil.

As of December 31, 2011, we had proved reserves of approximately 4.0 Tcfe with a pre-tax PV-10 of approximately $7 billion (of which approximately 54% of the PV-10 was attributed to proved developed producing reserves). We had 182 MMBbls of proved oil reserves, 19 MMBbls of proved NGL reserves and 2,782 Bcfe of proved natural gas reserves, representing 27%, 3% and 70%, respectively, of our total proved reserves. Given the recent commodity price environment, we have shifted our focus primarily to developing our key oil programs, resulting in 48% of our revenues (excluding realized and unrealized gains on financial derivatives) being contributed by oil and NGLs in the fourth quarter of 2011, versus 34% in the fourth quarter of 2010. Our oil production for the month of December 2011 was approximately 24,000 Bbls/d, which contributed to our approximate 50% year-over-year growth in oil production for the fourth quarter of 2011. We anticipate that approximately 91% of our capital expenditures for 2012 will be allocated to oil-focused key programs. For the six month period ended June 30, 2012, 57% of our revenues (excluding realized and unrealized gains on financial derivatives) were contributed by oil and NGLs, versus 35% during the same period in 2011. For the month of June 2012, our oil production was approximately 27,000 Bbls/d.

For the six months ended June 30, 2012, on a pro forma basis after giving effect to the Acquisition Transactions and the Refinancing Transactions, we generated Adjusted EBITDAX of $655 million on average daily production of 906 MMcfe/d. See "Summary—Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" for our definition of Adjusted EBITDAX and a reconciliation of Adjusted EBITDAX to amounts reported under GAAP.

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The following table provides summary data for each of our areas of operation:

	As of December 31, 2011									As of June 30, 2012

	Proved Reserves (Bcfe)		% Proved Developed			PV-10		Net Acres		Average Daily Production (MMcfe/d)
	(dollars in millions)
United States
Central
Haynesville Shale		903		34	%	$	719		41,000		317
South Louisiana Wilcox		31		48			143		183,000		16
Altamont Field		551		37			1,479		176,000		62
Other Central		1,117		75			998		1,339,000		208
Eagle Ford
Eagle Ford Shale		642		18			2,283		157,000		91
Southern
Wolfcamp Shale		148		12			337		138,000		10
Other Southern(1)		326		94			536		314,000		110

Total United States		3,718		48			6,495		2,348,000		814
International
Brazil		95		100			210		132,000		36
Egypt(2)		—		—			—		774,000		—

Total Consolidated		3,813		50			6,705		3,254,000		850

Unconsolidated Affiliate(3)		174		86			311				56

Total Combined		3,987		51		$	7,016				906

(1): Gulf of Mexico assets were sold in July 2012 and comprised reserves of 90 Bcfe, PV-10 of $150 million, net acres of 233,000 and average daily production of 45 Mcfe/d.
(2): Sold June 2012.
(3): Represents our approximate 49% equity interest in Four Star.

Key Programs

Over the past five years, our strategy has been to focus on areas that offer repeatable drilling programs, enabling us to reduce development costs, and to grow our asset base and inventory size. We have consistently improved the quality and increased the number of our drilling opportunities. During 2011, our principal focus was in the Haynesville Shale, the Eagle Ford Shale, the Wolfcamp Shale, the Altamont Field and South Louisiana Wilcox. We are redeploying the capital allocated to the Haynesville Shale to our oil programs. The technical and operating experience gained from our successful Haynesville program has been employed in our other key programs, including the Eagle Ford Shale.

Haynesville Shale

The initial execution of our strategy was in the Haynesville Shale, where we had existing conventional production as a result of historical development activities in east Texas and north Louisiana. Our operations in the Haynesville Shale are primarily focused in DeSoto Parish and Caddo Parish, Louisiana. We acquired additional leasehold interests through the acquisition of Peoples Energy Production Company in 2007. We piloted horizontally drilled wells in the Haynesville Shale,

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experimenting with different horizontal lateral lengths and fracture stimulation staging, with the objective of delivering optimal capital efficiency, finding costs and returns. High production rates in our Haynesville program combined with very low operating and development costs create competitive returns for us even at low natural gas prices. In addition, our acreage in the Haynesville Shale is predominately held by production, giving us the flexibility to pace our development and optimize our returns. Furthermore, our operations are surrounded by existing infrastructure, providing strong take-away access to markets. As of June 30, 2012, we had 66 net operated wells in this area. During the first quarter of 2012, although we had a very efficient drilling program in the Haynesville Shale, we suspended the program and released all rigs due to low natural gas prices.

Eagle Ford Shale

Beginning in late 2008, we were an early entrant in the Eagle Ford Shale, acquiring our interests through leasehold acquisitions for less than $1,000 per acre on average. Our operations in the Eagle Ford Shale are focused in LaSalle, Dimmit, Atascosa and Webb counties of south Texas. Overall, we hold rights to approximately 157,000 net acres across all Eagle Ford areas, where approximately 77,000 net acres are under development in our central Eagle Ford area. During 2010 and 2011, we improved the efficiency and productivity of our development program, reducing per-well capital costs by approximately 16% and drilling cycle time by more than 35% year over year. Most of our wells have had initial production rates that range from 600 to over 1,000 Boe/d, and our oil production in this area has grown significantly since the beginning of 2011. The Eagle Ford Shale currently provides the highest economic returns in our portfolio. Significant strengths of the Eagle Ford Shale also currently include a multi-year future drilling location inventory, favorable crude oil pricing relative to the WTI index and a newly constructed midstream infrastructure with ample take-away capacity. As a result, the Eagle Ford Shale has become one of our key programs and a contributor to the increase in our oil reserves and production. As of December 31, 2011, we had 1,246 future drilling locations in the Eagle Ford Shale. As of June 30, 2012, we had 98 net operated wells and are currently running four rigs in the Eagle Ford Shale. We plan to add a fifth rig and drill 79 gross wells in 2012 based on our capital budget.

Wolfcamp Shale

In 2009 and 2010, we established a new major oil shale position by successfully leasing approximately 138,000 net acres in the Wolfcamp Shale in the Permian Basin in west Texas. Our operations in the Wolfcamp Shale are focused in Reagan, Crockett, Upton and Irion counties. We were an early entrant in the Wolfcamp Shale, acquiring our interests through leasehold acquisitions for less than $1,500 per acre on average. We have leveraged our technical and operating expertise, and in 2011 advanced our understanding of this area using the same approach and techniques that have allowed us to be successful in the Haynesville and Eagle Ford Shales. As a result, in late 2011, we completed a 7,500 foot lateral well with 25 stages that tested at an initial production rate of 1,369 Boe/d, our highest initial production rate to date. In addition, the Wolfcamp Shale has high oil in place, a multi-year future drilling location inventory and favorable lease owner dynamics with the Texas University Land system as the predominant landowner. As of December 31, 2011, we had 983 future drilling locations in the Wolfcamp Shale. As of June 30, 2012, we had 26 net operated wells and are currently running one rig in the Wolfcamp Shale. We plan to drill 15 gross wells in 2012 based on our capital budget.

Altamont Field

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we received regulatory approval in 2008. The Altamont Field has a multi-year inventory of future drilling locations, giving us a substantial opportunity for growth in oil production. Since our acreage is predominantly held by production, we have greater flexibility to improve both our costs and technical understanding of this area, while also growing returns. As of December 31, 2011, we had 1,336 future drilling locations in the Altamont Field. As of June 30, 2012, we had 307 net operated wells and are currently running two rigs in the Altamont Field. We plan to drill 21 gross wells in 2012 based on our capital budget.

South Louisiana Wilcox

Other Gas Assets

Arklatex/Unconventional

Texas Gulf Coast/Gulf of Mexico

We have significant assets in fields throughout the Texas Gulf Coast. In addition, prior to selling our Gulf of Mexico assets in July 2012, this area included interests in 69 Blocks offshore of the Louisiana, Texas and Alabama coastlines focused on deep targets (greater than 12,000 feet) in relatively shallow water depths (less than 400 feet). In these areas, we licensed over 8,700 square miles of 3D seismic data onshore and over 61,000 square miles of 3D seismic data offshore. As of December 31, 2011, these operations included 314,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 111 MMcfe/d.

Raton Basin

Our operations in the Raton Basin of northern New Mexico and southern Colorado, where we own the minerals beneath the Vermejo Park Ranch, are primarily focused on coal bed methane

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production. As of December 31, 2011, these operations included 606,000 total net acres, and for the six months ended June 30, 2012 we had average daily production of 81 MMcfe/d.

Rocky Mountains

Four Star

2012 Capital Expenditures


2012 Capex Budget $1.5 Billion-$1.6 Billion(1)	Key Drilling Locations(2) 4,498 Locations	2012 Gross Wells Expected to Complete in Key Programs 144 Gross Well

(1): Includes approximately $100 million of capitalized interest, information technology and capitalized direct labor costs.
(2): As of December 31, 2011 (includes PUD locations shown on a risked basis).

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Competitive Strengths

We believe the following strengths provide us with significant competitive advantages:

Large and Diverse Producing Asset Base

Extensive Inventory of Low-Risk Drilling Opportunities

We have established a substantial resource base in unconventional oil plays to supplement our already significant inventory of unconventional natural gas resources. With the addition of the Eagle Ford and Wolfcamp shales, the ongoing development of our Altamont Field and the recent addition of South Louisiana Wilcox, we estimate have more than 20 years of drilling inventory in approximately 4,500 drilling locations across our key programs, 85% of which are located in oil-focused reservoirs. The move to oil-focused reservoirs has allowed us to take advantage of higher oil prices and has improved cash flow through commodity diversity. The development of these assets will generate accelerated growth in oil production and reserves and provide us the flexibility to take advantage of strength in either gas or oil commodity price environments. We expect that the oil composition of our production will continue to increase as we develop our key oil programs over the next several years.

Strong Financial Profile

Low Cost and Efficient Operations

We maintain a significant degree of operational control over our portfolio, operating approximately 77% of our producing wells and 88% of our key program drilling inventory as of December 31, 2011. Our operational efficiency has resulted in leading well cost performance in our key programs. Our three-year average reserve replacement cost of $1.55 per Mcfe ranks among the lowest in our peer group. Based on our operating efficiency, we believe our ability to generate significant cash flow in a variety of commodity price environments is enhanced, especially as our production profile becomes increasingly oil-focused. We have reduced our domestic unit operating costs over the last several years by approximately $0.21 per Mcfe by lowering lifting costs, reducing subsurface, compression and disposal costs and divesting of high cost production areas. From 2007 to 2011, we reduced our unit

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lifting costs by approximately 28%. A lower cost structure should allow us to preserve returns and margins throughout the commodity cycle. Given our proven ability to find and develop reserves economically, we believe we should be able to convert our sizeable drilling portfolio at similar or better rates of return going forward.

High Caliber Management Team with Proven Track Record

Business Strategy

Grow Our Production and Reserves with a Near-Term Focus on Oil

Currently, our primary focus is developing our key oil programs. We have a strategic presence in well-known oil resource areas, including the Eagle Ford Shale, the Altamont Field, the Wolfcamp Shale and South Louisiana Wilcox, and 85% of our key future drilling locations are in oil-focused areas. Our overall oil production volumes grew approximately 58% for the first six months of 2012 compared to the first six months of 2011, and our 2012 capital expenditure budget is heavily weighted toward oil-focused reservoirs, which comprise 91% of our capital expenditures.

Continue to Leverage Technical and Operating Expertise to Develop Repeatable, Low-Risk Plays

Continuously Improve Capital and Operating Efficiency

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returns. We have developed particular expertise as an operator of unconventional oil and natural gas plays. In each of our key programs, we have realized substantial reductions in drilling and completion costs and large improvements in cycle times by applying expertise from prior activities. For example, in the Eagle Ford Shale, we have quickly improved our efficiency and productivity, reducing capital costs by 16% and cycle time by more than 35% since the beginning of 2010.

Maintain Financial Strength and Flexibility

Manage Commodity Price Volatility

Operations

In the U.S., we currently operate through three divisions: Central, Eagle Ford and Southern. During 2011, we focused our activities on our key programs. Over the past few years, we have high-graded our future drilling opportunities through producing property acquisitions, acreage acquisitions and the sale of producing properties that tended to be late in life and without meaningful future drilling opportunities. As a result, our drilling programs are now lower risk, more concentrated, more domestic, more focused on oil and more profitable.

Internationally, our portfolio consists of producing fields along with exploration and development projects in offshore Brazil. Our Brazilian operations are in the Camamu, Espirito Santo and Potiguar basins. Previously we also had exploration activities in Egypt, but our interests were sold in June 2012.

U.S.

Central

The Central division includes operations that have largely been focused on shale gas primarily the Haynesville Shale in north Louisiana and oil and natural gas production from fractured tight sands within the Altamont Field in Utah. Additionally we have tight gas sands production in north Louisiana and east Texas, coal bed methane production in the Black Warrior Basin of Alabama and in the Arkoma Basin of Oklahoma, New Albany Shale production in Indiana and conventional oil production in our South Louisiana Wilcox program. The Central division operations have generally been characterized by lower development costs, higher drilling success rates and longer reserve lives. We have increased our drilling prospects in this division and have grown production in this area for five consecutive years. For the first six months of 2012, daily production for the Central division averaged 603 MMcfe. During 2011, we invested $790 million on capital projects and production averaged 576 MMcfe/d in the Central division.

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Haynesville Shale. In 2011, the Haynesville Shale was our key program in the Central division. It is located in northwest Louisiana and east Texas. Our operations are in the Holly, Bethany Longstreet and Logansport fields. A majority of our acreage is located in a high deliverability part of the play.

We have a history of delivering improved capital performance in the Haynesville Shale. In 2011, our average capital costs per well in Haynesville were $8.9 million, with a best of $7.7 million, as compared to average capital costs of $10.8 million for the first three wells in the location. In addition, our 2011 average cycle time per well was 34 days, with a best of 27 days, as compared to an average cycle time of 52 days for the first three wells in the location.

During 2011, we operated an average of four drilling rigs and invested $409 million in capital expenditures in our Haynesville Shale. Average production for the year ended December 31, 2011 was 265 MMcfe/d compared to 143 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, our properties in the Haynesville Shale included:

•: 41,000 total net acres, including approximately 29,000 undeveloped net acres;
•: 903 Bcfe of estimated net proved reserves; and
•: 93 net producing wells.

We have allocated approximately $96 million in capital expenditures to our Haynesville Shale program in 2012. Although we had a very efficient drilling program in the Haynesville Shale, we shut down the program due to low natural gas prices. We have released all rigs and will redeploy the capital allocated to the Haynesville Shale to our oil programs.

Altamont Field. The Altamont Field is our key program in the Western division. Our focus has been on drilling vertical fractured wells through fractured tight oil sands in the Uinta Basin located in Utah. We have gained operational efficiencies as we have developed the field.

We continue to focus on improving capital performance in the Altamont Field. In 2011, our average cycle time per well was 48 days, with a best of 23 days, as compared to an average cycle time of 66 days for the first three wells in the location. Our average 2011 capital costs per well in Altamont were $6.8 million, with a best of $4.6 million, as compared to average capital costs of $6.6 million for the first three wells in the location.

During 2011, we operated an average of three drilling rigs and invested $173 million in capital expenditures in the Altamont Field. Average production for the year ended December 31, 2011, was 55 MMcfe/d compared to 51 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, our properties in the Altamont Field included:

•: 176,000 total net acres, including approximately 56,000 undeveloped acres;
•: 551 Bcfe of estimated net proved reserves; and
•: 301 net producing wells.

We have allocated approximately $181 million in capital expenditures to the Altamont Field in 2012.

South Louisiana Wilcox. Our South Louisiana Wilcox play is located primarily in Beauregard Parish, Louisiana and is focused on the Wilcox Sands. This is a conventional vertical well play, utilizing 3-D seismic to help with location selection, that produces both oil and natural gas from a series of completed sands.

During 2011, we operated one drilling rig and invested $148 million in capital expenditures in South Louisiana Wilcox. Average production for the year ended December 31, 2011 was 10 MMcfe/d

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compared to 9 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, our properties in South Louisiana Wilcox included:

•: 183,000 total net acres, including approximately 173,000 net undeveloped net acres;
•: 31 Bcfe of estimated net proved reserves; and
•: 13 net producing wells.

We have allocated approximately $121 million in capital expenditures to South Louisiana Wilcox in 2012.

Arlatex/Unconventional. Our Arklatex land positions are primarily focused on tight gas sands production in the Travis Peak/Hosston, Bossier and Cotton Valley formations. Our operations are in the Bear Creek, Vacherie Dome, Holly, Bethany, Longstreet and Bald Prairie fields. Additionally we have shallow coal bed methane producing areas in the Black Warrior Basin in Alabama and the Arkoma Basin in Oklahoma. Our production is from vertical wells in Alabama and horizontal wells in the Hartshorne Coals in Oklahoma. We have high average working interests and long life reserves in these areas. In addition, we have a 50% average working interest covering approximately 46,000 net acres of coal bed methane production operated by Black Warrior Methane Corporation in the Brookwood Field. We also have approximately 200,000 net acres in the New Albany Shale in Indiana. We are the operator of these properties and have a 95% working interest. During 2011, we sold oil and natural gas properties located in the Minden and Blue Creek fields for approximately $204 million. Additionally, we sold our New Albany Shale properties in July of 2012 for $6 million.

We invested $28 million in capital expenditures in these operations in 2011 and have allocated approximately $5 million in capital expenditures in 2012. Average production for the year ended December 31, 2011 was 147 MMcfe/d compared to 185 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, our Arklatex land positions included:

•: 554,000 total net acres, including approximately 351,000 net undeveloped net acres;
•: 554 Bcfe of estimated net proved reserves; and
•: 1,843 net producing wells.

Raton Basin. Our operations in the Raton Basin of northern New Mexico and southern Colorado, where we own the minerals beneath the Vermejo Park Ranch, are primarily focused on coal bed methane production. We invested $30 million in capital expenditures in these operations in 2011 and have allocated approximately $6 million in capital expenditures in 2012. Average production for the year ended December 31, 2011 was 79 MMcfe/d compared to 76 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, these operations included 606,000 total net acres (including approximately 464,000 net undeveloped acres), 552 Bcfe of estimated net proved reserves and 972 operated/net producing wells.

Rocky Mountains. We have a non-operated working interest in the County Line coal bed methane property in Wyoming, with additional non-production acreage in Colorado, Wyoming, North Dakota and Utah. During 2011, we sold our operated oil and natural gas properties located in the Powder River Basin in Wyoming for approximately $346 million. We invested $2 million in capital expenditures in these operations in 2011 and have allocated less than $1 million in capital expenditures in 2012. Average production for the year ended December 31, 2011 was 20 MMcfe/d compared to 33 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, these operations included 179,000 total net acres (including approximately 169,000 net undeveloped acres), 7 Bcfe of estimated net proved reserves and 82 non-operated/net producing wells.

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Eagle Ford

Eagle Ford Shale. The Eagle Ford Shale is located in LaSalle, Webb, Atascosa and Dimmit counties. Our leasing efforts began early in the play in 2008, resulting in a relatively low per acre entry cost. The Eagle Ford central programs are currently the most economic programs in our portfolio, with approximately 50% of our total net acres located in this area.

We have a history of delivering improved capital performance in the Eagle Ford Shale. In 2011, our average capital costs per well in Eagle Ford were $9.6 million, with a best of $7.7 million, as compared to average capital costs of $9.8 million for the first three wells in the location. In addition, our 2011 average cycle time per well was 23 days, with a best of 14 days, as compared to an average cycle time of 38 days for the first three wells in the location.

During 2011, we operated an average of three drilling rigs and invested $626 million in capital expenditures in our Eagle Ford Shale. In late 2011, we also sold oil and natural gas properties located in the Frio county area for approximately $26 million. Average net production for the year ended December 31, 2011 was 40 MMcfe/d compared to 6 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, our properties in the Eagle Ford Shale included:

•: 157,000 total net acres, including approximately 151,000 undeveloped net acres;
•: 642 Bcfe of estimated net proved reserves; and
•: 64 net producing wells.

We have allocated approximately $896 million in capital expenditures to our Eagle Ford Shale program in 2012.

Southern

In our Southern division, our focus has primarily been on developing and exploring for oil and natural gas in unconventional shales and tight gas sands in south and west Texas. These opportunities have been characterized by lower risk, longer life production profiles. Prior to selling our Gulf of Mexico assets in July 2012, our operations in this area were focused on conventional reservoirs characterized by relatively high initial production rates, resulting in higher near-term cash flows and high decline rates. For the first six months of 2012, daily production for the Southern division averaged 120 MMcfe. During 2011, we invested $181 million on capital projects and production averaged 127 MMcfe/d in the Southern division.

Wolfcamp Shale. The Wolfcamp Shale is our key program in the Southern division. It is located in the Permian Basin in Reagan, Crockett, Upton and Irion Counties, Texas. Since 2010, we have grown our position in this area to approximately 138,000 net acres.

During 2011, we operated an average of two drilling rigs and invested $163 million in capital expenditures in our Wolfcamp Shale. Average net production for the year ended December 31, 2011 was 3 MMcfe/d. As of December 31, 2011, our properties in the Wolfcamp Shale included:

•: 138,000 total net acres, including approximately 135,000 undeveloped net acres;
•: 148 Bcfe of estimated net proved reserves; and
•: 14 net producing wells.

We have allocated approximately $204 million in capital expenditures to our Wolfcamp Shale program in 2012.

Texas Gulf Coast/Gulf of Mexico. Our assets in the Texas Gulf Coast include the Renger, Dry Hollow, Brushy Creek and Speaks fields, located in Lavaca County, the Graceland Field, located in

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Colorado County, and the Vicksburg/Frio area, with concentrated and contiguous assets in the Jeffress and Monte Christo fields, primarily in Hidalgo County. These assets also include assets in the Alvarado and Kelsey fields, in Starr and Brooks Counties, and working interests in the Bob West, Jennings Ranch and Roleta fields, located in Zapata County. Other interests in Zapata County include the Bustamante and Las Comitas fields.

Our assets in the Gulf of Mexico area included interests in 69 Blocks south of the Louisiana, Texas and Alabama shoreline focused on deep (greater than 12,000 feet) oil and natural gas reserves in relatively shallow water depths (less than 400 feet). In these areas, we licensed over 8,700 square miles of three dimensional (3D) seismic data onshore and over 61,000 square miles of 3D seismic data offshore.

We invested $18 million in capital expenditures in these operations in 2011 and have allocated approximately $11 million in capital expenditures in 2012. Average production for the year ended December 31, 2011 was 124 MMcfe/d compared to 183 MMcfe/d for the year ended December 31, 2010. As of December 31, 2011, these operations included 314,000 total net acres (including approximately 168,000 net undeveloped acres), 326 Bcfe of estimated net proved reserves and 785 operated/net producing wells. We sold our Gulf of Mexico operations in July of 2012.

Four Star

We have an approximate 49% equity interest in Four Star. Four Star operates in the San Juan, Permian, Hugoton and South Alabama basins and in the Gulf of Mexico. Production is from high quality conventional and CBM assets in several basins. During 2011, our equity interest share of Four Star's daily equivalent natural gas production averaged approximately 61 MMcfe/d.

International

Brazil

Our Brazilian operations cover approximately 132,000 net acres in the Espirito Santo, Potiguar and Camamu basins located in offshore Brazil. During 2011, we invested $19 million on capital projects in Brazil, and production averaged 34 MMcfe/d. As of December 31, 2011, we have total capitalized costs of approximately $205 million attributable to our operations in Brazil. Our operations in each basin are described below:

•: Espirito Santo Basin. We own an approximate 24% working interest in the Camarupim Field. We have four wells producing in the field, and production in the Camarupim Field averaged approximately 27 MMcfe/d in 2011. We also own a 35% working interest in two areas that are under plans of evaluation, originating from the ES-5 block, which are operated by Petrobras. During 2011 we also released approximately $86 million of unevaluated capitalized costs into the Brazilian cost pool related to the ES-5 block upon the completion of our evaluation of exploratory wells drilled in 2009 and 2010 that were not additive to our proved reserves.
•: Potiguar Basin. We own a 35% working interest in the Pescada-Arabaiana fields. Our production from these fields averaged approximately 7 MMcfe/d in 2011.
•: Camamu Basin. We own a 100% working interest in two development areas, the Pinauna and Camarao fields. During 2011, we were informed that our environmental permit request for the Pinauna Field in the Camamu Basin was denied by the Brazilian environmental regulatory agency. As a result, we released $94 million of unevaluated capitalized costs related to this field into the Brazilian full cost pool. We have filed an appeal with respect to the denial of this permit and are awaiting a response with respect thereto.

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We own a 20% interest in two additional blocks in the Camamu Basin, CAL-M-312 and CAL-M-372. During 2011, we relinquished our 18% working interest in the BM-CAL-5 block which is owned by Petrobras, Brazil's state-owned energy company.

Egypt

Prior to the sale of our interests in Egypt in June 2012, we had approximately 774,000 net acres in two blocks located onshore in Egypt's Western Desert. We owned a 60 percent working interest in the South Mariut block, which contained approximately 497,000 net acres and a 50 percent working interest in the South Alamein block, which contained approximately 277,000 net acres. As of December 31, 2011 we had total capitalized costs in Egypt of approximately $74 million.

Key Program Profiles

The following table describes the characteristics of an average well for the respective key areas based on our 2012 capital program and internal engineering estimates (dollars in millions):

	Capital Costs(1)

Eagle Ford Shale, Central	$	8.0 - 8.4	500 - 600	750 - 900	45 - 65	%	92	%	69	%
Wolfcamp Shale		8.0 - 8.4	465 - 510	575 - 675	20 - 30		100		75
Altamont Field		4.6 - 7.7	300 - 450	400 - 600	20 - 40		89		75
South Louisiana Wilcox		6.0 - 7.0	320 - 440	500 - 900	30 - 70		85		64

		Gross Capital Costs(1)			Estimated Gross Ultimate Recovery (Bcfe)(1)			Initial Production (MMcfe/d)(1)(2)			IRR(3)			Average Working Interest			Average Net Revenue Interest

Haynesville Shale, Holly		$	7.9 - 8.3			5.4 - 7.1			15 - 19			12 - 29	%		80	%		67	%

(1): Based on 100% working interest and net revenue interest basis.
(2): Based on initial 24 hours of production.
(3): After tax internal rate of return net to our interest based on $3.50 per MMBtu Henry Hub pricing and $90.00 per Bb1 WTI pricing.

Oil and Gas Properties

Oil and Condensate, Natural Gas and NGL Reserves and Production

The table below presents information about our proved reserves as of December 31, 2011. These reserves are based on our internal reserve report. The reserve data represents only estimates, which are often different from the quantities of oil and natural gas that are ultimately recovered. Certain risks and uncertainties associated with estimating proved oil and natural gas reserves are discussed further in

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"Risk Factors" and elsewhere herein Net proved reserves exclude royalties and interests owned by others and reflect contractual arrangements and royalty obligations in effect at December 31, 2011.

	Net Proved Reserves

			Oil/ Condensate
	Natural Gas				NGLs		Total
	Natural Gas				NGLs		Total						2011 Production (MMcfe)
	(MMcf)		(MBbls)		(MBbls)		(Mmcfe)			(Percent)			2011 Production (MMcfe)
Reserves and Production by Division
Consolidated:
Proved
U.S.
Central		2,176,021		70,995		—		2,601,991			65	%		210,272
Eagle Ford		91,271		82,750		9,092		642,321			16	%		14,550
Southern		298,574		24,056		5,153		473,830			12	%		46,335

Total		2,565,866		177,801		14,245		3,718,142			93	%		271,157
Brazil		81,325		2,269		—		94,942			3	%		12,539

Total Consolidated		2,647,191		180,070		14,245		3,813,084			96	%		283,696

Unconsolidated Affiliate(1)		134,713		1,569		4,908		173,574			4	%		22,052

Total Combined		2,781,904		181,639		19,153		3,986,658			100	%		305,748

Reserves by Classification
Consolidated:
Proved Developed
U.S.		1,488,045		46,797		5,168		1,799,831			47	%
Brazil		81,325		2,269		—		94,942			3	%

Total		1,569,370		49,066		5,168		1,894,773	(2)		50	%

Proved Undeveloped
U.S.		1,077,821		131,004		9,077		1,918,311			50	%
Brazil		—		—		—		—			0	%

Total		1,077,821		131,004		9,077		1,918,311			50	%

Total Consolidated		2,647,191		180,070		14,245		3,813,084	(2)		100	%

Unconsolidated Affiliate:(1)
Proved Developed		116,029		1,520		4,066		149,540			86	%
Proved Undeveloped		18,684		49		842		24,034			14	%

Unconsolidated Affiliate(1)		134,713		1,569		4,908		173,574			100	%

Total Combined		2,781,904		181,639		19,153		3,986,658			100	%

(1): Amounts represent our approximate 49% equity interest in Four Star.
(2): Includes 1,550 Bcfe of proved developed producing reserves representing 41% of consolidated proved reserves and 345 Bcfe of proved developed non-producing reserves representing 9% of consolidated proved reserves at December 31, 2011.

Our consolidated reserves in the table above are consistent with estimates of reserves filed with federal agencies except for differences of less than 5% resulting from actual production, acquisitions, property sales, necessary reserve revisions and additions to reflect actual experience.

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The table below presents proved reserves as reported and sensitivities related to our proved reserves based on differing price scenarios as of December 31, 2011.

		Net Proved Reserves (MMcfe)

As Reported
Consolidated			3,813,084
Unconsolidated Affiliate			173,574

Total Combined			3,986,658

10% increase in commodity prices(1)
Consolidated			3,836,145
Unconsolidated Affiliate			175,991

Total Combined			4,012,136

10% decrease in commodity prices(1)
Consolidated			3,614,145
Unconsolidated Affiliate			170,007

Total Combined			3,784,152

(1): Based on the first day 12-month average U.S. prices of $96.19 per barrel of oil and $4.12 per MMBtu of natural gas used to determine proved reserves at December 31, 2011.

Current natural gas prices are significantly below the 12-month average price used to determine our domestic proved reserves at December 31, 2011. A sustained period of low domestic natural gas prices will over time result in a downward revision of proved reserves and a corresponding reduction in the discounted future net cash flows from our proved reserves.

We employ a technical staff of engineers and geoscientists to perform technical analysis of each undeveloped location. The staff uses industry accepted practices to estimate, with reasonable certainty, the economically producible oil and natural gas. The practices for estimating hydrocarbons in place include, but are not limited to; mapping, seismic interpretation of two-dimensional and/or three-dimensional data, core analysis, mechanical properties of formations, thermal maturity, well logs of existing penetrations, correlation of known penetrations, decline curve analysis of producing locations with significant production history, well testing, static bottom hole testing, flowing bottom hole pressure analysis and pressure and rate transient analysis.

Our primary internal technical person in charge of overseeing our reserves estimates, including the reserves estimate we prepare related to our investment in Four Star, our unconsolidated affiliate, has a B.S. degree in Petroleum Engineering and is a member of the Society of Petroleum Engineers. He is currently responsible for reserve reporting, strategy development, technical excellence and land administration. He has more than 24 years of industry experience in various domestic and international engineering and management roles. For a discussion of the internal controls over our proved reserves estimation process, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates."

Ryder Scott conducted an audit of the estimates of proved reserves prepared by us as of December 31, 2011. In connection with its audit, Ryder Scott reviewed 86% of the properties associated with our total proved reserves on a natural gas equivalent basis, representing 87% of the total discounted future net cash flows of these proved reserves. Ryder Scott also conducted an audit of the estimates we prepared of the proved reserves of Four Star as of December 31, 2011. In connection with the audit of these proved reserves, Ryder Scott reviewed 87% of the properties associated with Four Star's total proved reserves on a natural gas equivalent basis, representing 91% of the total

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discounted future net cash flows. For the reviewed properties, our overall proved reserves estimates are within 10% of Ryder Scott's estimates.

The technical person primarily responsible for overseeing the reserves audit by Ryder Scott has a B.S. degree in mechanical engineering. He is a Licensed Professional Engineer in the State of Texas, a member of the Society of Petroleum Engineers and has more than 20 years of experience in petroleum reserves evaluation.

In general, the volume of production from oil and natural gas properties declines as reserves are depleted. Except to the extent we conduct successful exploration and development activities or acquire additional properties with proved reserves, or both, our proved reserves will decline as they are produced. Recovery of PUD reserves requires significant capital expenditures and successful drilling operations. Our reserve data contained in this prospectus assumes that we can and will make these expenditures and conduct these operations successfully, but future events, including commodity price changes and other events described under "Risk Factors" and elsewhere in this prospectus may cause these assumptions to change. In addition, estimates of PUD reserves and proved non-producing reserves are inherently subject to greater uncertainties than estimates of proved producing reserves.

We currently have 1,474 proved undeveloped drilling locations, of which 575 are in shale plays where we are actively developing reserves. The three shales are Haynesville, Eagle Ford and Wolfcamp. At this time we do not have a developed to undeveloped relationship that is beyond one adjacent offset to a productive well.

We assess our PUD reserves on a quarterly basis. At December 31, 2011, we had 1,918 Bcfe of consolidated PUD reserves representing an increase of 662 Bcfe of PUD reserves compared to December 31, 2010. During 2011, we added 939 Bcfe of PUD reserves primarily due to our drilling activities in the Haynesville Shale in our Central division and the Eagle Ford and Wolfcamp Shales in our Southern division. We had 210 Bcfe of PUD reserves transferred to proved developed reserves and negative revisions of 11 Bcfe related to reserves older than five years as well as 20 Bcfe related to prices and performance. We divested 36 Bcfe PUD reserves from the sales of assets throughout the year in our Central, Southern and Western divisions.

We spent approximately $601 million, $199 million and $186 million, during 2011, 2010 and 2009, respectively, to convert approximately 17% or 210 Bcfe, 11% or 94 Bcfe and 11% or 69 Bcfe, respectively, of our prior year-end PUD reserves to proved developed reserves. In our December 31, 2011 reserve report, the amounts estimated to be spent in 2012, 2013 and 2014 to develop our consolidated worldwide PUD reserves are $1,003 million, $1,009 million and $1,329 million, respectively. The upward trend in the amounts estimated to be spent to develop our PUD reserves is a result of our shift in capital focus to develop our key programs. The amount and timing of these expenditures will depend on a number of factors, including actual drilling results, service costs and commodity prices.

Of the 1,918 Bcfe of PUD reserves at December 31, 2011, we have 49 Bcfe of undeveloped reserves that are outside of our current five-year development plan in the Raton Basin located in northern New Mexico and southern Colorado. These reserves extend beyond the five-year development plan due to pace restrictions established by the surface owner which limits the number of wells drilled annually to a level significantly below the historical levels of wells drilled per year. Additionally, we own the mineral rights on the acreage in the Raton Basin which enables us to develop beyond the five-year window. We have historical and ongoing drilling and development activities in this area, including the drilling of 30 undeveloped locations in 2011 and a 30 to 50 well development program in 2013. There were no new PUD reserves booked to the Raton Basin in 2011, and the undeveloped reserves outside of our current five-year development plan represent less than 5% of the consolidated PUD reserves.

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Acreage and Wells

The following tables detail (i) our interest in developed and undeveloped acreage at December 31, 2011, (ii) our interest in oil and natural gas wells at December 31, 2011 and (iii) our exploratory and development wells drilled during the years 2009 through 2011. Any acreage in which our interest is limited to owned royalty, overriding royalty and other similar interests is excluded.

	Developed				Undeveloped				Total

	Gross(1)		Net(2)		Gross(1)		Net(2)		Gross(1)		Net(2)
Acreage
United States
Central		641,599		496,279		1,570,857		1,242,077		2,212,456		1,738,356
Eagle Ford		6,600		6,552		159,564		150,510		166,164		157,061
Southern		264,304		149,160		343,788		303,049		608,092		452,210

Total United States		912,503		651,991		2,074,209		1,695,636		2,986,712		2,347,627
Brazil		47,377		14,492		458,519		117,344		505,896		131,836
Egypt		—		—		1,382,856		774,195		1,382,856		774,195

Worldwide Total		959,880		666,483		3,915,584		2,587,175		4,875,464		3,253,658

(1): Gross interest reflects the total acreage we participate in regardless of our ownership interest in the acreage.
(2): Net interest is the aggregate of the fractional working interests that we have in the gross acreage.

In the United States, our net developed acreage is concentrated primarily in New Mexico (19%), Utah (18%), the Gulf of Mexico (13%), Texas (12%), Louisiana (11%), Oklahoma (11%) and Alabama (8%). Our net undeveloped acreage is concentrated primarily in New Mexico (26%), Texas (19%), Indiana (11%), Louisiana (10%), the Gulf of Mexico (9%) and Colorado (7%). Approximately 10%, 21% and 10% of our total United States net undeveloped acreage is held under leases that have minimum remaining primary terms expiring in 2012, 2013 and 2014, respectively. Approximately 6% of our total Brazilian net undeveloped acreage is held under leases that have minimum remaining primary terms expiring in 2012. Approximately 13% and 27% of our total Egyptian net undeveloped acreage is held under leases that have minimum remaining primary terms expiring in 2012 and 2013, respectively. We employ various techniques to manage the expiration of leases, including drilling the acreage

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ourselves prior to lease expiration, entering into farm-out agreements with other operators or extending lease terms.

	Natural Gas				Oil				Total				Wells Being Drilled at December 31, 2011(1)

	Gross(2)		Net(3)		Gross(2)		Net(3)		Gross(2)		Net(3)(4)		Gross(2)		Net(3)
Productive Wells
United States
Central		4,468		3,007		436		297		4,904		3,304		20		13
Eagle Ford		4		4		60		60		64		64		16		16
Southern		969		777		47		41		1,016		818		7		7

Total		5,441		3,788		543		398		5,984		4,186		43		36
Brazil		9		2		5		2		14		4		—		—
Egypt		—		—		—		—		—		—		4		2

Worldwide Total		5,450		3,790		548		400		5,998		4,190		47		38

(1): Includes wells that were spud in 2011 or a prior year and have not been completed.
(2): Gross interest reflects the total wells we participated in, regardless of our ownership interest.
(3): Net interest is the aggregate of the fractional working interests that we have in the gross wells or gross wells drilled.
(4): At December 31, 2011, we operated 3,625 of the 4,190 net productive wells.

	Net Exploratory(1)						Net Development(1)

	2011		2010		2009		2011		2010		2009
Wells Drilled
United States
Productive		87		35		61		95		55		69
Dry		—		—		2		—		2		2

Total		87		35		63		95		57		71

Brazil
Productive		—		—		—		—		—		1
Dry		1		—		—		—		—		—

Total		1		—		—		—		—		1

Egypt
Productive		—		—		—		—		—		—
Dry		—		—		2		—		—		—

Total		—		—		2		—		—		—

Worldwide
Productive		87		35		61		95		55		70
Dry		1		—		4		—		2		2

Total		88		35		65		95		57		72

(1): Net interest is the aggregate of the fractional working interests that we have in the gross wells or gross wells drilled.

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The drilling performance above should not be considered indicative of future drilling performance, nor should it be assumed that there is any correlation between the number of productive wells drilled and the amount of oil and natural gas that may ultimately be recovered.

Net Production, Sales Prices, Transportation and Production Costs

The following table details our net production volumes, average sales prices received, average transportation costs and average production costs (including production taxes) associated with the sale of oil and natural gas for each of the years ended December 31:

	2011		2010		2009

Volumes:
Consolidated Net Production Volumes
United States
Natural gas (MMcf)(1)		230,669		215,905		214,718
Oil and condensate (MBbls)(1)		5,680		4,363		3,978
NGL (MBbls)		1,068		1,423		1,570
Total (MMcfe)		271,157		250,621		248,006
Brazil
Natural gas (MMcf)		10,414		9,706		3,826
Oil and condensate (MBbls)		354		384		100
NGL (MBbls)		—		—		—
Total (MMcfe)		12,539		12,010		4,426
Consolidated—Worldwide
Natural gas (MMcf)		241,083		225,611		218,544
Oil and condensate (MBbls)		6,034		4,747		4,078
NGL (MBbls)		1,068		1,423		1,570
Total (MMcfe)		283,696		262,631		252,432
Total (MMcfe/d)		777		720		691
Unconsolidated Affiliate Volumes(2)
Natural gas (MMcf)		16,881		17,165		19,557
Oil and condensate (MBbls)		306		364		419
NGL (MBbls)		556		573		678
Total equivalent volumes (MMcfe)		22,052		22,787		26,139
MMcfe/d		61		62		72
Total Combined Volumes(2)
Natural gas (MMcf)		257,964		242,776		238,101
Oil and condensate (MBbls)		6,340		5,111		4,497
NGL (MBbls)		1,624		1,996		2,248
Total equivalent volumes (MMcfe)		305,748		285,418		278,571
MMcfe/d		838		782		763
Consolidated Prices and Costs per Unit:
Natural Gas Average Realized Sales Price ($/Mcf)
United States
Physical sales	$	3.91	$	4.26	$	3.78
Including financial derivative settlements(3)		5.37		5.71		7.68
Brazil
Physical sales		6.94		5.65		4.84
Including financial derivative settlements(3)		6.94		4.93		4.22
Worldwide
Physical sales		4.04		4.32		3.80
Including financial derivative settlements(3)		5.44		5.67		7.62

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Oil and Condensate Average Realized Sales Price ($/Bbl)
United States
Physical sales	90.22	72.37	52.27
Including financial derivative settlements(3)	88.98	70.52	96.44
Brazil
Physical sales	110.33	78.02	60.88
Including financial derivative settlements(3)	110.33	78.02	60.88
Worldwide
Physical sales	91.40	72.83	52.48
Including financial derivative settlements(3)	90.23	71.13	95.57
NGL Average Realized Sales Price ($/Bbl)
United States
Physical sales	53.50	42.38	33.75
Brazil
Physical sales	—	—	—
Worldwide
Physical sales	53.50	42.38	33.75
Average Transportation Costs
United States
Natural gas ($/Mcf)	0.35	0.31	0.28
Oil and Condensate ($/Bbl)	0.06	0.09	0.06
NGL ($/Bbl)	3.83	3.16	2.61
Worldwide
Natural gas ($/Mcf)	0.33	0.30	0.28
Oil and Condensate ($/Bbl)	0.06	0.08	0.06
NGL ($/Bbl)	3.83	3.16	2.61
Average Production Costs (Lease Operating Expenses ($/Mcfe)
United States	0.65	0.62	0.70
Brazil(4)	3.29	3.07	5.19
Worldwide(4)	0.77	0.73	0.78
Average Production Taxes ($/Mcfe)
United States	0.26	0.21	0.21
Brazil	0.91	0.73	0.68
Worldwide	0.28	0.27	0.22

(1): For the years ended December 31, 2011 and 2010, our Eagle Ford Shale program had natural gas volumes of 1,971 MMcf and 287 MMcf, oil and condensate volumes of 1,690 MMBbls and 177 MMBbls and NGL volumes of 207 MMBbls and 30 MMBbls, respectively. For the years ended December 31, 2011, 2010 and 2009, our Haynesville Shale program, within the Central division, had natural gas volumes of 80,591 MMcf, 42,820 MMcf and 11,223 MMcf, and NGL volumes of less than 2 MMBbls, 2 MMBbls and 1 MMBbls, respectively. The Haynesville Shale program had oil and condensate volumes of less than 1 MMBbls for the year ended December 31, 2011.
(2): Represents our approximate 49% equity interest in the volumes of Four Star.
(3): We had no cash premiums related to oil derivatives settled during the years ended December 31, 2011, 2010 and 2009. Premiums paid in 2009 related to natural gas derivatives settled during the year ended December 31, 2010 were $157 million. Premiums paid related to natural gas derivatives settled during the year ended December 31, 2011 were $23 million. Had we included these premiums in our natural gas average realized prices in 2011 and 2010, our realized price, including financial derivatives settlements, would have decreased by $0.10/Mcf and $0.70/Mcf for the years ended December 31, 2011 and 2010.
(4): Includes approximately $14 million of start-up costs in Camarupim Field in 2009 or $3.08 per Mcfe for Brazil and $0.05 per Mcfe worldwide.

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Acquisition, Development and Exploration Expenditures

The following table details information regarding our capital expenditures in our acquisition, development and exploration activities for each of the years ended December 31:

	2011		2010		2009

United States
Acquisition Costs:
Proved	$	—	$	51	$	87
Unproved		45		269		89
Development Costs		694		276		324
Exploration Costs:
Delay rentals		8		9		5
Seismic acquisition and reprocessing		32		15		27
Drilling		818		576		323
Asset Retirement Obligations		25		7		36

Total full cost pool expenditures		1,622		1,203		891
Non-full cost pool expenditures		18		35		34

Total capital expenditures	$	1,640	$	1,238	$	925

Brazil and Egypt(1)
Acquisition Costs:
Unproved	$	—	$	—	$	51
Development Costs		12		28		118
Exploration Costs:
Seismic acquisition and reprocessing		9		6		3
Drilling		6		52		64
Asset Retirement Obligations		—		—		6

Total full cost pool expenditures		27		86		242
Non-full cost pool expenditures		2		1		4

Total capital expenditures	$	29	$	87	$	246

Worldwide(1)
Acquisition Costs:
Proved	$	—	$	51	$	87
Unproved		45		269		140
Development Costs		706		304		442
Exploration Costs:
Delay rentals		8		9		5
Seismic acquisition and reprocessing		41		21		30
Drilling		824		628		387
Asset Retirement Obligations		25		7		42

Total full cost pool expenditures		1,649		1,289		1,133
Non-full cost pool expenditures		20		36		38

Total capital expenditures	$	1,669	$	1,325	$	1,171

(1): Total capital expenditures for Egypt were $8 million, $20 million and $81 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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Markets and Competition

We primarily sell our domestic oil and natural gas to third parties at spot market prices, subject to customary adjustments. We sell our NGL at market prices under monthly or long-term contracts, subject to customary adjustments. We have a highly experienced marketing team in place and strive to achieve best available pricing for sales from all of our production.

In Brazil, we sell the majority of our oil and natural gas under long-term contracts to Petrobras. These long-term contracts include a gas sales agreement and a condensate sales agreement. The gas sales agreement provides for a price that adjusts quarterly based on a basket of fuel oil prices, while the condensate sales agreement provides for a price that adjusts monthly based on a Brent crude price less a fixed differential that will adjust annually. The gas sales agreement also includes a minimum daily delivery commitment of our natural gas production. The current delivery commitment is approximately 15 MMcf/d and can be modified on an annual basis depending on the production capacity of the subject wells. We do not anticipate being unable to meet the current delivery commitment. We enter into derivative contracts on our oil and natural gas production to stabilize our cash flows, reduce the risk and financial impact of downward commodity price movements and protect the economic assumptions associated with our capital investment programs. For a further discussion of these contracts, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Price Risk Management Activities."

The exploration and production industry is highly competitive in the search for and acquisition of oil and natural gas reserves and in the sale of oil, natural gas and NGL. Our competitors include major and intermediate sized oil and natural gas companies, independent oil and natural gas operators and individual producers or operators with varying scopes of operations and financial resources. Competitive factors include price and contract terms, our ability to access drilling, completion and other equipment and our ability to hire and retain skilled personnel on a timely and cost effective basis. Ultimately, our future success in this business will be dependent on our ability to find or acquire additional reserves at costs that yield acceptable returns on the capital invested.

Regulatory Environment

Our oil and natural gas exploration and production activities are regulated at the federal, state and local levels in the United States and in Brazil. These regulations include, but are not limited to, those governing the drilling and spacing of wells, conservation, forced pooling and protection of correlative rights among interest owners. We are also subject to various governmental safety and environmental regulations in the jurisdictions in which we operate.

Our domestic operations under federal oil and natural gas leases are regulated by the statutes and regulations of the DOI that currently impose liability upon lessees for the cost of environmental impacts resulting from their operations. Royalty obligations on all federal leases are regulated by the Office of Natural Resources Revenue within the DOI, which has promulgated valuation guidelines for the payment of royalties by producers. Our exploration and production operations in Brazil are subject to environmental (and other) regulations administered by the Brazilian government, which include political subdivisions. These domestic and international laws and regulations affect the construction and operation of facilities, water disposal, drilling operations, production and future lease sales.

Hydraulic Fracturing

Hydraulic fracturing is the well stimulation technique we use to maximize productivity of our oil and natural gas wells in many of our domestic basins, including in our Haynesville, Eagle Ford, Wolfcamp, Altamont, South Louisiana Wilcox, Texas Gulf Coast, Raton and Black Warrior operations. We currently do not use hydraulic fracturing in our Arkoma program. Our net acreage position in basins in which hydraulic fracturing is utilized total approximately 2 million acres. Approximately 98%

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of our domestic proved undeveloped oil and natural gas reserves are subject to hydraulic fracturing. During 2011, we incurred costs of approximately $400 million associated with hydraulic fracturing.

Hydraulic fracturing fluid is typically composed of over 99% water and proppant, which is usually sand. The other 1% or less of the fluid is composed of additives that may contain acid, friction reducer, surfactant, gelling agent and scale inhibitor. We retain service companies to conduct such operations and we have worked with several service companies to evaluate, test and, where appropriate, modify our fluid design to reduce the use of chemicals in our fracturing fluid. We have worked closely with our service companies to provide, both voluntarily and under certain states' regulations, disclosure of our hydraulic fracturing fluids through the Groundwater Protection Council's FracFocus web site.

In order to protect surface and groundwater quality during the drilling and completion phases of our operations, we follow applicable industry practices and legal requirements of the applicable state oil and natural gas commissions with regard to well design, including requirements associated with casing steel strength, cement strength and slurry design. Our activities in the field are monitored by state and federal regulators. Key aspects of our field protection measures include: (i) pressure testing well construction and integrity, (ii) casing and cementing practices to ensure pressure management and separation of hydrocarbons from groundwater, and (iii) public disclosure of the contents of hydraulic fracture fluids. In addition to these measures, our drilling, casing and cementing procedures are designed to prevent fluid migration and include the following measures:

•: Our drilling process executes several repeated cycles conducted in sequence—drill, set casing, cement casing and then test casing and cement for integrity before proceeding to the next drilling interval.
•: Conductor casing is drilled and cemented or driven in place. This string serves as the structural foundation for the well. Conductor casing is not necessary or required for all wells.
•: Surface casing is set within the conductor casing and is cemented in place. Surface casing is set for all wells. The purpose of the surface casing is to contain wellbore fluids and pressure and protect Underground Sources of Drinking Water ("USDW") as identified by federal and state regulatory bodies. The surface casing and cement isolates wellbore materials from any potential USDW contact.
•: Intermediate casing is set through the surface casing to a depth necessary to isolate abnormally pressured subsurface formations from normally pressured formations. Intermediate casing is not necessary or required for all wells. Our standard practices include (a) cementing above any hydrocarbon bearing zone and (b) performing casing pressure and other tests to verify the integrity of the casing and cement.
•: Production casing is set through the surface and intermediate through the depth of the targeted producing formation. Our standard practices include (a) pumping cement above the confining structure of the target zone and (b) performing casing pressure tests and other tests to verify the integrity of the casing and cement. If any problems are detected, then appropriate remedial action is taken to ensure wellbore integrity.
•: With the casing set and cemented, a barrier of steel and cement is in place that is designed to isolate the wellbore from surrounding geologic formations. As designed, this barrier mitigates against the risk of drilling or fracturing fluids entering potential sources of drinking water.

In addition to the required use of casing and cement in the well construction, we follow additional regulatory requirements and industry operating practices. These typically include (i) pressure testing of casing and surface equipment, (ii) continuous monitoring of surface pressure, pumping rates, volumes of fluids and chemical concentrations, and (iii) continuous monitoring of well pressure during hydraulic fracturing operations. When any pressure differential outside the normal range of operations occurs,

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the pumps are promptly shut off until the cause of the pressure differential is identified and any required remedial measures are completed. Hydraulic fracturing fluid is delivered to our sites in accordance with Department of Transportation ("DOT") regulations in DOT approved shipping containers using DOT transporters.

We also have procedures to address water use and disposal. This includes evaluating surface and groundwater sources, commercial sources, and potential recycling and reuse of treated water sources. When commercially and technically feasible, we use recycled or treated water. This practice helps mitigate against potential adverse impacts to other water supply sources. When using raw surface or groundwater, we obtain all required water rights or compensate owners for water consumption. We are evaluating additional treatment capability to augment future water supplies at several of our sites. During our drilling operations, we manage waste water to minimize risks and costs. Frac water or flowback water returned to the surface is typically contained in steel tanks or pits. Water that is not treated for reuse is usually piped or trucked to waste disposal injection wells, many of which we own and operate. These wells are permitted through the Underground Injection Control ("UIC") program of the Safe Drinking Water Act. We also use commercial injection facilities for frac fluid disposal, which typically dispose of the frac fluids in permitted injection disposal wells. In Alabama, we operate a water treatment disposal facility with a permitted surface discharge. This facility is regulated under the National Pollutant Discharge Elimination System (the "NPDES") program.

We have not received regulatory citations or notice of suits related to our hydraulic fracturing operations for environmental concerns. We have experienced no material incidents of surface spills of fluids associated with hydraulic fracturing. Consistent with local, state and federal requirements, any releases were reported to appropriate regulatory agencies and site restoration was completed. No remediation reserve has been identified or anticipated as a result of these incidents.

Spill Prevention/Response Procedures

There are various state and federal regulations that are designed to prevent and respond to any spills or leaks resulting from exploration and production activities. In this regard, we maintain spill prevention control and countermeasures programs, which frequently include the installation and maintenance of spill containment devices designed to contain spill materials on location. In addition, we maintain emergency response plans to minimize potential environmental impacts in the event of a spill or leak or any material hydraulic fracturing well control issue.

We conduct annual training and drills for various upset scenarios. To augment our internal capability, we retain the services of vendors to assist our spill management team to the extent that we experience any prolonged and significant incidents. We also maintain contractual agreements and memberships with additional oil spill and emergency service providers and co-ops for equipment, response personnel, dispersant and aircraft, vessels, wildlife rehabilitation, and shoreline protection and cleanup.

We have an emergency response plan to address any material well control or asset issue in our onshore operations. We retain the services of experienced vendors to assist in the management of any material well control issues that might arise. Pursuant to our emergency response plan, after any well control issue is abated, we will initiate cleanup and restoration work.

Despite the existence of our procedures and plans, there is a risk that we could experience well control problems in our onshore operations. As a result, we could be exposed to regulatory fines and penalties, as well as landowner lawsuits resulting from any spills or leaks that might occur. We do not maintain insurance to cover all possible risks of loss. However, we expect to maintain liability and property damage insurance at levels customary in our industry.

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In addition, we might have remedies against our contractors or vendors or our joint working interest owners with respect to any losses associated with unintended spills or leaks. For example, we typically have indemnity provisions in our service agreements with our contractors. Liability under such agreements is typically allocated such that we and our contractors assume liability for our respective personnel and property, regardless of how the loss or damage to the personnel and property may have been caused. As a result, typically our contractors are required to indemnify us for any pollution originating from facilities or equipment in their control and custody above the surface of the land. In turn, we typically indemnify our contractors for any pollution originating below the surface of the land, including resulting from fire, blowout, cratering, seepage or other uncontrolled flow of oil, gas, water, drilling fluid or other fluids and materials from wells, except to the extent caused by a contractor's willful misconduct. Under our joint operating agreements with other working interest owners, each working interest owner is responsible for its working interest share of any liabilities arising out of joint operations, except generally in cases of gross negligence or willful misconduct by the operator.

To the extent that our well control issues might result in any injuries or fatalities, in addition to the potential insurance coverages mentioned above, we might have certain remedies against our contractors or working interest owners. Similar to property damage, our contractors assume responsibility for injury or death of their personnel arising in connection with activities conducted at our wellsites and other worksites, and our contractors are required to maintain appropriate levels of insurance against such liabilities. In addition, while we generally operate most of our properties, including jointly owned properties, in those instances where we are a non-operating party, each working interest owner in a property is required to bear its working interest share of any liability to a third party arising from such operations, and we generally would be entitled to indemnity from the operator only to the extent that we bore a disproportionate amount of the liability (in which case, we could look to the operator and any other non-operators for indemnity in respect of that portion of the liability borne by us in excess of our working interest share) or if the liability was caused by the operator's gross negligence or willful misconduct.

Legal Proceedings

We are named defendants in numerous legal proceedings that arise in the ordinary course of our business. There are also other regulatory rules and orders in various stages of adoption, review and/or implementation. For each of these matters, we evaluate the merits of the case or claim, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be estimated, we establish the necessary accruals. While the outcome of these matters cannot be predicted with certainty, and there are still uncertainties related to the costs we may incur, based upon our evaluation and experience to date, we believe we have established appropriate reserves. It is possible, however, that new information or future developments could require us to reassess our potential exposure related to these matters and adjust our accruals accordingly, and these adjustments could be material. As of June 30, 2012, we had approximately $23 million accrued for all outstanding legal proceedings and other contingent matters, including $22 million of sales tax reserves.

Sales Tax Audits. As a result of sales and use tax audits during 2010, the State of Texas has asserted additional taxes plus penalties and interest for the audit period 2001-2008 for two of our operating entities. We believe amounts reserved are adequate. We are currently contesting the assessments and the ultimate outcomes are still uncertain. We are indemnified by KMI if and to the extent the ultimate outcomes exceed the reserves. During the period ending June 30, 2012, the Louisiana audit was settled.

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Environmental

We are subject to existing federal, state and local laws and regulations governing environmental quality, pollution control and greenhouse gas (GHG) emissions. The environmental laws and regulations to which we are subject also require us to remove or remedy the effect on the environment of the disposal or release of specified substances at current and former operating sites. As of June 30, 2012, we had accrued less than $1 million for related environmental remediation costs associated with onsite, offsite and groundwater technical studies and for related environmental legal costs. Our accrual represents a combination of two estimation methodologies. First, where the most likely outcome can be reasonably estimated, that cost has been accrued. Second, where the most likely outcome cannot be estimated, a range of costs is established and if no one amount in that range is more likely than any other, the lower end of the expected range has been accrued. Our exposure could be as high as $1 million. Our environmental remediation projects are in various stages of completion. The liabilities we have recorded reflect our current estimates of amounts that we will expend to remediate these sites. However, depending on the stage of completion or assessment, the ultimate extent of contamination or remediation required may not be known. As additional assessments occur or remediation efforts continue, we may incur additional liabilities.

Climate Change and Other Emissions. The Environmental Protection Agency (EPA) and several state environmental agencies have adopted regulations to regulate GHG emissions. Although the EPA has adopted a tailoring rule to regulate GHG emissions, it is not expected to materially impact our existing operations until 2016. Any regulations regulating GHG emissions would likely increase our costs of compliance by potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric-driven compression at facilities to obtain regulatory permits and approvals in a timely manner.

Air Quality Regulations. In August 2010, the EPA finalized a rule that impacts emissions of hazardous air pollutants from reciprocating internal combustion engines and requires us to install emission controls on engines across our operations. Engines subject to the regulations have to be in compliance by October 2013. We plan to execute the required modifications and testing in 2013. Our current estimated impact is approximately $3 million in capital expenditures in 2013. On August 16, 2012 EPA published regulations in the Federal Register pursuant to the federal Clean Air Act to reduce various air pollutants from the oil and natural gas industry. These regulations will limit emissions from the hydraulic fracturing of certain natural gas wells and from certain equipment including compressors, storage vessels and natural gas processing plants. These regulations require reduction of flowback emissions from gas wells effective October 15, 2012 and use of "green completions" effective January 1, 2015. We are still evaluating the regulations and their impact on our operations and our financial results.

Hydraulic Fracturing Regulations. We use hydraulic fracturing extensively in our operations. Various regulations have been adopted and proposed at the federal, state and local levels to regulate hydraulic fracturing operations. These regulations range from banning or substantially limiting hydraulic fracturing operations, requiring disclosure of the hydraulic fracturing fluids and requiring additional permits for the use, recycling and disposal of water used in such operations. At this time no adopted regulations have imposed a material impact on our hydraulic fracturing operations. In addition, various agencies, including the EPA, the Department of Interior and Department of Energy are reviewing changes in their regulations to address the environmental impacts of hydraulic fracturing operations. Until such regulations are implemented, it is uncertain what impact they might have on our operations.

Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") Matters. As part of our environmental remediation projects, we are or have received notice that we could be designated as a Potentially Responsible Party ("PRP") with respect to one active site under the

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CERCLA or state equivalents. As of June 30, 2012, we have estimated our share of the remediation costs at this site to be less than $1 million. Because the clean-up costs are estimates and are subject to revision as more information becomes available about the extent of remediation required, and in some cases we have asserted a defense to any liability, our estimates could change. Moreover, liability under the federal CERCLA statute may be joint and several, meaning that we could be required to pay in excess of our pro rata share of remediation costs. Our understanding of the financial strength of other PRPs has been considered, where appropriate, in estimating our liabilities. Accruals for these matters are included in the environmental reserve discussed above.

It is possible that new information or future developments could require us to reassess our potential exposure related to environmental matters. We may incur significant costs and liabilities in order to comply with existing environmental laws and regulations. It is also possible that other developments, such as increasingly strict environmental laws, regulations, and orders of regulatory agencies, as well as claims for damages to property and the environment or injuries to employees and other persons resulting from our current or past operations, could result in substantial costs and liabilities in the future. As this information becomes available, or other relevant developments occur, we will adjust our accrual amounts accordingly. While there are still uncertainties related to the ultimate costs we may incur, based upon our evaluation and experience to date, we believe our reserves are adequate.

Employees

At September 5, 2012, we had 1,076 full-time employees, of which 63 employees are covered by collective bargaining agreements.

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MANAGEMENT

The following table provides information regarding the executive officers of the Issuer and the members of the board of managers of Parent (the "Board"), as of September 10, 2012. The supervision of the Issuer's management and the general course of its affairs and business operations is entrusted to the Board, which currently consists of nine members.

Name		Position(s)

Brent J. Smolik	51	President, Chief Executive Officer and Manager
Clayton A. Carrell	46	Executive Vice President and Chief Operating Officer
Joan M. Gallagher	48	Senior Vice President, Human Resources and Administrative Services
John D. Jensen	43	Executive Vice President, Operations Services
Dane E. Whitehead	51	Executive Vice President and Chief Financial Officer
Marguerite N. Woung-Chapman	47	Senior Vice President, General Counsel and Corporate Secretary
Gregory A. Beard	40	Manager
Joshua J. Harris	47	Manager
Chang-Seok Jeong	53	Manager
Pierre F. Lapeyre, Jr.	49	Manager
David Leuschen	60	Manager
Sam Oh	42	Manager
Donald A. Wagner	49	Manager
Rakesh Wilson	37	Manager

Brent J. Smolik became our President and Chief Executive Officer and a manager of Parent in May 2012 upon the consummation of the Acquisition. He was previously Executive Vice President and Member of the Executive Committee of El Paso Corporation and President of our predecessor since November 2006. Mr. Smolik was President of ConocoPhillips Canada from April 2006 to October 2006. Prior to the Burlington Resources merger with ConocoPhillips, he was President of Burlington Resources Canada from September 2004 to March 2006. From 1990 to 2004, Mr. Smolik worked in various engineering and asset management capacities for Burlington Resources Inc., including the Chief Engineering role from 2000 to 2004. He was a member of Burlington Executive Committee from 2001 to 2006. Mr. Smolik also serves on the boards of the American Exploration and Production Council, America's Natural Gas Alliance and the Independent Petroleum Association of America.

Clayton A. Carrell became our Executive Vice President and Chief Operating Officer in May 2012 upon the consummation of the Acquisition. He was previously Senior Vice President, Chief Engineer of our predecessor since June 2010. Mr. Carrell joined El Paso Corporation in March 2007 as Vice President, Texas Gulf Coast Division. Prior to that, he was Vice President, Engineering & Operations at Peoples Energy Production from February 2001 to March 2007. Prior to joining Peoples Energy Production, Mr. Carrell worked at Burlington Resources and ARCO Oil and Gas Company from May 1988 to February 2001 in various domestic and international engineering and management roles. He serves on the Industry Board of the Texas A&M Petroleum Engineering Department, is a member of the Society of Petroleum Engineers and a Board Member of the US Oil & Gas Association.

Joan M. Gallagher became our Senior Vice President, Human Resources and Administrative Services in May 2012 upon the consummation of the Acquisition. She was previously Vice President, Human Resources of El Paso Corporation since March 2011. From August 2005 until February 2011, she served as Vice President, Human Resources of our predecessor. In that capacity, Ms. Gallagher had HR responsibility for our predecessor's exploration and production business unit and from January 2010 to February 2011, she had added HR responsibilities for shared services and midstream. Prior to

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2005, Ms. Gallagher served as Vice President and Chief Administrative Officer of Torch Energy Advisors Incorporated.

John D. Jensen became our Executive Vice President, Operations Services in May 2012 upon the consummation of the Acquisition. He was previously Senior Vice President, Operations of our predecessor since June 2010. From May 2009 until May 2010 he served as Vice President of Operations of our predecessor. Mr. Jensen previously served as Vice President, Strategy and Engineering from April 2007 to May 2009. Prior to joining our predecessor, Mr. Jensen served as Vice President, Business Development and Strategic Planning for ConocoPhillips Canada from June 2005 to March 2007. In addition, he held various positions in upstream and midstream engineering, planning, and business development at ConocoPhillips starting in July 1990. He is a board member of the Texas Oil and Gas Association and a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.

Dane E. Whitehead became our Executive Vice President and Chief Financial Officer in May 2012 upon the consummation of the Acquisition. He was previously Senior Vice President of Strategy and Enterprise Business Development and a member of the Executive Committee of El Paso Corporation since October 2009. He previously served as Senior Vice President and Chief Financial Officer of our predecessor from May 2006 to October 2009. He was the Vice President and Controller of Burlington Resources Inc. from June 2005 to March 2006. From January 2002 to May 2005 he was Senior Vice President and Chief Financial Officer of Burlington Resources Canada. He was a member of the Burlington Resources Executive Committee from 2000 to 2006. From 1984 to 1993, Mr. Whitehead was an independent accountant with Coopers and Lybrand. He is a member of the American Institute of Certified Public Accountants.

Marguerite N. Woung-Chapman became our Senior Vice President, General Counsel and Corporate Secretary in May 2012 upon the consummation of the Acquisition. She was previously Vice President, Legal Shared Services, Corporate Secretary and Chief Governance Officer of El Paso Corporation since November 2009. Ms. Woung-Chapman was Vice President, Chief Governance Officer and Corporate Secretary at El Paso Corporation from May 2007 to November 2009 and from May 2006 to May 2007 served as General Counsel and Vice President of Rates and Regulatory Affairs for El Paso Corporation's Eastern Pipeline Group. She served as General Counsel of El Paso Corporation's Eastern Pipeline Group from April 2004 to May 2006. Ms. Woung-Chapman served as Vice President and Associate General Counsel of El Paso Merchant Energy from July 2003 to April 2004. Prior to that time, she held various legal positions with El Paso Corporation and Tenneco Energy starting in 1991.

Gregory A. Beard became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Beard joined Apollo Management in 2010 as the Global Head of Natural Resources, based in the New York office. Mr. Beard joined Apollo Management with 17 years of investment experience, the last ten years with Riverstone Holdings where he was a founding member, Managing Director and lead deal partner in many of the firm's top oil and gas and energy service investments. While at Riverstone, Mr. Beard was involved in all aspects of the investment process including sourcing, structuring, monitoring and exiting transactions. Mr. Beard began his career as a Financial Analyst at Goldman Sachs, where he played an active role in that firm's energy-sector principal investment activities. Mr. Beard has served on the board of directors of many oil and gas companies including Athlon Energy, Belden & Blake Corporation, Canera Resources, Cobalt International Energy, Eagle Energy, Legend Natural Gas I - IV, Mariner Energy, Phoenix Exploration, Titan Operating, and Vantage Energy. Mr. Beard has served on the Board of various oilfield services companies, including CDM Max, CDM Resource Management, and International Logging. Mr. Beard received his BA from the University of Illinois at Urbana.

Joshua J. Harris became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Harris is a Senior Managing Director of Apollo Global Management, LLC and

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Managing Partner of Apollo Management, L.P., which he co-founded in 1990. Prior to 1990, Mr. Harris was a member of the Mergers and Acquisitions Group of Drexel Burnham Lambert Incorporated. Mr. Harris currently serves on the boards of directors of Apollo Global Management, LLC, Berry Plastics Group Inc., LyondellBasell Industries, CEVA Group plc, Momentive Performance Materials and the holding company for Alcan Engineered Products and is the Managing Partner of the Philadelphia 76ers. Mr. Harris has previously served on the boards of directors of Verso Paper, Metals USA, Nalco, Allied Waste Industries, Pacer International, General Nutrition Centers, Furniture Brands International, Compass Minerals Group, Alliance Imaging, NRT Inc., Covalence Specialty Materials, United Agri Products, Quality Distribution, Whitmire Distribution, and Noranda Aluminum. Mr. Harris is actively involved in charitable and political organizations. Mr. Harris graduated summa cum laude and Beta Gamma Sigma from the University of Pennsylvania's Wharton School of Business with a Bachelor of Science degree in Economics and received his MBA from the Harvard Business School, where he graduated as a Baker and Loeb Scholar.

Chang-Seok Jeong became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Jeong joined KNOC in 1986. He is currently Executive Vice President for the America Group of KNOC. Prior to this role, Mr. Jeong was Managing Director of KNOC Vietnam. Before this, Mr. Jeong was Vice President of KNOC's Asia Production Department and Senior Manager of the New Ventures team. Mr. Jeong received his bachelor degree in Petroleum & Mining Engineering from Seoul National University, a master degree in Petroleum Engineering from Seoul National University and a PhD ABD in Petroleum Engineering from Seoul National University.

David Leuschen became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Leuschen is a founder and Senior Managing Director of Riverstone. Prior to co-founding Riverstone, Mr. Leuschen was a Partner and Managing Director at Goldman, Sachs & Co. and founder and head of the Goldman, Sachs & Co. Global Energy & Power Group. Mr. Leuschen joined Goldman, Sachs & Co. in 1977 and became head of the Global Energy & Power Group in 1985 and a Partner in 1986. He remained with Goldman, Sachs & Co. until leaving to found Riverstone. Mr. Leuschen has served as a director of Cambridge Energy Research Associates, Cross Timbers Oil Company (predecessor to XTO Energy), J. Aron Resources, Mega Energy, Inc. and Natural Meats Montana. He currently serves on the boards of directors of Legend Natural Gas, Dynamic Industries, Canera Resources and Titan Operating. He is also president of Switchback Ranch LLC and has served on a number of non-profit boards of directors. Mr. Leuschen received his Bachelor of Arts from Dartmouth and his Master of Business Administration from Dartmouth's Amos Tuck School of Business.

Pierre F. Lapeyre, Jr. became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Lapeyre is a founder and Senior Managing Director of Riverstone. Prior to co-founding Riverstone, Mr. Lapeyre was a Managing Director at Goldman, Sachs & Co. in its Global Energy & Power Group. Mr. Lapeyre joined Goldman, Sachs & Co. in 1986 and spent his 14-year investment banking career focused on energy and power, particularly the midstream/pipeline and oil service sectors. Mr. Lapeyre's responsibilities included client coverage and leading the execution of a wide variety of mergers and acquisitions, initial public offerings, strategic advisory and capital markets financings for clients across all sectors of the industry. Mr. Lapeyre serves on the boards of directors of Legend Natural Gas, Titan Specialties, Dynamic Industries, Titan Operating, Three Rivers and Quorum Technologies. Mr. Lapeyre received his Bachelor of Science in Finance and Economics from the University of Kentucky and his Master of Business Administration from the University of North Carolina at Chapel Hill.

Sam Oh became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Oh joined Apollo Management in 2008. He is a Senior Partner and one of the original founding members of Apollo's Natural Resources Group. Prior to that time, Mr. Oh was with Morgan Stanley's Commodities Department where he led principal investments for the group. While at Morgan Stanley,

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Mr. Oh launched a successful oil and gas fund, Helios Energy/Royalty Partners, and sat on the board of several portfolio companies. Mr. Oh has 18 years of experience, including 13 years of principal investing. He also has a broad range of experience in the commodities markets including risk management and structured products. Since joining Apollo Management, Mr. Oh has been actively involved in Apollo's E&P investments, including leading the Parallel Petroleum acquisition in 2009. Mr. Oh was formerly Chairman of the Board of Parallel Petroleum and is a Director of Athlon Energy. Mr. Oh received a BS from the University of Pennsylvania's Wharton School of Business and an MBA from the Yale School of Management. He is also a Certified Public Accountant and a Chartered Financial Analyst.

Donald A. Wagner became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Wagner is a Managing Director of Access Industries, having been with Access since 2010. He is responsible for sourcing and executing new investment opportunities in North America, and he oversees Access' current North American investments. From 2000 to 2009, Mr. Wagner was a Senior Managing Director of Ripplewood Holdings L.L.C., responsible for investments in several areas and heading the industry group focused on investments in basic industries. Previously, Mr. Wagner was a Managing Director of Lazard Freres & Co. LLC and had a 15-year career at that firm and its affiliates in New York and London. He is a board member of Access portfolio companies Warner Music Group and Boomerang Tube and was on the board of NYSE-listed RSC Holdings from November 2006 until August 2009. Mr. Wagner graduated summa cum laude with an A.B. in physics from Harvard College.

Rakesh Wilson became a manager of the Parent in May 2012 upon the consummation of the Acquisition. Mr. Wilson joined Apollo Management in 2009, where he is currently a senior member of the natural resources team. Prior to joining Apollo Management, Mr. Wilson was at Morgan Stanley's Commodities Department in the principal investing group responsible for generating, evaluating and executing investment ideas across the energy sector with deals including Wellbore Capital and Helios Energy/Royalty Partners. Mr. Wilson began his career at Goldman Sachs in equity research and then moved to its investment banking division in New York and Asia. Mr. Wilson currently serves on the boards of directors of Athlon Energy and Talos Energy and previously served as a director of Parallel Petroleum. Mr. Wilson graduated from the University of Texas at Austin and received his MBA from INSEAD, Fontainebleau, France. He has also taught business courses at universities in China.

Committees of the Board of Managers

Audit Committee. The Audit Committee consists of seven members: Messrs. Oh (as Chairman), Beard, Harris, Jeong, Lapeyre, Wagner and Wilson. In light of our status as a privately-held company and the absence of a public trading market for our common stock, there are no requirements that we have an independent audit committee and our Board has not designated any member of the Audit Committee as an "audit committee financial expert".

Compensation Committee. The Compensation Committee consists of seven members: Messrs. Oh (as Chairman), Beard, Harris, Jeong, Leuschen, Wagner and Wilson. The Compensation Committee is responsible for formulating, evaluating and approving the compensation and employment arrangements of the senior officers of the Issuer.

Budget Committee. The Budget Committee consists of two members: Messrs. Lapeyre and Oh. The Budget Committee is responsible for authorizing certain capital expenditures, acquisitions and dispositions by the Issuer and its subsidiaries.

Code of Ethics

We have adopted a code of ethics, referred to as our "Code of Conduct," that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer and senior financial and accounting officers. In addition to other matters, our Code of Conduct establishes policies to deter

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wrongdoing and to promote honest and ethical conduct. A copy of our Code of Conduct is available on our website at www.epenergy.com .

Executive Compensation

Compensation Discussion and Analysis

The following compensation discussion and analysis, or CD&A , provides information relevant to understanding the 2011 compensation of the executive officers identified in the Summary Compensation Table below, who we refer to as our named executive officers. They include our Chief Executive Officer, Mr. Brent J. Smolik, our Chief Financial Officer, Mr. Dane E. Whitehead, and our other three most highly compensated executive officers, Mr. Clayton A. Carrell, Mr. John D. Jensen, and Ms. Marguerite N. Woung-Chapman. Unless otherwise noted, the information provided in this CD&A reflects compensation earned by our named executive officers while employed by El Paso Corporation ("El Paso") pursuant to the design and objectives of El Paso's executive compensation programs in place prior to the closing of the sale of EP Energy to EPE Acquisition, LLC in May 2012. All executive compensation decisions for our named executive officers prior to the sale were made by El Paso, and to the extent applicable, the Compensation Committee of El Paso's Board of Directors ("El Paso's Compensation Committee"), and relate to the positions that such executives held at El Paso prior to the sale. Executive compensation decisions following the closing of the sale are made by the compensation committee of the board of our parent company, EPE Acquisition, LLC, and relate to the current positions the officers hold as executive officers of EP Energy. The discussion is divided into the following sections:

•: El Paso's Compensation Program Design and Approval Process
•: 2011 Compensation Decisions
•: Impact of EP Energy Sale and El Paso Merger on NEO Compensation
•: Executive Compensation Programs at EP Energy

El Paso's Compensation Program Design and Approval Process

Program Design

The core of our El Paso's 2011 executive compensation program was pay for performance. A significant portion of each of our named executive's total annual compensation was at risk and dependent upon El Paso's achievement of specific, measurable performance goals. The framework of El Paso's 2011 executive compensation program is set forth below:

•: total annual compensation included three principal elements: base salary, performance-based annual cash incentive awards, and long-term equity-based incentives;
•: El Paso's cash-based annual incentives were tied to specific pre-established financial, operational and safety performance goals; and
•: 2011 long-term incentive grants included stock options, time-vested restricted stock awards, and performance shares.

Role of El Paso's Compensation Committee

El Paso's Compensation Committee had primary responsibility for determining and approving, on an annual basis, the total compensation level of El Paso's senior officers who were subject to Section 16(a) of the Exchange Act, which included Messrs. Smolik and Whitehead. El Paso's Compensation Committee received information and advice from its compensation consultant as well as from El Paso's human resources department and management to assist in compensation determinations.

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Management of El Paso was responsible for determining and approving the total compensation level of officers who were not subject to Section 16(a) of the Exchange Act, which included Messrs. Carrell and Jensen and Ms. Woung-Chapman.

Compensation Consultant

El Paso's Compensation Committee retained Deloitte Consulting as its independent compensation consultant. Deloitte advised the committee on an ongoing basis with regard to the general competitive landscape and trends in compensation and executive and director compensation matters, including (i) competitive benchmarking, (ii) incentive plan design, (iii) performance metrics testing, (iv) peer group selection, (v) compensation risk-management, and (vi) updates on best-practices and trends in executive and director compensation.

2011 Compensation Decisions

2011 Annual Base Salaries and 2011 Target Bonus Opportunities

Our named executive officers received base salary adjustments in early 2011. Salary increases were generally between 3% and 6%. In each situation, the salary increases were made to align with market competitive levels and reflect individual contributions. No adjustments were made to the named executive officers' 2011 target bonus opportunities. These target bonus opportunities relate to the positions each of our named executive officers held with El Paso during 2011 and were derived in part from peer group and competitive survey benchmarking data and in part by the judgment of El Paso's Compensation Committee and management on the internal equity of the positions, scope of job responsibilities and the executives' industry experience and tenure. The following table sets forth the base salaries and annual target bonus opportunities for our named executive officers for 2011.

Annual Base Salaries and
Target Bonus Opportunities

Name

Brent J. Smolik	600,000	90	%
Dane E. Whitehead	406,008	60	%
Clayton A. Carrell	336,000	45	%
John D. Jensen	336,000	45	%
Marguerite N. Woung-Chapman	295,488	35	%

(1): Base salary increases were effective as of April 1, 2011.

Annual Cash Incentive Awards for 2011 Performance

Performance Goals. At the beginning of 2011, El Paso's Compensation Committee approved corporate and business unit financial and non-financial performance goals. El Paso's 2011 corporate financial goals, which were the primary goals used in determining the 2011 annual incentive bonuses for

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our named executive officers, are set forth below, including adjusted year-end results. For purposes of the performance goals, the reference to "MM" means million.

	2011 Goals

Corporate Financial Goals	Threshold	Target	Maximum	2011 Results	Weighting
Earnings Per Share	$0.84	$0.96	$1.08	$0.94		35	%
Segment EBITDA	$3,260 MM	$3,361 MM	$3,505 MM	$3,363 MM		35	%
Return on Total Capital	6.6%	7.1%	7.5%	7.1%		15	%
Debt (net of cash)	$13,200 MM	$12,700 MM	$12,400 MM	$12,381 MM		15	%

The corporate financial goals were set in alignment with El Paso's 2011 strategic plan. In making the determination of the threshold, target and maximum levels, El Paso's Compensation Committee considered the specific circumstances expected to be faced by El Paso and its business units in 2011. The threshold levels represent reasonably achievable goals, whereas the maximum levels represent a significant stretch and would require exceptional performance.

Annual Incentive Bonus Pool Funding. After the 2011 financial results became available, El Paso's Compensation Committee determined the appropriate funding of the 2011 annual incentive bonus pool based on the achievement of the pre-established performance goals for the year, as well as the successful execution of operational and strategic initiatives. The following table sets forth the percentage that the annual incentive bonus pool is funded based on the level of performance relative to the performance goals that were established for the year.

Funding of the
Annual Incentive Bonus Pool

Performance

Maximum Goals Met	150	%(1)
Target Goals Met	100	%(2)
Threshold Goals Met	50	%(3)
Threshold Not Met	0	%

(1): The maximum funding of the annual incentive bonus pool is 150% for performance at or above the maximum performance level.
(2): For performance above target but below maximum, actual funding is between 100% and 150%, as determined by El Paso's Compensation Committee.
(3): For performance above threshold but below target, actual funding is between 50% and 100%, as determined by El Paso's Compensation Committee.

Individual Performance Adjustment. In addition to company performance, individual performance was an important factor in determining annual incentives for 2011. Individual performance goals for 2011 included living El Paso's core values of stewardship, integrity, safety, accountability, and excellence strengthening El Paso's balance sheet, continuing to improve our exploration and production cost structure and delivering significant reserve growth with increased oil exposure, increasing our inventory of low-risk, repeatable drilling operations, executing on the construction of El Paso's backlog of pipeline projects and placing pipeline growth projects in service on time and on budget, continuing to grow El Paso's master limited partnership, reducing costs, improving execution capability, leadership training and development initiatives and supporting volunteer efforts in the communities in which we work. Based on the executive's performance in relation to these goals, an individual performance factor is assigned to each executive. The individual performance factor is used to adjust the executive's actual annual cash incentive award.

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The range of annual cash incentive bonuses is illustrated as a percentage of base salary for each named executive officer in the following table. The actual percentage of cash incentive bonuses could be at any level between the minimum and maximum percentages based on company and individual performance.

Range of Cash Incentive Bonuses as a Percentage of Base Salary for 2011



Brent J. Smolik	0	%	45	%	90	%	202.50	%
Dane E. Whitehead	0	%	30	%	60	%	135	%
Clayton A. Carrell	0	%	22.5	%	45	%	150	%
John D. Jensen	0	%	22.5	%	45	%	150	%
Marguerite N. Woung-Chapman	0	%	17.5	%	35	%	78.75	%

The potential range of values of the annual cash incentive awards for 2011 performance for each of the named executive officers is reflected in the Grants of Plan-Based Awards table in the "Estimated Possible Payouts under Non-Equity Incentive Plan Awards" column.

El Paso Performance. In February 2012, El Paso's Compensation Committee reviewed El Paso's performance and the performance of its business units relative to the performance goals that were established for the year. In reviewing El Paso's performance relative to the corporate financial goals, El Paso's Compensation Committee excluded the impacts of certain items under pre-approved adjustment categories, including: charges due to the deconsolidation of El Paso's joint venture Ruby Pipeline, L.L.C.; debt extinguishment losses; adjustments to exclude the mark-to-market impact of our derivative positions and include the value of hedge cash settlements; a ceiling test charge related to capitalized costs in Brazil; commodity price fluctuations in the exploration and production business unit, which resulted in an unfavorable adjustment to earnings per share, segment EBITDA and outstanding debt (net of cash); transaction-related costs; decision to develop El Paso's exploration and production Eagle Ford shale program without a joint venture partner as well the impact of certain divestitures not contemplated by plan, each of which resulted in adjustments to segment EBITDA; and actions taken to resolve legacy issues. El Paso's Compensation Committee determined that these items were not related to the ongoing operation of El Paso in a manner consistent with the way the performance goals and ranges were set for compensation-related purposes. Based on these adjustments, El Paso's Compensation Committee determined that El Paso achieved the following adjusted results:

•: earnings per share of $0.94;
•: segment EBITDA of $3,363 million;
•: return on total capital of 7.1%; and
•: outstanding debt (net of cash) of $12,381 million.

El Paso's Compensation Committee also considered the strategic initiatives undertaken by El Paso during 2011 that were designed to increase and accelerate stockholder value that required maximum performance on behalf of management and employees, including the proposed spin-off of El Paso's exploration and production business unit, and the subsequent decision to merge El Paso with Kinder Morgan, Inc. Based on the achievement of the performance goals and after considering management's execution of strategic initiatives that resulted in acceleration of El Paso's stockholder value for 2011, El Paso's Compensation Committee approved a corporate funding level of 150% for cash incentive awards, as well as a funding level of 146% for the exploration and production business unit.

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Individual Performance. After approving the bonus pool funding levels described above, El Paso's Compensation Committee and management reviewed the individual performance of each of our named executive officers, with particular focus on individual accountabilities and business unit performance. Based on this review, El Paso's Compensation Committee, as it related to Messrs. Smolik and Whitehead, and El Paso's management, as it related to Messrs. Carrell and Jensen and Ms. Woung-Chapman, awarded the executives above-target individual performance factors.

2011 Annual Incentives. Based on the policies described above, El Paso's Compensation Committee approved annual incentive bonuses for 2011 performance for Messrs. Smolik and Whitehead, and El Paso management approved annual incentive bonuses for 2011 performance for Messrs. Carrell and Jensen and Ms. Woung-Chapman in accordance with the funding levels set forth above and the individual performance and contributions of each named executive officer.

Annual Cash Incentives
for 2011 Performance

		Actual Incentive Bonus(1) ($)

Brent J. Smolik			1,206,900
Dane E. Whitehead			544,457
Clayton A. Carrell			344,000
John D. Jensen			333,750
Marguerite N. Woung-Chapman			184,000

(1): Cash incentive awards for 2011 performance were paid in March 2012.

Long-Term Incentive Awards

El Paso's annual long-term incentives have historically been comprised of an approximate 50/50 combination of stock options and restricted stock. However, commencing with the April 2011 grant cycle, El Paso's Compensation Committee incorporated performance shares into the equity program, along with traditional stock options and time-vested restricted stock. The performance shares were designed to pay out on the basis of El Paso's multi-year relative TSR results, with no dividends payable on unvested performance shares. With 2011 as a transition year, the performance share grant utilized two performance periods, with half of the target grant payout based on El Paso's TSR results over a two year period (2011-2012), and half on TSR results over a three year period (2011-2013).

The number and kind of El Paso equity awards granted in April 2011 to each of our named executive officers is reflected in the table below.

Annual Grant of
El Paso Long-Term Incentive Awards

Name

Brent J. Smolik	108,507	66,828	48,476
Dane E. Whitehead	35,156	22,853	17,313
Clayton A. Carrell	35,156	20,776	11,668
John D. Jensen	35,156	20,776	11,668
Marguerite N. Woung-Chapman	20,399	13,850	7,918

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Stock options were granted at target levels and were not adjusted for company or individual performance. In contrast, restricted stock awards were granted based on the level of achievement during 2011 of certain pre-established performance goals. The performance goals that were used by El Paso's Compensation Committee for purposes of determining the number of restricted stock awards granted to our named executive officers in April 2011 included (i) El Paso's 2011 annual corporate financial goals (weighted at 50%) and (ii) El Paso's 2011 relative TSR compared to its peer group of companies (weighted at 50%). During 2011, El Paso had above-target achievement of corporate financial goals, together with top quartile TSR performance, which resulted in above-target restricted share grants to our named executive officers. The performance share grants were granted at target levels, with minor adjustments for individual performance. El Paso made no equity grants to our named executive officers in 2012.

Impact of EP Energy Sale and El Paso Merger on NEO Compensation

Outstanding El Paso Equity Awards

All of our named executive officers held vested and unvested stock options to purchase shares of El Paso common stock, restricted shares and performance shares granted under El Paso's equity plan prior to the closing of the sale on May 24, 2012 of El Paso's exploration and production business unit to EPE Acquisition, LLC. Pursuant to the terms of the merger agreement between El Paso and Kinder Morgan, Inc., which merger became effective on May 25, 2012, each outstanding El Paso stock option, restricted share and performance share automatically vested. In the case of outstanding performance shares, performance was deemed to be attained at target. At such time, each outstanding stock option, restricted share and performance share was converted into the right to receive either cash or a mixture of cash and shares of Class P common stock of KMI for all shares subject to such awards (in the case of stock options, less the aggregate exercise price), pursuant to the terms of the El Paso/KMI merger agreement. Each holder also received warrants as part of the merger consideration in respect of such equity awards. Our named executive officers were deemed to remain in the employ of El Paso up to the effective time of the merger between El Paso and KMI for purposes of the treatment of their outstanding El Paso equity awards, which vested and were converted into merger consideration as described above.

Retention Plan

Our named executive officers participate in a retention plan that was established by El Paso in late 2011. The plan was adopted, in consultation with KMI, for full-time employees of El Paso who primarily provided services to El Paso's exploration and production business (the "Retention Plan"). Based on the level of gross sales proceeds received by El Paso/KMI in respect of the sale of the EP Energy business assets and on the specific time at which such assets were sold, a retention bonus pool in the aggregate amount of $1,750,000 has been established for EP Energy officers. Prior to the determination of actual pool funding in 2012, each of our named executive officers was awarded a percentage interest in the overall pool. In accordance with this allocation, Mr. Smolik's payment is $226,937, Mr. Whitehead's payment is $153,564, Mr. Carrell's payment is $127,085, Mr. Jensen's payment is $127,085, and Ms. Woung-Chapman's payment is $111,762.

Employment Agreements

In connection with the closing of the sale of EP Energy to EPE Acquisition, LLC, EP Energy entered into employment agreements with each of our named executive officers. These agreements provide us and the executives with certain rights and obligations during and following a termination of employment. We believe these agreements are necessary to protect our legitimate business interests, as well as to protect the executives in the event of certain termination events. The employment agreements provide for, among other things, base salaries, annual performance bonuses and severance

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benefits in the event of a termination of employment under certain circumstances. The employment agreements became effective as of the closing of the sale. The employment agreements have an initial term that expires on the fifth anniversary of their effective date, but the term of each agreement will automatically be extended for successive additional one-year periods unless either the executive or company provides written notice to the other at least 60 days prior to the end of the then-current initial term or extension term that no such automatic extension will occur. In addition, in connection with entering into the agreement, the executives agreed to waive any rights relating to their participation in El Paso's 2004 Key Executive Severance Protection Plan. Additional detail regarding the employment agreements is set forth below.

Brent J. Smolik. We entered into an employment agreement with Mr. Smolik, effective May 24, 2012, to serve as our President and Chief Executive Officer, as well as the Chairman of the Board of Managers of our parent EPE Acquisition, LLC. Under the terms of the agreement, Mr. Smolik's annual base salary is $850,000, with an annual cash bonus target equal to 100% of his annual base salary, with higher or lower amounts (0% to 200% of target) payable depending on performance relative to targeted results. Mr. Smolik is also entitled to an additional one-time guaranteed bonus of $2,000,000 payable in the first quarter of 2013. Mr. Smolik is eligible to participate in all benefit plans and programs that are available to other senior executives of our company. Mr. Smolik's employment agreement contains provisions related to the payment of benefits upon certain termination events, as well as non-compete, non-solicitation and confidentiality restrictions.

Dane E. Whitehead. We entered into an employment agreement with Mr. Whitehead, effective May 24, 2012, to serve as our Executive Vice President and Chief Financial Officer. Under the terms of the agreement, Mr. Whitehead's annual base salary is $450,000, with an annual cash bonus target equal to 100% of his annual base salary, with higher or lower amounts (0% to 200% of target) payable depending on performance relative to targeted results. Mr. Whitehead is also entitled to an additional one-time guaranteed bonus of $850,000 payable in the first quarter of 2013. Mr. Whitehead is eligible to participate in all benefit plans and programs that are available to other senior executives of our company. Mr. Whitehead's employment agreement contains provisions related to the payment of benefits upon certain termination events, as well as certain non-compete, non-solicitation and confidentiality restrictions.

Clayton A. Carrell. We entered into an employment agreement with Mr. Carrell, effective May 24, 2012, to serve as our Executive Vice President and Chief Operating Officer. Under the terms of the agreement, Mr. Carrell's annual base salary is $400,000, with an annual cash bonus target equal to 100% of his annual base salary, with higher or lower amounts (0% to 200% of target) payable depending on performance relative to targeted results. Mr. Carrell is also entitled to an additional one-time guaranteed bonus of $600,000 payable in the first quarter of 2013. Mr. Carrell is eligible to participate in all benefit plans and programs that are available to other senior executives of our company. Mr. Carrell's employment agreement contains provisions related to the payment of benefits upon certain termination events, as well as certain non-compete, non-solicitation and confidentiality restrictions.

John D. Jensen. We entered into an employment agreement with Mr. Jensen, effective May 24, 2012, to serve as our Executive Vice President, Operations Services. Under the terms of the agreement, Mr. Jensen's annual base salary is $400,000, with an annual cash bonus target equal to 100% of his annual base salary, with higher or lower amounts (0% to 200% of target) payable depending on performance relative to targeted results. Mr. Jensen is also entitled to an additional one-time guaranteed bonus of $600,000 payable in the first quarter of 2013. Mr. Jensen is eligible to participate in all benefit plans and programs that are available to other senior executives of our company. Mr. Jensen's employment agreement contains provisions related to the payment of benefits upon

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certain termination events, as well as certain non-compete, non-solicitation and confidentiality restrictions.

Marguerite N. Woung-Chapman. We entered into an employment agreement with Ms. Woung-Chapman, effective May 24, 2012, to serve as our Senior Vice President, General Counsel & Corporate Secretary. Under the terms of the agreement, Ms. Woung-Chapman's annual base salary is $370,000, with an annual cash bonus target equal to 55% of her annual base salary, with higher or lower amounts (0% to 200% of target) payable depending on performance relative to targeted results. Ms. Woung-Chapman is also entitled to an additional one-time guaranteed bonus of $370,000 payable in the first quarter of 2013. Ms. Woung-Chapman is eligible to participate in all benefit plans and programs that are available to other senior executives of our company. Ms. Woung-Chapman's employment agreement contains provisions related to the payment of benefits upon certain termination events, as well as certain non-compete, non-solicitation and confidentiality restrictions.

Executive Compensation Programs at EP Energy

Compensation Committee of Our Board of Managers

The compensation committee of the Board of Managers of our parent, EPE Acquisition, LLC ("Compensation Committee") is responsible with overseeing and approving compensation for our executive officers.

Our Compensation Programs

We believe El Paso's executive compensation programs were effective at retaining and motivating our named executive officers and in aligning their interests with the interests of El Paso's stockholders. As described below, the executive compensation programs initially adopted by us are similar to those in place at El Paso immediately prior to the sale, but, in the case of long-term incentive, tailored to reflect our status as a privately-owned company. The Compensation Committee will continue to evaluate our compensation and benefit programs and may make adjustments as necessary to meet prevailing business needs.

Compensation Objectives. Our executive compensation program at EP Energy is designed to achieve the following objectives:

•: attract, retain and motivate the high-performing executive talent necessary at a new privately-held operating company, and
•: align the interests of our executive officers with both the short-term and long-term interests of our equity holders.

In connection with the closing of the sale and as set forth in the executive officer employment agreements, we adopted the same components of compensation used by El Paso, consisting of base salary, annual performance-based cash bonus and long-term incentives.

Base Salary. The Compensation Committee will review the base salary of each of our named executive officers annually. In making base salary decisions, we anticipate that the Compensation Committee will consider factors including external benchmarking data, scope of job responsibilities, experience and individual performance.

Annual Performance-Based Cash Incentive. In connection with the closing of the sale, we adopted an annual incentive program for our named executive officers similar to the El Paso bonus program described above. The EP Energy officers' annual cash bonus program will link annual bonus payments to company performance and each individual officer's performance for the year.

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The Compensation Committee will establish company financial and operational performance goals each year as the primary driver in determining annual incentive bonuses for our named executive officers.

In addition to company performance metrics, we anticipate that the Compensation Committee will also consider individual performance in determining annual cash bonus payments.

The Compensation Committee may also consider additional relevant factors, including the marketplace for executive talent within our industry and the competitiveness of our annual cash bonus program relative to our peers.

Long-Term Incentive Awards. We provide our named executive officers with two forms of long-term equity incentive awards, each of which is designed to align the interests of our named executive officers with that of our equity investors, as described below.

Management Incentive Units. At the time of the closing of the sale of EP Energy, we issued Management Incentive Units ("MIPs") to our executive officers, which units are intended to constitute profits interests. The MIPs vest ratably over 5 years based on the executive's continued employment with the company and become payable based on the achievement of certain predetermined performance measures, including, without limitation, the occurrence of certain liquidity events. The MIPs were issued at no cost and, similar to a stock option, have value only to the extent the value of the company increases. The number of MIPs awarded to each named executive officer is set forth in the table below.

Management Incentive Units
(profits interests)

Name		MIPs (#)(1)

Brent J. Smolik			207,985
Dane E. Whitehead			69,328
Clayton A. Carrell			69,328
John D. Jensen			69,328
Marguerite N. Woung-Chapman			27,731

(1): The MIPs were issued on May 24, 2012.

Class A Investment Units. In addition to the MIPs awards described above, each of our named executive officers purchased Class A units (capital interests) in our parent company (at a purchase price of $1,000 per Class A unit) shortly following the closing of the sale. In connection with this purchase, each named executive officers was awarded a "matching" Class A unit grant in an amount equal to 50% of the Class A units purchased. The matching units are subject to forfeiture in the event of certain termination scenarios. The number of Class A units issued to each named executive officer is set forth in the table below.

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Class A Investment Units

Name

Brent J. Smolik	4,000	2,000	6,000
Dane E. Whitehead	1,700	850	2,550
Clayton A. Carrell	1,200	600	1,800
John D. Jensen	1,200	600	1,800
Marguerite N. Woung-Chapman	740	370	1,110

(1): This column reflects the number of Class A units of our parent company that each named executive officer purchased following the closing of the sale of EP Energy to EPE Acquisition, LLC, at a purchase price of $1,000 per Class A unit.
(2): This column reflects the matching Class A unit grant awarded to each named executive officer in connection with his or her buy-in of Class A units.
(3): The management buy-in and matching Class A units were issued on July 23, 2012.

Post-Employment Benefits

401(k) Retirement Plan. We sponsor a tax-qualified defined contribution retirement plan for a broad-based group of employees. We make matching contributions (dollar for dollar up to 6% of eligible compensation) and non-elective employer contributions (5% of eligible compensation) to the defined contribution plan, and individual employees, including our named executive officers, are eligible to contribute to the defined contribution plan. We do not sponsor a defined benefit pension plan.

Severance. Severance benefits are provided in certain termination events as set forth in the executives' employment agreements. Benefits include 3 times annual salary and target bonus for the CEO and 2 times annual salary and target bonus for other named executive officers.

Senior Executive Survivor Benefits Plan. We sponsor a welfare benefit plan that provides senior executives with survivor benefit coverage in lieu of the coverage provided generally to employees under EP Energy's group life insurance plan in the event of an executive's death. The amount of survivor benefit is 2 ¹ / 2 times the executive officer's annual salary.

Other Benefits. We anticipate that our executive officers will be offered limited perquisites, including financial planning assistance.

Summary Compensation Table

The following table and the narrative text that follows it provide a summary of the compensation earned or paid to our named executive officers during 2011 according to applicable SEC regulations. All of the information included in this table reflects compensation earned by the individuals for service with El Paso. We were not a reporting company under the Exchange Act for 2009 and 2010. Therefore, pursuant to the executive compensation rules adopted by the SEC, only the compensation of Mr. Smolik is shown for prior years when he was a named executive officer of El Paso. All references in the following tables to stock relate to awards of stock granted by El Paso. The amounts set forth in this table do not necessarily reflect the compensation such persons will receive from EP Energy, which could be higher or lower, because historical compensation was determined by El Paso and going forward compensation levels will be determined based on the compensation policies, programs and procedures established by the compensation committee of our parent, EPE Acquisition, LLC. The

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principal position listed for each name executive officer below reflects the current position each executive holds at EP Energy.

Summary Compensation Table

Name and Principal Position

Brent J. Smolik	2011	595,002	—	2,563,509	795,215	1,206,900	119,088	83,894	5,363,608
President & Chief Executive	2010	576,636	—	722,650	666,883	1,000,000	118,356	72,049	3,156,574
Officer	2009	566,520	—	385,023	502,351	1,000,000	57,136	34,724	2,545,754
Dane E. Whitehead	2011	402,447	—	897,081	257,648	544,457	61,190	55,110	2,217,933
Executive Vice President &
Chief Financial Officer
Clayton A. Carrell	2011	333,579	—	702,422	257,648	344,000	36,849	26,821	1,701,319
Executive Vice President &
Chief Operating Officer
John D. Jensen	2011	333,591	—	702,422	257,648	333,750	37,188	27,977	1,692,576
Executive Vice President
Operations Services
Marguerite N. Woung-Chapman	2011	291,114	—	472,141	149,498	184,000	46,765	40,427	1,183,945
Senior Vice President, General
Counsel & Corporate Secretary

(1): Amounts in this column reflect the aggregate grant date fair value of stock awards or option awards, as applicable, granted to each named executive officer under El Paso's equity plan computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, " Compensation—Stock Compensation " ("FASB ASC Topic 718").
(2): The amount in this column for 2011 reflects each named executive officer's annual cash incentive bonus earned for 2011 performance under El Paso's annual incentive plan.
(3): The amount in this column for 2011 reflects the annual change in the actuarial present value of each named executive officer's accumulated pension benefits under El Paso's pension and supplemental pension plans. The change in pension value is generally equal to the difference between the actuarial present value at the end of the year and the beginning of the year. The annual change in the actuarial present value of Messrs. Smolik's, Whitehead's, Carrell's and Jensen's and Ms. Woung-Chapman's accumulated pension and supplemental pension benefits for 2011 is $117,938, $60,854, $36,677, $37,032 and $46,333 respectively.
(4): The amount in this column for 2011 also reflects above-market interest credited to our named executive officers' El Paso supplemental Retirement Savings Plan account balances under El Paso's supplemental benefits plan. During 2011, interest was credited to the balance of each executive officer's supplemental Retirement Savings Plan account balance on a monthly basis at a rate equal to the average of Moody's Seasoned Aaa Corporate Bond Rate and Moody's Seasoned Baa Corporate Bond Rate, as published by Moody's Investors Services, Inc. It was determined that the rate of interest exceeded 120 percent of the applicable federal long-term rate for each month during 2011. The total amount of the above-market interest credited to Messrs. Smolik's, Whitehead's, Carrell's, and Jensen's and Ms. Woung-Chapman's supplemental Retirement Savings Plan account balance during 2011 was $418, $336, $172, $156, and $432, respectively.
(5): The compensation reflected in the "All Other Compensation" column for 2011 for each of our named executive officers includes company matching contributions to El Paso's Retirement Savings Plan, supplemental company matching contributions accrued under El Paso's 2005 Supplemental Benefits Plan, annual executive physicals, financial planning assistance and limited tax reimbursements, which are listed in the table immediately below.

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All Other Compensation included in the Summary Compensation Table for 2011

Name

Brent J. Smolik	11,025	60,750	11	1,397	10,082	629	83,894
Dane E. Whitehead	11,025	25,085	—	2,000	17,000	—	55,110
Clayton A. Carrell	11,025	14,399	—	1,397	—	—	26,821
John D. Jensen	11,025	14,652	209	2,000	—	91	27,977
Marguerite N. Woung-Chapman	22,050	16,930	—	1,447	—	—	40,427

(A): The compensation reflected in this column for each of our named executive officers for 2011 includes supplemental company matching contributions which were accrued under El Paso's 2005 Supplemental Benefits Plan.
(B): The amount shown in this column for Mr. Smolik for 2011 reflects the incremental cost to El Paso for an occasion when his spouse accompanied him on a business-related flight on private aircraft leased by El Paso. As Mr. Smolik was using the leased aircraft for business purposes, the only incremental cost to El Paso associated with his spouse's travel was a nominal per person segment fee charged by the private carrier to El Paso, which amount is shown above. The amount shown for Mr. Jensen reflects an occasion when his spouse accompanied him on a business-related flight using a commercial carrier. When the executive officer's use of leased aircraft or a guest's travel does not meet the IRS's standard for business use, but nevertheless is determined by the company to be business-related, the cost of that travel is imputed as income to the executive officer and a gross-up payment for taxes is provided. No tax gross-ups are made for flights that are not business-related. Any tax reimbursements with respect to the imputed income for business-related travel are reflected in the "Tax Reimbursements" column of this table.
(C): The amounts in this column for 2011 reflect the cost for executive officer annual physicals.
(D): The amounts in this column for 2011 reflect the cost for financial and tax planning assistance. This amount is imputed as income and no tax-gross up is provided.
(E): The amounts in this column for 2011 reflect tax reimbursements associated with imputed income for occasions when the executive's spouse accompanied him on a business-related flight.

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Grants of Plan-Based Awards Table

The following table provides additional information about stock awards and non-equity plan awards granted by El Paso to our named executive officers during the year ended December 31, 2011.

Grants of Plan-Based Awards
During the Year Ended December 31, 2011



					Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)								Estimated Possible Payouts Under Equity Incentive Plan Awards(2)								Exercise or Base Price of Option Awards ($/Sh)(5))			Grant Date Fair Value of Stock and Option Awards ($)(7)
			Date of Compensation Committee Action
Name	Grant Date		Date of Compensation Committee Action		Threshold Not Met ($)		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)
Brent J. Smolik
Short-Term Incentive		N/A		N/A		—		270,000		540,000		1,215,000
Stock Options		4/1/2011		2/7/2011																108,507		18.205	18.16		795,215
Restricted Stock		4/1/2011		2/7/2011															66,828						1,216,604
Performance Shares		4/1/2011		2/7/2011										—		48,476		96,952							1,346,906
Dane E. Whitehead
Short-Term Incentive		N/A		N/A		—		121,802		243,605		548,111
Stock Options		4/1/2011		2/7/2011																35,156		18.205	18.16		257,648
Restricted Stock		4/1/2011		2/7/2011															22,853						416,039
Performance Shares		4/1/2011		2/7/2011										—		17,313		34,626							481,042
Clayton A. Carrell
Short-Term Incentive		N/A		N/A		—		75,600		151,200		504,000
Stock Options		4/1/2011		2/7/2011																35,156		18.205	18.16		257,648
Restricted Stock		4/1/2011		2/7/2011															20,776						378,227
Performance Shares		4/1/2011		2/7/2011										—		11,668		23,336							324,195
John D. Jensen
Short-Term Incentive		N/A		N/A		—		75,600		151,200		504,000
Stock Options		4/1/2011		2/7/2011																35,156		18.205	18.16		257,648
Restricted Stock		4/1/2011		2/7/2011															20,776						378,227
Performance Shares		4/1/2011		2/7/2011										—		11,668		23,336							324,195
Marguerite N. Woung-Chapman
Short-Term Incentive		N/A		N/A		—		51,710		103,421		232,697
Stock Options		4/1/2011		2/7/2011																20,399		18.205	18.16		149,498
Restricted Stock		4/1/2011		2/7/2011															13,850						252,139
Performance Shares		4/1/2011		2/7/2011										—		7,918		15,836							220,002

(1): These columns show the potential value of the payout of the annual cash incentive bonuses for 2011 performance for each named executive officer if the threshold, target and maximum performance levels are achieved. The actual amount of the annual cash incentive bonuses paid for 2011 performance is shown in the Summary Compensation Table under the "Non-Equity Incentive Plan Compensation" column.
(2): These columns show the potential payout of performance shares granted in 2011 for each named executive officer if the target and maximum performance levels are achieved. No performance shares were paid out during 2011.
(3): This column shows the number of shares of El Paso restricted stock granted in 2011 to the named executive officers. The shares vest in three equal annual installments beginning one year from the date of grant.
(4): This column shows the number of El Paso stock options granted in 2011 to the named executive officers. The stock options vest in three equal annual installments beginning one year from the date of grant.
(5): This column shows the exercise price for the El Paso stock options granted during 2011, which was the average between the high and low selling prices at which our common stock traded on the date of grant.
(6): This column shows the closing market price of a share of El Paso's common stock on the date of grant of the stock options.
(7): This column shows the grant date fair value of El Paso restricted stock, performance shares and stock options computed in accordance with FASB ASC Topic 718 granted to the named executive officers during 2011.

The following is a description of material factors necessary to understand the information regarding the stock awards and option awards reflected in the Grants of Plan-Based Awards table. The awards reflected in the Grants of Plan-Based Awards table are shares of El Paso restricted stock, performance shares and non-qualified stock options to purchase shares of El Paso's common stock which were approved by El Paso's Compensation Committee and granted to the named executive officers on April 1, 2011. The stock options and restricted stock awards approved granted on April 1, 2011 were made as part of El Paso's 2011 annual grant of long-term incentive awards based on 2010 performance. The performance share awards granted on April 1, 2011 were not based on 2010 performance, but rather were approved by El Paso's Compensation Committee and incorporated into El Paso's long-term incentive program in 2011. As discussed further in the CD&A, the performance

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shares were designed to payout solely on the basis of El Paso's multi-year relative TSR results. With 2011 as a transition year, the performance share grant utilized two performance periods, with half of the target grant pay out based on El Paso's TSR results over a two-year period (2011-2012), and half on TSR results over a three-year period (2011-1013). The grant date fair value of the performance shares granted on April 1, 2011 that vest over a two-year period was $27.93, and the grant date fair value of performance shares that vest over a three-year period was $27.64. The grant date fair value per share for the restricted stock awards granted on April 1, 2011 was $18.205. The grant date fair value per option for the stock options granted on April 1, 2011 was $7.328, computed using a Black-Scholes option-pricing model based on several assumptions. These assumptions are based on El Paso's best estimate at the time of grant and are listed below, as follows:



Expected Term in Years	6.0
Expected Volatility	40	%
Expected Dividends	0.5000	%
Risk-Free Interest Rate	2.569	%

Restricted stock carries voting and dividend rights. The amount of dividends received during 2011 on shares of El Paso's unvested restricted stock granted to our named executive officers is factored into the grant date fair value per share and is not required to be included in the Summary Compensation Table or Grants of Plan-Based Awards table but is reflected in the table below.

Name		Dividends Received during 2011 on Restricted Stock ($)

Brent J. Smolik			5,427
Dane E. Whitehead			2,058
Clayton A. Carrell			1,441
John D. Jensen			1,475
Marguerite N. Woung-Chapman			1,050

Employment Agreements

As discussed in the CD&A, we entered into employment agreements with our named executive officers in connection with the closing of the sale of EP Energy to EPE Acquisition, LLC. The employment agreements are effective as of May 24, 2012 and have a five year term. See the heading "Impact of EP Energy Sale and El Paso Merger on NEO Compensation" in the CD&A for a summary of the key terms of the employment agreements.

Outstanding Equity Awards

The following table summarizes the equity awards El Paso made to our named executive officers which were outstanding as of December 31, 2011.

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Outstanding Equity Awards
at December 31, 2011

	Option Awards								Stock Awards

	Number of Securities Underlying Unexercised Options at Fiscal Year-End (#)								Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)(2)		Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)			Market or Payout of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)
						Option Exercise Price ($)(1)
								Option Expiration Date
Name	Exercisable		Unexercisable					Option Expiration Date
Brent J. Smolik		106,112		—			14.580	4/02/2017		13,053	(7)		346,818		48,476	(11)		1,288,007
		108,319		—			16.705	4/01/2018		21,617	(8)		574,364
		116,063		58,032	(4)		6.335	4/01/2019		43,520	(9)		1,156,326
		49,020		98,039	(5)		11.070	4/01/2020		66,828	(10)		1,775,620
		—		108,507	(6)		18.205	4/01/2021
Dane E. Whitehead		30,134		—			13.100	5/01/2016		7,769	(7)		206,422		17,313	(11)		460,006
		34,380		—			14.580	4/02/2017		16,352	(8)		434,473
		35,095		—			16.705	4/01/2018		4,638	(9)		123,232
		37,605		18,802	(4)		6.335	4/01/2019		22,853	(10)		607,204
		21,525		43,048	(5)		11.070	4/01/2020
		—		35,156	(6)		18.205	4/01/2021
Clayton A. Carrell		70,323		—			13.920	3/12/2017		3,446	(7)		91,560		11,668	(11)		310,019
		9,009		—			16.390	3/03/2018		14,845	(9)		394,432
		20,364		—			16.705	4/01/2018		20,776	(10)		552,018
		21,820		10,910	(4)		6.335	4/01/2019
		15,883		31,764	(5)		11.070	4/01/2020
		—		35,156	(6)		18.205	4/01/2021
John D. Jensen		—		10,910	(4)		6.335	4/01/2019		4,532	(7)		120,415		11,668	(11)		310,019
		—		31,764	(5)		11.070	4/01/2020		14,845	(9)		394,432
		—		35,156	(6)		18.205	4/01/2021		20,776	(10)		552,018
Marguerite N. Woung-Chapman		6,788		—			16.705	4/01/2018		4,177	(7)		110,983		7,918	(11)		210,381
		10,910		10,910	(4)		6.335	4/01/2019		9,348	(9)		248,376
		9,216		18,431	(5)		11.070	4/01/2020		13,850	(10)		367,995
		—		20,399	(6)		18.205	4/01/2021

(1): The average between the high and low selling prices at which El Paso's common stock traded on the grant date is used as the exercise price (or strike price) for stock options. No cash is realized until the shares received upon exercise of an option are sold.
(2): The values represented in this column have been calculated by multiplying $26.57, the closing price of El Paso's common stock on December 31, 2011 by the number of shares of stock.
(3): The number of shares in this column represents the number of performance shares that would vest based on achieving target-level performance.
(4): These are stock options that were granted as part of El Paso's 2009 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with the remaining vesting date on April 1, 2012.
(5): These are stock options that were granted as part of El Paso's 2010 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with the remaining vesting dates on April 1, 2012 and April 1, 2013.
(6): These are stock options that were granted as part of the El Paso's 2011 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with vesting dates on April 1, 2012, April 1, 2013 and April 1, 2014.
(7): These are shares of restricted stock that were granted as part of El Paso's 2009 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with the remaining vesting date on April 1, 2012.
(8): These are shares of restricted stock that El Paso's Compensation Committee awarded as part of the 2008 performance bonus in lieu of cash and cliff-vest three years from the date of grant, with the vesting date on April 1, 2012.
(9): These are shares of restricted stock that were granted as part of El Paso's 2010 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with the remaining vesting dates on April 1, 2012 and April 1, 2013.
(10): These are shares of restricted stock that were granted as part of El Paso's 2011 annual grant of long-term incentive awards and time vest in three equal annual installments beginning one year from the date of grant, with vesting dates on April 1, 2012, April 1, 2013 and April 1, 2014.
(11): These are performance shares granted as part of El Paso's 2011 annual grant of long-term incentive awards and vest based on El Paso's multi-year relative TSR results. The amount listed is the target grant. Actual payouts could range between 0-200% of target and would be settled in stock.

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Option Exercises and Stock Vested Table

The following table sets forth information concerning El Paso stock option exercises and vesting of El Paso restricted stock during 2011 for each of our named executive officers. In satisfaction of applicable SEC regulations, the number of securities for which stock options were exercised (if any) and the aggregate dollar value realized upon the exercise of such stock options is reflected in this table. The number of shares of restricted stock that have vested and the aggregate dollar value realized upon the vesting of such restricted stock is also reflected.

Option Exercises and Stock Vested
During Fiscal Year 2011

	Option Awards				Stock Awards

Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)(1)
Brent J. Smolik		—		—		48,138		876,352
Dane E. Whitehead		—		—		22,543		410,395
Clayton A. Carrell		—		—		15,182		276,495
John D. Jensen		55,417		447,826		14,232		259,094
Marguerite N. Woung-Chapman		45,536		258,331		11,607		211,305

(1): The values represented in this column for El Paso restricted stock have been calculated by multiplying the per share fair market value of the underlying shares on the vesting date by the number of shares of restricted stock that vested.

Pension Benefits Table

The following table sets forth information with respect to the pension benefits of each of the named executive officers under El Paso's qualified and nonqualified pension plans. El Paso sponsors a qualified Pension Plan and supplemental benefits plans in which the named executive officers participate. In satisfaction of applicable SEC regulations, this table provides the number of years of service credited to the named executive officers, the actuarial present value of the named executive officers' accumulated benefits at the earliest unreduced retirement age and the dollar amount of benefits paid, if any, to a named executive officer under each of the plans during 2011. No pension benefits were paid to the named executive officers during 2011.

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Pension Benefits

Name	Plan Name

Brent J. Smolik	Pension Plan	5	79,233	—
	Supplemental Benefits Plan	—	—	—
	2005 Supplemental Benefits Plan	5	298,632	—
Dane E. Whitehead	Pension Plan	6	86,557	—
	Supplemental Benefits Plan	—	—	—
	2005 Supplemental Benefits Plan	6	125,084	—
Clayton A. Carrell	Pension Plan	5	66,004	—
	Supplemental Benefits Plan	—	—	—
	2005 Supplemental Benefits Plan	5	59,832	—
John D. Jensen	Pension Plan	5	65,111	—
	Supplemental Benefits Plan	—	—	—
	2005 Supplemental Benefits Plan	5	50,527	—
Marguerite N. Woung-Chapman	Pension Plan	15	227,581	—
	Supplemental Benefits Plan	8	10,985	—
	2005 Supplemental Benefits Plan	7	63,791	—

(1): The present value of the named executive officers' accumulated pension benefits in this column reflects a 4.32 percent discount rate and December 31, 2011 measurement date. The calculations reflect an age 65 commencement date.

The following is a description of material factors necessary to understand the information disclosed above in the Pension Benefits table for each of the named executive officers. El Paso's Pension Plan provides pension benefits under a cash balance plan formula that defines participants' accrued benefits in terms of a notional cash account balance. Eligible El Paso employees become participants in the Pension Plan immediately upon employment and are fully vested in their benefits upon the earliest of the completion of three years of service or attainment of age 65. At the end of each calendar quarter, participant cash account balances are increased by an interest credit based on the 5-Year U.S. Treasury constant maturity yield, subject to a minimum interest credit of 4 percent per year, plus a pay credit equal to a percentage of salary and bonus.

Amounts in the Pension Benefits table reported as the actuarial present value of each named executive officer's accumulated benefits are calculated as of December 31, 2011 using the same assumptions that are used for El Paso's pension liability disclosure in Note 13 to El Paso's financial statements included in its 2011 Annual Report on Form 10-K filed with the SEC on February 27, 2012. However, the amounts in the Pension Benefits table assume no pre-retirement decrements (i.e., that the named executive officers work and survive to retirement age) and reflect an age 65 commencement date.

Under El Paso's qualified Pension Plan and applicable Code provisions, for 2011 compensation in excess of $245,000 could not be taken into account and the maximum payable benefit in 2011 was $195,000. For 2011, any excess benefits otherwise accruing under the Pension Plan were payable under El Paso's 2005 Supplemental Benefits Plan which was adopted effective January 1, 2005 in connection with the implementation of Section 409A of the Code. The 2005 Supplemental Benefits Plan replaced El Paso's prior Supplemental Benefits Plan for benefits accruing after 2004. The benefits that accrue under the 2005 Supplemental Benefits Plan are supplemental benefits for officers and key management employees (including all of the named executive officers) who could not be paid under El Paso's Pension Plan and/or Retirement Savings Plan due to certain Code limitations. The supplemental pension benefits under El Paso's 2005 Supplemental Benefits Plan, when combined with the supplemental pension benefits the executive is entitled to receive under the prior Supplemental Benefits Plan and the amounts a participant is entitled to receive under El Paso's qualified Pension Plan, will be the actuarial equivalent of the Pension Plan's benefit formula had the limitations of the Code not been applied. See the "Nonqualified Deferred Compensation" table below for additional information regarding our named executive officers' supplemental Retirement Savings Plan benefits. The management committee of the plans designates who may participate and also administers the plan.

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Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

The following table sets forth information with respect to nonqualified defined contribution plans sponsored by El Paso for each of the named executive officers as of December 31, 2011. El Paso sponsors a supplemental benefits plan that provides for the crediting of matching contributions that could not be paid under El Paso's Retirement Savings Plan due to Code limitations. El Paso does not sponsor a traditional nonqualified deferred compensation plan that provides for deferrals of base salary and bonuses for executive officers. None of the named executive officers had withdrawals or distributions of supplemental Retirement Savings Plan benefits during 2011.

Nonqualified Deferred Compensation
as of December 31, 2011

Name

Brent J. Smolik	60,750	5,816	182,289
Dane E. Whitehead	25,085	2,223	70,282
Clayton A. Carrell	14,399	1,141	38,405
John D. Jensen	14,652	1,040	36,648
Marguerite N. Woung-Chapman	16,930	2,852	75,316

(1): The amounts in this column are reported as compensation to the named executive officers in the Summary Compensation Table in the "All Other Compensation" column as supplemental company matching contributions for El Paso's Retirement Savings Plan which were accrued under El Paso's 2005 Supplemental Benefits Plan. See footnote 5 to the Summary Compensation Table.
(2): Of the amounts in this column, $418 for Mr. Smolik, $336 for Mr. Whitehead, $172 for Mr. Carrell, $156 for Mr. Jensen and $432 for Ms. Woung-Chapman are reported as compensation in the Summary Compensation Table in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column. See footnote 4 to the Summary Compensation Table.
(3): Of the totals in this column, $60,750 for Mr. Smolik, $25,085 for Mr. Whitehead, $14,399 for Mr. Carrell, $14,652 for Mr. Jensen and $16,930 for Ms. Woung-Chapman, were reported as compensation in the Summary Compensation Table included in this registration statement.

The following is a description of material factors necessary to understand the information disclosed above in the Nonqualified Deferred Compensation table for each of the named executive officers. The registrant's contributions reflected in this table include supplemental company matching contributions for the Retirement Savings Plan which are accrued under El Paso's supplemental benefits plans. The supplemental Retirement Savings Plan benefits are excess benefits in the form of company matching contributions that could not be made under El Paso's Retirement Savings Plan due to Code limitations. During 2011, these excess benefits were credited by El Paso to each executive's supplemental Retirement Savings Plan account balance under El Paso's 2005 Supplemental Benefits Plan. The plan administrator determines the rate of interest, if any, periodically attributable to the balance of each supplemental Retirement Savings Plan account. For 2011, interest was credited to the balance of each executive's supplemental Retirement Savings Plan account balance on a monthly basis at a rate equal to the average of Moody's Seasoned Aaa Corporate Bond Rate and Moody's Seasoned Baa Corporate Bond Rate, as published by Moody's Investors Services, Inc.

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Potential Payments upon Termination or Change in Control

The following tables reflect the incremental value of compensation and benefits each named executive officer would have received in the event of an involuntary termination without cause, death, disability, termination with cause and a termination following a change in control relative to a voluntary termination of employment by the executive. Pursuant to SEC rules, all amounts below are based upon amounts payable in the event the termination event occurred as of December 31, 2011, and thus reflect amounts payable under El Paso's compensation programs in effect at that time. All amounts are estimates of the amounts which would have been paid to the executive officers upon their termination. The actual amounts to be paid can only be determined at the time of such executive officer's termination.

Potential Payments upon Termination or Change in Control Assuming Termination Event Occurs on December 31, 2011

Payments made upon Voluntary Termination

The following table reflects the total value of payments the named executive officers would have received in the event of a voluntary termination on December 31, 2011. In the event a named executive officer voluntarily terminated his or her employment, the executive officer would have been entitled to his or her vested benefits under El Paso's Pension Plan and Retirement Savings Plan (including supplemental benefits). Under El Paso's equity compensation plan, unvested equity awards would be forfeited in the event of a voluntary termination.

Payments made upon Voluntary Termination

Name

Brent J. Smolik	76,609	288,744	271,831	182,289	5,449,195	6,268,668
Dane E. Whitehead	83,385	120,501	150,731	70,282	2,258,908	2,683,807
Clayton A. Carrell	62,989	57,099	152,485	38,405	1,823,489	2,134,467
John D. Jensen	61,533	47,751	182,841	36,648	—	328,773
Marguerite N. Woung-Chapman	218,511	71,796	462,308	75,316	430,575	1,258,506

Total						12,674,221

(1): The amounts in this column reflect a lump sum payment.
(2): The amounts in these columns may differ from the amounts in the Pension Benefits table due to several factors, including the use of different assumptions and the timing of commencement of payment.

Incremental Payments made upon Involuntary Termination without Cause

The following table reflects the incremental value of enhanced benefits the named executive officers would have received in the event of an involuntary termination without cause as of December 31, 2011 above the compensation and benefits that the executive officer would have been entitled to as a result of a voluntary termination, which includes a severance payment, continued medical benefits and the value of restricted stock that vest on a pro-rata basis. Under El Paso's severance plan, the amount of severance pay is based on the individual's years of service and his or her compensation level. The maximum amount of severance pay is 1 times the participant's annual base salary. Severance pay is paid in a lump sum as soon as administratively practicable following

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termination. Participants are also entitled to receive continued medical and dental coverage for a period of three months following termination. Under El Paso's equity compensation plans, restricted stock vests on a pro-rata basis and unvested stock options are forfeited in the event of an involuntary termination without cause.

Incremental Payments made upon Involuntary Termination without Cause

	Severance Plan				Equity Awards

Name	Severance Payment ($)		Continued Medical Benefits ($)		Stock Options ($)(1)		Restricted Stock ($)(2)		Performance Shares ($)(3)		Total ($)
Brent J. Smolik		600,000		3,369		—		1,641,415		536,670		2,781,454
Dane E. Whitehead		406,008		3,369		—		508,709		191,672		1,109,758
Clayton A. Carrell		336,000		3,369		—		349,767		129,174		818,310
John D. Jensen		336,000		3,369		—		371,103		129,174		839,646
Marguerite N. Woung-Chapman		295,488		1,623		—		264,743		87,659		649,513

Total												6,198,681

(1): Unvested stock options are forfeited in the event of an involuntary termination without cause.
(2): This column shows the value of shares of El Paso restricted stock that vest on a pro-rata basis in the event of an involuntary termination without cause calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(3): This column shows the value of El Paso performance shares that vest on a pro-rata basis in the event of an involuntary termination without cause based on target level achievement, calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.

Incremental Payments made upon Death

The following table reflects the incremental value of enhanced benefits our named executive officers would have received in the event of death above the compensation and benefits the executive officers are entitled to as a result of a voluntary termination. El Paso sponsored a Senior Executive Survivor Benefits Plan that provided certain senior executives of El Paso with survivor benefit coverage in lieu of the coverage provided generally under El Paso's group life insurance plan. The amount of benefits provided is 2.5 times the executive officer's annual salary. Messrs. Smolik, Whitehead, Carrell and Jensen participated in El Paso's Senior Executive Survivor Benefits Plan during 2011. Under El Paso's equity compensation plan, outstanding stock options become fully vested and exercisable and the restriction periods applicable to shares of restricted stock immediately lapse in the event of death.

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Incremental Payments made upon Death

			Equity Awards

	Survivor Benefit Coverage ($)		Equity Awards
Name	Survivor Benefit Coverage ($)		Stock Options ($)(1)		Restricted Stock ($)(2)		Performance Shares ($)(3)		Total ($)
Brent J. Smolik		1,500,000		3,601,543		3,853,128		536,670		9,491,341
Dane E. Whitehead		1,015,000		1,341,782		1,371,331		191,672		3,919,785
Clayton A. Carrell		840,000		1,007,186		1,038,010		129,174		3,014,370
John D. Jensen		840,000		1,007,186		1,066,865		129,174		3,043,225
Marguerite N. Woung-Chapman		295,000		677,082		727,354		87,659		1,787,095

Total										21,255,816

(1): This column shows the value of El Paso stock options that become fully vested and exercisable in the event of the death of a named executive officer calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(2): This column shows the value of shares of El Paso restricted stock that become fully vested in the event of the death of a named executive officer calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(3): This column shows the value of El Paso performance shares that vest on a pro-rata basis in the event of death, calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.

Incremental Payments made upon Disability

The following table reflects the incremental value of enhanced benefits our named executive officers would have received under El Paso's welfare benefits plan in the event of permanent disability above the compensation and benefits the executive officers are entitled to as a result of a voluntary termination, which include disability benefits, the value of unvested stock options that become fully vested and the value of restricted stock that vests on a pro-rata basis. In the event of a named executive officer's permanent disability, disability income would be payable on a monthly basis as long as the executive officer qualifies as permanently disabled. For purposes of this table, we have assumed the executive officer is disabled for a period of one year. The restrictions on outstanding shares of restricted stock lapse on a prorated basis and all stock options become fully vested and exercisable in the event an executive officer becomes permanently disabled. In addition, in the event of disability, performance shares vest on a pro-rata basis based on target.

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Incremental Payments made upon Disability

			Equity Awards

Name	Disability Income ($)(1)		Stock Options ($)(2)		Restricted Stock ($)(3)		Performance Shares ($)(4)		Total ($)
Brent J. Smolik		300,000		3,601,543		1,641,415		536,670		6,079,628
Dane E. Whitehead		243,605		1,341,782		508,709		191,672		2,285,768
Clayton A. Carrell		201,600		1,007,186		349,767		129,174		1,687,727
John D. Jensen		168,000		1,007,186		371,103		129,174		1,675,463
Marguerite N. Woung-Chapman		147,744		677,082		182,642		87,659		1,095,127

Total										12,823,713

(1): In the event of a named executive officer's permanent disability, disability income would be payable on a monthly basis as long as the executive officer qualifies as permanently disabled. The amounts in this column assume disability income is paid to the executive officer for a period of one year.
(2): This column shows the value of El Paso stock options that become fully vested and exercisable in the event of the disability of a named executive officer calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(3): This column shows the value of shares of El Paso restricted stock that vest on a pro-rata basis in the event of disability calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(4): This column shows the value of El Paso performance shares that vest on a pro-rata basis in the event of disability, calculated using $26,57, the closing price of El Paso's common stock on December 31, 2011.

Incremental Payments made upon Termination with Cause

In the event a named executive officer is terminated with cause, the named executive officer would not receive any benefits above the compensation and benefits he or she is entitled to as a result of a voluntary termination.

Incremental Payments made upon a Change in Control of El Paso

The following table reflects the incremental value of enhanced benefits the named executive officers would have received in the event of termination of employment on December 31, 2011 following a change in control of El Paso above the compensation and benefits the executive officers are entitled to as a result of a voluntary termination, which include benefits under El Paso's 2004 Key Executive Severance Protection Plan and the value of stock options and restricted stock that become fully vested. The plan provides severance benefits following an involuntary/good reason termination of employment within two years of a change in control of El Paso for certain executives designated by El Paso's Board or El Paso's Compensation Committee, including all of our named executive officers, and supersedes benefits payable under El Paso's severance plan (see "Incremental Payments made upon Involuntary Termination without Cause" above).

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Incremental Payments made upon a Change in Control of El Paso

	2004 Key Executive Severance Protection Plan

	2004 Key Executive Severance Protection Plan						Equity Awards
					Continued Medical Benefits ($)		Equity Awards
Name	Severance Payment ($)		Bonus Payment ($)		Continued Medical Benefits ($)		Stock Options ($)(1)		Restricted Stock ($)(2)		Performance Shares ($)(3)		Total ($)
Brent J. Smolik		2,280,000		540,000		27,126		3,601,543		3,853,128		1,288,007		11,589,804
Dane E. Whitehead		1,299,226		243,605		27,126		1,341,782		1,371,331		460,006		4,743,076
Clayton A. Carrell		974,400		151,200		27,126		1,007,186		1,038,010		310,019		3,507,941
John D. Jensen		974,400		151,200		27,126		1,007,186		1,066,865		310,019		3,536,796
Marguerite N. Woung-Chapman		398,909		103,421		7,005		677,082		727,354		210,381		2,124,152

Total														25,501,769

(1): This column shows the value of El Paso stock options that become fully vested and exercisable in the event of a change in control of El Paso calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(2): This column shows the value of shares of El Paso restricted stock that become fully vested in the event of a change in control of El Paso calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.
(3): This column shows the value of El Paso performance shares that vest at target in the event of a change in control of El Paso calculated using $26.57, the closing price of El Paso's common stock on December 31, 2011.

Director Compensation

Members of the Board of Managers of our parent, EPE Acquisition, LLC, do not receive a retainer or board meeting fees from EPE Acquisition, LLC for serving on the Board. All members of the Board are reimbursed for their reasonable expenses for attending Board functions.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of our equity interests are held indirectly by EPE Acquisition, LLC and we do not have any limited liability company units issued and outstanding. The following table sets forth information regarding the beneficial ownership of our equity interests as of September 1, 2012, and shows the percentage owned by:

•: each person known to beneficially own more than 5% of our equity interests;
•: each of our Named Executive Officers;
•: each member of our Board of Managers; and
•: all of the executive officers and members of our Board of Managers as a group.

The percentages of our equity interests beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as otherwise indicated in the footnotes below, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated equity interests, and has not pledged any such equity interests as security.

	Beneficial Ownership of Equity Interests

Name of Beneficial Owner	Percentage of Ownership
EPE Acquisition, LLC(1)		100.0	%
Brent J. Smolik(2)		—
Dane E. Whitehead(3)		—
Clayton A. Carrell(4)		—
John D. Jensen(5)		—
Marguerite N. Woung-Chapman(6)		—
Greg Beard(7)		—
Joshua J. Harris(7)		—
Chang-Seok Jeong(8)		—
Pierre F. Lapeyre, Jr.(9)		—
David Leuschen(9)		—
Sam Oh(7)		—
Donald A. Wagner(10)		—
Rakesh Wilson(7)		—
All managers and named executive officers as a group		—

*: Indicates less than 1%
(1): All of our equity interests are held by EPE Holdings LLC. EPE Intermediate LLC is the sole member of EPE Holdings LLC, and EPE Acquisition, LLC ("EPE Acquisition") is the sole member of EPE Intermediate LLC. ANRP (EPE AIV), L.P. ("ANRP EPE"), AIF PB VII (LS AIV), L.P. ("AIF PB"), AIF VII (AIV), L.P. ("AIF VII"), Apollo (EPE Intermediate DC I), LLC ("Intermediate I") and Apollo (EPE Intermediate DC II), LLC ("Intermediate II," and together with ANRP EPE, AIF PB, AIF VII and Intermediate I, the "Apollo Funds") have the right to appoint five out of ten members to EPE

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Acquisition's board of managers and may thus be deemed to control actions that EPE Acquisition's board of managers may take with respect to our equity interests that require approval of a majority of EPE Acquisition's managers. Apollo Management VII, L.P. ("Management VII") is the manager of each of ANRP EPE, AIF PB and AIF VII, and a manager of Intermediate I and Intermediate II along with Apollo Commodities Management, L.P. ("Commodities Management"), which also serves as a manager of Intermediate I and Intermediate II. The general partner of Management VII is AIF VII Management, LLC ("AIF VII LLC") and the general partner of Commodities Management is Apollo Commodities Management GP, LLC ("Commodities GP"). Apollo Management, L.P. ("Apollo Management") is the sole member-manager of AIF VII LLC. Apollo Management GP, LLC ("Management GP") is the general partner of Apollo Management. Apollo Management Holdings, L.P. ("Management Holdings") is the sole member and manager of Management GP and of Commodities GP. Apollo Management Holdings GP, LLC ("Management Holdings GP") is the general partner of Management Holdings. Leon Black, Joshua Harris and Marc Rowan are the managers, as well as principal executive officers, of Management Holdings GP, and as such may be deemed to have voting and dispositive control of the Units beneficially owned by EPE Acquisition. The address of EPE Holdings LLC, EPE Intermediate LLC and EPE Acquisition, LLC is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002. The address of each of the Apollo Funds other than ANRP EPE is One Manhattanville Road, Suite 201, Purchase, New York 10577. The address of ANRP EPE, Management VII, Commodities Management, AIF VII LLC, Commodities GP, Apollo Management, Management GP, Management Holdings and Management Holdings GP, and Messrs. Black, Harris and Rowan, is 9 W. 57 ^th Street, 43 ^rd Floor, New York, New York 10019.

(2): Mr. Smolik holds 6,000 Class A units of EPE Acquisition, LLC, which accounts for less than 1% of the issued and outstanding equity interests of EPE Acquisition, LLC. The address of Mr. Smolik is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002.
(3): Mr. Whitehead holds 2,550 Class A units of EPE Acquisition, LLC, which accounts for less than 1% of the issued and outstanding equity interests of EPE Acquisition, LLC. The address of Mr. Whitehead is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002.
(4): Mr. Carrell holds 1,800 Class A units of EPE Acquisition, LLC, which accounts for less than 1% of the issued and outstanding equity interests of EPE Acquisition, LLC. The address of Mr. Carrell is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002.
(5): Mr. Jensen holds 1,800 Class A units of EPE Acquisition, LLC, which accounts for less than 1% of the issued and outstanding equity interests of EPE Acquisition, LLC. The address of Mr. Jensen is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002.
(6): Ms. Woung-Chapman holds 1,100 Class A units of EPE Acquisition, LLC, which accounts for less than 1% of the issued and outstanding equity interests of EPE Acquisition, LLC. The address of Ms. Woung-Chapman is c/o EP Energy LLC, 1001 Louisiana Street, Houston, Texas 77002.
(7): The address of each of the managers is c/o Apollo Global Management, LLC, 9 West 57 ^th Street, New York, New York 10019.
(8): The address of the manager is c/o Korea National Oil Corporation, 57 Gwampyeong-ro212beong-gil, Dongan-gu, Anyang, Gyeonggido, Korea 431-711.
(9): The address of each of the managers is c/o Riverstone Holdings LLC, 712 Fifth Avenue, 19th Floor, New York, New York 10019.
(10): The address of the manager is c/o Access Industries Holdings LLC, 730 Fifth Avenue, 20th Floor, New York, New York 10019.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Second Amended and Restated Limited Liability Company Agreement of Parent

In connection with the Acquisition Transactions, certain affiliates of Apollo (collectively, the "Apollo Member"), EPE 892 and TE Co-Investors (DC), LLC (the "EPE 892 Member"), EPE Domestic Co-Investors, L.P. (the "EPE Domestic Member"), EPE Overseas Co-Investors (DC), LLC (the "EPE Overseas Member," and together with the EPE 892 Member and EPE Domestic Member, the "Co-Investment Members"), an affiliate of Access (the "Access Member"), a vehicle through which management holds class A common units ("Class A Units") of Parent (the "EMI Member"), an affiliate of KNOC (the "KNOC Member"), Riverstone V Everest Holdings, L.P. (the "Riverstone Member" and, together with the KNOC Member and the Access Member, the "Principal Members"), a vehicle through which management holds class B profits interest units ("Class B Units") of Parent (the "EEH Member") (collectively, the "Members") and Parent, entered into a second amended and restated limited liability company agreement of Parent (the "LLC Agreement"). The Apollo Member, the Co-Investment Members, the Principal Members and the EMI Member were issued Class A Units (such Members in their capacity as holders of Class A Units, the "Class A Members").

The Board initially consists of nine Managers: (a) four designated by the Apollo Member; (b) two designated by the Riverstone Member; (c) one designated by the Access Member; (d) one designated by the KNOC Member; and (e) the Chief Executive Officer of Parent.

The number of Managers that each such Member is entitled to designate is subject to such Member maintaining a certain Class A Unit ownership threshold. All decisions of the Board require a majority vote of the Managers, other than certain extraordinary specified matters, which require the approval of a majority of the Managers, which majority must include the affirmative vote by a Manager designated by a Principal Member or its replacement elected in accordance with the LLC Agreement.

The LLC Agreement provides for customary rights of first refusal, drag-along rights, tag-along rights and preemptive rights for all Class A Members.

If, by the fifth anniversary of the consummation of the Acquisition Transactions, Parent or a successor entity of Parent has not consummated an initial public offering or a change of control transaction, the Apollo Member or the Class A Members holding 40% of the then outstanding Class A Units shall have the right to cause Parent to consummate a qualified initial public offering ("QIPO") without the approval of the Board and without the consent of the other Members.

Related Party Transaction Policy

Under the LLC Agreement, the consummation of any transaction or series of related transactions involving Parent or any of its subsidiaries, on the one hand, and any Member, Manager or an affiliate of any Member or Manager, on the other hand (each such transaction, a "Related Party Transaction"), requires the approval of a majority of the Managers, other than those Managers that are (or whose affiliates are) party to such Related Party Transaction or that have been designated by the Class A Members that are party, or whose affiliates are party to, such Related Party Transaction. This voting requirement does not apply to (among other things): (i) any transaction consummated in the ordinary course of business, on arm's length terms and de minimis in nature; and (ii) an acquisition of additional securities by a Class A Member pursuant to an exercise of its preemptive rights pursuant to the LLC Agreement.

Transaction Fee Agreement

In connection with the Acquisition Transactions, Apollo Global Securities, LLC, the Riverstone Member (together, the "Initial Service Providers"), Access and KNOC (collectively with the Initial Service Providers, the "Service Providers") entered into a transaction fee agreement with EP Energy

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Global LLC ("EP Energy Global") and Parent (the "Transaction Fee Agreement") relating to the provision of certain structuring, financial, investment banking and other similar advisory services by the Service Providers to Parent, its direct and indirect divisions and subsidiaries, parent entities or controlled affiliates (collectively, the "Company Group") in connection with the Acquisition Transactions and future transactions. Parent will pay the Initial Service Providers a one-time transaction fee of $71.5 million in the aggregate in exchange for services rendered in connection with structuring the Acquisition Transactions, arranging the financing and performing other services in connection with the Acquisition Transactions. Subject to the terms and conditions of the Transaction Fee Agreement, Parent will pay to the Service Providers an additional transaction fee equal to the lesser of (i) 1% of the aggregate enterprise value paid or provided by the Company Group and (ii) $100,000,000 in connection with any transaction (including any merger, consolidation, recapitalization or sale of assets or equity interests) effected by a member of the Company Group after the consummation of the Acquisition Transactions and (x) which results in a change of control of the equity and voting securities, or sale of all or substantially all of the assets of, the Company Group, or (y) which is in connection with one or more public offerings of any class of equity securities of Parent, EP Energy Global or any other member of the Company Group.

Management Fee Agreement

In connection with the Acquisition Transactions, Apollo Management VII, L.P., Apollo Commodities Management, L.P., with respect to Series I, the Riverstone Member, Access and KNOC (collectively, the "Management Service Providers") entered into a management fee agreement with Parent and EP Energy Global (the "Management Fee Agreement") relating to the provision of certain management consulting and advisory services to the members of the Company Group following the consummation of the Acquisition Transactions. In exchange for the provision of such services, Parent will pay the Management Service Providers a non-refundable annual management fee of $25 million in the aggregate.

Participation of Apollo Global Securities, LLC in the Sales of the Initial Notes

Apollo Global Securities, LLC is an affiliate of Apollo, one of the Sponsors, and acted as an initial purchaser in the sales of the initial notes. Apollo Global Securities, LLC received $937,500, $2,500,000 and $131,250 of the gross spread in the sales of the initial senior secured notes, initial 2020 senior notes and initial 2022 senior notes, respectively.

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DESCRIPTION OF OTHER INDEBTEDNESS

The RBL Facility

The following sets forth a summary of the terms of the RBL Facility. This summary is not a complete description of all the terms of the agreements governing our RBL Facility.

General

In connection with the Acquisition Transactions, we entered into the RBL Facility, a new $2,000 million reserve-based borrowing base revolving credit facility, with JPMorgan Chase Bank, N.A. as the administrative agent, which will mature after five years. The RBL Facility provides for revolving loans, swing line loans and letters of credit. On the closing date of the Acquisition Transactions, we borrowed $750 million of loans under the RBL Facility to fund a portion of the Acquisition consideration, to fund certain original issue discount or upfront fees, to pay any working capital adjustments payable pursuant to the Purchase and Sale Agreement and to pay the costs and expenses incurred in connection with the Acquisition Transactions. The foregoing borrowings, together with letters of credit issued under the RBL Facility to roll over any of our letters of credit that are outstanding on the closing date of the Acquisition Transactions, reduce availability under the RBL Facility.

Interest Rates and Fees

Under the RBL Facility, we have a choice of borrowing at an interest rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the federal funds rate plus 50 basis points, (2) the prime commercial lending rate of JPMorgan Chase Bank, N.A. and (3) LIBOR for an interest period of one month beginning on such day plus 100 basis points or (b) a LIBOR rate, in each case, plus an applicable margin. The applicable margin varies depending on the percentage of our borrowing base utilized at a given time and ranges from 150 to 250 basis points per annum for LIBOR based borrowings and ranges from 50 to 150 basis points per annum for base rate borrowings.

In addition to paying interest on outstanding principal under the RBL Facility, we are required to pay a commitment fee to the lenders in respect of the unutilized commitments. The commitment fee rate ranges from 37.5 to 50 basis points per annum based on our borrowing base usage at a given time.

Prepayments and Adjustments of the Borrowing Base

The first semi-annual redetermination date of our borrowing base is scheduled to be April 1, 2013. If following a scheduled or interim redetermination of the borrowing base the aggregate amount of outstanding revolving loans, swingline loans and letters of credit exceeds the borrowing base, we will be required to elect within 10 business days to (i) within 30 days after such election, provide additional collateral having a borrowing base value sufficient to eliminate the deficiency; (ii) within 30 days after such election, prepay the loans (or cash collateralize the letters of credit) in an amount sufficient to eliminate such deficiency; (iii) prepay such deficiency in six equal monthly installments beginning on the 30 ^th day after our receipt of notice of the deficiency from the administrative agent; or (iv) undertake a combination of clauses (i), (ii) and (iii); provided that any such deficiency must be cured prior to the maturity date of the RBL Facility.

If the borrowing base is reduced as a result of the incurrence of certain debt, early monetization or termination of hedge positions (above a certain agreed-upon threshold) or disposition of borrowing base assets (above a certain agreed-upon threshold) and the aggregate amount of outstanding revolving loans, swingline loans and letters of credit exceeds such reduced borrowing base, we are required to prepay the loans (or cash collateralize letters of credit) in an amount sufficient to eliminate such deficiency within two business days following receipt of the RBL Facility administrative agent's written notice of such deficiency.

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Guarantees and Security

All obligations under the RBL Facility are fully and unconditionally guaranteed on a joint and several basis by, subject to certain exceptions, all of our existing and future direct and indirect wholly owned material domestic restricted subsidiaries, referred to collectively as guarantors (together with the borrower under the RBL Facility, referred to as "credit parties"). All obligations under the RBL Facility, and the guarantees of those obligations, are secured:

•: on a first-priority basis by a perfected pledge of all of our capital stock and all of the capital stock of each direct, wholly owned, domestic, material restricted subsidiary held by the credit parties;
•: on a first-priority basis by perfected real property mortgages on (x) not less than 50% of the PV-10 value of the proved oil and gas reserves included in the borrowing base under the RBL Facility no later than 90 days following the closing date of the Acquisition and (y) not less than 80% of the PV-10 value of the proved oil and gas reserves included in the borrowing base under the RBL Facility no later than 120 days following the closing date of the Acquisition, subject to extensions that may be granted in the discretion of the administrative agent under the RBL Facility; and
•: on a first-priority basis by a perfected security interest in substantially all other tangible (other than real property and other oil and gas properties) and intangible assets of the credit parties (together with the collateral described in the preceding sentences, collectively referred to as the "RBL Facility Priority Collateral"); and
•: on a second-priority basis by a perfected security interest in the Secured Notes/Term Loan Priority Collateral described below under "Senior Secured Term Loan."

The obligations under the RBL Facility are also guaranteed by Holdings, our direct parent. Holdings' guarantee is limited recourse to our equity interests owned by Holdings.

Restrictive Covenants and Other Matters

The RBL Facility contains restrictive covenants that may limit our ability to, among other things:

•: incur additional indebtedness;
•: create liens;
•: engage in mergers or consolidations;
•: change our lines of business;
•: sell or transfer assets;
•: pay dividends and distributions or repurchase our capital stock;
•: amend material agreements governing our subordinated indebtedness;
•: prepay, repay or repurchase certain junior indebtedness;
•: engage in transactions with affiliates;
•: make investments, acquisitions, loans and advances; and
•: enter into certain commodity and other regulated non-commodity hedging agreements.

Each of these covenants is subject to customary or agreed-upon exceptions, baskets and thresholds.

In addition, the RBL Facility requires us to maintain a ratio of our consolidated total debt, net of unrestricted cash and cash equivalents, to consolidated trailing 12-month EBITDAX (as defined in the

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credit agreement governing the RBL Facility) of not more than 5.0 to 1.0, with a step-down to 4.75 to 1.0 one year after entering into the RBL Facility and a further step down to 4.5 to 1.0 two years after entering into the RBL Facility and thereafter.

The credit agreement governing the RBL Facility also contains certain other customary affirmative covenants and events of default, subject to customary or agreed-upon exceptions, baskets and thresholds (including equity cure provisions).

Senior Secured Term Loan Facility

Concurrently with the closing of the offering of the initial senior secured notes and the initial 2020 senior notes, in order to fund a portion of the Acquisition, we also entered into a new $750 million senior secured term loan, with Citibank, N.A. as the administrative and collateral agent, which will mature on the sixth anniversary of the closing of the Acquisition. We refer to this loan in this prospectus as our "senior secured term loan."

Our senior secured term loan bears interest, at our option, at a rate equal to either (a) a base rate determined by reference to the highest of (1) the federal funds rate plus 50 basis points, (2) the prime commercial lending rate of Citibank, N.A. and (3) LIBOR for an interest period of one month beginning on such day plus 100 basis points or (b) a LIBOR rate, in each case, plus an applicable margin.

Any repricing amendment or refinancing through the issuance of any debt that results in a repricing event applicable to the senior secured term loan occurring at any time during the first year after the closing date will be accompanied by a 1.00% prepayment premium.

We are also required to offer to prepay our senior secured term loan, on terms and subject to reinvestment rights and other exceptions consistent with comparable provisions applicable to the senior secured notes (as described in "Description of Senior Secured Exchange Notes"), with (a) the net cash proceeds from any non-ordinary course disposition of any Secured Notes/Term Loan Priority Collateral and (ii) the net cash proceeds from any non-ordinary-course asset sale of RBL Facility Priority Collateral in excess of the amount required to be paid to the lenders under the RBL Facility or the holders of certain other indebtedness. We are also required to offer to prepay our senior secured term loan following the occurrence of a change of control at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repayment, on terms consistent with those applicable to the senior secured notes.

All obligations under our new senior secured term loan are fully and unconditionally guaranteed on a joint and several basis by each of the guarantors under the RBL Facility and the notes, and all such obligations and guarantees are secured (i) on a first-priority basis by a perfected pledge of the capital stock of all first-tier foreign subsidiaries that are directly owned by the borrower or any guarantor (which pledge will be limited to 65% of the voting capital stock and 100% of the non-voting capital stock of such subsidiary) (referred to as the "Secured Notes/Term Loan Priority Collateral") and (ii) on a second-priority basis by a security interest in the RBL Facility Priority Collateral. See "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements—Senior Lien Intercreditor Agreement." The senior secured term loan shares equally with the senior secured notes in the liens on the Secured Notes/Term Loan Priority Collateral and the RBL Facility Priority Collateral. The agent for the senior secured term loan and the trustee for the senior secured notes have entered into an intercreditor agreement governing the relationship between the lenders of the senior secured term loan and holders of the senior secured notes as well as holders of any other indebtedness that is secured on a pari passu basis with the senior secured notes. See "Description of Senior Secured Exchange Notes—Security—Intercreditor Agreements—Pari Passu Intercreditor Agreement."

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Our senior secured term loan includes customary events of default and contains customary representations and warranties and customary covenants, including, among other things, restrictions on indebtedness, investments, asset sales, mergers and consolidations, prepayments of subordinated indebtedness, liens, transactions with affiliates and dividends and other distributions, in each case, consistent with comparable provisions applicable to the senior secured notes. Our senior secured term loan does not contain any financial maintenance covenant.

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THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

We have entered into registration rights agreements with the initial purchasers of the initial notes, in which we agreed to file a registration statement relating to an offer to exchange the initial notes for exchange notes. The registration statement of which this prospectus forms a part was filed in compliance with this obligation. We also agreed to use our commercially reasonable efforts to file the registration statement with the SEC and to cause it to become effective under the Securities Act. The exchange notes will have terms substantially identical to the initial notes except that the exchange notes will not contain terms with respect to transfer restrictions and registration rights and additional interest payable for the failure to consummate the exchange offer by the dates set forth in the registration rights agreement. The initial senior secured notes and initial 2020 senior notes in aggregate principal amounts of $750,000,000 and $2,000,000,000, respectively, were issued on April 24, 2012 and the initial 2022 senior notes in aggregate principal amount of $350,000,000 were issued on August 13, 2012.

Under the circumstances set forth below, we will use our commercially reasonable efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the initial notes and to keep the shelf registration statement effective for up to two years after the effective date of the shelf registration statement. These circumstances include:

•: the exchange offer is not permitted by applicable law or SEC policy;
•: prior to the consummation of the exchange offer, existing SEC interpretations are changed such that the debt securities received by the holders of the initial notes in the exchange offer would not be transferable without restriction under the Securities Act;
•: if any initial purchaser so requests on or prior to the 60th day after consummation of the exchange offer with respect to the initial notes not eligible to be exchanged for the exchange notes and held by it following the consummation of the exchange offer;
•: if any holder that participates in the exchange offer does not receive freely transferable exchange notes in exchange for tendered initial notes and so requests on or prior to the 60th day after the consummation of the registered exchange offer; or
•: any other reason the exchange offer is not completed within 365 days following the issue date of the initial notes.

Each holder of initial notes that wishes to exchange such initial notes for transferable exchange notes in the exchange offer will be required to make the following representations:

•: any exchange notes to be received by it will be acquired in the ordinary course of its business;
•: it has no arrangement or understanding with any person or entity, including any of our affiliates, to participate in the distribution (within the meaning of Securities Act) of the exchange notes in violation of the Securities Act;
•: it is not our "affiliate," as defined in Rule 405 under the Securities Act, or, if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act; and
•: if such holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the exchange notes and if such holder is a broker-dealer, that it will receive exchange notes for its own account in exchange for initial notes that were acquired as a result of market-making activities or other trading activities and such holder will acknowledge that it (i) has not entered into any arrangement or understanding with the Issuers or an affiliate of the

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Issuer to distribute such exchange notes and (ii) will deliver a prospectus in connection with any resale of such exchange notes.

In addition, each broker-dealer that receives exchange notes for its own account in exchange for initial notes, where such initial notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution."

Resale of Exchange Notes

Based on interpretations of the SEC staff set forth in no action letters issued to unrelated third parties, we believe that exchange notes issued in the exchange offer in exchange for initial notes may be offered for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

•: such holder is not an "affiliate" of ours within the meaning of Rule 405 under the Securities Act;
•: such exchange notes are acquired in the ordinary course of the holder's business; and
•: the holder does not intend to participate in the distribution of such exchange notes.

Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes:

•: cannot rely on the position of the staff of the SEC set forth in "Exxon Capital Holdings Corporation" or similar interpretive letters; and
•: must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

If, as stated above, a holder cannot rely on the position of the staff of the SEC set forth in "Exxon Capital Holdings Corporation" or similar interpretive letters, any effective registration statement used in connection with a secondary resale transaction must contain the selling security holder information required by Item 507 of Regulation S-K under the Securities Act.

This prospectus may be used for an offer to resell, for the resale or for other retransfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the initial notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for initial notes, where such initial notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it (i) has not entered into any arrangement or understanding with the Issuer or an affiliate of the Issuer to distribute the exchange notes and (ii) will deliver a prospectus in connection with any resale of the exchange notes. Please read the section captioned "Plan of Distribution" for more details regarding these procedures for the transfer of exchange notes. We have agreed that, for a period of 180 days after the exchange offer is consummated, we will make this prospectus available to any broker-dealer for use in connection with any resale of the exchange notes.

Terms of the Exchange Offer

We are offering to exchange our exchange notes for a like aggregate principal amount of our initial notes. Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any initial notes properly tendered and not withdrawn prior to the expiration date. We will issue $1,000 principal amount of exchange notes in exchange for each

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$1,000 principal amount of initial notes surrendered under the exchange offer. Initial notes may be tendered only in denominations of $2,000 and in integral multiples of $1,000 in excess thereof.

The exchange notes that we propose to issue in this exchange offer will be substantially identical to the form and terms of our initial notes except that, unlike our initial notes, the exchange notes will have no transfer restrictions or registration rights. You should read the description of the exchange notes in the section in this prospectus entitled "Description of Senior Secured Exchange Notes," "Description of Senior 2020 Exchange Notes" and "Description of Senior 2022 Exchange Notes."

We reserve the right in our sole discretion to purchase or make offers for any initial notes that remain outstanding following the expiration or termination of this exchange offer and, to the extent permitted by applicable law, to purchase initial notes in the open market or privately negotiated transactions, one or more additional tender or exchange offers or otherwise. The terms and prices of these purchases or offers could differ significantly from the terms of this exchange offer.

Expiration Date; Extensions; Amendments; Termination

This exchange offer will expire at midnight, New York City time, on , 2012, unless we extend it in our reasonable discretion. The expiration date of this exchange offer will be at least 20 business days after the commencement of the exchange offer in accordance with Rule 14e-1(a) under the Securities Exchange Act of 1934.

We expressly reserve the right to delay acceptance of any initial notes, extend or terminate this exchange offer and not accept any initial notes that we have not previously accepted if any of the conditions described below under "—Conditions to the Exchange Offer" have not been satisfied or waived by us. We will notify the exchange agent of any extension by oral notice promptly confirmed in writing or by written notice. We will also notify the holders of the initial notes by a press release or other public announcement communicated before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date unless applicable laws require us to do otherwise and we will disclose the number of initial notes tendered as of the date of the notice.

We also expressly reserve the right to amend the terms of this exchange offer in any manner. If we make any material change, we will promptly disclose this change in a manner reasonably calculated to inform the holders of our initial notes of the change including providing public announcement or giving oral or written notice to these holders. A material change in the terms of this exchange offer could include a change in the timing of the exchange offer, a change in the exchange agent and other similar changes in the terms of this exchange offer. If we make any material change to this exchange offer, we will disclose this change by means of a post-effective amendment to the registration statement which includes this prospectus and will distribute an amended or supplemented prospectus to each registered holder of initial notes. In addition, we will extend this exchange offer for an additional five to ten business days as required by the Exchange Act, depending on the significance of the amendment, if the exchange offer would otherwise expire during that period. We will promptly notify the exchange agent by oral notice, promptly confirmed in writing, or written notice of any delay in acceptance, extension, termination or amendment of this exchange offer.

Procedures for Tendering Initial Notes

Proper Execution and Delivery of Letters of Transmittal

To tender your initial notes in this exchange offer, you must use one of the three alternative procedures described below:

(1): Regular delivery procedure : Complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal. Have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal. Mail or otherwise deliver the letter of transmittal or the

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facsimile together with the certificates representing the initial notes being tendered and any other required documents to the exchange agent on or before midnight, New York City time, on the expiration date.

(2): Book-entry delivery procedure : Send a timely confirmation of a book-entry transfer of your initial notes, if this procedure is available, into the exchange agent's account at The Depository Trust Company in accordance with the procedures for book-entry transfer described under "—Book-Entry Delivery Procedure" below, on or before midnight, New York City time, on the expiration date.
(3): Guaranteed delivery procedure : If time will not permit you to complete your tender by using the procedures described in (1) or (2) above before the expiration date and this procedure is available, comply with the guaranteed delivery procedures described under "—Guaranteed Delivery Procedure" below.

The method of delivery of the initial notes, the letter of transmittal and all other required documents is at your election and risk. Instead of delivery by mail, we recommend that you use an overnight or hand-delivery service. If you choose the mail, we recommend that you use registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. You should not send any letters of transmittal or initial notes to us. You must deliver all documents to the exchange agent at its address provided below. You may also request your broker, dealer, commercial bank, trust company or nominee to tender your initial notes on your behalf.

Only a holder of initial notes may tender initial notes in this exchange offer. A holder is any person in whose name initial notes are registered on our books or any other person who has obtained a properly completed bond power from the registered holder.

If you are the beneficial owner of initial notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your notes, you must contact that registered holder promptly and instruct that registered holder to tender your notes on your behalf. If you wish to tender your initial notes on your own behalf, you must, before completing and executing the letter of transmittal and delivering your initial notes, either make appropriate arrangements to register the ownership of these notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

You must have any signatures on a letter of transmittal or a notice of withdrawal guaranteed by:

(1)

a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc.;

(2)

a commercial bank or trust company having an office or correspondent in the United States; or

(3)

an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act, unless the initial notes are tendered:

(a): by a registered holder or by a participant in The Depository Trust Company whose name appears on a security position listing as the owner, who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal and only if the exchange notes are being issued directly to this registered holder or deposited into this participant's account at The Depository Trust Company; or
(b): for the account of a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934.

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If the letter of transmittal or any bond powers are signed by:

(1): the recordholder(s) of the initial notes tendered: the signature must correspond with the name(s) written on the face of the initial notes without alteration, enlargement or any change whatsoever.
(2): a participant in The Depository Trust Company: the signature must correspond with the name as it appears on the security position listing as the holder of the initial notes.
(3): a person other than the registered holder of any initial notes: these initial notes must be endorsed or accompanied by bond powers and a proxy that authorize this person to tender the initial notes on behalf of the registered holder, in satisfactory form to us as determined in our sole discretion, in each case, as the name of the registered holder or holders appears on the initial notes.
(4): trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity: these persons should so indicate when signing. Unless waived by us, evidence satisfactory to us of their authority to so act must also be submitted with the letter of transmittal.

To tender your initial notes in this exchange offer, you must make the following representations:

(1): you are authorized to tender, sell, assign and transfer the initial notes tendered and to acquire exchange notes issuable upon the exchange of such tendered initial notes, and that we will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by us;
(2): any exchange notes acquired by you pursuant to the exchange offer are being acquired in the ordinary course of business, whether or not you are the holder;
(3): you or any other person who receives exchange notes, whether or not such person is the holder of the exchange notes, has no arrangement or understanding with any person to participate in a distribution of such exchange notes within the meaning of the Securities Act and is not participating in, and does not intend to participate in, the distribution of such exchange notes within the meaning of the Securities Act;
(4): you or such other person who receives exchange notes, whether or not such person is the holder of the exchange notes, is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours, or if you or such other person is an affiliate, you or such other person will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
(5): if you are not a broker-dealer, you represent that you are not engaging in, and do not intend to engage in, a distribution of exchange notes; and
(6): if you are a broker-dealer that will receive exchange notes for your own account in exchange for initial notes, you represent that the initial notes to be exchanged for the exchange notes were acquired by you as a result of market-making or other trading activities and acknowledge that you will deliver a prospectus in connection with any resale, offer to resell or other transfer of such exchange notes.

You must also warrant that the acceptance of any tendered initial notes by the issuers and the issuance of exchange notes in exchange therefor shall constitute performance in full by the issuers of its obligations under the registration rights agreements relating to the initial notes.

To effectively tender notes through The Depository Trust Company, the financial institution that is a participant in The Depository Trust Company will electronically transmit its acceptance through the

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Automatic Tender Offer Program. The Depository Trust Company will then edit and verify the acceptance and send an agent's message to the exchange agent for its acceptance. An agent's message is a message transmitted by The Depository Trust Company to the exchange agent stating that The Depository Trust Company has received an express acknowledgment from the participant in The Depository Trust Company tendering the notes that this participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce this agreement against this participant.

In addition, each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it (i) has not entered into any arrangement or understanding with the Issuers or an affiliate of the Issuers to distribute such exchange notes and (ii) will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution."

Book-Entry Delivery Procedure

Any financial institution that is a participant in The Depository Trust Company's systems may make book-entry deliveries of initial notes by causing The Depository Trust Company to transfer these initial notes into the exchange agent's account at The Depository Trust Company in accordance with The Depository Trust Company's procedures for transfer. To effectively tender notes through The Depository Trust Company, the financial institution that is a participant in The Depository Trust Company will electronically transmit its acceptance through the Automatic Tender Offer Program. The Depository Trust Company will then edit and verify the acceptance and send an agent's message to the exchange agent for its acceptance. An agent's message is a message transmitted by The Depository Trust Company to the exchange agent stating that The Depository Trust Company has received an express acknowledgment from the participant in The Depository Trust Company tendering the notes that this participation has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce this agreement against this participant. The exchange agent will make a request to establish an account for the initial notes at The Depository Trust Company for purposes of the exchange offer within two business days after the date of this prospectus.

A delivery of initial notes through a book-entry transfer into the exchange agent's account at The Depository Trust Company will only be effective if an agent's message or the letter of transmittal or a facsimile of the letter of transmittal with any required signature guarantees and any other required documents is transmitted to and received by the exchange agent at the address indicated below under "—Exchange Agent" on or before the expiration date unless the guaranteed delivery procedures described below are complied with. Delivery of documents to The Depository Trust Company does not constitute delivery to the exchange agent.

Guaranteed Delivery Procedure

If you are a registered holder of initial notes and desire to tender your notes, and (1) these notes are not immediately available, (2) time will not permit your notes or other required documents to reach the exchange agent before the expiration date or (3) the procedures for book-entry transfer cannot be completed on a timely basis and an agent's message delivered, you may still tender in this exchange offer if:

(1): you tender through a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act;

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(2): on or before the expiration date, the exchange agent receives a properly completed and duly executed letter of transmittal or facsimile of the letter of transmittal, and a notice of guaranteed delivery, substantially in the form provided by us, with your name and address as holder of the initial notes and the amount of notes tendered, stating that the tender is being made by that letter and notice and guaranteeing that within three New York Stock Exchange trading days after the expiration date the certificates for all the initial notes tendered, in proper form for transfer, or a book-entry confirmation with an agent's message, as the case may be, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and
(3): the certificates for all your tendered initial notes in proper form for transfer or a book-entry confirmation as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within three New York Stock Exchange trading days after the expiration date.

Acceptance of Initial Notes for Exchange; Delivery of Exchange Notes

Your tender of initial notes will constitute an agreement between you and us governed by the terms and conditions provided in this prospectus and in the related letter of transmittal.

We will be deemed to have received your tender as of the date when your duly signed letter of transmittal accompanied by your initial notes tendered, or a timely confirmation of a book-entry transfer of these notes into the exchange agent's account at The Depository Trust Company with an agent's message, or a notice of guaranteed delivery from an eligible institution is received by the exchange agent.

All questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tenders will be determined by us in our sole discretion. Our determination will be final and binding.

We reserve the absolute right to reject any and all initial notes not properly tendered or any initial notes which, if accepted, would, in our opinion or our counsel's opinion, be unlawful. We also reserve the absolute right to waive any conditions of this exchange offer or irregularities or defects in tender as to particular notes with the exception of conditions to this exchange offer relating to the obligations of broker dealers, which we will not waive. If we waive a condition to this exchange offer, the waiver will be applied equally to all noteholders. Our interpretation of the terms and conditions of this exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of initial notes must be cured within such time as we shall determine. We, the exchange agent or any other person will be under no duty to give notification of defects or irregularities with respect to tenders of initial notes. We and the exchange agent or any other person will incur no liability for any failure to give notification of these defects or irregularities. Tenders of initial notes will not be deemed to have been made until such irregularities have been cured or waived. The exchange agent will return without cost to their holders any initial notes that are not properly tendered and as to which the defects or irregularities have not been cured or waived promptly following the expiration date.

If all the conditions to the exchange offer are satisfied or waived on the expiration date, we will accept all initial notes properly tendered and will issue the exchange notes promptly thereafter. Please refer to the section of this prospectus entitled "—Conditions to the Exchange Offer" below. For purposes of this exchange offer, initial notes will be deemed to have been accepted as validly tendered for exchange when, as and if we give oral or written notice of acceptance to the exchange agent.

We will issue the exchange notes in exchange for the initial notes tendered pursuant to a notice of guaranteed delivery by an eligible institution only against delivery to the exchange agent of the letter of

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transmittal, the tendered initial notes and any other required documents, or the receipt by the exchange agent of a timely confirmation of a book-entry transfer of initial notes into the exchange agent's account at The Depository Trust Company with an agent's message, in each case, in form satisfactory to us and the exchange agent.

If any tendered initial notes are not accepted for any reason provided by the terms and conditions of this exchange offer or if initial notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged initial notes will be returned without expense to the tendering holder, or, in the case of initial notes tendered by book-entry transfer procedures described above, will be credited to an account maintained with the book-entry transfer facility, promptly after withdrawal, rejection of tender or the expiration or termination of the exchange offer.

By tendering into this exchange offer, you will irrevocably appoint our designees as your attorney-in-fact and proxy with full power of substitution and resubstitution to the full extent of your rights on the notes tendered. This proxy will be considered coupled with an interest in the tendered notes. This appointment will be effective only when, and to the extent that we accept your notes in this exchange offer. All prior proxies on these notes will then be revoked and you will not be entitled to give any subsequent proxy. Any proxy that you may give subsequently will not be deemed effective. Our designees will be empowered to exercise all voting and other rights of the holders as they may deem proper at any meeting of noteholders or otherwise. The initial notes will be validly tendered only if we are able to exercise full voting rights on the notes, including voting at any meeting of the noteholders, and full rights to consent to any action taken by the noteholders.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, you may withdraw tenders of initial notes at any time before midnight, New York City time, on the expiration date.

For a withdrawal to be effective, you must send a written or facsimile transmission notice of withdrawal to the exchange agent before midnight, New York City time, on the expiration date at the address provided below under "—Exchange Agent" and before acceptance of your tendered notes for exchange by us.

Any notice of withdrawal must:

(1): specify the name of the person having tendered the initial notes to be withdrawn;
(2): identify the notes to be withdrawn, including, if applicable, the registration number or numbers and total principal amount of these notes;
(3): be signed by the person having tendered the initial notes to be withdrawn in the same manner as the original signature on the letter of transmittal by which these notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to permit the trustee for the initial notes to register the transfer of these notes into the name of the person having made the original tender and withdrawing the tender;
(4): specify the name in which any of these initial notes are to be registered, if this name is different from that of the person having tendered the initial notes to be withdrawn; and
(5): if applicable because the initial notes have been tendered through the book-entry procedure, specify the name and number of the participant's account at The Depository Trust Company to be credited, if different than that of the person having tendered the initial notes to be withdrawn.

We will determine all questions as to the validity, form and eligibility, including time of receipt, of all notices of withdrawal and our determination will be final and binding on all parties. Initial notes

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that are withdrawn will be deemed not to have been validly tendered for exchange in this exchange offer.

The exchange agent will return without cost to their holders all initial notes that have been tendered for exchange and are not exchanged for any reason, promptly after withdrawal, rejection of tender or expiration or termination of this exchange offer.

You may retender properly withdrawn initial notes in this exchange offer by following one of the procedures described under "—Procedures for Tendering Initial Notes" above at any time on or before the expiration date.

Conditions to the Exchange Offer

We will complete this exchange offer only if:

(1): there is no change in the laws and regulations which would reasonably be expected to impair our ability to proceed with this exchange offer;
(2): there is no change in the current interpretation of the staff of the SEC which permits resales of the exchange notes;
(3): there is no stop order issued by the SEC or any state securities authority suspending the effectiveness of the registration statement which includes this prospectus or the qualification of the indenture for our exchange notes under the Trust Indenture Act of 1939 and there are no proceedings initiated or, to our knowledge, threatened for that purpose;
(4): there is no action or proceeding instituted or threatened in any court or before any governmental agency or body that would reasonably be expected to prohibit, prevent or otherwise impair our ability to proceed with this exchange offer; and
(5): we obtain all governmental approvals that we deem in our sole discretion necessary to complete this exchange offer.

These conditions are for our sole benefit. We may assert any one of these conditions regardless of the circumstances giving rise to it and may also waive any one of them, in whole or in part, at any time and from time to time, if we determine in our reasonable discretion that it has not been satisfied, subject to applicable law. Notwithstanding the foregoing, all conditions to the exchange offer must be satisfied or waived before the expiration of this exchange offer. If we waive a condition to this exchange offer, the waiver will be applied equally to all noteholders. We will not be deemed to have waived our rights to assert or waive these conditions if we fail at any time to exercise any of them. Each of these rights will be deemed an ongoing right which we may assert at any time and from time to time.

If we determine that we may terminate this exchange offer because any of these conditions is not satisfied, we may:

(1): refuse to accept and return to their holders any initial notes that have been tendered;
(2): extend the exchange offer and retain all notes tendered before the expiration date, subject to the rights of the holders of these notes to withdraw their tenders; or
(3): waive any condition that has not been satisfied and accept all properly tendered notes that have not been withdrawn or otherwise amend the terms of this exchange offer in any respect as provided under the section in this prospectus entitled "—Expiration Date; Extensions; Amendments; Termination."

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Accounting Treatment

We will record the exchange notes at the same carrying value as the initial notes as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes. We will amortize the costs of the initial notes offering and the exchange offer over the term of the notes.

Exchange Agent

We have appointed Wilmington Trust, National Association as exchange agent for this exchange offer. You should direct all questions and requests for assistance on the procedures for tendering and all requests for additional copies of this prospectus or the letter of transmittal to the exchange agent as follows:

By Hand, Overnight Delivery, Registered or Certified Mail:

Wilmington Trust, National Association
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1626
Attention: Sam Hamed

By facsimile (for eligible institutions only): (302) 636-4139, Attention: Sam Hamed

For information or confirmation by telephone: (302) 636-6181

Fees and Expenses

We will bear the expenses of soliciting tenders in this exchange offer, including fees and expenses of the exchange agent and trustee and accounting, legal, printing and related fees and expenses.

We will not make any payments to brokers, dealers or other persons soliciting acceptances of this exchange offer. However, we will pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection with this exchange offer. We will also pay brokerage houses and other custodians, nominees and fiduciaries their reasonable out-of-pocket expenses for forwarding copies of the prospectus, letters of transmittal and related documents to the beneficial owners of the initial notes and for handling or forwarding tenders for exchange to their customers.

We will pay all transfer taxes, if any, applicable to the exchange of initial notes in accordance with this exchange offer. However, tendering holders will pay the amount of any transfer taxes, whether imposed on the registered holder or any other persons, if:

(1): certificates representing exchange notes or initial notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the notes tendered;
(2): tendered initial notes are registered in the name of any person other than the person signing the letter of transmittal; or
(3): a transfer tax is payable for any reason other than the exchange of the initial notes in this exchange offer.

If you do not submit satisfactory evidence of the payment of any of these taxes or of any exemption from this payment with the letter of transmittal, we will bill you directly the amount of these transfer taxes.

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Your Failure to Participate in the Exchange Offer Will Have Adverse Consequences

The initial notes were not registered under the Securities Act or under the securities laws of any state and you may not resell them, offer them for resale or otherwise transfer them unless they are subsequently registered or resold under an exemption from the registration requirements of the Securities Act and applicable state securities laws. If you do not exchange your initial notes for exchange notes in accordance with this exchange offer, or if you do not properly tender your initial notes in this exchange offer, you will not be able to resell, offer to resell or otherwise transfer the initial notes unless they are registered under the Securities Act or unless you resell them, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act.

In addition, except as set forth in this paragraph, you will not be able to obligate us to register the initial notes under the Securities Act. You will not be able to require us to register your initial notes under the Securities Act unless:

(1): an initial purchaser requests us to register initial notes that are not eligible to be exchanged for exchange notes in the exchange offer;
(2): you are not eligible to participate in the exchange offer;
(3): you may not resell the exchange notes you acquire in the exchange offer to the public without delivering a prospectus and that the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales by you; or
(4): you are a broker-dealer and hold initial notes that are part of an unsold allotment from the original sale of the initial notes, in which case the registration rights agreement requires us to file a registration statement for a continuous offer in accordance with Rule 415 under the Securities Act for the benefit of the holders of the initial notes described in this sentence. We do not currently anticipate that we will register under the Securities Act any notes that remain outstanding after completion of the exchange offer.

Delivery of Prospectus

Each broker-dealer that receives exchange notes for its own account in exchange for initial notes, where such initial notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution."

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DESCRIPTION OF SENIOR SECURED EXCHANGE NOTES

General

EP Energy LLC (formerly known as Everest Acquisition LLC), a Delaware limited liability company, and Everest Acquisition Finance Inc., a Delaware corporation (each an " Issuer " and together, the " Issuers ") issued $750,000,000 aggregate principal amount of 6.875% Senior Secured Notes due 2019 (the " initial senior secured notes " ) under an indenture (the " indenture "), dated as of April 24, 2012, by and among the Issuers, the Subsidiary Guarantors (as defined below) and Wilmington Trust, National Association, as Trustee. The Issuer will issue the senior secured exchange notes under the indenture. In this description, (i) "we," "us" and "our" mean EP Energy LLC and its Subsidiaries and (i) the term "Issuers" refers only to EP Energy LLC and Everest Acquisition Finance Inc., but not to any of their Subsidiaries.

The terms of the senior secured exchange notes are identical in all material respects to the initial senior secured notes except that upon completion of the exchange offer, the senior secured exchange notes will be registered under the Securities Act and free of any covenants regarding exchange registration rights. We refer to the initial senior secured notes as the "initial notes." We refer to the senior secured exchange notes as the "exchange notes." Unless otherwise indicated by the context, references in the "Description of Senior Secured Exchange Notes" section to the "notes" include the initial notes and the exchange notes.

The following summary of certain provisions of the indenture, the notes, the Security Documents and the Intercreditor Agreements does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of those agreements, including the definitions of certain terms therein and those terms made a part thereof by the TIA. We urge you to read those agreements because they, not this description, define your rights as holders of the notes. Capitalized terms used in this "Description of Senior Secured Exchange Notes" section and not otherwise defined have the meanings set forth under "—Certain Definitions."

The Issuers will issue the exchange notes in an aggregate principal amount up to $750,000,000. The Issuers may issue additional notes from time to time. Any offering of additional notes is subject to the covenants described below under the caption "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." The notes and any additional notes subsequently issued under the indenture may, at our election, be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the additional notes are not fungible with the notes for U.S. federal income tax purposes, the additional notes will have a separate CUSIP number, if applicable. Unless the context otherwise requires, for all purposes of the indenture and this "Description of Senior Secured Notes," references to the notes include any additional notes actually issued.

Principal of, premium, if any, and interest on the notes will be payable, and the notes may be exchanged or transferred, at the office or agency designated by the Issuers (which initially shall be the designated office or agency of the Trustee).

The exchange notes will be issued only in fully registered form, without coupons, in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof, provided that the exchange notes may be issued in denominations of less than $1,000 solely to accommodate book-entry positions that have been created by a DTC participant in denominations of less than $1,000. No service charge will be made for any registration of transfer or exchange of the notes, but in certain circumstances the Issuers may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith.

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Terms of the Notes

The notes are senior obligations of the Issuers, have the benefit of the security interests in the Collateral described below under "—Security" and will mature on May 1, 2019. Each note bears interest at a rate of 6.875% per annum from the Issue Date or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on April 15 or October 15 immediately preceding the interest payment date on May 1 and November 1 of each year, commencing November 1, 2012.

Optional Redemption

On or after May 1, 2015, the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 1 of the years set forth below:

Period

2015	103.438	%
2016	101.719	%
2017 and thereafter	100.000	%

In addition, prior to May 1, 2015 the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price equal to 100% of the principal amount of the notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to May 1, 2015 the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 106.875%, plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided , however , that at least 50% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) must remain outstanding after each such redemption; provided , further , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days' notice mailed to each holder of notes being redeemed and otherwise in accordance with the procedures set forth in the indenture.

Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuers' discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

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Selection

In the case of any partial redemption, selection of notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed, or if the notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in such manner that complies with the applicable legal requirements and the requirements of DTC, if applicable); provided that no notes of $2,000 or less shall be redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuers have deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and additional interest (if any) on, the notes to be redeemed.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain circumstances, the Issuers may be required to offer to purchase notes as described under the captions "—Change of Control" and "—Certain Covenants—Asset Sales." We may at any time and from time to time purchase notes in the open market or otherwise.

Ranking

The indebtedness evidenced by the notes is senior Indebtedness of the Issuers, ranks pari passu in right of payment with all existing and future senior Indebtedness of the Issuers, have the benefit of the security interest in the Collateral as described under "—Security" and is senior in right of payment to all existing and future Subordinated Indebtedness of the Issuers. Pursuant to the Security Documents and the Intercreditor Agreements, the security interests securing the notes are senior in priority (subject to Permitted Liens, including exceptions described under the caption "—Security") to all security interests in the Notes Priority Collateral granted to secure the First-Priority Lien Obligations and junior in priority (subject to Permitted Liens, including exceptions described under the caption "—Security") to all security interests in the RBL Priority Collateral at any time granted to secure First-Priority Lien Obligations. The notes rank pari passu with the loans under the Term Loan Facility.

The indebtedness evidenced by the Subsidiary Guarantees is senior Indebtedness of the applicable Subsidiary Guarantor, ranks pari passu in right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor, have the benefit of the security interest in the Collateral of such Subsidiary Guarantor as described under "—Security" and are senior in right of payment, to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor. Pursuant to the Security Documents and the Intercreditor Agreements, the security interests securing the Subsidiary Guarantees are senior in priority (subject to Permitted Liens, including exceptions described under the caption "—Security") to all security interests in the Notes Priority Collateral granted to secure the First-Priority Lien Obligations and junior in priority (subject to Permitted Liens, including exceptions described under the caption "—Security") to all security interests in the Collateral at any time granted to secure First-Priority Lien Obligations. The Subsidiary Guarantees ranks pari passu with the guarantees of the loans under the Term Loan Facility.

At June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions:

(1): Holdings and its Subsidiaries would have had $1,900 million in aggregate principal amount of Secured Indebtedness outstanding, including the notes and loans under the Term Loan Facility, of which $400 million of Secured Indebtedness would have been outstanding under

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the Credit Agreement (which constitutes First-Priority Lien Obligations), and approximately $1.5 billion million would have been available and undrawn, and to all of which (other than the Term Loan Facility) the notes will be subordinated with respect to the Liens on the RBL Priority Collateral shared by such Indebtedness; and

(2): Holdings and its Subsidiaries would have had $2,350 million in aggregate principal amount of senior unsecured Indebtedness outstanding, represented by the Senior Notes.

Although the indenture limits the Incurrence of Indebtedness and the issuance of Disqualified Stock by Holdings and its Restricted Subsidiaries, and the issuance of Preferred Stock by the Restricted Subsidiaries of Holdings that are not Subsidiary Guarantors, such limitation is subject to a number of significant qualifications and exceptions. Holdings and its Subsidiaries are able to Incur additional amounts of Indebtedness. Under certain circumstances the amount of such Indebtedness could be substantial and, subject to certain limitations, such Indebtedness may be Secured Indebtedness constituting First-Priority Lien Obligations or Other Second-Lien Obligations. See "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Liens."

Holdings is a holding company that has no material assets or operations other than the equity in the assets of its Subsidiaries. Unless a Subsidiary is a Subsidiary Guarantor, claims of creditors of such Subsidiary, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiary, generally will have priority with respect to the assets and earnings of such Subsidiary over the claims of creditors of the Issuers, including holders of the notes. The notes, therefore, will be effectively subordinated to holders of indebtedness and other creditors (including trade creditors) and preferred stockholders (if any) of Subsidiaries of Holdings that are not Subsidiary Guarantors. Our only Subsidiaries that are not Subsidiary Guarantors will be (i) non-Wholly Owned Subsidiaries and (ii) Foreign Subsidiaries, as well as Domestic Subsidiaries (x) that own no material assets (directly or through their Subsidiaries) other than equity interests of one or more of Foreign Subsidiaries that are CFCs or (y) that are Subsidiaries of Foreign Subsidiaries, all of which, as of June 30, 2012, had no outstanding indebtedness, excluding intercompany obligations.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—The notes will be structurally subordinated to all liabilities of our non-guarantor subsidiaries."

Security

The Note Obligations will be secured (i) by first-priority security interests in 65% of the voting capital stock and 100% of the nonvoting capital stock of first-tier Foreign Subsidiaries that are owned by any Issuer or any Subsidiary Guarantor, subject to the limitation set forth below under "—Limitation on Stock Collateral" (the " Notes/Term Loan Priority Collateral ") and (ii) by second-priority security interests in the collateral that secures the obligations of the Issuers and the Subsidiary Guarantors under the Credit Agreement other than the capital stock of Holdings (the " RBL Priority Collateral " and, together with the Notes/Term Loan Priority Collateral, the " Collateral "), in each case, subject to Permitted Liens. The Term Loan Facility is secured by security interests in both the RBL Priority Collateral and the Notes/Term Loan Priority Collateral that rank pari passu with the security interests securing the Notes Obligations. The Issuers and the Subsidiary Guarantors may incur additional Indebtedness in the future that may be secured by security interests in both the RBL Priority Collateral and the Notes/Term Loan Priority Collateral that rank pari passu with the security interests securing the Notes Obligations.

The Collateral consists of substantially all of the property and assets, in each case, that are held by any Issuer or Subsidiary Guarantor, to the extent that such assets secure the First-Priority Lien Obligations and to the extent that a security interest is able to be granted or perfected therein, subject to the exceptions described below. Please see "Description of Other Indebtedness—The RBL Facility—

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Guarantees and Security" for a description of the RBL Priority Collateral. The initial Collateral does not include, subject to certain exceptions, (i) any real property (owned or leased) or oil and gas properties (owned or leased), other than those securing the Credit Agreement, (ii) motor vehicles or other assets subject to certificates of title, letter of credit rights (other than to the extent a Lien thereon can be perfected by filing a customary financing statement) and commercial tort claims, (iii) those assets over which the granting of security interests in such assets would be prohibited by an enforceable contractual obligation binding on the assets that existed at the time of the acquisition thereof and was not created or made binding on the assets in contemplation or in connection with the acquisition of such assets (except in the case of assets owned on the Issue Date or acquired after the Issue Date with Indebtedness of the type permitted pursuant to clause (d) under the second paragraph under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"), applicable law or regulation (in each case, except to the extent such prohibition is unenforceable after giving effect to applicable provisions of the Uniform Commercial Code, other than proceeds thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibitions) or to the extent that such security interests would require obtaining the consent of any governmental authority or would result in materially adverse tax consequences as reasonably determined by Holdings, (iv) except with respect to the capital stock referenced in subclause (i) of the first sentence of the preceding paragraph, any foreign collateral or credit support, (v) margin stock and, to the extent prohibited by the terms of any applicable organizational documents, joint venture agreement or shareholders' agreement, equity interests in any Person other than Wholly-Owned Subsidiaries, (vi) any right, title or interest in any license, contract or agreement to which an Issuer or a Subsidiary Guarantor is a party or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would violate the terms of applicable law or of such license, contract or agreement, or result in a breach of the terms of, or constitute a default under, any such license, contract or agreement to which an Issuer or such Subsidiary Guarantor is a party (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code or any other applicable law or regulation (including Title 11 of the United States Code) or principles of equity); provided, that immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include all such rights and interests as if such provision had never been in effect, (vii) any equipment or other asset owned by an Issuer or any Subsidiary Guarantor that is subject to a purchase money lien or a Capitalized Lease Obligation, in each case, as permitted under the Indenture, if the contract or other agreement in which the Lien is granted (or the documentation providing for such Capitalized Lease Obligation) prohibits or requires the consent of any Person other than an Issuer or any Subsidiary Guarantor as a condition to the creation of any other security interest on such equipment or asset and, in each case, the prohibition or requirement is permitted under the Indenture, (viii) other than with respect to Notes/Term Loan Priority Collateral, any asset at any time that is not then subject to a Lien securing First-Priority Lien Obligations at such time, (ix) with respect to Notes/Term Loan Priority Collateral, any asset at any time that is not then subject to a Lien securing Second Lien Term Loan Obligations, except for the release of all or substantially all of the Collateral or in connection with the repayment in full of the Second Lien Term Loan Obligations, and (x) certain other exceptions described in the Security Documents, including the limitation on stock collateral described below (all such excluded assets referred to as " Excluded Assets "). The foregoing Excluded Assets (other than stock collateral not subject to the limitations described below) will not secure the Credit Agreement or other First-Priority Lien Obligations. The security interests in the RBL Priority Collateral securing the notes are second in priority to any and all security interests at any time granted to secure the First-Priority Lien Obligations and are also subject to all other Permitted Liens. No control agreements or control arrangements will be required with respect to any assets requiring perfection through control, control agreements or other control arrangements (other than control of pledged capital stock that is certificated to the extent otherwise required to be included in the Collateral), including deposit accounts, securities accounts and commodities accounts. The First-Priority

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Lien Obligations include Secured Bank Indebtedness and related obligations, as well as certain Hedging Obligations and certain other obligations in respect of cash management services. The other Persons holding First-Priority Lien Obligations may have rights and remedies with respect to the RBL Priority Collateral that, if exercised, could adversely affect the value of the RBL Priority Collateral or the ability of the RBL Agent or Second Lien Agent under the applicable intercreditor agreement to realize or foreclose on the RBL Priority Collateral on behalf of the holders of the notes. The RBL Agent and Second Lien Agent also have rights and remedies with respect to the Collateral that, if exercised, could also adversely affect the value of the Collateral or the ability of the holders of the notes to cause a realization or foreclosure on the Collateral, particularly the rights described below under "—Security—Intercreditor Agreements."

The Issuers and the Subsidiary Guarantors are able to incur additional Indebtedness in the future that could share in the Collateral, including additional First-Priority Lien Obligations and additional Indebtedness that would be secured on a pari passu basis with the notes. The amount of such First-Priority Lien Obligations and additional Indebtedness is limited by the covenants described under "—Certain Covenants—Liens" and "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuances of Disqualified Stock and Preferred Stock." Under certain circumstances, the amount of such First-Priority Lien Obligations and additional Indebtedness could be significant.

Limitations on Stock Collateral

The Capital Stock and securities of a Subsidiary of Holdings that are owned by an Issuer or any Subsidiary Guarantor will constitute Collateral only to the extent that such Capital Stock and securities can secure the notes without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency). In the event that Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiary's Capital Stock or securities secure the notes or any Guarantee, then the Capital Stock and/or securities of such Subsidiary shall automatically be deemed not to be part of the Collateral (but only to the extent necessary to not be subject to such requirement). In such event, the Security Documents may be amended or modified, without the consent of the Trustee or any holder of notes, to the extent necessary to release the security interests on the shares of Capital Stock and securities that are so deemed to no longer constitute part of the Collateral.

In the event that Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary's Capital Stock or securities to secure the notes in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and/or securities of such Subsidiary shall automatically be deemed to be a part of the Collateral (but only to the extent that will not result in such Subsidiary being subject to any such financial statement requirement). In such event, the Security Documents may be amended or modified, without the consent of the Trustee or any holder of notes, to the extent necessary to subject to the Liens under the Security Documents such additional Capital Stock and securities, on the terms contemplated herein.

After Acquired Collateral

Subject to certain limitations and exceptions (including Excluded Assets), if an Issuer or any Subsidiary Guarantor creates any additional security interest upon any property or asset to secure any First-Priority Lien Obligations (which include Obligations in respect of the Credit Agreement), it must

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concurrently grant a second priority security interest (subject to Permitted Liens, including the first priority lien that secures obligations in respect of the First-Priority Lien Obligations) upon such property as security for the notes. Also, if granting a security interest in such property requires the consent of a third party, Holdings will use commercially reasonable efforts to obtain such consent with respect to the second-priority security interest for the benefit of the Second Lien Collateral Agent on behalf of the Trustee and the holders of the notes. If such third party does not consent to the granting of the second-priority security interest after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such security interest.

Security Documents

The Issuers, the Subsidiary Guarantors and the Second Lien Collateral Agent entered into the Security Documents defining the terms of the security interests that secure the notes. These security interests secure the payment and performance when due of all of the Obligations of the Issuers and the Subsidiary Guarantors under the notes, the Subsidiary Guarantees, the Indenture and the Security Documents, as provided in the Security Documents.

Subject to the terms of the Security Documents, the Issuers and the Subsidiary Guarantors have the right to remain in possession and retain exclusive control of the Collateral securing the notes (other than any cash, securities, obligations and Cash Equivalents constituting part of the Collateral and deposited with the RBL Agent in accordance with the provisions of the Security Documents and other than as set forth in the Security Documents), to freely operate the Collateral and to collect, invest and dispose of any income therefrom.

Intercreditor Agreements

Senior Lien Intercreditor Agreement

The Second Lien Agent, on its own behalf and on behalf of the Secured Parties under the Indenture, the secured parties under the Term Loan Facility and holders of future Other Second-Lien Obligations, and the RBL Agent, on its own behalf and on behalf of the lenders under the Credit Agreement and the holders of the other First-Priority Lien Obligations (together with the Second Lien Agent, the " Applicable Collateral Agents ") entered into a senior lien intercreditor agreement (as hereafter amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the " Senior Lien Intercreditor Agreement ") that sets forth the relative priority of the Liens securing the Second-Priority Lien Obligations compared to the Liens securing the First-Priority Lien Obligations (collectively, all such Second-Priority Lien Obligations and First-Priority Lien Obligations, the " Applicable Obligations "). The RBL Agent shall initially be the administrative agent under the Credit Agreement. Although the holders of Second-Priority Lien Obligations and First-Priority Lien Obligations will not be parties to the Senior Lien Intercreditor Agreement, by their acceptance of the instruments evidencing such Obligations, each will be deemed to agree to be bound thereby. In addition, the Senior Lien Intercreditor Agreement provides that it may be amended from time to time to add holders of Other Second-Lien Obligations to the extent permitted to be incurred under the Indenture, the Term Loan Facility and the Credit Agreement and to add holders of First-Priority Lien Obligations arising under any Credit Agreement Documents. The Senior Lien Intercreditor Agreement allocates the benefits of any Collateral between the holders of the First-Priority Lien Obligations on the one hand and the holders of the Second-Priority Lien Obligations on the other hand.

The Senior Lien Intercreditor Agreement provides, among other things:

•: Lien Priority. Notwithstanding the time, order or method of grant, creation, attachment or perfection of any Liens securing any First-Priority Lien Obligations (the " RBL Liens "), the Liens securing any Second-Priority Lien Obligations (the " Notes Priority Liens "), or the enforceability

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of any such Liens or Obligations, (1) the RBL Liens on the RBL Priority Collateral will rank senior to any Notes Priority Liens on the RBL Priority Collateral, and (2) the Notes Priority Liens on the Notes/Term Loan Priority Collateral will rank senior to any RBL Liens on the Notes/Term Loan Priority Collateral.

•: Prohibition on Contesting Liens and Obligations. No Applicable Collateral Agent or holder of any Applicable Obligation may contest or support any other person in contesting the validity or enforceability of the Liens of any other Applicable Collateral Agent or holder of any other class of Applicable Obligations.
•: Exercise of Remedies and Release of Liens with respect to the RBL Priority Collateral. Prior to the Discharge of the First-Priority Lien Obligations, the RBL Agent will have the sole power to exercise remedies against the RBL Priority Collateral (subject to the right of the Second Lien Agent to take limited protective measures with respect to the Notes Priority Liens and to take certain actions that would be permitted to be taken by unsecured creditors) and to foreclose upon and dispose of the RBL Priority Collateral. Upon any sale of any RBL Priority Collateral in connection with any enforcement action consented to by the RBL Agent, which results in the release of the Liens of such First Lien on such item of RBL Priority Collateral, the Liens of each other class of Applicable Obligations on such item of RBL Priority Collateral will be automatically released.
•: Exercise of Remedies and Release of Liens with respect to the Notes/Term Loan Priority Collateral . Prior to the Discharge of Second-Priority Lien Obligations, the Second Lien Agent acting pursuant to the Pari Passu Intercreditor Agreement will have the sole power to exercise remedies against the Notes/Term Loan Priority Collateral (subject to the right of the RBL Agent to take limited protective measures with respect to the RBL Liens and to take certain actions that would be permitted to be taken by unsecured creditors) and to foreclose upon and dispose of the Notes/Term Loan Priority Collateral. Upon any sale of any Notes/Term Loan Priority Collateral in connection with any enforcement action consented to by the Second Lien Agent, which results in the release of the Liens of such Second Lien Agent on such item of Notes/Term Loan Priority Collateral, the Liens of each other class of Applicable Obligations on such item of Notes/Term Loan Priority Collateral will be automatically released.
•: Application of Proceeds and Turn-Over Provisions. In connection with any enforcement action with respect to the Collateral or including in respect of any Insolvency or Liquidation Proceeding, (x)(1) all proceeds of RBL Priority Collateral will first be applied to the repayment of all First-Priority Lien Obligations (including all claims for post-petition interest, whether such claims are allowed or allowable under Section 506(b) of the Bankruptcy Code in any insolvency or liquidation proceeding), before being applied to any Second-Priority Lien Obligations; and (2) after the Discharge of First-Priority Lien Obligations, if any Second-Priority Lien Obligations remain outstanding, all proceeds of RBL Priority Collateral will be applied to the repayment of any outstanding Second-Priority Lien Obligations in accordance with the terms of the Second Priority Documents and (y)(1) all proceeds of Notes/Term Loan Priority Collateral shall first be applied to the repayment of all Second-Priority Lien Obligations (including all claims for post-petition interest, whether such claims are allowed or allowable under Section 506(b) of the Bankruptcy Code in any insolvency or liquidation proceeding) before being applied to any First-Priority Lien Obligations; and (2) after the Discharge of Second-Priority Lien Obligations, if any First-Priority Lien Obligations remain outstanding, all proceeds of Notes/Term Loan Priority Collateral will be applied to the repayment of any outstanding First-Priority Lien Obligations in accordance with the terms of the related first-priority security documents. If any holder of any Applicable Obligations or if any Applicable Collateral Agent receives any proceeds of the Collateral in contravention of the foregoing, such proceeds will be turned over to the Applicable Collateral Agent entitled to receive such proceeds pursuant to the prior sentence, for application

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in accordance with the prior sentence (even if such turnover has the effect of reducing the recovery of the holder of the Applicable Obligations).

•: Amendments and Refinancings. The First-Priority Lien Obligations and the Second-Priority Lien Obligations may be amended or refinanced subject to the continuing rights of the holders of such refinancing Indebtedness under the Senior Lien Intercreditor Agreement.

In addition, the Senior Lien Intercreditor Agreement provides that if Holdings or any of its Subsidiaries is subject to a case under the Bankruptcy Code or any other bankruptcy law:

•: (x) if the RBL Agent desires to permit the use of cash collateral or to permit the Issuers or any Subsidiary Guarantor to obtain financing under Section 363 or Section 364 of the Bankruptcy Code or under any other similar law (" DIP Financing ") secured by a lien on RBL Priority Collateral, then the Second Lien Agent and the holders of Second-Priority Lien Obligations agree not to object to such use of cash collateral or DIP Financing or to request adequate protection (except as otherwise permitted under the Senior Lien Intercreditor Agreement) or any other relief in connection therewith and, to the extent the Liens on RBL Priority Collateral securing the First-Priority Lien Obligations are subordinated or pari passu with such DIP Financing, will subordinate or "carve out" its Liens in the RBL Priority Collateral to such DIP Financing (and all Obligations relating thereto), any adequate protection Liens granted to the RBL Agent on account of the RBL Priority Collateral, and any "carve-out" from the RBL Priority Collateral for professional or United States Trustee fees agreed to by the RBL Agent, in each case on the same basis as such Liens are subordinated to or "carved out from" the Liens in such RBL Priority Collateral securing the First-Priority Lien Obligations; and (y) if the Second Lien Agent desires to permit the Issuers or any Subsidiary Guarantor to obtain any DIP Financing secured by a Lien on Notes/Term Loan Priority Collateral, then the RBL Agent and the holders of First-Priority Lien Obligations agree not to object to such DIP Financing or to request adequate protection (except as otherwise permitted under the Senior Lien Intercreditor Agreement) or any other relief in connection therewith and, to the extent the Liens on Notes/Term Loan Priority Collateral securing the Second-Priority Lien Obligations are subordinated or pari passu with respect to such DIP Financing, will subordinate or "carve out" its Liens in the Notes/Term Loan Priority Collateral to such DIP Financing (and all Obligations relating thereto), any adequate protection Liens granted to the Second Lien Agent on account of the Notes/Term Loan Priority Collateral, and any "carve-out" from the Notes/Term Loan Priority Collateral for professional or United States Trustee fees agreed to by the Second Lien Agent, in each case on the same basis as such Liens are subordinated to the RBL Liens in the Notes/Term Loan Priority Collateral.
•: (x) in the case of RBL Priority Collateral, the Second Lien Agent and the holders of Second-Priority Lien Obligations will not object to, and will not otherwise contest (i) any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of the First-Priority Lien Obligations made by the RBL Agent or any holder of such First-Priority Lien Obligations (ii) any lawful exercise by any holder of First-Priority Lien Obligations of the right to credit bid First-Priority Lien Obligations in any sale in foreclosure of RBL Priority Collateral; and (iii) any other request for judicial relief made in any court by any holder of First-Priority Lien Obligations relating to the lawful enforcement of any Lien on the RBL Priority Collateral; and (y) in the case of Notes/Term Loan Priority Collateral, the RBL Agent and the holders of First-Priority Lien Obligations will not object to, and will not otherwise contest (i) any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of the Second-Priority Lien Obligations made by the Second Lien Agent or any holder of such Second-Priority Lien Obligations; (ii) any lawful exercise by any holder of Second-Priority Lien Obligations of the right to credit bid Second-Priority Lien Obligations in any sale in foreclosure of Notes/Term Loan Priority

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Collateral; and (iii) any other request for judicial relief made in any court by any holder of Second-Priority Lien Obligations relating to the lawful enforcement of any Lien on the Notes/Term Loan Priority Collateral.

•: (x) in the case of RBL Priority Collateral, the Second Lien Agent and the holders of Second-Priority Lien Obligations will not object to (and will not otherwise contest) any order relating to a sale of RBL Priority Collateral of any Issuer or Subsidiary Guarantor for which the RBL Agent has consented that provides, to the extent the sale is to be free and clear of Liens, that the RBL Liens and the Notes Priority Liens will attach to the proceeds of the sale on the same basis of priority as the Liens securing such Obligations on the assets being sold, in accordance with the Senior Lien Intercreditor Agreement; and (y) in the case of Notes/Term Loan Priority Collateral, the RBL Agent and the holders of First-Priority Lien Obligations will not object to (and will not otherwise contest) any order relating to a sale of Notes/Term Loan Priority Collateral of any Issuer or Subsidiary Guarantor for which the Second Lien Agent has consented that provides, to the extent the sale is to be free and clear of Liens, that the RBL Liens and the Notes Priority Liens will attach to the proceeds of the sale on the same basis of priority as such Liens attached to the assets being sold, in accordance with the Senior Lien Intercreditor Agreement.
•: (x) in the case of RBL Priority Collateral, the Second Lien Agent and the holders of Second-Priority Lien Obligations will not seek relief from the automatic stay or any other stay in any insolvency or liquidation proceeding without the prior consent of the RBL Agent; and (y) in the case of Notes/Term Loan Priority Collateral, the RBL Agent and the holders of First-Priority Lien Obligations will not seek relief from the automatic stay or any other stay in any insolvency or liquidation proceeding without the prior consent of the Second Lien Agent.
•: In respect of the RBL Priority Collateral, the Second Lien Agent and the holders of Second-Priority Lien Obligations will not contest (or support any other person contesting) (a) any request by the RBL Agent or the holders of First-Priority Lien Obligations for adequate protection or (b) any objection by the RBL Agent or the holders of First-Priority Lien Obligations to any motion, relief, action or proceeding based on the RBL Agent's or the holders of First-Priority Lien Obligations' claiming a lack of adequate protection. Notwithstanding the foregoing, in any insolvency or liquidation proceeding, (i) if the holders of First-Priority Lien Obligations (or any subset thereof) are granted adequate protection in respect of the RBL Priority Collateral in the form of a lien on additional or replacement collateral, then the Second Lien Agent may seek or request adequate protection in the form of a lien on such additional or replacement collateral, so long as, with respect to RBL Priority Collateral, such lien is subordinated to adequate protection liens granted to holders of the First-Priority Lien Obligations, on the same basis as the other Second-Priority Liens on RBL Priority Collateral are subordinated to the Liens on RBL Priority Collateral securing the First-Priority Lien Obligations under the Senior Lien Intercreditor Agreement and (ii) in the event the Second Lien Agent seeks or requests adequate protection in respect of the RBL Priority Collateral and such adequate protection is granted in the form of a lien on additional or replacement collateral, then the Second Lien Agent and the holders of Second-Priority Lien Obligations agree that the holders of the First-Priority Lien Obligations shall also be granted an adequate protection lien on such additional or replacement collateral, and that any such adequate protection lien on such additional or replacement collateral that constitutes RBL Priority Collateral granted to the holders of the First-Priority Lien Obligations shall be senior to the adequate protection liens on such collateral granted to the holders of the Second-Priority Lien Obligations on the same basis as the RBL Liens on the RBL Priority Collateral are senior to the Liens thereon securing the Second-Priority Lien Obligations under the Senior Lien Intercreditor Agreement. In addition, to the extent that the RBL Agent is granted a superpriority administrative claim as a form of

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adequate protection in respect of the RBL Priority Collateral, the holders of the Second-Priority Lien Obligations may also receive a superpriority administrative claim as a form of adequate protection in respect of the RBL Priority Collateral that is subordinate to the superpriority administrative claim granted to the RBL Agent.

•: In respect of the Notes/Term Loan Priority Collateral, the RBL Agent and the holders of First-Priority Lien Obligations will not contest (or support any other person contesting) (a) any request by the Second Lien Agent or the holders of Second-Priority Lien Obligations for adequate protection or (b) any objection by the Second Lien Agent's or the holders of Second-Priority Lien Obligations to any motion, relief, action or proceeding based on the Second Lien Agent and the holders of Second-Priority Lien Obligations' claiming a lack of adequate protection. Notwithstanding the foregoing, in any insolvency or liquidation proceeding, (i) if the holders of Second-Priority Lien Obligations (or any subset thereof) are granted adequate protection in respect of the Notes/Term Loan Priority Collateral in the form of a lien on additional or replacement collateral, then the RBL Agent may seek or request adequate protection in the form of a lien on such additional or replacement collateral, so long as, with respect to the Notes/Term Loan Priority Collateral, such lien is subordinated to the adequate protection liens granted to holders of the Second-Priority Lien Obligations, on the same basis as the other First-Priority Liens on the Notes/Term Loan Priority Collateral are subordinated to the Liens on the Notes/Term Loan Priority Collateral securing the Second-Priority Lien Obligations under the Senior Lien Intercreditor Agreement and (ii) in the event the RBL Agent seeks or requests adequate protection in respect of the Notes/Term Loan Priority Collateral and such adequate protection is granted in the form of a lien on additional or replacement collateral, then the RBL Agent and the holders of the First-Priority Lien Obligations agree that the holders of the Second-Priority Lien Obligations shall also be granted an adequate protection lien on such additional or replacement collateral, and that any such adequate protection lien on such additional or replacement collateral that constitutes Notes/Term Loan Priority Collateral granted to the holders of the Second-Priority Lien Obligations shall be senior to the adequate protection liens on such collateral granted to the holders of the First-Priority Lien Obligations on the same basis as the Second-Priority Liens on the Notes/Term Loan Priority Collateral are senior to the Liens thereon securing the First-Priority Lien Obligations under the Senior Lien Intercreditor Agreement. In addition, to the extent that the Second Lien Agent is granted a superpriority administrative claim as a form of adequate protection in respect of the Notes/Term Loan Priority Collateral, the holders of the First-Priority Lien Obligations may also receive a superpriority administrative claim as a form of adequate protection in respect of the Notes/Term Loan Priority Collateral that is subordinate to the superpriority administrative claim granted to the Second Lien Agent.
•: (x) Neither the Second Lien Agent nor any other holder of Second-Priority Lien Obligations shall oppose or seek to challenge any claim by the RBL Agent or any holder of First-Priority Lien Obligations for allowance of First-Priority Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the RBL Liens on the RBL Priority Collateral, without regard to the existence of the Notes Priority Liens on the RBL Priority Collateral; and (y) neither the RBL Agent nor any holder of First-Priority Lien Obligations shall oppose or seek to challenge any claim by the Second Lien Agent or any other holder of Second-Priority Lien Obligations for allowance of Second-Priority Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Notes Priority Liens on the Notes/Term Loan Priority Collateral, without regard to the existence of the RBL Liens on the Notes/Term Loan Priority Collateral.

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•: (x) until the Discharge of First-Priority Lien Obligations has occurred, the Second Lien Agent, on behalf of itself and the holders of Second-Priority Lien Obligations, will not assert or enforce any claim under Section 506(c) of the United States Bankruptcy Code senior to or on a parity with the RBL Liens on RBL Priority Collateral for costs or expenses of preserving or disposing of any Collateral; and (y) until the Discharge of Second-Priority Lien Obligations has occurred, the RBL Agent, on behalf of itself and the holders of First-Priority Lien Obligations, will not assert or enforce any claim under Section 506(c) of the United States Bankruptcy Code senior to or on a parity with the Notes Priority Liens on Notes/Term Loan Priority Collateral for costs or expenses of preserving or disposing of any Collateral.

Pari Passu Intercreditor Agreement

The Trustee and the Second Lien Collateral Agent entered into a Pari Passu Intercreditor Agreement (as the same may be amended from time to time, the " Pari Passu Intercreditor Agreement ") with the Second Lien Agent with respect to the Notes/Term Loan Priority Collateral, which may be amended from time to time without the consent of the holders of the notes to add other parties holding Second Priority Lien Obligations permitted to be incurred under the Indenture, the Term Loan Facility and the Pari Passu Intercreditor Agreement. The Second Lien Agent shall initially be the administrative agent under the Term Loan Facility.

Under the Pari Passu Intercreditor Agreement, as described below, the "Applicable Authorized Representative" has the right to direct foreclosures and take other actions with respect to the Common Collateral, and the Authorized Representatives of other Series of Second-Priority Lien Obligations have no right to take actions with respect to the Common Collateral. The Applicable Authorized Representative will initially be the administrative agent under the Term Loan Facility, and the Trustee for the holders of the notes, as Authorized Representative in respect of the notes, will have no rights to take any action under the Pari Passu Intercreditor Agreement.

The administrative agent under the Term Loan Facility will remain the Applicable Authorized Representative until the earlier of (1) the Discharge of Second Lien Term Loan Obligations and (2) the Non-Controlling Authorized Representative Enforcement Date (such date, the " Applicable Authorized Agent Date "). After the Applicable Authorized Agent Date, the Applicable Authorized Representative will be the Authorized Representative of the Series of Second Priority Lien Obligations that constitutes the largest outstanding principal amount of any then outstanding Series of Second-Priority Lien Obligations, other than the Second Lien Term Loan Obligations, with respect to the Common Collateral (the " Major Non-Controlling Authorized Representative ").

The " Non-Controlling Authorized Representative Enforcement Date " is the date that is 180 days (throughout which 180-day period the applicable Authorized Representative was the Major Non-Controlling Authorized Representative) after the occurrence of both (a) an event of default, as defined in the Indenture or other applicable governing instrument for that Series of Second-Priority Lien Obligations, and (b) the Second Lien Collateral Agent's and each other Authorized Representative's receipt of written notice from that Authorized Representative certifying that (i) such Authorized Representative is the Major Non-Controlling Authorized Representative and that an event of default, as defined in the Indenture or other applicable governing instrument for that Series of Second-Priority Lien Obligations, has occurred and is continuing and (ii) the Second-Priority Lien Obligations of that Series are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the Indenture or other applicable governing instrument for that Series of Second-Priority Lien Obligations; provided that the Non-Controlling Authorized Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Common Collateral (1) at any time the administrative agent under the Term Loan Facility or the Second Lien Collateral Agent has commenced and is diligently pursuing any enforcement action with respect to such Common Collateral or (2) at any time an Issuer or the

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Subsidiary Guarantor that has granted a security interest in such Common Collateral is then a debtor under or with respect to (or otherwise subject to) any insolvency or liquidation proceeding.

The Applicable Authorized Representative shall have the sole right to instruct the Second Lien Collateral Agent to act or refrain from acting with respect to the Common Collateral, (b) the Second Lien Collateral Agent shall not follow any instructions with respect to such Common Collateral from any representative of any Non-Controlling Secured Party or other Second Lien Secured Party (other than the Applicable Authorized Representative), and (c) no Authorized Representative of any Non-Controlling Secured Party or other Second Lien Secured Party (other than the Applicable Authorized Representative) will instruct the Second Lien Collateral Agent to commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interests in or realize upon, or take any other action available to it in respect of, the Common Collateral.

Notwithstanding the equal priority of the Liens, the Second Lien Collateral Agent, acting on the instructions of the Applicable Authorized Representative, may deal with the Common Collateral as if such Applicable Authorized Representative had a senior Lien on such Collateral. No representative of any Non-Controlling Secured Party may contest, protest or object to any foreclosure proceeding or action brought by the Second Lien Collateral Agent, Applicable Authorized Representative or Controlling Secured Party. The Second Lien Collateral Agent and each other Authorized Representative will agree that it will not accept any Lien on any Collateral for the benefit of the holders of the notes (other than funds deposited for the discharge or defeasance of the notes) other than pursuant to the Second Lien Security Documents. Each of the Second Lien Secured Parties also will agree that it will not contest or support any other person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any of the Second Lien Secured Parties in all or any part of the Collateral, or the provisions of the Pari Passu Intercreditor Agreement.

If an event of default under any Second Priority Document has occurred and is continuing and the Second Lien Collateral Agent is taking action to enforce rights in respect of any Common Collateral, or any distribution is made with respect to any Common Collateral in any bankruptcy case of an Issuer or any Subsidiary Guarantor, the proceeds of any sale, collection or other liquidation of any such Collateral by the Second Lien Collateral Agent or any other Second Lien Secured Party (or received pursuant to any other intercreditor agreement), as applicable, and proceeds of any such distribution (subject, in the case of any such distribution, to the paragraph immediately following) to which the Second Priority Lien Obligations are entitled under any other intercreditor agreement shall be applied among the Second Priority Lien Obligations to the payment in full of the Second Priority Lien Obligations on a ratable basis, after payment of all amounts owing to the Second Lien Collateral Agent.

Notwithstanding the foregoing, with respect to any Common Collateral for which a third party (other than a Second Lien Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of Second Priority Lien Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of Second Priority Lien Obligations (such third party, an " Intervening Creditor "), the value of any Common Collateral or proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Common Collateral or proceeds to be distributed in respect of the Series of Second Priority Lien Obligations with respect to which such Impairment exists.

None of the Second Lien Secured Parties may institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Second Lien Collateral Agent or any other Second Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Common Collateral. In addition, none of the Second Lien Secured

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Parties may seek to have any Common Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Collateral. If any Second Lien Secured Party obtains possession of any Common Collateral or realizes any proceeds or payment in respect thereof, at any time prior to the discharge of each of the Second Priority Lien Obligations, then it must hold such Common Collateral, proceeds or payment in trust for the other Second Lien Secured Parties and promptly transfer such Common Collateral, proceeds or payment to the Second Lien Collateral Agent to be distributed in accordance with the Pari Passu Intercreditor Agreement.

If an Issuer or any Subsidiary Guarantor becomes subject to any bankruptcy case, the Pari Passu Intercreditor Agreement will provide that (1) if an Issuer or any Subsidiary Guarantor shall, as debtor(s)-in-possession, move for approval of financing (the " DIP Financing ") to be provided by one or more lenders (the " DIP Lenders ") under Section 364 of the Bankruptcy Code or the use of cash collateral under Section 363 of the Bankruptcy Code, each Second Lien Secured Party will agree not to object to any such financing or to the Liens on the Common Collateral securing the same (the " DIP Financing Liens ") or to any use of cash collateral that constitutes Common Collateral, unless any Controlling Secured Party, or an Authorized Representative of any Controlling Secured Party, shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Common Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Common Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any Second Lien Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Common Collateral granted to secure the Second-Priority Lien Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Common Collateral as set forth in the Pari Passu Intercreditor Agreement), in each case so long as:

(A): the Second Lien Secured Parties of each Series retain the benefit of their Liens on all such Common Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding, with the same priority vis-a-vis all the other Second Lien Secured Parties (other than any Liens of the Second Lien Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the bankruptcy case,
(B): the Second Lien Secured Parties of each Series are granted Liens on any additional collateral pledged to any Second Lien Secured Parties as adequate protection or otherwise in connection with such DIP Financing or use of cash collateral, with the same priority vis-a-vis the Second Lien Secured Parties as set forth in the Pari Passu Intercreditor Agreement,
(C): if any amount of such DIP Financing or cash collateral is applied to repay any of the Second Priority Lien Obligations, such amount is applied pursuant to the Pari Passu Intercreditor Agreement, and
(D): if any Second Lien Secured Parties are granted adequate protection, including in the form of periodic payments, in connection with such DIP Financing or use of cash collateral, the proceeds of such adequate protection is applied pursuant to the Pari Passu Intercreditor Agreement; provided that the Second Lien Secured Parties of each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any Collateral subject to Liens in favor of the Second Lien Secured Parties of such Series or its representative that shall not constitute Common Collateral; and

provided , further, that the Second Lien Secured Parties receiving adequate protection shall not object to any other Second Lien Secured Party receiving adequate protection comparable to any adequate protection granted to such Second Lien Secured Parties in connection with a DIP Financing or use of cash collateral.

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The Second Lien Secured Parties acknowledge that the Second-Priority Lien Obligations of any Series may, subject to the limitations set forth in the other Second-Priority Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in the Pari Passu Intercreditor Agreement defining the relative rights of the Second Lien Secured Parties of any Series.

Release of Collateral

The Issuers and the Subsidiary Guarantors are entitled to the releases of property and other assets included in the Collateral from the Liens securing the notes under any one or more of the following circumstances:

(1): with respect to RBL Priority Collateral, upon the Discharge of First-Priority Lien Obligations and concurrent release of all other Liens on such property or assets securing First-Priority Lien Obligations (including all commitments and letters of credit thereunder); provided, however , that if an Issuer or any Subsidiary Guarantor subsequently incurs First-Priority Lien Obligations that are secured by Liens on property or assets of an Issuer or any Subsidiary Guarantor of the type constituting the RBL Priority Collateral and the related Liens are incurred in reliance on clause (6)(B) of the definition of Permitted Liens, then Holdings and the Subsidiary Guarantors will be required to reinstitute the security arrangements with respect to the RBL Priority Collateral in favor of the notes, which, in the case of any such subsequent First-Priority Lien Obligations, will be second priority Liens on the RBL Priority Collateral securing such First-Priority Lien Obligations to the same extent provided by the Security Documents and on the terms and conditions of the security documents relating to such First-Priority Lien Obligations, with the second priority Lien held either by the administrative agent, collateral agent or other representative for such First-Priority Lien Obligations or by a collateral agent or other representative designated by Holdings to hold the second priority Liens for the benefit of the holders of the notes and subject to an intercreditor agreement that provides the administrative agent or collateral agent substantially the same rights and powers as afforded under the Senior Lien Intercreditor Agreement;
(2): to enable us to consummate the disposition of such property or assets to a Person that is not an Issuer or a Subsidiary Guarantor to the extent not prohibited under the covenant described under "—Certain Covenants—Asset Sales";
(3): in respect of the property and assets of a Subsidiary Guarantor, upon the designation of such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the covenant described under "—Certain Covenants—Limitation on Restricted Payments" and the definition of "Unrestricted Subsidiary";
(4): in respect of the property and assets of a Subsidiary Guarantor, upon the release or discharge of the guarantee by such Subsidiary Guarantor of the Obligations under the Credit Agreement or any other Indebtedness which resulted in the obligation to become a Subsidiary Guarantor;
(5): in respect of any assets or property constituting RBL Priority Collateral, upon the release of the security interests in such assets or property securing any First-Priority Lien Obligations, other than in connection with a Discharge of First-Priority Lien Obligations; and
(6): as described under "—Amendments and Waivers" below.

If an Event of Default under the Indenture exists on the date of Discharge of First-Priority Lien Obligations, the second priority Liens on the RBL Priority Collateral securing the notes will not be released, except to the extent the RBL Priority Collateral or any portion thereof was disposed of in order to repay the First-Priority Lien Obligations secured by the RBL Priority Collateral, and thereafter

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the Second Lien Agent (or another designated representative appointed pursuant to the terms of the Pari Passu Intercreditor Agreement) will have the right to foreclose or direct the RBL Agent to foreclose upon the RBL Priority Collateral (but in such event, the Liens on the RBL Priority Collateral securing the notes will be released when such Event of Default and all other Events of Default under the Indenture cease to exist).

The security interests in all Collateral securing the notes also will be released upon (i) payment in full of the principal of, together with accrued and unpaid interest (including additional interest, if any) on, the notes and all other Obligations under the Indenture and the Security Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest (including additional interest, if any), are paid (including pursuant to a satisfaction and discharge of the Indenture as described below under "—Satisfaction and Discharge") or (ii) a legal defeasance or covenant defeasance under the Indenture as described below under "—Defeasance."

Subsidiary Guarantees

Each of Holdings' direct and indirect Wholly Owned Restricted Subsidiaries (other than Everest Acquisition Finance Inc.) that are Domestic Subsidiaries and that are borrowers or guarantors under the Credit Agreement jointly and severally irrevocably and unconditionally guarantee on a senior basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under the indenture and the notes, whether for payment of principal of, premium, if any, or interest or additional interest on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Subsidiary Guarantors being herein called the " Subsidiary Guaranteed Obligations "). The Subsidiary Guaranteed Obligations of all Subsidiary Guarantors are secured by first-priority security interests (subject to Permitted Liens) in the Notes Priority Collateral owned by such Subsidiary Guarantor and by second-priority security interests (subject to Permitted Liens) in the RBL Priority Collateral owned by such Subsidiary Guarantor. Such Subsidiary Guarantors agree to pay, in addition to the amount stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the holders in enforcing any rights under the Subsidiary Guarantees.

Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Subsidiary Guarantor without rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See "Risk Factors—Risks Related to Our Indebtedness and the Notes—Because each subsidiary guarantor's liability under its guarantee may be reduced to zero, avoided or released under certain circumstances, you may not receive any payments from some or all of the subsidiary guarantors." After the Issue Date, Holdings will cause each Wholly Owned Restricted Subsidiary (other than an Excluded Subsidiary) that Incurs or guarantees certain Indebtedness of Holdings or any of its Restricted Subsidiaries or issues shares of Disqualified Stock and Everest Acquisition Finance Inc. to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will guarantee payment of the notes on the same unsecured senior basis. See "—Certain Covenants—Future Subsidiary Guarantors."

Each Subsidiary Guarantee will be a continuing guarantee and shall:

(1): remain in full force and effect until payment in full of all the Subsidiary Guaranteed Obligations of such Subsidiary Guarantor;
(2): subject to the next two succeeding paragraphs, be binding upon each such Subsidiary Guarantor and its successors; and
(3): inure to the benefit of and be enforceable by the Trustee, the holders and their successors, transferees and assigns.

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Each Subsidiary's Subsidiary Guarantee will be automatically released upon:

(1): the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of the indenture;
(2): the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under "—Certain Covenants—Limitation on Restricted Payments" and the definition of "Unrestricted Subsidiary";
(3): the release or discharge of the guarantee by such Subsidiary Guarantor of the Credit Agreement or other Indebtedness or the guarantee of any other Indebtedness which resulted in the obligation to guarantee the notes;
(4): the Issuers' exercise of their legal defeasance option or covenant defeasance option as described under "—Defeasance" or if the Issuers' obligations under the indenture are discharged in accordance with the terms of the indenture;
(5): such Restricted Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First-Priority Lien Obligations, subject to, in each case, the application of the proceeds of such foreclosure in the manner described under "—Security—Release of Collateral"; and
(6): the occurrence of a Covenant Suspension Event.

A Restricted Subsidiary's Subsidiary Guarantee also will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

Change of Control

Upon the occurrence of a Change of Control, each holder will have the right to require the Issuers to repurchase all or any part of such holder's notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), except to the extent the Issuers have previously or concurrently elected to redeem notes as described under "—Optional Redemption."

In the event that at the time of such Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of notes pursuant to this covenant, then prior to the mailing of the notice to holders provided for in the immediately following paragraph but in any event within 30 days following any Change of Control, the Issuers shall:

(1): repay in full all Bank Indebtedness or, if doing so will allow the purchase of notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer; or
(2): obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the notes as provided for in the immediately following paragraph.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—We may not be able to repurchase the notes upon a change of control."

Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the notes by delivery of a notice of redemption as described under

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"—Optional Redemption," the Issuers shall mail a notice (a " Change of Control Offer ") to each holder with a copy to the Trustee stating:

(1): that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holder's notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date);
(2): the circumstances and relevant facts and financial information regarding such Change of Control;
(3): the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and
(4): the instructions determined by the Issuers, consistent with this covenant, that a holder must follow in order to have its notes purchased.

A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

In addition, the Issuers will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Issuers and purchases all notes properly tendered and not withdrawn under such Change of Control Offer.

Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of notes issued but not outstanding or will be retired and canceled at the option of the Issuers. Notes purchased by a third party pursuant to the preceding paragraph will have the status of notes issued and outstanding.

The Issuers will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof.

This Change of Control repurchase provision is a result of negotiations between the Issuers and the initial purchasers. The Issuers have no present intention to engage in a transaction involving a Change of Control, although it is possible that the Issuers could decide to do so in the future. Subject to the limitations discussed below, the Issuers could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the Issuers' capital structure or credit rating.

The occurrence of events which would constitute a Change of Control would constitute a default under the Credit Agreement. Future Bank Indebtedness of the Issuers may contain prohibitions on certain events which would constitute a Change of Control or require such Bank Indebtedness to be repurchased upon a Change of Control. Moreover, the exercise by the holders of their right to require the Issuers to repurchase the notes could cause a default under such Bank Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Issuers. Finally, the Issuers' ability to pay cash to the holders upon a repurchase may be limited by the Issuers' then existing financial resources. There can be no assurance that sufficient funds will be available when

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necessary to make any required repurchases. See "Risk Factors—Risks Related to Our Indebtedness and the Notes—We may not be able to repurchase the notes upon a change of control."

The definition of Change of Control includes a phrase relating to the sale, lease or transfer of "all or substantially all" the assets of Holdings and its Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase "substantially all," under New York law, which governs the indenture, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require the Issuers to repurchase such notes as a result of a sale, lease or transfer of less than all of the assets of Holdings and its Subsidiaries taken as a whole to another Person or group may be uncertain.

The provisions under the indenture relating to the Issuers' obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of the notes.

Certain Covenants

Set forth below are summaries of certain covenants that are contained in the indenture. If on any date following the Issue Date, (i) the notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under the indenture then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a " Covenant Suspension Event "), the covenants specifically listed under the following captions in this "Description of Senior Secured Exchange Notes" section of this prospectus will not be applicable to the notes (collectively, the " Suspended Covenants "):

(1): "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(2): "—Limitation on Restricted Payments";
(3): "—Dividend and Other Payment Restrictions Affecting Subsidiaries";
(4): "—Asset Sales";
(5): "—Transactions with Affiliates";
(6): clause (4) of the first paragraph of "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; and
(7): "—Future Subsidiary Guarantors."

If and while Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants, the notes will be entitled to substantially less covenant protection. In the event that Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants under the indenture for any period of time as a result of the foregoing, and on any subsequent date (the " Reversion Date ") one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the notes below an Investment Grade Rating, then Holdings and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the indenture with respect to future events. The period of time between the Covenant Suspension Event and the Reversion Date is referred to in this description as the " Suspension Period. "

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or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to the first or second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (c) of the second paragraph under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under "—Limitation on Restricted Payments" will be made as though the covenant described under "—Limitation on Restricted Payments" had been in effect since the Issue Date and prior, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under the first paragraph of "—Limitation on Restricted Payments." As described above, however, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, the Issuers must comply with the terms of the covenant described under "—Future Subsidiary Guarantors."

For purposes of the "—Asset Sales" covenant, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.

There can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

The indenture provides that:

(1): Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and
(2): Holdings will not permit any of the Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock;

provided , however , that Holdings and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary of Holdings that is not a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that any Restricted Subsidiary that is not a Subsidiary Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of an amount, together with any Refinancing Indebtedness thereof pursuant to clause (o) below, equal to, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), the greater of $150.0 million and 2% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).

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The foregoing limitations will not apply to:

(a): the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers' acceptances thereunder up to an aggregate principal amount outstanding at any time that does not exceed the greatest of (1) $3.0 billion, (2) the sum of (x) $500.0 million and (y) 30% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence and (3) the Borrowing Base at the time of Incurrence;
(b): the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by (1) the notes and the Subsidiary Guarantees, as applicable (not including any additional notes but including exchange notes and related guarantees thereof) and (2) Indebtedness, including in respect of the Senior Notes and the Term Loan Facility (including any guarantees thereof), in an aggregate principal amount for this clause (b)(2) outstanding at any time that, together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, does not exceed $2,750 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(c): Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (a) and (b));
(d): Indebtedness (including Capitalized Lease Obligations) Incurred by Holdings or any Restricted Subsidiary, Disqualified Stock issued by Holdings or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (d), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, does not exceed the greater of $350.0 million and 5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(e): Indebtedness Incurred by Holdings or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(f): Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions, any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of the indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(g): Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is

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subordinated in right of payment to the obligations of the Issuers under the notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (g);

(h): shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (h);
(i): Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (i);
(j): Hedging Obligations that are not incurred for speculative purposes but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(k): obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(l): Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (l), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) below, does not exceed the greater of $500.0 million and 7% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this

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clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed Incurred for purposes of the first paragraph of this covenant from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));

(m): Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of (i) the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Escrow Release Date plus (ii) the amount of net cash proceeds received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date, in each case from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the third paragraph of "—Limitation on Restricted Payments" or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(n): any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of the indenture; provided that (i) if such Indebtedness is by its express terms subordinated in right of payment to the notes or the Subsidiary Guarantee of Holdings or such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the notes or the Subsidiary Guarantee, as applicable and (ii) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, the covenant described under "—Future Subsidiary Guarantors" solely to the extent such covenant is applicable;
(o): the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (b), (c), (d), (l), (m), (o) and (p) of this paragraph up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to the first paragraph of this covenant or clauses (b), (c), (d), (l), (m), (o) and (p) of this paragraph, or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith

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(subject to the following proviso, " Refinancing Indebtedness ") prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

(1): has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date ( provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness constituting First-Priority Lien Obligations);
(2): to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the notes or the Subsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and
(3): shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of Holdings, an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

(p)

Indebtedness, Disqualified Stock or Preferred Stock of (x) Holdings or any Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of the indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either:

(1): Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant; or
(2): the Fixed Charge Coverage Ratio of Holdings would be greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

(q)

Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

(r)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;

(s)

Indebtedness of Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;

(t)

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clause (t) shall cease to be deemed incurred or outstanding for purposes of this clause (t) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (t));

(u): Indebtedness of Holdings or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(v): Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in clause (4) of the third paragraph of the covenant described under "—Limitation on Restricted Payments."

For purposes of determining compliance with this covenant:

(1): in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (v) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this covenant; provided , that (i) only Indebtedness outstanding under the Credit Agreement in excess of $2,000 million may be classified or reclassified as not incurred under clause (a) of the second paragraph of this covenant and (ii) the Senior Notes and the Term Loan Facility (including any guarantees thereof) outstanding on the Escrow Release Date shall at all times be treated as incurred pursuant to clause (b) of the second paragraph of this covenant;
(2): at the time of incurrence, Holdings will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above without giving pro forma effect to the Indebtedness Incurred pursuant to the second paragraph above when calculating the amount of Indebtedness that may be Incurred pursuant to the first paragraph above;
(3): if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and
(4): if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

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deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness other than as provided in clauses (3) and (4) above, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt.

Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.

Limitation on Restricted Payments

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:

(1): declare or pay any dividend or make any distribution on account of any of Holdings' or any of the Restricted Subsidiaries' Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(2): purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;
(3): make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or
(4): make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as " Restricted Payments "), unless, at the time of such Restricted Payment:

(a): no Default shall have occurred and be continuing or would occur as a consequence thereof;
(b): immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant

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described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and

(c): such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (c) thereof), (6)(c), (8) and (13)(b) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to the Cumulative Credit.

" Cumulative Credit " means the sum of (without duplication):

(1): 50% of the Consolidated Net Income of Holdings for the period from July 1, 2012 to the end of Holdings' most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the " Reference Period ") (or in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus
(2): 100% of (i) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Escrow Release Date plus (ii) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than net proceeds to the extent such net proceeds have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus
(3): 100% of (i) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Escrow Release Date plus (ii) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"), plus
(4): 100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Escrow Release Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

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(5)

100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash received by Holdings or any Restricted Subsidiary from:

(A): the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and the Restricted Subsidiaries by any Person (other than Holdings or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (7) of the succeeding paragraph),
(B): the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C): a distribution or dividend from an Unrestricted Subsidiary, plus

(6)

in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or the Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the fair market value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) of the succeeding paragraph or constituted a Permitted Investment).

The foregoing provisions will not prohibit:

(1)

the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of the indenture;

(2)

(a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (" Retired Capital Sto ck") or Subordinated Indebtedness of Holdings, any direct or indirect parent of Holdings or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of Holdings or any direct or indirect parent of Holdings or contributions to the equity capital of Holdings (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of Holdings) (collectively, including any such contributions, " Refunding Capital Stock "),

(b): the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and
(c): if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

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(3)

the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of an Issuer or a Subsidiary Guarantor, which is Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" so long as:

(a): the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),
(b): such Indebtedness is subordinated to the notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(c): such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any notes then outstanding, and
(d): such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date;

(4)

a Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of Holdings or any direct or indirect parent of Holdings held by any future, present or former employee, director or consultant of Holdings or any direct or indirect parent of Holdings or any Subsidiary of Holdings pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided , however , that the aggregate Restricted Payments made under this clause (4) do not exceed $50.0 million in any calendar year (which shall increase to $100.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock), with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $75.0 million in any calendar year (which shall increase to $150.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock); provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:

(a): the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors or consultants of Holdings and the Restricted Subsidiaries or any direct or indirect parent of Holdings that occurs after the Escrow Release Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments

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under clause (3) of the first paragraph under "—Limitation on Restricted Payments"), plus

(b): the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Escrow Release Date;

provided that Holdings may elect to apply all or any portion of the aggregate increase contemplated by clauses (a) and (b) above in any calendar year; and provided, further, that cancellation of Indebtedness owing to Holdings or any Restricted Subsidiary from any present or former employees, directors, officers or consultants of Holdings, any Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the indenture;

(5)

the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Holdings or any Restricted Subsidiary issued or incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

(6)

(a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(b): a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (b) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and
(c): the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

provided , however , in the case of each of (a) and (c) above of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Holdings would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7): Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $175.0 million and 2.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(8): the payment of dividends after a public offering of Capital Stock of Holdings or any direct or indirect parent of Holdings on Holdings' Capital Stock (or a Restricted Payment to any such direct or indirect parent of Holdings to fund the payment by such direct or indirect parent of Holdings of dividends on such entity's Capital Stock) of up to 6% per annum of the total market capitalization of Holdings or any such direct or indirect parent of Holdings as of the date of such public offering, other than public offerings with respect to Holdings' (or such

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direct or indirect parent's) Capital Stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(9)

Restricted Payments that are made with Excluded Contributions;

(10)

other Restricted Payments in an aggregate amount, when taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of $225.0 million and 3% of Adjusted Consolidated Net Tangible Assets at the time made;

(11)

the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(12)

(a) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group, and (b) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (a)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);

(13)

any Restricted Payment, if applicable:

(a): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings and general corporate operating and overhead expenses of any direct or indirect parent of Holdings in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;
(b): in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise

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considered Indebtedness of, Holdings Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and

(c): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;

(14): repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(15): purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;
(16): Restricted Payments by Holdings or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(17): the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the captions "—Change of Control" and "—Asset Sales"; provided that all notes tendered by holders of the notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(18): payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and the Restricted Subsidiaries, taken as a whole, that complies with the covenant described under "Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by the indenture) and that all notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value; and
(19): any Restricted Payment used to fund the Transactions and the payment of fees and expenses Incurred in connection with the Transactions or owed by Holdings or any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of Holdings to enable it to make payments in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case to the extent permitted by the covenant described under "—Transactions with Affiliates";

provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (6)(b), (7), (10), (11) and (13)(b), no Default shall have occurred and be continuing or would occur as a consequence thereof; provided , further that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by Holdings) of such property.

As of the Issue Date, all of the Subsidiaries of Holdings will be Restricted Subsidiaries. Holdings will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Holdings and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of "Investments." Such designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

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Dividend and Other Payment Restrictions Affecting Subsidiaries

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Issuer or Restricted Subsidiary to:

(a): (i) pay dividends or make any other distributions to Holdings or any Restricted Subsidiary (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any Restricted Subsidiary;
(b): make loans or advances to Holdings or any Restricted Subsidiary; or
(c): sell, lease or transfer any of its properties or assets to Holdings or any Restricted Subsidiary;

except in each case for such encumbrances or restrictions existing under or by reason of:

(1): (i) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Notes (including any guarantee thereof) and the Term Loan Facility (including any guarantee thereof) and (ii) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
(2): the indenture, the notes (and any exchange notes) or the Guarantees;
(3): applicable law or any applicable rule, regulation or order;
(4): any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5): contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6): Secured Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7): restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8): customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9): purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;
(10): customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;

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(11): in the case of clause (c) of the first paragraph of this covenant, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;
(12): any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , however , that such restrictions apply only to such Receivables Subsidiary;
(13): other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers' ability to make anticipated principal or interest payments on the notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date by the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(14): any Restricted Investment not prohibited by the covenant described under "—Limitation on Restricted Payments" and any Permitted Investment;
(15): any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of "Permitted Business Investment"; or
(16): any encumbrances or restrictions of the type referred to in clauses (a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this covenant, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to Holdings or a Restricted Subsidiary to other Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Asset Sales

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least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents or Additional Assets; provided that the amount of:

(a): any liabilities (as shown on Holdings' or a Restricted Subsidiary's most recent balance sheet or in the notes thereto) of Holdings or a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,
(b): any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),
(c): with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof), and
(d): any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of 4% of Adjusted Consolidated Net Tangible Assets and $300.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

shall be deemed to be Cash Equivalents for the purposes of this provision.

Within 365 days after Holdings' or any Restricted Subsidiary's receipt of the Net Proceeds of any Asset Sale, Holdings or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(1): to repay (a) Indebtedness constituting First-Priority Lien Obligations and other Pari Passu Indebtedness that is secured by a Lien permitted under the indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, (c) Obligations under the notes or (d) other Pari Passu Indebtedness ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Obligations under Pari Passu Indebtedness that does not constitute First-Priority Lien Obligations, the Issuers will equally and ratably reduce Obligations under the notes as provided under "Optional Redemption," through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and additional interest, if any, the pro rata principal amount of notes), in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings);
(2): to make an Investment in any one or more businesses (provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale; or

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(3): to invest in Additional Assets.

In the case of clause (2) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment until the 18-month anniversary of the date of the receipt of such Net Proceeds; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, then such Net Proceeds shall constitute Excess Proceeds unless Holdings or such Restricted Subsidiary enters into another binding commitment (a " Second Commitment ") within six months of such cancellation or termination of the prior binding commitment; provided , further, that Holdings or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Sale and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied or are not applied within 180 days of such Second Commitment, then such Net Proceeds shall constitute Excess Proceeds.

Pending the final application of any such Net Proceeds, Holdings or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not prohibited by the indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the second paragraph of this covenant (it being understood that any portion of such Net Proceeds used to make an offer to purchase notes, as described in clause (1) above, shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute " Excess Proceeds ." When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Issuers shall make an offer to all holders of notes (and, at the option of the Issuers, to holders of any Pari Passu Indebtedness) (an " Asset Sale Offer ") to purchase the maximum principal amount of notes (and such Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event the notes or such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and additional interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the indenture. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $50.0 million by mailing the notice required pursuant to the terms of the indenture, with a copy to the Trustee. To the extent that the aggregate amount of notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, Holdings may use any remaining Excess Proceeds for any purpose that is not prohibited by the indenture. If the aggregate principal amount of notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the notes to be purchased in the manner described below. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the indenture by virtue thereof.

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applicable legal requirements); provided that no notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.

Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each holder of notes at such holder's registered address. If any note is to be purchased in part only, any notice of purchase that relates to such note shall state the portion of the principal amount thereof that has been or is to be purchased.

Transactions with Affiliates

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an " Affiliate Transaction ") involving aggregate consideration in excess of $20.0 million, unless:

(a): such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person; and
(b): with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

(1): transactions between or among Holdings and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of the indenture and effected for a bona fide business purpose;
(2): Restricted Payments permitted by the provisions of the indenture described above under the covenant "—Limitation on Restricted Payments" and Permitted Investments;
(3): the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings;
(4): transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5): payments or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of Holdings in good faith;
(6): any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the notes in any material respect than the original

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agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;

(7): the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any transaction, agreement or arrangement described in the offering memorandum related to the initial notes dated April 10, 2012 and, in each case, any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided , however , that the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date;
(8): the execution of the Transactions, and the payment of all fees and expenses related to the Transactions, including fees to the Sponsors;
(9): (a) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the indenture, which are fair to Holdings and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(10): any transaction effected as part of a Qualified Receivables Financing;
(11): the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;
(12): the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;
(13): the entering into of any tax sharing agreement or arrangement that complies with clause (12) of the second paragraph of the covenant described under "—Limitation on Restricted Payments";
(14): any contribution to the capital of Holdings;
(15): transactions permitted by, and complying with, the provisions of the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets";
(16): transactions between Holdings or any Restricted Subsidiary and any Person, a director of which is also a director of Holdings or any direct or indirect parent of Holdings; provided , however , that such director abstains from voting as a director of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person;
(17): pledges of Equity Interests of Unrestricted Subsidiaries;

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(18): the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(19): any employment agreements entered into by Holdings or any Restricted Subsidiary in the ordinary course of business;
(20): the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar amounts) to the Sponsors pursuant to the Sponsor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement, in each case as in effect on the Issue Date or any amendment or modification thereto (so long as, in the good faith judgment of the Board of Directors of Holdings, any such amendment or modification is not more disadvantageous, taken as a whole, to holders in any material respect as compared to the Sponsor Management Agreement in effect on the Issue Date);
(21): payments by Holdings or any of its Restricted Subsidiaries to any of the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of Holdings in good faith;
(22): transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers' Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in the indenture;
(23): investments by the Sponsors in securities of Holdings or any Restricted Subsidiary (and payment of reasonable out-of-pocket expenses incurred by the Sponsors in connection therewith) so long as (i) the investment is being generally offered to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5% of the proposed or outstanding issue amount of such class of securities; and
(24): customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.

Liens

The indenture provides that Holdings will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist (i) any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or a Restricted Subsidiary unless the notes are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the notes) the obligations so secured until such time as such obligations are no longer secured by a Lien or (ii) any Lien securing any First-Priority Lien Obligation of Holdings or any Subsidiary Guarantor without effectively providing that the notes or the applicable Subsidiary Guarantee, as the case may be, shall be granted a second-priority security interest (subject to Permitted Liens) upon the RBL Priority Collateral constituting the collateral for such First-Priority Lien Obligations, except in respect of Excluded Assets and as set forth under "—Security"; provided , however , that if granting such security interests requires the consent of a third party, Holdings will use commercially reasonable efforts to obtain such consent with respect to the security interests for the benefit of the Second Lien Collateral Agent on behalf of the holders of the notes; provided further , however , that if such third party does not consent to the granting of such

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security interests after the use of commercially reasonable efforts, Holdings will not be required to provide such security interests.

Clause (i) of the preceding paragraph will not require the Issuer or any Restricted Subsidiary of the Issuer to secure the notes if the Lien consists of a Permitted Lien. Any Lien that is granted to secure the notes or any Subsidiary Guarantee under clause (i) of the preceding paragraph (unless also granted pursuant to clause (ii) of the preceding paragraph) shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the notes or such Subsidiary Guarantee under such clause (i).

For purposes of determining compliance with this covenant, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant, Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of "Permitted Liens" and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses or pursuant to the first paragraph hereof.

With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The " Increased Amount " of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of "Indebtedness."

Reports and Other Information

The indenture provides that notwithstanding that Holdings may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, Holdings will file with the SEC (and provide the Trustee and holders with copies thereof, without cost to each holder, within 15 days after it files them with the SEC),

(1): within the time period specified in the SEC's rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;
(2): within the time period specified in the SEC's rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;

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(3): promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC's rules and regulations), such other reports on Form 8-K (or any successor or comparable form); and
(4): subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

provided , however , that Holdings shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event Holdings will make available such information to prospective purchasers of notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act, subject, in the case of any such information, certificates or reports provided prior to the effectiveness of the exchange offer registration statement or shelf registration statement, to exceptions and exclusions consistent with the presentation of financial and other information in the offering memorandum related to the initial notes dated April 10, 2012 (including with respect to any periodic reports provided prior to effectiveness of the exchange offer registration statement or shelf registration statement, the omission of financial information required by Rule 3-10 under Regulation S-X promulgated by the SEC (or any successor provision)). In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the notes and securities analysts the information required to be provided pursuant to clauses (1), (2) or (3) of this paragraph, by posting such information to its website or on IntraLinks or any comparable online data system or website.

If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Holdings, then the annual and quarterly information required by clauses (1) and (2) of the first paragraph of this covenant shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

Notwithstanding the foregoing, Holdings will not be required to furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the effectiveness of the exchange offer registration statement or shelf registration statement, as applicable.

In the event that:

(a): the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entity's level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or
(b): any direct or indirect parent of Holdings is or becomes a guarantor of the notes,

consolidating reporting at the parent entity's level in a manner consistent with that described in this covenant for Holdings will satisfy this covenant, and the indenture will permit Holdings to satisfy its obligations in this covenant with respect to financial information relating Holdings by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than Holdings and its Subsidiaries, on the one hand, and the information relating to Holdings, the Subsidiary Guarantors and the other Subsidiaries of Holdings on a standalone basis, on the other hand.

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In addition, Holdings will make such information available to prospective investors upon request. In addition, Holdings has agreed that, for so long as any notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, it will furnish to the holders of the notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Escrow Release Date, for all holders and securities analysts to discuss such financial information no later than five business days after the distribution of such information required by this covenant and prior to the date of each such conference call, announcing the time and date of such conference call and either including all information necessary to access the call or informing holder of notes, prospective investors, market makers affiliated with any initial purchaser of the notes and securities analysts how they can obtain such information, including, without limitation, the applicable password or other login information.

Notwithstanding the foregoing, Holdings will be deemed to have furnished such reports referred to above to the Trustee and the holders if Holdings has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available. In addition, the requirements of this covenant shall be deemed satisfied prior to the commencement of the exchange offer contemplated by the Registration Rights Agreement relating to the notes or the effectiveness of the shelf registration statement by (1) the filing with the SEC of the exchange offer registration statement and/or shelf registration statement in accordance with the provisions of such Registration Rights Agreement, and any amendments thereto, and such registration statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in the first paragraph of this covenant and/or (2) the posting of reports that would be required to be provided to the Trustee and the holders on Holdings' website (or that of any of Holdings' parent companies).

Future Subsidiary Guarantors

The indenture provides that Holdings will cause each Wholly Owned Restricted Subsidiary that is not an Excluded Subsidiary and that guarantees any Indebtedness (other than Junior Lien Obligations) of an Issuer or any of the Subsidiary Guarantors secured by the Collateral (other than Excluded Assets) to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will guarantee payment of the notes and, if required by the applicable Intercreditor Agreement, a joinder to such Intercreditor Agreement. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Subsidiary Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Each Subsidiary Guarantee shall be released in accordance with the provisions of the indenture described under "—Subsidiary Guarantees."

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

The indenture provides that Holdings may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Holdings is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

(1): Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of

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the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the " Successor Holdco "); provided that in the case where the surviving Person is not a corporation, a co-obligor of the notes is a corporation;

(2)

the Successor Holdco (if other than Holdings) expressly assumes all the obligations of Holdings under the indenture pursuant to supplemental indentures;

(3)

immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Issuer or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;

(4)

immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Restricted Subsidiary at the time of such transaction), either

(a): the Successor Holdco would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or
(b): the Fixed Charge Coverage Ratio would be greater than such ratio immediately prior to such transaction;

(5)

if Holdings is not the Successor Holdco, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person's obligations under the indenture and the notes; and

(6)

the Successor Holdco shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with the indenture.

The Successor Holdco (if other than Holdings) will succeed to, and be substituted for, Holdings under the indenture and the notes, and in such event Holdings will automatically be released and discharged from its obligations under the indenture and the notes. Notwithstanding the foregoing clauses (3) and (4), (a) Holdings or any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to or to a Restricted Subsidiary, and (b) Holdings may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating Holdings in another state of the United States, the District of Columbia or any territory of the United States or may convert into a corporation, partnership or limited liability company, so long as the amount of Indebtedness of Holdings and the Restricted Subsidiaries is not increased thereby. This "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Holdings and the Restricted Subsidiaries.

The indenture further provides that, subject to certain limitations in the indenture governing release of assets and property securing the notes and a Subsidiary Guarantee upon the sale or disposition of a Restricted Subsidiary of Holdings that is a Subsidiary Guarantor, no Subsidiary Guarantor will, and Holdings will not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person),

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or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1): either (a) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof, (such Subsidiary Guarantor or such Person, as the case may be, being herein called the " Successor Subsidiary Guarantor ") and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under the indenture and the notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of the covenant described above under the caption "—Certain Covenants—Asset Sales"; and
(2): the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the indenture.

Subject to certain limitations described in the indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary Guarantor under the indenture and the notes or the Subsidiary Guarantee, as applicable, and QD such Subsidiary Guarantor will automatically be released and discharged from its obligations under the indenture and its Subsidiary Guarantee. Notwithstanding the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in a Permitted Jurisdiction or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of any Permitted Jurisdiction so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with Holdings or another Subsidiary Guarantor.

In addition, notwithstanding the foregoing, a Subsidiary Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a " Transfer ") to Holdings or any Subsidiary Guarantor.

Defaults

An "Event of Default" is defined in the indenture as:

(1): a default in any payment of interest (including any additional interest) on any note when due, continued for 30 days;
(2): a default in the payment of principal or premium, if any, of any note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(3): failure by Holdings for 120 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements contained in the provisions of the indenture described in "Certain covenants—Reports and Other Information";

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(4): the failure by Holdings or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3) above) contained in the notes or the indenture;
(5): the failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $125.0 million or its foreign currency equivalent (the " cross-acceleration provision ");
(6): certain events of bankruptcy, insolvency or reorganization of Holdings or a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) (the " bankruptcy provisions ");
(7): failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $125.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days (the " judgment default provision ");
(8): the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under the indenture or any Subsidiary Guarantee with respect to the notes and such Default continues for 10 days;
(9): unless such Liens have been released in accordance with the provisions of the Security Documents or the Intercreditor Agreements, the Liens in favor of the holders of the notes with respect to all or substantially all of the Collateral cease to be valid or enforceable and such Default continues for 30 days, or an Issuer shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any Subsidiary Guarantor, the Issuers fail to cause such Subsidiary Guarantor to rescind such assertions within 30 days after the Issuers have actual knowledge of such assertions; or
(10): the failure by an Issuer or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the holders of the notes and would not materially affect the value of the Collateral taken as a whole (together with the defaults described in clause (9) the "security default provisions").

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clauses (4) or (10) will not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding notes notify the Issuers of the default

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and the Issuers do not cure such default within the time specified in clauses (4) or (10) hereof after receipt of such notice.

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding notes by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings occurs, the principal of, premium, if any, and interest on all the notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding notes may rescind any such acceleration with respect to the notes and its consequences.

In the event of any Event of Default specified in clause (5) of the first paragraph above, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the notes, if within 20 days after such Event of Default arose the Issuers deliver an Officers' Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the notes as described above be annulled, waived or rescinded upon the happening of any such events.

In case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the indenture or the notes unless:

(1): such holder has previously given the Trustee notice that an Event of Default is continuing,
(2): holders of at least 30% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy,
(3): such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(4): the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(5): the holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the holders of a majority in principal amount of outstanding notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

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The indenture provides that if a Default occurs and is continuing and is actually known to a Trust Officer or the Trustee, the Trustee must mail to each holder of the notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice if it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the noteholders. In addition, Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. Holdings also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.

Amendments and Waivers

Subject to certain exceptions, the indenture, the notes, the Subsidiary Guarantees, the Security Documents and the Intercreditor Agreements may be amended with the consent of the holders of a majority in principal amount of the notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding. However, without the consent of each holder of an outstanding note affected, no amendment may, among other things:

(1): reduce the amount of notes whose holders must consent to an amendment;
(2): reduce the rate of or extend the time for payment of interest on any note;
(3): reduce the principal of or change the Stated Maturity of any note;
(4): reduce the premium payable upon the redemption of any note or change the time at which any note may be redeemed as described under "—Optional Redemption" above;
(5): make any note payable in money other than that stated in such note;
(6): expressly subordinate the notes or any related Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor;
(7): impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder's notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's notes;
(8): make any change in the amendment provisions which require each holder's consent or in the waiver provisions; or
(9): make any change in the provisions dealing with the application of proceeds of Collateral in the Intercreditor Agreements or the indenture that would adversely affect the holders of the notes.

Except as expressly provided by the indenture, without the consent of holders of at least 66.67% in principal amount of notes then outstanding, no amendment may modify or release the Subsidiary Guarantee of any Significant Subsidiary in any manner adverse to the holders of the notes. Without the consent of the holders of at least 66.67% in a aggregate principal amount of the notes then outstanding, no amendment or waiver may release all or substantially all of the Collateral from the Lien of the indenture and the Security Documents with respect to the notes.

Without the consent of any holder, the Issuers and the Trustee may amend the indenture, the notes, the Subsidiary Guarantees, the Security Documents or the Intercreditor Agreements to cure any ambiguity, omission, mistake, defect or inconsistency, to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under the indenture and the notes, to provide

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for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the indenture, its Subsidiary Guarantee and the Security Documents, to provide for uncertificated notes in addition to or in place of certificated notes ( provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code), to add a Subsidiary Guarantee or collateral with respect to the notes, to secure the notes, to release Collateral as permitted by the indenture and the Intercreditor Agreements, to add additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or other Junior Lien Obligations so long as such obligations are not prohibited by the indenture or the Security Documents, to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power conferred upon the Issuers, to make any change that does not adversely affect the rights of any holder, to conform the text of the indenture, Subsidiary Guarantees, the notes, the Security Documents or the Intercreditor Agreements, to any provision of this "Description of Senior Secured Exchange Notes" to the extent that such provision in this "Description of Senior Secured Exchange Notes" was intended by the Issuers to be a verbatim recitation of a provision of the indenture as stated in an Officers' Certificate, Subsidiary Guarantees, the notes, the Security Documents or the Intercreditor Agreements, to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA to effect any provision of the indenture or to make certain changes to the indenture to provide for the issuance of additional notes.

The consent of the noteholders is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

No Personal Liability of Directors, Officers, Employees, Managers and Stockholders

No director, officer, employee, manager, incorporator or holder of any Equity Interests in Holdings or any direct or indirect parent companies, as such, will have any liability for any obligations of Holdings or any Subsidiary Guarantor under the notes, the indenture or the Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Transfer and Exchange

A noteholder may transfer or exchange notes in accordance with the indenture. Upon any transfer or exchange, the registrar and the Trustee may require a noteholder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a noteholder to pay any taxes required by law or permitted by the indenture. The Issuers are not required to transfer or exchange any notes selected for redemption or to transfer or exchange any notes for a period of 15 days prior to a selection of notes to be redeemed. The notes will be issued in registered form and the registered holder of a note will be treated as the owner of such note for all purposes.

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Satisfaction and Discharge

The indenture will be discharged and will cease to be of further effect (except as to surviving rights and immunities of the Trustee and rights of registration or transfer or exchange of notes, as expressly provided for in the indenture) as to all outstanding notes when:

(1): either (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their stated maturity within one year or (iii) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
(2): the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under the indenture; and
(3): the Issuers have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with.

Defeasance

The Issuers at any time may terminate all of their obligations under the notes and the indenture with respect to the holders of the notes (" legal defeasance" ), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. The Issuers at any time may terminate their obligations under the covenants described under "—Certain Covenants" for the benefit of the holders of the notes, the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries, the judgment default provision described under "—Defaults" (but only to the extent that those provisions relate to the Defaults with respect to the notes) and the undertakings and covenants contained under "—Change of Control" and "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" (" covenant defeasance ") for the benefit of the holders of the notes. If the Issuers exercise their legal defeasance option or their covenant defeasance option, each Subsidiary Guarantor will be released from all of its obligations with respect to its Subsidiary Guarantee and the Security Documents.

The Issuers may exercise their legal defeasance option notwithstanding its prior exercise of the covenant defeasance option. If the Issuers exercise their legal defeasance option, payment of the notes may not be accelerated because of an Event of Default with respect thereto. If the Issuers exercise their covenant defeasance option, payment of the notes may not be accelerated because of an Event of Default specified in clause (3), (4) and (5) (with respect only to Significant Subsidiaries), (6), (7), (8) or (9) under "—Defaults" or because of the failure of Holdings to comply with the first clause (4) under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets."

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In order to exercise their defeasance option, the Issuers must irrevocably deposit in trust (the " defeasance trust ") with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable U.S. federal income tax law). Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers.

Concerning the Trustee

The Wilmington Trust, National Association is the Trustee under the indenture and has been appointed by the Issuers as registrar and a paying agent with regard to the notes.

Governing Law

The indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

" Acquired Indebtedness " means, with respect to any specified Person:

(1): Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and
(2): Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.

" Acquisition " means the purchase of EP Energy Corporation, EP Energy Holding Company and El Paso Brazil by EPE Acquisition, LLC as described in this prospectus under the heading "Summary—Recent Events—The Acquisition Transactions."

" Acquisition Documents " means the Purchase and Sale Agreement, dated as of February 24, 2012, by and among EP Energy Corporation, EP Energy Holding Company and El Paso Brazil, L.L.C., as sellers, and EPE Acquisition, LLC, as purchaser, and any other agreements or instruments contemplated thereby, in each case, as amended, restated, supplemented or otherwise modified from time to time.

" Additional Assets " means:

(1): any properties or assets used or useful in the Oil and Gas Business;
(2): capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;

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(3): the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or
(4): Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

" Additional Refinancing Amount " means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.

" Adjusted Consolidated Net Tangible Assets " means (without duplication), as of the date of determination, the remainder of:

(a)

the sum of:

(i): estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings' most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided, that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to

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such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of "Borrowing Base" and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each case as estimated by Holdings' petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;

(ii): the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings' books and records as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iii): the Net Working Capital on a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iv): assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business, provided that such net value shall not be less than zero; and
(v): the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements, and (B) the Fair Market Value, as estimated by Holdings, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus

(b)

the sum of:

(i): any amount included in (a)(i) through (a)(v) above that is attributable to minority interests;
(ii): any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings' latest audited consolidated financial statements;
(iii): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and
(iv): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in (a)(i) above, would

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be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

If Holdings changes its method of accounting from the full cost method of accounting to the successful efforts or a similar method, "Adjusted Consolidated Net Tangible Assets" will continue to be calculated as if Holdings were still using the full cost method of accounting.

" Affiliate " of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

" Applicable Premium " means, with respect to any note on any applicable redemption date, as determined by the Issuers, the greater of:

(1)

1% of the then outstanding principal amount of the note; and

(2)

the excess of:

(a): the present value at such redemption date of (i) the redemption price of the note, at May 1, 2015 (such redemption price being set forth in the applicable table appearing above under "—Optional Redemption") plus (ii) all required interest payments due on the note through May 1, 2015 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b): the then outstanding principal amount of the note.

" Asset Sale " means:

(1): the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) outside the ordinary course of business of Holdings or any Restricted Subsidiary (each referred to in this definition as a " disposition "); or
(2): the issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),

in each case other than:

(a): a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b): the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to the provisions described above under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" or any disposition that constitutes a Change of Control;
(c): any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under "—Certain Covenants—Limitation on Restricted Payments";

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(d): any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;
(e): any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;
(f): any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(g): foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;
(h): any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(i): the lease, assignment or sublease of, or any transfer related to a "reverse build to suit" or similar transaction in respect of, any real or personal property in the ordinary course of business;
(j): any sale of inventory or other assets in the ordinary course of business;
(k): any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l): in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(m): a transfer of accounts receivable and related assets of the type specified in the definition of "Receivables Financing" (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
(n): any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by the indenture;
(o): dispositions in connection with Permitted Liens;
(p): any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q): the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;
(r): dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

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(s): any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(t): a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;
(u): any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or Guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;
(v): the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by the Issuer or any Restricted Subsidiary in the ordinary course of business or which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and
(w): a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

" Bank Indebtedness " means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Holdings whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by Holdings to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

" Board of Directors " means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. In the case of Holdings, the Board of Directors of Holdings shall be deemed to include the Board of Directors of Holdings or any direct or indirect parent, as appropriate.

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(c) 25% of the net present value discounted at 9% of proven undeveloped (PUD) reserves, plus or minus (d) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus or minus (e) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings' petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 1.5% per annum.

" Business Day " means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

" Capital Stock " means:

(1): in the case of a corporation, corporate stock or shares;
(2): in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3): in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4): any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

" Capitalized Lease Obligation " means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations of Holdings or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Holdings and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancings thereof) (i) that were not included on the consolidated balance sheet of Holdings as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Holdings and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.

" Capitalized Software Expenditures " shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.

" Cash Equivalents " means:

(1): U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;

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(2): securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3): certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated "A" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
(4): repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5): commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least "A-1" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6): readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(7): Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher from Moody's (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and
(8): investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

" Change of Control " means the occurrence of either of the following:

(1): the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2): Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.

" Code " means the Internal Revenue Code of 1986, as amended.

" Collateral " means all property subject or purported to be subject, from time to time, to a Lien under any Security Documents.

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" Common Collateral " means, at any time, Collateral in which the holders of two or more Series of Second-Priority Lien Obligations (or their respective Authorized Representatives) hold a valid and perfected security interest at such time. If more than two Series of Second-Priority Lien Obligations are outstanding at any time and the holders of less than all Series of Second-Priority Lien Obligations hold a valid and perfected security interest in any Collateral at such time, then such Collateral shall constitute Common Collateral for those Series of Second-Priority Lien Obligations that hold a valid security interest in such Collateral at such time and shall not constitute Common Collateral for any Series which does not have a valid and perfected security interest in such Collateral at such time.

" Consolidated Depreciation, Depletion and Amortization Expense " means, with respect to any Person for any period, the total amount of depreciation, depletion and amortization expense, including the amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

" Consolidated Interest Expense " means, with respect to any Person for any period, the sum, without duplication, of:

(1): consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding additional interest in respect of the notes, amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2): consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus
(3): commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than Holdings and the Restricted Subsidiaries; minus
(4): interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

" Consolidated Net Income " means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided , however , that:

(1): any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facilities closing costs, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or

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issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions, in each case, shall be excluded;

(2): effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3): the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4): any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;
(5): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;
(6): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7): the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8): solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments," the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9): an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (12) of the second paragraph under "—Certain Covenants—Limitation on Restricted Payments" shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10): any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;

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(11): any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12): any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any Restricted Subsidiary, shall be excluded;
(13): accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(14): (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;
(15): (a)(i) the non-cash portion of "straight-line" rent expense shall be excluded and (ii) the cash portion of "straight-line" rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(16): any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;
(17): (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);
(18): Capitalized Software Expenditures shall be excluded; and
(19): Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

Notwithstanding the foregoing, for the purpose of the covenant described under "—Certain Covenants—Limitation on Restricted Payments" only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or Restricted Subsidiaries to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under such covenant pursuant to clauses (4) and (5) of the definition of Cumulative Credit contained therein.

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" Consolidated Non-Cash Charges " means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation, Depletion and Amortization Expense) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.

" Consolidated Taxes " means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.

" Consolidated Total Indebtedness " means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers' acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.

" Contingent Obligations " means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (" primary obligations ") of any other Person (the " primary obligor ") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1)

to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2)

to advance or supply funds:

(a): for the purchase or payment of any such primary obligation; or
(b): to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)

to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

" Credit Agreement " means (i) the Credit Agreement entered into upon expiration of the Escrow Period among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Holdings to be included in the definition of "Credit Agreement," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders

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against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

" Credit Agreement Documents " means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.

" Default " means any event which is, or after notice or passage of time or both would be, an Event of Default.

" Designated Non-cash Consideration " means the Fair Market Value (as determined in good faith by Holdings) of non-cash consideration received by Holdings or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers' Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

" Designated Preferred Stock " means Preferred Stock of Holdings or any direct or indirect parent of Holdings (other than Disqualified Stock), that is issued for cash (other than to Holdings or any of its Subsidiaries or an employee stock ownership plan or trust established by Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers' Certificate, on the issuance date thereof.

"Discharge of First-Priority Lien Obligations" shall mean, except to the extent otherwise provided in the Senior Intercreditor Agreement with respect to the reinstatement or continuation of any First-Priority Lien Obligation under certain circumstances, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of all First-Priority Lien Obligations and, with respect to any letters of credit or letter of credit guaranties outstanding under a document evidencing a First-Priority Lien Obligation, delivery of cash collateral or backstop letters of credit in respect thereof in a manner consistent with such document, in each case after or concurrently with the termination of all commitments to extend credit thereunder, and the termination of all commitments of the holders of First-Priority Lien Obligations under such document evidencing such obligation; provided that the Discharge of First-Priority Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of other First-Priority Lien Obligations that constitute an exchange or replacement for or a refinancing of any First-Priority Lien Obligations. In the event the First-Priority Lien Obligations are modified and the First-Priority Lien Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code under a confirmed and consummated plan, the First-Priority Lien Obligations shall be deemed to be discharged when the final payment is made under such plan in respect of such indebtedness and any obligations pursuant to such modified indebtedness shall have been satisfied.

"Discharge of Second Lien Term Loan Obligations" shall mean, except to the extent otherwise provided in the Pari Passu Intercreditor Agreement with respect to the reinstatement or continuation of any Second Lien Term Loan Obligation under certain circumstances, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of all Second Term Loan Obligations and, with respect to any letters of credit or letter of credit guaranties outstanding under a document evidencing a Second Lien Term Loan Obligation, delivery of cash collateral or backstop letters of credit in respect thereof in a manner consistent with such document, in each case after or concurrently with the termination of all commitments to extend credit thereunder, and the termination of all commitments of the lenders under the Term Loan Facility under

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such document evidencing such obligation; provided that the Discharge of Second Lien Term Loan Obligations shall not be deemed to have occurred if such payments are made with the proceeds of other Second-Priority Lien Obligations that constitute an exchange or replacement for or a refinancing of any Second-Priority Lien Obligations. In the event the Second Lien Term Loan Obligations are modified and the Second Lien Term Loan Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code under a confirmed and consummated plan, the Second Lien Term Loan Obligations shall be deemed to be discharged when the final payment is made under such plan in respect of such indebtedness and any obligations pursuant to such modified indebtedness shall have been satisfied.

"Discharge of Second-Priority Lien Obligations" shall mean, except to the extent otherwise provided in the Senior Intercreditor Agreement with respect to the reinstatement or continuation of any Second-Priority Lien Obligation under certain circumstances, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of all Second-Priority Lien Obligations and, with respect to any letters of credit or letter of credit guaranties outstanding under a document evidencing a Second-Priority Lien Obligation, delivery of cash collateral or backstop letters of credit in respect thereof in a manner consistent with such document, in each case after or concurrently with the termination of all commitments to extend credit thereunder, and the termination of all commitments of holders of the Second-Priority Lien Obligations under such document evidencing such obligation; provided that the Discharge of Second-Priority Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of other Second-Priority Lien Obligations that constitute an exchange or replacement for or a refinancing of any Second-Priority Lien Obligations. In the event the Second-Priority Lien Obligations are modified and the Second-Priority Lien Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code under a confirmed and consummated plan, the Second-Priority Lien Obligations shall be deemed to be discharged when the final payment is made under such plan in respect of such indebtedness and any obligations pursuant to such modified indebtedness shall have been satisfied.

" Disqualified Stock " means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

(1): matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2): is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or
(3): is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

in each case prior to 91 days after the earlier of the maturity date of the notes or the date the notes are no longer outstanding; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

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" Dollar-Denominated Production Payments " means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.

" Domestic Subsidiary " means a Restricted Subsidiary that is not a Foreign Subsidiary.

" EBITDA " means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1): Consolidated Taxes; plus
(2): Fixed Charges; plus
(3): Consolidated Depreciation, Depletion and Amortization Expense; plus
(4): Consolidated Non-Cash Charges; plus
(5): any expenses or charges (other than Consolidated Depreciation, Depletion and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness permitted to be incurred by the indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the Transactions, the notes or any Bank Indebtedness, (ii) any amendment or other modification of the notes or other Indebtedness, (iii) any additional interest in respect of the notes and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus
(6): business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); plus
(7): the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus
(8): any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus
(9): the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by the covenant described under "—Certain Covenants—Transactions with Affiliates"; plus
(10): all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (4) to the "Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" under "Summary" in the offering memorandum related to the initial notes dated April 10, 2012 to the extent such adjustments, without duplication, continue to be applicable to such period; plus
(11): the amount of any loss attributable to a new plant or facility until the date that is 12 months after completing construction of or acquiring such plant or facility, as the case may be; provided that (A) such losses are reasonably identifiable and factually supportable and

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certified by a responsible officer of Holdings and (B) losses attributable to such plant or facility after 12 months from the date of completing construction of or acquisition of such plant or facility, as the case may be, shall not be included in this clause (11), plus

(12): exploration expenses or costs (to the extent Holdings adopts the "successful efforts" method), and

less , without duplication, to the extent the same increased Consolidated Net Income,

(13): the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments;
(14): non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

" Equity Interests " means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

" Equity Offering " means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of Holdings or any direct or indirect parent of Holdings, as applicable (other than Disqualified Stock), other than:

(1): public offerings with respect to Holdings' or such direct or indirect parent's common stock registered on Form S-4 or Form S-8;
(2): issuances to any Subsidiary of Holdings; and
(3): any such public or private sale that constitutes an Excluded Contribution.

" Escrow Account " means a segregated account, under the sole control of the Trustee, that includes only cash and U.S. dollar denominated Cash Equivalents (or rights to receive such under letters of credit), the proceeds thereof and interest earned thereon, free from all Liens other than the Lien in favor of the Trustee for the benefit of the holders of the notes.

" Escrow Period " means that period beginning on the Issue Date and ending on the date on which the funds held in the Escrow Account are released upon satisfaction of all conditions precedent to such release, as set forth in the escrow agreement.

" Escrow Release Date " means the date upon which the Escrow Condition is satisfied.

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

" Excluded Contributions " means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of Holdings) received by Holdings after the Issue Date from:

(1): contributions to its common equity capital, and
(2): the sale (other than to a Subsidiary of Holdings or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Holdings,

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may be; provided , that $3,200 million of Cash Equivalents received by Holdings from the Equity Investors on or prior to the Escrow Release Date to fund the Acquisition shall not be permitted to be designated an Excluded Contribution.

" Excluded Subsidiary " means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a Wholly Owned Subsidiary, (c) any Foreign Subsidiary, (d) any Domestic Subsidiary (i) that owns no material assets (directly or through its Subsidiaries) other than equity interests of one or more Foreign Subsidiaries that are "controlled foreign corporations" within the meaning of Section 957 of the Code ("CFCs") or (ii) that is a direct or indirect Subsidiary of a Foreign Subsidiary, (e) any Receivables Subsidiary and (f) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of Holdings most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date.

" Fair Market Value " means, with respect to any asset or property, the price which could be negotiated in an arm's-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

" Farm-In Agreement " means an agreement whereby a Person agrees to pay all or a share of the drilling, completion or other expenses of one or more exploratory or development wells (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interests therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.

" Farm-Out Agreement " means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

" First-Priority After-Acquired Property " means any property of an Issuer or any Subsidiary Guarantor that secures any Secured Bank Indebtedness that is not already subject to the Lien under the Security Documents, other than any Excluded Assets.

" First-Priority Lien Obligations " means (i) all Secured Bank Indebtedness and (ii) all other obligations of the Issuer or any of its Restricted Subsidiaries in respect of Hedging Obligations or obligations in respect of cash management services in each case owing to a Person that is a holder of Secured Bank Indebtedness or an Affiliate of such holder at the time of entry into such Hedging Obligations or obligations in respect of cash management services.

" Fixed Charge Coverage Ratio " means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the " Calculation Date "), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers' Certificate delivered to the Trustee to treat all or any portion of the commitment under any

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Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers' Certificate, to reflect (1) operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event, and (2) all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (4) to the "Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" under "Summary" in the offering memorandum related to the initial notes dated April 10, 2012 to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.

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period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

" Fixed Charges " means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

" Foreign Subsidiary " means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.

" GAAP " means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of the indenture, the term "consolidated" with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

" guarantee " means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

" Hedging Obligations " means, with respect to any Person, the obligations of such Person under:

(1): currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2): other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

" holder " or " noteholder " means the Person in whose name a note is registered on the registrar's books.

" Holdings " means Everest Acquisition LLC (renamed as EP Energy LLC on the Escrow Release Date), together with its successors or assigns.

" Hydrocarbons " means oil, natural gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.

" Incur " means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

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" Indebtedness " means, with respect to any Person:

(1): the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that (i) constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2): to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3): to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Obligations under or in respect of Qualified Receivables Financing; (5) obligations under the Acquisition Documents; (6) Production Payments and Reserve Sales; (7) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property; (8) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the board of directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of the indenture; and (9) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.

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Notwithstanding anything in the indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under the indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under the indenture.

" Independent Financial Advisor " means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of Holdings, qualified to perform the task for which it has been engaged.

" Intercreditor Agreements " means the Senior Lien Intercreditor Agreement and the Pari Passu Intercreditor Agreement.

" Investment Grade Rating " means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

" Investment Grade Securities " means:

(1): securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2): securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody's and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,
(3): investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4): corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

" Investments " means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "—Certain Covenants—Limitation on Restricted Payments":

(1)

"Investments" shall include the portion (proportionate to Holdings' equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of a Subsidiary of Holdings at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a): Holdings' "Investment" in such Subsidiary at the time of such redesignation less

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(b): the portion (proportionate to Holdings' equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and

(2): any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.

" Issue Date " means the date on which the notes are originally issued.

" Junior Lien Obligations " means the Obligations with respect to other Indebtedness permitted to be incurred under the indenture, which is by its terms intended to be secured by the Collateral on a basis junior to the notes; provided such Lien is permitted to be incurred under the indenture.

" Lien " means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

" Management Group " means the group consisting of the directors, executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as the case may be, on the Issue Date together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of Holdings or any direct or indirect parent of Holdings, as applicable, was approved by a vote of a majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable.

" Moody's " means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.

" Net Income " means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

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Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

"Net Working Capital" means (a) all current assets of the Company and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business less (b) all current liabilities of the Company and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of the Company prepared in accordance with GAAP.

" Notes Documents " means the indenture, the notes, the Subsidiary Guarantees and the Security Documents.

" Notes Obligations " means Obligations in respect of the notes, the indenture and the Security Documents, including, for the avoidance of doubt, Obligations in respect of exchange notes and guarantees thereof.

" Obligations " means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers' acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the notes.

" Officer " means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of Holdings.

" Officers' Certificate " means a certificate signed on behalf of Holdings by two Officers of Holdings, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holdings, which meets the requirements set forth in the indenture.

" Oil and Gas Business " means:

(1): the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;
(2): the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;
(3): any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;
(4): any business relating to oil field sales and service; and

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(5): any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

" Oil and Gas Properties " means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and gas reserves or other reserves of Hydrocarbons.

" Opinion of Counsel " means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

" Other Second-Lien Obligations " means other Indebtedness of Holdings and its Restricted Subsidiaries that is equally and ratably secured with the notes as permitted by the Indenture and is designated by Holdings as an Other Second-Lien Obligation (provided that such designation shall not be required for the Term Loan Facility).

" Pari Passu Indebtedness " means: (a) with respect to an Issuer, the notes and any Indebtedness which ranks pari passu in right of payment to the notes; and (b) with respect to any Subsidiary Guarantor, its Subsidiary Guarantee and any Indebtedness which ranks pari passu in right of payment to such Subsidiary Guarantor's Subsidiary Guarantee.

" Pari Passu Intercreditor Agreement " means (i) the intercreditor agreement among Citibank, N.A., as Second Lien Collateral Agent, the Trustee, and the other parties from time to time party thereto, entered into upon expiration of the Escrow Period, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the indenture or (ii) any replacement thereof that contains terms not materially less favorable to the holders of the notes than the intercreditor agreement referred to in clause (i).

" Permitted Business Investment " means any Investment and/or expenditure made in the ordinary course of business or which are of a nature that is or shall have become customary in the Oil and Gas Business generally or in the geographic region in which such activities occur, including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, distributing, storing, or transporting oil, natural gas or other Hydrocarbons and minerals (including with respect to plugging and abandonment) through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including:

(1): Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;
(2): Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and

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(3): Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

" Permitted Holders " means, at any time, each of (i) the Sponsors, (ii) the Management Group, (iii) any Person that has no material assets other than the Capital Stock of Holdings and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings (a "Permitted Holder Group"), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other "group" (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

" Permitted Investments " means:

(1): any Investment in Holdings or any Restricted Subsidiary;
(2): any Investment in Cash Equivalents or Investment Grade Securities;
(3): any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;
(4): any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of "—Certain Covenants—Asset Sales" or any other disposition of assets not constituting an Asset Sale;
(5): any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under the indenture;
(6): advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $25.0 million at any one time outstanding;
(7): any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of Holdings of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8): Hedging Obligations permitted under clause (j) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

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(9): any Investment by Holdings or any Restricted Subsidiary in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (9) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(10): additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(11): loans and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person's purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;
(12): Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments";
(13): any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under "—Certain Covenants—Transactions with Affiliates" (except transactions described in clauses (2), (4), (6), (9)(b) and (16) of such paragraph);
(14): Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15): (x) guarantees issued in accordance with the covenants described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Future Subsidiary Guarantors," including, without limitation, any guarantee or other obligation issued or incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including

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obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

(16): Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(17): any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;
(18): any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivable Financing;
(19): additional Investments in joint ventures not to exceed, at any one time in the aggregate outstanding under this clause (19), $100.0 million (with the Fair Market Value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (19) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(20): Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21): any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(22): Permitted Business Investments.

" Permitted Liens " means, with respect to any Person:

(1): pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2): Liens imposed by law, such as landlord's, carriers', warehousemen's, mechanics', materialmen's, repairmen's, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

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(3)

Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

(4)

Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5)

minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6)

(A) Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

(B): Liens securing Indebtedness incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be incurred pursuant to clause (a) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(C): Liens securing Indebtedness incurred under the RBL Facility in excess of $2,000 million (and solely to the extent of such excess), including any letter of credit facility relating thereto, that was permitted to be incurred under the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(D): Liens securing Indebtedness permitted to be Incurred pursuant to clause (d), (l), (p) or (t) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" ( provided that in the case of clause (t), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor); and
(E): Liens securing the Notes Obligations;

(7)

Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement), including Liens securing the loans under the Term Loan Facility;

(8)

Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary;

(9)

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however , that the Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (p) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

(10): Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(11): Liens securing Hedging Obligations not incurred in violation of the indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12): Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13): leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;
(14): Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;
(15): Liens in favor of Holdings or any Subsidiary Guarantor;
(16): Liens on accounts receivable and related assets of the type specified in the definition of "Receivables Financing" Incurred in connection with a Qualified Receivables Financing;
(17): deposits made in the ordinary course of business to secure liability to insurance carriers;
(18): Liens on the Equity Interests of Unrestricted Subsidiaries;
(19): grants of software and other technology licenses in the ordinary course of business;
(20): Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under the indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B);

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(21): Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings' or such Restricted Subsidiary's client at which such equipment is located;
(22): judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(23): Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(24): Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;
(25): other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (25) that are at that time outstanding, exceed the greater of $350.0 million and 5% Adjusted Consolidated Net Tangible Assets at the time of Incurrence;
(26): any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(27): any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture pursuant to customary discharge, redemption or defeasance provisions;
(28): Liens arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;
(29): Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;
(30): Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(31): Liens in respect of Production Payments and Reserve Sales;
(32): Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract;
(33): Liens on pipelines or pipeline facilities that arise by operation of law;
(34): any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance

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with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics' liens, tax liens and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b); and

(35): Liens securing Junior Lien Obligations, provided that the notes are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien.

" Person " means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

" Preferred Stock " means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

" Production Payments and Reserve Sales " means the grant or transfer by Holdings or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar-denominated), partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers

" Qualified Receivables Financing " means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1): the Board of Directors of Holdings shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Holdings and the Receivables Subsidiary;
(2): all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and
(3): the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Holdings) and may include Standard Securitization Undertakings.

The grant of a security interest in any accounts receivable of Holdings or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the notes or any Refinancing Indebtedness with respect to the notes shall not be deemed a Qualified Receivables Financing.

" Rating Agency " means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to rate the notes for reasons outside of Holdings' control, a "nationally recognized statistical rating organization" within the meaning of Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by Holdings or any direct or indirect parent of Holdings as a replacement agency for Moody's or S&P, as the case may be.

" RBL Facility " means the credit agreement entered into on the Escrow Release Date among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase

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Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or other lenders), restructured, repaid, refunded, refinanced or otherwise modified from time to time pursuant to any amendment thereto or pursuant to a new loan agreement with other lenders, governed by a borrowing base set by the lenders, extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or under any successor or replacement agreement or increasing the amount loaned thereunder or altering the maturity thereof.

" RBL Agent " means the agent for secured parties holding First-Priority Lien Obligations, as appointed pursuant to the Senior Lien Intercreditor Agreement. The RBL Agent is initially the administrative agent under the Credit Agreement.

" Receivables Fees " means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

" Receivables Financing " means any transaction or series of transactions that may be entered into by Holdings or any of its Subsidiaries pursuant to which Holdings or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Holdings or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Holdings or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Holdings or any such Subsidiary in connection with such accounts receivable.

" Receivables Repurchase Obligation " means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

" Receivables Subsidiary " means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Qualified Receivables Financing with Holdings in which Holdings or any Subsidiary of Holdings makes an Investment and to which Holdings or any such Subsidiary transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Holdings and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Holdings (as provided below) as a Receivables Subsidiary and:

(a): no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

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(b): with which neither Holdings nor any Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which Holdings reasonably believes to be no less favorable to Holdings or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; and
(c): to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors of Holdings shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Holdings giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions.

" Restricted Cash " means cash and Cash Equivalents held by Restricted Subsidiaries that is contractually restricted from being distributed to Holdings, except for such cash and Cash Equivalents subject only to such restrictions that are contained in agreements governing Indebtedness permitted under the indenture and that is secured by such cash or Cash Equivalents.

" Restricted Investment " means an Investment other than a Permitted Investment.

" Restricted Subsidiary " means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this "Description of Senior Secured Exchange Notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.

" Sale/Leaseback Transaction " means an arrangement relating to property now owned or hereafter acquired by Holdings or a Restricted Subsidiary whereby Holdings or such Restricted Subsidiary transfers such property to a Person and Holdings or such Restricted Subsidiary leases it from such Person, other than leases between Holdings and a Restricted Subsidiary or between Restricted Subsidiaries.

" S&P " means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.

" SEC " means the Securities and Exchange Commission.

" Second Lien Agent " means the agent for secured parties holding Second Priority Lien Obligations, as appointed pursuant to the Pari Passu Intercreditor Agreement. The Second Lien Agent is initially the administrative agent under the Term Loan Facility.

" Second Lien Collateral Agent " means Citibank, N.A. in its capacity as "Collateral Agent" under the Security Documents and any successor thereto in such capacity.

" Second Lien Secured Parties" means (a) the "Secured Parties," as defined in the Term Loan Facility, (b) the Trustee and the holders of the notes (including the holders of any additional notes subsequently issued under and in compliance with the terms of the indenture), and (c) holders of Other Second-Lien Obligations.

" Second Lien Term Loan Obligations " means Obligations in respect of the Term Loan Facility and the Second-Priority Documents in respect thereof.

" Second-Priority Documents " means the Notes Documents, any document or instrument evidencing or governing the Term Loan Facility and any other document or instrument evidencing or governing any Other Second-Lien Obligations.

" Second-Priority Lien Obligations " means (a) the Notes Obligations, (b) the Second Lien Term Loan Obligations and (c) all other Obligations in respect of, or arising under, the Second-Priority Documents, including all fees and expenses of the collateral agent for any Other Second-Lien

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Obligations and shall include all interest and fees, which but for the filing of a petition in bankruptcy with respect to Holdings, an Issuer or any Subsidiary Guarantor, would have accrued on such obligations, whether or not a claim for such interest or fees is allowed in such proceeding.

" Secured Bank Indebtedness " means any Bank Indebtedness that is secured by a Permitted Lien incurred or deemed incurred pursuant to clause (6)(B) or clause (6)(C) of the definition of Permitted Lien.

" Secured Indebtedness " means any Consolidated Total Indebtedness secured by a Lien.

" Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

" Security Documents " means the security agreements, pledge agreements, collateral assignments, mortgages and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the Trustee, the Second Lien Collateral Agent and the holders of the notes as contemplated by the indenture.

" Senior Lien Intercreditor Agreement " means (i) the intercreditor agreement among JPMorgan Chase Bank, N.A., as RBL Agent, Citibank, N.A., as Second Lien Collateral Agent, and the other parties from time to time party thereto, entered into upon expiration of the Escrow Period, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the indenture or (ii) any replacement thereof that contains terms not materially less favorable to holders of the notes than the intercreditor agreement referred to in clause (i).

" Senior Notes " means the Issuers' 9.375% Senior Notes due 2020 issued on the Issue Date and including any exchange notes issued in exchange therefor pursuant to the Registration Rights Agreement.

" Series " means (a) with respect to the Second Lien Secured Parties, each of (i) the "Secured Parties," as defined in the Term Loan Facility (in their capacities as such), (ii) the holders of the notes and the Trustee (each in their capacity as such) and (iii) holders of Other Second-Lien Obligations that become subject to the Pari Passu Intercreditor Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such holders of Other Second-Lien Obligations) and (b) with respect to any Second-Priority Lien Obligations, each of (i) the Second Lien Term Loan Obligations, (ii) the Notes Obligations and (iii) the Other Second-Lien Obligations incurred pursuant to any applicable agreement, which pursuant to any joinder agreement, are to be represented under the Pari Passu Intercreditor Agreement by a common Authorized Representative (in its capacity as such for such Other Second-Lien Obligations).

" Significant Subsidiary " means any Restricted Subsidiary that would be a "Significant Subsidiary" of Holdings within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).

" Similar Business " means a business, the majority of whose revenues are derived from the activities of Holdings and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.

" Sponsor Management Agreement " means the management agreement between certain of the management companies associated with the Sponsors, EP Energy Holding Company and EPE Acquisition, LLC.

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dated as of February 24, 2012 (the " Interim Investors A greement ") and any other investors that may become party to the Interim Investors Agreement prior to or upon the consummation of the Acquisition and any of their respective Affiliates other than any portfolio companies (collectively, the " Equity Investor ") and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.

" Standard Securitization Undertakings " means representations, warranties, covenants, indemnities and guarantees of performance entered into by Holdings or any Subsidiary thereof which Holdings has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

" Stated Maturity " means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

" Subordinated Indebtedness " means (a) with respect to an Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the notes, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.

" Subsidiary " means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

" Subsidiary Guarantee " means any guarantee of the obligations of the Issuers under the indenture and the notes by any Subsidiary Guarantor in accordance with the provisions of the indenture.

" Subsidiary Guarantor " means any Subsidiary that Incurs a Subsidiary Guarantee; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with the indenture, such Subsidiary ceases to be a Subsidiary Guarantor.

" Tax Distributions " means any distributions described in clause (12) of the covenant entitled "—Certain Covenants—Limitation on Restricted Payments."

" Term Loan Facility " means the term loan agreement, dated as of the Issue Date, by and among Holdings, as borrower, the lenders party thereto in their capacities as lenders thereunder and Citibank, N.A., as administrative agent and collateral agent, including any guarantees, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications or restatements thereof.

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" TIA " means the Trust indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the indenture.

" Total Assets " means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any amortization of the amount of intangible assets since December 31, 2011, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.

" Transactions" means the transactions described under "Summary—Recent Events—The Acquisition Transactions."

" Treasury Rate " means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to May 1, 2015; provided , however , that if the period from such redemption date to May 1, 2015, as applicable, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

" Trust Officer " means:

(1): any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject, and
(2): who shall have direct responsibility for the administration of the indenture.

" Trustee " means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor.

" Unrestricted Subsidiary " means:

(1): any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and
(2): any Subsidiary of an Unrestricted Subsidiary;

Holdings may designate any Subsidiary of Holdings (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Holdings or any other Subsidiary of Holdings that is not a Subsidiary of the Subsidiary to be so designated; provided , however , that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings or any of the Restricted Subsidiaries (other than pursuant to customary Liens on related arrangements under any oil and gas royalty trust or master limited partnership); provided , further , however , that either:

(a): the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b): if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant described under "—Certain Covenants—Limitation on Restricted Payments."

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Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

(x): (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be greater than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and
(y): no Event of Default shall have occurred and be continuing.

Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.

" U.S. Government Obligations " means securities that are:

(1): direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2): obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.

" Volumetric Production Payments " means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.

" Voting Stock " of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

" Weighted Average Life to Maturity " means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

" Wholly Owned Restricted Subsidiary " is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

" Wholly Owned Subsidiary " of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

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DESCRIPTION OF SENIOR 2020 EXCHANGE NOTES

General

EP Energy LLC (formerly known as Everest Acquisition LLC), a Delaware limited liability company, and Everest Acquisition Finance Inc., a Delaware corporation (each an " Issuer " and together, the " Issuers ") issued $2,000,000,000 aggregate principal amount of 9.375% Senior Notes due 2020 (the " initial 2020 senior notes ") under an indenture (the "indenture" ), dated as of April 24, 2012, by and among the Issuers, the Subsidiary Guarantors (as defined below) and Wilmington Trust, National Association, as Trustee. In this description, (i) "we," "us" and "our" mean EP Energy LLC and its Subsidiaries and (i) the term "Issuers" refers only to EP Energy LLC and Everest Acquisition Finance Inc., but not to any of their Subsidiaries.

The Issuers will issue the senior 2020 exchange notes under the indenture. The terms of the senior 2020 exchange notes are identical in all material respects to the initial 2020 senior notes except that upon completion of the exchange offer, the senior 2020 exchange notes will be registered under the Securities Act and free of any covenants regarding exchange registration rights. We refer to the initial 2020 senior notes as the "initial notes." We refer to the senior 2020 exchange notes as the "exchange notes." Unless otherwise indicated by the context, references in the "Description of Senior 2020 Exchange Notes" section to the "notes" include the initial notes and the exchange notes.

The following summary of certain provisions of the indenture and the notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of those agreements, including the definitions of certain terms therein and those terms made a part thereof by the TIA. We urge you to read those agreements because they, not this description, define your rights as holders of the notes. Capitalized terms used in this "Description of Senior 2020 Exchange Notes" section and not otherwise defined have the meanings set forth under "—Certain Definitions."

The Issuers will issue the exchange notes in an aggregate principal amount up to $2,000,000,000. The Issuers may issue additional notes from time to time. Any offering of additional notes is subject to the covenants described below under the caption "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." The notes and any additional notes subsequently issued under the indenture may, at our election, be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the additional notes are not fungible with the notes for U.S. federal income tax purposes, the additional notes will have a separate CUSIP number, if applicable. Unless the context otherwise requires, for all purposes of the indenture and this "Description of Senior 2020 Exchange Notes," references to the notes include any additional notes actually issued.

Terms of the Notes

The notes are senior obligations of the Issuers and will mature on May 1, 2020. Each note bears interest at a rate of 9.375% per annum from the Issue Date or from the most recent date to which

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interest has been paid or provided for, payable semiannually to holders of record at the close of business on April 15 or October 15 immediately preceding the interest payment date on May 1 and November 1 of each year, commencing November 1, 2012.

Optional Redemption

On or after May 1, 2016 the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 1 of the years set forth below:

Period

2016	104.688	%
2017	102.344	%
2018 and thereafter	100.000	%

In addition, prior to May 1, 2016 the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price equal to 100% of the principal amount of the notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to May 1, 2015 the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 109.375%, plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided , however , that at least 50% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) must remain outstanding after each such redemption; provided , further , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days' notice mailed to each holder of notes being redeemed and otherwise in accordance with the procedures set forth in the indenture.

Selection

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part only, the notice of redemption relating to such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuers have deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and additional interest (if any) on, the notes to be redeemed.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

Ranking

The indebtedness evidenced by the Subsidiary Guarantees is senior Indebtedness of the applicable Subsidiary Guarantor, ranks pari passu in right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor and is senior in right of payment, to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor.

At June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions:

(1): Holdings and its Subsidiaries would have had $1,900 million in aggregate principal amount of Secured Indebtedness outstanding, including the Secured Notes and loans under the Term Loan Facility, of which $400 million of Secured Indebtedness would have been outstanding under the Credit Agreement, and approximately $1.5 billion would have been available and undrawn, and to all of which the notes will be subordinated to the extent of the value of the collateral securing such Indebtedness; and
(2): Holdings and its Subsidiaries would have had $2,350 million in aggregate principal amount of senior unsecured Indebtedness outstanding, including the notes and the senior 2022 notes.

Although the indenture will limit the Incurrence of Indebtedness and the issuance of Disqualified Stock by Holdings and its Restricted Subsidiaries, and the issuance of Preferred Stock by the Restricted Subsidiaries of Holdings that are not Subsidiary Guarantors, such limitation is subject to a number of significant qualifications and exceptions. Holdings and its Subsidiaries are able to Incur additional amounts of Indebtedness. Under certain circumstances the amount of such Indebtedness could be substantial and, subject to certain limitations, such Indebtedness may be Secured Indebtedness. See "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Liens."

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(ii) Foreign Subsidiaries, as well as Domestic Subsidiaries (x) that own no material assets (directly or through their Subsidiaries) other than equity interests of one or more of Foreign Subsidiaries that are CFCs or (y) that are Subsidiaries of Foreign Subsidiaries, all of which, as of June 30, 2012, had no outstanding indebtedness, excluding intercompany obligations.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—The notes will be structurally subordinated to all liabilities of our non-guarantor subsidiaries."

Subsidiary Guarantees

Each of Holdings' direct and indirect Wholly Owned Restricted Subsidiaries (other than Everest Acquisition Finance Inc.) that are Domestic Subsidiaries and that are borrowers or guarantors under the Credit Agreement jointly and severally irrevocably and unconditionally guarantee on a senior basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under the indenture and the notes, whether for payment of principal of, premium, if any, or interest or additional interest on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Subsidiary Guarantors being herein called the " Subsidiary Guaranteed Obligations "). Such Subsidiary Guarantors agree to pay, in addition to the amount stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the holders in enforcing any rights under the Subsidiary Guarantees.

Each Subsidiary Guarantee will be a continuing guarantee and shall:

(1): remain in full force and effect until payment in full of all the Subsidiary Guaranteed Obligations of such Subsidiary Guarantor;
(2): subject to the next two succeeding paragraphs, be binding upon each such Subsidiary Guarantor and its successors; and
(3): inure to the benefit of and be enforceable by the Trustee, the holders and their successors, transferees and assigns.

Each Subsidiary's Subsidiary Guarantee will be automatically released upon:

(1): the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of the indenture;
(2): the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under "—Certain Covenants—Limitation on Restricted Payments" and the definition of "Unrestricted Subsidiary";

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(3): the release or discharge of the guarantee by such Subsidiary Guarantor of the Credit Agreement or other Indebtedness or the guarantee of any other Indebtedness which resulted in the obligation to guarantee the notes;
(4): the Issuers' exercise of their legal defeasance option or covenant defeasance option as described under "—Defeasance" or if the Issuers' obligations under the indenture are discharged in accordance with the terms of the indenture; and
(5): the occurrence of a Covenant Suspension Event.

Change of Control

(1): repay in full all Bank Indebtedness or, if doing so will allow the purchase of notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer; or
(2): obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the notes as provided for in the immediately following paragraph.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—We may not be able to repurchase the notes upon a change of control."

Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the notes by delivery of a notice of redemption as described under "—Optional Redemption," the Issuers shall mail a notice (a " Change of Control Offer ") to each holder with a copy to the Trustee stating:

(1): that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holder's notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date);
(2): the circumstances and relevant facts and financial information regarding such Change of Control;
(3): the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and
(4): the instructions determined by the Issuers, consistent with this covenant, that a holder must follow in order to have its notes purchased.

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Certain Covenants

Set forth below are summaries of certain covenants that are contained in the indenture. If on any date following the Issue Date, (i) the notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under the indenture then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a " Covenant Suspension Event "), the covenants specifically listed under the following captions in this "Description of Senior 2020 Exchange Notes" section of this prospectus will not be applicable to the notes (collectively, the " Suspended Covenants "):

(1): "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(2): "—Limitation on Restricted Payments";
(3): "—Dividend and Other Payment Restrictions Affecting Subsidiaries";
(4): "—Asset Sales";
(5): "—Transactions with Affiliates";
(6): clause (4) of the first paragraph of "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; and
(7): "—Future Subsidiary Guarantors."

On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to the first paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" below or one of the clauses set forth in the second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" below (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to the first or second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (c) of the second paragraph under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under "—Limitation on Restricted Payments" will be made as though the covenant described under "—Limitation on Restricted Payments" had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under the first paragraph of "—Limitation on Restricted Payments." As described above, however, no Default or Event of Default will be deemed to have

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occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, the Issuers must comply with the terms of the covenant described under "—Future Subsidiary Guarantors."

For purposes of the "—Asset Sales" covenant, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.

There can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

The indenture provides that:

(1): Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and
(2): Holdings will not permit any of the Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock;

The foregoing limitations will not apply to:

(a): the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers' acceptances thereunder up to an aggregate principal amount outstanding at any time that does not exceed the greatest of (1) $3.0 billion, (2) the sum of (x) $500.0 million and (y) 30% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence and (3) the Borrowing Base at the time of Incurrence;
(b): the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by (1) the notes and the Subsidiary Guarantees, as applicable (not including any additional notes but including exchange notes and related guarantees thereof) and (2) Indebtedness, including in respect of the Secured Notes and the Term Loan Facility (including any guarantees thereof), in an aggregate principal amount for this clause (b)(2) outstanding at any time that, together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o)

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below, does not exceed $1,500 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(c): Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (a) and (b));
(d): Indebtedness (including Capitalized Lease Obligations) Incurred by Holdings or any Restricted Subsidiary, Disqualified Stock issued by Holdings or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (d), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, does not exceed the greater of $350.0 million and 5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(e): Indebtedness Incurred by Holdings or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(f): Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions, any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of the indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(g): Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (g);
(h): shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (h);

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(i): Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (i);
(j): Hedging Obligations that are not incurred for speculative purposes but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(k): obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(l): Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (l), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) below, does not exceed the greater of $500.0 million and 7% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed Incurred for purposes of the first paragraph of this covenant from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));
(m): Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of (i) the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Escrow Release Date plus (ii) the amount of net cash proceeds received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date, in each case from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its

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Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the third paragraph of "—Limitation on Restricted Payments" or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(n)

any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of the indenture; provided that (i) if such Indebtedness is by its express terms subordinated in right of payment to the notes or the Subsidiary Guarantee of Holdings or such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the notes or the Subsidiary Guarantee, as applicable and (ii) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, the covenant described under "—Future Subsidiary Guarantors" solely to the extent such covenant is applicable;

(o)

the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (b), (c), (d), (l), (m), (o) and (p) of this paragraph up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to the first paragraph of this covenant or clauses (b), (c), (d), (l), (m), (o) and (p) of this paragraph, or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, " Refinancing Indebtedness ") prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

(1): has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date ( provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(2): to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the notes or the Subsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and

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(3): shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of Holdings, an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

(p)

(1): Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant; or
(2): the Fixed Charge Coverage Ratio of Holdings would be greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

(q)

(r)

(s)

(t)

Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings and any Restricted Subsidiary; provided, however , that the aggregate principal amount of Indebtedness Incurred under this clause (t), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (t), does not exceed the greater of $150.0 million and 2% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (it being understood that any Indebtedness incurred pursuant to this clause (t) shall cease to be deemed incurred or outstanding for purposes of this clause (t) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (t));

(u)

Indebtedness of Holdings or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and

(v)

Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in clause (4) of the third paragraph of the covenant described under "—Limitation on Restricted Payments."

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For purposes of determining compliance with this covenant:

(1): in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (v) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this covenant; provided , that (i) only Indebtedness outstanding under the Credit Agreement in excess of $2,000 million may be classified or reclassified as not incurred under clause (a) of the second paragraph of this covenant and (ii) the Secured Notes and the Term Loan Facility (including any guarantees thereof) outstanding on the Escrow Release Date shall at all times be treated as incurred pursuant to clause (b) of the second paragraph of this covenant;
(2): at the time of incurrence, Holdings will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above without giving pro forma effect to the Indebtedness Incurred pursuant to the second paragraph above when calculating the amount of Indebtedness that may be Incurred pursuant to the first paragraph above;
(3): if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and
(4): if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.

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Limitation on Restricted Payments

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:

(1): declare or pay any dividend or make any distribution on account of any of Holdings' or any of the Restricted Subsidiaries' Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(2): purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;
(3): make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or
(4): make any Restricted Investment.

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as " Restricted Payments "), unless, at the time of such Restricted Payment:

(a): no Default shall have occurred and be continuing or would occur as a consequence thereof;
(b): immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(c): such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (c) thereof), (6)(c), (8) and (13)(b) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to the Cumulative Credit.

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" Cumulative Credit " means the sum of (without duplication):

(1)

50% of the Consolidated Net Income of Holdings for the period from July 1, 2012 to the end of Holdings' most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the " Reference Period ") (or in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(2)

100% of (i) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Escrow Release Date plus (ii) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than net proceeds to the extent such net proceeds have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus

(3)

100% of (i) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Escrow Release Date plus (ii) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"), plus

(4)

100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Escrow Release Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5)

(A): the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and the Restricted Subsidiaries by any Person (other than Holdings or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (7) of the succeeding paragraph),
(B): the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C): a distribution or dividend from an Unrestricted Subsidiary, plus

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(6): in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or the Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the fair market value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) of the succeeding paragraph or constituted a Permitted Investment).

The foregoing provisions will not prohibit:

(1)

(2)

(b): the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and
(c): if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3)

(a): the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),

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(b): such Indebtedness is subordinated to the notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(c): such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any notes then outstanding, and
(d): such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date;

(4)

(a): the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors or consultants of Holdings and the Restricted Subsidiaries or any direct or indirect parent of Holdings that occurs after the Escrow Release Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under "—Limitation on Restricted Payments"), plus
(b): the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Escrow Release Date;

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(5)

(6)

(a): the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;
(b): a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (b) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and
(c): the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

(7): Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $175.0 million and 2.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(8): the payment of dividends after a public offering of Capital Stock of Holdings or any direct or indirect parent of Holdings on Holdings' Capital Stock (or a Restricted Payment to any such direct or indirect parent of Holdings to fund the payment by such direct or indirect parent of Holdings of dividends on such entity's Capital Stock) of up to 6% per annum of the total market capitalization of Holdings or any such direct or indirect parent of Holdings as of the date of such public offering, other than public offerings with respect to Holdings' (or such direct or indirect parent's) Capital Stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;
(9): Restricted Payments that are made with Excluded Contributions;
(10): other Restricted Payments in an aggregate amount, when taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of $225.0 million and 3% of Adjusted Consolidated Net Tangible Assets at the time made;
(11): the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;
(12): (a) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or

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indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group, and (b) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (a)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);

(13)

any Restricted Payment, if applicable:

(a): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings and general corporate operating and overhead expenses of any direct or indirect parent of Holdings in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;
(b): in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(c): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;

(14)

repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(15)

purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

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(16): Restricted Payments by Holdings or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(17): the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the captions "—Change of Control" and "—Asset Sales"; provided that all notes tendered by holders of the notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(18): payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and the Restricted Subsidiaries, taken as a whole, that complies with the covenant described under "Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by the indenture) and that all notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value; and
(19): any Restricted Payment used to fund the Transactions and the payment of fees and expenses Incurred in connection with the Transactions or owed by Holdings or any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of Holdings to enable it to make payments in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case to the extent permitted by the covenant described under "—Transactions with Affiliates";

Dividend and Other Payment Restrictions Affecting Subsidiaries

(a): (i) pay dividends or make any other distributions to Holdings or any Restricted Subsidiary (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any Restricted Subsidiary;

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(b): make loans or advances to Holdings or any Restricted Subsidiary; or
(c): sell, lease or transfer any of its properties or assets to Holdings or any Restricted Subsidiary;

except in each case for such encumbrances or restrictions existing under or by reason of:

(1): (i) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Secured Notes (including any guarantee thereof) and the Term Loan Facility (including any guarantee thereof) and (ii) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
(2): the indenture, the notes (and any exchange notes) or the Guarantees;
(3): applicable law or any applicable rule, regulation or order;
(4): any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5): contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6): Secured Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7): restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8): customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9): purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;
(10): customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
(11): in the case of clause (c) of the first paragraph of this covenant, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;
(12): any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , however , that such restrictions apply only to such Receivables Subsidiary;

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(13): other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers' ability to make anticipated principal or interest payments on the notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date by the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(14): any Restricted Investment not prohibited by the covenant described under "—Limitation on Restricted Payments" and any Permitted Investment;
(15): any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of "Permitted Business Investment"; or
(16): any encumbrances or restrictions of the type referred to in clauses (a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Asset Sales

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) Holdings or any Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by Holdings) of the assets sold or otherwise disposed of, and (y) at least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents or Additional Assets; provided that the amount of:

(a): any liabilities (as shown on Holdings' or a Restricted Subsidiary's most recent balance sheet or in the notes thereto) of Holdings or a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,
(b): any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),
(c): with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or

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production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof), and

(d): any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of 4% of Adjusted Consolidated Net Tangible Assets and $300.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

shall be deemed to be Cash Equivalents for the purposes of this provision.

(1): to repay (a) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under the indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, (c) Obligations under the notes or (d) other Pari Passu Indebtedness ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness, the Issuers will equally and ratably reduce Obligations under the notes as provided under "Optional Redemption," through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and additional interest, if any, the pro rata principal amount of notes), in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings);
(2): to make an Investment in any one or more businesses (provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale; or
(3): to invest in Additional Assets.

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If more notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such notes for purchase will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such notes are listed, or if such notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.

Transactions with Affiliates

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amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an " Affiliate Transaction ") involving aggregate consideration in excess of $20.0 million, unless:

(a): such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person; and
(b): with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

(1): transactions between or among Holdings and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of the indenture and effected for a bona fide business purpose;
(2): Restricted Payments permitted by the provisions of the indenture described above under the covenant "—Limitation on Restricted Payments" and Permitted Investments;
(3): the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings;
(4): transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5): payments or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of Holdings in good faith;
(6): any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;
(7): the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any transaction, agreement or arrangement described in the offering memorandum related to the initial notes dated April 10, 2012 and, in each case, any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided , however , that the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such existing transaction, agreement or arrangement together with

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all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date;

(8): the execution of the Transactions, and the payment of all fees and expenses related to the Transactions, including fees to the Sponsors;
(9): (a) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the indenture, which are fair to Holdings and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(10): any transaction effected as part of a Qualified Receivables Financing;
(11): the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;
(12): the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;
(13): the entering into of any tax sharing agreement or arrangement that complies with clause (12) of the second paragraph of the covenant described under "—Limitation on Restricted Payments";
(14): any contribution to the capital of Holdings;
(15): transactions permitted by, and complying with, the provisions of the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets";
(16): transactions between Holdings or any Restricted Subsidiary and any Person, a director of which is also a director of Holdings or any direct or indirect parent of Holdings; provided , however , that such director abstains from voting as a director of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person;
(17): pledges of Equity Interests of Unrestricted Subsidiaries;
(18): the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(19): any employment agreements entered into by Holdings or any Restricted Subsidiary in the ordinary course of business;
(20): the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar amounts) to the Sponsors pursuant to the Sponsor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement, in each case as in effect on the Issue Date or any amendment or modification thereto (so long as, in the good faith judgment of the Board of Directors of Holdings, any such amendment or modification is not more disadvantageous, taken as a

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whole, to holders in any material respect as compared to the Sponsor Management Agreement in effect on the Issue Date);

(21): payments by Holdings or any of its Restricted Subsidiaries to any of the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of Holdings in good faith;
(22): transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers' Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in the indenture;
(23): investments by the Sponsors in securities of Holdings or any Restricted Subsidiary (and payment of reasonable out-of-pocket expenses incurred by the Sponsors in connection therewith) so long as (i) the investment is being generally offered to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5% of the proposed or outstanding issue amount of such class of securities; and
(24): customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.

Liens

The indenture provides that Holdings will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or a Restricted Subsidiary unless the notes are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the notes) the obligations so secured until such time as such obligations are no longer secured by a Lien.

Any Lien that is granted to secure the notes or any Subsidiary Guarantee under the preceding paragraph shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the notes or such Subsidiary Guarantee.

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additional Indebtedness with the same terms or in the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of "Indebtedness."

Reports and Other Information

(1): within the time period specified in the SEC's rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;
(2): within the time period specified in the SEC's rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;
(3): promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC's rules and regulations), such other reports on Form 8-K (or any successor or comparable form); and
(4): subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

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required by clauses (1) and (2) of the first paragraph of this covenant shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

In the event that:

(a): the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entity's level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or
(b): any direct or indirect parent of Holdings is or becomes a guarantor of the notes,

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Future Subsidiary Guarantors

The indenture provides that Holdings will cause each Wholly Owned Restricted Subsidiary that is not an Excluded Subsidiary and that guarantees any Indebtedness of an Issuer or any of the Subsidiary Guarantors to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will guarantee payment of the notes. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Subsidiary Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Each Subsidiary Guarantee shall be released in accordance with the provisions of the indenture described under "—Subsidiary Guarantees."

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

(1)

Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the " Successor Holdco "); provided that in the case where the surviving Person is not a corporation, a co-obligor of the notes is a corporation;

(2)

the Successor Holdco (if other than Holdings) expressly assumes all the obligations of Holdings under the indenture pursuant to supplemental indentures;

(3)

(4)

(a): the Successor Holdco would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or
(b): the Fixed Charge Coverage Ratio would be greater than such ratio immediately prior to such transaction;

(5)

if Holdings is not the Successor Holdco, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that

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its Subsidiary Guarantee shall apply to such Person's obligations under the indenture and the notes; and

(6): the Successor Holdco shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with the indenture.

The indenture further provides that, subject to certain limitations in the indenture governing release of a Subsidiary Guarantee upon the sale or disposition of a Restricted Subsidiary of Holdings that is a Subsidiary Guarantor, no Subsidiary Guarantor will, and Holdings will not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1): either (a) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof, (such Subsidiary Guarantor or such Person, as the case may be, being herein called the " Successor Subsidiary Guarantor ") and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under the indenture and the notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of the covenant described above under the caption "—Certain Covenants—Asset Sales"; and
(2): the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the indenture.

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liability company, corporation, partnership or similar entity organized or existing under the laws of any Permitted Jurisdiction so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with Holdings or another Subsidiary Guarantor.

Defaults

An "Event of Default" is defined in the indenture as:

(1): a default in any payment of interest (including any additional interest) on any note when due, continued for 30 days;
(2): a default in the payment of principal or premium, if any, of any note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(3): failure by Holdings for 120 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements contained in the provisions of the indenture described in "Certain covenants—Reports and Other Information";
(4): the failure by Holdings or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3) above) contained in the notes or the indenture;
(5): the failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $125.0 million or its foreign currency equivalent (the " cross-acceleration provision ");
(6): certain events of bankruptcy, insolvency or reorganization of Holdings or a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) (the " bankruptcy provisions ");
(7): failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $125.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days (the " judgment default provision "); or
(8): the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under the indenture or any Subsidiary Guarantee with respect to the notes and such Default continues for 10 days.

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However, a default under clause (4) will not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding notes notify the Issuers of the default and the Issuers do not cure such default within the time specified in clause (4) hereof after receipt of such notice.

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings) occurs with respect to the notes and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding notes by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings occurs, the principal of, premium, if any, and interest on all the notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding notes may rescind any such acceleration with respect to the notes and its consequences.

(1): such holder has previously given the Trustee notice that an Event of Default is continuing,
(2): holders of at least 30% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy,
(3): such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(4): the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(5): the holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

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however, may refuse to follow any direction that conflicts with law or the indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

Amendments and Waivers

Subject to certain exceptions, the indenture, the notes and the Subsidiary Guarantees may be amended with the consent of the holders of a majority in principal amount of the notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding. However, without the consent of each holder of an outstanding note affected, no amendment may, among other things:

(1): reduce the amount of notes whose holders must consent to an amendment;
(2): reduce the rate of or extend the time for payment of interest on any note;
(3): reduce the principal of or change the Stated Maturity of any note;
(4): reduce the premium payable upon the redemption of any note or change the time at which any note may be redeemed as described under "—Optional Redemption" above;
(5): make any note payable in money other than that stated in such note;
(6): expressly subordinate the notes or any related Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor;
(7): impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder's notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's notes; or
(8): make any change in the amendment provisions which require each holder's consent or in the waiver provisions.

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addition to or in place of certificated notes ( provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code), to add a Subsidiary Guarantee with respect to the notes, to secure the notes, to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power conferred upon the Issuers, to make any change that does not adversely affect the rights of any holder, to conform the text of the indenture, Subsidiary Guarantees or the notes, to any provision of this "Description of Senior 2020 Exchange Notes" to the extent that such provision in this "Description of Senior 2020 Exchange Notes" was intended by the Issuers to be a verbatim recitation of a provision of the indenture as stated in an Officers' Certificate, Subsidiary Guarantees or the notes, to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA to effect any provision of the indenture or to make certain changes to the indenture to provide for the issuance of additional notes.

No Personal Liability of Directors, Officers, Employees, Managers and Stockholders

Transfer and Exchange

Satisfaction and Discharge

(1): either (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their stated maturity within one year or (iii) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire

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Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(2): the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under the indenture; and
(3): the Issuers have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with.

Defeasance

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Concerning the Trustee

The Wilmington Trust, National Association is the Trustee under the indenture and has been appointed by the Issuers as registrar and a paying agent with regard to the notes.

Governing Law

The indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

" Acquired Indebtedness " means, with respect to any specified Person:

(1): Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and
(2): Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

" Additional Assets " means:

(1): any properties or assets used or useful in the Oil and Gas Business;
(2): capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;
(3): the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or
(4): Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

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" Adjusted Consolidated Net Tangible Assets " means (without duplication), as of the date of determination, the remainder of:

(a)

the sum of:

(i): estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings' most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided, that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of "Borrowing Base" and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each case as estimated by Holdings' petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;

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(ii): the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings' books and records as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iii): the Net Working Capital on a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iv): assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business, provided that such net value shall not be less than zero; and
(v): the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements, and (B) the Fair Market Value, as estimated by Holdings, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus

(b)

the sum of:

(i): any amount included in (a)(i) through (a)(v) above that is attributable to minority interests;
(ii): any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings' latest audited consolidated financial statements;
(iii): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and
(iv): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

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or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

" Applicable Premium " means, with respect to any note on any applicable redemption date, as determined by the Issuers, the greater of:

(1)

1% of the then outstanding principal amount of the note; and

(2)

the excess of:

(a): the present value at such redemption date of (i) the redemption price of the note, at May 1, 2016 (such redemption price being set forth in the applicable table appearing above under "—Optional Redemption") plus (ii) all required interest payments due on the note through May 1, 2016 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b): the then outstanding principal amount of the note.

" Asset Sale " means:

(1): the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) outside the ordinary course of business of Holdings or any Restricted Subsidiary (each referred to in this definition as a " disposition "); or
(2): the issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),

in each case other than:

(a): a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b): the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to the provisions described above under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" or any disposition that constitutes a Change of Control;
(c): any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under "—Certain Covenants—Limitation on Restricted Payments";
(d): any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;
(e): any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;
(f): any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;

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(g): foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;
(h): any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(i): the lease, assignment or sublease of, or any transfer related to a "reverse build to suit" or similar transaction in respect of, any real or personal property in the ordinary course of business;
(j): any sale of inventory or other assets in the ordinary course of business;
(k): any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l): in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(m): a transfer of accounts receivable and related assets of the type specified in the definition of "Receivables Financing" (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
(n): any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by the indenture;
(o): dispositions in connection with Permitted Liens;
(p): any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q): the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;
(r): dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(s): any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(t): a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;
(u): any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or Guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;

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(v): the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by the Issuer or any Restricted Subsidiary in the ordinary course of business or which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and
(w): a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

" Borrowing Base " means, at any date of determination, an amount equal to the amount of (a) 65% of the net present value discounted at 9% of proved developed producing (PDP) reserves, plus (b) 35% of the net present value discounted at 9% of proved developed non-producing (PDNP) reserves, plus (c) 25% of the net present value discounted at 9% of proven undeveloped (PUD) reserves, plus or minus (d) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus or minus (e) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings' petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential

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or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 1.5% per annum.

" Business Day " means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

" Capital Stock " means:

(1): in the case of a corporation, corporate stock or shares;
(2): in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3): in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4): any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

" Cash Equivalents " means:

(1): U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;
(2): securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3): certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated "A" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

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(4): repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5): commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least "A-1" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6): readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(7): Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher from Moody's (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and
(8): investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

" Change of Control " means the occurrence of either of the following:

(1): the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2): Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.

" Code " means the Internal Revenue Code of 1986, as amended.

" Consolidated Interest Expense " means, with respect to any Person for any period, the sum, without duplication, of:

(1): consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging

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Obligations and excluding additional interest in respect of the notes, amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus

(2): consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus
(3): commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than Holdings and the Restricted Subsidiaries; minus
(4): interest income for such period.

(1): any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facilities closing costs, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions, in each case, shall be excluded;
(2): effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3): the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4): any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;
(5): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;
(6): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;

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(7): the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8): solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments," the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9): an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (12) of the second paragraph under "—Certain Covenants—Limitation on Restricted Payments" shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10): any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;
(11): any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12): any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any Restricted Subsidiary, shall be excluded;
(13): accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(14): (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;

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(15): (a)(i) the non-cash portion of "straight-line" rent expense shall be excluded and (ii) the cash portion of "straight-line" rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(16): any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;
(17): (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);
(18): Capitalized Software Expenditures shall be excluded; and
(19): Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

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(1)

to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2)

to advance or supply funds:

(a): for the purchase or payment of any such primary obligation; or
(b): to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)

" Default " means any event which is, or after notice or passage of time or both would be, an Event of Default.

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Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers' Certificate, on the issuance date thereof.

(1): matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2): is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or
(3): is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

" Domestic Subsidiary " means a Restricted Subsidiary that is not a Foreign Subsidiary.

(1): Consolidated Taxes; plus
(2): Fixed Charges; plus
(3): Consolidated Depreciation, Depletion and Amortization Expense; plus
(4): Consolidated Non-Cash Charges; plus
(5): any expenses or charges (other than Consolidated Depreciation, Depletion and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness permitted to be incurred by the indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the Transactions, the notes or any Bank Indebtedness, (ii) any amendment or other modification of the notes or other Indebtedness, (iii) any additional interest in respect of the notes and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus
(6): business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory

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optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); plus

(7): the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus
(8): any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus
(9): the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by the covenant described under "—Certain Covenants—Transactions with Affiliates"; plus
(10): all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (4) to the "Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" under "Summary" in the offering memorandum related to the initial notes dated April 10, 2012 to the extent such adjustments, without duplication, continue to be applicable to such period; plus
(11): the amount of any loss attributable to a new plant or facility until the date that is 12 months after completing construction of or acquiring such plant or facility, as the case may be; provided that (A) such losses are reasonably identifiable and factually supportable and certified by a responsible officer of Holdings and (B) losses attributable to such plant or facility after 12 months from the date of completing construction of or acquisition of such plant or facility, as the case may be, shall not be included in this clause (11), plus
(12): exploration expenses or costs (to the extent Holdings adopts the "successful efforts" method), and

less , without duplication, to the extent the same increased Consolidated Net Income,

(13): the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments;
(14): non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

(1): public offerings with respect to Holdings' or such direct or indirect parent's common stock registered on Form S-4 or Form S-8;
(2): issuances to any Subsidiary of Holdings; and

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(3): any such public or private sale that constitutes an Excluded Contribution.

" Escrow Release Date " means the date upon which the Escrow Condition is satisfied.

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

(1): contributions to its common equity capital, and
(2): the sale (other than to a Subsidiary of Holdings or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Holdings,

in each case designated as Excluded Contributions pursuant to an Officers' Certificate on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be; provided , that $3,200 million of Cash Equivalents received by Holdings from the Equity Investors on or prior to the Escrow Release Date to fund the Acquisition shall not be permitted to be designated an Excluded Contribution.

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" Farm-Out Agreement " means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

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For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

" Foreign Subsidiary " means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.

" Hedging Obligations " means, with respect to any Person, the obligations of such Person under:

(1): currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2): other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

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" holder " or " noteholder " means the Person in whose name a note is registered on the registrar's books.

" Holdings " means Everest Acquisition LLC (renamed as EP Energy LLC on the Escrow Release Date), together with its successors or assigns.

" Indebtedness " means, with respect to any Person:

(1): the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that (i) constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2): to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3): to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

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Subsidiaries (as determined in good faith by the board of directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of the indenture; and (9) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.

" Investment Grade Rating " means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

" Investment Grade Securities " means:

(1): securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2): securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody's and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,
(3): investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4): corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

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(1)

(a): Holdings' "Investment" in such Subsidiary at the time of such redesignation less
(b): the portion (proportionate to Holdings' equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and

(2)

any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.

" Issue Date " means the date on which the notes are originally issued.

" Moody's " means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.

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" Net Proceeds " means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to the second paragraph of the covenant described under "—Certain Covenants—Asset Sales") to be paid as a result of such transaction, amounts paid in connection with the termination of Hedging Obligations related to Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

" Notes Obligations " means Obligations in respect of the notes and the indenture, including, for the avoidance of doubt, Obligations in respect of exchange notes and guarantees thereof.

" Oil and Gas Business " means:

(1): the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;

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(2): the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;
(3): any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;
(4): any business relating to oil field sales and service; and
(5): any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

" Opinion of Counsel " means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

(1): Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;
(2): Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and
(3): Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

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" Permitted Investments " means:

(1): any Investment in Holdings or any Restricted Subsidiary;
(2): any Investment in Cash Equivalents or Investment Grade Securities;
(3): any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;
(4): any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of "—Certain Covenants—Asset Sales" or any other disposition of assets not constituting an Asset Sale;
(5): any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under the indenture;
(6): advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $25.0 million at any one time outstanding;
(7): any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of Holdings of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8): Hedging Obligations permitted under clause (j) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(9): any Investment by Holdings or any Restricted Subsidiary in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with

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all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (9) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

(10): additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(11): loans and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person's purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;
(12): Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments";
(13): any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under "—Certain Covenants—Transactions with Affiliates" (except transactions described in clauses (2), (4), (6), (9)(b) and (16) of such paragraph);
(14): Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15): (x) guarantees issued in accordance with the covenants described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Future Subsidiary Guarantors," including, without limitation, any guarantee or other obligation issued or incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

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(16): Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(17): any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;
(18): any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivable Financing;
(19): additional Investments in joint ventures not to exceed, at any one time in the aggregate outstanding under this clause (19), $100.0 million (with the Fair Market Value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (19) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(20): Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21): any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(22): Permitted Business Investments.

" Permitted Liens " means, with respect to any Person:

(1): pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2): Liens imposed by law, such as landlord's, carriers', warehousemen's, mechanics', materialmen's, repairmen's, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3): Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

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(4)

(5)

(6)

(A): Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(B): Liens securing Indebtedness incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be incurred pursuant to clause (a) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(C): Liens securing Indebtedness incurred under the RBL Facility in excess of $2,000 million (and solely to the extent of such excess), including any letter of credit facility relating thereto, that was permitted to be incurred under the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(D): Liens securing Indebtedness permitted to be Incurred pursuant to clause (b)(2), (d), (l), (p) or (t) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" ( provided that in the case of clause (t), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor);

(7)

Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement, the holders of the Secured Notes or the lenders under the Term Loan Facility);

(8)

(9)

Liens on assets or property at the time Holdings or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into Holdings or any Restricted Subsidiary; provided , however , that such Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (p) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (p) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") may not extend to any other property owned by Holdings or any Restricted Subsidiary

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(other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

(10): Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(11): Liens securing Hedging Obligations not incurred in violation of the indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12): Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13): leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;
(14): Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;
(15): Liens in favor of Holdings or any Subsidiary Guarantor;
(16): Liens on accounts receivable and related assets of the type specified in the definition of "Receivables Financing" Incurred in connection with a Qualified Receivables Financing;
(17): deposits made in the ordinary course of business to secure liability to insurance carriers;
(18): Liens on the Equity Interests of Unrestricted Subsidiaries;
(19): grants of software and other technology licenses in the ordinary course of business;
(20): Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under the indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B);
(21): Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings' or such Restricted Subsidiary's client at which such equipment is located;

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(22): judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(23): Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(24): Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;
(25): other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (25) that are at that time outstanding, exceed the greater of $350.0 million and 5% Adjusted Consolidated Net Tangible Assets at the time of Incurrence;
(26): any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(27): any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture pursuant to customary discharge, redemption or defeasance provisions;
(28): Liens arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;
(29): Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;
(30): Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(31): Liens in respect of Production Payments and Reserve Sales;
(32): Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract;
(33): Liens on pipelines or pipeline facilities that arise by operation of law; and
(34): any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics' liens, tax liens and easements); or

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(c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b).

" Preferred Stock " means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

" Qualified Receivables Financing " means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1): the Board of Directors of Holdings shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Holdings and the Receivables Subsidiary;
(2): all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and
(3): the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Holdings) and may include Standard Securitization Undertakings.

" RBL Facility " means the credit agreement entered into on the Escrow Release Date among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or other lenders), restructured, repaid, refunded, refinanced or otherwise modified from time to time pursuant to any amendment thereto or pursuant to a new loan agreement with other lenders, governed by a borrowing base set by the lenders, extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or under any successor or replacement agreement or increasing the amount loaned thereunder or altering the maturity thereof.

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(a): no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;
(b): with which neither Holdings nor any Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which Holdings reasonably believes to be no less favorable to Holdings or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; and
(c): to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results.

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" Restricted Investment " means an Investment other than a Permitted Investment.

" Restricted Subsidiary " means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this "Description of Senior 2020 Exchange Notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.

" S&P " means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.

" SEC " means the Securities and Exchange Commission.

" Secured Indebtedness " means any Consolidated Total Indebtedness secured by a Lien.

" Secured Notes " means the Issuers' 6.875% Senior Secured Notes due 2019 issued on the Issue Date and including any exchange notes issued in exchange therefor pursuant to the Registration Rights Agreement.

" Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

" Sponsor Management Agreement " means the management agreement between certain of the management companies associated with the Sponsors, EP Energy Holding Company and EPE Acquisition, LLC.

" Sponsors " means (i) affiliates of each of Apollo Global Management, LLC, Access Industries, Inc. and Riverstone Holdings, L.P. and other investors party to that certain Interim Investors Agreement dated as of February 24, 2012 (the " Interim Investors A greement ") and any other investors that may become party to the Interim Investors Agreement prior to or upon the consummation of the Acquisition and any of their respective Affiliates other than any portfolio companies (collectively, the " Equity Investor ") and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.

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determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

" Subsidiary Guarantee " means any guarantee of the obligations of the Issuers under the indenture and the notes by any Subsidiary Guarantor in accordance with the provisions of the indenture.

" Tax Distributions " means any distributions described in clause (12) of the covenant entitled "—Certain Covenants—Limitation on Restricted Payments."

" TIA " means the Trust indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the indenture.

" Transactions " means the transactions described under "Summary—Recent Events—The Acquisition Transactions."

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" Treasury Rate " means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to May 1, 2016; provided , however , that if the period from such redemption date to May 1, 2016 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

" Trust Officer " means:

(1): any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject, and
(2): who shall have direct responsibility for the administration of the indenture.

" Trustee " means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor.

" Unrestricted Subsidiary " means:

(1): any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and
(2): any Subsidiary of an Unrestricted Subsidiary;

(a): the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b): if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant described under "—Certain Covenants—Limitation on Restricted Payments."

Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

(x): (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be greater than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

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(y): no Event of Default shall have occurred and be continuing.

" U.S. Government Obligations " means securities that are:

(1): direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2): obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

" Volumetric Production Payments " means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.

" Voting Stock " of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

" Wholly Owned Restricted Subsidiary " is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

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DESCRIPTION OF SENIOR 2022 EXCHANGE NOTES

General

EP Energy LLC, a Delaware limited liability company, and Everest Acquisition Finance Inc., a Delaware corporation (each an " Issuer " and together, the " Issuers "), issued $350,000,000 aggregate principal amount of 7.750% Senior Notes due 2022 (the " initial 2022 senior notes ") under an indenture (the " indenture "), dated as of August 13, 2012, by and among the Issuers, the Subsidiary Guarantors (as defined below) and Wilmington Trust, National Association, as Trustee. In this description, (i) "we," "us" and "our" mean EP Energy LLC and its Subsidiaries and (i) the term "Issuers" refers only to EP Energy LLC and Everest Acquisition Finance Inc., but not to any of their Subsidiaries.

The Issuers will issue the senior 2022 exchange notes under the indenture. The terms of the senior 2022 exchange notes are identical in all material respects to the initial 2022 senior notes except that upon completion of the exchange offer, the senior 2022 exchange notes will be registered under the Securities Act and free of any covenants regarding exchange registration rights. We refer to the initial 2022 senior notes as the "initial notes." We refer to the senior 2022 exchange notes as the "exchange notes." Unless otherwise indicated by the context, references in the "Description of Senior 2022 Exchange Notes" section to the "notes" include the initial notes and the exchange notes.

The following summary of certain provisions of the indenture and the notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of those agreements, including the definitions of certain terms therein and those terms made a part thereof by the TIA. We urge you to read those agreements because they, not this description, define your rights as holders of the notes. Capitalized terms used in this "Description of Senior 2022 Exchange Notes" section and not otherwise defined have the meanings set forth under "—Certain Definitions."

The Issuers will issue the exchange notes in an aggregate principal amount up to $350,000,000. The Issuers may issue additional notes from time to time. Any offering of additional notes is subject to the covenants described below under the caption "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." The notes and any additional notes subsequently issued under the indenture may, at our election, be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the additional notes are not fungible with the notes for U.S. federal income tax purposes, the additional notes will have a separate CUSIP number, if applicable. Unless the context otherwise requires, for all purposes of the indenture and this "Description of Senior 2022 Exchange Notes," references to the notes include any additional notes actually issued.

The exchange notes will be issued only in fully registered form, without coupons, in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof, provided that the exchange notes may be issued in denominations of less than $1,000 solely to accommodate book-entry positions that have been created by a DTC participant in denominations of less than $1,000. No service charge will be made for any registration of transfer or exchange of the notes, but in certain circumstances the Issuers may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith.

Terms of the Notes

The notes are senior obligations of the Issuers and will mature on September 1, 2022. Each note bears interest at a rate of 7.750% per annum from the Issue Date or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of

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business on February 15 or August 15 immediately preceding the interest payment date on March 1 and September 1 of each year, commencing March 1, 2013.

Optional Redemption

On or after September 1, 2017 the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 1 of the years set forth below:

Period

2017	103.875	%
2018	102.583	%
2019	101.292	%
2020 and thereafter	100.000	%

In addition, prior to September 1, 2017 the Issuers may redeem the notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by the Issuers by first-class mail to each holder's registered address, at a redemption price equal to 100% of the principal amount of the notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to September 1, 2015 the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 107.750%, plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided , however , that at least 50% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes) must remain outstanding after each such redemption; provided , further , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days' notice mailed to each holder of notes being redeemed and otherwise in accordance with the procedures set forth in the indenture.

Selection

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provided that no notes of $2,000 or less shall be redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuers have deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and additional interest (if any) on, the notes to be redeemed.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

Ranking

The indebtedness evidenced by the Subsidiary Guarantees is senior Indebtedness of the applicable Subsidiary Guarantor, ranks pari passu in right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor and is senior in right of payment, to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor.

At June 30, 2012, on a pro forma basis after giving effect to the Refinancing Transactions:

(1): Holdings and its Subsidiaries would have had $1,900 million in aggregate principal amount of Secured Indebtedness outstanding, including the Secured Notes and loans under the Term Loan Facility, of which $400 million of Secured Indebtedness would have been outstanding under the Credit Agreement, and approximately $1.5 billion would have been available and undrawn, and to all of which the notes will be subordinated to the extent of the value of the collateral securing such Indebtedness; and
(2): Holdings and its Subsidiaries would have had $2,350 million in aggregate principal amount of senior unsecured Indebtedness outstanding, including the Existing Senior Notes and the notes.

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Subsidiaries that are not Subsidiary Guarantors will be (i) non-Wholly Owned Subsidiaries and (ii) Foreign Subsidiaries, as well as Domestic Subsidiaries (x) that own no material assets (directly or through their Subsidiaries) other than equity interests of one or more of Foreign Subsidiaries that are CFCs or (y) that are Subsidiaries of Foreign Subsidiaries, all of which, as of March 31, 2012, had no outstanding indebtedness, excluding intercompany obligations.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—The notes will be structurally subordinated to all liabilities of our non-guarantor subsidiaries."

Subsidiary Guarantees

Each of Holdings' direct and indirect Wholly Owned Restricted Subsidiaries (other than Everest Acquisition Finance Inc.) that are Domestic Subsidiaries and that are borrowers or guarantors under the Credit Agreement jointly and severally irrevocably and unconditionally guarantee on a senior basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under the indenture and the notes, whether for payment of principal of, premium, if any, or interest or additional interest on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Subsidiary Guarantors being herein called the " Subsidiary Guaranteed Obligations "). Such Subsidiary Guarantors agree to pay, in addition to the amount stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the holders in enforcing any rights under the Subsidiary Guarantees.

Each Subsidiary Guarantee will be a continuing guarantee and shall:

(1): remain in full force and effect until payment in full of all the Subsidiary Guaranteed Obligations of such Subsidiary Guarantor;
(2): subject to the next two succeeding paragraphs, be binding upon each such Subsidiary Guarantor and its successors; and
(3): inure to the benefit of and be enforceable by the Trustee, the holders and their successors, transferees and assigns.

Each Subsidiary's Subsidiary Guarantee will be automatically released upon:

(1): the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of the indenture;

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(2): the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under "—Certain Covenants—Limitation on Restricted Payments" and the definition of "Unrestricted Subsidiary";
(3): the release or discharge of the guarantee by such Subsidiary Guarantor of the Credit Agreement or other Indebtedness or the guarantee of any other Indebtedness which resulted in the obligation to guarantee the notes;
(4): the Issuers' exercise of their legal defeasance option or covenant defeasance option as described under "—Defeasance" or if the Issuers' obligations under the indenture are discharged in accordance with the terms of the indenture; and
(5): the occurrence of a Covenant Suspension Event.

Change of Control

(1): repay in full all Bank Indebtedness or, if doing so will allow the purchase of notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer; or
(2): obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the notes as provided for in the immediately following paragraph.

See "Risk Factors—Risks Related to Our Indebtedness and the Notes—We may not be able to repurchase the notes upon a change of control."

(1): that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holder's notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date);
(2): the circumstances and relevant facts and financial information regarding such Change of Control;

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(3): the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and
(4): the instructions determined by the Issuers, consistent with this covenant, that a holder must follow in order to have its notes purchased.

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Certain Covenants

Set forth below are summaries of certain covenants that are contained in the indenture. If on any date following the Issue Date, (i) the notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under the indenture then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a " Covenant Suspension Event "), the covenants specifically listed under the following captions in this "Description of Senior 2022 Exchange Notes" section of this prospectus will not be applicable to the notes (collectively, the " Suspended Covenants "):

(1): "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(2): "—Limitation on Restricted Payments";
(3): "—Dividend and Other Payment Restrictions Affecting Subsidiaries";
(4): "—Asset Sales";
(5): "—Transactions with Affiliates";
(6): clause (4) of the first paragraph of "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; and
(7): "—Future Subsidiary Guarantors."

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Payments" had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under the first paragraph of "—Limitation on Restricted Payments." As described above, however, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, the Issuers must comply with the terms of the covenant described under "—Future Subsidiary Guarantors."

For purposes of the "—Asset Sales" covenant, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.

There can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

The indenture provides that:

(1): Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and
(2): Holdings will not permit any of the Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock;

The foregoing limitations will not apply to:

(a): the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers' acceptances thereunder up to an aggregate principal amount outstanding at any time that does not exceed the greatest of (1) $3.0 billion, (2) the sum of (x) $500.0 million and (y) 30% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence and (3) the Borrowing Base at the time of Incurrence;
(b): the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by (1) the notes and the Subsidiary Guarantees, as applicable (not including any additional notes but including exchange notes and related guarantees thereof) and (2) Indebtedness, including

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in respect of the Secured Notes and the Term Loan Facility (including any guarantees thereof), in an aggregate principal amount for this clause (b)(2) outstanding at any time that, together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, does not exceed $1,500 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(c): Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (a) and (b)), including the Existing Senior Notes and any guarantee thereof;
(d): Indebtedness (including Capitalized Lease Obligations) Incurred by Holdings or any Restricted Subsidiary, Disqualified Stock issued by Holdings or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (d), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, does not exceed the greater of $350.0 million and 5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(e): Indebtedness Incurred by Holdings or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(f): Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions, any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of the indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(g): Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (g);
(h): shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent

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transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (h);

(i): Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (i);
(j): Hedging Obligations that are not incurred for speculative purposes but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(k): obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(l): Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (l), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) below, does not exceed the greater of $500.0 million and 7% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed Incurred for purposes of the first paragraph of this covenant from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));
(m): Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of (i) the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after May 24, 2012 plus (ii) the amount of net cash proceeds received by Holdings in excess of $3,200 million prior to or on May 24, 2012, in each case from the issue

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or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the third paragraph of "—Limitation on Restricted Payments" or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(n)

(o)

(1): has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date ( provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(2): to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the notes or the Subsidiary Guarantee, as applicable, or (b) Disqualified Stock or

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Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and

(3): shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of Holdings, an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

(p)

(1): Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant; or
(2): the Fixed Charge Coverage Ratio of Holdings would be greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

(q)

(r)

(s)

(t)

(u)

(v)

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For purposes of determining compliance with this covenant:

(1): in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (v) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this covenant; provided , that (i) only Indebtedness outstanding under the Credit Agreement in excess of $2,000 million may be classified or reclassified as not incurred under clause (a) of the second paragraph of this covenant and (ii) the Secured Notes and the Term Loan Facility (including any guarantees thereof) outstanding on May 24, 2012, shall at all times be treated as incurred pursuant to clause (b) of the second paragraph of this covenant;
(2): at the time of incurrence, Holdings will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above without giving pro forma effect to the Indebtedness Incurred pursuant to the second paragraph above when calculating the amount of Indebtedness that may be Incurred pursuant to the first paragraph above;
(3): if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and
(4): if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (a) through (v) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

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Limitation on Restricted Payments

The indenture provides that Holdings will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:

(1): declare or pay any dividend or make any distribution on account of any of Holdings' or any of the Restricted Subsidiaries' Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(2): purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;
(3): make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or
(4): make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as " Restricted Payments "), unless, at the time of such Restricted Payment:

(a): no Default shall have occurred and be continuing or would occur as a consequence thereof;
(b): immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(c): such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (c) thereof), (6)(c), (8) and (13)(b) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to the Cumulative Credit.

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" Cumulative Credit " means the sum of (without duplication):

(1)

(2)

100% of (i) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after May 24, 2012 plus (ii) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings in excess of $3,200 million prior to or on May 24, 2012 (in each case other than net proceeds to the extent such net proceeds have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus

(3)

100% of (i) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after May 24, 2012 plus (ii) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, in excess of $3,200 million prior to or on May 24, 2012 (in each case other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"), plus

(4)

100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after May 24, 2012 (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5)

(A): the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and the Restricted Subsidiaries by any Person (other than Holdings or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (7) of the succeeding paragraph),

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(B): the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C): a distribution or dividend from an Unrestricted Subsidiary, plus

(6): in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or the Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the fair market value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) of the succeeding paragraph or constituted a Permitted Investment).

The foregoing provisions will not prohibit:

(1)

(2)

(b): the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and
(c): if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3)

(a): the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be

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paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),

(b): such Indebtedness is subordinated to the notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(c): such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any notes then outstanding, and
(d): such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any notes then outstanding were instead due on such date;

(4)

(a): the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors or consultants of Holdings and the Restricted Subsidiaries or any direct or indirect parent of Holdings that occurs after the Issue Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under "—Limitation on Restricted Payments"), plus
(b): the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Issue Date;

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Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the indenture;

(5)

(6)

(a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(b): a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (b) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and
(c): the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

(7): Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $175.0 million and 2.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(8): the payment of dividends after a public offering of Capital Stock of Holdings or any direct or indirect parent of Holdings on Holdings' Capital Stock (or a Restricted Payment to any such direct or indirect parent of Holdings to fund the payment by such direct or indirect parent of Holdings of dividends on such entity's Capital Stock) of up to 6% per annum of the total market capitalization of Holdings or any such direct or indirect parent of Holdings as of the date of such public offering, other than public offerings with respect to Holdings' (or such direct or indirect parent's) Capital Stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;
(9): Restricted Payments that are made with Excluded Contributions;
(10): other Restricted Payments in an aggregate amount, when taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of $225.0 million and 3% of Adjusted Consolidated Net Tangible Assets at the time made;
(11): the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;

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(12)

(13)

any Restricted Payment, if applicable:

(a): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings and general corporate operating and overhead expenses of any direct or indirect parent of Holdings in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;
(b): in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(c): in amounts required for any direct or indirect parent of Holdings to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;

(14)

repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(15)

purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

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(16): Restricted Payments by Holdings or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(17): the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the captions "—Change of Control" and "—Asset Sales"; provided that all notes tendered by holders of the notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(18): payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and the Restricted Subsidiaries, taken as a whole, that complies with the covenant described under "Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by the indenture) and that all notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value; and
(19): any Restricted Payment used to fund the Transactions and the payment of fees and expenses Incurred in connection with the Transactions or owed by Holdings or any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of Holdings to enable it to make payments in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case to the extent permitted by the covenant described under "—Transactions with Affiliates";

Dividend and Other Payment Restrictions Affecting Subsidiaries

(a): (i) pay dividends or make any other distributions to Holdings or any Restricted Subsidiary (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any Restricted Subsidiary;

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(b): make loans or advances to Holdings or any Restricted Subsidiary; or
(c): sell, lease or transfer any of its properties or assets to Holdings or any Restricted Subsidiary;

except in each case for such encumbrances or restrictions existing under or by reason of:

(1): (i) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Existing Senior Notes (including any guarantee thereof), the Secured Notes (including any guarantee thereof) and the Term Loan Facility (including any guarantee thereof) and (ii) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
(2): the indenture, the notes (and any exchange notes) or the Guarantees;
(3): applicable law or any applicable rule, regulation or order;
(4): any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5): contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6): Secured Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7): restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8): customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9): purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;
(10): customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
(11): in the case of clause (c) of the first paragraph of this covenant, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;

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(12): any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , however , that such restrictions apply only to such Receivables Subsidiary;
(13): other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers' ability to make anticipated principal or interest payments on the notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date by the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(14): any Restricted Investment not prohibited by the covenant described under "—Limitation on Restricted Payments" and any Permitted Investment;
(15): any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of "Permitted Business Investment"; or
(16): any encumbrances or restrictions of the type referred to in clauses (a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Asset Sales

(a): any liabilities (as shown on Holdings' or a Restricted Subsidiary's most recent balance sheet or in the notes thereto) of Holdings or a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,
(b): any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),

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(c): with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof), and
(d): any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of 4% of Adjusted Consolidated Net Tangible Assets and $300.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

shall be deemed to be Cash Equivalents for the purposes of this provision.

(1): to repay (a) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under the indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, (c) Obligations under the notes or (d) other Pari Passu Indebtedness ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness, the Issuers will equally and ratably reduce Obligations under the notes as provided under "Optional Redemption," through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and additional interest, if any, the pro rata principal amount of notes), in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings);
(2): to make an Investment in any one or more businesses (provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale; or
(3): to invest in Additional Assets.

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Proceeds are applied or are not applied within 180 days of such Second Commitment, then such Net Proceeds shall constitute Excess Proceeds.

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Transactions with Affiliates

(a): such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person; and
(b): with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

(1): transactions between or among Holdings and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of the indenture and effected for a bona fide business purpose;
(2): Restricted Payments permitted by the provisions of the indenture described above under the covenant "—Limitation on Restricted Payments" and Permitted Investments;
(3): the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings;
(4): transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5): payments or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of Holdings in good faith;
(6): any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;
(7): the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any transaction, agreement or arrangement described in the offering memorandum related to the initial notes dated August 8, 2012 and, in each case, any amendment thereto or similar transactions, agreements or arrangements which it may

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enter into thereafter; provided , however , that the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date;

(8): the execution of the Transactions, and the payment of all fees and expenses related to the Transactions, including fees to the Sponsors;
(9): (a) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the indenture, which are fair to Holdings and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(10): any transaction effected as part of a Qualified Receivables Financing;
(11): the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;
(12): the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;
(13): the entering into of any tax sharing agreement or arrangement that complies with clause (12) of the second paragraph of the covenant described under "—Limitation on Restricted Payments";
(14): any contribution to the capital of Holdings;
(15): transactions permitted by, and complying with, the provisions of the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets";
(16): transactions between Holdings or any Restricted Subsidiary and any Person, a director of which is also a director of Holdings or any direct or indirect parent of Holdings; provided , however , that such director abstains from voting as a director of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person;
(17): pledges of Equity Interests of Unrestricted Subsidiaries;
(18): the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(19): any employment agreements entered into by Holdings or any Restricted Subsidiary in the ordinary course of business;
(20): the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar amounts) to the Sponsors pursuant to the Sponsor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar

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amounts) accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement, in each case as in effect on the Issue Date or any amendment or modification thereto (so long as, in the good faith judgment of the Board of Directors of Holdings, any such amendment or modification is not more disadvantageous, taken as a whole, to holders in any material respect as compared to the Sponsor Management Agreement in effect on the Issue Date);

(21): payments by Holdings or any of its Restricted Subsidiaries to any of the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of Holdings in good faith;
(22): transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers' Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in the indenture;
(23): investments by the Sponsors in securities of Holdings or any Restricted Subsidiary (and payment of reasonable out-of-pocket expenses incurred by the Sponsors in connection therewith) so long as (i) the investment is being generally offered to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5% of the proposed or outstanding issue amount of such class of securities; and
(24): customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.

Liens

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Reports and Other Information

(1): within the time period specified in the SEC's rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;
(2): within the time period specified in the SEC's rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;
(3): promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC's rules and regulations), such other reports on Form 8-K (or any successor or comparable form); and
(4): subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

provided , however , that Holdings shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event Holdings will make available such information to prospective purchasers of notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act, subject, in the case of any such information, certificates or reports provided prior to the effectiveness of the exchange offer registration statement or shelf registration statement, to exceptions and exclusions consistent with the presentation of financial and other information in the offering memorandum related to the initial notes dated August 8, 2012 (including with respect to any periodic reports provided prior to effectiveness of the exchange offer registration statement or shelf registration statement, the omission of financial information required by Rule 3-10 under Regulation S-X promulgated by the SEC (or any successor provision)). In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the notes and securities analysts the information required to be provided pursuant to clauses (1), (2) or (3) of this

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paragraph, by posting such information to its website or on IntraLinks or any comparable online data system or website.

In the event that:

(a): the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entity's level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or
(b): any direct or indirect parent of Holdings is or becomes a guarantor of the notes,

In addition, Holdings will make such information available to prospective investors upon request. In addition, Holdings has agreed that, for so long as any notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, it will furnish to the holders of the notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending September 30, 2012, for all holders and securities analysts to discuss such financial information no later than five business days after the distribution of such information required by this covenant and prior to the date of each such conference call, announcing the time and date of such conference call and either including all information necessary to access the call or informing holder of notes, prospective investors, market makers affiliated with any initial purchaser of the notes and securities analysts how they can obtain such information, including, without limitation, the applicable password or other login information.

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that otherwise satisfy the time requirements set forth in the first paragraph of this covenant and/or (2) the posting of reports that would be required to be provided to the Trustee and the holders on Holdings' website (or that of any of Holdings' parent companies).

Future Subsidiary Guarantors

Each Subsidiary Guarantee shall be released in accordance with the provisions of the indenture described under "—Subsidiary Guarantees."

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

(1)

(2)

the Successor Holdco (if other than Holdings) expressly assumes all the obligations of Holdings under the indenture pursuant to supplemental indentures;

(3)

(4)

(a): the Successor Holdco would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or

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(b): the Fixed Charge Coverage Ratio would be greater than such ratio immediately prior to such transaction;

(5): if Holdings is not the Successor Holdco, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person's obligations under the indenture and the notes; and
(6): the Successor Holdco shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with the indenture.

(1): either (a) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof, (such Subsidiary Guarantor or such Person, as the case may be, being herein called the " Successor Subsidiary Guarantor ") and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under the indenture and the notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of the covenant described above under the caption "—Certain Covenants—Asset Sales"; and
(2): the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the indenture.

Subject to certain limitations described in the indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary

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Guarantor under the indenture and the notes or the Subsidiary Guarantee, as applicable, and QD such Subsidiary Guarantor will automatically be released and discharged from its obligations under the indenture and its Subsidiary Guarantee. Notwithstanding the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in a Permitted Jurisdiction or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of any Permitted Jurisdiction so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with Holdings or another Subsidiary Guarantor.

Defaults

An "Event of Default" is defined in the indenture as:

(1): a default in any payment of interest (including any additional interest) on any note when due, continued for 30 days;
(2): a default in the payment of principal or premium, if any, of any note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(3): failure by Holdings for 120 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements contained in the provisions of the indenture described in "Certain covenants—Reports and Other Information";
(4): the failure by Holdings or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3) above) contained in the notes or the indenture;
(5): the failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $125.0 million or its foreign currency equivalent (the " cross-acceleration provision ");
(6): certain events of bankruptcy, insolvency or reorganization of Holdings or a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) (the " bankruptcy provisions ");
(7): failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $125.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days (the " judgment default provision "); or

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(8): the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under the indenture or any Subsidiary Guarantee with respect to the notes and such Default continues for 10 days.

(1): such holder has previously given the Trustee notice that an Event of Default is continuing,
(2): holders of at least 30% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy,
(3): such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,

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(4): the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(5): the holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

The indenture provides that if a Default occurs and is continuing and is actually known to a Trust Officer or the Trustee, the Trustee must mail to each holder of the notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the noteholders. In addition, Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. Holdings also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.

Amendments and Waivers

(1): reduce the amount of notes whose holders must consent to an amendment;
(2): reduce the rate of or extend the time for payment of interest on any note;
(3): reduce the principal of or change the Stated Maturity of any note;
(4): reduce the premium payable upon the redemption of any note or change the time at which any note may be redeemed as described under "—Optional Redemption" above;
(5): make any note payable in money other than that stated in such note;
(6): expressly subordinate the notes or any related Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor;
(7): impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder's notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's notes; or
(8): make any change in the amendment provisions which require each holder's consent or in the waiver provisions.

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Without the consent of any holder, the Issuers and the Trustee may amend the indenture, the notes or the Subsidiary Guarantees to cure any ambiguity, omission, mistake, defect or inconsistency, to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under the indenture and the notes, to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the indenture and its Subsidiary Guarantee, to provide for uncertificated notes in addition to or in place of certificated notes ( provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code), to add a Subsidiary Guarantee with respect to the notes, to secure the notes, to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power conferred upon the Issuers, to make any change that does not adversely affect the rights of any holder, to conform the text of the indenture, Subsidiary Guarantees or the notes, to any provision of this "Description of Senior 2022 Exchange Notes" to the extent that such provision in this "Description of Senior 2022 Exchange Notes" was intended by the Issuers to be a verbatim recitation of a provision of the indenture as stated in an Officers' Certificate, Subsidiary Guarantees or the notes, to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA to effect any provision of the indenture or to make certain changes to the indenture to provide for the issuance of additional notes.

No Personal Liability of Directors, Officers, Employees, Managers and Stockholders

Transfer and Exchange

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Satisfaction and Discharge

(1): either (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their stated maturity within one year or (iii) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
(2): the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under the indenture; and
(3): the Issuers have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with.

Defeasance

In order to exercise their defeasance option, the Issuers must irrevocably deposit in trust (the " defeasance trust ") with the Trustee money or U.S. Government Obligations for the payment of

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principal, premium (if any) and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable U.S. federal income tax law). Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers.

Concerning the Trustee

The Wilmington Trust, National Association is the Trustee under the indenture and has been appointed by the Issuers as registrar and a paying agent with regard to the notes.

Governing Law

The indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

" Acquired Indebtedness " means, with respect to any specified Person:

(1): Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and
(2): Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

" Additional Assets " means:

(1): any properties or assets used or useful in the Oil and Gas Business;
(2): capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;
(3): the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or

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(4): Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

" Adjusted Consolidated Net Tangible Assets " means (without duplication), as of the date of determination, the remainder of:

(a)

the sum of:

(i): estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings' most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided, that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of "Borrowing Base" and

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giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each case as estimated by Holdings' petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;

(ii): the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings' books and records as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iii): the Net Working Capital on a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements;
(iv): assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business, provided that such net value shall not be less than zero; and
(v): the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest annual or quarterly consolidated financial statements, and (B) the Fair Market Value, as estimated by Holdings, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings' latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus

(b)

the sum of:

(i): any amount included in (a)(i) through (a)(v) above that is attributable to minority interests;
(ii): any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings' latest audited consolidated financial statements;
(iii): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and
(iv): to the extent included in (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted

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Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

" Applicable Premium " means, with respect to any note on any applicable redemption date, as determined by the Issuers, the greater of:

(1)

1% of the then outstanding principal amount of the note; and

(2)

the excess of:

(a): the present value at such redemption date of (i) the redemption price of the note, at September 1, 2017 (such redemption price being set forth in the applicable table appearing above under "—Optional Redemption") plus (ii) all required interest payments due on the note through September 1, 2017 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b): the then outstanding principal amount of the note.

" Asset Sale " means:

(1): the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) outside the ordinary course of business of Holdings or any Restricted Subsidiary (each referred to in this definition as a " disposition "); or
(2): the issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),

in each case other than:

(a): a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b): the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to the provisions described above under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" or any disposition that constitutes a Change of Control;
(c): any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under "—Certain Covenants—Limitation on Restricted Payments";

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(d): any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;
(e): any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;
(f): any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(g): foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;
(h): any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(i): the lease, assignment or sublease of, or any transfer related to a "reverse build to suit" or similar transaction in respect of, any real or personal property in the ordinary course of business;
(j): any sale of inventory or other assets in the ordinary course of business;
(k): any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l): in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(m): a transfer of accounts receivable and related assets of the type specified in the definition of "Receivables Financing" (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
(n): any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by the indenture;
(o): dispositions in connection with Permitted Liens;
(p): any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q): the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;
(r): dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

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(s): any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(t): a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;
(u): any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or Guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;
(v): the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by the Issuer or any Restricted Subsidiary in the ordinary course of business or which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and
(w): a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

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" Business Day " means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

" Capital Stock " means:

(1): in the case of a corporation, corporate stock or shares;
(2): in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3): in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4): any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

" Cash Equivalents " means:

(1): U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;

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(2): securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3): certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated "A" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
(4): repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5): commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least "A-1" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6): readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(7): Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher from Moody's (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and
(8): investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

" Change of Control " means the occurrence of either of the following:

(1): the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2): Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.

" Code " means the Internal Revenue Code of 1986, as amended.

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amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

" Consolidated Interest Expense " means, with respect to any Person for any period, the sum, without duplication, of:

(1): consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding additional interest in respect of the notes, amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2): consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus
(3): commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than Holdings and the Restricted Subsidiaries; minus
(4): interest income for such period.

(1): any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facilities closing costs, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions, in each case, shall be excluded;
(2): effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3): the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

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(4): any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;
(5): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;
(6): any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7): the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8): solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments," the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9): an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (12) of the second paragraph under "—Certain Covenants—Limitation on Restricted Payments" shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10): any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;
(11): any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12): any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any Restricted Subsidiary, shall be excluded;

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(13): accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(14): (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;
(15): (a)(i) the non-cash portion of "straight-line" rent expense shall be excluded and (ii) the cash portion of "straight-line" rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(16): any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;
(17): (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);
(18): Capitalized Software Expenditures shall be excluded; and
(19): Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

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(1)

to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2)

to advance or supply funds:

(a): for the purchase or payment of any such primary obligation; or
(b): to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)

" Credit Agreement " means (i) the Credit Agreement dated as of May 24, 2012 by and among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Holdings to be included in the definition of "Credit Agreement," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

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amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.

" Default " means any event which is, or after notice or passage of time or both would be, an Event of Default.

(1): matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2): is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or
(3): is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

" Domestic Subsidiary " means a Restricted Subsidiary that is not a Foreign Subsidiary.

(1): Consolidated Taxes; plus
(2): Fixed Charges; plus
(3): Consolidated Depreciation, Depletion and Amortization Expense; plus

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(4): Consolidated Non-Cash Charges; plus
(5): any expenses or charges (other than Consolidated Depreciation, Depletion and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness permitted to be incurred by the indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the Transactions, the notes or any Bank Indebtedness, (ii) any amendment or other modification of the notes or other Indebtedness, (iii) any additional interest in respect of the notes and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus
(6): business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); plus
(7): the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus
(8): any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus
(9): the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by the covenant described under "—Certain Covenants—Transactions with Affiliates"; plus
(10): all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (4) to the "Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" under "Summary" in the offering memorandum related to the initial notes dated August 8, 2012 to the extent such adjustments, without duplication, continue to be applicable to such period; plus
(11): the amount of any loss attributable to a new plant or facility until the date that is 12 months after completing construction of or acquiring such plant or facility, as the case may be; provided that (A) such losses are reasonably identifiable and factually supportable and certified by a responsible officer of Holdings and (B) losses attributable to such plant or facility after 12 months from the date of completing construction of or acquisition of such plant or facility, as the case may be, shall not be included in this clause (11), plus
(12): exploration expenses or costs (to the extent Holdings adopts the "successful efforts" method), and

less , without duplication, to the extent the same increased Consolidated Net Income,

(13): the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments;

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(14): non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

(1): public offerings with respect to Holdings' or such direct or indirect parent's common stock registered on Form S-4 or Form S-8;
(2): issuances to any Subsidiary of Holdings; and
(3): any such public or private sale that constitutes an Excluded Contribution.

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

(1): contributions to its common equity capital, and
(2): the sale (other than to a Subsidiary of Holdings or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Holdings,

in each case designated as Excluded Contributions pursuant to an Officers' Certificate on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be; provided , that $3,200 million of Cash Equivalents received by Holdings from the Equity Investors on or prior to May 24, 2012 to fund the Acquisition shall not be permitted to be designated an Excluded Contribution.

" Existing Senior Notes " means the Issuers' 9.375% Senior Notes due 2020 issued on April 24, 2012 (including exchange notes issued in exchange therefor pursuant to a registration rights agreement dated April 24, 2012) pursuant to the Indenture dated as of April 24, 2012 by and among the Issuers, the Subsidiary Guarantors party thereto, Wilmington Trust, National Association, as trustee, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

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" Farm-Out Agreement " means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

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For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers' Certificate, to reflect (1) operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event, and (2) all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (4) to the "Summary Historical and Pro Forma Consolidated Financial and Other Operating Data" under "Summary" in the offering memorandum related to the initial notes dated August 8, 2012 to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

" Foreign Subsidiary " means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.

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" Hedging Obligations " means, with respect to any Person, the obligations of such Person under:

(1): currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2): other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

" holder " or " noteholder " means the Person in whose name a note is registered on the registrar's books.

" Holdings " means EP Energy LLC, together with its successors or assigns.

" Indebtedness " means, with respect to any Person:

(1): the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that (i) constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2): to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3): to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

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money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Obligations under or in respect of Qualified Receivables Financing; (5) obligations under the Acquisition Documents; (6) Production Payments and Reserve Sales; (7) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property; (8) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the board of directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of the indenture; and (9) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.

" Investment Grade Rating " means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

" Investment Grade Securities " means:

(1): securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2): securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody's and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,
(3): investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4): corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

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(1)

(a): Holdings' "Investment" in such Subsidiary at the time of such redesignation less
(b): the portion (proportionate to Holdings' equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and

(2)

" Issue Date " means the date on which the notes are originally issued.

" Moody's " means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.

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" Notes Obligations " means Obligations in respect of the notes and the indenture, including, for the avoidance of doubt, Obligations in respect of exchange notes and guarantees thereof.

" Oil and Gas Business " means:

(1): the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;

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(2): the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;
(3): any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;
(4): any business relating to oil field sales and service; and
(5): any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

" Opinion of Counsel " means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

(1): Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;
(2): Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and
(3): Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

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" Permitted Investments " means:

(1): any Investment in Holdings or any Restricted Subsidiary;
(2): any Investment in Cash Equivalents or Investment Grade Securities;
(3): any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;
(4): any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of "—Certain Covenants—Asset Sales" or any other disposition of assets not constituting an Asset Sale;
(5): any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under the indenture;
(6): advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $25.0 million at any one time outstanding;
(7): any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of Holdings of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8): Hedging Obligations permitted under clause (j) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(9): any Investment by Holdings or any Restricted Subsidiary in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with

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(10): additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(11): loans and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person's purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;
(12): Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of Cumulative Credit contained in "—Certain Covenants—Limitation on Restricted Payments";
(13): any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under "—Certain Covenants—Transactions with Affiliates" (except transactions described in clauses (2), (4), (6), (9)(b) and (16) of such paragraph);
(14): Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15): (x) guarantees issued in accordance with the covenants described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Future Subsidiary Guarantors," including, without limitation, any guarantee or other obligation issued or incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

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(16): Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(17): any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;
(18): any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivable Financing;
(19): additional Investments in joint ventures not to exceed, at any one time in the aggregate outstanding under this clause (19), $100.0 million (with the Fair Market Value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (19) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(20): Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21): any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(22): Permitted Business Investments.

" Permitted Liens " means, with respect to any Person:

(1): pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2): Liens imposed by law, such as landlord's, carriers', warehousemen's, mechanics', materialmen's, repairmen's, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3): Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

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(4)

(5)

(6)

(B): Liens securing Indebtedness incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be incurred pursuant to clause (a) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(C): Liens securing Indebtedness incurred under the RBL Facility in excess of $2,000 million (and solely to the extent of such excess), including any letter of credit facility relating thereto, that was permitted to be incurred under the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and
(D): Liens securing Indebtedness permitted to be Incurred pursuant to clause (b)(2), (d), (l), (p) or (t) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" ( provided that in the case of clause (t), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor);

(7)

Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement, the holders of the Secured Notes or the lenders under the Term Loan Facility);

(8)

(9)

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(10): Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";
(11): Liens securing Hedging Obligations not incurred in violation of the indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12): Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13): leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;
(14): Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;
(15): Liens in favor of Holdings or any Subsidiary Guarantor;
(16): Liens on accounts receivable and related assets of the type specified in the definition of "Receivables Financing" Incurred in connection with a Qualified Receivables Financing;
(17): deposits made in the ordinary course of business to secure liability to insurance carriers;
(18): Liens on the Equity Interests of Unrestricted Subsidiaries;
(19): grants of software and other technology licenses in the ordinary course of business;
(20): Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under the indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B);
(21): Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings' or such Restricted Subsidiary's client at which such equipment is located;

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(22): judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(23): Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(24): Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;
(25): other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (25) that are at that time outstanding, exceed the greater of $350.0 million and 5% Adjusted Consolidated Net Tangible Assets at the time of Incurrence;
(26): any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(27): any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture pursuant to customary discharge, redemption or defeasance provisions;
(28): Liens arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;
(29): Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;
(30): Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(31): Liens in respect of Production Payments and Reserve Sales;
(32): Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract;
(33): Liens on pipelines or pipeline facilities that arise by operation of law; and
(34): any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics' liens, tax liens and easements); or

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(c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b).

" Preferred Stock " means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

" Qualified Receivables Financing " means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1): the Board of Directors of Holdings shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Holdings and the Receivables Subsidiary;
(2): all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and
(3): the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Holdings) and may include Standard Securitization Undertakings.

" RBL Facility " means the credit agreement dated as of May 24, 2012 by and among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or other lenders), restructured, repaid, refunded, refinanced or otherwise modified from time to time pursuant to any amendment thereto or pursuant to a new loan agreement with other lenders, governed by a borrowing base set by the lenders, extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or under any successor or replacement agreement or increasing the amount loaned thereunder or altering the maturity thereof.

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(a): no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;
(b): with which neither Holdings nor any Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which Holdings reasonably believes to be no less favorable to Holdings or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; and
(c): to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results.

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" Restricted Investment " means an Investment other than a Permitted Investment.

" Restricted Subsidiary " means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this "Description of Senior 2022 Exchange Notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.

" S&P " means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.

" SEC " means the Securities and Exchange Commission.

" Secured Indebtedness " means any Consolidated Total Indebtedness secured by a Lien.

" Secured Notes " means the Issuers' 6.875% Senior Secured Notes due 2019 issued on April 24, 2012 (including exchange notes issued in exchange therefor pursuant to a registration rights agreement dated April 24, 2012) pursuant to the Indenture dated as of April 24, 2012 by and among the Issuers, the Subsidiary Guarantors party thereto, Wilmington Trust, National Association, as trustee, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

" Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

" Sponsor Management Agreement " means the management agreement between certain of the management companies associated with the Sponsors, EP Energy Holding Company and EPE Acquisition, LLC.

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" Subsidiary Guarantee " means any guarantee of the obligations of the Issuers under the indenture and the notes by any Subsidiary Guarantor in accordance with the provisions of the indenture.

" Tax Distributions " means any distributions described in clause (12) of the covenant entitled "—Certain Covenants—Limitation on Restricted Payments."

" Term Loan Facility " means the term loan agreement, dated as of April 24, 2012, by and among Holdings, as borrower, the lenders party thereto in their capacities as lenders thereunder and Citibank, N.A., as administrative agent and collateral agent, including any guarantees, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications or restatements thereof.

" TIA " means the Trust indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the indenture.

" Transactions " means the transactions described under "Summary—Recent Events—The Acquisition Transactions."

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" Treasury Rate " means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to September 1, 2017; provided , however , that if the period from such redemption date to September 1, 2017, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

" Trust Officer " means:

(1): any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject, and
(2): who shall have direct responsibility for the administration of the indenture.

" Trustee " means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor.

" Unrestricted Subsidiary " means:

(1): any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and
(2): any Subsidiary of an Unrestricted Subsidiary;

(a): the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b): if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant described under "—Certain Covenants—Limitation on Restricted Payments."

Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

(x): (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be greater than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

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(y): no Event of Default shall have occurred and be continuing.

" U.S. Government Obligations " means securities that are:

(1): direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2): obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

" Volumetric Production Payments " means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.

" Voting Stock " of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

" Wholly Owned Restricted Subsidiary " is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

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BOOK-ENTRY; DELIVERY AND FORM

Except as set forth below, the exchange notes will initially be issued in registered, global notes in global form without coupons ("Global Notes"). Each Global Note shall be deposited with the Trustee, as custodian for, and registered in the name of The Depository Trust Company ("DTC") or a nominee thereof. The initial notes to the extent validly tendered and accepted and directed by their holders in their letters of transmittal, will be exchanged through book-entry electronic transfer for the global note.

Except as set forth below, the Global Notes may be transferred, in whole but not in part, solely to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in certificated form except in the limited circumstances described below.

The Global Notes

We expect that, pursuant to procedures established by DTC, (i) upon the issuance of the Global Notes, DTC or its custodian will credit, on its internal system, the principal amount at maturity of the individual beneficial interests represented by such Global Notes to the respective accounts of persons who have accounts with such depositary ("participants") and (ii) ownership of beneficial interests in the Global Notes will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Such accounts initially will be designated by or on behalf of the initial purchasers and ownership of beneficial interests in the Global Notes will be limited to participants or persons who hold interests through participants. Holders may hold their interests in the Global Notes directly through DTC if they are participants in such system, or indirectly through organizations that are participants in such system.

So long as DTC or its nominee is the registered owner or holder of the notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such Global Notes for all purposes under the indentures. No beneficial owner of an interest in the Global Notes will be able to transfer that interest except in accordance with DTC's procedures, in addition to those provided for under the indentures with respect to the notes.

Payments of the principal of, and premium (if any) and interest (including additional interest, if any) on, the Global Notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the issuer, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

We expect that DTC or its nominee, upon receipt of any payment of principal of, and premium (if any) and interest (including additional interest, if any) on the Global Notes, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

Transfers between participants in DTC will be effected in the ordinary way through DTC's same-day funds system in accordance with DTC rules and will be settled in same-day funds. If a holder requires physical delivery of a Certificated Security, such holder must transfer its interest in a Global Note, in accordance with the normal procedures of DTC and with the procedures set forth in the indentures.

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DTC has advised us that it will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the indentures, DTC will exchange the Global Notes for Certificated Securities, which it will distribute to its participants and which will include legends with applicable transfer restrictions for such notes.

DTC has advised us as follows: DTC is a limited-purpose trust company organized under New York banking law, a "banking organization" within the meaning of the New York banking law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for issues of U.S. and non-U.S. equity, corporate and municipal debt issues that participants deposit with DTC. DTC also facilitates the post-trade settlement among participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between participants' accounts. This eliminates the need for physical movement of securities certificates. Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the DTC system is also available to indirect participants such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. None of us, the Trustee or any paying agent will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Certificated Securities

A Global Note is exchangeable for certificated notes in fully registered form without interest coupons ("Certificated Securities") only in the following limited circumstances:

•: DTC notifies us that it is unwilling or unable to continue as depositary for the Global Note and we fail to appoint a successor depositary within 90 days of such notice, or
•: there shall have occurred and be continuing an event of default with respect to the notes under the indentures and DTC shall have requested the issuance of Certificated Securities.

Certificated Securities may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the indentures) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such notes.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer the notes will be limited to such extent.

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

Subject to the limitations and qualifications set forth herein (including Exhibit 8.1 hereto), this discussion is the opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, our U.S. federal income tax counsel. The following is a discussion of the material U.S. federal income tax considerations relevant to the exchange of initial notes for exchange notes pursuant to the exchange offer and the ownership and disposition of exchange notes acquired by U.S. Holders and non-U.S. Holders (each as defined below and collectively referred to as "Holders") pursuant to the exchange offer, but does not purport to be a complete analysis of all the potential tax considerations. This summary is based on the Code, Treasury Regulations issued thereunder, and administrative and judicial interpretations thereof, all as of the date of this prospectus and all of which are subject to change (perhaps with retroactive effect).

This summary does not represent a detailed description of the U.S. federal income tax consequences to Holders in light of their particular circumstances. In addition, it does not represent a detailed description of the U.S. federal income tax consequences applicable to Holders that are subject to special treatment under the U.S. federal income tax laws, such as financial institutions, regulated investment companies, real estate investment trusts, individual retirement and other tax deferred accounts, dealers or traders in securities or currencies, life insurance companies, partnerships or other passthrough entities (or investors therein), tax-exempt organizations, U.S. expatriates, non-U.S. trusts and estates that have U.S. beneficiaries, persons holding notes as a hedge or hedged against currency risk, in an integrated or conversion transaction, as a position in a constructive sale or straddle, or U.S. Holders whose "functional currency" is other than the U.S. dollar. This summary does not address U.S. federal tax consequences other than U.S. federal income tax consequences (such as estate or gift taxes), the recently enacted Medicare tax on certain investment income, the alternative minimum tax or the consequences under the tax laws of any foreign, state or local jurisdiction. The discussion deals only with notes held as "capital assets" within the meaning of Section 1221 of the Code. We have not requested a ruling from the Internal Revenue Service (the "IRS") on the tax consequences of owning the notes. As a result, the IRS could disagree with portions of this discussion.

For purposes of this discussion, a "U.S. Holder" means a beneficial owner of a note that is, for U.S. federal income tax purposes:

•: a citizen or resident alien individual of the United States;
•: a corporation that is organized under the laws of the United States, any state thereof or the District of Columbia;
•: an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•: a trust (i) that is subject to the primary supervision of a court within the United States and under the control of one or more U.S. persons, or (ii) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

For purposes of this discussion, the term "non-U.S. Holder" means a beneficial owner of a note that is, for U.S. federal income tax purposes, an individual, corporation, trust, or estate and that is not a U.S. Holder.

If an entity treated as a partnership for U.S. federal income tax purposes holds notes, the tax treatment of a partner in such an entity will depend on the status of the partner and the activities of the entity. Partners in such entities that are considering exchanging initial notes for exchange notes pursuant to the exchange offer should consult their own tax advisors.

Prospective investors should consult their own tax advisors concerning the particular U.S. federal income tax consequences of exchanging initial notes for exchange notes pursuant to the exchange offer

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and owning and disposing exchange notes acquired pursuant to the exchange offer, as well as the consequences arising under other federal tax laws and the laws of any other taxing jurisdiction.

Possible Alternative Treatment

We may be obligated to pay amounts in excess of the stated interest or principal on the exchange notes, including as described under "Description of Senior 2020 Exchange Notes—Optional Redemption," "Description of Senior 2022 Exchange Notes—Optional Redemption," "Description of Senior Secured Exchange Notes—Optional Redemption," "Description of Senior 2020 Exchange Notes—Change of Control," "Description of Senior 2022 Exchange Notes—Change of Control" and "Description of Senior Secured Exchange Notes—Change of Control." These potential payments may implicate the provisions of Treasury Regulations relating to "contingent payment debt instruments." According to the applicable Treasury Regulations, certain contingencies will not cause a debt instrument to be treated as a contingent payment debt instrument if such contingencies, as of the date of issuance, are remote or incidental. We intend to take the position that the foregoing contingencies are remote or incidental, and, accordingly, we do not intend to treat the exchange notes as contingent payment debt instruments. Our position that such contingencies are remote or incidental is binding on a Holder, unless such Holder discloses its contrary position in the manner required by applicable Treasury Regulations. Our position is not, however, binding on the IRS, and if the IRS were to successfully challenge this position, a Holder might be required to accrue ordinary interest income on the exchange notes at a rate in excess of the stated interest rate, and to treat as ordinary interest income any gain realized on the taxable disposition of an exchange note. The remainder of this discussion assumes that the exchange notes will not be treated as contingent payment debt instruments. Holders should consult their own tax advisors regarding the possible application of the contingent payment debt instrument rules to the exchange notes.

Certain U.S. Federal Income Tax Considerations for U.S. Holders

Exchange Offer

Exchanging an initial note for an exchange note pursuant to the exchange offer should not be treated as a taxable exchange for U.S. federal income tax purposes. Consequently, U.S. Holders should not recognize gain or loss upon receipt of an exchange note. The holding period for an exchange note should include the holding period for the initial note and the initial basis in an exchange note should be the same as the adjusted basis in the initial note.

Stated Interest

Absent an election to the contrary (see "—Election to Treat All Interest as Original Issue Discount (Constant Yield Method)," below), any stated interest payments on an exchange note to a U.S. Holder will be taxable as ordinary interest income at the time they accrue or are received, in accordance with the U.S. Holder's regular method of tax accounting for U.S. federal income tax purposes.

Market Discount and Bond Premium

Market Discount. If a U.S. Holder purchased an initial note (which will be exchanged for an exchange note pursuant to the exchange offer) for an amount that is less than its "revised issue price," the amount of the difference should be treated as market discount for U.S. federal income tax purposes. Any market discount applicable to an initial note should carry over to the exchange note received in exchange therefor. The amount of any market discount will be treated as de minimis and disregarded if it is less than one-quarter of one percent of the revised issue price of the initial note, multiplied by the number of complete years to maturity. For this purpose, the "revised issue price" of an initial note equals the issue price of the initial note. The "issue price" of a note is the first price at

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which a substantial amount of the notes is sold for cash to investors other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. The rules described below do not apply to a U.S. Holder if such holder purchased an initial note that has de minimis market discount.

Under the market discount rules, a U.S. Holder is required to treat any principal payment on, or any gain on the sale, exchange, redemption or other disposition of, an exchange note as ordinary income to the extent of any accrued market discount (on the initial note or the exchange note) that has not previously been included in income. If a U.S. Holder disposes of an exchange note in an otherwise nontaxable transaction (other than certain specified nonrecognition transactions), such holder will be required to include any accrued market discount as ordinary income as if such holder had sold the exchange note at its then fair market value. In addition, such holder may be required to defer, until the maturity of the exchange note or its earlier disposition in a taxable transaction, the deduction of a portion of the interest expense on any indebtedness incurred or continued to purchase or carry the initial note or the exchange note received in exchange therefor.

Market discount accrues ratably during the period from the date on which such holder acquired the initial note through the maturity date of the exchange note (for which the initial note was exchanged), unless such holder makes an irrevocable election to accrue market discount under a constant yield method. Such holder may elect to include market discount in income currently as it accrues (either ratably or under the constant yield method), in which case the rule described above regarding deferral of interest deductions will not apply. If such holder elects to include market discount in income currently, such holder's adjusted basis in an exchange note will be increased by any market discount included in income. An election to include market discount currently will apply to all market discount obligations acquired during or after the first taxable year in which the election is made, and the election may not be revoked without the consent of the IRS. If a U.S. Holder makes the election described below in "—Election to Treat All Interest as Original Issue Discount (Constant Yield Method)" for a market discount note, such holder would be treated as having made an election to include market discount in income currently under a constant yield method, as discussed in this paragraph.

Bond Premium. If a U.S. Holder purchased an initial note (which will be exchanged for an exchange note pursuant to the exchange offer) for an amount in excess of the principal amount of the initial note, the excess will be treated as bond premium. Any bond premium applicable to an initial note should carry over to the exchange note received in exchange therefor. A U.S. Holder may elect to reduce the amount required to be included in income each year with respect to interest on its note by the amount of amortizable bond premium allocable to that year, based on the exchange note's yield to maturity. However, because the exchange notes may be redeemed by us prior to maturity at a premium, special rules apply that may reduce or eliminate the amount of premium that a U.S. Holder may amortize with respect to an exchange note. U.S. Holders should consult their tax advisors about these special rules, including whether it would be advisable to elect to treat all interest on the exchange notes as original issue discount (see "—Election to Treat All Interest as Original Issue Discount (Constant Yield Method)," below), which would result in a U.S. Holder not being subject to these special rules. If a U.S. Holder makes the election to amortize bond premium, it will apply to all debt instruments (other than debt instruments the interest on which is excludible from gross income) that the U.S. Holder holds at the beginning of the first taxable year to which the election applies or thereafter acquires, and the election may not be revoked without the consent of the IRS. See also "—Election to Treat All Interest as Original Issue Discount (Constant Yield Method)," below.

Election to Treat All Interest as Original Issue Discount (Constant Yield Method)

A U.S. Holder may elect to include in gross income all "interest" (as defined below) that accrues on its exchange note using the constant-yield method described below. For purposes of this election,

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"interest" will include stated interest, market discount and de minimis market discount, as reduced by any amortizable bond premium (described in "—Bond Premium," above). A U.S. Holder that makes this election will be required to include interest in gross income for U.S. federal income tax purposes as it accrues (regardless of its method of tax accounting), which may be in advance of receipt of the cash attributable to that income.

Although this election applies only to the exchange note for which a U.S. Holder makes it, an electing U.S. Holder will be deemed to have made the election described in "—Bond Premium," above, to apply amortizable bond premium against interest for all debt instruments with amortizable bond premium (other than debt instruments the interest on which is excludible from gross income) that it holds at the beginning of the taxable year to which the election applies or any taxable year thereafter. Additionally, if a U.S. Holders makes this election for a market discount note, such holder will be treated as having made the election discussed above under "—Market Discount and Bond Premium—Market Discount" to include market discount in income currently over the life of all debt instruments that the U.S. holder hold at the time of the election or acquire thereafter. A U.S. Holder may not revoke an election to apply the constant-yield method to all interest on an exchange note without the consent of the IRS.

If a U.S. Holder makes this election for its exchange note, then no payments on the exchange note will be treated as payments of QSI, and the annual amounts of interest includible in income by the U.S. Holder will equal the sum of the "daily portions" of the interest with respect to the exchange note for each day on which the U.S. Holder owns the exchange note during the taxable year. The U.S. Holder determines the daily portions of interest by allocating to each day in an "accrual period" a pro rata portion of the interest that is allocable to that accrual period. The term "accrual period" means an interval of time with respect to which the accrual of interest is measured and which may vary in length over the term of an exchange note provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs on either the first or last day of an accrual period. For purposes of this election, the "issue date" of the exchange note is the date the U.S. Holder purchases the exchange note.

The amount of interest allocable to an accrual period will equal the product of the "adjusted issue price" of the exchange note at the beginning of the accrual period and its "yield to maturity." The adjusted issue price of an exchange note at the beginning of the first accrual period is the purchase price, and, on any day thereafter, it is the sum of the issue price and the amount of interest previously included in gross income, reduced by the amount of any payment previously made on the exchange note. If all accrual periods are of equal length except for a shorter initial or final accrual period, the U.S. Holder can compute the amount of interest allocable to the initial period using any reasonable method; however, the interest allocable to the final accrual period will always be the difference between the amount payable at maturity and the adjusted issue price at the beginning of the final accrual period.

Dispositions

A sale, exchange, redemption, retirement or other taxable disposition of an exchange note will result in taxable gain or loss to a U.S. Holder equal to the difference, if any, between the amount realized on the disposition (excluding amounts attributable to any accrued and unpaid stated interest, which will be taxed as ordinary income to the extent not previously so taxed) and the U.S. Holder's adjusted tax basis in the exchange note. The amount realized will equal the sum of any cash and the fair market value of any other property received on the disposition. A U.S. Holder's adjusted tax basis in an exchange note should equal the cost of such exchange note to such Holder, increased by any market discount previously included in gross income and reduced (but not below zero) by the amount of any amortizable bond premium taken into account with respect to the exchange note. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the exchange note (or the

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initial note exchanged therefor) is held for more than one year. Certain non-corporate U.S. Holders may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations.

Certain U.S. Federal Tax Considerations for Non-U.S. Holders

Exchange Offer

Non-U.S. Holders should not recognize gain or loss upon receipt of an exchange note in exchange for an initial note pursuant to the exchange offer.

Interest

Subject to the discussion below of backup withholding, U.S. federal income or withholding tax will not apply to a non-U.S. Holder in respect of any payment of interest on the exchange notes, provided that such payment is not effectively connected with such non-U.S. Holder's conduct of a U.S. trade or business and such non-U.S. Holder:

•: does not own actually or constructively own 10% or more of the capital or profits interest in Parent;
•: is not a controlled foreign corporation that is related to Parent under the applicable provisions of the Code; and
•: is not a bank whose receipt of interest on the exchange notes is described in section 881(c)(3)(A) of the Code; and

either (a) such non-U.S. Holder provides identifying information (i.e., name and address) to us on IRS Form W-8BEN (or successor form), and certifies, under penalty of perjury, that such non-U.S. Holder is not a U.S. person or (b) a financial institution holding the exchange notes on behalf of such non-U.S. Holder certifies, under penalty of perjury, that it has received such a certification from the beneficial owner and, when required, provides us with a copy.

If a non-U.S. Holder cannot satisfy the requirements described above, payments of interest made to such non-U.S. Holder will be subject to a 30% U.S. federal withholding tax, unless such Holder provides us with a properly executed (1) applicable IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in withholding under an applicable income tax treaty or (2) IRS Form W-8ECI (or successor form) stating that interest paid on the exchange note is not subject to withholding tax because it is effectively connected with such Holder's conduct of a trade or business in the United States (in which case such interest will be subject to tax as discussed below).

Dispositions

Any gain realized on the sale, exchange, retirement, redemption or other taxable disposition of an exchange note by a non-U.S. Holder will not be subject to U.S. federal income or withholding tax (except to the extent attributable to accrued and unpaid interest, which will be taxable as described above) unless (1) such gain is effectively connected with the conduct of a trade or business in the United States by such non-U.S. Holder (in which case such gain will be subject to regular graduated U.S. tax rates as described above) or (2) such non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition and certain other conditions are met (in which case such gain, net of certain U.S.-source losses, if any, will be subject to U.S. federal income tax at a flat rate of 30% (or at a reduced rate under an applicable income tax treaty)).

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Effectively Connected Interest or Gain

If a non-U.S. Holder is engaged in a trade or business in the United States and interest on the exchange notes or gain from the disposition of the exchange notes is effectively connected with the conduct of that trade or business, such non-U.S. Holder will, subject to any applicable income tax treaty, be subject to U.S. federal income tax on such interest or gain on a net income basis in the same manner as if such non-U.S. Holder were a U.S. Holder. In addition, if such non-U.S. Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (or a lower applicable treaty rate) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

Information Reporting and Backup Withholding

U.S. Holders

A U.S. Holder may be subject to information reporting and backup withholding (currently at the rate of 28%, and scheduled to increase to 31% in 2013) with respect to payments of stated interest and payments of the gross proceeds from the sale or other disposition (including a retirement or redemption) of an exchange note. Certain U.S. Holders (including corporations) are not subject to information reporting and backup withholding. A U.S. Holder will be subject to backup withholding if such U.S. Holder is not otherwise exempt and such U.S. Holder:

•: fails to furnish its correct taxpayer identification number ("TIN"), which, for an individual, is ordinarily his or her social security number;
•: is notified by the IRS that it is subject to backup withholding because it has previously failed to properly report payments of interest or dividends;
•: fails to certify, under penalties of perjury, that it has furnished a correct TIN and that the IRS has not notified the U.S. Holder that it is subject to backup withholding; or
•: otherwise fails to comply with applicable requirements of the backup withholding rules.

Non-U.S. Holders

A non-U.S. Holder will not be subject to backup withholding (currently at the rate of 28%, and scheduled to increase to 31% in 2013) with respect to payments of interest to such non-U.S. Holder if we have received from such non-U.S. Holder the statement described above under "—Certain U.S. Federal Tax Considerations to Non-U.S. Holders—Interest" or the non-U.S. Holder otherwise establishes an exemption, provided that we do not have actual knowledge or reason to know that such non-U.S. Holder is a U.S. person. A non-U.S. Holder may, however, be subject to information reporting requirements with respect to payments of interest on the exchange notes.

Proceeds from the sale, exchange, retirement, redemption or other taxable disposition of the exchange notes made to or through a foreign office of a foreign broker without certain specified connections to the United States will not be subject to information reporting or backup withholding. A non-U.S. Holder may be subject to backup withholding and/or information reporting with respect to the proceeds of the sale, exchange, retirement, redemption or other taxable disposition of an exchange note within the United States or conducted through certain U.S.-related financial intermediaries, unless the payer receives the statement described above under "—Certain U.S. Federal Tax Considerations to Non-U.S. Holders—Interest" and does not have actual knowledge or reason to know that such non-U.S. Holder is a U.S. person, as defined under the Code, or such non-U.S. Holder otherwise establishes an exemption.

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U.S. Holders and non-U.S. Holders

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a Holder's U.S. federal income tax liability, and may entitle a Holder to a refund, provided the required information is timely furnished to the IRS.

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PLAN OF DISTRIBUTION

Until 90 days after the date of this prospectus, all dealers effecting transactions in the exchange notes, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it (i) has not entered into any arrangement or understanding with the Issuer or an affiliate of the Issuer to distribute such exchange notes and (ii) will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for initial notes where such initial notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 2012, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. The exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

For a period of 180 days after the expiration date of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for holders of the notes), other than commissions or concessions of any brokers or dealers, and will indemnify the holders of the notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

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LEGAL MATTERS

The validity of the exchange notes and the enforceability of obligations under the exchange notes and guarantees being issued were passed upon for us by Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York.

EXPERTS

Independent registered public accounting firm

The consolidated financial statements of EP Energy Corporation at December 31, 2011 and 2010, and for each of the three years in the period ended December 31, 2011, appearing in this prospectus and registration statement, have been audited by Ernst & Young LLP, independent registered public accounting firm, as stated in their report thereon appearing herein. Such financial statements, except as they relate to Four Star Oil & Gas Company have been so included in reliance on the report of such independent registered public accounting firm given on the authority of said firm as experts in accounting and auditing.

The audited financial statements of Four Star Oil & Gas Company as of December 31, 2011 and for the year ended December 31, 2011, not separately presented in this prospectus, have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report thereon appears herein. The audited financial statements of EP Energy Corporation, to the extent they relate to Four Star Oil & Gas Company, have been so included in reliance on the report of such independent registered public accounting firm given on the authority of said firm as experts in auditing and accounting.

The financial statements of Everest Acquisition LLC at April 30, 2012, and for the period March 23, 2012 (inception) to April 30, 2012, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Independent Petroleum Engineers

Estimates of our oil, NGL and natural gas reserves, related future net cash flows and the present values thereof as of December 31, 2011 included in this prospectus were based in part upon reserve information that was audited by independent petroleum engineers, Ryder Scott Company, L.P. We have included these estimates in reliance on the authority of Ryder Scott Company, L.P. as experts in such matters.

WHERE YOU CAN FIND MORE INFORMATION

We will be required to file annual and quarterly reports and other information with the SEC after the registration statement described below is declared effective by the SEC. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C., 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our filings will also be available to the public through our internet website at www.epenergy.com or on the SEC's website at www.sec.gov. Information on our website does not constitute part of this prospectus and should not be relied upon in connection with making any decision with respect to the exchange offer. Our reports and other information that we have filed, or may in the future file, with the SEC are not incorporated by reference into and do not constitute part of this prospectus.

We have filed a registration statement on Form S-4 to register with the SEC the exchange notes to be issued in exchange for the initial notes. This prospectus is part of that registration statement. As

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allowed by the SEC's rules, this prospectus does not contain all of the information you can find in the registration statement or the exhibits to the registration statement. You should note that where we summarize in this prospectus the material terms of any contract, agreement or other document filed as an exhibit to the registration statement, the summary information provided in the prospectus is less complete than the actual contract, agreement or document. You should refer to the exhibits filed to the registration statement for copies of the actual contract, agreement or document.

We have not authorized anyone to give you any information or to make any representations about us or the transactions we discuss in this prospectus other than those contained in this prospectus. If you are given any information or representations about these matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities under applicable law.

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GLOSSARY OF OIL AND NATURAL GAS TERMS

The terms defined in this section are used throughout this prospectus:

" /d. " per day.

" Basin. " A large natural depression on the earth's surface in which sediments generally brought by water accumulate.

" Bbl. " One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil, condensate or natural gas liquids.

" Bcf. " One billion cubic feet of natural gas.

" Bcfe. " One billion cubic feet of natural gas equivalent, determined by using a ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or natural gas.

" Boe ." Barrel of oil equivalent, a standard convention used to express oil and gas volumes on a comparable oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of 6.0 Mcf of gas to 1.0 Bbl of oil or NGLs.

"Btu." British Thermal units, a measure of heating value.

" Completion. " The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas or oil, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.

" Developed acreage. " The number of acres that are allocated or assignable to productive wells or wells capable of production.

" Development well. " A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

" Dry hole. " Exploratory or development well that does not produce oil or natural gas in economically producible quantities.

" Exploratory well. " A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir.

" Farm-in or farm-out. " An agreement under which the owner of a working interest in an oil or natural gas lease assigns the working interest or a portion of the working interest to another party who desires to drill on the leased acreage. Generally, the assignee is required to drill one or more wells in order to earn its working interest in the acreage. The assignor usually retains a royalty or reversionary interest in the lease. The working interest received by an assignee is a "farm-in" while the working interest transferred by the assignor is a "farm-out."

" Field. " An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature and/or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

" Formation. " A layer of rock which has distinct characteristics that differ from nearby rock.

" Gross acreage or gross wells ." The total acres or wells, as the case may be, in which a working interest is owned.

" Horizontal drilling. " A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle within a specified interval.

" MBbl. " One thousand barrels of crude oil, condensate or NGLs.

" MBoe ." One thousand Boes.

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" Mcf. " One thousand cubic feet of natural gas.

" Mcfe. " One thousand cubic feet equivalent, determined by using a ratio of six Mcf of natural gas to one bbl of crude oil, condensate or NGLs.

" MMBbl. " One million barrels of crude oil, condensate or NGLs.

" MMBtu. " One million British thermal units.

" MMcfe. " One million cubic feet of natural gas equivalent, determined by using a ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or NGLs.

" Net Revenue Interest ." The interest in and to all hydrocarbons produced, saved and sold from or allocated to an oil and/or gas property after giving effect to all royalties, overriding royalties, production payments, carried interests, net profits interests, reversionary interests and other burdens upon, measured by or payable out of such hydrocarbon production.

" NGLs. " Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.

" NYMEX. " The New York Mercantile Exchange.

" Net acres. " The percentage of total acres an owner has out of a particular number of acres, or a specified tract. An owner who has 50% interest in 100 acres has 50 net acres.

" Productive well. " A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.

" Proved developed reserves. " Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well and through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

" Proved reserves. " The estimated quantities of oil, natural gas and NGLs which geoscience and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.

" Proved undeveloped ("PUD") reserves. " Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

" Recompletion. " The process of re-entering an existing wellbore that is either producing or not producing and completing new reservoirs in an attempt to establish or increase existing production.

" Reservoir. " A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

" Spacing. " The distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres, e.g., 40-acre spacing, and is often established by regulatory agencies.

" Standardized measure. " Discounted future net cash inflows estimated by applying year-end prices to the estimated future production of year-end proved reserves. Future cash inflows are reduced by estimated future production and development costs based on period-end costs to determine pre-tax cash inflows. Future income taxes, if applicable, are computed by applying the statutory tax rate to the excess of pre-tax cash inflows over our tax basis in the oil and natural gas properties. Future net cash inflows after income taxes are discounted using a 10% annual discount rate.

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" Tcfe. " One trillion cubic feet of natural gas equivalent, determined by using a ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or natural gas.

" Undeveloped acreage. " Acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas, regardless of whether such acreage contains proved reserves.

" Unit. " The joining of all or substantially all property interests in a particular spacing or development area tract or section, to provide for development and operation of all such separate property interests. Also, the area covered by a unitization agreement or pooling order.

" Wellbore. " The hole drilled by the bit that is equipped for natural gas production on a completed well. Also called well or borehole.

" Working interest. " The right granted to the lessee of a property to explore for and to produce and own oil, natural gas or other minerals. The working interest owners bear the exploration, development and operating costs on either a cash, penalty or carried basis.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Income for (i) the successor period from March 23, 2012 (inception) to June 30, 2012 and (ii) predecessor periods from January 1, 2012 to May 24, 2012 and the six month period ended June 30, 2011			F-2
Condensed Consolidated Statements of Comprehensive Income (Loss) for (i) the successor period from March 23, 2012 (inception) to June 30, 2012 and (ii) predecessor periods from January 1, 2012 to May 24, 2012 and the six month period ended June 30, 2011			F-3
Condensed Consolidated Balance Sheets as of June 30, 2012 (successor) and December 31, 2011 (predecessor)			F-4
Condensed Consolidated Statements of Cash Flows for the successor period from March 23, 2012 (inception) to June 30, 2012 and predecessor periods from January 1, 2012 to May 24, 2012 and the six months ended June 30, 2011			F-6
Condensed Consolidated Statements of Changes of Equity for the successor period from March 23, 2012 to June 30, 2012 and predecessor period from January 1, 2012 to May 24, 2012			F-7
Notes to the Condensed Consolidated Financial Statements			F-8
Audited Financial Statements (Successor)
Report of Independent Registered Public Accounting Firm			F-32
Balance Sheet as of April 30, 2012			F-33
Statement of Income (loss) for the Period from March 23, 2012 to April 30, 2012			F-34
Statement of Cash Flows for the Period from March 23, 2012 to April 30, 2012			F-35
Notes to Financial Statements			F-36
Audited Consolidated Financial Statements (Predecessor)
Report of Independent Registered Public Accounting Firm			F-39
Report of Independent Registered Public Accounting Firm			F-40
Consolidated Statements of Income for the Years Ended December 31, 2011, 2010 and 2009			F-41
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2011, 2010 and 2009			F-42
Consolidated Balance Sheets as of December 31, 2011 and 2010			F-43
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009			F-45
Consolidated Statements of Equity for the Years Ended December 31, 2011, 2010 and 2009			F-46
Notes to Consolidated Financial Statements			F-47
Supplemental Oil and Natural Gas Operations (Unaudited)			F-78
Schedule II Valuation and Qualifying Accounts			F-89

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EP ENERGY LLC

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions)

(Unaudited)

	Year-to-Date Periods

	Successor			Predecessor
	March 23 (inception) to June 30, 2012			January 1 to May 24, 2012			Six Months Ended June 30, 2011
Operating Revenues
Oil and condensate	$	77		$	322		$	236
Natural gas		61			262			497
NGL		5			29			28
Financial derivatives		57			365			24

Total operating revenues		200			978			785

Operating expenses
Transportation costs		14			45			38
Lease operating expenses		21			96			100
General and administrative expenses		209			75			98
Depreciation, depletion and amortization		34			319			280
Impairments/Ceiling test charges		1			62			—
Exploration expense		6			—			—
Taxes, other than income taxes		12			45			49

Total operating expenses		297			642			565

Operating income		(97	)		336			220
(Loss) earnings from unconsolidated affiliates		(1	)		(5	)		(1	)
Other (expense) income		1			(3	)		—
Interest expense
Third party		(53	)		(14	)		(2	)
Affiliated		—			—			(4	)

Income before income taxes		(150	)		314			213
Income tax expense		—			136			61

Net income (loss)	$	(150	)	$	178		$	152

See accompanying notes.

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EP ENERGY LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

(Unaudited)

	Year-to-Date Periods

	Successor			Predecessor
	March 23 (inception) to June 30, 2012			January 1 to May 24, 2012		Six Months Ended June 30, 2011
Net (loss) income	$	(150	)	$	178	$	152

Net gains from cash flow hedging activities:
Reclassification adjustment(1)		—			3		4

Other comprehensive gains		—			3		4

Comprehensive (loss) income	$	(150	)	$	181	$	156

(1): Reclassification adjustments are stated net of tax. Taxes recognized for the predecessor periods from January 1, 2012 to May 24, 2012 and six months ending June 30, 2011 of $2 million for both periods.

See accompanying notes.

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EP ENERGY LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

ASSETS



	Successor June 30, 2012		Predecessor December 31, 2011
Current assets
Cash and cash equivalents	$	55	$	25
Accounts receivable
Customer, net of allowance of less than $1 in 2012 and 2011		163		135
Affiliates		—		132
Other, net of allowance of $2 for 2012 and $7 for 2011		30		39
Materials and supplies		29		28
Derivatives		278		272
Prepaid assets		43		12
Other		—		15

Total current assets		598		658

Property, plant and equipment, at cost
Oil and natural gas properties, of which $481 was excluded from amortization for 2011		6,927		21,923
Other property, plant and equipment		89		147

		7,016		22,070
Less accumulated depreciation, depletion and amortization		34		18,003

Total property, plant and equipment, net		6,982		4,067

Other assets
Investments in unconsolidated affiliates		236		346
Derivatives		200		9
Deferred income taxes		6		7
Unamortized debt issue cost		139		8
Other		5		4

		586		374

Total assets	$	8,166	$	5,099

See accompanying notes.

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EP ENERGY LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(In millions, except share amounts)

(Unaudited)

LIABILITIES AND EQUITY



	Successor June 30, 2012		Predecessor December 31, 2011
Current liabilities
Accounts payable
Trade	$	107	$	140
Affiliates		—		47
Other		268		258
Derivatives		—		7
Accrued taxes other than income		30		33
Accrued interest		52		—
Deferred income taxes		—		91
Current reserves		23		—
Other		25		13

Total current liabilities		505		589

Long-term debt		4,243		851
Other long-term liabilities
Derivatives		18		73
Asset retirement obligations		226		148
Deferred income taxes		—		291
Other		16		47

Total non-current liabilities		4,503		1,410

Commitments and contingencies (Note 8)
Members'/Stockholder's equity
Common stock, par value $1 per share; 1,000 shares authorized and outstanding at December 31, 2011		—		—
Additional paid-in capital		—		4,580
Accumulated deficit		—		(1,476	)
Accumulated other comprehensive loss		—		(4	)
Members' equity		3,158		—

Total members'/stockholder's equity		3,158		3,100

Total liabilities and equity	$	8,166	$	5,099

See accompanying notes.

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EP ENERGY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Year-to-Date Periods

	Successor			Predecessor
	March 23 (Inception) to June 30, 2012			January 1 to May 24, 2012			Six Months Ended June 30, 2011
Cash flows from operating activities
Net income (loss)	$	(150	)	$	178		$	152
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		34			319			280
Deferred income tax expense		1			199			58
Loss from unconsolidated affiliates, adjusted for cash distributions		2			12			27
Impairments/Ceiling test charges		1			62			—
Amortization of equity compensation expense		8			—			—
Other non-cash income items		3			7			3
Asset and liability changes
Accounts receivable		(18	)		132			(28	)
Accounts payable		(6	)		(56	)		25
Affiliate income taxes		—			4			16
Derivatives		(15	)		(201	)		117
Accrued interest		52			(1	)		—
Other asset changes		(26	)		(7	)		11
Other liability changes		22			(68	)		2

Net cash (used in) provided by operating activities		(92	)		580			663

Cash flows from investing activities
Capital expenditures		(150	)		(636	)		(675	)
Net proceeds from the sale of assets		22			9			24
Cash paid for acquisitions, net of cash acquired		(7,126	)		(1	)		(1	)

Net cash used in investing activities		(7,254	)		(628	)		(652	)

Cash flows from financing activities
Proceeds from long term debt		4,323			215			925
Repayment of long term debt		(80	)		(1,065	)		(825	)
Contributed member equity		3,300			—			—
Contribution from El Paso Corporation		—			960			—
Change in note payable with El Paso Corporation		—			—			(145	)
Debt issuance costs		(142	)		—			—
Other		—			—			(6	)

Net cash provided by (used in) financing activities		7,401			110			(51	)

Change in cash and cash equivalents		55			62			(40	)
Cash and cash equivalents
Beginning of period		—			25			74

End of period	$	55		$	87		$	34

See accompanying notes

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EP ENERGY LLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions, except share amounts)

(Unaudited)

			Common Stock		Additional Paid-in Capital			Retained Earnings (Accumulated deficit)			Accumulated Other Comprehensive Income			Total Stockholder's/ Members' Equity

Predecessor
Balance at December 31, 2011	1,000		$	—	$	4,580		$	(1,476	)	$	(4	)	$	3,100
Contribution from parent				—		1,481			—			—			1,481
Other				—		12			—			3			15
Net income				—		—			178			—			178
Elimination of predecessor stockholder's equity	(1,000	)		—		(6,073	)		1,298			1			(4,774	)

Balance at May 24, 2012	—		$	—	$	—		$	—		$	—		$	—

Successor
Balance at March 23, 2012 (inception)	—		$	—	$	—		$	—		$	—		$	—
Member contributions	—			—		—			—			—			3,300
Equity compensation expense	—			—		—			—			—			8
Net loss	—			—		—			—			—			(150	)

Balance at June 30, 2012	—		$	—	$	—		$	—		$	—		$	3,158

See accompanying notes.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

EP Energy LLC (the successor and formerly known as Everest Acquisition LLC) was formed as a Delaware limited liability company on March 23, 2012 by Apollo Global Management LLC (Apollo) and other private equity investors (collectively, the Sponsors). On May 24, 2012, the Sponsors acquired EP Energy Global LLC, (formerly known as EP Energy Corporation and EP Energy, L.L.C. after its conversion into a Delaware limited liability company) and subsidiaries for approximately $7.2 billion in cash as contemplated by the merger agreement among El Paso Corporation (El Paso) and Kinder Morgan, Inc. (KMI) which is further described in Note 2. The entities acquired are engaged in the exploration for and the acquisition, development, and production of oil, natural gas and NGL primarily in the United States, with other activities in Brazil and Egypt and together constituted the oil and natural gas operations of El Paso. Hereinafter, the acquired entities are referred to as the predecessor for financial accounting and reporting purposes.

The condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles as it applies to interim financial statements. Because this is an interim period report presented using a condensed format, it does not include all of the disclosures required by United States generally accepted accounting principles. You should read this interim report along with the December 31, 2011 financial statements of the predecessor, which contain a summary of significant accounting policies and other disclosures. The financial statements as of June 30, 2012 and for each of the predecessor and successor periods presented are unaudited. The consolidated predecessor balance sheet as of December 31, 2011 has been derived from the audited balance sheet in the 2011 audited predecessor financial statements. In our opinion, all adjustments which are of a normal, recurring nature to fairly present these interim period results are reflected. We have evaluated subsequent events through September 11, 2012, the date of issuance of the financial statements. Due to the seasonal nature of our businesses, information for interim periods may not be indicative of our results of operations for the entire year. Predecessor periods reflect reclassifications to conform to EP Energy LLC's financial statement presentation.

Significant Accounting Policies

Other than as described below, there were no changes in significant accounting policies as described in the 2011 audited financial statements of the predecessor and no material accounting pronouncements issued but not yet adopted as of June 30, 2012.

Accounting for Oil and Natural Gas Activities. On May 25, 2012, in conjunction with the purchase of EP Energy, L.L.C., we began applying the successful efforts method of accounting (our accounting policy) for oil and natural gas exploration and development activities. Prior to the acquisition date, the predecessor applied the full cost method of accounting for its oil and natural gas exploration and development activities.

Under the successful efforts method, (i) lease acquisition costs and all development costs are capitalized and exploratory drilling costs are capitalized until results are determined, (ii) other non-drilling exploratory costs, including certain geological and geophysical costs such as seismic costs and delay rentals, are expensed as incurred, (iii) internal costs directly identified with the acquisition, successful drilling of exploratory wells and development activities are capitalized, and (iv) interest costs

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies (Continued)

related to financing oil and natural gas projects actively being developed are capitalized until the projects are evaluated or substantially complete and ready for their intended use if the projects were evaluated as successful.

The provision for depreciation, depletion, and amortization is determined on a basis identified by common geological structure or economic aggregation applied to total capitalized costs, plus future abandonment costs net of salvage value, using the unit of production method with lease acquisition costs amortized over total proved reserves and other exploratory drilling and developmental costs amortized over proved developed reserves. Impairments of capitalized costs are assessed on a basis identified by common geological structure or economic aggregation periodically (at least annually) or upon a triggering event to determine if impairment of such properties is necessary based on estimates of the future cash flows for all proved developed (producing and non-producing) and proved undeveloped reserves and related market factors. Unproved properties are also reviewed annually or upon an event that may indicate impairment (trigger) to determine if the market value is less than the carrying value, with any such impairment charged to expense in the period.

2. Acquisitions and Divestitures

Acquisitions. On May 24, 2012, Apollo and other investors acquired EP Energy Global LLC for approximately $7.2 billion. We also paid approximately $330 million in transaction, advisory, and other fees, of which $142 million was capitalized as debt issue costs and $15 million as prepaid costs in other assets on our balance sheet and the remaining $173 million expensed in our income statement. The acquisition was funded with approximately $3.3 billion in equity contributions and the issuance of approximately $4.25 billion of debt. In conjunction with the sale, a portion of the proceeds were also used to repay approximately $960 million outstanding under predecessor's revolving credit facility at that time. See Note 7 for additional discussion of debt. The purchase transaction was accounted for as a business combination under the acquisition method of accounting which requires, among other items, that assets and liabilities acquired assumed be recognized on the balance sheet at their fair values as of the acquisition date. Our consolidated balance sheet presented as of June 30, 2012, reflects the preliminary purchase price allocation based on available information. We expect to complete final purchase price allocation in the fourth quarter of 2012. The following is the preliminary allocation of the adjusted purchase to specific assets and liabilities assumed based on estimates of fair values and costs. There was no goodwill associated with the transaction.

Allocation of purchase price	May 24, 2012

	(In millions)
Current assets	$	586
Non-current assets		444
Property, plant and equipment		6,887
Current liabilities		(420	)
Non-current liabilities		(284	)

Total purchase price	$	7,213

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2. Acquisitions and Divestitures (Continued)

The unaudited pro forma information below for the six month periods ended June 30, 2012 and June 30, 2011 has been derived from the historical consolidated financial statements and has been prepared as though the acquisition occurred as of the beginning of January 1, 2011. The unaudited pro forma information does not purport to represent what our results of operations would have been if such transactions had occurred on such date.

	Six months ended June 30, 2012		Six months ended June 30, 2011

	(In millions)
Operating Revenues	$	1,178	$	785
Net Income		235		431

Divestitures. In June 2012, we sold our interests in Egypt for approximately $22 million and did not record a gain or loss on the sale. The sale represents an exit from the Egyptian exploration activities. In addition, we received approximately $9 million for the sale of domestic oil and natural gas properties that closed in December 2011. During the six months ended June 30, 2011, we received approximately $24 million for the sale of domestic oil and natural gas properties. In July 2012, we sold oil and natural gas properties located in the Gulf of Mexico for a gross purchase price of approximately $103 million. Proceeds net of purchase price adjustments, were approximately $79 million. We did not record a gain or loss on the sale.

3. Impairments/Ceiling Test Charges

Under the full cost method of accounting, the predecessor conducted quarterly ceiling tests of capitalized costs in each of the full cost pools. During the first quarter of 2012, a non-cash ceiling test charge of approximately $62 million was recorded as a result of the decision to end exploration and development activities in Egypt. The charge principally relates to unevaluated costs in that country and included approximately $2 million related to equipment. No full cost ceiling test charges were recorded during the six months ended June 30, 2011, and no impairments were recorded of oil and natural gas properties under the successful efforts method of accounting for oil and natural gas properties in the successor period through June 30, 2012. Due to current natural gas prices, the fair value of our oil and natural gas properties could decline in the future and we may be required to record an impairment of the carrying value.

4. Income Taxes

Prior to its acquisition, the predecessor was party to a tax accrual policy with El Paso whereby they filed U.S. and certain state returns on the predecessor's behalf. Under its policy, the predecessor recorded federal and state income taxes on a separate return basis and reflected current and deferred income taxes in the financial statements through the acquisition date. In conjunction with the acquisition, all domestic federal and state current and deferred income taxes were settled with El Paso through a non-cash contribution. As of May 25, 2012, we are only subject to foreign income taxes, and as of June 30, 2012 and December 31, 2011, we had net foreign income tax asset balances of $6 million and $7 million, respectively.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4. Income Taxes (Continued)

Income Tax Expense (Benefit). The components of the predecessor's income tax expense (benefit) were as follows:

	Predecessor

	January 1 to May 24, 2012			Six months ended June 30, 2011
	(In millions)
Components of Income Tax Expense
Current
Federal	$	(61	)	$	9
State		(3	)		1
Foreign		1			(7	)

		(63	)		3

Deferred
Federal		188			55
State		11			3

		199			58

Total income tax expense	$	136		$	61

Effective Tax Rate. Interim period income taxes for the predecessor were computed by applying an anticipated annual effective tax rate to year-to-date income or loss, except for significant unusual or infrequently occurring items, which were recorded in the period in which they occurred. Changes in tax laws or rates were recorded in the period of enactment. The effective tax rate was affected by items such as income attributable to dividend exclusions on earnings from unconsolidated affiliates where receipt of dividends was anticipated, the effect of state income taxes (net of federal income tax effects), and the effect of foreign income which was taxed at different rates.

Effective tax rates for the predecessor periods from January 1, 2012 to May 24, 2012 and six months ended June 30, 2011, were 43 percent and 29 percent, respectively. For the predecessor periods from January 1, 2012 to May 24, 2012, the effective tax rate was significantly higher than the statutory rate primarily due to the impact of an Egyptian ceiling test charge without a corresponding tax benefit. For the six months ended June 30, 2011, the effective tax rate of the predecessor was lower than the statutory rate primarily due to the favorable resolution of tax matters, dividend exclusions on earnings from unconsolidated affiliates where we anticipated receiving dividends, and foreign income taxed at different rates.

5. Property, Plant, and Equipment

Unproved oil and natural gas properties. As of June 30, 2012, we have approximately $3.0 billion of property, plant, and equipment associated with unproven oil and natural gas properties primarily a result of the purchase price allocation in conjunction with the acquisition of the predecessor. Unproved properties are reviewed annually or upon an event that may indicate impairment (trigger) to determine if the market value is less than the carrying value, with any such impairment charged to expense in the

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

5. Property, Plant, and Equipment (Continued)

period. Due to current natural gas prices, the fair value of our oil and natural gas properties could decline in the future and we may be required to record an impairment to the carrying value. As of June 30, 2012, we did not have any material suspended well costs.

Asset Retirement Obligations. We have legal obligations associated with the retirement of our oil and natural gas wells and related infrastructure. We have obligations to plug wells when production on those wells is exhausted, when we no longer plan to use them or when we abandon them. We accrue a liability on those legal obligations when we can estimate the timing and amount of their settlement and include obligations where we will be legally required to replace, remove or retire the associated assets. In estimating the liability associated with our asset retirement obligations, we utilize several assumptions, including a credit-adjusted risk-free rate of 7 percent and a projected inflation rate of 2.5 percent. Changes in estimate represent changes to the expected amount and timing of payments to settle our asset retirement obligations. Typically, these changes primarily result from obtaining new information about the timing of our obligations to plug our oil and natural gas wells and the costs to do so. The net asset retirement liability is reported on our balance sheet in other current and non-current liabilities. Changes in the net liability from December 31, 2011 through June 30, 2012 (reflecting both predecessor and successor periods) were as follows:

	2012

	(In millions)
Net asset retirement liability at January 1	$	153
Liabilities settled		(8	)
Accretion expense(1)		7
Liabilities incurred		7
Changes in estimate (predecessor)		42
Fair value adjustment related to acquisition		34

Net asset retirement liability at June 30(2)	$	235

(1): Includes approximately $5 million of accretion expense related to the predecessor period from January 1, 2012 to May 24, 2012.
(2): Includes approximately $64 million of asset retirement liability for the Gulf of Mexico oil and natural gas properties sold in July 2012.

Capitalized Interest. Interest expense is reflected net of capitalized interest for the period from March 23, 2012 (inception) to June 30, 2012 of $2 million, and for the predecessor periods from January 1, 2012 to May 24, 2012 and six months ending June 30, 2011 of $4 million and of $6 million.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6. Financial Instruments

The following table presents the carrying value and fair value of our financial instruments:

	Successor June 30, 2012				Predecessor December 31, 2011

	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Short-term debt	$	1	$	1	$	—	$	—
Long-term debt		4,243		4,282		851		765

Derivatives	$	460	$	460	$	201	$	201

As of June 30, 2012 and December 31, 2011, the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable represent fair value because of the short-term nature of these instruments. As of June 30, 2012, we hold short term and long term debt obligations with various terms, our debt obligations are discussed further in Note 7. We estimated the fair value of debt (representing a Level 2 fair value measurement) primarily based on quoted market prices for the same or similar issuances, including consideration of our credit risk related to those instruments.

Oil and natural gas derivatives. We attempt to mitigate a portion of our commodity price risk and stabilize cash flows associated with forecasted sales of oil and natural gas production through the use of oil and natural gas swaps, basis swaps and option contracts. As of June 30, 2012 and December 31, 2011, we have oil and natural gas derivatives on 33,706 MBbl and 14,530 MBbl of oil and 304 TBtu and 105 TBtu of natural gas, respectively. None of these contracts are designated as accounting hedges.

In July and August of 2012, we added 730 MBbls of oil fixed price swaps, 1,829 MBbls of costless three-way oil collars and 29 TBtu of natural gas fixed price swaps.

Interest Rate Derivatives. During July 2012, we entered into interest rate swaps on $600 million related to our reserves based lending credit facility (RBL). These interest rate derivatives start in November 2012 extending through April 2017 and attempt to reduce our variable interest rate exposure. None of these contracts are designated as accounting hedges.

Fair Value Measurements. We use various methods to determine the fair values of our financial instruments. The fair value of a financial instrument depends on a number of factors, including the availability of observable market data over the contractual term of the underlying instrument. We separate the fair values of our financial instruments into three levels (Levels 1, 2 and 3) based on our assessment of the availability of observable market data and the significance of non-observable data used to determine fair value. As of June 30, 2012, all of our financial instruments were classified as Level 2, which are based on pricing data representative of quoted prices for similar assets and liabilities in active markets (or identical assets and liabilities in less active markets). Our assessment of an instrument within a level can change over time based on the maturity or liquidity of the instrument, which could result in a change in the classification of our financial instruments between other levels, which are described below:

•: Level 1 instruments' fair values are based on quoted prices in actively traded markets.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6. Financial Instruments (Continued)

•: Level 3 instruments' fair values are partially calculated using pricing data that is similar to Level 2 instruments, but also reflect adjustments for being in less liquid markets or having longer contractual terms.

During the six months ended June 30, 2012, there have been no changes to the inputs and valuation techniques used to measure fair value, the types of instruments, or the levels in which they are classified. On certain derivative contracts recorded as assets in the table below we are exposed to the risk that our counterparties may not perform or post the required collateral.

Financial Statement Presentation. The following table presents the fair value associated with derivative financial instruments as of June 30, 2012 and December 31, 2011. Derivative assets and liabilities are netted with counterparties where we have a legal right of offset and classify our derivatives as either current or non-current assets or liabilities based on their anticipated settlement date.

	Level 2

	Successor			Predecessor
	June 30, 2012			December 31, 2011
	(In millions)
Assets
Oil and natural gas derivatives	$	525		$	304
Impact of master netting arrangements		(47	)		(23	)

Total net assets		478			281

Liabilities
Oil and natural gas derivatives		(65	)		(103	)
Impact of master netting arrangements		47			23

Total net liabilities		(18	)		(80	)

Total	$	460		$	201

The following table presents realized and unrealized net gains on financial derivatives and previously dedesignated cash flow hedges included in accumulated other comprehensive income (in millions):

	Year-to-Date Periods

	Successor		Predecessor
	March 23 (inception) to June 30, 2012		January 1 to May 24, 2012		Six Months Ended June 30, 2011
Realized and unrealized gains	$	57	$	365	$	24

Accumulated other comprehensive income	$	—	$	5	$	6

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Debt and Available Credit Facility

In conjunction with the acquisition of the predecessor for approximately $7.2 billion, during April and May we issued or obtained approximately $4.25 billion of debt and repaid amounts outstanding under the predecessor's existing revolving credit facility. Listed below are additional details related to each of these debt obligations:

		Successor		Predecessor

	Interest Rate	June 30, 2012		December 31, 2011
		(In millions)
$1 billion revolving credit facility—due June 2, 2016(1)	Variable	$	—	$	850
Senior notes—due June 1, 2013	7.75%		1		1
$2 billion RBL credit facility—due May 24, 2017	Variable		750		—
$750 million term loan—due April 24, 2018(2)	Variable		743		—
$750 million senior secured note—due May 1, 2019(3)	6.875%		750		—
$2.0 billion senior unsecured note—due May 1, 2020	9.375%		2,000		—

Total		$	4,244	$	851

(1): Prior to the acquisition, the predecessor maintained a $1 billion revolving credit facility. The amounts outstanding under this facility were repaid in conjunction with the acquisition as an equity contribution from El Paso.
(2): The Term Loan carries a specified margin over the LIBOR of 5.25%, with a minimum LIBOR floor of 1.25%.
(3): Each of the term loan and secured notes are secured by a second priority lien on all of the collateral securing the RBL credit facility, and effectively rank junior to any existing and future first lien secured indebtedness of the Company.

$2.0 Billion Reserve-based Loan (RBL). We have a $2.0 billion credit facility in place which allows us to borrow funds or issue letters of credit (LCs). We enter into letters of credit and issue surety bonds in the ordinary course of our operating activities. As of June 30, 2012, the aggregate amount of borrowings outstanding under the credit facility was $750 million. In addition, we had $8 million of letters of credit outstanding as of June 30, 2012. This facility is collateralized by certain of our oil and natural gas properties. The initial borrowing base for this facility was established at $2.0 billion, with semi-annual redeterminations beginning in April 2013. Amounts outstanding under the $2.0 billion RBL bear interest at specified margins over the LIBOR of between 1.50% and 2.50% for Eurodollar loans or at specified margins over the ABR of between 0.50% and 1.50% for ABR loans. Such margins will fluctuate based on the utilization of the facility. Listed below is a further description of our credit facility including remaining capacity under the facility as of June 30, 2012:

Credit Facility		Maturity Date		Interest Rate		Commitment fees		Remaining Capacity as of June 30, 2012(1)

$2.0 billion RBL		May 24, 2017		LIBOR + 1.75%(1) 1.75% for LCs		0.375% commitment fee on unused capacity		$1.25 billion

(1): Based on June 30, 2012 borrowing level.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Debt and Available Credit Facility (Continued)

On August 8, 2012, we issued $350 million of senior unsecured notes, which are set to mature September 1, 2022. The notes were issued at par, with a 7.75% coupon and the proceeds were used primarily to repay a portion of our RBL facility. In addition, on August 21, 2012, we re-priced our $750 term loan note from 6.5% to 5.0%.

Guarantees. Our obligations under the RBL, term loan, secured and unsecured notes are fully and unconditionally guaranteed, jointly and severally, by the Company's present and future direct and indirect wholly owned material domestic subsidiaries. Our foreign wholly-owned subsidiaries are not parties to the guarantees. As of June 30, 2012, foreign subsidiaries that will not guarantee the notes held approximately 2% of our consolidated assets and had no outstanding indebtedness, excluding intercompany obligations. For the period from March 23, 2012 (inception) to June 30, 2012 these non-guarantor subsidiaries generated approximately 8% of our revenue including the impacts of financial derivatives.

Restrictive Provisions/Covenants. The availability of borrowings under our credit agreements and our ability to incur additional indebtedness is subject to various financial and non-financial covenants and restrictions. Our most restrictive financial covenant requires that EP Energy LLC's debt to adjusted EBITDAX, as defined in the credit agreement, must not exceed 5.0 to 1.0 during the current period. Certain other covenants and restrictions, among other things, also limit our ability to incur or guarantee additional indebtedness; make any restricted payments or pay any dividends on equity interests or redeem, repurchase or retire parent entities' equity interests or subordinated indebtedness; sell assets; make investments; create certain liens; prepay debt obligations; engage in transactions with affiliates; and enter into certain hedge agreements. As of June 30, 2012, we were in compliance with our debt covenants.

8. Commitments and Contingencies

Legal Proceedings and Other Contingencies

We and our subsidiaries and affiliates are named defendants in numerous legal proceedings that arise in the ordinary course of our business. There are also other regulatory rules and orders in various stages of adoption, review and/or implementation. For each of these matters, we evaluate the merits of the case or claim, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be estimated, we establish the necessary accruals. While the outcome of these matters cannot be predicted with certainty and there are still uncertainties related to the costs we may incur, based upon our evaluation and experience to date, we believe we have established appropriate reserves. It is possible, however, that new information or future developments could require us to reassess our potential exposure related to these matters and adjust our accruals accordingly, and these adjustments could be material. As of June 30, 2012, we had approximately $23 million accrued for all outstanding legal proceedings and other contingent matters, including $22 million of sales tax reserves.

Sales Tax Audits. As a result of sales and use tax audits during 2010, the state of Texas has asserted additional taxes plus penalties and interest for the audit period 2001-2008 for two of our operating entities. We believe amounts reserved are adequate. We are currently contesting the assessments and the ultimate outcomes are still uncertain. We are indemnified by KMI if and to the

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

8. Commitments and Contingencies (Continued)

extent the ultimate outcomes exceed the reserves. During the period ending June 30, 2012, the Louisiana audit was settled.

Environmental Matters

We are subject to existing federal, state and local laws and regulations governing environmental air, land and water quality. The environmental laws and regulations to which we are subject also require us to remove or remedy the effect on the environment of the disposal or release of specified substances at current and former operating sites. As of June 30, 2012, we had accrued less than $1 million for related environmental remediation costs associated with onsite, offsite and groundwater technical studies and for related environmental legal costs. Our accrual represents a combination of two estimation methodologies. First, where the most likely outcome can be reasonably estimated, that cost has been accrued. Second, where the most likely outcome cannot be estimated, a range of costs is established and if no one amount in that range is more likely than any other, the lower end of the expected range has been accrued. Our exposure could be as high as $1 million. Our environmental remediation projects are in various stages of completion. The liabilities we have recorded reflect our current estimates of amounts that we will expend to remediate these sites. However, depending on the stage of completion or assessment, the ultimate extent of contamination or remediation required may not be known. As additional assessments occur or remediation efforts continue, we may incur additional liabilities.

Climate Change and other Emissions. The Environmental Protection Agency (EPA) and several state environmental agencies have adopted regulations to regulate greenhouse gas (GHG) emissions. Although the EPA has adopted a tailoring rule to regulate GHG emissions, at this time we do not expect a material impact to our existing operations until 2016. There have also been various legislative and regulatory proposals and final rules at the federal and state levels to address emissions from power plants and industrial boilers. Although such rules and proposals will generally favor the use of natural gas over other fossil fuels such as coal, it remains uncertain what regulations will ultimately be adopted and when they will be adopted. In addition, any regulations regulating GHG emissions would likely increase our costs of compliance by potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric-driven compression at facilities to obtain regulatory permits and approvals in a timely manner.

Air Quality Regulations. In August 2010, the EPA finalized a rule that mandates emission reductions of hazardous air pollutants from reciprocating internal combustion engines and requires us to install emission controls on engines across our operations. Engines subject to the regulations must comply by October 2013. We currently estimate approximately $3 million in capital expenditures in 2013 to complete the required modifications and testing. Recently, in June 2012, EPA published proposed amendments to the rule. We are reviewing these amendments which may result in a reduction to the estimated $3 million capital requirement.

In August 2012, EPA finalized New Source Performance Standard OOOO regulations to reduce various air pollutants from the oil and natural gas industry. These regulations will limit emissions from the hydraulic fracturing of certain natural gas wells and equipment including compressors, storage

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

8. Commitments and Contingencies (Continued)

vessels and natural gas processing plants. We do not anticipate a material impact associated with compliance to these new requirements.

In the State of Utah we are currently obtaining or amending air quality permits for a number of small oil and natural gas production facilities. As part of this permitting process we anticipate the installation of tank emission controls that will require approximately $2 million capital expenditures starting in 2013 and extending through the first half of 2014.

Hydraulic Fracturing Regulations. We use hydraulic fracturing extensively in our operations. Various regulations have been adopted and proposed at the federal, state and local levels to regulate hydraulic fracturing operations. These regulations range from banning or substantially limiting hydraulic fracturing operations, requiring disclosure of the hydraulic fracturing fluids and requiring additional permits for the use, recycling and disposal of water used in such operations. In addition, various agencies, including the EPA, the Department of Interior and Department of Education are reviewing changes in their regulations to address the environmental impacts of hydraulic fracturing operations. Until such regulations are implemented, it is uncertain what impact they might have on our operations.

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Matters. As part of our environmental remediation projects, we have received notice that we could be designated, or have been asked for information to determine whether we could be designated as a Potentially Responsible Party (PRP) with respect to the Casmalia Remediation site located in California under the CERCLA or state equivalents. As of June 30, 2012, we have estimated our share of the remediation costs at this site to be less than $1 million. Because the clean-up costs are estimates and are subject to revision as more information becomes available about the extent of remediation required, and in some cases we have asserted a defense to any liability, our estimates could change. Moreover, liability under the federal CERCLA statute may be joint and several, meaning that we could be required to pay in excess of our pro rata share of remediation costs. Our understanding of the financial strength of other PRPs has been considered, where appropriate, in estimating our liabilities. Accruals for these matters are included in the environmental reserve discussed above.

9. Investments in Unconsolidated Affiliates

We hold investments in two unconsolidated affiliates, Four Star Oil & Gas Company (Four Star) and Black Warrior Transmission Corporation, which are accounted for using the equity method of accounting. Our income statement typically reflects (i) our share of net earnings directly attributable to

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

9. Investments in Unconsolidated Affiliates (Continued)

these unconsolidated affiliates, and (ii) other adjustments, such as the amortization of the excess of our investment relative to the underlying equity in the net assets related to Four Star.

As of June 30, 2012 and December 31, 2011, our investment in unconsolidated affiliates was $236 million and $346 million ($281 million net of deferred income taxes). Included in these amounts was approximately $129 million and $272 million ($207 million net of deferred income taxes) related to the excess of our investment in Four Star relative to the underlying equity in the net assets of Four Star. In conjunction with the acquisition and purchase price allocation, we adjusted our basis in Four Star to approximately $232 million on the date of acquisition. We amortize the excess of our investment in Four Star over the underlying equity in the net assets using the unit-of-production method over the life of our estimate of Four Star's oil and natural gas reserves.

Due to current natural gas prices, the fair value of our investment in Four Star could decline as a result of lower natural gas prices and we may be required to record an impairment of the carrying value in the future if the loss is determined to be other than temporary.

We received no dividends from Four Star for the predecessor periods from January 1, 2012 to May 24, 2012 and six months ending June 30, 2011 we received dividends of $8 million and $26 million and for the successor period March 23, 2012 to June 30, 2012 we did not receive any dividends.

	Successor			Predecessor

	March 23 (inception) to June 30, 2012			January 1 to May 24, 2012		Six Months Ended June 30, 2011
	(In millions)
Operating results:
Operating revenues	$	9		$	75	$	130
Operating expenses		13			58		82
Net (loss) income(1)		(2	)		11		32

(1): Proportionate share does not reflect amortization of our investment in Four Star of $12 million and $18 million for the predecessor periods from January 1, 2012 to May 24, 2012 and six months ending June 30, 2011 and $1 million for the successor period of March 23, 2012 to June 30, 2012.

10. Long-Term Incentive Compensation / Post-Employment Benefits

Equity Awards Outstanding Prior to Acquisition. Prior to the closing of the merger between KMI and El Paso, certain of our employees held vested and unvested stock options, restricted shares and performance shares granted under El Paso's equity plan. Pursuant to the terms of the merger agreement between El Paso and KMI, each outstanding El Paso stock option, restricted share and performance share automatically vested upon completion of the merger. In the case of outstanding performance shares, performance was deemed to be attained at target. On the merger date, each outstanding stock option, restricted share and performance share was converted into the right to receive either cash or a mixture of cash and shares of Class P common stock of KMI for all shares subject to such awards (in the case of stock options, less the aggregate exercise price), pursuant to the terms of the El Paso/KMI merger agreement. Each holder also received warrants as part of the merger

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

10. Long-Term Incentive Compensation / Post-Employment Benefits (Continued)

consideration in respect of such equity awards. Through the merger date, the predecessor recorded as general and administrative expense in the income statements, amounts billed directly by El Paso for compensation expense related to certain stock-based compensation awards granted directly to our employees, as well as our proportionate share of El Paso's corporate compensation expense. However, compensation cost associated with the acceleration of vesting as a result of the merger between El Paso and KMI was assumed by El Paso and KMI and are not reflected in these financial statements.

EP Energy LLC Long Term Incentive Compensation Programs. Upon the closing of the acquisition, we adopted new long term incentive (LTI) programs, including an annual performance-based cash incentive payment program and certain long-term equity based programs:

•

Cash-Based Long Term Incentive. In addition to annual bonus payments, we provide a cash-based long term incentive program to certain of our employees linking annual performance-based cash incentive payments to the financial performance of the company as approved by the Compensation Committee of our Board of Managers and individual performance for the year. Cash-based LTI awards are expected to be granted annually with a three-year vesting schedule (50% vesting in the first year, and 25% vesting in each of the succeeding two years). We recognize compensation cost in our financial statements as general and administrative expense on these awards over the requisite service period for each separately vesting tranche of the award, net of estimates for forfeitures. For accounting purposes, these performance based cash incentive awards were treated as liability awards with a fair value on the grant date of approximately $23 million. For the periods ended March 23, 2012 to June 30, 2012, and April 1, 2012 to June 30, 2012 we recorded approximately $1 million for both periods related to these awards.

•

Long Term Equity Incentive Awards. We provide certain individuals with two forms of long term equity incentive awards as follows:

•: Class A "Matching" Grants. In conjunction with the acquisition by our Sponsors whereby the Sponsors contributed approximately $3.3 billion and received Class A units, certain of our employees purchased a total of approximately 24,000 Class A units (capital interests) in our parent company (at a purchase price of $1,000 per Class A unit) shortly following the closing of the sale. In connection with their purchase of these units, our parent awarded (i) "matching" Class A unit grants in an amount equal to 50% of the Class A units purchased (approximately 12,000 units) and (ii) a "guaranteed cash bonus" to be paid in early 2013 equivalent to the amount of the "matching" Class A unit grant. Matching units are subject to forfeiture in the event of certain termination scenarios. For accounting purposes, we treated the "guaranteed bonus" amounts as liability awards to be settled in cash and the "matching" Class A unit grants as compensatory equity awards. Both of these awards had a fair value of approximately $12 million each on the grant date based on 50 percent of the amount purchased by the participating officer and management group. For the "guaranteed cash bonus", we will recognize the fair value as compensation cost in general and administrative expense over the period from the date of grant (May 24, 2012) through the anticipated cash payout date in early 2013. For the "matching" Class A unit grant, we will recognize the fair value as compensation cost in general and administrative expense ratably over the four year period from the date of grant through the period over

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

10. Long-Term Incentive Compensation / Post-Employment Benefits (Continued)

which the requisite service is provided and the time period at which certain transferability restrictions are removed. For the periods from March 23, 2012 to June 30, 2012, and April 1, 2012 to June 30, 2012, we recognized approximately $1.9 million related to both of these awards.

•: Management Incentive Units. In addition to the Class A "matching" awards described above, our parent issued approximately 808,000 Management Incentive Units ("MIPs") to certain of our employees. These MIPs are intended to constitute profits interests. The MIPs vest ratably over 5 years subject to certain forfeiture provisions based on continued employment with the company and become payable based on the achievement of certain predetermined performance measures, including, without limitation, the occurrence of certain specified threshold capital transactions. The MIPs were issued at no cost and have value only to the extent the value of the company increases. For accounting purposes, these profits interests were treated as compensatory equity awards. We determined a grant date fair value of approximately $70 million using an option pricing model. We recognize compensation cost in our financial statements as general and administrative expense on these awards. Compensation cost, net of forfeitures, will be recognized on an accelerated basis for each tranche of the award, over the five year requisite service period considering certain termination provisions limiting recipients to the receipt of 75 percent of the vested portion of such awards prior to a specified threshold capital transaction. For the periods from March 23, 2012 to June 30, 2012, and April 1, 2012 to June 30, 2012, we recognized approximately $7.8 million related to these awards.

Post Employment Benefits. We sponsor a tax-qualified defined contribution retirement plan for a broad-based group of employees. We make matching contributions (dollar for dollar up to 6% of eligible compensation) and non-elective employer contributions (5% of eligible compensation) to the defined contribution plan, and individual employees, are eligible to contribute to the defined contribution plan. We do not sponsor a defined benefit pension plan or a postretirement welfare benefit plan.

11. Related Party Transactions

Transaction Fee Agreement. In connection with the acquisition of EP Energy Global LLC, we were subject to a transaction fee agreement with certain of our Sponsors (the "Service Providers") for the provision of certain structuring, financial, investment banking and other similar advisory services. Included in the transaction and other costs paid at the time of the acquisition as further described in Note 2, we paid one-time transaction fees of $71.5 million (recorded as general and administrative expense in our income statement) to the Service Providers in the aggregate in exchange for services rendered in connection with structuring, arranging the financing and performing other services. In the event of any future transactions (including any merger, consolidation, recapitalization or sale of assets or equity interests resulting in a change of control of the equity and voting securities, or sale of all or substantially all of the assets or which is in connection with one or more public offerings, each as further defined in the Transaction Fee Agreement), we would pay an additional transaction fee equal to the lesser of (i) 1% of the aggregate enterprise value paid or provided and (ii) $100,000,000.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

11. Related Party Transactions (Continued)

Management Fee Agreement. We entered into a management fee agreement with certain of our Sponsors for the provision of certain management consulting and advisory services. Under the agreement, we pay a non-refundable annual management fee of $25 million. In 2012, we prepaid approximately $15 million for these services through the end of 2012 and through June 30, 2012, have expensed $2 million in general and administrative expense.

Related Party Transactions Prior to the Acquisition. In conjunction with the acquisition, El Paso made total contributions of approximately $1.5 billion to the predecessor including a non-cash contribution of approximately $0.5 billion to satisfy its current and deferred income tax balances at that time and a cash contribution to facilitate repayment of approximately $960 million of outstanding debt of the predecessor under its revolving credit facility. Additionally, prior to the completion of the acquisition, the predecessor entered into transactions during the ordinary course of conducting its business with affiliates of El Paso, primarily related to the sale, transportation and hedging of its oil, natural gas and NGL production. Other than continuing transition services agreements with KMI, the agreements noted below ceased on the date of acquisition and included the following services:

•

General. El Paso billed the predecessor directly for certain general and administrative costs and allocated a portion of its general and administrative costs. The allocation was based on the estimated level of resources devoted to its operations and the relative size of its earnings before interest and taxes, gross property and payroll. These expenses were primarily related to management, legal, financial, tax, consultative, administrative and other services, including employee benefits, pension benefits, annual incentive bonuses, rent, insurance, and information technology. El Paso also billed the predecessor directly for compensation expense related to certain stock-based compensation awards granted directly to the predecessor's employees, and allocated to the predecessor a proportionate share of El Paso's corporate compensation expense.

•: Pension and Retirement Benefits. El Paso maintained a primary pension plan, the El Paso Corporation Pension Plan, a defined benefit plan covering substantially all of our employees prior to the acquisition and providing benefits under a cash balance formula. El Paso also maintained a defined contribution plan covering all of our employees prior to the acquisition. El Paso matched 75 percent of participant basic contributions up to 6 percent of eligible compensation and made additional discretionary matching contributions. El Paso was responsible for benefits accrued under these plans and allocated related costs.
•: Other Post-Retirement Benefits. El Paso provided limited post-retirement life insurance benefits for current and retired employees prior to the acquisition. El Paso was responsible for benefits accrued under its plan and allocated the related costs to its affiliates.

•

Marketing. Prior to the completion of the acquisition, the predecessor sold natural gas primarily to El Paso Marketing at spot market prices. Substantially all of the affiliated accounts receivable at December 31, 2011 related to sales of natural gas to El Paso Marketing. The predecessor was also a party to a hedging contract with El Paso Marketing. Realized gains and losses on these hedges were included in operating revenues.

•

Transportation and Related Services. Prior to the completion of the acquisition, the predecessor also contracted for services with El Paso's regulated interstate pipelines that provided

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

11. Related Party Transactions (Continued)

transportation and related services for natural gas production. At December 31, 2011, contractual deposits were $8 million associated with El Paso's regulated interstate pipelines.

The following table shows revenues and charges to/from affiliates for the following predecessor periods:

	January 1, 2012 to May 24, 2012		Six months ended June 30, 2011

	(In millions)
Operating revenues	$	143	$	322
Operating expenses		44		58
Reimbursements of operating expenses		—		1

•: Income Taxes. Prior to the acquisition, El Paso filed consolidated U.S. federal and certain state tax returns which included the predecessor's taxable income. See Note 4 for additional information on income tax related matters.

Cash Management Program. Prior to the acquisition, our predecessor participated in El Paso's cash management program which matched short-term cash surpluses and needs of its participating affiliates, thus minimizing total borrowings from outside sources.

12. Condensed Consolidating Financial Statements

As discussed in Note 7, our secured and unsecured notes are fully and unconditionally guaranteed, jointly and severally, by the Company's present and future direct and indirect wholly owned material domestic subsidiaries. Our foreign wholly-owned subsidiaries are not parties to the guarantees (the "Non-Guarantor Subsidiaries"). The following reflects condensed consolidating financial information of the issuer, guarantor subsidiaries, non-guarantor subsidiaries, eliminating entries (to combine the entities) and consolidated results as of June 30, 2012 and December 31, 2011. Also presented are condensed consolidating statements of operations and cash flows for the successor for the period from March 23, 2012 (inception) to June 30, 2012 and for the predecessor for the period from January 1, 2012 to May 24, 2012.

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE PERIOD FROM MARCH 23, 2012 (INCEPTION) TO JUNE 30, 2012
(In millions)

	Successor

	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Operating Revenues
Oil and condensate	$	—		$	69		$	8	$	—		$	77
Natural gas		—			53			8		—			61
NGL		—			5			—		—			5
Financial derivatives		28			29			—		—			57

Total operating revenues		28			156			16		—			200

Operating expenses
Transportation costs		—			14			—		—			14
Lease operating expenses		—			16			5		—			21
General and administrative expenses		183			24			2		—			209
Depreciation, depletion and amortization		—			33			1		—			34
Impairments		—			1			—		—			1
Exploration expense		—			6			—		—			6
Taxes, other than income taxes		—			10			2		—			12

Total operating expenses		183			104			10		—			297

Operating (loss) income		(155	)		52			6		—			(97	)
Loss from unconsolidated affiliates		—			(1	)		—		—			(1	)
Other income		—			—			1		—			1
Interest expense		(54	)		1			—		—			(53	)

Income (loss) before earnings from consolidated subsidiaries		(209	)		52			7		—			(150	)

Earnings (loss) from consolidated subsidiaries		59			7			—		(66	)		—

Net (loss) income	$	(150	)	$	59		$	7	$	(66	)	$	(150	)

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE PERIOD FROM JANUARY 1, 2012 TO MAY 24, 2012
(In millions)

	Predecessor

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Operating Revenues
Oil and condensate	$	310		$	12		$	—	$	322
Natural gas		228			34			—		262
NGL		29			—			—		29
Financial derivatives		365			—			—		365

Total operating revenues		932			46			—		978

Operating expenses
Transportation costs		45			—			—		45
Lease operating expenses		80			16			—		96
General and administrative expenses		69			6			—		75
Depreciation, depletion and amortization		307			12			—		319
Ceiling test charges		—			62			—		62
Taxes, other than income taxes		31			14			—		45

Total operating expenses		532			110			—		642

Operating income		400			(64	)		—		336
Loss from unconsolidated affiliates		(5	)		—			—		(5	)
Other income (expense)		1			(4	)		—		(3	)
Interest expense
Third party		(14	)		—			—		(14	)
Affiliated		2			(2	)		—		—

Income (loss) before income taxes		384			(70	)		—		314
Income tax expense		135			1			—		136

Income (loss) before earnings from consolidated subsidiaries		249			(71	)		—		178

(Loss) Earnings from consolidated subsidiaries		(71	)		—			71		—

Net income (loss)	$	178		$	(71	)	$	71	$	178

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2011
(In millions)

	Predecessor

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating Revenues
Oil and condensate	$	217		$	19		$	—		$	236
Natural gas		464			33			—			497
NGL		28			—			—			28
Financial derivatives		24			—			—			24

Total operating revenues		733			52			—			785

Operating expenses
Transportation costs		38			—			—			38
Lease operating expenses		80			20			—			100
General and administrative expenses		91			7			—			98
Depreciation, depletion and amortization		266			14			—			280
Taxes, other than income taxes		42			7			—			49

Total operating expenses		517			48			—			565

Operating income		216			4			—			220
Loss from unconsolidated affiliates		(1	)		—			—			(1	)
Other (expense) income		(1	)		1			—			—
Interest expense
Third party		(4	)		—			2			(2	)
Affiliated		(2	)		—			(2	)		(4	)

Income before income taxes		208			5			—			213
Income tax expense (benefit)		69			(8	)		—			61

Income before earnings from consolidated subsidiaries		139			13			—			152

Earnings (loss) from consolidated subsidiaries		13			—			(13	)		—

Net income (loss)	$	152		$	13		$	(13	)	$	152

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 2012
(In millions)

	Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Current assets
Cash and cash equivalents	$	1	$	42	$	12	$	—		$	55
Accounts receivable
Customer, net of allowance of less than $1		3		133		27		—			163
Affiliates		21		4		—		(25	)		—
Other, net of allowance of $2		—		29		1		—			30
Materials and supplies		—		29		—		—			29
Derivatives		95		183		—		—			278
Prepaid assets		13		20		10		—			43

Total current assets		133		440		50		(25	)		598

Property, plant and equipment, at cost
Oil and natural gas properties		—		6,824		103		—			6,927
Other property, plant and equipment		—		87		2		—			89

		—		6,911		105		—			7,016
Less accumulated depreciation, depletion and amortization		—		33		1		—			34

Total property, plant and equipment, net		—		6,878		104		—			6,982

Other assets
Investments in unconsolidated affiliates		—		236		—		—			236
Investment in consolidated affiliate		7,018		77		—		(7,095	)		—
Derivatives		174		26		—		—			200
Deferred income taxes		—		—		6		—			6
Unamortized debt issue cost		139		—		—		—			139
Other		—		5		—		—			5

		7,331		344		6		(7,095	)		586

Total assets	$	7,464	$	7,662	$	160	$	(7,120	)	$	8,166

LIABILITIES AND EQUITY
Current liabilities
Accounts payable
Trade	$	—	$	107	$	—	$	—		$	107
Affiliates		—		21		4		(25	)		—
Other		—		226		42		—			268
Accrued taxes other than income		—		22		8		—			30
Accrued interest		52		—		—		—			52
Current reserves		—		23		—		—			23
Other		—		25		—		—			25

Total current liabilities		52		424		54		(25	)		505

Long-term debt		4,243		—		—		—			4,243
Other long-term liabilities
Derivatives		11		7		—		—			18
Asset retirement obligations		—		204		22		—			226
Other		—		9		7		—			16

Total non-current liabilities		4,254		220		29		—			4,503

Commitments and contingencies
Members' equity		3,158		7,018		77		(7,095	)		3,158

Total liabilities and equity	$	7,464	$	7,662	$	160	$	(7,120	)	$	8.166

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2011

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Current assets
Cash and cash equivalents	$	6		$	19		$	—		$	25
Accounts receivable
Customer, net of allowance of less than $1		119			16			—			135
Affiliates		132			—			—			132
Other, net of allowance of $7		38			1			—			39
Materials and supplies		21			7			—			28
Derivatives		272			—			—			272
Prepaid assets		4			8			—			12
Other		14			1			—			15

Total current assets		606			52			—			658

Property, plant and equipment, at cost
Oil and natural gas properties		20,670			1,253			—			21,923
Other property, plant and equipment		143			4			—			147

		20,813			1,257			—			22,070
Less accumulated depreciation, depletion and amortization		17,026			977			—			18,003

Total property, plant and equipment, net		3,787			280			—			4,067

Other assets
Investments in unconsolidated affiliates		346			—			—			346
Investment in consolidated affiliate		2			—			(2	)		—
Derivatives		9			—			—			9
Deferred income taxes		—			7			—			7
Unamortized debt issue cost		259			—			(251	)		8
Other		4			—			—			4

		620			7			(253	)		374

Total assets	$	5,013		$	339		$	(253	)	$	5,099

LIABILITIES AND EQUITY
Current liabilities
Accounts payable
Trade	$	140		$	—		$	—		$	140
Affiliates		47			—			—			47
Other		210			48			—			258
Derivatives		7			—			—			7
Accrued taxes other than income		24			9			—			33
Deferred income taxes		91			—			—			91
Other		13			—			—			13

Total current liabilities		532			57			—			589

Long-term debt		851			—			—			851
Non-current note payable to unconsolidated affiliate		—			251			(251	)		—
Other long-term liabilities
Derivatives		73			—			—			73
Asset retirement obligations		126			22			—			148
Deferred income taxes		291			—			—			291
Other		40			7			—			47

		1,381			280			(251	)		1,410

Commitments and contingencies
Stockholder's equity
Common stock, par value $1 per share; 1,000 shares authorized and outstanding		—			381			(381	)		—
Preferred stock		—			4			(4	)		—
Additional paid-in capital		4,580			393			(393	)		4,580
Accumulated deficit		(1,476	)		(776	)		776			(1,476	)
Accumulated other comprehensive loss		(4	)		—			—			(4	)

Total stockholder's equity		3,100			2			(2	)		3,100

Total liabilities and equity	$	5,013		$	339		$	(253	)	$	5,099

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 23, 2012 (INCEPTION) TO JUNE 30, 2012
(In millions)

	Successor

	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net (loss) income	$	(150	)	$	59		$	6		$	(65	)	$	(150	)
Adjustments to reconcile net (loss) income to net cash from operating activities
Depreciation, depletion and amortization		—			33			1			—			34
Deferred income tax expense		—			—			1			—			1
Loss from unconsolidated affiliates, adjusted for cash distributions		—			2			—			—			2
Earnings from consolidated affiliates		(59	)		(6	)		—			65			—
Impairments		—			1			—			—			1
Amortization of equity compensation expense		8			—			—			—			8
Other non-cash income items		2			1			—			—			3
Asset and liability changes
Accounts receivable		(3	)		(4	)		(12	)		1			(18	)
Accounts payable		—			(10	)		5			(1	)		(6	)
Derivatives		(25	)		10			—			—			(15	)
Accrued interest		52			—			—			—			52
Other asset changes		(13	)		(13	)		—			—			(26	)
Other liability changes		—			23			(1	)		—			22

Net cash (used in) provided by operating activities		(188	)		96			—			—			(92	)

Cash flows from investing activities
Capital expenditures		—			(150	)		—			—			(150	)
Net proceeds from the sale of assets		—			22			—			—			22
Cash paid for acquisitions, net of cash acquired		(7,213	)		—			—			87			(7,126	)

Net cash (used in) provided by investing activities		(7,213	)		(128	)					87			(7,254	)

Cash flows from financing activities
Proceeds from long term debt		4,323			—			—			—			4,323
Repayment of long term debt		(80	)		—			—			—			(80	)
Contributed member equity		3,300			—			—			—			3,300
Debt issuance costs		(142	)		—			—			—			(142	)

Net cash provided by financing activities		7,401			—			—			—			7,401

Change in cash and cash equivalents		—			(32	)		—			87			55
Cash and cash equivalents
Beginning of period		—			75			12			(87	)		—

End of period	$	—		$	43		$	12		$	—		$	55

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, 2012 TO MAY 24, 2012
(In millions)

	Predecessor

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net income (loss)	$	178		$	(71	)	$	71		$	178
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		307			12			—			319
Deferred income tax expense		199			—			—			199
Loss from unconsolidated affiliates, adjusted for cash distributions		12			—			—			12
Earnings from consolidated affiliates		71			—			(71	)		—
Ceiling test charges		—			62			—			62
Other non-cash income items		7			—			—			7
Asset and liability changes
Accounts receivable		132			2			(2	)		132
Accounts payable		(54	)		(4	)		2			(56	)
Affiliate income taxes		3			1			—			4
Derivatives		(201	)		—			—			(201	)
Accrued interest		(1	)		—			—			(1	)
Other asset changes		(7	)		—			—			(7	)
Other liability changes		(66	)		(2	)		—			(68	)

Net cash provided by operating activities		580			—			—			580

Cash flows from investing activities
Capital expenditures		(628	)		(8	)		—			(636	)
Net proceeds from the sale of assets		9			—			—			9
Change in note receivable with affiliates		(1	)		—			1			—
Cash paid for acquisitions, net of cash acquired		(1	)		—			—			(1	)

Net cash provided by (used in) investing activities		(621	)		(8	)		1			(628	)

Cash flows from financing activities
Proceeds from long term debt		215			—			—			215
Repayment of long term debt		(1,065	)		—			—			(1,065	)
Contribution from El Paso Corporation		960			—			—			960
Change in note payable with affiliate		—			1			(1	)		—

Net cash provided by (used in) financing activities		110			1			(1	)		110

Change in cash and cash equivalents		69			(7	)		—			62
Cash and cash equivalents
Beginning of period		6			19			—			25

End of period	$	75		$	12		$	—		$	87

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EP ENERGY LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY LLC
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2011
(In millions)

	Predecessor

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net income (loss)	$	152		$	13		$	(13	)	$	152
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		266			14			—			280
Deferred income tax expense		58			—			—			58
Earnings from unconsolidated affiliates, adjusted for cash distributions		27			—			—			27
Loss from consolidated affiliates		(13	)		—			13			—
Other non-cash income items		2			1			—			3
Asset and liability changes
Accounts receivable		(21	)		(7	)		—			(28	)
Accounts payable		24			1			—			25
Income taxes		16			—			—			16
Derivatives		117			—			—			117
Other asset changes		9			2			—			11
Other liability changes		7			(5	)		—			2

Net cash provided by (used in) operating activities		644			19			—			663

Cash flows from investing activities
Capital expenditures		(661	)		(14	)		—			(675	)
Net proceeds from the sale of assets		24			—			—			24
Cash paid for acquisitions, net of cash acquired		(1	)		—			—			(1	)
Investment in affiliate		(6	)		—			6			—
Change in note receivable with affiliate		(5	)		—			5			—

Net cash provided by (used in) investing activities		(649	)		(14	)		11			(652	)

Cash flows from financing activities
Proceeds from borrowing under revolving credit facility		925			—			—			925
Repayment of amounts borrowed under revolving credit facility		(825	)		—			—			(825	)
Change in note payable with affiliate		(145	)		5			(5	)		(145	)
Contribution from parent		—			6			(6	)		—
Other		(6	)		—			—			(6	)

Net cash provided by (used in) financing activities		(51	)		11			(11	)		(51	)

Change in cash and cash equivalents		(56	)		16			—			(40	)
Cash and cash equivalents
Beginning of period		67			7			—			74

End of period	$	11		$	23		$	—		$	34

F-31

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Managers of
Everest Acquisition LLC:

We have audited the accompanying balance sheet of Everest Acquisition LLC as of April 30, 2012, and the related statements of income (loss) and cash flows for the period March 23, 2012 (inception) to April 30, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Everest Acquisition LLC as of April 30, 2012, and the results of its operations and its cash flows for the period March 23, 2012 (inception) to April 30, 2012, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Houston, Texas
September 11, 2012

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Table of Contents

EVEREST ACQUISITION LLC
BALANCE SHEET
(In thousands)

	April 30, 2012

ASSETS
Current assets
Cash	$	5,864
Restricted cash		2,878,956

Total current assets		2,884,820

Total assets	$	2,884,820

LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Accrued liabilities	$	25,051
Interest payable		4,794

Total current liabilities		29,845

Long-term debt obligations		2,750,000

Commitments and contingencies
Members' Equity		104,975

Total liabilities and members' equity	$	2,884,820

See accompanying notes.

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Table of Contents

EVEREST ACQUISITION LLC
STATEMENT OF INCOME (LOSS)
(In thousands)

	March 23, 2012 (inception) to April 30, 2012

Costs and expenses:
General and administrative expenses	$	25,051
Interest expense		4,794

Operating loss		29,845

Net loss	$	29,845

See accompanying notes.

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EVEREST ACQUISITION LLC
STATEMENT OF CASH FLOWS
(In thousands)

	March 23, 2012 (inception) to April 30, 2012

Cash flows from operating activities
Net (loss)	$	(29,845	)
Adjustments to reconcile net loss to net cash from operating activities
Changes in operating assets and liabilities
Accrued liabilities		25,051
Interest payable		4,794

Net cash provided by operating activities		—

Cash flows from investing activities
Increase in restricted cash		(2,878,956	)

Net cash provided by investing activities		(2,878,956	)

Cash flows from financing activities
Proceeds from debt borrowings		2,750,000
Proceeds from members' contributions		134,820

Net cash provided by financing activities		2,884,820

Change in cash		5,864
Cash
Beginning of period		—

End of period	$	5,864

See accompanying notes.

F-35

EVEREST ACQUISITION LLC

NOTES TO FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Description of the Company

Everest Acquisition LLC (the "Company," "we," "our") was formed as a Delaware limited liability company on March 23, 2012 by Apollo Global Management, LLC ("Apollo") and other private equity investors (collectively, the "Sponsors"). The company was established along with Everest Acquisition Finance, Inc. On April 24, 2012, we and Everest Acquisition Finance, Inc. co-issued approximately $2.75 billion in private placement notes.

On May 24, 2012, the Sponsors acquired EP Energy Global LLC, (formerly known as EP Energy Corporation and EP Energy, L.L.C. after its conversion into a Delaware limited liability company) and subsidiaries for approximately $7.2 billion in cash (exclusive of approximately $330 million of transaction fees and expenses) using the $2.75 billion in private placement notes noted above, $750 million borrowed pursuant to a reserve based lending facility ("RBL Facility") entered into in May 2012, proceeds from a $743 million senior secured term loan and approximately $3.3 billion provided by the Sponsors. Following these transactions, Everest Acquisition LLC was renamed EP Energy LLC. As a result of the acquisition, EP Energy LLC owns 100% in each of EP Energy Global LLC and Everest Acquisition Finance, Inc.

Our financial statements are prepared in accordance with United States generally accepted accounting principles. We have evaluated subsequent events through September 11, 2012, the date of issuance of our financial statements.

Cash and Restricted Cash

We consider short-term investments with an original maturity of less than three months to be cash equivalents. As of April 30, 2012 we had approximately $2.88 billion of restricted cash held in escrow to fund the acquisition of EP Energy Global LLC (classified as current assets on our balance sheet). These amounts consisted of $2.75 billion in proceeds received from debt borrowings and approximately $130 million contributed by the members (see Note 4).

2. Long-Term Debt

On April 24, 2012, we issued long-term debt as follows:

			Amount

			(In Millions)
$750 million senior secured note—due May 1, 2019	6.875	%	$	750
$2 billion senior secured note—due May 1, 2020	9.375	%		2,000

Total			$	2,750

Pursuant to the terms of the note agreements, the proceeds from these borrowings were required to be placed into escrow and subject to certain call features in the event the acquisition were not to occur. As a result of the acquisition discussed above closing on May 24, 2012, the proceeds were released from escrow and as such we have reflected this borrowing as long-term debt in our balance sheet.

As of April 30, the fair value of our debt obligations approximates their carrying value. We estimated the fair value of debt (representing a Level 2 fair value measurement) primarily based on

F-36

EVEREST ACQUISITION LLC

NOTES TO FINANCIAL STATEMENTS (Continued)

2. Long-Term Debt (Continued)

quoted market prices for the same or similar issuances, including consideration of our credit risk related to those instruments. Level 2 instruments are based on pricing data representative of quoted prices for similiar assets and liabilities in active markets (or identical assets and liabilities in less active markets).

Our ability to incur additional indebtedness is subject to various covenants and restrictions. Certain of these covenants and restrictions, among other things, limit our ability to incur or guarantee additional indebtedness; make any restricted payments or pay any dividends on equity interests or redeem, repurchase or retire parent entities' equity interests or subordinated indebtedness; sell assets; make investments; create certain liens; prepay debt obligations; engage in transactions with affiliates; and enter into certain hedge agreements. As of April 30, 2012, we were in compliance with all of our debt covenants.

During the period from March 23, 2012 (inception) through April 30, 2012, we accrued interest expense of $4.8 million on our senior notes issued in late April 2012. Interest is payable semi-annually on May 1 and November 1 of each year.

In May 2012, in conjunction with the acquisition, we entered into a $750 million term loan—due April 24, 2018, and a $2 billion reserve based lending (RBL) credit facility due May 24, 2017. In August 2012, we issued $350 million of additional senior unsecured notes, which are set to mature September 1, 2022. The notes were issued at par, with a 7.75% coupon and the proceeds were used primarily to repay a portion of our RBL facility. In addition, in August 2012 we re-priced our $750 million term loan from 6.5% to 5.0%.

3. Transaction Fees

During the period from March 23, 2012 (inception) to April 30, 2012, we accrued approximately $25 million in certain initial legal and advisory, rating, printing and other expenses associated with the acquisition of EP Energy Global LLC and the related financing transactions. In conjunction with and prior to the acquisition of EP Energy Global LLC and the related financing transactions, we incurred certain legal and advisory, rating agency, printing, and other fees totaling approximately $330 million, of which approximately $173 million was not capitalizable. During the period from March 23, 2012 (our inception) to April 30, 2012, we had accrued approximately $25 million of these costs which had been incurred as of April 30, 2012 and which were not contingent on the closing of the acquisition.

4. Members' Equity

In April 2012, our members contributed approximately $134.8 million, of which approximately $130 million was maintained in an escrow account prior to the May 24, 2012 acquisition of EP Energy Global LLC as further described in Note 1. In May 2012, these amounts in escrow were released to our members at which time they contributed a total of $3.3 billion to complete the acquisition of EP Energy Global LLC. During the periods from March 23, 2012 (inception) to April 30, 2012 we recorded a net loss of approximately $29.8 million.

5. Acquisition of EP Energy Global LLC

The purchase transaction described in Note 1 was accounted for as a business combination under the acquisition method of accounting which requires, among other items, that assets and liabilities

F-37

EVEREST ACQUISITION LLC

NOTES TO FINANCIAL STATEMENTS (Continued)

5. Acquisition of EP Energy Global LLC (Continued)

acquired and assumed be recognized on the balance sheet at their fair values as of the acquisition date. The following is the allocation of the adjusted purchase to specific assets and liabilities assumed based on estimates of fair values and costs. There was no goodwill associated with the transaction.

Allocation of purchase price

	(In millions)
Current assets	$	586
Non-current assets		444
Property, plant and equipment		6,887
Current liabilities		(420	)
Non-current liabilities		(284	)

Total purchase price	$	7,213

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder of
EP Energy Corporation:

We have audited the accompanying consolidated balance sheets of EP Energy Corporation (the Company) as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, cash flows, and stockholder's equity for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedule listed in the Index to Consolidated Financial Statements. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. The financial statements of Four Star Oil & Gas Company (a corporation in which the Company has a 49 percent interest), have been audited by other auditors whose report has been furnished to us, and our opinion on the consolidated financial statements, insofar as it relates to the amounts included from Four Star Oil & Gas Company, is based solely on the report of other auditors. In the consolidated financial statements, the Company's investments in unconsolidated affiliates includes approximately $70 million from Four Star Oil & Gas Company as of December 31, 2011, and the Company's earnings from unconsolidated affiliates includes approximately $29 million for the year ended December 31, 2011, from Four Star Oil & Gas Company.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of EP Energy Corporation at December 31, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, effective December 31, 2009 the Company has changed its reserve estimates and related disclosures as a result of adopting new oil and gas reserve estimation and disclosure requirements.

/s/ Ernst & Young LLP

Houston, Texas
March 7, 2012,
except for Note 12, as to which the date is
September 11, 2012

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Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and the Stockholders of
Four Star Oil & Gas Company:

In our opinion, the consolidated balance sheet and the related consolidated statements of income, of stockholders' equity and of cash flows (not presented separately herein) present fairly, in all material respects, the financial position of Four Star Oil & Gas Company and its subsidiary (the "Company") at December 31, 2011, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As described in Notes 4 and 5 to the consolidated financial statements, the Company has significant transactions with affiliated companies. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

/s/PricewaterhouseCoopers LLP

February 24, 2012
Houston, Texas

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Table of Contents

EP ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions)

	Year Ended December 31,

	2011			2010			2009
Operating revenues
Oil and natural gas sales
Third parties	$	948		$	634		$	552
Affiliates		634			746			545
Realized and unrealized gains on financial derivatives		284			390			687
Other		1			19			44

		1,867			1,789			1,828

Operating expenses
Cost of products		—			15			31
Transportation costs		85			73			66
Operation and maintenance		418			383			392
Depreciation, depletion and amortization		612			477			440
Ceiling test charges		152			25			2,123
Impairment of inventory and other assets		6			—			25
Taxes, other than income taxes		91			85			68

		1,364			1,058			3,145

Operating income (loss)		503			731			(1,317	)
Loss from unconsolidated affiliates		(7	)		(7	)		(30	)
Other (expense) income		(2	)		3			(1	)
Interest expense, net of capitalized interest of $13 in 2011, $9 in 2010 and $7 in 2009
Third parties		(9	)		(16	)		(21	)
Affiliates		(3	)		(5	)		(4	)

Income (loss) before income taxes		482			706			(1,373	)
Income tax expense (benefit)		220			263			(462	)

Net income (loss)	$	262		$	443		$	(911	)

See accompanying notes.

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Table of Contents

EP ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Year Ended December 31,

	2011		2010		2009
Net income (loss)	$	262	$	443	$	(911	)

Net gains (losses) from cash flow hedging activities:
Reclassification adjustments for amounts recognized during the period (net of income taxes of $4 in 2011 and 2010 and $147 in 2009)		7		7		(259	)

Other comprehensive gain (loss)		7		7		(259	)

Comprehensive income (loss)	$	269	$	450	$	(1,170	)

See accompanying notes.

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EP ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions)

	December 31,

	2011		2010
ASSETS
Current assets
Cash and cash equivalents	$	25	$	74
Accounts receivable
Customer, net of allowance of less than $1 in 2011 and 2010		135		78
Affiliates		132		170
Other, net of allowance of $7 in 2011 and 2010		39		38
Materials and supplies		28		39
Income tax receivable from affiliates		6		89
Assets from price risk management activities		272		247
Other		21		25

Total current assets		658		760

Property, plant and equipment, at cost
Oil and natural gas properties
Proved properties-full cost method		21,442		20,771
Unevaluated costs excluded from amortization		481		785
Other		147		136

		22,070		21,692
Less accumulated depreciation, depletion and amortization		18,003		17,968

Total property, plant and equipment, net		4,067		3,724

Other assets
Investments in unconsolidated affiliates		346		399
Assets from price risk management activities		9		29
Deferred income taxes		7		19
Other		12		11

		374		458

Total assets	$	5,099	$	4,942

See accompanying notes.

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EP ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS (Continued)

(In millions, except share amounts)

	December 31,

	2011			2010
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
Trade	$	140		$	118
Affiliates		47			139
Other		258			187
Income tax payable		4			4
Liabilities from price risk management activities		7			14
Asset retirement obligations		5			34
Deferred income taxes		91			37
Other		37			29

Total current liabilities		589			562

Long-term debt		851			301
Note payable to affiliate		—			781
Other long-term liabilities
Liabilities from price risk management activities		73			25
Asset retirement obligations		148			101
Deferred income taxes		291			49
Other		47			56

Total non-current liabilities		1,410			1,313

Commitments and contingencies (Note 8)
Stockholder's equity
Common stock, par value $1 per share; 1,000 shares authorized and outstanding		—			—
Additional paid-in capital		4,580			4,816
Accumulated deficit		(1,476	)		(1,738	)
Accumulated other comprehensive loss		(4	)		(11	)

Total stockholder's equity		3,100			3,067

Total liabilities and equity	$	5,099		$	4,942

See accompanying notes.

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EP ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Year Ended December 31,

	2011			2010			2009
Cash flows from operating activities
Net income (loss)	$	262		$	443		$	(911	)
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		612			477			440
Ceiling test charges		152			25			2,123
Deferred income tax expense (benefit)		304			320			(550	)
Loss from unconsolidated affiliates, adjusted for cash distributions		53			57			75
Other non-cash income items		10			5			31
Asset and liability changes
Accounts receivable		(20	)		(17	)		102
Materials and supplies		5			10			18
Change in price risk management activities, net		47			(99	)		150
Accounts payable		(67	)		90			(55	)
Income taxes		83			(172	)		140
Other asset changes		7			6			(27	)
Other liability changes		(22	)		(78	)		37

Net cash provided by operating activities		1,426			1,067			1,573

Cash flows from investing activities
Capital expenditures		(1,591	)		(1,238	)		(1,115	)
Cash paid for acquisitions, net of cash acquired		(22	)		(51	)		(131	)
Net proceeds from the sale of assets		612			155			93
Increase in note receivable with affiliate		(236	)		—			—
Other		—			4			(3	)

Net cash used in investing activities		(1,237	)		(1,130	)		(1,156	)

Cash flows from financing activities
Proceeds from borrowings under revolving credit facility		2,030			500			100
Repayment of amounts borrowed under revolving credit facility		(1,480	)		(1,034	)		(180	)
(Decrease) increase in note payable with affiliate		(781	)		489			(256	)
Other		(7	)		(1	)		—

Net cash used in financing activities		(238	)		(46	)		(336	)

Change in cash and cash equivalents		(49	)		(109	)		81
Cash and cash equivalents
Beginning of period		74			183			102

End of period	$	25		$	74		$	183

Supplemental cash flow information
Interest paid, net of amounts capitalized	$	9		$	7		$	19
Income tax (refunds) payments		(158	)		105			(52	)

See accompanying notes.

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EP ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(In millions, except share amounts)

	Year Ended December 31,

	2011					2010					2009
	Shares		Amount			Shares		Amount			Shares		Amount
Common stock, $1.00 par value:
Balance at beginning of year		1,000	$	—			1,000	$	—			1,000	$	—

Balance at end of year		1,000		—			1,000		—			1,000		—

Additional paid-in capital:
Balance at beginning of year				4,816					4,725					4,723
Contribution from parent				—					91					2
Distribution to parent				(236	)				—					—

Balance at end of year				4,580					4,816					4,725

Retained earnings (accumulated deficit)
Balance at beginning of year				(1,738	)				(2,178	)				(1,267	)
Other				—					(3	)				—
Net income (loss)				262					443					(911	)

Balance at end of year				(1,476	)				(1,738	)				(2,178	)

Accumulated other comprehensive (loss) income:
Balance at beginning of year				(11	)				(18	)				241
Other comprehensive income (loss)				7					7					(259	)

Balance at end of year				(4	)				(11	)				(18	)

Total equity at end of year		1,000	$	3,100			1,000	$	3,067			1,000	$	2,529

See accompanying notes.

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Table of Contents

EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Consolidation

We are a Delaware corporation formed in 1999 as a wholly-owned direct subsidiary of El Paso Corporation (El Paso). We engage in the exploration for and the acquisition, development, and production of oil, natural gas and NGLs in the United States, Brazil and Egypt. During 2011, we changed our name to EP Energy Corporation from El Paso Exploration and Production Company.

Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles and include the accounts of all consolidated subsidiaries after the elimination of all significant intercompany accounts and transactions. We have evaluated subsequent events through March 7, 2012, the date of issuance of our financial statements.

On October 16, 2011, El Paso announced a definitive merger agreement with Kinder Morgan, Inc. (KMI) whereby KMI will acquire El Paso in a transaction that valued El Paso at approximately $38 billion (based on the KMI stock price at that date), including the assumption of debt. In conjunction with the merger, KMI has announced that they intend to sell our assets. The merger agreement has been approved by El Paso's and KMI's board of directors. The completion of the merger is subject to satisfaction or waiver of certain closing conditions including, among others, customary regulatory approvals, approval by El Paso's stockholders and approval of the issuance of KMI stock and warrants by KMI's stockholders. A voting agreement has been executed by certain stockholders of KMI, holding approximately 75 percent of the voting power of KMI, in which such stockholders have agreed to vote in favor of the merger and issuance of KMI stock and warrants. The completion of the merger will constitute a change of control for El Paso that may trigger change in control provisions in certain agreements including those related to (i) debt and other financing agreements, (ii) severance agreements and (iii) incentive compensation plan agreements that will result in an immediate acceleration of all unvested stock based compensation awards upon closing of the merger. We have obtained consent that the KMI acquisition does not trigger a change in control for our revolving credit facility covenants, however when our assets are sold, we will need to either amend our debt agreements or obtain waivers of those covenants at that time.

On February 24, 2012, we entered into a purchase and sale agreement to sell all of our assets to an affiliate of Apollo Global Management, LLC (Apollo) and certain other parties for $7.15 billion subject to certain adjustments for items such as contributions or distributions, incurrence of debt and title defects. The sale is contemplated by the merger agreement with KMI. The closing of the sale is conditioned upon the closing of the transactions contemplated by the merger agreement with KMI. Both transactions are expected to be completed in the second quarter of 2012. The purchase and sale agreement contains customary representations and warranties relating to our assets and operations. Additionally, El Paso has entered into a performance guarantee in favor of Apollo, under which El Paso guarantees the performance of all of our obligations under the purchase and sale agreement. Pursuant to the merger agreement with KMI, KMI is required to indemnify El Paso from any and all costs incurred by El Paso arising from or relating to the sale of our assets.

We consolidate entities when we have the ability to control the operating and financial decisions of the entity or when we have a significant interest in the entity that gives us the ability to direct the activities that are significant to that entity. The determination of our ability to control, direct or exert significant influence over an entity involves the use of judgment. We apply the equity method of accounting where we can exert significant influence over, but do not control or direct the policies,

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation and Significant Accounting Policies (Continued)

decisions and activities of an entity. We use the cost method of accounting where we are unable to exert significant influence over the entity.

Use of Estimates

The preparation of our financial statements requires the use of estimates and assumptions that affect the amounts we report as assets, liabilities, revenues and expenses and our disclosures in these financial statements. Actual results can, and often do, differ from those estimates.

Revenue Recognition

Our revenues are derived primarily through the physical sale of oil, condensate, natural gas and NGLs. Revenues from sales of these products are recorded upon delivery and the passage of title using the sales method, net of any royalty interests or other profit interests in the produced product. Revenues related to products delivered, but not yet billed, are estimated each month. These estimates are based on contract data, commodity prices and preliminary throughput and allocation measurements. When actual sales volumes exceed our entitled share of sales volumes, an overproduced imbalance occurs. To the extent the overproduced imbalance exceeds our share of the remaining estimated proved natural gas reserves for a given property, we record a liability. Costs associated with the transportation and delivery of production are included in transportation costs. Our revenue from El Paso Marketing, L.P. (El Paso Marketing) represents 34 percent, 41 percent and 30 percent of our total revenues in 2011, 2010 and 2009, respectively. We have no other customers whose revenue exceeds 10 percent of our total revenues in 2011, 2010 and 2009.

Cash and Cash Equivalents

We consider short-term investments with an original maturity of less than three months to be cash equivalents. As of December 31, 2011 and 2010, we had less than $1 million of restricted cash in other current assets to cover escrow amounts required for leasehold agreements in our domestic operations.

Allowance for Doubtful Accounts

We establish provisions for losses on accounts receivable and for natural gas imbalances with other parties if we determine that we will not collect all or part of the outstanding balance. We regularly review collectibility and establish or adjust our allowance as necessary using the specific identification method.

Oil and Natural Gas Properties

We use the full cost method to account for our oil and natural gas properties. Under the full cost method, substantially all costs incurred in connection with the acquisition, development and exploration of oil and natural gas reserves are capitalized on a country-by-country basis. These capitalized amounts include the costs of unproved properties, internal costs directly related to acquisition, development and exploration activities, asset retirement costs and capitalized interest. Under the full cost method, both dry hole costs and geological and geophysical costs are capitalized into the full cost pool, which is subject to amortization and periodically assessed for impairment through a ceiling test calculation discussed below.

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation and Significant Accounting Policies (Continued)

Capitalized costs associated with proved reserves are amortized over the life of the proved reserves using the unit of production method. Conversely, capitalized costs associated with unproved properties are excluded from the amortizable base until these properties are evaluated or it is determined that the costs are impaired. On a quarterly basis, we transfer unproved property costs into the amortizable base when properties are determined to have proved reserves. If costs are determined to be impaired, the amount of any impairment is transferred to the full cost pool if an oil or natural gas reserve base exists, or is expensed if a reserve base has not yet been created. The amortizable base includes future development costs; dismantlement, restoration and abandonment costs, net of estimated salvage values; and geological and geophysical costs incurred that cannot be associated with specific unevaluated properties or prospects in which we own a direct interest.

Our capitalized costs in each country, net of related deferred income taxes, are limited to a ceiling based on the present value of future net revenues from proved reserves less estimated future capital expenditures, discounted at 10 percent, plus the cost of unproved oil and natural gas properties not being amortized, less related income tax effects. We perform this ceiling test calculation each quarter. Prior to December 31, 2009, we utilized end of period spot prices to determine future net revenues. As a result of our adoption of the Securities and Exchange Commission (SEC)'s final rule on the Modernization of Oil and Gas Reporting, effective December 31, 2009, we utilize a 12-month average price (calculated as the unweighted arithmetic average of the price on the first day of each month within the 12-month period prior to the end of the reporting period) when performing the ceiling test. We are also required to hold prices constant over the life of the reserves, even though actual prices of oil and natural gas are volatile and change from period to period. If total capitalized costs exceed the ceiling, we are required to writedown our capitalized costs to the ceiling. Any required write-down is included as a ceiling test charge on our income statement and as an increase to accumulated depreciation, depletion and amortization on our balance sheet. The present value of future net revenues used for our ceiling test calculations excludes the impact of derivatives and the estimated future cash outflows associated with asset retirement liabilities related to proved developed reserves.

When we sell or convey interests in our oil and natural gas properties, we reduce our oil and natural gas reserves for the amount attributable to the sold or conveyed interest. We do not recognize a gain or loss on sales of our oil and natural gas properties, unless those sales would significantly alter the relationship between capitalized costs and proved reserves. We treat sales proceeds on non-significant sales as an adjustment to the cost of our properties.

Property, Plant and Equipment (Other than Oil and Natural Gas Properties)

Our property, plant and equipment, other than our assets accounted for under the full cost method, is recorded at its original cost of construction or, upon acquisition, at the fair value of the assets acquired. We capitalize the major units of property replacements or improvements and expense minor items. We depreciate our property, plant and equipment using the straight-line method over the useful lives of the assets which range from three to 15 years.

Accounting for Asset Retirement Obligations

We record a liability for legal obligations associated with the replacement, removal or retirement of our long-lived assets in the period the obligation is incurred and estimable. Our asset retirement liabilities are initially recorded at their estimated fair value with a corresponding increase to property,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation and Significant Accounting Policies (Continued)

plant and equipment. This increase in property, plant and equipment is then depreciated over the useful life of the asset to which that liability relates. An ongoing expense is recognized for changes in the value of the liability as a result of the passage of time, which we record as depreciation, depletion and amortization expense in our income statement.

Accounting for Stock-Based Compensation

We measure all employee stock-based compensation awards at fair value on the date the awards are granted to employees and recognized compensation cost in our financial statements over the requisite service period. For a further discussion of our stock-based compensation awards, see Note 9.

Environmental Costs and Other Contingencies

Environmental Costs. We record environmental liabilities at their undiscounted amounts on our balance sheet in other current and long-term liabilities when our environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated. Estimates of our environmental liabilities are based on current available facts, existing technology and presently enacted laws and regulations, taking into consideration the likely effects of other societal and economic factors, and include estimates of associated legal costs. These amounts also consider prior experience in remediating contaminated sites, other companies' clean-up experience and data released by the Environmental Protection Agency (EPA) or other organizations. Our estimates are subject to revision in future periods based on actual costs or new circumstances. We capitalize costs that benefit future periods and we recognize a current period charge in operation and maintenance expense when clean-up efforts do not benefit future periods.

We evaluate any amounts paid directly or reimbursed by government sponsored programs and potential recoveries or reimbursements of remediation costs from third parties, including insurance coverage, separately from our liability. Recovery is evaluated based on the creditworthiness or solvency of the third party, among other factors. When recovery is assured, we record and report an asset separately from the associated liability on our balance sheet.

Other Contingencies. We recognize liabilities for other contingencies when we have an exposure that indicates it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where the most likely outcome of a contingency can be reasonably estimated, we accrue a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than any other to occur, the low end of the range is accrued.

Price Risk Management Activities

We enter into derivative contracts on our oil and natural gas products primarily to stabilize cash flows and reduce the risk and financial impact of downward commodity price movements on commodity sales.

Our derivatives are reflected on our balance sheet at their fair value as assets and liabilities from price risk management activities. We classify our derivatives as either current or non-current assets or liabilities based on their anticipated settlement date. We net derivative assets and liabilities on counterparties where we have a legal right of offset.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation and Significant Accounting Policies (Continued)

All of our derivatives are marked-to-market each period and changes in their fair value, as well as any realized amounts, are reflected as operating revenues.

In our cash flow statement, cash inflows and outflows associated with the settlement of our derivative instruments are recognized in operating cash flows. In our balance sheet, receivables and payables resulting from the settlement of our derivative instruments are reported as either trade or affiliate receivables and payables. See Note 5 for a further discussion of our price risk management activities.

Income Taxes

Our operations have been included in El Paso's U.S. federal and certain state returns. We record income taxes on a separate return basis as if we had filed separate income tax returns under our existing structure for the periods presented in accordance with the tax sharing agreement between us and El Paso. El Paso maintains a tax accrual policy to record both regular and alternative minimum taxes for companies included in its consolidated federal and state income tax returns. The policy provides, among other things, that (i) each company in a taxable income position will accrue a current expense equivalent to its federal and state income taxes, and (ii) each company in a tax loss position will accrue a benefit to the extent that its deductions, including general business credits, can be utilized in El Paso's consolidated returns. In certain states, we file and pay directly to the state taxing authorities. El Paso pays all consolidated U.S. federal and state income tax directly to the appropriate taxing jurisdictions and, under a separate tax billing agreement, El Paso bills or refunds us for our portion of these income taxes.

We record current income taxes based on our current taxable income and provide for deferred income taxes to reflect estimated future tax payments and receipts. Deferred taxes represent the tax impacts of differences between the financial statement and tax bases of assets and liabilities and carryovers at each year end. We account for tax credits under the flow-through method, which reduces the provision for income taxes in the year the tax credits first become available.

The realization of our deferred tax assets depends on recognition of sufficient future taxable income in specific tax jurisdictions during periods in which those temporary differences are deductible. We reduce deferred tax assets by a valuation allowance when, based on our estimates, it is more likely than not that a portion of those assets will not be realized in a future period. The estimates utilized in recognition of deferred tax assets are subject to revision, either up or down, in future periods based on new facts or circumstances. Under the tax sharing agreement, in evaluating our valuation allowances, we consider the reversal of existing temporary differences, the existence of taxable income in prior carryback years, tax-planning strategies and future taxable income for each of our taxable jurisdictions, the latter two of which involve the exercise of significant judgment. Changes to our valuation allowances could materially impact our results of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Acquisitions and Divestitures

Acquisitions. During 2011, 2010 and 2009, we acquired the following assets:

	2011		2010		2009

	(In millions)
Domestic oil and natural gas properties(1)	$	—	$	51	$	92
Other		22		—		39

Total	$	22	$	51	$	131

(1): Includes producing properties of approximately $87 million located primarily in Utah during 2009.

Divestitures. During 2011, 2010 and 2009, we sold assets receiving proceeds as follows:

	2011		2010		2009

	(In millions)
Domestic oil and natural gas properties	$	612	$	29	$	93
Processing plants, dehydration facility and gathering systems		—		126		—

Total	$	612	$	155	$	93

In 2011, we sold non-core oil and natural gas properties located in Alabama, Texas and Wyoming in several transactions from which we received proceeds that totaled approximately $596 million. In addition, we received approximately $16 million for the sale of oil and natural gas properties located primarily in Utah that closed in December of 2010. In 2010, we sold our Altamont and Bluebell processing plants and related gathering systems in Utah and our Crystal Gas gathering system, Holly dehydration facility in North Louisiana, and our Camino Real gathering system under construction in Texas to a Midstream affiliate for cash proceeds of approximately $126 million. These properties had a net asset book value of approximately $48 million, estimated asset retirement obligations of approximately $5 million and environmental remediation liabilities of approximately $4 million. Due to the affiliated nature of the sale, no gain or loss was recognized and the difference was reflected as an additional paid-in capital of $91 million. In 2011, we reacquired the Crystal Gas gathering system and the Holly dehydration facility in north Louisiana from the Midstream affiliate for approximately $22 million.

3. Ceiling Test Charges

We are required to conduct quarterly ceiling tests of our capitalized costs in each of our full cost pools. During the years ended December 31, 2011, 2010, and 2009, we recorded the following ceiling test charges:

	2011		2010		2009

	(In millions)
Full cost pool:
U.S.	$	—	$	—	$	2,031
Brazil		152		—		58
Egypt		—		25		34

Total	$	152	$	25	$	2,123

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Ceiling Test Charges (Continued)

During 2011, our non-cash Brazilian ceiling test charge was driven, in part, by the release of certain unevaluated costs into the Brazilian full cost pool primarily as a result of the denial of a necessary environmental permit and the completion of our evaluation of two exploratory wells drilled in 2009 and 2010 without any additions to our proved reserves. See Note 6 for further discussion. We may incur additional ceiling test charges in Brazil in the future depending on the value of our proved reserves, which are subject to change as a result of factors such as prices, costs and well performance. In the future, we may incur ceiling test charges in Egypt depending on the results of our activities and political unrest in that country. We continue to evaluate the commerciality of these areas. The non-cash ceiling test charges recorded in 2009 were primarily due to a decline in commodity prices.

4. Income Taxes

Pretax Income (Loss) and Income Tax Expense (Benefit). The tables below show our pretax income (loss) and the components of income tax expense (benefit) for each of the three years ended December 31:

	2011			2010			2009

	(In millions)
Pretax Income (Loss)
U.S.	$	635		$	736		$	(1,260	)
Foreign		(153	)		(30	)		(113	)

	$	482		$	706		$	(1,373	)

Components of Income Tax Expense (Benefit)
Current
Federal	$	(77	)	$	(71	)	$	82
State		1			3			3
Foreign		(8	)		11			3

		(84	)		(57	)		88

Deferred
Federal		284			314			(526	)
State		19			12			(23	)
Foreign		1			(6	)		(1	)

		304			320			(550	)

Total income tax expense (benefit)	$	220		$	263		$	(462	)

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Income Taxes (Continued)

Effective Tax Rate Reconciliation. Our income taxes included in net income differs from the amount computed by applying the statutory federal income tax rate of 35 percent for the following reasons for each of the three years ended December 31:

	2011			2010			2009

	(In millions, except rates)
Income taxes at the statutory federal rate of 35%	$	169		$	247		$	(481	)
Increase (decrease)
State income taxes, net of federal income tax effect		12			10			(12	)
Earnings from unconsolidated affiliates where we received or will receive dividends		(8	)		(9	)		(5	)
Valuation allowances		23			6			75
Foreign income (loss) taxed at different rates		24			9			(35	)
Other		—			—			(4	)

Income tax expense (benefit)	$	220		$	263		$	(462	)

Effective tax rate		46	%		37	%		34	%

In 2011, our effective tax rate was higher than the statutory rate primarily due to the impact of the Brazilian non-cash ceiling test charge without a corresponding U.S. or Brazilian tax benefit offset by dividend exclusions on earnings from unconsolidated affiliates where we received dividends and the favorable resolution of certain tax matters.

Deferred Tax Assets and Liabilities. The following are the components of our net deferred tax liability as of December 31:

	2011			2010

	(In millions)
Deferred tax liabilities
Property, plant and equipment	$	495		$	78
Investments in unconsolidated affiliates		67			80
Price risk management activities		73			55

Total deferred tax liabilities		635			213

Deferred tax assets
Net operating loss and tax credit carryovers		458			328
Asset retirement obligation, legal and other reserves		112			106
Other		3			2
Valuation allowance		(313	)		(290	)

Total deferred tax assets		260			146

Net deferred tax liabilities	$	375		$	67

Unrecognized Tax Benefits. We are subject to taxation in the U.S. and various states and foreign jurisdictions. With a few exceptions, we are no longer subject to state, local or foreign income tax examinations by tax authorities for years prior to 2001 and U.S. income tax examinations for years prior

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Income Taxes (Continued)

to 2007. For years in which our returns are still subject to review, our unrecognized tax benefits could increase or decrease our income tax expense and effective income tax rates as these matters are finalized. We are currently unable to estimate the range of potential impacts the resolution of any contested matters could have on our financial statements. The following table shows the change in our unrecognized tax benefits during the year:

	2011			2010

	(In millions)
Amount at January 1	$	30		$	22
Tax positions taken in current year		—			7
Foreign currency fluctuations		(1	)		1
Settlements with taxing authorities		(1	)		—

Amount at December 31	$	28		$	30

As of December 31, 2011 and 2010, approximately $21 million and $24 million (net of federal tax benefits) of unrecognized tax benefits and associated interest and penalties would affect our income tax expense and our effective income tax rate if recognized in future periods. We believe it is reasonably possible that the total amount of unrecognized tax benefits (including interest and penalty) could decrease by as much as $18 million over the next 12 months as a result of the anticipated favorable resolution of certain tax matters.

We classify interest and penalties related to unrecognized tax benefits as income taxes in our financial statements. We recognized in our consolidated statements of income ($7) million for 2011 and less than $1 million in 2010 and 2009 for interest and penalties related to unrecognized tax benefits. As of December 31, 2011 and 2010, we had $2 million and $9 million, respectively, of accrued interest and penalties in our consolidated balance sheets.

Net Operating Loss and Tax Credit Carryovers. The table below presents the details of our federal and state net operating loss carryover periods as of December 31, 2011 (in millions):

	Carryover Period

	2012 - 2024		2025 - 2031		Total
U.S. federal net operating loss	$	355	$	461	$	816
State net operating loss		197		143		340

We also have U.S. federal alternative minimum tax credits of $26 million that carry over indefinitely. We have foreign net operating loss carryovers of $332 million and capital loss carryovers of $89 million. The losses related to Brazil are carried over indefinitely and can be utilized up to 30 percent of taxable income and the losses related to Egypt will expire after a five-year carryover period following the start of production. Use of our federal carryover is subject to the limitations provided under Sections 382 and 383 of the Internal Revenue Code as well as separate return limitation year rules of IRS regulations.

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Income Taxes (Continued)

Our intent is to indefinitely reinvest in foreign operations the cumulative undistributed earnings from our foreign subsidiaries. Therefore, we do not record deferred tax liabilities for any U.S. taxes or foreign withholding taxes that may be applicable upon actual or deemed repatriation. At December 31, 2011, we did not have any cumulative undistributed earnings from these investments on which we have not recorded U.S. income taxes.

Valuation Allowances. The realization of our deferred tax assets depends on recognition of sufficient future taxable income in specific tax jurisdictions during periods in which those temporary differences are deductible. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts we believe are more likely than not to be recovered. In evaluating our valuation allowances, we consider the reversal of existing temporary differences, the existence of taxable income in prior carryback years, tax planning strategies and future taxable income for each of our taxable jurisdictions, the latter two of which involve the exercise of significant judgment. Changes to our valuation allowances could materially impact our results of operations.

As of December 31, 2011, our valuation allowance relates to deferred tax assets recorded on foreign net operating losses and temporary differences. The valuation allowance related to our Brazilian and Egyptian net operating losses was initially established primarily as a result of changes in worldwide economic conditions that created uncertainty in our outlook as to future taxable income in those particular tax jurisdictions. In 2011, our valuation allowance increased by $23 million on deferred tax assets associated with Brazil and Egypt net operating losses and ceiling test charges. In 2010, our valuation allowance increased by $6 million on deferred tax assets associated with Brazil and Egypt net operating losses and ceiling test charges. In 2009, we provided a valuation allowance of $75 million on deferred tax assets primarily associated with Brazil net operating losses and ceiling test charges. We believe it is more likely than not that we will realize the benefit of our deferred tax assets, net of existing valuation allowances, after considering the factors discussed above as well as the tax accrual policy with El Paso, as discussed further in Note 1.

Affiliated Taxes. We are a party to a tax accrual policy with El Paso whereby El Paso files U.S. and certain state returns on our behalf. See Note 11 for further discussion.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Financial Instruments

The following table presents the carrying amounts and estimated fair values of our financial instruments as of December 31:

	2011				2010

	Carrying Amount		Fair Value		Carrying Amount			Fair Value
	(In millions)
Long-term debt	$	851	$	765	$	301		$	293

Note payable to affiliate	$	—	$	—	$	781		$	781

Net assets (liabilities) from price risk management activities
Derivatives with third parties	$	199	$	199	$	243		$	243
Derivatives with affiliate		2		2		(6	)		(6	)

Net assets from price risk management activities	$	201	$	201	$	237		$	237

For the years ended December 31, 2011 and 2010, the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable represent fair value because of the short-term nature of these instruments. As of December 31, 2011 and 2010, substantially all of the long-term debt balance was attributable to variable rate debt. We estimated the fair value of debt based on quoted market prices for the same or similar issuances, including consideration of our credit risk related to these instruments.

Oil and natural gas derivatives. We attempt to mitigate a portion of our commodity price risk and stabilize cash flows associated with forecasted sales of oil and natural gas production through the use of oil and natural gas swaps, basis swaps and option contracts. As of December 31, 2011 and 2010, we have oil and natural gas derivatives on 14,530 MBbl and 12,240 MBbl of oil and 105 TBtu and 283 TBtu of natural gas, respectively.

During February and March of 2012, we entered into the following derivative contracts:

	2012				2013				2014

	Volumes(1)		Average Price(1)		Volumes(1)		Average Price(1)		Volumes(1)		Average Price(1)
Natural Gas
Fixed Price Swaps		77	$	2.88		64	$	3.61		37	$	3.96
Oil
Fixed Price Swaps		675	$	108.95		7,429	$	104.83		4,015	$	98.66

(1): Volumes presented are TBtu for natural gas and MBbl for oil. Prices presented are per MMBtu of natural gas and per Bbl of oil.

We use various methods to determine the fair values of our financial instruments. The fair value of a financial instrument depends on a number of factors, including the availability of observable market data over the contractual term of the underlying instrument.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Financial Instruments (Continued)

We separate the fair values of our financial instruments into three levels (Levels 1, 2 and 3) based on our assessment of the availability of observable market data and the significance of non-observable data used to determine fair value. As of December 31, 2011 and 2010, all of our financial instruments were classified as Level 2, which are based on pricing data representative of quoted prices for similar assets and liabilities in active markets (or identical assets and liabilities in less active markets).

Our assessment of an instrument within a level can change over time based on the maturity or liquidity of the instrument, which could result in a change in the classification of our financial instruments between other levels, which are described below:

•: Level 1 instruments' fair values are based on quoted prices in actively traded markets.
•: Level 3 instruments' fair values are partially calculated using pricing data that is similar to Level 2 instruments, but also reflect adjustments for being in less liquid markets or having longer contractual terms.

Financial Statement Presentation. The following table presents the fair value of our derivative financial instruments at December 31. We net our derivative assets and liabilities for counterparties where we have a legal right of offset and classify our derivatives as either current or non-current assets or liabilities based on their anticipated settlement date.

	Level 2

	2011			2010
	(In millions)
Assets
Oil and natural gas derivatives	$	304		$	373
Impact of master netting arrangements		(23	)		(97	)

Total net assets		281			276

Liabilities
Oil and natural gas derivatives		(103	)		(136	)
Impact of master netting arrangements		23			97

Total net liabilities		(80	)		(39	)

Total	$	201		$	237

For the years ended December 31, 2011, 2010 and 2009, we recognized realized and unrealized net gains on our financial derivatives of $284 million, $390 million and $687 million respectively. As of December 31, 2011, 2010 and 2009, the amount of our previously de-designated cash flow hedges included in accumulated other comprehensive income consisted of unrealized losses of $7 million for each of the years 2011 and 2010 and unrealized gains of $259 million for 2009, net of income taxes.

Credit Risk. We are subject to the risk of loss on our financial instruments that we would incur as a result of non-performance by counterparties pursuant to the terms of their contractual obligations. We maintain credit policies with regard to our counterparties to minimize overall credit risk. These policies require (i) the evaluation of potential counterparties' financial condition (including credit rating) and (ii) the use of master netting agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Our assets from price risk

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Financial Instruments (Continued)

management activities at December 31, 2011 represent derivative instruments from eight counterparties; all of which are financial institutions that have an "investment grade" (minimum Standard & Poor's rating of A or better) credit rating. We enter into derivatives directly with third parties and are not currently required to post collateral or other security for credit risk. Subject to the terms of our $1 billion revolving credit facility, collateral or other securities are not exchanged in relation to price risk management activities with the parties in the revolving credit facility.

6. Property, Plant and Equipment

Unevaluated Capitalized Costs. Unevaluated capitalized costs of oil and natural gas properties were as follows:

	December 31

	2011		2010
	(In millions)
U.S.
Acquisition	$	301	$	407
Exploration		98		130

Total U.S.		399		537

Egypt & Brazil
Acquisition		36		45
Exploration		46		203

Total Egypt & Brazil		82		248

Worldwide	$	481	$	785

During 2011, we released approximately $86 million of our unevaluated capitalized costs to our Brazilian full cost pool upon completing our evaluation of certain exploratory wells drilled in 2009 and 2010 and also released approximately $94 million related to a Brazilian development project where we were denied a necessary environmental permit. These actions contributed to a ceiling test charge recorded on the Brazilian full cost pool during 2011. See Note 3 for a further discussion. At December 31, 2011, we have total oil and natural gas capitalized costs of approximately $74 million and $205 million in Egypt and Brazil, of which $74 million and $8 million are unevaluated capitalized costs.

In estimating the liability associated with our asset retirement obligations, we utilize several assumptions, including credit-adjusted risk-free rates ranging from 5 to 12 percent and a projected inflation rate of 2.5 percent. Changes in estimate represent changes to the expected amount and timing of payments to settle our asset retirement obligations. Typically, these changes primarily result from obtaining new information about the timing of our obligations to plug our oil and natural gas wells and the costs to do so. The net asset retirement liability as of December 31 reported on our balance sheet

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Property, Plant and Equipment (Continued)

in other current and non-current liabilities, and the changes in the net liability for the years ended December 31 were as follows:

	2011			2010

	(In millions)
Net asset retirement liability at January 1	$	135		$	169
Liabilities settled		(11	)		(26	)
Accretion expense		13			16
Liabilities incurred		2			2
Liabilities transferred to affiliate		1			(5	)
Changes in estimate		13			(21	)

Net asset retirement liability at December 31	$	153		$	135

7. Debt and Available Credit Facilities

Our long-term debt and available credit facilities consisted of the following at December 31:

			Amount Outstanding

	Interest Rate		Amount Outstanding
Description	Interest Rate	Term	2011		2010
			(In millions)
$1 billion revolving credit facility	Variable	June 2, 2016	$	850	$	—
$1 billion revolving credit facility	Variable	September 7, 2012		—		300
Senior notes	7.75%	June 1, 2013		1		1

Total			$	851	$	301

$1 Billion Revolving Credit Facility. As of December 31, 2011, we had $150 million of available capacity under this facility. Based on December 31, 2011 borrowing levels, we pay interest at LIBOR plus 2.25% on our borrowings and a commitment fee of 0.50% on any unused capacity. This facility is collateralized by certain of our oil and natural gas properties. The credit agreement is subject to a borrowing base redetermination on a semiannual basis. Subsequent to December 31, 2011, we borrowed an additional $110 million under our revolving credit facility.

The availability of borrowings under the facilities is subject to various conditions, which include compliance with the financial covenants and ratios required by the facilities, absence of default under the facilities, and the continued accuracy of the representations and warranties contained in the facilities. The financial coverage ratios under the facilities require that our EBITDA (as defined in the facilities) to interest expense ratio not be less than 2.0 to 1.0 and our debt (as defined in the facilities) to EBITDA ratio not to exceed 4.0 to 1.0. For the year ended December 31, 2011, we were in compliance with our debt-related covenants.

A downward revision of our oil and natural gas reserves due to future declines in commodity prices, performance revisions or otherwise, could require a redetermination of the borrowing base and could negatively impact our ability to borrow funds from such facilities in the future.

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Debt and Available Credit Facilities (Continued)

We have obtained consent that the KMI acquisition does not trigger a change in control for our revolving credit facility covenants, however when our assets are sold, we will need to either amend our debt agreements or obtain waivers of those covenants at that time.

8. Commitments and Contingencies

Legal Proceedings and Other Contingencies

We and our subsidiaries and affiliates are named defendants in numerous legal proceedings that arise in the ordinary course of our business. There are also other regulatory rules and orders in various stages of adoption, review and/or implementation. For each of these matters, we evaluate the merits of the case or claim, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be estimated, we establish the necessary accruals. While the outcome of these matters cannot be predicted with certainty and there are still uncertainties related to the costs we may incur, based upon our evaluation and experience to date, we believe we have established appropriate reserves. It is possible, however, that new information or future developments could require us to reassess our potential exposure related to these matters and adjust our accruals accordingly, and these adjustments could be material. As of December 31, 2011, we had approximately $5 million accrued for all outstanding legal proceedings and other contingent matters, not including sales tax reserves.

Cash Balance Plan Lawsuit. In December 2004, a purported class action lawsuit entitled Tomlinson, et al. v. El Paso Corporation and El Paso Corporation Pension Plan was filed in U.S. District Court for Denver, Colorado. The lawsuit alleges various violations of the Employee Retirement Income Security Act (ERISA) and the Age Discrimination in Employment Act as a result of our change from a final average earnings formula pension plan to a cash balance pension plan. In 2010, a District Court dismissed all of the claims in this matter. The plaintiffs appealed the dismissal of the case and in August 2011 the Court of Appeals for the Tenth Circuit affirmed the District Court's decision. Plaintiffs filed a petition with the United States Supreme Court to review the case, which was denied. The matter is now resolved with no liability on the part of El Paso or the El Paso Corporation Pension Plan.

Sales Tax Audits. As a result of a sales and use tax audit during 2010, the State of Texas has asserted additional taxes for the audit period 2001-2008 for two of our operating entities. We have recorded reserves of approximately $22 million of which approximately $12 million is being asserted by the state and approximately $10 million is related to interest, penalties and professional fees as of December 31, 2011. We are currently contesting the assessment and the ultimate outcome is still uncertain. These reserves are reported on our balance sheet in other current liabilities.

Environmental Matters

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costs. Our accrual represents a combination of two estimation methodologies. First, where the most likely outcome can be reasonably estimated, that cost has been accrued. Second, where the most likely outcome cannot be estimated, a range of costs is established and if no one amount in that range is more likely than any other, the lower end of the expected range has been accrued. Our exposure could be as high as $1 million. Our environmental remediation projects are in various stages of completion. The liabilities we have recorded reflect our current estimates of amounts that we will expend to remediate these sites. However, depending on the stage of completion or assessment, the ultimate extent of contamination or remediation required may not be known. As additional assessments occur or remediation efforts continue, we may incur additional liabilities.

Climate Change and other Emissions. The Environmental Protection Agency (EPA) and several state environmental agencies have adopted regulations to regulate GHG emissions. Although the EPA has adopted a tailoring rule to regulate GHG emissions, it is not expected to materially impact our existing operations until 2016. However, the tailoring rule is subject to judicial reviews and such reviews could result in the EPA being required to regulate GHG emissions at lower levels that could subject many of our larger facilities to regulation prior to 2016. There have also been various legislative and regulatory proposals and final rules at the federal and state levels to address emissions from power plants and industrial boilers. Although such rules and proposals will generally favor the use of natural gas over other fossil fuels such as coal, it remains uncertain what regulations will ultimately be adopted and when they will be adopted. In addition, any regulations regulating GHG emissions would likely increase our costs of compliance by potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric-driven compression at facilities to obtain regulatory permits and approvals in a timely manner.

Air Quality Regulations. In August 2010, the EPA finalized a rule that impacts emissions of hazardous air pollutants from reciprocating internal combustion engines and requires us to install emission controls on engines across our operations. Engines subject to the regulations have to be in compliance by October 2013. We plan to execute the required modifications and testing in 2013. Our current estimated impact is approximately $4 million in capital expenditures in 2013. In July 2011, the EPA proposed regulations that would subject oil and gas operations to new source performance standards for volatile organic compound emissions. If adopted, these regulations would require oil and gas operators to employ "green completion" technology to reduce methane emissions during the completion of hydraulically fractured wells.

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Matters. As part of our environmental remediation projects, we have received notice that we could be designated,

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or have been asked for information to determine whether we could be designated as a Potentially Responsible Party (PRP) with respect to one active site under the CERCLA or state equivalents. We have sought to resolve our liability as a PRP at this site through indemnification by third parties and settlements which provide for payment of our allocable share of remediation costs. As of December 31, 2011, we have estimated our share of the remediation costs at this site to be less than $1 million. Because the clean-up costs are estimates and are subject to revision as more information becomes available about the extent of remediation required, and in some cases we have asserted a defense to any liability, our estimates could change. Moreover, liability under the federal CERCLA statute may be joint and several, meaning that we could be required to pay in excess of our pro rata share of remediation costs. Our understanding of the financial strength of other PRPs has been considered, where appropriate, in estimating our liabilities. Accruals for these matters are included in the environmental reserve discussed above.

Lease Obligations

We lease office space and various equipment under operating lease agreements. As of December 31, 2011, the annual minimum lease payments under non-cancelable future operating lease commitments are approximately $3 million for each of the years 2012 and 2013 and approximately $2 million for 2014 and thereafter. These amounts exclude minimum annual commitments paid by El Paso, which are allocated to us through an overhead allocation. Rental expense for operating leases, including the overhead allocation, is approximately $2 million for each year ended December 31, 2011, 2010 and 2009.

Other Commercial Commitments

At December 31, 2011, we have various commercial commitments totaling $679 million primarily related to commitments associated with volume and transportation, drilling rig, completion and seismic activities. Our annual obligations under these arrangements are $145 million in 2012, $66 million in 2013, $65 million in 2014, $63 million in 2015, $78 million in 2016 and $262 million thereafter.

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9. Stock-Based Compensation

Overview. Certain employees of the Company (direct employees) participate in El Paso's stock-based compensation plans. The plan permits the granting of various types of awards including, but not limited to non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units and other stock-based awards. Pursuant to the merger agreement with KMI, on closing of the merger, all unvested stock-based compensation awards will immediately vest and become exercisable, with performance shares vesting at 100 percent of targeted shares. At that time, all unrecognized stock-based compensation expense will accelerate. The disclosures and tables that follow are based on the existing terms of our stock-based compensation awards and do not reflect any impacts of the merger agreement with KMI.

We are charged by El Paso for stock-based compensation expense related to our direct employees. El Paso also charges us for the allocated costs of certain indirect employees of El Paso (including stock-based compensation) who provide general and administrative services on our behalf and may become our employees in the future. Information presented herein is limited to stock-based compensation associated with our direct employees. Accordingly, the amounts presented are not necessarily indicative of future performance and do not necessarily reflect the results we would have experienced as an independent company for the periods presented.

Stock based compensation expense is recorded over the requisite service period for each separately vesting portion of the award, net of estimates of forfeitures. If forfeitures differ from estimates, additional adjustments to compensation expense will be required in future periods. For the years ended 2011, 2010, and 2009, total stock-based compensation expense included in operation and maintenance expense was approximately $21 million, $18 million, and $19 million, amounts capitalized as part of fixed assets were $6 million, $5 million and $6 million, and we generated $7 million, $6 million and $7 million of income tax benefits. Total unrecognized stock based compensation cost at December 31, 2011 was approximately $20 million, which is expected to be recognized over a weighted average period of 10 months. During the years ended December 31, 2011, 2010, and 2009, options exercised had a total intrinsic value of $19 million, $2 million and less than $1 million, respectively, and the fair value of restricted shares vested was $15 million, $12 million, and $5 million, respectively.

Non-Qualified Stock Options. El Paso grants non-qualified stock options to our employees at an exercise price equal to the market value of El Paso's stock on the grant date. The stock option awards have contractual terms of 10 years and generally have vested in equal amounts over three years from the grant date. Dividends are not paid on unexercised options. Proceeds upon exercise are paid directly

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to El Paso by our employees. A summary of stock option transactions for the year ended December 31, 2011 is presented below:

			Weighted Average Exercise Price per Share			Aggregate Intrinsic Value (In millions)

Outstanding at December 31, 2010	8,218,613		$	14.25
Granted	441,347		$	18.07
Exercised	(2,243,840	)	$	11.69
Forfeited or canceled	(349,873	)	$	9.74
Expired	(548,350	)	$	53.67

Outstanding at December 31, 2011	5,517,897		$	11.94	6.87	$	81

Vested at December 31, 2011 or expected to vest in the future	5,397,318		$	11.96	6.84	$	79

Exercisable at December 31, 2011	3,106,320		$	12.59	5.86	$	44

Fair Value Assumptions. The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes option-pricing model based on several assumptions. These assumptions are based on El Paso management's best estimate at the time of grant. For the years ended December 31, 2011, 2010 and 2009 the weighted average grant date fair value per share of options granted was $7.26, $4.54 and $2.96.

Listed below is the weighted average of each assumption based on grants in each fiscal year:



Expected Term in Years	6.0		6.0		6.0
Expected Volatility	40	%	40	%	54	%
Expected Dividends	0.5	%	0.5	%	1.5	%
Risk-Free Interest Rate	2.5	%	2.9	%	2.0	%

The expected volatility estimates are based on an analysis of implied volatilities from traded options on El Paso's common stock and from their historical stock price volatility over the expected term. The estimated expected term of the option awards are based on the vesting period and average remaining contractual term, referred to as the "simplified method." This method is used to provide a reasonable basis for estimating the expected term based on insufficient historical data prior to 2006 primarily due to significant changes in the composition of employees receiving stock-based compensation awards.

Restricted Stock. El Paso grants shares of restricted common stock, which carry voting and dividend rights, to our employees. Sale or transfer of these shares is restricted until they vest. The fair value of the restricted shares is determined on the grant date and these shares generally have vested in

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9. Stock-Based Compensation (Continued)

equal amounts over three years from the date of the grant. A summary of the changes in non-vested restricted shares for the year ended December 31, 2011 is presented below:

Nonvested Shares			Weighted Average Grant Date Fair Value per Share

Nonvested at December 31, 2010	1,768,577		$	9.87
Granted	1,411,140		$	18.17
Vested	(796,972	)	$	10.28
Forfeited	(205,189	)	$	12.82

Nonvested at December 31, 2011	2,177,556		$	14.82

The weighted average grant date fair value per share for restricted stock granted during 2011, 2010 and 2009 was $18.17, $11.09 and $6.49, respectively.

Performance Shares. Beginning in 2011, El Paso granted approximately 130,000 performance shares to our officers. The number of performance shares ultimately earned will vary between zero and 200 percent of targeted shares depending on the level of El Paso's total shareholder return ("TSR") relative to that of El Paso's peer group of companies. The performance shares carry dividend rights and cannot be sold or transferred until they vest. The fair value of the performance-based shares granted is estimated on the day of grant using a Monte-Carlo simulation. Of the awards granted, fifty percent vest at the end of a two year performance period beginning January 1, 2011 with a grant date fair value per share of $27.93 and the remaining fifty percent vest at the end of a three year performance period beginning January 1, 2011 with a grant date fair value per share of $27.64. At December 31, 2011, the number of shares that El Paso would issue under the 2011 performance grants, assuming the awards were vested and relative TSR performance was determined at that date, would be approximately 260,000 shares.

10. Investments in Unconsolidated Affiliates

Four Star Oil & Gas Company (Four Star). We account for our investment using the equity method of accounting and report our share of Four Star's earnings as earnings from unconsolidated affiliates on our income statement, net of amortization of the excess of our underlying equity in the net assets. We hold an approximate 49 percent ownership investment in Four Star. We amortize our investment in excess of our underlying equity in the net assets of Four Star using the unit-of-production method over the life of our estimate of Four Star's oil and natural gas reserves. We recorded $34 million, $38 million and $48 million during the years ended December 31, 2011, 2010 and 2009 to amortize our investment in excess of the underlying equity in the net assets of the investment. Our investment in Four Star was greater than our equity in the net assets by $272 million and $306 million at December 31, 2011 and 2010. We received dividends of $46 million, $50 million and $45 million from Four Star in 2011, 2010 and 2009. Below is summarized financial information of the financial

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10. Investments in Unconsolidated Affiliates (Continued)

position and operating results of Four Star as of December 31, 2011 and 2010 and for the years ended December 31, 2011, 2010 and 2009, respectively.

	For the year ended December 31,

	2011		2010		2009
	(In millions)
Operating results data:
Operating revenues	$	252	$	245	$	205
Operating expenses		163		147		148
Net income		59		63		38

	As of December 31,

	2011		2010
	(In millions)
Financial position data:
Current assets	$	68	$	76
Non-current assets		286		305
Current liabilities		64		52
Non-current liabilities		147		150
Equity in net assets		143		179

11. Related Party Transactions

Cash Management Program. Subject to limitations in our credit facility, we participate in El Paso's cash management program, which matches short-term cash surpluses and needs of its participating affiliates, thus minimizing total borrowings from outside sources by El Paso. At December 31, 2010, we had a note payable due to El Paso in the amount of $781 million pursuant to the cash management program. During 2011, we repaid this amount in full and advanced El Paso an additional $236 million in the form of a note receivable. On December 31, 2011, the note receivable was settled in the form of a noncash equity distribution to El Paso. The balance outstanding under the cash management program at December 31, 2011 was zero. The program remains in place and available to us in 2012.

The basis for the interest rate under the cash management program is LIBOR plus 2.25% for 2011, and LIBOR plus 1.25% for 2010 and 2009. The interest rate under the cash management program was 2.52%, 1.52% and 1.48% as of December 31, 2011, 2010 and 2009.

Other Affiliated Transactions. During the ordinary course of conducting our business, we enter into transactions with affiliates primarily related to the sale, transport and hedging of our oil, natural gas

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and NGL production. The following table shows revenues and charges to/from our affiliates for the years ended December 31:

	2011		2010		2009

	(In millions)
Operating revenues	$	634	$	746	$	545
Operating expenses		138		132		92
Reimbursements of operating expenses		3		2		2

•: El Paso Marketing. We sell our natural gas primarily to El Paso Marketing at spot market prices. Substantially all of our affiliated accounts receivable at December 31, 2011 and 2010 related to sales of natural gas to El Paso Marketing. We are also a party to a hedging contract with El Paso Marketing. Realized gains and losses on these hedges are included in our operating revenues.
•: El Paso. El Paso bills us directly for certain general and administrative costs and allocates a portion of its general and administrative costs to us. This allocation is based on the estimated level of resources devoted to our operations and the relative size of our earnings before interest and taxes, gross property and payroll. These expenses are primarily related to management, legal, financial, tax, consultative, administrative and other services, including employee benefits, pension benefits, annual incentive bonuses, rent, insurance, and information technology. El Paso currently bills us directly for compensation expense related to certain stock-based compensation awards granted to our direct employees, and allocates to us our proportionate share of El Paso's corporate compensation expense. General and administrative costs are included in our operation and maintenance expenses.
•: El Paso Pipelines. We contract for services with El Paso's regulated interstate pipelines that provide transportation and related services for our natural gas production. At December 31, 2011 and 2010 we had contractual deposits of $8 million and $7 million with El Paso's regulated interstate pipelines.

Taxes. We are party to a tax accrual policy with El Paso whereby El Paso files U.S. and certain state tax returns on our behalf, as further described in Note 1. At December 31, 2011, we had federal income tax receivables of $6 million, state income taxes payable of $2 million and foreign income taxes payable of $2 million. At December 31, 2010, we had federal income tax receivable of $89 million, state income taxes payable of $1 million and foreign income taxes payable of $3 million. These assets and liabilities are recorded as current assets and current liabilities on our balance sheets. The majority of these balances will become payable to or receivable from El Paso under the tax accrual policy.

Pension and Retirement Benefits. El Paso maintains a primary pension plan, the El Paso Corporation Pension Plan that is a defined benefit plan that covers substantially all of our employees and provides benefits under a cash balance formula. El Paso also maintains a defined contribution plan covering all of our employees. El Paso matches 75 percent of participant basic contributions up to 6 percent of eligible compensation and can also make additional discretionary matching contributions. El Paso is responsible for benefits accrued under these plans and allocates our related costs to us.

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12. Condensed Consolidating Financial Statements

On May 24, 2012, Apollo Global Management LLC ("Apollo") and other private equity investors (collectively, the Sponsors) acquired EP Energy Global LLC (f/k/a EP Energy Corporation) for approximately $7.2 billion. The acquisition was funded with approximately $3.3 billion in equity contributions from the Sponsors and the issuance of approximately $4.25 billion of debt (including secured and unsecured notes issued by EP Energy LLC, who is the parent company of EP Energy Global LLC (subsequent to the acquisition). In conjunction with the sale, a portion of the proceeds were also used to repay approximately $960 million outstanding under EP Energy Corporation's revolving credit facility at that time. The secured and unsecured notes issued in conjunction with the acquisition are fully and unconditionally guaranteed, jointly and severally, by EP Energy LLC's present and future direct and indirect wholly owned material domestic subsidiaries. EP Energy LLC's foreign wholly-owned subsidiaries are not parties to the guarantees (the "Non-Guarantor Subsidiaries"). The following reflects condensed consolidating financial information on a basis consistent with the described debt structure for the guarantor subsidiaries, non-guarantor subsidiaries, and eliminating entries (to combine the entities), as well as consolidated results as of December 31, 2011 and 2010 and for the three years ended December 31, 2011.

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EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2011
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating Revenues
Oil and natural gas sales
Third parties	$	837		$	111		$	—		$	948
Affiliates		634			—			—			634
Realized and unrealized gains on financial derivatives		284			—			—			284
Other		1			—			—			1

Total operating revenues		1,756			111			—			1,867

Operating expenses
Transportation costs		85			—			—			85
Operation and maintenance		363			55			—			418
Depreciation, depletion and amortization		581			31			—			612
Ceiling test charges		24			128			—			152
Impairment of inventory and other assets		6			—			—			6
Taxes, other than income taxes		76			15			—			91

Total operating expenses		1,135			229			—			1,364

Operating income (loss)		621			(118	)		—			503
Loss from unconsolidated affiliates		(7	)		—			—			(7	)
Other income (expense)		1			(3	)		—			(2	)
Interest (expense) income
Third party		(10	)		—			1			(9	)
Affiliated		8			(10	)		(1	)		(3	)

Income (loss) before income taxes		613			(131	)		—			482
Income tax expense (benefit)		228			(8	)		—			220

Income (loss) before earnings from consolidated subsidiaries		385			(123	)		—			262

(Loss) earnings from consolidated subsidiaries		(123	)		—			123			—

Net income (loss)	$	262		$	(123	)	$	123		$	262

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12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2010
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating Revenues
Oil and natural gas sales
Third parties	$	549		$	85		$	—		$	634
Affiliates		746			—			—			746
Realized and unrealized gains on financial derivatives		390			—			—			390
Other		19			—			—			19

Total operating revenues		1,704			85			—			1,789

Operating expenses
Cost of products		15			—			—			15
Transportation costs		73			—			—			73
Operation and maintenance		332			51			—			383
Depreciation, depletion and amortization		450			27			—			477
Ceiling test charges		—			25			—			25
Taxes, other than income taxes		73			12			—			85

Total operating expenses		943			115			—			1,058

Operating income (loss)		761			(30	)		—			731
Loss from unconsolidated affiliates		(7	)		—			—			(7	)
Other income		1			2			—			3
Interest (expense) income
Third party		(17	)		—			1			(16	)
Affiliated		(3	)		(1	)		(1	)		(5	)

Income (loss) before income taxes		735			(29	)		—			706
Income tax expense		253			10			—			263

Income (loss) before earnings from consolidated subsidiaries		482			(39	)		—			443

(Loss) earnings from consolidated subsidiaries		(39	)		—			39			—

Net income (loss)	$	443		$	(39	)	$	39		$	443

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EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2009
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating Revenues
Oil and natural gas sales
Third parties	$	527		$	25		$	—		$	552
Affiliates		545			—			—			545
Realized and unrealized gains on financial derivatives		687			—			—			687
Other		44			—			—			44

Total operating revenues		1,803			25			—			1,828

Operating expenses
Cost of products		31			—			—			31
Transportation costs		66			—			—			66
Operation and maintenance		356			36			—			392
Depreciation, depletion and amortization		430			10			—			440
Ceiling test charges		2,047			76			—			2,123
Impairment of inventory and other assets		25			—			—			25
Taxes, other than income taxes		61			7			—			68

Total operating expenses		3,016			129			—			3,145

Operating loss		(1,213	)		(104	)		—			(1,317	)
Loss from unconsolidated affiliates		(30	)		—			—			(30	)
Other income (expense)		4			(5	)		—			(1	)
Interest (expense) income
Third party		(22	)		—			1			(21	)
Affiliated		(3	)		—			(1	)		(4	)

Loss before income taxes		(1,264	)		(109	)		—			(1,373	)
Income tax benefit		(462	)		—			—			(462	)

Loss before earnings from consolidated subsidiaries		(802	)		(109	)		—			(911	)

(Loss) earnings from consolidated subsidiaries		(109	)		—			109			—

Net (loss) income	$	(911	)	$	(109	)	$	109		$	(911	)

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12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2011
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Current assets
Cash and cash equivalents	$	6		$	19		$	—		$	25
Accounts receivable
Customer, net of allowance of less than $1		119			16			—			135
Affiliates		132			—			—			132
Other, net of allowance of $7		38			1			—			39
Income tax receivable from affiliate		6			—			—			6
Materials and supplies		21			7			—			28
Assets from price risk management activities		272			—			—			272
Other		12			9			—			21

Total current assets		606			52			—			658

Property, plant and equipment, at cost
Oil and natural gas properties
Proved property—full cost method		20,271			1,171			—			21,442
Unevaluated costs excluded from amortization		400			81			—			481
Other property, plant and equipment		142			5			—			147

		20,813			1,257			—			22,070
Less accumulated depreciation, depletion and amortization		17,026			977			—			18,003

Total property, plant and equipment, net		3,787			280			—			4,067

Other assets
Investments in unconsolidated affiliates		346			—			—			346
Investment in consolidated affiliate		2			—			(2	)		—
Assets from price risk management activities		9			—			—			9
Deferred income taxes		—			7			—			7
Unamortized debt issue cost		259			—			(251	)		8
Other		4			—			—			4

		620			7			(253	)		374

Total assets	$	5,013		$	339		$	(253	)	$	5,099

LIABILITIES AND EQUITY
Current liabilities
Accounts payable
Trade	$	140		$	—		$	—		$	140
Affiliates		47			—			—			47
Other		210			48			—			258
Income tax payable		4			—			—			4
Liabilities from price risk management activities		7			—			—			7
Asset retirement obligation		5			—			—			5
Deferred income taxes		91			—			—			91
Other		28			9			—			37

Total current liabilities		532			57			—			589

Long-term debt		851			—			—			851
Non-current note payable to unconsolidated affiliate		—			251			(251	)		—
Other long-term liabilities
Liabilities from price risk management activities		73			—			—			73
Asset retirement obligations		126			22			—			148
Deferred income taxes		291			—			—			291
Other		40			7			—			47

Total non-current liabilities		1,381			280			(251	)		1,410

Commitments and contingencies
Stockholder's equity
Common stock, par value $1 per share; 1,000 shares authorized and outstanding		—			381			(381	)		—
Preferred stock		—			4			(4	)		—
Additional paid-in capital		4,580			393			(393	)		4,580
Accumulated deficit		(1,476	)		(776	)		776			(1,476	)
Accumulated other comprehensive loss		(4	)		—			—			(4	)

Total stockholder's equity		3,100			2			(2	)		3,100

Total liabilities and equity	$	5,013		$	339		$	(253	)	$	5,099

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2010
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Current assets
Cash and cash equivalents	$	67		$	7		$	—		$	74
Accounts receivable
Customer, net of allowance of less than $1		64			14			—			78
Affiliates		170			—			—			170
Other, net of allowance of $7		37			1			—			38
Materials and supplies		32			7			—			39
Income tax receivable from affiliate		89			—			—			89
Assets from price risk management activities		247			—			—			247
Other		14			11			—			25

Total current assets		720			40			—			760

Property, plant and equipment, at cost
Oil and natural gas properties
Proved property—full cost method		19,780			991			—			20,771
Unevaluated costs excluded from amortization		546			239			—			785
Other property, plant and equipment		133			3			—			136

		20,459			1,233			—			21,692
Less accumulated depreciation, depletion and amortization		17,149			819			—			17,968

Total property, plant and equipment, net		3,310			414			—			3,724

Other assets
Investment in consolidated affiliate		(149	)		—			149			—
Investments in unconsolidated affiliates		399			—			—			399
Assets from price risk management activities		29			—			—			29
Deferred income taxes		11			8			—			19
Notes receivable from affiliate		504			—			(504	)		—
Other		7			4			—			11

		801			12			(355	)		458

Total assets	$	4,831		$	466		$	(355	)	$	4,942

LIABILITIES AND EQUITY
Current liabilities
Accounts payable
Trade	$	118		$	—		$	—		$	118
Affiliates		139			—			—			139
Other		118			69			—			187
Income tax payable		4			—			—			4
Liabilities from price risk management activities		14			—			—			14
Asset retirement obligations		34			—			—			34
Deferred income taxes		37			—			—			37
Other		23			6			—			29

Total current liabilities		487			75			—			562

Long-term debt		301			—			—			301
Notes payable to affiliate		781			504			(504	)		781
Other long-term liabilities
Liabilities from price risk management activities		25			—			—			25
Asset retirement obligations		81			20			—			101
Deferred income taxes		49			—			—			49
Other		40			16			—			56

Total non-current liabilities		1,277			540			(504	)		1,313

Commitments and contingencies
Stockholder's equity
Common stock, par value $1 per share; 1,000 shares authorized and outstanding		—			381			(381	)		—
Preferred stock		—			4			(4	)		—
Additional paid-in capital		4,816			118			(118	)		4,816
Accumulated deficit		(1,738	)		(652	)		652			(1,738	)
Accumulated other comprehensive loss		(11	)		—			—			(11	)

Total stockholder's equity		3,067			(149	)		149			3,067

Total liabilities and equity	$	4,831		$	466		$	(355	)	$	4,942

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2011
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities
Net income (loss)	$	262		$	(123	)	$	123		$	262
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		581			31			—			612
Ceiling test charges		24			128			—			152
Deferred income tax expense		303			1			—			304
Earnings from unconsolidated affiliates, adjusted for cash distributions		53			—			—			53
Earnings from consolidated affiliates		123			—			(123	)		—
Other non-cash income items		10			—			—			10
Asset and liability changes
Accounts receivable		(18	)		(2	)		—			(20	)
Materials and supplies		5			—			—			5
Change in price risk management activities, net		47			—			—			47
Accounts payable		(61	)		(6	)		—			(67	)
Income taxes		83			—			—			83
Other asset changes		2			5			—			7
Other liability changes		(15	)		(7	)		—			(22	)

Net cash provided by operating activities		1,399			27			—			1,426

Cash flows from investing activities
Capital expenditures		(1,555	)		(36	)		—			(1,591	)
Cash paid for acquisitions, net of cash acquired		(21	)		(1	)		—			(22	)
Net proceeds from the sale of assets		612			—			—			612
Investment in subsidiary		(6	)		—			6			—
Increase in note receivable with affiliate		(252	)		—			16			(236	)

Net cash (used in) provided by investing activities		(1,222	)		(37	)		22			(1,237	)

Cash flows from financing activities
Proceeds from borrowings under revolving credit facility		2,030			—			—			2,030
Repayment of amounts borrowed under revolving credit facility		(1,480	)		—			—			(1,480	)
Contributions from parent		—			6			(6	)		—
(Decrease) increase in note payable with affiliate		(781	)		16			(16	)		(781	)
Other		(7	)		—			—			(7	)

Net cash (used in) provided by financing activities		(238	)		22			(22	)		(238	)

Change in cash and cash equivalents		(61	)		12			—			(49	)
Cash and cash equivalents
Beginning of period		67			7			—			74

End of period	$	6		$	19		$	—		$	25

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2010
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities
Net income (loss)	$	443		$	(39	)	$	39		$	443
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		450			27			—			477
Ceiling test charges		—			25			—			25
Deferred income tax expense (benefit)		328			(8	)		—			320
Earnings from unconsolidated affiliates, adjusted for cash distributions		57			—			—			57
Earnings from consolidated affiliates		39			—			(39	)		—
Other non-cash income items		5			—			—			5
Asset and liability changes
Accounts receivable		(16	)		(1	)		—			(17	)
Materials and supplies		10			—			—			10
Change in price risk management activities, net		(99	)		—			—			(99	)
Accounts payable		105			(15	)		—			90
Income taxes		(172	)		—			—			(172	)
Other asset changes		1			5			—			6
Other liability changes		(92	)		14			—			(78	)

Net cash provided by operating activities		1,059			8			—			1,067

Cash flows from investing activities
Capital expenditures		(1,161	)		(77	)		—			(1,238	)
Cash paid for acquisitions, net of cash acquired		(51	)		—			—			(51	)
Net proceeds from the sale of assets		155			—			—			155
Increase in note receivable with affiliate		(50	)		—			50			—
Investment in subsidiary		(17	)		—			17			—
Other		4			—			—			4

Net cash (used in) provided by investing activities		(1,120	)		(77	)		67			(1,130	)

Cash flows from financing activities
Proceeds from borrowings under revolving credit facility		500			—			—			500
Repayment of amounts borrowed under revolving credit facility		(1,034	)		—			—			(1,034	)
Increase (decrease) in note payable with affiliate		489			50			(50	)		489
Other		(1	)		17			(17	)		(1	)

Net cash (used in) provided by financing activities		(46	)		67			(67	)		(46	)

Change in cash and cash equivalents		(107	)		(2	)		—			(109	)
Cash and cash equivalents
Beginning of period		174			9			—			183

End of period	$	67		$	7		$	—		$	74

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EP ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Condensed Consolidating Financial Statements (Continued)

EP ENERGY CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2009
(In millions)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities
Net income (loss)	$	(911	)	$	(109	)	$	109		$	(911	)
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion and amortization		430			10			—			440
Ceiling test charges		2,047			76			—			2,123
Deferred income tax benefit		(550	)		—			—			(550	)
Earnings from unconsolidated affiliates, adjusted for cash distributions		75			—			—			75
Earnings from consolidated affiliates		109			—			(109	)		—
Other non-cash income items		31			—			—			31
Asset and liability changes
Accounts receivable		110			(8	)		—			102
Materials and supplies		25			(7	)		—			18
Change in price risk management activities, net		150			—			—			150
Accounts payable		(77	)		22			—			(55	)
Income taxes		140			—			—			140
Other asset changes		(22	)		(5	)		—			(27	)
Other liability changes		28			9			—			37

Net cash provided by (used in) operating activities		1,585			(12	)		—			1,573

Cash flows from investing activities
Capital expenditures		(880	)		(235	)		—			(1,115	)
Cash paid for acquisitions, net of cash acquired		(92	)		(39	)		—			(131	)
Net proceeds from the sale of assets		89			4			—			93
Investment in subsidiary		(193	)		—			193			—
(Decrease) increase in note receivable with affiliate		(81	)		—			81			—
Other		(3	)		—			—			(3	)

Net cash (used in) provided by investing activities		(1,160	)		(270	)		274			(1,156	)

Cash flows from financing activities
Proceeds from borrowings under revolving credit facility		100			—			—			100
Repayment of amounts borrowed under revolving credit facility		(180	)		—			—			(180	)
Contributions from parent		—			193			(193	)		—
(Decrease) increase in note payable with affiliate		(256	)		81			(81	)		(256	)

Net cash (used in) provided by financing activities		(336	)		274			(274	)		(336	)

Change in cash and cash equivalents		89			(8	)		—			81
Cash and cash equivalents
Beginning of period		84			18			—			102

End of period	$	173		$	10		$	—		$	183

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Supplemental Oil and Natural Gas Operations (Unaudited)

EP Energy Corporation is engaged in the exploration for, and the acquisition, development and production of oil, natural gas and NGL, in the United States (U.S.), Brazil and Egypt.

Capitalized Costs. Capitalized costs relating to oil and natural gas producing activities and related accumulated depreciation, depletion and amortization were as follows at December 31 (in millions):

	U.S.		Brazil and Egypt(1)		Worldwide

2011 Consolidated:
Oil and natural gas properties:
Costs subject to amortization	$	20,156	$	1,284	$	21,440
Costs not subject to amortization		399		82		481

		20,555		1,366		21,921
Less accumulated depreciation, depletion and amortization		16,837		1,087		17,924

Net capitalized costs	$	3,718	$	279	$	3,997

2011 Unconsolidated Affiliate—Four Star(2):
Oil and natural gas properties	$	628	$	—	$	628
Less accumulated depreciation, depletion and amortization		489		—		489

Net capitalized costs	$	139	$	—	$	139

2010 Consolidated:
Oil and natural gas properties:
Costs subject to amortization	$	19,676	$	1,091	$	20,767
Costs not subject to amortization		537		248		785

		20,213		1,339		21,552
Less accumulated depreciation, depletion and amortization		16,993		902		17,895

Net capitalized costs	$	3,220	$	437	$	3,657

2010 Unconsolidated Affiliate—Four Star(2):
Oil and natural gas properties	$	614	$	—	$	614
Less accumulated depreciation, depletion and amortization		466		—		466

Net capitalized costs	$	148	$	—	$	148

(1): Capitalized costs for Egypt were $74 million and $66 million as of December 31, 2011 and 2010, included in costs not subject to amortization. During 2011, we recorded a ceiling test charge of $152 million in our Brazilian full cost pool. During 2010, we recorded a ceiling test charge of $25 million in our Egyptian full cost pool.
(2): Amounts represent our approximate 49 percent equity interest in the underlying oil and gas assets of Four Star. Four Star applies the successful efforts method of accounting for its oil and gas properties.

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Total Costs Incurred. Costs incurred in oil and natural gas producing activities, whether capitalized or expensed, were as follows for the year ended December 31 (in millions):

	U.S.		Brazil and Egypt(1)		Worldwide

2011 Consolidated:
Property acquisition costs
Proved properties	$	—	$	—	$	—
Unproved properties		45		—		45
Exploration costs		858		15		873
Development costs		694		12		706

Costs expended		1,597		27		1,624
Asset retirement obligation costs		25		—		25

Total costs incurred	$	1,622	$	27	$	1,649

2011 Unconsolidated Affiliate—Four Star(2):
Development costs expended	$	12	$	—	$	12

2010 Consolidated:
Property acquisition costs
Proved properties	$	51	$	—	$	51
Unproved properties		269		—		269
Exploration costs		600		58		658
Development costs		276		28		304

Costs expended		1,196		86		1,282
Asset retirement obligation costs		7		—		7

Total costs incurred	$	1,203	$	86	$	1,289

2010 Unconsolidated Affiliate—Four Star(2):
Development costs expended	$	20	$	—	$	20

2009 Consolidated:
Property acquisition costs
Proved properties	$	87	$	—	$	87
Unproved properties		89		51		140
Exploration costs		355		67		422
Development costs		324		118		442

Costs expended		855		236		1,091
Asset retirement obligation costs		36		6		42

Total costs incurred	$	891	$	242	$	1,133

2009 Unconsolidated Affiliate—Four Star(2):
Development costs expended	$	10	$	—	$	10

(1): Costs incurred for Egypt were $8 million, $20 million and $81 million for the years ended December 31, 2011, 2010 and 2009.
(2): Amounts represent our approximate 49 percent equity interest in the underlying costs incurred by Four Star.

Pursuant to the full cost method of accounting, we capitalize certain general and administrative expenses directly related to property acquisition, exploration and development activities and interest

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costs incurred and attributable to unproved oil and natural gas properties and major development projects of oil and natural gas properties. The table above includes capitalized internal general and administrative costs incurred in connection with the acquisition, development and exploration of oil and natural gas reserves of $81 million for each of the years ended December 31, 2011 and 2010 and $80 million for the year ended December 31, 2009. We also capitalized interest of $13 million, $9 million and $7 million for the years ended December 31, 2011, 2010 and 2009.

In our December 31, 2011 reserve report, the amounts estimated to be spent in 2012, 2013 and 2014 to develop our consolidated worldwide proved undeveloped reserves are $1,003 million, $1,009 million and $1,329 million, respectively.

Unevaluated Capitalized Costs. We exclude capitalized costs of oil and natural gas properties from amortization that are in various stages of evaluation or are part of a major development project. We expect these costs to be included in the amortization calculation in the next three to five years.

Presented below is an analysis of the capitalized costs of oil and natural gas properties by year of expenditure that are not being amortized as of December 31, 2011 pending determination of proved reserves (in millions):

			Costs Excluded for Years Ended December 31(1)

	Cumulative Balance December 31, 2011		Costs Excluded for Years Ended December 31(1)						Cumulative Balance January 1, 2009
	Cumulative Balance December 31, 2011		2011		2010		2009		Cumulative Balance January 1, 2009
U.S.
Acquisition	$	301	$	20	$	206	$	29	$	46
Exploration		98		80		4		10		4

Total U.S.(2)		399		100		210		39		50

Egypt & Brazil
Acquisition		36		1		—		32		3
Exploration		46		8		20		10		8

Total Egypt & Brazil(3)		82		9		20		42		11

Worldwide	$	481	$	109	$	230	$	81	$	61

(1): Includes capitalized interest of $2 million, $6 million and $2 million for the years ended December 31, 2011, 2010 and 2009.
(2): Includes $155 million related to the Wolfcamp Shale and $94 million related to the Eagle Ford Shale at December 31, 2011.
(3): Includes $8 million related to Brazil at December 31, 2011.

During 2011 we were informed that our environmental permit request for the Pinauna Field in the Camamu Basin was denied. As a result, we released $94 million of unevaluated capitalized costs related to this field into the Brazilian full cost pool. Additionally, during 2011, we released approximately $86 million of unevaluated capitalized costs into the Brazilian full cost pool related to the ES-5 block in the Espirito Santo Basin upon the completion of our evaluation of exploratory wells drilled in 2009 and 2010 without any additions to our proved reserves. We will continue to pursue alternatives for the hydrocarbons discovered in these areas. See Note 3 for further discussion.

Oil and Natural Gas Reserves. Net quantities of proved developed and undeveloped reserves of natural gas, oil and condensate and NGL and changes in these reserves at December 31, 2011 presented in the tables below are based on our internal reserve report. Net proved reserves exclude royalties and interests owned by others and reflect contractual arrangements and royalty obligations in

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effect at the time of the estimate. Our 2010 consolidated proved reserves were consistent with estimates of proved reserves filed with other federal agencies in 2011 except for differences of less than five percent resulting from actual production, acquisitions, property sales, necessary reserve revisions and additions to reflect actual experience.

Ryder Scott Company, L.P. (Ryder Scott), conducted an audit of the estimates of the proved reserves prepared by us as of December 31, 2011. In connection with its audit, Ryder Scott reviewed 86 percent of the properties associated with our proved reserves on a natural gas equivalent basis, representing 87 percent of the total discounted future net cash flows of these proved reserves. Ryder Scott also conducted an audit of the estimates we prepared of the proved reserves of Four Star as of December 31, 2011. In connection with the audit of these proved reserves, Ryder Scott reviewed 87 percent of the properties associated with Four Star's total proved reserves on a natural gas equivalent basis, representing 91 percent of the total discounted future net cash flows. For the reviewed properties, our overall proved reserves estimates are within 10 percent of Ryder Scott's estimates.

										Oil and Condensate									NGL

	Natural Gas (in Bcf)									(in MBbls)									(in MBbls)
	Natural Gas (in Bcf)									(in MBbls)									(in MBbls)			Equivalent Volumes (in Bcfe)
	U.S.			Brazil			Worldwide			U.S.			Brazil			Worldwide			U.S.			Equivalent Volumes (in Bcfe)
Consolidated:
January 1, 2009		2,091			47			2,138			23,910			3,180			27,090			4,159			2,325
Revisions due to prices		(138	)		(2	)		(140	)		13,336			(380	)		12,956			(3,552	)		(84	)
Revisions other than price		(36	)		(6	)		(42	)		3,477			(640	)		2,837			1,511			(16	)
Extensions and discoveries(1)		380			70			450			18,089			2,136			20,225			16			572
Purchases of reserves in place(1)		19			—			19			7,343			—			7,343			—			63
Sales of reserves in place(1)		(49	)		—			(49	)		(1,328	)		—			(1,328	)		(260	)		(59	)
Production		(215	)		(4	)		(219	)		(3,978	)		(100	)		(4,078	)		(1,570	)		(252	)

December 31, 2009		2,052			105			2,157			60,849			4,196			65,045			304			2,549

Revisions due to prices		108			3			111			8,719			88			8,807			105			164
Revisions other than price		(58	)		(13	)		(71	)		7,873			(1,246	)		6,627			6,977			11
Extensions and discoveries(2)		506			—			506			28,141			—			28,141			3,088			693
Purchases of reserves in place(2)		25			—			25			3,045			—			3,045			—			43
Sales of reserves in place(2)		(21	)		—			(21	)		(1,024	)		—			(1,024	)		—			(27	)
Production		(216	)		(10	)		(226	)		(4,363	)		(384	)		(4,747	)		(1,423	)		(263	)

December 31, 2010		2,396			85			2,481			103,240			2,654			105,894			9,051			3,170

Revisions due to prices		(9	)		—			(9	)		713			3			716			—			(5	)
Revisions other than price		44			6			50			(1,630	)		(34	)		(1,664	)		(1,124	)		34
Extensions and discoveries(3)		519			—			519			90,128			—			90,128			7,525			1,105
Purchases of reserves in place(3)		—			—			—			13			—			13			—			—
Sales of reserves in place(3)		(153	)		—			(153	)		(8,983	)		—			(8,983	)		(139	)		(207	)
Production		(231	)		(10	)		(241	)		(5,680	)		(354	)		(6,034	)		(1,068	)		(284	)

December 31, 2011		2,566			81			2,647			177,801			2,269			180,070			14,245			3,813

Unconsolidated Affiliate—Four Star:
January 1, 2009		176			—			176			2,199			—			2,199			5,518			222
Revisions due to prices		(9	)		—			(9	)		23			—			23			(40	)		(9	)
Revisions other than price		10			—			10			100			—			100			456			13
Extensions and discoveries		1			—			1			4			—			4			8			1
Production		(20	)		—			(20	)		(419	)		—			(419	)		(678	)		(26	)

December 31, 2009		158			—			158			1,907			—			1,907			5,264			201

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									Oil and Condensate								NGL

	Natural Gas (in Bcf)								(in MBbls)								(in MBbls)
	Natural Gas (in Bcf)								(in MBbls)								(in MBbls)			Equivalent Volumes (in Bcfe)
	U.S.			Brazil		Worldwide			U.S.			Brazil		Worldwide			U.S.			Equivalent Volumes (in Bcfe)
Revisions due to prices		8			—		8			44			—		44			87			9
Revisions other than price		6			—		6			36			—		36			(325	)		4
Extensions and discoveries		—			—		—			—			—		—			5			—
Production		(17	)		—		(17	)		(364	)		—		(364	)		(573	)		(22	)

December 31, 2010		155			—		155			1,623			—		1,623			4,458			192

Revisions due to prices		(5	)		—		(5	)		31			—		31			(28	)		(5	)
Revisions other than price		2			—		2			221			—		221			1,034			9
Extensions and discoveries		—			—		—			—			—		—			—			—
Production		(17	)		—		(17	)		(306	)		—		(306	)		(556	)		(22	)

December 31, 2011		135			—		135			1,569			—		1,569			4,908			174

Total Combined:
December 31, 2009		2,210			105		2,315			62,756			4,196		66,952			5,568			2,750

December 31, 2010		2,551			85		2,636			104,863			2,654		107,517			13,509			3,362

December 31, 2011		2,701			81		2,782			179,370			2,269		181,639			19,153			3,987

Consolidated:
Proved developed reserves:
January 1, 2011		1,559			75		1,634			38,278			2,403		40,681			6,096			1,914
December 31, 2011		1,488			81		1,569			46,797			2,269		49,066			5,168			1,895
Proved undeveloped reserves:
January 1, 2011		837			10		847			64,962			251		65,213			2,955			1,256
December 31, 2011		1,078			—		1,078			131,004			—		131,004			9,077			1,918
Unconsolidated Affiliate—Four Star:
Proved developed reserves:
January 1, 2011		129			—		129			1,574			—		1,574			3,483			159
December 31, 2011		116			—		116			1,520			—		1,520			4,066			150
Proved undeveloped reserves:
January 1, 2011		26			—		26			49			—		49			975			32
December 31, 2011		19			—		19			49			—		49			842			24
Total Combined:
Proved developed reserves:
January 1, 2011		1,688			75		1,763			39,852			2,403		42,255			9,579			2,074
December 31, 2011		1,604			81		1,685			48,317			2,269		50,586			9,234			2,045
Proved undeveloped reserves:
January 1, 2011		863			10		873			65,011			251		65,262			3,930			1,288
December 31, 2011		1,097			—		1,097			131,053			—		131,053			9,919			1,942

(1): In 2009, of the 572 Bcfe of extensions and discoveries, 301 Bcfe related to the Central division, of which, 208 Bcfe related to the Haynesville Shale and 70 Bcfe related to the Holly/Kingston fields. We also had 147 Bcfe of extensions and discoveries related to Altamont in the Western division and 83 Bcfe related to the Camarupim Field in Brazil. In addition, 41 Bcfe of extensions and discoveries related to the Gulf Coast division, of which, 14 Bcfe related to Eugene Island 364/365 in the Gulf of Mexico and 12 Bcfe related to the Wilcox area in South Texas. In 2009, we acquired interests in domestic oil and natural gas producing properties located in the Western division. We also sold domestic natural gas producing properties located in the Central and Western divisions.
(2): In 2010, of the 693 Bcfe of extensions and discoveries, 452 Bcfe related to the Central division, of which, 425 Bcfe related to the Haynesville Shale area. There were 238 Bcfe of extensions and discoveries in the Gulf Coast division with 187 Bcfe of that coming from the Eagle Ford Shale. The Western division

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accounted for 3 Bcfe of extensions and discoveries and there were no extensions and discoveries in the International division.

(3): In 2011, of the 1,105 Bcfe of extensions and discoveries, 428 Bcfe related to the Central division, of which, 389 Bcfe related to the Haynesville Shale area. There were 592 Bcfe of extensions and discoveries in the Southern division with 479 Bcfe of that coming from the Eagle Ford Shale and 113 coming from the Wolfcamp Shale. The Western division accounted for 85 Bcfe of extensions and discoveries and there were no extensions and discoveries in the International division.

Beginning December 31, 2009, in accordance with SEC Regulation S-X, Rule 4-10 as amended, we use the 12-month average price calculated as the unweighted arithmetic average of the spot price on the first day of each month within the 12-month period prior to the end of the reporting period. The first day 12-month average U.S. price used to estimate our proved reserves at December 31, 2011 was $4.12 per MMBtu for natural gas and $96.19 per barrel of oil. The prices used for our International assets were contractually defined. The aggregate International price used to estimate our proved reserves at December 31, 2011 was $5.31 per MMBtu for natural gas and $109.29 per barrel of oil.

All estimates of proved reserves are determined according to the rules prescribed by the SEC in existence at the time estimates were made. These rules require that the standard of "reasonable certainty" be applied to proved reserve estimates, which is defined as having a high degree of confidence that the quantities will be recovered. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as more technical and economic data becomes available, a positive or upward revision or no revision is much more likely than a negative or downward revision. Estimates are subject to revision based upon a number of factors, including many factors beyond our control such as reservoir performance, prices, economic conditions and government restrictions. In addition, as a result of drilling, testing and production subsequent to the date of an estimate may justify revision of that estimate. Reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered. Estimating quantities of proved oil and natural gas reserves is a complex process that involves significant interpretations and assumptions and cannot be measured in an exact manner. It requires interpretations and judgment of available technical data, including the evaluation of available geological, geophysical, and engineering data. The accuracy of any reserve estimate is highly dependent on the quality of available data, the accuracy of the assumptions on which they are based upon economic factors, such as oil and natural gas prices, production costs, severance and excise taxes, capital expenditures, workover and remedial costs, and the assumed effects of governmental regulation. In addition, due to the lack of substantial, if any, production data, there are greater uncertainties in estimating proved undeveloped reserves, proved developed non-producing reserves and proved developed reserves that are early in their production life. As a result, our reserve estimates are inherently imprecise.

The meaningfulness of reserve estimates is highly dependent on the accuracy of the assumptions on which they were based. In general, the volume of production from oil and natural gas properties we own declines as reserves are depleted. Except to the extent we conduct successful exploration and development activities or acquire additional properties containing proved reserves, or both, our proved reserves will decline as reserves are produced. Subsequent to December 31, 2011, there have been no major discoveries or other events, favorable or otherwise, that may be considered to have caused a significant change in our estimated proved reserves at December 31, 2011. Current natural gas prices are significantly below the 12-month average price used to determine our domestic proved reserves at December 31, 2011. A sustained period of low domestic natural gas prices will over time result in a downward revision of proved reserves and a corresponding reduction in the discounted future net cash flows from our proved reserves.

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Results of Operations. Results of operations for oil and natural gas producing activities by fiscal year were as follows at December 31 (in millions):

	U.S.			Brazil and Egypt			Worldwide

2011 Consolidated:
Net Revenues(1)
Sales to external customers	$	837		$	111		$	948
Affiliated sales		634			—			634

Total		1,471			111			1,582
Cost of products and services		(91	)		(5	)		(96	)
Production costs(2)		(245	)		(53	)		(298	)
Ceiling test charges(3)		—			(152	)		(152	)
Depreciation, depletion and amortization(4)		(563	)		(32	)		(595	)

		572			(131	)		441
Income tax expense		(207	)		—			(207	)

Results of operations from producing activities	$	365		$	(131	)	$	234

Depreciation, depletion and amortization ($/Mcfe)(4)	$	2.08		$	2.60		$	2.10

2011 Unconsolidated Affiliate—Four Star (5):
Net Revenues—Sales to external customers(1)	$	123		$	—		$	123

Cost of products and services		(4	)		—			(4	)
Production costs(2)		(49	)		—			(49	)
Depreciation, depletion and amortization(6)		(27	)		—			(27	)

		43			—			43
Income tax expense		15			—			15

Results of operations from producing activities	$	28		$	—		$	28

Depreciation, depletion and amortization ($/Mcfe)(6)	$	1.20		$	—		$	1.20

2010 Consolidated:
Net Revenues(1)
Sales to external customers	$	551		$	86		$	637
Affiliated sales		743			—			743

Total		1,294			86			1,380
Cost of products and services		(81	)		(5	)		(86	)
Production costs(2)		(218	)		(46	)		(264	)
Ceiling test charges(3)		—			(25	)		(25	)
Depreciation, depletion and amortization(4)		(432	)		(28	)		(460	)

		563			(18	)		545
Income tax expense		(204	)		—			(204	)

Results of operations from producing activities	$	359		$	(18	)	$	341

Depreciation, depletion and amortization ($/Mcfe)(4)	$	1.72		$	2.33		$	1.75

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	U.S.			Brazil and Egypt		Worldwide

2010 Unconsolidated Affiliate—Four Star (5):
Net Revenues—Sales to external customers(1)	$	119		$	—	$	119

Cost of products and services		(4	)		—		(4	)
Production costs(2)		(36	)		—		(36	)
Depreciation, depletion and amortization(6)		(28	)		—		(28	)
Asset impairment		(4	)		—		(4	)

		47			—		47
Income tax expense		(17	)		—		(17	)

Results of operations from producing activities	$	30		$	—	$	30

Depreciation, depletion and amortization ($/Mcfe)(6)	$	1.24		$	—	$	1.24

	U.S.			Brazil and Egypt			Worldwide

2009 Consolidated:
Net Revenues(1)
Sales to external customers	$	534		$	25		$	559
Affiliated sales		538			—			538

Total		1,072			25			1,097
Cost of products and services		(72	)		(5	)		(77	)
Production costs(2)		(226	)		(26	)		(252	)
Ceiling test charges(3)		(2,031	)		(92	)		(2,123	)
Depreciation, depletion and amortization(4)		(415	)		(9	)		(424	)

		(1,672	)		(107	)		(1,779	)
Income tax benefit		605			—			605

Results of operations from producing activities	$	(1,067	)	$	(107	)	$	(1,174	)

Depreciation, depletion and amortization ($/Mcfe)(4)	$	1.67		$	2.13		$	1.68

2009 Unconsolidated Affiliate—Four Star (5):
Net Revenues—Sales to external customers(1)	$	100		$	—		$	100

Cost of products and services		(6	)		—			(6	)
Production costs(2)		(37	)		—			(37	)
Depreciation, depletion and amortization(6)		(29	)		—			(29	)

		28			—			28
Income tax expense		(10	)		—			(10	)

Results of operations from producing activities	$	18		$	—		$	18

Depreciation, depletion and amortization ($/Mcfe)(6)	$	1.09		$	—		$	1.09

(1): Excludes the effects of oil and natural gas derivative contracts.
(2): Production costs include lease operating costs and production related taxes, including ad valorem and severance taxes.
(3): Includes $152 million related to Brazil for the year ended December 31, 2011 and $25 million and $34 million related to Egypt for the years ended December 31, 2010 and 2009.

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(4): Includes accretion expense on asset retirement obligations of $13 million or $0.05/Mcfe in 2011 and $16 million or $0.06/Mcfe in 2010 and 2009, respectively.
(5): Results do not include amortization of $34 million, $38 million and $48 million for the years ended December 31, 2011, 2010 and 2009 related to cost in excess of our equity interest in the underlying net assets of Four Star.
(6): Includes accretion expense on asset retirement obligations of $2 million or $0.10/Mcfe in 2011, $1 million or $0.06/Mcfe in 2010 and $2 million or $0.06/Mcfe in 2009.

Standardized Measure of Discounted Future Net Cash Flows. The standardized measure of discounted future net cash flows relating to our consolidated proved oil and natural gas reserves at December 31 is as follows (in millions):

	U.S.			Brazil			Worldwide

2011 Consolidated :
Future cash inflows(1)	$	26,079		$	768		$	26,847
Future production costs		(5,840	)		(415	)		(6,255	)
Future development costs		(6,343	)		(34	)		(6,377	)
Future income tax expenses		(4,086	)		(23	)		(4,109	)

Future net cash flows		9,810			296			10,106
10% annual discount for estimated timing of cash flows		(4,793	)		(97	)		(4,890	)

Standardized measure of discounted future net cash flows	$	5,017		$	199		$	5,216

2011 Unconsolidated Affiliate—Four Star(2) :
Future cash inflows(1)	$	938		$	—		$	938
Future production costs		(348	)		—			(348	)
Future development costs		(66	)		—			(66	)
Future income tax expenses		(201	)		—			(201	)

Future net cash flows		323			—			323
10% annual discount for estimated timing of cash flows		(129	)		—			(129	)

Standardized measure of discounted future net cash flows	$	194		$	—		$	194

2010 Consolidated:
Future cash inflows(1)	$	17,145		$	659		$	17,804
Future production costs		(4,768	)		(325	)		(5,093	)
Future development costs		(3,249	)		(67	)		(3,316	)
Future income tax expenses		(2,403	)		(9	)		(2,412	)

Future net cash flows		6,725			258			6,983
10% annual discount for estimated timing of cash flows		(2,905	)		(77	)		(2,982	)

Standardized measure of discounted future net cash flows	$	3,820		$	181		$	4,001

2010 Unconsolidated Affiliate—Four Star(2) :
Future cash inflows(1)	$	943		$	—		$	943
Future production costs		(404	)		—			(404	)
Future development costs		(34	)		—			(34	)
Future income tax expenses		(192	)		—			(192	)

Future net cash flows		313			—			313
10% annual discount for estimated timing of cash flows		(131	)		—			(131	)

Standardized measure of discounted future net cash flows	$	182		$	—		$	182

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	U.S.			Brazil			Worldwide

2009 Consolidated:
Future cash inflows(1)	$	10,058		$	714		$	10,772
Future production costs		(3,531	)		(339	)		(3,870	)
Future development costs		(1,698	)		(108	)		(1,806	)
Future income tax expenses		(511	)		(17	)		(528	)

Future net cash flows		4,318			250			4,568
10% annual discount for estimated timing of cash flows		(1,744	)		(82	)		(1,826	)

Standardized measure of discounted future net cash flows	$	2,574		$	168		$	2,742

2009 Unconsolidated Affiliate—Four Star(2):
Future cash inflows(1)	$	855		$	—		$	855
Future production costs		(394	)		—			(394	)
Future development costs		(32	)		—			(32	)
Future income tax expenses		(157	)		—			(157	)

Future net cash flows		272			—			272
10% annual discount for estimated timing of cash flows		(110	)		—			(110	)

Standardized measure of discounted future net cash flows	$	162		$	—		$	162

(1): The company had no commodity-based derivative contracts designated as accounting hedges at December 31, 2011, 2010 and 2009. Amounts also exclude the impact on future net cash flows of derivatives not designated as accounting hedges.
(2): Amounts represent our approximate 49 percent equity interest in Four Star.

For the calculations in the preceding table, estimated future cash inflows from estimated future production of proved reserves as of December 31, 2011 were computed using a first day 12-month average U.S. price of $4.12 per MMBtu for natural gas and $96.19 per barrel of oil. The aggregate international price used to estimate our proved reserves at December 31, 2011 was $5.31 per MMBtu for natural gas and $109.29 per barrel of oil.

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Changes in Standardized Measure of Discounted Future Net Cash Flows. The following are the principal sources of change in our consolidated worldwide standardized measure of discounted future net cash flows (in millions):

	Years Ended December 31,(1)

	2011			2010			2009
	(In millions)
Consolidated:
Sales and transfers of oil and natural gas produced net of production costs	$	(1,200	)	$	(1,042	)	$	(779	)
Net changes in prices and production costs		1,057			1,734			(1,455	)
Extensions, discoveries and improved recovery, less related costs		2,140			986			646
Changes in estimated future development costs		(415	)		(226	)		45
Previously estimated development costs incurred during the period		601			199			186
Revision of previous quantity estimates		49			315			(94	)
Accretion of discount		430			220			310
Net change in income taxes		(599	)		(934	)		246
Purchases of reserves in place		—			73			121
Sales of reserves in place		(587	)		(47	)		(79	)
Change in production rates, timing and other		(261	)		(19	)		199

Net change	$	1,215		$	1,259		$	(654	)

Unconsolidated Affiliate—Four Star:
Sales and transfers of oil and natural gas produced net of production costs	$	(74	)	$	(83	)	$	(137	)
Net changes in prices and production costs		62			70			(351	)
Extensions, discoveries and improved recovery, less related costs		—			1			1
Changes in estimated future development costs		(14	)		(1	)		22
Revision of previous quantity estimates		6			16			5
Accretion of discount		22			18			57
Net change in income taxes		(9	)		(16	)		137
Change in production rates, timing and other		19			15			32

Net change	$	12		$	20		$	(234	)

(1): This disclosure reflects changes in the standardized measure calculation excluding the effects of hedging activities.

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SCHEDULE II

EP ENERGY CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2011, 2010 and 2009

(In millions)

Description	Balance at Beginning of Period		Charged to Costs and Expenses			Deductions			Charged to Other Accounts			Balance at End of Period

2011
Allowance for doubtful accounts
Customer	$	—	$	—		$	—		$	—		$	—
Other		8		—			(1	)		—			7
Valuation allowance on deferred tax assets		290		23	(1)		—			—			313
Legal reserves		6		—			(1	)		—			5
Environmental reserves		—		1			—			—			1
2010
Allowance for doubtful accounts
Customer	$	3	$	(1	)	$	(1	)	$	(1	)	$	—
Other		7		1			—			—			8
Valuation allowance on deferred tax assets		284		6	(2)		—			—			290
Legal reserves		3		4			(1	)		—			6
Environmental reserves		4		—			—			(4	)		—
2009
Allowance for doubtful accounts
Customer	$	1	$	—		$	—		$	2		$	3
Other		7		1			(1	)		—			7
Valuation allowance on deferred tax assets		209		75	(1)		—			—			284
Legal reserves		4		—			—			(1	)		3
Environmental reserves		5		—			(1	)		—			4

(1): Amounts reflect valuation allowances primarily associated with Brazil and Egypt net operating losses and ceiling test charges.
(2): Amounts reflect valuation allowances primarily associated with Brazil and Egypt net operating losses.

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EP Energy LLC

Everest Acquisition Finance Inc.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

(a) Everest Acquisition Finance Inc. and EPE Nominee Corp. are incorporated under the laws of Delaware.

Section 145 of the Delaware General Corporation Law (the "DGCL") permits each corporation organized thereunder the power to indemnify any person who is or was a director, officer, employee or agent of a corporation or enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, by reason of being or having been in any such capacity, if (i) he acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and (ii) with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

Section 102(b)(7) of the DGCL enables a corporation in its certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders of monetary damages for violations of the directors' fiduciary duty of care, except (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit.

The bylaws of each of the registrants incorporated in Delaware provide that each company will indemnify to the fullest extent of the law every director and officer of the company, or directors and officers of other entities serving at the company's request, against expenses incurred, provided (i) such indemnifiable party acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the company, and (ii) with respect to any criminal proceeding, had no reasonable cause to believe their conduct was unlawful. However, with respect to proceedings brought by the company, under the bylaws of the company, no indemnification will be made in respect of any claim as to which an indemnifiable party has been adjudged to be liable to the company unless the court in which such action was brought determines that, despite adjudication of liability, such indemnifiable party is fairly and reasonably entitled to indemnity for such expenses which the court deems proper. Any indemnification will be made by the company only as authorized by (i) its board of directors, (ii) independent legal counsel if the board of directors cannot obtain a quorum or so directs, or (iii) by the stockholders. Expenses incurred in defending or investigating a threatened or pending action will be paid by the company in advance of the final disposition of such action upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it is ultimately determined that such party is not entitled to be indemnified by the company.

(b) EP Energy LLC, EP Energy Global LLC, EP Energy Brazil, L.L.C., EP Energy Preferred Holdings Company, L.L.C., MBOW Four Star, L.L.C., EP Energy Management, L.L.C., EP Energy Resale Company, L.L.C., EP Energy Gathering Company, L.L.C., and Crystal E&P Company, L.L.C. are each organized as limited liability companies under the laws of Delaware.

Section 18-108 of the Delaware Limited Liability Company Act permits a Delaware limited liability company to indemnify and hold harmless any member or manager of the limited liability company from and against any and all claims and demands whatsoever.

The limited liability company agreement of each of the registrants formed in Delaware indemnifies the sole member and the officers of the company to the fullest extent of the law, provided, that such reimbursement and/or advancement of indemnification amounts will only be provided upon receipt by

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the company of an undertaking by such indemnifiable party that if it is finally judicially determined that such indemnifiable party is not entitled to the indemnification, then such indemnifiable party will promptly repay the company for any reimbursed or advanced expenses.

The limited liability company agreement of EP Energy LLC provides that no indemnification will be made with respect to liability which results from an indemnifiable party's own fraud, gross negligence or willful misconduct.

The limited liability company agreement of each of EP Energy Global LLC, EP Energy Brazil, L.L.C., EP Energy Preferred Holdings Company, L.L.C., MBOW Four Star, L.L.C., EP Energy Management, L.L.C., EP Energy Resale Company, L.L.C., EP Energy Gathering Company, L.L.C. and Crystal E&P Company, L.L.C. provides that no indemnification will be made if a judgment or other final adjudication adverse to an indemnifiable party establishes that such party's conduct did not meet the then applicable minimum statutory standards of conduct. Indemnification with respect to settlements and non-adjudicated dispositions is subject to the prior consent of the company.

(c) EP Energy E&P Company, L.P. is organized as a limited partnership under the laws of Delaware.

Section 17-108 of the Delaware Revised Uniform Limited Partnership Act (the "Act") permits a limited partnership to indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever.

The agreement of limited partnership of EP Energy E&P Company, L.P. does not contain provisions addressing indemnification.

Item 21. Exhibits and Financial Schedules.

(a) Exhibits

See the Exhibit Index immediately following the signature pages included in this Registration Statement.

(b) Financial Statement Schedules

Schedules for the years ended December 31, 2011, 2010 and 2009, are as follows:

Schedule II—Consolidated valuation and qualifying accounts.

Schedule I, III, IV, and V are not applicable and have therefore been omitted.

Item 22. Undertakings.

(a)

Each of the undersigned registrants hereby undertakes:

(1)

to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i): to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii): to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and

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(iii): to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

(2): That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(3): To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(4): The undersigned registrant hereby undertakes as follows: That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form;
(5): The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (h)(1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(6): Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(b): Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of Form S-4 within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(c): Each of the undersigned registrants hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction ,and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY LLC
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President & Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Marguerite N. Woung-Chapman and Dane E. Whitehead, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature	Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik	President & Chief Executive Officer (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead	Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III	Vice President & Controller (Principal Accounting Officer)	September 11, 2012
/s/ GREGORY BEARD Gregory Beard	Manager, EPE Acquisition, LLC	September 11, 2012

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Signature	Capacity	Date


/s/ JOSHUA J. HARRIS Joshua J. Harris	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ CHANG-SEOK JEONG Chang-Seok Jeong	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ PIERRE F. LAPEYRE, JR. Pierre F. Lapeyre, Jr.	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ DAVID LEUSCHEN David Leuschen	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ SAM OH Sam Oh	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ BRENT J. SMOLIK Brent J. Smolik	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ DONALD A. WAGNER Donald A. Wagner	Manager, EPE Acquisition, LLC	September 11, 2012
/s/ RAKESH WILSON Rakesh Wilson	Manager, EPE Acquisition, LLC	September 11, 2012

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Everest Acquisition Finance Inc. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EVEREST ACQUISITION FINANCE INC.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President & Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature	Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik	President, Chief Executive Officer & Director (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead	Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III	Vice President & Controller (Principal Accounting Officer)	September 11, 2012
/s/ GREGORY BEARD Gregory Beard	Director	September 11, 2012
/s/ SAM OH Sam Oh	Director	September 11, 2012
/s/ RAKESH WILSON Rakesh Wilson	Director	September 11, 2012

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Global LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY GLOBAL LLC
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature	Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik	President & Director (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead	Executive Vice President, Chief Financial Officer & Director (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III	Vice President & Controller (Principal Accounting Officer)	September 11, 2012

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Brazil, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY BRAZIL, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Marguerite N. Woung-Chapman and Dane E. Whithead, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY GLOBAL LLC			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Preferred Holdings Company, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY GLOBAL LLC			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, MBOW Four Star, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		MBOW FOUR STAR, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Marguerite N. Woung-Chapman and Dane E. Whitehead, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agent[s, or either of them individually, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

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Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY GLOBAL LLC			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Management, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY MANAGEMENT, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

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Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY GLOBAL LLC			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Resale Company, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY RESALE COMPANY, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY MANAGEMENT, L.L.C.			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy Gathering Company, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY GATHERING COMPANY, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY RESALE COMPANY, L.L.C.			Sole Managing Member	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EP Energy E&P Company, L.P. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EP ENERGY E&P COMPANY, L.P.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Marguerite N. Woung-Chapman and Dane E. Whitehead, and each of them, acting individually and without the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agent[s, or either of them individually, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY MANAGEMENT, L.L.C.			General Partner	September 11, 2012
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EPE Nominee Corp. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		EPE NOMINEE CORP.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature	Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik	President & Director (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead	Executive Vice President, Chief Financial Officer & Director (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III	Vice President & Controller (Principal Accounting Officer)	September 11, 2012

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Crystal E&P Company, L.L.C. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, State of Texas, on the 11th day of September, 2012.


		CRYSTAL E&P COMPANY, L.L.C.
		By:		/s/ BRENT J. SMOLIK Brent J. Smolik President

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.

Signature			Capacity	Date


/s/ BRENT J. SMOLIK Brent J. Smolik			President (Principal Executive Officer)	September 11, 2012
/s/ DANE E. WHITEHEAD Dane E. Whitehead			Executive Vice President & Chief Financial Officer (Principal Financial Officer)	September 11, 2012
/s/ FRANCIS C. OLMSTED III Francis C. Olmsted III			Vice President & Controller (Principal Accounting Officer)	September 11, 2012
EP ENERGY E&P COMPANY, L.P.			Sole Managing Member	September 11, 2012
By:	EP ENERGY MANAGEMENT, L.L.C. its general partner
By:	/s/ BRENT J. SMOLIK
	Name:	Brent J. Smolik
	Title:	President

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EXHIBIT INDEX

Exhibit No.			Exhibit Description

	2.1		Purchase and Sale Agreement among EP Energy Corporation, EP Energy Holding Company and El Paso Brazil, L.L.C., as sellers, and EPE Acquisition, LLC, as purchaser, dated as of February 24, 2012
	2.2		Amendment No. 1 to Purchase and Sale Agreement, dated as of April 16, 2012, among EP Energy, L.L.C. (f/k/a EP Energy Corporation), EP Energy Holding Company, El Paso Brazil, L.L.C. and EPE Acquisition, LLC
	2.3		Amendment No. 2 to Purchase and Sale Agreement, dated as of May 24, 2012, among EP Energy, L.L.C. (f/k/a EP Energy Corporation), EP Energy Holding Company, El Paso Brazil, L.L.C., EP Production International Cayman Company, EPE Acquisition, LLC and solely for purposes of Sections 2 and 5 thereunder, El Paso LLC
	3.1		Certificate of Formation of EP Energy LLC
	3.2		Limited Liability Company Agreement of EP Energy LLC
	3.3		Certificate of Formation of Everest Acquisition Finance Inc.
	3.4		Bylaws of Everest Acquisition Finance Inc.
	3.5		Certificate of Formation of EP Energy Global LLC
	3.6		Limited Liability Company Agreement of EP Energy Global LLC
	3.7		Certificate of Formation of EP Energy Brazil, L.L.C.
	3.8		Second Amended and Restated Limited Liability Company Agreement of EP Energy Brazil, L.L.C.
	3.9		Certificate of Formation of EP Energy Preferred Holdings Company, L.L.C.
	3.10		Limited Liability Company Agreement of EP Energy Preferred Holdings Company, L.L.C.
	3.11		Certificate of Formation of MBOW Four Star, L.L.C.
	3.12		Limited Liability Company Agreement of MBOW Four Start, L.L.C.
	3.13		Certificate of Formation of EP Energy Management, L.L.C.
	3.14		Limited Liability Company Agreement of EP Energy Management, L.L.C.
	3.15		Certificate of Formation of EP Energy Resale Company, L.L.C.
	3.16		Limited Liability Company Agreement of EP Energy Resale Company, L.L.C.
	3.17		Certificate of Formation of EP Energy Gathering Company, L.L.C.
	3.18		First Amended and Restated Limited Liability Company Agreement of EP Energy Gathering Company, L.L.C.
	3.19		Certificate of Limited Partnership of EP Energy E&P Company, L.P.
	3.20		Seventh Amended and Restated Agreement of Limited Partnership of EP Energy E&P Company, L.P.
	3.21		Certificate of Incorporation of EPE Nominee Corp.
	3.22		Bylaws of EPE Nominee Corp.
	3.23		Certificate of Formation of Crystal E&P Company, L.L.C.
	3.24		Second Amended and Restated Limited Liability Company Agreement of Crystal E&P Company, L.L.C.

Table of Contents

Exhibit No.			Exhibit Description

	4.1		Indenture, dated as of April 24, 2012, between EP Energy LLC (f/k/a Everest Acquisition LLC) and Everest Acquisition Finance Inc., as Co-Issuers, and Wilmington Trust, National Association, as Trustee, in respect of 6.875% Senior Secured Notes due 2019
	4.2		Indenture, dated as of April 24, 2012, between EP Energy LLC (f/k/a Everest Acquisition LLC) and Everest Acquisition Finance Inc., as Co-Issuers, and Wilmington Trust, National Association, as Trustee, in respect of 9.375% Senior Notes due 2020
	4.3		Indenture, dated as of August 13, 2012, between EP Energy LLC and Everest Acquisition Finance Inc., as Co-Issuers, and Wilmington Trust, National Association, as Trustee, in respect of 7.750% Senior Notes due 2022
	4.4		Registration Rights Agreement, dated as of April 24, 2012, between EP Energy LLC (f/k/a Everest Acquisition LLC), Everest Acquisition Finance Inc. and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers, in respect of 6.875% Senior Secured Notes due 2019
	4.5		Registration Rights Agreement, dated as of April 24, 2012, between EP Energy LLC (f/k/a Everest Acquisition LLC), Everest Acquisition Finance Inc. and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers, in respect of 9.375% Senior Notes due 2020
	4.6		Registration Rights Agreement, dated as of August 13, 2012, between EP Energy LLC, Everest Acquisition Finance Inc. and Citigroup Global Markets Inc., as representative of the several initial purchasers, in respect of 7.750% Senior Notes due 2022
	5.1		Opinion of Paul Weiss Rifkind Wharton & Garrison LLP
	8.1		Opinion of Paul Weiss Rifkind Wharton & Garrison LLP
	10.1		Credit Agreement, dated as of May 24, 2012, by and among EPE Holdings, LLC, as Holdings, EP Energy LLC (f/k/a Everest Acquisition LLC), as the Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and the other parties party thereto
	10.2		Guarantee Agreement, dated as of May 24, 2012, by and among EPE Holdings LLC, the Domestic Subsidiaries of the Borrower signatory thereto and JPMorgan Chase Bank, N.A., as collateral agent for the Secured Parties referred to therein
	10.3		Collateral Agreement, dated as of May 24, 2012, by and among EPE Holdings LLC, EP Energy LLC (f/k/a Everest Acquisition LLC), each Subsidiary of EP Energy LLC identified therein and JPMorgan Chase Bank, N.A., as Collateral Agent
	10.4		Pledge Agreement, dated as of May 24, 2012, by and among EP Energy LLC (f/k/a Everest Acquisition LLC), each Subsidiary of EP Energy LLC identified therein and JPMorgan Chase Bank, N.A., as Collateral Agent
	10.5		Pledge Agreement, dated as of May 24, 2012, by and among El Paso Brazil, L.L.C., as Pledgor, and JPMorgan Chase Bank, N.A., as Collateral Agent
	10.6		Senior Lien Intercreditor Agreement, dated as of May 24, 2012, among JPMorgan Chase Bank, N.A., as RBL Facility Agent and Applicable First Lien Agent, Citibank, N.A., as Term Facility Agent, Senior Secured Notes Collateral Agent and Applicable Second Lien Agent, Wilmington Trust, National Association, as Trustee under the Senior Secured Notes Indenture, EP Energy LLC and the Subsidiaries of EP Energy LLC named therein
	10.7		Term Loan Agreement, dated as of April 24, 2012, by and among EP Energy LLC (f/k/a Everest Acquisition LLC), as Borrower, the Lenders party thereto, Citibank, N.A., as Administrative Agent and Collateral Agent, and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as Co-Lead Arrangers

Table of Contents

Exhibit No.			Exhibit Description

	10.8		Guarantee Agreement, dated as of April 24, 2012, by and between Everest Acquisition Finance Inc., as Guarantor, and Citibank, N.A., as collateral agent for the Secured Parties referred to therein
	10.9		Collateral Agreement, dated as of May 24, 2012, by and among EP Energy LLC (f/k/a Everest Acquisition LLC), each Subsidiary of EP Energy LLC identified therein and Citibank, N.A., as Collateral Agent
	10.10		Pledge Agreement, dated as of May 24, 2012, by and among EP Energy LLC (f/k/a Everest Acquisition LLC), each Subsidiary of EP Energy LLC identified therein and Citibank, N.A., as Collateral Agent
	10.11		Pledge Agreement, dated as of May 24, 2012, by and among EP Energy Brazil, L.L.C. (f/k/a El Paso Brazil, L.L.C.), as Pledgor, and Citibank, N.A., as Collateral Agent
	10.12		Pari Passu Intercreditor Agreement, dated as of May 24, 2012, among Citibank, N.A., as Second Lien Agent, Citibank, N.A., as Authorized Representative for the Term Loan Agreement, Wilmington Trust, National Association, as the Initial Other Authorized Representative and each additional Authorized Representative from time to time party hereto
	10.13		Transaction Fee Agreement, dated as of May 24, 2012, among EP Energy Global LLC, EPE Acquisition, LLC, Apollo Global Securities, LLC, Riverstone V Everest Holdings, L.P., Access Industries, Inc. and Korea National Oil Corporation
	10.14		Management Fee Agreement, dated as of May 24, 2012, among EP Energy Global LLC, EPE Acquisition, LLC, Apollo Management VII, L.P., Apollo Commodities Management, L.P., With Respect to Series I, Riverstone V Everest Holdings, L.P., Access Industries, Inc. and Korea National Oil Corporation
	10.15		Amendment, dated as of August 17, 2012, to the Credit Agreement, dated as of May 24, 2012, among EPE Holdings LLC, EP Energy LLC, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent
	10.16		Amendment No. 1, dated as of August 21, 2012, to the Term Loan Agreement, dated as of April 24, 2012, among EP Energy LLC, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent
	10.17		Joinder Agreement, dated as of August 21, 2012, among Citibank, N.A., as Additional Tranche B-1 Lender, EP Energy LLC and Citibank, N.A., as administrative agent
	10.18		Employment Agreement dated May 24, 2012 for Clayton A. Carrell
	10.19		Employment Agreement dated May 24, 2012 for John D. Jensen
	10.20		Employment Agreement dated May 24, 2012 for Brent J. Smolik
	10.21		Employment Agreement dated May 24, 2012 for Dane E. Whitehead
	10.22		Employment Agreement dated May 24, 2012 for Marguerite N. Woung-Chapman
	10.23		Senior Executive Survivor Benefit Plan adopted as of May 24, 2012
	10.24		2012 Omnibus Incentive Plan
	10.25		Management Incentive Plan Agreement, dated as of May 24, 2012, between EPE Acquisition, LLC and EPE Employee Holdings, LLC
	10.26		Form of EPE Employee Holdings, LLC Management Incentive Unit Agreement
	10.27		Second Amended and Restated Limited Liability Company Agreement of EPE Employee Holdings, LLC dated as of May 24, 2012

Table of Contents

Exhibit No.			Exhibit Description

	10.28		Second Amended and Restated Limited Liability Company Agreement of EPE Management Investors, LLC dated as of May 24, 2012
	10.29		Amended and Restated Subscription Agreement, dated as of May 24, 2012, between EPE Acquisition, LLC and EPE Management Investors, LLC
	12.1		Statement regarding Computation of Ratios
	21.1		Subsidiaries of EP Energy LLC
	23.1		Consent of Ernst & Young LLP, an independent registered public accounting firm
	23.2		Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm
	23.3		Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included in Exhibits 5.1 and 8.1)
	23.4		Consent of Ryder Scott Company, L.P.
	24.1		Powers of Attorney of the Directors and Officers of the Registrants (included in signature pages)
	25.1		Form T-1 (Wilmington Trust, National Association)
	99.1		Form of Letter of Transmittal
	99.2		Form of Notice of Guaranteed Delivery
	99.3		Form of Letter to Brokers
	99.4		Form of Letter to Clients
	99.5		Ryder Scott Company, L.P. reserve report for El Paso Production Company as of December 31, 2011

Exhibit 2.1

Execution Version

PURCHASE AND SALE AGREEMENT

AMONG

EP ENERGY CORPORATION,

EP ENERGY HOLDING COMPANY

AND

EL PASO BRAZIL, L.L.C.,

AS SELLERS,

AND

EPE ACQUISITION, LLC,

AS PURCHASER

DATED AS OF FEBRUARY 24, 2012

TABLE OF CONTENTS

Article 1	PURCHASE AND SALE	1

Section 1.1.	Purchase and Sale	1
Section 1.2.	Certain Definitions	2
Section 1.3.	Excluded Assets	17

Article 2	PURCHASE PRICE	17

Section 2.1.	Purchase Price	17
Section 2.2.	Allocation of Purchase Price	17
Section 2.3.	Adjustments to Purchase Price	19
Section 2.4.	Closing Payment and Post-Closing Purchase Price Adjustments	21
Section 2.5.	Withholding Rights	22

Article 3	REPRESENTATIONS AND WARRANTIES OF SELLERS	23

Section 3.1.	Sellers	23
Section 3.2.	The Companies	24
Section 3.3.	Company Subsidiaries and the JV Entity	25
Section 3.4.	Financial Statements	27
Section 3.5.	No Undisclosed Liabilities	27
Section 3.6.	Labor Matters	27
Section 3.7.	Employee Benefits	27
Section 3.8.	Accuracy of Data	29
Section 3.9.	Litigation	29
Section 3.10.	Taxes and Assessments	29
Section 3.11.	Environmental Laws	31
Section 3.12.	Compliance with Laws	32
Section 3.13.	Company Contracts	32
Section 3.14.	Preferential Purchase Rights	32
Section 3.15.	Liability for Brokers’ Fees	32
Section 3.16.	Outstanding Capital Commitments	33
Section 3.17.	Absence of Certain Changes	33
Section 3.18.	Governmental Authorizations; Permits	33
Section 3.19.	Assets of the E&P Business	33
Section 3.20.	Insurance	33
Section 3.21.	Intellectual Property	34
Section 3.22.	Oil and Gas Matters	34
Section 3.23.	Royalties	35
Section 3.24.	Qualification	35
Section 3.25.	Affiliate Transactions	36
Section 3.26.	Anti-Corruption Laws; Certain Regulatory Matters	36
Section 3.27.	Limitations	37

Article 4	REPRESENTATIONS AND WARRANTIES OF PURCHASER	39

Section 4.1.	Existence and Qualification	39
Section 4.2.	Power	39
Section 4.3.	Authorization and Enforceability	39
Section 4.4.	No Conflicts	40
Section 4.5.	Consents, Approvals or Waivers	40
Section 4.6.	Litigation	40

Section 4.7.	Financing	40
Section 4.8.	Investment Intent	41
Section 4.9.	Independent Investigation	41
Section 4.10.	Liability for Brokers’ Fees	42

Article 5	COVENANTS OF THE PARTIES	42

Section 5.1.	Access	42
Section 5.2.	Press Releases	43
Section 5.3.	Operation of Business	43
Section 5.4.	Conduct of the Companies and the Company Subsidiaries	45
Section 5.5.	Indemnity Regarding Access	48
Section 5.6.	Reasonable Best Efforts; Further Action	49
Section 5.7.	Intercompany Indebtedness	50
Section 5.8.	Third Person Indebtedness	51
Section 5.9.	Hedges	51
Section 5.10.	Further Assurances	52
Section 5.11.	Employee Matters	52
Section 5.12.	Transition Committee and Transition Services Agreement	55
Section 5.13.	Replacement of Bonds, Letters of Credit and Guarantees; Insurance	55
Section 5.14.	Surviving Agreements	57
Section 5.15.	Preferential Purchase Rights; Consents	57
Section 5.16.	Transfer of Certain Assets Not Held by the Companies or Wholly-Owned Subsidiaries	59
Section 5.17.	Directors’ and Officers’ Indemnification	59
Section 5.18.	Title Matters	60
Section 5.19.	Financing	60
Section 5.20.	Confidentiality	65
Section 5.21.	Release	65
Section 5.22.	Seismic Transfer	66

Article 6	CONDITIONS TO CLOSING	66

Section 6.1.	Conditions of Sellers to Closing	66
Section 6.2.	Conditions of Purchaser to Closing	67

Article 7	CLOSING	68

Section 7.1.	Time and Place of Closing	68
Section 7.2.	Obligations of Sellers at Closing	68
Section 7.3.	Obligations of Purchaser at Closing	69

Article 8	TAX MATTERS	70

Section 8.1.	Liability for Taxes	70
Section 8.2.	Preparation and Filing of Company or Company Subsidiary Tax Returns	72
Section 8.3.	Tax Sharing Agreement	73
Section 8.4.	Access to Information	73
Section 8.5.	Contest Provisions	74
Section 8.6.	Post-Closing Actions Which Affect Sellers’ Tax Liability	74
Section 8.7.	Refunds	75
Section 8.8.	No Duplication	75
Section 8.9.	Cooperation	75
Section 8.10.	Intended U.S. Federal Income Tax Treatment of Transaction	75
Section 8.11.	Section 754 Election	76

Section 8.12.	Conflict	76

Article 9	TERMINATION AND AMENDMENT	76

Section 9.1.	Termination	76
Section 9.2.	Effect of Termination	77

Article 10	INDEMNIFICATION; LIMITATIONS	80

Section 10.1.	Indemnification	80
Section 10.2.	Indemnification Actions	84
Section 10.3.	Casualty and Condemnation	85
Section 10.4.	Limitation on Actions	86

Article 11	MISCELLANEOUS	87

Section 11.1.	Counterparts	87
Section 11.2.	Notices	88
Section 11.3.	Sales or Use Tax, Recording Fees and Similar Taxes and Fees	88
Section 11.4.	Expenses	89
Section 11.5.	Company Records	89
Section 11.6.	Name Change	90
Section 11.7.	Governing Law	90
Section 11.8.	Dispute Resolution	90
Section 11.9.	Captions	91
Section 11.10.	Waivers	91
Section 11.11.	Assignment	91
Section 11.12.	Entire Agreement	92
Section 11.13.	Amendment	92
Section 11.14.	No Third-Person Beneficiaries	92
Section 11.15.	Guarantees	92
Section 11.16.	Headings	92
Section 11.17.	References	92
Section 11.18.	Construction	93
Section 11.19.	Time of Essence	93
Section 11.20.	Non-Recourse	93

iii

EXHIBITS:

Exhibit A	Form of Parent Guarantee

Exhibit B	Form of El Paso Guarantee

Exhibit C	Form of Transition Services Agreement
	Exhibit A	IT Services
	Exhibit B	Payroll Administration
	Exhibit C	Human Resources Services
	Exhibit D	Benefits Administration
	Exhibit E	Legal, Corporate Secretary and Related Services
	Exhibit F	Tax Services
	Exhibit G	Telephone Services
	Exhibit H	Data Subscription Services
	Exhibit I	Access to Travis Place
	Exhibit J	Consulting Services
	Exhibit K	Marketing Services
	Exhibit L	Brazilian Power Services
	Exhibit M	Company Group Consulting Services
	Schedule 2.3(b)	Approved Third Party Providers
	Schedule 4.1	Payment Instructions
	Schedule 8.4	Insurance Coverage

Exhibit D	Form of Lease
	Exhibit A	Floor Plan for Leased Premises
	Exhibit B	Additional Leasehold Improvements and Tenant Finish
	Exhibit C	Rules and Regulations
	Exhibit D	Parking
	Exhibit E	Letter Confirming Commencement Date
	Exhibit F	Operating Expenses
	Exhibit G	Insurance Requirements
	Exhibit H	Renewal, Expansion and Contraction Options
	Exhibit I	Lease Memorandum
	Exhibit J	Building Access and Visitor Desk
	Exhibit K	Tenant Property

Exhibit E	Form of Personal Property Assignment
	Exhibit A	List of Equipment
	Exhibit B	List of Contracts

ANNEX:

Annex 1	Title Matters

	Exhibit C-1, Part 1		Wells
	Exhibit C-1, Part 2		Michigan Undeveloped Leases
	Exhibit C-2		Payment Accounts

Annex 2	Transition Committee Provisions

SCHEDULES:

Schedule 1.2(n)	Capital Expenditure Plans
Schedule 1.2(tt)	Financial Statements
Schedule 1.2(oooo)	Service Employees
Schedule 1.3	Excluded Assets
Schedule 2.4(e)	Bank Account Information
Schedule 3.1(d)	Consents
Schedule 3.2(e)	The Shares
Schedule 3.3	Company Subsidiaries and the JV Entity
Schedule 3.3(f)	Certain Stock Ownership
Schedule 3.5	No Undisclosed Liabilities
Schedule 3.6	Labor Matters
Schedule 3.7	Employee Benefits
Schedule 3.7(e)	Payments Under Benefit Plans
Schedule 3.9(a)	Litigation
Schedule 3.10	Taxes and Assessments
Schedule 3.11	Environmental Laws
Schedule 3.12	Compliance with Laws
Schedule 3.13	Company Contracts Disclosure
Schedule 3.14	Preferential Purchase Rights
Schedule 3.16	Outstanding Capital Commitments
Schedule 3.17	Absence of Certain Changes
Schedule 3.19	Assets of the E&P Business
Schedule 3.20	Insurance
Schedule 3.21(a)	Intellectual Property
Schedule 3.22(b)	Major Midstream Assets
Schedule 3.22(d)	Imbalances
Schedule 3.22(f)	Brazil Concessions
Schedule 3.25	Affiliate Transactions
Schedule 3.27(c)	Sellers Knowledge Persons
Schedule 5.3	Operation of the E&P Business
Schedule 5.4	Conduct of the Companies and the Company Subsidiaries
Schedule 5.8(b)	Certain Third Person Indebtedness
Schedule 5.9	Hedges
Schedule 5.11(b)	Business Employees
Schedule 5.11(c)	Severance Plans
Schedule 5.13	Guarantees, Bonds and Letters of Credit to be Replaced
Schedule 5.14	Surviving Agreements
Schedule 5.15	Preference Rights; Consents
Schedule 5.16	Certain Personal Property
Schedule 6.1(d)	Governmental Consents

Index of Defined Terms

Term		Section
2008-2010 Audited Financials		1.2(tt)
2011 Unaudited Financials		1.2(tt)
Accounting Principles		1.2(a)
Action		1.2(b)
Adjustment Notice		2.4(b)
Affiliate		1.2(c)
Affiliated Apollo Persons		1.2(c)
Affiliated Riverstone Persons		1.2(c)
Affiliate Transaction		3.25
Agreed Rate		1.2(d)
Agreement		Preamble (pg. 1)
Alleged Required Consent		5.15(c)
Allocated Value		Annex 1
Alternate Debt Commitment Letter		5.19(c)
Alternate Financing		5.19(c)
ANP		1.2(e)
Antitrust Laws		5.6(a)
Anti-Corruption Laws		1.2(f)
Asset Unadjusted Purchase Price Allocations		2.2(a)
Audited Reserve Report		3.8
Bank Execution Date		1.2(g)
Bond Escrow Date		1.2(h)
Bond Interests Costs		1.2(i)
BrazilCo		Recitals (pg. 1)
BrazilCo Shares		3.2(e)(iv)
BrazilCos		Recitals (pg. 1)
Brazil Concession Contracts		3.22(f)
Brazil Concessions		1.2(j)
Brazil Holdings		Recitals (pg. 1)
Brazil Holdings Shares		3.2(e)(iii)
Brazil O&G		Recitals (pg. 1)
Brazil O&G Shares		3.2(e)(iv)
Brazil Tax Loss		1.2(k)
Brazilian Shares		1.1
Business Day		1.2(l)
Business Employees		1.2(m)
Capital Expenditure Plan		1.2(n)
Claim		10.2(b)
Claim Notice		10.2(b)
Closing		7.1
Closing Date		7.1
Closing Payment		2.4(a)
Closing Settlement Statement		2.4(a)
Code		1.2(o)
Companies		1.2(p)
Companies Employee Plans		3.7(a)
Company		1.2(p)
Company Contract		1.2(q)

Term		Section
Company Equipment		1.2(r)
Company Mineral Interests		1.2(s)
Company Properties		1.2(t)
Company Records		1.2(u)
Company Representative		1.2(v)
Company Subsidiary		1.2(w)
Company Wells		1.2(x)
Compliant		1.2(y)
Confidentiality Agreement		5.1(a)
Consent Claim Notice		1.2(z)
Consent Notice		5.15(c)
Consent Period		5.15(e)
Contract		1.2(aa)
Controlled Group Liability		1.2(bb)
Covered Persons		11.20
Damages		10.1(d)
Data Room		1.2(cc)
Debt Commitment Letter		4.7(a)(ii)
Debt Financing		4.7(a)(ii)
Debt Financing Expenses		1.2(dd)
Debt Payoff Amount		1.2(ee)
Debt Payoff Letters		1.2(ff)
Debt Providers		4.7(a)(ii)
Defensible Title		Annex 1
Derivatives		1.2(gg)
Determination Date		2.4(b)(ii)
Dispute Auditor		2.4(b)(ii)
Due Date		8.2(d)
E&P Business		1.2(hh)
Effective Time		1.2(ii)
Effective Time Net Working Capital		1.2(jj)
EgyptCos		1.2(kk)
Egypt Production		1.2(ll)
El Paso		6.1(e)
El Paso Guarantee		11.15
El Paso Guarantor		11.15
Employee Plans		1.2(mm)
End Date		9.1
Environmental Laws		3.11
EP Brazil		Preamble (pg. 1)
EP E&P Management		1.2(m); 8.10(a)
EP Energy		Preamble (pg. 1)
EP Egypt		Recitals (pg. 1)
EP Egypt Shares		3.2(e)(v)
EP Preferred Holding LLC		8.10(a)
EP Revolver		1.2(nn)
EPC Insurance Policies		5.13(d)
EPE LLC		Recitals (pg. 1); 8.10(a)
EPE LLC Membership Interests		3.2(e)(i)
Equity Financing		4.7(a)(i)

vii

Term		Section
Equity Funding Letters		4.7(a)(i)
Equity Interests		3.3(d)
Equity Providers		4.7(a)(i)
ERISA		1.2(oo)
ERISA Affiliate		1.2(pp)
Exchange Act		1.2(qq)
Excluded Assets		1.3
Excluded Company Records		1.2(u)(iv)
Execution Date		Preamble (pg. 1)
Existing Business		3.19
FCPA		1.2(f)
FCPA Government Official		1.2(rr)
FCPA Governmental Authority		1.2(ss)
Final Section 2.2(b) Schedule		2.2(b)
Financial Guaranties		5.13(a)
Financial Statements		1.2(tt)
Financing		4.7(a)(ii)
Financing Letters		4.7(a)(ii)
FMLA		1.2(m)
Foreign Loans		5.7
Funding Failure		1.2(uu)
Gathering and Transportation Contracts		1.2(nnn)(ii)
GIC		1.2(c)
Government Official		1.2(vv)
Governmental Authority		1.2(ww)
Governmental Authorizations		1.2(xx)
Hart-Scott-Rodino Act		1.2(yy)
Holly Gathering System		1.2(zz)
Hydrocarbons		1.2(aaa)
Impaired Reserve Asset		Annex 1
Income Tax		1.2(bbb)
Indebtedness		1.2(ccc)
Indemnified Person		10.2(a)
Indemnifying Person		10.2(a)
Independent Appraiser		2.2(b)
Intellectual Property		1.2(ddd)
Investment Grade		5.13(b)
IRS		1.2(eee)
JV Entity		1.2(fff)
Kinder Morgan		6.1(e)
Kinder Morgan Merger		1.2(ggg)
Kinder Morgan Merger Agreement		6.1(e)
KM Transaction Costs and Expenses		1.2(hhh)
Laws		1.2(iii)
Lease		7.2(e)
Liability		1.2(jjj)
LIBOR		1.2(kkk)
Liens		1.2(lll)
Loan(s)		2.3(c)
Major Midstream Assets		3.22(b)

viii

Term		Section
Marketing Period		1.2(mmm)
Material Adverse Effect		3.27(f)
Material Contract		1.2(nnn)
Merger EPE		8.10(a)
Michigan Undeveloped Leases		Annex 1
Multiemployer Plan		1.2(ooo)
Net Mineral Acre(s)		1.2(ppp); Annex 1
New EPE		Preamble (pg. 1)
Non-Income Tax		1.2(qqq)
Non-U.S. Employee Plans		3.7(a)
Obligors		5.13(b)
Occurrence Based Policies		5.13(c)
Operating and Development Agreements		1.2(nnn)(v)
Order		1.2(rrr)
Organizational Documents		1.2(sss)
Other Real Property Interests		Annex 1
Owned Intellectual Property		3.21(a)
Parent Guarantee		11.15
Parties		Preamble (pg. 1)
Party		Preamble (pg. 1)
PBGC		1.2(ttt)
Permit		1.2(uuu)
Permitted Encumbrances		Annex 1
Permitted Liens		1.2(vvv)
Person		1.2(www)
Personal Property Assignment		5.16
Post-Closing Period		1.2(xxx)
Post-Closing Statement		2.4(b)
Post-Effective Time Period		1.2(yyy)
Post-Execution Date Returns		5.4(m)
Pre-Closing Income Taxes		8.1(a)(i)
Pre-Closing Period		1.2(zzz)
Pre-Effective Time Non-Income Taxes		8.1(a)(ii)
Pre-Effective Time Period		1.2(aaaa)
Preliminary Section 2.2(b) Schedule		2.2(b)
Purchase Price		2.1
Purchaser		Preamble (pg. 1)
Purchaser Employee Plans		5.11(e)
Purchaser Fundamental Representations		1.2(bbbb)
Purchaser Guarantors		11.15
Purchaser Indemnified Taxes		8.1(b)(i)
Purchaser Parties		1.2(cccc)
Purchaser Termination Fee		1.2(dddd)
RE Permitted Encumbrances		1.2(eeee)
Representatives		5.19(d)
Requested Swaps		5.9(a)
Required Amount		4.7(b)
Required Consent		5.15(e)
Required Consent Adjustment Amount		5.15(e)
Required Consent Dispute		5.15(d)

Term		Section
Required Information		1.2(ffff)
Reserve Assets		Annex 1
Reserve Reports		5.19(d)(v)
Revolving Credit Facility		1.2(gggg)
Rights of Way		1.2(hhhh)
SEC		1.2(iiii)
Securities Act		1.2(jjjj)
Seller		Preamble (pg. 1)
Seller Employee Plans		3.7(a)
Seller Fundamental Representations		1.2(kkkk)
Seller Fundamental Tax Covenants		1.2(llll)
Seller Fundamental Tax Representations		1.2(mmmm)
Seller Termination Fee		1.2(nnnn)
Sellers		Preamble (pg. 1)
Sellers Indemnified Taxes		8.1(a)(ii)
Sellers Knowledge Person		3.27(c)
Sellers Knowledge Persons		3.27(c)
Service Employees		1.2(oooo)
Severance Plans		5.11(c)
Share Unadjusted Purchase Price Allocation		2.2(a)
Shares		1.1; 1.3
Straddle Income Period		1.2(pppp)
Straddle Non-Income Period		1.2(qqqq)
Subsidiary		1.2(rrrr)
Surviving Agreements		5.14
Tax		1.2(ssss)
Tax Actions		5.4(o)
Tax Affidavits		6.2(f)
Tax Audit		8.5(a)
Tax Indemnified Person		8.5(a)
Tax Indemnified Purchaser Parties		8.1(a)
Tax Indemnified Purchaser Party		8.1(a)
Tax Indemnified Seller Party		8.1(b)
Tax Loss		8.1(a)
Tax Losses		8.1(a)
Tax Return		8.2(a)
Tax Sharing Agreement		8.3
Third-Party Loans		1.2(tttt)
Title Arbitrator		Annex 1
Title Assets		Annex 1
Title Benefit		Annex 1
Title Benefit Amount		Annex 1
Title Claim Date		Annex 1
Title Deductible		Annex 1
Title Defect		Annex 1
Title Defect Amount		Annex 1
Title Defect Notice		Annex 1
Title Threshold		Annex 1
Transaction Costs and Expenses		1.2(uuuu)
Transfer Taxes		11.3

Term		Section
Transition Committee		Annex 2
Transition Services Agreement		7.2(e)
Treasury Regulations		1.2(vvvv)
Unadjusted Purchase Price		2.1
U.S. Employee Plans		3.7(a)
UnoPaso		Recitals (pg. 1)
UnoPaso Shares		3.2(e)(ii)
Unreleased Financial Guaranties		5.13(b)
WARN Act		1.2(wwww)
Well		Annex 1
Wells		Annex 1
Wholly-Owned Subsidiary		1.2(xxxx)
Willful and Material Breach		1.2(yyyy)
Willful and Material Breach Fee		9.2(d)

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “ Agreement ”) is dated as of February 24, 2012 (the “ Execution Date ”), by and among EP Energy Corporation, a corporation organized under the Laws of the State of Delaware (“ EP Energy ”), EP Energy Holding Company, a corporation organized under the Laws of the State of Delaware (“ New EPE ”), El Paso Brazil, L.L.C., a limited liability company organized under the Laws of the State of Delaware (“ EP Brazil ” and together with EP Energy and New EPE, “ Sellers ” and each a “ Seller ”), and EPE Acquisition, LLC, a limited liability company organized under the Laws of the State of Delaware (“ Purchaser ”). Sellers, on the one hand, and Purchaser, on the other hand, are referred to collectively as the “ Parties ” and individually as a “ Party .”

RECITALS

A. New EPE desires, after giving effect to the actions contemplated by Section 8.10 , to sell, and Purchaser desires to purchase (a) all of the issued and outstanding membership interests of EP Energy, LLC, a limited liability company to be organized under the Laws of the State of Delaware resulting from the conversion of EP Energy to a limited liability company in accordance with Section 8.10 (“ EPE LLC ”) and (b) all of the issued and outstanding shares of El Paso E&P S. Alamein Cayman Company, a company incorporated under the Laws of the Cayman Islands (“ EP Egypt ”).

B. EP Brazil desires to sell, and Purchaser desires to purchase (a) all of the issued and outstanding quotas of (i) UnoPaso Exploracao e Producao de Petroleo e Gas Ltda., a company incorporated under the Laws of Brazil (“ UnoPaso ”) and (ii) El Paso Oleo e Gas do Brasil Ltda., a company incorporated under the Laws of Brazil (“ Brazil O&G ”) and (b) all of the issued and outstanding shares of El Paso Brazil Holdings Company, a company incorporated under the Laws of the Cayman Islands (“ Brazil Holdings ” and, together with UnoPaso and Brazil O&G, the “ BrazilCos ” and each a “ BrazilCo ”).

NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article 1
PURCHASE AND SALE

Section 1.1. Purchase and Sale . On the terms and conditions contained in this Agreement, Sellers agree to sell, assign, transfer and convey to Purchaser, and Purchaser agrees to purchase, accept and pay for (i) in the case of New EPE as Seller, the EPE LLC Membership Interests and the EP Egypt Shares, and (ii) in the case of EP Brazil as Seller, the UnoPaso Shares, the Brazil Holdings Shares and the Brazil O&G Shares (the UnoPaso Shares, the Brazil Holdings Shares and the Brazil O&G Shares, collectively, the “ Brazilian Shares ” and together with the EPE LLC Membership Interests and the EP Egypt Shares, the “ Shares ”). For the avoidance of doubt, through its acquisition of the Shares hereunder, Purchaser shall also acquire (and Sellers shall use reasonable best efforts to ensure that Purchaser does acquire) one hundred percent (100%) of the Derivatives (as the same may be impacted by Section 5.9 ) held by any of the Companies or the Company Subsidiaries or otherwise held in respect of the E&P Business; provided, however that the foregoing shall not impose any independent obligation to provide funding from the Sellers.

Section 1.2. Certain Definitions . Capitalized terms set forth in this Agreement have the meanings set forth in this Section 1.2 or in the Sections referenced in the “Index of Defined Terms” at the front of this Agreement. As used herein:

(a) “ Accounting Principles ” means United States generally accepted accounting principles.

(b) “ Action ” means any action, complaint, suit, arbitration or other proceeding, whether civil, criminal, administrative or otherwise, at law or in equity, in each case, instituted by or pending before any Governmental Authority.

(c) “ Affiliate ” means, with respect to any Person, a Person that directly or indirectly controls, is controlled by or is under common control with such Person, with control in such context (including, with its correlative meanings, “controlled by” and “under common control with”) meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by Contract or otherwise. Notwithstanding anything to the contrary, the term “Affiliate” shall not include (i) (A) any investment fund controlled or managed by any affiliate of Purchaser other than Apollo Investment Fund VII, L.P. and (B) any entities owned, managed or controlled by Apollo Investment Fund VII, L.P., any other investment fund Affiliated with Apollo Investment Fund VII, L.P. or any portfolio company or Affiliate of any of the foregoing, other than those entities that directly or indirectly own equity in Purchaser (the “ Affiliated Apollo Persons ”), (ii) (A) any investment fund controlled or managed by any affiliate of Purchaser other than Riverstone Global Energy and Power Fund V, L.P. and (B) any entities owned, managed or controlled by Riverstone Global Energy and Power Fund V, L.P., other than those entities that directly or indirectly own equity in Purchaser (the “ Affiliated Riverstone Persons ”) or (iii) any Person that controls Government of Singapore Investment Corporation Pte Ltd (“ GIC ”) or that, solely by virtue of its control by GIC, would be considered under common control with GIC.

(d) “ Agreed Rate ” means the lesser of (i) LIBOR plus two percentage points (LIBOR + two percent (2%)) and (ii) the maximum rate allowed by applicable Laws.

(e) “ ANP ” means Agência National do Petróleo, Gas Natural e Biocombustiveis of the Federative Republic of Brazil.

(f) “ Anti-Corruption Laws ” means all Laws relating to anti-bribery or anti-corruption (governmental or commercial) that apply to the E&P Business, including Laws that prohibit the payment, offer, promise or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any government official, government employee or commercial entity to obtain a business advantage, including under the relevant laws of Brazil and Egypt, the U.S. Foreign Corrupt Practices Act of 1977, as amended from time to time (the “ FCPA ”) and all other Laws that apply to the E&P Business enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

(g) “ Bank Execution Date ” means the date on which both (i) a definitive form of credit agreement in respect of the bank lending component of the Debt Financing has been agreed by or on behalf of the parties to the Debt Commitment Letter as being in final form for execution by Purchaser and (ii) Purchaser has provided notice to Sellers of such agreement.

(h) “ Bond Escrow Date ” means the date on which any proceeds from the bond offering component of the Debt Financing are placed into escrow.

(i) “ Bond Interest Costs ” means if, and only if, proceeds from the bond component of the Debt Financing have been funded into escrow, the amount of interest paid in connection with the escrow thereof on the applicable bonds prior to the redemption thereof that are funded into such escrow, minus (A) any such interest that is actually released from escrow back to the party or parties that pre-funded such interest and not paid to the holders of the applicable bonds and (B) any net interest or other net earnings on the funds deposited into the applicable escrow.

(j) “ Brazil Concessions ” means the Concessions set forth on Schedule 3.22(f) .

(k) “ Brazil Tax Loss ” means any Tax Loss attributable to a claim for indemnity pursuant to Section 8.1(a)(ii) to the extent that such Tax Loss relates to a Tax imposed by any Governmental Authority of Brazil.

(l) “ Business Day ” means any day other than a Saturday, a Sunday, or a day on which either the SEC or banks are closed for business in New York, New York, United States of America.

(m) “ Business Employees ” means individuals who are (i) employed as common law employees by El Paso Exploration & Production Management, Inc. to be converted into a limited liability company prior to Closing in accordance with Section 8.10(a) (“ EP E&P Management ”), Brazil O&G or Egypt Production or (ii) Service Employees, in each case including any such employees who are not actively at work on the Closing Date due to a leave of absence covered by the Family and Medical Leave Act of 1993 (“ FMLA ”) or any other authorized leave of absence.

(n) “ Capital Expenditure Plan ” means the Capital Expenditure Forecast for 2012 set forth in Schedule 1.2(n) .

(o) “ Code ” means the United States Internal Revenue Code of 1986, as amended.

(p) “ Companies ” means, collectively, EPE LLC, the BrazilCos and the EgyptCos (and, each, a “ Company ”).

(q) “ Company Contract ” means any Contract, agreement or instrument to which any Company or any Company Subsidiary is a party or by which any of their respective assets or properties are bound, provided that the defined term “Company Contract” shall not include any Right of Way or any lease, exploration license, concession, risk service or technical service Contract, development lease or license, or production sharing Contract included in the Company Mineral Interests and other instruments constituting any Company’s or Company Subsidiary’s chain of title to the Company Mineral Interests.

(r) “ Company Equipment ” means all equipment, machinery, vehicles, materials, platforms, wellhead equipment, pumping units, flowlines, tanks, buildings, injection facilities, water disposal facilities, processing and separating facilities, compression facilities, gathering systems, platforms, casing, rods, tanks, boilers, tubing, pumps, motors, machinery, monitoring equipment, fixtures, pipe, tubular goods, equipment inventory, fixtures and other tangible personal property and improvements located on the Company Properties or Rights of Way or used or held for use in connection with the ownership and/or operation of the Company Properties or Rights of Way or the production of Hydrocarbons from the Company Properties.

(s) “ Company Mineral Interests ” means all of the Companies’ or the Company Subsidiaries’ rights, titles, and interests in and to all Hydrocarbon leases and subleases; production sharing Contracts, risk service or technical service Contracts, exploration or production concessions, development leases or licenses, and any rights or interests issued thereunder or in connection therewith; royalties, overriding royalties, net profit interests, mineral fee interests, mineral interests and carried interests; other rights to Hydrocarbons in place; Hydrocarbon entitlements, rights to explore for, appraise, and/or produce Hydrocarbons or receive a share of (or payment with respect to) Hydrocarbons produced pursuant thereto; mineral servitudes, and all other mineral fee, Hydrocarbon leasehold or other interests in any lands, including (i) all pooled, communitized or unitized acreage which includes all or a part of any such interests or other rights and (ii) all tenements, hereditaments and appurtenances belonging thereto.

(t) “ Company Properties ” means the Company Mineral Interests and the Company Wells and all surface fee interests, easements, permits, licenses, servitudes, rights-of-way (including Rights of Way), surface leases and other surface rights or interests appurtenant to, and used or held for use in connection therewith.

(u) “ Company Records ” means all data, information, software, books, files and records of the Companies and the Company Subsidiaries that relate to any period of time prior to the Closing, including all production records, operating records, correspondence, lease records, well logs and other records, and division order records; prospect files; title records (including abstracts of title, title opinions and memoranda, and title curative documents); Contract files; and geological and seismic data (including interpretive data), maps, electric logs, core data, pressure data and decline curves; excluding, however:

(i) any data, information, software and records to the extent disclosure or change in ownership in connection with a sale of Shares is prohibited, other than pursuant to any Contract with Sellers or any of their Affiliates, or subjected to payment of a fee or other consideration by any license agreement or other agreement with a Person other than Affiliates of Sellers, or by applicable Law, and for which no consent to transfer has been received or for which Purchaser has not agreed in writing to pay the fee or other consideration, as applicable;

(ii) all legal records and legal files of Sellers including all work product of and attorney-client communications with any Seller’s legal counsel (other than title opinions and Sellers’ legal records and legal files for litigation, claims or proceedings (including insurance claims) involving or relating to any Company, any Company Subsidiary or the JV Entity or assets of the E&P Business, including any files or records necessary or useful to defend or prosecute any such lawsuit or claim);

(iii) data and records relating to the sale of the Shares, any of the Companies or Company Subsidiaries, or any assets of the E&P Business to the extent the data and records pertain to a proposed sale where there is no Contract of sale by any Seller or any of its Affiliates imposing any current or future obligations on, or providing for any current or future benefits or rights of, any Company or Company Subsidiary, including bids received from and records of negotiations with third Persons; and

(iv) those original data, information, software and records retained by any Seller pursuant to Section 11.5(b) (the records referred to in clauses (i) through (iii) above, the “ Excluded Company Records ”).

(v) “ Company Representative ” means any Company, Company Subsidiary, Seller or other Affiliate of a Company, as well as any director, officer, agent, employee, representative, consultant, or agent for any of the foregoing (individually and collectively).

(w) “ Company Subsidiary ” means any Subsidiary of any of the Companies.

(x) “ Company Wells ” means any and all oil, gas, water, CO2, water disposal or injection wells located on any of the Company Mineral Interests or on the pooled, communitized or unitized acreage that includes all or any part of the Company Mineral Interests.

(y) “ Compliant ” means, with respect to the Required Information, that such Required Information (other than projections, interpretations and other forward-looking information, and information of a general economic or industry-specific nature) does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such Required Information not materially misleading under the circumstances.

(z) “ Consent Claim Notice ” means a notice from (or on behalf of) any Person to the effect that the consent of such Person is or may be (or was or may have been) required with respect to any of the Company Mineral Interests, Company Wells or Rights of Way as a result of the transactions contemplated by this Agreement.

(aa) “ Contract ” means any agreement, contract, obligation, commitment, franchise, indenture, lease, license or other undertaking or legally binding arrangement, whether written or oral.

(bb) “ Controlled Group Liability ” means all Liabilities (i) under Section 302 of ERISA, (ii) under Title IV of ERISA, (iii) under Sections 412 or 4971 of the Code, in the case of clauses (i), (ii) and (iii), that are imposed on the Companies or the Company Subsidiaries under or in respect of an Employee Plan solely by reason of the treatment of the Companies or the Company Subsidiaries as a single employer with another Person as a result of the application of Sections 414(b), (c), (m) or (o) of the Code or by reason of the treatment of the Companies or the Company Subsidiaries as under common control with another Person as a result of the application of Section 4001(b) of ERISA, and (iv) in respect of a Multiemployer Plan that are imposed on the Companies or the Company Subsidiaries on a so-called “controlled group” basis, including under Section 414 of the Code.

(cc) “ Data Room ” means the electronic data room established by or on behalf of Sellers and made available to Purchaser, but solely to the extent of the contents thereof on February 23, 2012, a date prior to the Execution Date.

(dd) “ Debt Financing Expenses ” means an amount equal to (i) the sum of all documented out-of-pocket costs and expenses incurred by or on behalf of Purchaser in connection with the Debt Financing other than the Bond Interest Costs plus (ii) the Bond Interest Costs.

(ee) “ Debt Payoff Amount ” means, with respect to any of the Companies and the Wholly-Owned Subsidiaries as of the Closing Date, the amount set forth in each corresponding Debt Payoff Letter in connection with the payment and discharge of all Third-Party Loans referenced in such Debt Payoff Letter as contemplated by this Agreement.

(ff) “ Debt Payoff Letters ” means customary payoff letters, in form and substance reasonably acceptable to Purchaser, from each lender (or the agent for one or more lenders) of a Third-Party Loan (other than any Loan set forth on Schedule 5.8(b) ) setting forth (i) the aggregate amount, including interest, breakage costs, premiums, prepayment penalties, and other fees and related expenses, required to be paid to satisfy fully all Third-Party Loans owed to such lender (or the agent for one or more lenders) as of the anticipated Closing Date (other than any existing letters of credit relating to

the E&P Business that, pursuant to Section 5.13(a) ), are being cash collateralized, backstopped by a third Person or replaced by the Closing in a manner that permits the applicable Debt Payoff Letter to be received), and a per diem amount for each day thereafter and (ii) wire transfer instructions for such lender. Each Debt Payoff Letter shall provide that, if such amount is paid to such lender (or the agent for one or more lenders) or counterparty on the Closing Date, then such lender or counterparty will automatically release any and all Liens securing such Third-Party Loan that it may have with respect to any Seller’s, any Company’s or any Company Subsidiary’s assets (other than cash collateral that is not prohibited pursuant to Section 5.3 or 5.4 ) and will take all actions necessary to effect such release, including executing and delivering all reasonably necessary documentation and forms suitable for filing with all appropriate Governmental Authorities.

(gg) “ Derivatives ” means futures, options, swaps and other derivatives.

(hh) “ E&P Business ” means the oil and gas exploration and production business and operations, including gathering, treating, pumping, processing and marketing operations related thereto, conducted on the Execution Date by the Companies and the Company Subsidiaries, but excluding such business and operations of the JV Entity and any other Subsidiary of any Seller that is not a Company or Company Subsidiary.

(ii) “ Effective Time ” means 7:00 a.m., local time at the respective location of the assets of the E&P Business, on January 1, 2012.

(jj) “ Effective Time Net Working Capital ” means a negative amount equal to $100,657,908.87.

(kk) “ EgyptCos ” means all or any of (i) El Paso Egypt S. Alamein Company, a company incorporated under the Laws of the Cayman Islands; (ii) El Paso Egypt Tanta Company, a company incorporated under the Laws of the Cayman Islands; (iii) Egypt Production; and (iv) EP Egypt.

(ll) “ Egypt Production ” means El Paso Egypt Production Company, a company incorporated under the Laws of the Cayman Islands.

(mm) “ Employee Plans ” means any employee benefit plans, programs, arrangements and agreements (whether or not written), including (i) all retirement, savings and other pension plans; (ii) all health, severance, insurance, disability and other employee welfare plans and (iii) all employment, incentive, deferred compensation, equity compensation, perquisites, severance, employment, change of control, vacation and other similar plans, programs, practices or agreements, whether or not subject to ERISA and whether covering one person or more than one person.

(nn) “ EP Revolver ” means the Fourth Amended and Restated Credit Agreement dated as of May 27, 2011, among El Paso Corporation, El Paso Natural Gas Company, Tennessee Gas Pipeline Company, the several banks and other financial institutions from time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent.

(oo) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

(pp) “ ERISA Affiliate ” means any other Person that is required to be treated as a single employer with any Seller or any Company under Section 414(b), (c), (m) or (o) of the Code.

(qq) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(rr) “ FCPA Government Official ” means (i) any official, officer, employee, or representative of, or any Person acting in an official capacity for or on behalf of, any FCPA Governmental Authority, (ii) any political party official or candidate for political office or (iii) any company, business, enterprise or other entity owned or controlled by any Person described in the foregoing clauses (i) or (ii).

(ss) “ FCPA Governmental Authority ” means (i) any national, federal, state, county, municipal, local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or administrative functions of a governmental nature, (ii) any public international organization, (iii) any agency, division, bureau, department, or other political subdivision of any government, entity or organization described in the foregoing clauses (i) or (ii), (iv) any company, business, enterprise, or other entity owned or controlled by any government, entity, or organization described in the foregoing clauses (i), (ii) or (iii) or (v) any political party.

(tt) “ Financial Statements ” means (i) EP Energy’s audited consolidated balance sheet and related statements of income, cash flows, retained earnings and capitalization as of and for the fiscal years ended as of December 31, 2010, December 31, 2009 and December 31, 2008 prepared in a manner to comply with Regulation S-X (the “ 2008-2010 Audited Financials ”) and (ii) EP Energy’s unaudited consolidated balance sheet as of December 31, 2011 and related statements of income, cash flows, retained earnings and capitalization for the twelve (12) month period then ended prepared in a manner to comply with Section 3-05 of Regulation S-X (the “ 2011 Unaudited Financials ”), each attached as Schedule 1.2(tt) .

(uu) “ Funding Failure ” means Purchaser’s inability or failure for any reason to make (or obtain funds sufficient to make) the Closing Payment if (i) all conditions precedent to Purchaser’s obligations to make such payment under Section 6.2 are satisfied or waived in accordance with the terms of this Agreement (other than those conditions precedent which by their terms can only be satisfied simultaneously with the Closing but which are capable of being satisfied at the Closing); provided , that if the Marketing Period has not ended at such time, no Funding Failure will exist unless such inability or failure continues to exist at the time provided in Section 7.1 for the occurrence of the Closing, and (ii) Sellers stand ready, willing and able to close.

(vv) “ Government Official ” means (i) any official, officer, employee, or representative of, or any Person acting in an official capacity for or on behalf of, any Governmental Authority or (ii) any political party official or candidate for political office.

(ww) “ Governmental Authority ” means (i) any national, federal, state, county, municipal, local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or administrative functions of a governmental nature or (ii) any agency, division, bureau, department, or other political subdivision of any government, entity or organization described in the foregoing clauses (i) or (ii).

(xx) “ Governmental Authorizations ” means any governmental licenses, permits, franchises, orders, exemptions, variances, waivers, authorizations, certificates, consents, rights, privileges and applications therefor issued by, or submitted to, any Governmental Authority.

(yy) “ Hart-Scott-Rodino Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

(zz) “ Holly Gathering System ” means the gathering system described on Schedule 3.22(b) .

(aaa) “ Hydrocarbons ” means oil, gas, condensate or any other gaseous and liquid hydrocarbons or any combination or constituents thereof, including sulphur and other constituents extracted therefrom.

(bbb) “ Income Tax ” means any U.S. federal or state income Tax, excluding any such Taxes assessed or imposed on Black Warrior Methane Corporation, Black Warrior Transmission Corporation, and Four Star Oil & Gas Company.

(ccc) “ Indebtedness ” means, of any Person at any date and without duplication, (i) all indebtedness of such Person for borrowed money, whether current, short-term or long-term and whether secured or unsecured, including loans, deferred consideration for the purchase of assets, ownership interests, businesses or other property or services (other than deferred consideration for the purchase of assets, ownership interests, businesses or other property or services or other obligations that would be included as current liabilities in accordance with the Accounting Principles) and any lease obligations that are required to be capitalized under the Accounting Principles, (ii) any other indebtedness of such Person which is evidenced by a bond (other than surety, performance, bid, appeal and other similar types of bonds), promissory note, debenture or similar instrument (including a deed of trust or mortgage given in connection with the acquisition of, or exchange for, any property or assets), (iii) all indebtedness of the type referred to in the clauses (i) or (ii) of third Persons guaranteed, directly or indirectly, by such Person or as to which such Person has an obligation, contingent or otherwise (other than a guarantee held in connection with the operation of the E&P Business in the ordinary course), including but not limited to bank debt, bank fees, shareholder debt and vendor debt, that is substantially the economic equivalent of a guarantee, including, in each case above, any interest accrued thereon and prepayment or similar penalties and expenses which would be payable if such liability were paid in full as of the Closing Date, (iv) any amendment, renewal, extension, revision or refunding of any of the foregoing Indebtedness, or (v) net obligations of such Person under any Derivative as of any date of determination that would be payable by such Person were such Derivative terminated on such date (after giving effect to any netting agreements).

(ddd) “ Intellectual Property ” means any of the following, as they exist anywhere in the world, whether registered or unregistered: (i) patents, patentable inventions and other patent rights (including any divisions, continuations, continuations-in-part, reissues, reexaminations and interferences thereof); (ii) trademarks, service marks, trade dress, trade names, taglines, brand names, logos and corporate names and all goodwill related thereto; (iii) copyrights, mask works and designs; (iv) trade secrets, know-how, inventions, processes, procedures, databases, confidential business information and other proprietary information and rights; (v) computer software programs, including all source code, object code, specifications, designs and documentation related thereto and (vi) domain names, Internet addresses and other computer identifiers.

(eee) “ IRS ” means the United States Internal Revenue Service and any successor thereto.

(fff) “ JV Entity ” means Four Star Oil & Gas Company, a Delaware corporation.

(ggg) “ Kinder Morgan Merger ” means the Second Merger as contemplated by and defined in the Kinder Morgan Merger Agreement.

(hhh) “ KM Transaction Costs and Expenses ” means all reasonable and documented out-of-pocket costs and expenses actually incurred by or on behalf of Kinder Morgan in connection with the negotiation and execution of this Agreement with the Purchaser (without duplication of any Transaction Costs and Expenses actually incurred by or on behalf of Sellers or any Affiliate thereof).

(iii) “ Laws ” means all laws, statutes, rules, regulations, ordinances, orders, writs, injunctions, decrees, requirements, judgments and codes of Governmental Authorities, including obligations arising under the common law.

(jjj) “ Liability ” means any liability, debt, obligation, loss, damage, claim, cost or expense (including costs of investigation and defense and attorney’s fees, costs and expenses), in each case, whether direct or indirect, known or unknown and whether accrued or contingent.

(kkk) “ LIBOR ” means, for each applicable day, the rate stated in the “Money Rates” section of The Wall Street Journal published on such day as the one (1) month London Interbank Offered Rate; and if The Wall Street Journal is not published on such day, then the aforesaid rate in the most recent edition of The Wall Street Journal preceding such day shall be utilized for such day; provided , however , if The Wall Street Journal ceases publication of the one (1) month London Interbank Offered Rate, the rate appearing on BBAM of Bloomberg Financial Markets Information Service (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, for purposes of providing quotations of interest rates applicable to dollar deposits in the London Interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the applicable day, as the rate for dollar deposits with a maturity of one (1) month. In the event that such rate is not available from the publications described above for any reason, any data vendor or publication licensed by the British Banker’s Association may be substituted.

(lll) “ Liens ” means any lien, pledge, claim, charge, security interest or other encumbrance, option, title defect or other rights of any third Person with respect to the applicable property.

(mmm) “ Marketing Period ” means the first period of twenty-five (25) consecutive calendar days after the Execution Date (i) throughout and at the end of which Purchaser shall have (and the Debt Providers shall have) access to the Required Information and (ii) throughout and at the end of which the conditions set forth in Section 6.2 (other than those conditions that by their nature were to have been satisfied by actions taken at the Closing or during the Marketing Period, which conditions were, at the time of any termination of this Agreement, capable of being satisfied if the Closing had occurred at such times) shall be satisfied and nothing has occurred and no condition exists that would cause any of the conditions set forth in Section 6.2 to fail to be satisfied assuming the Closing were to be scheduled for any time during such twenty-five (25) consecutive calendar day period; provided that such twenty-five (25) consecutive calendar day period shall not include July 2 through July 6, 2012 and shall be completed entirely prior to August 24, 2012 or entirely after September 3, 2012. Notwithstanding anything in this definition to the contrary, (x) the Marketing Period shall end on any earlier date prior to the expiration of the twenty-five (25) consecutive calendar day period described above if the Debt Financing is consummated on such earlier date and (y) the Marketing Period shall not commence or be deemed to have commenced if, after the date hereof and prior to the completion of such twenty-five (25) consecutive calendar day period: (A) any of the Companies or Sellers has publicly announced its intention to, or determines that it must, restate any historical financial statements or other financial information included in the Required Information or any such restatement is under active consideration, in which case, the Marketing Period shall not commence unless and until such restatement has been completed and the

applicable Required Information has been amended and updated or the Companies or the Sellers have publicly announced, or informed Purchaser, that they have concluded no such restatement is required, (B) the applicable independent accountants of the Companies shall have withdrawn any audit opinion with respect to any financial statements contained in the Required Information for which they have provided an opinion, in which case the Marketing Period shall not be deemed to commence unless and until, at the earliest, a new unqualified audit opinion is issued with respect to such financial statements of the Companies for the applicable periods by the applicable independent accountants or another independent public accounting firm reasonably acceptable to Purchaser, (C) the financial statements included in the Required Information that is available to Purchaser on the first day of any such twenty-five (25) consecutive calendar day period would be required to be updated under Regulation S-X in order to be sufficiently current on any day during such twenty-five (25) consecutive calendar day period to permit a registration statement using such financial statements to be declared effective by the SEC on the last day of such twenty-five (25) consecutive calendar day period, in which case, the Marketing Period shall not be deemed to commence unless and until, at the earliest, receipt by Purchaser of updated Required Information that would be required under of Regulation S-X to permit a registration statement using such financial statements to be declared effective by the SEC on the last day of such new twenty-five (25) consecutive calendar day period or (D) any such Required Information shall cease to be Compliant or any such information ceases to meet the requirement of Required Information, in which case the Marketing Period shall not be deemed to commence unless and until, at the earliest, such Required Information is updated or supplemented so that it is Compliant.

If Sellers shall in good faith reasonably believe that they have delivered the Required Information, they may deliver to Purchaser written notice to that effect (stating when they believe they completed the applicable delivery), in which case the Required Information shall be deemed to have been delivered on the date of the applicable notice, in each case unless Purchaser in good faith reasonably believes that Sellers have not completed delivery of the Required Information and, within five (5) Business Days after its receipt of such notice from Sellers, Purchaser delivers a written notice to Sellers to that effect (stating with specificity the Required Information that has not been delivered).

(nnn) “ Material Contract ” means any Company Contract which is of one or more of the following types:

(i) Contracts for the purchase, sale or exchange of oil, gas or other Hydrocarbons reasonably expected, as of the Execution Date, to result in the purchase, sale or exchange of more than $25,000,000 of Hydrocarbons in any twelve (12) month period, which Contract is not terminable without penalty upon sixty (60) days’ or less notice by any Company or Company Subsidiary, as applicable;

(ii) Contracts for the gathering, treating, processing, handling, storing or transporting of Hydrocarbons (such Contracts, collectively, “ Gathering and Transportation Contracts ”) reasonably expected, as of the Execution Date, to result in the gathering, treating, processing, handling, storing or transporting in any twelve (12) month period of more than either (A) 3,650,000 MCF of gaseous Hydrocarbons or (B) 750,000 barrels of liquid hydrocarbons;

(iii) Contracts for the use of drilling rigs and other Contracts relating to the drilling, completion or hydraulic fracturing of wells including sand supply Contracts reasonably expected, as of the Execution Date, to result in expenditures in excess of $25,000,000 in any twelve (12) month period;

(iv) purchase and sale agreements, farmin and farmout agreements, exploration agreements, participation agreements, and similar agreements entered into on or after January

1, 2009 and either (A) providing for the purchase, sale, earning or other acquisition or disposition of assets or equity interests, individually, or (if part of a series of related transactions), in the aggregate, for more than $25,000,000 or (B) covering more than 10,000 Net Mineral Acres;

(v) to the extent the same will be binding on the Company Mineral Interests after Closing, any operating agreements, joint development agreements, area of mutual interest agreements, unit agreements and unit operating agreements (all such agreements, collectively, “ Operating and Development Agreements ”) covering more than 10,000 Net Mineral Acres;

(vi) master seismic licenses or agreements;

(vii) Contracts for the construction and installation of Company Equipment reasonably expected, as of the Execution Date, to result in expenditures in excess of $25,000,000 in any twelve (12) month period;

(viii) any Contract (other than any Gathering and Transportation Contracts and Operating and Development Agreements, or Contracts of the type described in another subsection of this Section 1.2(lll) , without regard to Dollar, acreage, date or volume limitations in such subsections) which would reasonably be expected, as of the Execution Date, to result in expenditures by or revenues to any Company or Company Subsidiary in excess of $25,000,000 in any twelve (12) month period;

(ix) any partnership, joint venture or similar agreement(other than any Operating and Development Agreements);

(x) any Contract (A) relating to the license, disposition or acquisition (directly or indirectly) by any Company or Company Subsidiary of assets other than in the ordinary course of business consistent with past practice or (B) pursuant to which any Company or Company Subsidiary will acquire any material interest in any other Person;

(xi) any Contract relating to Derivatives, including any and all confirmations under any such Contract;

(xii) to the extent relating to Company Mineral Interests existing as of the Closing, any Contract which limits or otherwise restricts or limits in any material respect the right of any Company or Company Subsidiary to engage or compete in any line of business, in any county, parish or similar (local or foreign) geographic location in which any Company Mineral Interest is located or with any Person;

(xiii) any Contract that would prevent, materially delay or materially impede consummation of any of the transactions contemplated by this Agreement (disregarding for purposes of this clause (xiii) any consent or approval requirement that may be contained in any Contract);

(xiv) any indenture, loan, note, credit or similar Contract (excluding any such Contract filed in the real property records of a county or parish) under which any Company or Company Subsidiary has borrowed any money or issued any note, bond, indenture or other evidence of Indebtedness for borrowed money, sold and leased back assets or guaranteed Indebtedness for others and which imposes any current or future obligation on any Company or Company Subsidiary;

(xv) any guarantee by any Company or Company Subsidiary of any obligation of another Person other than another Company or Company Subsidiary;

(xvi) any lease for office space rented by any Company or Company Subsidiary;

(xvii) any Tax partnership to which any of the Company Mineral Interests are subject;

(xviii) any employment or similar Contract with any officer, employee or consultant (to the extent any such Contract with a consultant is not terminable without penalty by any Company or Company Subsidiary, as applicable, upon ninety (90) days’ notice or less) of any Company or any Company Subsidiary;

(xix) any Contract governing an Affiliate Transaction;

(xx) any Contract (other than a geophysical or seismic license or Contract) (i) pursuant to which the Companies or the Company Subsidiaries use any licensed Intellectual Property or (ii) pursuant to which the Companies or the Company Subsidiaries have granted to a third-party any right in or to any Owned Intellectual Property; and

(xxi) any Contract the expiration or termination of which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and is not of a type required to be disclosed (without regard to Dollar, acreage, date or volume limitations therein) pursuant to clauses (i) through (xx) above.

(ooo) “ Multiemployer Plan ” means a multiemployer plan, within the meaning of 3(37) and Section 4001(a)(3) of ERISA.

(ppp) “ Net Mineral Acre ” has the meaning set forth in Annex 1 .

(qqq) “ Non-Income Tax ” means any Tax other than an Income Tax.

(rrr) “ Order ” means any award, writ, assessment, injunction, judgment, order, ruling or decree entered, issued, made, or rendered by any Governmental Authority, excluding, however, any Law, regulation, authorization, permit, franchise, field or statewide order or other ruling or order of general applicability.

(sss) “ Organizational Documents ” means (i) the articles or certificate of incorporation and bylaws of a corporation; (ii) the certificate of formation and limited liability company agreement of a limited liability company; (iii) the limited partnership agreement and a certificate of limited partnership of a limited partnership; (iv) any charter or similar document adopted or filed in connection with the creation, formation, or organization of any Person and (v) any amendment to any of the foregoing.

(ttt) “ PBGC ” means the Pension Benefit Guaranty Corporation.

(uuu) “ Permit ” means any approval, permit or license of any Governmental Authority.

(vvv) “ Permitted Liens ” means (i) any RE Permitted Encumbrance, (ii) Liens with respect to an obligation or liability that is not yet due or delinquent or that may thereafter be paid without penalty, or the validity or amount of which is being contested in good faith by appropriate proceedings and for which appropriate reserves have been established, or securing the performance of

bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation) incurred or made in the ordinary course of business consistent with past practice, (iii) any Lien created pursuant to any lease of property, real or personal, the obligations under which are capitalized on the relevant entity’s financial statements and which does not materially detract from the value of or materially interfere with the occupancy, use (or use contemplated by the Companies or Company Subsidiaries) or present or contemplated operation (if contemplated by the Companies or Company Subsidiaries) of the applicable property in the ordinary course of the E&P Business, (iv) any Lien created to secure purchase money indebtedness incurred or made in the ordinary course of business consistent with past practice, (v) any other Liens arising in the ordinary course of business and not incurred in connection with the borrowing of money, (vi) Liens to secure indebtedness pursuant to the Revolving Credit Facility and (vii) any “Permitted Lien” as such term is defined in the Revolving Credit Facility.

(www) “ Person ” means any individual, corporation, partnership, limited liability company, trust, estate, Governmental Authority or any other entity.

(xxx) “ Post-Closing Period ” means any Tax period (or portion thereof) beginning after the Closing Date.

(yyy) “ Post-Effective Time Period ” means any Tax period (or portion thereof) beginning after December 31, 2011.

(zzz) “ Pre-Closing Period ” means any Tax period (or portion thereof) ending on or before the Closing Date.

(aaaa) “ Pre-Effective Time Period ” means any Tax period (or portion thereof) ending on or before December 31, 2011.

(bbbb) “ Purchaser Fundamental Representations ” means those representations and warranties set forth in Sections 4.1 through 4.3 , Sections 4.4(i) , (iii) and (iv) , Section 4.8 and Section 4.10 .

(cccc) “ Purchaser Parties ” means, collectively, Purchaser, the Purchaser Guarantors, the Equity Providers, the Debt Providers and any of their respective current, former or future directors, officers, general or limited partners, stockholders, members, managers, partners, controlling persons, Affiliates, agents, employees or Representatives.

(dddd) “ Purchaser Termination Fee ” means $200,000,000; provided , however , that in the event of any Funding Failure due to a failure of the Equity Financing to be funded, the Purchaser Termination Fee shall instead be an amount equal to one hundred and fifty percent (150%) of the foregoing.

(eeee) “ RE Permitted Encumbrances ” means (i) Liens for Taxes or assessments not yet delinquent or, if delinquent, being contested in good faith by appropriate actions and for which appropriate reserves have been established on the Financial Statements in accordance with the Accounting Principles; (ii) materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other similar liens or charges arising in the ordinary course of business for amounts not yet delinquent (including any amounts being withheld as provided by Law), or if delinquent, being contested in good faith by appropriate actions and for which appropriate reserves have been established on the Financial Statements in accordance with the Accounting Principles; (iii) any state of facts which an accurate on-the-ground survey would show and that, individually and in the aggregate, does not materially detract from

the value of or materially interfere with the occupancy, use (or use contemplated by the Companies or Company Subsidiaries) or present or contemplated operation (if contemplated by the Companies or Company Subsidiaries) of the applicable property in the ordinary course of the E&P Business; (iv) any Liens, easements, rights of way, restrictions, rights, leases and other encumbrances affecting title, whether recorded or not, that, individually or in the aggregate, do not materially detract from the value of or materially interfere with the occupation, use (or use contemplated by the Companies or Company Subsidiaries) or present or contemplated operation (if contemplated by the Companies or Company Subsidiaries) of the applicable property in the ordinary course of the E&P Business; (v) legal highways and zoning and building Laws that do not materially interfere with the occupancy, use (or use contemplated by the Companies or Company Subsidiaries) or present or contemplated operation (if contemplated by the Companies or Company Subsidiaries) of the applicable property by the Companies and the Company Subsidiaries in the ordinary course of the E&P Business; (vi) Liens based solely on a lack of information in Sellers’, any Company’s or any Company Subsidiary’s files; (vii) Liens based on alleged defects in the authorization, execution, delivery, acknowledgment or approval of any instrument, unless Purchaser provides evidence that such defect results in a third Person’s superior claim of title to the relevant Company Property; (viii) Liens based on the failure to recite marital status in documents or omissions or lack of heirship, succession or probate proceedings, unless Purchaser provides evidence that such defects or irregularities results in a third Person’s superior claim of title; (ix) Liens arising solely out of lack of survey, overlapping survey or lack of metes and bounds descriptions, unless one is required by Law; (x) Liens that have been cured by applicable Laws of limitations or prescription, including adverse possession, the doctrine of laches and deemed marketable record title; (xi) Liens arising from any change in applicable Laws after the Execution Date; (xii) Liens with respect to which the true owner of the applicable Company Property is another Company or Company Subsidiary; (xiii) Liens based on a claim that none of the Companies or the Company Subsidiaries has title to any Company Property if any of the Companies or the Company Subsidiaries has a valid right to use such Company Property for the purposes for which it is being used; (xiv) Liens based solely on Sellers’ failure to have a title insurance policy or survey on any Company Property; (xv) Liens arising out of mortgages of liens that are unenforceable under applicable statutes of limitations; (xvi) all rights of first refusal, preferential purchase rights and similar rights with respect to the Company Properties; (xvii) all third party consent requirements and similar restrictions; (xviii) all rights to consent, required notices to, filings with or other actions by Governmental Authorities in connection with the sale or conveyance of properties (or rights or interests therein) if they are customarily obtained subsequent to the sale or conveyance of assets and properties similar to the applicable Company Property; (xix) all rights of reassignment arising upon final intention to abandon or release the Company Properties or any of them; (xx) all rights reserved to or vested in any Governmental Authorities to control or regulate any of the Company Properties in any manner or to assess Tax with respect to any of the Company Properties, the ownership, use or operation of any of the Company Properties, or the revenue, income or capital gains with respect thereto, and all obligations and duties under all applicable Laws of any such Governmental Authority or under any franchise, grant, license or permit issued by any Governmental Authority; (xxi) all Liens on or affecting the Company Properties which are expressly waived (by Purchaser), assumed, bonded or paid at or prior to Closing or which is disregarded at or prior to Closing (in each case, at no cost to the Companies or any Company Subsidiary); (xxii) any Lien or trust arising in connection with workers’ compensation, unemployment insurance, pension or employment Laws and (xxiii) any Lien resulting from the failure to record leases issued by any Governmental Authority in the real property, conveyance or other records of the county or parish in which such leases are located.

(ffff) “ Required Information ” means (i) such pertinent and customary (as compared to other transactions of this size and nature) information (other than financial information, which is covered by clause (ii) below), to the extent reasonably available to Sellers, any Company or any Company Subsidiary, regarding any Company or any Company Subsidiary as may be reasonably determined by Purchaser to be necessary in order to consummate the arrangement and borrowings of the

oil and gas reserve-based credit facility and loans, the bridge loan commitments and loans and offerings of debt securities contemplated by the Debt Financing and (ii) all financial statements, financial data, audit reports, production data, reserves information and other financial information regarding the Companies and the Company Subsidiaries (A) of the type required in registration statements on Form S-1 by Regulation S-X and Regulation S-K under the Securities Act (subject to exceptions customary for private placements pursuant to Rule 144A promulgated under the Securities Act) and of the type and form customarily included in private placements of debt securities under Rule 144A of the Securities Act, to consummate the offering(s) of debt securities contemplated by the Debt Commitment Letter, assuming that such offering(s) were consummated at the same time during the Companies’ fiscal year as such offering(s) of debt securities will be made and (B) such other financial or other information as otherwise reasonably required in connection with the Debt Commitment Letter or as otherwise necessary in order to assist in receiving customary “comfort” (including as to “negative assurance” comfort and change period) from the Companies’ independent accountants (which “comfort” letters such accountants shall have confirmed they are prepared to issue) and customary reserve engineers’ “comfort” from independent nationally-recognized petroleum engineers, in each case in connection with offering(s) of debt securities and the syndication of such reserve-based credit facility contemplated by the Debt Commitment Letter.

(gggg) “ Revolving Credit Facility ” means that certain Third Amended and Restated Credit Agreement, dated as of June 2, 2011, among El Paso Exploration & Production Company (n/k/a EP Energy Corporation), El Paso E&P Company, L.P. and the lenders and other parties thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

(hhhh) “ Rights of Way ” means the rights of way, permits, licenses, easements and other authorizations and rights in real property comprising the land rights upon or under which any Company or any Company Subsidiary operates gathering, pipeline or other midstream assets and the Contracts creating such rights.

(iiii) “ SEC ” means the U.S. Securities and Exchange Commission.

(jjjj) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(kkkk) “ Seller Fundamental Representations ” means those representations and warranties set forth in Sections 3.1(a) through 3.1(c), 3.1(d)(i) , 3.2(a) (other than clause (i) thereof), 3.2(b)(i) , 3.2(d) and (e) , 3.3(a) (other than clause (i) thereof), 3.3(b)(i) , 3.3(d) and (e) and 3.15 .

(llll) “ Seller Fundamental Tax Covenants ” means those covenants and agreements set forth in Sections 5.4(m) through 5.4(q) , 8.3 , 8.10(c) and 8.11 .

(mmmm) “ Seller Fundamental Tax Representations ” means (i) those representations and warranties set forth in Sections 3.10(f) , 3.10(i) and 3.10(l) through 3.10(o) and (ii) those representations and warranties set forth in the other subsections of Section 3.10 (but only, in the case of this clause (ii) to the extent such representations and warranties relate to an Income Tax).

(nnnn) “ Seller Termination Fee ” means an amount equal to $400,000,000.

(oooo) “ Service Employees ” means the individuals employed by El Paso or any of its Subsidiaries, other than the Companies or the Company Subsidiaries, who are listed on Schedule 1.2(oooo) .

(pppp) “ Straddle Income Period ” means any Tax period that begins on or before the Closing Date and ends after the Closing Date.

(qqqq) “ Straddle Non-Income Period ” means any Tax period that begins on or before December 31, 2011 and ends after December 31, 2011.

(rrrr) “ Subsidiary ” means, with respect to any Person (a) a corporation more than fifty percent (50%) of the combined voting power of the outstanding voting stock of which is owned, directly or indirectly, by such Person and/or by one or more other subsidiaries of such Person, (b) a partnership of which such Person, or one or more other subsidiaries of such Person, directly or indirectly, is the general partner and has the power to direct the policies, management and affairs of such partnership, (c) a limited liability company of which such Person and/or one or more other subsidiaries of such Person, directly or indirectly, is the managing member and has the power to direct the policies, management and affairs of such company and (d) any other Person (other than a corporation, partnership or limited liability company) in which such Person, and/or one or more other subsidiaries of such Person, directly or indirectly, has at least a majority ownership and power to direct the policies, management and affairs thereof.

(ssss) “ Tax ” means (i) any tax, assessment, unclaimed property, escheat obligation, fee or other governmental charge imposed by any Governmental Authority, including any foreign, federal, state or local income tax, surtax, remittance tax, presumptive tax, net worth tax, special contribution, production tax, pipeline transportation tax, freehold mineral tax, value added tax, withholding tax, gross receipts tax, windfall profits tax, environmental tax (including taxes under Section 59A of the Code), profits tax, severance tax, personal property tax, real property tax, sales tax, license tax, goods and services tax, service tax, transfer tax, use tax, excise tax, premium tax, stamp tax, motor vehicle tax, entertainment tax, insurance tax, capital stock tax, franchise tax, occupation tax, payroll tax, employment tax, social security (or similar) tax, unemployment tax, disability tax, alternative or add-on minimum tax, estimated tax or other tax of any kind whatsoever, (ii) any interest, fine, penalty or additions to tax imposed by a Governmental Authority in connection with any item described in clause (i) and (iii) any liability in respect of any item described in clauses (i) or (ii) above, that arises by reason of a Contract, assumption, transferee or successor liability, operation of Law, Treasury Regulation §1.1502-6 (or any predecessor or successor thereof or any analogous provision under state, local or other Law) or otherwise, and whether any item described in clauses (i), (ii) or (iii) is disputed or not.

(tttt) “ Third-Party Loans ” means all Loans owing by the Companies or Wholly-Owned Subsidiaries to Persons other than a Seller or its Affiliates.

(uuuu) “ Transaction Costs and Expenses ” means all reasonable and documented out of pocket costs and expenses actually incurred by or on behalf of either Party in connection with the negotiation and execution of this Agreement with the other Party.

(vvvv) “ Treasury Regulations ” means the U.S. Treasury regulations promulgated under the Code, as amended.

(wwww) “ WARN Act ” means the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. § 2109 et seq. and the regulations promulgated thereunder.

(xxxx) “ Wholly-Owned Subsidiary ” means any Person in which all issued and outstanding equity interests of such Person are owned, directly or indirectly, by the Companies.

(yyyy) “ Willful and Material Breach ” means (i) a deliberate act or a deliberate failure to act, which act or failure to act constitutes in and of itself a material breach of this Agreement (including, in the case of Purchaser and with respect to Sections 5.5 and 5.19 , any such act or failure to act by its Affiliates) and which was undertaken with the knowledge that such act or failure to act would be, or would reasonably be expected to cause, a material breach of this Agreement or (ii) the failure by any Party to consummate the transactions contemplated by this Agreement after all conditions to such Party’s obligations in Article 6 have been satisfied or waived in accordance with the terms of this Agreement (other than those conditions precedent which by their terms can only be satisfied simultaneously with the Closing but which are capable of being satisfied at the Closing); provided , that in the case of Purchaser, if the Marketing Period has not ended at such time, no Willful and Material Breach will exist under clause (ii) unless such inability or failure continues to exist at the time provided in Section 7.1 ; notwithstanding the foregoing, in the case of Purchaser, it shall not constitute a Willful and Material Breach if Purchaser is unable to consummate the transactions contemplated by this Agreement as a result of the failure of either of the Debt Financing or the Equity Financing to fund where either such failure to fund did not result from the breach by Purchaser of any covenant in this Agreement.

Section 1.3. Excluded Assets . Notwithstanding anything to the contrary in Article 1 or elsewhere in this Agreement, the “ Shares ” shall not include any rights with respect to any of the assets of the E&P Business set forth in Schedule 1.3 (the “ Excluded Assets ”) which, if owned by any Company or Wholly-Owned Subsidiary, the applicable Seller shall cause such Company or Wholly-Owned Subsidiary to transfer or distribute to the applicable Seller or any of its Affiliates via one or more steps, pursuant to instruments reasonably satisfactory to Purchaser, prior to the Closing, in each case at Sellers’ sole cost and expense (which instruments shall in any event provide that any such transfer or distribution shall be made without any representation or warranty on an “AS IS WHERE IS” basis and the assignee thereunder assumes all obligations and liabilities with respect to the Excluded Assets).

Article 2
PURCHASE PRICE

Section 2.1. Purchase Price . The purchase price for the Shares shall be $7,150,000,000 (the “ Unadjusted Purchase Price ”), adjusted as provided in Section 2.3 (as so adjusted, the “ Purchase Price ”).

Section 2.2. Allocation of Purchase Price .

(a) The Unadjusted Purchase Price shall be allocated as follows: (i) first, among the Shares of each of the Companies (such allocation, the “ Share Unadjusted Purchase Price Allocation ”) and (ii) thereafter, the portion of the Unadjusted Purchase Price so allocated to the Shares of any Company (other than EP Egypt) shall be allocated among (A) the classes of assets of such Company and (B) with respect to EP Egypt and the BrazilCos, each of the exploration and production concessions of such Company (such allocations, the “ Asset Unadjusted Purchase Price Allocations ”). If any adjustment is made to the Unadjusted Purchase Price pursuant to Section 2.3 , then the Share Unadjusted Purchase Price Allocation and the Asset Unadjusted Purchase Price Allocations shall each be revised to reflect such adjustment; provided that, in making any such revisions, proper account shall be given to the Company or the specific asset to which such adjustment relates.

(b) Within sixty (60) days after the Closing Date, Sellers shall prepare and deliver to Purchaser, using and based upon the best information available to Sellers, a schedule (the “ Preliminary Section 2.2(b) Schedule ”), along with reasonably detailed supporting documentation, setting forth the following items:

(i) the Share Unadjusted Purchase Price Allocation and the Asset Unadjusted Purchase Price Allocations;

(ii) the liabilities of each Company and the Wholly-Owned Subsidiaries as of the Closing (as required for the allocations described in clause (iii) below), excluding any insurance liabilities insured by the Sellers’ captive insurance company; and

(iii) with respect to each Seller, an allocation among (A) the classes of assets of the Company or Companies to be sold by such Seller pursuant to this Agreement and (B) with respect to EP Brazil, its exploration and production concessions, in each case, of the sum of (x) the portion of the Unadjusted Purchase Price allocated to the Shares to be sold by such Seller pursuant to this Agreement (as reflected in the Share Unadjusted Purchase Price Allocation) and (y) the aggregate amount of liabilities described in the preceding clause (ii) that are includable in such Seller’s amount realized; provided that such allocation shall be consistent with the Asset Unadjusted Purchase Price Allocations and shall be made in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder (and any similar provisions of state, local or foreign Law, as appropriate).

Sellers shall at Purchaser’s request make reasonable documentation available to support the proposed allocation. As soon as reasonably practicable, but not later than forty-five (45) days following receipt of Sellers’ proposed allocation schedule, Purchaser shall deliver to Sellers a written report containing any changes that Purchaser proposes to be made in such schedule (and specifying the reasons therefor in reasonable detail). The Parties shall undertake to agree on a final schedule no later than fifteen (15) Business Days subsequent to the receipt by Sellers of Purchaser’s proposed changes.

Within thirty (30) days after the later of the determination of the Purchase Price under Section 2.4(b) and the agreement on the schedule described above in this Section 2.2(b) , such schedule shall be amended by Sellers and delivered to Purchaser to reflect the Purchase Price following final adjustments. Purchaser shall cooperate with Sellers in the preparation of the amended schedule in a manner consistent with the provisions of Section 8.4 . If Sellers’ amendments to the schedule to reflect the Purchase Price following the final adjustments are not objected to by Purchaser (by written notice to Sellers specifying the reasons therefor in reasonable detail) within thirty (30) days after delivery of Sellers’ adjustments to the schedule, it shall be deemed agreed upon by the Parties and shall constitute the “ Final Section 2.2(b) Schedule .” In the event that the Parties cannot reach an agreement within twenty (20) days after Sellers receive notice of any objection by Purchaser, then, any Party may refer the matters in dispute to KPMG LLP or another mutually acceptable independent appraiser (the “ Independent Appraiser ”) to assist in determining the matters in dispute with respect to the allocation of the Purchase Price. Should KPMG LLP fail or refuse to agree to serve as Independent Appraiser within twenty (20) days after written request from any Party to serve, and the Parties fail to agree in writing on a replacement Independent Appraiser within ten (10) days after the end of that twenty (20) day period, or should no replacement Independent Appraiser agree to serve within forty-five (45) days after the original written request pursuant to this sentence, the Independent Appraiser shall be appointed by the Houston, Texas office of the American Arbitration Association. In connection with the engagement of the Independent Appraiser, each of Sellers and Purchaser shall execute such engagement, indemnity and other agreements as the Independent Appraiser shall require as a condition to such engagement. The Independent Appraiser shall be instructed to deliver to Purchaser and Sellers a written determination of the valuation and any revisions to the Preliminary Section 2.2(b) Schedule within thirty (30) days after the date of referral thereof to the Independent Appraiser. Purchaser and Sellers agree to accept the Independent Appraiser’s determinations as to the matters in dispute and the appropriate adjustments to the schedule to reflect those determinations, which as so adjusted shall constitute the Final Section 2.2(b) Schedule. The Independent Appraiser may determine the issues in dispute following such procedures and the provisions of this Agreement, as it reasonably deems appropriate in the circumstances and with reference to the amounts in

issue. The Parties do not intend to impose any particular procedures upon the Independent Appraiser, it being the desire and direction of the Parties that any such disagreement shall be resolved as expeditiously and inexpensively as reasonably practicable. The Independent Appraiser shall act as an expert for the limited purpose of determining the specific disputed aspects of the allocation schedule submitted by any Party and may not award damages, interest, or penalties to any Party with respect to any matter. Each Seller and Purchaser shall bear its own legal fees and costs of presenting its case. Sellers shall bear one half and Purchaser shall bear one half of the costs and expenses of the Independent Appraiser.

The allocations set forth in the Final Section 2.2(b) Schedule shall be used by Sellers, Purchaser and the Companies and Wholly-Owned Subsidiaries as the basis for reporting asset values and other items for purposes of all Tax Returns. The allocations set forth in the Final Section 2.2(b) Schedule shall also be used by Sellers and Purchaser in preparing IRS Form 8594, Asset Acquisition Statement, and other required forms. Such Form 8594 shall be completed by such Parties as soon as practicable after the Closing but in no event later than fifteen (15) days prior to the date such form is required to be filed. Sellers and Purchaser agree not to assert, and will cause their Affiliates not to assert, in connection with any audit or other proceeding with respect to Taxes, any asset values or other items inconsistent with the amounts set forth in the Final Section 2.2(b) Schedule unless otherwise required by a determination under Section 1313(a) of the Code.

Section 2.3. Adjustments to Purchase Price . The Unadjusted Purchase Price shall be adjusted as of the Closing pursuant to Section 2.4(a) and, after the Closing, pursuant to Section 2.4(b) , but only with respect to matters identified in the Closing Settlement Statement, the Post-Closing Statement or an Adjustment Notice, in accordance with the following:

(a) (i) decreased by the amount of cash or cash equivalents of the Companies or any of their Wholly-Owned Subsidiaries distributed from and after the Effective Time until Closing to any Seller or any of its Affiliates (other than the Companies and their Wholly-Owned Subsidiaries) or (ii) increased by the amount of any cash or cash equivalents contributed to the Companies or the Wholly-Owned Subsidiaries (including intercompany debt of a Company or a Wholly-Owned Subsidiary that is capitalized in accordance with Section 5.7 ) from and after the Effective Time until Closing by any Seller or any Person who, directly or indirectly, owns an equity interest in any Seller;

(b) decreased by the amount (if the Effective Time Net Working Capital is negative, the absolute value) of the Effective Time Net Working Capital;

(c) decreased by the principal amount of all Indebtedness (for this purpose, ignoring clause (v) of the definition thereof) owing by the Companies and any Wholly-Owned Subsidiary to any Person other than a Company or a Wholly-Owned Subsidiary of any Company (“ Loans ”) at the Effective Time and all interest that has accrued and that accrues through the Closing Date on the principal amount of such Loans outstanding as of the Effective Time and all prepayment penalties, premiums, fees and other similar costs and expenses due and owing in connection with the repayment of Loans in accordance with the Debt Payoff Letters;

(d) increased by any amounts (other than in respect of Taxes) paid by any Seller (or any Person who, directly or indirectly, owns an equity interest in any Seller) on behalf of any of the Companies or any of their Subsidiaries, including the Wholly-Owned Subsidiaries, from and after the Effective Time and prior to Closing, including any payments by any such Person to satisfy Loans or other obligations pursuant to Section 5.7 , Section 5.8 or Section 5.9 (other than, in any such case, any amounts that, based on historical practice, are included in the applicable corporate allocation of shared services from any Affiliate of any Seller to any Seller);

(e) increased or decreased, as appropriate, in accordance with Section 1.5 of Annex 1 ;

(f) increased by the amount of interest accrued on the Unadjusted Purchase Price from the Effective Time until the Closing Date at a rate of interest equal to the Agreed Rate; provided , that interest on that portion of the Unadjusted Purchase Price that is equal to the (i) portion of the bond offering component of the Debt Financing that is funded into escrow (in the event proceeds therefrom are deposited into escrow) shall only accrue from the Effective Time until the later of (x) the Bond Escrow Date applicable to the portion so funded and (y) the date that is ninety (90) calendar days after the Execution Date and (ii) bank lending component of the Debt Financing shall only accrue from the Effective Time until the later of (x) the Bank Execution Date and (y) the date that is ninety (90) calendar days after the Execution Date, at a rate of interest equal to the Agreed Rate;

(g) decreased by all amounts incurred by or (to the extent such amounts are subject to Section 2.3(d) ) on behalf of any Company or any Company Subsidiary (net to Sellers’ indirect interest) (including (to the extent such amounts are subject to Section 2.3(d) ) all amounts incurred by Sellers or any of their Affiliates) after the Effective Time until Closing in connection with curing or attempting to cure (i) any Title Defect or (ii) any breach of any representation or warranty set forth in Article 3 whether or not such breach of representation or warranty is claimed by Purchaser, but:

(A) in the case of clause (i) with respect to amounts incurred to cure or attempt to cure any Title Defect, decreased only to the extent the Unadjusted Purchase Price would have been decreased pursuant to Section 2.3(e) if such Title Defect had not been cured (and, if the amounts incurred to cure and attempt to cure such Title Defect with respect to any Title Asset are not applied to reduce the Unadjusted Purchase Price pursuant to this Section 2.3(g) , then the aggregate of (x) such amounts plus (y) the portion of the Title Defect Amount associated with the uncured portion of the Title Defect pertaining to such Title Asset and asserted by Purchaser in accordance with Annex 1 shall (if such aggregate amount of clauses (x) and (y) exceeds the Title Threshold) be applied dollar for dollar to reduce the Title Deductible); provided , however , that costs incurred by (or on behalf of) any Company or Company Subsidiary to cure or to attempt to cure any Title Defect after the Title Claim Date shall not be subject to the foregoing provisions of this Section 2.3(g) (and, for the avoidance of doubt, such costs shall not be applied to reduce the Unadjusted Purchase Price) unless Purchaser has delivered a Title Defect Notice with respect to such Title Defect prior to the expiration of the Title Claim Date; and

(B) in the case of clause (ii) with respect to any breach of any such representation or warranty, decreased only to the extent Sellers would owe an indemnification payment under Article 10 if the representation and warranty had not been cured (after taking into account the limitations on indemnification under Sections 10.1(d)(iv) and 10.4(c) ) and assuming Purchaser had timely asserted a claim for indemnification under Article 10 ) (and to the extent the amounts incurred to cure and attempt to cure any such breach of any such representation or warranty are not applied to reduce the Unadjusted Purchase Price pursuant to this Section 2.3(g) as a result of the application of the limitations on indemnification under Section 10.4(c) , then such amounts shall be applied to reduce on a dollar for dollar basis the two percent (2%) deductible referred to in Section 10.4(c) ; and

(h) decreased by an amount equal to the Allocated Value of each Company Property set forth on Exhibit C-1 to Annex 1 that is sold (or otherwise disposed of) by any Company or Company Subsidiary (or any of their Affiliates) prior to the Effective time (and, where only a portion of any such Company Property is so sold or disposed of, decreased by the portion of such Allocated Value attributable to such portion so sold or otherwise disposed of).

In calculating the adjustment to the Unadjusted Purchase Price pursuant to this Section 2.3 , no adjustment may be accounted for in more than one of the paragraphs (a) through (h) above. For clarity, (i) no payment by any Company or Wholly-Owned Subsidiary pursuant to Section 5.7 shall be deemed to have been distributed to any Seller or its Affiliates for purposes of Section 2.3(a) , (ii) no payment by any Seller or its Affiliates (other than the Companies and Wholly-Owned Subsidiaries) pursuant to Section 5.7 shall be deemed to have been contributed to the Companies or the Wholly-Owned Subsidiaries for purposes of Section 2.3(a) , (iii) any Loan amount that is capitalized in accordance with Section 5.7 shall be deemed to have been contributed to the Companies or the Wholly-Owned Subsidiaries for purposes of Section 2.3(a) , (iv) no payment received or made in respect of any ordinary course sale of goods or services, respectively, by any Seller or its Affiliates (other than the Companies and Wholly-Owned Subsidiaries), on the one hand, from or to, respectively, any Company or Wholly-Owned Subsidiary, on the other hand, shall adjust the Unadjusted Purchase Price pursuant to this Section 2.3 and (v) distributions to any Seller or its Affiliates in respect of amounts that would be owed to Sellers pursuant to Section 8.7 if such amounts were received after the Closing shall not adjust the Unadjusted Purchase Price pursuant to this Section 2.3 . For the avoidance of doubt, the Parties acknowledge and agree that no adjustments shall be made to the Effective Time Net Working Capital.

Notwithstanding anything to the contrary contained herein, there shall be no adjustments made (i) pursuant to Section 2.3(c) with respect to any of the obligations described in item 2 of Schedule 3.5 or (ii) pursuant to any provision of this Section 2.3 with respect to any actions taken between the Execution Date and the Closing with respect to such obligations pursuant to Section 5.7 or Section 8.10(a) or as described in Schedule 3.5 .

Section 2.4. Closing Payment and Post-Closing Purchase Price Adjustments .

(a) Not later than five (5) Business Days prior to the Closing Date, Sellers shall prepare and deliver to Purchaser a settlement statement (the “ Closing Settlement Statement ”) calculating the amount equal to the Unadjusted Purchase Price as adjusted to give effect to Sellers’ good faith estimate of the adjustments provided for in Section 2.3 (or, if then determinable, the final amounts thereof). Purchaser shall have three (3) Business Days to review the settlement statement from Purchaser’s receipt thereof. On the day following expiration of such three (3) Business Day review period, Purchaser shall submit a written report containing any changes Purchaser proposes to be made to the settlement statement. Sellers and Purchaser shall agree on a final settlement statement no later than one (1) Business Day prior to Closing; provided , however , if Sellers and Purchaser are unable to agree, then, subject to Section 2.4(b) , Sellers’ determination shall be used for purposes of the payment to be made at the Closing. The calculation delivered by Sellers in accordance with this Section 2.4(a) , as adjusted in accordance with the immediately preceding sentence, if applicable, shall constitute the dollar amount to be paid by Purchaser to Sellers at the Closing (the “ Closing Payment ”).

(b) As soon as reasonably practicable after the Closing but not later than the later of the ninetieth (90th) day following the Closing Date and the day on which all Title Defects, Title Benefits, Title Defect Amounts and Title Benefit Amounts (but not, for the avoidance of doubt, any Required Consent Dispute) have been finally determined in accordance with Section 1.5(i) of Annex 1 , Purchaser shall prepare and deliver to Sellers a draft statement (the “ Post-Closing Statement ”) setting forth the final calculation of the Purchase Price taking into account any adjustments pursuant to Section 2.3 (and any Title Defects finally resolved pursuant to Section 1.5 of Annex 1 after the Closing). As soon as reasonably practicable but not later than the sixtieth (60th) Business Day following receipt of Purchaser’s statement hereunder, Seller shall deliver to Purchaser a written report (an “ Adjustment Notice ”) containing any changes (other than with respect to Title Defects) Sellers propose be made in such statement. Sellers shall be deemed to have accepted and agreed to all items in the Post-Closing Statement other than such matters that are proposed to be changed in the Adjustment Notice and other

than Title Defects. The Parties shall undertake to agree on the final Purchase Price no later than ten (10) Business Days after delivery of the Post-Closing Statement. If the final Purchase Price is:

(i) mutually agreed upon in writing by Sellers and Purchaser during such ten (10) Business Day period, the final Purchase Price shall be conclusive and binding on the Parties; or

(ii) not mutually agreed upon by Sellers and Purchaser during such ten (10) Business Day period, then KPMG LLP (the “ Dispute Auditor ”) shall resolve any disagreements (other than with respect to Title Defects). Should KPMG LLP fail or refuse to agree to serve as Dispute Auditor within ten (10) days after written request from any Party to serve, and the Parties fail to agree in writing on a replacement Dispute Auditor within five (5) days after the end of that ten (10) day period, or should no replacement Dispute Auditor agree to serve within fifteen (15) days after the original written request pursuant to this sentence, the Dispute Auditor shall be appointed by the Houston, Texas office of the American Arbitration Association. In connection with the engagement of the Dispute Auditor, each of Sellers and Purchaser shall execute such engagement, indemnity and other agreements as the Dispute Auditor shall require as a condition to such engagement. The Dispute Auditor shall determine as promptly as practicable, but in any event within thirty (30) days after the selection of the Dispute Auditor, based solely on written submissions provided by Purchaser and Sellers to the Dispute Auditor (and without independent investigation on the part of the Dispute Auditor) within ten (10) days following the Dispute Auditor’s selection, whether and to what extent (if any) Purchaser’s statement requires adjustment. In resolving any disputed item, the Dispute Auditor shall act as an expert and not an arbitrator, and shall resolve only the items set forth in the Adjustment Notice that are still in dispute and may not assign a value to any item greater than the highest value for such item claimed by either Party or less than the lowest value for such item claimed by either Party. The fees and expenses of the Dispute Auditor shall be paid by the Parties in inverse proportion to the relative success of their claims. The determination of the Dispute Auditor shall be final, conclusive and binding on Purchaser and Sellers. The date on which the final Purchase Price is finally determined in accordance with this Section 2.4(b) is referred to as the “ Determination Date .”

(c) Any difference in the Closing Payment and the final Purchase Price shall be paid by the owing Party to the owed Party within ten (10) Business Days of the Determination Date. Any post-Closing payment pursuant to this Section 2.4 shall bear interest from the Closing Date to the date of payment at the Agreed Rate.

(d) Sellers shall assist Purchaser in preparation of the Post-Closing Statement of the Purchase Price under Section 2.4(b) by furnishing invoices, receipts, reasonable access to personnel and such other assistance as may be requested by Purchaser to facilitate such process post-Closing.

(e) All payments made or to be made under this Agreement to Sellers shall be made by electronic transfer of immediately available funds to New EPE, acting as representative of Sellers, at the account set forth in Schedule 2.4(e) , for the credit of the applicable Sellers, or to such other bank and account as may be specified by New EPE in writing. All payments made or to be made hereunder to Purchaser shall be by electronic transfer or immediately available funds to a bank and account specified by Purchaser in writing to New EPE, for the credit of Purchaser.

Section 2.5. Withholding Rights . Purchaser shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as Purchaser is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax Laws. To the extent that such amounts are so withheld by Purchaser, such withheld

and deducted amounts will be treated for all purposes of this Agreement as having been paid to the holders of the Shares in respect of which such deduction and withholding was made by Purchaser.

Article 3
REPRESENTATIONS AND WARRANTIES OF SELLERS

Subject to the provisions of this Article 3 , Sellers, jointly and severally, represent and warrant to Purchaser the matters set out in Section 3.1 through Section 3.27 .

Section 3.1. Sellers .

(a) Existence and Qualification . Each of New EPE and EP Energy is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. EP Brazil is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware.

(b) Power . Each Seller has the corporate or limited liability company, as applicable, power and authority to enter into, deliver and perform this Agreement (and all documents required to be executed and delivered by such Seller pursuant hereto) and to consummate the transactions contemplated by this Agreement (and such documents).

(c) Authorization and Enforceability . Each Seller’s execution, delivery and performance of this Agreement (and all documents required to be executed and delivered by each Seller pursuant hereto), and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate or limited liability company, as applicable, action on the part of such Seller and no other corporate or limited liability company, as applicable, proceedings are necessary in connection therewith. This Agreement has been duly executed and delivered by each Seller (and all documents required to be executed and delivered by each Seller pursuant hereto shall be duly executed and delivered by such Seller), and this Agreement constitutes, and at the Closing such documents shall constitute, the valid and binding obligations of each Seller, enforceable in accordance with their terms.

(d) No Conflicts . Each Seller’s execution, delivery and performance of this Agreement (and all documents required to be executed and delivered at Closing by each Seller pursuant hereto), and the consummation of the transactions contemplated hereby and thereby, shall not (i) violate any provision of the Organizational Documents of such Seller, (ii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests or any Contract relating to the licensing of seismic or geophysical data and (C) any preferential purchase right requirement described in Schedule 3.14 , result in default (with or without due notice or lapse of time or both) or the creation of any Lien or give rise to any right of termination, cancellation or acceleration under any asset, Contract, note, bond, mortgage, indenture, or other financing instrument to which such Seller is a party or by which it is bound, (iii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests and (C) any preferential purchase right requirement described in Schedule 3.14 , require any authorization, consent or approval of, or notice to, any Person or Governmental Authority (except for the applicable requirements of the Hart-Scott-Rodino Act and any other applicable Antitrust Laws), (iv) violate any Order applicable to such Seller as a party in interest or (v) assuming that the consents of the applicable Governmental Authorities contemplated in clause (iii) above are obtained, violate any Laws applicable to such Seller, except any matters described in clauses (ii), (iii), (iv) or (v) above which would not, individually or in the aggregate, have a Material Adverse Effect.

Section 3.2. The Companies .

(a) Existence and Qualification . Each Company is a corporation, limited liability company or partnership, as applicable, duly organized, validly existing and in good standing under the Laws of the jurisdiction where it is incorporated (as set forth in the recitals to this Agreement). Each Company is (i) duly qualified to do business as a foreign corporation, limited liability company or partnership, as applicable, in, and is in good standing under the Laws of, each jurisdiction where such qualification is required and (ii) authorized and has all requisite corporate, limited liability company or partnership, as applicable, power to conduct business, own, lease and operate its material properties and assets as such are now being conducted, in each case except where the lack of such qualification, authorization or good standing has not or would not, individually or in the aggregate, have a Material Adverse Effect.

(b) No Conflicts . The consummation of the transactions contemplated by this Agreement shall not (i) violate any provision of the Organizational Documents of any Company, (ii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests or any Contract relating to the licensing of seismic or geophysical data and (C) any preferential purchase right requirement described in Schedule 3.14 , result in default (with or without due notice or lapse of time or both), the creation of any Lien or give rise to any right of termination, cancellation or acceleration under any asset, Company Contract, note, bond, mortgage, indenture, or other financing instrument to which such Company is a party or by which it is bound, (iii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests and (C) any preferential purchase right requirement described in Schedule 3.14 , require any authorization, consent or approval of, or notice to, any Person or Governmental Authority (except for the applicable requirements of the Hart-Scott-Rodino Act and any other applicable Antitrust Laws), (iv) violate any Order applicable to any Company as a party in interest or (v) assuming that the consents of the applicable Government Authority contemplated in clause (iii) above are obtained, violate any Laws applicable to any Company, except any matters described in clauses (ii), (iii), (iv) or (v) above which would not, individually or in the aggregate, have a Material Adverse Effect.

(c) Organizational Documents . Sellers have delivered to Purchaser via the Data Room true, complete and correct copies of the Organizational Documents, each as amended to date, of the Companies and have made available to Purchaser for inspection the true, complete and correct ownership interest certificates, if any, and transfer books, and the minute books, of the Companies.

(d) Title to the Shares . Sellers have good and valid title to the Shares, as applicable, in each case, free and clear of Liens of any kind other than restrictions on transfer that may be imposed by applicable securities Laws. Other than this Agreement, the Shares are not subject to any voting agreement or other Contract, including any Contract restricting or otherwise relating to the voting, dividend rights or disposition of Shares. Upon delivery to Purchaser at the Closing of certificates representing the Shares held by such Seller, good and valid title to such Shares will pass to Purchaser, free and clear of Liens of any kind, other than restrictions on transfer that may be imposed by applicable securities Laws or the Organizational Documents of the issuer of the Shares.

(e) The Shares . Schedule 3.2(e) sets forth the names of the holders of the shares, quotas or units, as applicable, the number of shares, quotas or units, as applicable, held by each such holder, and the number of shares, quotas, or units, as applicable, authorized, of (i) the capital stock of EP Energy (any issued and outstanding capital stock of EP Energy set forth on Schedule 3.2(e) as converted into limited liability company interests of EPE LLC in connection with the actions contemplated by Section 8.10 , the “ EPE LLC Membership Interests ”); (ii) the issued and outstanding

capital stock of UnoPaso (any issued and outstanding quotas of UnoPaso set forth on Schedule 3.2(e) , the “ UnoPaso Shares ”); (iii) the capital stock of Brazil Holdings (any issued and outstanding common stock of Brazil Holdings set forth on Schedule 3.2(e) , the “ Brazil Holdings Shares ”); (iv) the capital stock of Brazil O&G (any issued and outstanding quotas of Brazil O&G set forth on Schedule 3.2(e) , the “ Brazil O&G Shares ” and, together with the UnoPaso Shares and the Brazil Holdings Shares, the “ BrazilCo Shares ”); and (v) the issued and outstanding capital stock of EP Egypt (any issued and outstanding common stock of EP Egypt after giving effect to the actions contemplated by Section 8.10 , the “ EP Egypt Shares ”). The Shares are duly authorized and validly issued and outstanding, fully paid, non-assessable and have not been issued in violation of any preemptive rights. Except for the Shares, there are no shares of capital stock, membership interests or other equity interests in any Company issued, reserved for issuance or outstanding, or any contractual arrangements giving any Person a right to receive any benefits or rights similar to the rights enjoyed by or accruing to the holders of any Shares of any Company. Other than pursuant to this Agreement, there are no outstanding warrants, options, rights, convertible or exchangeable securities or other commitments pursuant to which any Seller or a Company is or may become obligated to issue or sell any shares of capital stock, membership interests or other equity interest in such Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to any Company. No Company has an obligation to repurchase, redeem, or otherwise acquire shares of its capital stock or other equity interests. No outstanding holders of Indebtedness of any Company have any right to vote (or to convert into, exchange or subscribe for or acquire securities having the right to vote) with the equity holders of any Company on any matter. No Person has any right of first offer, right of first refusal, consent right or preemptive right in connection with any offer, sale or issuance of the capital stock of any Company (including with respect to the transactions contemplated by this Agreement). There is no obligation to make any loan or capital contribution to any Company Subsidiary.

Section 3.3. Company Subsidiaries and the JV Entity .

(a) Existence and Qualification . Each Company Subsidiary and the JV Entity is a corporation, limited liability company or partnership, as applicable, duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of incorporation or formation as set forth on Schedule 3.3 . Each Company Subsidiary and the JV Entity is (i) duly qualified to do business as a foreign corporation, limited liability company or partnership, as applicable, in, and is in good standing under the Laws of, each jurisdiction where such qualification is required and (ii) authorized and has all requisite corporate, limited liability company or partnership, as applicable, power to conduct business, own, lease and operate its material properties and assets as such are now being conducted, in each case except where the lack of such qualification, authorization or good standing has not or would not have, individually or in the aggregate, a Material Adverse Effect.

(b) No Conflicts . The consummation of the transactions contemplated by this Agreement shall not (i) violate any provision of the Organizational Documents of any Company Subsidiary or the JV Entity, (ii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests or any Contract relating to the licensing of seismic or geophysical data and (C) any preferential purchase right requirement described in Schedule 3.14 , result in default (with or without due notice or lapse of time or both) the creation of any Lien or give rise to any right of termination, cancellation or acceleration under any asset, Contract, note, bond, mortgage, indenture, or other financing instrument to which any Company Subsidiary is a party or by which it is bound, (iii) except for (A) any consent described in Schedule 3.1(d) , (B) any consent covering (or created under) any of the Company Mineral Interests and (C) any preferential purchase right requirement described in Schedule 3.14 , require any authorization, consent or approval of, or notice to, any Person or Governmental Authority (except for the applicable requirements of the Hart-Scott-Rodino Act and any other applicable Antitrust Laws), (iv) violate any Order applicable to any Company

Subsidiary or the JV Entity as a party in interest or (v) assuming that the consents of the applicable Government Authority contemplated in clause (iii) above are obtained, violate any Laws applicable to any Company Subsidiary or the JV Entity, except any matters described in clauses (ii), (iii), (iv) or (v) above which would not, individually or in the aggregate, have a Material Adverse Effect.

(c) Organizational Documents . Sellers have delivered to Purchaser via the Data Room true, complete and correct copies of the Organizational Documents, each as amended to date, of each Company Subsidiary and the JV Entity and have made available to Purchaser for inspection the ownership interest certificates, if any, and transfer books, and the minute books, of each Company Subsidiary.

(d) Title to Equity Interests of the Company Subsidiaries and the JV Entity . The issued and outstanding shares, membership interests or partnership interests, as appropriate, in each Company Subsidiary and the JV Entity are owned of record as described in Schedule 3.3 . In the case of such issued and outstanding shares of capital stock owned of record by a Company, any Company Subsidiary or the JV Entity as shown on Schedule 3.3 (the “ Equity Interests ”), (i) each applicable owner has good and valid title to such shares, membership interests or partnership interests, as appropriate and (ii) such shares or interests are also owned beneficially and free and clear of any Liens of any kind, other than restrictions on transfers that may be imposed by applicable federal or state securities laws. Other than this Agreement, the Equity Interests are not subject to any voting agreement, proxies, stockholder agreements or other Contract relating to the voting, dividend rights or disposition of the Equity Interests.

(e) The Equity Interests . The names of the holders of the Equity Interests and the number of shares, quotas or units, as applicable, held by each such holder are set forth on Schedule 3.3 . All the Equity Interests are duly authorized and validly issued and outstanding, fully paid, non-assessable (except, in the case of Company Subsidiaries that are limited liability companies, as expressly authorized by the terms of the applicable Organizational Documents of such Company Subsidiaries) and have not been issued in violation of any preemptive rights. Except for the Equity Interests shown on Schedule 3.3 , there are no shares, units or other equity interests in any Company Subsidiary or the JV Entity issued, reserved for issuance or outstanding, or any contractual arrangements giving any Person a right to receive any benefits or rights similar to the rights enjoyed by or accruing to the holders of any Equity Interests. Other than pursuant to this Agreement, there are no outstanding warrants, options, rights, convertible or exchangeable securities or other commitments pursuant to which any Company, any Company Subsidiary or the JV Entity is or may become obligated to issue or sell any capital stock, membership interests or other equity interests in such Company Subsidiary or the JV Entity. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to any Company Subsidiary or the JV Entity. No Company Subsidiary or the JV Entity has an obligation to repurchase, redeem, or otherwise acquire shares of its capital stock or other equity interest. No outstanding holders of Indebtedness of any Company Subsidiary or the JV Entity have any right to vote (or to convert into, exchange or subscribe for or acquire securities having the right to vote) with the equity holders of any Company Subsidiary or the JV Entity on any matter. No Person has any right of first offer, right of first refusal, consent right or preemptive right in connection with any offer, sale or issuance of the capital stock of any Company Subsidiary or the JV Entity (including with respect to the transactions contemplated by this Agreement).

(f) Other than as set forth in Schedule 3.3(f), and other than the capital stock or other equity interests that any Company owns of its respective Company Subsidiaries and the JV Entity, no Company owns, directly or indirectly, any capital stock or other equity interests of any other Person. No Company, Company Subsidiary or the JV Entity is obligated to make any investment in or capital contribution to any Person.

Section 3.4. Financial Statements . The Financial Statements (i) are compliant with Regulation S-X, (ii) present fairly in all material respects in accordance with the Accounting Principles, applied consistently during the periods involved, the combined financial position of the Companies together with their respective consolidated Company Subsidiaries as of the respective dates thereof and the combined results of operations, cash flows and shareholders’ equity of the Companies together with their respective consolidated Company Subsidiaries for the periods covered thereby and (iii) are prepared in accordance with the books of account and records of the Companies and their respective consolidated Company Subsidiaries in all material respects. The accounting controls of the Companies have been and are sufficient to provide reasonable assurances that (a) all transactions are executed in accordance with management’s general or specific authorization and (b) all transactions are recorded as necessary to permit the accurate preparation of financial statements in accordance with the Accounting Principles and to maintain proper accountability for items. Without limiting the foregoing, the Financial Statements provide an accurate statement of the Companies’ asset retirement obligations based on presently available information and the Accounting Principles to the extent that they are required to be disclosed in the Financial Statements in accordance with the Accounting Principles.

Section 3.5. No Undisclosed Liabilities . There are no Liabilities of or with respect to any of the Companies or any of the Company Subsidiaries that would be required by the Accounting Principles to be disclosed on a balance sheet other than (a) Liabilities disclosed on Schedule 3.5 , (b) Liabilities disclosed in the Financial Statements, (c) Liabilities for performance under (but not Liabilities for breach of) the Material Contracts listed on Schedule 3.13 or any other Contracts not required to be disclosed on Schedule 3.13 or (d) Liabilities incurred in the ordinary course of business consistent with past practice, since December 31, 2010, that, individually or in the aggregate, are not, and would not reasonably be expected to be, material to the Companies and the Company Subsidiaries, taken as a whole.

Section 3.6. Labor Matters . Except as set forth in Schedule 3.6 , none of the Companies or the Company Subsidiaries is a party to a collective bargaining agreement or other labor agreement with any labor union, works council or organization and no consent, approval or authorization from any labor organization is required for the execution, delivery and performance of this Agreement by Sellers and/or the consummation of the transactions contemplated hereby. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) (x) no labor organization or group of the Business Employees has made a demand for recognition or certification as a union or other labor organization with respect to any of the Business Employees and (y) there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to any Seller’s knowledge, threatened to be brought or filed with the National Labor Relations Board or any U.S. or non-U.S. labor relations tribunal or authority with respect to any of such employees, (ii) there are no organizing activities, (iii) there are no (and during the two (2) year period preceding the date of this Agreement, there have not been any) strikes, work stoppages, slowdowns, arbitrations, grievances or other labor disputes pending or, to any Seller’s knowledge, threatened, involving the Business Employees, (iv) the Companies and the Company Subsidiaries are in compliance with all collective bargaining and union Contracts, (v) there is no unfair labor practice charge or complaint against the Companies or the Company Subsidiaries pending or, to any Seller’s knowledge, threatened before the National Labor Relations Board or any similar state agency and (vi) none of the Companies or any of the Company Subsidiaries has incurred any Liability or obligation under the WARN Act or any similar state or local Law that remains unsatisfied.

Section 3.7. Employee Benefits .

(a) Part A of Schedule 3.7 lists all of the Employee Plans (i) under which any Business Employee has any present or future right to benefits that is maintained, sponsored or contributed to by Sellers or any of their ERISA Affiliates or (ii) with respect to which Sellers or any of their ERISA Affiliates has any present or future liability in respect of the Business Employees (the “ Seller

Employee Plans ”). The Seller Employee Plans maintained, sponsored or contributed to by Sellers or their ERISA Affiliates that are organized in the United States shall hereinafter be referred to as “U.S. Employee Plans” and the Seller Employee Plans which are not U.S. Employee Plans shall hereinafter be referred to as “ Non-U.S. Employee Plans .” Part A of Schedule 3.7 separately indicates those Seller Employee Plans that are sponsored or maintained solely by the Companies or the Company Subsidiaries (the “ Companies Employee Plans ”).

(b) The El Paso Corporation Retirement Savings 401(k) Plan and any related trust agreement that is intended to qualify as tax exempt under Code Section 501(a) have received a favorable determination letter from the IRS that has not been revoked, and, to the knowledge of any Seller, nothing has occurred since the date of such determination letter or letters from the Internal Revenue Service that would reasonably be expected to adversely affect the qualified status of the El Paso Corporation Retirement Savings 401(k) Plan or any related trust agreement.

(c) With respect to each U.S. Employee Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (i) Sellers and their ERISA Affiliates have complied with the minimum funding requirements of Sections 412, 430 and 431 of the Code and Sections 302, 303 and 304 of ERISA, whether or not waived and (ii) there is no Controlled Group Liability, and no event has occurred, and to the knowledge of any Seller, no condition exists that could reasonably be expected to result in any Controlled Group Liability being imposed on Purchaser, the Companies or any of their ERISA Affiliates, except, in each case of (i) and (ii), as would not have, individually or in the aggregate, a Material Adverse Effect. The Companies and the Company Subsidiaries (i) do not have any Liability with respect to any Seller Employee Plan or other arrangement that provides for post-retirement or other post-employment medical or life insurance benefits (other than health care continuation coverage as required by applicable Laws) and (ii) have complied in all material respects with the notice and continuation coverage requirements, and all other requirements, of Section 4980B of the Code and Parts 6 and 8 of Title I of ERISA, and the regulations thereunder, except, in each case of (i) and (ii), as would not have, individually or in the aggregate, a Material Adverse Effect.

(d) Except as set forth on Part D of Schedule 3.7 , no non-exempt “prohibited transaction” or “reportable event” has occurred within the meaning of the applicable provisions of ERISA or the Code with respect to any Seller Employee Plan and no “fiduciary” (as defined in ERISA Section 3(21)) has committed any breach of duty that could subject the Companies or the Company Subsidiaries to liability under Title I or ERISA or to Tax under Code Section 4975, except, in each case, as would not have, individually or in the aggregate, a Material Adverse Effect.

(e) Except as set forth on Schedule 3.7(e) or as would not have, individually or in the aggregate, a Material Adverse Effect or as specifically contemplated by this Agreement, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated by this Agreement will cause or result in (either alone or in combination with another event): (i) any payment, compensation or benefit becoming due, or any increase in the amount of any payment, compensation or benefit due, or the acceleration of the time of payment or vesting or in any funding (through a grantor trust or otherwise) of compensation or benefits to any Business Employee or (ii) the payment of any amount to any Business Employee that could, individually or in combination with any other such payment, constitute an “excess parachute payment,” as defined in Code Section 280G(b)(1). Except as set forth on Part E of Schedule 3.7 , no “disqualified individual” (within the meaning of Code Section 280G(c)) who is also a Business Employee is entitled to receive any additional payment from the Companies or any of the Company Subsidiaries or any other Person in the event that the excise Tax required by Code Section 4999(a) is imposed on such “disqualified individual.”

Section 3.8. Accuracy of Data . Except for any matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and excluding title information, the factual, non-interpretative data provided by any Seller or any Affiliate of any Seller to Ryder Scott Company, L.P. in connection with the preparation of its report dated as of December 31, 2011 (the “ Audited Reserve Report ”) that was material to Ryder Scott Company, L.P.’s estimates of the proved oil and gas reserves set forth in the Audited Reserve Report was, as of the issuance of the Audited Reserve Report, accurate in all respects, and to any Seller’s knowledge there were no errors in the assumptions and estimates provided by any Seller or any Affiliate of any Seller to Ryder Scott Company, L.P. in connection with the preparation of the Audited Reserve Report.

Section 3.9. Litigation .

(a) Except as disclosed in Schedule 3.9(a) or as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there are no Actions, inquiries or investigations pending or, to any Seller’s knowledge, threatened, involving any Seller, any of the Companies or, with respect to the E&P Business, any of their respective Affiliates. Except as set forth on Schedule 3.9(a) , none of the Companies, nor the Company Subsidiaries are subject to any outstanding settlement or other similar agreement or Order that would reasonably be expected to result, or has resulted, individually or in the aggregate, in a Material Adverse Effect.

(b) There are no bankruptcy or other insolvency proceedings involving claims or Actions by or against any of the Companies or any of the Company Subsidiaries, nor, to any Seller’s knowledge, are any such claims or Actions threatened.

(c) This Section 3.9 shall not apply in respect of environmental matters, which are exclusively covered by Section 3.11 .

Section 3.10. Taxes and Assessments . Except as disclosed in Schedule 3.10 :

(a) Each Company and each Company Subsidiary has properly prepared and timely filed all material Tax Returns that it was required to file, and all such Tax Returns were correct and complete in all material respects;

(b) Each Company and each Company Subsidiary has timely paid (or, in the case of Taxes not yet due and payable or that are being contested in good faith, adequately reserved against in the Financial Statements) all Taxes shown on the Tax Returns described in Section 3.10(a) and all other material Taxes due from or with respect to it;

(c) (i) No action, suit, Governmental Authority proceeding or audit is now in progress or pending or has been threatened in writing with respect to any Company or any Company Subsidiary for and (ii) no Company or Company Subsidiary has received written notice of any pending claim against it (which remains outstanding) from any applicable Governmental Authority for, assessment or deficiency of material Taxes, and no such claim has been threatened in writing;

(d) No Company or Company Subsidiary has waived any statute of limitations in respect of any Taxes that is currently in effect or agreed to any extension of time with respect to a Tax assessment or deficiency that is currently in effect; there are no agreements or waivers currently in effect providing for an extension of time with respect to the filing of any Tax Returns of any Company or any Company Subsidiary, and no request for any such waiver or extension is pending;

(e) Except for deficiencies being contested in good faith, all deficiencies for Taxes asserted or assessed in writing against any Company or Company Subsidiary have been fully and timely paid, settled or properly reflected in the Financial Statements;

(f) No Company or Company Subsidiary is a party to any agreement relating to Taxes with any Governmental Authority that would be terminated or adversely affected as a result of the transactions contemplated by this Agreement;

(g) No Company or Company Subsidiary has (i) participated in any reportable transaction within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b) (or any similar provision of state, local or foreign Tax Laws) or (ii) taken any reporting position on a Tax Return, which reporting position (A) if not sustained would be reasonably likely, absent disclosure, to give rise to a penalty for substantial understatement of federal income Tax under Section 6662 of the Code (or any similar provision of state, local, or foreign Tax Laws) and (B) has not adequately been disclosed on such Tax Return in accordance with Section 6662(d)(2)(B) of the Code (or any similar provision of state, local, or foreign Tax Laws);

(h) No Company or Company Subsidiary (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was El Paso) or (ii) has any liability for the Taxes of any Person other than such Company or Company Subsidiary under Treasury Regulation §§ 1.1502-6 or 1.1502-78 (or any similar provision of state, local or non-U.S. Law), as a transferee or successor, by Contract, or otherwise;

(i) There are no Liens for material Taxes upon the assets or properties of any Company or Company Subsidiary, except for statutory Liens for current Taxes not yet due;

(j) Since December 31, 2004, no Company or Company Subsidiary has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code;

(k) No Company or Company Subsidiary will be required to include in a Post-Closing Period taxable income attributable to income that accrued in a Pre-Closing Period but was not recognized for Tax purposes in such Pre-Closing Period (or to exclude from taxable income in a Post-Closing Period any deduction the recognition of which was accelerated from such Post-Closing Period to a Pre-Closing Period) as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, Section 481 of the Code or Section 108(i) of the Code or comparable provisions of state, local or foreign Tax Laws;

(l) Since January 1, 2009, and, prior to such time, to Sellers’ knowledge, no Company or Company Subsidiary has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of state, local or foreign Tax Laws, and no Company or Company Subsidiary is subject to any private letter ruling of the IRS or comparable ruling of any other Governmental Authority;

(m) Since January 1, 2009, each Company’s and Company Subsidiary’s property that is subject to property Tax has been properly listed and described on the property tax rolls of the appropriate taxing jurisdictions for all periods prior to Closing and no portion of any Company’s or any Company Subsidiary’s property constitutes omitted property for property Tax purposes;

(n) As of the Closing Date, each Company (other than EP Egypt) and Wholly-Owned Subsidiary will be treated as an entity disregarded from its owner for U.S. federal income tax purposes; and

(o) Neither the quotas nor the assets of the BrazilCos constitute a “United States real property interest” as defined in Section 897(c)(1) of the Code.

Section 3.11. Environmental Laws . Except as disclosed in Schedule 3.11 or as would not have, individually or in the aggregate, a Material Adverse Effect:

(a) each Company Subsidiary is and, within the relevant time period specified under all applicable statutes of limitation, has been, in compliance with all applicable Environmental Laws;

(b) each Company and Company Subsidiary possesses or has obtained all Governmental Authorizations required for operation of the E&P Business, the operation of their facilities and the use of their respective assets pursuant to applicable Environmental Law, all such Governmental Authorizations are in effect, and, to any Seller’s knowledge, there is no actual or alleged proceeding to revoke, modify or terminate any of such Governmental Authorizations;

(c) there has been no pollution or contamination of groundwater, surface water, subsurface strata or soil on the Company Properties or adjacent property resulting from any Company’s or Company Subsidiary’s activities or, to any Seller’s knowledge, at any other property or location for which any Company or Company Subsidiary is or would be liable to remediate under applicable Environmental Laws on or before the date of this Agreement but which has not been remediated; and

(d) there are no actions, suits or proceedings pending, or, to any Seller’s knowledge, threatened by or before any Governmental Authority or arbitrator alleging violations of or Liability under Environmental Laws by any Company or Company Subsidiary or by any of their properties or operations, or claiming remediation obligations of any Company or Company Subsidiary under applicable Environmental Laws, nor have any of the Companies or Company Subsidiaries received a written complaint from any third-party asserting that any Company or Company Subsidiary has caused or is otherwise responsible for material damage to their property or material contamination of their water supply.

Purchaser acknowledges that naturally occurring radioactive material, asbestos, mercury, polychlorinated biphenyls, drilling fluids and chemicals, and produced waters and Hydrocarbons that may be present in or on the Company Properties in quantities or concentrations that do not violate, and that do not give rise to any remediation obligations under Environmental Laws shall not in and of itself constitute a breach of this Section 3.11 . For purposes of this Agreement, “ Environmental Laws ” means all Laws pertaining to prevention of pollution, remediation of contamination, or protection of human health or the environment (including natural resources), including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Authorization Act, 49 U.S.C. § 5101 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001 et seq.; and the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j, in each case as amended to the Execution Date, and all similar Laws as of the Execution Date of any Governmental Authority having jurisdiction over the property in question and all regulations implementing the foregoing.

Section 3.12. Compliance with Laws . Except (a) with respect to Environmental Laws, which are exclusively addressed in Section 3.11 , (b) with respect to Anti-Corruption Laws, which are exclusively addressed in Section 3.26 and (c) as set forth on Schedule 3.12 , the Companies and the Company Subsidiaries have been and are in compliance with all applicable Laws, except such failures to comply as would not have, individually or in the aggregate, a Material Adverse Effect. None of the Companies or the Company Subsidiaries have received any written notice or, to any Seller’s knowledge, oral notice, from any Governmental Authority or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any Law, other than such violation or failure that would not have, individually or in the aggregate, a Material Adverse Effect.

Section 3.13. Company Contracts . Except (a) as would not, individually or in the aggregate, have a Material Adverse Effect, (b) for confirmations under any Contract relating to Derivatives and (c) for Contracts (x) set forth on Schedule 3.13 and noted with an asterisk (*) and (y) seismic licenses and other similar Contracts the disclosure of the existence of which is prohibited or conditioned (the aggregate number of which is set forth on Schedule 3.13 ), there are no Material Contracts except as set forth on Schedule 3.13 . The applicable Seller, Company or Company Subsidiary party thereto or subject thereto has (i) to any Seller’s knowledge, performed all obligations under each Material Contract and (ii) not received written notice of its being in breach or default under any Material Contract, in each case, except as disclosed in Schedule 3.13 and except for such breaches or defaults as would not have a Material Adverse Effect. All Material Contracts are valid and binding upon the applicable Seller, Company or Company Subsidiary party thereto or subject thereto, and to any Seller’s knowledge, in full force and effect and enforceable against the other parties thereto, except such failures to be in full force and effect as would not have, individually or in the aggregate, a Material Adverse Effect. No event has occurred with respect to any Material Contract that, after notice or lapse of time, or both, would constitute a default by any Seller, Company or Company Subsidiary party thereto or, to any Seller’s knowledge, any other party thereto that would have a Material Adverse Effect. Except for Contracts (x) set forth on Schedule 3.13 and noted with an asterisk (*) and (y) seismic licenses and other similar Contracts, the disclosure of which is prohibited or conditioned (the aggregate number of which is set forth on Schedule 3.13 ), true, complete and correct copies of the Material Contracts in existence as of the execution hereof have been included in the Data Room. No notice of default or breach has been received or delivered by any Seller, Company or Company Subsidiary under any Material Contract, or other Contract disclosed in Schedule 3.13 , the resolution of which is currently outstanding, and no currently effective notices have been received by any Seller, Company or Company Subsidiary of the exercise of any premature termination, price redetermination, market-out or curtailment of any Material Contract or other Contract disclosed in Schedule 3.13 . Sellers shall be permitted to update Schedule 3.13 to reflect any changes between the Execution Date and Closing that are made in compliance with Sellers’ obligations under Section 5.3 and Section 5.4 , and Schedule 3.13 , as so updated, shall be deemed to have been included as Material Contracts thereon on the Execution Date.

Section 3.14. Preferential Purchase Rights . Except as set forth in Schedule 3.14 and except as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect, there is no preferential purchase right which may be applicable in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

Section 3.15. Liability for Brokers’ Fees . Purchaser and the Companies shall not directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Sellers, the Companies or any Wholly-Owned Subsidiary or any of its or their Affiliates or Kinder Morgan prior to Closing, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation to an intermediary in connection with the negotiation, execution or delivery of this Agreement or any agreement or transaction contemplated hereby.

Section 3.16. Outstanding Capital Commitments . Except as described in Schedule 3.16 , as of the Execution Date there is no outstanding authorization for expenditure or other commitment for capital expenditure which is binding on any Company or Company Subsidiary and which any Seller reasonably anticipates will require expenditure by any Company or Company Subsidiary after the Closing Date in excess of $5,000,000, individually, or in the case of any Well, on a Well-by-Well basis.

Section 3.17. Absence of Certain Changes . Since September 30, 2011, except as set forth in Schedule 3.17 or as provided in Section 8.10(a) , the Companies and the Company Subsidiaries (a) have, in all material respects, conducted their business and operated their properties in the ordinary course of business consistent with past practice and (b) have not taken any action or failed to take any action that, if taken after the date hereof, would have resulted in a breach of Section 5.3 or Section 5.4 or would require the consent of Purchaser pursuant to Section 5.3 or Section 5.4 , except with regard to compliance with the Capital Expenditure Plans, which the Parties agree apply only to the period between January 1, 2012 and December 31, 2012.

Section 3.18. Governmental Authorizations; Permits . Except with respect to Environmental Laws, which are exclusively addressed in Section 3.11 and except as may be required to effectuate the actions contemplated by Section 8.10 , each Company and Company Subsidiary has obtained and is maintaining all Governmental Authorizations and Permits that are necessary or required for the lawful ownership and operation of the E&P Business as currently owned and operated by such Person, except as would not have, individually or in the aggregate, a Material Adverse Effect. There has not occurred any default under any such Governmental Authorization or Permit, nor will one result from the execution of this Agreement or the Closing, except to the extent that such default would not have, individually or in the aggregate, a Material Adverse Effect. Since January 1, 2010, no Company or Company Subsidiary has received any written notice, or to any Seller’s knowledge, oral notice, from any Governmental Authority that such Governmental Authority intends to revoke, not renew, or adversely modify any such Governmental Authorization or Permit in a manner that would have, individually or in the aggregate, a Material Adverse Effect.

Section 3.19. Assets of the E&P Business . Except (a) as set forth in Schedule 3.19 , (b) for any defects or deficiencies in title in any Company Properties, (c) for any defect in title with respect to any of the assets and properties of the Companies or the Company Subsidiaries described in Sections 3.22(b) and 3.22(c) and (d) as would not, individually or in the aggregate, have a Material Adverse Effect, the Companies and the Company Subsidiaries (or, to Sellers’ knowledge, the operator of any applicable Company Property) own or have the valid right to use all equipment, material, Contracts, data, records, rights, interests and other property and assets, tangible and intangible, necessary (together with the services to be provided pursuant to the Transition Services Agreement and the Business Employees required to be transferred pursuant to Section 5.11(a) ) for the conduct of the E&P Business as conducted as of the date hereof (the “ Existing Business ”) in all material respects. Except as set forth in Schedule 3.19 , no property, right or interest material to the continued operation of the Existing Business is being retained by or transferred to any Seller or Affiliate of any Seller (other than any Company or Company Subsidiary).

Section 3.20. Insurance . Set forth in Schedule 3.20 is a true, complete and correct list of (a) all Company or Company Subsidiary insurance policies currently in effect and (b) all “Occurrence Form” policies of insurance in force, owned, held by or maintained for the benefit of any Company, any Company Subsidiary or the E&P Business, in each case for this clause (b) within the four (4) year period prior to the Execution Date. The policies set forth in Schedule 3.20 that are listed as current are in full force and effect in all material respects and satisfy all requirements of applicable Laws and, other than as have not had or would not have, individually or in the aggregate, a Material Adverse Effect, any Contracts to which any Company or Company Subsidiary is a party. All known incidents and claims reportable

under any claims-made policies have been reported. As of the Execution Date, the Companies and the Company Subsidiaries maintain, or are entitled to the benefits of, and subject to actions taken in compliance with Section 5.3 or Section 5.4 , immediately prior to Closing will maintain, or will be entitled to the benefits of, insurance covering their properties, operations, personnel and business in amounts customary for the E&P Business. Except as would not have reasonably been expected to have, individually or in the aggregate, a Material Adverse Effect, none of Sellers (or any of their controlled Affiliates), the Companies or the Company Subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance.

Section 3.21. Intellectual Property .

(a) Schedule 3.21(a) sets forth a true, complete and correct list of (i) all Intellectual Property owned or purported to be owned by any Company or Company Subsidiary (the “ Owned Intellectual Property ”) that is registered, issued or the subject of a pending application and (ii) all material unregistered Owned Intellectual Property. All of the registrations, issuances and applications set forth on Schedule 3.21(a) are valid, in full force and effect and have not expired or been cancelled, abandoned or otherwise terminated, and payment of all renewal and maintenance fees, costs and expenses in respect thereof, and all filings related thereto, have been duly made.

(b) To any Seller’s knowledge, the conduct of the E&P Business does not infringe or otherwise violate any Intellectual Property of any other Person in any material respect. To the knowledge of any Seller, no Person is infringing or otherwise violating any Owned Intellectual Property or any rights of the Companies or the Company Subsidiaries in any licensed Intellectual Property in any material respect, other than with respect to any geophysical or seismic licenses.

Section 3.22. Oil and Gas Matters .

(a) Company Properties . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all proceeds from the sale of Hydrocarbons produced from Company Properties are being received by a Company or Company Subsidiary in a timely manner and are not being held in suspense.

(b) Major Midstream Assets . Subject to the RE Permitted Encumbrances, the Companies and the Company Subsidiaries have good and defensible title to the Rights of Way and other real property interests used in their ownership and/or operation of the Holly Gathering System (as owned and/or operated as of the Execution Date) (the “ Major Midstream Assets ”), except for such failures to have good and defensible title to the Rights of Way and other real property interests used in such ownership and/or operation of the Holly Gathering System that would not be materially adverse to the value, ownership, use, or operation of the Major Midstream Assets. The Major Midstream Assets are located within or on property covered by such Rights of Way or other real property interests, except with respect to those instances in which the failure of such Major Midstream Assets to be located within or on such property would not be materially adverse to the value, ownership, use or operation of the applicable Major Midstream Asset. The Rights of Way and other real property interests used in the ownership and/or operation of the Major Midstream Assets as owned and/or operated as of the Execution Date constitute continuous land rights, except for gaps which would not be materially adverse to the value, ownership, use or operation of the applicable Major Midstream Asset. Notwithstanding the foregoing, no representation or warranty is given pursuant to this Section 3.22(b) with respect to the Title Assets.

(c) Company Equipment . The Companies and Company Subsidiaries (or, to Sellers’ knowledge, the applicable operator) have good and defensible title to, or a valid leasehold

interest in, the Company Equipment, free and clear of any Liens, except such imperfections of title as, individually or in the aggregate, do not or would not be reasonably expected to have a Material Adverse Effect.

(d) Imbalances . There are no production imbalances with respect to Company Mineral Interests operated by any Company or Company Subsidiary, or to Sellers’ knowledge with respect to any Company Mineral Interests operated by any third party, as of November 1, 2011, except as set forth in Schedule 3.22(d) or except as would not exceed $100,000 on a well by well basis. There are no pipeline, transportation or processing imbalances existing with respect to the Company Mineral Interests as of November 1, 2011 that exceed $100,000, except as set forth on Schedule 3.22(d) . In making this representation and warranty with respect to Company Properties operated by third Persons, Sellers shall be entitled to rely upon imbalance statements rendered by such operators as of November 1, 2011.

(e) Production . Other than gas balancing obligations, no Company or Company Subsidiary is obligated by virtue of a take or pay payment, advance payment or other similar payment (other than royalties and similar arrangements established in the Company Mineral Interests) to deliver Hydrocarbons, or proceeds from the sale thereof, attributable to any Company’s or Company Subsidiary’s interest in the Company Properties at some future time without receiving payment therefor at or after the time of delivery.

(f) Brazil Concessions . One or more of the BrazilCos own (directly or indirectly) the interests set forth on Schedule 3.22(f) in each Brazil Concession. Schedule 3.22(f) lists all exploration and production concessions granted by ANP for the exploration and production of Hydrocarbons in which any Company or Company Subsidiary holds a participating interest (directly or indirectly). None of Sellers, the Companies or the Company Subsidiaries have received any written notice or, to any Seller’s knowledge, oral notice, from any Governmental Authority or any other Person regarding any actual, alleged, possible or potential material violation, material breach or default of, or material failure to comply with, any of the Contracts creating the applicable Company’s or Company Subsidiary’s right, title and interest in and to the Brazil Concessions (such Contracts, the “ Brazil Concession Contracts ”). The applicable Seller, Company or Company Subsidiary party to (or guarantor with respect to) the Brazil Concession Contracts has performed all material obligations under each Brazil Concession Contract. All of the Brazil Concession Contracts are valid and binding upon the applicable Company or Company Subsidiary party thereto or subject thereto and, to Seller’s knowledge, in full force and effect and enforceable, in each case, in all material respects, against the other parties thereto. No event has occurred with respect to any Brazil Concession Contract that, after notice or lapse of time, or both, would constitute a material default by any Seller, Company or Company Subsidiary party thereto or subject thereto or, to any Seller’s knowledge, any other party thereto. True, complete and correct copies of the Brazil Concession Contracts in existence as of the execution hereof have been included in the Data Room. No notice of default or breach has been delivered by any Seller, Company or Company Subsidiary under any Brazil Concession Contract, the resolution of which is currently outstanding.

Section 3.23. Royalties . All rentals, delay rentals, shut-ins, royalties and other payments due under the Company Mineral Interests operated by any Company or Company Subsidiary, and to Sellers’ knowledge, all rentals, delay rentals, shut-ins, royalties and other payments due under the Company Mineral Interests operated by any third party, have been promptly and fully paid, except (a) to the extent such failure has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (b) for amounts that are being held in suspense.

Section 3.24. Qualification . The Companies and the Company Subsidiaries that own Company Mineral Interests, rights of way and other rights issued by the United States government or

other Governmental Authorities are qualified under applicable Laws to hold such Company Mineral Interests, rights of way and other rights, except for such non-compliance as may result from the actions contemplated by Section 8.10 and which non-compliance is cured on or before Closing.

Section 3.25. Affiliate Transactions . Except as set forth on Schedule 3.25 , there are no Contracts or arrangements relating to transactions (other than related to continuing employment and benefit matters) between any Company or any Company Subsidiary, on the one hand, and any Seller, equity holder, manager or executive officer thereof or any member of such executive officer’s, director’s or stockholder’s immediate family, or any Affiliate or Person controlled by such executive officer, director or stockholder on the other hand (other than agreements related to their employment) (an “ Affiliate Transaction ”).

Section 3.26. Anti-Corruption Laws; Certain Regulatory Matters .

(a) In connection with the E&P Business, no Company, Company Subsidiary, Seller or other Affiliate of a Company, or any director, officer, or employee of any of the foregoing, nor, to the Sellers’ knowledge, any agent, representative or consultant of any Company, Company Subsidiary, Seller or other Affiliate of a Company, has either (i) in the past five (5) years violated in any material respect any Anti-Corruption Laws or (ii) offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, including but not limited to cash, checks, wire transfers, tangible and intangible gifts, favors, services, and those entertainment and travel expenses that go beyond what is reasonable and customary and of modest value:

(i) to any FCPA Government Official, whether directly or through any other Person, for the purpose of: (A) influencing any act or decision of a FCPA Government Official in his or her official capacity; (B) inducing a FCPA Government Official to do or omit to do any act in violation of his or her lawful duties; (C) securing any improper advantage; (D) inducing a FCPA Government Official to influence or affect any act or decision of any FCPA Governmental Authority or (E) assisting any Company Representative in obtaining or retaining business for or with, or directing business to, any Person; or

(ii) to any Person in a manner which would constitute or have the purpose or effect of public or commercial bribery, or the acceptance of or acquiescence in extortion, kickbacks, or other unlawful or improper means of obtaining business or any improper advantage.

(b) No Company, Company Subsidiary, Seller or other Affiliate of a Company, or any director, officer, or employee of any of the foregoing, nor, to the Sellers’ knowledge, any agent, representative or consultant of any Company, Company Subsidiary, Seller or other Affiliate of a Company, has, in connection with the E&P Business, either (i) (A) conducted or initiated any review, audit, or internal investigation or (B) made a voluntary, directed, or involuntary disclosure to any Governmental Authority responsible for enforcing Anti-Corruption Laws, in each case with respect to any alleged act or omission arising under or relating to noncompliance with any Anti-Corruption Law or (ii) received any notice, request, or citation from any Person alleging noncompliance with any Anti-Corruption Law.

(c) To Sellers’ knowledge, no officer, director, or employee of any Company or any Company Subsidiary is a FCPA Government Official.

(d) Each Company and each Company Subsidiary has maintained complete and accurate books and record of any payments to or other expenses involving agents,

consultants, representatives, customer employees, and FCPA Government Officials in accordance with the Accounting Principles.

(e) No Company or Company Subsidiary owns or operates any facility that is subject to regulation by the Federal Energy Regulation Commission under the Natural Gas Act, Natural Gas Policy Act, Interstate Commerce Act or the Public Utility Holding Company Act.

Section 3.27. Limitations .

(a) Except as and to the extent expressly set forth in this Article 3 , in the certificate of Sellers to be delivered pursuant to Section 7.2(b) , in any other agreement or document required to be executed and delivered at Closing pursuant to Article 7 or in any certificate delivered by Sellers pursuant to Section 1.2(c)(v) of Annex 1 , (i) Sellers make no representations or warranties, express or implied, with respect to the Companies, the Company Subsidiaries, the E&P Business or the transactions contemplated hereby and (ii) Sellers expressly disclaim all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to Purchaser or any of its Affiliates, employees, agents, consultants or representatives (including any opinion, information, projection or advice that may have been provided to Purchaser by any officer, director, employee, agent, consultant, representative or advisor of any Seller or any of their Affiliates).

(b) EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS ARTICLE 3 , IN THE CERTIFICATE OF SELLERS TO BE DELIVERED AT CLOSING PURSUANT TO SECTION 7.2(b) , IN ANY OTHER AGREEMENT OR DOCUMENT REQUIRED TO BE EXECUTED AND DELIVERED AT THE CLOSING PURSUANT TO ARTICLE 7 OR IN ANY CERTIFICATE DELIVERED BY SELLERS PURSUANT TO SECTION 1.2(C)(V) OF ANNEX 1 , WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLERS (1) MAKE NO AND EXPRESSLY DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS OF THE E&P BUSINESS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS OF THE E&P BUSINESS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS OF THE E&P BUSINESS, (IV) THE EXISTENCE OF ANY PROSPECT, RECOMPLETION, INFILL OR STEP-OUT DRILLING OPPORTUNITIES, (V) ANY ESTIMATES OF THE VALUE OF THE ASSETS OF THE E&P BUSINESS OR FUTURE REVENUES GENERATED BY THE ASSETS OF THE E&P BUSINESS, (VI) THE PRODUCTION OF HYDROCARBONS FROM THE ASSETS OF THE E&P BUSINESS, OR WHETHER PRODUCTION HAS BEEN CONTINUOUS, OR IN PAYING QUANTITIES, OR ANY PRODUCTION OR DECLINE RATES, (VII) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS OF THE E&P BUSINESS, (VIII) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT OR (IX) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (2) FURTHER DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OR ANY EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES THAT, EXCEPT AS SET FORTH IN ANNEX 1 AND EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS ARTICLE 3 , IN THE CERTIFICATE OF SELLERS TO BE DELIVERED AT CLOSING PURSUANT TO SECTION 7.2(b) , IN ANY OTHER AGREEMENT OR

DOCUMENT REQUIRED TO BE EXECUTED AND DELIVERED AT THE CLOSING PURSUANT TO ARTICLE 7 OR IN ANY CERTIFICATE DELIVERED BY SELLERS PURSUANT TO SECTION 1.2(C)(V) OF ANNEX 1 , THE ASSETS OF THE E&P BUSINESS ARE BEING TRANSFERRED “AS IS, WHERE IS,” WITH ALL FAULTS AND DEFECTS, AND THAT PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN SECTION 3.11 , IN THE CERTIFICATE OF SELLERS TO BE DELIVERED AT CLOSING PURSUANT TO SECTION 7.2(b) , IN ANY OTHER AGREEMENT OR DOCUMENT REQUIRED TO BE EXECUTED AND DELIVERED BY SELLERS AT CLOSING PURSUANT TO ARTICLE 7 OR IN ANY CERTIFICATE DELIVERED BY SELLERS PURSUANT TO SECTION 1.2(C)(V) OF ANNEX 1 , SELLERS HAVE NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS OF THE E&P BUSINESS, AND PURCHASER SHALL BE DEEMED TO BE TAKING THE ASSETS OF THE E&P BUSINESS “AS IS, WHERE IS” FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION.

(c) Any representation or warranty qualified by the phrase “to the knowledge of any Seller,” the phrase “to any Seller’s knowledge” or by any other phrase referring to the knowledge of one or more of Sellers, is limited to matters within the actual knowledge of the individuals set forth on Schedule 3.27(c) and the individuals (if any) who hereafter have substantially the same responsibilities as the individuals listed on Schedule 3.27(c) (all such individuals, collectively, the “ Sellers Knowledge Persons ” and each, individually, a “ Sellers Knowledge Person ”). For the avoidance of doubt, the actual knowledge of each Sellers Knowledge Person shall be imputed to each of the other Sellers Knowledge Persons and the actual knowledge of any Seller shall be imputed to each of the other Sellers.

(d) Inclusion of a matter on a Schedule attached hereto shall not be deemed an indication that such matter is, or may be, material or does, or may, have a Material Adverse Effect. Schedules may include matters not required by the terms of the Agreement to be listed on the Schedule, which additional matters are disclosed for purposes of information only, and inclusion of any such matter does not mean that all such matters not required to be disclosed are included.

(e) For purposes of the representations and warranties of Sellers contained in this Agreement, disclosure of any matter in any one of the Schedules shall be deemed to be a disclosure of such matter with respect to any other Schedule calling for disclosure of such information, if it is readily apparent on its face from such first Schedules. All matters of fact and of opinion disclosed by El Paso Corporation (relating directly or indirectly to the E&P Business) in publicly-available filings with the SEC, and all exhibits and schedules thereto, shall be deemed to be incorporated in the Schedules attached hereto and shall be exceptions to any representation or warranty to which it is readily apparent on its face from such document that such disclosure is applicable, in each case, to the extent such matters were disclosed in filings on or after January 1, 2010 and prior to January 1, 2012, but excluding all disclosures under the heading “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” or similar headings and excluding all general cautionary statements customarily included under the heading “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” regardless of whether such general cautionary statements are included under those headings or elsewhere in the disclosure.

(f) As used herein, “ Material Adverse Effect ” means a change, event, circumstance, development, state of facts, or condition that has or would reasonably be expected to (A) materially impair, prevent or delay any Seller’s timely consummation of the transaction contemplated

hereby or (B) have a material adverse effect on the E&P Business or the ownership, assets, operations or financial condition of the Companies and the Company Subsidiaries, taken as a whole; provided , however , that, for purposes of clause (B), Material Adverse Effect shall not include material adverse effects resulting from: (i) changes in the prices of Hydrocarbons; (ii) any declines in Company Well performance that do not result from the gross negligence of any Seller, Company, or Company Subsidiary; (iii) general changes in the industry in which the Companies and the Company Subsidiaries participate or in which the E&P Business is engaged; (iv) general changes in economic or political conditions, or financial markets; (v) changes in conditions or developments generally applicable to the oil and gas industry in any area or areas where the E&P Business is located; (vi) failure alone to meet internal or analyst projections or forecasts or estimates of revenues, earnings or other financial metrics for any period ( provided , that the underlying reasons for such failure shall be taken into account in determining whether there has been a Material Adverse Effect); (vii) acts of God, including hurricanes and storms, acts or failures to act of Governmental Authorities (where not caused by the willful or negligent acts of Sellers, Companies, the Company Subsidiaries or any of their respective Affiliates); (viii) civil unrest or similar disorder; terrorist acts; (ix) changes in applicable Laws or interpretations thereof by any Governmental Authority, including any changes in the deductibility of drilling completion or operating costs or other taxes; (x) any reclassification or recalculation of reserves in the ordinary course of business consistent with past practice; (xi) effects or changes that are cured ( provided that, except to the extent they would generate a downward adjustment to the Purchase Price pursuant to Section 2.3(g) or reduce the two percent (2%) deductible referred to in Section 10.4(c) , the costs of the cure to the Companies and the Company Subsidiaries shall be taken into account in determining whether there has been a Material Adverse Effect) or no longer exist by the earlier of the Closing or the termination of this Agreement pursuant to Article 9 , (xii) performance of this Agreement and the transactions contemplated hereby, including compliance with covenants set forth herein or (xiii) changes resulting from the announcement of the transactions contemplated hereby or the Kinder Morgan Merger. Notwithstanding the foregoing (1) for purposes of Sections 3.1(d)(ii) , 3.1(d)(iii) , 3.2(b)(ii) , 3.2(b)(iii) , 3.3(b)(ii) , 3.3(b)(iii) and 3.14 , “Material Adverse Effect” shall be determined without giving effect to clause (xii) of the definition thereof and (2) changes, events, circumstances, developments, states of facts, and conditions referred to in clauses (iii), (iv), (v) and (ix) in the definition of “Material Adverse Effect” shall be considered for purposes of determining whether there has been (or would reasonably be expected to be) a “Material Adverse Effect” if, and only to the extent, such change, event, circumstance, development, state of facts, or condition has had (or would reasonably be expected to have) a disproportionate adverse effect on the E&P Business or the ownership, assets, operations or financial condition of the Companies and the Company Subsidiaries, as opposed to other companies (and businesses) operating in the industries in which such Persons (and the E&P Business) operates.

Article 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Sellers the following:

Section 4.1. Existence and Qualification . Purchaser is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware.

Section 4.2. Power . Purchaser has the limited liability company power to enter into and perform its obligations under this Agreement (and all documents required to be executed and delivered by Purchaser pursuant hereto) and to consummate the transactions contemplated by this Agreement (and such documents).

Section 4.3. Authorization and Enforceability . The execution, delivery and performance of this Agreement (and all documents required to be executed and delivered by Purchaser pursuant hereto),

and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary limited liability company action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser (and all documents required to be executed and delivered by Purchaser pursuant hereto will be duly executed and delivered by Purchaser) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Purchaser, enforceable in accordance with their terms.

Section 4.4. No Conflicts . The execution, delivery and performance of this Agreement by Purchaser, and the consummation of the transactions contemplated by this Agreement, will not (i) violate any provision of the Organizational Documents of Purchaser, (ii) result in a material default (with or without due notice or lapse of time or both) or the creation of any Lien or give rise to any right of termination, cancellation or acceleration under any asset, Contract, note, bond, mortgage, indenture, or other financing instrument to which such Company is a party or by which it is bound, (iii) violate any Order applicable to Purchaser as a party in interest or (iv) violate any Law applicable to Purchaser, except any matters described in clauses (ii), (iii) or (iv) above which would not have, individually or in the aggregate, a material adverse effect on Purchaser or its properties.

Section 4.5. Consents, Approvals or Waivers . The execution, delivery and performance of this Agreement by Purchaser will not be subject to any consent, approval or waiver from any Governmental Authority or other third Person except for the approval and waiting period requirements under the Antitrust Laws.

Section 4.6. Litigation . There are no actions, suits or proceedings pending, or to Purchaser’s knowledge, threatened in writing before any Governmental Authority or arbitrator against Purchaser or any Affiliate of Purchaser which are reasonably likely to impair or delay Purchaser’s ability to perform its obligations under this Agreement.

Section 4.7. Financing .

(a) Purchaser has delivered to Sellers correct and complete copies of:

(i) executed commitment letters dated as of the date hereof (including all exhibits, schedules and annexes thereto, collectively, the “ Equity Funding Letters ”) from the parties set forth therein (collectively, the “ Equity Providers ”) pursuant to which the Equity Providers have committed, subject to the terms and conditions therein, to invest the amounts set forth therein (the “ Equity Financing ”); and

(ii) an executed commitment letter dated as of the date hereof (as the same may be amended or replaced pursuant to Section 5.19(a) and including any executed commitment letter (or similar agreement) for Alternate Financing, in each case, pursuant to Section 5.19(c) , including all exhibits, schedules and annexes thereto, collectively, the “ Debt Commitment Letter ” and, together with the Equity Funding Letters, the “ Financing Letters ”) from the financial institutions identified therein (including any Affiliates thereof, the “ Debt Providers ”) pursuant to which, and subject to the terms and conditions therein, the Debt Providers have committed to provide or cause to be provided the debt financing in the amounts set forth therein (collectively, the “ Debt Financing ,” and together with the Equity Financing collectively referred to as the “ Financing ”).

(b) As of the date hereof, none of the Financing Letters have been amended or modified in any respect, and the respective obligations and commitments contained in such letters have not been withdrawn or rescinded in any respect. Purchaser has fully paid or has caused to be fully paid any and all commitment fees or other fees in connection with the Financing Letters that are

payable on or prior to the date hereof. Assuming (i) the Financing is funded in accordance with the Financing Letters, (ii) the accuracy of the representations and warranties set forth in Article 3 and (iii) the performance by Sellers and the Companies of the covenants contained in this Agreement, the net cash proceeds contemplated by the Financing Letters will, together with available cash of Purchaser and cash on hand of the Companies, if any, on the Closing Date , in the aggregate be sufficient for Purchaser to pay the following (the “ Required Amount ”): the aggregate amounts required to be paid by Purchaser pursuant to Section 2.1 , and all fees, costs and expenses required to be paid by Purchaser in connection with the transactions contemplated by this Agreement and by the Financing.

(c) The Financing Letters are in full force and effect and are the valid, binding and enforceable obligations of Purchaser and, to the knowledge of Purchaser, the other parties thereto, except as such enforceability may be (i) limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws of general application relating to or affecting creditors’ rights generally and (ii) subject to general equitable principles (whether considered in a proceeding in equity or at law). Assuming the accuracy of the representations and warranties set forth in Article 3 and the performance by Sellers, the Companies and the Company Subsidiaries of their obligations contained in this Agreement as of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to constitute a default or breach on the part of Purchaser or, to the knowledge of Purchaser, any other parties thereto, under the Financing Letters. As of the date of this Agreement, Purchaser is not aware of any fact, occurrence or condition that makes any of the assumptions or statements set forth in the Financing Letters inaccurate in any material respect or that would cause any of the commitments provided in the Financing Letters to be terminated or ineffective or, assuming satisfaction of the condition precedent set forth in Section 6.2(a) , any reason to believe that any of the conditions precedent set forth therein will not be met. The Financing Letters contain all of the conditions precedent to the obligations of the parties thereunder to make the Financing available to Purchaser on the terms therein, and there are no other conditions related to the funding of the full amount of the Financing. As of the date hereof, there are no side letters or other contracts, arrangements or understandings to which Purchaser or any of its Subsidiaries or the Equity Providers are a party related to the funding or investing, as applicable, of the full amount of the Financing (other than the Financing Letters), except for any customary fee, fee credit and engagement letters in respect of the Debt Financing (in each case, which shall not reduce, or contemplate the reduction of, the full amount of the Debt Financing below the amount of the Required Amount, after taking into account other sources of funds, including the Equity Financing and available cash of Purchaser).

(d) In no event shall the receipt or availability of any Financing by Purchaser or any of its Affiliates be a condition to any of Purchaser’s obligations hereunder.

Section 4.8. Investment Intent . Purchaser is acquiring the Shares for its own account and not with a view to their sale or distribution in violation of the Securities Act of 1933, as amended, the rules and regulations thereunder, any applicable state blue sky Laws, or any other applicable securities Laws.

Section 4.9. Independent Investigation . Purchaser is (or its advisors are) experienced and knowledgeable in the oil and gas business and aware of the risks of that business. Except for the representations and warranties expressly made by Sellers in Article 3 , in the certificate to be delivered to Purchaser pursuant to Section 7.2(b) , in any other agreement or document delivered pursuant to this Agreement or in any certificate delivered by Sellers pursuant to Section 1.2(c)(v) of Annex 1 , Purchaser acknowledges that there are no representations or warranties, express or implied, as to the financial condition, assets, liabilities, equity, operations, business or prospects of the Companies, the Wholly-Owned Subsidiaries or any Affiliate thereof, and that in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser has relied solely upon the

representations and warranties expressly made in Article 3 , in the certificate to be delivered to Purchaser pursuant to Section 7.2(b) , in any other agreement or document delivered pursuant to this Agreement or in any certificate delivered by Sellers pursuant to Section 1.2(c)(v) of Annex 1 , its own independent investigation, verification, analysis and evaluation.

Section 4.10. Liability for Brokers’ Fees . Sellers, and, prior to Closing, the Companies, shall not directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Purchaser, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation to an intermediary in connection with the negotiation, execution or delivery of this Agreement or any agreement or transaction contemplated hereby.

Article 5
COVENANTS OF THE PARTIES

Section 5.1. Access .

(a) On and after the Execution Date to the Closing Date, Sellers will give Purchaser and its representatives reasonable access to the E&P Business (and to personnel and representatives of Sellers, Companies, the Company Subsidiaries and their respective Affiliates responsible for the E&P Business at such times as Purchaser may reasonably request) and reasonable access to and the right to copy, at Purchaser’s expense, the Company Records in Sellers’, the Companies’, the Company Subsidiaries’ and/or their respective Affiliates’ possession or readily available to any of them at immaterial cost or expense, for the purpose of conducting a due diligence review of the E&P Business, the Companies and the Company Subsidiaries and for transition and integration planning. Such reasonable access by Purchaser shall be limited to Sellers’ normal business hours, and Purchaser’s investigation shall be conducted in a manner that does not unreasonably interfere with the operation of the E&P Business or the other businesses of Sellers or their Affiliates. Purchaser’s right of access shall not entitle Purchaser to operate Company Equipment to conduct intrusive or environmental testing or sampling, and prior to the Closing Purchaser shall not operate Company Equipment or conduct intrusive or environmental testing or sampling. Purchaser shall provide Sellers with prior notice before the E&P Business is accessed pursuant to this Section 5.1 , along with a description of the activities Purchaser intends to undertake. All information obtained by Purchaser and its representatives under this Section 5.1 shall be subject to the terms of that certain confidentiality agreement between El Paso and an Affiliate of Purchaser, dated as of November 3, 2011 (the “ Confidentiality Agreement ”), and any applicable privacy Laws regarding personal information.

(b) Section 5.1(a) shall not require Sellers to permit any access, or to disclose any information, that in the reasonable, good faith judgment (after consultation with outside counsel) would reasonably be expected to result in violation of any Contract to which any Seller or any of Sellers’ Affiliates is a party or applicable Laws, including the Antitrust Laws, or is subject to or would cause any privilege (including attorney-client privilege) which any Seller or any of Sellers’ Affiliates would be entitled to assert to be undermined with respect to such information and such undermining of such privilege could in any such Seller’s or such Seller’s Affiliates’ good faith judgment (after consultation with counsel) adversely affect in any material respect such Seller’s or such Seller’s Affiliates’ position in any pending, or what any such Seller’s or such Seller’s Affiliates’ believes in good faith (after consultation with counsel) could be, future litigation; provided , however , that the Parties shall cooperate in seeking to find a way to allow disclosure of such information to the extent doing so would not reasonably be likely (in the good faith belief of the Party (or its Affiliate) disclosing such information) to result in the violation of any such Contract or Law or reasonably be likely to cause such privilege to be undermined with respect to such information or could reasonably (in the good faith belief of the Party (or its Affiliate) disclosing such information) be managed through the use of customary “clean-room”

arrangements pursuant to which non-employee representatives of the other Party shall be provided access to such information; provided , further , that the Party being requested to disclose the information shall (i) notify the other Party that such disclosures are reasonably likely to violate its or its Affiliate’s obligations under any such Contract or Law or are reasonably likely to cause such privilege to be undermined, (ii) communicate to the other Party in reasonable detail the facts giving rise to such notification and the subject matter of such information (to the extent it is able to do so in accordance with the immediately preceding proviso) and (iii) in the case where such disclosures are reasonably likely to violate its or its Affiliate’s obligations under any Contract, use reasonable commercial efforts to seek consent from the applicable third Person to any such Contract with respect to the disclosures prohibited thereby (to the extent not otherwise expressly prohibited by the terms of such Contract).

Section 5.2. Press Releases . Neither Sellers nor Purchaser, nor an Affiliate of any of them, shall make any press release or other public announcement regarding the existence of this Agreement, the contents hereof or the transactions contemplated hereby without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed); provided , however , that the foregoing shall not restrict disclosures to the extent (i) necessary for a Party to perform this Agreement (including disclosure to a Governmental Authority or any third Persons holding preferential rights to purchase any of the assets of the E&P Business, rights of consent or other rights that are applicable to the transactions contemplated by this Agreement, as reasonably necessary to provide notices, seek waivers, amendments or termination of such rights, or seek such consents), (ii) required (upon advice of counsel) by applicable securities or other applicable Laws or regulations or the applicable rules of any stock exchange having jurisdiction over such Party or its respective Affiliates or (iii) subject to the Confidentiality Agreement, such Party has given the other Party a reasonable opportunity to review such disclosure prior to its release and no objection is raised; provided , further , that, in the case of clauses (i) and (ii), each Party shall use its reasonable efforts to consult with the other Party regarding the contents of any such release or announcement prior to making such release or announcement.

Section 5.3. Operation of Business . Except as (i) required by applicable Law, (ii) provided in the Capital Expenditure Plans, (iii) set forth on Schedule 5.3 or 5.4 or (iv) required pursuant to the terms of this Agreement, until the Closing, Sellers shall cause the Companies and the Wholly-Owned Subsidiaries to each operate the E&P Business in the ordinary course consistent with past practice and not engage in any business other than the E&P Business, and shall (w) use their commercially reasonable efforts to keep available the services of their directors, officers and key employees, (x) use their commercially reasonable efforts to maintain in effect all Company Contracts and preserve the present relationships with their customers, suppliers, lenders and other Persons having material business relationships with them, (y) manage their working capital in the ordinary course of business consistent with past practice and (z) use commercially reasonable efforts to implement the drilling program and other activities in accordance with and as contemplated by the Capital Expenditure Plans. Without limiting the generality of the foregoing, from the date hereof until the Closing, except as otherwise set forth on Schedule 5.3 or 5.4 , Sellers shall not permit the Companies or the Wholly-Owned Subsidiaries to, and shall cause the Companies and the Wholly-Owned Subsidiaries not to, do any of the following without the prior written consent of Purchaser:

(a) acquire, lease, transfer, sell, hypothecate, encumber, relinquish or otherwise dispose of any assets of the E&P Business, except for (i) sales and dispositions of Hydrocarbons in the ordinary course of business consistent with past practice, (ii) sales of assets of the E&P Business not to exceed $25,000,000 individually or $100,000,000 in the aggregate, (iii) other sales and dispositions of surplus, worn-out or obsolete Company Equipment in the ordinary course of business consistent with past practice not exceeding, in the aggregate, $10,000,000, (iv) Company Mineral Interests which have expired in accordance with the terms thereof, (v) reductions or forfeitures of interest due to non-consent elections made in the ordinary course of business consistent with past practice,

interests earned by non-consent parties after non-consent payouts, and other interests subject to earnout, back-in interests, net profits interests or similar contingent payout or interests provisions in Company Contracts in effect on the Execution Date, (vi) sales of assets of the E&P Business set forth in Schedule 5.3 , (vii) acquisitions of oil and gas properties in the ordinary course of business consistent with past practices, (viii) purchases of inventory and equipment in the ordinary course of business consistent with past practice, (ix) acquisition of seismic, geophysical and similar data and (x) (A) materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other similar Liens arising in the ordinary course of business for amounts not yet delinquent (including any amounts being withheld as provided by Law), or if delinquent, being contested in good faith by appropriate actions and (B) Liens constituting Permitted Liens;

(b) terminate, materially amend (or waive any material rights), extend, violate, breach or default under any Material Contracts set forth on Schedule 3.13 (or enter into any Contract that would be a Material Contract if in existence on the Execution Date), other than those Material Contracts relating to Derivatives that are terminated or entered into in accordance with Section 5.9 , in each case, except (i) in case of an emergency that, in Seller’s good faith determination, presents a reasonable likelihood of material property or environmental damage and/or any risk to human health or safety; (ii) in connection with terminations of employment or services in the ordinary course of business consistent with past practice; or (iii) Material Contracts in express furtherance of the Capital Expenditure Plans;

(c) (i) fail to maintain insurance coverage on the assets of the E&P Business in the amounts and of the types currently in force or, upon renewal thereof, in similar amounts and types to the extent then available on commercially reasonable terms and prices or (ii) arrange, enter into or agree to acquire director and officer “tail” insurance coverage for any current or former directors or officers of any of the Companies;

(d) fail to use commercially reasonable efforts to maintain all material Government Authorizations in effect on the Execution Date and necessary or required for the ownership and operation of the E&P Business;

(e) waive, compromise, or settle (i) any material claim involving or against any of the Companies or the Company Subsidiaries, (ii) any stockholder Action against any Company or any Company Subsidiary or any of their respective officers or directors, if such waiver, compromise or settlement would result in any liability on the part of any Company or Company Subsidiary, (iii) any Action that relates to this Agreement or the transactions contemplated hereby or (iv) any Action that could reasonably be expected to adversely affect ownership, operation or value of any material Company Mineral Interests, to the extent that any of the foregoing could reasonably be expected to materially and adversely affect any Company, Company Subsidiary, or the Company Mineral Interests, taken as a whole;

(f) grant or create any material consent or preference right with respect to any material Company Mineral Interests;

(g) with respect to any material Company Property or Company Well, voluntarily resign or transfer operatorship, except in connection with the disposition of such Company Property or Company Well pursuant to the change of control provisions under any Company Contract or the transactions contemplated by this Agreement;

(h) terminate or voluntarily relinquish any material Governmental Authorization necessary for the conduct of the E&P Business except in the ordinary course of business consistent with past practice or in connection with the actions contemplated in Section 8.10 ;

(i) make any capital expenditure that is not permitted pursuant to the Capital Expenditure Plan and that is in excess of $100,000,000 (excluding any cost overruns with respect to operations conducted by third Persons and in which the applicable Seller, Company, or Company Subsidiary is bound to participate), individually or in the aggregate, except in case of an emergency that Sellers in good faith believe presents a reasonable likelihood of material property or environmental damage and/or any risk to human health or safety; or

(j) agree to do any of the foregoing.

For purposes of clarity, to the extent that the Capital Expenditure Plan directly conflicts with any of the restrictions set forth in this Section 5.3 or Section 5.4 , the Capital Expenditure Plan shall govern. Requests for approval of any action restricted by this Section 5.3 shall be delivered to the following individual, who shall have full authority to grant or deny such requests for approval on behalf of Purchaser:

EPE Acquisition, LLC
c/o Apollo Management, L.P.
9 West 57th Street
New York, New York 10019
Attention: Sam Oh
Telephone: (212) 822-0629
Telecopy: (646) 417-6651

Purchaser’s approval of any action set forth in Sections 5.3(c) , 5.3(d) , 5.3(e) and 5.3(h) above may be granted or withheld in its sole discretion and Purchaser’s approval of any action set forth in Sections 5.3(a) , 5.3(b) , 5.3(f) , 5.3(g) , 5.3(i) and 5.3(j) (but, with respect to Section 5.3(j) , only to the extent applicable to the other clauses designated in this sentence) above, shall not be unreasonably withheld, conditioned or delayed and shall be considered granted within fifteen (15) days (unless a shorter time is required in an applicable operating agreement, unit agreement, unit operating agreement, or similar agreement, or authority for expenditure or operations notice from a third party, or a rig is onsite and is incurring, or, absent such consent, will incur, standby or similar charges, in which case such shorter time requirement shall be specified in Sellers’ notice to Purchaser but shall not be fewer than two (2) days) of Sellers’ notice to Purchaser requesting such consent. Purchaser acknowledges that the Companies and their Wholly-Owned Subsidiaries may own undivided interests in certain assets or entities, and Purchaser agrees that (i) the acts or omissions by any Company or Wholly-Owned Subsidiary in its capacity as general partner or manager (or similar capacity) of another entity that is listed on Schedule 5.3 shall not be restricted by this Section 5.3 and (ii) the acts or omissions of third Persons shall not constitute a violation of the provisions of this Section 5.3 , nor shall any action required by a vote of working or equity interest or the owners of capital stock constitute such a violation so long as Sellers, the Companies and the Wholly-Owned Subsidiaries, in each case, have each voted all of their respective working or equity interest or shares of capital stock in a manner consistent with this Section 5.3 , except to the extent that such vote would be inconsistent with such Sellers’, Companies’ or Wholly-Owned Subsidiaries’ fiduciary duties, if any, to such underlying entities or the beneficial owners thereof.

Section 5.4. Conduct of the Companies and the Company Subsidiaries . Without limiting the generality of the provisions of Section 5.3 , except as set forth on Schedule 5.4 , from the date hereof until the Closing, Sellers shall not permit the Companies or the Company Subsidiaries to, and shall cause

the Companies and the Companies Subsidiaries not to, do any of the following without the prior written consent of Purchaser:

(a) amend its Organizational Documents other than in connection with the actions contemplated in Section 8.10 ;

(b) split, combine, reclassify, issue, deliver, sell, redeem, repurchase or otherwise acquire any shares of its capital stock or issue any option, warrant, commitments, subscriptions, rights to purchase or other right relating to its capital stock or any securities convertible into or exchangeable for any shares of capital stock, declare, set aside or pay any stock-split, dividend or any other payment or distribution (whether in cash, stock or property or any combination thereof) to any Seller or other Affiliate or amend in any respect any of the terms of any such capital stock outstanding on the date hereof, except, in the case of the declaration or payment of dividends, to the extent otherwise contemplated in Section 2.2(a) ;

(c) incur, create, assume, suffer to exist or otherwise be liable with respect to any Indebtedness (excluding (i) accounts payable incurred in the ordinary course of business consistent with past practice, (ii) the incurrence of Indebtedness and reimbursement obligations in respect of letters of credit under the Revolving Credit Facility, (iii) Indebtedness existing as of the date hereof, (iv) Indebtedness described in clause (v) of the definition of Indebtedness and (v) inter-company Indebtedness owed to Sellers or any of their Affiliates subject to, where applicable, Section 5.7 );

(d) make an equity investment in or capital contribution to(i) any of the EgyptCos or (ii) any other Person (except investments in another Company or Wholly-Owned Subsidiary other than the Egypt Cos) in excess of, in the case of clause (ii), $10,000,000 individually or $50,000,000 in the aggregate;

(e) make any change in any method of accounting or accounting principles other than those required by the Accounting Principles;

(f) merge or consolidate with any other entity or purchase capital stock or other equity interests of any Person other than in connection with the actions contemplated in Section 8.10 ;

(g) acquire the assets of any Person for total consideration in excess of $25,000,000 individually or $100,000,000 in the aggregate;

(h) make any loan or advance to any Person (excluding (i) loans to Affiliates (excluding the EgyptCos but otherwise including Affiliates that are not other Companies or Company Subsidiaries) that bear an interest rate equal to or greater than LIBOR plus two percentage points (LIBOR plus two percent (2%)), (ii) accounts receivable in the ordinary course of business consistent with past practice, (iii) advances or cash call payments to the operator as required under applicable operating agreements, (iv) advances as operator on behalf of co-owners for costs under applicable operating agreements, (v) loans to another Company or Wholly-Owned Subsidiary (other than the EgyptCos) or (vi) other loans, in the ordinary course of business consistent with past practice, to any Person (other than to any of the EgyptCos, Sellers or any of Sellers’ Affiliates (other than any Company or Wholly-Owned Subsidiary));

(i) guarantee or otherwise provide any credit support on behalf of any of the EgyptCos;

(j) except as required under any Employee Plan, as required by applicable Law (including to avoid the imposition of any penalty taxes under Section 409A of the Code), or as set forth in Schedule 5.4 , (i) establish, adopt, enter into, materially amend or terminate any material Companies Employee Plans, (ii) materially increase or decrease the benefits or compensation payable to or for Business Employees under any Seller Employee Plans (excluding any Companies Employee Plan), except for changes generally affecting all employees of Seller and its ERISA Affiliates, (iii) enter into any negotiation in respect of any collective bargaining agreement solely covering Business Employees, (iv) pay or agree to pay any material pension, material retirement allowance or other material employee benefit not contemplated by any Employee Plan to any Business Employee, (v) materially increase the compensation or fringe benefits of any Business Employee, except for changes generally affecting all employees of Sellers and its ERISA Affiliates, (vi) grant any severance or termination pay to any Business Employees not provided for under any Employee Plan or (vii) enter into any employment, consulting or material severance agreement or arrangement with any Business Employee (except for at will offers of employment in the ordinary course of business consistent with past practice);

(k) hire or terminate (other than for cause) any employee who is, or would upon hire, be classified both as a Business Employee and senior managerial personnel;

(l) plan, announce, implement or effect any reduction in force, lay-off, early retirement program or other program or effort concerning the termination of employment of any Business Employee that would constitute a “mass layoff” or “plant closing” (as defined in the WARN Act or similar state and local Laws);

(m) fail to prepare, in the ordinary course of business and consistent with past practice (except as otherwise required by applicable Law), and timely file all Tax Returns that are true, correct and complete in all material respects and fully and timely pay all Taxes shown on such Tax Returns, in each case, required to be filed by it on or before the Closing Date (“ Post-Execution Date Returns ”);

(n) fail to consult with Purchaser with respect to all material Post-Execution Date Returns and deliver drafts of such Post-Execution Date Returns to Purchaser no later than five (5) Business Days prior to the date (including extensions) on which such Post-Execution Date Returns are required to be filed;

(o) fail to promptly notify Purchaser of any material federal, state, local or foreign income or franchise tax, suit, claim, action, investigation, proceeding or audit (collectively, “ Tax Actions ”) pending or threatened in writing against or with respect to it in respect of any material Tax matter, including (without limitation) material Tax liabilities and refund claims, and not settle or compromise any such material Tax matter or material Tax Action without Purchaser’s consent;

(p) make, modify or revoke any material election with regard to Taxes or file any material amended Tax Returns or make any material change in any Tax accounting method, except as may be appropriate to conform to changes in Tax Laws or in connection with the actions described in Section 8.10 , waive any statute of limitations in respect of any material Taxes or agree to any extension of time with respect to a material Tax assessment or deficiency;

(q) take any action that is inconsistent with the intended U.S. federal income tax classification of the Companies and Company Subsidiaries as of the Closing Date, as described in Section 8.10(b) ;

(r) modify the allocation of costs with respect to, or increase the costs of, in each case, any intercompany services provided by any of Sellers or any of their Affiliates (other than any Company or Company Subsidiary) to any Company or Company Subsidiary;

(s) incur, create, assume, suffer to exist or otherwise be liable with respect to any Derivatives, other than as required or permitted pursuant to Section 5.9 (it being understood that fluctuations in the value of any Derivatives permitted or required to be implemented pursuant to Section 5.9 shall not be violations of this clause (s)); or

(t) agree to do any of the foregoing.

Requests for approval of any action restricted by this Section 5.4 shall be delivered to the following individual, who shall have full authority to grant or deny such requests for approval on behalf of Purchaser:

EPE Acquisition, LLC
c/o Apollo Management, L.P.
9 West 57th Street
New York, New York 10019
Attention: Sam Oh
Telephone: (212) 822-0629
Telecopy: (646) 417-6651

Purchaser’s approval of any action set forth in Sections 5.4(a) , 5.4(b) , 5.4(c) , 5.4(e) , 5.4(i) , 5.4(l) , 5.4(m) , 5.4(n) , 5.4(o) , 5.4(p) and 5.4(q) above may be granted or withheld in its sole discretion and Purchaser’s approval of any action set forth in Sections 5.4(d) , 5.4(f) , 5.4(g) , 5.4(h) , 5.4(j) , 5.4(k) and 5.4(r) (but, with respect to Section 5.4(r) , only to the extent applicable to the other clauses designated in this sentence) above, shall not be unreasonably withheld, conditioned or delayed and shall be considered granted within fifteen (15) days (unless a shorter time is required in an applicable operating agreement, unit agreement, unit operating agreement, or similar agreement, or authority for expenditure or operations notice from a third party, or a rig is onsite and is incurring, or, absent such consent, will incur, standby or similar charges, in which case such shorter time requirement shall be specified in Sellers’ notice to Purchaser but shall not be fewer than two (2) days) of Sellers’ notice to Purchaser requesting such consent. Purchaser acknowledges that the Companies and their Wholly-Owned Subsidiaries may own undivided interests in certain assets or entities, and Purchaser agrees that (i) the acts or omissions by any Company or Wholly-Owned Subsidiary in its capacity as a general partner or manager (or similar capacity) of another entity not directly or indirectly wholly-owned by another Company shall not be restricted by this Section 5.4 and (ii) the acts or omissions of third Persons shall not constitute a violation of the provisions of this Section 5.4 , nor shall any action required by a vote of working or equity interest or the owners of capital stock constitute such a violation so long as Sellers, the Companies and the Wholly-Owned Subsidiaries, in each case in this clause (ii), have each voted all of their respective working or equity interest or shares of capital stock in a manner consistent with this Section 5.4 , except to the extent that such vote would be inconsistent with such Sellers’, Companies’ or Wholly-Owned Subsidiaries’ fiduciary duties, if any, to such underlying entities or the beneficial owners thereof.

Section 5.5. Indemnity Regarding Access . Purchaser agrees to indemnify, defend and hold harmless Sellers, their Affiliates (including until Closing the Companies and the Company Subsidiaries),

the other owners of interests in the Company Properties (and operating Affiliates conducting operations thereof, or with respect thereto), and all such Persons’ directors, officers, employees, agents and representatives from and against any and all claims, liabilities, losses, costs and expenses (including court costs and reasonable attorneys’ fees), including claims, liabilities, losses, costs and expenses attributable to personal injury, death, or property damage, caused by access to the E&P Business prior to the Closing by Purchaser, its Affiliates, or its or their directors, officers, employees, agents or representatives, EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR LEGAL FAULT OF ANY INDEMNIFIED PERSON (BUT NOT SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) .

Section 5.6. Reasonable Best Efforts; Further Action .

(a) Except with respect to efforts to obtain the Financing, which are exclusively addressed in Section 5.19 , Sellers and Purchaser shall use their reasonable best efforts to take or cause to be taken all appropriate action, and to do, or cause to be done, all things necessary or reasonably advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including using their reasonable best efforts to obtain, or cause to be obtained, all waivers, permits, consents, approvals, authorizations, qualifications and Orders of all Governmental Authorities and officials and parties to Contracts with the Companies that may be or become necessary for the performance of obligations pursuant to this Agreement and the consummation of the transactions contemplated by this Agreement, and all Parties will cooperate fully with the other Parties in promptly seeking to obtain all such waivers, permits, consents, approvals, authorizations, qualifications and Orders. Upon the terms and subject to the conditions of this Agreement, each Party agrees to make any appropriate filings, if necessary, pursuant to the Hart-Scott-Rodino Act or other applicable foreign, federal, state or supranational antitrust, competition, fair trade or similar Laws (collectively, the “ Antitrust Laws ”) with respect to the transactions contemplated by this Agreement as promptly as practicable and to supply as promptly as practicable and advisable to the appropriate Governmental Authorities any additional information and documentary material that may be requested, necessary, proper or advisable pursuant to the Antitrust Laws. All antitrust filings to be made shall be made in substantial compliance with the requirements of the Antitrust Laws. Purchaser shall be solely responsible for the payment of any and all filing fees due under any of the Antitrust Laws with respect to all antitrust filings.

(b) The Parties shall cooperate and assist one another in connection with all actions to be taken pursuant to Section 5.6(a) , including the preparation and making of the filings referred to therein and, if requested, amending or furnishing additional information hereunder. Each Party shall use its reasonable best efforts to provide or cause to be provided promptly to the other Party all necessary information and assistance as any Governmental Authority may from time to time require in connection with obtaining the relevant waivers, permits, consents, approvals, authorizations, qualifications, Orders or expiration of waiting periods in relation to these filings or in connection with any other review or investigation of the transactions contemplated by this Agreement by a Governmental Authority. The Parties shall consult with each other prior to taking any material substantive position with respect to the filings under the Antitrust Laws, in any written submission to, or, to the extent practicable, in any discussions with, any Governmental Authority. Each Party shall permit the other Party to review and discuss in advance, and shall consider in good faith the views of the other Party in connection with, any analyses, presentations, memoranda, briefs, written arguments, opinions, written proposals or other materials to be submitted to the Governmental Authorities with respect to such filings. Each Party shall keep the other apprised of the material content and status of any material communications with, and material communications from, any Governmental Authority with respect to the transactions contemplated by this Agreement, including promptly notifying the other of any material communication it receives from any Governmental Authority relating to any review or investigation of the transactions

contemplated by this Agreement under the Antitrust Laws. The Parties shall, and shall cause their respective Affiliates to use their reasonable best efforts to, provide each other with copies of all material, substantive correspondence, filings or communications between them or any of their respective representatives, on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated by this Agreement; provided , however , that materials may be redacted (i) to remove references concerning the valuation of the Companies; (ii) as necessary to comply with contractual arrangements or applicable Laws and (iii) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns.

(c) Purchaser shall, and shall cause each of its Affiliates to, use their reasonable best efforts to take any and all steps necessary to avoid or eliminate each and every legal impediment under any applicable Antitrust Law that may be asserted by any antitrust or competition Governmental Authority or any other Party so as to enable the Parties hereto to close the transactions contemplated by this Agreement as promptly as practicable, and in any event prior to the End Date, including, proposing, negotiating, committing to and effecting, by consent decree, hold separate orders, or otherwise, the sale, divestiture or disposition of their assets, properties or businesses, and the entrance into such other arrangements, as are necessary or reasonably advisable in order to avoid the entry of, and the commencement of litigation seeking the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other Order in any suit or proceeding, which would otherwise have the effect of materially delaying or preventing the consummation of the transactions contemplated by this Agreement. In addition, Purchaser shall, and shall cause each of its Affiliates to, defend through litigation on the merits any claim asserted in court or administrative or other tribunal by any Person (including any Governmental Authority) in order to avoid entry of, or to have vacated or terminated, any decree, Order or judgment (whether temporary, preliminary or permanent) that would prevent the Closing prior to the End Date; provided , however , that such litigation in no way limits the obligations of the Parties to comply with their reasonable best efforts obligations under the terms of this Section 5.6 . Purchaser shall have the sole and exclusive right to direct and control any litigation, negotiation or other action, with counsel of its own choosing, and Sellers agree to cooperate with Purchaser with respect thereto; provided , however , that Purchaser shall consult in advance with Sellers and in good faith take Sellers’ views into account regarding the overall strategic direction of the defense of any such litigation and consult with Sellers prior to taking any material substantive positions, making dispositive motions or other material substantive filings or entering into any negotiations concerning such litigation.

(d) Purchaser shall, to the extent practicable and permitted by the relevant Governmental Authority, give Sellers (through their counsel) the opportunity to attend and participate in all substantive meetings, telephone calls or discussions in respect of any filings, investigation (including settlement of the investigation), litigation or other inquiry.

Section 5.7. Intercompany Indebtedness . At or prior to Closing, Sellers and their Affiliates (other than the Companies and Wholly-Owned Subsidiaries) shall (i) either capitalize or cause each Company and Wholly-Owned Subsidiary to repay by cash payment any Loans of such Company or Wholly-Owned Subsidiary from Sellers or any other Affiliates and (ii) repay any loans (together with all accrued and unpaid interest thereon) of Sellers or any such Affiliate from any Company or Wholly-Owned Subsidiary. Notwithstanding the foregoing, with respect to any such loan outstanding between (x) EP Brazil and Brazil O&G, (y) EP Brazil and El Paso Maritime BV or (z) EP Brazil and UnoPaso (as such Loans are further described in Schedule 3.5 ) (collectively, the “ Foreign Loans ”), upon Purchaser providing written notice to Sellers (such notice to be provided no later than thirty (30) days before the Closing Date), Sellers and their Affiliates (other than the Companies and Wholly-Owned Subsidiaries) shall capitalize all or a portion of such Foreign Loans to the equity of the relevant obligor, as stipulated in such written notice. To the extent all or a portion of such Foreign Loans are not capitalized pursuant to the preceding sentence Purchaser shall purchase the non-capitalized portion of such Foreign Loans from EP

Brazil for an amount equal to the principal amount of each Foreign Loan as of the Closing. Nothing to the contrary in this Agreement withstanding, the purchase or capitalization of the Foreign Loans pursuant to this Section 5.7 will have no impact on the Unadjusted Purchase Price and will not result in any adjustments pursuant to Section 2.3 ; however, to the extent the Foreign Loans are purchased by Purchaser a portion of the Purchase Price equal to the amount paid for such Foreign Loans will be allocated to the Foreign Loans pursuant to Section 2.2(b) .

Section 5.8. Third Person Indebtedness .

(a) Sellers shall use commercially reasonable efforts to deliver a draft Debt Payoff Letter from each payee of a Third-Party Loan to the applicable payor Company or Wholly-Owned Subsidiary at least two (2), but no more than five (5), Business Days prior to the Closing Date, copies of which shall be promptly delivered to Purchaser.

(b) At or prior to Closing, except as set forth in Schedule 5.8(b) , Sellers shall have paid or caused the Companies and Wholly-Owned Subsidiaries to pay all amounts payable as set forth in any applicable Debt Payoff Letter. Purchaser, each Seller and each Company shall cooperate in arranging for such Lien releases as of Closing.

Section 5.9. Hedges .

(a) As soon as reasonably practicable after the Execution Date and in consultation with Purchaser, Sellers shall cause the Companies and Wholly-Owned Subsidiaries to enter into new swaps so that the commodity price risk associated with the anticipated future production of the Companies and Wholly Owned Subsidiaries set forth on Schedule 5.9 for the calendar years of 2012 and 2013 will be hedged at market prices prevailing at the time of entering into such swaps. Sellers shall consult with Purchaser concerning the counterparties to such hedges and the quantities to be hedged. As such hedges are entered into, Sellers shall promptly notify Purchaser of the counterparty to the transaction, the product involved, the quantity hedged, the hedge price under the new hedge, any premiums or other payments made or received to enter into any new hedge and all other details of the transaction and provide Purchaser copies of the confirmations and other documentation evidencing such transactions. Purchaser may request that Sellers enter into new swaps so that the commodity price risk associated with the anticipated future production of the Companies and the Wholly Owned Subsidiaries for calendar year 2012 or 2013 will be hedged to a greater percentage level than the levels set forth on Schedule 5.9 , or that commodity price risk associated with the anticipated future production of the Companies and the Wholly Owned Subsidiaries for calendar years 2014 and 2015 will be hedged at specified percentage levels (the “ Requested Swaps ”). Sellers shall (and shall cause the Companies and Company Subsidiaries to) reasonably cooperate with Purchaser to accommodate such request and implement the Requested Swaps, as permitted under the Revolving Credit Facility. Notwithstanding anything to the contrary herein, in no event shall Sellers, the Companies and the Company Subsidiaries be required to (i) enter into any transaction relating to Derivatives that would constitute a breach of, or default under, the Revolving Credit Facility or the EP Revolver or (ii) enter into any transactions relating to Requested Swaps unless Purchaser has agreed to pay and/or post (and does pay and/or post) any required premium, fee or other cost or expense associated with, or collateral required by, such transaction prior to its consummation.

(b) If this Agreement is terminated pursuant to Article 9 , Sellers shall have the right to terminate any Requested Swaps by giving Purchaser written notice thereof on or before ten (10) Business Days after such termination. To the extent Sellers elect to terminate a Requested Swap, Purchaser shall indemnify, defend and hold harmless Sellers and their Affiliates (including, until termination of this Agreement, the Companies and Company Subsidiaries) from and against any and all

direct fees, losses and expenses resulting from actions taken by such Persons at Purchaser’s request with respect to such terminated Requested Swap. To the extent Sellers do not elect to terminate such Requested Swap, Sellers shall promptly refund any required premium, fee or other cost or expense paid by or on behalf of Purchaser with respect to the applicable terminated Requested Swap.

Section 5.10. Further Assurances . After Closing, each of Sellers and Purchaser agree to take such further actions and to execute, acknowledge and deliver all such further documents as are reasonably requested by the other for carrying out the purposes of this Agreement or of any document delivered pursuant to this Agreement.

Section 5.11. Employee Matters .

(a) Prior to Closing, Sellers and their Affiliates shall cause each of the Business Employees to be employed by either EP E&P Management, Brazil O&G or Egypt Production, subject to exceptions due only to terminations and resignations, in each case, in the ordinary course, consistent with Sellers’ and their Affiliates’ past employment practices.

(b) Schedule 5.11(b) , which is subject to changes due only to hirings, terminations and resignations, in each case, in the ordinary course, consistent with the Companies’ and the Company Subsidiaries’ past employment practices, lists, as of the Execution Date, the Business Employees by reference to their employee identification number and job category, Sellers acknowledging and agreeing that contemporaneously with the execution of this Agreement, Sellers have provided a corresponding list of the names of such Business Employees and their date of hire, rate of base salary or hourly wage, annual bonus, active employee status and job description, which will not be listed on Schedule 5.11(b) . At Closing, Sellers shall deliver to Purchaser a revised Schedule 5.11(b) that lists the Business Employees and the information in the preceding sentence with respect to each such employee as of ten (10) days prior to the Closing (Sellers acknowledging and agreeing that contemporaneously with the delivery of the revised Schedule 5.11(b) , Sellers shall provide a corresponding list of the names of such Business Employees and their dates of hire, rate of base salary or hourly wage, annual bonus, active employee status and job description, which will not be listed on Schedule 5.11(b) ), provided , that, any revisions to Schedule 5.11(b) shall be due only to hirings, terminations and resignations, in each case in the ordinary course, consistent with the Companies’ and the Company Subsidiaries’ past employment practices. Commencing on the Closing Date and continuing through the date that is twelve (12) months following the Closing Date, Purchaser shall provide or cause to be provided to each Business Employee, other than any such Business Employee covered by a collective bargaining agreement, levels of base pay and annual cash bonus opportunities that are no less favorable than those provided to such Business Employee as of the Closing Date, and employee benefits that are substantially comparable in the aggregate to those provided to such Business Employee as of the Closing Date (in all cases without regard to any equity-based incentive compensation, defined benefit pension plan, any retiree medical or other post-retirement welfare plan, or benefits under any frozen employee benefit plan; provided , that notwithstanding the foregoing, Purchaser shall be required to take the value of such compensation and benefits into account as part of Purchaser’s obligation to provide employee benefits that are substantially comparable in the aggregate).

(c) With respect to each of the Business Employees, Purchaser agrees to (i) assume and perform the obligations of El Paso and its Affiliates under the severance plans set forth in Schedule 5.11(c) (the “ Severance Plans ”) from and after the Closing Date, in the same manner, and to the same extent that El Paso and its Affiliates would be required to perform if the transactions contemplated by this Agreement had not taken place and (ii) if the Kinder Morgan Merger is consummated, treat the Closing as a “Change in Control” event for purposes of each of the Severance Plans. Purchaser’s obligations under this Section 5.11(c) shall continue until at least the end of the Continuation Period (as

defined in the Kinder Morgan Merger Agreement) or such longer period as may be required under any Severance Plan in effect as of the Execution Date; provided , that notwithstanding anything to the contrary contained in this Section 5.11(c) , Purchaser shall be solely responsible for any severance payments and benefits under the Severance Plans which may be payable to any Business Employees as a result of any termination of employment deemed to have occurred under the Severance Plans on or following the Closing Date and Sellers shall be solely responsible for any severance payments or benefits under the Severance Plans which may be payable to any Business Employee as a result of any termination of employment deemed to have occurred under the Severance Plans prior to the Closing Date (without any action of Purchaser). No later than five (5) days prior to the Closing Date, Sellers shall provide Purchaser with the aggregate amount of all severance obligations under the Severance Plans in respect of Business Employees (assuming for such purpose that their termination of employment occurred on the day after the Closing Date).

(d) Effective as of the Closing Date, all Business Employees shall cease to be active participants in all Seller Employee Plans (other than Companies Employment Plans) and shall cease to accrue additional benefits under such plans for any periods after the Closing Date; provided that if the Closing Date occurs prior to the consummation of the Kinder Morgan Merger, the Business Employees shall be deemed to have remained employed through the date of the consummation of the Kinder Morgan Merger for purposes of any rights such Business Employees may have to any accrued benefits and accelerated vesting under the Seller Employee Plans as contemplated by the Kinder Morgan Merger Agreement. Effective as of the Closing Date, each of EP E&P Management, Brazil O&G and Egypt Production shall cease to be a participating employer in all Seller Employee Plans, other than the Companies Employee Plans.

(e) As of the Closing Date, all Business Employees shall be eligible to participate in and, if elected, shall commence participation in each of the employee benefit plans (within the meaning of Section 3(3) of ERISA), programs, policies, fringe benefits, or arrangements (whether written or unwritten) of Purchaser or its Affiliates (collectively, “ Purchaser Employee Plans ”). Purchaser shall (i) to the extent within Purchaser’s control and ability under any Purchaser Employer Plan waive, or use commercially reasonable efforts to cause any third-party insurance carriers to waive, all limitations as to pre-existing condition exclusions and waiting periods with respect to Business Employees and their spouses and dependents, if applicable, under any Purchaser Employee Plan which is a welfare benefit plan and (ii) cause each Purchaser Employee Plan to provide, to the extent within Purchaser’s control and ability under any Purchaser Employee Plan, or use commercially reasonable efforts to cause any third-party insurance carriers to provide, each Business Employee with credit for any co-payments and deductibles paid prior to the Closing Date in satisfying any deductible or out of pocket requirements under Purchaser Employee Plans for the plan year in which the Closing Date occurs.

(f) Purchaser shall accept or cause to be accepted transfers from Sellers’ or any ERISA Affiliate’s health care flexible spending account plan of each Business Employee’s account balance as of the Closing Date and credit such employee with such amounts under the applicable Purchaser Employee Plan. On and after the Closing Date, Business Employees shall have no further claim for reimbursement under Sellers’ or any ERISA Affiliate’s health care flexible spending account and all claims must be submitted under the applicable Purchaser Employee Plan, including expenses incurred prior to the Closing Date.

(g) Purchaser shall cause to be provided to each Business Employee credit for prior service with any Seller or its Affiliates to the extent such service would be recognized if it had been performed as an employee of Purchaser or its Subsidiaries or Affiliates for all purposes (including vesting, eligibility, benefit accrual and/or level of benefits) in all Purchaser Employee Plans (but not for benefit accruals under any defined benefit pension plan, any retiree medical or other post-retirement

welfare plan, or benefits under any frozen employee benefit plan), including fringe benefit plans, vacation and sick leave policies, severance plans or policies, defined contribution pension plans and matching contributions under defined contribution plans maintained or provided by Purchaser or its Subsidiaries or Affiliates in which such Business Employees are eligible to participate after the Closing Date; provided , however , that, such service need not be recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.

(h) During the calendar year in which the Closing occurs, Purchaser or its Affiliates shall maintain Sellers’ vacation policy with respect to each Business Employee and shall credit each such individual with all earned but unused vacation as of the Closing Date with respect to any year prior to 2012, as determined under any and all of Sellers’ time off policies. Each Business Employee shall be entitled in 2012 to the greater of (i) such Business Employee’s previously earned but unused vacation, determined as of the Closing Date under Sellers’ vacation policy or (ii) the number of vacation days with respect to calendar year 2012 to which such Business Employee is entitled under Purchaser’s vacation policy, less any 2012 vacation days used by such Business Employee prior to the Closing Date. No Business Employee will be allowed to carry forward any unused vacation time beyond 2012 unless allowed under Purchaser’s vacation policy. With respect to each year after 2012, Purchaser shall consider each Business Employee’s prior full-time service with Sellers in determining the amount of vacation the Business Employee will be eligible for under Purchaser’s vacation policy.

(i) To the extent allowable by Law, Purchaser shall take any and all necessary action to cause the trustee of a defined contribution plan of Purchaser or one of its Affiliates, if requested to do so by a Business Employee, to accept a “direct rollover” pursuant to Section 401(a)(31) of the Code of all or a portion of such employee’s “eligible rollover distribution” (as defined in Section 402(c)(4) of the Code) from the El Paso Corporation Retirement Savings 401(k) Plan; provided , however , that Purchaser shall be required to accept a rollover of a Business Employee’s plan loans only if such Business Employee rolls over one hundred percent (100%) of such Business Employee’s distribution from such plan. Except for plan loans, all “direct rollovers” shall be made in cash and shall be subject to such administrative terms determined by Purchaser, including with respect to timing of any such “direct rollover.”

(j) With respect to each Business Employee who is not actively at work and who is, as of the Closing Date, receiving any form of pay/wage continuation (including short-term sickness, short-term disability, military leave or vacation pay) or unpaid leave (including Family and Medical Leave Act of 1993 leave or military leave), Sellers or the appropriate ERISA Affiliate shall be responsible for any such payments due prior to the Closing Date and Purchaser shall be responsible for any payments due on or after the Closing Date.

(k) If a plant closing or a mass layoff occurs or is deemed to occur with respect to the Business Employees at any time on or after the Closing, Purchaser shall be solely responsible for providing all notices required under the WARN Act and for taking all remedial measures, including the payment of all amounts, penalties, liabilities, costs and expenses if such notices are not provided. On the Closing Date, Sellers shall provide Purchaser with a schedule of all Business Employees whose employment was terminated by Sellers in the ninety (90) day period prior to the Closing Date and their dates of termination.

(l) None of Purchaser, the Companies, the Company Subsidiaries or any of their respective Affiliates, shall assume or retain any Seller Employee Plans or any Liability whatsoever related to Seller Employee Plans (other than the Companies Employee Plans and, as contemplated by Section 5.11(c) , the Severance Plans), and Sellers shall retain sole responsibility for all

Liabilities, claims, rights and payments under each Seller Employee Plan (other than the Companies Employee Plans and, as contemplated by Section 5.11(c) , the Severance Plans).

(m) Sellers shall provide, or cause to be provided, to Purchaser, on a timely basis, all pertinent and requisite information reasonably requested by Purchaser to effect the transactions contemplated by this Section 5.11 and to facilitate the transition of the employment of Business Employees with Purchaser or its Affiliates.

(n) Except as expressly provided in this Section 5.11 , the Parties acknowledge and agree that no provision of this Agreement shall be construed to: (i) create any right to any compensation or benefits whatsoever on the part of any Business Employee or other future, present or former employee of the Companies or the Company Subsidiaries, Purchaser or its Affiliates; (ii) guarantee employment for any period of time or preclude the ability of Purchaser to terminate any employee, independent contractor or Business Employee for any reason at any time; (iii) require Purchaser to continue any Purchaser Employee Plan, or other employee compensation or benefit plans or arrangements, or prevent the amendment, modification or termination thereof after the Closing Date or (iv) constitute an amendment to any Seller Employee Plan, Purchaser Employee Plan, or other employee benefit or compensation plan or arrangements.

(o) Nothing in this Section 5.11 or elsewhere in this Agreement shall be deemed to make any current or former employee, officer, director or independent contractor or any other individual associated therewith (including any beneficiary or dependent thereof) a third-party beneficiary of this Agreement.

Section 5.12. Transition Committee and Transition Services Agreement . Sellers and Purchaser agree to (i) as promptly as practicable after the date hereof, establish a transition committee to take certain actions, each as further set forth on Annex 2 and (ii) prior to Closing, cooperate in good faith to design and implement a mutually agreeable transition plan with respect to the services listed on the schedules to the Transition Services Agreement.

Section 5.13. Replacement of Bonds, Letters of Credit and Guarantees; Insurance .

(a) The Parties understand that none of the bonds, letters of credit and guarantees, if any, posted by Sellers or any other Affiliate of the Companies (including the Companies and the Company Subsidiaries to the extent Sellers or their Affiliates (except the Companies and the Company Subsidiaries) provide credit support for any such bonds, letters of credit or guarantees) with any Governmental Authority or third Person and relating to the E&P Business are to be transferred to Purchaser. On or before the Closing, Purchaser shall use its commercially reasonable efforts to (i) obtain, or cause to be obtained in the name of Purchaser, replacements for the bonds, letters of credit and guarantees identified in Schedule 5.13 (which, for the avoidance of doubt, shall contain letters of credit that are exclusive to the Companies or Company Subsidiaries only, and not letters of credit that are shared between or among the Companies or Company Subsidiaries and El Paso or any subsidiary other than the Companies or Company Subsidiaries) and such other bonds, letters of credit and guarantees posted (or supported) by Sellers or such Affiliates that may arise between the Execution Date and Closing in the ordinary course of business consistent with past practice that are disclosed in writing by Sellers to Purchaser at least five (5) Business Days prior to the Closing Date (collectively, the “ Financial Guaranties ”) (which, for the avoidance of doubt, shall contain letters of credit that are exclusive to the Companies or Company Subsidiaries only, and not letters of credit that are shared between or among the Companies or Company Subsidiaries and El Paso or any subsidiary other than the Companies or the Company Subsidiaries) and (ii) cause, effective as of the Closing, the cancellation or return to Sellers of the Financial Guaranties, and Sellers shall provide reasonable cooperation to Purchaser in connection

therewith. Purchaser may also provide evidence that such replacements are not necessary as a result of existing bonds, letters of credit or guarantees that Purchaser has previously posted as long as such existing bonds, letters of credit or guarantees are adequate to secure the release of those posted (or supported) by Sellers. Schedule 5.13 identifies the bonds, letters of credit and guarantees posted (or supported) by Sellers or any other Affiliate of the Companies (including the Companies and the Company Subsidiaries to the extent Sellers or their Affiliates (except the Companies and the Company Subsidiaries) provide credit support for any such bonds, letters of credit or guarantees) with respect to the E&P Business as of the date noted on such Schedule, which Sellers may update through the Closing to include Financial Guaranties entered into after the date hereof in compliance with Sections 5.3 and 5.4 . Notwithstanding anything to the contrary set forth herein, (i) neither the Company nor any Company Subsidiary shall be responsible for any collateral currently provided by Sellers under any shared insurance program and (ii) with respect to letters of credit outstanding under any Third Party Loan facilities, Purchaser shall take such action to replace, cash collateralize or provide third Person backstops so as to enable a Debt Payoff Letter with respect the applicable Third Party Loan to be received prior to Closing.

(b) If, as of the Closing, any one or more Financial Guaranties has neither been released nor expired in accordance with its terms (the “ Unreleased Financial Guaranties ”), then Purchaser shall, at Closing, execute and deliver to Sellers for the benefit of Sellers and their Affiliates (to the extent Sellers and such Affiliates are obligors under the Unreleased Financial Guaranties (the “ Obligors ”)) an indemnity agreement in form and substance reasonably acceptable to Sellers pursuant to which Purchaser, the Companies and the Wholly-Owned Subsidiaries agree to indemnify the Obligors from and against all of their obligations arising under the Unreleased Financial Guaranties except to the extent such obligations are otherwise subject to Section 10.1(b) . If all Unreleased Financial Guaranties have not been so released or expired on or before one (1) year from the Closing Date, or should the indemnitor under any indemnity agreement delivered in connection with this Section 5.13(b) not have and maintain a minimum investment grade rating on all of its outstanding senior unsecured long-term debt of at least BBB-, as determined by Standard & Poor’s Rating Agency Group, or Baa3, as determined by Moody’s Investors Service, Inc., or, in each case, any nationally-recognized successor thereto (“ Investment Grade ”), Purchaser shall (i) cause an Affiliate of Purchaser or other third Person that, in each case, has, and for the previous five (5) years has maintained, an Investment Grade senior unsecured long-term debt rating, to provide a guarantee in favor of Sellers that is in form and substance substantially similar to the indemnity agreement provided by Purchaser at Closing pursuant to this Section 5.13 or (ii) provide, or cause to be provided, such other security for the obligations under the indemnity agreements that is in form, substance, and amount reasonably satisfactory to Sellers. No such provision of an indemnity agreement shall relieve any Purchaser or any other Person providing an indemnity, guarantee, or other form of surety or security of its obligations thereunder. Purchaser agrees that Sellers will not have an adequate remedy at Law if Purchaser violates (or threatens to violate) any of the terms of this Section 5.13 . In such event, Sellers shall have the right, in addition to any other they may have, to obtain injunctive relief to restrain any breach or threatened breach of the terms of this Section 5.13 .

(c) Purchaser acknowledges and agrees that, effective upon the Closing, all insurance coverage provided with respect to the Companies and the Company Subsidiaries pursuant to “claims made” or “claims first made” based policies maintained by Sellers (or any of their Affiliates, other than any Company or Company Subsidiary) shall not be available to the Companies or the Company Subsidiaries under such policies but (subject to the terms of any relevant policy or arrangement) without prejudice to any claims or accrued claims which any Company or Company Subsidiary may have at or prior to the Closing or based upon wrongful acts committed or alleged to be committed by any Company or Company Subsidiary prior to the Closing. Each Company and Company Subsidiary shall retain the benefit of each “occurrence” based policy, which is underwritten and/or issued by any Person under which any Company or any Company Subsidiary is an insured, hereinafter referred to as “ Occurrence Based Policies ,” in relation to events occurring prior to Closing in respect of claims for

which it may have coverage thereunder, it being understood and agreed that such coverage shall be without prejudice to the rights of Sellers ( provided , however that Sellers shall not, and shall cause their Affiliates not to, terminate or amend or waive any of its rights under the Occurrence Based Policies), and other current or former Affiliates (other than the Companies and the Company Subsidiaries) to access and continue to retain the benefit of such Occurrence Based Policies at and after the Closing as such policies were in effect on the date prior to the Closing Date. From and after the Effective Date, at the request of Purchaser, Sellers shall, and shall cause the Companies and the Company Subsidiaries to, cooperate in the procurement of such named windstorm insurance coverage with respect to the Companies, the Company Subsidiaries and/or the E&P Business as may be requested by Purchaser; provided, however that none of Sellers, the Companies or the Company Subsidiaries shall be required to make any payment of any premium for such named windstorm coverage prior to June 1, 2012. Promptly following any termination of this Agreement, if at all, Purchaser shall reimburse Sellers for one hundred and fifty percent (150%) of any actual and reasonable out of pocket costs incurred by Sellers under the preceding sentence of this Section 5.13(c) .

(d) Purchaser acknowledges and agrees that, following the Closing, El Paso insurance coverage as set forth on Schedule 3.20 (less and except any Company or Company Subsidiary policies in effect) (the “ EPC Insurance Policies ”) shall be terminated or modified to exclude coverage of all or any portion of the Companies or Company Subsidiaries by the Sellers, and, as a result, Purchaser will need to, at or before Closing, obtain at its sole cost and expense replacement insurance, including insurance required by any third party to be maintained by any of the Companies or Company Subsidiaries. Purchaser further acknowledges and agrees that Purchaser will need to provide to certain Governmental Authorities and third parties evidence of such replacement or substitute insurance coverage for the continued operations of the businesses of the Companies or Company Subsidiaries following Closing. For avoidance of doubt, the Companies and Company Subsidiaries, as applicable, shall have the right to pursue claims or losses under such EPC Insurance Policies.

Section 5.14. Surviving Agreements . At or prior to the Closing, the applicable Seller (or Affiliate of such Seller), on the one hand, and the applicable Company (or applicable Company Subsidiary), on the other hand, shall terminate all Affiliate Transactions pursuant to termination agreements in form and substance reasonably acceptable to Purchaser, other than those agreements (the “ Surviving Agreements ”) set forth in Schedule 5.14 .

Section 5.15. Preferential Purchase Rights; Consents .

(a) Promptly after the Execution Date, Sellers shall prepare and send (i) notices to the holders of any consents that are set forth in Schedule 5.15 requesting consents to the transactions contemplated by this Agreement and (ii) notices to the holders of any applicable preferential rights to purchase, rights of first negotiation or similar rights in compliance with the terms of such rights and requesting waivers of such rights. Prior to Closing, the Parties shall reasonably cooperate to cause such consents and waivers of preferential rights to purchase or similar rights (or the exercise thereof) to be obtained and delivered prior to Closing; provided, however that Sellers and their Affiliates shall not be required to make payments or undertake obligations to or for the benefit of the holders of such consent rights in order to obtain such consents and waivers.

(b) Should the holder of any preferential purchase right set forth in Schedule 3.14 validly exercise the same (whether before or after Closing), then:

(i) the Company or Wholly-Owned Subsidiary owning the applicable asset of the E&P Business shall transfer such asset to the holder of the preferential purchase right on the terms and provisions set out in the applicable preferential purchase right provision; and

(ii) such Company or Wholly-Owned Subsidiary shall be entitled to the consideration paid by such holder.

(c) Purchaser may, pursuant to a notice substantially in the form of a Title Defect Notice (a “ Consent Notice ”), delivered on or before the Title Claim Date, allege that the consents identified thereon (that are not set forth on Schedule 5.15 ), if not obtained or waived, would impair (or cause a defect in) any Company’s or Company Subsidiary’s title to any Company Mineral Interest, Company Well or Right of Way (each such consent, an “ Alleged Required Consent ”). With respect to any Alleged Required Consent, Sellers may, pursuant to written notice to Purchaser on or before the date that is ten (10) Business Days after their receipt of a Consent Notice with respect thereto, agree or disagree that such Alleged Required Consent, if not obtained or waived, would so impair or cause a defect in such title ( provided that, if Sellers do not respond within such period, they shall be deemed to have disagreed that such Alleged Required Consent, if not obtained or waived, would so impair or cause a defect in such title). In the event that any consent has not been raised by Purchaser pursuant to the foregoing provisions of this Section 5.15(c) , this Section 5.15 (other than Section 5.15(h) ) shall no longer apply thereto, and such consent shall be solely and exclusively covered by Sections 5.15(h) , 10.1(a)(iii) and 10.1(b)(iv) .

(d) All disputes as to whether an Alleged Required Consent would, if not obtained or waived, impair (or cause a defect in) any Company’s or Company Subsidiary’s title to any Company Mineral Interest, Company Well or Right of Way, or whether, and to what extent, the rights of the holder of a Required Consent have been barred under applicable Law (each such dispute, a “ Required Consent Dispute ”), shall be determined by a Title Arbitrator pursuant to Section 1.5(i) of Annex 1 .

(e) In the event any (i) consent set forth on Schedule 5.15 , (ii) Alleged Required Consent that Sellers and Purchaser have agreed in writing would, if not obtained or waived, impair (or cause a defect in) any Company’s or Company Subsidiary’s title to any Company Mineral Interest, Company Well or Right of Way or (iii) Alleged Required Consent that a Title Arbitrator has finally determined, would, if not obtained or waived, impair (or cause a defect in) any Company’s or Company Subsidiary’s title to any Company Mineral Interest, Company Well or Right of Way (each consent described in the foregoing clauses (i), (ii) and (ii), a “ Required Consent ”) is not obtained (in form and substance reasonably acceptable to Purchaser) on or before the end of the Consent Period and the rights of the holder of such Required Consent are not otherwise barred pursuant to applicable Law, then Sellers shall pay to Purchasers promptly (but in any event within five (5) Business Days after the end of the Consent Period for the relevant Required Consent) an amount equal to (x) in the case of a Company Mineral Interest or Company Well, the Allocated Value thereof (or portion thereof affected by the Required Consent), or (y) in the case of a Right of Way, the Damages actually incurred or suffered by the Companies or Company Subsidiaries with respect to such Required Consent (such amount, the “ Required Consent Adjustment Amount ”). For the avoidance of doubt, neither the Title Threshold nor the Title Deductible, nor either of the limitations set forth in Sections 10.1(d)(iv) and 10.4(c) shall apply to the determination of the Required Consent Adjustment Amount. As used herein, the term “ Consent Period ” means, with respect to each Required Consent, the later of (x) the date that is nine (9) months after the Closing Date and (y) the date on which the Title Arbitrator finally resolves Required Consent Dispute (if any) with respect to such Required Consent in accordance with the provisions of Section 1.5(i) of Annex 1 ; provided, however , that, if a lawsuit, arbitration or other proceeding is pending with respect to any Required Consent, the Consent Period with respect to such Required Consent may, at Sellers’ option, be extended until the end of one (1) month after the final disposition of the same at Sellers’ sole cost, risk, and expense.

(f) Except as set forth in Section 5.15(g) , Section 10.1(a)(iii) and Section 10.1(b)(iv) shall be the sole and exclusive remedy for all consent and alleged consent requirements covering (or created under) a Company Mineral Interest, Company Well or Right of Way that are not

Required Consents. This Section 5.15 shall be the sole and exclusive remedy of Purchaser with respect to Required Consents.

(g) Notwithstanding anything to the contrary herein, any consent right that provides it may not be unreasonably withheld, shall not be subject to this Section 5.15 , Section 10.1(a)(iii) or Section 10.1(b)(iv) .

(h) Purchaser hereby covenants and agrees to bear fifty percent (50%) of each dollar of any Damages attributable to a claim for indemnity pursuant to Section 10.1(b)(iv) , until the total amount of such Damages (measured in the aggregate and not as to the fifty percent (50%) for which Purchaser is liable pursuant to this Section 5.15(h) ) exceeds $15,000,000.

Section 5.16. Transfer of Certain Assets Not Held by the Companies or Wholly-Owned Subsidiaries . At Closing, Sellers or any of their Affiliates, as applicable, shall assign to Purchaser (or its designee) certain personal property set forth in Schedule 5.16 (as may be modified by the agreement of the Parties to reflect any matters that the Parties agree to between the Execution Date and Closing) pursuant to an assignment substantially in the form set forth on Exhibit E (the “ Personal Property Assignment ”). EXCEPT AS OTHERWISE PROVIDED IN THE PERSONAL PROPERTY ASSIGNMENT, THE ASSIGNMENT OF SUCH PERSONAL PROPERTY SHALL BE “AS IS, WHERE IS” WITH ALL FAULTS, AND ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF CONDITION, QUALITY, SUITABILITY, DESIGN, MARKETABILITY, INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS ARE HEREBY DISCLAIMED.

Section 5.17. Directors’ and Officers’ Indemnification .

(a) After Closing, the Organizational Documents of the Companies and the Wholly-Owned Subsidiaries shall contain provisions no less favorable with respect to indemnification than are set forth in their respective Organizational Documents immediately prior to Closing and set forth in any indemnification agreement currently in effect between any Seller, Company or Wholly-Owned Subsidiary and any current or former officer or director of any Company or Wholly-Owned Subsidiary or any current or former Business Employee, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Closing Date in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing Date, were directors, officers, fiduciaries or agents of any Company or Wholly-Owned Subsidiary or Business Employees; provided , that, in the event that any claim for indemnification is asserted or made within such six (6) year period, all rights to indemnification in respect of such claim shall continue until the final disposition of such claim.

(b) This Section 5.17 is intended to be for the benefit of, and shall be enforceable by, present or former directors and officers of each Company and Wholly-Owned Subsidiary, their respective heirs and personal representatives and shall be binding on Purchaser and its successors and assigns. In the event that Purchaser or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person (including by dissolution), then, and in each such case, Purchaser shall cause proper provision to be made so that the successors and assigns of Purchaser assume and honor the obligations set forth in this Section 5.17 . The agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any such present or former director or officer is entitled, whether pursuant to Law, Contract or otherwise. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been

in existence with respect to any Company or Wholly-Owned Subsidiary or their respective officers and directors and Business Employees, it being understood and agreed that the indemnification provided for in this Section 5.17 is not prior to or in substitution for any such claims under any such policies.

Section 5.18. Title Matters . The Parties shall comply in all respects with the provisions of Annex 1 and hereby agree that the rights and remedies of Purchaser set forth in Annex 1 represent Purchaser’s sole and exclusive rights and remedies with respect to any defect in title with respect to the Company Properties.

Section 5.19. Financing .

(a) Purchaser shall use reasonable best efforts (taking into account the expected timing of the Marketing Period) to take all actions and to do or cause to be done all things necessary, proper or advisable to obtain the proceeds of the Financing on the terms and conditions described in the Financing Letters ( provided , that Purchaser may (i) amend the Debt Commitment Letter to add lenders, lead arrangers, bookrunners, syndication agents or similar entities who had not executed the Debt Commitment Letter as of the date of this Agreement so long as such Persons are reasonably acceptable to Sellers or (ii) otherwise replace or amend the Debt Commitment Letter so long as such action would not reasonably be expected to delay or prevent the Closing and the terms are not materially less beneficial to Purchaser, with respect to conditionality, than those in the Debt Commitment Letter as in effect on the date of this Agreement). Purchaser shall not permit any amendment or modification to be made to, or any waiver of any provision under, the Financing Letters without the prior written consent of Sellers if such amendment, supplement, modification or waiver:

(i) with respect to the Financing Letters, reduces the aggregate amount of the Financing (including by increasing the amount of fees to be paid or original issue discount as compared to such fees and original issue discount contemplated by the Debt Commitment Letter and related fee letters in effect on the date hereof unless the Debt Financing or the Equity Financing is increased by such amount);

(ii) (A) imposes new or additional conditions or (B) otherwise adversely expands, amends or modifies any of the conditions precedent to the Financing, or otherwise expands, amends or modifies any other provision of the Financing Letters, in the case of clause (B), in a manner that would reasonably be expected to prevent or materially delay the ability of Purchaser to consummate the Closing on the Closing Date; or

(iii) would otherwise materially adversely impact the ability of Purchaser to enforce its rights against other parties to the Financing Letters or otherwise to timely consummate the transactions contemplated by this Agreement.

Purchaser shall promptly deliver to Sellers copies of any such amendment, modification, waiver or replacement. For purposes of this Agreement, references to “Financing” or “Debt Financing,” as applicable, shall include the financing contemplated by the Financing Letters as permitted to be amended, modified or replaced by this Section 5.19(a) or 5.19(c) and references to “Debt Commitment Letter” shall include such documents as permitted to be amended, modified or replaced by this Section 5.19(a) or 5.19(c) .

(b) Purchaser shall use reasonable best efforts to:

(i) maintain in effect the Financing Letters;

(ii) negotiate and enter into definitive agreements (which with respect to the bridge facility documentation shall not be required until reasonably necessary in connection with the funding of the Financing), and provide Sellers with copies of all substantially final drafts of documents with respect to the Debt Financing on the terms and conditions contained in the Debt Commitment Letter (including the “flex” provisions contained in any related fee letter) or on other terms in the aggregate materially no less favorable to Purchaser, as to conditionality, than the terms and conditions in the Debt Commitment Letter; provided , that in no event shall any such definitive agreement contain terms (other than those included in the Debt Commitment Letter) that would reasonably be expected to prevent or materially delay the Closing;

(iii) satisfy (or, if deemed advisable by Purchaser, seek the waiver of) on a timely basis all conditions applicable to Purchaser that are within its control as set forth in the Financing Letters and to comply with all of its material obligations pursuant to the Debt Commitment Letter;

(iv) upon satisfaction of such conditions, cause the funding of the Debt Financing at or prior to Closing (together with other sources of funds, including the Equity Financing, with respect to amounts required to pay the Required Amounts);

(v) enforce all of its rights under the Debt Commitment Letter (including, for the avoidance of doubt, by instituting litigation in respect thereof); provided that all of the conditions to Purchaser’s obligations under Section 6.2 (except those to be satisfied at the Closing) have been satisfied or waived; and

(vi) give Sellers prompt notice of any material breach by any party to the Debt Commitment Letters of which Purchaser has become aware or any termination of any of the Commitment Letters. Purchaser shall keep the Company apprised of material developments relating to the Financing and shall give the Company prompt notice of any material adverse change with respect to such Financing. Without limiting the foregoing, Purchaser agrees to notify Sellers promptly if at any time any financing source that is a party to the Debt Commitment Letter notifies Purchaser that such source no longer intends to provide financing on the terms set forth therein.

Notwithstanding anything to the contrary in this Agreement, nothing contained in this Section 5.19(b) shall require, and in no event shall the reasonable best efforts of Purchaser be deemed or construed to require, Purchaser or any Affiliate thereof to (i) seek the Equity Financing from any source other than those counterparty to, or in any amount in excess of that contemplated by, the Equity Funding Letter or (ii) pay any material fees in excess of those contemplated by the Financing Letters (including pursuant to the “flex” provisions contained in any fee letter relating to the Debt Financing).

(c) If any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated in the Debt Commitment Letter or the Debt Commitment Letter is terminated or modified in a manner materially adverse to Purchaser for any reason, Purchaser shall promptly notify Sellers in writing and shall use its reasonable best efforts to arrange to obtain alternative financing from alternative sources for such portion as promptly as practicable following such event on terms no less favorable to Purchaser in any material respect as those contained in the Debt Commitment Letter and in an amount sufficient, together with the Equity Financing and cash on hand of the Companies, if any, to fund the Required Amount (the “ Alternate Financing ”) and, if obtained, will provide Sellers with a copy of, a new financing commitment that provides for at least the same amount of financing as provided under the Debt Commitment Letter originally issued, to the extent needed to fund the Required Amount, and on terms and conditions (including all terms, termination rights, flex provisions and funding conditions) no less favorable in any material respect to Purchaser than those included in the Debt Commitment Letter (an “ Alternate Debt Commitment Letter ”). Purchaser shall use

its reasonable best efforts (taking into account the expected timing of the Marketing Period) to take, or cause to be taken, all actions and things necessary, proper or advisable to arrange promptly and consummate the Alternate Financing on the terms and conditions described in any Alternate Debt Commitment Letter, including by complying with its obligations under clause (b) above as though the references therein to Debt Commitment Letter and Debt Financing were instead references to the Alternate Financing and the Alternate Debt Commitment Letter.

Notwithstanding anything to the contrary in this Agreement, Purchaser may enter discussions regarding, and may enter into arrangements and agreements relating to the Financing to add other equity providers, so long as in respect of any such arrangements and agreements, the following conditions are met: (i) the aggregate amount of the Equity Financing is not reduced; (ii) the arrangements and agreements, in the aggregate, would not be reasonably likely to delay or prevent the Closing and (iii) the arrangements and agreements would not diminish or release the pre-closing obligations of the parties to the Equity Funding Letter, adversely affect the rights of Purchaser to enforce its rights against the other parties to the Equity Funding Letter, or otherwise constitute a waiver or reduction of Purchaser’s rights under the Equity Funding Letter.

For the avoidance of doubt, in the event that (i) all or any portion of the Debt Financing contemplated to be raised in lieu of the bridge financing contemplated under the Debt Commitment Letter has not been consummated and (ii) the conditions set forth in Article 6 have been satisfied or waived (and which are, to the extent not satisfied or waived, at the time of the termination of this Agreement, capable of being satisfied if the Closing were to occur at such time) and (iii) all of the conditions set forth in the Debt Commitment Letters have been satisfied or waived (other than those conditions which by their nature are to be satisfied at Closing, but subject to the satisfaction of those conditions), Purchaser shall use reasonable best efforts to cause the proceeds of the bridge facility contemplated by the Debt Commitment Letters to be used to cause the Closing to occur in accordance with the terms and conditions hereunder.

(d) Prior to the Closing Date or as expressly provided for in subclause (vi) below, Sellers shall use their respective reasonable best efforts to provide, and shall cause each Company and each Company Subsidiary to use reasonable best efforts to provide, and shall use reasonable best efforts to cause its respective directors, officers, employees, consultants, agents, financial advisors, attorneys, accountants or other representatives (collectively, “ Representatives ”) to use reasonable best efforts to provide, to Purchaser such cooperation as may be reasonably requested by Purchaser; provided , that such requested cooperation does not materially and adversely interfere with the E&P Business. Such cooperation shall include:

(i) as promptly as reasonably practical, (x) furnishing Purchaser and Purchaser’s financing sources and their respective Representatives with the Required Information; provided that Sellers shall provide to Purchaser, or shall cause to be provided to Purchaser, the audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Companies and Company Subsidiaries for 2011 no later than March 15, 2012 and (y) inform Purchaser if the Companies or the Company Subsidiaries shall have knowledge of any facts that would likely require the restatement of such financial statements for such financial statements to comply with the Accounting Principles;

(ii) participating in a reasonable number of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with rating agencies in connection with the Financing and assisting Purchaser in obtaining ratings as contemplated by the Debt Financing;

(iii) assisting with the preparation of materials for rating agency presentations, offering documents, private placement memoranda, bank information memoranda, prospectuses and similar documents required in connection with the Financing, including the execution and delivery of customary representation letters in connection with bank information memoranda and reviewing and commenting on Purchaser’s draft of a business description and “Management’s Discussion and Analysis” of Seller’s financial statements to be included in offering documents contemplated by the Debt Financing;

(iv) providing to Purchaser upon request a copy of each semi-annual proved oil and gas reserves report, which may be prepared internally by petroleum engineers who are employees of each Company and each Company Subsidiary, for the periods ended December 31, 2011, together with audit reports prepared by third-party independent petroleum engineering firms reasonably acceptable to Purchaser and the debt financing sources in respect of any such reports prepared as of December 31 of each year and six (6) months thereafter, and including consents from such independent petroleum engineering firms to inclusion of such reports in any offering documents, private placement memoranda, bank information memoranda, prospectuses and similar documents in connection with the Financing;

(v) (A) using reasonable best efforts to obtain and provide customary (x) reserve engineers’ “comfort” for Rule 144A high-yield offerings, internal and audited oil and gas reserves reports and such other engineering reports required to be provided by the Debt Financing (such reports, collectively, the “ Reserve Reports ”) and (y) accountants’ comfort letters, and (B) using commercially reasonable efforts to obtain and provide appraisals, and surveys, and using reasonable best efforts to permit and/or facilitate environmental and other inspections (including providing reasonable access to Purchaser and its Representative to all properties of proved oil and gas reserves included in the Reserve Reports and other owned or leased real property for such purposes), title information, and other documentation and items relating to the Debt Financing, as contemplated by the Debt Commitment Letter or reasonably requested by Purchaser and, if requested by Purchaser, to cooperate with and assist Purchaser in obtaining such documentation and items, with the understanding that depending on the specific properties represented and the timing of the Closing Date, additional technical work may be required before post-dated “comfort” can be provided;

(vi) both before the Closing and, to the extent reasonably necessary to allow Purchaser or any of its Affiliates to consummate a securities offering or comply with SEC requirements, after the Closing, providing appropriate representations in connection with the preparation of financial statements and other financial data of each Company and each Company Subsidiary and requesting accountants’ consents in connection with the use of each Company’s and each Company Subsidiary’s financial statements in offering documents, prospectuses, Current Reports on Form 8-K and other documents to be filed with the SEC;

(vii) using reasonable best efforts to assist Purchaser in connection with the preparation of pro forma financial information and financial statements to the extent required by SEC rules and regulations or necessary (or reasonably required by Purchaser’s financing sources) to be included in any offering documents; provided that Purchaser shall have provided Sellers or the Companies with information relating to the proposed debt and equity capitalization that is required for such pro forma financial information in financial reports;

(viii) using reasonable best efforts to (x) provide monthly financial statements (excluding footnotes) within fifteen (15) Business Days of the end of each month prior to the Closing Date and (y) providing quarterly financial statements within forty-five (45) days of the end of each fiscal quarter prior to the Closing Date;

(ix) executing and delivering as of the Closing any pledge and security documents, other definitive financing documents, or other certificates, legal opinions or documents as may be reasonably requested by Purchaser (including a certificate of the chief financial officer of any of the Companies or Company Subsidiaries with respect to solvency matters in the form set forth as an annex to the Debt Commitment Letter and otherwise facilitating the pledging of collateral (including cooperation in connection with the pay-off of existing Indebtedness to the extent contemplated by this Agreement and the release of related Liens and termination of security interest);

(x) using reasonable best efforts to assist Purchaser in obtaining waivers, consents, estoppels and approvals from other parties to material leases, other than leases constituting Company Mineral Interests, rights of way and other encumbrances and Company Contracts to which any Company or any Company Subsidiary is a party and to arrange discussions among Purchaser, the Equity Providers and the Debt Providers and their respective Representatives with other parties to material leases, rights of way and other encumbrances and Contracts as of the Closing;

(xi) taking all commercially reasonable actions necessary to (A) permit the prospective lenders involved in the Debt Financing (through any Debt Provider) and the Debt Providers to evaluate the Companies’ and the Company Subsidiaries’ current assets, cash management and accounting systems, policies and procedures relating thereto for the purposes of establishing collateral arrangements as of the Closing and to assist with other collateral audits and due diligence examinations reasonable and customary for oil and gas industry reserve-based financing) and (B) establish bank and other accounts and blocked account agreements and lock box arrangements to the extent necessary in connection with the Debt Financing;

(xii) taking all corporate actions, subject to the occurrence of the Closing, reasonably requested by Purchaser that are necessary or customary to permit the consummation of the Debt Financing, including any high yield financing, and to permit the proceeds thereof, together with the cash at each Company and each Company Subsidiary, if any (not needed for other purposes), to be made available on the Closing Date to consummate the transactions contemplated by this Agreement; and

(xiii) providing all documentation and other information about the Companies and the Company Subsidiaries as is required by applicable “know your customer” and anti-money laundering rules and regulations including without limitation the USA PATRIOT Act to the extent reasonably requested at least five (5) Business Days prior to the anticipated Closing Date;

provided , that no obligation of any Company or any Company Subsidiary, or any Lien on any of their respective assets, in connection with the Financing shall be effective until the Closing; no Company or any Company Subsidiary or any Representatives of any of the foregoing shall be required to pay any commitment or other fee or incur any other liability in connection with the Financing prior to the Closing; and no director or officer of any Company or any Company Subsidiary shall be required to execute any agreement, certificate, document or instrument with respect to the Financing that would be effective prior to the Closing.

(e) Sellers shall, and shall cause the Companies to, use reasonable best efforts to periodically update any Required Information provided to Purchaser as may be necessary so that such Required Information is (i) Compliant, (ii) meets the applicable requirements set forth in the definition of “Required Information” and (iii) would not, after giving effect to such update(s), result in the Marketing Period to cease to be deemed to have commenced. For the avoidance of doubt, Purchaser may, to most effectively access the financing markets, require the cooperation of any Company under Section 5.19(d) at any time, and from time to time and on multiple occasions, between the date hereof and the Closing.; provided that, for the avoidance of doubt, the Marketing Period shall not be applicable as to

each attempt to access the markets. El Paso shall timely (taking into account any extensions permitted by the applicable SEC rules) file SEC documents and other materials with the SEC to the extent required by the SEC in accordance with Law to the extent such SEC documents relate specifically to any Company or any Company Subsidiary. In addition, if, in connection with a marketing effort contemplated by the Debt Commitment Letter, Purchaser reasonably requests Sellers to file a Current Report on Form 8-K pursuant to the Exchange Act that contains material non-public information with respect to each Company and each Company Subsidiary, which Purchaser reasonably determines (in consultation with Sellers) to include in a customary offering memorandum for the Debt Financing, then, upon Sellers’ review of and reasonable satisfaction with such filing, Sellers shall file such Current Report on Form 8-K.

(f) Sellers hereby consent to the use of their logos in connection with the Financing; provided , that such logos are used solely in a manner that is not intended to or reasonably likely to harm or disparage Sellers or the reputation or goodwill of Sellers.

(g) Purchaser shall promptly, upon request by Sellers, reimburse Sellers, the Company or any Company Subsidiary, as applicable, for all reasonable and documented out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by such Person in connection with its cooperation contemplated by this Section 5.19 .

(h) Purchaser shall indemnify and hold harmless Sellers, the Companies and the Company Subsidiaries and their respective Representatives from and against any and all liabilities, losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the Financing (other than information provided in writing specifically for use by or on behalf of any Seller, any Company or any Company Subsidiary), in each case other than to the extent any of the foregoing arises from the bad faith, gross negligence or willful misconduct of, or material breach of this Agreement by, any of the Companies, any of the Company Subsidiaries or any of their respective Affiliates and Representatives.

Section 5.20. Confidentiality . After the Closing, each Seller shall hold and shall cause each of its Affiliates to hold, and each Seller shall use its reasonable best efforts to cause its and its Affiliates’ respective Representatives to hold, in confidence, unless compelled to disclose by judicial or administrative process, Order or by other requirements of Law, all confidential documents and information concerning each Company and each of the Company Subsidiaries or their respective businesses, except to the extent that such information (a) was or is in the public domain through no fault of such Seller or its Affiliate, (b) was or is later lawfully acquired by such Seller from sources other than those related to its prior ownership of any of the Companies or any of the Company Subsidiaries or (c) is permitted to be disclosed pursuant to Section 5.2 .

Section 5.21. Release . Effective as of the Closing, (i) each Seller, on its own behalf and on behalf of its Affiliates and their respective heirs, estate, executors, administrators, successors and assigns, hereby unconditionally and irrevocably releases and waives any claims that such Seller or any of its Affiliates has or may in the future have, in its capacity as an equity holder, member, manager, director, officer, employee or similar capacity, against any of the Companies, their subsidiaries, the JV Entity or any of their respective directors, officers, employees, Affiliates or equity holders, in each case arising out of, resulting from or relating to actions, omissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any Surviving Agreement and (ii) Purchaser shall cause each Company, each of its subsidiaries, on its own behalf and on behalf of its Affiliates or their respective heirs, estate, executors, administrators and the JV Entity, successors and assigns, to unconditionally release and waive any claims that such Company or any of its subsidiaries or the JV Entity has or may in the future have against any Seller or any of their respective directors, officers, employees, Affiliates or equity holders in such Seller’s capacity as an equity

holder, member, manager or similar capacity of any Company, in each case arising out of, resulting from or relating to actions, commissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any Surviving Agreement.

Section 5.22. Seismic Transfer . Until a date that is one hundred eighty (180) days after the Closing, Sellers and Purchaser shall use commercially reasonable efforts to obtain replacement licenses in the name of Purchaser (or its designee), or approval for transfer of the existing licenses, for seismic data relating solely to the Company Properties which Sellers, the Companies, or the Company Subsidiaries hold under license and the transfer of which is prohibited or subjected to payment of a fee or other consideration in connection with the transactions contemplated by this Agreement. All costs of such replacement licenses or license transfers shall be borne by Purchaser. Purchaser and Sellers shall reasonably cooperate with each other in this effort; provided , however , that Sellers (and, until the Closing, Companies and Company Subsidiaries) shall not be required to pay any fee, or undertake any obligations for the benefit of any third Person pursuant to the foregoing.

Article 6
CONDITIONS TO CLOSING

Section 6.1. Conditions of Sellers to Closing . The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject, at the option of Sellers, to the satisfaction on or prior to Closing of each of the following conditions:

(a) Representations . The representations and warranties of Purchaser set forth in Article 4 shall be true and correct in all material respects as of the Execution Date and as of the Closing Date (other than representations and warranties that refer to a specified date, which need only be true and correct on and as of such specified date) as though made on and as of the Closing Date, except for any failures that would not be expected to have more than an immaterial adverse impact on Sellers or their benefit of the transactions contemplated by this Agreement;

(b) Performance . Purchaser shall have performed and observed all covenants and agreements to be performed or observed by it under this Agreement prior to or on the Closing Date, except for any such failures as are not material in the aggregate in the context of the transactions contemplated by this Agreement;

(c) No Order or Law . On the Closing Date, no injunction, Order or Law restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement shall have been issued and remain in force;

(d) Governmental Consents . All consents and approvals of any Governmental Authority that are set forth on Schedule 6.1(d) shall have been granted without condition and any waiting periods (including those required under the Antitrust Laws) applicable to the transactions contemplated hereby shall have expired (or the early termination thereof shall have been granted); and

(e) Kinder Morgan Merger . Either (A) (i) all of the conditions to closing set forth in Article VI of the Agreement and Plan of Merger, dated as of October 16, 2011 (the “ Kinder Morgan Merger Agreement ”), among Kinder Morgan, Inc. (“ Kinder Morgan ”), Sherpa Merger Sub, Inc., Sherpa Acquisition, LLC, Sirius Holdings Merger Corporation, Sirius Merger Corporation and El Paso Corporation (“ El Paso ”) shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the Kinder Morgan Merger) (ii) Kinder Morgan is and has irrevocably confirmed in writing to El Paso that it is ready, willing and able to close the Kinder Morgan

Merger immediately following the Closing and (iii) Kinder Morgan and its Financing Source (as defined in the Kinder Morgan Merger Agreement) have irrevocably committed in writing to El Paso to effect the closing of the Kinder Morgan Merger immediately following the Closing or (B) the consummation of the Kinder Morgan Merger shall have occurred; provided , however , that the condition set forth in this Section 6.1(e) shall no longer be applicable if Sellers properly waive the automatic termination of this Agreement pursuant to Section 9.1(ii) .

Section 6.2. Conditions of Purchaser to Closing . The obligations of Purchaser to consummate the transactions contemplated by this Agreement are subject, at the option of Purchaser, to the satisfaction on or prior to Closing of each of the following conditions:

(a) Representations . The representations and warranties of Sellers (i) set forth in Article 3 (other than Seller Fundamental Representations) shall be true and correct as of the Execution Date and as of the Closing Date as though made on and as of the Closing Date (other than representations and warranties that refer to a specified date, which need only be true and correct on and as of such specified date), except for such breaches, if any, of representations and warranties as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect (except to the extent such representation or warranty is qualified by its terms by materiality or Material Adverse Effect, such qualification in its terms shall be inapplicable for purposes of this Section 6.2(a) ) and (ii) set forth in Article 3 that are Seller Fundamental Representations shall be true and correct as of the Execution Date and as of the Closing Date (other than representations and warranties that refer to a specified date, which need only be true and correct on and as of such specified date), except for any failures that would not be expected to have more than an immaterial adverse impact on Purchaser or its benefit of the transactions contemplated by this Agreement(except to the extent such representation or warranty is qualified by its terms by materiality or Material Adverse Effect, such qualification in its terms shall be inapplicable for purposes of this Section 6.2(a) );

(b) Performance . Sellers shall have performed and observed all covenants and agreements to be performed or observed by them under this Agreement prior to or on the Closing Date, except for any such failures as are not material in the aggregate in the context of the transactions contemplated by this Agreement;

(e) Debt Payoff Letters . Each payee (or agent or trustee therefor) of a Third-Party Loan (other than any Loan that, in accordance with Section 5.8(b) , is not required to be repaid by the Closing) shall have executed and delivered a Debt Payoff Letter to the applicable payor Company or Wholly-Owned Subsidiary and the Debt Payoff Amount stated in each Debt Payoff Letter so delivered;

(f) FIRPTA Affidavits . New EPE shall have delivered to Purchaser a non-foreign affidavit dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under Treasury Regulations issued pursuant to Section 1445 of the Code stating that New EPE is not a “foreign person” as defined in Section 1445 of the Code, and Sellers shall have caused EP Production International Cayman Company to have delivered to Purchaser an affidavit dated as of the

Closing Date in form and substance reasonably acceptable to Purchaser stating that neither the quotas nor the assets of the BrazilCos constitute a “United States real property interest” as defined in Section 897(c)(1) of the Code (together the “ Tax Affidavits ”);

(g) Restructuring . Sellers shall have effected the restructuring steps described in Section 8.10(a) and shall have provided evidence, reasonably satisfactory to Purchaser, that such restructuring steps have been effected; and

(h) No Material Adverse Effect . Since December 31, 2010, no change, event, circumstance, development, state of facts, or condition has occurred (or existed, as applicable), that would, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect

Article 7
CLOSING

Section 7.1. Time and Place of Closing . The consummation of the purchase and sale of the Shares contemplated by this Agreement (the “ Closing ”) shall, unless otherwise agreed to in writing by Purchaser and Sellers, take place at a law firm located in New York, New York, as mutually agreed upon by the Parties or, if the Parties cannot mutually agree, at the office of Simpson Thatcher & Bartlett LLP, located at 425 Lexington Avenue, New York, New York (a) at such time as may be mutually agreed by the Parties on a date after May 9, 2012 that all conditions set forth in Article 6 have been satisfied or waived, which time shall be immediately prior to the consummation of the Kinder Morgan Merger if the condition in Section 6.1(e) remains in effect (but not prior to the third (3rd) Business Day after the date that all conditions set forth in Article 6 have been satisfied or waived, other than those that, by their nature, are to be satisfied only on the Closing Date, but subject to the satisfaction or waiver of such conditions on the Closing Date), subject to the provisions of Article 9 ; provided , that if the Marketing Period has not ended at the time of the satisfaction or waiver of all of the conditions set forth in Article 6 (other than those that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver in writing of those conditions), notwithstanding the satisfaction or waiver of such conditions, Purchaser shall not be required to effect the Closing until the earlier of (i) a date during the Marketing Period specified by Purchaser on not less than two (2) Business Days’ notice to Sellers and (ii) the third (3rd) Business Day immediately following the final day of the Marketing Period (subject, in each case, to the satisfaction or waiver in writing of all of the conditions set forth in Article 6 as of the date determined pursuant to this proviso), or (b) at such other time and date as shall be agreed upon in writing between Purchaser and Sellers. The date on which the Closing occurs is referred to herein as the “ Closing Date .”

Section 7.2. Obligations of Sellers at Closing . At the Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous performance by Purchaser of its obligations pursuant to Section 7.3 , Sellers shall deliver or cause to be delivered to Purchaser the following:

(a) valid instruments of assignment of the Shares(in form and substance reasonably acceptable to Purchaser) to Purchaser, free and clear of all Liens, duly executed by the applicable Sellers;

(b) a certificate duly executed by an authorized corporate officer of each Seller, dated as of the Closing, certifying on behalf of each Seller that the conditions set forth in Section 6.2(a) and Section 6.2(b) have been fulfilled;

(c) a certificate duly executed by the secretary or any assistant secretary of each Seller, dated as of the Closing, (i) attaching and certifying on behalf of such Seller complete and correct copies of (A) the Organizational Documents of such Seller, each as in effect as of the Closing, (B) the resolutions of the Board of Directors or other governing body of such Seller authorizing the execution, delivery, and performance by such Seller of this Agreement and the transactions contemplated hereby and (C) any required approval by the stockholders or members, as applicable, of such Seller of this Agreement and the transactions contemplated hereby and (ii) certifying on behalf of such Seller the incumbency of each officer of such Seller executing this Agreement or any document delivered in connection with the Closing;

(d) where notices of approval are received by any Seller pursuant to a filing or application under Section 5.6 , copies of those notices of approval;

(e) counterparts of (i) a transition services agreement by and among Sellers, Purchaser and the other parties thereto substantially in the form attached here to as Exhibit C (the “ Transition Services Agreement ”), duly executed by the Sellers and (ii) a lease agreement by and among EPEC Realty, Inc. and EP Energy in the form attached hereto as Exhibit D (the “ Lease ”), duly executed by EPEC Realty, Inc.;

(f) counterparts of the Personal Property Assignment, duly executed by Sellers and/or any Affiliates of Sellers (other than any Company or Company Subsidiary ) ;

(g) the Tax Affidavits, duly executed by an authorized corporate officers of New EPE and EP Production International Cayman Company; and

(h) all other documents and instruments reasonably requested by Purchaser from Sellers to transfer the Shares to Purchaser.

Section 7.3. Obligations of Purchaser at Closing . At the Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous performance by Sellers of their obligations pursuant to Section 7.2 , Purchaser shall deliver or cause to be delivered to Sellers the following:

(a) a wire transfer of the Closing Payment in same day funds to New EPE for the account of Sellers;

(b) a certificate by an authorized corporate officer of Purchaser, dated as of the Closing, certifying on behalf of Purchaser that the conditions set forth in Section 6.1(a) and Section 6.1(b) have been fulfilled;

(c) a certificate duly executed by the secretary or any assistant secretary of Purchaser, dated as of the Closing, (i) attaching and certifying on behalf of Purchaser complete and correct copies of (A) the Organizational Documents of Purchaser, each as in effect as of the Closing, (B) the resolutions of the Board of Directors or other governing body of Purchaser authorizing the execution, delivery, and performance by Purchaser of this Agreement and the transactions contemplated hereby and (C) any required approval by the stockholders of Purchaser of this Agreement and the transactions contemplated hereby and (ii) certifying on behalf of Purchaser the incumbency of each officer of Purchaser executing this Agreement or any document delivered in connection with the Closing;

(d) where notices of approval are received by Purchaser pursuant to a filing or application under Section 5.6 , copies of those notices of approval;

(e) evidence of replacement bonds, guarantees and letters of credit pursuant to Section 5.13 , to the extent obtained prior to the Closing;

(f) counterparts of (i) the Transition Services Agreement, duly executed by Purchaser and (ii) the Lease, duly executed by EP Energy; and

(g) counterparts of the Personal Property Assignment, duly executed by the Purchaser and/or any of its Affiliates (including any of the Companies or the Company Subsidiaries).

Article 8
TAX MATTERS

Section 8.1. Liability for Taxes .

(a) Tax Indemnification by Sellers . Subject to Section 8.1(d) , Section 8.8 and Section 10.4(d) , from and after Closing, Sellers shall be liable for, and shall, jointly and severally, indemnify and hold harmless Purchaser, the Companies, the Company Subsidiaries, and their respective Affiliates (each a “ Tax Indemnified Purchaser Party ” and collectively, the “ Tax Indemnified Purchaser Parties ”) from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties (including, without limitation, reasonable fees for outside counsel, outside consultants and outside accountants) (each a “ Tax Loss ” and collectively, the “ Tax Losses ”) incurred by a Tax Indemnified Purchaser Party arising out of (without duplication) (i) any Income Taxes imposed on, relating to, or incurred by any Company or Company Subsidiary attributable to a Pre- Closing Period (“ Pre-Closing Income Taxes ”); (ii) any Non-Income Taxes imposed on, relating to, or incurred by any Company or Company Subsidiary attributable to a Pre-Effective Time Period (“ Pre-Effective Time Non-Income Taxes ,” and together with Pre-Closing Income Taxes, “ Sellers Indemnified Taxes ”); (iii) any Taxes of a Person other than a Company or Company Subsidiary for which any Company or Company Subsidiary is liable by virtue of any affiliation, merger or other event occurring prior to the Closing (including pursuant to Treasury Regulations Sections 1.1502-6 or 1.1502-78 (or any similar provision of state, local or non-U.S. law)); (iv) any breach of a Seller Fundamental Tax Representation or Seller Fundamental Tax Covenant ( provided , that (A) for purposes of this Section 8.1(a)(iv) only, any breach of any such Seller Fundamental Tax Representation or Seller Fundamental Tax Covenant shall be determined without reference to any materiality qualifier with respect thereto , and (B) to the extent that a breach of any covenant or agreement set forth in Section 5.4(m) gives rise to a Post-Effective Time Period Non-Income Tax, the Tax Loss relating to such Post-Effective Time Period Non-Income Tax shall be reduced by the amount that such Post-Effective Time Period Non-Income Tax would have been had no such breach occurred); (v) the restructuring steps described in Section 8.10(a) or the actions of Sellers or their Affiliates pursuant to Section 5.7 ; and (vi) any withholding Taxes relating to the sale of the Brazilian Shares hereunder. Notwithstanding the preceding sentence, Sellers shall have no obligation to indemnify the Tax Indemnified Purchaser Parties from and against, and Purchaser hereby waives any claims against, and releases, Sellers from any Tax Losses relating to, or suffered or incurred by, any EgyptCo. Subject to Section 8.1(d) , Section 8.8 and Section 10.4(d) , Sellers shall pay the Tax Indemnified Purchaser Parties with respect to a Tax Loss under this Section 8.1(a) promptly in cleared funds no later than the later of (i) two (2) Business Days before the date on which the relevant Taxes (if applicable) are required to be paid and (ii) five (5) Business Days after Sellers’ receipt of notice and supporting work papers (or other appropriate documentation) from Purchaser of Sellers’ liability therefor.

(b) Tax Indemnification by Purchaser . Subject to Section 8.8 , from and after Closing, Purchaser shall be liable for, and shall indemnify and hold harmless each Seller and its Affiliates (other than the Companies and Company Subsidiaries) (each, a “ Tax Indemnified Seller Party ”) from and against all Tax Losses incurred by a Tax Indemnified Seller Party arising out of (i) any Income

Taxes imposed on, relating to, or incurred by a Company or Company Subsidiary and attributable to any Post-Closing Period and any Non-Income Taxes imposed on, relating to, or incurred by a Company or Company Subsidiary and attributable to any Post-Effective Time Period (in each case, other than any such Taxes (A) for which such Company or Company Subsidiary is liable by virtue of any affiliation, merger or other event occurring prior to the Closing (including pursuant to Treasury Regulations Sections 1.1502-6 or 1.1502-78 (or any similar provision of state, local or non-U.S. law)), (B) that result from a breach of a Seller Fundamental Tax Representation or a Seller Fundamental Tax Covenant ( provided , that for purposes of this Section 8.1(b)(i)(B) only, any breach of any such Seller Fundamental Tax Representation or Seller Fundamental Tax Covenant shall be determined without reference to any materiality qualifier with respect thereto), (C) that result from the restructuring steps described in Section 8.10(a) or (D) that are withholding Taxes relating to the sale of the Brazilian Shares hereunder)) (“ Purchaser Indemnified Taxes ”) and (ii) any Transfer Taxes required to be borne by Purchaser pursuant to Section 11.3 . Subject to Section 8.8 , Purchaser shall pay Sellers or their Affiliates with respect to a Tax Loss under this Section 8.1(b) promptly in cleared funds no later than the later of (i) two (2) Business Days before the date on which the relevant Taxes (if applicable) are required to be paid and (ii) five (5) Business Days after Purchaser’s receipt of notice and supporting work papers (or other appropriate documentation) from Sellers of Purchaser’s liability therefor.

(c) Straddle Period Taxes . Whenever it is necessary for purposes of this Agreement to determine the portion of any Taxes of or with respect to any Company or Company Subsidiary for a Straddle Income Period which is allocable to the Pre-Closing Period or the Post- Closing Period or for a Straddle Non-Income Period which is allocable to the Pre-Effective Time Period or the Post-Effective Time Period, as the case may be, the determination shall be made as if each of the Companies and the Company Subsidiaries was not a member of its respective Seller’s consolidated, affiliated, combined or unitary group for Tax purposes. Any Income Taxes attributable to a Straddle Income Period will be allocated between the Pre-Closing Period and the Post-Closing Period based on an interim closing of the books (such Taxes allocable to the Pre-Closing Period being determined as if such taxable period ended as of the Closing Date). Any Non-Income Taxes attributable to a Straddle Non-Income Period will be allocated between the Pre-Effective Time Period and the Post-Effective Time Period based upon the number of days in the applicable period falling on or before, or after, December 31, 2011. To the extent necessary, a Seller shall estimate Taxes based on Seller’s liability for Taxes with respect to the same or similar Tax item in the immediately preceding year. Notwithstanding anything to the contrary herein, (i) any franchise Tax paid or payable with respect to each Company or Company Subsidiary shall be allocated to the taxable period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another taxable period is obtained by the payment of such franchise Tax, (ii) any ad valorem or property Taxes paid or payable with respect to the assets of the E&P Business shall be allocated to the taxable period applicable to the ownership of the assets of the E&P Business regardless of when such Taxes are assessed and (iii) any severance, production and similar Taxes based upon or measured by the quantity of or the value of the production of Hydrocarbons shall be apportioned between Sellers and Purchaser based on the number of units or value of production actually produced and subject to Tax, as applicable, on or before, and after, December 31, 2011 and any such Taxes shall be deemed attributable to the period during which the relevant production occurred.

(d) Survival of Tax Indemnification . The right to assert an indemnification claim pursuant to this Section 8.1 shall survive Closing and remain in full force and effect until the date which is sixty (60) days after the date upon which liability to which any such claim may relate is barred by all applicable statutes of limitations (including all periods of extension, whether automatic or permissive).

Section 8.2. Preparation and Filing of Company or Company Subsidiary Tax Returns .

(a) Subject to Section 8.2(b) , with respect to each Tax return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof (a “ Tax Return ”) that is required to be filed for, by or with respect to a Company or Company Subsidiary after the Closing Date, Purchaser shall cause such Tax Return to be prepared and, subject to Sellers’ obligations under Section 8.1 , shall cause each Company to file timely such Tax Return with the appropriate Governmental Authority and pay timely the amount of Taxes shown to be due on such Tax Return. Subject to Section 8.8 , Sellers shall pay Purchaser or its designee in cleared funds an amount equal to all Sellers Indemnified Taxes due in respect of such Tax Returns no later than the later of (i) three (3) Business Days prior to the due date (including extensions) for such Tax Returns and (ii) five (5) Business Days after Sellers’ receipt of notice and supporting work papers (or other appropriate documentation) from Purchaser of Sellers’ liability therefor).

(b) With respect to each Tax Return relating to Income Taxes that is required to be filed after the Closing Date for, by or with respect to any consolidated, combined or unitary group of which a Company or Company Subsidiary is a member (but the parent thereof is not a Company or Company Subsidiary), Sellers shall cause such Tax Return to be prepared and shall cause such Tax Return to be timely filed with the appropriate Governmental Authority and pay timely the amount of Taxes shown to be due on such Tax Return.

(c) Any Tax Return to be prepared pursuant to Section 8.2(a) in respect of a Pre-Effective Time Period (or, in the case of a Tax Return relating to Income Taxes, in respect of a Pre-Closing Period) and any Tax Return to be prepared pursuant to Section 8.2(b) shall, in each case, shall be prepared in a manner consistent with practices, elections, and methods of accounting followed in prior years with respect to similar Tax Returns for the applicable entity, except for changes required by applicable Law, subject to the return preparer’s ethical and legal obligations under applicable Laws.

(d) With respect to Tax Returns of a Company or Company Subsidiary for a Pre-Effective Time Period or Pre-Closing Period to be filed after the Closing Date, if Sellers may be liable for any portion of the Tax payable in connection with such Tax Return, Purchaser shall prepare and deliver to Sellers a copy of such return and any schedules, work papers and other documentation then available that are relevant to the preparation of the portion of such return for which Sellers are or may be liable under this Agreement not later than forty-five (45) days before the date on which the Tax Return is due to be filed (taking into account any valid extensions) (the “ Due Date ”) (or, in the case of ad valorem property Taxes, within thirty (30) days of receipt of the bill for such ad valorem property Taxes from the applicable Governmental Authority) or, in the case of any such Tax Returns due within sixty (60) days after the Closing Date, as soon as reasonably practicable. Purchaser shall not file such return or cause such return to be filed until the earlier of either the receipt of written notice from Sellers indicating Sellers’ consent thereto, or the Due Date. If Sellers dispute any item on such Tax Return, they shall notify Purchaser of such disputed item (or items) and the basis for their objection. The Parties shall act in good faith to resolve any such dispute prior to the date on which such Tax Return is required to be filed. If the Parties cannot resolve any disputed item, the item in question shall be resolved by an independent accounting firm mutually acceptable to Sellers and Purchaser. The fees and expenses of such accounting firm shall be borne equally by Sellers and Purchaser.

(e) Notwithstanding any other provision of this Agreement to the contrary, Purchaser and its Affiliates shall be entitled to prepare and file all Tax Returns, and to conduct all Tax audits, adjustments, claims, examinations, assessments or other proceedings, with respect to their operations, assets, and activities for any Tax period beginning after the Closing Date or with respect to

any consolidated, combined or unitary group of which Purchaser or any of its Affiliates is a member in such manner as Purchaser may determine in Purchaser’s sole discretion; provided , however , that this Section 8.2 shall not limit Purchaser’s liability under this Agreement for breaches of covenants or agreements contained in Sections 2.2(b) , 8.7 or 10.1(h) .

Section 8.3. Tax Sharing Agreement . Effective as of December 31, 2011 (in respect of Non-Income Taxes) and the Closing Date (in respect of Income Taxes), any tax indemnity, sharing, allocation or similar agreement or arrangement (a “ Tax Sharing Agreement ”) that may be in effect between or among a Company or Company Subsidiary, on the one hand, and its Seller or any of its Affiliates (other than the Companies and the Company Subsidiaries), on the other hand, shall be extinguished in full as the Tax Sharing Agreement relates to such Company or Company Subsidiary, and any liabilities or rights existing under any such agreement or arrangement by or with respect to a Company or Company Subsidiary shall cease to exist and shall no longer be enforceable as to all past, present and future taxable periods.

Section 8.4. Access to Information .

(a) From and after Closing, each Seller shall grant to Purchaser (or its designees) reasonable access at all reasonable times to the information, books and records relating to a Company or Wholly-Owned Subsidiary within the possession of such Seller (including work papers and correspondence with taxing authorities), and shall afford Purchaser (or its designees) the right (at Purchaser’s expense) to take extracts therefrom and to make copies thereof, to the extent reasonably necessary to permit Purchaser (or its designees) to prepare Tax Returns, to conduct negotiations with Tax authorities, and to implement the provisions of, or to investigate or defend any claims between the Parties arising under, this Agreement.

(b) From and after Closing, Purchaser shall grant to Sellers (or Sellers’ designees) reasonable access at all reasonable times to the information, books and records relating to the Companies or Wholly-Owned Subsidiaries within the possession of Purchaser, the Companies or Wholly-Owned Subsidiaries (including work papers and correspondence with taxing authorities, but excluding work product of and attorney-client communications with any of Purchaser’s legal counsel and personnel files), and shall afford Sellers (or Sellers’ designees) the right (at Sellers’ expense) to take extracts therefrom and to make copies thereof, to the extent reasonably necessary to permit Sellers (or Sellers’ designees) to prepare Tax Returns, to conduct negotiations with, or contest deficiencies asserted by, Tax authorities, and to implement the provisions of, or to investigate or defend any claims between the Parties arising under, this Agreement.

(c) Each of the Parties hereto will preserve and retain all schedules, work papers and other documents within the Party’s possession relating to any Tax Returns of or with respect to Taxes of the Companies or Wholly-Owned Subsidiaries or to any claims, audits or other proceedings affecting the Companies or Wholly-Owned Subsidiaries until the expiration of the statute of limitations (including extensions) applicable to the taxable period to which such documents relate or until the final determination of any controversy with respect to such taxable period, and until the final determination of any payments that may be required with respect to such taxable period under this Agreement.

(d) At either Purchaser’s or Sellers’ request, the other Party shall provide reasonable access to Purchaser’s or Sellers’, as the case may be, and their respective Affiliates’ (including the Companies’ and Wholly-Owned Subsidiaries’) personnel who have knowledge of the information described in this Section 8.4 . In addition, at Sellers’ request, Purchaser shall provide to Sellers in a timely manner such information and assistance as Purchaser may reasonably request (including pro forma Tax Returns and supporting information and documentation related thereto) so as to permit Sellers to

accurately prepare and timely file any Tax Returns of Sellers or their Affiliates that include tax attributes of any Company or Company Subsidiary.

(e) In the case of any Tax Return to be prepared pursuant to the provisions of this Article 8 , if the Party that is not preparing the Tax Return (or any of its Affiliates) is required to pay any Taxes shown on the Tax Return, then the Party preparing the Tax Return shall provide the Party not preparing the Tax Return with appropriate documentation and computations reasonably requested by such latter Party supporting the determinations made by the Party preparing the Tax Return as to the amount of Tax so due by the Party not preparing the Tax Return (or any of its Affiliates).

(f) Any information obtained under this Section 8.4 or Section 8.9 shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or in the conduct of a Tax Audit or other Tax proceeding.

Section 8.5. Contest Provisions .

(a) From and after Closing, each of Purchaser, on the one hand, and Sellers, on the other hand (the “ Tax Indemnified Person ”), shall notify the chief tax officer (or other appropriate person) of New EPE or Purchaser, as the case may be, in writing within fifteen (15) days of receipt by the Tax Indemnified Person of written notice of any pending or threatened audits, adjustments, claims, examinations, assessments or other proceedings with respect to a Company or Wholly-Owned Subsidiary (a “ Tax Audit ”) which are likely to affect the liability for Taxes of such other Party. If the Tax Indemnified Person fails to give such timely notice to the other Party, it shall not be entitled to indemnification for any Taxes arising in connection with such Tax Audit to the extent such failure to give notice actually and materially adversely affects the other Party.

(b) If such Tax Audit relates solely to Taxes for which Purchaser is indemnified under Section 8.1(a) , Sellers shall, at their expense, conduct and control the defense and settlement of such Tax Audit, but Purchaser shall have the right to participate in such Tax Audit at its own expense, and Sellers shall not be able to settle, compromise and/or concede any portion of such Tax Audit that is reasonably likely to affect the Tax liability of Purchaser, a Company or a Company Subsidiary for any post-Closing Period without the consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned; provided , that if Sellers fail to assume control of the conduct of any such Tax Audit within a reasonable period following the receipt by Sellers of notice of such Tax Audit, Purchaser shall have the right to assume control of such Tax Audit and shall be able to settle, compromise and/or concede such Tax Audit in its sole discretion. If such Tax Audit relates to Taxes for which Purchaser is indemnified under Section 8.1(a) and Taxes for which Purchaser is not indemnified under Section 8.1(a) , Purchaser shall control the conduct of such Tax Audit, but Sellers shall have the right to participate in such Tax Audit at their own expense, and Purchaser shall not settle, compromise and/or concede such Tax Audit without the consent of Sellers, which consent shall not be unreasonably withheld, delayed or conditioned. If such Tax Audit relates solely to Taxes for which Purchaser is not indemnified under Section 8.1(a) , Purchaser shall conduct and control the defense and settlement of such Tax Audit.

Section 8.6. Post-Closing Actions Which Affect Sellers’ Tax Liability . Except to the extent required by applicable Laws, neither Purchaser, on the one hand, nor Sellers, on the other hand, shall and they shall not permit their respective Affiliates, including the Companies and the Company Subsidiaries, to amend any Tax Return of the Companies or the Company Subsidiaries with respect to a Pre-Effective Time Period without the prior written consent of the other (such consent not to be unreasonably withheld, delayed or conditioned) if such amended Tax Return would materially increase the amount of Taxes for which the other Party is responsible.

Section 8.7. Refunds . Purchaser agrees to pay to Sellers any refund received together with any interest thereon from a Governmental Authority after the Closing by Purchaser or its Affiliates, including the Companies and the Company Subsidiaries in respect of any Non-Income Taxes of any Company or Company Subsidiary for a Pre-Effective Time Period and any Income Taxes of any Company or Company Subsidiary for a Pre-Closing Period (in both cases, other than any refund resulting from the carryback of a net operating loss or other Tax attribute from a period beginning after the Closing Date to a period ending on or prior to the Closing Date, which refund shall be for the account of Purchaser) to the extent not taken into account in determining the Effective Time Net Working Capital. Any such refund received by Purchaser, its Affiliates, a Company or Company Subsidiary shall be paid to Sellers, reduced by any Taxes imposed thereon and net of any reasonable costs or expenses incurred by Purchaser or its Affiliates in procuring such refund, within thirty (30) days after such refund is received. Purchaser agrees to notify Sellers within ten (10) days upon receipt of any such refund. Purchaser shall be entitled to any refund received (whether by payment, credit, offset or otherwise, and together with any interest thereon), with respect to or relating to any of the Companies or Wholly-Owned Subsidiaries, other than those to which Sellers are entitled pursuant to this Section 8.7 .

Section 8.8. No Duplication . Notwithstanding anything to the contrary in this Article 8 , (i) Sellers shall not have any liability for, and shall not be required to pay to Purchaser, any amounts pursuant to this Article 8 in respect of any Taxes to the extent such Taxes were taken into account in determining the Effective Time Net Working Capital and (ii) Purchaser shall not have any liability for, and shall not be required to pay to Sellers, any amounts pursuant to this Article 8 in respect of any Taxes to the extent such Taxes were taken into account in determining any adjustments to the Unadjusted Purchase Price described in Section 2.3 , in each case, as ultimately determined pursuant to Article 2 .

Section 8.9. Cooperation .

(a) Each Party shall provide the other Party with such cooperation and information as it reasonably may request with respect to the Companies and Wholly-Owned Subsidiaries in filing any Tax Return, amended Tax Return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes. Each Party shall bear its own expenses in complying with the foregoing provisions.

(b) Purchaser and Sellers further agree, upon request, to use their reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated hereby).

Section 8.10. Intended U.S. Federal Income Tax Treatment of Transaction .

(a) Prior to Closing, (i) EP Energy Corporation, a Delaware corporation, formed New EPE, as a direct wholly owned Subsidiary, (ii) New EPE formed El Paso EPE Merger Company, a Delaware corporation (“ Merger EPE ”), (iii) Merger EPE merged with and into EP Energy Corporation with EP Energy Corporation surviving (and shares of EP Energy Corporation stock previously held by El Paso were converted into shares of New EPE), (iv) EP Energy Corporation then converted into a Delaware limited liability company (referred to in this Agreement as “ EPE LLC ”) and became a disregarded entity for United States federal Tax purposes and corresponding state income Tax laws, (v) El Paso Exploration & Production Management, Inc., a Delaware corporation, converted into a Delaware limited liability company and became a disregarded entity for United States federal Tax purposes and corresponding state income Tax laws (referred to in this Agreement as “ EP E&P Management ”), (vi) MBOW Four Star Corporation, a Delaware corporation, converted into a Delaware limited liability company and became a disregarded entity for United States federal Tax purposes and

corresponding state income Tax laws, (vii) El Paso Preferred Holdings Company, a Delaware corporation, converted into a Delaware limited liability company and became a disregarded entity for United States federal Tax purposes and corresponding state income Tax laws (“ EP Preferred Holding LLC ”), (viii) EP Preferred Holdings LLC distributed its preferred shares in EP Production International Cayman Company and EP Egypt to EPE LLC, (ix) EPE LLC distributed its common and preferred shares in EP Production International Cayman Company and EP Egypt and distributed all intercompany receivables associated with the Brazil and Egypt projects to New EPE (as further described on Schedule 3.5 ) and (x) EP Brazil, each of the BrazilCos and each of the EgyptCos (other than EP Egypt) has previously made a check-the-box election to be a disregarded entity for United States federal Tax purposes.

(b) Accordingly, the Parties intend for the United States federal Tax purposes and for relevant state income Tax purposes, (i) EPE LLC and each of its United States Wholly-Owned Subsidiaries that is classified as a corporation for United States federal Tax purposes will be treated as completely liquidated in a nontaxable transaction pursuant to Sections 332 and 337 of the Code, (ii) the purchase and sale hereunder of the EPE LLC Membership Interests as a single-member limited liability company will be treated as a taxable sale by New EPE of the assets of EPE LLC and its United States Wholly-Owned Subsidiaries to Purchaser, and the purchase of such assets by Purchaser from New EPE, for the applicable portion of the Purchase Price and the assumption of liabilities allocable to the EPE LLC Membership Interests, (iii) this Agreement is a plan of complete liquidation of EPE LLC and each of its United States Wholly-Owned Subsidiaries that is classified as a corporation for United States federal Tax purposes pursuant to Section 332 of the Code, (iv) the purchase and sale hereunder of the BrazilCos Shares for United States federal income Tax purposes will be treated as a taxable sale by EP Production International Cayman Company (a controlled foreign corporation wholly-owned by New EPE) of the assets of the BrazilCos and the purchase of such assets by Purchaser from EP Production International Cayman Company for the applicable portion of the Purchase Price and the assumption of liabilities allocable to the BrazilCos Shares and (v) the purchase and sale hereunder of the EP Egypt Shares for United States federal income tax purposes will be treated as a taxable sale by New EPE of the EP Egypt Shares.

Section 8.11. Section 754 Election . The parties agree to cause each subsidiary of a Company or Company Subsidiary that is treated as a partnership for U.S. federal income tax purposes to make a valid election under Section 754 of the Code for the taxable year which includes the Closing Date.

Section 8.12. Conflict . In the event of a conflict between the provisions of this Article 8 and any other provision of this Agreement, this Article 8 shall control.

Article 9
TERMINATION AND AMENDMENT

Section 9.1. Termination . This Agreement may be terminated at any time prior to Closing:

(i) by the mutual prior written consent of the Parties;

(ii) without any additional action by any Party at the end of the tenth (10th) Business Day following termination of the Kinder Morgan Merger Agreement unless Sellers elect to waive such automatic termination by providing Purchaser with written notice of such election before the expiration of such ten (10) Business Day period;

(iii) by Sellers (other than in the case of a Funding Failure) or Purchaser, by written notice to Purchaser or Sellers, respectively, if Purchaser or if any Seller, respectively, is in breach of any representation or covenant in this Agreement, which breach would give rise to the failure of a condition set forth in Article 6 to be satisfied and is incapable of being cured, or is not cured, by such breaching Party within the earlier of (A) thirty (30) days following receipt of written notice from the non-breaching Party of such breach or such longer period reasonably required to cure such breach and (B) the End Date;

(iv) by Sellers or Purchaser, by written notice to the other Party, if Closing has not occurred on or before the End Date;

(v) by Sellers or Purchaser, by written notice to the other Party, pursuant to the terms of Section 1.7 of Annex 1 ; or

(vi) by Sellers, by written notice to Purchaser, if a Funding Failure shall have occurred;

provided , however , that (A) neither Sellers nor Purchaser shall be entitled to terminate this Agreement under Section 9.1(iii) or 9.1(iv) if, in the case of Section 9.1(iii) , at the time such termination right arises, or, in the case of Section 9.1(iv) , the Closing has failed to occur, in each case, such Party is in breach of any of its representations, warranties or covenants in this Agreement and such breach would give rise to the failure of a condition set forth in Article 6 to be satisfied and (B) no one Seller may terminate this Agreement pursuant to this Section 9.1 unless all of Sellers terminate this Agreement (and elect to exercise such right to terminate this Agreement). As used in this Agreement, the term “ End Date ” means October 1, 2012; provided , however , that if the Marketing Period has commenced prior to the End Date and has not been completed by the End Date, the End Date shall be extended to the third (3rd) Business Day after the date on which the Marketing Period is completed, and, in the event of such an extension, such date shall be the “End Date” for purposes of the foregoing; provided , further , however , that, if all of the conditions to Closing set forth in Section 6.1(a) , 6.1(b) , 6.1(c) and 6.1(d) have been satisfied, and the Closing shall not have occurred as of such time, Purchaser shall have the right to elect to extend the End Date until the termination date set forth in the Kinder Morgan Merger Agreement (including as such termination date may be further extended thereunder), and in the event of such an execution, such date shall be the “End Date” for purposes of the foregoing.

Section 9.2. Effect of Termination .

(a) If this Agreement is terminated pursuant to Section 9.1 , this Agreement shall become void and of no further force or effect (except for the provisions of Section 1.2 , Section 3.15 , Section 4.10 , Section 5.2 , Section 5.5 , Section 5.9 , Article 9 , Section 11.1 , Section 11.2 , Section 11.4 , Section 11.7 , Section 11.8 , Section 11.9 , Section 11.10 , Section 11.11 , Section 11.12 , Section 11.13 , Section 11.14 , Section 11.15 , Section 11.16 , Section 11.17 , Section 11.18 , Section 11.19 and Section 11.20 and of the Confidentiality Agreement, all of which shall continue in full force and effect). In such event, no Party shall have any liability except as expressly provided in this Section 9.2 .

(b) Certain Termination Fees Payable by Purchaser . In the event this Agreement is terminated:

(i) by Sellers pursuant to Section 9.1(iii) , then Purchaser shall pay, or cause to be paid (x) to Sellers an amount equal to the total Transaction Costs and Expenses incurred by Sellers and (y) to Kinder Morgan an amount equal to the KM Transaction Costs and Expenses; or

(ii) by Sellers pursuant to Section 9.1(vi) , then Purchaser shall pay, or cause to be paid, to Sellers the Purchaser Termination Fee.

For the avoidance of doubt, in no event shall Purchaser be required to pay the amount of any Transaction Costs and Expenses incurred by Sellers, the KM Transaction Costs and Expenses, the amount of the Purchaser Termination Fee, or any amounts under Section 9.2(d) as applicable, on more than one occasion or be required to pay any amounts under more than one of Sections 9.2(b)(i) , 9.2(b)(ii) or 9.2(d) . Payment of the amount of any Transaction Costs and Expenses incurred by Sellers, or the amount of the Purchaser Termination Fee, as applicable, by Purchaser shall be made by wire transfer of same day funds promptly after termination of this Agreement (and, in any event, within five (5) Business Days thereof) to the account or accounts designated by Sellers.

(i) pursuant to Section 9.1(ii) , then Kinder Morgan shall pay, or cause to be paid, to Purchaser, substantially simultaneously with such termination, an amount equal to the Seller Termination Fee by wire transfer of same day funds to the account or accounts designated by Purchaser;

(ii) by Purchaser pursuant to Section 9.1(iii) , then Kinder Morgan shall, jointly and severally, pay, or cause to be paid, to Purchaser an amount equal to the Debt Financing Expenses plus the total amount of all Transaction Costs and Expenses incurred by Purchaser, by wire transfer of same day funds promptly after termination of this Agreement (and, in any event, within five (5) Business Days thereof) to the account or accounts designated by Purchaser;

(iii) by either Party pursuant to Section 9.1(iv) , then, if, at the time of such termination all of the conditions to Closing set forth in Sections 6.1(a) , 6.1(b) , 6.1(c) and 6.1(d) have been satisfied and Purchaser stands ready, willing and able to consummate the Closing, then Kinder Morgan shall pay, or cause to be paid, to Purchaser an amount equal to the Seller Termination Fee by wire transfer of same day funds promptly after termination of this Agreement (and, in any event, within five (5) Business Days thereof) to the account or accounts designated by Purchaser; or

(iv) by either Party pursuant to Section 9.1(v) , then Kinder Morgan shall, jointly and severally, pay, or cause to be paid, to Purchaser an amount equal to the Debt Financing Expenses plus the total Transaction Costs and Expenses incurred by Purchaser, by wire transfer of same day funds promptly after termination of this Agreement (and, in any event, within five (5) Business Days thereof) to the account or accounts designated by Purchaser.

For the avoidance of doubt, in no event shall Kinder Morgan be required to pay the Seller Termination Fee (or, if applicable, the amount of Transaction Costs and Expenses incurred by Purchaser or the Debt Financing Expenses) or any amounts under Section 9.2(d) on more than one occasion or be required to pay any amounts under more than one of Sections 9.2(c)(i) , 9.2(c)(ii) , 9.2(c)(iii) , 9.2(c)(iv) or 9.2(d) .

(d) Willful and Material Breaches . In lieu of the payment of the amounts owed pursuant to Section 9.2(b) or 9.2(c) , as applicable, as a result of the termination of this Agreement contemplated by Sections 9.2(b) and 9.2(c) , as applicable, Purchaser or Sellers may assert a claim for Willful and Material Breach in accordance with the definition thereof by the other Party(ies), and, solely in the case of a final determination of a Willful and Material Breach by a court of competent jurisdiction, the Party that has successfully asserted such Willful and Material Breach shall be paid by the Party that has committed such Willful and Material Breach, an amount equal to $200,000,000 (which shall not

constitute liquidated damages or place any other limitation on full recovery of monetary damages set forth below, subject to Section 9.2(e) ) ( plus , if the demanding Party is Purchaser, an amount equal to the Debt Financing Expenses) (the “ Willful and Material Breach Fee ”), in which case, such Party shall in addition be entitled to pursue all legal remedies available to it at law to recover from the Party that has committed such Willful and Material Breach all actual damages incurred by it with respect to such Willful and Material Breach less the amount of the Willful and Material Breach Fee previously paid to the Party that successfully asserted such Willful and Material Breach, subject to the limitations set forth in Section 9.2(e) below.

(e) Effect of Payment; Limitations .

(i) Except for the Purchaser Guarantors (but only to the extent set forth in the Parent Guarantees), no current, former or future directors, officers, general or limited partners, stockholders, members, managers, partners, controlling persons, Affiliates, agents, employees or Representatives of Purchaser (or any Affiliates of any of the foregoing) shall have any liability for any obligation or liability of the Parties or for any claim for any loss suffered as a result of any breach of this Agreement, the Parent Guarantees or the Financing Letters (including any Willful and Material Breach or any Funding Failure), or the failure of the transactions contemplated hereby or thereby to be consummated, or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise.

(ii) The maximum aggregate monetary liability of the Purchaser Parties for any loss suffered by Sellers as a result of any breach of this Agreement that causes this Agreement to terminate, the Parent Guarantees or the Financing Letters (including any Funding Failure), the failure of the transactions contemplated hereby or thereby to be consummated or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise, shall, in each case, be limited to an amount equal to (I) in circumstances where a termination fee under Section 9.2(b) is elected, (A) the amount set forth in Section 9.2(b) , plus (B) the amount of any payment obligations pursuant to Sections 5.5 , 5.9 , 5.13(c) or 5.19(g) plus (C) the amount of all court costs and attorneys’ fees of Sellers incurred to recover any such amount or (II) in circumstances where a Willful and Material Breach has been finally determined to have occurred pursuant to Section 9.2(d) , an amount equal to $3,000,000,000 (subject to the terms and conditions set forth in the Parent Guarantees). In no event shall any Seller seek to recover any money damages (including consequential, indirect or punitive damages) in excess of such respective foregoing amounts.

(iii) If the amount determined pursuant to Section 9.2(e)(ii) has been paid, then neither Purchaser nor the Purchaser Guarantors (nor any other Purchaser Party) shall have any further liability or obligation relating to or arising out of this Agreement, the Parent Guarantees or the Financing Letters, or the failure of the transactions contemplated hereby or thereby to be consummated, or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise, and in such event, no Seller nor any of its Representatives or Affiliates shall seek to recover (or shall obtain) any money damages (including consequential, indirect or punitive damages, or damages on account of a Willful and Material Breach, if applicable) or obtain any equitable relief from any Purchaser Party.

(iv) Except for the El Paso Guarantor (but only to the extent set forth in the El Paso Guarantee), no current, former or future directors, officers, general or limited partners, stockholders, members, managers, partners, controlling persons, Affiliates (other than Sellers themselves), agents, employees or Representatives of a Seller shall have any liability for any obligation or liability of the other Parties or for any claim for any loss suffered as a result of any breach of this Agreement (including any Willful and Material Breach), or the failure of the transactions contemplated

hereby to be consummated, or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise.

(v) The maximum aggregate monetary liability of Sellers and the El Paso Guarantor for any loss suffered by Purchaser as a result of any breach of this Agreement that causes this Agreement to terminate or the El Paso Guarantee, the failure of the transactions contemplated hereby or thereby to be consummated or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise, shall, in each case, be limited to an amount equal to (I) in circumstances where a termination fee under Section 9.2(c) is elected, (A) the amount set forth in Section 9.2(c) plus (B) the amount of all court costs and attorneys’ fees of Purchaser incurred to recover any such amount or (II) in circumstances where a Willful and Material Breach has been finally determined to have occurred pursuant to Section 9.2(d) , an amount equal to $3,000,000,000 (subject, if applicable, to the terms and conditions set forth in the El Paso Guarantee). In no event shall Purchaser seek to recover any money damages (including consequential, indirect or punitive damages) in excess of such respective foregoing amounts.

(vi) If the amount determined pursuant to Section 9.2(e)(v) , along with any court costs and attorneys’ fees of Purchaser incurred to recover any such amount, has been paid, then neither Sellers nor the El Paso Guarantor shall have any further liability or obligation relating to or arising out of this Agreement or the failure of the transactions contemplated hereby to be consummated, or in respect of any oral representation made or alleged to have been made in connection herewith or therewith, whether in equity or at Law, in contract, in tort or otherwise, and in such event, neither Purchaser nor any of its Representatives of Affiliates shall seek to recover (or shall obtain) any money damages (including consequential, indirect or punitive damages) or obtain any equitable relief from any Seller or the El Paso Guarantor.

Article 10
INDEMNIFICATION; LIMITATIONS

Section 10.1. Indemnification .

(a) From and after Closing, Purchaser shall indemnify, defend and hold harmless Sellers and their current and former Affiliates (other than the Companies and any Wholly-Owned Subsidiary) and its and their respective officers, directors, employees, shareholders, members, partners and agents from and against all Damages incurred or suffered by such Persons:

(i) caused by or arising out of or resulting from Purchaser’s breach of any of Purchaser’s covenants or agreements contained in this Agreement;

(ii) caused by or arising out of or resulting from any breach of any representation or warranty made by Purchaser contained in this Agreement or the failure of any representation or warranty made by Purchaser contained in this Agreement to be true and correct as of the Closing (other than any representation or warranty that refers to a specified date, which need only be true and correct on and as of such specified date); or

(iii) resulting from Purchaser’s breach of its obligations set forth in Section 5.15(h) .

but excepting in each of clauses (i) and (ii) above, Damages against which any Seller would be required to indemnify Purchaser under Section 10.1(b) at the time the claim notice is presented by Purchaser.

(b) From and after Closing, Sellers shall, jointly and severally, indemnify, defend and hold harmless Purchaser, its current and former Affiliates (including, for the avoidance of doubt, the Companies and the Company Subsidiaries) and its and their respective officers, directors, employees, shareholders, members, partners and agents against and from all Damages incurred or suffered by such Persons:

(i) caused by or arising out of or resulting from any Seller’s breach of any of such Seller’s covenants or agreements contained in this Agreement;

(ii) caused by or arising out of or resulting from any breach of any representation or warranty made by any Seller contained in this Agreement (other than the representations and warranties contained in Section 3.10 ), or the failure of any representation or warranty made by any Seller (except as they may relate to the representations and warranties contained in Section 3.10 ) to be true and correct as of the Closing (other than any representation or warranty that refers to a specified date, which need only be true and correct on and as of such specified date);

(iii) with respect to any Excluded Asset;

(iv) subject to Section 10.4(c) , with respect to any consent (other than any Required Consent) referred to in any Consent Claim Notice received by either Party, any Company, any Company Subsidiary or any of their respective Affiliates on or prior to the date that is nine (9) months after the Closing Date; or

(v) with respect to the failure of Sellers to obtain any consent from ANP that is necessary or advisable in connection with the transactions contemplated hereby.

Sellers have no obligation to indemnify Purchaser, its current and former Affiliates and its and their respective officers, directors, employees and agents against and from, and Purchaser hereby waives any claims against, and releases, Sellers from, any liability, loss, cost, expense, claim, award or judgment suffered or incurred by any EgyptCo, except to the extent any Damages related thereto are suffered or incurred by any Company or any Subsidiary of any Company thereof other than any EgyptCo.

(c) Notwithstanding anything to the contrary contained in this Agreement (other than Article 8 ), from and after Closing, Sellers’ and Purchaser’s exclusive remedy for money damages against each other with respect to breaches of the representations, warranties, covenants and agreements of the Parties contained in Article 3 , Article 4 and Article 5 , the affirmations of such representations, warranties, covenants and agreements contained in the certificates delivered by each Party at Closing pursuant to Section 7.2(b) or Section 7.3(b) , as applicable, and any consent referred to in any Consent Claim Notice referred to in Sections 10.1(a)(iii) and 10.1(b)(iv) , is set forth in this Article 10 ; provided , however , that with respect to a claim for indemnification for the breach of any representation or warranty set forth in Article 3 that resulted from intentional fraud on the part of any Seller (A) the limitation set forth in clause (iv) of the final sentence of the definition of “Damages” shall not be applicable, (B) the limitation on the time period for asserting an indemnification claim as set forth in Section 10.4(a) shall not be applicable, (C) the limitation set forth in Section 10.4(b) shall not be applicable, (D) the limitation set forth in Section 10.4(c) shall not be applicable and (E) the limitation set forth in Section 10.4(e) shall not be applicable. Without limiting the generality of the preceding sentence, (i) Purchaser agrees that from and after Closing its only remedy with respect to any Seller’s breach of its representations, warranties, covenants and agreements set forth in Article 3 and Article 5 shall be the indemnities of Sellers in Section 10.1(b) , as limited by the terms of this Article 10 and (ii) each Seller agrees that from and after the Closing its only remedy with respect to Purchaser’s breach of its

representations and warranties, covenants and agreements set forth in Article 4 and Article 5 shall be the indemnities of Purchaser in Section 10.1(a) , as limited by the terms of this Article 10 .

(d) “ Damages ” means the amount of any actual liability, loss, cost, expense, claim, award, judgment, settlement, obligation, damage, injury, Tax, fine, lien, penalty or deficiency incurred or suffered by any Indemnified Person arising out of or resulting from the indemnified matter, whether attributable to personal injury or death, property damage, Contract claims, torts or otherwise, including reasonable fees and expenses of attorneys, consultants, accountants or other agents and experts reasonably incident to matters indemnified against, and the costs of investigation and/or monitoring of such matters, and the costs of enforcement of the indemnity. Notwithstanding the foregoing, Purchaser and Sellers shall not be entitled to indemnification under this Section 10.1 for, and Damages shall not include, (i) Tax Losses; (ii) loss of profits, whether actual or consequential, or other consequential damages suffered by the Party claiming indemnification, or any punitive damages (other than loss of profits, consequential damages or punitive damages suffered by third Persons for which responsibility is allocated between the Parties); (iii) any liability, loss, cost, expense, claim, award or judgment to the extent resulting from or increased by the actions of any Indemnified Person after the Closing; (iv) only in the case of claims under Section 10.1(b)(ii) (other than with respect to the Seller Fundamental Representations), any liability, loss, cost, expense, claim, award, judgment, settlement, obligation, damage, injury, Tax, fine, lien, penalty or deficiency that does not individually exceed $1,000,000 ( less any amount in respect of any individual item that is incurred as described in Section 2.3(g) in connection with curing or attempting to cure the applicable breach of representation of warranty) and (v) any effects of a breach of representation or warranty in this Agreement that have been cured at the time of Closing for which there is no continuing Damage.

(e) Any claim for indemnity under this Section 10.1 by any current or former Affiliate, director, officer, employee or agent must be brought and administered by the applicable Party to this Agreement. No Indemnified Person other than Sellers and Purchaser shall have any rights against any Seller or Purchaser under the terms of this Section 10.1 except as may be exercised on its behalf by Purchaser or Sellers, as applicable, pursuant to this Section 10.1(e) . Each of Sellers and Purchaser may elect to exercise or not exercise indemnification rights under this Section 10.1(e) on behalf of the other Indemnified Persons affiliated with it in its sole discretion and shall have no liability to any such other Indemnified Person for any action or inaction under this Section 10.1(e) .

(f) The conduct of any environmental investigation, material remediation or other response action (and communication or negotiation with any Governmental Authority regarding same) with respect to any claimed Damages under this Section 10.1 or relating to a breach of Sellers’ representation or warranty pursuant to Section 3.11 or any Claim relating to the subject matter of such representation or warranty shall be subject to the following:

(i) Sellers and Purchaser agree that no environmental investigation, material remediation or other response action with respect to any claimed Damages shall be undertaken unless required by Environmental Laws, a Governmental Authority, a Contract in effect as of the Closing or as otherwise agreed to by the Parties;

(ii) Sellers and Purchaser agree to take all reasonable actions to avoid and minimize damages that would otherwise be subject to indemnification under this Section 10.1 , including not causing, soliciting or importuning any Governmental Authority to require any environmental action, investigation, monitoring or remediation not required by Environmental Laws;

(iii) From and following the Closing, Purchaser shall not conduct (or have conducted on its behalf) any environmental investigation, material remediation or other response action

that includes invasive testing or could reasonably be expected to result in a claim for damages without first giving Sellers notice of such action with reasonable detail at least thirty (30) days prior thereto (or such shorter period of time as shall be required by any Governmental Authority or as may be necessary to address an emergency that Purchaser in good faith believes presents a reasonably likelihood of material property damage and/or any risk to human health of safety). Sellers shall have the option to observe such investigation, remediation, or response operations. With respect to any investigation, remediation or other response action subject to the provisions of this Section 10.1(f) , Purchaser agrees to provide Sellers with copies of all reports submitted to the overseeing Governmental Authority and all results of sampling and analysis activities after such results have been subject to reasonable quality assurance and quality control; provided , however , that, with respect to any samples taken, Purchaser shall take split samples and provide one of such samples, properly labeled and identified, to Sellers free of charge.

(iv) Any remediation activities undertaken with respect to the assets of the E&P Business for which any Seller may have responsibility shall be reasonable in extent and cost effective and shall be designed or implemented in such a manner as to achieve the least stringent risk-based closure or remediation standard applicable to the property in question under Environmental Laws, subject to the approval of any Governmental Authority with jurisdiction over such remediation activities, and to the extent either Party has legal capacity to do so, Purchaser and the applicable Seller agree to impose reasonable environmental deed or use restrictions that reduce the cost of any such remediation activities; provided , however , that nothing in this Section 10.1(f)(iv) shall be construed to require a closure or remediation standard that would pose an ongoing risk or hazard to any operator or occupant of the affected property, that would violate the terms of any existing agreement pertaining to the property, or that would cause Purchaser to be subject to a materially increased risk of a claim by a third-party for Damages; and

(v) No Indemnifying Person shall have any obligation to indemnify any Indemnified Person under this Section 10.1 for any Damages constituting costs of any remedial, removal or other response action taken in order to meet a more stringent cleanup standard (in comparison to the standard in effect as of the Closing Date) triggered by a change by any Indemnified Person in land use from such use in effect as of the Closing Date (unless such change in use was required by any agreement in effect as of the Closing Date), or from a change in applicable Environmental Law after the Closing Date. In connection with any remedial, removal or other response action required in connection with any such change in use not already required as of the Closing Date, the Indemnifying Person shall be responsible for Damages to achieve the original standard in effect as of the Closing Date and the Indemnified Person shall be responsible for all incremental additional Damages, if any, necessary to achieve the more stringent standard.

(g) After becoming aware of any fact, event, circumstance or condition that has given rise to or would reasonably be expected to give rise to any Damages, the Indemnified Persons shall use commercially reasonable efforts to mitigate damages, for which efforts such Indemnified Persons are entitled or may be entitled to indemnification under this Section 10.1 . In connection with each Indemnified Person’s obligation to use commercially reasonable efforts to mitigate Damages, none of the Parties shall knowingly or intentionally take any action that would be expected to provoke a Governmental Authority or other Person to take any action that would materially exacerbate any damages, taking into consideration the situation as a whole.

(h) The Parties shall treat, for Tax purposes, any amounts paid under Article 8 or this Article 10 as an adjustment to the Purchase Price, which adjustment shall be reflected in the Share Unadjusted Purchase Price Allocation and applicable Asset Unadjusted Purchase Price Allocation(s) in the same manner as provided in Section 2.2 .

Section 10.2. Indemnification Actions . All claims for indemnification under Section 10.1 shall be asserted and resolved as follows:

(a) For purposes of this Article 10 , the term “ Indemnifying Person ” when used in connection with particular Damages means the Person having an obligation to indemnify another Person or Persons with respect to such Damages pursuant to this Article 10 and the term “ Indemnified Person ” when used in connection with particular Damages means a Person having the right to be indemnified with respect to such Damages pursuant to this Article 10 (including those Persons identified in Section 10.1(e) ).

(b) To make a claim for indemnification under Section 10.1 , an Indemnified Person shall notify the Indemnifying Person of its claim, including the reasonably specific details of and reasonably specific basis under this Agreement for its claim (the “ Claim Notice ”). In the event that the claim for indemnification is based upon a claim by a third Person against the Indemnified Person (a “ Claim ”), the Indemnified Person shall provide its Claim Notice promptly after the Indemnified Person has actual knowledge of the Claim and shall enclose a copy of all papers (if any) served with respect to the Claim; provided that the failure of any Indemnified Person to give notice of a Claim as provided in this Section 10.2 shall not relieve the Indemnifying Person of its obligations under Section 10.1 except to the extent such failure actually prejudices the Indemnifying Person’s ability to defend against the Claim. In the event that the claim for indemnification is based upon an inaccuracy or breach of a representation, warranty, covenant or agreement, the Claim Notice shall specify the representation, warranty, covenant or agreement that was inaccurate or breached.

(c) In the case of a claim for indemnification based upon a Claim, the Indemnifying Person shall have thirty (30) days from its receipt of the Claim Notice to notify the Indemnified Person whether it admits or denies its obligation to defend the Indemnified Person against such Claim under this Article 10 . The Indemnified Person may, during such thirty (30) day period and upon ten (10) days prior written notice to the Indemnifying Person, file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Person and that is not prejudicial to the Indemnifying Person.

(d) If the Indemnifying Person admits its obligation, it shall have the right and obligation to defend, at its sole cost and expense, and with counsel reasonably satisfactory to the Indemnified Person, the Claim. The Indemnifying Person shall have full control of such defense and proceedings, including any compromise or settlement thereof (subject to the penultimate sentence of this Section 10.2(d) ) and, in the event the Indemnified Person settles any claim over the objection of the Indemnifying Person, the Indemnified Person shall be deemed to have waived any right to indemnity therefor. If requested by the Indemnifying Person, the Indemnified Person agrees to reasonably cooperate, at the Indemnifying Person’s sole cost and expense, in contesting any Claim which the Indemnifying Person elects to contest ( provided , however , that the Indemnified Person shall not be required to bring any counterclaim or cross-complaint against any Person). The Indemnified Person may participate in, but not control, any defense or settlement of any Claim controlled by the Indemnifying Person pursuant to this Section 10.2(d) . Notwithstanding an Indemnifying Person’s election to assume the defense of a Claim, the Indemnified Person shall have the right to employ separate counsel and to participate in the defense of such Claim, and the Indemnifying Person shall bear the reasonable fees, costs and expenses of such separate counsel if: (i) the use of such counsel chosen by the Indemnifying Person to represent the Indemnified Person would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such claim include both the Indemnifying Person and the Indemnified Person, and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to those available to the Indemnifying Person (in which case the Indemnifying Person shall not have the right to assume the defense of such claim on the

Indemnified Person’s behalf); (iii) the Indemnifying Person shall not have employed counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the institution of such claim or (iv) the Indemnifying Person shall authorize the Indemnified Party to employ separate counsel at the Indemnifying Party’s expense. An Indemnifying Person shall not, without the written consent of the Indemnified Person, settle any Claim or consent to the entry of any judgment with respect thereto that (i) does not result in a final resolution of the Indemnified Person’s liability with respect to the Claim (including, in the case of a settlement, an unconditional written release of the Indemnified Person from all further liability in respect of such Claim) or (ii) provides for relief other than monetary damages that are to be paid in full by the Indemnifying Person or (iii) includes or contains a finding or admission of any violation of Law or has any effect on any other Claims that may be made against the Indemnified Person. In the event an Indemnifying Party assumes the defense of a claim, such Indemnifying Party shall defend such claim vigorously and in good faith.

(e) If the Indemnifying Person does not admit its obligation or admits its obligation but fails to defend or settle the Claim, then the Indemnified Person shall have the right to defend against the Claim (at the sole cost and expense of the Indemnifying Person, if the Indemnified Person is entitled to indemnification hereunder), with counsel of the Indemnified Person’s choosing, subject to the right of the Indemnifying Person to admit its obligation to indemnify the Indemnified Person and assume the defense of the Claim at any time prior to settlement or final determination thereof. If the Indemnifying Person has not yet admitted its obligation to indemnify the Indemnified Person, the Indemnified Person shall send written notice to the Indemnifying Person of any proposed settlement and the Indemnifying Person shall have the option for ten (10) days following receipt of such notice to (i) admit in writing its obligation for indemnification with respect to such Claim and (ii) if its obligation is so admitted, assume the defense of the Claim, including the power to reject and accept the obligation with respect to the proposed settlement. If the Indemnified Person settles any Claim over the objection of the Indemnifying Person after the Indemnifying Person has timely admitted its obligation for indemnification in writing and assumed (and continues) the defense of the Claim, the Indemnified Person shall be deemed to have waived any right to indemnity therefor.

(f) In the case of a claim for indemnification not based upon a Claim, the Indemnifying Person shall have thirty (30) days from its receipt of the Claim Notice to (i) fully cure the Damages complained of, if such Damages are capable of being fully cured within such period, (ii) admit its obligation to provide indemnification with respect to such Damages or (iii) dispute the claim for such Damages. If the Indemnifying Person does not notify the Indemnified Person within such thirty (30) day period that it has fully cured the Damages or that it disputes the claim for such Damages, the Indemnifying Person shall be conclusively deemed obligated to provide indemnification hereunder.

Section 10.3. Casualty and Condemnation . If, after the Execution Date but prior to the Closing Date, any portion of the assets of the E&P Business is destroyed or damaged by fire or other casualty or is expropriated or taken in condemnation or under right of eminent domain, Purchaser shall nevertheless be required to comply with the covenants in Article 7 and attend the Closing if all conditions to Closing set forth in Section 6.2 are satisfied. In the event of any such casualty or taking after the Execution Date but prior to the Closing Date, the applicable Seller shall cause to be transferred to the applicable Company or Wholly-Owned Subsidiary all sums paid to such Seller or its Affiliates (other than the Companies or their Wholly-Owned Subsidiaries) by third Persons by reason of the casualty or taking of such assets of the E&P Business, including any sums paid pursuant to any policy or agreement of insurance or indemnity, and shall assign, transfer and set over unto such Company or Wholly-Owned Subsidiary all of the rights, title and interest of Sellers or its Affiliates (other than the Companies or their Wholly-Owned Subsidiaries) in and to any claims, causes of action, unpaid proceeds or other payments from third Persons, including any policy or agreement of insurance or indemnity, arising out of such casualty or taking.

Section 10.4. Limitation on Actions .

(a) The right to assert an indemnification claim pursuant to Section 10.1 with respect to the representations and warranties of Sellers and Purchaser in Article 3 and Article 4 and the corresponding representations and warranties given in the certificates delivered at Closing pursuant to Section 7.2(b) or Section 7.3(b) , as applicable, shall survive the Closing for twelve (12) months except that (i) the right to assert an indemnification claim pursuant to Section 10.1 with respect to Seller Fundamental Representations or the Purchaser Fundamental Representations, as applicable, shall survive the Closing without time limit and (ii) there shall be no post-Closing right to indemnification pursuant to Section 10.1 with respect to the diminution or loss of value in the EgyptCos or the EP Egypt Shares arising as a result of a breach of the representations and warranties of Sellers relating to the EP Egypt Shares or E&P Business of the EgyptCos. The right to assert an indemnification claim pursuant to Section 10.1 for the breach of (x) covenants requiring performance on or prior to the Closing shall survive the Closing for twelve (12) months and (y) covenants requiring performance after the Closing shall survive the Closing for twelve (12) months following the date on which any such covenant expires in accordance with its terms or after the applicable statute of limitations period, if shorter.

Representations, warranties, covenants and agreements shall be of no further force and effect after the date of the expiration of a right to assert an indemnification claim with respect thereto, provided that there shall be no termination of any claim asserted pursuant to this Agreement with respect to such a representation, warranty, covenant or agreement prior to the applicable expiration date.

(b) The indemnities in Section 10.1(a)(i) , Section 10.1(a)(ii) , Section 10.1(b)(i) and Section 10.1(b)(ii) shall terminate as of the termination date of each respective representation, warranty, covenant or agreement that is subject to indemnification, except in each case as to matters for which a specific written claim for indemnity has been delivered to the Indemnifying Person on or before such termination date. The indemnities in Sections 10.1(a)(iii) and 10.1(b)(iv) shall survive the Closing for a period of nine (9) months, except with respect to any Damages with respect to any of the consents referred to in any Consent Claim Notice received by any Party, any Company or any Company Subsidiary prior to the date that is nine (9) months after the Closing Date, with respect to which such indemnities shall survive until such matters are fully and finally resolved. Section 10.1(b)(v) shall survive the Closing without time limit.

(c) No Seller shall have any liability for any indemnification under Section 10.1(b)(ii) (other than with respect to the Seller Fundamental Representations) until and unless the aggregate amount of the liability for all Damages for which Claim Notices are delivered by Purchaser exceed two percent (2.0%) of the Unadjusted Purchase Price, and then only to the extent such Damages exceed two percent (2.0%) of the Unadjusted Purchase Price. Sellers shall be required to bear (and indemnify Purchaser from and against) (i) fifty percent (50%) of each dollar of any Damages attributable to a claim for indemnity pursuant to Section 10.1(b)(iv ) until the total amount of such Damages exceeds $15,000,000, in the aggregate and (ii) one hundred percent (100%) of any Damages suffered or incurred by the Companies and/or the Company Subsidiaries and attributable to claims for indemnity pursuant to Section 10.1(b)(iv) after the Companies and/or the Company Subsidiaries have suffered or incurred an amount equal to $7,500,000 with respect to such Damages.

(d) No Seller shall have any liability for any Brazil Tax Loss until and unless the aggregate amount of the liability for all Brazil Tax Losses exceeds $15,000,000, and then only to the extent such aggregate amount exceeds $15,000,000.

(e) Notwithstanding anything to the contrary contained elsewhere in this Agreement, no Seller shall be required to indemnify Purchaser under Section 10.1(b)(ii) (other than with

respect to the Seller Fundamental Representations and the indemnity in Section 10.1(b)(iv) ) for aggregate Damages in excess of ten percent (10%) of the Unadjusted Purchase Price.

(f) For purposes of determining Damages subject to indemnification pursuant to this Article 10 (but not, for the avoidance of doubt, for purposes of determining whether any representation and warranty has been breached or is true and correct, other than the representations and warranties set forth in Section 3.5 ( No Undisclosed Liabilities ) and Section 3.12 ( Compliance with Laws , but solely to the extent arising out of or related to compliance with Laws that are in existence on the Execution Date), in each case, for which the representations and warranties contained therein shall be deemed to have been made, for purposes of indemnification pursuant to this Article 10 , without any qualifications as to materiality, Material Adverse Effect, specified dollar thresholds or similar qualifications for purposes of determining whether any such representation or warranty has been breached or is true and correct), the representations and warranties contained in this Agreement shall be deemed to have been made without any qualifications as to materiality, Material Adverse Effect, specified dollar thresholds or similar qualifications; provided , however , that for purposes of determining whether a representation or warranty in Section 3.6 ( Labor Matters ), Section 3.7 ( Employee Benefits ), Section 3.9 ( Litigation ), Section 3.11 ( Environmental Laws ) or Section 3.19 ( Assets of the E&P Business ) has been breached or is true and correct as of the Closing for purposes of indemnification pursuant to this Article 10 , any reference in such representation or warranty to “Material Adverse Effect” shall instead be deemed to be a reference to an adverse effect on the E&P Business or the ownership, assets, operations or financial condition of the Company and Company Subsidiaries, taken as a whole, that would result in Damages of at least $62,500,000; provided , further , however , that for purposes of determining whether a representation or warranty in Section 3.8 ( Accuracy of Data ) has been breached or is true and correct as of the Closing for purposes of indemnification pursuant to this Article 10 , any reference in such representation or warranty to “Material Adverse Effect” shall instead be deemed to be a reference to an adverse effect on the E&P Business or the ownership, assets, operations or financial condition of the Company and Company Subsidiaries, taken as a whole, that would result in Damages of at least $25,000,000.

(g) The amount of any Damages for which an Indemnified Person is entitled to indemnity under this Article 10 shall be reduced by the amount of insurance proceeds actually realized by the Indemnified Person or its Affiliates with respect to such Damages (net of any collection costs and associated premium increases, and excluding the proceeds of any insurance policy issued or underwritten by the Indemnified Person or its Affiliates, any retrospective insurance policies and any captive insurance policies). In the event that an Indemnified Person is entitled to any insurance, indemnification or other recovery from any third Person with respect to any Damages for which such Indemnified Person seeks indemnification, such Indemnified Person shall use commercially reasonable efforts to obtain any such indemnification or recovery, as the case may be. In the event that any insurance proceeds or other amounts from any third Person are actually recovered or realized by an Indemnified Person subsequent to receipt by such Indemnified Person of any indemnification payment hereunder in respect of the claims to which such insurance proceeds or other amounts relate, a portion of such indemnification payment equal to the net amounts so recovered or realized shall promptly be refunded to the Indemnifying Person.

Article 11
MISCELLANEOUS

Section 11.1. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Delivery of an executed counterpart signature page by facsimile is as effective as executing and delivering this Agreement in the presence of the other Parties to this Agreement.

Section 11.2. Notices . All notices that are required or may be given pursuant to this Agreement shall be sufficient in all respects if given in writing, in English and delivered personally, by telecopy or by recognized courier service, as follows:

If to any Seller:	EP Energy Holding Company
	1001 Louisiana Street
	Houston, Texas 77002
	Attention: General Counsel
	Telecopy: (713) 420-5043

with a copy to:	Locke Lord LLP
	600 Travis, Suite 2800
	Houston, Texas 77002
	Attention: Joe Perillo
	Telephone: (713) 226-1284
	Telecopy: (713) 229-2610

If to Purchaser:	EPE Acquisition, LLC
	c/o Apollo Management, L.P.
	9 West 57th Street
	New York, New York 10019
	Attention: Sam Oh
	Telephone: (212) 822-0629
	Telecopy: (646) 417-6651

with a copy to:	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	1285 Avenue of Americas
	New York, NY 10019-6064
	Attention: John M. Scott
	Telephone: (212) 373-3574
	Telecopy: (212) 492-0574

with a further copy to:	Vinson & Elkins LLP
	666 Fifth Avenue, 26th Floor
	New York, NY 10103-0040
	Attention: James J. Fox
	Telephone: (212) 237-0131
	Telecopy: (917) 849-5328

Either Party may change its address for notice by notice to the other in the manner set forth above. All notices shall be deemed to have been duly given at the time of receipt by the Party to which such notice is addressed.

Section 11.3. Sales or Use Tax, Recording Fees and Similar Taxes and Fees . Notwithstanding anything to the contrary in Article 8 , Purchaser shall be solely responsible for any and all sales, use, excise, real property transfer, registration, documentary, stamp or transfer Taxes, recording fees and similar Taxes and fees incurred and imposed upon, or with respect to, the property transfers to Purchaser contemplated hereby (other than Section 1.3 ), except to the extent incurred as a result of the restructuring steps described in Section 8.10(a) (“ Transfer Taxes ”). Should any Seller, Company or Affiliate of any of them pay prior to Closing, or should any Seller or any continuing Affiliate of any Seller pay after Closing, any amount for which Purchaser is liable under this Section 11.3 , Purchaser

shall, promptly following Closing and receipt of such Seller’s invoice, reimburse the amount paid. Sellers shall provide reasonable assistance to Purchaser in establishing the applicability of any exemption from sales, use, real property transfer or any other Transfer Taxes that is based wholly or partially on facts and information related to Sellers, including, providing Purchaser and taxing authorities access to books and records establishing the lack of prior similar sales activity and the ability of a particular Seller to separately establish income and expenses attributable to assets being transferred to Purchaser.

Section 11.4. Expenses . Except as provided in Section 5.6 , Section 5.19 and Section 11.3 , all expenses incurred by Sellers (or by any Company or Wholly-Owned Subsidiary) in connection with or related to the authorization, preparation or execution of this Agreement, and the Exhibits and Schedules hereto and thereto, and all other matters related to the Closing, including all fees and expenses of counsel, accountants and financial advisers employed by Sellers, shall be borne solely and entirely by Sellers, and all such expenses incurred by Purchaser shall be borne solely and entirely by Purchaser.

Section 11.5. Company Records .

(a) As soon as reasonably practicable after the Closing Date, each Seller shall deliver or cause to be delivered to Purchaser any Company Records that are in its possession (or under its control), subject to Section 11.5(b) .

(b) Sellers may retain the Excluded Company Records and the originals of those Company Records relating to Tax and accounting matters and provide Purchaser with copies of such Company Records that pertain to (i) Non-Income Tax matters solely related to the Companies or (ii) non-unitary state Income Tax Returns to the extent such Tax Returns are reasonably necessary to satisfy Purchaser’s Tax Return filing obligations under Section 8.2 . Sellers may retain copies of any other Company Records.

(c) Purchaser, for a period of seven (7) years following the Closing (and subject to Purchaser’s additional obligations under Section 8.4 ) shall:

(i) retain copies of the Company Records;

(ii) provide Sellers, their Affiliates, and their respective officers, employees and representatives with access to the Company Records during normal business hours for review and copying at Sellers’ expense; and

(iii) provide Sellers, their Affiliates, and their respective officers, employees and representatives with access, during normal business hours, to materials received or produced after Closing relating to:

(A) Sellers’ obligations under Article 8 (including to prepare Tax Returns and to conduct negotiations with Tax Authorities); or

(B) The facts concerning the existence of any claim for indemnification made under Section 10.1 of this Agreement (excluding, however, attorney work product and attorney-client communications with respect to any such claim being brought by Purchaser under this Agreement);

for review and copying at Sellers’ expense and to the Companies’ and their Affiliates’ personnel for the purpose of discussing any such matter or claim.

Section 11.6. Name Change . On the Closing Date, or as soon as practicable thereafter, Purchaser shall make the filings required in each Company’s and Wholly-Owned Subsidiary’s jurisdiction of organization to eliminate the name “El Paso” and any variant thereof from the name of each Company and Wholly-Owned Subsidiary. As promptly as practicable, but in any case within two hundred and seventy (270) days after the Closing Date, Purchaser shall (i) make all other filings (including assumed name filings) required to reflect the change of name in all applicable records of Governmental Authorities and (ii) use commercially reasonable efforts to eliminate the use of the name “El Paso” and any variant thereof from the assets of the E&P Business and the E&P Business, and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks or trade names belonging to any Seller or any of its Affiliates. Purchaser shall be solely responsible for any direct or indirect costs or expenses resulting from the change in use of name, and any resulting notification or approval requirements. Notwithstanding anything to the contrary set forth in this Section 11.6 , the use by Purchaser and its Affiliates (which for the avoidance of doubt shall include any Company and any Company Subsidiary) of “EP Resources” or “EP Energy” shall not be restricted hereunder.

Section 11.7. Governing Law . THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES (INCLUDING ANY CLAIMS MADE IN CONTRACT, TORT OR OTHERWISE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

Section 11.8. Dispute Resolution .

(a) The Parties agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each of the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each Party consents to personal jurisdiction in any action brought in the Delaware Court of Chancery (or, if jurisdiction is not available in the Delaware Court of Chancery, to personal jurisdiction in any action brought in the state or federal courts located in the State of Delaware) with respect to any dispute, claim or controversy arising out of or in relation to or in connection with this Agreement (including any claims made in Contract, tort or otherwise relating to this Agreement or the transactions contemplated hereby), and each of the Parties agrees that any action instituted by it against the other with respect to any such dispute, controversy or claim (except to the extent a dispute, controversy, or claim arising out of or in relation to or in connection with the allocation of the Purchase Price pursuant to Section 2.2(b) or the determination of the final Purchase Price pursuant to Section 2.4(b) is referred to an expert pursuant to those Sections and subject to the provisions of Annex 1 ) will be instituted exclusively in the Delaware Court of Chancery (or, if jurisdiction is not available in the Delaware Court of Chancery, then exclusively in the state or federal courts located in the State of Delaware). The Parties hereby waive trial by jury in any action, proceeding or counterclaim brought by any Party against another in any matter whatsoever arising out of or in relation to or in connection with this Agreement.

(b) Limitation on Suits Against Financing Providers . Notwithstanding anything herein to the contrary, each of the Parties agrees that it will not bring or support any action, cause of action, claim, cross-claim or third-party claim of any kind or description, whether in Law or in

equity, whether in contract or in tort or otherwise, against the Equity Providers or the Debt Providers and their respective current, former or future directors, officers, general or limited partners, stockholders, members, managers, controlling persons, Affiliates, employees or Representatives in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the Financing Letters or the performance thereof, in any forum other than the Supreme Court of the State of New York, County of New York, or, if under applicable law exclusive jurisdiction is vested in the federal courts, the United States District Court for the Southern District of New York (and appellate courts thereof). Each of the Parties irrevocably agrees to waive trial by jury in any action, cause of action, claim, cross-claim or third-party claim referred to in this paragraph.

(c) Notwithstanding anything herein to the contrary, Sellers shall be entitled to specific performance to cause Purchaser to draw down the Equity Financing or to consummate the Closing only if:

(i) all conditions in Section 6.2 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to those conditions being capable of being satisfied) have been satisfied;

(ii) Purchaser has failed to complete the Closing by the date the Closing is required to occur pursuant to Section 7.1 ;

(iii) the Debt Financing has been funded or is expected to be funded at the Closing if the Equity Financing is funded at the Closing ( provided , that Purchaser shall not be required to draw down the Equity Financing or to consummate the Closing if the Debt Financing is not in fact funded at the Closing); and

(iv) Sellers have irrevocably confirmed in writing to Purchaser that if specific performance is granted and the Equity Financing and Debt Financing are funded, then the Closing will occur.

(d) Notwithstanding anything herein to the contrary, Sellers shall be entitled to specific performance to cause Purchaser to draw down the Debt Financing (or any Alternate Financing) only if the Closing will occur substantially simultaneously with such draw down.

Section 11.9. Captions . The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

Section 11.10. Waivers . Any failure by any Party to comply with any of its obligations, agreements or conditions herein contained may be waived by the Party to whom such compliance is owed by an instrument signed by the Party to whom compliance is owed and expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 11.11. Assignment . No Party shall assign or otherwise transfer all or any part of this Agreement, nor shall any Party delegate any of its rights or duties hereunder, without the prior written consent of the other Party and any transfer or delegation made without such consent shall be void; provided , however , that each Party shall have the right to assign its rights under this Agreement to any of its Affiliates or as collateral to any lender (or agent or trustee therefor) in connection with any bona fide financing arrangement, including in the case of Purchaser the Debt Financing; provided, further, however ,

that no such assignment shall relieve such Party of its obligations hereunder in the event of the failure of performance by such assignee. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 11.12. Entire Agreement . The Confidentiality Agreement, this Agreement and the documents to be executed hereunder (including the Transition Services Agreement, the Lease and the Personal Property Assignment) and the Exhibits and Schedules attached hereto constitute the entire agreement among the Parties pertaining to the subject matter hereof, and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof.

Section 11.13. Amendment . This Agreement may be amended or modified only by an agreement in writing signed by Sellers and Purchaser and expressly identified as an amendment or modification.

Section 11.14. No Third-Person Beneficiaries . Nothing in this Agreement shall entitle any Person other than Purchaser and Sellers to any claim, cause of action, remedy or right of any kind, except the rights expressly provided to the Persons described in Section 5.17 , Section 9.2 and Section 11.20 and except that the Debt Providers and their respective current, former or future directors, officers, general or limited partners, stockholders, members, managers, controlling persons, Affiliates, employees or Representatives shall be third party beneficiaries of Sections 9.2 , 11.7 , 11.8(a) , 11.8(b) , 11.8(d) and this Section 11.14 .

Section 11.15. Guarantees . Simultaneously with execution of this Agreement, (i) Purchaser has caused those certain entities party thereto (the “ Purchaser Guarantors ”) to deliver to Sellers guarantees each in substantially the form attached hereto as Exhibit A (each a “ Parent Guarantee ”) and (ii) Sellers have caused El Paso (the “ El Paso Guarantor ”) to deliver to Purchaser a guarantee in substantially the form attached hereto as Exhibit B (the “ El Paso Guarantee ”).

Section 11.16. Headings . Headings have been provided for the sections of this Agreement, the Schedules and Exhibits for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 11.17. References . In this Agreement:

(a) references to any gender includes a reference to all other genders;

(b) references to the singular includes the plural, and vice versa;

(d) reference to any Exhibit or Schedule means an Exhibit or Schedule to this Agreement, all of which are incorporated into and made a part of this Agreement;

(e) unless expressly provided to the contrary, “hereunder,” “hereof,” “herein” and words of similar import are references to this Agreement as a whole and not any particular Section or other provision of this Agreement;

(f) unless expressly provided to the contrary, the word “or” is not exclusive;

(g) references to “$” or “Dollars” means United States Dollars; and

(h) “include” and “including” means include or including without limiting the generality of the description preceding such term.

Section 11.18. Construction . Purchaser is capable of making such investigation, inspection, review and evaluation of the assets of the E&P Business as a prudent purchaser would deem appropriate under the circumstances, including with respect to all matters relating to the assets of the E&P Business and their value, operation and suitability. Each of Sellers and Purchaser has had the opportunity to exercise business discretion in relation to the negotiation of the details of the transaction contemplated hereby. This Agreement is the result of arm’s-length negotiations from equal bargaining positions. It is expressly agreed that this Agreement shall not be construed against any Party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any particular provision thereof; it being further understood and agreed that nothing in this Section 11.18 shall limit any representation, warranty, covenant or indemnity contained herein or in any certificate delivered pursuant hereto.

Section 11.19. Time of Essence . This Agreement contains a number of dates and times by which performance or the exercise of rights is due, and the Parties intend that each and every such date and time be the firm and final date and time, as agreed. For this reason, each Party hereby waives and relinquishes any right it might otherwise have to challenge its failure to meet any performance or rights election date applicable to it on the basis that its late action constitutes substantial performance, to require the other Party to show prejudice, or on any equitable grounds. Without limiting the foregoing, time is of the essence in this Agreement. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

Section 11.20. Non-Recourse . None of Kinder Morgan (except with respect to its obligations under Section 9.2(c)(i) or Section 9.2(c)(iii) ) (or its current or future Affiliates, other than Sellers, the Companies and the Company Subsidiaries), the Purchaser Guarantors (or any of their respective Affiliates, other than Purchaser), any of the Affiliated Apollo Persons (or any of their respective Affiliates, other than Purchaser) or any of the Affiliated Riverstone Persons (or any of their respective Affiliates, other than Purchaser) (the foregoing described persons, the “ Covered Persons ”), nor any past, present or future director, officer, employee, incorporator, agent, attorney or representative of any of the Covered Persons or, other than Purchaser and Sellers, any member, partner or stockholder of any of the Covered Persons, shall have any liability (whether in contract or in tort) for any obligations or liabilities arising under, in connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby; provided , however , that nothing in this Section 11.20 shall limit (i) any liability of the Parties for breaches of this Agreement, (ii) any liability of the Purchaser Guarantors provided for in the Parent Guarantee or (iii) any liability of the El Paso Guarantor provided for in the El Paso Guarantee.

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, this Agreement has been signed by each of the Parties as of the Execution Date.

	SELLER:	EP ENERGY CORPORATION

		By:
		Name:
		Title:

	SELLER:	EP ENERGY HOLDING COMPANY

		By:
		Name:
		Title:

	SELLER:	EL PASO BRAZIL, L.L.C.

		By:
		Name:
		Title:

	PURCHASER:	EPE ACQUISITION, LLC

		By:
		Name:
		Title:

Signature Page to Purchase and Sale Agreement

THE UNDERSIGNED IS EXECUTING THIS AGREEMENT SOLELY FOR PURPOSES OF SECTION 9.2(c) AND ARTICLE XI AND FOR NO OTHER PURPOSE.

KINDER MORGAN, INC.

By:
Name:
Title:

Signature Page to Purchase and Sale Agreement

ANNEX 1
TITLE MATTERS

Section 1.1 Title . The rights and remedies of Purchaser set forth in (i) this Annex 1 , (ii) Sections , 3.10 , 3.12 , 3.13 , 3.14 , 3.22 and 3.23 of the Agreement (and the indemnities related thereto), (iii) Section 2.3(h) of the Agreement with respect to any of the matters described therein and (iv) Section 5.15 of the Agreement and the indemnity set forth in Section 10.1(b)(iv) of the Agreement, shall be Purchaser’s sole and exclusive rights and remedies with respect to any defect in title with respect to the Company Properties, including with respect to the Companies’ or the Company Subsidiaries’, as applicable, title to the wells, recompletions, proved undeveloped locations, probable undeveloped locations, possible undeveloped locations and other undeveloped acreage shown on Exhibit C-1 , Part 1 (each, a “ Well ” and, collectively, the “ Wells ”), the leases and other interests listed on Exhibit C-1 , Part 2 (the “ Michigan Undeveloped Leases ” and together with the Wells, the “ Reserve Assets ”) and all of the Companies’ and Company Subsidiaries’ other real property interests used in connection with the ownership, development or operation of, or the marketing, transportation or other disposition of production from, the Company Properties, other than the Major Midstream Assets (the “ Other Real Property Interests ” and together with the Reserve Assets, the “ Title Assets ”); provided , however , that, for the avoidance of doubt, this Annex 1 shall not cover the Major Midstream Assets, and any defect or deficiency in title with respect thereto (or the right of use thereof) shall not be the basis for, or otherwise contribute to, any Title Defect or Title Defect Amount pursuant to this Annex 1 . Capitalized terms used, but not defined, in this Annex 1 shall have the meanings ascribed to them in that certain Purchase and Sale Agreement, dated as of February 24, 2012, between EP Energy Holding Company, EP Energy Corporation, El Paso Brazil, L.L.C. and EPE Acquisition, LLC, to which this Annex 1 is annexed.

Section 1.2 Definition of Defensible Title .

(a) As used in this Annex 1 , the term “ Defensible Title ” means that title (other than to the Major Midstream Assets) of the Companies and the Company Subsidiaries, which, subject to the Permitted Encumbrances (with respect to Company Properties other than Other Real Property Interests) or RE Permitted Encumbrances (with respect to the Other Real Property Interests), as applicable, as of the Execution Date:

(i) entitles the Companies and/or the Company Subsidiaries, as applicable, to receive, in the case of any Well (after satisfaction of all royalties, overriding royalties, nonparticipating royalties, net profits interests or similar burdens on or measured by production of Hydrocarbons), not less than the applicable net revenue interest share shown in Exhibit C-1 , Part 1 of all Hydrocarbons produced, saved and marketed from such Well (from the formation(s) denoted for such Well in Exhibit C-1 , Part 1 if a formation(s) is listed in Exhibit C-1 , Part 1 with respect to such Well) throughout the duration of the productive life of such Well, or, in the case of any Michigan Undeveloped Lease (after satisfaction of all royalties, overriding royalties, nonparticipating royalties, net profits interests or similar burdens on or measured by production of Hydrocarbons), not less than the net revenue interest share set forth in Exhibit C-1 , Part 2 for such Michigan Undeveloped Lease of all Hydrocarbons produced, saved and marketed from the lands covered by such Michigan Undeveloped Lease throughout the duration of the productive life of such Michigan Undeveloped Lease, in each case, except (A) decreases in connection with those operations in which the Companies or any Company Subsidiary may elect after the Execution Date to be a nonconsenting co-owner, (B) decreases resulting from reversions of interests to co-owners with respect to operations in which such co-owners elect, after the Execution Date, not to consent, (C) decreases resulting from pooling or unitization after the Execution Date and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries;

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(ii) as to any Well, obligates the Companies and/or the Company Subsidiaries, as applicable, to bear a percentage of the costs and expenses for the maintenance and development of, and operations relating to, such Well throughout the duration of the productive life of such Well not greater than the working interest shown in Exhibit C-1 , Part 1 for such Well (with respect to the formation(s) denoted for such Well in Exhibit C-1 , Part 1 if a formation(s) is listed in Exhibit C-1 , Part 1 with respect to such Well) without increase, except (A) as expressly stated in Exhibit C-1 , Part 1 or Exhibit C-2 , (B) increases resulting from contribution requirements with respect to defaults by co-owners after the Execution Date and (C) increases that are accompanied by at least a proportionate increase in the Companies’ or Company Subsidiaries’, as applicable, applicable net revenue interest in such Well above that shown in Exhibit C-1 , Part 1 for such Well;

(iii) as to any Michigan Undeveloped Lease, covers a number of Net Mineral Acres not less than the number of Net Mineral Acres specified therefor in the “Net Ac” column in Exhibit C-1 , Part 2 ;

(iv) (A) as to any Michigan Undeveloped Lease and any other lease related to the Wells listed on Exhibit C-1 that is not held by production or held by operations, the primary term of such Michigan Undeveloped Lease or other lease, (1) if stated on Exhibit C-1 or Exhibit C-2 , as applicable, is correct or (2) will expire after September 30, 2012 and (B) as to any Title Asset, title to which is pursuant to a seismic option or other option to acquire any lease, the end of the period of time in which such option may be exercised (1) if stated on Exhibit C-1 or Exhibit C-2 , as applicable, is correct or (2) will expire after September 30, 2012;

(v) as to any Other Real Property Interest, is good and indefensible record title or is a lease or other similar agreement in favor of a Company or a Company Subsidiary that is in full force and effect in all material respects and constitutes the legal, valid and binding obligation of the owner of the property covered thereby; and

(vi) as to any Title Asset, is free and clear of all Liens.

(b) As used in this Annex 1 :

(i) the term “ Title Defect ” means any Lien, charge, encumbrance, obligation or defect affecting any Title Asset (including, with respect to a Reserve Asset, a discrepancy in net revenue interest or working interest) that causes the Companies or the Company Subsidiaries not to have Defensible Title to such Title Asset;

(ii) the term “ Title Benefit ” means (A) any right, circumstance or condition that operates to increase the applicable net revenue interest in any Reserve Asset above that shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, for such Reserve Asset, without causing a greater than proportionate increase in the working interest in any such Reserve Asset that is a Well above that shown in Exhibit C-1 , Part 1 , for such Well or (B) any increase in the number of Net Mineral Acres covered by any Michigan Undeveloped Lease above the number of Net Mineral Acres set forth for such Michigan Undeveloped Lease in the “Net Ac” column in Exhibit C-1 , Part 2 ; and

(iii) the term “ Net Mineral Acres ” means, with respect to any Michigan Undeveloped Lease, the total number of surface acres covered by such Michigan Undeveloped Lease multiplied by the fractional or percentage interest in the minerals underlying such surface acreage covered by such Michigan Undeveloped Lease multiplied by the undivided interest of the Companies or the Company Subsidiaries, as applicable, in such Michigan Undeveloped Lease.

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(i) defects based solely on a lack of information in Sellers’, any Company’s or any Company Subsidiary’s files;

(ii) alleged defects in the authorization, execution, delivery, acknowledgment or approval of any instrument, unless Purchaser provides evidence that such defect results in a third Person’s superior claim of title to the relevant Company Property;

(iii) with respect to Company Mineral Interests from any Governmental Authority (which, for the avoidance of doubt, for the purposes of this Annex 1 , includes any tribal authority and the Bureau of Indian Affairs, the Bureau of Land Management, the Minerals Management Service and the Bureau of Ocean Energy Management, or any successor agency thereto), defects based on a gap in any chain of title in the records of any such Person if the applicable chain of title is reflected in the applicable county or parish;

(iv) defects or irregularities in the chain of title consisting of the failure to recite marital status in documents or omissions or lack of heirship, succession or probate proceedings, unless Purchaser provides evidence that such defects or irregularities results in a third Person’s superior claim of title;

(v) with respect to (i) Wells that have been producing and in “pay” status (other than interruptions in the ordinary course of business arising from the transfer in ownership thereof) since January 1, 2002 and (ii) non-producing Title Assets that have common title with any such producing Wells, defects based on alleged gaps in production from such Wells that occurred prior to January 1, 2002; provided that, upon request of Purchaser, in each case, Sellers have provided to Purchaser a certificate, in form and substance reasonably satisfactory to the Parties, representing and warranting that, as of the date thereof, no claim has been made or threatened by any third Person with respect thereto, which such representation and warranty shall survive for a period of twelve (12) months after Closing (it being understood and agreed that any breach of such representation or warranty shall be subject to the Title Threshold and Title Deductible as though such breach constituted a Title Defect with respect to the applicable Title Asset);

(vi) defects arising solely out of lack of survey, overlapping survey, or lack of metes and bounds descriptions, unless one is required by Law;

(vii) defects that have been cured by applicable Laws of limitations or prescription, including adverse possession, the doctrine of laches, and deemed marketable record title;

(viii) defects arising from any change in applicable Laws after the Execution Date;

(ix) defects arising from prior expired oil and gas leases that are not surrendered or released of record;

(x) defects with respect to which the true owner of the applicable Company Property is another Company or Company Subsidiary;

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(xi) defects based on Purchaser’s change (or desired change) in the surface or bottom hole location, borehole or drainhole path, well or operational plan, operational technique (including completion or stimulation technique) of any Title Asset;

(xii) defects arising out of production payments that have expired of their own terms;

(xiii) defects based on a claim that none of the Companies or the Company Subsidiaries has title to a Company Property (other than a Reserve Asset), if any of the Companies or the Company Subsidiaries has a valid right to use such Company Property for the purposes for which it is being used;

(xiv) defects based solely on Sellers’ failure to have a title insurance policy or survey on any Company Property;

(xv) defects based upon an Impaired Reserve Asset to the extent the basis on which such defect is asserted is any defect or deficiency with respect to the Major Midstream Assets; and

(xvi) defects arising out of mortgages or liens that are unenforceable under applicable statutes of limitations.

(d) The Parties acknowledge and agree that any reference in this Annex 1 to the net revenue interest of any Michigan Undeveloped Lease as set forth in Exhibit C-1 , Part 2 shall be a reference to a percentage (expressed as a decimal) equal to the product of (i) one hundred percent (100%) minus the sum (expressed as a percentage) of the amounts set forth in the “Royalty Burden” column and “ORRI Burden” column on Exhibit C-1 , Part 2 for such Michigan Undeveloped Lease, as applicable, multiplied by (ii) a fraction, the numerator of which is the number set forth in the “NET AC” column in Exhibit C-1 , Part 2 for such Michigan Undeveloped Lease and the denominator of which is the number set forth in the “GR AC” column in Exhibit C-1 , Part 2 for such Michigan Undeveloped Lease.

Section 1.3 Definition of Permitted Encumbrances . As used in this Annex 1 , the term “ Permitted Encumbrances ” means any or all of the following:

(a) all Lessors’ royalties and any overriding royalties, reversionary interests, net profits interests, production payments and other burdens to the extent that they do not, individually or in the aggregate, reduce the applicable net revenue interest in any Reserve Asset below that shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, for such Reserve Asset, or increase the working interest in any Reserve Asset that is a Well above that shown in Exhibit C-1 , Part 1 , for such Well, without a corresponding increase in the applicable net revenue interest in such Well above that shown in Exhibit C-1 for such Well;

(b) all leases, unit agreements, pooling agreements, operating agreements, farmout agreements, production sales contracts, division orders and other contracts, agreements and instruments applicable to the Company Properties, including provisions for penalties, suspensions or forfeitures contained therein, to the extent that they do not, in the absence of non-consent elections or default, individually or in the aggregate, reduce the applicable net revenue interest in any Reserve Asset below that shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, for any Reserve Asset, or increase the working interest in any Reserve Asset that is a Well above that shown in Exhibit C-1 , Part 1 , for such Well, without a corresponding increase in the applicable net revenue interest in such Well above that shown in Exhibit C-1 for such Well;

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(d) all third-party consent requirements and similar restrictions;

(e) all liens for Taxes or assessments not yet delinquent or, if delinquent, that are being contested in good faith by appropriate actions and for which appropriate reserves have been established on the applicable Company’s or Company Subsidiary’s financial statements in accordance with the Accounting Principles;

(f) all materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other similar liens or charges arising in the ordinary course of business for amounts not yet delinquent (including any amounts being withheld as provided by Law), or if delinquent, that are being contested in good faith by appropriate actions and for which appropriate reserves have been established on the applicable Company’s or Company Subsidiary’s financial statements in accordance with the Accounting Principles;

(g) all rights to consent, required notices to, filings with, or other actions by Governmental Authorities in connection with the sale or conveyance of oil and gas leases or rights or interests therein if they are customarily obtained subsequent to the sale or conveyance of assets and properties similar to the Title Assets;

(h) all rights of reassignment arising upon final intention to abandon or release the Company Properties or any of them;

(i) all easements, rights-of-way, covenants, servitudes, permits, surface leases and other rights in respect of surface operations to the extent they do not, individually or in the aggregate, (i) reduce the applicable net revenue interest in any Reserve Asset below that shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, for any Reserve Asset, or increase the working interest in any Reserve Asset that is a Well above that shown in Exhibit C-1 , Part 1 , for such Well, without a corresponding increase in the net revenue interest in such Well above that shown in Exhibit C-1 for such Well or (ii) materially detract from the value of or materially interfere with the use, ownership or operation of the Company Properties subject thereto or affected thereby as currently used, owned or operated;

(j) all calls on production; provided that the holder of such right must pay an index-based price that adjusts on a monthly (or more frequent) basis for any production purchased by virtue of such call on production;

(k) all rights reserved to or vested in any Governmental Authorities to control or regulate any of the Company Properties in any manner or to assess Tax with respect to any of the Company Properties, the ownership, use or operation of any of the Title Assets, or the revenue, income or capital gains with respect thereto, and all obligations and duties under all applicable Laws of any such Governmental Authority or under any franchise, grant, license or permit issued by any Governmental Authority, provided that none of the foregoing have the effect, individually or in the aggregate, of reducing the applicable net revenue interest in any Reserve Asset below that shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, for such Reserve Asset, or increasing the working interest in any Reserve Asset that is a Well above that shown in Exhibit C-1 , Part 1 , for such Well, without a corresponding increase in the applicable net revenue interest in such Well above that shown in Exhibit C-1 for such Well;

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(l) all Liens on or affecting the Company Properties which are expressly waived (by Purchaser), assumed, bonded or paid at or prior to Closing or which is discharged at or prior to Closing (in each case, at no cost to the Companies or any Company Subsidiary);

(m) any Lien or trust arising in connection with workers’ compensation, unemployment insurance, pension or employment Laws;

(n) any failure to record leases issued by any Governmental Authority in the real property, conveyance, or other records of the county or parish in which such leases are located or, in the case of Reserve Assets located in the United States Outer Continental Shelf, the county or parish to which such Reserve Assets are adjacent;

(o) any matters specifically shown on Exhibit C-1 or C-2 or Schedule 3.9(a) ;

(p) “most favored nations” and similar clauses that have not been triggered prior to Closing (and are not triggered by the Closing);

(q) legal highways and zoning and building Laws, which (i) affect Other Real Property Assets and (ii) do not materially interfere with the use by the Companies and the Company Subsidiaries of the applicable Other Real Property Asset in the ordinary course of the E&P Business; and

(r) any other Liens (i) that do not, individually or in the aggregate, materially detract from the value of or materially interfere with the ownership, use (or use contemplated by the Companies or Company Subsidiaries) or present or contemplated operation (if contemplated by the Companies or Company Subsidiaries) of the Company Properties subject thereto or affected thereby and (ii) that would be accepted by a reasonably prudent purchaser engaged in the business of owning and operating oil and gas properties similar to the Company Properties.

Section 1.4 Allocated Values . The “ Allocated Value ” for (a) any Well shall be equal to the portion of the Unadjusted Purchase Price allocated to such Well on Exhibit C-1 , Part 1 and (b) for each Michigan Undeveloped Lease shall be equal to the number of Net Mineral Acres covered by such Lease as set forth in Exhibit C-1 , Part 2 , multiplied by $300. Sellers have accepted such Allocated Values for purposes of this Annex 1 , but make no representation or warranty as to the accuracy of such value.

Section 1.5 Notice of Title Defects; Defect Adjustments .

(a) To assert a Title Defect, Purchaser must deliver a claim notice or notices to Sellers with respect thereto on or before the date that is seventy-five (75) days following the Execution Date (the “ Title Claim Date ”); provided that Purchaser agrees to use reasonable efforts to provide Sellers with periodic (but in no event less frequently than once every two (2) weeks) updates in writing concerning the progress of Purchaser’s title due diligence. Each notice of Title Defect shall be in writing and shall include (each such notice, a “ Title Defect Notice ”):

(i) a reasonably detailed description of the alleged Title Defect(s);

(ii) the Title Asset(s) affected;

(iii) the Allocated Values of the Title Asset(s) subject to or affected by the alleged Title Defect(s); and

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(iv) the amount by which Purchaser reasonably believes the Allocated Values of those Title Assets are reduced by the alleged Title Defect(s) and the computations and information upon which Purchaser’s belief is based.

Purchaser shall provide Sellers documentation available to Purchaser supporting Purchaser’s asserted Title Defect(s). Purchaser shall be deemed to have waived all defects in title to the Company Properties (other than as described in Section 1.1 of this Annex 1 ) of which Sellers have not been given written notice from Purchaser on or before the Title Claim Date.

(b) Should Purchaser discover any Title Benefit on or before the Title Claim Date, Purchaser shall deliver to Sellers on or before the Title Claim Date a written notice including:

(i) a description of the Title Benefit;

(ii) the Title Asset(s) affected;

(iii) the Allocated Values of the Title Asset(s) subject to such Title Benefit; and

(iv) the amount by which Purchaser reasonably believes the Allocated Value of those Title Assets is increased by the Title Benefit(s) and the computations and information upon which Purchaser’s belief is based.

Sellers shall have the right, but not the obligation, to deliver to Purchaser an equivalent notice on or before the date that is the Title Claim Date with respect to each Title Benefit discovered by Sellers. Sellers shall be deemed to have waived all Title Benefits of which no Party has given notice on or before the Title Claim Date, except to the extent Purchaser has failed to give a written notice which it was obligated to give under this Section 1.5(b) . If Sellers deliver such notice to Purchaser, Sellers shall provide Purchaser documentation available to Sellers supporting Sellers’ asserted Title Benefit(s).

(c) Sellers shall have the right, but not the obligation, to attempt, at Sellers’ sole cost, to cure or remove on or before sixty (60) days after the Closing Date, any Title Defects of which Sellers have been advised by Purchaser. Purchaser shall reasonably cooperate with Sellers in Sellers’ efforts to cure Title Defects during such period; provided , however that, the Parties agree that the foregoing shall not require Purchaser (or, after Closing, any Company or Company Subsidiary) to incur any costs or expenses (or waive any rights it may have) with respect thereto. No reduction shall be made in the Unadjusted Purchase Price with respect to a Title Defect for purposes of Closing if Sellers have provided written notice to Purchaser of Sellers’ intent to attempt to cure such Title Defect on or before the Closing Date. If the Title Defect is not cured as agreed by Sellers and Purchaser or if Sellers and Purchaser cannot agree, and it is determined by the Title Arbitrator that such Title Defect is not cured at the end of the sixty (60) day post-Closing period, the adjustment to the Unadjusted Purchase Price required under this Annex 1 shall be made pursuant to Section 2.3 of the Agreement. Sellers’ election to attempt to cure a Title Defect shall not constitute a waiver of Sellers right to dispute the existence, nature or value of, the Title Defect.

(d) With respect to each Title Asset affected by a Title Defect reported under Section 1.5(a) , the Unadjusted Purchase Price shall be reduced by an amount (the “ Title Defect Amount ”) equal to the reduction in the Allocated Value for such Title Asset(s) caused by such Title Defects, as determined pursuant to Sections 1.5(g) and 1.5(i) . Notwithstanding the foregoing provisions of this Section 1.5(d) , no adjustment to the Unadjusted Purchase Price shall be made with respect to any Title Defect that is cured within sixty (60) days after the Closing.

Annex 1 - 7

(e) With respect to each Title Asset affected by a Title Benefit reported under Section 1.5(b) (or which Purchaser should have reported under Section 1.5(b) ), the Unadjusted Purchase Price shall be increased by an amount (the “ Title Benefit Amount ”) equal to the increase in the Allocated Value for such Title Asset caused by such Title Benefits, as determined pursuant to Sections 1.5(h) and 1.5(i) ; provided , however that, in no event will the aggregate adjustments to the Unadjusted Purchase Price as a result of Title Benefits exceed the aggregate adjustments to the Unadjusted Purchase Price due to Title Defects.

(f) This Annex 1 , Sections 3.9 , 3.10 , 3.12 , 3.13 , 3.14 , 3.22 and 3.23 of the Agreement (and the indemnities related thereto), Section 2.3(h) of the Agreement with respect to any of the matters described therein and Section 5.15 of the Agreement and the indemnity set forth in Section 10.1(b)(iv) of the Agreement, shall be the sole and exclusive right and remedy of Purchaser with respect to any defect in title with respect to any of the Company Properties; provided , however , that Section 3.22(b) shall be the sole and exclusive right and remedy of Purchaser with respect to the Major Midstream Assets. In this regard and notwithstanding anything to the contrary in the Agreement, if any Title Defect with respect to any of the Company Properties results from any matter which could also result in the breach of any representation or warranty of a Seller as set forth in Article 3 of the Agreement (other than Sections 3.9 , 3.10 , 3.12 , 3.13 , 3.14 , 3.22 and 3.23 of the Agreement), then Purchaser shall only be entitled to assert such matter prior to the Title Claim Date as a Title Defect to the extent permitted by this Annex 1 and shall be precluded from also asserting such matter as the basis of the breach of any such representation or warranty. Except as provided in this Annex 1 (and Sections 3.9 , 3.10 , 3.12 , 3.13 , 3.14 , 3.22 and 3.23 of the Agreement (and the indemnities related thereto), Section 2.3(h) of the Agreement with respect to any of the matters described therein and Section 5.15 of the Agreement and the indemnity set forth in Section 10.1(b)(iv) of the Agreement), Purchaser releases, remises and forever discharges Sellers and their current and former Affiliates and all such parties’ stockholders, officers, directors, employees, agents, advisors and representatives from any and all suits, legal or administrative proceedings, claims, demands, damages, losses, costs, liabilities, interest or causes of action whatsoever, in law or in equity, known or unknown, which Purchaser might now or subsequently may have, based on, relating to or arising out of, any Title Defect, or other deficiency in title with respect to any of the Company Properties.

(g) The Title Defect Amount (calculated in the case of a Title Defect that affects multiple Title Assets, as a single aggregate amount for all Title Assets affected thereby and not as a separate amount of each of the individual Title Assets affected thereby) resulting from a Title Defect shall be determined as follows:

(i) if Purchaser and Sellers agree on the Title Defect Amount, that amount shall be the Title Defect Amount;

(ii) if the Title Defect is a lien, encumbrance, or other charge which is undisputed and liquidated in amount, then the Title Defect Amount shall be the amount necessary to be paid to remove the Title Defect from the relevant Company’s or Company Subsidiary’s interest in the affected Title Asset;

(iii) if the Title Defect represents a discrepancy between (A) the net revenue interest for any Reserve Asset and (B) the net revenue interest for such Reserve Asset shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, then the Title Defect Amount shall be the product of the Allocated Value of such Reserve Asset multiplied by a fraction, the numerator of which is such net revenue interest decrease and the denominator of which is the net revenue interest for such Reserve Asset shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively, provided that if the Title Defect does not

Annex 1 - 8

affect such Reserve Asset throughout its entire productive life, the Title Defect Amount determined under this Section 1.5(g)(iii) shall be reduced to take into account the applicable time period only;

(iv) if the Title Defect results from the failure of any of the Companies or the Company Subsidiaries to have title to the number of Net Mineral Acres set forth in the “Net Ac” column in Exhibit C-1 , Part 2 for any Michigan Undeveloped Lease, then the Title Defect Amount shall be $300 per Net Mineral Acre multiplied by the amount of such Net Mineral Acre shortfall;

(v) if the Title Defect represents an obligation, encumbrance, burden or charge upon or other defect in title to the affected Title Asset of a type not described in subsections (i), (ii), (iii) or (iv) above, then the Title Defect Amount shall be determined by taking into account the Allocated Value of the Title Asset(s) so affected, the portion of the relevant Company’s or Company Subsidiary’s interest in the Title Asset(s) affected by the Title Defect, the legal effect of the Title Defect, the potential economic effect of the Title Defect over the life of the affected Title Asset or Title Assets, the age of the factual matters causing or constituting the alleged Title Defect, and such other factors as are necessary to make a proper evaluation;

(vi) notwithstanding anything to the contrary in this Annex 1 , (A) a claim for a Title Defect for which notice is given prior to the Title Claim Date shall only generate an adjustment to the Unadjusted Purchase Price if the Title Defect Amount (calculated in the case of a Title Defect that affects multiple Title Assets, as a single aggregate amount for all Title Assets affected thereby and not as a separate amount for each Title Asset affected thereby) with respect thereto exceeds $1,000,000 (the “ Title Threshold ”), (B) the aggregate Title Defect Amounts attributable to the effects of all Title Defects upon any given Title Asset shall not exceed the Allocated Value of such Title Asset (it being understood that in the case of a Title Defect affecting multiple Title Assets, the Title Defect Amount will be allocated among affected Title Assets in a fair and equitable manner) and (C) there shall be no adjustment to the Unadjusted Purchase Price for Title Defects unless and until the aggregate amount of all Title Defect Amounts for which an adjustment to the Unadjusted Purchase Price would be permitted pursuant to Section 1.5(g)(vi)(A) exceeds $85,000,000 (the “ Title Deductible ”), and then only to the extent that such aggregate amount of all such Title Defect Amounts exceeds the Title Deductible;

(vii) if the Title Defect affects an Other Real Property Interest and the loss of such Other Real Property Interest will materially and adversely affect the development, operation or production of one or more Reserve Assets (each an “ Impaired Reserve Asset ”), then such Title Defect shall be considered to affect the applicable Impaired Reserve Assets and the Title Defect Amount shall take into account the decrease in the Allocated Value for the applicable Impaired Reserve Assets; and

(viii) without limitation of Purchaser’s right to aggregate all Title Defect Amounts attributable to the same Title Defect for purposes of determining if the Title Threshold has been met with respect to such Title Defect, the Title Defect Amount with respect to a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Amount hereunder, or for which Purchaser otherwise receives credit in the calculation of the Purchase Price.

(h) The Title Benefit Amount for any Title Benefit shall be: (i) in the case of a Title Benefit affecting any Title Asset, the product of the Allocated Value of the affected Title Asset multiplied by a fraction, the numerator of which is the net revenue interest increase and the denominator of which is the applicable net revenue interest in such Title Asset shown in Exhibit C-1 , Part 1 or Exhibit C-1 , Part 2 , respectively and (ii) in the case of a Title Benefit affecting a Michigan Undeveloped Lease, $300 multiplied by the amount of the increase in the number of Net Mineral Acres for such Michigan Undeveloped Lease above the number of Net Mineral Acres set forth for such Michigan Undeveloped Lease in Exhibit C-1 , Part 2 , provided that, in each case above, (x) if a Title Benefit affects multiple Title

Annex 1 - 9

Assets, then the Title Benefit Amount shall be calculated as a single aggregate amount for all Title Assets affected thereby and not as a separate amount for each Title Asset affected thereby and (y) if the Title Benefit does not affect a Title Asset throughout the entire life of the Title Asset, then the Title Benefit Amount determined under this Section 1.5(h) shall be reduced to take into account the applicable time period only. Notwithstanding anything to the contrary in this Annex 1 , an individual claim for a Title Benefit which is reported under Section 1.5(b) (or which Purchaser should have reported under Section 1.5(b) ) prior to the Title Claim Date shall only generate an adjustment to the Unadjusted Purchase Price if the aggregate of all Title Benefit Amounts with respect to all Title Assets affected thereby exceeds the Title Threshold.

(i) Sellers and Purchaser shall attempt to agree on all (i) Title Defects, Title Benefits, Title Defect Amounts and Title Benefit Amounts within thirty (30) days after the Title Claim Date and (ii) Alleged Required Consents within thirty (30) days after the delivery of the Consent Notice with respect thereto (which such thirty (30) day period, for the avoidance of doubt, shall be inclusive of the ten (10) Business Day period described in Section 5.15(c) of the Agreement). The Title Defects, Title Benefits, Title Defect Amounts and Title Benefit Amounts that Sellers and Purchaser are unable to agree with respect to by such date, and all Required Consent Disputes submitted to arbitration pursuant to Section 5.15(d) of the Agreement, shall be exclusively and finally resolved by arbitration pursuant to this Section 1.5(i) , and, if the Closing Date occurs prior to the final resolution of any such matters, then, to the extent such unresolved matters relate to a Title Defect, Title Benefit, Title Defect Amount or Title Benefit Amount, Sellers’ good faith estimate shall be used to determine the Closing Payment pursuant to Section 2.4(a) of the Agreement. During the ten (10) day period following the expiration of the applicable thirty (30) day period, all Title Defects, Title Benefits, Title Defect Amounts and Title Benefit Amounts in dispute, or, if applicable, all Required Consent Disputes, shall be submitted (a) with respect to any disputes regarding Title Defects, Title Benefits, Title Defect Amounts or Title Benefit Amounts, to a title attorney with at least ten (10) years’ experience in oil and gas titles in the state or other jurisdiction in which the Title Assets with the largest aggregate Allocated Value of all of the Title Assets in question are located ( provided , however , for this purpose, the Title Assets located in the United States outer continental shelf shall be deemed to be located in the state adjacent to which the applicable Title Assets are located, determined pursuant to the currently-existing administrative boundaries for the Gulf of Mexico Region of the Outer Continental Shelf published by the Bureau of Ocean Energy Management), as selected by mutual agreement of Purchaser and Sellers or absent such agreement during the ten (10) day period, by the Houston office of the American Arbitration Association or (b) with respect to any Required Consent Dispute, to a title attorney with at least ten (10) years’ experience in oil and gas titles as selected by mutual agreement of Purchaser and Sellers or absent such agreement during the ten (10) day period, by the Houston office of the American Arbitration Association (each title attorney selected with respect to each of the foregoing described disputes, a “ Title Arbitrator ”). Likewise, if by the end of the sixty (60) day post-Closing cure period under Section 1.5(c) , Sellers have failed to cure any Title Defects which it provided notice prior to Closing that it would attempt to cure, and Sellers and Purchaser have been unable to agree on the Title Defect Amounts for such Title Defects, the Title Defect Amounts in dispute shall be submitted to the applicable Title Arbitrator. No Title Arbitrator shall have worked as an employee or outside counsel for either Party or its Affiliates during the five (5) year period preceding the arbitration or have any financial interest in the dispute. In connection with the engagement of a Title Arbitrator, each of Sellers and Purchaser shall execute such engagement, indemnity and other agreements as such Title Arbitrator shall require as a condition to such engagement. The arbitration proceeding shall be held in Houston, Texas and shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, to the extent such rules do not conflict with the terms of this Section 1.5(i) . Each Title Arbitrator’s determination shall be made within forty-five (45) days after submission of the matters in dispute and shall be final and binding upon the Parties, without right of appeal. In making his determination, each Title Arbitrator shall be bound by (y) with respect to any disputes regarding Title Defects, Title Benefits, Title Defect Amounts or Title Benefit Amounts, the rules

Annex 1 - 10

set forth in this Annex 1 and (z) with respect to any Required Consent Dispute, the provisions of Section 5.15 of the Agreement, and, in each case, may consider such other matters as in the opinion of such Title Arbitrator are necessary or helpful to make a proper determination. Additionally, each Title Arbitrator may consult with and engage disinterested third Persons to advise the arbitrator, including title attorneys from other states and petroleum engineers. Each Title Arbitrator shall act as an expert for the limited purpose of determining the specified disputed matters submitted to it pursuant to this Section 1.5(i) (or, with respect to any Required Consent Dispute, pursuant to Section 5.15 of the Agreement) and, except in the case of any Required Consent Dispute, may not award damages, interest or penalties to any Party with respect to any matter. Sellers and Purchaser shall each bear its own legal fees and other costs of presenting its case to a Title Arbitrator. Purchaser shall bear one-half of the costs and expenses of each Title Arbitrator, and Sellers shall be responsible for the remaining one-half of the costs and expenses of each Title Arbitrator. Notwithstanding anything to the contrary set forth herein (or in the Agreement), (1) if any lawsuit, arbitration or other proceeding with respect to any Required Consent is pending at the time such Required Consent becomes the subject of a Required Consent Dispute or (2) if during the determination by any Title Arbitrator of any Required Consent Dispute the Required Consent that is the subject matter of such Required Consent Dispute becomes the subject matter of any lawsuit, arbitration or other proceeding, then, the provisions of this Section 1.5(i) shall, in the situation described in clause (1), not apply to such Required Consent Dispute and, in the situation described in clause (2), immediately cease to apply to such Required Consent Dispute, in each case, until such time as such lawsuit, arbitration or other proceeding is finally determined.

Section 1.6 Limitations on Applicability . The right of Purchaser or Sellers to assert a Title Defect or Title Benefit, respectively, under this Agreement shall terminate on the Title Claim Date; provided there shall be no termination of Purchaser’s or Sellers’ rights under Section 1.5 with respect to any bona fide Title Defect or Title Benefit claim properly reported on or before the Title Claim Date (or which should have been reported by Sellers or Purchaser pursuant to Sections 1.5(a) or 1.5(b) , respectively).

Section 1.7 Termination . The Agreement, including this Annex 1 , may be terminated prior to Closing by either Purchaser or Sellers, upon written notice to the other Party, in the event that the sum of the Title Defect Amounts properly asserted by Purchaser in good faith less the sum of all Title Benefit Amounts, after giving effect to the Title Threshold and the Title Deductible, as may be applicable thereto, equal or exceed fifteen percent (15%) of the Unadjusted Purchase Price.

Annex 1 - 11

ANNEX 2
TRANSITION COMMITTEE PROVISIONS

1. The Parties hereby establish a transition committee (the “ Transition Committee ”) consisting of the following persons (or their reasonably appropriate designees or replacements):

Sellers’ Transition Committee Members:		Purchaser’s Transition Committee Members:

1. James E. Street		1. Faye L. Stallings
2. Henry Neumann		2. Delaney Bellinger
3. Richard Burnett		3. Joan Gallagher
4. Deb Witges		4. Francis C. Olmsted

The Transition Committee shall continue to exist until the earlier of the Closing and the termination of this Agreement.

2. The Transition Committee shall meet periodically, but no less than monthly, on a Business Day at the offices of EP Energy Holding Company (or such other place as the Parties may mutually agree) at such time as the Parties may mutually agree to review and discuss:

(a) (i) progress and performance with respect to the E&P Business, including drilling, completion and production operations and costs and revenues related thereto, (ii) comparisons of the foregoing against the E&P Business plans (including the Capital Expenditure Plans) and projections previously provided to (or discussed with) Purchaser or the Transition Committee and (iii) the E&P Business plans and projections applicable to the next sixty (60) day period;

(b) development of a joint migration plan, including the allocation of internal resources and personnel, to support the IT transition activities of each party; and implementation progress of the IT migration plans of each party;

(d) such other matters with respect to the Companies and/or the Company Subsidiaries as Purchaser may reasonably request.

3. The Transition Committee shall not have any approval or veto rights.

Annex 2 - 1

Exhibit 2.2

Execution Version

AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT

THIS AMENDMENT NO. I TO PURCHASE AND SALE AGREEMENT (this “Amendment”), dated as of April 16, 2012 (the “ Effective Date” ), is entered into by and among EP Energy, L.L.C., a limited liability company organized under the Laws of the State of Delaware and formerly known as EP Energy Corporation (“ EPE LLC” ), EP Energy Holding Company, a corporation organized under the Laws of the State of Delaware (‘‘ New EPE” ), El Paso Brazil, L.L.C., a limited liability company organized under the Laws of the State of Delaware (“ EP Brazil ” and together with EPE LLC and New EPE, “ Sellers ” and each a “ Seller’ ’), and EPE Acquisition, LLC, a limited liability company organized under the Laws of the State of Delaware (“Purchaser”). Sellers, on the one hand, and Purchaser, on the other hand, are referred to collectively as the “ Parties ” and individually as a “ ”.

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement, dated as of February 24, 2012 (the “Purchase and Sale Agreement”), whereby (i) New EPE agreed, after giving effect to the actions contemplated by Section 8.I 0 of the Purchase and Sale Agreement, to sell, and Purchaser agreed to purchase (a) all of the issued and outstanding membership interests of EPE LLC and (b) all of the issued and outstanding shares of EP Egypt and (ii) EP Brazil agreed to sell, and Purchaser agreed to purchase all ofthe issued and outstanding quotas (or, in the case ofEl Paso Brazil Holding Company, all of the issued and outstanding shares) of the BrazilCos;

WHEREAS, the Parties desire to amend the Purchase and Sale Agreement in certain respects as more specifically set forth below; and

WHEREAS, capitalized terms not defined herein shall have the meanings given to them in the

Purchase and Sale Agreement.

NOW, THEREFORE, in consideration ofthe agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

I. Amendments. The Parties agree that the Purchase and Sale Agreement is hereby amended as follows:

(a) Section 5.9(a) of the Purchase and Sale Agreement is hereby replaced in its entirety with the following:

“(a) As soon as reasonably practicable after the Execution Date and in consultation with Purchaser, Sellers shall cause the Companies and Wholly-Owned Subsidiaries to enter into new swaps so that the commodity price risk associated with the anticipated future production of the Companies and Wholly Owned Subsidiaries for the calendar years of 2012 and 2013 will be hedged to the volumes set forth on Schedule 5.9 at market prices prevailing at the time of entering into such swaps. Sellers shall consult with Purchaser concerning the counterparties to such hedges and the quantities to be hedged. As such hedges are entered into, Sellers shall promptly notify Purchaser of the counterparty to the transaction, the product involved, the quantity hedged, the hedge price under the new hedge, any premiums or other payments made or received to enter into any new hedge and all other details of the transaction and provide Purchaser copies of the confirmations and other documentation evidencing such transactions. Purchaser may request that Sellers enter into new swaps so that the commodity price risk associated with the anticipated future production of the Companies and the Wholly Owned Subsidiaries for calendar year 2012 or 2013 will be hedged to volumes greater than the volumes set forth on Schedule or that commodity price risk associated with the anticipated future production of the Companies and the Wholly Owned Subsidiaries for calendar years 2014 and 2015 will be hedged at specified percentage

levels (the “ Requested Swaps” ). Sellers shall (and shall cause the Companies and Company Subsidiaries to) reasonably cooperate with Purchaser to accommodate such request and implement the Requested Swaps, as permitted under the Revolving Credit Facility. Notwithstanding anything to the contrary herein, in no event shall Sellers, the Companies and the Company Subsidiaries be required to (i) enter into any transaction relating to Derivatives that would constitute a breach of, or default under, the Revolving Credit Facility or the EP Revolver or (ii) enter into any transactions relating to Requested Swaps unless Purchaser has agreed to pay and/or post (and does pay and/or post) any required premium, fee or other cost or expense associated with, or collateral required by, such transaction prior to its consummation.”.

(b) Schedule 5.9 (Hedges) of the Purchase and Sale Agreement is hereby replaced its entirety with Exhibit A attached hereto.

(c) Exhibit D (Form of Lease) of the Purchase and Sale Agreement is hereby replaced in its entirety with Exhibit B attached hereto.

2. Ratification. Except as expressly amended hereby, all other terms and provisions of the Purchase and Sale Agreement shall remain in full force and effect. The Parties acknowledge that the Purchase and Sale Agreement, as amended hereby, is ratified and confirmed to be in full force and effect and that all rights, powers and duties created thereunder or existing thereby are ratified and confirmed in all respects.

3. Execution in Counterparts. For the convenience of the Parties, this Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4. Governing Law. THIS AMENDMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES (INCLUDING ANY CLAIMS MADE IN CONTRACT, TORT OR OTHERWISE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

(Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

SELLER:	EP ENERGY, L.L.C.

	By:		/s/ Authorized Person
	Name:
	Title:

SELLER:	EP ENERGY HOLDING COMPANY

	By:	/s/ Authorized Person
	Name:
	Title:

SELLER:	EL PASO BRAZIL, L.L.C.

	By:	/s/ Antonio J. de Pinho
	Name:	Antonio J. de Pinho
	Title:	President

PURCHASER:	EPE ACQUISITION, LLC

	By:	/s/ Authorized Person
	Name:
	Title:

Exhibit 2.3

Execution Version

AMENDMENT N0. 2 TOPURCHASEANDSALEAGREEMENT

THIS AMENDMENT NO. 2 TO PURCHASE AND SALE AGREEMENT (this “Amendment”), dated as of May 24, 2012 (the “ Effective Date” ), is entered into by and among EP Energy, L.L.C., a limited liability company organized under the Laws of the State of Delaware and formerly known as EP Energy Corporation (“ EPE LLC” ), EP Energy Holding Company, a corporation organized under the Laws of the State of Delaware (“New EPE”), El Paso Brazil, L.L.C., a limited liability company organized under the Laws of the State of Delaware (“EP Brazil”), EP Production International Cayman Company, a company incorporated under the Laws of the Cayman Islands (“EPPI”), EPE Acquisition, LLC, a limited liability company organized under the Laws of the State of Delaware (“ Purchaser” ) and solely for purposes of Sections 2 and 5 hereunder, and El Paso LLC, a limited liability company organized under the Laws of the State of Delaware and formerly known as El Paso Corporation (“El Paso” ). EPE LLC, New EPE, EP Brazil, EPPI and Purchaser are referred to collectively as the “Parties” and each, individually, as a “ ”.

WHEREAS, EPE LLC, New EPE, EP Brazil and Purchaser entered into that certain Purchase and Sale Agreement, dated as of February 24, 2012 (as amended, the “ Purchase and Sale Agreement” ), whereby (i) New EPE agreed, after giving effect to the actions contemplated by Section 8.10 of the Purchase and Sale Agreement, to sell, and Purchaser agreed to purchase (a) all of the issued and outstanding membership interests of EPE LLC and (b) all of the issued and outstanding shares of EP Egypt and (ii) EP Brazil agreed to sell, and Purchaser agreed to purchase all of the issued and outstanding quotas (or, in the case of El Paso Brazil Holdings Company, all of the issued and outstanding shares) of the BrazilCos;

WHEREAS, (i) EPE LLC, New EPE, EP Brazil and Purchaser desire to amend the Purchase and Sale Agreement in certain respects as more specifically set forth below and (ii) EPPI desires to (and the other Parties desire that EPPI) become a party to the Purchase and Sale Agreement, effective as of the Effective Date, as though it were originally a party thereto by executing this Amendment; and

WHEREAS, capitalized terms used herein, but not defined herein, shall have the meanings given to them in the Purchase and Sale Agreement

NOW, THEREFORE, in consideration of the agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1. Amendments. The Parties agree that the Purchase and Sale Agreement IS hereby amended as follows:

(a) The definition of the term “Sellers” is hereby amended to include EPPI, and exclude EP Brazil.

(b) Recital B is hereby deleted and replaced in its entirety with the following:

“EP Production International Cayman Company, a company incorporated under the Laws of the Cayman Islands (“EPPI”) desires, after giving effect to the actions contemplated by Section 8.1 0, to sell, and Purchaser desires to purchase, all of the issued and outstanding membership interests of EP Brazil, which owns (a) all ofthe issued and outstanding quotas of(i) UnoPaso Exploracao e Producao de Petroleo e Gas Ltda., a company incorporated under the Laws of Brazil (“ UnoPaso” ) and (ii) El Paso Oleo e Gas do Brasil Ltda., a company incorporated under the Laws of Brazil (“ Brazil O&G” ) and (b) all of the issued

and outstanding shares of El Paso Brazil Holdings Company, a company incorporated under the Laws of the Cayman Islands (“ Brazil Holdings ” and, together with UnoPaso and Brazil O&G, the “BrazilCos”).”

“(ii) in the case of EPPI as Seller, the Brazilian Membership Interests (together with the EPE LLC Membership Interests and the EP Egypt Shares, the “Shares”).”

(d) Sections 1.2(k) through are each hereby advanced one letter and the following is added as a new Section 1.2(k):

“(k) “ Brazil Tax Basis Shortfall ” means the excess of (i) the aggregate amount allocated to the quotas of UnoPaso pursuant to Section 2.2 over (ii) the aggregate tax basis of the quotas of UnoPaso as determined for Brazilian nonresident capital gains tax purposes as of the Closing Date as adjusted by actions taken after the Closing pursuant to Section 8.13.”.

(e) Section 1.2(1) (formerly Section 1.2(k)) is hereby amended by adding the following sentence at the end of the definition:

“For the avoidance of doubt, the defined term “Brazil Tax Loss” shall not include any Tax Losses described in Sections 8. l(a)(v) through (viii).”

(f) Section 1.2(g) (formerly Section 1.2(p) ) is hereby deleted and replaced in its entirety with the following:

““ Companies ” means, collectively, EPE LLC, EP Brazil, the BrazilCos and the EgyptCos (and, each, a “Company”).”.

(g) Section 2.2(a) is hereby amended by deleting the first sentence in its entirety and replaced with the following:

“(a) The Unadjusted Purchase Price shall be allocated as follows: (i) first, among the Shares of each of the Companies (other than the BrazilCos) (such allocation, together with the allocation among the shares/quotas of each of the BrazilCos described in clause (ii) below, the “ Share Unadjusted Purchase Price Allocation” ) and (ii) thereafter, the portion of the Unadjusted Purchase Price so allocated to the Shares of each such Company shall be allocated among the classes of assets (including each of the exploration and production concessions of EP Egypt and the BrazilCos) of each such Company (for the avoidance of doubt, including among the shares/quotas of each BrazilCo) (such allocations, other than the allocation among the shares/quotas of each of the BrazilCos, the “Asset Unadjusted Purchase Price Allocations”).”.

(h) Section 2.2Cb)(iii) is hereby amended by deleting the reference to “EP Brazil” and replacing it with a reference to “EPPI”.

(i) Section 3.l(a) is hereby amended by deleting the second sentence in its entirety and replacing it with the following:

“EPPI is a company duly organized, validly existing and in good standing under the Laws of the Cayman Islands.”

G) Schedule 3.l(d) (Consents) is hereby amended to read in its entirety as set forth on Exhibit A attached hereto.

(k) Section 3.2(e) is hereby amended by deleting clauses (ii), (iii), (iv) and (v) from the first grammatical sentence thereof and replaced with the following:

“(ii) the limited liability company interests ofEP Brazil (any issued and outstanding membership interests of EP Brazil set forth on Schedule 3.2(e) , the “Brazilian Membership Interests”); and (iii) the issued and outstanding capital stock of EP Egypt (any issued and outstanding common stock of EP Egypt after giving effect to the actions contemplated by Section 8.10, the “EP Egypt Shares”).”.

(l) Schedule 3.2(e) (The Shares) is hereby amended to read in its entirety as set forth on Exhibit B attached hereto.

(m) Schedule 3.3 (Company Subsidiaries and the N Entity) is hereby amended to read in its entirety as set forth on Exhibit C attached hereto.

(n) Section 6.2<0 is hereby deleted and replaced with the following:

“(f) FIRPTA Affidavits . New EPE shall have delivered to Purchaser a nonforeign affidavit dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under Treasury Regulations issued pursuant to Section 1445 of the Code stating that New EPE is not a “foreign person” as defined in Section 1445 of the Code, and EPPI shall have delivered to Purchaser an affidavit dated as of the Closing Date in form and substance reasonably acceptable to Purchaser stating that none of the Brazilian Membership Interests, the Brazilian Shares or the assets ofEP Brazil or the BraziiCos constitute a “United States real property interest” as defined in Section 897(c)(l) of the Code and applicable Treasury Regulations (together, the “ Tax Affidavits” );”

(o) Section 7.2(e) is hereby amended by (i) replacing clause (i) thereof in its entirety with the following: “(i) the transition services agreement by and among Sellers, Purchaser and the other parties thereto substantially in the form attached hereto as Exhibit C. Part l (the “ Transition Services Agreement ”), duly executed by the Sellers”, (ii) deleting the word “and” before clause (ii) thereof and (iii) adding the following at the end thereof: “and (iii) a transition services agreement with respect to certain transition services to be rendered in Brazil by and among Sellers, Purchaser, and the other parties thereto substantially in the form attached hereto as Exhibit C. Part 2 (the “ Brazil Transition Services Agreement”), duly executed by the counterparty thereto.”

(p) Section 7.3(0) is hereby amended by (i) deleting the word “and” before clause (ii) thereof and (ii) adding the following at the end thereof:

“and (iii) Brazil Transition Services Agreement, duly executed by the counterparty thereto.”.

(q) Section 8.1(a) is hereby amended by deleting the word “and” before clause (vi) thereof and adding the following new clauses (vii) and (viii):

“(vii) the actions described in Section 8.13 and (viii) any Taxes imposed by any Governmental Authority of Brazil on a direct or indirect sale of the quotas of UnoPaso by EP Brazil (or an Affiliate thereof) (without duplication) to the extent attributable to the Brazil Tax Basis Shortfall.”.

(r) Sections 8.l(a) and 8.1(b) are hereby amended by deleting the references to ‘‘the sale of the Brazilian Shares hereunder” and replacing them with references to ‘‘the sale of the Brazilian Membership Interests hereunder (including any deemed sale of the Brazilian Shares thereby).”

(s) Section 8.10(a) is hereby amended by adding a reference to EPPI in clause (x) thereof.

(t) Sections 8.1O(a) and 8.1 O(b) are hereby amended by deleting the references to “EP Production International Cayman Company” and replacing them with references to “EPPI.”

(u) Section 8.1 O(a) is hereby amended by (i) deleting the word “and” before clause (x) thereof, (ii) adding the following new clause (xi) at the end thereof and (iii) adding a new Schedule 8.1O(a)(xi) , attached hereto as Exhibit D:

“and (xi) the noncash contributions of intercompany receivables set forth on Schedule 8.1O(a)(xi).”

(v) Section 8.10(b) is hereby amended by deleting clause (iv) and replacing it with the following:

“(iv) the purchase and sale hereunder of the Brazilian Membership Interests for United States federal income Tax purposes will be treated as a sale by EPPI (a controlled foreign corporation wholly-owned by New EPE) of all of the assets of EPPI, including the assets of the BrazilCos, and the purchase of such assets by Purchaser from EPPI for the applicable portion of the Purchase Price and the assumption of liabilities allocable to the Brazilian Membership Interests and.”

(w) The following is added as a new Section 8.13:

“Section 8.13. Brazil Tax Basis. Prior to the Closing Date, Sellers and their Affiliates will use their reasonable best efforts to take any and all steps necessary to increase the Brazilian tax basis in the quotas of UnoPaso through the capitalization of earnings of UnoPaso and/or the capitalization of interest on net equity in favor of the quota holders of UnoPaso. If the actions required by the proceeding sentence cannot be completed prior to the Closing Date, Purchaser and its Affiliates will use their reasonable best efforts to cooperate with Sellers and their respective Affiliates so that such actions can be completed as soon as reasonably practicable following the Closing Date.”.

(x) Schedule 5.16 is hereby amended by deleting item number I thereon in its entirety and replacing it with the following:

“See Annexes L-1, L-2, L-3 and L-4; provided however that any licenses, services agreements and other contracts listed on Annex L-3 or Annex L-4 which are not assignable or transferrable without the consent of any Person (other than Sellers, any Affiliate of Sellers or EPE LLC) shall be excluded from Annex L-3 or L-4 (as applicable) to the extent that such consent remains outstanding as of the Closing Date; provided, further, however that each Seller (and, if applicable, its Affiliates) shall have the continuing obligation for twelve (12) months after the Closing Date to use its (or their, as applicable) commercially reasonable efforts to cooperate with EPE LLC to obtain all necessary consents to the assignment of such licenses, services agreements and other contracts and, upon obtaining the requisite third party consent(s) with respect to any such license, services agreement or other contract which is not assigned on the Closing Date, such license, services agreement or other contract shall automatically, and without further action by any Party or any of its Affiliates, be assigned by the applicable Seller (or its Affiliate, if

applicable) to EPE LLC (or, if applicable, its Affiliate) as provided in the Personal Property Assignment.”.

(y) Exhibit C i s hereby replaced in its entirety with Exhibit E attached hereto.

(z) Schedules 1.2(oooo) (Service Employees) and 5.11{b) (Business Employees) are hereby amended to delete the person identified by employee number 702333 therefrom.

(aa) Schedule 3.5 is hereby amended by deleting the phrase ‘‘will distribute the receivable to New EPE pursuant to Section 8.10(a) of the Agreement and New EPE” from item 2E thereof.

(bb) Section 8.10(a) is hereby amended by deleting the phrase “and Egypt” from clause (ix) thereof.

2. Indemnity. From and after the Closing, Sellers shall, jointly and severally, indemnify, defend and hold harmless Purchaser, its current and former Affiliates (including, for the avoidance of doubt, the Companies (as such definition is amended hereby) and the Company Subsidiaries (as such definition is amended hereby)) and any of its and their respective officers, directors, employees, shareholders, members, partners and agents (each, the “Purchase Indemnified Party”) from and against all Damages incurred or suffered by such Persons and caused by or arising out of or resulting from (a) the amendments to the Purchase and Sale Agreement set forth in Section I hereunder (other than clauses (m), (n), (v) and (w)) hereof and (b) the joinder of EPPI to the Purchase and Sale Agreement pursuant to Section 3 hereof. The provisions of Article I 0 of the Purchase and Sale Agreement (other than the provisions of Sections IO.I(dXiv), I0.4(c), 10.4(d) and I0.4(e)) of the Purchase and Sale Agreement) shall apply to any claim for indemnity made by any Purchaser Indemnified Party pursuant to this Section 2.

3. EPPI as Party. EPPI shall, by its signature hereof, join and agree to be a Party to and bound by all of the terms and provisions of the Purchase and Sale Agreement as if it were originally a Seller party thereto. EPPI ratifies all actions taken by EP Brazil prior to the date of this Amendment.

4. Capitalization of Certain Intercompany Indebtedness. Notwithstanding anything to . the contrary in the Purchase and Sale Agreement, prior to Closing, Sellers shall (a) capitalize, or cause to be capitalized, all of the Indebtedness set forth in Sections 2A., 2B., 2C., and 2E. of Schedule 3.5 of the Purchase and Sale Agreement and (b) distribute all of the Indebtedness set forth in Section 20. of Schedule 3.5 of the Purchase and Sale Agreement to New EPE as per Section 8.10(a)(ix) of the Purchase Agreement.

5. Ratification. Except as expressly amended hereby, all other terms and provisions of the Purchase and Sale Agreement shall remain in full force and effect. The Parties acknowledge that the Purchase and Sale Agreement, as amended hereby, is ratified and confirmed to be in full force and effect and that all rights, powers and duties created thereunder or existing thereby are ratified and confirmed in all respects. El Paso hereby acknowledges that it shall guarantee the Sellers’ additional obligations under Section 2 hereunder in the same manner and to the same extent as it is liable for the Sellers’ obligations under the El Paso Guarantee.

6. Execution in Counterparts. For the convenience of the Parties, this Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7. Governing Law. TIDS AMENDMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES (INCLUDING ANY CLAIMS MADE IN CONTRACT, TORT OR OTHERWISE RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment on the Effective Date.

SELLER:	EP ENERGY, L.L.C.


	By:	/s/ John Hopper
	Name:	John Hopper
	Title:	Vice President

SELLER:	EP ENERGY HOLDING COMPANY


	By:	/s/ John Hopper
	Name:	John Hopper
	Title:	Vice President

SELLER:	EL PASO BRAZIL, L.L.C.


	By:	/s/ Antonio de Pinho
	Name:	Antonio de Pinho
	Title:	President

SELLER:	EP PRODUCTION INTERNATIONAL CAYMAN COMPANY


	By:	/s/ Francis Olmsted III
	Name:	Francis Olmsted III
	Title:	Director

PURCHASER:	EPE ACQUISITION, LLC


	By:	/s/ Sam Oh
	Name:	Sam Oh
	Title:	Vice President

[Signatures continued on the following page]

Signature page to Amendment No. 2 to the PSA

	THE UNDERSIGNED IS EXECUTING THIS AGREEMENT SOLELY FOR PURPOSES OF SECTIONS 2 AND 5 AND FOR NO OTHER PURPOSE.

	ELPASOLLC


	By:	/s/ John Hopper
	Name:	John Hopper
	Title:	Vice President

Signature page to Amendment No. 2 to the PSA

Exhibit 3.1

Delaware

The first State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY LLC” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF FORMATION, FILED THE TWENTY-THIRD DAY OF MARCH, A.D. 2012, AT 5:35 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EVEREST ACQUISITION LLC” TO “EP ENERGY LLC”, FILED THE TWENTY-FOURTH DAY OF MAY, A.D. 2012, AT 9:28 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY LLC”.


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
5129536 8100H 120919677 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION: DATE:	9768587 08-09-12

State of Delaware
Secretary of State
Division of Corporations
Delivered 05:35 PM 03/23/2012
FILED 05:35 PM 03/23/2012
SRV 120350646 - 5129536 FILE

CERTIFICATE OF FORMATION

EVEREST ACQUISITION LLC

The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Title 6, Chapter 18 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the “ Delaware Limited Liability Company Act ”), hereby certifies that:

FIRST : The name of the limited liability company (hereinafter called the “ limited liability company ”) is Everest Acquisition LLC.

SECOND : The address of the registered office of the limited liability company in the State of Delaware is c/o the Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware, 19808.

THIRD : The name and address of the registered agent required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act is the Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware, 19808.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation on March 23, 2012.

	/s/ Jaime A. Madell
	Name:	Jaime A. Madell
	Title:	Authorized Person

Signature Page to Certificate of Formation of Everest Acquisition LLC

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:33 AM 05/24/2012
		FILED 09:28 AM 05/24/2012
		SRV 120623632 - 5129536 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EVEREST ACQUISITION LLC

The undersigned, desiring to amend the Certificate of Formation of Everest Acquisition LLC (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST:	The name of the LLC is:

	Everest Acquisition LLC

SECOND:	The article numbered “FIRST” of the Certificate of Formation of the LLC shall be amended as follows:

	“ FIRST : The name of the limited liability company (hereinafter called the “ limited liability company ”) is EP Energy LLC .”

THIRD:	This Amendment to the Certificate of Formation shall be effective on the date and at the time filed.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 24 th day of May, 2012.

	EVEREST ACQUISITION LLC


By:	/s/ Sam Oh
	Name:	Sam Oh
	Title:	Vice President

Exhibit 3.2

EXECUTION VERSION

LIMITED LIABILITY COMPANY AGREEMENT

EVEREST ACQUISITION LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (this “ Agreement ”), dated as of March 29, 2012, of EVEREST ACQUISITION LLC, a Delaware limited liability company (the “ Company ”), is adopted and entered into by the sole member of the Company, EPE Holdings LLC, a Delaware limited liability company (the “ Sole Member ”), pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq. ), as amended from time to time (the “ Act ”), and the terms of this Agreement.

WHEREAS, the Company has heretofore been formed as a limited liability company under the Act pursuant to a Certificate of Formation filed with the Secretary of State of the State of Delaware on March 23, 2012;

WHEREAS, the Sole Member agrees that membership in and management of the Company shall be governed by the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the covenants and agreements herein made and other good and valuable consideration, the Sole Member hereby agrees as follows:

1. Name . The name of the Company is “EVEREST ACQUISITION LLC”.

2. Formation . The Company was formed upon the execution of the Certificate of Formation of the Company by Jaime A. Madell and the filing of such Certificate of Formation on March 23, 2012 with the Secretary of State of the State of Delaware, Jaime A. Madell being authorized to take such actions.

3. Purpose . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing. The Company shall have the authority to take all actions necessary or convenient to accomplish its purposes and operate its business as described in this Section 3.

4. Registered Office and Registered Agent . The registered office of the Company in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware, 19808, and the name of its registered agent at such address is the Corporation Service Company. The Sole Member may change the registered office and registered agent of the Company from time to time.

5. Principal Place of Business . The principal place of business of the Company is c/o Apollo Management VII, L.P., 9 West 57th Street, 43rd Floor, New York, NY 10019. The Sole Member may change the office locations of the Company from time to time.

6. Sole Member . The name and business address of the Sole Member is: EPE Holdings LLC, c/o Apollo Management VII, L.P., 9 West 57 th Street, New York, New York 10019. The initial ownership interest of the Sole Member is 100%.

7. Management .

(a) Except as otherwise expressly provided for in this Agreement, the Company shall be managed by the Sole Member in accordance with Section 18-402 of the Act. The Sole Member shall be deemed to be a “manager” for the purposes of applying the Act, unless the context otherwise requires, and shall have and be subject to all of the duties and liabilities of a “manager” provided in the Act and, except as otherwise limited herein, have all powers, statutory or otherwise, possessed by a manager under the laws of the State of Delaware. Except as otherwise provided in this Agreement, any action to be taken in the name and on behalf of the Company shall require the prior approval of the Sole Member and the actions of the Sole Member shall bind the Company. The Sole Member may take any and all actions (including, without limitation, executing, delivering and performing on behalf of the Company any and all contracts, agreements, certificates, undertakings or other documents or instruments) and do any and all things necessary, desirable, convenient or incidental to carry on the business and purposes of the Company. The Sole Member may execute any contract, agreement, certificate, undertaking or other document or instrument as a “Managing Member”, a “Member”, a “Manager” or an “Authorized Person”. The Sole Member may delegate any responsibility or authority to any officer, employee or agent of the Company.

(b) The Sole Member may from time to time, in its sole discretion, appoint any person as an officer of the Company, holding such titles and having such duties as determined by the Sole Member. Each officer of the Company shall be subject to removal with or without cause at any time by the Sole Member. Each of the individuals set forth on Schedule 1 hereto shall initially serve in the offices set forth opposite the name of such individual until the earlier of his retirement, removal, death or disability. Schedule 1 shall be amended to reflect any changes to any officers of the Company. Except as otherwise provided in this Agreement, the action of any officer (including, without limitation, the execution and delivery by any officer, on behalf of the Company, of any and all contracts, agreements, certificates, undertakings or other documents or instruments) pursuant to authority granted by the Sole Member shall bind the Company.

(c) Notwithstanding anything to the contrary contained in Sections 7(a) and 7(b), any officer of the Company is empowered and authorized to take actions in the name and on behalf of the Company that are purely ministerial and administrative in nature, including, without limitation, to execute, file and record or cause

to be executed, filed and recorded all such certificates and documents, including amendments to the Certificate of Formation, and to do or cause to be done such other acts as may be appropriate to comply with all requirements for the formation, continuation and operation of a limited liability company, the ownership of property, the establishment and opening of one or more bank accounts and the conduct of business under the laws of the State of Delaware and any other jurisdiction in which the Company may own property or conduct business.

(d) Any person dealing with the Company may rely upon a certificate signed by the Sole Member or any officer of the Company as to: (i) the identity of the Sole Member or any officer of the Company; and (ii) the person or persons who are authorized to execute and deliver any contract, agreement, certificate, undertaking or other document or instrument on behalf of the Company.

8. Capital Contributions .

(a) The Sole Member shall have no obligation to make any capital contributions to the Company, but may make such capital contributions to the Company as it may deem necessary or advisable in connection with the business of the Company from time to time.

(b) The provisions of this Section 8 are intended solely to benefit the Sole Member and, to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company other than the Sole Member (and no such creditor of the Company shall be a third party beneficiary of this Agreement). The Sole Member shall not have a duty or obligation to any creditor of the Company to make any contribution to the Company or to issue any call for capital pursuant to this Section 8.

9. Allocations of Profits and Losses . The Company’s profits and losses shall be allocated 100% to the Sole Member.

10. Allocations of Profits and Losses for Tax Purposes . For federal income tax purposes, all items of income, gain, loss, deduction or credit for any year shall be allocated in accordance with the manner in which such items of income, gain, deduction or loss affected the amounts which were either credited or charged to the capital account of the Sole Member during such year.

11. Tax Matters . The Sole Member and the Company intend that the Company be treated as an entity disregarded from its owner for U.S. federal income tax purposes and will file such necessary and appropriate forms in furtherance thereof.

12. Distributions . Distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Sole Member.

13. Restrictions on Transfer . The Sole Member may offer, sell, assign, mortgage, transfer, pledge, hypothecate or otherwise dispose of or encumber, in whole or in part, directly or indirectly (“ Transfer ”), its interest in the Company at any time in its

sole discretion. In the event of any such Transfer (other than in the case of a mortgage, pledge or hypothecation of interest in the Company), the transferee shall as a condition to such Transfer execute a counterpart to this Agreement pursuant to which it agrees to be bound by the terms hereof, and any representation letter requested by the Sole Member to assure compliance with applicable laws (including the absence of any registration requirement or other obligation imposed on the Company or the Sole Member as a result of such Transfer).

14. Admission of Additional or Substitute Member . Additional members and a substitute Sole Member may be admitted to the Company at any time with the prior written consent of the Sole Member. Prior to the admission of any such additional members of the Company, the Sole Member shall amend this Agreement to make such changes as the Sole Member shall determine to reflect the fact that the Company shall have more than one member and each additional member shall execute and deliver a counterpart of this Agreement, as amended.

15. Liability of Sole Member and Officers .

(a) Neither the Sole Member, any officer of the Company nor any of their respective affiliates (as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, and used herein, “ Affiliates ”) shall be liable to the Company, any member of the Company, any officer of the Company or any of their respective Affiliates for any action taken or omitted to be taken by the Sole Member, such officer or any of their respective Affiliates in good faith and with the belief that such action or omission was in the best interest of the Company, so long as such action or omission is not in violation of the provisions hereof and does not constitute fraud, gross negligence or willful misconduct. Neither the Sole Member, any officer of the Company nor any of their respective Affiliates shall be liable to the Company, any member of the Company, any officer of the Company or any of their respective Affiliates for any action taken or omitted to be taken by any other member of the Company, any other officer of the Company or any of their respective Affiliates nor shall the Sole Member or any officer of the Company (in the absence of fraud, gross negligence or willful misconduct by either Member or such officer, as the case may be) be liable to the Company, any member of the Company or any officer of the Company for any action or omission of any employee or agent of the Company.

(b) The Sole Member shall not be obligated to restore by way of capital contribution or otherwise any deficit in its capital account (if such deficit occurs).

16. Limited Liability of Members . Except as otherwise expressly set forth herein or in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Sole Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

17. Indemnification .

(a) Indemnification of Protected Persons . To the fullest extent permitted by law, the Company shall indemnify, hold harmless, protect and defend the Sole Member and each officer of the Company (each, a “ Protected Person ”) against any losses, claims, damages or liabilities, including legal fees and expenses incurred in investigating or defending against any such losses, claims, damages or liabilities, and any amounts expended in settlement of any claims approved by the Sole Member (collectively, “ Liabilities ”), to which any Protected Person may become subject:

(i) by reason of any act or omission or alleged act or omission (even if negligent) performed or omitted to be performed in connection with the activities of the Company;

(ii) by reason of the fact that it is or was acting in connection with the activities of the Company in any capacity or that it is or was serving at the request of the Company as a member, partner, shareholder, director, officer, employee or agent of any person; or

(iii) by reason of any other act or omission or alleged act or omission arising out of or in connection with the activities of the Company;

unless , in each case, such Liability results from such Protected Person’s own fraud, gross negligence or willful misconduct.

(b) Reimbursement of Expenses . The Company shall promptly reimburse (and/or advance to the extent reasonably required) each Protected Person for reasonable legal or other expenses (as incurred) of each Protected Person in connection with investigating, preparing to defend or defending any claim, lawsuit or other proceeding relating to any Liabilities for which the Protected Person may be indemnified pursuant to this Section 17; provided , that such Protected Person executes a written undertaking to repay the Company for such reimbursed or advanced expenses if it is finally judicially determined that such Protected Person is not entitled to the indemnification provided by this Section 17.

(c) Survival of Protection . The provisions of this Section 17 shall continue to afford protection to each Protected Person regardless of whether such Protected Person remains in the position or capacity pursuant to which such Protected Person became entitled to indemnification under this Section 17 and regardless of any subsequent amendment to this Agreement; provided , that no such amendment shall reduce or restrict the extent to which these indemnification provisions apply to actions taken or omissions made prior to the date of such amendment.

18. Dissolution . The Company shall be dissolved and its affairs shall be wound up upon a decision to dissolve the Company made at any time by the Sole Member. In the absence of such a decision, the Company shall be dissolved and its affairs

wound up upon the bankruptcy or dissolution of the Sole Member or as otherwise specifically required by the Act.

19. Liquidation . Upon a dissolution pursuant to Section 18, the Company’s business and assets shall be liquidated in an orderly manner. The Sole Member shall designate a person to be the liquidator to wind up the affairs of the Company. In performing its duties, the liquidator is authorized to sell, distribute, exchange or otherwise dispose of Company assets in accordance with the Act in any manner that the liquidator shall determine.

20. Amendments . This Agreement may be amended only by a written instrument executed by the Sole Member; provided , however , that Schedule 1 may be amended in accordance with the provisions of this Agreement.

21. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company, any creditor of the Sole Member or any creditor of any officer of the Company.

22. Conflicts of Interest; Transactions with Affiliates . (a) The Sole Member and the Officers of the Company at any time and from time to time may engage in and possess interests in other business ventures of any and every type and description, independently or with others, including ones in competition with the Company, with no obligation to offer to the Company or the Sole Member or other officer the right to participate therein. The Sole Member and the officers of the Company may invest in, or provide services to, any person that directly or indirectly competes with the Company and shall have no obligation to present any business opportunity to the Company or the Sole Members, even if the opportunity is one that the Company might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. The Sole Member and the officers of the Company shall not be liable to the Company or the Sole Member for breach of any fiduciary or other duty solely by reason of the fact that the Sole Member or such officers pursue or acquire such business opportunity, direct such business opportunity to another person or fail to present such business opportunity to the Company.

(b) Transactions with Affiliates of the Company shall not be void, voidable or subject to change if made on terms that the Sole Member in good faith determines are no less favorable in the aggregate to the Company than would be obtainable on an arm’s-length basis from an unaffiliated third party. No party to such a transaction shall be obligated to obtain a fairness opinion concerning that transaction (for the avoidance of doubt, except to the extent, if at all, expressly set forth otherwise in any contract or binding agreement entered into by the Company). Nonetheless, an opinion provided by an independent third party valuation or similar firm to the effect that such a transaction is fair to the Company shall conclusively establish the fairness of that transaction.

23. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first above written.

SOLE MEMBER :

EPE HOLDINGS LLC


By:	/s/ Laurie D. Medley
	Name:	Laurie D. Medley
	Title:	Vice President & Assistant Secretary

Signature Page to Limited Liability Company Agreement of Everest Acquisition LLC

SCHEDULE 1

OFFICERS

(as of March 29, 2012)

President	Gregory Beard

Vice President	Sam Oh

Vice President & Secretary	John J. Suydam

Vice President & Assistant Secretary	Wendy F. Dulman

Vice President & Assistant Secretary	Katherine G. Newman

Vice President & Assistant Secretary	Laurie D. Medley

Vice President & Assistant Secretary	Cindy Z. Michel

Vice President & Assistant Secretary	Jessica L. Lomm

Exhibit 3.3

Delaware

The first State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EVEREST ACQUISITION FINANCE INC. “ AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE TWENTY-THIRD DAY OF MARCH, A.D. 2012, AT 5:34 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION, “EVEREST ACQUISITION FINANCE INC.”.


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
5129542 8100H 120919702 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768605
	DATE:	08-09-12

State of Delaware
Secretary of State
Division of Corporations
Delivered 05:34 PM 03/23/2012
FILED 05:34 PM 03/23/2012
SRV 120350668 - 5129542 FILE

CERTIFICATE OF INCORPORATION

EVEREST ACQUISITION FINANCE INC.

FIRST: The name of this corporation shall be Everest Acquisition Finance Inc.

SECOND: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware, 19808, and the name of its registered agent at such address is the Corporation Service Company.

THIRD: The purpose or purposes of the corporation shall be to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of stock which this corporation is authorized to issue is 1,000, all of which are without par value. All such shares are of one class and are shares of Common Stock.

FIFTH: The name and mailing address of the incorporator are as follows:

Name		Mailing Address
Jaime A. Madell		Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064

SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the bylaws.

SEVENTH: The personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by the provisions of paragraph (7) of subsection (b) of §102 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed, signed and acknowledged this Certificate of Incorporation this 23 rd day of March, 2012.

	/s/ Jaime A. Madell
	Jaime A. Madell
	Incorporator

Signature Page to Everest Acquisition Finance Inc. Certificate of Incorporation

Exhibit 3.4

BYLAWS

EVEREST ACQUISITION FINANCE INC.

ARTICLE I

OFFICES

Section 1. REGISTERED OFFICES. The registered office shall be in Wilmington, Delaware, or such other location as the Board of Directors may determine or the business of the corporation may require.

Section 2. OTHER OFFICES. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. PLACE OF MEETINGS. Meetings of stockholders shall be held at any place within or outside the State of Delaware as designated by the Board of Directors. In the absence of any such designation, stockholders’ meetings shall be held at the principal executive office of the corporation.

Section 2. ANNUAL MEETING OF STOCKHOLDERS. The annual meeting of stockholders shall be held each year on a date and a time designated by the Board of Directors. At each annual meeting directors shall be elected and any other proper business may be transacted.

Section 3. QUORUM; ADJOURNED MEETINGS AND NOTICE THEREOF. A majority of the stock issued and outstanding and entitled to vote at any meeting of stockholders, the holders of which are present in person or represented by proxy, shall constitute a quorum for the transaction of business except as otherwise provided by law, by the Certificate of Incorporation, or by these Bylaws. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum and the votes present may continue to transact business until adjournment. If, however, such quorum shall not be present or represented at any meeting of the stockholders, a majority of the voting stock represented in person or by proxy may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned

meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat.

Section 4. VOTING. When a quorum is present at any meeting, in all matters other than the election of directors, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, or the Certificate of Incorporation, or these Bylaws, a different vote is required in which case such express provision shall govern and control the decision of such question. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.

Section 5. PROXIES. At each meeting of the stockholders, each stockholder having the right to vote may vote in person or may authorize another person or persons to act for him by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than three years prior to said meeting, unless said instrument provides for a longer period. All proxies must be filed with the Secretary of the corporation at the beginning of each meeting in order to be counted in any vote at the meeting. Each stockholder shall have one vote for each share of stock having voting power, registered in his name on the books of the corporation on the record date set by the Board of Directors as provided in Article VI, Section 5 hereof.

Section 6. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President and shall be called by the President or the Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding, and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7. NOTICE OF STOCKHOLDERS’ MEETINGS. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. The written notice of any meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.

city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 9. STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in Delaware, its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered in the manner required by this Section 9 to the corporation, written consents signed by a sufficient number of holders to take action are delivered to the corporation by delivery to its registered office in Delaware, its principal place of business or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

Section 1. THE NUMBER OF DIRECTORS. The Board of Directors shall consist of at least one (1) director. The number of directors shall be fixed or changed from time to time by the then appointed directors. The directors need not be stockholders. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and the directors elected shall hold office until his successor is elected and qualified; provided, however, that unless otherwise restricted by the Certificate of Incorporation or by law, any director or the entire Board of Directors may be removed, either with or without cause, from the Board of Directors at any meeting of stockholders by a majority of the stock represented and entitled to vote thereat.

remaining director. The directors so chosen shall hold office until the next annual election of directors and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

Section 3. POWERS. The property and business of the corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 4. PLACE OF DIRECTORS’ MEETINGS. The directors may hold their meetings and have one or more offices, and keep the books of the corporation outside of the State of Delaware.

Section 5. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.

Section 6. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the President on forty-eight hours’ notice to each director, either personally or by mail; special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors unless the Board consists of only one director; in which case special meetings shall be called by the President or Secretary in like manner or on like notice on the written request of the sole director.

Section 7. QUORUM. At all meetings of the Board of Directors a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the vote of a majority of the directors present at any meeting at which there is a quorum, shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these Bylaws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. If only one director is authorized, such sole director shall constitute a quorum.

Section 8. ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

Section 10. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the Bylaws of the corporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

Section 11. MINUTES OF COMMITTEE MEETINGS. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 12. COMPENSATION OF DIRECTORS. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

OFFICERS

Section 1. OFFICERS. The officers of this corporation shall be chosen by the Board of Directors and shall include a Chairman of the Board of Directors or a President, or both, and a Secretary. The corporation may also have, at the discretion of the Board of Directors, such other officers as are desired, including a Vice-Chairman of the Board of Directors, a Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents, one

or more Assistant Secretaries and Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 hereof. At the time of the election of officers, the directors may by resolution determine the order of their rank, if any. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these Bylaws otherwise provide.

Section 2. ELECTION OF OFFICERS. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall choose the officers of the corporation.

Section 3. SUBORDINATE OFFICERS. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

Section 4. TERM OF OFFICE; REMOVAL AND VACANCIES. The officers of the corporation shall hold office until their successors are chosen and qualify in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. If the office of any officer or officers becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.

Section 5. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be elected, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by these Bylaws. If there is no President, the Chairman of the Board shall in addition be the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 6 of this Article IV.

Section 6. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an officer, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. He shall preside at all meetings of the stockholders and, in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board of Directors. He shall be an ex-officio member of all committees and shall have the general powers and duties of management usually vested in the office of President and Chief Executive Officer of corporations, and shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

Section 7. VICE PRESIDENTS. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other duties as from time to time may be prescribed for them, respectively, by the Board of Directors.

Section 8. SECRETARY. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all

proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required by the Board of Directors. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or these Bylaws. He shall keep in safe custody the seal of the corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.

Section 9. ASSISTANT SECRETARY. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if there be no such determination, the Assistant Secretary designated by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys, and other valuable effects in the name and to the credit of the corporation, in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Chief Financial Officer and of the financial condition of the corporation. If required by the Board of Directors, he shall give the corporation a bond, in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors, for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 11. ASSISTANT TREASURER. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, or if there be no such determination, the Assistant Treasurer designated by the Board of Directors, shall, in the absence or disability of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

ARTICLE V

INDEMNIFICATION OF DIRECTORS AND OFFICERS

completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2. PROCEEDINGS BROUGHT BY THE CORPORATION. The corporation shall indemnify to the maximum extent permitted by law any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 3. INDEMNIFICATION AGAINST EXPENSES. To the extent that a director or officer of the corporation shall be successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article V, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

Section 4. AUTHORIZATION FOR INDEMNIFICATION AGAINST EXPENSES. Any indemnification under Sections 1 and 2 of this Article V (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 1 and 2 of this Article V. Such determination shall be made (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders. The corporation, acting through its Board of Directors or otherwise, shall

cause such determination to be made if so requested by any person who is indemnifiable under this Article V.

Section 5. ADVANCEMENT OF EXPENSES. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation as they are incurred and in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article V.

Section 6. INDEMNIFICATION OF EXPENSES NOT EXCLUSIVE. The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Article V shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

Section 7. DIRECTORS AND OFFICERS INSURANCE. The Board of Directors may authorize, by a vote of a majority of a quorum of the Board of Directors, the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article V.

Section 8. CORPORATION DEFINED; EFFECTS OF MERGER OR CONSOLIDATION. For the purposes of this Article V, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article V with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

Section 9. OTHER ENTERPRISES DEFINED. For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include service as a director or officer of the corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

Section 10. CESSATION OF DIRECTOR OR OFFICER STATUS. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 11. PROCEEDINGS INITIATED BY INDIVIDUAL. The corporation shall be required to indemnify a person in connection with an action, suit or proceeding (or part thereof) initiated by such person only if the action, suit or proceeding (or part thereof) was authorized by the Board of Directors of the corporation.

ARTICLE VI

CERTIFICATES OF STOCK

Section 1. CERTIFICATES. At the option of the Board of Directors, the stock of the corporation may be (i) uncertificated, evidenced by entries into the corporation’s stock ledger or other appropriate corporate books and records, as the Board of Directors may determine from time to time, or (ii) evidenced by a certificate signed by, or in the name of the corporation by, the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Chief Financial Officer or an Assistant Treasurer of the corporation, certifying the number of shares represented by the certificate owned by such stockholder in the corporation.

Section 2. SIGNATURES ON CERTIFICATES. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

Section 3. LOST CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 5. FIXED RECORD DATE. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date which shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors.

Section 6. REGISTERED STOCKHOLDERS. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware.

ARTICLE VII

GENERAL PROVISIONS

Section 1. DIVIDENDS. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.

Section 2. PAYMENT OF DIVIDENDS; DIRECTORS’ DUTIES. Before payment of any dividend there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interests of the corporation, and the directors may abolish any such reserve.

Section 3. CHECKS. All checks or demands for money and notes of the corporation shall be signed by such officer or officers as the Board of Directors may from time to time designate.

Section 4. FISCAL YEAR. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 5. CORPORATE SEAL. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 6. MANNER OF GIVING NOTICE. Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram.

Section 7. WAIVER OF NOTICE. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE IX

AMENDMENTS

AMENDMENT BY DIRECTORS OR STOCKHOLDERS. These Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Certificate of Incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.

* * * * *

Exhibit 3.5

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY GLOBAL LLC” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE SIXTH DAY OF DECEMBER, A.D. 1999, AT 10:45 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE THIRTEENTH DAY OF MARCH, A.D. 2003, AT 1:30 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE TWENTY-THIRD DAY OF MAY, A.D. 2003, AT 3:15 O’CLOCK P.M.

RESTATED CERTIFICATE, FILED THE TWENTY-THIRD DAY OF MAY, A.D. 2003, AT 3:16 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO PRODUCTION HOLDING COMPANY” TO “EL PASO EXPLORATION & PRODUCTION COMPANY”, FILED THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2005, AT 9:30 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2005, AT 10:30 O’CLOCK A.M.


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3136209 8100H 120919824 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768704

	DATE:	08-09-12

Delaware

The First State

RESTATED CERTIFICATE, FILED THE SIXTEENTH DAY OF FEBRUARY, A.D. 2006, AT 5:36 O’CLOCK P.M.

CERTIFICATE OF OWNERSHIP, FILED THE NINTH DAY OF JUNE, A.D. 2006, AT 8:41 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF OWNERSHIP IS THE THIRTIETH DAY OF JUNE, A.D. 2006, AT 9:15 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE TWELFTH DAY OF NOVEMBER, A.D. 2008, AT 12:20 O’CLOCK P.M.

CERTIFICATE OF OWNERSHIP, FILED THE THIRTIETH DAY OF JUNE, A.D. 2010, AT 3:34 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF OWNERSHIP IS THE FIRST DAY OF JULY, A.D. 2010.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO EXPLORATION & PRODUCTION COMPANY” TO “EP ENERGY CORPORATION”, FILED THE TWENTY-SEVENTH DAY OF JULY, A.D. 2011, AT 11:47 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE TWELFTH DAY OF MARCH, A.D. 2012, AT 3:42 O’CLOCK P.M.


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3136209 8100H 120919824 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768704

	DATE:	08-09-12

Delaware

The First State

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “EP ENERGY CORPORATION” TO “EP ENERGY, L.L.C.”, FILED THE TWELFTH DAY OF MARCH, A.D. 2012, AT 3:43 O’CLOCK P.M.

CERTIFICATE OF FORMATION, FILED THE TWELFTH DAY OF MARCH, A.D. 2012, AT 3:43 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EP ENERGY, L.L.C.” TO “EP ENERGY GLOBAL LLC”, FILED THE TWENTY-FOURTH DAY OF MAY, A.D. 2012, AT 9:27 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY GLOBAL LLC”.


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3136209 8100H 120919824 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768704

	DATE:	08-09-12

		STATE OF DELAWARE
		SECRETARY OF STATE
		DIVISION OF CORPORATIONS
		FILED 10:45 AM 12/06/1999
		991519121 - 3136209

CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION HOLDING COMPANY

FIRST: The name of the Corporation is:

El Paso Production Holding Company

SECOND: The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of the registered agent at the above address is The Corporation Trust Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (“GCL”).

FOURTH: The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value One Dollar ($1.00) per share.

Shares of stock of the Corporation whether with or without par value, of any class or classes hereby or hereafter authorized may be issued by the Corporation from time to time for such consideration permitted by law as may be fixed from time to time by the Board of Directors.

FIFTH: Unless required by the by-laws, the election of the Board of Directors need not be by written ballot.

Upon the filing of the Certificate of Incorporation, the powers of the incorporator shall terminate and the following named individuals, each of whose mailing address is set out beside his name, shall serve as director until the first meeting of the stockholders or until successors are elected and qualified:

	H. Brent Austin		1001 Louisiana Street
			Houston, Texas 77002

	Ralph Eads		1001 Louisiana Street
			Houston, Texas 77002

	John B. Holmes, Jr.		1001 Louisiana Street
			Houston, Texas 77002

	William A. Wise		1001 Louisiana Street
			Houston, Texas 77002

SIXTH: The Board of Directors shall have the power to make, alter, or repeal the by-laws of the Corporation, but the stockholders may make additional by-laws and may alter or repeal any by-law whether or not adopted by them.

SEVENTH: The Corporation shall indemnify its officers and directors to the full extent permitted by the GCL, as amended from time to time.

EIGHTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, for any act or omission, except that a director may be liable (i) for breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the GCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended. The elimination and limitation of liability provided herein shall continue after a director has ceased to occupy such position as to acts or omissions occurring during such director’s term or terms of office. Any amendment, repeal or modification of this Article Eighth shall not adversely affect any right of protection of a director of the Corporation existing at the time of such repeal or modification.

NINTH: Margaret E. Roark is the sole incorporator and her mailing address is 1001 Louisiana Street, Houston, Texas 77002.

	/s/ Margaret E. Roark
	Margaret E. Roark, Incorporator


Dated: December 6, 1999

		STATE OF DELAWARE
		SECRETARY OF STATE
		DIVISION OF CORPORATIONS
		FILED 01:30 PM 03/13/2003
		030167801 - 3136209

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION HOLDING COMPANY

EL PASO PRODUCTION HOLDING COMPANY, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

1. A new Article TENTH is hereby added to the Certificate of Incorporation as follows:

“TENTH: Notwithstanding any other provision of this Certificate of Incorporation or in the By-Laws to the contrary, the Board of Directors of the Corporation shall at all times include at least one Independent Director. To the fullest extent permitted by applicable law, including the General Corporation Law of the State of Delaware as in effect from time to time, the Independent Director’s fiduciary duty in respect of any decision on any matters referred to in Article ELEVENTH shall be to the Corporation (including its creditors) rather than solely to the Corporation’s shareholders. In furtherance of the foregoing, when voting on matters subject to the vote of the Board of Directors, including those matters specified in Article ELEVENTH, notwithstanding that the Corporation is not then insolvent, the Independent Director shall take into account the interests of the creditors of the Corporation as the interests of the Corporation. The Independent Director may not be removed without the appointment of a successor Independent Director. For purposes of this Article TENTH, (a) “Independent” shall mean, when used with respect to any Person, a Person who (i) is in fact independent, (ii) does not have any direct financial interest or any material indirect financial interest in the Corporation or in any Affiliate of the Corporation, and (iii) is not, and has not been for a period of at least five years immediately preceding the calendar year of the election of such Person as Independent Director, connected as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions with the Corporation, any Affiliate of the Corporation or any Person with a material direct or indirect financial interest in the Corporation; (b) “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing; and (c) “Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person. For purposes of this definition, control of a Person shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise.”

2. A new Article ELEVENTH shall be added to the Certificate of Incorporation as follows:

“ ELEVENTH : Notwithstanding any other provision of this Certificate of Incorporation or the By-Laws to the contrary, including, without limitation, Article THIRD and

Article SIXTH of this Certificate of Incorporation, and any provision of law that otherwise so empowers the Corporation, the Corporation shall not, without the affirmative vote or unanimous written consent of all the members of the Board of Directors (including, in each case, at least one Independent Director), do any of the following:

(a) dissolve or liquidate, or take corporate action in furtherance of any such action;

(b) consolidate or merge with or into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity;

(c) institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Corporation, or file a petition seeking the institution of bankruptcy or insolvency proceedings against the Corporation, or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Corporation or of a substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take corporate action in furtherance of any action;

(d) delete, amend, supplement or otherwise modify any provision of this Certificate of Incorporation; or

(e) delete, amend, supplement or otherwise modify any part of the Bylaws of the Corporation.

3. In lieu of a meeting and vote of stockholders, the stockholders entitled to vote have given unanimous written consent to this Certificate of Amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

4. This Certificate of Amendment was duly authorized and effected in accordance with the applicable provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, EL PASO PRODUCTION HOLDING COMPANY , has caused this certificate to be signed on its behalf by its Vice President, this 13th day of March 2003.

	EL PASO PRODUCTION HOLDING COMPANY


	/s/ John J. Hopper
	John J. Hopper
	Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 01:00 PM 05/23/2003
		FILED 03:15 PM 05/23/2003
		SRV 030338252 - 3136209 FILE

CERTIFICATE OF MERGER

merging

SABINE RIVER INVESTORS VI, L.L.C.

and

SABINE RIVER INVESTORS IX, L.L.C.

with and into

EL PASO PRODUCTION HOLDING COMPANY

Pursuant to Section 264 of the

General Corporation Law of the State of Delaware (“DGCL”)

and Section 18-209 of the

Delaware Limited Liability Company Act (“DLLCA”)

El Paso Production Holding Company, a Delaware corporation (the “Company”), for the purpose of merging (the “Merger”) Sabine River Investors VI, L.L.C., and Sabine River Investors IX, L.L.C., each a Delaware limited liability company (the “Subsidiaries”), with and into the Company, does hereby certify as follows:

FIRST: That the name and state of domicile of each of the constituent entities to the Merger is as follows:

Name		State of Domicile

Sabine River Investors VI, L.L.C.		Delaware
Sabine River Investors IX, L.L.C.		Delaware
El Paso Red River Holding Company		Delaware

SECOND: That an Agreement of Merger dated May 23, 2003 (the “Merger Agreement”), has been approved, adopted, certified, executed and acknowledged by each of the constituent entities to the Merger in accordance with Section 264(c) of the DGCL and Section 18-209 of the DLLCA.

THIRD: That the name of the surviving corporation is El Paso Production Holding Company.

FOURTH: That the existing Certificate of Incorporation of the Company shall be the Certificate of Incorporation of the surviving corporation.

FIFTH: That the effective date of the Merger shall be on May 23, 2003.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of the surviving corporation, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished by the surviving corporation upon request and without cost to any member of the Subsidiary, or to any stockholder of the Company.

IN WITNESS WHEREOF, El Paso Production Holding Company has caused this Certificate of Merger to be signed by David L. Siddall, its Vice President and attested by Margaret E. Roark, its Assistant Secretary, this 23rd day of May 2003.

		EL PASO PRODUCTION HOLDING COMPANY


		By:	/s/ David L. Siddall
			David L. Siddall
			Vice President


Attest:


By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 02:11 PM 05/23/2003
		FILED 03:16 PM 05/23/2003
		SRV 030338311 - 3136209 FILE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION HOLDING COMPANY

Pursuant to Sections 242 and 245 of the

General Corporation Law of the State of Delaware

El Paso Production Holding Company, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name of the corporation is El Paso Production Holding Company (the “Corporation”). The original certificate of incorporation was filed with the Secretary of State of the State of Delaware on December 6, 1999.

2. This Amended and Restated Certificate of Incorporation restates and amends the Certificate of Incorporation of the Corporation and has been adopted and approved in accordance with Section 242 and 245 of the General Corporation Law of the State of Delaware. Stockholder approval of this Amended and Restated Certificate of Incorporation was given by unanimous written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.

3. The text of the Certificate of Incorporation, as heretofore amended, is hereby amended and restated to read in its entirety as follows:

FIRST: The name of the Corporation is El Paso Production Holding Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (“GCL”).

FOURTH: The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value One Dollar ($1.00) per share.

FIFTH: Unless required by the by-laws, the election of the Board of Directors need not be by written ballot.

SEVENTH: The Corporation shall indemnify its officers and directors to the full extent permitted by the GCL, as amended from time to time.

IN WITNESS WHEREOF, EL PASO PRODUCTION HOLDING COMPANY, has caused this Amended and Restated Certificate of Incorporation to be signed on its behalf by its Vice President, this 23rd day of May 2003

	EL PASO PRODUCTION HOLDING COMPANY


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:25 PM 12/28/2005
		FILED 09:30 PM 12/28/2005
		SRV 051069298 - 3136209 FILE

CERTIFICATE OF AMENDMENT

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION HOLDING COMPANY (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of the Company (the “Board”), by the written consent of its sole member, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Amended and Restated Certificate of Incorporation of the Company:

RESOLVED that it is deemed advisable that effective at 10:30 a.m., Eastern Standard Time, on December 31, 2005, the Amended and Restated Certificate of Incorporation of this Company (the “Cert. of Inc.”) be amended, and that the Cert. of Inc. be so amended, by changing the Article thereof numbered “FIRST:” so that, as amended, said Article shall be and read as follows:

“FIRST: The name of the Corporation is El Paso Exploration & Production Company.”

SECOND: That in lieu of a meeting and vote of stockholders, the sole stockholder entitled to vote has given written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

FOURTH: That in accordance with the aforesaid amendment, the effective time and date of this Certificate of Amendment are 10:30 a.m., Eastern Standard Time, on December 31, 2005.

IN WITNESS WHEREOF, said EL PASO PRODUCTION HOLDING COMPANY has caused the foregoing Certificate of Amendment to be signed on its behalf by its President and attested by an Assistant Secretary, this 28th day of December 2005.

		EL PASO PRODUCTION HOLDING COMPANY


		/s/ Lisa A. Stewart
		Lisa A. Stewart
		President


Attest:


/s/ Margaret E. Roark
Margaret E. Roark, Assistant Secretary

Prod./Pipes Reorg. Step 13 of 18

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 05:47 PM 02/16/2006
		FILED 05:36 PM 02/16/2006
		SRV 060149604 - 3136209 FILE

RESTATED

CERTIFICATE OF INCORPORATION

EL PASO EXPLORATION & PRODUCTION COMPANY

Pursuant to Section 245 of the

General Corporation Law of the State of Delaware

El Paso Exploration & Production Company, a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify:

1. The name of the corporation is El Paso Exploration & Production Company (the “Corporation”). The Corporation was originally incorporated under the name El Paso Production Holding Company. The original certificate of incorporation was filed with the Secretary of State of the State of Delaware on December 6, 1999.

2. This Restated Certificate of Incorporation has been adopted and approved in accordance with Section 245 of the General Corporation Law of the State of Delaware, and this Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Corporation’s Amended and Restated Certification as theretofore amended or supplemented.

3. The text of the Restated Certificate of Incorporation is hereby restated and integrated to read in its entirety as follows:

FIRST : The name of the Corporation is El Paso Exploration & Production Company.

SECOND : The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of the registered agent at the above address is The Corporation Trust Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (“GCL”).

FOURTH : The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value One Dollar ($1.00) per share. Shares of stock of the Corporation whether with or without par value, of any class or classes hereby or hereafter authorized may be issued by the Corporation from time to time for such consideration permitted by law as may be fixed from time to time by the Board of Directors.

FIFTH: Unless required by the by-laws, the election of the Board of Directors need not be by written ballot.

SIXTH: The Board of Directors shall have the power to make, alter, or repeal the by-laws of the Corporation, but the stockholders may make additional by-laws and may alter or repeal any by-law whether or not adopted by them.

SEVENTH : The Corporation shall indemnify its officers and directors to the full extent permitted by the GCL, as amended from time to time.

EIGHTH : No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, for any act or omission, except that a director may be liable (i) for breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the GCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended. The elimination and limitation of liability provided herein shall continue after a director has ceased to occupy such position as to acts or omissions occurring during such director’s term or terms of office. Any amendment, repeal or modification of this Article Eighth shall not adversely affect any right of protection of a director of the Corporation existing at the time of such repeal or modification.

IN WITNESS WHEREOF, the undersigned has caused this Restated Certificate of Incorporation to be executed by a duly authorized officer this 15th day of February 2006.

	EL PASO EXPLORATION & PRODUCTION COMPANY


	By:	/s/ Thomas M. Hart
		Thomas M. Hart
		Vice President

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

MEDICINE BOW ENERGY CORPORATION

INTO

EL PASO EXPLORATION & PRODUCTION COMPANY

(Pursuant to Section 253 of the General Corporation Law of the State of Delaware.)

El Paso Exploration & Production Company, a Delaware corporation (the “Company”), for the purpose of merging Medicine Bow Energy Corporation, a Delaware corporation (the “Subsidiary”), with and into the Company, does hereby certify as follows:

FIRST: That the name and state of incorporation of each constituent corporation of the merger is as follows:

Name		State of Incorporation

Medicine Bow Energy Corporation		Delaware
El Paso Exploration & Production Company		Delaware

SECOND: That the Company owns all of the outstanding shares of each class of the capital stock of the Subsidiary.

THIRD: Attached hereto as Exhibit A is a true and correct copy of the resolutions adopted by the Company’s Board of Directors dated as of the 31st day of May 2006, pursuant to which the Company determined to merge into itself the Subsidiary on the conditions set forth in such resolutions.

FOURTH: That this Certificate of Ownership and Merger and the merger contemplated hereby shall be effective at 9:15 a.m., Eastern Daylight Time, on June 30, 2006.

			State of Delaware
			Secretary of State
			Division of Corporations
			Delivered 09:16 PM 06/09/2006
			FILED 08:41 PM 06/09/2006
			SRV 060562319 - 3136209 FILE

IN WITNESS WHEREOF, said El Paso Exploration & Production Company, has caused the foregoing Certificate of Ownership and Merger to be signed by Lisa A. Stewart, its President, and attested by Margaret E. Roark, one of its Assistant Secretaries, this 31st day of May 2006.

		EL PASO EXPLORATION & PRODUCTION COMPANY


		By:	/s/ Lisa A. Stewart
			Lisa A. Stewart
			President


Attest:


By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

EXHIBIT A

WHEREAS, this Company is the owner of all of the issued and outstanding shares of common stock of Medicine Bow Energy Corporation, a Delaware corporation (the “Subsidiary”);

WHEREAS, effective on June 30, 2006, this Company desires to merge the Subsidiary with and into itself and to possess all of the estate, property, rights, privileges and franchises of the Subsidiary (the “Subsidiary”); and

WHEREAS, the Board of Directors of this Company believes it is in the best interest of this Company to merge the Subsidiary with and into itself;

NOW, THEREFORE, BE IT RESOLVED that this Company merge the Subsidiary with and into itself, that the separate existence of the Subsidiary cease on the Effective Date (hereafter defined), and that this Company, as the surviving Company of the merger pursuant to Section 253 of the General Corporation Law of the State of Delaware (the “DGCL”), continue to exist by virtue of and be governed by the laws of the State of Delaware (such actions, collectively, being called the “Merger”).

RESOLVED that the Merger be, and hereby is, approved.

RESOLVED that the Merger shall be effective on June 30, 2006 (such date being referred to herein as the “Effective Date”).

RESOLVED that, on the Effective Date, this Company, without further action, as provided by the laws of the State of Delaware, succeed to and possess all the rights, privileges, powers, and franchises, of a public as well as of a private nature, of the Subsidiary; and all property, real, personal and mixed, and all debts due on whatsoever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to the Subsidiary shall be vested in this Company without further act or deed; and all property, rights, privileges, powers and franchises, and all and every other interest shall thereafter be as effectively the property of this Company as they were of the Subsidiary, and the title to any real estate, or any interest therein, vested in this Company or the Subsidiary by deed or otherwise shall not revert or be in any way impaired by reason of the Merger. This Company shall thereafter be responsible and liable for all debts, liabilities, and duties of the Subsidiary, which may be enforced against this Company to the same extent as if those debts, liabilities, and duties had been incurred or contracted by this Company. Neither the rights of

creditors nor any liens upon the property of the Subsidiary or this Company shall be impaired by the Merger.

RESOLVED that, on the Effective Date, each share of common stock of the Subsidiary be cancelled.

RESOLVED that any officer of this Company be, and each of them hereby is, authorized and directed to execute and acknowledge in the name and on behalf of this Company a Certificate of Ownership and Merger setting forth, among other things, a copy of these resolutions and the date of their adoption; and that each such officer is hereby authorized and directed to cause the executed Certificate of Ownership and Merger to be filed in the Office of the Secretary of State of the State of Delaware and to cause certified copies of that Certificate to be recorded in the Offices of the Recorder of Deeds of the appropriate counties, all in accordance with Sections 103 and 253 of the DGCL.

RESOLVED that the proper officers be, and each of them hereby is, authorized and empowered, in the name and on behalf of this Company, or any Subsidiary of this Company, to do and perform, or cause to be done and performed, all such acts, deeds and things, to make, execute, and deliver, or cause to be made, executed, and delivered, all such agreements, guaranties, notes, evidences of borrowings, undertakings, documents, instruments and certificates as each such officer may deem necessary or appropriate to effectuate and carry out fully the purpose and intent of the foregoing resolutions.

RESOLVED that at any time prior to the Effective Date, the Board of Directors of this Company may terminate the Merger and if, at the time of such termination, a Certificate of Ownership and Merger has been filed with the Secretary of State of the State of Delaware, any officer of this Company be, and each of them hereby is, authorized and directed to execute and acknowledge in the name and on behalf of this Company a Certificate of Termination.

RESOLVED that any and all actions heretofore taken by any officer of this Company, or any Subsidiary of this Company, in connection with the foregoing resolutions be, and hereby are, ratified and approved.

CERTIFICATE OF MERGER

EL PASO E&P INTERNATIONAL CORPORATION,

a Delaware corporation

into

EL PASO EXPLORATION & PRODUCTION COMPANY,

a Delaware corporation

The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

Name		State of Incorporation:
El Paso E&P International Corporation		Delaware
El Paso Exploration & Production Company		Delaware

SECOND: That an Agreement and Plan of Merger among the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of subsection (c) of Section 251 of the General Corporation Law of the State of Delaware.

THIRD: That the name of the surviving corporation is El Paso Exploration & Production Company.

FOURTH: That the existing certificate of incorporation of El Paso Exploration & Production Company shall be the certificate of incorporation of the surviving corporation.

FIFTH: That the executed Agreement and Plan of Merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is 1001 Louisiana Street, Houston, Texas 77002.

			State of Delaware
			Secretary of State
			Division of Corporations
			Delivered 12:23 PM 11/12/2008
			FILED 12:20 PM 11/12/2008
			SRV 081109470 - 3136209 FILE

SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation.

SEVENTH: That this Certificate of Merger shall be effective upon filing.

IN WITNESS WHEREOF, said El Paso Exploration & Production Company has caused this certificate to be signed by Brent J. Smolik, its President, and attested by Joyce Allen-Dennis, its Assistant Secretary this 7th day of November, 2008.

		EL PASO EXPLORATION & PRODUCTION COMPANY


		By:	/s/ Brent J. Smolik
		Name:	Brent J. Smolik
		Title:	President


Attest:


By:	/s/ Joyce Allen-Dennis
	Joyce Allen-Dennis, Assistant Secretary

	*State of Delaware*
	*Secretary of State*
	*Division of Corporations*
	*Delivered 03:39 PM 06/30/2010*
	*FILED 03:34 PM 06/30/2010*
	*SRV 100705955 - 3136209 FILE*

CERTIFICATE OF OWNERSHIP AND MERGER

merging

EL PASO E&P INTERNATIONAL HOLDING COMPANY

into

EL PASO EXPLORATION & PRODUCTION COMPANY

(Pursuant to Section 253 of the General Corporation Law of the State of Delaware.)

El Paso Exploration & Production Company, a Delaware corporation (the “Company”), for the purpose of merging El Paso E&P International Holding Company, a Delaware corporation (the “Subsidiary”) with and into this Company, does hereby certify as follows:

FIRST: That the name and state of incorporation of each constituent corporation of the merger is as follows:

	Name		State of Incorporation

	El Paso E&P International Holding Company		Delaware
	El Paso Exploration & Production Company		Delaware

SECOND: That the Company owns all of the outstanding shares of each class of the capital stock of the Subsidiary.

THIRD: Attached hereto as Exhibit A is a true and correct copy of the resolutions adopted by the Company’s Board of Directors dated as of the 24th day of June 2010, pursuant to which the Company determined to merge into itself the Subsidiary on the conditions set forth in such resolutions.

FOURTH: That this Certificate of Ownership and Merger and the merger contemplated hereby shall be effective on July 1, 2010.

IN WITNESS WHEREOF, said El Paso Exploration & Production Company, has caused this certificate to be signed by Francis C. Olmsted III, its Vice President, and attested by Joseph C. James, its Assistant Secretary, this 24th day of June 2010.

	EL PASO EXPLORATION & PRODUCTION COMPANY


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

Attest:

By:	/s/ Joseph C. James
	Joseph C. James, Assistant Secretary

EXHIBIT A

WHEREAS, this Company is the owner of all of the issued and outstanding shares of common stock of El Paso E&P International Holding Company, a Delaware corporation (the “Subsidiary”);

WHEREAS, this Company desires to merge the Subsidiary with and into itself and to possess all of the estate, property, rights, privileges and franchises of the Subsidiary; and

WHEREAS, the Board of Directors of this Company believes it is in the best interest of this Company to merge the Subsidiary with and into itself;

RESOLVED that the Merger be, and hereby is, approved.

RESOLVED that the Merger shall be effective on July 1, 2010 (such date being referred to herein as the “Effective Date”).

RESOLVED that, on the Effective Date, this Company, without further action, as provided by the laws of the State of Delaware, succeed to and possess all the rights, privileges, powers, and franchises, of a public as well as of a private nature, of the Subsidiary; and all property, real, personal and mixed, and all debts due on whatsoever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to the Subsidiary shall be vested in this Company without further act or deed; and all property, rights, privileges, powers and franchises, and all and every other interest shall thereafter be as effectively the property of this Company as they were of the Subsidiary; and the title to any real estate, or any interest therein, vested in this Company or the Subsidiary by deed or otherwise shall not revert or be in any way impaired by reason of the Merger. This Company shall thereafter be responsible and liable for all debts, liabilities, and duties of the Subsidiary, which may be enforced against this Company to the same extent as if those debts, liabilities, and duties had been incurred or contracted by this Company. Neither the rights of creditors nor any liens upon the property of the Subsidiary or this Company shall be impaired by the Merger.

RESOLVED that, on the Effective Date, each share of common stock of the Subsidiary be cancelled.

RESOLVED that any officer of this Company be, and each of them hereby is, authorized and directed to execute and acknowledge in the name and on behalf of this

Company a Certificate of Ownership and Merger setting forth, among other things, a copy of these resolutions and the date of their adoption; and that each such officer is hereby authorized and directed to cause the executed Certificate of Ownership and Merger to be filed in the Office of the Secretary of State of the State of Delaware and to cause certified copies of that Certificate to be recorded in the Offices of the Recorder of Deeds of the appropriate counties, all in accordance with Sections 103 and 253 of the DGCL.

	*State of Delaware*
	*Secretary of State*
	*Division of Corporations*
	*Delivered 11:52 AM 07/27/2011*
	*FILED 11:47 AM 07/27/2011*
	*SRV 110862141 - 3136209 FILE*

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

El Paso Exploration & Production Company (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of the Company, by the unanimous written consent of its members, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of the Company:

RESOLVED that it is deemed advisable that the Certificate of Incorporation of this Company be amended, and that said Certificate of Incorporation be so amended, by changing the Article thereof numbered “FIRST:” so that, as amended, said Article shall be and read as follows:

FIRST: The name of the corporation is EP Energy Corporation

SECOND: That in lieu of a meeting and vote of stockholders, the stockholders entitled to vote have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said El Paso Exploration & Production Company has caused this certificate to be signed on its behalf by a Vice President and attested by an Assistant Secretary, this 27 th day of July 2011.

	EL PASO EXPLORATION & PRODUCTION COMPANY


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

Attest:

/s/ Joseph C. James
Joseph C. James, Assistant Secretary

State of Delaware

Secretary of State

Division of Corporations

Delivered 03:42 PM 03/12/2012

FILED 03:42 PM 03/12/2012

SRV 120300717 - 3136209 FILE

CERTIFICATE OF MERGER

between

EP ENERGY CORPORATION

AND

EL PASO EPE MERGER COMPANY

The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

	Name		State of Incorporation:
	EP Energy Corporation		Delaware
	El Paso EPE Merger Company		Delaware

THIRD: That the name of the surviving corporation in the merger is EP Energy Corporation.

FOURTH: That the existing certificate of incorporation of EP Energy Corporation shall be the certificate of incorporation of the surviving corporation.

SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation.

SEVENTH: That this Certificate of Merger shall be effective upon filing with the Delaware Secretary of state in the state of Delaware.

IN WITNESS WHEREOF, said EP Energy Corporation has caused this certificate to be signed by Francis C. Olmsted III, its Vice President this 8 th day of March, 2012.

	EP ENERGY CORPORATION


	By:	/s/ Francis C. Olmsted III
	Name:	Francis C. Olmsted III
	Title:	Vice President

State of Delaware

Secretary of State

Division of Corporations

Delivered 03:42 PM 03/12/2012

FILED 03:43 PM 03/12/2012

SRV 120300728 - 3136209 FILE

CERTIFICATE OF CONVERSION

FROM A CORPORATION TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 266

OF THE DELAWARE

GENERAL CORPORATION LAW

AND SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of EP Energy Corporation (the “Corporation”) effective on March 9, 2012, is being duly executed and filed by an authorized person of the Corporation to convert the Corporation to a Delaware limited liability company in accordance with Section 266 of the Delaware General Corporation Law (the “DGCL”) and Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Corporation set forth in its original Certificate of Incorporation was:

El Paso Production Holding Company

2. The name of the Corporation immediately prior to filing this Certificate of Conversion was:

EP Energy Corporation

3. The jurisdiction of the Corporation immediately prior to filing this Certificate of Conversion was:

Delaware

4. The jurisdiction where the Corporation was first created is:

Delaware

5. The date the Certificate of Incorporation of the Corporation was filed is:

December 6, 1999

6. The name of the limited liability company (the “LLC”) as set forth in its Certificate of Formation is:

EP Energy, L.L.C.

7. This conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the DLLCA.

8. This Certificate of Conversion shall be effective upon filing with the Delaware Secretary of state in the state of Delaware.

IN WITNESS WHEREOF, this Certificate of Conversion has been executed by an authorized person of the Corporation on the 9 th day of March, 2012.

	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

State of Delaware

Secretary of State

Division of Corporations

Delivered 03:42 PM 03/12/2012

FILED 03:43 PM 03/12/2012

SRV 120300728 - 3136209 FILE

CERTIFICATE OF FORMATION

EP ENERGY, L.L.C.

This Certificate of Formation of EP Energy, L.L.C. (the “LLC”) dated as of March 9, 2012, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST:		The name of the LLC formed hereby is:

		EP Energy, L.L.C.

SECOND:	The address of the registered office of the LLC in the State of Delaware is:

		Corporation Trust Center
		1209 Orange Street
		New Castle County
		Wilmington, Delaware 19801

THIRD:	The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

		The Corporation Trust Company
		Corporation Trust Center
		1209 Orange Street
		New Castle County
		Wilmington, Delaware 19801

FOURTH:	The Certificate of Formation shall be effective upon filing with the Delaware Secretary of state in the state of Delaware.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed, this 9 th day of March, 2012.

	/s/ Joseph C. James
	Joseph C. James
	Authorized Person

State of Delaware

Secretary of State

Division of Corporations

Delivered 09:33 AM 05/24/2012

FILED 09:27 AM 05/24/2012

SRV 120623622 - 3136209 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EP ENERGY, L.L.C.

The undersigned, desiring to amend the Certificate of Formation of EP Energy, L.L.C. (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST:	The name of the LLC is:

	EP Energy, L.L.C.

SECOND:	The article numbered “FIRST” of the Certificate of Formation of the LLC shall be amended as follows:

	“FIRST:	The name of the LLC formed hereby is:

		EP Energy Global LLC”

THIRD:	This Amendment to the Certificate of Formation shall be effective on the date and at the time filed.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 24th day of May, 2012.

	EP ENERGY, L.L.C.


	By:	/s/ Joseph C. James
		Name: Joseph C. James
		Title: Assistant Secretary

Exhibit 3.6

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

EP ENERGY GLOBAL LLC

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of EP Energy Global LLC (the “Company”) is entered into effective as of the 24th day of May, 2012, by EP Energy LLC (the “Member”).

WHEREAS, the Company was formed under the name of EP Energy, L.L.C. as a limited liability company under the Act (as hereinafter defined) pursuant to the filing of the Certificate of Formation (as hereinafter defined) on March 12, 2012, and the execution of that certain Agreement of Limited Liability Company dated as of March 12, 2012, by the Member (the “Original Agreement”);

WHEREAS, on May 24, 2012, the Company changed its name to EP Energy Global LLC, evidenced by the filing of an Amended Certificate of Formation with the office of the Secretary of State of Delaware; and

WHEREAS, Everest Acquisition LLC amended and restated the Original Agreement on May 24, 2012 by entering into the Amended and Restated Limited Liability Company Agreement of the Company (the “Amended and Restated Agreement”); and

WHEREAS, on May 24, 2012, Everest Acquisition LLC changed its name to EP Energy LLC, evidenced by the filing of an Amended Certificate of Formation with the office of the Secretary of State of Delaware; and

WHEREAS, EP Energy LLC, as the sole Member (as hereinafter defined) of EP Energy Global LLC, desires to amend and restate the Amended and Restated Limited Company Agreement for the purposes and upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and covenants herein contained, EP Energy LLC does hereby agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions . Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding Law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Board ” has the meaning given such term in Section 6.01.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or Section 3.02.

“ Certificate of Conversion ” means the Certificate of Conversion filed with the Secretary of State of the State of Delaware effective as of March 12, 2012, to convert the Company from a Delaware corporation to a Delaware limited liability company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act).

“ Certificate of Formation ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware effective as of March 12, 2012, to form the Company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires.

“ Claim ” means any and all losses, claims, damages, liabilities (joint or several), expenses (including reasonable legal fees and expenses), judgments, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings (whether civil, criminal, administrative or investigative), deficiencies, levies, duties, imposts, remediation and cleanup costs and natural resources damages.

“ Director ” has the meaning given such term in Section 6.02.

“ Distributable Cash ” means cash (in U.S. dollars) of the Company that the Member determines is available for distribution.

“ Interest ” means, with respect to any Member the ownership interest in the Company at any time, as set forth on Exhibit A, including the right of the Member to any and all benefits to which the Member may be entitled as provided in this Agreement, together with the obligations of the Member to comply with all the terms and provisions of this Agreement.

“ Law ” means any applicable constitutional provision, statute, act, code (including the Internal Revenue Code of 1986, as amended and in effect from time to time), law, regulation, rule, ordinance, order, decree, ruling, proclamation, notice, resolution, judgment, decision, declaration, policy statement or interpretative or advisory opinion or letter of a Governmental Authority having valid jurisdiction.

“ Member ” refers to the Member set forth in Exhibit A hereto and any other member or members admitted to the Company in accordance with this Agreement or any amendment or restatement hereof.

“ Person ” has the meaning set forth in the Act.

SECTION 1.02. Terms Generally . The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

ARTICLE II

FORMATION

SECTION 2.01. Name . The name of the Company shall be as set forth in the Preamble hereof. All business of the Company shall be conducted under such name and title to all property, real, personal, or mixed, owned by or leased to the Company shall be held in such name. Notwithstanding the preceding sentence, the Member may change the name of the Company or adopt such trade or fictitious names as it may determine.

SECTION 2.02. Formation and Term . The Company was first incorporated as a Delaware corporation under Delaware General Corporation Law on December 6, 1999. By filing the Certificate of Conversion and the Certificate of Formation, the Company has been converted and continued as a Delaware limited liability company under the Act. The term of the Company shall continue until terminated as provided in Article VIII hereof.

SECTION 2.03. Principal Place of Business . The principal place of business of the Company shall be located at 1001 Louisiana, Houston, Texas 77002. The Member may establish other offices at other locations.

SECTION 2.04. Agent for Service of Process . The Corporation Trust Company shall be the registered agent of the Company upon whom process against it may be served. The address of such agent within the State of Delaware is: Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member made contributions in the amounts shown in the records of the Company.

SECTION 3.02. Additional Capital Contributions . If at any time the Member shall determine that additional funds or property are necessary or desirable to meet the obligations or needs of the Company, the Member may make additional Capital Contributions.

SECTION 3.03. Limitation on Liability . The liability of the Member shall be limited to its Interest in the Company, and the Member shall not have any personal liability to contribute money to, or in respect of, the liabilities or the obligations of the Company, except as set forth in the Act.

SECTION 3.04. Withdrawal of Capital; Interest . The Member may not withdraw capital or receive any distributions, except as specifically provided herein. No interest shall be paid by the Company on any Capital Contributions.

ARTICLE IV

DISTRIBUTIONS

SECTION 4.01. Distributions . Except as otherwise provided in the Act, all Distributable Cash of the Company shall be distributed to the Member, or distributions in kind may be made to the Member at such times as the Member shall determine.

ARTICLE V

BOOKS AND RECORDS

SECTION 5.01. Books and Records . The Member shall keep or cause to be kept complete and accurate books of account and records that shall reflect all transactions and other matters and include all documents and other materials with respect to the Company’s business that are usually entered into and maintained by Persons engaged in similar businesses. All Company financial statements shall be accurate in all material respects, shall fairly present the financial position of the Company and the results of its operations and Distributable Cash and transactions in its reserve accounts, and shall be prepared in accordance with generally accepted accounting principles, subject, in the case of quarterly statements, to year-end adjustments. The books of the Company shall at all times be maintained at the principal office of the Company or at such other location as the Member decides.

ARTICLE VI

MANAGEMENT OF THE COMPANY

SECTION 6.01. Management by Board of Directors . The business and affairs of the Company shall be fully vested in, and managed by, a Board of Directors (the “Board”) and subject to the discretion of the Board, officers elected pursuant to Section 6.13. The Directors and officers shall collectively constitute “managers” of the Company within the meaning of the Act. Except as otherwise provided in this Agreement, the authority and functions of the Board, on the one hand, and of the officers, on the other hand, shall be identical to the authority and functions of the board of directors and officers, respectively, of a corporation organized under the General Corporation Law of the State of Delaware. The officers shall be vested with such powers and duties as are set forth in Section 6.13 and as are specified by the Board. Accordingly, except as otherwise specifically provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board, and the day-to-day activities of the Company shall be conducted on the Company’s behalf by the officers who shall be agents of the Company.

SECTION 6.02. Number; Qualification; Tenure

The number of directors constituting the Board shall be no less than two (each a “Director” and, collectively, the “Directors”), and may be fixed from time to time pursuant to a resolution adopted by the Member. A Director need not be a Member. Each Director shall be elected or approved by the Member and shall serve as a Director of the Company for a term of one year (or their earlier death or removal from office) or until their successors are elected and qualified. The initial Directors of the Company shall be Francis C. Olmsted III and Brent J. Smolik.

SECTION 6.03. Regular Meetings .

Regular meetings of the Board shall be held at such time and place as shall be designated from time to time by resolution of the Board. Notice of such regular meetings shall not be required.

SECTION 6.04. Special Meetings .

A special meeting of the Board may be called at any time at the request of the President or any two Directors.

SECTION 6.05. Notice .

Written notice of all special meetings of the Board must be given to all Directors at least one business day prior to any special meeting of the Board.

All notices and other communications to be given to Directors shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service or three days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when received in the form of a telegram or facsimile, and shall be directed to the address or facsimile number as such Director shall designate by notice to the Company. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, except for amendments to this Agreement, as provided herein.

Attendance of a Director at a meeting shall constitute waiver of notice of such meeting, except where such Director attends the meeting for the express purpose of objecting to the transaction of business on the ground that the meeting is not lawfully called or convened. A meeting may be held at any time without notice if all the Directors are present or if those not present waive notice of the meeting either before or after such meeting.

SECTION 6.06. Action By Consent of Board or Committee of Board .

To the extent permitted by applicable law, the Board, or any committee of the Board, may act without a meeting so long as all members of the Board or committee shall have executed a written consent with respect to any action taken in lieu of a meeting.

SECTION 6.07. Conference Telephone Meetings . Directors or members of any committee of the Board may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

SECTION 6.08. Quorum .

A majority of all Directors, present in person or participating in accordance with Section 6.07, shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the Directors present may adjourn the meeting from time to time without further notice. Except as otherwise required by applicable law, all decisions of the Board, or any committee of the Board, shall require the affirmative vote of a majority of all Directors of the Board, or any committee of the Board, respectively. The Directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.

SECTION 6.09. Vacancies; Increases in the Number of Directors .

Vacancies and newly created directorships resulting from any increase in the number of Directors shall be filled by the Board in its sole discretion. Any Director so chosen shall hold office until the next annual election and until his successor shall be duly elected and shall qualify, unless sooner displaced.

SECTION 6.10. Committees .

Unless the Board of Directors otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects such committee shall conduct its business in the same manner as the Board conducts its business. Nothing herein shall be deemed to prevent the Board from appointing one or more committees consisting in whole or in part of persons who are not Directors; provided, however, that no such committee shall have or may exercise any authority of the Board.

SECTION 6.11. Removal .

Any Director or the entire Board may be removed at any time, with or without cause, by the Member.

SECTION 6.12. Compensation of Directors .

Except as expressly provided in any written agreement between the Company and a Director or by resolution of the Board, no Director shall receive any compensation from the Company for services provided to the Company in its capacity as a Director, except that each Director shall be compensated for attendance at Board meetings at rates of compensation as from time to time established by the Board or a committee thereof; provided, however, that Directors who are also employees of the Company or any affiliate thereof shall receive no compensation for their services as Directors or committee members. In addition, the Directors who are not employees of the Company or any affiliate thereof shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in connection with attending meetings of the Board or committees thereof.

SECTION 6.13. Officers . Such of the following officers shall be elected as the Board deems necessary or appropriate: a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers, and such other officers with such titles and powers and/or duties as the Board shall from time to time determine. Officers may be designated for particular areas of responsibility and simultaneously serve as officers of subsidiaries or divisions. Any officer so elected may resign at any time upon written notice to the Board. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Board. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board.

(a) President. The President shall have general control of the business, affairs, operations and property of the Company, subject to the supervision of the Board. He may sign or execute, in the name of the Company, all deeds, mortgages, bonds, contracts or other undertakings or instruments, except in cases where the signing or execution thereof shall have been expressly delegated by the Board to some other officer or agent of the Company. He shall have and may exercise such powers and perform such duties as may be provided by Law or as are incident to the office of President of a company (as if the Company were a Delaware corporation) and such other duties as are assigned from time to time by the Board.

(b) Vice Presidents. Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have such powers and perform such duties as may be provided by Law or as may from time to time be assigned to him, either generally or in specific instances, by the Board or the President. Any Executive Vice President or Senior Vice President may perform any of the duties or exercise any of the powers of the President at the request of, or in the absence or disability of, the President or otherwise as occasion may require in the administration of the business and affairs of the Company.

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Board to some other officer or agent of the Company.

(c) Secretary. The Secretary shall keep the records of the Company, in books provided for the purpose; he shall be custodian of the seal or seals of the Company; he shall see that the seal is affixed to all documents requiring same, the execution of which, on behalf of the Company, under its seal, is duly authorized, and when said seal is so affixed he may attest same; and, in general, he shall perform all duties incident to the office of the secretary of a company (as if the Company were a Delaware corporation), and such other duties as from time to time may be assigned to him by the Board or the President or as may be provided by Law. Any Assistant Secretary may perform any of the duties or exercise any of the powers of the Secretary at the request of, or in the absence or disability of, the Secretary or otherwise as occasion may require in the administration of the business and affairs of the Company.

(d) Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Company, and shall deposit, or cause to be deposited, in the name of the Company, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Board; if required, he shall give a bond for the faithful discharge of his duties, with such surety or sureties as the Board may determine; he shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Company and shall render to the Board or the President, whenever requested, an account of the financial condition of the Company (as if the Company were a Delaware corporation); and, in general, he shall perform all the duties incident to the office of treasurer of a company, and such other duties as may be assigned to him by the Board or the President or as may be provided by Law.

(e) Controller. The Controller shall be the chief accounting officer of the Company. He shall keep full and accurate accounts of the assets, liabilities, commitments, receipts, disbursements and other financial transactions of the Company; shall cause regular audits of the books and records of account of the Company and supervise the preparation of the Company’s financial statements; and, in general, he shall perform the duties incident to the office of controller of a company (as if the Company were a Delaware corporation) and such other duties as may be assigned to him by the Board or the President or as may be provided by Law. If no Controller is elected by the Board, the Treasurer shall perform the duties of the office of controller.

(f) Tax Officer. The Tax Officer shall have the authority to sign or execute on behalf of this Company any federal, foreign, Indian, state or local tax return or report, claim for refund of taxes, extension of a statute of limitation, administrative tax appeals filings and any other document relating to this Company’s tax responsibilities.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

SECTION 7.01. Transfers . The Member may, directly or indirectly, sell, assign, transfer, pledge, hypothecate or otherwise dispose of all or any part of its Interest. Any Person acquiring the Member’s Interest shall be admitted to the Company as a substituted Member with no further action being required on the part of the Member.

ARTICLE VIII

DISSOLUTION AND TERMINATION

SECTION 8.01. Dissolution . The Company shall be dissolved and its business wound up upon the decision made at any time by the Member to dissolve the Company, or upon the occurrence of any event of dissolution under the Act.

SECTION 8.02. Liquidation . Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Member shall wind up the affairs of the Company pursuant to this Agreement and in accordance with the Act, including, without limitation, Section 18-804 thereof.

SECTION 8.03. Distribution of Property . If in the discretion of the Member it becomes necessary to make a distribution of Company property in kind in connection with the liquidation of the Company, such property shall be transferred and conveyed to the Member subject to Section 18-804 of the Act.

ARTICLE IX

INDEMNIFICATION

SECTION 9.01. General . Except to the extent expressly prohibited by the Act, the Company shall indemnify each Person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such Person or such Person’s testator or intestate is or was a Member, Director or officer of the Company, against Claims incurred in connection with such action or proceeding, or any appeal therefrom; provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such Person establishes that his conduct did not meet the then applicable minimum statutory standards of conduct; and provided, further, that no such indemnification shall be required in connection with any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding unless the Company has given its prior consent to such settlement or such other disposition, which consent shall not be unreasonably withheld.

SECTION 9.02. Reimbursement . The Company shall advance or promptly reimburse, upon request, any Person entitled to indemnification hereunder for all expenses, including attorneys’ fees, reasonably incurred in defending any action or proceeding in advance of the final

disposition thereof upon receipt of an undertaking by or on behalf of such Person (in form and substance satisfactory to the Company) to repay such amount if such Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Person is entitled; provided that such Person shall cooperate in good faith with any request by the Company that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties; and provided, further, that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.03. Availability . The right to indemnification and advancement of expenses under this provision is intended to be retroactive and shall be available with respect to any action or proceeding which relates to events prior to the effective date of this provision.

SECTION 9.04. Indemnification Agreement . The Company is authorized to enter into agreements with any of its members or officers extending rights to indemnification and advancement of expenses to such Person to the fullest extent permitted by applicable Law, but the failure to enter into any such agreement shall not affect or limit the rights of such Person pursuant to this provision.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by Law.

SECTION 9.06. No Amendments . No amendment or repeal of this provision shall apply to or have any effect on the indemnification of, or advancement of expenses to, the Member or any Director or officer of the Company for, or with respect to, acts or omissions of such Member or officer occurring prior to such amendment or repeal.

SECTION 9.07. Not Exclusive . The foregoing shall not be exclusive of any other rights to which the Member or any officer may be entitled as a matter of Law and shall not affect any rights to indemnification to which Company personnel other than the Member or officers may be entitled by contract or otherwise.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

SECTION 10.03. Integration . This Agreement constitutes the entire agreement pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements in connection therewith. No covenant, representation or condition not expressed in this Agreement shall affect, or be effective to interpret, change or restrict, the express provisions of this Agreement.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.05. Severability . Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions hereof are determined to be invalid and contrary to any existing or future Law, such invalidity shall not impair the operation of or affect those portions of this Agreement, which are valid.

SECTION 10.06. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the Laws of the State of Delaware, without regard to its conflict of law principles.

SECTION 10.07. Security . Interest shall constitute “securities” within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware and in the State of New York and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

IN WITNESS WHEREOF , this Limited Liability Company Agreement has been duly executed by EP Energy LLC, effective as of the 24th day of May, 2012.

	EP ENERGY LLC


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

Exhibit A

Interests

Member		Percentage Interest
EP Energy LLC		100%
c/o Apollo Management VII, L.P.
9 West 57th Street, 43rd Floor
New York, NY 10019

Exhibit 3.7

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY BRAZIL, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF FORMATION, FILED THE SEVENTH DAY OF MAY, A.D. 2002, AT 2:30 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF FORMATION IS THE TENTH DAY OF MAY, A.D. 2002.

CERTIFICATE OF CORRECTION, FILED THE SEVENTEENTH DAY OF MAY, A.D. 2002, AT 2:30 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, FILED THE FOURTEENTH DAY OF NOVEMBER, A.D. 2002, AT 12 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE FIFTEENTH DAY OF NOVEMBER, A.D. 2002.

CERTIFICATE OF MERGER, FILED THE TWENTY-FIFTH DAY OF NOVEMBER, A.D. 2008, AT 5:14 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE SEVENTEENTH DAY OF




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3522643 8100H 120919798 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768679

	DATE:	08-09-12

Delaware

The First State

FEBRUARY, A.D. 2009, AT 12:17 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:40 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE TWENTY-FOURTH DAY OF MAY, A.D. 2012.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO BRAZIL, L.L.C.” TO “EP ENERGY BRAZIL, L.L.C.”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:41 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE FIRST DAY OF JUNE, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY BRAZIL, L.L.C”.




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3522643 8100H 120919798 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768679

	DATE:	08-09-12

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 02:30 PM 05/07/2002
	020291010 - 3522643

CERTIFICATE OF FORMATION

EL PASO BRAZIL, L.L.C.

This Certificate of Formation of El Paso Brazil, L.L.C. (the “LLC”) dated as of May 7, 2002, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST: The name of the LLC formed hereby is:

El Paso Brazil, L.L.C.

SECOND: The address of the registered office of the LLC in the State of Delaware is:

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed as of the date first above written.

	/s/ Pilar DeAnda
	Pilar DeAnda
	Authorized Person

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 02:30 PM 05/17/2002
	020317925 - 3522643

LIMITED LIABILITY COMPANY

CERTIFICATE OF CORRECTION

FILED TO CORRECT A CERTAIN ERROR IN THE CERTIFICATE OF

FORMATION

EL PASO BRAZIL, L.L.C.

FILED IN THE OFFICE OF THE SECRETARY OF STATE

OF DELAWARE ON MAY 7, 2002.

1. The name of the limited liability company is El Paso Brazil, L.L.C.

2. A Certificate of Formation was filed by the Secretary of State of the State of Delaware on May 7, 2002 that requires correction as permitted by Section 18-211 of the Delaware Limited Liability Company Act.

3. The inaccuracy or defect of the Certificate to be corrected is as follows:

The FOURTH Article of the Certificate was erroneously omitted and should have included an effective filing date of May 10, 2002.

4. Article Fourth is added to the Certificate to read as follows:

FOURTH: The Certificate of Formation shall be effective on May 10, 2002.

IN WITNESS WHEREOF, El Paso Brazil, L.L.C. has caused this Certificate to be signed by Pilar DeAnda, Authorized Person, this 17 th day of May 2002.

	EL PASO BRAZIL, L.L.C.


	By:	/s/ Pilar DeAnda
		Pilar DeAnda
		Authorized Person

CERTIFICATE OF AMENDMENT

EL PASO BRAZIL, L.L.C.

1. The name of the limited liability company is El Paso Brazil, L.L.C. (“ LLC ”).

2. The Certificate of Formation of the limited liability company is hereby amended by adding the following Article:

FIFTH: LLC shall be a series limited liability company and the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of LLC generally or assets allocated to another series.

3. This Certificate of Amendment shall become effective on the 15 th day of November, 2002.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of El Paso Brazil, L.L.C. on this 14th day of November, 2002.

	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 12:00 PM 11/14/2002
	020701946 - 3522643

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 05:23 PM 11/25/2008
	FILED 05:14 PM 11/25/2008
	SRV 081146412 - 3522643 FILE

CERTIFICATE OF MERGER

merging

POTIGUAR I, L.L.C.

with and into

EL PASO BRAZIL, L.L.C.

Pursuant to Section 18-209 of the Delaware Limited Liability Company Act

El Paso Brazil, L.L.C. (“El Paso Brazil”), a Delaware limited liability company, hereby certifies to the following facts relating to the merger (the “Merger”) of Potiguar I, L.L.C., a Delaware limited liability company, with and into El Paso Brazil, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and submits the following Certificate of Merger for filing:

FIRST: That the name and state of formation of each limited liability company that is to merge is as follows:

Name		State of Formation

Potiguar I, L.L.C.		Delaware
El Paso Brazil, L.L.C.		Delaware

SECOND: That an Agreement of Merger dated as of November 25, 2008 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA.

THIRD: That the name of the surviving entity is El Paso Brazil, L.L.C.

FOURTH: That the existing Certificate of Formation of El Paso Brazil shall be the Certificate of Formation of the surviving entity.

FIVE: That the Merger shall be effective upon filing.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of El Paso Brazil, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso Brazil, L.L.C. has caused this Certificate of Merger to be signed by a duly authorized officer this 25th day of November, 2008.

	EL PASO BRAZIL, L.L.C.
	By: Its Members

	SERIES B (BM-CAL-4) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-4 Company

	SERIES E (BAS-97) SERIES REPRESENTATIVE:
	El Paso Cayman BAS-97 Company

	SERIES G (BS-1) SERIES REPRESENTATIVE:
	El Paso Cayman BS-1 Company

	SERIES H (BM-POT-11) SERIES REPRESENTATIVE:
	El Paso Cayman BM-POT-11 Company

	SERIES I (BM-POT-13) SERIES REPRESENTATIVE:
	El Paso Cayman BM-POT-13 Company

	SERIES L (BM-CAL-6) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-6 Company

	SERIES M (BM-ES-5) SERIES REPRESENTATIVE:
	El Paso Cayman BM-ES-5 Company

	SERIES N (BM-CAL-5) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-5 Company

	SERIES O SERIES REPRESENTATIVE:
	El Paso Production International Cayman Company

	SERIES P (CAL-M-312) SERIES REPRESENTATIVE:
	El Paso Cayman CAL-M-312 Company

	SERIES Q (CAL-M-372) SERIES REPRESENTATIVE:
	El Paso Cayman CAL-M-372 Company

	COMMON SERIES REPRESENTATIVE:
	El Paso Cayman Brazil Ventures Company

	By:	/s/ Antonio de Pinho
		Antonio de Pinho,
		as Director of each of the foregoing
		companies

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 12:45 PM 02/17/2009
	FILED 12:17 PM 02/17/2009
	SRV 090147335 - 3522643 FILE

CERTIFICATE OF MERGER

merging

POTIGUAR II, L.L.C.

and

POTIGUAR 4B LLC

with and into

EL PASO BRAZIL, L.L.C.

Pursuant to Section 18-209 of the Delaware Limited Liability Company Act

El Paso Brazil, L.L.C. (“El Paso Brazil”), a Delaware limited liability company, hereby certifies to the following facts relating to the merger (the “Merger”) of Potiguar II, L.L.C. and Potiguar 4B LLC each a Delaware limited liability company, with and into El Paso Brazil, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and submits the following Certificate of Merger for filing:

FIRST: That the name and state of formation of each limited liability company that is to merge is as follows:

Name		State of Formation

Potiguar II, L.L.C.		Delaware
Potiguar 4B LLC		Delaware
El Paso Brazil. L.L.C.		Delaware

SECOND: That an Agreement of Merger dated as of February 16, 2009 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA.

THIRD: That the name of the surviving entity is El Paso Brazil, L.L.C.

FOURTH: That the existing Certificate of Formation of El Paso Brazil shall be the Certificate of Formation of the surviving entity.

FIVE: That the Merger shall be effective upon filing.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of El Paso Brazil, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and

without cost to any member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso Brazil, L.L.C. has caused this Certificate of Merger to be signed by a duly authorized officer this 16th day of February, 2009.

	EL PASO BRAZIL, L.L.C.
	By: Its Members


	SERIES B (BM-CAL-4) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-4 Company

	SERIES E (BAS-97) SERIES REPRESENTATIVE:
	El Paso Cayman BAS-97 Company

	SERIES F (BCAM-2) SERIES REPRESENTATIVE:
	El Paso Cayman BCAM-2 Company

	SERIES G (BS-1) SERIES REPRESENTATIVE:
	El Paso Cayman BS-1 Company

	SERIES H (BM-POT-11) SERIES REPRESENTATIVE:
	El Paso Cayman BM-POT-11 Company

	SERIES I (BM-POT-13) SERIES REPRESENTATIVE:
	El Paso Cayman BM-POT-13 Company

	SERIES K (BM-S-13) SERIES REPRESENTATIVE:
	El Paso Cayman BM-S-13 Company

	SERIES L (BM-CAL-6) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-6 Company

	SERIES M (BM-ES-5) SERIES REPRESENTATIVE:
	El Paso Cayman BM-ES-5 Company

	SERIES N (BM-CAL-5) SERIES REPRESENTATIVE:
	El Paso Cayman BM-CAL-5 Company

	SERIES O SERIES REPRESENTATIVE:
	El Paso Production International Cayman Company

	SERIES P (CAL-M-312) SERIES REPRESENTATIVE:
	El Paso Cayman CAL-M-312 Company

	SERIES Q (CAL-M-372) SERIES REPRESENTATIVE:
	El Paso Cayman CAL-M-372 Company

	COMMON SERIES REPRESENTATIVE:
	El Paso Cayman Brazil Ventures Company


	By:	/s/ Gene T. Waguespack
		Gene T. Waguespack,
		as Director of each of the foregoing
		companies

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:40 PM 05/21/2012
	FILED 04:40 PM 05/21/2012
	SRV 120601891 - 3522643 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EL PASO BRAZIL, L.L.C.

The undersigned, desiring to amend the Certificate of Formation of El Paso Brazil, L.L.C. (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the LLC is:

El Paso Brazil, L.L.C.

SECOND: The Certificate of Formation of the limited liability company is hereby amended by deleting the article numbered “FIFTH” in its entirety.

THIRD: This amendment to the Certificate of Formation shall be effective at on May 24th, 2012.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 21st day of May 2012.

	EL PASO BRAZIL, L.L.C.


	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:40 PM 05/21/2012
	FILED 04:41 PM 05/21/2012
	SRV 120601898 - 3522643 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EL PASO BRAZIL, L.L.C.

FIRST: The name of the LLC is:

El Paso Brazil, L.L.C.

SECOND: The article numbered “FIRST” of the Certificate of Formation of the Company shall be amended as follows:

“FIRST: The name of the LLC formed hereby is:

EP Energy Brazil, L.L.C.”

THIRD: This amendment to the Certificate of Formation shall be effective at 12:01a.m. Eastern Time on June 1, 2012.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 18th day of May 2012.

	EL PASO BRAZIL, L.L.C.


	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

Exhibit 3.8

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

EP ENERGY BRAZIL, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of EP Energy Brazil, L.L.C. (the “Company”) is entered into effective as of the 24th day of May, 2012, by EP ENERGY GLOBAL LLC (the “Member”).

WHEREAS, the Company was formed under the name of El Paso Brazil, L.L.C. as a limited liability company under the Act (as hereinafter defined) pursuant to the filing of the Certificate of Formation (as hereinafter defined) on May 7, 2002, and the execution of that certain Agreement of Limited Liability Company dated as of December 18, 2009, by El Paso Cayman BT-PR-4 Company, El Paso Cayman BM-PAMA-1 Company, El Paso Cayman BM-CAL-4 Company, El Paso BPAR-10 Company, El Paso Cayman BAS-97 Company, El Paso Brazil Holdings Company, El Paso Cayman Brazil Ventures Company, each a Cayman Island corporation, (the “Original Agreement”);

WHEREAS, EP Production International Cayman Company (formerly known as El Paso Cayman BM-CAL-4 Company) is the sole existing member that entered into the Original Agreement;

WHEREAS, on May 24, 2012, EP Production International Cayman Company sold its 100% membership interest to EP Energy LLC;

WHEREAS, on May 24, 2012, EP Energy LLC contributed its 100% membership interest to EP Energy Global LLC;

WHEREAS, EP Energy Global LLC, as the sole Member, desires to amend and restate the First Amended and Restated Limited Company Agreement for the purposes and upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and covenants herein contained, EP Energy Global LLC does hereby agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or 3.02.

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware on may 17, 2002, to form the Company pursuant to the Act, as originally executed by Pilar DeAnda (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires.

“ Company ” means the limited liability company formed pursuant to this Agreement.

“ Distributable Cash ” means cash (in U.S. dollars) of the Company that the Member determine is available for distribution.

“ Interest ” means the ownership interest in the Company at any time, including the right of the Member to any and all benefits to which the Member may be entitled as provided in this Agreement, together with the obligations of the Member to comply with all the terms and provisions of this Agreement.

“ Member ” refers to the Member set forth in Exhibit A hereto, and any other member or members admitted to the Company in accordance with this Agreement or any amendment or restatement hereof.

“ Person ” has the meaning set forth in the Act.

SECTION 1.02. Terms Generally . The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

ARTICLE II

FORMATION

SECTION 2.01. Name . The name of the Company shall be as set forth in the Preamble hereof. All business of the Company shall be conducted under such name and title to all property, real, personal, or mixed, owned by or leased to the Company shall be held in such name. Notwithstanding the preceding sentence, the Member may change the name of the Company or adopt such trade or fictitious names as it may determine.

SECTION 2.02. Term . The term of the Company commenced on the date of filing of the Certificate of Formation of the Company in the Office of the Secretary of State of Delaware (the “Effective Date”) and, pursuant to Section 18-201(d) of the Act, this Agreement shall be effective as of the Effective Date. The term of the Company shall continue until terminated as provided in Article VIII hereof.

SECTION 2.03. Principal Place of Business. The principal place of business of the Company shall be located at 1001 Louisiana, Houston, Texas 77002. The Member may establish other offices at other locations.

SECTION 2.04. Agent for Service of Process . The Corporation Trust Company shall be the registered agent of the Company upon whom process against it may be served. The address of such agent within the State of Delaware is: Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member may contribute cash or other property to the Company as they shall decide, from time to time.

SECTION 3.02. Additional Capital Contributions . If at any time the Member shall determine that additional funds or property are necessary or desirable to meet the obligations or needs of the Company, the Member may make additional Capital Contributions.

SECTION 3.03. Limitation on Liability . The liability of the Member shall be limited to its Interest in the Company, and the Member shall not have any personal liability to contribute money to, or in respect of, the liabilities or the obligations of the Company, except as set forth in the Act.

SECTION 3.04. Withdrawal of Capital; Interest . The Member may not withdraw capital or receive any distributions, except as specifically provided herein. No interest shall be paid by the Company on any Capital Contributions.

ARTICLE IV

DISTRIBUTIONS

SECTION 4.01. Distributions . Except as otherwise provided in the Act, all Distributable Cash of the Company shall be distributed to the Member, or distributions in kind may be made to the Member at such times as the Member shall determine.

ARTICLE V

BOOKS AND RECORDS

SECTION 5.01. Books and Records . The Member shall keep or cause to be kept complete and accurate books of account and records that shall reflect all transactions and other matters and include all documents and other materials with respect to the Company’s business that are usually entered into and maintained by Persons engaged in similar businesses. All Company financial statements shall be accurate in all material respects, shall fairly present the financial position of the Company and the results of its operations and Distributable Cash and transactions in its reserve accounts, and shall be prepared in accordance with generally accepted accounting principles, subject, in the case of quarterly statements, to year-end adjustments. The books of the Company shall at all times be maintained at the principal office of the Company or at such other location as the Member decides.

ARTICLE VI

MANAGEMENT OF THE COMPANY

SECTION 6.01. Management . The management of the Company shall be under the direction of the Member, who may, from time to time, designate one or more persons to be officers of the Company, with such titles as the Member may determine, including those positions set forth in Section 6.02.

SECTION 6.02. Officers . Such of the following officers shall be elected as the Member deems necessary or appropriate: a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers, and such other officers with such titles and powers and/or duties as the Member shall from time to time determine. Officers may be designated for particular areas of responsibility and simultaneously serve as officers of subsidiaries or divisions. Any officer so elected may resign at any time upon written notice to the Member. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Member. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Member.

(a) President . The President shall have general control of the business, affairs, operations and property of the Company, subject to the supervision of the Member. He may sign or execute, in the name of the Company, all deeds, mortgages, bonds, contracts or other undertakings or instruments, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company. He shall have and may exercise such powers and perform such duties as may be provided by law or as are incident to the office of President of a company (as if the Company were a Delaware corporation) and such other duties as are assigned from time to time by the Member.

(b) Vice Presidents . Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have such powers and perform such duties as may be provided by law or as may from time to time be assigned to him, either generally or in specific instances, by the Member or the President. Any Executive Vice President or Senior Vice President may perform any of the duties or exercise any of the powers of the President at the request of, or in the absence or disability of, the President or otherwise as occasion may require in the administration of the business and affairs of the Company.

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company.

(c) Secretary . The Secretary shall keep the records of the Company, in books provided for the purpose; he shall be custodian of the seal or seals of the Company; he shall see that the seal is affixed to all documents requiring same, the execution of which, on behalf of the Company, under its seal, is duly authorized, and when said seal is so affixed he may attest same; and, in general, he shall perform all duties incident to the office of the secretary of a company (as if the Company were a Delaware corporation), and such other duties as from time to time may be assigned to him by the Member or the President or as may be provided by law. Any Assistant Secretary may perform any of the duties or exercise any of the powers of the Secretary at the request of, or in the absence or disability of, the Secretary or otherwise as occasion may require in the administration of the business and affairs of the Company.

(d) Treasurer . The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Company, and shall deposit, or cause to be deposited, in the name of the Company, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Member; if required, he shall give a bond for the faithful discharge of his duties, with such surety or sureties as the Member may determine; he shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Company and shall render to the Member or the President, whenever requested, an account of the financial condition of the Company (as if the Company were a Delaware corporation); and, in general, he shall perform all the duties incident to the office of treasurer of a company, and such other duties as may be assigned to him by the Member or the President or as may be provided by law.

(e) Controller . The Controller shall be the chief accounting officer of the Company. He shall keep full and accurate accounts of the assets, liabilities, commitments, receipts, disbursements and other financial transactions of the Company; shall cause regular audits of the books and records of account of the Company and supervise the preparation of the Company’s financial statements; and, in general, he shall perform the duties incident to the office of controller of a company (as if the Company were a Delaware corporation) and such other duties as may be assigned to him by the Member or the President or as may be provided by law. If no Controller is elected by the Member, the Treasurer shall perform the duties of the office of controller.

(f) Tax Officer . The office of Tax Officer shall have the authority to sign or execute on behalf of this Company any federal, foreign, Indian, state or local tax return or report, claim for refund of taxes, extension of a statute of limitation, administrative tax appeals filings and any other document relating to this Company’s tax responsibilities.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

SECTION 7.01. Transfers . Any Member may, directly or indirectly, sell, assign, transfer, pledge, hypothecate or otherwise dispose of all or any part of its Interest. Any Person acquiring the Member’s Interest shall be admitted to the Company as a substituted Member with no further action being required on the part of the Member.

ARTICLE VIII

DISSOLUTION AND TERMINATION

SECTION 8.01. Dissolution . The Company shall be dissolved and its business wound up upon the decision made at any time by the Member to dissolve the Company, or upon the occurrence of any event of dissolution under the Act.

SECTION 8.02. Liquidation . Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Member shall wind up the affairs of the Company pursuant to this Agreement and in accordance with the Act, including, without limitation, Section 18-804 thereof.

SECTION 8.03. Distribution of Property . If in the discretion of the Member it becomes necessary to make a distribution of Company property in kind in connection with the liquidation of the Company, such property shall be transferred and conveyed to the Member.

ARTICLE IX

INDEMNIFICATION

testator or intestate is or was a member or officer of the Company, against judgments, fines (including excise taxes assessed on a Person with respect to an employee benefit plan), penalties, amounts paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with such action or proceeding, or any appeal therefrom; provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such Person establishes that his conduct did not meet the then applicable minimum statutory standards of conduct; and provided, further, that no such indemnification shall be required in connection with any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding unless the Company has given its prior consent to such settlement or such other disposition, which consent shall not be unreasonably withheld.

SECTION 9.02. Reimbursement . The Company shall advance or promptly reimburse, upon request, any Person entitled to indemnification hereunder for all expenses, including attorneys’ fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Person (in form and substance satisfactory to the Company) to repay such amount if such Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Person is entitled; provided that such Person shall cooperate in good faith with any request by the Company that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties; and provided, further, that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.03. Availability . The right to indemnification and advancement of expenses under this provision is intended to be retroactive and shall be available with respect to any action or proceeding which relates to events prior to the effective date of this provision.

SECTION 9.04. Indemnification Agreement . The Company is authorized to enter into agreements with any of its Member or officers extending rights to indemnification and advancement of expenses to such Person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such Person pursuant to this provision.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its Member and officers, acting in such capacities, to the fullest extent permitted by law.

SECTION 9.06. No Amendments . No amendment or repeal of this provision shall apply to or have any effect on the indemnification of, or advancement of expenses to, the Member or any officer of the Company for, or with respect to, acts or omissions of such Member or officer occurring prior to such amendment or repeal.

SECTION 9.07. Not Exclusive . The foregoing shall not be exclusive of any other rights to which any Member or any officer may be entitled as a matter of law and shall not affect any rights to indemnification to which Company personnel other than the Member or officers may be entitled by contract or otherwise.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

SECTION 10.03. Integration . This Agreement constitutes the entire agreement pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements in connection therewith. No covenant, representation or condition not expressed in this Agreement shall affect, or be effective to interpret, change or restrict, the express provisions of this Agreement.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.05. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, which may be sufficiently evidenced by one counterpart.

SECTION 10.06. Severability . Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions hereof are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement, which are valid.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

SECTION 10.08. Security . For purposes of providing for transfer of, perfection a security interest in, and other relevant matters related to, a membership interest in the Company, each membership interest in the Company shall be deemed to be a ‘security’ subject to the rules set forth in Chapters 8 and 9 of the Texas Uniform Commercial Code and any similar Uniform Commercial Code provision adopted by the States of New York or Delaware or any other relevant jurisdiction.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by EP Energy Global LLC, effective as of the 24th day of May 2012.

	EP ENERGY GLOBAL LLC


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

Exhibit A

Interests

Member	Percentage Interest
EP Energy Global LLC	100	%
1001 Louisiana Street
Houston, TX 77002

Exhibit 3.9

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE SEVENTH DAY OF MAY, A.D. 2002, AT 2:30 O’CLOCK P.M.

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “EL PASO PREFERRED HOLDINGS COMPANY” TO “EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:40 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF CONVERSION IS THE TWENTY-SECOND DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

CERTIFICATE OF FORMATION, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:40 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF FORMATION IS THE TWENTY-SECOND DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3522642 8100H 120919836 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768716

	DATE:	08-09-12

Delaware

The First State

CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C.”.




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
3522642 8100H 120919836 You may verify this certificate online at corp.delaware.gov/authver.shtml	AUTHENTICATION:	9768716

	DATE:	08-09-12

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 02:30 PM 05/07/2002
	020291002 - 3522642

CERTIFICATE OF INCORPORATION

EL PASO PREFERRED HOLDINGS COMPANY

FIRST: The name of the Corporation is:

El Paso Preferred Holdings Company

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (“GCL”).

FOURTH: The total number of shares of stock that the Corporation shall have authority to issue shall be One Thousand (1,000) shares of Common Stock, par value One Dollar ($1.00) per share.

FIFTH: Unless required by the by-laws, the election of the Board of Directors need not be by written ballot.

Brent H. Austin		1001 Louisiana Street
		Houston, Texas 77002

William A. Wise		1001 Louisiana Street
		Houston, Texas 77002

SEVENTH: The Corporation shall indemnify its officers and directors to the full extent permitted by the GCL, as amended from time to time.

NINTH: Pilar DeAnda is the sole incorporator and her mailing address is 1001 Louisiana Street, Houston, Texas 77002.

	/s/ Pilar DeAnda
	Pilar DeAnda, Incorporator


Dated: May 7, 2001

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:40 PM 05/21/2012
	FILED 04:40 PM 05/21/2012
	SRV 120601828 - 3522642 FILE

CERTIFICATE OF CONVERSION

FROM A CORPORATION TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 266

OF THE DELAWARE

GENERAL CORPORATION LAW

AND SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of El Paso Preferred Holdings Company (the “Corporation”) is being duly executed and filed by an authorized person of the Corporation to convert the Corporation to a Delaware limited liability company in accordance with Section 266 of the Delaware General Corporation Law (the “DGCL’’) and Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Corporation set forth in its original Certificate of Incorporation was:

El Paso Preferred Holdings Company

2. The name of the Corporation immediately prior to filing this Certificate of Conversion was:

El Paso Preferred Holdings Company

3. The jurisdiction of the Corporation immediately prior to filing this Certificate of Conversion was:

Delaware

4. The jurisdiction where the Corporation was first created is:

Delaware

5. The date the Certificate of Incorporation of the Corporation was filed is:

May 7, 2002

6. The name of the limited liability company (the “LLC”) as set forth in its Certificate of Formation is:

EP Energy Preferred Holdings Company, L.L.C.

7. This conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the DLLCA.

8. This Certificate of Conversion shall be effective at 12:01a.m. Eastern Time on May 22, 2012.

IN WITNESS WHEREOF, this Certificate of Conversion has been executed by an authorized person of the Corporation on the 18th day of May, 2012.

	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:40 PM 05/21/2012
	FILED 04:40 PM 05/21/2012
	SRV 120601828 - 3522642 FILE

CERTIFICATE OF FORMATION

EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C.

This Certificate of Formation of EP Energy Preferred Holdings Company, L.L.C. (the “LLC”) dated as of May 18, 2012, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST: The name of the LLC formed hereby is:

EP Energy Preferred Holdings Company, L.L.C.

SECOND: The address of the registered office of the LLC in the State of Delaware is:

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

FOURTH: The Certificate of Formation shall be effective at 12:01a.m. Eastern Time on May 22, 2012.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed, this 18th day of May, 2012.

	/s/ Joseph C. James
	Joseph C. James
	Authorized Person

Exhibit 3.10

LIMITED LIABILITY COMPANY AGREEMENT

EP ENERGY PREFERRED HOLDINGS COMPANY, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

The undersigned member, EP Energy, L.L.C., a Delaware limited liability company (the “Sole Member”) hereby forms EP Preferred Holdings Company, L.L.C. (the “Company”), a Delaware limited liability company, pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq. (the “Act”), and hereby declares the following to be the Limited Liability Company Agreement of such limited liability company as of the Effective Date (as defined herein).

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or 3.02.

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware effective as of May 22, 2012, to form the Company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires

“ Company ” means the limited liability company formed pursuant to this Agreement.

“ Distributable Cash ” means cash (in U.S dollars) of the Company that the Member determines is available for distribution

“ Person ” has the meaning set forth in the Act.

ARTICLE II

FORMATION

SECTION 2.02. Term . The term of the Company commenced on the effective date as stated in the Certificate of Formation of the Company and filed in the Office of the Secretary of State of Delaware (the “Effective Date”). The term of the Company shall continue until terminated as provided in Article VIII hereof.

SECTION 2.03. Principal Place of Business . The principal place of business of the Company shall be located at 1001 Louisiana, Houston, Texas 77002. The Member may establish other offices at other locations.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member may contribute cash or other property to the Company as it shall decide, from time to time.

ARTICLE IV

DISTRIBUTIONS

SECTION 4 01. Distributions . Except as otherwise provided in the Act, all Distributable Cash of the Company shall be distributed to the Member, or distributions in kind may be made to the Member at such times as the Member shall determine.

ARTICLE V

BOOKS AND RECORDS

ARTICLE VI

MANAGEMENT OF THE COMPANY

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company.

(f) Tax Officer . The Tax Officer shall have the authority to sign or execute on behalf of this Company any federal, foreign, Indian, state or local tax return or report, claim for refund of taxes, extension of a statute of limitation, administrative tax appeals filings and any other document relating to this Company’s tax responsibilities.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

SECTION 7.01. Transfers . The Member may, directly or indirectly, sell, assign, transfer, pledge, hypothecate or otherwise dispose of all or any part of its Interest. Any Person acquiring the Member’s Interest shall be admitted to the Company as a substituted Member with no further action being required on the part of the Member

ARTICLE VIII

DISSOLUTION AND TERMINATION

ARTICLE IX

INDEMNIFICATION

SECTION 9.01. General . Except to the extent expressly prohibited by the Act, the Company shall indemnify each Person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such Person or such Person’s testator or intestate is or was a member or officer of the Company, against judgments, fines (including excise taxes assessed on a Person with respect to an employee benefit plan), penalties, amounts paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with such action or proceeding, or any appeal therefrom; provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such Person establishes that his conduct did not meet the then applicable minimum statutory standards of conduct; and provided, further, that no such indemnification shall be required in connection with any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding unless the Company has given its prior consent to such settlement or such other disposition, which consent shall not be unreasonably withheld.

among such parties; and provided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.04. Indemnification Agreement . The Company is authorized to enter into agreements with any of its members or officers extending rights to indemnification and advancement of expenses to such Person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such Person pursuant to this provision.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by law.

SECTION 9.07. Not Exclusive . The foregoing shall not be exclusive of any other rights to which the Member or any officer may be entitled as a matter of law and shall not affect any rights to indemnification to which Company personnel other than the Member or officers may be entitled by contract or otherwise.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of Agreement. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by EP Energy, L.L.C., effective as of the 22th day of May, 2012.

	EP ENERGY, L.L.C.


	/s/ Francis C. Olmsted III
	Francis C. Olmsted III
	Vice President

Exhibit A

Percentage Interests

Member:	Percentage Interest

EP Energy, L.L.C.	100	%
1001 Louisiana Street
Houston, Texas 77002

Exhibit 3.11

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “MBOW FOUR STAR, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE SEVENTH DAY OF JANUARY, A.D. 2004, AT 7:51 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE EIGHTH DAY OF JANUARY, A.D. 2004, AT 6:25 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE NINETEENTH DAY OF JULY, A.D. 2004, AT 5:57 O’CLOCK P.M.

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “MBOW FOUR STAR CORPORATION” TO “MBOW FOUR STAR, L.L.C”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:39 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF CONVERSION IS THE TWENTY-SECOND DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

CERTIFICATE OF FORMATION, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:39 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF

	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
	AUTHENTICATION	:	9768725

	DATE	:	08-09-12
3749729 8100H

120919845

You may verify this certificate online

at corp.delaware.gov/authver.shtml

THE AFORESAID CERTIFICATE OF FORMATION IS THE TWENTY-SECOND DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “MBOW FOUR STAR, L.L.C.”.

	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
	AUTHENTICATION	:	9768725

	DATE	:	08-09-12
3749729 8100H

120919845

You may verify this certificate online

at corp.delaware.gov/authver.shtml

CERTIFICATE OF INCORPORATION

MBOW FOUR STAR CORPORATION

THE UNDERSIGNED, A NATURAL PERSON (THE “ SOLE INCORPORATOR ”), FOR THE PURPOSE OF ORGANIZING A CORPORATION TO CONDUCT THE BUSINESS AND PROMOTE THE PURPOSES HEREINAFTER STATED, UNDER THE PROVISIONS AND SUBJECT TO THE REQUIREMENTS OF THE LAWS OF THE STATE OF DELAWARE HEREBY CERTIFIES THAT:

ARTICLE I

The name of the corporation is MBOW Four Star Corporation (the “ Corporation ”).

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington 19801, County of New Castle. The name of the Corporation’s registered agent in the State of Delaware at such address is The Corporation Trust Company.

ARTICLE III

The purposes of the Corporation are to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“ DGCL ”).

ARTICLE IV

The Corporation is to have perpetual existence.

ARTICLE V

SECTION 1. The corporation is authorized to issue one class of stock to be designated, “Common Stock.” The total number of shares of Common Stock which the Corporation shall have authority to issue is 1,000 shares, par value $0.01 per share.

SECTION 2. Each share of Common Stock of the Corporation shall have identical privileges in every respect. Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held of record on all matters on which stockholders generally are entitled to vote. Dividends may be paid on the Common Stock out of assets legally available for dividends, but only at such times and in such amounts as the Board of Directors shall determine

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 10:10 PM 01/07/2004
	FILED 07:51 PM 01/07/2004
	SRV 040012431 - 3749729 FILE

and declare. Upon the dissolution, liquidation or winding up of the Corporation, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them, respectively.

ARTICLE VI

SECTION 1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors of the Corporation shall be fixed from time to time by this Certificate of Incorporation or pursuant to the Bylaws of the Corporation. The number of directors of the Corporation shall not be less than one (1) nor more than nine (9). All directors of the Corporation shall hold office until their resignation or removal or until their successors are duly elected and qualified.

SECTION 2. Election of directors need not be by written ballot unless the Bylaws shall so provide. No holders of Common Stock of the Corporation shall have any rights to cumulate votes in the election of directors.

ARTICLE VII

In furtherance of, and not in limitation of, the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation or adopt new bylaws, without any action on the part of the stockholders; provided , however , that no such adoption, amendment, or repeal shall be valid with respect to Bylaw provisions that have been adopted, amended, or repealed by the stockholders; and further provided , that Bylaws adopted or amended by the Board of Directors and any powers thereby conferred may be amended, altered, or repealed by the stockholders.

ARTICLE VIII

SECTION 1. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.

If the DGCL is amended after the date hereof to authorize action by corporations organized pursuant to the DGCL to further eliminate or limit the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as amended.

SECTION 2.

(a) Each person who was or is made a party or is threatened to be made a party or is involved in any threatened, pending or completed action, suit or proceeding, whether formal or informal, whether of a civil, criminal, administrative or investigative nature (a “Proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation, whether the basis of such Proceeding is an alleged action or inaction in an official capacity or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent permissible under Delaware law, as the same exists or may hereafter exist in the future (but, in the case of any future change, only to the extent that such change permits the Corporation to provide broader indemnification rights than the law permitted prior to such change), against all costs, charges, expenses, liabilities and losses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators.

(b) The Corporation shall pay expenses actually incurred by a director or officer in connection with any Proceeding in advance of its final disposition; provided , however , that if Delaware law then requires, the payment of such expenses incurred in advance of the final disposition of a Proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified.

(c) If a claim under paragraph (a) of this Section 2 of this Article VIII is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of the claimant is permissible in the circumstances because the claimant has met the applicable standard of conduct, if any, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met the standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the standard of conduct.

SECTION 3. The Corporation may provide indemnification to employees and agents of the Corporation to the fullest extent permissible under Delaware law.

SECTION 4. To the extent that any director, officer, employee or agent of the Corporation is, by reason of such position, or position with another entity at the request of the Corporation, a witness in any Proceeding, he or she shall be indemnified against all costs and expenses actually and reasonably incurred by him or her on his or her behalf in connection therewith.

SECTION 5. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under Delaware law.

SECTION 6. The Corporation may enter into agreements with any director, officer, employee or agent of the Corporation providing for indemnification to the fullest extent permissible under Delaware law.

SECTION 7. Each and every paragraph, sentence, term and provision of this Article VIII is separate and distinct, so that if any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or unenforceability of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision of this Article VIII may be modified by a court of competent jurisdiction to preserve its validity and to provide the claimant with, subject to the limitations set forth in this Article VIII and any agreement between the Corporation and claimant, the broadest possible indemnification permitted under applicable law.

SECTION 8. Each of the rights conferred on directors and officers of the Corporation by Section 1, 2 and 4 of this Article VIII and on employees or agents of the Corporation by Sections 3 and 4 of this Article VIII shall be a contract right and any repeal or amendment of the provisions of this Article VIII shall not adversely affect any right hereunder of any person existing at the time of such repeal or amendment with respect to any act or omission occurring prior to the time of such repeal or amendment and, further, shall not apply to any proceeding, irrespective of when the proceeding is initiated, arising from the service of such person prior to such repeal or amendment.

SECTION 9. The rights conferred in this Article VIII shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

ARTICLE IX

The Corporation reserves the right to amend, add, alter, change, repeal or adopt any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon the stockholder of the Corporation herein are granted subject to this reservation.

IN WITNESS WHEREOF , the corporation has caused this Certificate to be signed by Joseph M. Brooker, its Sole Incorporator, on this 7th day of January, 2004.

	By:	/s/ Joseph M. Brooker
	Name:	Joseph M. Brooker
	Title:	Sole Incorporator
		Medicine Bow Energy Corporation
		1225 seventeenth street, suite 1900
		Denver, Colorado 80202

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 06:25 PM 01/08/2004
	FILED 06:25 PM 01/08/2004
	SRV 040013885 - 3749129 FILE

CERTIFICATE OF MERGER OF

EDISON MISSION ENERGY OIL & GAS

A California Corporation

WITH AND INTO

MBOW FOUR STAR CORPORATION

A Delaware Corporation

MBOW Four Star Corporation, a Delaware corporation, DOES HEREBY CERTIFY AS FOLLOWS in accordance with Section 252 of the Delaware General Corporation Law:

FIRST: The names of the corporations proposing to merge (the “ Constituent Corporations ”) and the states under which such corporations are incorporated are as follows:

	Name of Corporation		State of Incorporation

	Edison Mission Energy Oil & Gas		California
	MBOW Four Star Corporation		Delaware

SECOND: An Agreement and Plan of Merger has been adopted, approved, certified, executed and acknowledged by each of the Constituent Corporations in accordance with Section 252 of the Delaware General Corporation Law (the “ Agreement and Plan of Merger ”);

THIRD: The name of the surviving corporation shall be “MBOW Four Star Corporation.”

FOURTH: The executed Agreement and Plan of Merger is on file at the office of the surviving corporation located at 1225 Seventeenth Street, Suite 1900, Denver, Colorado 80202.

FIFTH: A copy of the Agreement and Plan of Merger will be furnished upon request and without cost to any stockholder of any Constituent Corporations.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

Executed this 8th day of January, 2004.

ATTEST:	MBOW FOUR STAR CORPORATION


/s/ Joseph M.Brooker	By:	/s/ Mitchell L. Solich
Joseph M.Brooker	Name:	Mitchell L. Solich
Assistant Secretary	Title:	President and Chief Executive Officer


ATTEST:	EDISON MISSION ENERGY OIL & GAS


/s/ Joseph M. Brooker	By:	/s/ Mitchell L. Solich
Joseph M. Brooker	Name:	Mitchell L. Solich
Assistant Secretary	Title:	President and Chief Executive Officer

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 06:13 PM 07/19/2004
	FILED 05:57 PM 07/19/2004
	SRV 040528065 - 3749729 FILE

CERTIFICATE OF MERGER OF

FRONTSTREET FOURSTAR, LLC

A Delaware Limited Liability Company

WITH AND INTO

MBOW FOUR STAR CORPORATION

A Delaware Corporation

Pursuant to Title 8, Section 264(c) of the Delaware General Corporation Law and Title 6, Section 18-209 of the Delaware Limited Liability Company Act, the undersigned corporation executed the following Certificate of Merger:

FIRST: The name of the surviving corporation is MBOW Four Star Corporation, a Delaware corporation, and the name of the limited liability company being merged into this surviving corporation is FrontStreet FourStar, LLC, a Delaware limited liability company.

SECOND: An Agreement and Plan of Merger has been adopted, approved, certified, executed and acknowledged by each of the surviving corporation and the merging limited liability company;

THIRD: The name of the surviving corporation is MBOW Four Star Corporation.

FOURTH: The merger is to become effective upon the filing of this Certificate of Merger with the Delaware Secretary of State.

FIFTH: A copy of the Agreement and Plan of Merger is on file at the office of the surviving corporation located at 1225 Seventeenth Street, Suite 1900, Denver, Colorado 80202 and will be furnished upon request and without cost to any member or stockholder of either MBOW Four Star Corporation or FrontStreet FourStar, LLC.

SIXTH: The Certificate of Incorporation of the surviving corporation shall be its Certificate of Incorporation.

IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by an authorized Officer this 19 th day of July, 2004.

	MBOW FOUR STAR CORPORATION


	By:	/s/ Mitchell L. Solich
	Name:	Mitchell L. Solich
	Title:	President and Chief Executive Officer

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:39 PM 05/21/2012
	FILED 04:39 PM 05/21/2012
	SRV 120602307 - 37 49729 FILE

CERTIFICATE OF CONVERSION

FROM A CORPORATION TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 266

OF THE DELAWARE

GENERAL CORPORATION LAW

AND SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of MBOW Four Star Corporation (the “Corporation”) is being duly executed and filed by an authorized person of the Corporation to convert the Corporation to a Delaware limited liability company in accordance with Section 266 of the Delaware General Corporation Law (the “DGCL”) and Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Corporation set forth in its original Certificate of Incorporation was:

MBOW Four Star Corporation

2. The name of the Corporation immediately prior to filing this Certificate of Conversion was:

MBOW Four Star Corporation

3. The jurisdiction of the Corporation immediately prior to filing this Certificate of Conversion was:

Delaware

4. The jurisdiction where the Corporation was first created is:

Delaware

5. The date the Certificate of Incorporation of the Corporation was filed is:

January 7, 2004

6. The name of the limited liability company (the “LLC”) as set forth in its Certificate of Formation is:

MBOW Four Star, L.L.C.

7. This conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the DLLCA.

8. This Certificate of Conversion shall be effective at 12:01 a.m. Eastern Time on May 22, 2012.

IN WITNESS WHEREOF, this Certificate of Conversion has been executed by an authorized person of the Corporation on the 18th day of May, 2012.

	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:39 PM 05/21/2012
	FILED 04:39 PM 05/21/2012
	SRV 120602307 - 3749729 FILE

CERTIFICATE OF FORMATION

MBOW FOUR STAR, L.L.C.

This Certificate of Formation of MBOW Four Star, L.L.C. (the “LLC”) dated as of May 18, 2012, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST:	The name of the LLC formed hereby is:

	MBOW Four Star, L.L.C.

SECOND:	The address of the registered office of the LLC in the State of Delaware is:

	Corporation Trust Center
	1209 Orange Street
	New Castle County
	Wilmington, Delaware 19801

THIRD:	The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

	The Corporation Trust Company
	Corporation Trust Center
	1209 Orange Street
	New Castle County
	Wilmington, Delaware 19801

FOURTH:	The Certificate of Formation shall be effective at 12:01a.m. Eastern Time on May 22, 2012.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed, this 18th day of May, 2012.

	/s/ Joseph C. James
	Joseph C. James
	Authorized Person

Exhibit 3.12

LIMITED LIABILITY COMPANY AGREEMENT

MBOW FOUR STAR, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

The undersigned member, EP Energy, L.L.C., a Delaware limited liability company (the “Sole Member”) hereby forms MBOW Four Star. L.L.C. (the “Company”), a Delaware limited liability company, pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq. (the “Act”), and hereby declares the following to be the Limited Liability Company Agreement of such limited liability company as of the Effective Date (as defined herein).

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101. et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or 3.02

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware effective as of May 22, 2012. to form the Company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires.

“ Company ” means the limited liability company formed pursuant to this Agreement.

“ Distributable Cash ” means cash (in U.S. dollars) of the Company that the Member determines is available for distribution.

“ Person ” has the meaning set forth in the Act.

SECTION 1.02. Terms Generally . The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles. Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

ARTICLE II

FORMATION

SECTION 2.01. Name The name of the Company shall be as set forth in the Preamble hereof. All business of the Company shall be conducted under such name and title to all property, real, personal, or mixed, owned by or leased to the Company shall be held in such name. Notwithstanding the preceding sentence, the Member may change the name of the Company or adopt such trade or fictitious names as it may determine.

SECTION 2.02. Term . The term of the Company commenced on the date of filing of the Certificate of Formation of the Company in the Office of the Secretary of State of Delaware (the “Effective Date”). The term of the Company shall continue until terminated as provided in Article VIII hereof.

SECTION 2.03. Principal Place of Business. The principal place of business of the Company shall be located at 1001 Louisiana, Houston. Texas 77002. The Member may establish other offices at other locations.

SECTION 2.04. Agent for Service of Process . The Corporation Trust Company shall be the registered agent of the Company upon whom process against it may be served. The address of such agent within the State of Delaware is: Corporation Trust Center. 1209 Orange Street. City of Wilmington, County of New Castle, Delaware 19801.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member may contribute cash or other property to the Company as it shall decide, from time to time.

ARTICLE IV

DISTRIBUTIONS

ARTICLE V

BOOKS AND RECORDS

ARTICLE VI

MANAGEMENT OF THE COMPANY

SECTION 6.02. Officers . Such of the following officers shall be elected as the Member deems necessary or appropriate: a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant Vice Presidents. Assistant Secretaries, Assistant Treasurers and Assistant Controllers, and such other officers with such titles and powers and/or duties as the Member shall from time to time determine. Officers may be designated for particular areas of responsibility and simultaneously serve as officers of subsidiaries or divisions. Any officer so elected may resign at any time upon written notice to the Member. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Member. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Member.

shall have been expressly delegated by the Member to some other officer or agent of the Company.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

SECTION 7.01. Transfers . The Member may, directly or indirectly, sell, assign, transfer, pledge, hypothecate or otherwise dispose of all or am part of its Interest. Any Person

acquiring the Member’s Interest shall be admitted to the Company as a substituted Member with no further action being required on the part of the Member.

ARTICLE VIII

DISSOLUTION AND TERMINATION

ARTICLE IX

INDEMNIFICATION

common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties: and provided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by law.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of A g reement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

Agreement shall affect, or be effective to interpret, change or restrict, the express provisions of this Agreement.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by EP Energy, L.L.C., effective as of the 22nd day of May, 2012.

	EP ENERGY, L.L.C.


	/s/ Francis C. Olmsted III
	Francis C. Olmsted III
	Vice President

Exhibit A

Percentage Interests

Member:	Percentage Interest

EP Energy, L.L.C.	100	%
1001 Louisiana Street
Houston, Texas 77002

Exhibit 3.13

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY MANAGEMENT, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE TWENTIETH DAY OF APRIL, A.D. 1964, AT 10 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-SEVENTH DAY OF APRIL, A.D. 1964, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “COASTAL STATES ENTERPRISES, INC.” TO “GAS PRODUCING ENTERPRISES, INC.”, FILED THE THIRTEENTH DAY OF FEBRUARY, A.D. 1969, AT 10 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE FIFTEENTH DAY OF DECEMBER, A.D. 1977, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “GAS PRODUCING ENTERPRISES, INC.” TO “COASTAL OIL & GAS CORPORATION”, FILED THE SEVENTH DAY OF MARCH, A.D. 1980, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE FOURTEENTH DAY OF OCTOBER, A.D. 1983, AT 3 O’CLOCK P.M.




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
0610204 8100H			AUTHENTICATION: 9768670

120919780			DATE: 08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

Delaware

The First State

CERTIFICATE OF OWNERSHIP, FILED THE THIRD DAY OF JANUARY, A.D. 1984, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE SECOND DAY OF APRIL, A.D. 1985, AT 8:30 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE THIRTY-FIRST DAY OF DECEMBER, A.D. 1985, AT 10 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE THIRTY-FIRST DAY OF DECEMBER, A.D. 1987, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “COASTAL OIL & GAS CORPORATION” TO “EL PASO PRODUCTION OIL & GAS COMPANY”, FILED THE NINTH DAY OF MARCH, A.D. 2001, AT 11 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTY-FIRST DAY OF OCTOBER, A.D. 2002, AT 10 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE TWENTY-SEVENTH DAY OF AUGUST, A.D. 2003, AT 10:19 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF AUGUST, A.D. 2003.

CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-SEVENTH DAY OF




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
0610204 8100H			AUTHENTICATION: 9768670

120919780			DATE: 08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

Delaware

The First State

AUGUST, A.D. 2003, AT 10:26 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF OWNERSHIP IS THE THIRTY-FIRST DAY OF AUGUST, A.D. 2003.

CERTIFICATE OF MERGER, FILED THE TWENTY-SIXTH DAY OF SEPTEMBER, A.D. 2003, AT 9:15 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTIETH DAY OF SEPTEMBER, A.D. 2003.

RESTATED CERTIFICATE, FILED THE SEVENTEENTH DAY OF JUNE, A.D. 2004, AT 12:08 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2005, AT 9:27 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2005, AT 9:30 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO PRODUCTION OIL & GAS COMPANY” TO “EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.”, FILED THE NINTH DAY OF JUNE, A.D. 2006, AT 9:08 O’CLOCK P.M.




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
0610204 8100H			AUTHENTICATION: 9768670

120919780			DATE: 08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

Delaware

The First State

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE THIRTIETH DAY OF JUNE, A.D. 2006, AT 10:45 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTIETH DAY OF JUNE, A.D. 2010, AT 5:47 O’CLOCK P.M.

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.” TO “EP ENERGY MANAGEMENT, L.L.C.”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:39 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF CONVERSION IS THE TWENTY-FOURTH DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

CERTIFICATE OF FORMATION, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:39 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF FORMATION IS THE TWENTY-FOURTH DAY OF MAY, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY MANAGEMENT,




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
0610204 8100H			AUTHENTICATION: 9768670

120919780			DATE: 08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

Delaware

The First State

L.L.C.”.




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
0610204 8100H			AUTHENTICATION: 9768670

120919780			DATE: 08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

CERTIFICATE OF INCORPORATION

COASTAL STATES ENTERPRISES, INC.

RECEIVED & FILED

APR 20 1964 10 A M

	/s/ Secretary of State
	SECRETARY OF STATE

6100-4

CERTIFICATE OF INCORPORATION

COASTAL STATES ENTERPRISES, INC.

FIRST. The name of the corporation is COASTAL STATES ENTERPRISES, INC.

SECOND. Its principal office in the State of Delaware is located at No. 100 West Tenth Street, in the City of Wilmington, County of Net Castle. The name and address of its resident agent is The Corporation Trust Company, No. 100 West Tenth Street, Wilmington 99, Delaware.

THIRD. The nature of the business, or objects or purposes to be transacted, promoted or carried on are:

To buy, sell and operate business establishments and to act as agent for individuals, corporations, business establishments of any kind or character in the purchase or sale of business establishments, including sole proprietor-ships, partnerships, corporations and any other business organization.

To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description.

To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation.

To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of

letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade-marks and trade names, relating to or useful in connection with any business of this corporation.

To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof.

To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof.

To borrow or raise moneys for any of the purposes of the corporation and, from time to time without limit as to amount, to draw, make, accept, endorse, execute and issue

promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes.

To loan to any person, firm or corporation any of its surplus funds, either with or without security.

To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.

To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of, real and personal property of every class and description in any of the states, districts, territories or colonies of the United States, and in any and all foreign countries, subject to the laws of such state, district, territory, colony or country.

In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the General Corporation Law of the State

of Delaware, and to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do.

The objects and purposes specified in the fore-going clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes.

FOURTH. The total number of shares of stock which the corporation shall have authority to issue is five hundred (500) and the par value of each of such shares is One Thousand Dollars ($1,000.00) amounting in the aggregate to Five Hundred Thousand Dollars ($500,000.00).

FIFTH. The minimum amount of capital with which the corporation will commence business is One Thousand Dollars ($1,000.00).

SIXTH. The names and places of residence of the incorporators are as follows:

	NAMES		RESIDENCES
	S. H. Livesay		Wilmington, Delaware
	F. J. Obara, Jr.		Wilmington, Delaware
	A. D. Grier		Wilmington, Delaware

SEVENTH. The corporation is to have perpetual existence.

EIGHTH. The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.

NINTH. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

To make, alter or repeal the by-laws of the corporation.

To authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation.

To set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created.

By resolution passed by a majority of the whole board, to designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in the resolution or in the by-laws of the corporation, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the by-laws of the corporation or as may be determined from time to time by resolution adopted by the board of directors.

When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholders’ meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all

of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may be in whole or in part shares of stock in, and/or other securities of, any other corporation or corporations, as its board of directors shall deem expedient and for the best interests of the corporation.

TENTH. Whenever a compromise or arrangement is proposed between this corporation and is creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the

creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.

ELEVENTH. No contract or other transactions between the corporation and any other corporation, firm or individual shall be affected or invalidated by the fact that any one or more of the directors or officers of this corporation is or are interested in or is a director or officer of such other corporation, or a member of such firm, and any director or officer, individually or jointly, may be a party to or may be interested in any contract, or transaction, of this corporation or in which this corporation is interested, and no contract, act or transaction of this corporation with any person or persons, firms or corporations, shall be affected or invalidated by the fact that any director or officer of this corporation is a party to or interested in such contract, act or transaction, or in any way connected with such person or persons, firm or corporation, and each and every person who may become a director or officer of this corporation is hereby relieved from any liability that might otherwise exist from contracting with the corporation for the benefit of himself or any firm or corporation in which he may be in anywise interested.

TWELFTH. Meetings of stockholders may be held outside the State of Delaware, if the by-laws so provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of

the corporation. Elections of directors need not be by ballot unless the by-laws of the corporation shall so provide.

THIRTEENTH. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set our hands and seals this 20th day of April A.D. 1964.

	/s/ Authorized Person

STATE OF DELAWARE

SS.

COUNTY OF NEW CASTLE

BE IT REMENBERED that on this 20th day of April A.D. 1964, personally came before me, a Notary Public for the State of Delaware, S. H. Livesay, F. J. Obara, Jr. and A. D. Grier all of the parties to the foregoing certificate of incorporation, known to me personally to be such, and severally acknowledged the said certificate to be the act and deed of the signers respectively and that the facts therein stated are truly set forth.

GIVEN under my hand and seal of office the day and year aforesaid.

	/s/ Authorized Notary
	Notary Public

CERTIFICATE OF OWNERSHIP

COASTAL STATES ENTERPRISES, INC. (TEXAS)

MERGING INTO:

COASTAL STATES ENTERPRISES, INC. (DEL.)

6102-4

RECEIVED & FILED

APR 27 1964 10 A.M.

	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

COASTAL STATES ENTERPRISES, INC., incorporated in Texas

INTO

COASTAL STATES ENTERPRISES, INC., incorporated in Delaware

*** *** ***

COASTAL STATES ENTERPRISES, INC., a corporation organized and existing under the laws of Delaware,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on the 22nd day of April, 1964, pursuant to the Delaware Corporation Law of the State of Delaware.

SECOND: That this corporation owns all of the outstanding shares of the common stock of COASTAL STATES ENTERPRISES, INC., a corporation incorporated on the 7th day of May, 1962, pursuant to the Texas Corporation Law of the State of Texas.

THIRD: That this corporation, by the following resolutions of its Board of Directors, July adopted at a meeting held on the 23rd day of April, 1964, determined to and did merge into itself said COASTAL STATES ENTERPRISES, INC., incorporated in Texas:

RESOLVED, that COASTAL STATES ENTERPRISES, INC., incorporated in Delaware, merge, and it hereby does merge into itself said COASTAL STATES ENTERPRISES, INC., incorporated in Texas, and assumes all of its obligations; and

FURTHER RESOLVED, that the proper officers of this corporation be and they hereby are directed to make and execute, under the corporate seal of this corporation, a Certificate of Ownership and Merger setting forth a copy of the resolutions to merge said COASTAL STATES ENTERPRISES, INC., incorporated in Texas, and assume its liabilities and obligations, and the date of adoption thereof, and to cause the same to be filed, in the manner provided by law, and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in anywise necessary or proper to effect said merger.

FURTHER RESOLVED, that the merger shall be effective upon filing with the Secretary of State of Delaware and upon recording a certified copy in the office of the Recorder of Deeds of New Castle County.

IN WITNESS WHEREOF, said COASTAL STATES ENTERPRISES, INC., incorporated in Delaware, has caused its corporate seal to be affixed and this certificate to be signed by M. T. Arnold, its Vice President, and Ellis M. Brown, its Secretary, this 24th day of April, A. D. 1964.

	COASTAL STATES ENTERPRISES, INC.
	Incorporated in Delaware


	By	/s/ M T. Arnold
		Vice President


	By	/s/ Ellis M. Brown
		Secretary

STATE OF TEXAS	$

COUNTY OF NUECES	$

BE IT REMEMBERED that on this 24th day of April, 1964, personally came before me, Authorized Notary, a Notary Public in and for the County and State aforesaid, M. T. Arnold, Vice President of COASTAL STATES ENTERPRISES, INC., a corporation of the State of Delaware, the corporation described in and which executed the foregoing certificate, known to me personally to be such, and he, the said M T. Arnold as such Vice President, duly executed said certificate before me and acknowledged the said certificate to be his act and deed and the act and deed of said corporation; that the signatures of the said Vice President and of the Secretary of said corporation to said foregoing certificate are in the handwriting of the said Vice President and Secretary of said corporation, respectively, and that the seal affixed to said certificate is the common or corporate seal of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.

[SEAL]	/s/ Authorized Notary
	Notary Public

CERTIFICATE OF AMENDMENT

COASTAL STATES ENTERPRISES, INC.

6102-4

FILED

FEB 13 1969 10 AM

	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

* * * * * * * *

COASTAL STATES ENTERPRISES, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware

DOES HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of said corporation, duly held and convened on February 7, 1969, resolutions were adopted proposing and declaring advisable the following amendments to the certificate of incorporation of said corporation:

RESOLVED: That the Certificate of Incorporation of Coastal States Enterprises, Inc. be amended by changing Article FIRST, so that as so amended said Article FIRST shall be, and read in its entirety, as follows:

“ FIRST . The name of the Corporation is GAS PRODUCING ENTERPRISES, INC.”

II.

RESOLVED: That the Certificate of Incorporation of COASTAL STATES ENTERPRISES, INC. be amended by changing Article THIRD, so that as so amended said Article THIRD shall be, and read in its entirety, as follows:

“ THIRD . The nature of the business or objects or purposes to be transacted, promoted or carried on are:

“To mine for, prospect for, drill for, produce, store, buy or in any manner acquire, refine, manufacture into its several products and to sell, market, distribute and transport petroleum and its products and by-products; to mine for, prospect for, drill for, produce, manufacture, store, buy or in any manner acquire, and to market, sell, transport, and distribute natural gas and/or artificial gas and/or liquified petroleum gas and any by-products and residual products thereof, and to own, hold,

maintain and operate and to sell, exchange, lease, encumber or in any manner dispose of works, buildings, pipe lines, mains, gathering systems, distribution systems, machinery, appliances, apparatus, facilities, rights, privileges, franchises, ordinances and all such real and personal property as may be necessary, useful or convenient in the production, acquisition, manufacture, storage, transportation, sale and marketing of petroleum natural gas and artificial gas, or any of them, and the products or by-products thereof.

“To acquire, by purchase or otherwise, construct, lease, let, own, hold, sell, convey, equip, maintain, operate and otherwise deal in and with pipe lines, cars, vessels, tanks, tramways, refineries, reduction plants and any and all other conveyances, appliances and apparatus for storing, transporting, distributing, marketing, manufacturing, distilling, refining, reducing, preparing or otherwise dealing in and with petroleum, gas, gasoline, asphaltum, and any and all other minerals, metals, ores, the products and by-products thereof and mineral substances, products and by-products thereof.

“To acquire, own, construct, erect, lay down, manage, maintain, operate, enlarge, alter, work and use all such lands, interests in land, buildings, easements, gas, electric and other works, machinery, plant stock, pipes, lamps, maters, fittings, motors, apparatus, appliances, materials and things, and to supply all such materials, products and things as may be necessary, incident or convenient in connection with the production, use, storage, regulation, purification, measurement, supply and distribution of any of the products of the Corporation.

“To obtain the grant of, purchase, lease, or otherwise acquire any concessions, leases, rights, options, patents, privileges, lands and interests therein, rights of way, sites, properties, undertakings or businesses, or any right, option or contract in relation thereto, and to perform, carry out and fulfill the terms and conditions thereof, and to carry the same into effect, and to develop, maintain, lease, sell, transfer, dispose of in whole or in part and otherwise deal with the same.

“To transact any manufacturing or mining business, and to purchase and sell goods, wares and merchandise used for such business.

“To store, transport, buy and sell oil, gas, salt, brine and other mineral solutions and liquified minerals; also sand and clay for the manufacture and sale of clay products.

“To establish and maintain an oil and gas business with authority to contract for the lease and purchase of the right to prospect for, develop and use coal and other minerals, petroleum and gas; also the right to erect, build and own all necessary oil tanks, cars and pipes necessary for the operation of the business of the same.

“To establish and maintain a drilling business, with authority to own and operate drilling rigs, machinery, tools and apparatus necessary in the boring, or otherwise sinking of wells in the production of oil, gas, or water, or either, and the purchase and sale of such goods, wares and merchandise used for such business.

“To purchase, take, lease as lessee or otherwise acquire, to own, use, improve and maintain, and to sell, convey, mortgage, pledge, lease as [ILLEGIBEL] dispose of uranium, vanadium, oil, gas and mineral lands, lands and real estate of all kinds, and the uranium, vanadium, oil, gas and mineral rights and interests in lands; to produce therefrom oil, gas, minerals, elements, deposits and substances of all kinds including solids, liquids and gases and to develop and exploit said lands, rights and interests; to develop such lands, rights and interests by, and to enter into and execute contracts for the drilling of wells and the installation of plants, machinery and equipment, and to dispose of the products therefrom either as a raw product or otherwise; to refine and reduce said products, to prepare said products for market and to manufacture from said products any and all marketable commodities.

“To purchase and sell goods, wares and merchandise.

“To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description.

“To acquire and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation.

“To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage, or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or useful in connection with any business of this corporation.

“To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof.

“To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof.

“To borrow or raise moneys for any of the purposes of the corporation and, from time to time, without limit as to amount to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of

any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes.

“To loan to any person, firm or corporation any of its surplus funds, either with or without security.

“To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.

“To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey, or otherwise dispose of real and personal property of every class and description in any of the States, Districts, Territories or Colonies of the United States, and in any and all foreign countries, subject to the laws of such State, District, Territory, Colony or Country.

“In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the General Corporation Law of the State of Delaware, and to do any or all of the things herein-before set forth to the same extent as natural persons might or could do.

“The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes.”

SECOND: That said amendments have been consented to and authorized by the holder of all of the issued and outstanding stock of said Corporation, entitled to vote, by a written consent given in accordance with the provisions

of Section 228 of the General Corporation Law of Delaware, and filed with the permanent records of the corporation.

THIRD: That the said amendments were duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of Delaware.

FOURTH: That the capital of the corporation will not be reduced under or by reason of said amendments.

IN WITNESS WHEREOF, said COASTAL STATES ENTERPRISES, INC. has caused its corporate seal to be hereunto affixed and this certificate to be signed by George L. Brundrett, Jr., its Vice President, and attested by Leroy Taylor, its Secretary, this 7th day of February, 1969.

			COASTAL STATES ENTERPRISES, INC.
Coastal Enterprises, Inc.

Corporate Seal			By	/s/ George L. Brundrett, Jr.
Delaware				Vice President
[SEAL]

	ATTEST:

	By	/s/ Leroy Taylor
		Secretary

STATE OF TEXAS	$

COUNTY OF NUECES	$

BE IT REMEMBERED that on this 7th day of February, 1969, personally came before me a Notary Public in and for the County and State aforesaid, George L. Brundrett, Jr., Vice President of COASTAL STATES ENTERPRISES, INC., a corporation of the State of Delaware, and he duly executed said certificate before me and acknowledged the said certificate to be his act and deed and the act and deed of said corporation, and that the facts stated therein are true; and that the seal affixed to said certificate and attested by the Secretary of said corporation is the common or corporate seal of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.

	/s/ Authorized Notary
	Notary Public in and for Nueces County
	TEXAS

My commission expires June 1, 1969

[SEAL]

Notary Public

County of Nueces, Texas.

CERTIFICATE OF OWNERSHIP AND MERGER

GAS PRODUCING ENTERPRISES, INC. (DEL.DOM.)

MERGING

COLORADO OIL COMPANY, INC. (DEL.DOM.)

6102-4

FILED

DEC 15 1977 10 AM

	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

COLORADO OIL COMPANY, INC.

INTO

GAS PRODUCING ENTERPRISES, INC.

******

GAS PRODUCING ENTERPRISES, INC. a corporation organized and existing under the laws of Delaware,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on the 20th day of April, 1964, pursuant to the General Corporation Law of the State of Delaware.

SECOND: That this corporation owns all of the outstanding shares of stock of COLORADO OIL COMPANY, INC., a corporation incorporated on the 12th day of November, 1975, pursuant to the General Corporation Law of the State of Delaware.

THIRD: That this corporation, by the following resolutions of its Board of Directors, duly adopted at a meeting held on the 28th day of November, 1977, determined to merge into itself said COLORADO OIL COMPANY, INC.:

RESOLVED, that GAS PRODUCING ENTEPRISES, INC. merge, and it hereby does merge into itself said COLORADO OIL COMPANY, INC., and assumes all of its obligations; and further

RESOLVED, that the merger shall become effective at the close of business on December 31, 1977; and further

RESOLVED, that the proper offices of this corporation be and they hereby are directed to make and execute a Certificate of Ownership and Merger setting forth a copy of the resolutions to merge said COLORADO OIL COMPANY, INC., into this corporation and assume its liabilities and obligations, and the date of adoption thereof, and to cause the same to be filed with the Secretary of State of Delaware and a certified copy recorded in the office of the Recorder of Deeds of New Castle County, Delaware, and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in anywise necessary or proper to effect said merger.

IN WITNESS WHEREOF, said GAS PRODUCING ENTERPRISES, INC. has caused this certificate to be signed by AUSTIN M. O’TOOLE, its Vice President and attested by W. J. KNIGHT, JR., its Assistant Secretary, this 7th day of December, 1977.

		GAS PRODUCING ENTERPRISES, INC.


		By	/s/ AUSTIN M. O’TOOLE
			AUSTIN M. O’TOOLE
			Vice President

ATTEST:

[SEAL]

By	/s/ W. J. KNIGHT, JR.
	W. J. KNIGHT, JR.
	Assistant Secretary

6102.04

FILED

MAR 7 1980

	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

GAS PRODUCING ENTERPRISES, INC.

Gas Producing Enterprises, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of said Corporation, at a meeting duly held, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation:

RESOLVED, that the Certificate of Incorporation of Gas Producing Enterprises, Inc. be amended by changing the first Article thereof so that, as amended, said Article shall be and read as follows:

“FIRST. The name of the Corporation is

COASTAL OIL & GAS CORPORATION.”

SECOND: That in lieu of a meeting and vote of stockholders, the sole stockholder has given its written consent to said amendment in accordance with the provisions of section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of sections 242 and 228 of the General Corporation Law of the State of Delaware.

FOURTH: That the capital of the corporation will not be changed under or by reason of said amendment.

IN WITNESS WHEREOF, said Gas Producing Enterprises, Inc. has caused this certificate to be signed by Austin M. O’Toole, its Vice President and attested by John C. Simons, its Assistant Secretary this 7th day of March, 1980.

		GAS PRODUCING ENTERPRISES, INC.


	By	/s/ Austin M. O’Toole
		Austin M. O’Toole, Vice President


/s/ John C. Simons
John C. Simons, Assistant Secretary

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

COASTAL OIL & GAS CORPORATION

Coastal Oil & Gas Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”).

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of the corporation, by Unamious Consent in Lieu of Special Meeting, dated October 10, 1983, adopted the following resolution:

RESOLVED, that the Board of Directors of the corporation does hereby propose and declare advisable an amendment to the Certificate of Incorporation of the corporation to renumber present Article Thirteenth thereof as Article Fourteenth, and to add a new Article Thirteenth thereto, in the form submitted herewith, and directs that such amendment be submitted for approval by the sole stockholder of the corporation.

SECOND: That by Consent of sole stockholder of the corporation dated October 12, 1983, the sole stockholder gave approval to said amendment in the form approved by the Board of Directors and attached hereto as Exhibit A, in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

FOURTH: That this Certificate of Amendment of the Certificate of Incorporation shall be effective upon filing with the Secretary of State of the State of Delaware.

00002

IN WITNESS WHEREOF, Coastal Oil & Gas Corporation, has caused this certificate to be signed by George L. Brundrett, Jr., its Senior Vice President, and attested by Austin M. O’Toole, its Secretary, this 13th day of October, 1983.

	COASTAL OIL & GAS CORPORATION


[SEAL]	By	/s/ George L. Brundrett, Jr.
		Senior Vice President

ATTEST:


/s/ Austin M. O’Toole
Secretary

STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

Before me, Rose Marie Sanchez, a Notary Public in and for the State of Texas, on this day personally appeared George L. Brundrett, Jr., known to me to be the person whose name is subscribed to the foregoing instrument, and known to me to be the Senior Vice President of the corporation named therein, and acknowledged to me that he executed said instrument for the purposes and consideration therein expressed, and as the act of said corporation.

Given under my hand and seal of office this 13th day of October, 1983.

[SEAL]

	/s/ Rose Marie Sanchez
	Notary Public in and for the State of Texas


		00003

EXHIBIT A

THIRTEENTH. The following additional provisions shall govern the Board of Directors of the corporation:

a. Number . The number of directors that shall constitute the Board of Directors shall be six (6).

b. Election and Term . The Board of Directors shall be divided into three classes with the term of office of the first class expiring at the annual meeting of stockholders in 1984, of the second class expiring at the annual meeting of stockholders in 1985, and of the third class expiring at the annual meeting of stockholders in 1986.

At each annual meeting of stockholders, commencing with the annual meeting of stockholders in 1984, successors to directors of the class whose terms then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting of stockholders and until their successors shall have been duly elected and qualified. When the number of directors is changed, any new y-created directorships or any decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as possible.

c. Removal . Any director or the entire Board of Directors may be removed, for cause only, at a meeting of stockholders, by the holders of a majority of the shares of the corporation then entitled to vote in an election of directors. “Cause” as

00004

used herein shall mean conduct amounting to fraud, gross negligence or willful misconduct. Any vacancy resulting from such action shall be filled at a meeting of stockholders (which may be the same meeting) by the same vote.

d. Vacancies . Any vacancy in the Board of Directors, (other than a vacancy resulting from removal for cause pursuant to paragraph c. hereof), whether by death, incapacity, resignation, or otherwise, may be filled by a majority of the directors then in office (even though less than a quorum), and any director so chosen shall hold office for the balance of the term of office of the director who is succeeded.

00005

	CERTIFICATE OF OWNERSHIP AND MERGER

	MERGING

	WESTERN ENTERPRISES, INC.	[SEAL]

	INTO

	COASTAL OIL & GAS CORPORATION

* * * * *

COASTAL OIL & GAS CORPORATION, a corporation organized and existing under the laws of Delaware,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on the 20th day of April, 1964, pursuant to the General Corporation Law of the State of Delaware.

SECOND: That this corporation owns all of the outstanding shares (of each class) of the stock of Western Enterprises, Inc., a corporation incorporated on the 18th day of October, 1974, pursuant to the General Corporation Law of the State of Delaware.

THIRD: That this corporation, by the following resolutions of its Board of Directors, duly adopted by the unanimous written consent of its members, filed with the minutes of the board, on the 1st day of December, 1983, determined to and did merge into itself said Western Enterprises, Inc.

RESOLVED, that Western Enterprises, Inc., a wholly-owned subsidiary of the Company, be merged into the Company, and that the Company shall assume all liabilities and obligations of such subsidiary in connection therewith; and further

RESOLVED, that such merger shall be effective upon the date of filing with the Secretary of State of the State of Delaware; and further

RESOLVED, that the officers of the Company, and each of them, are hereby authorized and directed to make and execute a Certificate of Ownership and Merger, setting forth a copy of these resolutions and the date of adoption thereof, and to cause the same to be filed with the Secretary of State of

00002

Delaware and a certified copy recorded in the office of the Recorder of Deeds of New Castle County, and to do all acts and things whatsoever which may be necessary or proper in the discretion of such officers to effect such merger.

FOURTH: Anything herein or elsewhere to the contrary notwithstanding this merger may be amended or terminated and abandoned by the board of directors of Coastal Oil & Gas Corporation at any time prior to the date of filing the merger with the Secretary of State.

IN WITNESS WHEREOF, said Coastal Oil & Gas Corporation has caused this certificate to be signed by Austin M. O’Toole, its Vice President and Secretary and attested by John C. Simons, its Assistant Secretary, this 23rd day of December, 1983.

		By	/s/ AUSTIN M. O’TOOLE
[SEAL]			AUSTIN M. O’TOOLE
			Vice President and Secretary

ATTEST:


By	/s/ JOHN C. SIMONS
	JOHN C. SIMONS
	Assistant Secretary

00003

	FILED
	APR 2 1985 8:30 AM
	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

COASTAL OIL & GAS CORPORATION

Coastal Oil & Gas Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “corporation”),

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of the corporation, by Unanimous Consent in Lieu of Special Meeting, dated February 7, 1985, adopted the following resolution:

RESOLVED, that the Board of Directors of the corporation does hereby propose and declare advisable an amendment to the Certificate of Incorporation of the corporation to delete present Article Thirteenth thereof and renumber present Article Fourteenth thereof as Article Thirteenth, and directs that such amendment be submitted for approval by the sole stockholder of the corporation.

SECOND: That by Consent of Sole Stockholder of the corporation dated February 15, 1985, the sole stockholder gave approval to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

FOURTH: That this Certificate of Amendment of Certificate of Incorporation shall be effective upon filing with the Secretary of State of the State of Delaware.

IN WITNESS WHEREOF, Coastal Oil & Gas Corporation has caused this certificate to be signed by George L. Brundrett, Jr., its Senior Vice President, and attested by Austin M. O’Toole, its Secretary, this 27th day of March, 1985.

		COASTAL OIL & GAS CORPORATION


		By	/s/ George L. Brundrett, Jr.
			George L. Brundrett, Jr.
			Senior Vice President

ATTEST:


/s/ Austin M. O’Toole
Austin M. O’Toole
Secretary


STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

Before me, Phyllis D. O’Neal, a Notary Public in and for the State of Texas, on this day personally appeared George L. Brundrett, Jr., known to me to be the person whose name is subscribed to the foregoing instrument and known to me to be the Senior Vice President of the corporation named therein, and acknowledged to me that be executed said instrument for the purposes and consideration therein expressed, and as the act of said corporation.

Given under my hand and seal of office this 27th day of March, 1985.

	/s/ Phyllis D. O’Neal
	Notary Public in and for the State of Texas


	My Commission Expires: 9/16/85


00008

	FILED
	DEC 31 1985 10 AM
	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

COASTAL CAMEROON ONSHORE, INC.,

COASTAL CONGO, INC.,

COASTAL INDONESIA, INC.

AND

COASTAL PAPUA NEW GUINEA EXPLORATION, INC.

INTO

COASTAL OIL & GAS CORPORATION

COASTAL OIL & GAS CORPORATION, a corporation organized and existing under the laws of Delaware,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on April 20, 1964, pursuant to the General Corporation Law of the State of Delaware.

SECOND: That this corporation owns all of the outstanding shares of stock of COASTAL CAMEROON ONSHORE, INC., a corporation incorporated on December 29, 1977, pursuant to the General Corporation Law of the State of Delaware.

THIRD: That this corporation owns all of the outstanding shares of stock of COASTAL CONGO, INC., a corporation incorporated on August 3, 1978, pursuant to the General Corporation Law of the State of Delaware.

FOURTH: That this corporation owns all of the outstanding shares of stock of COASTAL INDONESIA, INC., a corporation incorporated on November 16, 1977, pursuant to the General Corporation Law of the State of Delaware.

000002

FIFTH: That this corporation owns all of the outstanding shares of stock of COASTAL PAPUA NEW GUINEA EXPLORATION, INC., a corporation incorporated on January 18, 1980, pursuant to the General Corporation Law of the State of Delaware.

SIXTH: That this corporation, by the following resolutions of its Board of Directors, duly adopted by the unanimous written consent of its members, filed with the minutes of the Board on December 27, 1985, determined to and did merge into itself said COASTAL CAMEROON ONSHORE, INC., COASTAL CONGO, INC., COASTAL INDONESIA, INC. and COASTAL PAPUA NEW GUINEA EXPLORATION, INC.

RESOLVED, that COASTAL OIL & GAS CORPORATION does hereby merge into itself COASTAL CAMEROON ONSHORE, INC., COASTAL CONGO, INC., COASTAL INDONESIA, INC. and COASTAL PAPUA NEW GUINEA EXPLORATION, INC., and assumes all of their liabilities and obligations; and further

RESOLVED, that the merger shall be effective upon the date of filing with the Secretary of State of Delaware; and further

RESOLVED, that the proper officers of the Company are authorized and directed to prepare and execute a Certificate of Ownership and Merger setting forth a copy of the resolutions to merge said COASTAL CAMEROON ONSHORE, INC., COASTAL CONGO, INC., COASTAL INDONESIA, INC. and COASTAL PAPUA NEW GUINEA EXPLORATION, INC. into the Company and assume all of their liabilities and obligations, and the date of adoption thereof, and to cause the same to be filed with the Secretary of State of Delaware and a certified copy recorded in the office of the Recorder of Deeds of New Castle County and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in anywise necessary or proper to effect said merger.

IN WITNESS WHEREOF, said COASTAL OIL & GAS CORPORATION has caused this certificate to be signed by Austin M. O’Toole, its

00003

Senior Vice President, and attested by Francis T. Kelly, its Assistant Secretary, this 27th day of December, 1985.

			COASTAL OIL & GAS CORPORATION


			By	/s/ Austin M. O’Toole
				Austin M. O’Toole
				Senior Vice President




By	/s/ Francis T. Kelly
	Francis T. Kelly
	Assistant Secretary

STATE OF TEXAS		)
		)
COUNTY OF HARRIS		)

Before me, Patricia B. Zimmerman, a Notary Public for the State of Texas, on this day personally appeared AUSTIN M. O’TOOLE, known to me to be the person whose name is subscribed to the foregoing instrument, and known to me to be the Senior Vice President of the corporation named herein, and acknowledged to me that he executed said instrument for the purposes and consideration therein expressed, and as the act of said corporation.

GIVEN UNDER MY HAND AND SEAL this 27th day of December 1985.

		/s/ Patricia B. Zimmerman
		Patricia B. Zimmerman
		Notary Public State of Texas

Commission Expires July 10, 1989.

00004

	FILED
	Dec 1967
	/s/ Secretary of State
	SECRETARY OF STATE

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

BORDER EXPLORATION COMPANY

AND

SYRIAN AMERICAN OIL CORPORATION (TEXAS)

AND

COASTAL URANIUM, INC.

INTO

COASTAL OIL & GAS CORPORATION

* * * *

Coastal Oil & Gas Corporation, a corporation organized and existing under the laws of Delaware,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on April 20, 1964, pursuant to the General Corporation Law of the State of Delaware.

SECOND: That this corporation owns all of the outstanding shares of the stock of Border Exploration Company, a corporation incorporated on July 7, 1978, pursuant to the Business Corporation Act of the State of Texas.

THIRD: That this corporation owns all of the outstanding shares of the stock, of Syrian American Oil Corporation (Texas), a corporation incorporated on August 9, 1977, pursuant to the Business Corporation Act of the State of Texas.

FOURTH: That this corporation owns all of the outstanding shares of the stock of Coastal Uranium, Inc., a corporation incorporated on July 20, 1979, pursuant to the Business Corporation Act of the State of Texas.

FIFTH: That this corporation, by the following resolutions of its Board of Directors, duly adopted by the unanimous written consent of its members, filed with the minutes of the board on the 29th day of December, 1987, determined to and did merge into itself said Border Exploration Company, Syrian American Oil Corporation (Texas), and Coastal Uranium, Inc.:

RESOLVED, that Coastal Oil & Gas Corporation shall and it hereby does merge into itself Border Exploration Company, Syrian American Oil Corporation (Texas), and Coastal Uranium, Inc. and assumes all of their obligations; and further

RESOLVED, that the merger shall become effective at the close of business on December 31, 1987; and further

RESOLVED, that the proper officers of this corporation be and they hereby are authorized to prepare and to execute a Certificate of Ownership and Merger setting forth a copy of the resolutions to merge Border Exploration Company, Syrian American Oil Corporation (Texas), and Coastal Uranium, Inc. and assume their liabilities and obligations, and the date of adoption thereof, and to cause the same to be filed with the Delaware Secretary of State and a certified copy recorded in the office of the Recorder of Deeds of New Castle County, Delaware and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in anywise necessary or proper to effect said merger.

IN WITNESS WHEREOF, said Coastal Oil & Gas Corporation has caused this certificate to be signed by Austin M. O’Toole, its Senior Vice President, and attested by Jay L. Gallia, its Assistant Secretary, this 30th day of December, 1987.

		COASTAL OIL & GAS CORPORATION


		By:	/s/ Austin M. O’Toole
			Austin M. O’Toole
			Senior Vice President
			[SEAL]
ATTEST:

By:	/s/ Jay L. Gallia
	Jay L. Gallia
	Assistant Secretary

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

COASTAL OIL & GAS CORPORATION (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

RESOLVED that it is deemed advisable that the Certificate of Incorporation of this Company be amended, and that said Certificate of Incorporation be so amended, by changing the Article thereof numbered “FIRST,” so that, as amended, said Article shall be and read as follows:

“FIRST. The name of the corporation is El Paso Production Oil & Gas Company.”

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said COASTAL OIL & GAS CORPORATION has caused this certificate to be signed on its behalf by a Vice President and attested by an Assistant Secretary, this 9th day of March 2001.

	COASTAL OIL & GAS CORPORATION


	/s/ David L. Siddall
	David L. Siddall
	Vice President


Attest:
		STATE OF DELAWARE
		SECRETARY OF STATE
/s/ Margaret E. Roark		DIVISION OF CORPORATIONS
Margaret E. Roark, Assistant Secretary		FILED 11:00 AM 03/09/2001
		010118394 – 0610204

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 10:00 AM 10/31/2002
	020670276 – 0610204

CERTIFICATE OF MERGER

COASTAL BORDER GAS SALES, INC.

a Texas corporation

into

EL PASO PRODUCTION OIL & GAS COMPANY

a Delaware Corporation

The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

Name		State of Incorporation

Coastal Border Gas Sales, Inc.		Texas
El Paso Production Oil & Gas Company		Delaware

SECOND: That an Agreement and Plan of Merger among the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations and their respective members in accordance with the requirements of Section 252 of the General Corporation Law of the State of Delaware.

THIRD: That name of the surviving corporation is El Paso Production Oil & Gas Company.

FOURTH: That the existing certificate of incorporation of El Paso Production Oil & Gas Company, a Delaware corporation, shall be the certificate of incorporation of the surviving corporation.

SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by the surviving corporation, on request and without cost, to any member of any constituent corporation.

SEVENTH: That all liabilities and obligations of Coastal Border Gas Sales, Inc., be and they hereby are, assumed by the surviving corporation.

EIGHTH: The authorized capital stock of each foreign corporation which is a party to the merger is as follows:

		Authorized Number	Par Value
Corporation	Class	of Shares	per Share

Coastal Border Gas Sales, Inc., a Texas corporation	Common	1,000	$	1.00

NINTH: That this Certificate of Merger shall be effective on the 31st day of October 2002.

IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed by its duly executed officer this 31st day of October 2002.

		EL PASO PRODUCTION OIL & GAS COMPANY


		By:	/s/ David L. Siddall
			David L. Siddall
			Vice President

Attest:


By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 10:26 AM 08/27/2003
	FILED 10:19 AM 08/27/2003
	SRV 030556306 – 0610204 FILE

CERTIFICATE OF MERGER

merging

EL PASO JAVELINA, L.L.C.

and

EL PASO JAVELINA GP, L.L.C.

into

EL PASO PRODUCTION OIL & GAS COMPANY

Pursuant to Section 264 of the General

Corporation Law of the State of Delaware (“GCLD”)

and Section 18-209 of the

Delaware Limited Liability Company Act (“DLLCA”)

El Paso Production Oil & Gas Company, a Delaware corporation (the “Company”), for the purpose of merging El Paso Javelina, L.L.C. and El Paso Javelina GP, L.L.C., each a Delaware limited liability company (the “Subsidiaries”) with and into the Company, does hereby certify as follows:

FIRST: That the name and state of incorporation or formation of each constituent entity of the merger is as follows:

Name		State of Incorporation

El Paso Javelina, L.L.C.		Delaware
El Paso Javelina GP, L.L.C.		Delaware
El Paso Production Oil & Gas Company		Delaware

SECOND: An Agreement of Merger (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 264(c) of the GCLD and Section 18-209 of the DLLCA.

THIRD: The name of the surviving entity is El Paso Production Oil & Gas Company.

FOURTH: The existing Certificate of Incorporation of the Company shall be the Certificate of Incorporation of the surviving entity.

FIVE: The effective date of the Merger shall be on August 31, 2003.

SIXTH: An executed copy of the Merger Agreement is on file at the place of business of El Paso Production Oil & Gas Company, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: A copy of the Merger Agreement will be furnished upon request and without cost to any member of the Subsidiaries, or to any stockholder of the Company.

IN WITNESS WHEREOF, said El Paso Production Oil & Gas Company, has caused this certificate to be signed by David L. Siddall, its Vice President, and attested by Stacy J. James, its Assistant Secretary, on this 27th day of August 2003.

		EL PASO PRODUCTION OIL & GAS COMPANY


		By:	/s/ David L. Siddall
			David L. Siddall
			Vice President

Attest:


By:	/s/ Stacy J James
	Stacy J James, Assistant Secretary

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 10:26 AM 08/27/2003
		FILED 10:26 AM 08/27/2003
		SRV 030556327 – 0610204 FILE

CERTIFICATE OF OWNERSHIP AND MERGER

merging

EL PASO DRILLING COMPANY

into

EL PASO PRODUCTION OIL & GAS COMPANY

(Pursuant to Section 253 of the General Corporation Law of the State of Delaware.)

El Paso Production Oil & Gas Company, a Delaware corporation (the “Company”), for the purpose of merging El Paso Drilling Company, a Delaware corporation (the “Subsidiary”) with and into the Company, does hereby certify as follows:

FIRST: That the name and state of incorporation of each constituent corporation of the merger is as follows:

Name		State of Incorporation

El Paso Drilling Company		Delaware

El Paso Production Oil & Gas Company		Delaware

SECOND: That the Company owns all of the outstanding shares of each class of the capital stock of the Subsidiary.

THIRD: Attached hereto as Exhibit A is a true and correct copy of the resolutions adopted by the Company’s Board of Directors dated as of the 27th day of August 2003, pursuant to which the Company determined to merge into itself the Subsidiary on the conditions set forth in such resolutions.

FOURTH: That this Certificate of Ownership and Merger and the mergers contemplated hereby shall be effective on August 31, 2003.

IN WITNESS WHEREOF, said El Paso Production Oil & Gas Company, has caused this certificate to be signed by David L. Siddall, its Vice President, and attested by Margaret E. Roark, its Assistant Secretary, this 27th day of August 2003.

	EL PASO PRODUCTION OIL & GAS COMPANY


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

Attest:

By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

EXHIBIT A

WHEREAS, this Company is the owner of all of the issued and outstanding shares of common stock of El Paso Drilling Company, a Delaware corporation (the “Subsidiary”);

WHEREAS, this Company desires to merge the Subsidiary with and into itself and to possess all of the estate, property, rights, privileges and franchises of the Subsidiary; and

WHEREAS, the Board of Directors of this Company believes it is in the best interest of this Company to merge the Subsidiary with and into itself;

NOW, THEREFORE, BE IT RESOLVED that this Company merge the Subsidiary with and into itself, that the separate existence of the Subsidiary cease on the Effective Date, and that this Company, as the surviving Company of the merger pursuant to Section 253 of the General Corporation Law of the State of Delaware (the “DGCL”), continue to exist by virtue of and be governed by the laws of the State of Delaware (such actions, collectively, being called the “Merger”).

RESOLVED that the Merger be, and hereby is, approved.

RESOLVED that the Merger shall be effective on August 31, 2003 (such date being referred to herein as the “Effective Date”).

RESOLVED that, on the Effective Date, this Company, without further action, as provided by the laws of the State of Delaware, succeed to and possess all the rights, privileges, powers, and franchises, of a public as well as of a private nature, of the Subsidiary; and all property, real, personal and mixed, and all debts due on whatsoever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to the Subsidiary shall be vested in this Company without further act or deed; and all property, rights, privileges, powers and franchises, and all and every other interest shall thereafter be as effectively the property of this Company as they were of the Subsidiary; and the title to any real estate, or any interest therein, vested in this Company or the Subsidiary by deed or otherwise shall not revert or be in any way impaired by reason of the Merger. This Company shall thereafter be responsible and liable for all debts, liabilities, and duties of the Subsidiary, which may be enforced against this Company to the same extent as if those debts, liabilities, and duties had been incurred or contracted by

this Company. Neither the rights of creditors nor any liens upon the property of the Subsidiary or this Company shall be impaired by the Merger.

RESOLVED that, on the Effective Date, each share of common stock of the Subsidiary be cancelled.

RESOLVED that the proper officers be, and each of them hereby is, authorized and empowered, in the name and on behalf of this Company, or any subsidiary of this Company, to do and perform, or cause to be done and performed, all such acts, deeds and things, to make, execute, and deliver, or cause to be made, executed, and delivered, all such agreements, guaranties, notes, evidences of borrowings, undertakings, documents, instruments and certificates as each such officer may deem necessary or appropriate to effectuate and carry out fully the purpose and intent of the foregoing resolutions.

RESOLVED that any and all actions heretofore taken by any officer of this Company or any subsidiary of this Company, in connection with the foregoing resolutions be, and hereby are, ratified and approved.

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:01 AM 09/26/2003
		FILED 09:15 AM 09/26/2003
		SRV 030619855 – 0610204 FILE

CERTIFICATE OF MERGER

merging

EL PASO COGR I, L.L.C.

and

EL PASO COGR IV, L.L.C.

into

EL PASO PRODUCTION OIL & GAS COMPANY

Pursuant to Section 264 of the General

Corporation Law of the State of Delaware (“GCLD”)

and Section 18-209 of the

Delaware Limited Liability Company Act (“DLLCA”)

El Paso Production Oil & Gas Company (the “Company”), a Delaware corporation, for the purpose of merging El Paso COGR I, L.L.C., and El Paso COGR IV, L.L.C., each a Delaware limited liability company, with and into the Company, does hereby certify as follows:

FIRST: That the name and state of incorporation and formation of each constituent entities of the merger is as follows:

Name		State of Incorporation

El Paso COGR I, L.L.C.		Delaware
El Paso COGR IV, L.L.C.		Delaware
El Paso Production Oil & Gas Company		Delaware

SECOND: An Agreement of Merger dated September 26, 2003 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituents entities to the Merger in accordance with Section 264(c) of the GCLD and Section 18-209 of the DLLCA.

THIRD: The name of the surviving entity is El Paso Production Oil & Gas Company.

FOURTH: The existing Certificate of Incorporation of the Company shall be the Certificate of Incorporation of the surviving entity.

FIVE: The effective time of the Merger shall be on September 30, 2003.

SIXTH: An executed copy of the Merger Agreement is on file at the place of business of El Paso Production Oil & Gas Company, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: A copy of the Merger Agreement will be furnished upon request and without cost to any member of the constituent entities or to any stockholder of the Company.

	EL PASO PRODUCTION OIL & GAS COMPANY


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

Attest:

By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

State of Delaware
Secretary of State
Division of Corporations
Delivered 01:45 PM 06/17/2004
FILED 12:08 PM 06/17/2004
SRV 040447602 – 0610204 FILE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION OIL & GAS COMPANY

Pursuant to Sections 242 and 245 of the

General Corporation Law of the State of Delaware

El Paso Production Oil & Gas Company (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name of the Corporation is El Paso Production Oil & Gas Company. The Corporation was originally incorporated on April 20, 1964, under the name Coastal States Enterprises, Inc. The name of the Corporation was changed on February 13, 1969 to Gas Producing Enterprises, Inc. The name was changed on March 7, 1980 to Coastal Oil & Gas Corporation. The Certificate of Incorporation was amended on October 14, 1983 renumbering Article Thirteen to Article Fourteen. The Certificate of Incorporation was amended on April 2, 1985, deleting Article Thirteen and renumbering Article Fourteen to Article Thirteen. The Corporation changed its name on March 9, 2001 to El Paso Production Oil & Gas Company.

2. This Amended and Restated Certificate of Incorporation restates and further amends the Certificate of Incorporation of the Corporation and has been adopted and approved in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. Stockholder approval of this Restated Certificate of Incorporation was given by unanimous written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.

3. The text of the Certificate of Incorporation, as heretofore amended, is hereby amended and restated to read in its entirety as follows:

FIRST: The name of the corporation is El Paso Production Oil & Gas Company.

SECOND: The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, New Castle County, Delaware 19801, and the name of its registered agent at the above address is The Corporation Trust Company.

THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of stock the corporation shall have authority to issue is five hundred (500) shares of common stock with a par value of one thousand dollars ($1,000.00) per share.

Shares of stock of this corporation whether with or without par value, of any class or classes hereby or hereafter authorized, may be issued by this corporation from time to time for such consideration permitted by law as may be fixed from time to time by the Board of Directors.

FIFTH: Unless required by the By-laws, the election of the Board of Directors need not be by written ballot.

SIXTH: The Board of Directors of this corporation is expressly authorized to make, alter, or repeal the By-laws of the corporation, but the stockholders may make additional By-laws and may alter or repeal any By-law whether or not adopted by them.

SEVENTH: No director of the Corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, for any act or omission, except that a director may be liable (i) for breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. If the General Corporation Law of the State of Delaware is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. The elimination and limitation of liability provided herein shall continue after a director has ceased to occupy such position as to acts or omissions occurring during such director’s term or terms of office. Any amendment, repeal or modification of this Article Seventh shall not adversely affect any right of protection of a director of the Corporation existing at the time of such repeal or modification.

IN WITNESS WHEREOF, El Paso Production Oil & Gas Company has caused this Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer this 17th day of June 2004.

	EL PASO PRODUCTION OIL & GAS COMPANY


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:25 PM 12/28/2005
		FILED 09:27 PM 12/28/2005
		SRV 051069281 – 0610204 FILE

CERTIFICATE OF MERGER

EL PASO PRODUCTION SERVICE COMPANY,

a Delaware corporation

with and into

EL PASO PRODUCTION OIL & GAS COMPANY,

a Delaware corporation

The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

Name		State of Incorporation
El Paso Production Service Company		Delaware
El Paso Production Oil & Gas Company		Delaware

THIRD: That the name of the surviving corporation is El Paso Production Oil & Gas Company.

FOURTH: That the existing certificate of incorporation of El Paso Production Oil & Gas Company shall be the certificate of incorporation of the surviving corporation.

SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation.

SEVENTH: That this Certificate of Merger shall be effective at 9:30 a.m., Eastern Standard Time, on December 31, 2005.

IN WITNESS WHEREOF, said El Paso Production Oil & Gas Company has caused this certificate to be signed by Lisa A. Stewart, its President, and attested by Margaret E. Roark, one of its Assistant Secretaries, this 28th day of December 2005.

	EL PASO PRODUCTION OIL & GAS COMPANY


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

Attest:

By:	/s/ Margaret E. Roark
	Margaret E. Roark, Assistant Secretary

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:17 PM 06/09/2006
		FILED 09:08 PM 06/09/2006
		SRV 060562343 – 0610204 FILE

CERTIFICATE OF AMENDMENT

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

EL PASO PRODUCTION OIL & GAS COMPANY (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of the Company (the “Board”), by written consent filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Amended and Restated Certificate of Incorporation of the Company:

RESOLVED that it is deemed advisable that effective at 10:45 a.m., Eastern Daylight Time, on June 30, 2006, the Second Amended and Restated Certificate of Incorporation of this Company be amended by changing the Article thereof numbered “FIRST:” so that, as amended, said Article shall be and read as follows:

“FIRST: The name of the Corporation is El Paso Exploration & Production Management, Inc.”

SECOND: That in lieu of a meeting and vote of stockholders, the sole stockholder entitled to vote has given written consent to said amendment in accordance with, the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

FOURTH: That in accordance with the aforesaid amendment, the effective time and date of this Certificate of Amendment are 10:45 a.m., Eastern Daylight Time, on June 30, 2006.

IN WITNESS WHEREOF, said EL PASO PRODUCTION OIL & GAS COMPANY has caused the foregoing Certificate of Amendment to be signed on its behalf by its President and attested by an Assistant Secretary, this 31st day of May, 2006.

	EL PASO PRODUCTION OIL & GAS COMPANY


	/s/ Lisa A. Stewart
	Lisa A. Stewart
	President

Attest:

/s/ Margaret E. Roark
Margaret E. Roark, Assistant Secretary

CERTIFICATE OF MERGER

SANDBAR PETROLEUM COMPANY,

a Delaware corporation

into

EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.,

a Delaware corporation

The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger are as follows:

Name		State of Incorporation:
Sandbar Petroleum Company		Delaware
El Paso Exploration & Production Management, Inc.		Delaware

THIRD: That the name of the surviving corporation is El Paso Exploration & Production Management, Inc.

FOURTH: That the existing certificate of incorporation of El Paso Exploration & Production Management, Inc. shall be the certificate of incorporation of the surviving corporation.

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 06:10 PM 06/30/2010
		FILED 05:47 PM 06/30/2010
		SRV 100707032 – 0610204 FILE

SIXTH: That a copy of the Agreement and Plan of Merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation.

SEVENTH: That this Certificate of Merger shall be effective on June 30, 2010.

IN WITNESS WHEREOF, said El Paso Exploration & Production Management, Inc. has caused this certificate to be signed by Francis C. Olmsted III, its Vice President, and attested by Joyce Allen-Dennis, its Assistant Secretary this 24th day of June, 2010.

	EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.


	By:	/s/ Francis C. Olmsted III
	Name:	Francis C. Olmsted III
	Title:	Vice President

Attest:


By:	/s/ Joyce Allen-Dennis
	Joyce Allen-Dennis, Assistant Secretary

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 04:39 PM 05/21/2012
		FILED 04:39 PM 05/21/2012
		SRV 120601759 – 0610204 FILE

CERTIFICATE OF CONVERSION

FROM A CORPORATION TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 266

OF THE DELAWARE

GENERAL CORPORATION LAW

AND SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of El Paso Exploration & Production Management, Inc. (the “Corporation”) is being duly executed and filed by an authorized person of the Corporation to convert the Corporation to a Delaware limited liability company in accordance with Section 266 of the Delaware General Corporation Law (the “DGCL”) and Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Corporation set forth in its original Certificate of Incorporation was:

Coastal States Enterprises, Inc.

2. The name of the Corporation immediately prior to filing this Certificate of Conversion was:

El Paso Exploration & Production Management, Inc.

3. The jurisdiction of the Corporation immediately prior to filing this Certificate of Conversion was:

Delaware

4. The jurisdiction where the Corporation was first created is:

Delaware

5. The date the Certificate of Incorporation of the Corporation was filed is:

April 20, 1964

6. The name of the limited liability company (the “LLC”) as set forth in its Certificate of Formation is:

EP Energy Management, L.L.C.

7. This conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the DLLCA.

8. This Certificate of Conversion shall be effective at 12:01 a.m. Eastern Time on May 24, 2012.

IN WITNESS WHEREOF, this Certificate of Conversion has been executed by an authorized person of the Corporation on the 18th day of May, 2012.

	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 04:39 PM 05/21/2012
		FILED 04:39 PM 05/21/2012
		SRV 120601759 – 0610204 FILE

CERTIFICATE OF FORMATION

EP ENERGY MANAGEMENT, L.L.C.

This Certificate of Formation of EP Energy Management, L.L.C. (the “LLC”) dated as of May 18, 2012, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST: The name of the LLC formed hereby is:

EP Energy Management, L.L.C.

SECOND: The address of the registered office of the LLC in the State of Delaware is:

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

FOURTH: The Certificate of Formation shall be effective at 12:01a.m. Eastern Time on May 24, 2012.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed, this 18th day of May, 2012.

	/s/ Joseph C. James
	Joseph C. James
	Authorized Person

Exhibit 3.14

LIMITED LIABILITY COMPANY AGREEMENT

EP ENERGY MANAGEMENT, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

The undersigned member, EP Energy, L.L.C., a Delaware limited liability company (the “Sole Member”) hereby forms EP Energy Management, L.L.C. (the “Company”), a Delaware limited liability company, pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq. (the “Act”), and hereby declares the following to be the Limited Liability Company Agreement of such limited liability company as of the Effective Date (as defined herein).

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101. et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or 3.02.

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware effective as of May 24, 2012, to form the Company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires

“ Company ” means the limited liability company formed pursuant to this Agreement.

“ Distributable Cash ” means cash (in U.S dollars) of the Company that the Member determines is available for distribution.

“ Person ” has the meaning set forth in the Act.

ARTICLE II

FORMATION

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member may contribute cash or other property to the Company as it shall decide, from time to time.

ARTICLE IV

DISTRIBUTIONS

ARTICLE V

BOOKS AND RECORDS

ARTICLE VI

MANAGEMENT OF THE COMPANY

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

ARTICLE VIII

DISSOLUTION AND TERMINATION

ARTICLE IX

INDEMNIFICATION

SECTION 9.01. General . Except to the extent expressly prohibited by the Act, the Company shall indemnify each Person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such Person or such Person’s testator or intestate is or was a member or officer of the Company, against judgments, fines (including excise taxes assessed on a Person with respect to an employee benefit plan), penalties, amounts paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with such action or proceeding, or any appeal therefrom; provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such Person establishes that his conduct did not meet the then applicable minimum statutory standards of conduct: and provided, further, that no such indemnification shall be required in connection with any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding unless the Company has given its prior consent to such settlement or such other disposition, which consent shall not be unreasonably withheld.

among such parties: and provided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by law.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by EP Energy, L.L.C., effective as of the 24th day of May, 2012.

	EP ENERGY, L.L.C.


	/s/ Francis C. Olmsted III
	Francis C. Olmsted III
	Vice President

Exhibit A

Percentage Interests

Member:		Percentage Interest

EP Energy, L.L.C.		100%
1001 Louisiana Street
Houston, Texas 77002

Exhibit 3.15

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY RESALE COMPANY, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE TWENTY-THIRD DAY OF FEBRUARY, A.D. 1994, AT 4:30 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “COGC RESALE COMPANY” TO “EL PASO PRODUCTION RESALE COMPANY”, FILED THE THIRTY-FIRST DAY OF OCTOBER, A.D. 2002, AT 10 O’CLOCK A.M.

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “EL PASO PRODUCTION RESALE COMPANY” TO “EL PASO PRODUCTION RESALE COMPANY, L.L.C”, FILED THE EIGHTEENTH DAY OF DECEMBER, A.D. 2009, AT 6:04 O’CLOCK P.M.

CERTIFICATE OF FORMATION, FILED THE EIGHTEENTH DAY OF DECEMBER, A.D. 2009, AT 6:04 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE THIRTIETH DAY OF NOVEMBER, A.D. 2010, AT 10:04 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO PRODUCTION RESALE COMPANY, L.L.C.” TO “EP ENERGY RESALE COMPANY,




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
	2377052	8100H	AUTHENTICATION:	9768657

	120919759		DATE:	08-09-12
You may verify this certificate online
at corp.delaware.gov/authver.shtml

Delaware

The First State

L.L.C.”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:26 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE FIRST DAY OF JUNE, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “EP ENERGY RESALE COMPANY, L.L.C.”.




			/s/ Jeffrey W. Bullock
			Jeffrey W. Bullock, Secretary of State
	2377052	8100H	AUTHENTICATION:	9768657

	120919759		DATE:	08-09-12
You may verify this certificate online
at corp.delaware.gov/authver.shtml

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 04:30 PM 02/23/1994

944026617 - 2377052

CERTIFICATE OF INCORPORATION

COGC RESALE COMPANY

1. The name of the corporation is:

COGC RESALE COMPANY

2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

4. The total number of shares of stock which the corporation shall have authority to issue is One Thousand (1,000) and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand Dollars ($1,000.00).

5. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Any repeal or modification of the foregoing paragraph by the stockholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification.

6. The Board of Directors is authorized to make, alter or repeal the bylaws of the corporation. Election of directors need not be by written ballot.

7. The name and mailing address of the incorporator is:

	AUSTIN M. O’TOOLE
	Coastal Tower
	Nine Greenway Plaza
	Houston, Texas 77046-0995

I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 23rd day of February, 1994.

	/s/ AUSTIN M. O’TOOLE
	AUSTIN M. O’TOOLE
	Incorporator

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 10:00 AM 10/31/2002

020670289 - 2377052

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

COGC Resale Company (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

RESOLVED that it is deemed advisable that the Certificate of Incorporation of this Company be amended, and that said Certificate of Incorporation be so amended, by changing the Articles thereof numbered “FIRST:” so that, as amended, said Article shall be and read as follows:

FIRST: The name of the corporation is El Paso Production Resale Company

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said COGC Resale Company, has caused this certificate to be signed on its behalf by its Vice President and attested by its Assistant Secretary, this 31st day of October 2002.

	COGC RESALE COMPANY


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President
Attest:

/s/ Margaret E. Roark
Margaret E. Roark, Assistant Secretary

State of Delaware

Secretary of State

Division of Corporations

Delivered 06:04 PM 12/18/2009

FILED 06:04 PM 12/18/2009

SRV 091118568 - 2377052 FILE

CERTIFICATE OF CONVERSION

FROM A CORPORATION TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 266

OF THE DELAWARE

GENERAL CORPORATION LAW

AND SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of El Paso Production Resale Company (the “Corporation”) dated as of December 18 th , 2009, is being duly executed and filed by an authorized officer of the Corporation to convert the Corporation to a Delaware limited liability company in accordance with Section 266 of the Delaware General Corporation Law (the “DGCL”) and Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Corporation immediately prior to filing this Certificate of Conversion, was:

El Paso Production Resale Company

2. The name of the Corporation set forth in its original Certificate of Incorporation, was:

COGC Resale Company

3. The jurisdiction of the Corporation immediately prior to filing this Certificate of Conversion was:

Delaware

4. The jurisdiction where the Corporation was first created is:

Delaware

5. The date the Certificate of Incorporation of the Corporation was filed is:

February 23, 1994

6. The name of the limited liability company (the “LLC”) as set forth in its Certificate of Formation is:

El Paso Production Resale Company, L.L.C.

7. This conversion has been approved in accordance with the provisions of Section 266 of the DGCL and Section 18-214 of the DLLCA.

IN WITNESS WHEREOF, this Certificate of Conversion has been executed by an authorized officer of the Corporation on the 18 th date of December 2009.

	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

State of Delaware

Secretary of State

Division of Corporations

Delivered 06:04 PM 12/18/2009

FILED 06:04 PM 12/18/2009

SRV 091118568 - 2377052 FILE

CERTIFICATE OF FORMATION

EL PASO PRODUCTION RESALE COMPANY, L.L.C.

This Certificate of Formation of El Paso Production Resale Company, L.L.C. (the “LLC”) dated as of December 18 th 2009, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seq.

FIRST:	The name of the LLC formed hereby is:

	El Paso Production Resale Company, L.L.C.

SECOND:	The address of the registered office of the LLC in the State of Delaware is:

	Corporation Trust Center
	1209 Orange Street
	New Castle County
	Wilmington, Delaware 19801

THIRD:	The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

	The Corporation Trust Company
	Corporation Trust Center
	1209 Orange Street
	New Castle County
	Wilmington, Delaware 19801

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed as of the date first above written.

	/s/ Joseph C. James
	Joseph C. James
	Authorized Person

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:15 AM 11/30/2010

FILED 10:04 AM 11/30/2010

SRV 101129245 - 2377052 FILE

CERTIFICATE OF MERGER

merging

EL PASO E&P HOLDINGS COMPANY, L.L.C.

with and into

EL PASO PRODUCTION RESALE COMPANY, L.L.C.

Pursuant to Section 18-209 of the Delaware Limited Liability Company Act

El Paso Production Resale Company, L.L.C. (“Resale”), a Delaware limited liability company, hereby certifies to the following facts relating to the merger (the “Merger”) of El Paso E&P Holdings Company, L.L.C., a Delaware limited liability company, with and into Resale, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and submits the following Certificate of Merger for filing:

FIRST: That the name and state of formation of each limited liability company that is to merge is as follows:

	Name		State of Formation

	El Paso E&P Holdings Company, L.L.C.		Delaware
	El Paso Production Resale Company, L.L.C.		Delaware

SECOND: That an Agreement of Merger dated as of November 29, 2010 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA.

THIRD: That the name of the surviving entity is El Paso Production Resale Company, L.L.C.

FOURTH: That the existing Certificate of Formation of Resale shall be the Certificate of Formation of the surviving entity.

FIVE: That the Merger shall be effective on November 30, 2010.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of Resale, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso Production Resale Company, L.L.C. has caused this Certificate of Merger to be signed by a duly authorized officer this 29th day of November, 2010.

	EL PASO PRODUCTION RESALE COMPANY, L.L.C.


	By:	/s/ Francis C. Olmsted III
	Name:	Francis C. Olmsted III
	Title:	Vice President

State of Delaware

Secretary of State

Division of Corporations

Delivered 04:40 PM 05/21/2012

FILED 04:26 PM 05/21/2012

SRV 120601857 - 2377052 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EL PASO PRODUCTION RESALE COMPANY, L.L.C.

The undersigned, desiring to amend the Certificate of Formation of El Paso Production Resale Company, L.L.C. (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST:	The name of the LLC is:

	El Paso Production Resale Company, L.L.C.

SECOND:	The article numbered “FIRST” of the Certificate of Formation of the Company shall be amended as follows:

	“FIRST:	The name of the LLC formed hereby is:

		EP Energy Resale Company, L.L.C.”

THIRD:	This amendment to the Certificate of Formation shall be effective at 12:01a.m. Eastern Time on June 1, 2012.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 18th day of May, 2012.

	EL PASO PRODUCTION RESALE COMPANY, L.L.C.


	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

Exhibit 3.16

LIMITED LIABILITY COMPANY AGREEMENT

EL PASO PRODUCTION RESALE COMPANY, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

The undersigned member, El Paso Exploration & Production Management, Inc., a Delaware corporation, (the “Member”), hereby form El Paso Production Resale Company, L.L.C. (the “Company”), a Delaware limited liability company, pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq. (the “Act”), and hereby declare the following to be the Limited Liability Company Agreement of such limited liability company as of the Effective Date (as defined herein).

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Members pursuant to Section 3.01 or 3.02.

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware on December 18 th , 2009, to form the Company pursuant to the Act, as originally executed by Joseph C. James (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires.

“ Company ” means the limited liability company formed pmsuant to this Agreement.

“ Distributable Cash ” means cash (in U.S. dollars) of the Company that the Members determine is available for distribution.

“ Interest ” means the ownership interest in the Company at any time, including the right of the Members to any and all benefits to which the Members may be entitled as provided in this Agreement, together with the obligations of the Members to comply with all the terms and provisions of this Agreement.

“ Members ” means El Paso Exploration & Production Management, Inc. and any other member or members admitted to the Company in accordance with this Agreement or any amendment or restatement hereof

“ Person ” has the meaning set forth in the Act.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

ARTICLE II

FORMATION

SECTION 2.01. Name . The name of the Company shall be as set forth in the Preamble hereof All business of the Company shall be conducted under such name and title to all property, real, personal, or mixed, owned by or leased to the Company shall be held in such name. Notwithstanding the preceding sentence, the Members may change the name of the Company or adopt such trade or fictitious names as it may determine.

SECTION 2.03. Principal Place of Business. The principal place of business of the Company shall be located at 1001 Louisiana, Houston, Texas 77002. The Members may establish other offices at other locations.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage

in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Members may contribute cash or other property to the Company as they shall decide, from time to time.

SECTION 3.02. Additional Capital Contributions . If at any time the Members shall determine that additional funds or property are necessary or desirable to meet the obligations or needs of the Company, the Members may make additional Capital Contributions.

SECTION 3.03. Limitation on Liability . The liability of the Members shall be limited to its Interest in the Company, and the Members shall not have any personal liability to contribute money to, or in respect of, the liabilities or the obligations of the Company, except as set forth in the Act.

SECTION 3.04. Withdrawal of Capital; Interest . The Members may not withdraw capital or receive any distributions, except as specifically provided herein. No interest shall be paid by the Company on any Capital Contributions.

ARTICLE IV

DISTRIBUTIONS

SECTION 4.01. Distributions . Except as otherwise provided in the Act, all Distributable Cash of the Company shall be distributed to the Members, or distributions in kind may be made to the Members at such times as the Members shall determine.

ARTICLE V

BOOKS AND RECORDS

SECTION 5.01. Books and Records . The Members shall keep or cause to be kept complete and accmate books of account and records that shall reflect all transactions and other matters and include all documents and other materials with respect to the Company’s business that are usually entered into and maintained by Persons engaged in similar businesses. All Company financial statements shall be accurate in all material respects, shall fairly present the financial position of the Company and the results of its operations and Distributable Cash and transactions in its reserve accounts, and shall be prepared in accordance with generally accepted accounting principles, subject, in the case of quarterly statements, to year-end adjustments. The books of the Company shall at all times be maintained at the principal office of the Company or at such other location as the Members decides.

ARTICLE VI

MANAGEMENT OF THE COMPANY

SECTION 6.01. Management . The management of the Company shall be under the direction of the Members, who may, from time to time, designate one or more persons to be officers of the Company, with such titles as the Members may determine, including those positions set forth in Section 6.02.

SECTION 6.02. Officers . Such of the following officers shall be elected as the Members deems necessary or appropriate: a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers, and such other officers with such titles and powers and/or duties as the Members shall from time to time determine. Officers may be designated for particular areas of responsibility and simultaneously serve as officers of subsidiaries or divisions. Any officer so elected may resign at any time upon written notice to the Members. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Members. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Members.

(a) President . The President shall have general control of the business, affairs, operations and property of the Company, subject to the supervision of the Members. He may sign or execute, in the name of the Company, all deeds, mortgages, bonds, contracts or other undertakings or instruments, except in cases where the signing or execution thereof shall have been expressly delegated by the Members to some other officer or agent of the Company. He shall have and may exercise such powers and perform such duties as may be provided by law or as are incident to the office of President of a company (as if the Company were a Delaware corporation) and such other duties as are assigned from time to time by the Members.

(b) Vice Presidents . Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have such powers and perform such duties as may be provided by law or as may from time to time be assigned to him, either generally or in specific instances, by the Members or the President. Any Executive Vice President or Senior Vice President may perform any of the duties or exercise any of the powers of the President at the request of, or in the absence or disability of, the President or otherwise as occasion may require in the administration of the business and affairs of the Company.

shall have been expressly delegated by the Members to some other officer or agent of the Company.

(c) Secretary . The Secretary shall keep the records of the Company, in books provided for the purpose; he shall be custodian of the seal or seals of the Company; he shall see that the seal is affixed to all documents requiring same, the execution of which, on behalf of the Company, under its seal, is duly authorized, and when said seal is so affixed he may attest same; and, in general, he shall perform all duties incident to the office of the secretary of a company (as if the Company were a Delaware corporation), and such other duties as from time to time may be assigned to him by the Members or the President or as may be provided by law. Any Assistant Secretary may perform any of the duties or exercise any of the powers of the Secretary at the request of, or in the absence or disability of, the Secretary or otherwise as occasion may require in the administration of the business and affairs of the Company.

(d) Treasurer . The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Company, and shall deposit, or cause to be deposited, in the name of the Company, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Members; if required, he shall give a bond for the faithful discharge of his duties, with such surety or sureties as the Members may determine; he shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Company and shall render to the Members or the President, whenever requested, an account of the financial condition of the Company (as if the Company were a Delaware corporation); and, in general, he shall perform all the duties incident to the office of treasurer of a company, and such other duties as may be assigned to him by the Members or the President or as may be provided by law.

(e) Controller . The Controller shall be the chief accounting officer of the Company. He shall keep full and accurate accounts of the assets, liabilities, commitments, receipts, disbinsements and other financial transactions of the Company; shall cause regular audits of the books and records of account of the Company and supervise the preparation of the Company’s financial statements; and, in general, he shall perform the duties incident to the office of controller of a company (as if the Company were a Delaware corporation) and such other duties as may be assigned to him by the Members or the President or as may be provided by law. If no Controller is elected by the Members, the Treasurer shall perform the duties of the office of controller.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

ARTICLE VIII

DISSOLUTION AND TERMINATION

SECTION 8.01. Dissolution . The Company shall be dissolved and its business wound up upon the decision made at any time by the Members to dissolve the Company, or upon the occurrence of any event of dissolution under the Act.

SECTION 8.02. Liquidation . Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Members shall wind up the affairs of the Company pursuant to this Agreement and in accordance with the Act, including, without limitation, Section 18-804 thereof

SECTION 8.03. Distribution of Property . If in the discretion of the Members it becomes necessary to make a distribution of Company property in kind in connection with the liquidation of the Company, such property shall be transferred and conveyed to the Members.

ARTICLE IX

INDEMNIFICATION

SECTION 9.02. Reimbursement . The Company shall advance or promptly reimburse, upon request, any Person entitled to indemnification hereunder for all expenses, including attorneys’ fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Person (in form and substance satisfactory to the Company) to repay such amount if such Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Person is entitled; provided that such Person shall cooperate in good faith with any request by the Company that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties; and p rovided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.04. Indemnification Agreement . The Company is authorized to enter into agreements with any of its Members or officers extending rights to indemnification and advancement of expenses to such Person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such Person pursuant to this provision.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by law.

SECTION 9.06. No Amendments . No amendment or repeal of this provision shall apply to or have any effect on the indemnification of, or advancement of expenses to, the Members or any officer of the Company for, or with respect to, acts or omissions of such Members or officer occurring prior to such amendment or repeal.

SECTION 9.07. Not Exclusive . The foregoing shall not be exclusive of any other rights to which any Member or any officer may be entitled as a matter of law and shall not affect any rights to indemnification to which Company personnel other than the Members or officers may be entitled by contract or otherwise.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Members.

SECTION 10.02. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Members.

SECTION 10.04. Headings . The tities of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by El Paso Exploration & Production Management, Inc., effective as of the 18 th day of December 2009.

	EL PASO EXPLORATION & PRODUCTION
	MANGEMENT INC.


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

Exhibit 3.17

State of Delaware

Office of the Secretary of State

I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF LIMITED PARTNERSHIP OF “COASTAL OIL & GAS GATHERING, L.P.”, FILED IN THIS OFFICE ON THE NINETEENTH DAY OF MAY, A.D. 1999, AT 10 O’CLOCK A.M.

	/s/ Edward J. Freel
	Edward J. Freel, Secretary of State

3044912 8100	AUTHENTICATION:	9753523

991199395	DATE:	05-19-99

CERTIFICATE OF LIMITED PARTNERSHIP

COASTAL OIL & GAS GATHERING, L.P.

The undersigned, desiring to form a limited partnership pursuant to the Delaware Revised Unifonn Limited Partnership Act, 6 Delaware Code, Chapter 17, do hereby certify as follows:

I. The name of the limited partnership is:

COASTAL OIL & GAS GATHERING, L.P.

II. The address of the Partnership’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the Partnership’s registered agent for service of process in the State of Delaware at such address is The Corporation Trust Company.

III. The name and mailing address of the general partner is:

NAME		MAILING ADDRESS

Coastal Oil & Gas Corporation		Nine Greenway Plaza
		Houston, Texas 77046

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership of Coastal Oil & Gas Gathering, L.P., as of the 19th day of May, 1999.

	COASTAL OIL & GAS CORPORATION, GENERAL PARTNER


	By:	/s/ AUSTIN M. O’TOOLE
		AUSTIN M. O’TOOLE
		Senior Vice President and Secretary

State of Delaware

Office of the Secretary of State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF “COASTAL OIL & GAS GATHERING, L.P.”, CHANGING ITS NAME FROM “COASTAL OIL & GAS GATHERING, L.P.” TO “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.”, FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF APRIL, A.D. 2001, AT 10 O’CLOCK A.M.

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100	AUTHENTICATION:	1087930

010184665	DATE:	04-19-01

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

COASTAL OIL & GAS GATHERING, L.P.

The undersigned, desiring to amend the Certificate of Limited Partnership of COASTAL OIL & GAS GATHERING, L.P., pursuant to the provisions of Section 17-202 of the Revised Uniform Limited Partnership Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the Limited Partnership is:

Coastal Oil & Gas Gathering, L.P.

SECOND: Article “ I .” of the Certificate of Limited Partnership shall be amended as follows:

“I. The name of the limited partnership shall be El Paso Production Oil & Gas Gathering, L.P.”

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 16th day of April 2001.

	EL PASO PRODUCTION OIL & GAS COMPANY
		the General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 A.M 04/17/2001
010184665 - 3044912

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES:

“EL PASO PROCESSING PLANTS COMPANY, L.L.C.”, A DELAWARE LIMITED LIABILITY COMPANY,

WITH AND INTO “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.” UNDER THE NAME OF “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.”, A LIMITED PARTNERSHIP ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED-AND FILED IN THIS OFFICE THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2005, AT 9:25 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2005, AT 8:20 O’CLOCK A.M..

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100M	AUTHENTICATION:	4411521

051069264	DATE:	12-29-05

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 09:25 PM 12/28/2005
		FILED 09:25 PM 12/28/2005
		SRV 051069264 - 3044912 FILE

CERTIFICATE OF MERGER

merging

EL PASO PROCESSING PLANTS COMPANY, L.L.C.

with and into

EL PASO PRODUCTION OIL & GAS GATHERING, L.P.

Pinsuact to

Section 18-209 of the Delaware Limited Liability Company Act

and

Section 17-211 of the Delaware Revised Unifonn Limited Partnership Act

El Paso Production Oil & Gas Gathering, L.P., a Delaware limited partnership, hereby certifies to the following focts relating to the merger (the “Merger”) of El Paso Processing Plants Company, L.L.C., a Delaware limited liability company, with and into El Paso Production Oil & Gas Gathering, L.P., pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

Name		State of Jurisdiction

El Paso Processing Plants Company, L.L.C.		Delaware
El Paso Production Oil & Gas Gafoering, L.P.		Delaware

SECOND: That an Agreement of Merger dated aa of Oeoember 2S, 2005 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso Production Oil & Gas Gathering, L.P. (“Gathering”).

FOURTH: That the existing Certificate of Limited Partnership of Gathering shall be the Certificate of Limited Partnership of the surviving entity.

FIFTH: That the Merger shall be effective at 8:20 a.m., Eastern Standard Time, on December 31, 2005.

SIXTH: That an executed copy of the Merger Agreement is on file et the place of business of Gathering, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request arul without cost to any partner or member of, or any parson holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso Production Oil & Gas Gathering, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 28th day of December 2005.

EL PASO PRODUCTION OIL & GAS GATHERING, L.P.
By:	EL PASO PRODUCTION OIL & GAS COMPANY
	Its General Partner


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

Prod./Pipes Reorg. Step 3 of 3

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (this “Agreement”) dated as of the 31st day of December 2005, pursuant to Section 18-209 of the Delaware Limited Liability Company Act and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act, between El Paso Processing Plants Company, L.L.C. (“Plants Co.”), a Delaware limited liability company, and El Paso Production Oil & Gas Gathering, L.P. (“Gathering”), a Delaware limited partnership.

W I T N E S S E T H:

WHEREAS, Plants Co. (the “Merging Entity”) desires to merge (the “Merger”) with and into Gathering (the “Survivor” or “Surviving Entity”).

NOW, THEREFORE, the parties to this Agreement, in consideration of the mutual covenants, agreements and provisions hereinafter contained, do hereby prescribe the terms and conditions of the Merger and mode of carrying the same into effect as follows:

FIRST: The Survivor hereby merges with and into itself the Merging Entity, and the Merging Entity shall be and hereby is merged into the Survivor, which shall be the Surviving Entity.

SECOND: The Certificate of Limited Partnership of the Survivor, as amended, which exists prior to the Merger, shall be the Certificate of Limited Partnership of the Surviving Entity.

THIRD: The terms and conditions of the Merger are as follows:

(a) The Amended and Restated Limited Partnership Agreement of the Survivor, as it shall exist on the effective date of this Merger, shall be and remain the Amended and Restated Limited Partnership Agreement of the Surviving Entity until the same shall be altered, amended or repealed as therein provided.

(b) This Merger shall become effective at 8:20 a.m., Eastern Standard Time, on December 31, 2005.

(c) Upon the Merger becoming effective, all the property, rights, privileges, franchises, patents, trademarks, licenses, registrations and other assets of every kind and description of the Merging Entity shall be transferred to, vested in, and devolve upon the Surviving Entity without further act or deed, and all property, rights, and every other interest of the Surviving Entity and the Merging Entity shall be as effectively the property of the Surviving Entity as they were of the Surviving Entity and the Merging Entity, respectively. The Merging Entity hereby agrees from time to time, as and when requested by the Surviving Entity or by its successors or assigns, to execute and deliver or cause to be executed and delivered all such deeds and instruments, and to take or cause to be taken such further or other action as the Surviving Entity may deem necessary or desirable in order to vest in and confirm in the Surviving Entity title to and possession of any property of the Merging Entity acquired or to be acquired by reason of or as a result of the Merger herein provided for and otherwise to carry out the interest and purposes hereof, and the proper officers of the Merging Entity and the proper officers of the Surviving Entity are fully authorized in the name of the Merging Entity or otherwise to take any and all such action.

IN WITNESS WHEREOF, the parties to this Agreement of Merger, pursuant to the approval and authority duly given by resolutions adopted by their respective members and partners, have caused these presents to be executed by each party hereto as the respective act, deed and agreement of each of said Entities, as of the 31st day of December 2005.

EL PASO PROCESSING PLANTS COMPANY, L.L.C.		EL PASO PRODUCTION OIL & GAS GATHERING, L.P.


By:	/s/ Lisa A. Stewart	By:	/s/ Lisa A. Stewart
	Lisa A. Stewart		Lisa A. Stewart
	President		President

Prod./Pipes Reorg. Step 3 of 3

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.”, FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF SEPTEMBER, A.D. 2006, AT 12:34 O’CLOCK P.M.

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100	AUTHENTICATION:	5044848

060853302	DATE:	09-15-06

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS GATHERING, L.P.

The undersigned, desiring to amend the Amended and Restated Certificate of Limited Partnership of EI Paso Production Oil & Gas Gathering, L.P., pursuant to the provisions of Section 17-202 of the Delaware Revised Unifona Limited Partnership Act, as amended (“DRULPA”) does hereby certify as follows:

1. The name of the Limited Partnership is El Paso Production Oil & Gas Gathering, L.P.

2. The text of Article HI of the Amended and Restated Certificate of Limited Partnership is hereby amended and restated to mad in its entirety as follows:

The name and mailing address of the general partner of the Limited Partnership is:

El Paso Exploration & Production Management, Inc

1001 Louisiana Street

Houston, Texas 77002.”

IN WITNESS WHEREOF, the undersigned general partner has executed this Certificate of Amendment on this 12th day of September 2006.

	EL PASO PRODUCTION OIL & GAS GATHERING, L.P.

	By:	El Paso Exploration & Production Management, Inc.
		Its General Partner


	By:	/s/ Thomas M. Hart
		Thomas M. Hart
		Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 01:56 PM 09/15/2006
		FILED 12:34 PM 09/15/2006
		SRV 060853302 - 3044912 FILE

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES:

“EL PASO ENERGY OIL TRANSMISSION, L.L.C.”, A DELAWARE LIMITED LIABILITY COMPANY,

WITH AND INTO “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.” UNDER THE NAME OF “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.”, A LIMITED LIABILITY COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE EIGHTEENTH DAY OF DECEMBER, A.D. 2008, AT. 6:15 O’CLOCK P.M.

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100M	AUTHENTICATION:	7038966

081211697	DATE:	12-19-08

You may verify this certificate online
at corp.delaware.gov/authver.shtml

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 06:15 PM 12/18/2008
		FILED 06:15 PM 12/18/2008
		SRV 081211697 – 3044912 FILE

CERTIFICATE OF MERGER

merging

EL PASO ENERGY OIL TRANSMISSION, L.L.C.

with and into

EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.

Pursuant to Section 18-209 of the Delaware Limited Liability Company Act

El Paso Production Oil & Gas Gathering Company, L.L.C. (“Oil & Gas Gathering”), a Delaware limited liability company, hereby certifies to the following facts relating to the merger (the “Merger”) of El Paso Energy Oil Transmission, L.L.C., a Delaware limited liability company, with and into Oil & Gas Gathering, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and submits the following Certificate of Merger for filing:

FIRST: That the name and state of formation of each limited liability company diat is to merge is as follows:

Name		State of Formation

El Paso Energy Oil Transmission, L.L.C.		Delaware
El Paso Production Oil & Gas Gathering Company, L.L.C.		Delaware

SECOND: That an Agreement of Merger dated as of December 16, 2008 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA.

THIRD: That the name of the surviving entity is El Paso production Oil & Gas Gathering Company, L.L.C.

FOURTH: That die existing Certificate of Formation of Oil & Gas Gathering shall be the Certificate of Formation of the surviving entity.

FIVE: That the Merger shall be effective upon filing with the Delaware Secretary of State in the state of Delaware.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of Oil & Gas Gathering, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso Production Oil & Gas Gathering Company. L.L.C. has caused this Certificate of Merger to be signed by a duly authorized officer this 16th day of December, 2008.

	EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.

	By:	/s/ Dane E. Whitehead
	Name:	Dane E. Whitehead
	Title:	Senior Vice President

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (this “Agreement”) dated as of the 16th day of December 2008, pursuant to Section 18-209 of the Delaware Limited Liability Company Act, between El Paso Energy Oil Transmission, L.L.C. (“Oil Transmission”), a Delaware limited liability company, and El Paso Production Oil & Gas Gathering Company, L.L.C. (“Oil & Gas Gathering”), a Delaware limited liability company.

W I T N E S S E T H:

WHEREAS, Oil Transmission (the “Merging Entity”) desires to merge (the “Merger”) with and into Oil & Gas Gathering (the “Survivor” or “Surviving Entity”).

FIRST: The Survivor hereby merges with and into itself the Merging Entity, and the Merging Entity shall be and hereby is merged into the Survivor, which shall be the Surviving Entity.

SECOND: The Certificate of Formation of the Survivor, which exists prior to the Merger, shall be the Certificate of Formation of the Surviving Entity.

THIRD: The terms and conditions of the Merger are as follows:

(a) The Limited Liability Company Agreement of the Survivor, as it shall exist on the effective date of this Merger, shall be and remain the Limited Liability Company Agreement of the Surviving Entity until the same shall be altered, amended or repealed as therein provided.

(b) This Merger shall become effective upon filing with the Delaware Secretary of State in the State of Delaware.

IN WITNESS WHEREOF, the parties to this Agreement of Merger, pursuant to the approval and authority duly given by resolutions adopted by their respective members, have caused these presents to be executed by each party hereto as the respective act, deed and agreement of each of said Entities, as of the 16th day of December 2008.

EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.		EL PASO ENERGY OIL TRANSMISSION, L.L.C.
By:	EL PASO E&P HOLDINGS, INC.	By:	EL PASO E&P HOLDINGS, INC.
	its Member		its Member


By:	/s/ Dane E. Whitehead	By:	/s/ Dane E. Whitehead
	Dane E. Whitehead		Dane E. Whitehead
	Senior Vice President		Senior Vice President

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THAT THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF CONVERSION OF A DELAWARE LIMITED PARTNERSHIP UNDER THE NAME OF “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.” TO A DELAWARE LIMITED LIABILITY COMPANY, CHANGING ITS NAME FROM “EL PASO PRODUCTION OIL & GAS GATHERING, L.P.” TO “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.”, FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF DECEMBER, A.D. 2008, AT 7:01 O’CLOCK P.M.

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100V	AUTHENTICATION:	7036064

081207243	DATE:	12-18-08

You may verify this certificate online

at corp.delaware.gov/authver.shtml

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 07:01 PM 12/17/2008
		FILED 07:01 PM 12/17/2008
		SRV 081207243 - 3044912 FILE

CERTIFICATE OF CONVERSION

FROM A LIMITED PARTNERSHIP TO A

LIMITED LIABILITY COMPANY

PURSUANT TO SECTION 18-214 OF THE

DELAWARE LIMITED LIABILITY COMPANY ACT

This Certificate of Conversion of El Paso Production Oil & Gas Gathering, L.P. (the “Partnership”), dated as of December 16, 2008, is being duly executed and filed by an authorized officer of the Partnership to convert the Partnership to a Delaware limited liability company in accordance with section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”).

1. The name of the Partnership set forth in its original Certificate of Limited Partnership, and immediately prior to filing this Certificate of Conversion, was:

El Paso Production Oil & Gas Gathering, L.P.

2. The jurisdiction of the Partnership immediately prior to filing this Certificate of Conversion was:

Delaware

3. The jurisdiction where the Partnership was first created is:

Delaware

4. The date the Certificate of Limited Partnership of the Partnership was filed is:

May 19, 1999

5. The name of the limited liability company as set forth in its Certificate of Formation is:

El Paso Production Oil & Gas Gathering Company, L.L.C.

6. This conversion has been approved in accordance with the provisions of Section 18-214 of the DLLCA.

7. This Certificate of Conversion and the conversion contemplated hereby shall be effective upon the filing of this Certificate of Conversion and the Certificate of Formation.

IN WITNESS WHEREOF, this certificate of Conversion has been executed by an authorized officer of the Partnership on the 16th day of December 2008.

	By:	/s/ Joyce Allen-Dennis
		Joyce Allen-Dennis
		Assistant Secretary

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THAT THE ATTACHED IS A TRUE AND CORRECT COPY OF CERTIFICATE OF FORMATION OF “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.” FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF DECEMBER, A.D. 2008, AT 7:01 O’CLOCK P.M.

	/s/ Harriet Smith Windsor
	Harriet Smith Windsor, Secretary of State

3044912 8100V	AUTHENTICATION:	7036064

081207243	DATE:	12-18-08

You may verify this certificate online

at corp delaware gov/authver shtml

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 07:01 PM 12/17/2008
		FILED 07:01 PM 12/17/2008
		SRV 081207243 - 3044912 FILE

CERTIFICATE OF FORMATION

EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.

This Certificate of Formation of El Paso Production Oil & Gas Gathering Company, L.L.C. (the “LLC”) dated as of December 16, 2008, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C.§§ 18-101, et . seg.

FIRST: The name of the LLC formed hereby is:

El Paso Production Oil & Gas Gathering Company, L.L.C.

SECOND: The address of the registered office of the LLC in die State of Delaware is:

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

THIRD: The name and address of the registered agent for service of process on the LLC in the State of Delaware are:

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

New Castle County

Wilmington, Delaware 19801

FOURTH: This Certificate of Formation and the conversion contemplated hereby shall be effective upon the filing of this Certificate of Conversion and the Certificate of Formation.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be executed as of the date first above written.

	/s/ Joyce Allen-Dennis
	Joyce Allen-Dennis
	Authorized Person

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.”, CHANGING ITS NAME FROM “EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.” TO “EP ENERGY GATHERING COMPANY, L.L.C”, FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:22 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE FIRST DAY OF JUNE, A.D. 2012, AT 12:01 O’CLOCK A.M.

	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State

3044912 8100	AUTHENTICATION:	9586597

120601815	DATE:	05-21-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 04:39 PM 05/21/2012
		FILED 04:22 PM 05/21/2012
		SRV 120601815 - 3044912 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.

The undersigned, desiring to amend the Certificate of Formation of El Paso Production Oil & Gas Gathering Company, L.L.C. (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the LLC is:

El Paso Production Oil & Gas Gathering Company, L.L.C.

SECOND: The article numbered “FIRST” of the Certificate of Formation of the Company shall be amended as follows:

“FIRST: The name of the LLC formed hereby is:

EP Energy Gathering Company, L.L.C.”

THIRD: This amendment to the Certificate of Formation shall be effective at 12:01a.m. Eastern Time on June 1, 2012.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 18th day of May 2012.

	EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.


	By:	/s/ Joseph C. James
		Joseph C. James
		Authorized Person

Exhibit 3.18

FIRST AMENDED & RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

EL PASO PRODUCTION OIL & GAS GATHERING COMPANY, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of El Paso Production Oil & Gas Gathering Company, L.L.C. (the “Company”) is made on this 30th day of November 2010, by El Paso Production Resale Company, L.L.C., a Delaware limited liability company (“Production Resale”), the Member of this Company.

WHEREAS, the Company was formed under the name of El Paso Production Oil & Gas Gathering Company, L.L.C., as a limited liability company under the Act (as hereinafter defined) pursuant to the filing of the Certificate of Formation (as hereinafter defined) on December 17, 2008, and the execution of that certain Agreement of Limited Liability Company dated as of December 17, 2008, by El Paso E&P Holdings, Inc, a Delaware corporation and El Paso Exploration & Production Management, Inc., a Delaware corporation (“E&P Management”) (the “Original Agreement”);

WHEREAS, on December 17, 2008, E&P Management Inc. contributed its 1% Membership interest to El Paso E&P Holdings, Inc.; and

WHEREAS, on December 31, 2009, El Paso E&P Holdings Inc. converted into a limited liability company named El Paso E&P Holdings Company, L.L.C (“E&P Holdings LLC”), evidenced by the filing of a Certificate of Conversion with the office of the Secretary of State of Delaware; and

WHEREAS, on November 30, 2010, E&P Holdings LLC merged into El Paso Production Resale Company, L.L.C, evidenced by the filing of a Certificate of Conversion with the office of the Secretary of State of Delaware; and

WHEREAS, Production Resale, as the Member of the Company, desires to amend and restate the Original Agreement for the purposes and upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and covenants herein contained, Production Resale does hereby agree as follows:

ARTICLE II

FORMATION

SECTION 2.01. Name . The name of the Company shall be as set forth in the Preamble hereof All business of the Company shall be conducted under such name and title to all property, real, personal, or mixed, owned by or leased to the Company shall be held in such name. Notwithstanding the preceding sentence, the Member may change the name of the Company or adopt such trade or fictitious names as it may determine.

SECTION 2.02. Term . The term of the Company commenced on the date of filing of the Certificate of Formation of the Company in the Office of the Secretary of State of Delaware (the “Effective Date”). The term of the Company shall continue until terminated as provided in Article VIII hereof

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

SECTION 3.01. Capital Contribution . The Member may contribute cash or other property to the Company as it shall decide, from time to time. The initial contribution shall be one thousand dollars ($1,000), payable immediately.

Controllers, and such other officers with such titles and powers and/or duties as the Member shall from time to time determine. Officers may be designated for particular areas of responsibility and simultaneously serve as officers of subsidiaries or divisions. Any officer so elected may resign at any time upon written notice to the Member. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Member. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Member.

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company.

ARTICLE IX

INDEMNIFICATION

SECTION 9.02. Reimbursement . The Company shall advance or promptly reimburse, upon request, any Person entitled to indemnification hereunder for all expenses, including attorneys’ fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Person (in form and substance satisfactory to the Company) to repay such amount if such Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Person is entitled; provided that such Person shall cooperate in good faith with any request by the Company that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties; and provided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

affect those portions of this Agreement, which are valid.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by El Paso E&P Company, L.P., effective as of the 30th day of November, 2010.

	EL PASO PRODUCTION RESALE
	COMPANY, L.L.C.


	By:	/s/ John J. Hopper
		John J. Hopper
		Vice President and Treasurer

Exhibit 3.19

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EP ENERGY E&P COMPANY, L.P.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF LIMITED PARTNERSHIP, FILED THE SIXTH DAY OF DECEMBER, A.D. 1995, AT 4:30 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “COASTAL OIL & GAS USA, L.P.” TO “EL PASO PRODUCTION OIL & GAS USA, L.P.”, FILED THE SEVENTEENTH DAY OF APRIL, A.D. 2001, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE EIGHTH DAY OF NOVEMBER, A.D. 2002, AT 4 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2002, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE TWENTY-SECOND DAY OF AUGUST, A.D. 2003, AT 4:13 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE TWENTY-THIRD DAY OF DECEMBER, A.D. 2003, AT 2:10 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF



		/s/ Jeffrey W. Bullock
		Jeffrey W. Bullock, Secretary of State

2543123 8100H		AUTHENTICATION: 9768628

120919728		DATE: 08-09-12

You may verify this certificate online
at corp.delaware.gov/authver.shtml

Delaware

The First State

THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2003.

CERTIFICATE OF MERGER, FILED THE TWENTY-THIRD DAY OF DECEMBER, A.D. 2003, AT 2:11 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2003.

CERTIFICATE OF MERGER, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 2004, AT 8:53 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE FOURTEENTH DAY OF JANUARY, A.D. 2004, AT 8 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 2004, AT 8:54 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE FOURTEENTH DAY OF JANUARY, A.D. 2004, AT 8:10 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 2004, AT 8:55 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF



		/s/ Jeffrey W. Bullock
		Jeffrey W. Bullock, Secretary of State

2543123 8100H		AUTHENTICATION: 9768628

120919728		DATE: 08-09-12

You may verify this certificate online
at corp.delaware.gov/authver.shtml

Delaware

The First State

THE AFORESAID CERTIFICATE OF MERGER IS THE FOURTEENTH DAY OF JANUARY, A.D. 2004, AT 8:20 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 2004, AT 8:56 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE FOURTEENTH DAY OF JANUARY, A.D. 2004, AT 8:30 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 2004, AT 8:57 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE FOURTEENTH DAY OF JANUARY, A.D. 2004, AT 8:40 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE NINTH DAY OF MARCH, A.D. 2004, AT 11:46 O’CLOCK A.M.

RESTATED CERTIFICATE, FILED THE SEVENTEENTH DAY OF JUNE, A.D. 2004, AT 12:10 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO PRODUCTION OIL & GAS USA, L.P.” TO “EL PASO E&P COMPANY, L.P.”, FILED THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2005, AT 9:28 O’CLOCK P.M.



		/s/ Jeffrey W. Bullock
		Jeffrey W. Bullock, Secretary of State

2543123 8100H		AUTHENTICATION: 9768628

120919728		DATE: 08-09-12

You may verify this certificate online
at corp.delaware.gov/authver.shtml

Delaware

The First State

CERTIFICATE OF MERGER, FILED THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2005, AT 9:29 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2005, AT 10:10 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE NINTH DAY OF JUNE, A.D. 2006, AT 8:57 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTIETH DAY OF JUNE, A.D. 2006, AT 9:45 O’CLOCK A.M.

CERTIFICATE OF MERGER, FILED THE NINTH DAY OF JUNE, A.D. 2006, AT 9:17 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTIETH DAY OF JUNE, A.D. 2006, AT 10 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE ELEVENTH DAY OF AUGUST, A.D. 2006, AT 6:42 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE FIFTEENTH DAY OF SEPTEMBER, A.D. 2009, AT 7:55 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE FIFTEENTH DAY OF SEPTEMBER,



		/s/ Jeffrey W. Bullock
		Jeffrey W. Bullock, Secretary of State

2543123 8100H		AUTHENTICATION: 9768628

120919728		DATE: 08-09-12

You may verify this certificate online
at corp.delaware.gov/authver.shtml

Delaware

The First State

A.D. 2009, AT 8:02 O’CLOCK P.M.

CERTIFICATE OF MERGER, FILED THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 2010, AT 6:32 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF DECEMBER, A.D. 2010.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “EL PASO E&P COMPANY, L.P.” TO “EP ENERGY E&P COMPANY, L.P.”, FILED THE TWENTY-FIRST DAY OF MAY, A.D. 2012, AT 4:16 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE FIRST DAY OF JUNE, A.D. 2012, AT 12:01 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED PARTNERSHIP, “EP ENERGY E&P COMPANY, L.P.”.



		/s/ Jeffrey W. Bullock
		Jeffrey W. Bullock, Secretary of State

2543123 8100H		AUTHENTICATION: 9768628

120919728		DATE: 08-09-12

You may verify this certificate online
at corp.delaware.gov/authver.shtml

		STATE OF DELAWARE
		SECRETARY OF STATE
		DIVISION OF CORPORATIONS
		FILED 04:30 PM 12/06/1995
		950284975 - 2543123

CERTIFICATE OF LIMITED PARTNERSHIP

COASTAL OIL & GAS USA, L.P.

The undersigned, desiring to form a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter 17, do hereby certify as follows:

I. The name of the limited partnership is:

COASTAL OIL & GAS USA, L.P.

III. The name and mailing address of the general partner is:

NAME		MAILING ADDRESS

Coastal Oil & Gas Corporation		9 Greenway Plaza
		Houston, Texas 77046

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership of Coastal Oil & Gas USA, L.P., as of the 6th day of December, 1995.

	COASTAL OIL & GAS CORPORATION
	GENERAL PARTNER


	By:	/s/ AUSTIN M. O’TOOLE
		AUSTIN M. O’TOOLE
		Senior Vice President

		STATE OF DELAWARE
		SECRETARY OF STATE
		DIVISION OF CORPORATIONS
		FILED 10:00 AM 04/17/2001
		010184674 - 2543123

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

COASTAL OIL & GAS USA, L.P.

The undersigned, desiring to amend the Certificate of Limited Partnership of COASTAL OIL & GAS USA, L.P., pursuant to the provisions of Section 17-202 of the Revised Uniform Limited Partnership Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the Limited Partnership is:

Coastal Oil & Gas USA, L.P.

SECOND: Article “I.” of the Certificate of Limited Partnership shall be amended as follows:

“I. The name of the limited partnership shall be El Paso Production Oil & Gas USA, L.P.”

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 16th day of April 2001.

	EL PASO PRODUCTION OIL & GAS COMPANY
	the General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:00 PM 11/08/2002
020692145 - 2543123

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS USA, L.P.

The undersigned, desiring to amend the Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., pursuant to the provisions of Section 17-202 of the Revised Uniform Limited Partnership Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the Limited Partnership is El Paso Production Oil & Gas USA, L.P.

SECOND: Article III of the Certificate of Limited Partnership shall be amended to add an additional General Partner as follows:

Article III. The name and mailing address of the general partners are as follows:

Name		Address

ANR Production Company		1001 Louisiana Street
		Houston, Texas 77002

El Paso Production Oil & Gas Company		1001 Louisiana Street
		Houston, Texas 77002

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 8th day of November 2002.

	ANR PRODUCTION COMPANY
	General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	EL PASO PRODUCTION OIL & GAS
	COMPANY
	General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

		STATE OF DELAWARE
		SECRETARY OF STATE
		DIVISION OF CORPORATIONS
		FILED 10:00 AM 12/31/2002
		020808756 - 2543123

CERTIFICATE OF MERGER

MERGING

EL PASO PRODUCTION OFFSHORE PARTNERSHIP I, L.P.

AND

EL PASO PRODUCTION OFFSHORE PARTNERSHIP II, L.P.

INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

Pursuant to Title 6, Section 17-211 of the Delaware Code, the undersigned surviving limited partnership submits the following Certificate of Merger for filing and certifies that:

FIRST: The name and jurisdiction of formation or organization of each of the domestic limited partnerships or other business entities that are to merge are as follows:

Name		Jurisdiction

El Paso Production Offshore Partnership I, L.P.		Delaware

El Paso Production Offshore Partnership II, L.P.		Delaware

El Paso Production Oil & Gas USA, L.P.		Delaware

SECOND: An Agreement of Merger has been approved and executed by El Paso Production Offshore Partnership I, L.P., El Paso Production Offshore Partnership II, L.P. and El Paso Production Oil & Gas USA, L.P.

THIRD: The name of the surviving limited partnership is: El Paso Production Oil & Gas USA, L.P.

FOURTH: The merger shall become effective on December 31, 2002.

FIFTH: The Agreement of Merger is on file at a place of business of the surviving limited partnership which is located at 1001 Louisiana Street, Houston, Texas 77002.

SIXTH: A copy of the Agreement of Merger will be furnished by the surviving limited partnership, on request and without cost, to any partner of any domestic limited partnership or any person holding an interest in any other business entity that is to merge.

IN WITNESS WHEREOF, this Certificate of Merger has been duly executed as of the 23rd day of December 2002, and is being filed in accordance with Title 6, Section 17-211 by an authorized officer of the General Partner of the surviving limited partnership in the merger.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
	By: El Paso Production Oil & Gas Company
	The General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 05:02 PM 08/22/2003
		FILED 04:13 PM 08/22/2003
		SRV 030549356 - 2543123 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS USA, L.P.

FIRST: The name of the Limited Partnership is El Paso Production Oil & Gas USA, L.P. (the “Partnership”).

SECOND: Article III of the Certificate of Limited Partnership shall be amended as follows:

“The name of the general partners of the Partnership are:

ANR Production Company		El Paso Production Oil & Gas Company
1001 Louisiana Street		1001 Louisiana Street
Houston, Texas 77002		Houston, Texas 77002.”

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 21st day of August 2003.

	EL PASO PRODUCTION OIL & GAS USA, L.P.

	By: ANR Production Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	By: El Paso Production Oil & Gas Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

State of Delaware
Secretary of State
Division of Corporations
Delivered 02:10 PM 12/23/2003
FILED 02:10 PM 12/23/2003
SRV 030830854 - 2543123 FILE

CERTIFICATE OF MERGER

CIGE MERGER COMPANY, L.L.C.

AND

EP PRODUCTION MERGER COMPANY, L.L.C.

each, a Delaware limited liability company

WITH AND INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.,

a Delaware limited partnership

Pursuant to Section 17-211 of the

Delaware Revised Uniform Limited Partnership Act (“DRULPA”)

El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger of CIGE Merger Company, L.L.C. and EP Production Merger Company, L.L.C., each a Delaware limited liability company, with and into El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership (the “Merger”):

First : The name and jurisdiction of formation or organization of each of the constituent entities to the Merger are:

	Name		State

	El Paso Production Oil & Gas USA, L.P.		Delaware
	CIGE Merger Company, L.L.C.		Delaware
	EP Production Merger Company, L.L.C.		Delaware

Second : An Agreement of Merger dated December 19, 2003 (the “Merger Agreement”), has been approved, adopted, certified, executed and acknowledged by each of the constituent entities to the Merger in accordance with Section 17-211 of the DRULPA. The effective date of the merger shall be December 31, 2003.

Third : The name of the surviving limited partnership is El Paso Production Oil & Gas USA, L.P.

Fourth : The Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., as in existence immediately prior to the filing of this Certificate of Merger shall be the Certificate of Limited Partnership of the surviving limited partnership.

Fifth : An executed copy of the Merger Agreement is on file at the principal place of business of El Paso Production Oil & Gas USA, LP., located at 1001 Louisiana Street, Houston, Texas 77002.

Sixth : A copy of the Merger Agreement will be furnished by El Paso Production Oil & Gas USA, L.P., upon request and without cost, to any member of CIGE Merger Company, L.L.C. and EP Production Merger Company, L.L.C. or to any partner of El Paso Production Oil & Gas USA, L.P.

Seventh : This Certificate of Merger shall be effective on December 31, 2003.

IN WITNESS WHEREOF, this Certificate has been duly executed on behalf of El Paso Production Oil & Gas USA, L.P., by a duly authorized officer of the General Partner this 19th day of December 2003.

EL PASO PRODUCTION OIL & GAS USA, L.P.
By:	El Paso Production Oil & Gas Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 02:10 PM 12/23/2003
		FILED 02:11 PM 12/23/2003
		SRV 030830928 - 2543123 FILE

CERTIFICATE OF MERGER

EL PASO OIL & GAS RESOURCES COMPANY, L.P.

INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

Pursuant to Title 6, Section 17-211 of the Delaware Code, the undersigned surviving limited partnership submits the following Certificate of Merger for filing and certifies that:

FIRST: The name and jurisdiction of formation or organization of each of the domestic limited partnerships or other business entities that are to merge are as follows:

Name		Jurisdiction

El Paso Oil & Gas Resources Company, L.P.		Delaware

El Paso Production Oil & Gas USA, L.P.		Delaware

SECOND: An Agreement of Merger has been approved and executed by El Paso Production Oil & Gas USA, L.P. and El Paso Oil & Gas Resources Company, L.P.

THIRD: The name of the surviving limited partnership is: El Paso Production Oil & Gas USA, L.P.

FOURTH: The merger shall become effective on December 31, 2003.

FIFTH: The Agreement and Plan of Merger is on file at a place of business of the surviving limited partnership which is located at 1001 Louisiana Street, Houston, Texas 77002.

SIXTH: A copy of the Agreement and Plan of Merger will be furnished by the surviving limited partnership, on request and without cost, to any partner of any domestic limited partnership or any person holding an interest in any other business entity that is to merge.

IN WITNESS WHEREOF, this Certificate of Merger has been duly executed as of the 19th day of December 2003, and is being filed in accordance with Title 6, Section 17-211 by the General Partner of the surviving limited partnership in the merger.

EL PASO PRODUCTION OIL & GAS USA, L.P.
By:	El Paso Production Oil & Gas Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

		State of Delaware
		Secretary of State
		Division of Corporations
		Delivered 08:53 AM 01/13/2004
		FILED 08:53 AM 01/13/2004
		SRV 040022284 - 2543123 FILE

CERTIFICATE OF MERGER

EL PASO NORIC INVESTMENTS IV, L.L.C.

a Delaware limited liability company

WITH AND INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

a Delaware limited partnership

Pursuant to Section 17-211 of the

Delaware Revised Uniform Limited Partnership Act (“DRULPA”)

El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger of El Paso Noric Investments IV, L.L.C., a Delaware limited liability company, with and into El Paso Merchant Energy, L.P., a Delaware limited partnership (the “Merger”):

First : The name and jurisdiction of formation or organization of each of the constituent entities to the Merger are;

Name		State

El Paso Production Oil & Gas USA, L.P.		Delaware
El Paso Noric Investments IV, L.L.C.		Delaware

Second : An Agreement of Merger dated January 9, 2004 (the “Merger Agreement”), has been approved, adopted, certified, executed and acknowledged by each of the constituent entities to the Merger in accordance with Section 17-211 of the DRULPA. The effective date of the merger is upon filing with the Delaware Secretary of State in the State of Delaware.

Third : The name of the surviving limited partnership is El Paso Production Oil & Gas USA, L.P.

Fourth : The Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., as in existence immediately prior to the filing of this Certificate

of Merger shall be the Certificate of Limited Partnership of the surviving limited partnership.

Fifth : An executed copy of the Merger Agreement is on file at the principal place of business of El Paso Production Oil & Gas USA, L.P., located at 1001 Louisiana Street, Houston, Texas 77002.

Sixth : A copy of the Merger Agreement will be furnished by El Paso Production Oil & Gas USA, L.P., upon request and without cost, to any Member of El Paso Noric Investments IV, L.L.C. or to any partner of El Paso Production Oil & Gas USA, L.P.

Seventh : This Certificate of Merger shall be effective as of 8:00 a.m., Eastern Standard Time, on January 14, 2004.

IN WITNESS WHEREOF, El Paso Production Oil & Gas USA, L.P., has caused this Certificate of Merger to be executed by a duly authorized officer, this 9th day of January 2004.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
By:		El Paso Production Oil & Gas Company
		Its General Partner


		By:	/s/ David L. Siddall
			David L. Siddall
			Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:53 AM 01/13/2004
	FILED 08:54 AM 01/13/2004
	SRV 040022293 - 2543123 FILE

CERTIFICATE OF MERGER

NORIC HOLDINGS IV, L.L.C.

a Delaware limited liability company

WITH AND INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

a Delaware limited partnership

Pursuant to Section 17-211 of the

Delaware Revised Uniform Limited Partnership Act (“DRULPA”)

El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger of Noric Holdings IV, L.L.C., a Delaware limited liability company, with and into El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership (the “Merger”):

First : The name and jurisdiction of formation or organization of each of the constituent entities to the Merger are:

Name		State

El Paso Production Oil & Gas USA, L.P.		Delaware
Noric Holdings IV, L.L.C.		Delaware

Second : An Agreement of Merger dated January 12, 2004 (the “Merger Agreement”), has been approved, adopted, certified, executed and acknowledged by each of the constituent entities to the Merger in accordance with Section 17-211 of the DRULPA. The effective date of the merger is upon filing with the Delaware Secretary of State in the State of Delaware.

Third : The name of the surviving limited partnership is El Paso Production Oil & Gas USA, L.P.

Fourth : The Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., as in existence immediately prior to the filing of this Certificate

of Merger shall be the Certificate of Limited Partnership of the surviving limited partnership.

Fifth : An executed copy of the Merger Agreement is on file at the principal place of business of El Paso Production Oil & Gas USA, L.P., located at 1001 Louisiana Street, Houston, Texas 77002.

Sixth : A copy of the Merger Agreement will be furnished by El Paso Production Oil & Gas USA, L.P., upon request and without cost, to any Member of Noric Holdings IV, L.L.C. or to any partner of El Paso Production Oil & Gas USA, L.P.

Seventh : This Certificate of Merger shall be effective as of 8:10 a.m., Eastern Standard Time, on January 14, 2004.

IN WITNESS WHEREOF, El Paso Production Oil & Gas USA, L.P., has caused this Certificate of Merger to be executed by a duly authorized officer, this 12th day of January 2004.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
	By: El Paso Production Oil & Gas Company
	Its General Partner

	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:53 AM 01/13/2004
	FILED 08:55 AM 01/13/2004
	SRV 040022297 - 2543123 FILE

CERTIFICATE OF MERGER

LIPIZZAN HOLDING, L.P.

INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

Pursuant to Title 6, Section 17-211 of the Delaware Code, the undersigned surviving limited partnership submits the following Certificate of Merger for filing and certifies that:

FIRST: The name and jurisdiction of formation or organization of each of the domestic limited partnerships or other business entities that are to merge are as follows:

Name		Jurisdiction

Lipizzan Holding, L.P.		Delaware

EI Paso Production Oil & Gas USA, L.P.		Delaware

SECOND: An Agreement of Merger has been approved and executed by El Paso Production Oil & Gas USA, L.P. and Lipizzan Holding, L.P.

THIRD: The name of the surviving limited partnership is: El Paso Production Oil & Gas USA, L.P.

FOURTH: The merger shall become effective as of 8:20 a.m., Eastern Standard Time, on January 14, 2004.

FIFTH: The Agreement and Plan of Merger is on file at a place of business of the surviving limited partnership which is located at 1001 Louisiana Street, Houston, Texas 77002.

IN WITNESS WHEREOF, this Certificate of Merger has been duly executed as of the 12th day of January 2004, and is being filed in accordance with Title 6, Section 17-211 by an authorized person of the surviving limited partnership in the merger.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
	By: El Paso Production Oil & Gas Company
	Its General Partner

	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:53 AM 01/13/2004
	FILED 08:56 AM 01/13/2004
	SRV 040022392 - 2543123 FILE

CERTIFICATE OF MERGER

LUSITANO, L.L.C.

a Delaware limited liability company

WITH AND INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

a Delaware limited partnership

Pursuant to Section 17-211 of the

Delaware Revised Uniform Limited Partnership Act (“DRULPA”)

El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger of Lusitano, L.L.C., a Delaware limited liability company, with and into El Paso Production Oil & Gas USA, L.P., a Delaware limited partnership (The “Merger”):

First : The name and jurisdiction of formation or organization of each of the constituent entities to the Merger are:

Name		State

El Paso Production Oil & Gas USA, L.P.		Delaware
Lusitano, L.L.C.		Delaware

Third : The name of the surviving limited partnership is El Paso Production Oil & Gas USA, L.P.

Fourth : The Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., as in existence immediately prior to the filing of this Certificate

of Merger shall be the Certificate of Limited Partnership of the surviving limited partnership.

Fifth : An executed copy of the Merger Agreement is on file at the principal place of business of El Paso Production Oil & Gas USA, L.P., located at 1001 Louisiana Street, Houston, Texas 77002.

Sixth : A copy of the Merger Agreement will be furnished by El Paso Production Oil & Gas USA, L.P., upon request and without cost, to any Member of Lusitano, L.L.C. or to any partner of El Paso Production Oil & Gas USA, L.P.

Seventh : This Certificate of Merger shall be effective as of 8:30 a.m., Eastern Standard Time, on January 14, 2004.

IN WITNESS WHEREOF, El Paso Production Oil & Gas USA, L.P., has caused this Certificate of Merger to be executed by a duly authorized officer, this 12th day of January 2004.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
	By: El Paso Production Oil & Gas Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:53 AM 01/13/2004
	FILED 08:57 AM 01/13/2004
	SRV 040022404 - 2543123 FILE

CERTIFICATE OF MERGER

NORIC, L.P.

INTO

EL PASO PRODUCTION OIL & GAS USA, L.P.

Pursuant to Title 6, Section 17-211 of the Delaware Code, the undersigned surviving limited partnership submits the following Certificate of Merger for filing and certifies that:

FIRST: The name and jurisdiction of formation or organization of each of the domestic limited partnerships or other business entities that are to merge are as follows:

Name		Jurisdiction

Noric, L.P.		Delaware

El Paso Production Oil & Gas USA, L.P.		Delaware

SECOND: An Agreement of Merger has been approved and executed by El Paso Production Oil & Gas USA, L.P. and Noric, L.P.

THIRD: The name of the surviving limited partnership is: El Paso Production Oil & Gas USA, L.P.

FOURTH: The merger shall become effective as of 8:40 a.m., Eastern Standard Time, on January 14, 2004.

FIFTH: The Agreement and Plan of Merger is on file at a place of business of the surviving limited partnership which is located at 1001 Louisiana Street, Houston, Texas 77002.

	EL PASO PRODUCTION OIL & GAS USA, L.P.
	By: El Paso Production Oil & Gas Company
	Its General Partner

	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS USA, L.P.

FIRST: The name of the Limited Partnership is El Paso Production Oil & Gas USA, L.P. (the “Partnership”).

SECOND: Article III of the Certificate of Limited Partnership shall be amended as follows:

“The name of the general partner of the Partnership is:

El Paso Production Oil & Gas Company

1001 Louisiana Street

Houston, Texas 77002.”

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 8th day of March 2004.

	EL PASO PRODUCTION OIL & GAS USA, L.P.

	By: El Paso Production Oil & Gas Company
	Its General Partner


	By:	/s/ David L. Siddall
		David L. Siddall
		Vice President

State of Delaware

Secretary of State

Division of Corporations

Delivered 11:54 AM 03/09/2004

FILED 11:46 AM 03/09/2004

SRV 040175258 - 2543123 FILE

AMENDED AND RESTATED

CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS USA, L.P.

The undersigned, desiring to Amended and Restate the Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., pursuant to the provisions of Sections 17-202 and 17-210 of the Delaware Revised Uniform Limited Partnership Act, as amended (“DRULPA”) does hereby certify as follows:

1. The original Certificate of Limited Partnership was filed with the Office of the Secretary of State of Delaware on December 6, 1995, under the name of Coastal Oil & Gas USA, L.P.

2. The Certificate of Limited Partnership was Amended on April 1, 2001, changing the name of the Limited Partnership to El Paso Production Oil 7 Gas USA, L.P.

3. The Certificate of Limited Partnership was Amended on November 8, 2002, listing the name of the General Partners.

4. The Certificate of Limited Partnership was Amended on August 21, 2003, listing the name of the General Partners.

5. The Certificate of Limited Partnership was Amended on March 8, 2004, listing the name of the General Partner.

6. This Amended and Restated Certificate of Limited Partnership has been adopted and approved by the General Partner in accordance with Section 17-202 of the Delaware Revised Uniform Limited Partnership Act, pursuant to which, this Amended and Restated Certificate of Limited Partnership amends and restates the provisions of the Limited Partnership’s Certificate of Limited Partnership.

7. The text of the Certificate of Limited Partnership of the Limited Partnership is hereby amended and restated to read in its entirety as follows:

ARTICLE I

NAME

The name of the Limited Partnership shall be El Paso Production Oil & Gas USA, L.P. (hereinafter, the “Company”)

State of Delaware

Secretary of State

Division of Corporations

Delivered 01:47 PM 06/17/2004

FILED 12:10 PM 06/17/2004

SRV 040447606 - 2543123 FILE

ARTICLE II

POWER

The Company shall have all the powers accorded to a limited partnership organized under the DRULPA.

ARTICLE III

PURPOSE

The purpose for which the company is organized is to transact any and all lawful business for which a limited partnership may be organized under the DRULPA.

ARTICLE IV

GENERAL PARTNER

The name and mailing address of each party who is to serve as the general partner is as follows:

El Paso Production Oil & Gas Company

1001 Louisiana Street

Houston, Texas 77002

ARTICLE V

PARTNERSHIP AGREEMENT

The general partner shall adopt the Partnership Agreement (the “Agreement”) that shall govern the operations of the Company; provided, however, that the failure to adopt such Agreement prior to the date on which this Certificate of Limited Partnership (“Certificate”) is filed with the Secretary of State of the State of Delaware shall not affect the Company’s commencement of existence on such date. The Agreement shall provide for all the terms and conditions for the governance of the Company not inconsistent with any rule of law or equity or with this Certificate and may be altered, amended, restated, or repealed by the Company in the manner set forth therein.

ARTICLE VI

INDEMNIFICATION

Subject to such standards and restrictions as are set forth in the Agreement, the Company shall have the power and authority to indemnify and hold harmless any general partner, limited partner, officer, director, or any other person against any and all claims and demands whatsoever to the fullest extent permitted by law.

ARTICLE VII

REGISTERED OFFICE

AND REGISTERED AGENT

The registered office of the Company is 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent of the Company at such address is The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Limited Partnership on this 17th day of June 2004.

	EL PASO PRODUCTION OIL & GAS COMPANY
	The General Partner


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

State of Delaware

Secretary of State

Division of Corporations

Delivered 09:25 PM 12/28/2005

FILED 09:28 PM 12/28/2005

SRV 051069290 - 2543123 FILE

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO PRODUCTION OIL & GAS USA, L.P.

The undersigned, desiring to amend the Amended and Restated Certificate of Limited Partnership of El Paso Production Oil & Gas USA, L.P., pursuant to the provisions of Section 17-202 of the Delaware Revised Uniform Limited Partnership Act, as amended (“DRULPA”) does hereby certify as follows:

1. The name of the Limited Partnership is El Paso Production Oil & Gas USA, L.P.

2. The text of Article I of the Certificate of Limited Partnership of the Limited Partnership is hereby amended and restated to read in its entirety as follows:

“ARTICLE I

NAME

The name of the Limited Partnership shall be El Paso E&P Company, L.P. (hereinafter, the “Company”).”

IN WITNESS WHEREOF, the undersigned general partner has executed this Certificate of Amendment on this 28th day of December 2005.

	EL PASO PRODUCTION OIL & GAS COMPANY
	The General Partner


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

State of Delaware

Secretary of State

Division of Corporations

Delivered 09:25 PM 12/28/2005

FILED 09:29 PM 12/28/2005

SRV 051069291 - 2543123 FILE

CERTIFICATE OF MERGER

merging

EL PASO PRODUCTION GOM INC.

and

EL PASO ENERGY RATON CORPORATION

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 263 of the Delaware General Corporation Law

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of El Paso Production GOM Inc., a Delaware corporation, and El Paso Energy Raton Corporation, a Delaware corporation, with and into El Paso E&P Company, L.P., pursuant to Section 263 of the Delaware General Corporation Law (“DGCL”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

	Name		State of Jurisdiction

	El Paso Production GOM Inc.		Delaware
	El Paso Energy Raton Corporation		Delaware
	El Paso E&P Company, L.P.		Delaware

SECOND: That an Agreement of Merger dated as of December 28, 2005 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 263 of the DGCL and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P. (“E&P LP”).

FOURTH: That the existing Certificate of Limited Partnership of E&P LP shall be the Certificate of Limited Partnership of the surviving entity.

FIFTH: That the Merger shall be effective at 10:10 a.m., Eastern Standard Time, on December 31, 2005.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of E&P LP, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or stockholder of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 28th day of December 2005.

EL PASO E&P COMPANY, L.P .
By:	EL PASO PRODUCTION OIL & GAS COMPANY
	Its General Partner


	By:	/s/ Lisa A. Stewart
	Lisa A. Stewart
	President

State of Delaware

Secretary of State

Division of Corporations

Delivered 09:17 PM 06/09/2006

FILED 08:57 PM 06/09/2006

SRV 060562332 - 2543123 FILE

CERTIFICATE OF MERGER

merging

EL PASO PRODUCTION COMPANY

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 263 of the Delaware General Corporation Law

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of El Paso Production Company, a Delaware corporation, with and into El Paso E&P Company, L.P., pursuant to Section 263 of the Delaware General Corporation Law (“DGCL”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

	Name		State of Jurisdiction

	El Paso Production Company		Delaware
	El Paso E&P Company, L.P.		Delaware

SECOND: That an Agreement of Merger dated as of May 31, 2006 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 263 of the DGCL and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P. (“E&P LP”).

FOURTH: That the Merger shall be deemed for federal income tax purposes a liquidation of El Paso Production Company under Section 332 of the Internal Revenue Code of 1986.

FIFTH: That the existing Certificate of Limited Partnership of E&P LP shall be the Certificate of Limited Partnership of the surviving entity.

SIXTH: That the Merger shall be effective at 9:45 a.m., Eastern Daylight Time, on June 30, 2006.

SEVENTH: That an executed copy of the Merger Agreement is on file at the place of business of E&P LP, 1001 Louisiana Street, Houston, Texas 77002.

EIGHTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or stockholder of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 31st day of May 2006.

EL PASO E&P COMPANY, L.P .
By:	EL PASO PRODUCTION OIL & GAS COMPANY
	Its General Partner


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 09:17 PM 06/09/2006
	FILED 09:17 PM 06/09/2006
	SRV 060562338 - 2543123 FILE

CERTIFICATE OF MERGER

merging

MEDICINE BOW OPERATING COMPANY

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 263 of the Delaware General Corporation Law

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P., a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of Medicine Bow Operating Company, a Delaware corporation, with and into El Paso E&P Company, L.P., pursuant to Section 263 of the Delaware General Corporation Law (“DGCL”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

Name		State of Jurisdiction

Medicine Bow Operating Company		Delaware
El Paso E&P Company, L.P.		Delaware

SECOND: That an Agreement of Merger dated as of June 30, 2006 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by the constituent entity to the Merger in accordance with Section 263 of the DGCL and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P. (“E&P LP”).

FOURTH: That the existing Certificate of Limited Partnership of E&P LP shall be the Certificate of Limited Partnership of the surviving entity.

FIFTH: That the Merger shall be effective at 10:00 a.m., Eastern Daylight Time, on June 30, 2006.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of

business of E&P LP, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or stockholder of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 31st day of May 2006.

EL PASO E&P COMPANY, L.P .

By:	EL PASO PRODUCTION OIL & GAS COMPANY
	Its General Partner


	By:	/s/ Lisa A. Stewart
		Lisa A. Stewart
		President

State of Delaware
Secretary of State
Division of Corporations
Delivered 07:00 PM 08/11/2006
FILED 06:42 PM 08/11/2006
SRV 060756743 - 2543123 FILE

CERTIFICATE OF AMENDMENT

TO THE

AMENDED AND RESTATED

CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO E&P COMPANY, L.P.

The undersigned, desiring to amend the Amended and Restated Certificate of Limited Partnership of El Paso E&P Company, L.P., pursuant to the provisions of Section 17-202 of the Delaware Revised Uniform Limited Partnership Act, as amended (“DRULPA”) does hereby certify as follows:

1. The name of the Limited Partnership is El Paso E&P Company, L.P.

2. The text of Article IV of the Amended and Restated Certificate of Limited Partnership is hereby amended and restated to read in its entirety as follows:

“ARTICLE IV

GENERAL PARTNER

The name and mailing address of the general partner of the Limited Partnership is:

El Paso Exploration & Production Management, Inc

1001 Louisiana Street

Houston, Texas 77002.”

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment on this 10th day of August 2006.

	EL PASO E&P COMPANY, L.P.

	By:	El Paso Exploration & Production
		Management, Inc.
		Its General Partner


	By:	/s/ Thomas M. Hart
		Thomas M. Hart
		Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:02 PM 09/15/2009
	FILED 07:55 PM 09/15/2009
	SRV 090857944 - 2543123 FILE

CERTIFICATE OF MERGER

merging

CORONADO ENERGY PRODUCTION, L.L.C.

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 18-209 of the Delaware Limited Liability Company Act

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P. (“El Paso E&P”), a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of Coronado Energy Production, L.L.C., a Delaware limited liability company, with and into El Paso E&P, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

Name		State of Jurisdiction

Coronado Energy Production Operating, L.L.C.		Delaware
El Paso E&P Company, L.P.		Delaware

SECOND: That an Agreement of Merger dated as of September 14, 2009 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P.

FOURTH: That the existing Certificate of Limited Partnership of El Paso E&P shall be the Certificate of Limited Partnership of the surviving entity.

FIVE: That the Merger shall be effective on September 15, 2009.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of El Paso E&P, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 14th day of September 2009.

EL PASO E&P COMPANY, L.P.
By:	EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.
	Its General Partner


	By:	/s/ Dane E. Whitehead
		Dane E. Whitehead
		Senior Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 08:02 PM 09/15/2009
	FILED 08:02 PM 09/15/2009
	SRV 090857948 - 2543123 FILE

CERTIFICATE OF MERGER

merging

CORONADO ENERGY PRODUCTION OPERATING, L.L.C.

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 18-209 of the Delaware Limited Liability Company Act

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P. (“El Paso E&P”), a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of Coronado Energy Production Operating, L.L.C., a Delaware limited liability company, with and into El Paso E&P, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”) and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

Name		State of Jurisdiction

Coronado Energy Production Operating, L.L.C.		Delaware
El Paso E&P Company, L.P.		Delaware

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P.

FOURTH: That the existing Certificate of Limited Partnership of El Paso E&P shall be the Certificate of Limited Partnership of the surviving entity.

FIVE: That the Merger shall be effective on September 15, 2009.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of El Paso E&P, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 14th day of September 2009.

EL PASO E&P COMPANY, L.P.
By:	EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.
	Its General Partner


	By:	/s/ Dane E. Whitehead
		Dane E. Whitehead
		Senior Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 06:42 PM 12/28/2010
	FILED 06:32 PM 12/28/2010
	SRV 101241147 - 2543123 FILE

CERTIFICATE OF MERGER

merging

CORONADO ENERGY E&P COMPANY, L.L.C.,

EL PASO SOUTH TEXAS E&P COMPANY, L.L.C.,

and

EL PASO E&P ZAPATA, L.P.

with and into

EL PASO E&P COMPANY, L.P.

Pursuant to

Section 18-209 of the Delaware Limited Liability Company Act

Section 10.002 of the Texas Revised Limited Partnership Act

and

Section 17-211 of the Delaware Revised Uniform Limited Partnership Act

El Paso E&P Company, L.P. (“El Paso E&P”), a Delaware limited partnership, hereby certifies to the following facts relating to the merger (the “Merger”) of Coronado Energy E&P Company, L.L.C., a Delaware limited liability company, El Paso South Texas E&P Company, L.L.C., a Delaware limited liability company, and El Paso E&P Zapata, L.P., a Texas limited partnership, with and into El Paso E&P, pursuant to Section 18-209 of the Delaware Limited Liability Company Act (“DLLCA”), and Section 10.002 of the Texas Revised Limited Partnership Act (“TRLPA”), and Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), and submits the following Certificate of Merger for filing:

FIRST: That the name and state of jurisdiction of each entity that is to merge is as follows:

Name		State of Jurisdiction

Coronado Energy E&P Company, L.L.C.		Delaware
El Paso South Texas E&P Company, L.L.C.		Delaware
El Paso E&P Zapata, L.P.		Texas
El Paso E&P Company, L.P.		Delaware

SECOND: That an Agreement of Merger dated as of December 15, 2010 (the “Merger Agreement”), has been approved, adopted, certified, executed, and acknowledged by each of the constituent entities to the Merger in accordance with Section 18-209 of the DLLCA, Section 10.002 of the TRLPA and Section 17-211 of the DRULPA.

THIRD: That the name of the surviving entity is El Paso E&P Company, L.P.

FOURTH: That the existing Certificate of Limited Partnership of El Paso E&P shall be the Certificate of Limited Partnership of the surviving entity.

FIVE: That the Merger shall be effective on December 31, 2010.

SIXTH: That an executed copy of the Merger Agreement is on file at the place of business of El Paso E&P, 1001 Louisiana Street, Houston, Texas 77002.

SEVENTH: That a copy of the Merger Agreement will be furnished upon request and without cost to any partner or member of, or any person holding an interest in, any entity that is to merge.

IN WITNESS WHEREOF, El Paso E&P Company, L.P. has caused this Certificate of Merger to be signed by a duly authorized officer of the General Partner this 15th day of December 2010.

EL PASO E&P COMPANY, L.P.
By:	EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.
	Its General Partner


	By:	/s/ Francis C. Olmsted III
		Francis C. Olmsted III
		Vice President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 04:38 PM 05/21/2012
	FILED 04:16 PM 05/21/2012
	SRV 120601727 - 2543123 FILE

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP

EL PASO E&P COMPANY, L.P.

1. The name of the Limited Partnership is El Paso E&P Company, L.P.

2. The text of Article I of the Certificate of Limited Partnership of the Limited Partnership is hereby amended and restated to read in its entirety as follows:

“ARTICLE I

NAME

The name of the Limited Partnership shall be EP Energy E&P Company, L.P. (hereinafter, the “Company”).”

3. This amendment to the Certificate of Amendment shall be effective at 12:01a.m. Eastern Time on June 1, 2012.

IN WITNESS WHEREOF, the undersigned general partner has executed this Certificate of Amendment on this 18th day of May, 2012.

	EL PASO EXPLORATION &
	PRODUCTION MANAGEMENT, INC.
	The General Partner


	By:	/s/ Joseph C. James
		Joseph C. James
		Assistant Secretary

Exhibit 3.20

SEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

EL PASO E&P COMPANY, L.P.

Between

EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.

General Partner

EL PASO PRODUCTION RESALE COMPANY, L.L.C.

Limited Partner

Effective as of November 30, 2010

SEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

EL PASO E&P COMPANY, L.P.

This Seventh Amended and Restated Agreement of Limited Partnership of El Paso E&P Company, L.P. (the “Partnership”) is entered into between El Paso Exploration & Production Management, Inc., a Delaware corporation, as the general partner (the “ General Partner ”) and El Paso Production Resale Company, L.L.C., a Delaware limited liability company, as the sole limited partner (the “ Limited Partner ”.)

WHEREAS, the Partnership was formed pursuant to the filing of the Certificate of Limited Partnership with the Delaware Secretary of State in the State of Delaware on December 6,1995, under the name Coastal Oil & Gas USA, L.P.;

WHEREAS, at the time of the formation of the Partnership, Coastal Oil & Gas Corporation owned a 1% general partner interest, Coastal Oil & Gas Holdings, Inc. owned a 69% limited partner interest in the Partnership, and ANRPC Holdings, Inc. owned a 30% limited partner interest in the Partnership;

WHEREAS, on March 9, 2001, the general partner, Coastal Oil & Gas Corporation changed its name to El Paso Production Oil & Gas Company;

WHEREAS, on April 17, 2001, the Partnership changed its name to El Paso Production Oil & Gas USA, L.P., evidenced by the filing of an Amended Certificate of Limited Partnership with the Delaware Secretary of State in the State of Delaware;

WHEREAS, on May 15, 2001, the limited partner, Coastal Oil & Gas Holdings, Inc. changed its name to El Paso Production Oil & Gas Holdings, Inc;

WHEREAS, on October 31, 2002, the limited partner, ANRPC Holdings, Inc. merged into ANR Production Company, a Delaware corporation (“ANR”);

WHEREAS, on October 31, 2002, the successor limited partner, ANR converted its 30% limited partner interest in the Partnership into a 30% general partner interest;

WHEREAS, on December 31, 2003, ANR merged into EP Production Merger Company, L.L.C., a Delaware corporation, (“Merger”);

WHEREAS, on December 31, 2003, the successor general partner, Merger merged into the Partnership and the 30% general partner interest was distributed to the existing general partner and limited partner for a resuhing ownership of El Paso Production Oil & Gas Company owning a 1% general partner interest; and El Paso Production Oil & Gas Holdings, Inc. owning a 99% limited partner interest;

WHEREAS, on December 31, 2005, the Partnership changed its name to El Paso E&P Company, L.P., evidenced by filing of an Amended Certificate of Limited Partnership with the Secretary of State in the State of Delaware.

WHEREAS, on December 31, 2005, El Paso Production GOM, Inc. merged into the Partnership, with the Partnership being the survivor, and El Paso Production Oil & Gas Company received an additional 39% limited partner interest in the Partnership.

WHEREAS, on December 31, 2005, El Paso Energy Raton Corporation merged into the Partnership, with the Partnership being the survivor, and El Paso Production Company, was admitted as an additional limited partner and received a 4% limited partner interest in the Partnership.

WHEREAS, on December 31, 2005, El Paso Production Oil & Gas Company (i) designated 0.4% percent of its limited partner interest to a general partner interest in the Partnership and (ii) contributed its remaining 38.6% limited partner interest to El Paso Oil & Gas Holdings, Inc.

WHEREAS, on December 31, 2005, El Paso Production Oil & Gas Holdings, Inc. changed its name to El Paso E&P Holdings, Inc.

WHEREAS, on June 30, 2006, El Paso Production Company (i) transferred its 4% limited partner interest in the Partnership to El Paso Production Oil & Gas Company, and (ii) then merged into the Partnership, with the Partnership being the survivor; and El Paso Production Oil & Gas Company then received an additional 15.7% limited partner interest in the Partnership.

WHEREAS, on June 30, 2006, Medicine Bow Operating Company merged into the Partnership, with the Partnership being the survivor, and El Paso E&P Holdings, Inc. then received an additional 7.7% limited partner interest in the Partnership.

WHEREAS, on June 30, 2006, El Paso Production Oil & Gas Company (i) designated 0.3% percent of its limited partner interest to a general partner interest in the Partnership and (ii) contributed its remaining 19.4% limited partner interest to El Paso E&P Holdings, Inc.

WHEREAS, on June 30, 2006, El Paso Production Oil & Gas Company changed its name to El Paso Exploration & Production Management, Inc.

WHEREAS, on December 31, 2009, the limited partners, El Paso E&P Holdings, Inc. converted to a Delaware limited liability company and changed its name to El Paso E&P Holdings Company, L.L.C.

WHEREAS, on November 30, 2010, the limited partner, El Paso E&P Holdings Company, L.L.C. merged into El Paso Production Resale Company, L.L.C.

NOW, THEREFORE, in order to reflect and consent to the transactions stated above, the parties hereby agree that the Partnership Agreement shall be amended and restated as follows:

ARTICLE I

Organizational Matters

1.1 Formation. The Partnership was formed as a Limited Partnership pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act, as amended (the “Act”). The Partners hereby enter into this Agreement in order to set forth the rights and obligations of the Partners and certain matters related thereto. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act.

1.2 Name. The name of the Partnership is “El Paso E&P Company, L.P.,” and the business of the Partnership is to be conducted under such name. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner. The General Partner may change the name of the Partnership at any time and from time to time.

1.3 Registered Office; Principal Place of Business. The registered and principal office of the Partnership in the State of Delaware is to be Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 and The Corporation Trust Company is to be the registered agent for service of process on the Partnership at such office. The Partnership may maintain offices at such other place or places as the General Partner deems advisable or necessary to efficiently conduct the Partnership’s business.

1.4 Term. The Partnership’s existence shall commence on the date of the filing of the Certificate of Limited Partnership and shall continue in existence until the first to occur (i) fifty (50) years from the date of the filing of the Certificate of Limited Partnership or (ii) unless it is earlier terminated pursuant to the provisions of Article XIII.

1.5 Effective Date. The Effective Date of this Seventh Amended and Restated Agreement shall be November 30, 2010.

ARTICLE II

Definitions

The following definitions shall for all purposes, unless otherwise clearly indicated to the contrary, apply to the terms used in this Agreement.

“Act” shall have the meaning assigned to such term in Section 1.1.

“Adjusted Capital Account” shall mean, with respect to any Partner, the balance, if any, in such Partner’s Capital Account as of the end of the relevant taxable year, after giving effect to the following adjustments:

(a) credit to such Capital Account the maximum amount which such Partner could then be obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the Allocation Regulations.

(b) debit to such Capital Account the items described in Sections 1.704-l(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of the Allocation Regulations.

The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Allocation Regulations and shall be interpreted consistently therewith.

“Affiliate” shall mean any Person that directly or indirectly controls, is controlled by or is under common control with the Person in question. As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“Agreement” shall mean this Agreement of Limited Partnership of El Paso E&P Company, L.P. as it may be amended or restated from time to time.

“Allocation Regulations” shall mean Treasury Regulation Sections 1.704-1(b), 1.704-2 and 1.704-3 (including any temporary regulations) as such regulations may be amended and in effect from time to time and any corresponding provision of succeeding regulations.

“Assignee” means any transferee meeting the requirements of Article X.

“Capital Account” shall mean the capital account maintained for a Partner pursuant to Section 4.3.

“Capital Contributions” shall mean any cash or property contributed to the Partnership by a Partner.

“Carrying, Value” means (a) with respect to property contributed to the Partnership, the fair market value of such property at the time of contribution reduced (but not below zero) by all depreciation, depletion (computed as a separate item of deduction), amortization and cost recovery deductions charged to the Partners’ Capital Accounts, (b) with respect to any property whose value is adjusted pursuant to the Allocation Regulations, the adjusted value of such property reduced (but not below zero) by all depreciation and cost recovery deductions charged to the Partner’s Capital Accounts and (c) with respect to any other Partnership Property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination.

“Certificate of Limited Partnership” means the Certificate of Limited Partnership of Partnership filed with the Delaware Secretary of State in the State of Delaware pursuant to Section 1.1 of this Agreement, and as it may be amended from time to time.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time, and any successor statute.

“General Partner” shall mean El Paso Exploration & Production Management, Inc.

“Limited Partner” shall mean El Paso Production Resale Company, L.L.C.

“Notice” shall have the meaning assigned to such term in Section 15.1.

“Partner” shall mean the General Partner or the Limited Partner.

“Partnership” shall mean the Limited Partnership created pursuant to this Agreement.

“Partnership Interest” shall mean the interest of a Partner in the Partnership.

“Partnership Property” shall mean any and all property, both real and personal, tangible and intangible, whether contributed or otherwise acquired, owned by the Partnership.

“Percentage Interest” shall mean those percentages set forth opposite the Partners’ names on Exhibit A.

“Person” shall mean an individual, estate, corporation, limited liability company partnership, limited liability partnership, trust, unincorporated organization, association, enterprise or other entity.

ARTICLE III

Purpose

The purpose and nature of the business to be conducted by the Partnership shall be (i) to acquire, develop, own, convey, manage and/or operate oil and gas properties, interests therein and related businesses and (ii) to engage in any other business or activity that now or hereafter may be necessary, incidental, proper, advisable, convenient or related thereto (including obtaining financing therefore and including the sale of production payments) and that is not prohibited by the law of the jurisdiction in which the Partnership engages in that business or activity.

ARTICLE IV

Capital Contributions and Capital Accounts

4.1 Capital Contributions. The Partners of the Partnership have made contributions to the Partnership as set forth in this Agreement as may be otherwise set forth on the books of the Partnership.

4.2 Additional Capital Contributions of the Partners. The Partners shall not be required to make additional Capital Contributions to the Partnership unless they otherwise agree.

4.3 Capital Accounts. The Partnership will maintain and shall continue to maintain for each Partner a separate Capital Account in accordance with Treasury Regulation Section 1.704-1(b) et. seq ., as such regulations may be amended and in effect from time to time and any corresponding provisions of succeeding regulations.

4.4 Interest. No interest shall be paid by the Partnership on Capital Contributions or on balances in the Partners’ Capital Accounts.

4.5 Loans from the Partners. Loans by a Partner to the Partnership shall not be considered Capital Contributions.

ARTICLE V

Allocations and Distributions

5.1 Allocations For Capital Account Purposes.

(a) General. Except as otherwise set forth in Section 5.1(b), for purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction shall be allocated and charged to the Partners in accordance with their respective Percentage Interests.

(b) Special Allocations. The following special allocations shall be made prior to making any allocations provided for in 5.1(a) above:

(i) Qualified Income Offset. Except as provided in Section 5.1(b)(ii) hereof, in the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(i)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specifically allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Allocation Regulations, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible.

(ii) Nonrecourse Debt Allocations. Notwithstanding any other provision of this Section 5.1, each Partner shall be allocated items of Partnership income and gain in each fiscal year as necessary, in the General Partner’ discretion, to comply with the Allocation Regulations relating to nomecourse debt.

(iii) Gross Income Allocations. In the event any Partner has a deficit balance in its Adjusted Capital Account at the end of any Partnership taxable period, such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.1(b)(iii) shall be made only if and to the extent that such Partner would have a deficit balance in its Adjusted Capital Account after all other allocations provided in this Section 5.1 have been tentatively made as if Section 5.1(b)(iii) were not in the Agreement.

(iv) Code Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to the Allocation Regulations, to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to the Allocation Regulations.

(v) Curative Allocation. The special allocations set forth in Section 5.1(b)(i), (ii) and (iii) (the “Regulatory Allocations”) are intended to comply with the Allocation Regulations. Notwithstanding any other provisions of this Section 5.1, the Regulatory Allocations shall be taken into account in allocating items of income, gain, loss and deduction among the Partners such that, to the extent possible, the net amount of allocations of such items and the Regulatory Allocations to each Partner shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not occurred.

5.2 Tax Allocations. For federal income tax purposes, except as otherwise required by the Code, the Allocation Regulations or the following sentence, each item of Partnership income, gain, loss, deduction and credit shall be allocated among the Partners in the same manner as corresponding items are allocated in Section 5.1. Notwithstanding any provisions contained herein to the contrary, solely for federal income tax purposes, items of income, gain, depreciation, gain or loss with respect to property contributed or deemed contributed to the Partnership by a Partner shall be allocated so as to take into account the variation between the Partnership’s tax basis in such contributed property and its Carrying Value.

5.3 Distributions.

(a) Except as otherwise provided in Section 13.3, cash may be distributed at such time and in such amounts as the General Partner shall determine to the Partners in accordance with their respective Percentage Interests.

(b) Such distributions shall be made concurrently to the Partners (or their Assignees) as reflected on the books of the Partnership on the date set for purposes of such distribution.

ARTICLE VI

Rights, Powers and Duties of the General Partner;

Outside Activities of Partners

6.1 Management and Control of the Partnership. Except as otherwise specifically provided herein, the General Partner shall have full power and authority on behalf of the Partnership to manage, control, administer, operate and conduct the Partnership business. Any document executed by the General Partner while acting in good faith in the name and on behalf of the Partnership and within the parameters of his authority granted herein shall be deemed to be the action of the Partnership with respect to any third parties.

6.2 Officers. (a) The General Partner may, at any time and from time to time, in its discretion, delegate management and other responsibilities to the officers of the Partnership appointed pursuant to Section 6.2(b). It is the intent of the Partners that the day-to-day operations of the Partnership shall be managed by or under the direction of the President of the Partnership (the “President”) and the other officers of the Partnership (and persons to whom the President and such other officers have the power to delegate, and so delegate, responsibilities) in accordance with delegations of authority approved by the General Partner or, in the case of the President, as otherwise set forth in Section 6.2(b).

(b) The General Partner shall, from time to time as appropriate, elect an individual to serve as the President and shall, from time to time as appropriate, elect other officers of the Partnership (the President and such other officers are referred to herein collectively as the “Officers”) having such thles, duties and authority as shall be determined by the General Partner. The President shall have full power and discretion to manage the day-to-day operations of the Partnership and, without limiting the generality of the foregoing, the President (i) may, and may authorize any of the other Officers to, execute on behalf of the Partnership contracts, documents and other instruments (it being agreed that the General Partner may also delegate such authority to the foregoing Persons) and (ii) may in his discretion appoint and remove other Officers having such titles, duties and authority as shall be determined by the President.

6.3 Outside Activities of Partners. The General Partner, the Limited Partner and any shareholder, director, officer or employee of the General Partner, the Limited Partner or any of their respective Affiliates may have business interests and engage in business activities, some or all of which may conflict with the business activities of the Partnership, in addition to those relating to the Partnership for their own account and for the account of others without having or incurring any obligation to offer any interest in such properties, businesses or activities to the Partnership or any Partner. Neither the Partnership nor any of the Partners shall have any rights by virtne of this Agreement or the partnership relationship created hereby in any business ventures of any such Person.

ARTICLE VII

Rights and Obligations of the Limited Partner

7.1 Limitations on the Limited Partner. Except as otherwise specifically provided herein, the Limited Partner shall not (a) be permitted to take part in the management or control of the Partnership business or the affairs of the Partnership, (b) have the authority or power in its capacity as Limited Partner to act as agent for or on behalf of the Partnership or any other Partner, (c) do any act which would be binding on the Partnership or any other Partner, or (d) incur any expenditures on behalf of or with respect to the Partnership.

7.2 Liability of the Limited Partner. The Limited Partner shall not be directly liable to any third party for the debts, liabilities, contracts or other obligations of the Partnership except to the extent of (a) any unpaid Capital Contributions agreed to be made by them as set forth in Sections 4.1 and 4.2, and (b) the Limited Partner’s share of the assets (including undistributed revenues) of the Partnership.

7.3 Return of Capital. Except as otherwise provided in Article XIII, no Partner shall be entitled to the withdrawal or return of its Capital Contribution.

ARTICLE VIII

Books, Records, Accounting and Reports

8.1 Records and Accounting. The General Partner shall keep or cause to be kept appropriate books with respect to the Partnership’s business, which books shall at all times be kept at the principal office of the Partnership. Any records maintained by the Partnership in the regular course of its business, including the record of the holders of Partnership Interests, books on account, and records of Partnership proceedings may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographic or any other information storage device, provided that the records so kept are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained on a consistent basis determined by the General Partner.

8.2 Fiscal Year. The fiscal year of the Partnership shall be the calendar year.

ARTICLE IX

Tax Matters

The General Partner shall arrange for the preparation (at the Partnership’s expense) and timely filing of all returns of Partnership income, gains, deductions and losses necessary for federal and state income tax purposes and shall use reasonable efforts to cause copies of such returns or all pertinent information contained therein to be furnished to the Partners within ninety (90) days of the close of the taxable year. The General Partner shall also cause the Partnership to timely file all other required Partnership tax and information returns. The General Partner shall be the “tax matters partner” (as defined in Section 6231 of the Code) and shall be authorized and required to represent the Partnership (at the expense of the Partnership) in connection with all examinations of the affairs of the Partnership by tax authorities and to expend Partnership funds for professional services and costs associated therewith.

ARTICLE X

Transfer of Interests

10.1 Transfer. No Partner may transfer a Partnership Interest (or any rights therein) in whole or in part, except in accordance with the terms and conditions set forth in this Article X. Any transfer or purported transfer of any Partnership Interest not made in accordance with this Article X shall be null and void ab initio and of no force and effect.

10.2 Transfer of Interest of General Partner. The General Partner may not transfer all or any portion of its Partnership Interest as a General Partner (or any rights therein) without the consent of the Limited Partner.

10.3 Transfer of Interest of the Limited Partner. No Limhed Partner may transfer all or any part of its Partnership Interest as a Limited Partner (or any rights therein) without the prior written consent of the General Partner.

10.4 Effective Date of Transfer. Any permitted assignment shall become effective as of the first day of the calendar month during which the General Partner receive a copy of the instrument of assignment and such other documents which the General Partner may request. The Partnership shall thereafter pay all further distributions or profits or other compensation by way of income, or return of capital, on account of the Partnership Interest so transferred, to the transferee from such effective date.

ARTICLE XI

Admission of Partners

11.1 Admission of Partners. The General Partner shall reflect on the books of the Partnership that the General Partner and the Limited Partner are being admitted to the Partnership simultaneously with the execution of this Agreement.

11.2 Admission of Successor Partners. The transferee of the entire Partnership Interest of the one or both General Partner pursuant to Section 10.2 shall be admitted to the Partnership as a General Partner, effective as of the date an amendment to the Certificate of Limited Partnership is filed with the Secretary of State of the State of Delaware effecting such substitution. The transferee of the entire Partnership Interest of any Limited Partner pursuant to Section 10.3 shall be admitted to the Partnership as a Limited Partner, effective in accordance with Section 10.4.

11.3 Amendment of Agreement. For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate to prepare and record, as necessary, an amendment of this Agreement and the Certificate of Limited Partnership.

ARTICLE XII

Withdrawal of the General Partner

The General Partner may not withdraw from the Partnership without the written consent of the Limited Partner. The interest of the withdrawing General Partner may, at the option of the Limited Partner, be converted into a limited partner interest without any reduction in such interest (subject to proportionate dilution by reason of admission of its successor).

ARTICLE XIII

Dissolution and Liquidation

13.1 Dissolution. The Partnership shall be dissolved upon:

(a) the disposition of all or substantially all of the assets owned by the Partnership; or

(b) an election to dissolve the Partnership which is approved by the Partners.

13.2 Liquidation. Upon dissolution of the Partnership, the General Partner, or in the event the General Partner has been dissolved or removed or withdrawn, a liquidator or liquidating committee selected by the Limited Partner shall be the “Liquidator.” The Liquidator shall liquidate the assets of the Partnership and apply and distribute the proceeds of such liquidation in the following order of priority, unless otherwise required by mandatory provisions of applicable law:

(a) First, to the payment of creditors of the Partnership, other than Partners, in order of priority provided by law;

(b) Second, to the payment of Partners pro rata for loans made by them to the Partnership;

(c) Third, to the Partners in proportion to and to the extent of the positive balances in their respective Capital Accounts after taking into account all adjustments to the Capital Account balances pursuant to Section 5.1.

13.3 Distribution in Kind. Notwithstanding the provisions of Section 13.2, but subject to the order of priorities set forth therein, if on dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (other than those to Partners) and may distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2(c), undivided interests in such Partnership Property as the Liquidator deems not suitable for liquidation.

13.4 Return of Capital. The General Partner shall not be personally liable for the return of the Capital Contributions of the Partners or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets.

13.5 Waiver of Partition. Each Partner hereby waives any rights to partition of the Partnership Property.

13.6 Cancellation of Certificate of Limited Partnership. Upon the completion of the distribution of Partnership Property as provided in Sections 13.2 and 13.3, the Partnership shall be terminated, and the Liquidator (or the General Partner or the Limited Partner, as the case may be in accordance with the Act) shall cause the Certificate of Limited Partnership to be canceled and shall take such other actions as may be necessary to terminate the Partnership.

13.7 Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Sections 13.2 and 13.3 in order to minimize any losses otherwise attendant upon such winding up.

13.8 Capital Account Restoration. The Limited Partner shall not be obligated to restore any negative balance in its Capital Account or have any obligation to make additional contributions of capital upon liquidation.

ARTICLE XIV

Amendment of Partnership Agreement

Any amendment to this Agreement may only be adopted by the agreement in writing of all of the Partners. The Limited Partner agree promptly to execute or cause to be executed such amendments to this Agreement and the Certificate of Limited Partnership as the General Partner may deem appropriate to reflect amendments adopted in accordance with this paragraph.

ARTICLE XV

General Provisions

15.1 Addresses and Notices. The address of each Partner for all purposes shall be the address set forth on Exhibit A attached hereto or such other address of which the General Partner have received written notice. Subject to the following sentence, any notice, demand, request or report required or permitted to be given or made to a Partner under this Agreement (“Notice”) shall be in writing and shall be deemed given or made when delivered in person or when sent to the Partner at such address by first class mail or by other means of written communication, including telecopy, telex, or cable, if the address of such Partner furnished hereunder contains sufficient information to transmit notice by such means.

15.2 Titles and Captions. All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof

15.3 Pronouns and Plurals. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

15.4 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purpose of this Agreement.

15.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their successors, legal representatives and permitted assigns.

15.6 Integration. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

15.7 Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Partnership.

15.8 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

15.9 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

15.10 Consent to Jurisdiction. Each Partner hereby (i) irrevocably submits to the non-exclusive jurisdiction of any Delaware State court or Federal court sitting in Wilmington, Delaware in any action arising out of this Agreement, and (ii) consents to the service of process by mail. Nothing herein shall affect the right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court

15.11 Exhibits. Any and all Exhibits referred to in this Agreement are by such reference incorporated herein and made a part hereof for all purposes.

15.12 Invalidity of Provisions. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

15.13 Counterparts and Signatures. This Agreement may be executed in any number of counterparts, with each such counterpart being deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Signatures received by telecopy or facsimile shall be treated as original signatures for purposes of execution of this Agreement.

EXECUTED as of November 30, 2010.

	GENERAL PARTNER:

	EL PASO EXPLORATION & PRODUCTION MANAGEMENT, INC.


	By:	/s/ John J. Hopper
		John J. Hopper
		Vice President and Treasurer


	LIMITED PARTNER:

	EL PASO PRODUCTION RESALE COMPANY, L.L.C.


	By:	/s/ John J. Hopper
		John J. Hopper
		Vice President and Treasurer

Exhibit A

Percentage Interests

	Percentage
	Interest

General Partner:

El Paso Exploration & Production Management, Inc.	1.00	%
1001 Louisiana Street
Houston, Texas 77002

Limited Partner:

El Paso Production Resale Company, L.L.C.	99.00	%
1001 Louisiana Street
Houston, Texas 77002

Total	100.00	%

Exhibit 3.21

	*Delaware*

	The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “EPE NOMINEE CORP.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE EIGHTEENTH DAY OF MAY, A.D. 2012, AT 4:45 O’CLOCK P.M.

CERTIFICATE OF CHANGE OF REGISTERED AGENT, FILED THE THIRTIETH DAY OF MAY, A.D. 2012, AT 2:11 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION, “EPE NOMINEE CORP.”.




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
5155305 8100H	AUTHENTICATION:	9768694

120919817	DATE:	08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

State of Delaware
Secretary of State
Division of Corporations
Delivered 04:49 PM 05/18/2012
FILED 04:45 PM 05/18/2012
SRV 120593664 - 5155305 FILE

CERTIFICATE OF INCORPORATION

EPE NOMINEE CORP.

FIRST: The name of this corporation shall be EPE Nominee Corp.

THIRD: The purpose or purposes of the corporation shall be to (i) hold (as agent for El Paso E&P Company, L.P. (together with its successors and assigns, the “Principal”) and for the sole benefit of the Principal) legal title to certain oil and gas leases, (ii) provide such other services as may be required by the Principal from time to time, and (iii) engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware to the extent such act or activity is permitted by (or in furtherance of) the relationship and activities described in the foregoing clauses (i) and (ii).

FOURTH: The total number of shares of stock which this corporation is authorized to issue is 100, all of which are without par value. All such shares are of one class and are shares of Common Stock.

FIFTH: The name and mailing address of the incorporator are as follows:

Name		Mailing Address
Carson L. Sieving		Vinson & Elkins L.L.P.
		666 Fifth Avenue
		New York, New York 10103

SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the bylaws.

EIGHTH: The name and mailing address of the initial directors, who shall serve until the first annual meeting of stockholders or until their successors are elected and qualified, are as follows:

Name		Mailing Address
Gregory Beard		c/o Apollo Management, L.P.
Sam Oh		9 West 57 th Street
Rakesh Wilson		New York, New York 10019

IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed, signed and acknowledged this Certificate of Incorporation this 18th day of May, 2012.

	/s/ Carson L. Sieving
	Carson L. Sieving
	Incorporator

State of Delaware
Secretary of State
Division of Corporations
Delivered 02:24 PM 05/30/2012
FILED 02:11 PM 05/30/2012
SRV 120662191 - 5155305 FILE

STATE OF DELAWARE

CERTIFICATE OF CHANGE OF REGISTERED AGENT

AND/OR REGISTERED OFFICE

The corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies as follows:

1. The name of the corporation is EPE Nominee Corp.

2. The Registered Office of the corporation in the State of Delaware is changed to Corporation Trust Center, 1209 Orange (street), in the City of Wilmington, County of New Castle Zip Code 19801. The name of the Registered Agent at such address upon whom process against this Corporation may be served is THE CORPORATION TRUST COMPANY.

3. The foregoing change to the registered office/agent was adopted by a resolution of the Board of Directors of the corporation.

	By:		/s/ Joseph C. James
			Authorized Officer


	Name:		Joseph C. James, Assistant Secretary
			Print or Type

Exhibit 3.22

Execution Version

BYLAWS

EPE NOMINEE CORP.

ARTICLE I

OFFICES

Section 1. REGISTERED OFFICES. The registered office shall be in Wilmington, Delaware, or such other location as the Board of Directors may determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 8. MAINTENANCE AND INSPECTION OF STOCKHOLDER LIST. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

Section 1. THE NUMBER OF DIRECTORS. The Board of Directors shall consist of at least one (1) director. The number of directors shall be fixed or changed from time to time by the then appointed directors. The directors need not be stockholders. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and the directors elected shall hold office until his successor is elected and qualified; provided, however , that unless otherwise restricted by the Certificate of Incorporation or by law, any director or the entire Board of Directors may be removed, either with or without cause, from the Board of Directors at any meeting of stockholders by a majority of the stock represented and entitled to vote thereat.

Section 2. VACANCIES. Vacancies on the Board of Directors by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. The directors so chosen shall hold office until the next annual election of directors and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

Section 3. POWERS. The property and business of the corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the corporation and do all such lawful acts and things permitted by the Certificate of Incorporation and are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 4. PLACE OF DIRECTORS’ MEETINGS. The directors may hold their meetings and have one or more offices, and keep the books of the corporation outside of the State of Delaware.

Section 5. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.

other than announcement at the meeting, until a quorum shall be present. If only one director is authorized, such sole director shall constitute a quorum.

Section 9. TELEPHONIC MEETINGS. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

Section 10. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation (if any) to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the Bylaws of the corporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

Section 11. MINUTES OF COMMITTEE MEETINGS. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE IV

OFFICERS

Section 1. OFFICERS. The officers of the corporation shall be chosen by the Board of Directors and shall include a Chairman of the Board of Directors or a President, or both, and a Secretary. The corporation may also have, at the discretion of the Board of Directors, such other officers as are desired, including a Vice-Chairman of the Board of Directors, a Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 hereof. At the time of the election of officers, the directors may by resolution determine the order of their rank, if any. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these Bylaws otherwise provide.

Section 2. ELECTION OF OFFICERS. The Board of Directors, at its first meeting and after each annual meeting of stockholders, shall choose the officers of the corporation.

Section 7. VICE PRESIDENTS. In the absence or disability of the President, the Vice Presidents (if any) in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other duties as from time to time may be prescribed for them, respectively, by the Board of Directors.

Section 8. SECRETARY. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required by the Board of Directors. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or these Bylaws. He shall keep in safe custody the seal of the corporation (if any), and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation (if any) and to attest the affixing by his signature.

Section 9. ASSISTANT SECRETARY. The Assistant Secretary (if any), or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if there be no such determination, the Assistant Secretary designated by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer (if any) shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys, and other valuable effects in the name and to the credit of the corporation, in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Chief Financial Officer and of the financial condition of the corporation. If required by the Board of Directors, he shall give the corporation a bond, in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors, for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 11. ASSISTANT TREASURER. The Assistant Treasurer (if any), or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, or if there be no such determination, the Assistant Treasurer designated by the Board of Directors, shall, in the absence or disability of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

ARTICLE V

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 1. PROCEEDINGS OTHER THAN THOSE BROUGHT BY THE CORPORATION. The corporation shall indemnify to the maximum extent permitted by law any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment,

order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article V.

ARTICLE VI

CERTIFICATES OF STOCK

Section 4. TRANSFERS OF STOCK. Upon surrender to the corporation, or the transfer agent of the corporation, of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 5. FIXED RECORD DATE. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however , that the Board of Directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date which shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors.

ARTICLE VII

GENERAL PROVISIONS

Section 3. CHECKS. All checks or demands for money and notes of the corporation shall be signed by such officer or officers as the Board of Directors may from time to time designate.

Section 4. FISCAL YEAR. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 5. CORPORATE SEAL. The corporate seal, if any, shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware.” Said seal (if any) may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE IX

AMENDMENTS

* * * * *

Exhibit 3.23

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “CRYSTAL E&P COMPANY, L.L.C.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF LIMITED PARTNERSHIP, FILED THE THIRTIETH DAY OF MARCH, A.D. 1998, AT 9 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “U.P. HALL HOLDINGS I, L.P.” TO “PEOPLES ENERGY TEXAS PRODUCTION HOLDINGS, L.P.”, FILED THE FIFTEENTH DAY OF JANUARY, A.D. 1999, AT 9 O’CLOCK A.M.

CERTIFICATE OF AMENDMENT, FILED THE TWENTY-SIXTH DAY OF SEPTEMBER, A.D. 2001, AT 1:30 O’CLOCK P.M.

CERTIFICATE OF MERGER, CHANGING ITS NAME FROM “PEOPLES ENERGY TEXAS PRODUCTION HOLDINGS, L.P.” TO “PEOPLES ENERGY PRODUCTION PARTNERS, L.P.”, FILED THE TWENTY-EIGHTH DAY OF SEPTEMBER, A.D. 2001, AT 1 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE FIRST DAY OF OCTOBER, A.D. 2001, AT 12:01 O’CLOCK A.M.




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
2878523 8100H	AUTHENTICATION:	9768611

120919708	DATE:	08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

Delaware

The First State

CERTIFICATE OF CONVERSION, CHANGING ITS NAME FROM “PEOPLES ENERGY PRODUCTION PARTNERS, L.P.” TO “CORONADO ENERGY PRODUCTION PARTNERS, L.L.C.”, FILED THE TWENTY-SEVENTH DAY OF SEPTEMBER, A.D. 2007, AT 11:50 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF CONVERSION IS THE TWENTY-SEVENTH DAY OF SEPTEMBER, A.D. 2007, AT 6:15 O’CLOCK P.M.

CERTIFICATE OF FORMATION, FILED THE TWENTY-SEVENTH DAY OF SEPTEMBER, A.D. 2007, AT 11:50 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF FORMATION IS THE TWENTY-SEVENTH DAY OF SEPTEMBER, A.D. 2007, AT 6:15 O’CLOCK P.M.

CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM “CORONADO ENERGY PRODUCTION PARTNERS, L.L.C.” TO “CRYSTAL E&P COMPANY, L.L.C.”, FILED THE SECOND DAY OF JUNE, A.D. 2009, AT 1:25 O’CLOCK P.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED LIABILITY COMPANY, “CRYSTAL E&P COMPANY, L.L.C.”.




	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
2878523 8100H	AUTHENTICATION:	9768611

120919708	DATE:	08-09-12

You may verify this certificate online

at corp.delaware.gov/authver.shtml

CERTIFICATE OF LIMITED PARTNERSHIP

U.P. HALL HOLDINGS I, L.P.

This Certificate of Limited Partnership of U.P. HALL HOLDINGS I, L.P. is being executed and filed by the undersigned General Partner for the purpose of forming a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act.

1.	The name of the limited partnership formed hereby is U.P. HALL HOLDINGS I, L.P. (the “ Limited Partnership ”).

2.	The address of the registered office of the Limited Partnership in Delaware is 1013 Centre Road, Wilmington, New Castle County, Delaware 19805 and the name and address of the registered agent for service of process on the Limited Partnership in Delaware is Corporation Service Company, 1013 Centre Road, Wilmington, New Castle County, Delaware 19805.

3.	The name and address of the sole general partner is as follows:

	NAME	ADDRESS

	U.P. HALL I, INC.	130 East Randolph Drive
		Chicago, IL 60601

IN WITNESS WHEREOF, the undersigned, being the sole general partner of the Limited Partnership, has caused this Certificate of Limited Partnership to be duly executed as of this 30th day of March, 1998.

	U.P. HALL I, INC.


	By:	/s/ Thomas M. Patrick
	Name:	Thomas M. Patrick
	Title:	Vice President

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 09:00 AM 03/30/1998
	981124342 - 2878523

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 09:00 AM 01/15/1999
	991018080 - 2878523

CERTIFICATE OF AMENDMENT

CERTIFICATE OF LIMITED PARTNERSHIP

U. P. HALL HOLDINGS I, L.P.

It is hereby certified that:

FIRST: The name of the limited partnership (hereinafter called the “partnership”) is U. P. Hall Holdings I, L.P.

SECOND: Pursuant to provisions of Section 17-202, title 6, Delaware Code, the Certificate of Limited Partnership is amended as follows:

Article 1 of the Certificate of Limited Partnership is deleted and in lieu of said Article the following new Article 1 is substitiuted:

1. The name of the limited partnership is Peoples Energy Texas Production Holdings, L.P.

The undersigned, a general partner of the partnership, executed this certificate of amendment on December 31, 1988.

	By:	U. P. Hall I, Inc.

	By:	/s/ James M. Luebbers
		James M. Luebbers

	Its:	Vice President and Controller

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 01:30 PM 09/26/2001
	010477644 - 2878523

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF LIMITED PARTNERSHIP

PEOPLES ENERGY TEXAS PRODUCTION HOLDINGS, L.P.

The undersigned, desiring to amend the Certificate of Limited Partnership of Peoples Energy Texas Production Holdings, L.P. pursuant to the provisions of Section 17-202 of the Revised Uniform Limited Partnership Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the Limited Partnership is Peoples Energy Texas Production Holdings, L.P.

SECOND: Article 3 of the Certificate of Limited Partnership shall be amended as follows:

“The name and business address of the sole General Partner is as follows:

	NAME:		ADDRESS:

	Peoples Energy Production Operating Company		130 East Randolph Drive
			Chicago, Illinois 60601”

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Limited Partnership on this 26 th day of September, 2001.

	Peoples Energy Production Operating Company
	As General Partner

	By	/s/ James M. Luebbers
	Name:	James M. Luebbers
	Title:	Vice President and Controller

	STATE OF DELAWARE
	SECRETARY OF STATE
	DIVISION OF CORPORATIONS
	FILED 01:00 PM 09/28/2001
	010484830 - 2878523

CERTIFICATE OF MERGER

Merging

Peoples Energy Louisiana Production Holdings, L.P.,

Peoples Energy North Dakota Production Holdings, L.P.,

Peoples Energy Colorado Production Holdings, L.P.

Into

Peoples Energy Texas Production Holdings, L.P.,

Pursuant to the provisions of Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (the “DRULPA”), the undersigned corporation submits the following Certificate of Merger for the purpose of effecting a merger under the DRULPA.

1. The name and jurisdiction of formation of each of the constituent entities are as follows:

Name of Limited Partnership	Type of Entity	State of Formation

Peoples Energy Texas Production Holdings, L.P.	Limited Partnership	Delaware

Peoples Energy Louisiana Production Holdings, L.P.	Limited Partnership	Delaware

Peoples Energy North Dakota Production Holdings, L.P.	Limited Partnership	Delaware

Peoples Energy Colorado Production Holdings, L.P.	Limited Partnership	Delaware

2. An agreement and plan of merger (the “Merger Agreement”) has been approved and executed by each of the constituent entities in accordance with Section 17-211 of the DRULPA.

3. The name of the surviving Limited Partnership is Peoples Energy Texas Production Holdings, L.P.

4. The name of the surviving Limited Partnership is hereby amended to Peoples Energy Production Partners, L.P.

5. The executed Merger Agreement is on file at the principal place of business of the surviving domestic limited partnership, located at 130 East Randolph Dr., Chicago, Illinois 60601.

6. A copy of the Merger Agreement will be furnished by the surviving domestic limited partnership, on request and without cost, to any partner of the constituent entities.

7. The merger shall become effective at 12:01 a.m., Eastern Standard Time, on October 1, 2001.

Dated as of the 26 th day of September, 2001.

	PEOPLES ENERGY TEXAS PRODUCTION HOLDINGS, L.P.

	By: Peoples Energy Production Operating Company
	as General Partner

	By:	/s/ Steven W. Nance
	Name:	Steven W. Nance
	Title:	President

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 11:49 AM 09/27/2007
	FILED 11:50 AM 09/27/2007
	SRV 071059234 - 2878523 FILE

CERTIFICATE OF CONVERSION

PEOPLES ENERGY PRODUCTION PARTNERS, L.P.

The undersigned hereby executes this Certificate of Conversion of Peoples Energy Production Partners, L.P. (the “Company”) for the purpose of converting the Company into a Delaware limited liability company in accordance with Section 18-214 of the Delaware Limited Liability Company Act (the “DLLCA”) and Section 17-219 of the Delaware Revised Uniform Limited Partnership Act (the “DRULPA”).

1. The Company was first formed on March 30, 1998 in the State of Delaware in accordance with the DRULPA, and the jurisdiction immediately prior to the filing of this Certificate continues to be Delaware.

2. The name of the Company immediately prior to filing this Certificate is Peoples Energy Production Partners, L.P.

3. The name of the limited liability company as set forth in its Certificate of Formation filed in accordance with Section 18-214(b)(2) of the DLLCA is Coronado Energy Production Partners, L.L.C.

4. This Certificate of Conversion, and the conversion of the Company into a Delaware limited liability company, shall be effective as of 6:15 PM Eastern Time on September 27, 2007.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Conversion as of the 27 th day of September, 2007.

	/s/ Barth J. Wolf
	Barth J. Wolf, Authorized Person

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 11:49 AM 09/27/2007
	FILED 11:50 AM 09/27/2007
	SRV 071059234 - 2878523 FILE

CERTIFICATE OF FORMATION

CORONADO ENERGY PRODUCTION PARTNERS, L.L.C.

The undersigned hereby executes this Certificate of Formation of Coronado Energy Production Partners, L.L.C. (the “Company”) for the purpose of forming a limited liability company pursuant to the Delaware Limited Liability Company Act.

1. The name of the Company is Coronado Energy Production Partners, L.L.C.

2. The address of the registered office of the Company is c/o The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

3. The Company’s registered agent at such registered office address is The Corporation Trust Company.

4. This Certificate of Formation, and the formation of the Company, shall be effective as of 6:15 PM Eastern Time on September 27, 2007.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Formation as of the 27 th day of September, 2007.

	/s/ Barth J. Wolf
	Barth J. Wolf, Authorized Person

	State of Delaware
	Secretary of State
	Division of Corporations
	Delivered 01:42 PM 06/02/2009
	FILED 01:25 PM 06/02/2009
	SRV 090579402 - 2878523 FILE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

CORONADO ENERGY PRODUCTION PARTNERS, L.L.C.

The undersigned, desiring to amend the Certificate of Formation of Coronado Energy Production Partners, L.L.C. (the “LLC”), pursuant to the provisions of Section 18-202 of the Limited Liability Company Act of the State of Delaware, does hereby certify as follows:

FIRST: The name of the LLC is:

Coronado Energy Production Partners, L.L.C.

SECOND: The article numbered “FIRST” of the Certificate of Formation of the Company shall be amended as follows:

“FIRST: The name of the LLC formed hereby is:

Crystal E&P Company, L.L.C.”

THIRD: This amendment to the Certificate of Formation shall be effective on upon filing with the Delaware Secretary of State.

IN WITNESS WHEREOF, the undersigned executed this Amendment to the Certificate of Formation on this 1st day of June 2009.

	CORONADO ENERGY PRODUCTION PARTNERS, L.L.C.


	By:	/s/ Joyce Allen-Dennis
		Joyce Allen-Dennis
		Assistant Secretary

Exhibit 3.24

SECOND AMENDED & RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

CRYSTAL E&P COMPANY, L.L.C.

A DELAWARE LIMITED LIABILITY COMPANY

PREAMBLE

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Crystal E&P Company, L.L.C. (the “Company”) made on this 15th day of September 2009, by El Paso E&P Company, L.P., a Delaware limited partnership (“E&P Company”), the Member of this Company.

WHEREAS, the Company was formed under the name of Coronado Energy Production Partners, L.L.C, as a limited liability company under the Act (as hereinafter defined) pursuant to the filing of the Certificate of Formation (as hereinafter defined) on September 27, 2007, and the execution of that certain Agreement of Limited Liability Company dated as of September 28, 2007, by Coronado Energy Production Operating, L.L.C., a Delaware limited liability company (“CEPOLLC”) and Coronado Energy Production, L.L.C., a Delaware limited liability company (“CEPLLC”) (the “Original Agreement”);

WHEREAS, on June 2, 2009, Coronado Energy Production Partners, L.L.C. changed its name to Crystal E&P Company, L.L.C., and entered into a First Amended and Restated Limited Liability Company Agreement of the Company; and

WHEREAS, on September 15, 2009. CEPOLLC and CEPLLC merged into El Paso E&P Company, L.P., evidenced by the filing of a Certificate of Merger with the office of the Secretary of State of Delaware; and

WHEREAS, E&P Company, as the Member of Crystal E&P Company, L.L.C., desires to amend and restate the First Amended and Restated Limited Liability Company Agreement for the purposes and upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and covenants herein contained, E&P Company does hereby agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. Definitions Unless the context otherwise requires, the following terms shall have the following meanings for the purposes of this Agreement:

“ Act ” means the Delaware Limited Liability Company Act, 6 Del C. §§ 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

“ Agreement ” means this Limited Liability Company Agreement, as the same may be amended from time to time.

“ Assets ” means, at any time, any real property and other assets owned or leased by the Company from time to time.

“ Capital Contribution ” means a capital contribution made by the Member pursuant to Section 3.01 or 3.02.

“ Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Delaware on September 27, 2007, to form the Company pursuant to the Act, as originally executed by Barth J. Wolf (as an authorized person within the meaning of the Act) and as amended, modified, supplemented or restated from time to time, as the context requires.

“ Company ” means the limited liability company formed pursuant to this Agreement.

“ Distributable Cash ” means cash (in U.S. dollars) of the Company that the Member determines is available for distribution.

“ Interest ” means the ownership interest in the Company at any time, including the right of the Member to any and all benefits to which the Member may be entitled as provided in this Agreement, together with the obligations of the Member to comply with all the terms and provisions of this Agreement.

“ Member ” means El Paso E&P Company, L.P., and any other member or members admitted to the Company in accordance with this Agreement or any amendment or restatement hereof.

“ Person ” has the meaning set forth in the Act.

ARTICLE II

FORMATION

SECTION 2.02. Term . The term of the Company commenced on the date of filing of the Certificate of Formation of the Company in the Office of the Secretary of State of Delaware (the “Effective Date”). The term of the Company shall continue until terminated as provided in Article VIII hereof.

SECTION 2.05. Purposes of the Company . The Company has been organized to engage in any lawful act or activity for which a Delaware limited liability company may be formed.

ARTICLE III

CAPITAL CONTRIBUTIONS

ARTICLE IV

DISTRIBUTIONS

ARTICLE V

BOOKS AND RECORDS

ARTICLE VI

MANAGEMENT OF THE COMPANY

shall be necessary to make it effective. Any officer may be removed, with or without cause, by the Member. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company, but the election or appointment of any officer shall not of itself create contractual rights. Any number of offices may be held by the same person. Any vacancy occurring in any office by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Member.

Each Executive Vice President, Senior Vice President, Vice President and Assistant Vice President shall have authority to sign or execute all deeds, mortgages, bonds, contracts or other instruments on behalf of the Company, except in cases where the signing or execution thereof shall have been expressly delegated by the Member to some other officer or agent of the Company.

the Member; if required, he shall give a bond for the faithful discharge of his duties, with such surety or sureties as the Member may determine; he shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Company and shall render to the Member or the President, whenever requested, an account of the financial condition of the Company (as if the Company were a Delaware corporation); and, in general, he shall perform all the duties incident to the office of treasurer of a company, and such other duties as may be assigned to him by the Member or the President or as may be provided by law.

ARTICLE VII

TRANSFERS OF COMPANY INTERESTS

ARTICLE VIII

DISSOLUTION AND TERMINATION

SECTION 8.03. Distribution of Property . If in the discretion of the Member it becomes necessary to make a distribution of Company property in kind in connection with the liquidation

of the Company, such property shall be transferred and conveyed to the Member subject to Section 18-804 of the Act.

ARTICLE IX

INDEMNIFICATION

SECTION 9.02. Reimbursement . The Company shall advance or promptly reimburse, upon request, any Person entitled to indemnification hereunder for all expenses, including attorneys’ fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Person (in form and substance satisfactory to the Company) to repay such amount if such Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Person is entitled: provided that such Person shall cooperate in good faith with any request by the Company that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential conflicts of interest between or among such parties; and provided , further , that the Company shall only advance attorneys’ fees in respect of legal counsel approved by the Company, such approval not to be unreasonably withheld.

SECTION 9.05. Enforceability . In case any provision in this Article IX shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provisions shall be given the fullest possible enforcement in the circumstances, it being the intention of the Company to provide indemnification and advancement of expenses to its members and officers, acting in such capacities, to the fullest extent permitted by law.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments and Consents . This Agreement may be modified or amended only by the Member.

SECTION 10.02. Benefits of Agreement . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or the Member.

SECTION 10.04. Headings . The titles of Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.

SECTION 10.07. Applicable Law . This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware, without regard to its conflict of law principles.

IN WITNESS WHEREOF, this Limited Liability Company Agreement has been duly executed by El Paso E&P Company, L.P., effective as of the 15th day of September, 2009.

	EL PASO E&P COMPANY, L.P.


	By:	/s/ John J. Hopper
		John J. Hopper
		Vice President and Treasurer

Exhibit A

Percentage Interests

	Percentage Interest
Member:

El Paso E&P Company, L.P.	100	%
1001 Louisiana Street
Houston, Texas 77002

Exhibit 4.1

EXECUTION VERSION

EVEREST ACQUISITION LLC

and

EVEREST ACQUISITION FINANCE INC.

as Issuers

and the Subsidiary Guarantors party hereto from time to time

6.875% Senior Secured Notes due 2019

INDENTURE

Dated as of April 24, 2012

and

Wilmington Trust, National Association

as Trustee

TABLE OF CONTENTS

		Page

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01	Definitions	1
SECTION 1.02	Other Definitions	48
SECTION 1.03	Rules of Construction	49

ARTICLE II

THE NOTES

SECTION 2.01	Amount of Notes	50
SECTION 2.02	Form and Dating	51
SECTION 2.03	Execution and Authentication	52
SECTION 2.04	Registrar and Paying Agent	52
SECTION 2.05	Paying Agent to Hold Money in Trust	53
SECTION 2.06	Holder Lists	53
SECTION 2.07	Transfer and Exchange	54
SECTION 2.08	Replacement Notes	54
SECTION 2.09	Outstanding Notes	55
SECTION 2.10	Cancellation	55
SECTION 2.11	Defaulted Interest	56
SECTION 2.12	CUSIP Numbers, ISINs, Etc.	56
SECTION 2.13	Calculation of Principal Amount of Notes	56

ARTICLE III

REDEMPTION

SECTION 3.01	Redemption	56
SECTION 3.02	Applicability of Article	57
SECTION 3.03	Notices to Trustee	57
SECTION 3.04	Selection of Notes to Be Redeemed	57
SECTION 3.05	Notice of Optional Redemption	57
SECTION 3.06	Effect of Notice of Redemption	58
SECTION 3.07	Deposit of Redemption Price	58
SECTION 3.08	Notes Redeemed in Part	59

ARTICLE IV

COVENANTS

SECTION 4.01	Payment of Notes	59
SECTION 4.02	Reports and Other Information	59
SECTION 4.03	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	62
SECTION 4.04	Limitation on Restricted Payments	69
SECTION 4.05	Dividend and Other Payment Restrictions Affecting Subsidiaries	75

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(cont’d)

		Page

SECTION 4.06	Asset Sales	77
SECTION 4.07	Transactions with Affiliates	81
SECTION 4.08	Change of Control	84
SECTION 4.09	Compliance Certificate	85
SECTION 4.10	Further Instruments and Acts	86
SECTION 4.11	Future Subsidiary Guarantors	86
SECTION 4.12	Liens	86
SECTION 4.13	After-Acquired Property	87
SECTION 4.14	Maintenance of Office or Agency	88
SECTION 4.15	Covenant Suspension	89
SECTION 4.16	Maintenance of Insurance	90

ARTICLE V

SUCCESSOR COMPANY

SECTION 5.01	When Issuers May Merge or Transfer Assets	90

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01	Events of Default	92
SECTION 6.02	Acceleration	94
SECTION 6.03	Other Remedies	95
SECTION 6.04	Waiver of Past Defaults	95
SECTION 6.05	Control by Majority	95
SECTION 6.06	Limitation on Suits	96
SECTION 6.07	Rights of the Holders to Receive Payment	96
SECTION 6.08	Collection Suit by Trustee	96
SECTION 6.09	Trustee May File Proofs of Claim	97
SECTION 6.10	Priorities	97
SECTION 6.11	Undertaking for Costs	97
SECTION 6.12	Waiver of Stay or Extension Laws	98

ARTICLE VII

TRUSTEE

SECTION 7.01	Duties of Trustee	98
SECTION 7.02	Rights of Trustee	99
SECTION 7.03	Individual Rights of Trustee	101
SECTION 7.04	Trustee’s Disclaimer	101
SECTION 7.05	Notice of Defaults	101
SECTION 7.06	Reports by Trustee to the Holders	102
SECTION 7.07	Compensation and Indemnity	102
SECTION 7.08	Replacement of Trustee	103
SECTION 7.09	Successor Trustee by Merger	104

TABLE OF CONTENTS

(cont’d)

		Page

SECTION 7.10	Eligibility; Disqualification	104
SECTION 7.11	Preferential Collection of Claims Against the Issuers	104
SECTION 7.12	Limitation on Duty of Trustee in Respect of Collateral; Indemnification	105

ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01	Discharge of Liability on Notes; Defeasance	105
SECTION 8.02	Conditions to Defeasance	107
SECTION 8.03	Application of Trust Money	108
SECTION 8.04	Repayment to Issuer	108
SECTION 8.05	Indemnity for U.S. Government Obligations	108
SECTION 8.06	Reinstatement	108

ARTICLE IX

AMENDMENTS AND WAIVERS

SECTION 9.01	Without Consent of the Holders	109
SECTION 9.02	With Consent of the Holders	110
SECTION 9.03	Revocation and Effect of Consents and Waivers	111
SECTION 9.04	Notation on or Exchange of Notes	112
SECTION 9.05	Trustee to Sign Amendments	112
SECTION 9.06	Additional Voting Terms; Calculation of Principal Amount	112
SECTION 9.07	Compliance with the Trust Indenture Act	112

ARTICLE X

RANKING OF NOTE LIENS

SECTION 10.01	Relative Rights	112

ARTICLE XI

COLLATERAL

SECTION 11.01	Security Documents	114
SECTION 11.02	Second Lien Collateral Agent	114
SECTION 11.03	Authorization of Actions to Be Taken	116
SECTION 11.04	Release of Liens	117
SECTION 11.05	Powers Exercisable by Receiver or Trustee	119
SECTION 11.06	Release Upon Termination of the Issuers’ Obligations	120
SECTION 11.07	Designations	120
SECTION 11.08	Certificates of the Trustee	120

iii

TABLE OF CONTENTS

(cont’d)

			Page

ARTICLE XII

GUARANTEE

SECTION 12.01	Guarantee		121
SECTION 12.02	Limitation on Liability		123
SECTION 12.03	[Intentionally Omitted]		124
SECTION 12.04	Successors and Assigns		124
SECTION 12.05	No Waiver		124
SECTION 12.06	Modification		124
SECTION 12.07	Execution of Supplemental Indenture for Future Guarantors		125
SECTION 12.08	Non-Impairment		125

ARTICLE XIII

ESCROW ARRANGEMENTS

SECTION 13.01	Escrow Account		125
SECTION 13.02	Special Mandatory Redemption		125
SECTION 13.03	Release of Escrow Property		125

ARTICLE XIV

MISCELLANEOUS

SECTION 14.01	Trust Indenture Act Controls		126
SECTION 14.02	Notices		126
SECTION 14.03	Communication by the Holders with Other Holders		127
SECTION 14.04	Certificate and Opinion as to Conditions Precedent		127
SECTION 14.05	Statements Required in Certificate or Opinion		128
SECTION 14.06	When Notes Disregarded		128
SECTION 14.07	Rules by Trustee, Paying Agent and Registrar		128
SECTION 14.08	Legal Holidays		128
SECTION 14.09	GOVERNING LAW		128
SECTION 14.10	No Recourse Against Others		128
SECTION 14.11	Successors		129
SECTION 14.12	Multiple Originals		129
SECTION 14.13	Table of Contents; Headings		129
SECTION 14.14	Indenture Controls		129
SECTION 14.15	Severability		129
SECTION 14.16	Intercreditor Agreement		129
SECTION 14.17	Waiver of Jury Trial		129

Appendix A	—	Provisions Relating to Initial Notes and Additional Notes

TABLE OF CONTENTS

(cont’d)

EXHIBIT INDEX

Exhibit A	—	Form of Initial Note
Exhibit B	—	Form of Exchange Note
Exhibit C	—	Form of Transferee Letter of Representation
Exhibit D	—	Form of Supplemental Indenture

CROSS-REFERENCE TABLE

TIA		Indenture
Section		Section
310	(a)(1)	7.10
	(a)(2)	7.10
	(a)(3)	7.10
	(a)(4)	7.10
	(b)	7.08; 7.10
	(c)	N.A.
311	(a)	7.11
	(b)	7.11
	(c)	N.A.
312	(a)	2.06
	(b)	14.03
	(c)	14.03
313	(a)	7.06
	(b)(1)	7.06
	(b)(2)	7.06
	(c)	7.06
	(d)	7.06
314	(a)	4.02; 4.09
	(b)	4.09
	(c)(1)	14.04
	(c)(2)	14.04
	(c)(3)	N.A.
	(d)	11.08
	(e)	14.05
	(f)	4.10
315	(a)	7.01
	(b)	7.05
	(c)	7.01
	(d)	7.01
	(e)	6.11
316	(a) (last sentence)	14.06
	(a)(1)(A)	6.05
	(a)(1)(B)	6.04
	(a)(2)	N.A.
	(b)	6.07
317	(a)(1)	6.08
	(a)(2)	6.09
	(b)	2.05
318	(a)	14.01

N.A. Means Not Applicable.

Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.

INDENTURE, dated as of April 24, 2012, among EVEREST ACQUISITION LLC, a Delaware limited liability company to be renamed as EP Energy LLC on or after the Escrow Release Date (together with its successors and assigns, “ Holdings ”), EVEREST ACQUISITION FINANCE INC., a Delaware corporation to be renamed as EP Energy Finance Inc. on or after the Escrow Release Date (together with its successors and assigns, the “ Co-Issuer ” and, together with Holdings, the “ Issuers ”), the Subsidiary Guarantors party hereto from time to time (as defined below) and Wilmington Trust, National Association, as trustee (the “ Trustee ”).

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $750,000,000 aggregate principal amount of the Issuers’ 6.875% Senior Secured Notes due 2019 issued on the date hereof (the “ Initial Notes ”), (ii) Exchange Notes issued in exchange for the Initial Notes and (iii) Additional Notes issued from time to time (together with the Initial Notes and the Exchange Notes, the “ Notes ”):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions .

“ Acquired Business ” means (i) all of the issued and outstanding membership interests of EP Energy L.L.C. (f/k/a EP Energy Corporation); (ii) all of the issued and outstanding shares of El Paso E&P S. Alamein Cayman Company; (iii) all of the issued and outstanding quotas of UnoPaso Exploracao e Producao de Petroleo e Gas Ltda. and El Paso Oleo e Gas do Brasil Ltda.; and (iv) all of the issued and outstanding shares of El Paso Brazil Holdings Company.

“ Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“ Acquisition ” means the purchase by EPE Acquisition, LLC of the Acquired Business.

agreements or instruments contemplated thereby, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“ Additional Assets ” means:

(1) any properties or assets used or useful in the Oil and Gas Business;

(2) capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;

(3) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or

(4) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

“ Additional Notes ” means the Notes issued under the terms of this Indenture subsequent to the Issue Date.

“ Additional Refinancing Amount ” means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.

“ Adjusted Consolidated Net Tangible Assets ” means (without duplication), as of the date of determination, the remainder of:

(a) the sum of:

(i) estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings’ most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted

future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided , that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of “Borrowing Base” and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each case as estimated by Holdings’ petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;

(ii) the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings’ books and records as of a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements;

(iii) the Net Working Capital on a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements;

(iv) assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business, provided that such net value shall not be less than zero; and

(v) the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and

mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements, and (B) the Fair Market Value, as estimated by Holdings, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings’ latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus

(b) the sum of:

(i) any amount included in clauses (a)(i) through (a)(v) above that is attributable to minority interests;

(ii) any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings’ latest audited consolidated financial statements;

(iii) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in clause (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and

(iv) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in clause (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in clause (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

If Holdings changes its method of accounting from the full cost method of accounting to the successful efforts or a similar method, “Adjusted Consolidated Net Tangible Assets” will continue to be calculated as if Holdings were still using the full cost method of accounting.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“ Applicable Authorized Representative ” has the meaning specified in the Pari Passu Intercreditor Agreement.

“ Applicable Premium ” means, with respect to any Note on any applicable redemption date, as determined by the Issuers, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

(a) the present value at such redemption date of (i) the redemption price of the Note, at May 1, 2015 (such redemption price being set forth in Paragraph 5 of the Note) plus (ii) all required interest payments due on the Note through May 1, 2015 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

“ Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) outside the ordinary course of business of Holdings or any Restricted Subsidiary (each referred to in this definition as a “ disposition ”); or

(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;

(d) any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which

assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;

(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;

(f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;

(g) foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) the lease, assignment or sublease of, or any transfer related to a “reverse build to suit” or similar transaction in respect of, any real or personal property in the ordinary course of business;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;

(l) in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;

(m) a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

(n) any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

(o) dispositions in connection with Permitted Liens;

formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

(q) the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;

(r) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(s) any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(t) a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;

(u) any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to an Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;

(v) the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by an Issuer or any Restricted Subsidiary in the ordinary course of business or which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and

(w) a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

“ Bank Indebtedness ” means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Holdings whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof and

(b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by Holdings to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

“ Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. In the case of Holdings, the Board of Directors of Holdings shall be deemed to include the Board of Directors of Holdings or any direct or indirect parent of Holdings, as appropriate.

“ Borrowing Base ” means, at any date of determination, an amount equal to the amount of (a) 65% of the net present value discounted at 9% of proved developed producing (PDP) reserves, plus (b) 35% of the net present value discounted at 9% of proved developed non-producing (PDNP) reserves, plus (c) 25% of the net present value discounted at 9% of proven undeveloped (PUD) reserves, plus or minus (d) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus or minus (e) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings’ petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 1.5% per annum.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

“ Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“ Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations of Holdings or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Holdings and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancings thereof) (i) that were not included on the consolidated balance sheet of Holdings as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Holdings and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.

“ Capitalized Software Expenditures ” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.

“ Cash Equivalents ” means:

(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and sur plus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ Change of Control ” means the occurrence of either of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(2) Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” means all property subject or purported to be subject, from time to time, to a Lien under any Security Documents.

“ Collateral Agreement ” means the Collateral Agreement among the Issuers, each Subsidiary Guarantor and the Second Lien Collateral Agent, to be executed in connection with the occurrence of the Escrow Release Date, consistent in all material respects with the description thereof in the Offering Memorandum with such modifications, prior to the Escrow Release Date, as may be approved by the Applicable Authorized Representative, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms and in accordance with this Indenture.

“ Consolidated Depreciation, Depletion and Amortization Expense ” means, with respect to any Person for any period, the total amount of depreciation, depletion and amortization expense, including the amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“ Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding Additional Interest in respect of the Notes, amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus

(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

(3) commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than Holdings and the Restricted Subsidiaries; minus

(4) interest income for such period.

“ Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided , however , that:

(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facilities closing costs, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions, in each case, shall be excluded;

(2) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

(4) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;

(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;

(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;

(7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10) any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;

(11) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;

(12) any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any Restricted Subsidiary, shall be excluded;

(13) accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;

(14) (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;

gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;

(16) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;

(17) (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);

(18) Capitalized Software Expenditures shall be excluded; and

(19) Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or Restricted Subsidiaries to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Section 4.04 pursuant to clauses (4) and (5) of the definition of “Cumulative Credit.”

“ Consolidated Non-Cash Charges ” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation, Depletion and Amortization Expense) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.

“ Consolidated Taxes ” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.

“ Consolidated Total Indebtedness ” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all

outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers’ acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.

“ Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“ Corporate Trust Office ” means the designated office of the Trustee in the United States of America at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the holders and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Issuers).

“ Credit Agreement ” means (i) the Credit Agreement to be entered into upon expiration of the Escrow Period among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Holdings to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to

borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

“ Credit Agreement Documents ” means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.

“ Cumulative Credit ” means the sum of (without duplication):

(1) 50% of the Consolidated Net Income of Holdings for the period from July 1, 2012 to the end of Holdings’ most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the “ Reference Period ”) (or in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(2) 100% of (i) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Escrow Release Date plus (ii) the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.03(b)(xiii)) from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus

(3) 100% of (i) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Escrow Release Date plus (ii) the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, in excess of $3,200 million prior to or on the Escrow Release Date (in each case other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to Section 4.03(b)(xiii)), plus

(other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5) 100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash received by Holdings or any Restricted Subsidiary from:

(A) the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and the Restricted Subsidiaries by any Person (other than Holdings or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to Section 4.04(b)(vii)),

(B) the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or

(6) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or the Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the Fair Market Value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to Section 4.04(b)(vii) or constituted a Permitted Investment).

“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“ Designated Non-cash Consideration ” means the Fair Market Value (as determined in good faith by Holdings) of non-cash consideration received by Holdings or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers’ Certificate, on the issuance date thereof.

“ Discharge of First-Priority Lien Obligations ” shall mean, except to the extent otherwise provided in the Senior Intercreditor Agreement with respect to the reinstatement or continuation of any First-Priority Lien Obligation under certain circumstances, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of all First-Priority Lien Obligations and, with respect to any letters of credit or letter of credit guaranties outstanding under a document evidencing a First-Priority Lien Obligation, delivery of cash collateral or backstop letters of credit in respect thereof in a manner consistent with such document, in each case after or concurrently with the termination of all commitments to extend credit thereunder, and the termination of all commitments of the holders of First-Priority Lien Obligations under such document evidencing such obligation; provided that the Discharge of First-Priority Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of other First-Priority Lien Obligations that constitute an exchange or replacement for or a refinancing of any First-Priority Lien Obligations. In the event the First-Priority Lien Obligations are modified and the First-Priority Lien Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code under a confirmed and consummated plan, the First-Priority Lien Obligations shall be deemed to be discharged when the final payment is made under such plan in respect of such indebtedness and any obligations pursuant to such modified indebtedness shall have been satisfied.

“ Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

in each case prior to 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

“ Dollar-Denominated Production Payments ” means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.

“ Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

“ EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus , without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1) Consolidated Taxes; plus

(2) Fixed Charges; plus

(3) Consolidated Depreciation, Depletion and Amortization Expense; plus

(4) Consolidated Non-Cash Charges; plus

(5) any expenses or charges (other than Consolidated Depreciation, Depletion and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the Incurrence or repayment of Indebtedness permitted to be Incurred by this Indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the Transactions, the Notes or any Bank Indebtedness, (ii) any amendment or other modification of the Notes or other Indebtedness, (iii) any Additional Interest in respect of the Notes and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus

(6) business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); plus

(7) the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus

(8) any costs or expense Incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus

(9) the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such

fees and related expenses) during such period to the extent otherwise permitted by Section 4.07; plus

(10) all adjustments of the nature used in connection with the calculation of “Adjusted EBITDA” as set forth in footnote (4) to the “Summary Historical and Pro Forma Consolidated Financial and Other Operating Data” under “Summary” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such period; plus

(11) the amount of any loss attributable to a new plant or facility until the date that is 12 months after completing construction of or acquiring such plant or facility, as the case may be; provided that (A) such losses are reasonably identifiable and factually supportable and certified by a responsible officer of Holdings and (B) losses attributable to such plant or facility after 12 months from the date of completing construction of or acquisition of such plant or facility, as the case may be, shall not be included in this clause (11), plus

(12) exploration expenses or costs (to the extent Holdings adopts the “successful efforts” method), and

less , without duplication, to the extent the same increased Consolidated Net Income,

(13) the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments; and

(14) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

“ Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“ Equity Offering ” means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of Holdings or any direct or indirect parent of Holdings, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to Holdings’ or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of Holdings; and

(3) any such public or private sale that constitutes an Excluded Contribution.

“ Escrow Account ” means a segregated account, under the sole control of the Trustee, that includes only cash and U.S. dollar denominated Cash Equivalents (or rights to receive such under letters of credit), the proceeds thereof and interest earned thereon, free from all Liens other than the Lien in favor of the Trustee for the benefit of the holders of the Notes.

“ Escrow Agent ” means Wilmington Trust, National Association, together with its successors in such capacity.

“ Escrow Agreement ” means the Escrow and Security Agreement, dated the Issue Date, among the Issuers, the Trustee and the Escrow Agent, relating to the Notes, as amended, supplemented or otherwise modified from time to time in accordance with this Indenture.

“ Escrow Condition ” means the delivery of an Officers’ Certificate instructing the Escrow Agent to release the Escrow Property from the Escrow Account and certifying that, prior to or concurrently with the release of the Escrow Property from the Escrow Account, (i) the Acquisition shall have been consummated and the existing reserve-based credit facility of the Acquired Business retired in all material respects as described under “Summary—The Transactions” in the Offering Memorandum, (ii) borrowings under the Term Loan Facility shall have been made, (iii) investments in EPE Acquisition, LLC’s equity by funds affiliated with the Sponsors and other investors shall have been made and (iv) borrowings under the Credit Agreement shall have been made, in the case of clauses (ii), (iii) and (iv) above in an aggregate amount sufficient, when taken together with the net proceeds of the Notes and the Senior Notes, to fund the Acquisition and to pay related fees and expenses, and (v) the Subsidiary Guarantors that have on such date guaranteed the Credit Agreement shall have, by supplemental indenture effective upon the Escrow Release Date, become parties to this Indenture as Subsidiary Guarantors.

“ Escrow Period ” means the period beginning on the Issue Date and ending on the Escrow Release Date.

“ Escrow Release Date ” means the date upon which the Escrow Condition is satisfied.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Exchange Notes ” means the Notes of the Issuers issued pursuant to this Indenture in exchange for, and in an aggregate principal amount equal to or not in excess of, the Initial Notes or any Additional Notes, if applicable, in compliance with the terms of the Registration Rights Agreement.

“ Exchange Offer Registration Statement ” means the registration statement filed with the SEC in connection with the Registered Exchange Offer.

“ Excluded Assets ” means the property and other assets of the Issuers and the Subsidiary Guarantors that is excluded from the grant of security interest in favor of the Collateral Agent, on behalf of the Secured Parties, pursuant to the terms of this Indenture and the Security Documents.

“ Excluded Contributions ” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of Holdings) received by Holdings after the Issue Date from:

(1) contributions to its common equity capital, and

(2) the sale (other than to a Subsidiary of Holdings or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Holdings,

in each case designated as Excluded Contributions pursuant to an Officers’ Certificate on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be; provided, that $3,200 million of Cash Equivalents received by Holdings from the Equity Investors on or prior to the Escrow Release Date to fund the Acquisition shall not be permitted to be designated an Excluded Contribution.

“ Excluded Subsidiary ” means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a Wholly Owned Subsidiary, (c) any Foreign Subsidiary, (d) any Domestic Subsidiary (i) that owns no material assets (directly or through its Subsidiaries) other than equity interests of one or more Foreign Subsidiaries that are CFCs or (ii) that is a direct or indirect Subsidiary of a Foreign Subsidiary, (e) any Receivables Subsidiary and (f) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of Holdings most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date.

“ Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

“ Farm-In Agreement ” means an agreement whereby a Person agrees to pay all or a share of the drilling, completion or other expenses of one or more exploratory or development wells (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interests therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.

“ Farm-Out Agreement ” means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

“ First-Priority After-Acquired Property ” means any property of an Issuer or any Subsidiary Guarantor that secures any Secured Bank Indebtedness that is not already subject to the Lien under the Security Documents, other than any Excluded Assets.

“ First-Priority Lien Obligations ” means (i) all Secured Bank Indebtedness and (ii) all other obligations of an Issuer or any Restricted Subsidiary in respect of Hedging Obligations or obligations in respect of cash management services in each case owing to a Person that is a holder of Secured Bank Indebtedness or an Affiliate of such holder at the time of entry into such Hedging Obligations or obligations in respect of cash management services.

“ Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers’ Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an

Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers’ Certificate, to reflect (1) operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event, and (2) all adjustments of the nature used in connection with the calculation of “Adjusted EBITDA” as set forth in footnote (4) to the “Summary Historical and Pro Forma Consolidated Financial and Other Operating Data” under “Summary” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.

“ Fixed Charges ” means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

“ Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American

Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “ consolidated ” with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

“ guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

“ Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(1) currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

“ holder ” or “ noteholder ” means the Person in whose name a Note is registered on the Registrar’s books.

“ Holdings ” means Everest Acquisition LLC (to be renamed as EP Energy LLC on or after the Escrow Release Date), together with its successors or assigns.

“ Hydrocarbons ” means oil, natural gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.

“ Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

“ Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds,

notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Obligations under or in respect of Qualified Receivables Financing; (5) obligations under the Acquisition Documents; (6) Production Payments and Reserve Sales; (7) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property; (8) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the board of directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond

in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of this Indenture; and (9) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

“ Indenture ” means this Indenture as amended or supplemented from time to time.

“ Independent Financial Advisor ” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of Holdings, qualified to perform the task for which it has been engaged.

“ Intercreditor Agreements ” means the Senior Lien Intercreditor Agreement and the Pari Passu Intercreditor Agreement.

“ Interest Payment Date ” has the meaning set forth in Exhibit A hereto.

“ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“ Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),

(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

“ Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or

capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

(1) “Investments” shall include the portion (proportionate to Holdings’ equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of a Subsidiary of Holdings at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a) Holdings’ “Investment” in such Subsidiary at the time of such redesignation less

(b) the portion (proportionate to Holdings’ equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.

“ Issue Date ” means April 24, 2012.

“ Junior Lien Obligations ” means the Obligations with respect to other Indebtedness permitted to be Incurred under this Indenture, which is by its terms intended to be secured by the Collateral on a basis junior to the Notes; provided such Lien is permitted to be Incurred under this Indenture.

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable.

“ Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“ Mortgaged Properties ” means the owned real property of the Issuers and any Subsidiary Guarantor encumbered by a Mortgage to secure the First-Priority Lien Obligations.

“ Mortgages ” means, collectively, the mortgages, trusts deeds, deeds of trust and other security documents delivered with respect to the Mortgaged Properties, as amended, supplemented, or otherwise modified from time to time.

“ Net Income ” means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“ Net Proceeds ” means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, amounts paid in connection with the termination of Hedging Obligations related to Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“ Net Working Capital ” means (a) all current assets of Holdings and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in

the ordinary course of the Oil and Gas Business less (b) all current liabilities of Holdings and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of Holdings prepared in accordance with GAAP.

“ Notes Documents ” means this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents.

“ Notes Obligations ” means Obligations in respect of the Notes, this Indenture and the Security Documents, including, for the avoidance of doubt, Obligations in respect of Exchange Notes and guarantees thereof.

“ NYMEX ” means the New York Mercantile Exchange.

“ Obligations ” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the Notes.

“ Offering Memorandum ” means the offering memorandum, dated April 10, 2012, as supplemented or amended from time to time, relating to the issuance of the Initial Notes.

“ Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of Holdings.

“ Officers’ Certificate ” means a certificate signed on behalf of Holdings by two Officers of Holdings, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holdings, which meets the requirements set forth in this Indenture.

“ Oil and Gas Business ” means:

(1) the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;

(2) the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;

(3) any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;

(4) any business relating to oil field sales and service; and

(5) any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

“ Oil and Gas Properties ” means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and gas reserves or other reserves of Hydrocarbons.

“ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

“ Other Second-Lien Obligations ” means other Indebtedness of Holdings and its Restricted Subsidiaries that is equally and ratably secured with the Notes as permitted by this Indenture and is designated by Holdings as an Other Second-Lien Obligation ( provided that such designation shall not be required for the Term Loan Facility).

“ Outside Date ” means October 31, 2012.

“ Pari Passu Indebtedness ” means: (a) with respect to an Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and (b) with respect to any Subsidiary Guarantor, its Subsidiary Guarantee and any Indebtedness which ranks pari passu in right of payment to such Subsidiary Guarantor’s Subsidiary Guarantee.

“ Pari Passu Intercreditor Agreement ” means (i) the intercreditor agreement among Citibank, N.A., as Second Lien Collateral Agent, the Trustee, and the other parties from time to time party thereto, to be entered into upon expiration of the Escrow Period, consistent in all material respects with the description thereof in the Offering Memorandum with such modifications, prior to the Escrow Release Date, as may be approved by the Applicable Authorized Representative, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture or (ii) any replacement thereof that contains terms not materially less favorable to the holders of the Notes than the intercreditor agreement referred to in clause (i).

“ Permitted Business Investment ” means any Investment and/or expenditure made in the ordinary course of business or which are of a nature that is or shall have become customary in the Oil and Gas Business generally or in the geographic region in which such activities occur, including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, distributing, storing, or transporting oil, natural gas or other Hydrocarbons and minerals (including with respect to plugging and abandonment) through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local

ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including:

(1) Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;

(2) Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and

(3) Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

“ Permitted Holders ” means, at any time, each of (i) the Sponsors, (ii) the Management Group, (iii) any Person that has no material assets other than the Capital Stock of Holdings and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings (a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“ Permitted Investments ” means:

(1) any Investment in Holdings or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such

Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;

(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;

(6) advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $25.0 million at any one time outstanding;

(7) any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(8) Hedging Obligations permitted under Section 4.03(b)(x);

(9) any Investment by Holdings or any Restricted Subsidiary in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (9) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

(11) loans and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person’s purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;

(12) Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of “Cumulative Credit”;

(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (iv), (vi), (ix)(B) and (xvi) of Section 4.07(b));

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15) (x) guarantees issued in accordance with Section 4.03 and Section 4.11 including, without limitation, any guarantee or other obligation issued or Incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

(16) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;

(17) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;

(18) any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivables Financing;

(19) additional Investments in joint ventures not to exceed, at any one time in the aggregate outstanding under this clause (19), $100.0 million (with the Fair Market Value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (19) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

(20) Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(21) any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and

(22) Permitted Business Investments.

“ Permitted Liens ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2) Liens imposed by law, such as landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) (A) Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.03;

(B) Liens securing Indebtedness Incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be Incurred pursuant to Section 4.03(b)(i);

(C) Liens securing Indebtedness Incurred under the RBL Facility in excess of $2,000 million (and solely to the extent of such excess), including any letter of credit facility relating thereto, that was permitted to be Incurred under Section 4.03;

(D) Liens securing Indebtedness permitted to be Incurred pursuant to clause (iv), (xii), (xvi) or (xx) of Section 4.03(b) ( provided that in the case of clause (xx), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor); and

(E) Liens securing the Notes Obligations;

(7) Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement), including Liens securing the loans under the Term Loan Facility;

(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary;

(9) Liens on assets or property at the time Holdings or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into Holdings or any Restricted Subsidiary; provided , however , that such Liens (other than Liens to secure Indebtedness Incurred pursuant to Section 4.03(b)(xvi)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens (other than Liens to secure Indebtedness Incurred pursuant to Section 4.03(b)(xvi)) may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time

of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

(10) Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03;

(11) Liens securing Hedging Obligations not Incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;

(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;

(15) Liens in favor of Holdings or any Subsidiary Guarantor;

(16) Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B);

(21) Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings’ or such Restricted Subsidiary’s client at which such equipment is located;

(22) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(24) Liens Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(25) other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens Incurred under this clause (25) that are at that time outstanding, exceed the greater of $350.0 million and 5% Adjusted Consolidated Net Tangible Assets at the time of Incurrence;

(26) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(27) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions;

(28) Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;

(29) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;

(30) Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;

(31) Liens in respect of Production Payments and Reserve Sales;

(32) Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided , however , in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract;

(33) Liens on pipelines or pipeline facilities that arise by operation of law;

(34) any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics’ liens, tax liens and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b); and

(35) Liens securing Junior Lien Obligations, provided that the Notes are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“ Pledge Agreement ” means the Pledge Agreement among the Issuers, each Subsidiary Guarantor and the Second Lien Collateral Agent, to be executed in connection with the occurrence of the Escrow Release Date, consistent in all material respects with the description thereof in the Offering Memorandum with such modifications, prior to the Escrow Release Date, as may be approved by the Applicable Authorized Representative, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms and in accordance with this Indenture.

“ Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

“ Production Payments and Reserve Sales ” means the grant or transfer by Holdings or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar-denominated), partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers.

“ Qualified Receivables Financing ” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1) the Board of Directors of Holdings shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Holdings and the Receivables Subsidiary;

(2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and

(3) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Holdings) and may include Standard Securitization Undertakings.

The grant of a security interest in any accounts receivable of Holdings or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Refinancing Indebtedness with respect to the Notes shall not be deemed a Qualified Receivables Financing.

“ Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of Holdings’ control, a “nationally recognized statistical rating organization” within the meaning of Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by Holdings or any direct or indirect parent of Holdings as a replacement agency for Moody’s or S&P, as the case may be.

“ RBL Agent ” means the agent for secured parties holding First-Priority Lien Obligations, as appointed pursuant to the Senior Lien Intercreditor Agreement. The RBL Agent is initially the administrative agent under the Credit Agreement.

lenders, governed by a borrowing base set by the lenders, extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or under any successor or replacement agreement or increasing the amount loaned thereunder or altering the maturity thereof.

“ RBL Priority Collateral ” shall have the meaning set forth in the Senior Lien Intercreditor Agreement.

“ Receivables Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“ Receivables Financing ” means any transaction or series of transactions that may be entered into by Holdings or any of its Subsidiaries pursuant to which Holdings or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Holdings or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Holdings or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Holdings or any such Subsidiary in connection with such accounts receivable.

“ Receivables Repurchase Obligation ” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

“ Receivables Subsidiary ” means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Qualified Receivables Financing with Holdings in which Holdings or any Subsidiary of Holdings makes an Investment and to which Holdings or any such Subsidiary transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Holdings and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Holdings (as provided below) as a Receivables Subsidiary and:

obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

(b) with which neither Holdings nor any Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which Holdings reasonably believes to be no less favorable to Holdings or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; and

(c) to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors of Holdings shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

“ Record Date ” has the meaning specified in Exhibit A hereto.

“ Registration Rights Agreement ” means (a) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among the Issuers and the Initial Purchasers, and (b) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuers, any Subsidiary Guarantors and the Persons purchasing such Additional Notes under the related purchase agreement.

“ Restricted Investment ” means an Investment other than a Permitted Investment.

“ Restricted Subsidiary ” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.

“ Sale/Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by Holdings or a Restricted Subsidiary whereby Holdings or such Restricted Subsidiary transfers such property to a Person and Holdings or such Restricted Subsidiary leases it from such Person, other than leases between Holdings and a Restricted Subsidiary or between Restricted Subsidiaries.

“ S&P ” means Standard & Poor’s Ratings Group or any successor to the rating agency business thereof.

“ SEC ” means the Securities and Exchange Commission.

“ Second Lien Agent ” means the agent for secured parties holding Second-Priority Lien Obligations, as appointed pursuant to the Pari Passu Intercreditor Agreement. The Second Lien Agent is initially the administrative agent under the Term Loan Facility.

“ Second Lien Collateral Agent ” means Citibank, N.A. in its capacity as “Collateral Agent” under the Security Documents and any successor thereto in such capacity.

“ Second Lien Term Loan Obligations ” means Obligations in respect of the Term Loan Facility and the Second-Priority Documents in respect thereof.

“ Second-Priority Documents ” means the Notes Documents, any document or instrument evidencing or governing the Term Loan Facility and any other document or instrument evidencing or governing any Other Second-Lien Obligations.

“ Second-Priority Lien Obligations ” means (a) the Notes Obligations, (b) the Second Lien Term Loan Obligations and (c) all other Obligations in respect of, or arising under, the Second-Priority Documents, including all fees and expenses of the collateral agent for any Other Second-Lien Obligations and shall include all interest and fees, which but for the filing of a petition in bankruptcy with respect to Holdings, an Issuer or any Subsidiary Guarantor, would have accrued on such obligations, whether or not a claim for such interest or fees is allowed in such proceeding.

“ Secured Bank Indebtedness ” means any Bank Indebtedness that is secured by a Permitted Lien Incurred or deemed Incurred pursuant to clause (6)(B) or clause (6)(C) of the definition of Permitted Liens.

“ Secured Indebtedness ” means any Consolidated Total Indebtedness secured by a Lien.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Security Documents ” means the Collateral Agreement and the Pledge Agreement and security agreements, collateral assignments, mortgages and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the Trustee, the Second Lien Collateral Agent and the holders of the Notes as contemplated by this Indenture.

“ Senior Lien Intercreditor Agreement ” means (i) the intercreditor agreement among JPMorgan Chase Bank, N.A., as RBL Agent, Citibank, N.A., as Second Lien Collateral Agent, and the other parties from time to time party thereto, to be entered into upon expiration of the Escrow Period, consistent in all material respects with the description thereof in the Offering Memorandum with such modifications, prior to the Escrow Release Date, as may be approved by the Applicable Authorized Representative, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture or (ii) any replacement thereof that contains terms not materially less favorable to holders of the Notes than the intercreditor agreement referred to in clause (i).

“ Senior Notes ” means the Issuers’ 9.375% Senior Notes due 2020 issued on the Issue Date and including any exchange notes issued in exchange therefor pursuant to a registration rights agreement dated as of the Issue Date among the Issuers and the Initial Purchasers.

“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of Holdings within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).

“ Similar Business ” means a business, the majority of whose revenues are derived from the activities of Holdings and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.

“ Special Mandatory Redemption Price ” means an amount of cash equal to $750,000,000, plus interest accrued on $750,000,000 from the Issue Date to, but excluding, the Special Mandatory Redemption Date, calculated using a rate of 6.875% per annum.

“ Sponsor Management Agreement ” means the management agreement between certain of the management companies associated with the Sponsors, EP Energy Holding Company and EPE Acquisition, LLC.

“ Sponsors ” means (i) affiliates of each of Apollo Global Management, LLC, Access Industries, Inc. and Riverstone Holdings, L.P. and other investors party to that certain Interim Investors Agreement dated as of February 24, 2012 (the “ Interim Investors Agreement ”) and any other investors that may become party to the Interim Investors Agreement prior to or upon the consummation of the Acquisition and any of their respective Affiliates other than any portfolio companies (collectively, the “ Equity Investor ”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.

“ Standard Securitization Undertakings ” means representations, warranties, covenants, indemnities and guarantees of performance entered into by Holdings or any Subsidiary thereof which Holdings has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

“ Subordinated Indebtedness ” means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes,

and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.

“ Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“ Subsidiary Guarantee ” means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary Guarantor in accordance with the provisions of this Indenture.

“ Subsidiary Guarantor ” means any Subsidiary that Incurs a Subsidiary Guarantee; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with this Indenture, such Subsidiary ceases to be a Subsidiary Guarantor.

“ Suspension Period ” means the period of time between a Covenant Suspension Event and the related Reversion Date.

“ Tax Distributions ” means any distributions described in Section 4.04(b)(xii).

“ Term Loan Facility ” means the term loan agreement, dated as of the Issue Date, by and among Holdings, as borrower, the lenders party thereto in their capacities as lenders thereunder and Citibank, N.A., as administrative agent and collateral agent, including any guarantees, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications or restatements thereof.

“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

“ Term/Notes Priority After-Acquired Property ” means any property of an Issuer or any Subsidiary Guarantor that constitutes Term/Notes Priority Collateral that is not already subject to the Lien under the Security Documents, other than any Excluded Assets.

“ Term/Notes Priority Collateral ” shall have the meaning set forth in the Senior Lien Intercreditor Agreement.

“ Total Assets ” means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any

amortization of the amount of intangible assets since December 31, 2011, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.

“ Transactions ” means the transactions described under “Summary—The Transactions” in the Offering Memorandum.

“ Treasury Rate ” means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to May 1, 2015; provided , however , that if the period from such redemption date to May 1, 2015, as applicable, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“ Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

“ Uniform Commercial Code ” or “ UCC ” means the New York Uniform Commercial Code as in effect from time to time.

“ Unrestricted Subsidiary ” means:

(1) any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary;

Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings or any of the Restricted Subsidiaries (other than pursuant to customary Liens on related arrangements under any oil and gas royalty trust or master limited partnership); provided , further , however , that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.

Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

(x) (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be greater than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y) no Event of Default shall have occurred and be continuing.

Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“ U.S. Government Obligations ” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

“ Volumetric Production Payments ” means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.

“ Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

“ Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

“ Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02 Other Definitions .

Term		Section
$		1.03(j)
Additional Interest		Appendix A
Affiliate Transaction		4.07(a)
Agent Members		Appendix A
Asset Sale Offer		4.06(b)(iii)
Bankruptcy Law		6.01(k)
Change of Control Offer		4.08(b)
Co-Issuer		Preamble
covenant defeasance option		8.01(b)
Covenant Suspension Event		4.15
Custodian		6.01(k)
Definitive Note		Appendix A
Depository		Appendix A
Escrow Property		13.01
Event of Default		6.01
Excess Proceeds		4.06(b)(iii)
Global Notes		Appendix A
Global Notes Legend		Appendix A
Holdings		Preamble
IAI		Appendix A
Increased Amount		4.12(d)
Initial Notes		Preamble

Term		Section
Initial Purchasers		Appendix A
Issuers		Preamble
legal defeasance option		8.01(b)
Notes		Preamble
Notes Custodian		Appendix A
Notice of Default		6.01(k)
Offer Period		4.06(d)
Paying Agent		2.04(a)
protected purchaser		2.08
QIB		Appendix A
Refinancing Indebtedness		4.03(b)(xv)
Refunding Capital Stock		4.04(b)(ii)
Registered Exchange Offer		Appendix A
Registrar		2.04(a)
Regulation S		Appendix A
Regulation S Global Notes		Appendix A
Regulation S Notes		Appendix A
Restricted Notes Legend		Appendix A
Restricted Payments		Section 4.04(a)
Restricted Period		Appendix A
Retired Capital Stock		4.04(b)(ii)
Reversion Date		4.15
Rule 144A		Appendix A
Rule 144A Global Notes		Appendix A
Rule 144A Notes		Appendix A
Rule 501		Appendix A
Second Commitment		4.06(b)(iii)
Shelf Registration Statement		Appendix A
Special Mandatory Redemption Date		Paragraph 5 of Exhibit A and Exhibit B
Subsidiary Guaranteed Obligations		12.01(a)
Successor Holdco		5.01(a)(i)
Successor Subsidiary Guarantor		5.01(b)(i)
Suspended Covenants		4.15
Transfer		5.01(b)(ii)
Transfer Restricted Definitive Notes		Appendix A
Transfer Restricted Global Notes		Appendix A
Transfer Restricted Notes		Appendix A
U.S. dollars		1.03(j)
Unrestricted Definitive Notes		Appendix A
Unrestricted Global Notes		Appendix A

SECTION 1.03 Rules of Construction . Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(d) “ including ” means including without limitation;

(e) words in the singular include the plural and words in the plural include the singular;

(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

(h) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;

(i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;

(j) “ $ ” and “ U.S. dollars ” each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts; and

(k) whenever in this Indenture or the Notes there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Notes, such mention shall be deemed to include mention of the payment of Additional Interest, to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof.

ARTICLE II

THE NOTES

SECTION 2.01 Amount of Notes . The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $750,000,000.

other Notes pursuant to Section 2.07, 2.08, 2.09, 3.06, 4.06(e), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or determined in the manner provided in an Officers’ Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:

(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;

(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue;

(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof; and

(4) if applicable, that such Additional Notes that are not Transfer Restricted Notes shall not be issued in the form of Initial Notes as set forth in Exhibit A hereto but shall be issued in the form of Exchange Notes as set forth in Exhibit B hereto.

If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of Holdings and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.

The Initial Notes, including any Additional Notes, may, at the Issuers’ option, be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.

required by law, stock exchange rule, agreements to which the Issuers or any Subsidiary Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by the Depository in denominations of less than $2,000.

SECTION 2.03 Execution and Authentication . The Trustee shall authenticate and make available for delivery upon a written order of the Issuers signed by one Officer of each Issuer (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $750,000,000, (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein and (c) the Exchange Notes for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes exchanged pursuant thereto or otherwise pursuant to an effective registration statement under the Securities Act. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, the registered holder of each of the Notes and delivery instructions. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.

One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee may appoint one or more authenticating agents reasonably acceptable to Holdings to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to Holdings. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

SECTION 2.04 Registrar and Paying Agent .

keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrars. The term “ Paying Agent ” includes the Paying Agent and any additional paying agents. The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.

(b) The Issuers may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. Holdings shall notify the Trustee in writing of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Holdings or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

(c) The Issuers may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuers and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.

SECTION 2.05 Paying Agent to Hold Money in Trust . Prior to each due date of the principal of and interest on any Note, the Issuers shall deposit with each Paying Agent (or if Holdings or a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuers in making any such payment. If Holdings or a Wholly Owned Subsidiary of Holdings acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section, a Paying Agent shall have no further liability for the money delivered to the Trustee.

SECTION 2.06 Holder Lists . The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders. If the Trustee is not the Registrar, Holdings shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders.

SECTION 2.07 Transfer and Exchange . The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A . When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrar’s request. The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. The Issuers shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed.

Prior to the due presentation for registration of transfer of any Note, the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the holder of such Global Note (or its agent) or (b) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.

All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depository.

SECTION 2.08 Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or

wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “ protected purchaser ”) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee. If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment. The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including without limitation, attorneys’ fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.

Every replacement Note is an additional obligation of the Issuers.

The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.

SECTION 2.09 Outstanding Notes . Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to Section 14.06, a Note does not cease to be outstanding because one of the Issuers or an Affiliate of one of the Issuers holds the Note.

If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.

If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.

SECTION 2.11 Defaulted Interest . If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest then borne by the Notes ( plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Issuers may pay the defaulted interest to the Persons who are holders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each affected holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.12 CUSIP Numbers, ISINs, Etc . The Issuers in issuing the Notes may use CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use), and the Trustee shall use any such CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee of any change in any such CUSIP numbers, ISINs and “Common Code” numbers.

SECTION 2.13 Calculation of Principal Amount of Notes . The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 14.06 of this Indenture. Any calculation of the Applicable Premium or made pursuant to this Section 2.13 shall be made by Holdings and delivered to the Trustee pursuant to an Officers’ Certificate.

ARTICLE III

REDEMPTION

SECTION 3.01 Redemption . The Notes may be redeemed, in whole or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the forms of Notes set forth in Exhibits A and B hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest and Additional Interest, if any, to the redemption date.

SECTION 3.02 Applicability of Article . Redemption of Notes at the election of the Issuers or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article III.

SECTION 3.03 Notices to Trustee . If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the Note, Holdings shall notify the Trustee in an Officers’ Certificate of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. Holdings shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is an optional redemption pursuant to Paragraph 5 of the Note and shall give notice of a Special Mandatory Redemption pursuant to Paragraph 5 of the Note at least three (3) Business Days in advance. Holdings may also include a request in such Officers’ Certificate that the Trustee give the notice of redemption in the Issuers’ name and at their expense and setting forth the information to be stated in such notice as provided in Section 3.05. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any holder or otherwise delivered in accordance with the applicable procedures of the Depository and shall thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.04.

SECTION 3.04 Selection of Notes to Be Redeemed . In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or if the Notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method the Trustee shall deem fair and appropriate (and, in such manner that complies with the applicable legal requirements and the requirements of the Depository, if applicable); provided that no Notes of $2,000 (and integral multiples of $1,000 in excess thereof) or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000. Notes and portions of them the Trustee selects shall be in amounts of $2,000 or integral multiples of $1,000 in excess thereof. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed.

SECTION 3.05 Notice of Optional Redemption .

(a) At least 30 but not more than 60 days before a redemption date pursuant to Paragraph 5 of the Note (or at least three (3) Business Days in the case of a Special Mandatory Redemption pursuant to Paragraph 5 of the Note), the Issuers shall mail or cause to be mailed by first-class mail, or otherwise deliver in accordance with the procedures of the Depository, a notice of redemption to each holder whose Notes are to be redeemed at its registered address (with a copy to the Trustee), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes, a satisfaction and discharge of this Indenture pursuant to Article VIII or a Special Mandatory Redemption pursuant to Article XIII.

Any such notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price and the amount of accrued interest to the redemption date;

(iii) the name and address of the Paying Agent;

(iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price, plus accrued and unpaid interest and Additional Interest, if any;

(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;

(vi) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

(vii) the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the Notes being redeemed; and

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice or printed on the Notes.

(b) At Holdings’ request, the Trustee shall deliver the notice of redemption in the Issuers’ name and at the Issuers’ expense. In such event, Holdings shall notify the Trustee of such request at least three (3) Business Days prior to the date such notice is to be provided to holders. Such notice may not be canceled once delivered to holders of Notes.

SECTION 3.06 Effect of Notice of Redemption . Once notice of redemption is mailed or otherwise delivered in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice, except as provided in the final sentence of paragraph 5 of the Notes. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued and unpaid interest and Additional Interest, if any, to, but not including, the redemption date; provided , however , that if the redemption date is after a regular Record Date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed Notes registered on the relevant Record Date. Failure to give notice or any defect in the notice to any holder shall not affect the validity of the notice to any other holder.

SECTION 3.07 Deposit of Redemption Price . With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with

the Paying Agent (or, if Holdings or a Wholly Owned Subsidiary of Holdings is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest and Additional Interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest, if any, on, the Notes to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.

SECTION 3.08 Notes Redeemed in Part . If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. Upon surrender of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the holder (at the Issuers’ expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

ARTICLE IV

COVENANTS

SECTION 4.01 Payment of Notes . The Issuers shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds as of 12:00 p.m. New York City time money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture.

The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful.

SECTION 4.02 Reports and Other Information .

(a) Notwithstanding that Holdings may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, Holdings will file with the SEC (and provide the Trustee and holders with copies thereof, without cost to each holder, within 15 days after it files them with the SEC):

(i) within the time period specified in the SEC’s rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;

(ii) within the time period specified in the SEC’s rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;

(iii) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC’s rules and regulations), such other reports on Form 8-K (or any successor or comparable form); and

(iv) subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

provided , however , that Holdings shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event Holdings will make available such information to prospective purchasers of Notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act, subject, in the case of any such information, certificates or reports provided prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, to exceptions and exclusions consistent with the presentation of financial and other information in the Offering Memorandum (including with respect to any periodic reports provided prior to effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, the omission of financial information required by Rule 3-10 under Regulation S-X promulgated by the SEC (or any successor provision)). In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) or (iii), by posting such information to its website or on IntraLinks or any comparable online data system or website.

If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Holdings, then the annual and quarterly information required to be provided by clauses (i) and (ii) of this Section 4.02(a) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

(b) Notwithstanding the foregoing, Holdings will not be required to furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, as applicable.

(i) the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entity’s level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or

(ii) any direct or indirect parent of Holdings is or becomes a guarantor of the Notes,

consolidated reporting at such parent entity’s level in a manner consistent with that described in this Section 4.02 for Holdings will satisfy this Section 4.02, and Holdings is permitted to satisfy its obligations in this Section 4.02 with respect to financial information relating Holdings by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than Holdings and its Subsidiaries, on the one hand, and the information relating to Holdings, the Subsidiary Guarantors and the other Subsidiaries of Holdings on a standalone basis, on the other hand. In addition, Holdings will make such information available to prospective investors upon request.

(d) In addition, Holdings shall, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Escrow Release Date, for all holders and securities analysts to discuss such financial information no later than five business days after the distribution of such information required by Sections 4.02(a)(i) and (ii) and prior to the date of each such conference call, announcing the time and date of such conference call and either including all information necessary to access the call or informing holder of Notes, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts how they can obtain such information, including, without limitation, the applicable password or other login information.

(e) Notwithstanding the foregoing, Holdings will be deemed to have furnished the reports referred to in this Section 4.02 to the Trustee and the holders if Holdings has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied prior to the commencement of the exchange offer contemplated by the Registration Rights Agreement relating to the Notes or the effectiveness of the Shelf Registration Statement by (1) the filing with the SEC of the Exchange Offer Registration Statement and/or Shelf Registration Statement in accordance with the provisions of such Registration Rights Agreement, and any amendments thereto, if such registration statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in Section 4.02(a) and/or (2) the posting of reports that would be required to be provided to the Trustee and the holders on Holdings’ website (or that of any of Holdings’ parent companies).

(f) Delivery of such reports, information and documents to the Trustee pursuant to this Section 4.02 is for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers’ compliance with any of their covenants under this Indenture (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

SECTION 4.03 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) (i) Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) Holdings shall not permit any of the Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided , however , that Holdings and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary of Holdings that is not a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that any Restricted Subsidiary that is not a Subsidiary Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of an amount together with any Refinancing Indebtedness thereof pursuant to Section 4.03(b)(xv), equal to, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), the greater of $150.0 million and 2% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).

(b) The limitations set forth in Section 4.03(a) shall not apply to:

(i) the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder up to an aggregate principal amount outstanding at any time that does not exceed the greatest of (1) $3.0 billion, (2) the sum of (x) $500.0 million and (y) 30% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence and (3) the Borrowing Base at the time of Incurrence;

thereof) and (B) Indebtedness, including in respect of the Senior Notes and the Term Loan Facility (including any guarantees thereof), in an aggregate principal amount for this clause (ii)(B) outstanding at any time that, together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $2,750 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));

(iv) Indebtedness (including Capitalized Lease Obligations) Incurred by Holdings or any Restricted Subsidiary, Disqualified Stock issued by Holdings or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $350.0 million and 5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(v) Indebtedness Incurred by Holdings or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(vi) Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions, any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

under the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);

(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);

(ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);

(x) Hedging Obligations that are not Incurred for speculative purposes but (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;

(xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

(xii) Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise

permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $500.0 million and 7% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));

(xiii) Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of (A) the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Escrow Release Date plus (B) the amount of net cash proceeds received by Holdings in excess of $3,200 million prior to or on the Escrow Release Date, in each case from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(xiv) any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Subsidiary Guarantee, as applicable and (B) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent Section 4.11 is applicable;

applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) of this Section 4.03(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date ( provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness constituting First-Priority Lien Obligations);

(2) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Subsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and

(3) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of Holdings, an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

(xvi) Indebtedness, Disqualified Stock or Preferred Stock of (A) Holdings or any Restricted Subsidiary Incurred to finance an acquisition or (B) Persons that are acquired by Holdings or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either:

(1) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or

(2) the Fixed Charge Coverage Ratio of Holdings would be greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

(xvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

(xviii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;

(xix) Indebtedness of Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;

(xx) Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings and any Restricted Subsidiary; provided , however , that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150.0 million and 2% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (it being understood that any Indebtedness Incurred pursuant to this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for the purposes of Section 4.03(a) from and after the first date on which such Restricted Subsidiary could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx));

(xxi) Indebtedness of Holdings or any Restricted Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and

(xxii) Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in Section 4.04(b)(iv).

For purposes of determining compliance with this Section 4.03:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) of Section 4.03(b) above or is entitled to be Incurred pursuant to Section 4.03(a), then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03; provided , that (A) only Indebtedness outstanding under the Credit Agreement in excess of $2,000 million may be classified or reclassified as not Incurred under Section 4.03(b)(i) and (B) the Senior Notes and the

Term Loan Facility (including any guarantees thereof) outstanding on the Escrow Release Date shall at all times be treated as Incurred pursuant to Section 4.03(b)(ii)(B);

(2) at the time of Incurrence, Holdings will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.03(a) and (b) without giving pro forma effect to the Indebtedness Incurred pursuant to Section 4.03(b) when calculating the amount of Indebtedness that may be Incurred pursuant to Section 4.03(a);

(3) if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and

(4) if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.

Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.

SECTION 4.04 Limitation on Restricted Payments .

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i) declare or pay any dividend or make any distribution on account of any of Holdings’ or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(ii) purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;

(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or

(iv) make any Restricted Investment

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under Section 4.03(a); and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i), (ii) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (C) thereof), (vi)(C), (viii) and (xiii)(B) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the amount equal to the Cumulative Credit.

(b) The provisions of Section 4.04(a) shall not prohibit:

(i) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of this Indenture;

(ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) or Subordinated Indebtedness of Holdings, any direct or indirect parent of Holdings or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of Holdings or any direct or indirect parent of Holdings or contributions to the equity capital of Holdings (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of Holdings) (collectively, including any such contributions, “ Refunding Capital Stock ”),

(B) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and

(C) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this Section 4.04(b) and not made pursuant to clause (ii)(B), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(iii) the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of an Issuer or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as:

(A) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses Incurred in connection therewith),

(B) such Indebtedness is subordinated to the Notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

(C) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Notes then outstanding, and

(D) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;

(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of Holdings or any direct or indirect parent of Holdings held by any future, present or former employee, director or consultant of Holdings or any direct or indirect parent of Holdings or any Subsidiary of Holdings pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided , however , that the aggregate Restricted Payments made under this clause (iv) do not exceed $50.0 million in any calendar year (which shall increase to $100.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock), with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $75.0 million in any calendar year (which shall increase to $150.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock); provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:

(A) the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors or consultants of Holdings and the Restricted Subsidiaries or any direct or indirect parent of Holdings that occurs after the Escrow Release Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under Section 4.04(a)(iii)), plus

(B) the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Escrow Release Date;

Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;

(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Holdings or any Restricted Subsidiary issued or Incurred in accordance with Section 4.03;

(vi) (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(B) a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (B) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and

(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to Section 4.04(b)(ii);

provided , however , in the case of each of clauses (A) and (C) above of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Holdings would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(vii) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of $175.0 million and 2.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(viii) the payment of dividends after a public offering of Capital Stock of Holdings or any direct or indirect parent of Holdings on Holdings’ Capital Stock (or a Restricted Payment to any such direct or indirect parent of Holdings to fund the payment by such direct or indirect parent of Holdings of dividends on such entity’s Capital Stock) of up to 6% per annum of the total market capitalization of Holdings or any such direct or indirect parent of Holdings as of the date of such public offering, other than public

offerings with respect to Holdings’ (or such direct or indirect parent’s) Capital Stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(ix) Restricted Payments that are made with Excluded Contributions;

(x) other Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (x) that are at that time outstanding, not to exceed the greater of $225.0 million and 3% of Adjusted Consolidated Net Tangible Assets at the time made;

(xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(xii) (A) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group, and (B) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (A)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);

(xiii) any Restricted Payment, if applicable:

(A) in amounts required for any direct or indirect parent of Holdings to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings and general corporate operating and overhead expenses of any direct or indirect parent of Holdings in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;

(B) in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with Section 4.03; and

(C) in amounts required for any direct or indirect parent of Holdings to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;

(xiv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(xv) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

(xvi) Restricted Payments by Holdings or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;

(xvii) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to provisions similar to those described in Section 4.06 and Section 4.08; provided that all Notes tendered by holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

(xviii) payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and the Restricted Subsidiaries, taken as a whole, that complies with Section 5.01; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by this Indenture) and that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value; and

(xix) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by Holdings or

any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of Holdings to enable it to make payments in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case to the extent permitted by Section 4.07;

provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi)(B), (vii), (x), (xi) and (xiii)(B) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof; provided , further that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by Holdings) of such property.

(c) As of the Issue Date, all of the Subsidiaries of Holdings will be Restricted Subsidiaries. Holdings will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Holdings and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

SECTION 4.05 Dividend and Other Payment Restrictions Affecting Subsidiaries . Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of the Co-Issuer or any Restricted Subsidiary to:

(a) (i) pay dividends or make any other distributions to Holdings or any Restricted Subsidiary (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any Restricted Subsidiary;

(b) make loans or advances to Holdings or any Restricted Subsidiary; or

except in each case for such encumbrances or restrictions existing under or by reason of:

(1) (A) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Notes (including any guarantee thereof) and the Term Loan Facility (including any guarantee thereof) and (B) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;

(2) this Indenture, the Notes (and any Exchange Notes) or the Subsidiary Guarantees;

(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

(5) contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;

(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;

(9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;

(11) in the case of clause (c) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;

(12) any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided , however , that such restrictions apply only to such Receivables Subsidiary;

(13) other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is the Co-Issuer, a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not the Co-Issuer, a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers’ ability to make anticipated principal or interest payments on the Notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.03;

(14) any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment;

(15) any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of “Permitted Business Investment”; or

(16) any encumbrances or restrictions of the type referred to in Section 4.05(a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Holdings or a Restricted Subsidiary to other Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

SECTION 4.06 Asset Sales .

(a) Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) Holdings or any Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by Holdings) of the assets sold or otherwise disposed of, and (y) at least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents or Additional Assets; provided that the amount of:

(i) any liabilities (as shown on Holdings’ or a Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of Holdings or a Restricted Subsidiary (other

than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,

(ii) any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),

(iii) with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof), and

(iv) any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this Section 4.06(a)(iv) that is at that time outstanding, not to exceed the greater of 4% of Adjusted Consolidated Net Tangible Assets and $300.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).

(b) Within 365 days after Holdings’ or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, Holdings or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(i) to repay (A) Indebtedness constituting First-Priority Lien Obligations and other Pari Passu Indebtedness that is secured by a Lien permitted under this Indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (B) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, (C) Obligations under the Notes or (D) other Pari Passu Indebtedness ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Obligations under Pari Passu Indebtedness that does not constitute First-Priority Lien Obligations, the Issuers will equally and ratably reduce Obligations under the Notes pursuant to Section 3.01, through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof (or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes, in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings;

(ii) to make an Investment in any one or more businesses ( provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (A) used or useful in a Similar Business or (B) that replace the properties and assets that are the subject of such Asset Sale; or

(iii) to invest in Additional Assets.

In the case of Section 4.06(b)(ii), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment until the 18-month anniversary of the date of the receipt of such Net Proceeds; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, then such Net Proceeds shall constitute Excess Proceeds unless Holdings or such Restricted Subsidiary enters into another binding commitment (a “ Second Commitment ”) within six months of such cancellation or termination of the prior binding commitment; provided , further , that Holdings or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Sale and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied or are not applied within 180 days of such Second Commitment, then such Net Proceeds shall constitute Excess Proceeds.

Pending the final application of any such Net Proceeds, Holdings or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (i) of this Section 4.06(b), shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Issuers shall make an offer to all holders of Notes (and, at the option of the Issuers, to holders of any Pari Passu Indebtedness) (an “ Asset Sale Offer ”) to purchase the maximum principal amount of Notes (and such Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event the Notes or such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $50.0 million by mailing the notice required pursuant to the terms of Sections 3.05 and 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, Holdings may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be

purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

(c) The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(d) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, Holdings shall deliver to the Trustee an Officers’ Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On such date, the Issuers shall also irrevocably deposit with the Trustee or with a paying agent (or, if an Issuer or a Wholly Owned Restricted Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by Holdings and to be held for payment in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the “ Offer Period ”), the Issuers shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuers. The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering holder in the amount of the purchase price. In the event that the Excess Proceeds delivered by the Issuers to the Trustee are greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuers immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.

(e) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or an Issuer receives not later than one Business Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such Notes for purchase shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed, or if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Pari Passu Indebtedness.

purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.

SECTION 4.07 Transactions with Affiliates .

(a) Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $20.0 million, unless:

(i) such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person; and

(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above.

(b) The provisions of Section 4.07(a) shall not apply to the following:

(i) transactions between or among Holdings and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;

(iii) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings;

(iv) transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);

(v) payments or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of Holdings in good faith;

(vi) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;

(vii) the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any transaction, agreement or arrangement described in the Offering Memorandum and, in each case, any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided , however , that the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the Notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date;

(viii) the execution of the Transactions, and the payment of all fees and expenses related to the Transactions, including fees paid to the Sponsors;

(ix) (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to Holdings and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;

(x) any transaction effected as part of a Qualified Receivables Financing;

(xi) the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;

(xii) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;

(xiii) the entering into of any tax sharing agreement or arrangement that complies with Section 4.04(b)(xii);

(xiv) any contribution to the capital of Holdings;

(xv) transactions permitted by, and complying with, Section 5.01;

(xvi) transactions between Holdings or any Restricted Subsidiary and any Person, a director of which is also a director of Holdings or any direct or indirect parent of Holdings; provided , however , that such director abstains from voting as a director of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(xvii) pledges of Equity Interests of Unrestricted Subsidiaries;

(xviii) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;

(xix) any employment agreements entered into by Holdings or any Restricted Subsidiary in the ordinary course of business;

(xx) the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar amounts) to the Sponsors pursuant to the Sponsor Management Agreement ( plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement, in each case as in effect on the Issue Date or any amendment or modification thereto (so long as, in the good faith judgment of the Board of Directors of Holdings, any such amendment or modification is not more disadvantageous, taken as a whole, to holders in any material respect as compared to the Sponsor Management Agreement in effect on the Issue Date);

(xxi) payments by Holdings or any of its Restricted Subsidiaries to any of the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of Holdings in good faith;

(xxii) transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers’ Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;

investors on the same or more favorable terms and (ii) the investment constitutes less than 5% of the proposed or outstanding issue amount of such class of securities; and

(xxiv) customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.

SECTION 4.08 Change of Control .

(a) Upon the occurrence of a Change of Control, each holder shall have the right to require the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Notes in accordance with Article III of this Indenture. In the event that at the time of such Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the mailing of the notice to the holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Issuers shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).

(b) Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the Notes in accordance with Article III of this Indenture, the Issuers shall mail a notice (a “ Change of Control Offer ”) to each holder with a copy to the Trustee stating:

(i) that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, to the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest on the relevant Interest Payment Date);

(ii) the circumstances and relevant facts and financial information regarding such Change of Control;

(iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(iv) the instructions determined by the Issuers, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased.

(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the

notice at least three Business Days prior to the purchase date. The holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered for purchase by the holder and a statement that such holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.

(d) On the purchase date, all Notes purchased by the Issuers under this Section 4.08 shall be delivered to the Trustee for cancellation, and the Issuers shall pay the purchase price plus accrued and unpaid interest to the holders entitled thereto.

(e) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(f) Notwithstanding the foregoing provisions of this Section 4.08, the Issuers shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

(g) Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuers. Notes purchased by a third party pursuant to the preceding clause (f) will have the status of Notes issued and outstanding.

(h) At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, Holdings shall also deliver an Officers’ Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering holder.

(i) Prior to any Change of Control Offer, Holdings shall deliver to the Trustee an Officers’ Certificate stating that all conditions precedent contained herein to the right of the Issuers to make such offer have been complied with.

(j) The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section by virtue thereof.

SECTION 4.09 Compliance Certificate . Holdings shall deliver to the Trustee within 120 days after the end of each fiscal year of Holdings, beginning with the fiscal

year ending on December 31, 2012, an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of Holdings they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If any Officer does, the certificate shall describe the Default, its status and what action the Issuers are taking or propose to take with respect thereto. The Issuers also shall comply with Sections 314(a)(4) and 314(b) of the TIA. Except with respect to receipt of payments of principal and interest on the Notes and any Default or Event of Default information contained in the Officers’ Certificate delivered to it pursuant to this Section 4.09, the Trustee shall have no duty to review, ascertain or confirm the Issuers’ compliance with or the breach of any representation, warranty or covenant made in this Indenture.

SECTION 4.10 Further Instruments and Acts . Upon request of the Trustee, the Issuers shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 4.11 Future Subsidiary Guarantors . Holdings shall cause each Wholly Owned Restricted Subsidiary that is not an Excluded Subsidiary and that guarantees any Indebtedness (other than Junior Lien Obligations) of an Issuer or any of the Subsidiary Guarantors secured by the Collateral (other than Excluded Assets) to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit D hereto pursuant to which such Wholly Owned Restricted Subsidiary will guarantee the Issuers’ Obligations under the Notes and this Indenture, as well as to execute and deliver a joinder to the applicable Intercreditor Agreement if required by such Intercreditor Agreement and to execute and deliver a joinder to each applicable Security Document to the extent required by Section 4.13.

SECTION 4.12 Liens .

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist (i) any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or a Restricted Subsidiary unless the Notes are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes) the obligations so secured until such time as such obligations are no longer secured by a Lien or (ii) any Lien securing any First-Priority Lien Obligation of Holdings or any Subsidiary Guarantor without effectively providing that the Notes or the applicable Subsidiary Guarantee, as the case may be, shall be granted a second-priority security interest (subject to Permitted Liens) upon the RBL Priority Collateral constituting the collateral for such First-Priority Lien Obligations, except in respect of Excluded Assets and limitations set forth in the Security Documents; provided , however , that if granting such security interests requires the consent of a third party, Holdings will use commercially reasonable efforts to obtain such consent with respect to the security interests for the benefit of the Second Lien Collateral Agent on behalf of the holders of the Notes; provided , further , however , that if such third party does not consent to the granting of such security interests after the use of commercially reasonable efforts, Holdings will not be required to provide such security interests.

(b) Section 4.12(a)(i) shall not require Holdings or any of its Restricted Subsidiaries to secure the Notes if the Lien consists of a Permitted Lien. Any Lien that is granted

to secure the Notes or any Subsidiary Guarantee under Section 4.12(a)(i) (unless also granted pursuant to Section 4.12(a)(ii)) shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes or such Subsidiary Guarantee under such Section 4.12(a)(i).

(c) For purposes of determining compliance with this Section 4.12, (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in the definition of “Permitted Liens” or pursuant to Section 4.12(a) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in the definition of “Permitted Liens” or pursuant to Section 4.12(a), Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of “Permitted Liens” and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses or pursuant to Section 4.12(a).

(d) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “ Increased Amount ” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “Indebtedness.”

SECTION 4.13 After-Acquired Property .

(a) Upon the acquisition by an Issuer or any Subsidiary Guarantor of any First-Priority After-Acquired Property, or upon any additional Restricted Subsidiary becoming a Subsidiary Guarantor required to pledge its existing First-Priority After-Acquired Property as Collateral pursuant to this Article IV, such Issuer or Subsidiary Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and other Security Documents as shall be reasonably necessary to vest in the Second Lien Collateral Agent a perfected second-priority security interest, subject only to Permitted Liens and Liens permitted under Section 4.12, in such First-Priority After-Acquired Property and to have such First-Priority After-Acquired Property (but subject to the limitations as described in Article XI, the Security Documents, the Intercreditor Agreements) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such First-Priority After-Acquired Property to the same extent and with the same force and effect.

(b) Upon the acquisition by an Issuer or any Subsidiary Guarantor of any Term/Notes Priority After-Acquired Property, or upon any additional Restricted Subsidiary becoming a Subsidiary Guarantor required to pledge its existing Term/Notes Priority After-Acquired Property as Collateral pursuant to this Article IV, such Issuer or Subsidiary Guarantor shall, as promptly as practicable, execute and deliver such security instruments, financing statements and other Security Documents as shall be reasonably necessary to vest in the Second Lien Collateral Agent a perfected first-priority security interest, subject only to Permitted Liens and Liens permitted under Section 4.12, in such Term/Notes Priority After-Acquired Property and to have such Term/Notes Priority After-Acquired Property (but subject to the limitations described in Article XI, the Security Documents, the Intercreditor Agreements and limitations under applicable local law) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such Term/Notes Priority After-Acquired Property to the same extent and with the same force and effect.

Notwithstanding the foregoing, if granting a security interest in any property pursuant to the foregoing clauses (a) or (b) requires the consent of a third party, Holdings shall use commercially reasonable efforts to obtain such consent with respect to such security interest for the benefit of the Second Lien Collateral Agent on behalf of the Trustee and the holders of the Notes. If such third party does not consent to the granting of such security interest after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such security interest.

Notwithstanding the foregoing, Holdings shall use commercially reasonable efforts to perfect all security interests in the Collateral in respect of the Acquired Business (other than Excluded Assets) on or prior to the Escrow Release Date. In the event Mortgages in respect of owned real properties to be mortgaged as security for the Notes are not in place prior to the Escrow Release Date or, with respect to any other Collateral in respect of the Notes, security interests have not been granted prior to the Escrow Release Date, Holdings will use commercially reasonable efforts to cause second-priority mortgages to be recorded with respect to the Mortgaged Properties and, where applicable, to obtain title insurance policies insuring the second-priority Mortgages on the properties, in each case, subject to local law limitation in granting of security to more than one secured party, and to cause the taking of additional actions required to perfect the security interest in the other Collateral required to be pledged under this Indenture and the Security Documents, in each case within 90 days following the Escrow Release Date, or such later date as may be agreed by the RBL Agent, in the case of RBL Priority Collateral, or the Second Lien Collateral Agent, in the case of Term/Notes Priority Collateral.

SECTION 4.14 Maintenance of Office or Agency .

(a) The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee as set forth in Section 14.01.

(b) The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission shall in any manner relieve an Issuer of its obligation to maintain an office or agency for such purposes. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

(c) The Issuers hereby designates the Corporate Trust Office of the Trustee or its agent as such office or agency of the Issuers in accordance with Section 2.04.

SECTION 4.15 Covenant Suspension . If on any date following the Issue Date, (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under this Indenture, then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “ Covenant Suspension Event ”), and subject to the provisions of the following paragraph, the Issuers and the Restricted Subsidiaries shall not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and 5.01(a)(iv) (collectively the “ Suspended Covenants ”).

In the event that Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then Holdings and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events.

On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to Sections 4.03(a) and (b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Sections 4.03(a) and (b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.03(b)(iii). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 4.04(a). As described above, however, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, the Issuers must comply with the terms of Section 4.11.

For purposes of Section 4.06, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.

SECTION 4.16 Maintenance of Insurance . The Issuers shall maintain, with financially sound and reputable insurance companies, insurance (subject to customary deductibles and retentions) in such amounts and against such risks as are customarily maintained by similarly situated companies engaged in the same or similar businesses operating in the same or similar locations and cause the Issuers and the Subsidiary Guarantors to be listed as insured and the Second Lien Collateral Agent to be listed as co-loss payee on property and property casualty policies and as an additional insured on liability policies. Notwithstanding the foregoing, the Issuers and the Subsidiary Guarantors may self-insure with respect to such risks with respect to which companies of established reputation in the same general line of business in the same general area usually self-insure.

ARTICLE V

SUCCESSOR COMPANY

SECTION 5.01 When Issuers May Merge or Transfer Assets .

(a) Holdings may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Holdings is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

(i) Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the “ Successor Holdco ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(ii) the Successor Holdco (if other than Holdings) expressly assumes all the obligations of Holdings under this Indenture pursuant to supplemental indentures;

(iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Issuer or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;

(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Restricted Subsidiary at the time of such transaction), either

(1) the Successor Holdco would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or

(2) the Fixed Charge Coverage Ratio for the Successor Holdco and its Restricted Subsidiaries would be greater than such ratio for Holdings and its Restricted Subsidiaries immediately prior to such transaction;

(v) if Holdings is not the Successor Holdco, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(vi) the Successor Holdco shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with this Indenture.

The Successor Holdco (if other than Holdings) will succeed to, and be substituted for, Holdings under this Indenture and the Notes, and in such event Holdings will automatically be released and discharged from its obligations under this Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (a) Holdings or any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to Holdings or to a Restricted Subsidiary, and (b) Holdings may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating Holdings in another state of the United States, the District of Columbia or any territory of the United States or may convert into a corporation, partnership or limited liability company, so long as the amount of Indebtedness of Holdings and the Restricted Subsidiaries is not increased thereby. This Article V will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Holdings and the Restricted Subsidiaries.

(b) Subject to the provisions of Section 11.04 and Section 12.02(b)(i), no Subsidiary Guarantor shall, and Holdings shall not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) either (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the “ Successor Subsidiary Guarantor ”) and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the

obligations of such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and

(ii) the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

Except as otherwise provided in this Indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under this Indenture and its Subsidiary Guarantee. Notwithstanding the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with Holdings or another Subsidiary Guarantor.

In addition, notwithstanding the foregoing, a Subsidiary Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to Holdings or any Subsidiary Guarantor.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01 Events of Default . An “ Event of Default ” occurs with respect to Notes if:

(a) there is a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,

(b) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(c) there is a failure by Holdings for 120 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the

Notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements in Section 4.02,

(d) there is a failure by Holdings or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (a), (b) and (c) above) contained in the Notes or this Indenture,

(e) there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $125.0 million or its foreign currency equivalent,

(f) Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) pursuant to or within the meaning of any Bankruptcy Law:

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an involuntary case;

(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or

(iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,

(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against Holdings or any Significant Subsidiary in an involuntary case;

(ii) appoints a Custodian of Holdings or any Significant Subsidiary or for any substantial part of its property; or

(iii) orders the winding up or liquidation of Holdings or any Significant Subsidiary;

or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,

which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days,

(i) the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the Notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Subsidiary Guarantee with respect to the Notes and such Default continues for 10 days,

(j) unless such Liens have been released in accordance with the provisions of Article XI, the Security Documents or the Intercreditor Agreements, the Liens in favor of the holders of the Notes with respect to all or substantially all of the Collateral cease to be valid or enforceable and such Default continues for 30 days, or an Issuer shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any Subsidiary Guarantor, the Issuers fail to cause such Subsidiary Guarantor to rescind such assertions within 30 days after the Issuers have actual knowledge of such assertions, or

(k) the failure by an Issuer or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the holders of the Notes and would not materially affect the value of the Collateral taken as a whole.

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clause (c), (d) or (k) above shall not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding Notes notify the Issuers of the default and the Issuers do not cure such default within the time specified in clauses (c), (d) or (k) hereof after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “ Notice of Default .” Holdings shall deliver to the Trustee, within five Business Days after the occurrence thereof, written notice in the form of an Officers’ Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuers are taking or propose to take with respect thereto.

The term “ Bankruptcy Law ” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term “ Custodian ” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

SECTION 6.02 Acceleration . If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) hereof with respect to Holdings) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes

(with a copy to the Trustee) by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to Holdings occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the Notes, if within 20 days after such Event of Default arose Holdings delivers an Officers’ Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

SECTION 6.03 Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. To the extent required by law, all available remedies are cumulative.

SECTION 6.04 Waiver of Past Defaults . Provided the Notes are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes by written notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each holder affected. When a Default is waived, it is deemed cured and the Issuers, the Trustee and the holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

or, if the Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith shall determine that the action or proceeding so directed would involve the Trustee in personal liability or expense for which it is not adequately indemnified, or subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.

SECTION 6.06 Limitation on Suits .

(a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to this Indenture or the Notes unless:

(i) such holder has previously given the Trustee notice that an Event of Default is continuing,

(ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy,

(iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,

(iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and

(v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

(b) A holder may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder.

SECTION 6.07 Rights of the Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any holder to receive payment of principal of and interest on the Notes held by such holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder.

SECTION 6.08 Collection Suit by Trustee . If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07.

SECTION 6.09 Trustee May File Proofs of Claim . The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the holders allowed in any judicial proceedings relative to the Issuer, the Subsidiary Guarantors, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.

SECTION 6.10 Priorities . Subject to the terms of the Intercreditor Agreements and the Security Documents, any money or property collected by the Trustee pursuant to this Article VI and any other money or property distributable in respect of the Issuers’ or any Subsidiary Guarantor’s obligations under this Indenture after an Event of Default shall be applied in the following order:

FIRST: to the Trustee and Second Lien Collateral Agent for amounts due hereunder and under the Security Documents;

SECOND: to the holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and

THIRD: to the Issuers or, to the extent the Trustee collects any amount for any Subsidiary Guarantor, to such Subsidiary Guarantor.

The Trustee may fix a record date and payment date for any payment to the holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each holder and the Issuers a notice that states the record date, the payment date and the amount to be paid.

the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Article VI does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the Notes.

SECTION 6.12 Waiver of Stay or Extension Laws . Neither the Issuers nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuers and the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE VII

TRUSTEE

SECTION 7.01 Duties of Trustee .

(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and

(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01(c) and the TIA.

SECTION 7.02 Rights of Trustee .

(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall not be responsible or liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided , however , that the Trustee’s conduct does not constitute willful misconduct or negligence.

(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney, at the expense of the Issuers and shall Incur no liability of any kind by reason of such inquiry or investigation.

(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the holders pursuant to this Indenture, unless such holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be Incurred by it in compliance with such request or direction.

(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder, including the Second Lien Collateral Agent.

(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.

(j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding upon future holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.

(k) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

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Person authorized to sign an Officers’ Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.

(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.

(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.

SECTION 7.03 Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10 and 7.11.

SECTION 7.04 Trustee’s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Subsidiary Guarantees or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers or any Subsidiary Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j) or (k) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 14.02 hereof from the Issuers, any Subsidiary Guarantor or any holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of Notes and the Issuers having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.

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determines that withholding notice is in the interests of the noteholders. Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. Holdings also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.

SECTION 7.06 Reports by Trustee to the Holders . As promptly as practicable after each November 1 beginning with the November 1 following the date of this Indenture, and in any event prior to December 1 in each year, the Trustee shall mail to each holder a brief report dated as of such November 1 that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA.

Pursuant to Section 313(d) of the TIA, a copy of each report at the time of its mailing to the holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed if the Notes are listed. Holdings agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. All reports pursuant to this Section 7.06 shall be provided in accordance with Section 313(c) of the TIA.

SECTION 7.07 Compensation and Indemnity . The Issuers shall pay to the Trustee from time to time compensation for the Trustee’s acceptance of this Indenture and its services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Issuers and the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee or any predecessor Trustee and their directors, officers, employees and agents against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) Incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Subsidiary Guarantee against any Issuer or any Subsidiary Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by any Issuer, any Subsidiary Guarantor, any holder or any other Person). The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee. The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided , however , that any failure so to notify the Issuers shall not relieve any Issuer or any Subsidiary Guarantor of its indemnity obligations hereunder. The Issuers shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers’ expense in the defense. Such indemnified parties may have separate counsel and the Issuers and such Subsidiary Guarantor, as applicable, shall pay the fees and expenses of such counsel; provided , however , that the Issuers shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is no actual or potential conflict of interest between the Issuers and the Subsidiary Guarantor, as

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applicable, and such parties in connection with such defense. The Issuers need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such party’s own willful misconduct, negligence or bad faith.

To secure the Issuers’ and the Subsidiary Guarantors’ payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.

The Issuers’ and the Subsidiary Guarantors’ payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee Incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.

SECTION 7.08 Replacement of Trustee .

(a) The Trustee may resign at any time by so notifying the Issuer. The holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuers shall remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10;

(ii) the Trustee is adjudged bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Trustee or its property; or

(iv) the Trustee otherwise becomes incapable of acting.

(b) If the Trustee resigns, is removed by the Issuers or by the holders of a majority in principal amount of the Notes and such holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.

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succession to the holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.

(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the holders of 10% in principal amount of the Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.

(e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA, any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

SECTION 7.09 Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

SECTION 7.10 Eligibility; Disqualification . The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided , however , that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.

SECTION 7.11 Preferential Collection of Claims Against the Issuers . The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.

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SECTION 7.12 Limitation on Duty of Trustee in Respect of Collateral; Indemnification .

(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Trustee shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee in good faith.

(b) The Trustee shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 7.01 of this Indenture, the Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Intercreditor Agreements, the Escrow Agreement, the Collateral Agreement or any other Security Document by the Issuers, the Subsidiary Guarantors, the First Lien Agent or the Senior Lenders.

ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01 Discharge of Liability on Notes; Defeasance .

(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights and immunities of the Trustee and rights of registration or of registration of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes and the security interest in the Collateral securing the Notes Obligations will be automatically released when:

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the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(ii) the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under this Indenture; and

(iii) the Issuers have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time may terminate (i) all of their obligations under the Notes and this Indenture with respect to the holders of the Notes (“ legal defeasance option ”), and (ii) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.13 and 4.15 and the operation of Section 5.01 for the benefit of the holders of the Notes, and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and 6.01(g) with respect to Significant Subsidiaries of the Issuers only), 6.01(h), 6.01(i), 6.01(j) and 6.01(k) (“ covenant defeasance option ”). The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. In the event that the Issuers terminate all of their obligations under the Notes and this Indenture (with respect to such Notes) by exercising their legal defeasance option or their covenant defeasance option, the obligations of each Subsidiary Guarantor with respect to its Subsidiary Guarantee and the Security Documents shall be terminated simultaneously with the termination of such obligations.

If the Issuers exercises their legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuers exercise their covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of Holdings only), 6.01(h), 6.01(i), 6.01(j) or 6.01(k) or because of the failure of Holdings to comply with Section 5.01.

Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.

(c) Notwithstanding clauses (a) and (b) above, the Issuers’ obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09 and Article VII, including, without limitation, Sections 7.07, 7.08 and 7.09, and in this Article VIII and the rights and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full. Thereafter, the Issuers’ obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive such satisfaction and discharge.

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SECTION 8.02 Conditions to Defeasance .

(a) The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:

(i) the Issuers irrevocably deposit in trust with the Trustee cash in U.S. Dollars, U.S. Government Obligations or a combination thereof sufficient, or a combination thereof sufficient, to pay the principal of and premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be;

(ii) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;

(iii) no Default specified in Section 6.01(f) or (g) with respect to the Issuers shall have occurred or is continuing on the date of such deposit;

(iv) the deposit does not constitute a default under any other material agreement or instrument binding on the Issuers and is not prohibited by Article X;

(v) in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(vi) such exercise does not impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Notes on or after the due dates therefore or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes;

(vii) in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same

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amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and

(viii) the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with.

(b) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III.

SECTION 8.03 Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. The Trustee shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.

SECTION 8.04 Repayment to Issuer . Each of the Trustee and each Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it as provided in this Article VIII that, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article VIII.

Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.

SECTION 8.05 Indemnity for U.S. Government Obligations . The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

SECTION 8.06 Reinstatement . If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Issuers have made any payment of principal of, or interest on, any such Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the holders of such Notes to

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receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.

ARTICLE IX

AMENDMENTS AND WAIVERS

SECTION 9.01 Without Consent of the Holders .

(a) The Issuers and the Trustee may amend this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or the Intercreditor Agreements without notice to or consent of any holder:

(i) to cure any ambiguity, omission, defect or inconsistency;

(ii) to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under this Indenture and the Notes;

(iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under this Indenture, its Subsidiary Guarantee and the Security Documents;

(iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code;

(v) to conform the text of this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or any Intercreditor Agreement to any provision of the “Description of Senior Secured Notes” in the Offering Memorandum to the extent that such provision in this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or such Intercreditor Agreement was intended by the Issuers to be verbatim recitation of a provision in the “Description of Senior Secured Notes” in the Offering Memorandum, as stated in an Officers’ Certificate;

(vi) to add a Subsidiary Guarantee with respect to the Notes,

(vii) to add Collateral to secure the Notes;

(viii) to release Collateral or a Subsidiary Guarantee as permitted by this Indenture, the Security Documents and the Intercreditor Agreements;

(ix) to add additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or other Junior Lien Obligations, so long as such obligations are not prohibited by this Indenture or the Security Documents;

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(x) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers;

(xi) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of, this Indenture under the TIA;

(xii) to make any change that does not adversely affect the rights of any holder; or

(xiii) to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities.

(b) The Intercreditor Agreements may be amended without the consent of any holder or the Trustee in connection with the permitted entry into the Intercreditor Agreements of any class of additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or Junior Lien Obligations to effectuate such entry into the Intercreditor Agreements and to make the lien of such class equal and ratable with, as applicable, the lien of the First-Priority Lien Obligations, the Other Second-Lien Obligations or the Junior Lien Obligations.

(c) After an amendment under this Section 9.01 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.

SECTION 9.02 With Consent of the Holders . The Issuers and the Trustee may amend this Indenture, the Notes, the Subsidiary Guarantees, the Intercreditor Agreements and the Security Documents with the consent of the Issuers and the holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each holder of an outstanding Note affected, an amendment may not:

(1) reduce the amount of Notes whose holders must consent to an amendment,

(2) reduce the rate of or extend the time for payment of interest on any Note,

(3) reduce the principal of or change the Stated Maturity of any Note,

(4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article III,

(5) make any Note payable in money other than that stated in such Note,

(6) expressly subordinate the Notes or any related Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor,

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(7) impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes,

(8) make any change in the amendment provisions which require each holder’s consent or in the waiver provisions, or

(9) make any change in the provisions in the Intercreditor Agreements or this Indenture dealing with the application of proceeds of Collateral to the Notes Obligations that would adversely affect the holders of the Notes.

Except as expressly provided by this Indenture or the Security Documents, without the consent of holders of at least 66.67% in aggregate principal amount of Notes then outstanding, no amendment may modify or release the Subsidiary Guarantee of any Significant Subsidiary in any manner adverse to the holders of the Notes. In addition, without the consent of the holders of at least 66.67% in aggregate principal amount of Notes then outstanding, no amendment or waiver may release all or substantially all of the Collateral from the Lien of this Indenture and the Security Documents with respect to the Notes.

It shall not be necessary for the consent of the holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

After an amendment under this Section 9.02 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

SECTION 9.03 Revocation and Effect of Consents and Waivers .

(a) A consent to an amendment or a waiver by a holder of a Note shall bind the holder and every subsequent holder of that Note or portion of the Note that evidences the same debt as the consenting holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such holder or subsequent holder may revoke the consent or waiver as to such holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers’ Certificate from Holdings certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuers or the Trustee of consents by the holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuers and the Trustee.

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entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.

SECTION 9.04 Notation on or Exchange of Notes . If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the holder. Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.

SECTION 9.05 Trustee to Sign Amendments . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, (i) an Officers’ Certificate, (ii) an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof, (iii) a copy of the resolution of the Board of Directors, certified by the Secretary or Assistant Secretary of Holdings, authorizing the execution of such amendment, supplement or waiver and (iv) if such amendment, supplement or waiver is executed pursuant to Section 9.02, evidence reasonably satisfactory to the Trustee of the consent of the holders required to consent thereto.

SECTION 9.06 Additional Voting Terms; Calculation of Principal Amount . All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.

SECTION 9.07 Compliance with the Trust Indenture Act . From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.

ARTICLE X

RANKING OF NOTE LIENS

SECTION 10.01 Relative Rights . The Pari Passu Intercreditor Agreement defines the relative rights, as lienholders, among holders of Liens securing Second-Priority Lien Obligations and the Senior Lien Intercreditor Agreement defines the relative rights, as lienholders, of holders of Liens securing Second-Priority Lien Obligations and holders of Liens

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securing First-Priority Lien Obligations. Nothing in this Indenture or the Intercreditor Agreements will:

(a) impair, as between the Issuers and holders of Notes, the obligation of the Issuers, which is absolute and unconditional, to pay principal of, premium and interest on Notes in accordance with their terms or to perform any other obligation of the Issuers or any other obligor under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents;

(b) restrict the right of any holder to sue for payments that are then due and owing, in a manner not inconsistent with the provisions of each Intercreditor Agreement;

(c) prevent the Trustee, the Second Lien Collateral Agent or any holder from exercising against the Issuers or any other obligor any of its other available remedies upon a Default or Event of Default (other than its rights as a secured party, which are subject to the Intercreditor Agreements); or

(d) restrict the right of the Trustee, the Second Lien Collateral Agent or any holder:

(1) to file and prosecute a petition seeking an order for relief in an involuntary bankruptcy case as to any obligor or otherwise to commence, or seek relief commencing, any insolvency or liquidation proceeding involuntarily against any obligor;

(2) to make, support or oppose any request for an order for dismissal, abstention or conversion in any insolvency or liquidation proceeding;

(3) to make, support or oppose, in any insolvency or liquidation proceeding, any request for an order extending or terminating any period during which the debtor (or any other Person) has the exclusive right to propose a plan of reorganization or other dispositive restructuring or liquidation plan therein;

(4) to seek the creation of, or appointment to, any official committee representing creditors (or certain of the creditors) in any insolvency or liquidation proceedings and, if appointed, to serve and act as a member of such committee without being in any respect restricted or bound by, or liable for, any of the obligations under this Article X;

(5) to seek or object to the appointment of any professional person to serve in any capacity in any insolvency or liquidation proceeding or to support or object to any request for compensation made by any professional person or others therein;

(6) to make, support or oppose any request for order appointing a trustee or examiner in any insolvency or liquidation proceedings; or

(7) otherwise to make, support or oppose any request for relief in any insolvency or liquidation proceeding that it is permitted by law to make, support or oppose if it were a holder of unsecured claims, or as to any matter relating to (x) any plan of reorganization or other restructuring or liquidation plan or (y) the administration of the

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estate or the disposition of the case or proceeding (in each case except as set forth in each Intercreditor Agreement).

ARTICLE XI

COLLATERAL

SECTION 11.01 Security Documents . (a) On the Issue Date, the Issuers and the Trustee shall execute and deliver the Escrow Agreement. Until the Escrow Release Date, the payment of the principal of and interest on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise shall be secured as provided in the Escrow Agreement.

(b) From and after the Escrow Release Date, the payment of the principal of and interest and premium, if any, on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Issuers pursuant to the Notes or by the Subsidiary Guarantors pursuant to the Subsidiary Guarantees, the payment of all other Obligations and the performance of all other obligations of the Issuers and the Subsidiary Guarantors under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents shall be secured as provided in the Security Documents, which the Issuers and the Subsidiary Guarantors shall enter into on or prior to the Escrow Release Date to the extent required by Section 4.13 and will be secured by Security Documents delivered as required or permitted by this Indenture. The Issuers shall, and shall cause each Restricted Subsidiary to, and each Restricted Subsidiary shall, make all filings (including filings of continuation statements and amendments to UCC financing statements that may be necessary to continue the effectiveness of such UCC financing statements) and all other actions as are necessary or required by the Security Documents to maintain (at the sole cost and expense of the Issuers and the Restricted Subsidiaries) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a perfected security interest subject only to Permitted Liens and Liens permitted by Section 4.12.

SECTION 11.02 Second Lien Collateral Agent .

(a) The Second Lien Collateral Agent is authorized and empowered to appoint one or more co-Second Lien Collateral Agents as it deems necessary or appropriate.

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(b) Subject to Section 7.01, neither the Trustee nor the Second Lien Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Lien securing Second-Priority Lien Obligations, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens securing Second-Priority Lien Obligations or the Security Documents or any delay in doing so.

(c) The Second Lien Collateral Agent will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture); provided that in the event of conflict between directions received pursuant to the Security Documents and directions received hereunder, the Second Lien Collateral Agent will be subject to directions received pursuant to the Security Documents and the Intercreditor Agreements. Except as directed by the Trustee as required or permitted by this Indenture and any other representatives or pursuant to the Security Documents, the Second Lien Collateral Agent will not be obligated:

(1) to act upon directions purported to be delivered to it by any other Person;

(2) to foreclose upon or otherwise enforce any Lien securing Second-Priority Lien Obligations; or

(3) to take any other action whatsoever with regard to any or all of the Liens securing Second-Priority Lien Obligations, Security Documents or Collateral.

(d) The Second Lien Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing Second-Priority Lien Obligations or the Security Documents.

(e) In acting as Second Lien Collateral Agent or co-Second Lien Collateral Agent, the Second Lien Collateral Agent and each co-Second Lien Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits of the Trustee under Article VII hereof

(f) The holders of Notes agree that the Second Lien Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Second Lien Collateral Agent by the Security Documents. Furthermore, each holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the Second Lien Collateral Agent to enter into and perform each Intercreditor Agreement and Security Documents in each of its capacities thereunder.

(g) If the Issuers (i) Incur First-Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First-Priority Lien Obligations entitled to the benefit of an existing Intercreditor Agreement is concurrently retired, and (ii) delivers to the Second Lien Collateral Agent an Officers’ Certificate so stating and requesting the Second Lien Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Senior Lien Intercreditor Agreement) in favor of a designated

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agent or representative for the holders of the First-Priority Lien Obligations so Incurred, the Second Lien Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuers (i) Incur Other Second-Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting Other Second-Lien Obligations entitled to the benefit of an existing Intercreditor Agreement is concurrently retired, and (ii) delivers to the Second Lien Collateral Agent an Officers’ Certificate so stating and requesting the Second Lien Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Pari Passu Intercreditor Agreement ) in favor of a designated agent or representative for the holders of the Other Second-Lien Obligations so Incurred, the Second Lien Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.

(h) At all times when the Trustee is not itself the Second Lien Collateral Agent, the Issuers will deliver to the Trustee copies of all Security Documents delivered to the Second Lien Collateral Agent and copies of all documents delivered to the Second Lien Collateral Agent pursuant to this Indenture and the Security Documents.

SECTION 11.03 Authorization of Actions to Be Taken . (a) Each holder of Notes, by its acceptance thereof, consents and agrees to the terms of each Security Document, the Escrow Agreement and each Intercreditor Agreement as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee and/or the Second Lien Collateral Agent to enter into the Escrow Agreement, the Intercreditor Agreements and the Security Documents to which it is a party, authorizes and empowers the Trustee to direct the Second Lien Collateral Agent to enter into, and the Second Lien Collateral Agent to execute and deliver, the Security Documents and Intercreditor Agreements and authorizes and empowers the Trustee and the Second Lien Collateral Agent to bind the holders of Notes and other holders of Obligations as set forth in the Security Documents to which it is a party and the Intercreditor Agreements and to perform its obligations and exercise its rights and powers thereunder.

(b) The Trustee and the Second Lien Collateral Agent are authorized and empowered to receive for the benefit of the holders of Notes any funds collected or distributed under the Security Documents to which the Second Lien Collateral Agent or Trustee is a party and to make further distributions of such funds to the holders of Notes according to the provisions of this Indenture.

(c) Subject to the provisions of Article VI, Section 7.01 and Section 7.02 hereof, the Intercreditor Agreements and the Security Documents, upon the occurrence and continuance of an Event of Default, the Trustee may, in its sole discretion and without the consent of the holders, direct, on behalf of the holders, the Second Lien Collateral Agent to take all actions it deems necessary or appropriate in order to:

(1) foreclose upon or otherwise enforce any or all of the Liens securing the Second-Priority Lien Obligations;

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(2) enforce any of the terms of the Security Documents to which the Second Lien Collateral Agent or Trustee is a party; or

(3) collect and receive payment of any and all Obligations.

Subject to the Intercreditor Agreements, the Trustee is authorized and empowered to institute and maintain, or direct the Second Lien Collateral Agent to institute and maintain, such suits and proceedings as it may deem expedient to protect or enforce the Liens securing the Second-Priority Lien Obligations or the Security Documents to which the Second Lien Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of the Security Documents to which the Second Lien Collateral Agent or Trustee is a party or this Indenture, and such suits and proceedings as the Trustee or the Second Lien Collateral Agent may deem expedient to preserve or protect its interests and the interests of the holders of Notes in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of holders, the Trustee or the Second Lien Collateral Agent.

SECTION 11.04 Release of Liens . (a) Notwithstanding anything to the contrary in the Security Documents, Collateral may be released from the Lien and security interest created by the Security Documents to secure the Notes and obligations under this Indenture at any time or from time to time in accordance with the provisions of the Intercreditor Agreements or as provided hereby. The applicable assets included in the Collateral shall be automatically released from the Liens securing the Notes, and the applicable Subsidiary Guarantor shall be automatically released from its obligations under this Indenture and the Security Documents, under any one or more of the following circumstances or any applicable circumstance as provided in the Intercreditor Agreements or the Security Documents:

(1) with respect to the RBL Priority Collateral, upon the Discharge of First-Priority Lien Obligations and concurrent release of all other Liens on such property or assets (except cash collateral in respect of any letters of credit) securing First-Priority Lien Obligations (including all commitments and letters of credit thereunder); provided , however , that if an Issuer or any Subsidiary Guarantor subsequently incurs First-Priority Lien Obligations that are secured by Liens on property or assets of an Issuer or any Subsidiary Guarantor of the type constituting RBL Priority Collateral and the related Liens are Incurred in reliance on clause (6)(B) or (6)(C) of the definition of “Permitted Liens,” then Holdings and the Subsidiary Guarantors will be required to reinstitute the security arrangements with respect to the RBL Priority Collateral in favor of the Notes, which, in the case of any such subsequent First-Priority Lien Obligations, will be second-priority Liens on the RBL Priority Collateral securing such First-Priority Lien Obligations to the same extent provided by the Security Documents and on the terms and conditions of the security documents relating to such First-Priority Lien Obligations, with the second-priority Lien held by the Second Lien Collateral Agent or other representative designated by Holdings to hold the second-priority Liens for the benefit of the holders of the Notes and subject to the Senior Lien Intercreditor Agreement or an intercreditor

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agreement that provides the administrative agent or collateral agent substantially the same rights and obligations as afforded under the Senior Lien Intercreditor Agreement; provided , however , that an Issuer will provide the Trustee and Second Lien Collateral Agent under the Collateral Agreements with prompt written notification of such reinstitution;

(2) to enable the Issuers or any Subsidiary Guarantor to consummate the disposition (other than any disposition to an Issuer or another Subsidiary Guarantor) of such property or assets to the extent not prohibited under Section 4.06;

(3) in respect of the property and assets of a Subsidiary Guarantor, (i) upon the designation of such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.04 and the definition of “Unrestricted Subsidiary”, and such Subsidiary Guarantor shall be automatically released from its obligations hereunder and under the Security Documents or (ii) upon the release of such Subsidiary Guarantee pursuant to Section 12.02(b);

(4) in respect of the property and assets of a Subsidiary Guarantor, upon the release or discharge of the guarantee by such Subsidiary Guarantor of the Obligations under the Credit Agreement or any other Indebtedness which resulted in the obligation to become a Subsidiary Guarantor;

(5) in respect of any assets or property constituting RBL Priority Collateral, upon the release of the security interests in such assets or property securing any First-Priority Lien Obligations, other than in connection with a Discharge of First-Priority Lien Obligations; and

(6) as described under Article IX.

Notwithstanding the foregoing, if an Event of Default under this Indenture exists on the date of Discharge of First-Priority Lien Obligations, the second-priority Liens on the RBL Priority Collateral securing the Notes will not be released, except to the extent the RBL Priority Collateral or any portion thereof was disposed of in order to repay the First-Priority Lien Obligations secured by the RBL Priority Collateral, and thereafter the Second Lien Agent (or another designated representative appointed pursuant to the terms of the Pari Passu Intercreditor Agreement) will have the right to foreclose or direct the RBL Agent to foreclose upon the RBL Priority Collateral (but in such event, the Liens on the RBL Priority Collateral securing the Notes will be released when such Event of Default and all other Events of Default under this Indenture cease to exist).

In addition, (i) the security interests granted pursuant to the Security Documents securing the Obligations shall automatically terminate and/or be released all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the applicable Pledgors (as defined in the Collateral Agreement), as of the date when all the Obligations (other than contingent or unliquidated obligations or liabilities not then due) have been paid in full in cash or immediately available funds; and (ii) the security interests granted pursuant to the Security Documents securing the Obligations shall automatically terminate as of

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the date when the holders of at least two thirds in aggregate principal amount of all Notes issued under this Indenture consent to the termination of the Security Documents.

In connection with any termination or release pursuant to this Section 11.04(a), the Second Lien Collateral Agent shall execute and deliver to any Pledgor (as defined in the Collateral Agreement), at such Pledgor’s expense, all documents that such Pledgor shall reasonably request to evidence such termination or release (including, without limitation, UCC termination statements), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral (as defined in the Collateral Agreement) that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to this Indenture or the Security Documents. Any execution and delivery of documents pursuant to this Section 11.04(a) shall be without recourse to or warranty by the Second Lien Collateral Agent. In connection with any release pursuant to this Section 11.04(a), the Pledgors shall be permitted to take any action in connection therewith consistent with such release including, without limitation, the filing of UCC termination statements.

Upon the receipt of an Officers’ Certificate from the Issuers, as described in Section 11.04(b) below, if applicable, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuers, the Second Lien Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents or the Intercreditor Agreements.

(b) Notwithstanding anything herein to the contrary, in connection with (x) any release of Collateral pursuant to Section 11.04(a)(1), (4) or (6), such Collateral may not be released from the Lien and security interest created by the Security Documents and (y) any release of Collateral pursuant to Section 11.04(a)(2), (3) and (5) the Second Lien Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release unless, in each case, an Officers’ Certificate and Opinion of Counsel certifying that all conditions precedent, including, without limitation, this Section 11.04, have been met and stating under which of the circumstances set forth in Section 11.04(a) above the Collateral is being released have been delivered to the Second Lien Collateral Agent on or prior to the date of such release or, in the case of clause (y) above, the date on which the Second Lien Collateral Agent executes any such instrument.

(c) Notwithstanding anything herein to the contrary, at any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee has delivered a notice of acceleration to the Second Lien Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the holders, except as otherwise provided in the Intercreditor Agreements.

SECTION 11.05 Powers Exercisable by Receiver or Trustee . In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI upon the Issuers or the Subsidiary Guarantors with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any

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similar instrument of the Issuers or the Subsidiary Guarantors or of any officer or officers thereof required by the provisions of this Article XI; and if the Trustee, Second Lien Collateral Agent or a nominee of the Trustee or Second Lien Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, Second Lien Collateral Agent or a nominee of the Trustee or Second Lien Collateral Agent.

SECTION 11.06 Release Upon Termination of the Issuers’ Obligations . In the event (i) that Holdings delivers to the Trustee, in form and substance acceptable to it, an Officers’ Certificate and Opinion of Counsel certifying that all the obligations under this Indenture, the Notes and the Security Documents have been satisfied and discharged by the payment in full of the Issuers’ obligations under the Notes, this Indenture and the Security Documents, and all such obligations have been so satisfied, or (ii) a discharge, legal defeasance or covenant defeasance of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuers and the Second Lien Collateral Agent a notice stating that the Trustee, on behalf of the holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents, and upon receipt by the Second Lien Collateral Agent of such notice, the Second Lien Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary at the request and expense of the Issuers to release such Lien as soon as is reasonably practicable.

SECTION 11.07 Designations . Except as provided in the next sentence, for purposes of the provisions hereof and the Intercreditor Agreements requiring the Issuers to designate Indebtedness for the purposes of the terms First-Priority Lien Obligations, Other Second-Lien Obligations , Junior Lien Obligations or any other such designations hereunder or under the Intercreditor Agreements, any such designation shall be sufficient if the relevant designation provides in writing that such First-Priority Lien Obligations, Junior Lien Obligations or Other Second-Lien Obligations are permitted under this Indenture and is signed on behalf of Holdings by an Officer and delivered to the Trustee, the Second Lien Collateral Agent and the First Lien Agent. For all purposes hereof and the Intercreditor Agreements, Holdings hereby designates the Obligations pursuant to the Credit Agreement as in effect on the Escrow Release Date as First-Priority Lien Obligations and the Obligations pursuant to the Term Loan Facility as in effect on the Escrow Release Date as Other Second-Lien Obligations.

SECTION 11.08 Certificates of the Trustee . In the event that the Issuers wish to release Collateral in accordance with this Indenture and the Security Documents and the Intercreditor Agreements at a time when the Trustee is not itself also the Second Lien Collateral Agent and the Issuers have delivered the certificates and documents required by the Security Documents and Section 11.03 hereof, the Trustee will determine whether it has received all documentation required by TIA § 314(d) in connection with such release and, based on such determination, will deliver a certificate to the Second Lien Collateral Agent setting forth such determination.

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ARTICLE XII

GUARANTEE

SECTION 12.01 Guarantee .

(a) Each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior secured basis from the Escrow Release Date, as a primary obligor and not merely as a surety, to each holder and to the Trustee and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuers under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the “ Subsidiary Guaranteed Obligations ”). The Subsidiary Guaranteed Obligations of all Subsidiary Guarantors shall be secured by first-priority security interests (subject to Permitted Liens and permitted by Section 4.12) in the Term/Notes Priority Collateral owned by such Subsidiary Guarantor and by second-priority security interests (subject to Permitted Liens and permitted by Section 4.12) in the RBL Priority Collateral. Each Subsidiary Guarantor further agrees that the Subsidiary Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Subsidiary Guarantor, and that each Subsidiary Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Subsidiary Guaranteed Obligation.

(b) Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Subsidiary Guaranteed Obligations and also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any default under the Notes or the Subsidiary Guaranteed Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any holder or the Trustee for the Subsidiary Guaranteed Obligations or each Subsidiary Guarantor; (v) the failure of any holder or Trustee to exercise any right or remedy against any other guarantor of the Subsidiary Guaranteed Obligations; or (vi) any change in the ownership of each Subsidiary Guarantor, except as provided in Section 12.02(b) . Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Subsidiary Guarantors, such that such Subsidiary Guarantor’s obligations would be less than the full amount claimed.

(c) Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers’ or such Subsidiary Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Subsidiary Guarantor hereunder. Each Subsidiary Guarantor hereby waives any

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right to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Subsidiary Guarantor.

(d) Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder or the Trustee to any security held for payment of the Subsidiary Guaranteed Obligations.

(e) The Subsidiary Guarantee of each Subsidiary Guarantor is, to the extent and in the manner set forth in Article XII, equal in right of payment to all existing and future Pari Passu Indebtedness, senior in right of payment to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor and subordinated and subject in right of payment to the prior payment in full of the principal of and premium, if any, and interest on all Secured Indebtedness of the relevant Subsidiary Guarantor and is made subject to such provisions of this Indenture. Pursuant to the Security Documents and the Intercreditor Agreements, the security interests securing the Subsidiary Guarantees will be senior in priority (subject to Permitted Liens and Liens permitted by Section 4.12) to all security interests in the Term/Notes Priority Collateral granted to secure the First-Priority Lien Obligations and junior in priority (subject to Permitted Liens and Liens permitted by Section 4.12) to all security interests in the RBL Priority Collateral at any time granted to secure First-Priority Lien Obligations. The Subsidiary Guarantees will rank pari passu with the guarantees of the loans under the Term Loan Facility.

(f) Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Subsidiary Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of any Subsidiary Guarantor as a matter of law or equity.

(g) Each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Subsidiary Guaranteed Obligations. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Subsidiary Guaranteed Obligation is rescinded or must otherwise be restored by any holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.

(h) In furtherance of the foregoing and not in limitation of any other right which any holder or the Trustee has at law or in equity against any Subsidiary Guarantor by

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virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Subsidiary Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Subsidiary Guaranteed Obligation, each Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Subsidiary Guaranteed Obligations, (ii) accrued and unpaid interest on such Subsidiary Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to the holders and the Trustee.

(i) Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the holders in respect of any Subsidiary Guaranteed Obligations guaranteed hereby until payment in full of all Subsidiary Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, as between it, on the one hand, and the holders and the Trustee, on the other hand, (i) the maturity of the Subsidiary Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Subsidiary Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Subsidiary Guaranteed Obligations as provided in Article VI, such Subsidiary Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purposes of this Section 12.01.

(j) Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys’ fees and expenses) Incurred by the Trustee, the Second Lien Collateral Agent or any holder in enforcing any rights under this Section 12.01.

(k) Upon request of the Trustee, each Subsidiary Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 12.02 Limitation on Liability .

(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Subsidiary Guaranteed Obligations guaranteed hereunder by each Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Subsidiary Guarantor without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.

(b) A Subsidiary Guarantee as to any Restricted Subsidiary that is a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.11 hereof and provides a guarantee shall terminate and be of no further force or effect and such Subsidiary Guarantee shall be deemed to be released from all obligations under this Article XII upon:

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(i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of this Indenture;

(ii) the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the provisions of Section 4.04 and the definition of “Unrestricted Subsidiary”;

(iii) the release or discharge of the guarantee by such Subsidiary Guarantor of the Credit Agreement or other Indebtedness or the guarantee of any other Indebtedness which resulted in the obligation to guarantee the Notes;

(iv) the Issuers’ exercise of their legal defeasance option or covenant defeasance option under Article VIII or if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture;

(v) such Restricted Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First-Priority Lien Obligations, subject to, in each case, the application of the proceeds of such foreclosure in accordance with Section 11.04; and

(vi) the occurrence of a Covenant Suspension Event.

SECTION 12.03 [Intentionally Omitted] .

SECTION 12.04 Successors and Assigns . This Article XII shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the holders and, in the event of any transfer or assignment of rights by any holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

SECTION 12.05 No Waiver . Neither a failure nor a delay on the part of either the Trustee or the holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise.

SECTION 12.06 Modification . No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Subsidiary Guarantor in any case

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shall entitle any Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances.

SECTION 12.07 Execution of Supplemental Indenture for Future Guarantors . Each Subsidiary which is required to become a Subsidiary Guarantor of the Notes pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article XII and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, Holdings shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate certifying that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary Guarantor is a valid and binding obligation of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request.

SECTION 12.08 Non-Impairment . The failure to endorse a Subsidiary Guarantee on any Note shall not affect or impair the validity thereof.

ARTICLE XIII

ESCROW ARRANGEMENTS

SECTION 13.01 Escrow Account . Notwithstanding anything in this Indenture to the contrary, on the Issue Date simultaneously with the issuance of the Notes, the Issuers shall, pursuant to the terms of the Escrow Agreement, deposit into the Escrow Account the proceeds of the offering of the Notes, together with cash and/or Cash Equivalents (either in cash or in the form of letters of credit) (collectively with the Escrow Account and any other property from time to time held in the Escrow Account, the “ Escrow Property ”), sufficient to yield the aggregate Special Mandatory Redemption Price on the Special Mandatory Redemption Date for all of the Notes. The Issuers shall grant the Trustee, for the benefit of holders of the Notes, a security interest on a first-priority basis in the Escrow Property to secure the Notes Obligations pending disbursement in accordance with the terms of the Escrow Agreement.

SECTION 13.02 Special Mandatory Redemption . If the Escrow Condition has not been satisfied on or prior to the Outside Date or Holdings determines in its sole discretion at any time prior to the Outside Date that the Escrow Conditions cannot be satisfied on or prior to the Outside Date, the Escrow Agent shall pursuant to the terms of the Escrow Agreement release the Escrow Property (including investment earnings thereon) to the Trustee for application as payment to the holders of the Notes of the Special Mandatory Redemption Price pursuant to Paragraph 5 of the Note.

SECTION 13.03 Release of Escrow Property. Upon the satisfaction of the Escrow Conditions on or prior to the Outside Date the Escrow Property will be released in accordance with the terms of the Escrow Agreement.

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ARTICLE XIV

MISCELLANEOUS

SECTION 14.01 Trust Indenture Act Controls . If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.

SECTION 14.02 Notices .

(a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:

if to the Issuers or a Subsidiary Guarantor:

	c/o EP Energy LLC
	1001 Louisiana Street
	Houston, TX 77002
	Attention:	Dane Whitehead, Chief Financial Officer
		Marguerite Woung-Chapman, General Counsel
	Fax: 713-420-6603

	with copies to:

	c/o Apollo Management, L.P.
	9 West 57th Street, 43rd Floor
	New York, NY 10019
	Attention:	Sam Oh and Chief Legal Officer
	Fax: 646-417-6651

	and

	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	1285 Avenue of the Americas
	New York, NY 10019
	Attention:	Gregory Ezring
		Monica Thurmond
	Fax: 212-757-3990

if to the Trustee:

	Wilmington Trust, National Association
	Corporate Client Services
	50 South Sixth Street, Suite 1290
	Minneapolis, MN 55402

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		Attention: Everest/EP Energy Administrator
		Fax: 612-217-5651

The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

(b) Any notice or communication mailed to a holder shall be mailed, first class mail, to the holder at the holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

(c) Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.

The Trustee may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Indenture sent by e-mail, facsimile transmission or other similar electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the holders may be made electronically in accordance with procedures of the Depository.

SECTION 14.03 Communication by the Holders with Other Holders . The holders may communicate pursuant to Section 312(b) of the TIA with other holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA.

SECTION 14.04 Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee at the request of the Trustee:

(a) an Officers’ Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

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SECTION 14.05 Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:

(a) a statement that the individual making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.

SECTION 14.06 When Notes Disregarded . In determining whether the holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers, the Subsidiary Guarantors or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or the Subsidiary Guarantors shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee actually knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.

SECTION 14.07 Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or a meeting of the holders. The Registrar and a Paying Agent may make reasonable rules for their functions.

SECTION 14.08 Legal Holidays . If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular Record Date is not a Business Day, the Record Date shall not be affected.

SECTION 14.09 GOVERNING LAW . THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

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Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 14.11 Successors . All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Notes shall bind such person’s successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 14.12 Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

SECTION 14.13 Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 14.14 Indenture Controls . If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.

SECTION 14.15 Severability . In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

SECTION 14.16 Intercreditor Agreement . The terms of this Indenture are subject to the terms of the Intercreditor Agreement.

SECTION 14.17 Waiver of Jury Trial . EACH OF THE ISSUERS, THE SUBSIDIARY GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

	EVEREST ACQUISITION LLC


	By:	/s/ Laurie D. Medley
		Name: Laurie D. Medley
		Title: Vice President & Assistant Secretary


	EVEREST ACQUISITION FINANCE INC.


	By:	/s/ Laurie D. Medley
		Name: Laurie D. Medley
		Title: Vice President & Assistant Secretary

[Senior Secured Notes Indenture]

	WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee

	By:	/s/ Jane Schweiger
		Name: Jane Schweiger
		Title: Vice President

[Signature Page to Senior Secured Notes Indenture]

APPENDIX A

PROVISIONS RELATING TO INITIAL NOTES, ADDITIONAL NOTES AND EXCHANGE NOTES

1. Definitions.

1.1 Definitions.

For the purposes of this Appendix A the following terms shall have the meanings indicated below:

“ Additional Interest ” has the meaning set forth in the Registration Rights Agreement.

“ Definitive Note ” means a certificated Initial Note, Additional Note or Exchange Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

“ Depository ” means The Depository Trust Company, its nominees and their respective successors.

“ Global Notes Legend ” means the legend set forth under that caption in the applicable Exhibit to this Indenture.

“ IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“ Initial Purchasers ” means Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BMO Capital Markets Corp., RBC Capital Markets, LLC, UBS Securities LLC, Nomura Securities International, Inc., Apollo Global Securities, LLC, Banco Bilbao Vizcaya Argentaria, S.A., Capital One Southcoast, Inc., CIBC World Markets Corp., Comerica Securities, Inc., DNB Markets, Inc., ING Financial Markets LLC, Lloyds Securities Inc., Mitsubishi UFJ Securities (USA), Inc., Mizuho Securities USA Inc., RBS Securities Inc., Scotia Capital (USA) Inc., SMBC Nikko Capital Markets Limited, SG Americas Securities, LLC, SunTrust Robinson Humphrey, Inc. and TD Securities (USA) LLC.

“ Notes Custodian ” means the custodian with respect to a Global Note (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.

“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

“ Registered Exchange Offer ” means the offer by the Issuers, pursuant to the Registration Rights Agreement, to certain holders of Initial Notes, to issue and deliver to such holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

Appendix A-1

“ Regulation S ” means Regulation S under the Securities Act.

“ Regulation S Notes ” means all Initial Notes offered and sold outside the United States in reliance on Regulation S.

“ Restricted Notes Legend ” means the legend set forth in Section 2.2(f)(i) herein.

“ Restricted Period ,” with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuers to the Trustee, and (b) the Issue Date, and with respect to any Additional Notes that are Transfer Restricted Notes, it means the comparable period of 40 consecutive days.

“ Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“ Rule 144A ” means Rule 144A under the Securities Act.

“ Rule 144A Notes” means all Initial Notes offered and sold to QIBs in reliance on Rule 144A.

“ Shelf Registration Statement ” means the registration statement filed by the Issuers in connection with the offer and sale of Initial Notes pursuant to the Registration Rights Agreement.

“ Transfer Restricted Definitive Notes ” means Definitive Notes that bear or are required to bear or are subject to the Restricted Notes Legend.

“ Transfer Restricted Global Notes ” means Global Notes that bear or are required to bear or are subject to the Restricted Notes Legend.

“ Transfer Restricted Notes ” means the Transfer Restricted Definitive Notes and Transfer Restricted Global Notes.

“ Unrestricted Definitive Notes ” means Definitive Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.

“ Unrestricted Global Notes ” means Global Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.

1.2 Other Definitions .

Term:		Defined in Section:
Agent Members		2.1 (b)
Global Notes		2.1 (b)
Regulation S Global Notes		2.1 (b)
Rule 144A Global Notes		2.1 (b)

Appendix A-2

2. The Notes.

2.1 Form and Dating; Global Notes.

(a) The Initial Notes issued on the date hereof will be (i) privately placed by the Issuers pursuant to the Offering Memorandum and (ii) sold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more agreements in accordance with applicable law.

(b) Global Notes . (i) Except as provided in clause (d) below, Rule 144A Notes initially shall be represented by one or more Notes in definitive, fully registered, global form without interest coupons (collectively, the “ Rule 144A Global Notes ”).

Regulation S Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the “ Regulation S Global Notes ”), which shall be registered in the name of the Depository or the nominee of the Depository for the accounts of designated agents holding on behalf of Euroclear or Clearstream.

The term “ Global Notes ” means the Rule 144A Global Notes and the Regulation S Global Notes. The Global Notes shall bear the Global Note Legend. The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear the Restricted Notes Legend.

Members of, or direct or indirect participants in, the Depository (collectively, the “ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes. The Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository, or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.

(ii) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depository and the provisions of Section 2.2. In addition, a Global Note shall be exchangeable for Definitive Notes if (x) the Depository (1) notifies the Issuers that it is unwilling or unable to continue as depository for such Global Note and the Issuers thereupon fail to appoint a successor depository or (2) has ceased to be a clearing agency registered under the Exchange Act or (y) there shall have occurred and be continuing an Event of Default with respect to such Global Note and a request has been made for such exchange; provided that in no event

Appendix A-3

shall the Regulation S Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository in accordance with its customary procedures.

(iii) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.

(iv) Any Transfer Restricted Note delivered in exchange for an interest in a Global Note pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Notes Legend.

(v) Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in a Regulation S Global Note may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.

(vi) The holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes.

2.2 Transfer and Exchange.

(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred as a whole except as set forth in Section 2.1(b). Global Notes will not be exchanged by the Issuers for Definitive Notes except under the circumstances described in Section 2.1(b)(ii). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.08 of this Indenture. Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b).

(b) Transfer and Exchange of Beneficial Interests in Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Transfer Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

Appendix A-4

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Transfer Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. A beneficial interest in an Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository directing the Depository to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(i).

(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Note if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note; and

(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note.

(iv) T ransfer and Exchange of Beneficial Interests in a Transfer Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

Appendix A-5

(A) I f the holder of such beneficial interest in a Transfer Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or

(B) I f the holder of such beneficial interest in a Transfer Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,

and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate in accordance with Section 2.01, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).

(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Transfer Restricted Global Note . Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.

(c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes . A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.1(b)(ii). A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii). In any case, beneficial interests in Global Notes shall be transferred or exchanged only for Definitive Notes.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes . Transfers and exchanges of Definitive Notes for beneficial interests in the Global Notes also shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:

(i) Transfer Restricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . If any holder of a Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in a Transfer Restricted Global Note or to transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

Appendix A-6

(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Note for a beneficial interest in a Transfer Restricted Global Note, a certificate from such holder in the form attached to the applicable Note;

(B) if such Transfer Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

(C) if such Transfer Restricted Definitive Note is being transferred to a Non U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

(D) if such Transfer Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

(E) if such Transfer Restricted Definitive Note is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such holder in the form attached to the applicable Note, including the certifications, certificates and Opinion of Counsel, if applicable; or

(F) if such Transfer Restricted Definitive Note is being transferred to Holdings or a Subsidiary thereof, a certificate from such holder in the form attached to the applicable Note;

the Trustee shall cancel the Transfer Restricted Definitive Note, and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Note.

(ii) Transfer Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of a Transfer Restricted Definitive Note may exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or

(B) if the holder of such Transfer Restricted Definitive Notes proposes to transfer such Transfer Restricted Definitive Note to a Person who shall take

Appendix A-7

delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,

and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Notes transferred or exchanged pursuant to this subparagraph (ii).

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of an Unrestricted Definitive Note may exchange such Unrestricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Unrestricted Definitive Notes transferred or exchanged pursuant to this subparagraph (iii).

(iv) Unrestricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a holder of Definitive Notes and such holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by its attorney, duly authorized in writing. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).

Appendix A-8

(i) Transfer Restricted Definitive Notes to Transfer Restricted Definitive Notes . A Transfer Restricted Note may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;

(C) if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Note;

(D) if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Note; and

(E) if such transfer will be made to Holdings or a Subsidiary thereof, a certificate in the form attached to the applicable Note.

(ii) Transfer Restricted Definitive Notes to Unrestricted Definitive Notes . Any Transfer Restricted Definitive Note may be exchanged by the holder thereof for an Unrestricted Definitive Note or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:

(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note; or

(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note,

and, in each such case, if the Issuers or the Registrar so request, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A holder of an Unrestricted Definitive Note may transfer such Unrestricted Definitive Notes to a

Appendix A-9

Person who takes delivery thereof in the form of an Unrestricted Definitive Note at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the holder thereof.

(iv) Unrestricted Definitive Notes to Transfer Restricted Definitive Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Note.

At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.

(f) Legend.

(i) Except as permitted by the following paragraph (iii), (iv) or (v), each Note certificate evidencing the Global Notes and any Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (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 THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE

Appendix A-10

LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

“FROM THE ESCROW RELEASE DATE, THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF (I) THE SENIOR LIEN INTERCREDITOR AGREEMENT AMONG JPMORGAN CHASE BANK, N.A., AS RBL AGENT, CITIBANK, N.A., AS SECOND LIEN COLLATERAL AGENT, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, TO BE ENTERED INTO UPON EXPIRATION OF THE ESCROW PERIOD, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE AND (II) THE PARI PASSU INTERCREDITOR AGREEMENT AMONG CITIBANK, N.A., AS SECOND LIEN COLLATERAL AGENT, THE TRUSTEE, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, TO BE ENTERED INTO UPON EXPIRATION OF THE ESCROW PERIOD, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.”

Each Definitive Note shall bear the following additional legend:

Appendix A-11

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

(ii) Upon any sale or transfer of a Transfer Restricted Definitive Note, the Registrar shall permit the holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Note if the holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

(iii) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note acquired pursuant to Regulation S, all requirements that such Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.

(iv) After a transfer of any Initial Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to the Restricted Notes Legend on any such Initial Note will cease to apply, the requirements requiring any such Initial Note issued to certain holders be issued in global form will continue to apply, and an Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the holder of such Initial Notes upon exchange of such transferring holder’s certificated Initial Note or directions to transfer such holder’s interest in the Global Note, as applicable.

(v) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes pursuant to which holders of such Initial Notes are offered Exchange Notes in exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain holders be issued in global form will still apply with respect to holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the Restricted Notes Legend, will be available to holders that exchange such Initial Notes in such Registered Exchange Offer.

(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

Appendix A-12

of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.

(h) Obligations with Respect to Transfers and Exchanges of Notes .

(i) To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(i) No Obligation of the Trustee.

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the holders and all payments to be made to the holders under the Notes shall be given or made only to the registered holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

Appendix A-13

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Appendix A-14

EXHIBIT A

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]

BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

[Restricted Notes Legend]

Exhibit A-1

RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

[Restricted Notes Legend]

[Definitive Notes Legend]

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[FORM OF INITIAL NOTE]

EVEREST ACQUISITION LLC

EVEREST ACQUISITION FINANCE INC.

No. [ ]

144A CUSIP No. 29977H AC4

144A ISIN No. US29977HAC43

REG S CUSIP No. U2993N AB7

REG S ISIN No. USU2993NAB74

$[ ]

6.875% Senior Secured Note due 2019

EVEREST ACQUISITION LLC, a Delaware limited liability company, and EVEREST ACQUISITION FINANCE INC., a Delaware corporation, jointly and severally, promise to pay to Cede & Co., or registered assigns, the principal sum set forth on the Schedule of Increases or Decreases in Global Note attached hereto on May 1, 2019.

Interest Payment Dates: May 1 and November 1, commencing November 1, 2012

Record Dates: April 15 and October 15

Additional provisions of this Note are set forth on the other side of this Note.

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IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

	EVEREST ACQUISITION LLC


	By:
			Name:
			Title:

	EVEREST ACQUISITION FINANCE INC.


	By:
		Name:
		Title:

Dated:

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST, NATIONAL ASSOCIATION
	as Trustee, certifies that this is
	one of the Notes
	referred to in the Indenture.

By:
	Authorized Signatory

Dated:

*/ If the Note is to be issued in global form, add the Global Notes Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL NOTES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

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[FORM OF REVERSE SIDE OF INITIAL NOTE]

6.875% Senior Secured Note Due 2019

1. Interest

EVEREST ACQUISITION LLC, a Delaware limited liability company (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called “ Holdings ”), and EVEREST ACQUISITION FINANCE INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “ Co-Issuer ” and, together with Holdings, the “ Issuer ”), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above; provided , however , that if a Registration Default (as defined in the Registration Rights Agreement) occurs, Additional Interest will accrue on this Note at a rate of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which such Registration Default occurs up to a maximum Additional Interest rate of 1.00%) from and including the date on which any such Registration Default shall occur to but excluding the earlier of (x) the date on which all Registration Defaults have been cured and (y) the date which is two years from the Issue Date. The Issuers shall pay interest semiannually on May 1 and November 1 of each year (each an “ Interest Payment Date ”), commencing November 1, 2012. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 24, 2012, until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

2. Method of Payment

The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on April 15 or October 15 (each a “ Record Date ”) immediately preceding the Interest Payment Date even if Notes are canceled after the Record Date and on or before the Interest Payment Date (whether or not a Business Day). Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary. The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided , however , that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such

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account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

Initially, Wilmington Trust, National Association, as trustee under the Indenture (the “ Trustee ”), will act as Paying Agent and Registrar. The Issuers may appoint and change any Paying Agent or Registrar without notice. The Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

4. Indenture

The Issuers issued the Notes under an Indenture dated as of April 24, 2012 (the “ Indenture ”), among the Issuers, the Subsidiary Guarantors and the Trustee. Capitalized terms used herein are used as defined in the Indenture, unless otherwise indicated. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “ TIA ”). The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

The Notes are senior secured obligations of the Issuers. This Note is one of the Initial Notes referred to in the Indenture. The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed the Subsidiary Guaranteed Obligations pursuant to the terms of the Indenture and any Subsidiary Guarantor that executes a Subsidiary Guarantee will unconditionally guarantee the Subsidiary Guaranteed Obligations, which such Subsidiary Guarantees shall be on a senior secured basis from the Escrow Release Date, pursuant to the terms of the Indenture.

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5. Redemption

On or after May 1, 2015 the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period commencing on May 1 of the years set forth below:

Period	Redemption Price
2015	103.438	%
2016	101.719	%
2017 and thereafter	100.000	%

In addition, prior to May 1, 2015, the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

Notwithstanding the foregoing, at any time and from time to time on or prior to May 1, 2015, the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or are used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 106.875%, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided , however , that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) must remain outstanding after each such redemption; provided , further , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

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Mandatory Redemption Price no later than the fifth (5th) Business Day following the Escrow Date of Determination or the date that the Escrow Property is released by the Escrow Agent to the Trustee, if later (such date, the “ Special Mandatory Redemption Date ”) and (z) such other items set forth in Section 3.05(a) of the Indenture. On the Special Mandatory Redemption Date, the Issuers shall be required to redeem the Notes at the Special Mandatory Redemption Price.

6. Mandatory Redemption

Except as set forth in Paragraph 5 of this Note, the Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. Notice of Redemption

Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date (or at least three (3) Business Days in advance in the case of a Special Mandatory Redemption pursuant to Paragraph 5 of this Note), to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of the Depository Trust Company (“ DTC ”), except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

8. Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales

Upon the occurrence of a Change of Control, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.

In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.

9. Ranking and Collateral

From the Issue Date to the Escrow Release Date, these Notes will be secured by a first-priority security interest in the Escrow Account pursuant to the Escrow Agreement. From the Escrow Release Date, these Notes and the Subsidiary Guarantees will be secured by a first-priority security interest in the Term/Notes Priority Collateral and a second-priority security interest in the RBL Priority Collateral pursuant to certain Security Documents. The Liens upon any and all Collateral are, to the extent and in the manner provided in the Intercreditor Agreements, subordinate in ranking to all present and future Liens securing First-Priority Lien

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Obligations and will be of equal ranking with all present and future Liens securing Second-Priority Lien Obligations as set forth in the Intercreditor Agreements.

10. Denominations; Transfer; Exchange

The Notes are in registered form, without coupons, in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed.

11. Persons Deemed Owners

The registered holder of this Note shall be treated as the owner of it for all purposes.

12. Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuers at their written request unless an abandoned property law designates another Person. After any such payment, the holders entitled to the money must look to the Issuers for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

13. Discharge and Defeasance

Subject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.

14. Amendment; Waiver

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Guarantor under the Indenture, its Subsidiary Guarantee and the Security Documents; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code; (v) to conform the text of the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or any Intercreditor Agreement to any provision of the “Description of Senior Secured Notes” in the Offering Memorandum to the extent that such provision of the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or such Intercreditor Agreement was intended by the Issuers to be a verbatim recitation of a provision of the “Description of Senior Secured Notes” in the Offering Memorandum; (vi) to add a Subsidiary Guarantee with respect to the Notes; (vii) to add Collateral to secure the Notes; (viii) to release Collateral or a Subsidiary Guarantee as permitted by the Indenture, the Security Documents and the Intercreditor Agreements; (ix) to add additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or other Junior Lien Obligation, so long as such obligations are not prohibited by the Indenture or the Security Documents; (x) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (xi) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA; (xii) to make any change that does not adversely affect the rights of any holder; or (xiii) to make certain changes to the Indenture to provide for the issuance of Additional Notes.

In addition, the Intercreditor Agreements may be amended without the consent of any holder or the Trustee in connection with the permitted entry into the Intercreditor Agreements of any class of additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or Junior Lien Obligations to effectuate such entry into the Intercreditor Agreements and to make the lien of such class equal and ratable with, as applicable, the lien of the First-Priority Lien Obligations, the Other Second-Lien Obligations or the Junior Lien Obligations.

15. Defaults and Remedies

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuers occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

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complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given the Trustee notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.

16. Trustee Dealings with the Issuers

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.

17. No Recourse Against Others

No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any Subsidiary Guarantor or any direct or indirect parent companies, as such, will have any liability for any obligations of an Issuer or any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability.

18. Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.

19. Abbreviations

Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

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20. Holders Compliance with Registration Rights Agreement

Each holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the holders with respect to a registration and the indemnification of the Issuers to the extent provided therein.

21. Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

22. CUSIP Numbers; ISINs

The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:

Your Signature:

Sign exactly as your name appears on the other side of this Note.

Signature Guarantee:

Date:

Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee			Signature of Signature Guarantee

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.

The undersigned (check one box below):

o has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depository a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above);

o has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring while this Note is still a Transfer Restricted Definitive Note or a Transfer Restricted Global Note, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

(1)	o	to the Issuers; or

(2)	o	to the Registrar for registration in the name of the holder, without transfer; or

(3)	o	pursuant to an effective registration statement under the Securities Act of 1933; or

(4)	o	inside the United States to a “ qualified institutional buyer ” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or

(5)	o	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or

(6)	o	to an institutional “ accredited investor ” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or

(7)	o	pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933.

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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers or the Trustee have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

Date:

Your Signature:

Sign exactly as your name appears on the other side of this Note.

Signature Guarantee:

Date:

Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee			Signature of Signature Guarantee

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TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “ qualified institutional buyer ” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Date:
			NOTICE: To be executed by an executive officer

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[TO BE ATTACHED TO GLOBAL NOTES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The initial principal amount of this Global Note is $ . The following increases or decreases in this Global Note have been made:

Date of Exchange	Amount of decrease in Principal Amount of this Global Note	Amount of increase in Principal Amount of this Global Note	Principal amount of this Global Note following such decrease or increase	Signature of authorized signatory of Trustee or Notes Custodian

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:

Asset Sale o

Change of Control o

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):

Date:			Your Signature:
				(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee

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EXHIBIT B

[FORM OF FACE OF EXCHANGE NOTE*/]

*/ If the Note is to be issued in global form add the Global Notes Legend from Exhibit A and the attachment from such Exhibit A captioned “[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

B-1

[FORM OF EXCHANGE NOTE]

EVEREST ACQUISITION LLC

EVEREST ACQUISITION FINANCE INC.

No. [ ]	CUSIP No. 29977H AD2

	ISIN No. US29977HAD26

	$[ ]

6.875% Senior Secured Note due 2019

Interest Payment Dates: May 1 and November 1, commencing November 1, 2012

Record Dates: April 15 and October 15

Additional provisions of this Note are set forth on the other side of this Note.

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IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

	EVEREST ACQUISITION LLC


	By:
		Name:
		Title:


	EVEREST ACQUISITION FINANCE INC.


	By:
		Name:
		Title:


Dated:

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST, NATIONAL ASSOCIATION
	as Trustee, certifies that this is one of the Notes referred to in the Indenture.

By:
	Authorized Signatory

Dated:

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[FORM OF REVERSE SIDE OF EXCHANGE NOTE]

6.875% Senior Secured Note Due 2019

1. Interest

EVEREST ACQUISITION LLC, a Delaware limited liability company (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called “ Holdings ”), and EVEREST ACQUISITION FINANCE INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “ Co-Issuer ” and, together with Holdings, the “ Issuer ”), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above[; provided , however , that if a Registration Default (as defined in the Registration Rights Agreement) occurs, Additional Interest will accrue on this Note at a rate of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which such Registration Default occurs up to a maximum Additional Interest rate of 1.00%) from and including the date on which any such Registration Default shall occur to but excluding the earlier of (x) the date on which all Registration Defaults have been cured and (y) the date which is two years from the Issue Date](1). The Issuers shall pay interest semiannually on May 1 and November 1 of each year (each an “ Interest Payment Date ”), commencing November 1, 2012. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 24, 2012, until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

2. Method of Payment

(1) Insert if at the date of issuance of the Exchange Note any Registration Default has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs.

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provided , however , that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

4. Indenture

The Notes are senior secured obligations of the Issuers. This Note is one of the Initial Notes referred to in the Indenture. The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of the Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

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Guarantees shall be on a senior secured basis from the Escrow Release Date, pursuant to the terms of the Indenture.

5. Redemption

Period	Redemption Price
2015	103.438	%
2016	101.719	%
2017 and thereafter	100.000	%

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In the event that the Escrow Condition has not been satisfied on or prior to the Outside Date or Holdings determines in its sole discretion at any time prior to the Outside Date that the Escrow Conditions cannot be satisfied on or prior to the Outside Date (such earlier date, the “ Escrow Date of Determination ”), the Issuers shall promptly send a notice of redemption to holders of the Notes stating (x) that an Escrow Date of Determination has occurred, (y) the Special Mandatory Redemption Price and that the Notes will be redeemed at the Special Mandatory Redemption Price no later than the fifth (5th) Business Day following the Escrow Date of Determination or the date that the Escrow Property is released by the Escrow Agent to the Trustee, if later (such date, the “ Special Mandatory Redemption Date ”) and (z) such other items set forth in Section 3.05(a) of the Indenture. On the Special Mandatory Redemption Date, the Issuers shall be required to redeem the Notes at the Special Mandatory Redemption Price.

6. Mandatory Redemption

Except as set forth in Paragraph 5 of this Note, the Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. Notice of Redemption

Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date (or three (3) Business Days in advance in the case of a Special Mandatory Redemption pursuant to Paragraph 5 of this Note), to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of the Depository Trust Company (“ DTC ”), except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

8. Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales

In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.

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9. Ranking and Collateral

10. Denominations; Transfer; Exchange

11. Persons Deemed Owners

The registered holder of this Note shall be treated as the owner of it for all purposes.

12. Unclaimed Money

13. Discharge and Defeasance

14. Amendment; Waiver

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principal amount of the outstanding Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuers and the Trustee may amend the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or the Intercreditor Agreements (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under the Indenture and the Notes; (iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the Indenture, its Subsidiary Guarantee and the Security Documents; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code; (v) to conform the text of the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or any Intercreditor Agreement to any provision of the “Description of Senior Secured Notes” in the Offering Memorandum to the extent that such provision of the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents or such Intercreditor Agreement was intended by the Issuers to be a verbatim recitation of a provision of the “Description of Senior Secured Notes” in the Offering Memorandum; (vi) to add a Subsidiary Guarantee with respect to the Notes; (vii) to add Collateral to secure the Notes; (viii) to release Collateral or a Subsidiary Guarantee as permitted by the Indenture, the Security Documents and the Intercreditor Agreements; (ix) to add additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or other Junior Lien Obligation, so long as such obligations are not prohibited by the Indenture or the Security Documents; (x) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (xi) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA; (xii) to make any change that does not adversely affect the rights of any holder; or (xiii) to make certain changes to the Indenture to provide for the issuance of Additional Notes.

15. Defaults and Remedies

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amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given the Trustee notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.

16. Trustee Dealings with the Issuers

17. No Recourse Against Others

18. Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.

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19. Abbreviations

20. Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

21. CUSIP Numbers; ISINs

The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:

Your Signature:

Sign exactly as your name appears on the other side of this Note.

Signature Guarantee:

Date:
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee			Signature of Signature Guarantee

B-13

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:

Asset Sale o

Change of Control o

$


Date:	Your Signature:
		(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee

B-14

EXHIBIT C

[FORM OF TRANSFEREE LETTER OF REPRESENTATION]

TRANSFEREE LETTER OF REPRESENTATION

[EVEREST ACQUISITION LLC]

[EVEREST ACQUISITION FINANCE INC.]

c/o Wilmington Trust, National Association

Corporate Client Services

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $[ ] principal amount of the 6.875% Senior Secured Notes due 2019 (the “ Notes ”) of [EVEREST ACQUISITION LLC] and [EVEREST ACQUISITION FINANCE INC.] (collectively with their successors and assigns, the “ Issuers ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:

Address:

Taxpayer ID Number:

The undersigned represents and warrants to you that:

1. We are an institutional “ accredited investor ” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “ accredited investor ” at least $100,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is two years after the later of the date of original issue and the last date on which either of the Issuers or any affiliate of such Issuers was the owner of such Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) in the United States to a person whom we reasonably

C-1

believe is a qualified institutional buyer (as defined in rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (b) outside the United States in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if applicable) or (d) pursuant to an effective registration statement under the Securities Act, in each of cases (a) through (d) in accordance with any applicable securities laws of any state of the United States. In addition, we will, and each subsequent holder is required to, notify any purchaser of the Note evidenced hereby of the resale restrictions set forth above. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made to an institutional “ accredited investor ” prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuers and the Trustee, which shall provide, among other things, that the transferee is an institutional “ accredited investor ” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuers and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause 1(b), 1(c) or 1(d) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuers and the Trustee.

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EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE]

SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”) dated as of [DATE], among [SUBSIDIARY GUARANTOR] (the “ New Subsidiary Guarantor ”), a subsidiary of EVEREST ACQUISITION LLC (or its successor), a Delaware limited liability company (“ Holdings ”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “ Trustee ”).

W I T N E S S E T H :

WHEREAS Holdings, Everest Acquisition Finance Inc. (or its successor), a Delaware corporation (the “ Co-Issuer ” and, together with Holdings, the “ Issuers ”), certain Subsidiary Guarantors and the Trustee have heretofore executed an indenture, dated as of April 24, 2012 (as amended, supplemented or otherwise modified, the “ Indenture ”), providing for the issuance of the Issuers’ 6.875% Senior Secured Notes due 2019 ( the “ Notes ”), initially in the aggregate principal amount of $750,000,000;

WHEREAS Sections 4.11 and 12.07 of the Indenture provide that under certain circumstances Holdings is required to cause the New Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee all the Issuers’ Obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and

WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

1. Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “ holders ” in this Supplemental Indenture shall refer to the term “ holders ” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words “ herein ,” “ hereof ” and “ hereby ” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.

2. Agreement to Guarantee . The New Subsidiary Guarantor hereby agrees, jointly and severally with all existing Subsidiary Guarantors (if any), to unconditionally guarantee the Issuers’ Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable

D-1

provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.

3. Notices . All notices or other communications to the New Subsidiary Guarantor shall be given as provided in Section 14.02 of the Indenture.

4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

5. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

7. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.

[ Remainder of page intentionally left blank. ]

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

	[EVEREST ACQUISITION LLC]


	By:
		Name:
		Title:


	[EVEREST ACQUISITION FINANCE INC.]


	By:
		Name:
		Title:


	[ NEW SUBSIDIARY GUARANTOR ] , as a Guarantor


	By:
		Name: [ ]
		Title: [ ]


	WILMINGTON TRUST, NATIONAL ASSOCIATION , not in its individual capacity, but solely as Trustee


	By:
		Name: [ ]
		Title: [ ]

D-3

Exhibit 4.2

EXECUTION VERSION

EVEREST ACQUISITION LLC

and

EVEREST ACQUISITION FINANCE INC.

as Issuers

and the Subsidiary Guarantors party hereto from time to time

9.375% Senior Notes due 2020

INDENTURE

Dated as of April 24, 2012

and

Wilmington Trust, National Association

as Trustee

TABLE OF CONTENTS

		Page
ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01	Definitions	1
SECTION 1.02	Other Definitions	45
SECTION 1.03	Rules of Construction	46

ARTICLE II

THE NOTES

SECTION 2.01	Amount of Notes	47
SECTION 2.02	Form and Dating	48
SECTION 2.03	Execution and Authentication	48
SECTION 2.04	Registrar and Paying Agent	49
SECTION 2.05	Paying Agent to Hold Money in Trust	50
SECTION 2.06	Holder Lists	50
SECTION 2.07	Transfer and Exchange	50
SECTION 2.08	Replacement Notes	51
SECTION 2.09	Outstanding Notes	52
SECTION 2.10	Cancellation	52
SECTION 2.11	Defaulted Interest	52
SECTION 2.12	CUSIP Numbers, ISINs, Etc.	52
SECTION 2.13	Calculation of Principal Amount of Notes	53

ARTICLE III

REDEMPTION

SECTION 3.01	Redemption	53
SECTION 3.02	Applicability of Article	53
SECTION 3.03	Notices to Trustee	53
SECTION 3.04	Selection of Notes to Be Redeemed	54
SECTION 3.05	Notice of Optional Redemption	54
SECTION 3.06	Effect of Notice of Redemption	55
SECTION 3.07	Deposit of Redemption Price	55
SECTION 3.08	Notes Redeemed in Part	55

ARTICLE IV

COVENANTS

SECTION 4.01	Payment of Notes	56
SECTION 4.02	Reports and Other Information	56
SECTION 4.03	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	58
SECTION 4.04	Limitation on Restricted Payments	65
SECTION 4.05	Dividend and Other Payment Restrictions Affecting Subsidiaries	72

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SECTION 4.06	Asset Sales	74
SECTION 4.07	Transactions with Affiliates	77
SECTION 4.08	Change of Control	80
SECTION 4.09	Compliance Certificate	82
SECTION 4.10	Further Instruments and Acts	82
SECTION 4.11	Future Subsidiary Guarantors	82
SECTION 4.12	Liens	83
SECTION 4.13	[Intentionally Omitted]	83
SECTION 4.14	Maintenance of Office or Agency	84
SECTION 4.15	Covenant Suspension	84
ARTICLE V

SUCCESSOR COMPANY

SECTION 5.01	When Issuers May Merge or Transfer Assets	85

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01	Events of Default	87
SECTION 6.02	Acceleration	89
SECTION 6.03	Other Remedies	90
SECTION 6.04	Waiver of Past Defaults	90
SECTION 6.05	Control by Majority	90
SECTION 6.06	Limitation on Suits	90
SECTION 6.07	Rights of the Holders to Receive Payment	91
SECTION 6.08	Collection Suit by Trustee	91
SECTION 6.09	Trustee May File Proofs of Claim	91
SECTION 6.10	Priorities	92
SECTION 6.11	Undertaking for Costs	92
SECTION 6.12	Waiver of Stay or Extension Laws	92

ARTICLE VII

TRUSTEE

SECTION 7.01	Duties of Trustee	92
SECTION 7.02	Rights of Trustee	94
SECTION 7.03	Individual Rights of Trustee	95
SECTION 7.04	Trustee’s Disclaimer	96
SECTION 7.05	Notice of Defaults	96
SECTION 7.06	Reports by Trustee to the Holders	96
SECTION 7.07	Compensation and Indemnity	96
SECTION 7.08	Replacement of Trustee	98
SECTION 7.09	Successor Trustee by Merger	98
SECTION 7.10	Eligibility; Disqualification	99

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SECTION 7.11	Preferential Collection of Claims Against the Issuers	99

ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01	Discharge of Liability on Notes; Defeasance	99
SECTION 8.02	Conditions to Defeasance	100
SECTION 8.03	Application of Trust Money	102
SECTION 8.04	Repayment to Issuer	102
SECTION 8.05	Indemnity for U.S. Government Obligations	102
SECTION 8.06	Reinstatement	102

ARTICLE IX

AMENDMENTS AND WAIVERS

SECTION 9.01	Without Consent of the Holders	103
SECTION 9.02	With Consent of the Holders	104
SECTION 9.03	Revocation and Effect of Consents and Waivers	105
SECTION 9.04	Notation on or Exchange of Notes	105
SECTION 9.05	Trustee to Sign Amendments	105
SECTION 9.06	Additional Voting Terms; Calculation of Principal Amount	106
SECTION 9.07	Compliance with the Trust Indenture Act	106

ARTICLE X

[INTENTIONALLY OMITTED]

ARTICLE XI

[INTENTIONALLY OMITTED]

ARTICLE XII

GUARANTEE

SECTION 12.01	Guarantee	106
SECTION 12.02	Limitation on Liability	109
SECTION 12.03	[Intentionally Omitted]	109
SECTION 12.04	Successors and Assigns	110
SECTION 12.05	No Waiver	110
SECTION 12.06	Modification	110
SECTION 12.07	Execution of Supplemental Indenture for Future Guarantors	110
SECTION 12.08	Non-Impairment	110

iii

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ARTICLE XIII

ESCROW ARRANGEMENTS

SECTION 13.01	Escrow Account	110
SECTION 13.02	Special Mandatory Redemption	111
SECTION 13.03	Release of Escrow Property	111

ARTICLE XIV

MISCELLANEOUS

SECTION 14.01	Trust Indenture Act Controls	111
SECTION 14.02	Notices	111
SECTION 14.03	Communication by the Holders with Other Holders	113
SECTION 14.04	Certificate and Opinion as to Conditions Precedent	113
SECTION 14.05	Statements Required in Certificate or Opinion	113
SECTION 14.06	When Notes Disregarded	113
SECTION 14.07	Rules by Trustee, Paying Agent and Registrar	114
SECTION 14.08	Legal Holidays	114
SECTION 14.09	GOVERNING LAW	114
SECTION 14.10	No Recourse Against Others	114
SECTION 14.11	Successors	114
SECTION 14.12	Multiple Originals	114
SECTION 14.13	Table of Contents; Headings	114
SECTION 14.14	Indenture Controls	114
SECTION 14.15	Severability	114
SECTION 14.16	Waiver of Jury Trial	115

Appendix A	— Provisions Relating to Initial Notes and Additional Notes

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EXHIBIT INDEX

Exhibit A	–	Form of Initial Note
Exhibit B	–	Form of Exchange Note
Exhibit C	–	Form of Transferee Letter of Representation
Exhibit D	–	Form of Supplemental Indenture

CROSS-REFERENCE TABLE

TIA		Indenture
Section		Section
310	(a)(1)	7.10
	(a)(2)	7.10
	(a)(3)	7.10
	(a)(4)	7.10
	(b)	7.08; 7.10
	(c)	N.A.
311	(a)	7.11
	(b)	7.11
	(c)	N.A.
312	(a)	2.06
	(b)	14.03
	(c)	14.03
313	(a)	7.06
	(b)(1)	7.06
	(b)(2)	7.06
	(c)	7.06
	(d)	7.06
314	(a)	4.02; 4.09
	(b)	N.A.
	(c)(1)	14.04
	(c)(2)	14.04
	(c)(3)	N.A.
	(d)	N.A.
	(e)	14.05
	(f)	4.10
315	(a)	7.01
	(b)	7.05
	(c)	7.01
	(d)	7.01
	(e)	6.11
316	(a) (last sentence)	14.06
	(a)(1)(A)	6.05
	(a)(1)(B)	6.04
	(a)(2)	N.A.
	(b)	6.07
317	(a)(1)	6.08
	(a)(2)	6.09
	(b)	2.05
318	(a)	14.01

N.A. Means Not Applicable.

Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $2,000,000,000 aggregate principal amount of the Issuers’ 9.375% Senior Notes due 2020 issued on the date hereof (the “ Initial Notes ”), (ii) Exchange Notes issued in exchange for the Initial Notes and (iii) Additional Notes issued from time to time (together with the Initial Notes and the Exchange Notes, the “ Notes ”):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions .

“ Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“ Acquisition ” means the purchase by EPE Acquisition, LLC of the Acquired Business.

agreements or instruments contemplated thereby, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“ Additional Assets ” means:

(1) any properties or assets used or useful in the Oil and Gas Business;

(2) capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;

(3) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or

(4) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

“ Additional Notes ” means the Notes issued under the terms of this Indenture subsequent to the Issue Date.

“ Adjusted Consolidated Net Tangible Assets ” means (without duplication), as of the date of determination, the remainder of:

(a) the sum of:

(iii) the Net Working Capital on a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements;

(v) the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and

(b) the sum of:

(i) any amount included in clauses (a)(i) through (a)(v) above that is attributable to minority interests;

(ii) any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings’ latest audited consolidated financial statements;

“ Applicable Premium ” means, with respect to any Note on any applicable redemption date, as determined by the Issuers, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

(a) the present value at such redemption date of (i) the redemption price of the Note, at May 1, 2016 (such redemption price being set forth in Paragraph 5 of the Note) plus (ii) all required interest payments due on the Note through May 1, 2016 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

“ Asset Sale ” means:

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;

(d) any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;

(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;

(g) foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;

(o) dispositions in connection with Permitted Liens;

(p) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

(q) the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;

(s) any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(t) a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;

(w) a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

“ Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“ Cash Equivalents ” means:

(5) commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least “A-1 or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

(7) Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2 or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ Change of Control ” means the occurrence of either of the following:

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

(4) interest income for such period.

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of “Cumulative Credit,” the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(15) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;

(18) Capitalized Software Expenditures shall be excluded; and

(19) Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

“ Consolidated Total Indebtedness ” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers’ acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

“ Cumulative Credit ” means the sum of (without duplication):

accounting period, the “ Reference Period ”) (or in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(4) 100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Escrow Release Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

(B) the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or

“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“ Designated Preferred Stock ” means Preferred Stock of Holdings or any direct or indirect parent of Holdings (other than Disqualified Stock), that is issued for cash (other than to Holdings or any of its Subsidiaries or an employee stock ownership plan or trust established by Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers’ Certificate, on the issuance date thereof.

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

“ Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

(1) Consolidated Taxes; plus

(2) Fixed Charges; plus

(3) Consolidated Depreciation, Depletion and Amortization Expense; plus

(4) Consolidated Non-Cash Charges; plus

(7) the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus

(9) the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by Section 4.07; plus

(12) exploration expenses or costs (to the extent Holdings adopts the “successful efforts” method), and

less , without duplication, to the extent the same increased Consolidated Net Income,

(1) public offerings with respect to Holdings’ or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of Holdings; and

(3) any such public or private sale that constitutes an Excluded Contribution.

“ Escrow Agent ” means Wilmington Trust, National Association, together with its successors in such capacity.

“ Escrow Condition ” means the delivery of an Officers’ Certificate instructing the Escrow Agent to release the Escrow Property from the Escrow Account and certifying that, prior to or concurrently with the release of the Escrow Property from the Escrow Account, (i) the Acquisition shall have been consummated and the existing reserve-based credit facility of the Acquired Business retired in all material respects as described under “Summary—The Transactions” in the Offering Memorandum, (ii) borrowings under the Term Loan Facility shall have been made, (iii) investments in EPE Acquisition, LLC’s equity by funds affiliated with the Sponsors and other investors shall have been made and (iv) borrowings under the Credit Agreement shall have been made, in the case of clauses (ii), (iii) and (iv) above in an aggregate amount sufficient, when taken together with the net proceeds of the Notes and the Secured Notes, to fund the Acquisition and to pay related fees and expenses, and (v) the Subsidiary Guarantors that have on such date guaranteed the Credit Agreement shall have, by supplemental indenture effective upon the Escrow Release Date, become parties to this Indenture as Subsidiary Guarantors.

“ Escrow Period ” means the period beginning on the Issue Date and ending on the Escrow Release Date.

“ Escrow Release Date ” means the date upon which the Escrow Condition is satisfied.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Exchange Offer Registration Statement ” means the registration statement filed with the SEC in connection with the Registered Exchange Offer.

(1) contributions to its common equity capital, and

or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.

“ Farm-Out Agreement ” means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.

“ Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “ consolidated ” with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any

Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

“ Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

“ holder ” or “ noteholder ” means the Person in whose name a Note is registered on the Registrar’s books.

“ Holdings ” means Everest Acquisition LLC (to be renamed as EP Energy LLC on or after the Escrow Release Date), together with its successors or assigns.

“ Indebtedness ” means, with respect to any Person:

liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

“ Indenture ” means this Indenture as amended or supplemented from time to time.

“ Interest Payment Date ” has the meaning set forth in Exhibit A hereto.

“ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“ Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),

“ Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

(a) Holdings’ “Investment” in such Subsidiary at the time of such redesignation less

“ Issue Date ” means April 24, 2012.

“ Management Group ” means the group consisting of the directors, executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as the case may be, on the Issue Date together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of Holdings or any direct or indirect parent of Holdings, as applicable, was approved by a vote of a majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of Holdings or any direct or indirect parent of Holdings, as applicable.

“ Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“ Net Working Capital ” means (a) all current assets of Holdings and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business less (b) all current liabilities of Holdings and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of Holdings prepared in accordance with GAAP.

“ Notes Obligations ” means Obligations in respect of the Notes and this Indenture, including, for the avoidance of doubt, Obligations in respect of Exchange Notes and guarantees thereof.

“ NYMEX ” means the New York Mercantile Exchange.

“ Offering Memorandum ” means the offering memorandum, dated April 10, 2012, as supplemented or amended from time to time, relating to the issuance of the Initial Notes.

“ Oil and Gas Business ” means:

(4) any business relating to oil field sales and service; and

(5) any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

“ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

“ Outside Date ” means October 31, 2012.

(3) Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

“ Permitted Investments ” means:

(1) any Investment in Holdings or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;

(6) advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $25.0 million at any one time outstanding;

(8) Hedging Obligations permitted under Section 4.03(b)(x);

(10) additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $350.0 million and (y) 5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(17) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables

Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;

(18) any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivables Financing;

(22) Permitted Business Investments.

“ Permitted Liens ” means, with respect to any Person:

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

(6) (A) Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.03;

(B) Liens securing Indebtedness Incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be Incurred pursuant to Section 4.03(b)(i);

(D) Liens securing Indebtedness permitted to be Incurred pursuant to clause (ii)(B), (iv), (xii), (xvi) or (xx) of Section 4.03(b) ( provided that in the case of clause (xx), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor).

(7) Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement, the holders of the Secured Notes or the lenders under the Term Loan Facility);

pursuant to Section 4.03(b)(xvi)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens (other than Liens to secure Indebtedness Incurred pursuant to Section 4.03(b)(xvi)) may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

(13) leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;

(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;

(15) Liens in favor of Holdings or any Subsidiary Guarantor;

(16) Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

original Lien ( plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B);

(21) Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings’ or such Restricted Subsidiary’s client at which such equipment is located;

(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(24) Liens Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(26) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(29) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;

(30) Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;

(31) Liens in respect of Production Payments and Reserve Sales;

(33) Liens on pipelines or pipeline facilities that arise by operation of law; and

“ Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers.

“ Qualified Receivables Financing ” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and

The grant of a security interest in any accounts receivable of Holdings or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Refinancing Indebtedness with respect to the Notes shall not be deemed a Qualified Receivables Financing.

“ RBL Facility ” means the credit agreement to be entered into on the Escrow Release Date among Holdings, the guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or other lenders), restructured, repaid, refunded, refinanced or otherwise modified from time to time pursuant to any amendment thereto or pursuant to a new loan agreement with other lenders, governed by a borrowing base set by the lenders, extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or under any successor or replacement agreement or increasing the amount loaned thereunder or altering the maturity thereof.

“ Receivables Financing ” means any transaction or series of transactions that may be entered into by Holdings or any of its Subsidiaries pursuant to which Holdings or any of its

Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Holdings or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Holdings or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Holdings or any such Subsidiary in connection with such accounts receivable.

(a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

(c) to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors of Holdings shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

“ Record Date ” has the meaning specified in Exhibit A hereto.

“ Restricted Investment ” means an Investment other than a Permitted Investment.

“ S&P ” means Standard & Poor’s Ratings Group or any successor to the rating agency business thereof.

“ SEC ” means the Securities and Exchange Commission.

“ Secured Indebtedness ” means any Consolidated Total Indebtedness secured by a Lien.

“ Secured Notes ” means the Issuers’ 6.875% Senior Secured Notes due 2019 issued on the Issue Date and including any exchange notes issued in exchange therefor pursuant to a registration rights agreement dated as of the Issue Date among the Issuers and the Initial Purchasers.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Special Mandatory Redemption Price ” means an amount of cash equal to $2,000,000,000, plus interest accrued on $2,000,000,000 from the Issue Date to, but excluding, the Special Mandatory Redemption Date, calculated using a rate of 9.375% per annum.

“ Sponsor Management Agreement ” means the management agreement between certain of the management companies associated with the Sponsors, EP Energy Holding Company and EPE Acquisition, LLC.

“ Subordinated Indebtedness ” means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.

such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“ Subsidiary Guarantee ” means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary Guarantor in accordance with the provisions of this Indenture.

“ Suspension Period ” means the period of time between a Covenant Suspension Event and the related Reversion Date.

“ Tax Distributions ” means any distributions described in Section 4.04(b)(xii).

“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

“ Total Assets ” means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any amortization of the amount of intangible assets since December 31, 2011, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.

“ Transactions ” means the transactions described under “Summary—The Transactions” in the Offering Memorandum.

“ Treasury Rate ” means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to May 1, 2016; provided , however , that if the period from such redemption date to May 1,

2016, as applicable, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“ Trust Officer ” means:

(2) who shall have direct responsibility for the administration of this Indenture.

“ Uniform Commercial Code ” or “ UCC ” means the New York Uniform Commercial Code as in effect from time to time.

“ Unrestricted Subsidiary ” means:

(1) any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary;

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.

Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:

(y) no Event of Default shall have occurred and be continuing.

Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“ U.S. Government Obligations ” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

“ Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“ Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

SECTION 1.02 Other Definitions .

Term		Section
$		1.03(j)
Additional Interest		Appendix A
Affiliate Transaction		4.07(a)
Agent Members		Appendix A
Asset Sale Offer		4.06(b)(iii)
Bankruptcy Law		6.01
Change of Control Offer		4.08(b)
Co-Issuer		Preamble
covenant defeasance option		8.01(b)
Covenant Suspension Event		4.15
Custodian		6.01
Definitive Note		Appendix A
Depository		Appendix A
Escrow Property		13.01
Event of Default		6.01
Excess Proceeds		4.06(b)(iii)
Global Notes		Appendix A
Global Notes Legend		Appendix A
Holdings		Preamble
IAI		Appendix A
Increased Amount		4.12(d)
Initial Notes		Preamble
Initial Purchasers		Appendix A
Issuers		Preamble
legal defeasance option		8.01(b)
Notes		Preamble
Notes Custodian		Appendix A
Notice of Default		6.01
Offer Period		4.06(d)
Paying Agent		2.04(a)
protected purchaser		2.08
QIB		Appendix A
Refinancing Indebtedness		4.03(b)(xv)
Refunding Capital Stock		4.04(b)(ii)
Registered Exchange Offer		Appendix A
Registrar		2.04(a)

Term		Section
Regulation S		Appendix A
Regulation S Global Notes		Appendix A
Regulation S Notes		Appendix A
Restricted Notes Legend		Appendix A
Restricted Payments		Section 4.04(a)
Restricted Period		Appendix A
Retired Capital Stock		4.04(b)(ii)
Reversion Date		4.15
Rule 144A		Appendix A
Rule 144A Global Notes		Appendix A
Rule 144A Notes		Appendix A
Rule 501		Appendix A
Second Commitment		4.06(b)(iii)
Shelf Registration Statement		Appendix A
Special Mandatory Redemption Date		Paragraph 5 of Exhibit A and Exhibit B
Subsidiary Guaranteed Obligations		12.01(a)
Successor Holdco		5.01(a)(i)
Successor Subsidiary Guarantor		5.01(b)(i)
Suspended Covenants		4.15
Transfer		5.01(b)(ii)
Transfer Restricted Definitive Notes		Appendix A
Transfer Restricted Global Notes		Appendix A
Transfer Restricted Notes		Appendix A
U.S. dollars		1.03(j)
Unrestricted Definitive Notes		Appendix A
Unrestricted Global Notes		Appendix A

SECTION 1.03 Rules of Construction . Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(d) “ including ” means including without limitation;

(e) words in the singular include the plural and words in the plural include the singular;

(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

ARTICLE II

THE NOTES

SECTION 2.01 Amount of Notes . The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $2,000,000,000.

The Issuers may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09, 3.06, 4.06(e), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or determined in the manner provided in an Officers’ Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:

(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;

(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue;

(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective

depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof; and

SECTION 2.02 Form and Dating . Provisions relating to the Initial Notes and the Exchange Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Exchange Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes issued other than as Transfer Restricted Notes and the Trustee’s certificate of authentication shall each be substantially in the form set forth in Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuers or any Subsidiary Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by the Depository in denominations of less than $2,000.

and (c) the Exchange Notes for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes exchanged pursuant thereto or otherwise pursuant to an effective registration statement under the Securities Act. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, the registered holder of each of the Notes and delivery instructions. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.

One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

SECTION 2.04 Registrar and Paying Agent .

(a) The Issuers shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the “ Registrar ”) and (ii) an office or agency where Notes may be presented for payment (the “ Paying Agent ”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrars. The term “ Paying Agent ” includes the Paying Agent and any additional paying agents. The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.

None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depository.

SECTION 2.08 Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “ protected purchaser ”) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee. If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment. The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including without limitation, attorneys’ fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and

payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.

Every replacement Note is an additional obligation of the Issuers.

SECTION 2.10 Cancellation . The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures. The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.

SECTION 2.12 CUSIP Numbers, ISINs, Etc . The Issuers in issuing the Notes may use CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use),

and the Trustee shall use any such CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee of any change in any such CUSIP numbers, ISINs and “Common Code” numbers.

ARTICLE III

REDEMPTION

thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.04.

SECTION 3.05 Notice of Optional Redemption .

Any such notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price and the amount of accrued interest to the redemption date;

(iii) the name and address of the Paying Agent;

(iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price, plus accrued and unpaid interest and Additional Interest, if any;

(vii) the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the Notes being redeemed; and

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice or printed on the Notes.

SECTION 3.07 Deposit of Redemption Price . With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if Holdings or a Wholly Owned Subsidiary of Holdings is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest and Additional Interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest, if any, on, the Notes to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.

ARTICLE IV

COVENANTS

SECTION 4.02 Reports and Other Information .

(iv) subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in the case of any such information, certificates or reports provided prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, to exceptions and exclusions consistent with the presentation of financial and other information in the Offering Memorandum (including with respect to any periodic reports provided prior to effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, the omission of financial information required by Rule 3-10 under Regulation S-X promulgated by the SEC (or any successor provision)). In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) or (iii), by posting such information to its website or on IntraLinks or any comparable online data system or website.

If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Holdings, then the annual and quarterly information required to be provided by clauses (i) and (ii) of this Section 4.02(a) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

(ii) any direct or indirect parent of Holdings is or becomes a guarantor of the Notes,

SECTION 4.03 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that any Restricted Subsidiary that is not a Subsidiary Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of an amount together with any Refinancing Indebtedness thereof pursuant to Section 4.03(b)(xv), equal to, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), the greater of $150.0 million and 2% of Adjusted Consolidated Net Tangible Assets of Holdings and the Restricted Subsidiaries at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).

(b) The limitations set forth in Section 4.03(a) shall not apply to:

(ii) the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by (A) the Notes and the Subsidiary Guarantees, as applicable (not including any Additional Notes but including Exchange Notes and related guarantees thereof) and (B) Indebtedness, including in respect of the Secured Notes and the Term Loan Facility (including any guarantees thereof), in an aggregate principal amount for this clause (ii)(B) outstanding at any time that, together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $1,500 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));

the greater of $350.0 million and 5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

(vii) Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);

with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);

(xii) Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $500.0 million and 7% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));

prior to or on the Escrow Release Date, in each case from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(xv) the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) of this Section 4.03(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

such date ( provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);

(1) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or

(2) the Fixed Charge Coverage Ratio of Holdings would be greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

understood that any Indebtedness Incurred pursuant to this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for the purposes of Section 4.03(a) from and after the first date on which such Restricted Subsidiary could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx));

For purposes of determining compliance with this Section 4.03:

amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.

SECTION 4.04 Limitation on Restricted Payments .

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(ii) purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;

(iv) make any Restricted Investment

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under Section 4.03(a); and

(b) The provisions of Section 4.04(a) shall not prohibit:

pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided , however , that the aggregate Restricted Payments made under this clause (iv) do not exceed $50.0 million in any calendar year (which shall increase to $100.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock), with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $75.0 million in any calendar year (which shall increase to $150.0 million subsequent to the consummation of an underwritten public Equity Offering of common stock); provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:

provided that Holdings may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year; and provided , further , that cancellation of Indebtedness owing to Holdings or any Restricted Subsidiary from any present or former employees, directors, officers or consultants of Holdings, any Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;

(vi) (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and

(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to Section 4.04(b)(ii);

(ix) Restricted Payments that are made with Excluded Contributions;

(xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;

Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group, and (B) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (A)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);

(xiii) any Restricted Payment, if applicable:

(C) in amounts required for any direct or indirect parent of Holdings to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;

(xiv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(xv) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

(xix) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by Holdings or any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of Holdings to enable it to make payments in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case to the extent permitted by Section 4.07;

last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(b) make loans or advances to Holdings or any Restricted Subsidiary; or

except in each case for such encumbrances or restrictions existing under or by reason of:

(1) (A) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Secured Notes (including any guarantee thereof) and the Term Loan Facility (including any guarantee thereof) and (B) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;