United States Department of the Interior

BUREAU OF OCEAN ENERGY MANAGEMENT Gulf of Mexico OCS Region

1201 ElmwoodPark Boulevard Nevv Orleans, LA 70123-2394

In Reply Refer To: MS GM 266A OCS-G 30124

March 27, 2017

Mr. Robert G. Gerdes ANKOR Energy LLC 1615 Poydras Street, Suite 1100 New Orleans, LA 70112

Dear Mr. Gerdes:

We acknowledge receipt of your new Outer Continental Shelf (OCS) Mineral Lessee's or Operator's Supplemental Bond No. 800008919 in the amount of $2,130,390 executed on January 9, 2017, with ANKOR Energy LLC as principal, and Atlantic Specialty Insurance Company as surety, conditioned to cover Right-of-Use and Easement OCS-G 30124.

This bond replaces your Outer Continental Shelf Mineral Lessee's or Operator's Supplemental Bond No. K09022995 in the amount of $1,060,000 executed on December 1, 2014, with ANKOR Energy LLC as principal, and Westchester Fire Insurance Company as surety, conditioned to cover Right-of-Use and Easement OCS-G 30124.

The period of liability of Outer Continental Shelf Mineral Lessee's and Operator's Bond No. K09022995 is considered to have terminated on January 9, 2017, the date the replacement bond was executed, and the bond is cancelled the same date without residual liability. The replacement bond, Bond No. 800008919, is considered to be effective January 9, 2017.

The replacement bond, Bond No. 800008919, conforms to the requirements of the leasing and operating regulations for submerged lands ofthe Outer Continental Shelf and has been placed in Right-of-Use and Easement file OCS-G 30124, maintained in the Leasing and Financial Responsibility Section.

Should you need further assistance, please contact Kathleen Lee at (504) 736-5774 or boemgomrfinancialassurance@boem.gov.

Sincerely,

cc: Ms. Stephanie Gunderson Atlantic Specialty Insurance Company 5847 San Felipe, Suite 320 Houston, TX 77057

c

Mr. John A. Martinez Westchester Fire Insurance Company 5847 San Felipe, Suite 320 Houston, TX 77057

ANNETTE EHRHORN-

WILLEMAN

DtgnaHy i ig twd by ANNETTE EHRHORN-

6.9. IM2.19I003M.1oai , l ' l *OOIOOMS3333. cn=ANNETTt EHRHORN-WILLEM AN Date: 2017.0*2707:53:0* ^OSW

Annette Ehrhom-Willeman, Acting Chief Leasing and Financial Responsibility Section Leasing and Plans

Sent Via Email To: Stephanie Gunderson at SGunderson@lockton.com, Brandt Prat at bprat@ankorenergv.com , John Martinez at iamartinez@lockton.com , Bob Gerdes at bgerdes@ankorenergv.com , Lydia McCombs at Lmccombs@ankorenergv.com .

January 12,2017

United States Department ofthe Interior Bureau of Ocean Energy Management GulfofMexico OCS Region Leasing and Financial Responsibility Section 1201 Elmwood Park Blvd., GM 266A New Orleans, Louisiana 70123

LEASING & FINANCIAL RESPONSIBILITY SECTION

RE: GM 365-D Order to Provide Financial Assurance RUE Number OCS-G 30124 mi

Ladies and Gentlemen:

With reference to BOEM Order to Provide Financial Assurance dated December 29, 2016, ANKOR Energ> LLC #03059 is providing Supplemental Bond No. 800008919, in the amount of $2,130,390.00, which covers 100% oft i ie required bonding for RUE No. OCS-G 30124, South Pass Area, All of Block 60. Please note that your Order dated December 29, 2016 requested that ANKOR Energy LLC provide additional security in the amount of $ 1,070,390.00. The security currently in place is covered by Bond No. K09022995. in the amount of $1,060,000.00. ANKOR changed their surety company for bonding for this property. Accordingly. ANKOR is providing Bond No. 800008919 to cover the entire Decommissioning Costs for said property.

Also, enclosed is a transmittal letter from Lockton requesting that the BOEM return Supplemental Bond No. K09022995. which is currently on file with the BOEM. The Atlantic Specialty Insurance Coinpany Bond No. 800008919 replaces and supersedes the Westchester Fire Insurance Company Bond No. K09022995.

I fyou have any questions regarding this matter, please do not hesitate to contact me at 1615 Poydras Street, Suite 1100. New Orleans, LA 70112, telephone number 504-596-3668 or email at hprat^ankorcnergv.coni.

Yours very truly,

ANKOR Energy LLC

randt J. Prat Land Manager

Enclosures

1615 Poydras Street, Suite 1100 • New Orleans, Louisiana 70112 • Phone: 504.596.3700 Fax: 504.596.3250

9)m LOCKTOtT

n i

JAN 12 2017 1 Li i / ~1

January 9, 2017 LEASING & FINANCIAL

.RESPONSIBILITY .QCPT,^,

U.S. Department of the Interior, Bureau of Ocean Energy Management

Re: Replacement for U.S. Department ofthe Interior, Bureau of Ocean Energy Management - OCS Mineral Lessee's or Operators Supplemental Bond

Dear Sir/Madam:

Ankor Energy LLC currently has an OCS Mineral Lessee's or Operators Supplemental Bond (bond no. K09022995) on file with your office.

Enclosed please find the Atlantic Specialty Insurance Company bond number 800008919 which replaces and supersedes the Westchester Fire Insurance Company bond number K09022995 you are currently holding.

We request that you return the Westchester Fire Insurance Company bond to our broker:

Stephanie Gunderson Account Manager Lockton Companies Surety Department 5847 San Felipe, Suite 320 Houston, TX 77057 (713) 458-2532 sgundersonfSjlockton.com

Please also include a letter on department letterhead explaining that the Westchester Fire Insurance Company bond is being returned for cancellation. For your reference, we have included generic release language on the following page.

Should you have any questions, please do not hesitate to contact me at (713) 458-2532.

Thank you,

Stephanie Gunderson Account Manager

{Obligee Letterhead}

Westchester Fire Insurance Company issued OCS Mineral Lessee's or Operators Supplemental Bond (Bond No. K09022995) in the amount of $1,060,000 (the "bond") at the request of Ankor Energy LLC, as Principal, for the benefit of U.S. Department of the Interior, Bureau of Ocean Energy Management as obligee ("Obligee").

Obligee hereby fully and unconditionally discharges and releases the Bond and releases Westchester Fire Insurance Company, its parents, affiliates and subsidiaries from any and all past, present and future liability under said Bond. Contemporaneous with the execution of this Release the Bond is discharged and the Obligee shall return the original Bond to Westchester Fire Insurance Company and Obligee hereby surrenders any and all rights associated with the Bond. The undersigned warrants that he or she has the authority to execute this Release on behalf of the Obligee and to bind the Obligee hereunder.

Signed by officer with requisite authority to sign on Obligee's behalf Date

Printed Name and Title

U.S. Department of the Interior OMB Control No.: 1010-0006 Bureau of Ocean Energy Management Expiration Date: 3/31/17

Effective January 9, 2017 Atlantic Specialty Insurance Company Bond No. 800008919 Replaces and Supersedes Westchester Fire Insurance Company Bond No. K09022995.

Cover Page

OUTER CONTINENTAL SHELF (OCS) MINERAL LESSEE'S OR OPERATOR'S

SUPPLEMENTAL BOND

Form BOEM-2028A

This form dated March 2014 supersedes all previous versions of form BOEM-2028A

Paperwork Reduction Act of 1995 (PRA) Statement: The PRA (44 U.S.C. 3501 et seq.) requires us to infonn you that BOEM collects this infomiation to hold the surety liable for the obligations and liability of the Principal (lessee or operator). Responses are mandatory. No proprietary information is collected. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of infonnation unless it displays a currently valid OMB Control Number. Public reporting burden for this form is estimated to average 15 minutes per response, including the time for reviewing instructions, gathering and maintaining data, and completing and reviewing the form. Comments regarding the burden estimate or any other aspect of this form should be directed to the Information Collection Clearance Officer, Bureau of Ocean Energy Management, 381 Elden Street, Hemdon, VA 20170.

BOEM-2028A (March 2014) Page 1 of 3 Previous Editions are Obsolete.

Effective January 9,2017 Atlantic Specialty Insurance Company Bond No. 800008919 Replaces and Supersedes Westchester Fire Insurance Company Bond No. K09022995. v s D E P A R T M E N T O F T H E I N T E R I O R

Bureau of Ocean Energy Management Bond No.800008919 OCS Lease/RUE/ROW N o .»-*i-*"*^-'"»*»

Bond Type Supplemental Bond Amount $2,130,390.00

OUTER CONTINENTAL SHELF (OCS) MINERAL L E S S E E ' S OR OPERATOR'S SUPPLEMENTAL BOND

mm JAN 12 201?

The Surety is the entity Guaranteeing Performance.

Name of Surety: Atlantic Specialty Insurance Company

Mailing Address: 601 Carlson Parkway, Suite 700

Minnetonka, MN 55305

Ifa Corporation, Incorporated in the State of: New York j County or Parish of: NewYo[feASING&FlNANCIAI Etheck here ifSurety is certified by U.S. Treasury as an acceptable surety on Federal Bonds and listed in the cun^6@{SOM^BiyTYr(S&G l̂ONQ

The Principal is the Lessee or Designated Operator for Whom the Bond is Issued.

Name of Principal: ANKOR Energy LLC

Mailing Address: 1615 Poydras Street, Suite 1100

NewOrleans, LA70112

Schedule A, the lease/RUE/ROW covered by this bond, is composed of: (add legal description)

• The following lease/RUE/ROW: South Pass Area, All of Block 60, RUE No. OCS-G 30124

In addition to the Obligations of the Principal during the period of liability of this bond, the Surety also accepts the following Obligations: (Check one) • N o Obligations other than the Obligations of the Principal during the period of liability of this bond. Ul All Obligations of all previous Sureties or guarantors even if the Obligations are not Obligations of the Principal during the period of liability of this bond. • All Obligations of all previous Sureties or guarantors even if the Obligations are not Obligations of the Principal during the period of liability of this bond with the following exceptions or limitations (use an attached rider).

Definitions

For the purposes of this document:

A Principal includes an entity holding an interest in the oil & gas lease in one or more of the following ways: (1) as an approved record title owner of all or a portion of the lease, (2) as an approved operating rights owner of all or a portion of the lease, or (3) as a designated operator or designated agent in all or a portion of the lease. A Lessee includes an approved record title owner of all or a portion of the lease or an approved operating rights owner of all or a portion of the lease. An Obligation includes any obligation arising from any regulations of the Department of the Interior or any Instrument issued, maintained, or approved under the OCS Lands Act (43 U.S.C. 1331 et seq.). An Instrument includes individually or collectively any lease, operating agreement, designation of operator or agent, storage agreement, compensatory royalty agreement, transfer of operating rights, permit, license, or easement, whereunder the Principal has the right, privilege, or license to conduct operations on the OCS. A Person includes an individual, a public or private entity, a State, a political subdivision of a State, any association of individuals, corporations, States, or subdivisions of States, or a govemment agency.

By signing below, the Principal verifies that the information above is correct and agrees to the following: The Principal as agent on behalf of all lessees, operating rights owners, and operators will fulfill all Obligations for the entire leasehold and to the same extent as though the Principal were the sole lessee for the lease/RUE/ROW in Schedule A. By signing below, the Surety verifies that the information above is correct and agrees to the following: 1. The Surety does hereby absolutely and unconditionally bind itself to the United States of America acting through and by the

Bureau of Ocean Energy Management (BOEM), or such other official designated by the Secretary of the Interior for this purpose, for the payment of all of the cost of the plugging and abandonment Obligations. The Surety will be responsible for all Obligations of the Principal in existence at the time this document becomes effective and all Obligations that accrue after that date and until all Obligations are met or until the Regional Director terminates the period of liability of this bond. If the Regional Director terminates the period of liability of this bond, the Surety will remain responsible for Obligations that accrued during the period of liability until the Regional Director issues a written cancellation of the bond in favor ofthe Surety. If this bond is cancelled, the Regional Director may reinstate this bond as if no cancellation had occurred if any payment of any Obligation of the Principal(s) is rescinded or must be restored pursuant to any insolvency, bankruptcy, reorganization, or receivership, or should the representation of the Principal that it has paid its financial Obligations or performed the other

BOEM-2028A (March 2014) Previous Editions are Obsolete. Page 2 of 3

2.

3.

4.

Obligations of the lease in accordance with BOEM specifications be materially false and BOEM relied upon such representation in canceling the instrument.

5. The Surety waives any right of notice of this bond taking effect and agrees that this bond will take effect upon delivery lo BOEM. 6. The Surety's Obligations will remain in full force and effect, even if:

(a) Any person assigns all or part of any interest in an Instrument covered by this document. (b) Any person modifies an Instrument or Obligation under an Instrument in any manner including modifications that result from

a commitment to a unit, cooperative, communitization, or storage agreement; suspension of operations or production; suspension or changes in rental, minimum royalty, or royalties; modification of regulations or interpretations of regulations; creation or modification of compensatory royalty agreements or payments; or creation of any mortgage, pledge, or other grant of security interest in the Instruments.

(c) Any person, event, or condition terminates any Instrument covered by this bond, whether the termination is by operation of law or otherwise.

(d) BOEM takes or fails to take any action in enforcing, as against any party to the Instrument, the payment of rentals or royalties or the performance of any other covenant, condition or agreement of the lease, or giving notice of or making demand with respect to such nonperformance.

(e) The Surety suffers any loss by reason of any law limiting, qualifying, or discharging the Principal's Obligation. 7. The Surety agrees to be bound under this bond as to the interests in any Instrument retained by the Principal when BOEM

approves the transfer of any or all of the Instruments or interests in the Instruments. 8. In the event of any default under a lease, the Surety must provide payment of all of the cost of the Obligations of the Principal

upon demand by BOEM. 9. If BOEM decides to commence suit to enforce its rights, it may commence and prosecute any claim, suit, action, or other

proceeding against the Principal and Surety, or either of them, whether or not BOEM joins the lessees or any other party. 10. In the event there is more than one Surety for the Principal's performance of the Obligations, as to any Instrument, the Surety's

Obligation and liability under this bond is on a "solidary" or "joint and several" basis along with other guarantors or sureties. 11. The Surety agrees to give prompt notice to BOEM and the Principal of any action filed alleging the insolvency or bankruptcy of

the Surety or the Principal, or alleging any violation that would result in suspension or revocation of the Surety's charter or license to do business.

12. The Surety's Obligation and liabilities under this Bond are binding upon the Surety's successors and assigns. Nothing in this document permits assignment of the Surety's Obligation without the written consent of BOEM.

13. The Surety hereby waives any defenses to liability on this bond based on an unauthorized Principal signature.

Atlantic Specialty Insurance Company Name of Surety

SignaUire cf Person Executing for Surety

Stephanie Gunderson, Attorney-in-Fact

ANKOR Energy LLC

Name,of Principal

Name and Title (typed or printed)

5847 San Felipe, Suite 320 Business Address

Houston, TX 77057 Business Address

Signature of Person Executing for Principal

Robert G. Gerdes, President Name and Title (typed or printed)

1615 Poydras Street, Suite 1100 Business Address

New Orleans, LA 70112

Business Address

Signed on this 9th day of January _, in the presence of:

Name (typed or printed)

5847 San Felipe, Suite 320

lure of Witness

Address Houston, TX 77057

Name (typed or printed)

1615 Poydras Street, Suite 1100 Address New Orleans, LA 70112

Address Address Note: The person executing for the Surety must attach a corporate resolution and power of attorney stating his or her authority to undertake this Obligation, pursuant to the acts of the corporate board of directors and the laws of the State of incorporation. The corporation executing this bond as Surety and the Principal, if a corporation, must affix their corporate seals. BOEM-2028A (March 2014) Page 3 of 3 Previous Editions are Obsolete.

O n e B e a c o n I N S U R A N C E G R O U P

Power of Attorney

KNOW ALL MEN BY THF.SE PRESENTS, that ATLANTIC SPECIALTY INSURANCE COMPANY, a New York corporation with its principal office in Plymouth, Minnesota, does hereby constitute and appoint: Robert F. Bobo, John A. Martinez, Florence McClellan, Kristin Darling, Stephanie Gunderson, each individually ifthere be more than one named, its true and lawful Attomey-in-Eact, to make, execute, seal and deliver, for and on its behalf as surety, any and all bonds, recognizances, contracts of indemnity, and all other writings obligatory in the natiirc thereof; provided that no bond or undertaking executed under this authority shall exceed in amount the sum of: sixty million dollars ($60,000,000) and the execution of such bonds, recognizances, contracts of indemnity, and all other writings obligatory in the nature thereof in pursuance of these presents, shall be as binding upon said Company as if they had been fully signed by an authorized officer of the Company and sealed with the Company seal. This Power of Attomey is made and executed by authority ofthe following resolutions adopted by the Board ofDirectors of ATLANTIC SPECIALTY INSURANCE COMPANY on the twenty-fifth day of September, 2012:

Resolved: That the President, any Senior Vice President or Vice-President (each an "Authorized Officer") may execute for and in behalf of the Company any and all bonds, recognizances, contracts of indemnity, and all other writings obligatory in the nature thereof, and affix the seal of the Company thereto; and that the Authorized Officer may appoint and authorize an Attorney-in-Fact to execute on behalfof the Company any and all such instruments and to affix the Company seal thereto; and that the Authorized Officer may at any time remove any such Attorney-in-Fact and revoke all power and authority given to any such Attorney-in-Fact.

Resolved: That the Attomey-in-Fact may be given full power and authority to execute for and in the name and on behalf ofthe Company any and all bonds, recognizances, contracts of indemnity, and all other writings obligatory in the nature thereof, and any such instrument executed by any such Attomey-in-Fact shall be as binding upon the Company as if signed and sealed by an Authorized Offieer and, further, the Attorney-in-Fact is hereby authorized to verify any affidavit required to be attached to bonds,

This power of attomey is signed and sealed by facsimile under the authority of the following Resolution adopted by the Board of Directors of ATLANTIC SPECIALTY INSURANCE COMPANY on the twenty-fifth day of September, 2012:

Resolved: That the signature of an Authorized Officer, the signature of the Secretary or the Assistant Secretary, and the Coinpany seal may be affixed by facsimile to any power of attomey or to any certificate relating thereto appointing an Attorney-in-Fact fbr purposes only of executing and sealing any bond, undertaking, recognizance or other written obligation in the nature thereof, and any such signature and seal where so used, being hereby adopted by the Company as the original signature of such officer and the original seal of the Company, to be valid and binding upon the Company with the same force and effect as though manually affixed.

IN WITNESS WHEREOF, ATLANTIC SPECIALTY INSURANCE COMPANY has caused these presents to be signed by an Authorized Officer and the seal ofthe Company to be affixed this eighth day of December, 2014.

SEAL « l 1986 | / By [o

- V

STATEOF MINNESOTA HENNEPIN COUNTY " :

Paul J. Brehm, Senior Vice Presideni

On this eighth day of December, 2014, before me personally came Paul J. Brehm, Senior Vice President of ATLANTIC SPECIALTY INSURANCE COMPANY, to me personally known to be the individual and ofTicer described in and who executed the preceding instmment, and he acknowledged the execution of the same, and being by mc duly swom, that he is the said officer of the Company aforesaid, and that the seal affixed to the preceding instmment is the seal of said Company and that the said seal and the signature as such officer was duly affixed and subscribed to the said instmment by the authority and at the direction of the Company.

TARAJANELLE STAFFORD NOTARY PUBLIC • MINNESOTA

My Commission Expires January 31.2020 Notary Public

I, the undersigned. Assistant Secretary of ATLANTIC SPECIALTY INSURANCE COMPANY, a New York Corporation, do hereby certify that the foregoing power of attomey is in ftill force and has not been revoked, and the resolutions set forth above are now in force. Signed and sealed. Dated 9 t h dayof January ,2017,

This Power of Attorney expires October 1,2017

f5 SEAL > \

i 7 M 1986

-Hi

James G. Jordan, Assistant Secretary