THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Plains Resources Inc. (Retired) (PLX.X)

3/5/2004 10K Information

We, along with Sable Investments, L.P. (which is owned by Mr. Flores, our Executive Chairman, and Mr. Raymond, our Chief Executive Officer), Kafu Holdings, L.P. (which is controlled by Kayne Anderson Capital Advisors, L.P. and Kayne Anderson Investment Management, Inc., of which Mr. Sinnott is Senior Vice President), and E-Holdings III, L.P. (which is controlled by EnCap Investments L.L.C. and of which Mr. Phillips is a managing director and principal) are parties to agreements governing Plains All American GP LLC, which is the general partner of Plains AAP, L.P., and Plains AAP, L.P., which is the general partner of PAA. These agreements govern the ongoing management of PAA.

In addition, the general partner of PAA is owned as follows:

Plains Resources 44.00 % Sable Investments, L.P. 20.00 % Kafu Holdings, L.P. 16.42 % E-Holdings, L.P. 9.00 % Others 10.58 %

Also, each of we, Sable Investments, Kafu Holdings, and E-Holdings may appoint one member of the Plains All American GP LLC board of directors. Under a Voting and Designation Agreement dated December 18, 2003, we have the right to direct Sable Investments to appoint the person we designate as director of Plains All American GP LLC.

We have ongoing relationships with PAA, including:

• a marketing agreement that provides that PAA will purchase all of our equity oil production at market prices for a fee of $.20 per barrel. In 2003, PAA paid us $26.2 million for such equity production, including the royalty share of production, and we paid PAA $0.2 million in marketing fees; and

• a separation agreement whereby, among other things, (1) we agreed to indemnify PAA, its general partner, and its subsidiaries against (a) any claims related to the upstream business, whenever arising, and (b) any claims related to federal or state securities laws or the regulations of any self-regulatory authority, or other similar claims, resulting from alleged acts or omissions by us, our subsidiaries, PAA, or PAA’s subsidiaries occurring on or before June 8, 2001, and (2) PAA agreed to indemnify us and our subsidiaries against any claims related to the midstream business, whenever arising.

In connection with the spin-off we entered into certain agreements with PXP, including a master separation agreement; an intellectual property agreement; the Plains Exploration & Production transition services agreement that expires June 16, 2004; the Plains Resources transition services agreement that expires June 8, 2004; and a technical services agreement that expires July 2005. For the year ended December 31, 2003, PXP billed us $0.5 million for services provided to us under these agreements and we billed PXP $0.1 million for services we provided under these agreements.

From time to time we charter private aircraft from Gulf Coast Aviation Inc. (“Gulf Coast”), which is not affiliated with us or our employees. On certain occasions, the aircraft that Gulf Coast charters is owned by our Executive Chairman. In 2003, we paid Gulf Coast $0.1 million for aircraft chartering services provided by Gulf Coast using an aircraft owned by our Executive Chairman. The charters were arranged through arms-length dealings with Gulf Coast and the rates were market based.

4/15/2003 Proxy Information

We from time to time charter private jets from Gulf Coast Aviation Inc., or Gulf Coast, which is not affiliated with us or our employees. On occasion, the airplane that Gulf Coast charters for our trips is owned by Mr. Flores. In 2002, we paid approximately $425,000 to Gulf Coast in connection with airplane chartering services Gulf Coast provided to us using Mr. Flores’ airplanes. The charters are arranged through arms-length dealings with Gulf Coast and the rates are market-based.

Governance of PAA

We, along with Sable Investments, L.P. (which is owned by Mr. Flores, our Chairman, and Mr. Raymond, our President and Chief Executive Officer), Kafu Holdings, L.P. (which is controlled by Kayne Anderson Capital Advisors, L.P., which beneficially owned 7.9% of our outstanding common stock as of March 1, 2003 and which is controlled by Kayne Anderson Investment Management, Inc., of which Mr. Sinnott is Senior Vice President), and E-Holdings III, L.P. (which is controlled by EnCap Investments L.L.C., which beneficially owned 7.6% of our outstanding common stock as of March 1, 2003 and of which Mr. Phillips is a managing director and principal) are parties to a limited liability company agreement of Plains All American GP LLC, which is the general partner of Plains AAP, L.P., and a limited partnership agreement of Plains AAP, L.P., which is the general partner of PAA. These agreements govern the ongoing management of PAA.

In addition, the general partner of PAA is owned as follows: Plains Resources 44.0 % Sable Investments, L.P. 20.0 % Kafu Holdings, L.P. 16.418 % E-Holdings, L.P. 9.0 % Others 10.582 % Also, each of we, Sable Investments, Kafu Holdings, and E-Holdings may appoint one member of the Plains All American GP LLC board of directors.

Value Assurance Agreements

We entered into a value assurance agreement with each of Sable Investments, Kafu Holdings and E-Holdings with respect to the subordinated units they acquired from us in our June 2001 strategic restructuring. The value assurance agreements require us to pay to them an amount per fiscal year, payable on a quarterly basis, equal to the difference between $1.85 per unit and the actual amount PAA distributes during that period. The value assurance agreements will expire upon the earlier of the conversion of the subordinated units to common units, or June 8, 2006.

Our Relationship with PAA

We have ongoing relationships with PAA, including:

• a marketing agreement that provides that PAA will purchase all of our equity crude oil production at market prices for a fee of $.20 per barrel. In 2002, PAA paid us $22.7 million for such equity production and we paid PAA $0.2 million in marketing fees; and • a separation agreement whereby, among other things, (1) we agreed to indemnify PAA, its general partner, and its subsidiaries against (a) any claims related to the upstream business, whenever arising, and (b) any claims related to federal or state securities laws or the regulations of any self-regulatory authority, or other similar claims, resulting from alleged acts or omissions by us, our subsidiaries, PAA, or PAA’s subsidiaries occurring on or before June 8, 2001, and (2) PAA agreed to indemnify us and our subsidiaries against any claims related to the midstream business, whenever arising.

We are currently negotiating a new marketing agreement with PAA to, among other things, add a definitive term to the agreement and provide that PAA will use its reasonably best efforts to obtain the best price for our crude production. There can be no assurance, however, that we will enter into a new marketing agreement with PAA.

Spin-Off Agreements

Before December 18, 2002, Plains Exploration & Production Company, or PXP, was our wholly owned subsidiary. On December 18, 2002, we distributed the issued and outstanding shares of PXP common stock to the holders of record of our common stock as of the close of business on December 11, 2002. Each of our stockholders received one share of PXP common stock for each share of our common stock held. Before the spin-off, we made an aggregate of $52.2 million in cash contributions to PXP and transferred certain assets and liabilities to PXP, primarily related to land, unproved oil and gas properties, office equipment and pension obligations.

In contemplation of the spin-off, under the terms of a master separation agreement between us and PXP, on July 3, 2002 we contributed to PXP 100% of the capital stock of our wholly owned subsidiaries that own oil and gas properties in offshore California and Illinois. As a result, PXP indirectly owned our offshore California and Illinois properties and directly owned our onshore California properties. We also contributed $256.0 million of intercompany receivables that PXP and its subsidiaries owed to us. On July 3, 2002 PXP issued $200 million of 8.75% Senior Subordinated Notes due 2012, or the 8.75% notes, and entered into a $300 million revolving credit facility. PXP distributed to us the net proceeds of $195.3 million from the 8.75% notes and $116.7 million of initial borrowings under the credit facility. We used such amounts to redeem our 10.25% senior subordinated notes on August 3, 2002 ($287.0 million) and to repay amounts outstanding under our credit facility ($25.0 million).

We received a letter ruling from the IRS on May 22, 2002, as supplemented on November 5, 2002, to the effect that the spin-off will qualify as a tax-free distribution. A letter ruling from the IRS, while generally binding on the IRS, may under certain circumstances be retroactively revoked or modified by the IRS. A letter ruling is based on the facts and representations presented in the request for that ruling. Generally, an IRS letter ruling will not be revoked or modified retroactively if there has been no misstatement or omission of material facts, the facts at the time of the transaction are not materially different from the facts upon which the IRS letter ruling was based, and there has been no change in the applicable law. We are not aware of any facts or circumstances that would cause the representations in the ruling request to be untrue or incomplete in any material respect.