10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2004
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number 1-11516

Remington Oil and Gas Corporation

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	75-2369148 (I.R.S. employer identification no.)
8201 Preston Road, Suite 600, Dallas, Texas (Address of principal executive offices)	75225-6211 (Zip code)

Registrant’s telephone number, including area code:

(214) 210-2650

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.01 Par Value	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $0.01 Par Value

(Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o

      The aggregate market value of common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, was $510,629,613. On March 14, 2005, the number of outstanding shares of common stock, $0.01 par value, was 28,191,269.

DOCUMENTS INCORPORATED BY REFERENCE

      (1) Proxy Statement for Annual Meeting of Stockholders to be held May 25, 2005 – Referenced in Part III of this Report.

FORM 10-K

REMINGTON OIL AND GAS CORPORATION

TABLE OF CONTENTS

			Page
PART I				2
	Item 1.	Business		2
	Item 2.	Properties		5
	Item 3.	Legal Proceedings		8
	Item 4.	Submission of Matters to a Vote of Security Holders		8
PART II				9
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		9
	Item 6.	Selected Financial Data		11
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		23
	Item 8.	Financial Statements and Supplementary Data		24
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		52
	Item 9A.	Controls and Procedures		52
	Item 9B.	Other Information		53
PART III				54
	Item 10.	Directors and Executive Officers of the Registrant		54
	Item 11.	Executive Compensation		54
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		54
	Item 13.	Certain Relationships and Related Transactions		54
	Item 14.	Principal Accountant Fees and Services		54
PART IV				55
	Item 15.	Exhibits, Financial Statement Schedules		55
Signatures				57
Restated Certificate of Incorporation
2004 Stock Incentive Plan
Subsidiaries
Consent of Ernst & Young LLP
Consent of Netherland, Sewell & Associates, Inc.
Certification of CEO Pursuant to Section 302
Certification of Principal Financial Officer Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of Principal Financial Officer Pursuant to Section 906

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PART I

Item 1. Business.

General

      Remington Oil and Gas Corporation

•  Incorporated — 1991, Delaware

•  Address — 8201 Preston Road, Suite 600, Dallas, Texas 75225-6211

•  Telephone number — (214) 210-2650

•  Website — www.remoil.net — Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on our website under the link “SEC Filings” as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). Further, our website contains our corporate governance documents, including our Corporate Governance Guidelines and our Code of Business Conduct and Ethics, that apply to all directors and employees, including our Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer. Also included on the website as part of our corporate governance documents are our By-Laws and the charters for our Audit, Nominating and Corporate Governance, Compensation, and Executive Committees. Persons may obtain free of charge a copy of the reports listed above and our corporate governance documents by written request to the Secretary of the Company. Additional information on our website includes Whistle Blower procedures, recent investor presentations, company contacts and recent press releases. Information on our website is not incorporated into this report on Form 10-K.

•  37 employees on December 31, 2004

      Our primary business operation is exploration, development, and production of oil and gas reserves in the offshore Gulf of Mexico and onshore Gulf Coast areas. All of our assets are located in these areas and all of our revenues and expenses are generated in these same regions of the United States.

Long-Term Strategy

      Our long-term strategy is to increase our oil and gas reserves and production while keeping our finding and development costs and operating costs competitive with our industry peers. We implement this strategy through drilling exploratory and development wells from an inventory of available prospects that we have evaluated for geologic and mechanical risk and future reserve potential. Our drilling program will contain some high risk/high reserve potential opportunities as well as some lower risk/lower reserve potential opportunities, in order to attempt to deliver a balanced program of reserve and production growth. Success of this strategy is contingent on various risk factors, as discussed in our filings with the SEC.

Activities and Operations

      We identify prospective oil and gas properties primarily by using 3-D seismic technology. After acquiring an interest in a prospective property, we drill one or more exploratory wells. If the exploratory wells find commercial oil and/or gas, we complete the wells and begin producing the oil or gas. Because most of our operations are located in the offshore Gulf of Mexico, we must install facilities such as offshore platforms and gathering pipelines in order to produce the oil and gas and deliver it to the marketplace. Certain properties require additional drilling to fully develop the oil and gas reserves and maximize the production from a particular discovery. In order to increase our oil and gas reserves and production, we continually reinvest our net operating cash flow into new or existing exploration, development, and acquisition activities.

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      We share ownership in our oil and gas properties with various industry participants. We currently operate the majority of our offshore properties. An operator is generally able to maintain a greater degree of control over the timing and amount of capital expenditures than can a non-operating interest owner.

Risks Involved in Exploration, Development, and Production

      Exploration, development, and production operations can be risky. These risks fall into two broad categories. First there is the risk that each time we drill a well, the well will not find oil or gas reserves. Even if a well does find reserves, it is possible that the well will not produce enough oil or gas to return a profit on the amount invested in the well. We try to mitigate these exploration and drilling risks by using 3-D seismic data and other applied technology to identify and define the parameters prior to drilling, although this does not guarantee successful results. Much of our success depends upon the quality of the information used to determine drilling locations and the abilities and experience of our management, technical, and service personnel.

      Second is the broad category of operating risks. Operating risks include mechanical failure, title risk, blowouts, environmental pollution, and personal injury. We maintain both general liability insurance and activity specific insurance against major production losses, blowouts, redrilling, and many other operating hazards, including certain pollution risks. Uninsured losses or losses and liabilities that exceed the limits of our insurance could adversely affect our financial condition.

Competition in the Oil and Gas Industry

We compete with:	We compete for:
• Large integrated oil and gas companies	• Operational, technical, and support staff
• Independent exploration and production companies	• Options and/or leases on properties
• Private individuals	• Markets for the sale of oil and gas production
• Sponsored drilling programs	• Access to capital

      Many of our competitors may have significantly more financial, personnel, technological, and other resources available. In addition, some of the larger integrated companies may be better able to respond to industry changes including price fluctuations, oil and gas demands, and governmental regulations.

Markets for Oil and Gas Production

      Oil and gas are generally homogenous commodities, and the market prices for these commodities fluctuate significantly. Purchasers adjust prices for quality, refined product yield, geographic proximity to refineries or major market centers, and the availability of transportation pipelines or facilities. Outside factors beyond our control combine to influence the market prices. Some of the more critical factors that affect oil and gas commodity prices include the following:

•  Changes in supply and demand

•  Changes in refinery utilization

•  Levels of economic activity throughout the country

•  Seasonal or extraordinary weather patterns

•  Political developments throughout the world

      We have no real ability to influence or predict the market prices. Therefore, we normally sell our oil and gas production based on posted market prices, spot market indices, or prices derived from the posted price or index. At times we will lock in a fixed price for a portion of our future production to be delivered as it is produced. We use an independent company to market almost all of our offshore gas production and a portion

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of our offshore oil production. Because oil and gas are homogenous commodities and other customers and marketers are readily available, we believe that the loss of any of our current customers or our independent marketing company would not be detrimental to our operations nor have a material effect on our revenues.

Securities Regulation and Corporate Governance

      We are a publicly traded company with our common stock listed for trading on The New York Stock Exchange. Because our securities are traded in the public markets, we are subject to regulation by governmental and private organizations such as the SEC and The New York Stock Exchange. This regulatory oversight imposes on us the responsibility for establishing and maintaining disclosure controls and procedures. The objective of those controls and procedures is to ensure that material information relating to us is made known to our management and that the financial statements and other information included in this Form 10-K and other reports and documents filed with the SEC do not contain any untrue statement of material fact, or omit to state a material fact, necessary to make the statements made in this Form 10-K and those other reports and documents not misleading. Our compliance with the increasing scope of regulation has significantly increased our audit and internal control costs.

      Seven members serve on our Board of Directors. Five of these members are independent outside directors while the other two are our Chief Executive Officer and our Chief Operating Officer. We have a lead independent director whose responsibilities are set forth in our corporate governance documents. The Board has established four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Executive. The members of the Audit, Compensation, and Nominating and Corporate Governance Committees are all independent directors. Two of the three members of the Executive Committee are independent directors. Each standing committee is governed by its own charter.

Governmental Regulation, Including Environmental Regulation, of Oil and Gas Operations

      Numerous federal and state regulations affect our oil and gas operations. Current regulations are constantly reviewed by the various agencies at the same time that new regulations are being considered and implemented. In addition, because we hold federal leases, the federal government requires us to comply with numerous regulations that focus on government contractors. The regulatory burden upon the oil and gas industry increases the cost of doing business and consequently affects our profitability.

      State regulations relate to virtually all aspects of the oil and gas business including drilling permits, bonds, and operation reports. In addition, many states have regulations relating to pooling of oil and gas properties, maximum rates of production, and spacing and plugging and abandonment of wells.

      Our oil and gas operations are subject to stringent federal, state, and local environmental laws and regulations. Environmental laws and regulations are complex, change frequently, and have tended to become more restrictive over time. Many environmental laws require permits from governmental authorities before construction on a project may be commenced or before wastes or other materials may be discharged into the environment. The process for obtaining necessary permits can be lengthy and complex, and can sometimes result in the establishment of permit conditions that make the project or activity for which the permit was sought either unprofitable or otherwise unattractive. Even where permits are not required, compliance with environmental laws and regulations can require significant capital and operating expenditures, and we may be required to incur costs to remediate contamination from past releases of wastes into the environment. Failure to comply with these statutes, rules and regulations may result in the assessment of administrative, civil and even criminal penalties. The most significant environmental obligations applicable to our operations relate to compliance with the federal Oil Pollution Act and the Clean Water Act. The Oil Pollution Act and its implementing regulations (“OPA”) establish requirements for the prevention of oil spills and impose liability for damages resulting from spills into waters of the United States. The OPA also requires that operators of offshore oil production facilities, such as our facilities in the Gulf of Mexico, demonstrate to the U.S. Minerals Management Service that they possess at least $35.0 million in financial resources available to pay for costs that may be incurred in responding to an oil spill. The Clean Water Act and its implementing regulations impose restrictions and strict controls on the discharge of wastes into the waters of the United States,

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including discharges of oil, produced water and sand, drilling fluids, drill cuttings, and other wastes typically generated by the oil and gas industry. Although we believe that we are in compliance with the requirements of the OPA and Clean Water Act, as well as the other statutes and associated regulations governing the discharge of materials into the environment, the cost of compliance with this federal and state legislation could have a significant impact on our financial ability to carry out our oil and gas operations.

      Our operations are also subject to environmental laws and regulations that impose requirements for remediation of soil and groundwater contamination. In many cases, these laws apply retroactively to previous waste disposal practices regardless of fault, legality of the original activities, or ownership or control of sites. A company could be subject to severe fines and cleanup costs if found liable under these laws. We have never been a liable party under these laws nor have we been named a potentially responsible party for waste disposal at any site. However, we do own and operate onshore properties that were previously owned and operated by companies whose waste disposal practices, while legal and standard within the industry at the time they occurred, may have resulted in on-site contamination that may require remedial action under current standards. There can be no assurance that we will not be required to undertake remedial actions for such instances of contamination in connection with our ownership and operation of these properties, or that the costs associated with such remedial actions will be fully covered by insurance.

Other Business Information

      Except for our oil and gas leases with third parties and licenses to acquire or use seismic data, we have no material patents, licenses, franchises, or concessions that we consider significant to our oil and gas operations. We do not have any “backlog” of products, customer orders, or inventory. We have not been a party to any bankruptcy, reorganization, adjustment or similar proceeding except in the capacity as a creditor.

Item 2. Properties.

      We concentrate our principal operations in the federal waters of the Gulf of Mexico and its coastal regions. In addition to the information below, we encourage you to read the discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the notes to our consolidated financial statements in Item 8, “Financial Statements and Supplementary Data,” below. Note 2 — Oil and Gas Properties and Note 9 — Oil and Gas Reserves and Present Value Disclosures in our Notes to Consolidated Financial Statements provide detailed information concerning costs incurred, proved oil and gas reserves, and discounted future net revenue for proved reserves.

Leasehold Acreage

      Our leasehold acreage of oil and gas property as of December 31, 2004, was as follows:

	Undeveloped				Developed
	Gross		Net		Gross		Net
Offshore		504,622		288,126		244,690		115,242
Onshore		45,800		17,409		28,594		9,630
Total		550,422		305,535		273,284		124,872

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      The current terms of leases on undeveloped acreage are scheduled to expire as shown in the table below. The term of a lease may be extended by drilling and production operations.

	For the Years Ended December 31,
	2005				2006				2007				2008 & Beyond				Total
	Gross		Net		Gross		Net		Gross		Net		Gross		Net		Gross		Net
Offshore		20,278		11,264		118,240		61,120		100,800		53,424		265,304		162,318		504,622		288,126
Onshore		32,132		6,819		5,230		4,666		3,708		2,490		4,730		3,434		45,800		17,409
Total		52,410		18,083		123,470		65,786		104,508		55,914		270,034		165,752		550,422		305,535

Proved Oil and Gas Reserves

      Net proved oil and gas reserves at December 31, 2004, as audited by independent reserve engineers, Netherland, Sewell & Associates, Inc., are summarized below. The quantities of proved oil and gas reserves discussed in this section include only the amounts which we reasonably expect to recover in the future from known oil and gas reservoirs under the current economic and operating conditions. Proved reserves include only quantities that we expect to recover commercially using current prices, costs, existing regulatory practices, and technology. Therefore, any changes in future prices, costs, regulations, technology or other unforeseen factors could materially increase or decrease the proved reserve estimates.

	Net Oil		Net Gas
	Reserves		Reserves
	MBbls		MMcf
Offshore Gulf of Mexico		13,102		146,841
Onshore Gulf Coast		3,797		3,858
Total		16,899		150,699

      In 2004 our standardized measure of discounted future net cash flows was $638.8 million. We used the December 31, 2004, West Texas Intermediate posted price of $40.25 per barrel and a Gulf Coast spot market price of $6.18 per MMBtu, adjusted by property for energy content, quality, transportation fees, and regional price differentials. We estimated the costs based on the prior year costs incurred for individual properties or similar properties if a particular property did not produce during the prior year.

      The present value of future net cash flows attributable to estimated net proved reserves, discounted at 10% per annum, (“PV10”) is a computation of the standardized measure of discounted future net cash flows on a pre-tax basis. The table below provides a reconciliation of PV10 to the standardized measure of discounted future net cash flows. PV10 may be considered a non-GAAP financial measure as defined by the SEC’s Regulation G. We believe PV10 to be an important measure for evaluating the relative significance of our natural gas and oil properties. PV10 is computed on the same basis as the standardized measure of discounted future net cash flows but without deducting income taxes. We further believe investors and creditors may utilize our PV10 as a basis for comparison of the relative size and value of our reserves to other companies. However, PV10 is not a substitute for the standardized measure. Our PV10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of our natural gas and oil reserves.

	At December 31,
	2004		2003		2002
	(In thousands)
Net present value of future cash flows, before income taxes	$	868,048	$	651,829	$	469,252
Future income taxes, discounted at 10%		229,199		165,533		118,210
Standardized measure of discounted future net cash flows	$	638,849	$	486,296	$	351,042

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Producing Properties

      The table below summarizes our ownership in producing wells at the end of each of the last three years.

		At December 31,
		2004				2003				2002
		Gross		Net		Gross		Net		Gross		Net
Oil wells
	Offshore Gulf of Mexico		31		13.13		27		11.05		25		8.67
	Onshore Gulf Coast		28		10.87		32		12.25		32		12.89
Total			59		24.00		59		23.30		57		21.56
Gas wells
	Offshore Gulf of Mexico		63		26.02		45		17.37		35		11.19
	Onshore Gulf Coast		77		17.43		75		16.36		75		18.52
Total			140		43.45		120		33.73		110		29.71

      Our offshore Gulf of Mexico properties account for approximately 83% of our oil production and approximately 98% of our gas production. In addition, total revenues from offshore Gulf of Mexico oil and gas production during 2004 accounted for approximately 94% of our total oil and gas revenues. We owned varying working interests (5% to 100%) in 144 offshore Gulf of Mexico blocks at December 31, 2004, and currently produce from 51 of these blocks. Five additional blocks are currently under development. We operate a majority of these blocks.

      In addition, through our entry into 3-D seismic licensing agreements with various venders, we have access to 3-D seismic data covering approximately 4,000 blocks in the Gulf of Mexico. The duration and coverage of the three most significant agreements are as follows:

			Approximate No.
			of Blocks
Effective Date	Duration		Covered
March, 1998		99 years		1,100
October, 2000		Indefinite		1,000
May, 2004	20 years with option to renew for 20 years			1,200

      These agreements, combined with our computer technology, provide our technical team with immediate access to the seismic data covered by the agreements.

      During 2004 we successfully drilled 17 out of 24 exploratory wells and 5 development wells in the offshore Gulf of Mexico. In addition, we constructed and installed 7 production platforms and 1 subsea completion, and associated pipelines.

      Our onshore Gulf Coast area properties are principally located in the State of Mississippi and along the Texas Gulf Coast. In 2004, these properties accounted for approximately 17% of our oil production and approximately 2% of our gas production. We drilled a total of 3 wells on our onshore properties during 2004 and completed 2 wells as producers. Our working interests in these wells range from 15% to 100%.

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Drilling Activities

      The following is a summary of our exploration and development wells drilled during the past three years.

	For the Years Ended December 31,
	2004								2003								2002
	Gross				Net				Gross				Net				Gross				Net
	Prod.		Dry		Prod.		Dry		Prod.		Dry		Prod.		Dry		Prod.		Dry		Prod.		Dry
Exploratory
Offshore Gulf of Mexico		17		7		9.28		4.15		15		7		8.00		3.46		11		4		5.28		1.66
Onshore Gulf Coast		0		1		—		0.20		2		1		.41		1.00		5		3		1.66		0.75
Total		17		8		9.28		4.35		17		8		8.41		4.46		16		7		6.94		2.41
Development
Offshore Gulf of Mexico		5		0		3.25		—		3		1		1.37		0.50		2		—		0.66		—
Onshore Gulf Coast		2		0		0.80		0.20		2		1		0.25		0.20		1		—		0.13		—
Total		7		0		4.05		0.20		5		2		1.62		0.70		3		—		0.79		—

      We had an interest in 1 well (0.75 net) in progress at December 31, 2004, 3 wells (2.10 net) in progress at December 31, 2003, and 1 well (0.25 net) in progress at December 31, 2002.

Other Property and Office Lease

      We own several non-contiguous tracts of land covering approximately 2,500 surface acres in southern Louisiana and southern Mississippi. We currently lease approximately 17,000 square feet of office space in Dallas, Texas. However, we have commitments to lease an additional 8,000 square feet in the same building by May 2006. The lease on our office space expires in March 2012.

Item 3. Legal Proceedings.

      We are not a party to any material legal proceedings at this time.

Item 4. Submission of Matters to a Vote of Security Holders.

      We did not submit any matters to a vote of security holders during the fourth quarter of 2004.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

      Our common stock trades on The New York Stock Exchange under the symbol REM. The following table sets forth the high and low closing price per share for the periods indicated as reported in the NYSE composite transactions.

		Common Stock
		High		Low
2005
	First Quarter through March 14, 2005	$	34.49	$	24.82
2004
	Fourth Quarter		29.02		24.69
	Third Quarter		26.27		21.45
	Second Quarter		23.60		19.47
	First Quarter		21.12		18.06
2003
	Fourth Quarter		20.30		17.25
	Third Quarter		19.48		17.09
	Second Quarter		19.59		15.32
	First Quarter		19.75		16.63

      On March 14, 2005, the last reported sales price for our common stock was $30.89 per share. On that date, there were 548 stockholders of record.

      No dividends have ever been paid on our common stock. Our credit facility agreement prohibits our paying dividends. The determination of future cash dividends, if any, will depend upon, among other things, our financial condition, cash flow from operating activities, the level of our capital and exploration expenditure needs, future business prospects, and renegotiation of our line of credit.

      The following table presents information about our equity compensation plans at December 31, 2004.

	Number of Securities
	to be Issued		Weighted Average
	upon Exercise		Exercise Price		Number of Securities
	of Outstanding Options,		of Outstanding Options,		Remaining Available
Plan Category	Warrants and Rights		Warrants and Rights		for Future Issuance
	(a)		(b)		(c)
Equity compensation plans approved by stockholders		1,728,439	$	11.50		1,926,805
Equity compensation plans not approved by stockholders		129,382	$	—		—
Total		1,857,821	$	10.70		1,926,805

      The information above regarding equity compensation plans not approved by the stockholders includes contingent one-time stock grants made in 1999 to all employees and directors, which include the following significant attributes:

•  Shares awarded based on annual base salary as of June 17, 1999, or in the case of non-employee directors $100,000, divided by $4.19 (the closing price on June 17, 1999).

•  In order for the grants to become effective, our common stock had to close at or above $10.42 per share for 20 consecutive trading days within 5 years of the grant date (the “trigger event”).

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•  The trigger event was achieved on January 24, 2001.

•  686,472 shares were awarded. As of December 31, 2004, 516,243 shares have vested, and 40,847 shares have been forfeited. Of the remaining 129,382 shares, 64,691 vested on January 17, 2005, and, except as noted below the remaining 64,691 vest on January 17, 2006.

•  Each employee and director must remain an employee or director during his/her respective vesting schedule in order to receive the shares, except as noted below.

•  The vesting period was modified by the Board on October 8, 2004. The modification provides that vesting of any remaining award may now occur in the event that a director retires from the Board or an employee retires from the company prior to age 65 and the retirement date for the individual is within 18 months of the final vesting date. The approved modification was deemed not to be a material amendment of the grant.

•  In the event of death or a change of control, an employee’s or director’s shares will fully vest. In the event of the long-term disability of an employee, the employee reaching the retirement age of 65, or the employee retiring within 18 months of the final vesting date, the shares will fully vest.

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Item 6. Selected Financial Data.

      The selected consolidated financial data should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements. In addition, you should also read our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7. below.

		2004			2003			2002			2001(1)			2000(1)
		(In thousands, except prices, volumes, and per-share data)
Financial
Total revenue		$	234,129		$	183,052		$	104,866		$	116,620		$	99,661
Net income		$	60,996		$	42,924		$	11,332		$	8,344		$	45,044
Basic income per share		$	2.23		$	1.61		$	0.45		$	0.38		$	2.10
Diluted income per share		$	2.14		$	1.53		$	0.42		$	0.35		$	1.99
Total assets		$	453,114		$	359,385		$	288,993		$	240,432		$	192,474
81/4% convertible subordinated notes		$	—		$	—		$	—		$	—		$	5,880
Bank debt		$	—		$	18,000		$	37,400		$	71,000		$	27,428
Stockholders’ equity		$	313,960		$	241,877		$	193,660		$	125,338		$	102,708
Total shares outstanding			27,849			26,912			26,236			22,651			21,564
Cash Flow
	Net cash flow from operations	$	188,582		$	153,215		$	71,420		$	99,025		$	69,963
	Net cash flow (used in) investing	$	(148,908	)	$	(115,714	)	$	(92,126	)	$	(119,242	)	$	(57,511	)
	Net cash flow provided by (used in) financing	$	(12,423	)	$	(21,022	)	$	16,258		$	21,463		$	1,323
Operational
Proved reserves(2)
	Oil (MBbls)		16,899			11,619			13,114			13,865			10,370
	Gas (MMcf)		150,699			142,432			124,967			111,920			88,650
Standardized measure of discounted future net cash flows — end of year(2)		$	638,849		$	486,296		$	351,042		$	199,983		$	458,649
Average sales price(3)
	Oil (per Bbl)	$	39.37		$	29.43		$	24.27		$	23.29		$	27.69
	Gas (per Mcf)	$	5.97		$	5.40		$	3.35		$	4.02		$	4.02
Average production (net sales volume)
	Oil (Bbls per day)		4,588			4,863			4,736			3,378			3,234
	Gas (Mcf per day)		76,869			66,160			47,804			58,265			34,951

(1)	Financial results for 2001 include a $13.5 million charge for the final settlement of the Phillips Petroleum litigation, and financial results for 2000 include a $12.5 million gain on sale of certain South Texas properties.
(2)	The quantities of proved oil and gas reserves include only the amounts which we reasonably expect to recover in the future from known oil and gas reservoirs under the current economic and operating conditions. Proved reserves include only quantities that we can commercially recover using current prices, costs, and existing regulatory practices and technology. We base the standardized measure of future discounted net cash flows on year-end prices and costs. Any changes in future prices, costs, regulations, technology, or other unforeseen factors could significantly increase or decrease the proved reserve estimates.
(3)	We have not entered into any financial hedges for oil or gas prices during any of the years presented, therefore, the average sales prices represent actual sales revenue per barrel or Mcf.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

      The following discussion will assist you in understanding our financial position, liquidity, and results of operations. The information below should be read in conjunction with our consolidated financial statements, and the notes to our consolidated financial statements. Our discussion contains both historical and forward-looking information. We assess the risks and uncertainties about our business, long-term strategy, and financial condition before we make any forward-looking statements, but we cannot guarantee that our assessment is accurate or that our goals and projections can or will be met. Statements concerning results of future exploration, exploitation, development, and acquisition expenditures as well as expense and reserve levels are forward-looking statements. We make assumptions about commodity prices, drilling results, production costs, administrative expenses, and interest costs that we believe are reasonable based on currently available information.

Critical Estimates and Accounting Policies

      We prepare our consolidated financial statements in this report using accounting principles that are generally accepted in the United States (“GAAP”). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. We must make judgments, estimates, and in certain circumstances, choices between acceptable GAAP alternatives as we apply these rules and requirements. The most critical estimate we make is the engineering estimate of proved oil and gas reserves. This estimate affects the application of the successful efforts method of accounting, the calculation of depreciation, depletion and amortization of oil and gas properties, and the estimate of the impairment of our oil and gas properties. It also affects the estimated lives used to determine asset retirement obligations. In addition, the estimates of proved oil and gas reserves are the basis for the related standardized measure of discounted future net cash flows.

Estimated Proved Oil and Gas Reserves

      The evaluation of our oil and gas reserves is critical to the management of our operations and ultimately our economic success. Decisions such as whether development of a property should proceed and what technical methods are available for development are based on an evaluation of reserves. These oil and gas reserve quantities are also used as the basis for calculating the unit-of-production rates for depreciation, depletion and amortization, evaluating impairment and estimating the life of our producing oil and gas properties in our asset retirement obligations. Our proved reserves are classified as either proved developed or proved undeveloped. Proved developed reserves are those reserves which can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves include reserves expected to be recovered from new wells from undrilled proven reservoirs or from existing wells where a significant major expenditure is required for completion and production. Since a significant amount of our drilling is ongoing exploration activity, our oil and gas reserve estimates in our year-end reports include significant proved undeveloped reserves because of new discoveries that are waiting for platform or pipeline facilities to be completed in order for production to commence. These proved undeveloped reserves are subject to higher uncertainty because the estimates for the reserves do not include any production history.

      We prepare and independent reserve engineers audit the estimates of our oil and gas reserves presented in this report based on guidelines promulgated under GAAP and in accordance with the rules and regulations of the SEC. The audit of our reserves by the independent reserve engineers involves their rigorous examination of our technical evaluation and extrapolations of well information such as flow rates and reservoir pressure declines as well as other technical information and measurements. Our internal reservoir engineers interpret these data to determine the nature of the reservoir and ultimately the quantity of proved oil and gas reserves attributable to a specific property. Our proved reserves in this report include only quantities that we expect to recover commercially using current prices, costs, existing regulatory practices and technology. While we are reasonably certain that the proved reserves will be produced, the timing and ultimate recovery can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals and changes in projections of long-term oil and gas prices. Revisions can include upward or downward changes in the previously estimated volumes of proved reserves for existing fields due to evaluation of (1) already available geologic, reservoir, or production data or (2) new geologic or reservoir data obtained

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from wells. Revisions can also include changes associated with significant changes in development strategy, oil and gas prices, or production equipment/facility capacity.

Standardized Measure of Discounted Future Net Cash Flows

      The standardized measure of discounted future net cash flows relies on these estimates of oil and gas reserves using commodity prices and costs at year-end. In our 2004 year-end reserve report we used the December 31, 2004 West Texas Intermediate posted price of $40.25 per barrel and a Gulf Coast spot market price of $6.18 per MMBtu adjusted by property for energy content, quality, transportation fees, and regional price differentials. We estimated the costs based on the prior year costs incurred for individual properties or similar properties if a particular property did not have production during the prior year. Future global economic and political events will most likely result in significant fluctuations in future oil prices.

Successful-Efforts Method of Accounting

      Oil and gas exploration and production companies choose one of two acceptable accounting methods, successful-efforts or full cost. The most significant difference between the two methods relates to the accounting treatment of drilling costs for unsuccessful exploration wells (“dry holes”) and exploration costs. Under the successful-efforts method, we recognize exploration costs and dry hole costs (the primary uncertainty affecting this method) as expenses when incurred and capitalize the costs of successful exploration wells as oil and gas properties. Entities that follow the full cost method capitalize all drilling and exploration costs including dry hole costs into one pool of total oil and gas property costs.

      It is typical for companies that drill a significant number of exploration wells, as we do, to incur dry hole costs. During the last three years we have drilled 73 exploration wells, of which 23 were considered dry holes resulting in a 68% success ratio on exploratory wells. It is impossible to accurately predict specific dry holes; however, based on past experience, we estimate that between 20% and 35% of our exploration wells and associated exploration drilling costs, will be dry holes. Because we cannot predict the timing and the magnitude of dry holes, quarterly and annual net income can vary dramatically.

      The calculation of depreciation, depletion and amortization of capitalized costs under the successful-efforts method of accounting differs from that calculation under the full cost method in that the successful-efforts method requires us to calculate depreciation, depletion and amortization expense on individual properties rather than on one pool of costs. In addition, under the successful-efforts method, we assess our oil and gas properties individually for impairment compared to the assessment of one pool of costs under the full cost method.

Depreciation, Depletion and Amortization of Oil and Gas Properties

      The application of the unit-of-production method of depreciation, depletion and amortization of oil and gas properties under the successful-efforts method of accounting is applied pursuant to the simple multiplication of units produced by the costs per unit associated with a property. The cost per unit is calculated by dividing the total costs associated with a property by the estimated proved oil and gas reserves on that property. The volumes or units produced and asset costs are known, and while the proved reserves have a high probability of recoverability, they are based on estimates that are subject to some variability. The factors which create this variability are included in the discussion of estimated proved oil and gas reserves above.

Impairment of Oil and Gas Properties

      Like depreciation, depletion and amortization, we test for impairment of our oil and gas properties based on estimates of proved reserves. Proved oil and gas properties held and used by us are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. We estimate the future undiscounted net cash flows of the affected properties to judge the recoverability of the carrying amounts. Initially this analysis is based on proved reserves. However, when we believe that a property contains oil and gas reserves that do not meet the defined parameters of proved reserves, an appropriately risk adjusted amount of these reserves may be included in the impairment evaluation. These reserves are subject to much greater risk of ultimate recovery. An asset would be impaired if the future undiscounted net cash flows were

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less than its carrying value. Impairments are measured by the amount by which the carrying value exceeds its fair value.

      Impairment analysis is performed on an ongoing basis. In addition to using estimates of oil and gas reserve volumes in conducting impairment analysis, it is also necessary to estimate future oil and gas prices. The impairment evaluation triggers include a significant long-term decrease in current and projected prices, or reserve volumes, an accumulation of project costs significantly in excess of the amount originally expected, and historical and current negative operating losses. Although we evaluate future oil and gas prices as part of the impairment analysis, we do not view short-term decreases in prices, even if significant, as impairment triggering events.

3-D Seismic Data License Agreements

      The 3-D seismic agreements we have entered into allow us access to, but do not give us ownership of, 3-D seismic data. Prior to the 3-D seismic agreement we entered into in May of 2004, we had entered into two other significant 3-D seismic licensing agreements. The agreement entered into in 1998 covered approximately 1,100 blocks in the Gulf of Mexico and has a 99 year term while the agreement entered into in 2000 covers approximately 1,000 blocks in the Gulf of Mexico and is for an indefinite term.

      Until the third quarter of 2003, our accounting policy was to capitalize a discounted total of the required payments under the agreements over an assumed useful life of four years using the straight line method. In the fourth quarter of 2003, we completed a review of our accounting policies in relation to the contracts and determined that as of the fourth quarter 2003, we would charge exploration expense as invoices are paid. This change did not have a material effect on our current or prior financial statements.

      In May 2004, we entered into a 3-D seismic licensing agreement covering an additional approximately 1,200 blocks in deeper water trends in the Gulf of Mexico. The license has a term of 20 years with an option to renew for an additional 20 years. An initial payment followed by a series of quarterly invoices through July 2008 is provided for in the agreement. There are no contingent payments. The license agreement is an executory contract under which both parties have certain ongoing rights and obligations. If we wish to continue using the data, we are required to make the payments as invoiced and comply with certain confidentiality provisions. The vendor’s ongoing obligations include warranty and indemnity responsibilities as to intellectual property matters. We believe that the contract provides us with termination rights and therefore under our accounting policy, we recognize the liabilities as they become due and payable within the terms of the contract. In the event of an enforceable finding that we do not have a right of termination prior to the full contract price being due and payable, we would re-assess our accounting policy with respect to this agreement.

Exploratory Drilling Costs

      The costs of drilling an exploratory well are capitalized as uncompleted wells pending the determination of whether the well has found proved reserves. If proved reserves are not found, these capitalized costs are charged to expense. On the other hand, the determination that proved reserves have been found results in the continued capitalization of the drilling costs of the well and its reclassification as a well containing proved reserves. At times, it may be determined that an exploratory well may have found hydrocarbons at the time drilling is completed, but it may not be possible to classify the reserves at that time. In this case, we continue to capitalize the drilling costs as an uncompleted well until the earlier to occur of one year from the date drilling is completed or suspended, or the reserves are deemed to be proved. At that time the well is either reclassified as a proved well or is considered impaired and its costs, net of any salvage value, are charged to expense.

      Occasionally, we may choose to salvage a portion of an unsuccessful exploratory well in order to continue exploratory drilling in an effort to reach the target geological structure/formation. In such cases, we charge only the unusable portion of the well bore to dry hole expense, and we continue to capitalize the costs associated with the salvageable portion of the well bore and add the costs to the new exploratory well. In certain situations, the well bore may be carried for more than one year beyond the date drilling in the original well bore was suspended. This may be due to the need to obtain, and/or analyze the availability of, equipment

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or crews or other activities necessary to pursue the targeted reserves or evaluate new or reprocessed seismic and geologic data. If, after we analyze the new information and conclude that we will not reuse the well bore or if the new exploratory well is determined to be unsuccessful after we complete drilling, we will charge the capitalized costs to dry hole expense.

General and Administrative Expenses

      Our general and administrative expenses are affected by the method in which we measure and record stock based compensation expense and, to a lesser extent, assumptions related to our defined benefit pension plans. We have included a further discussion of these critical estimates and accounting policies in the following sections of this item: Long-Term Strategy and Business Developments, Liquidity and Capital Resources and Results of Operations. Our Notes to Consolidated Financial Statements included in this report also have a more comprehensive discussion of our significant accounting policies.

Long-Term Strategy and Business Developments

      Our long-term strategy is to increase our oil and gas reserves and production while keeping our finding and development costs and operating costs (on a per Mcf equivalent (Mcfe) basis) competitive with our industry peers. We will implement this strategy through drilling exploratory and development wells from our inventory of available prospects that we have evaluated for geologic and mechanical risk and future reserve potential. Our drilling program will contain some high risk/ high reserve potential opportunities as well as some lower risk/ lower reserve potential opportunities, in order to attempt to achieve a balanced program of reserve and production growth. Success of this strategy is contingent on various risk factors, as discussed in our filings with the SEC. Over the last three years, we have invested $375.4 million in oil and gas properties and found 163.2 Bcfe of proved reserves. The following tables reflect our results during the last three years.

				% Increase					% Increase
		2004		(Decrease)			2003		(Decrease)			2002
Production:
	Oil MBbls		1,675		(6	)%		1,775		3	%		1,729
	Gas MMcf		28,057		16	%		24,149		38	%		17,448
Total MMcfe(1)			38,107		10	%		34,799		25	%		27,822
Proved reserves:
	Oil MBbls		16,899		45	%		11,619		(11	)%		13,114
	Gas MMcf		150,699		6	%		142,432		14	%		124,967
Total MMcfe(1)			252,093		19	%		212,146		4	%		203,651
Operating costs per Mcfe		$	0.66		10	%	$	0.60		3	%	$	0.58

(1)  Barrels of oil are converted to Mcfe at the ratio of 1 barrel of oil equals 6 Mcf of gas.

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      Operating costs on a Mcfe produced basis have increased over the past three years from $0.58 to $0.66 or approximately 14% (or 6.67% per annum). This is the result of rising material and labor costs experienced during a period of increasing activity in our sphere of operations.

										Three Years
	For the Years Ended December 31,									Ended
										December 31,
	2004			2003			2002			2004
	(In thousands)
Unproved acquisition costs	$	10,878		$	2,370		$	4,215		$	17,463
Proved acquisition costs		1,554			1,466			—			3,020
Exploration		80,970			54,138			45,381			180,489
Development		65,080			58,475			50,904			174,459
Asset retirement obligation		4,267			9,963			—			14,230
Total capital and exploration costs	$	162,749		$	126,412		$	100,500		$	389,661
Proved reserves (Mcfe)
Beginning total proved reserves		212,146			203,651			195,110			195,110
Revisions of previous estimates		(1,629	)		(7,932	)		(7,847	)		(17,408	)
Extensions and discoveries		79,683			44,698			49,671			174,052
Reserves purchased		—			6,528			—			6,528
Total proved reserve additions		78,054			43,294			41,824			163,172
Reserves sold		—			—			(5,461	)		(5,461	)
Production		(38,107	)		(34,799	)		(27,822	)		100,728
Ending total proved reserves		252,093			212,146			203,651			252,093

      The implementation of our long-term strategy requires that we continually incur significant capital expenditures in order to replace current production and find and develop new oil and gas reserves. In order to finance our capital and exploration program, we depend on cash flow from operations or bank debt and equity offerings as discussed below under Liquidity and Capital Resources.

Liquidity and Capital Resources

      Cash flow provided by operations for the year ended December 31, 2004, increased by $35.4 million, or 23%, compared to the prior year primarily due to a 9.5% increase in production and an $0.88/ Mcfe, or 16.8% increase in oil and gas prices. We expect our cash flow provided by operations for 2005 to increase because of higher projected production from new properties, combined with oil and gas prices consistent with 2004 and steady operating, general and administrative, interest, and financing costs per Mcfe.

      Excluding the effects of significant unforeseen expenses or other income, our cash flow from operations fluctuates primarily because of variations in oil and gas production and prices or changes in working capital accounts. Our oil and gas production will vary based on actual well performance but may be curtailed due to factors beyond our control. Hurricanes in the Gulf of Mexico will shut down our production for the duration of the storm’s presence in the Gulf, and may damage our production facilities so that we cannot produce from a particular property for an extended amount of time. In addition, downstream activities on major pipelines in the Gulf of Mexico can also cause us to shut-in production for various lengths of time, as was exemplified by pipeline and other infrastructure disruptions caused by Hurricane Ivan last September.

      Our realized oil and gas prices vary significantly due to world political events, supply and demand of products, production storage levels, and weather patterns. We sell the vast majority of our production at spot market prices. Accordingly, product price volatility will affect our cash flow from operations. To mitigate price volatility we sometimes lock in prices for some portion of our production (usually less than 33%) through the use of forward sale agreements. Currently we have no such arrangements in place. See additional discussion under Commodity Price Risk in Item 7A — Quantitative and Qualitative Disclosures about Market Risk.

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      Changes in our working capital accounts from 2003 to 2004 include an increase in our accounts receivable (a decrease in our cash flow provided by operations) due to higher oil and gas prices, increased production and increased balances due from our joint interest participants as a result of increased operating activities (drilling wells and facilities construction) at year end. Due to the increase in operating activities our accounts payable balance increased by $11.0 million which increased our cash flow from operations. Cash flow provided by operations also decreased due to an increase in prepaid expenses and other current assets primarily because of an increase in prepaid drilling and facility costs.

      We incurred capital and exploration expenditures totaling $148.9 million during 2004. The capital expenditures included $12.4 million for leasehold acquisition, $81.0 million for exploration costs, $65.1 million for development costs, including platform and facilities construction and $4.3 million for asset retirement costs. During the year we built and installed 2 offshore platforms and facilities. In addition, in 2004 we drilled 25 exploration wells (24 offshore) and 7 development wells (5 offshore) and had 1 well in progress at year-end.

      We expect to continue to make significant capital expenditures over the next several years as part of our long-term growth strategy. We have budgeted $144.6 million for capital and exploration expenditures in 2005. Our 2005 capital and exploration budget includes $78.8 million for 28 exploratory wells. We project that we will spend $71.5 million on 24 wells in the Gulf of Mexico and $7.3 million on 4 onshore wells in South Texas and Mississippi. The budget also includes $41.2 million for platforms and development drilling. Additional development expenditures beyond the budgeted amount will be required throughout the year; the amount of such additional expenditures being dependent upon our success with our 2005 exploration and development program. The remaining $24.5 million will be allocated to leasehold acquisitions, seismic acquisitions, and workovers. If our exploratory drilling results in significant new discoveries, we will have to expend additional capital in order to finance the completion, development, and potential additional opportunities generated by our success. If we continue at our historical success rates, the 2005 capital expenditures are estimated to be $200 million to $225 million. We believe that, because of the additional reserves resulting from the exploratory success and our record of reserve growth in recent years, we will be able to access sufficient additional capital through available cash on hand and/or additional bank financing and/or offerings of debt or equity securities.

      Effective May 1, 2004, we agreed with our lenders to maintain our borrowing base at $100.0 million. As of December 31, 2004, we had nothing borrowed under the facility. The banks review the borrowing base semi-annually and, at their discretion, may decrease or propose an increase to the borrowing base relative to a re-determined estimate of proved oil and gas reserves. Our oil and gas properties are pledged as collateral for the line of credit. Additionally, we have agreed not to pay dividends. The most significant financial covenants in the line of credit include maintaining a minimum current ratio (as defined in the credit agreement) of 1.0 to 1.0, a minimum tangible net worth of $85.0 million plus 50% of net income (accumulated from the inception of the agreement) and 100% of any non-redeemable preferred or common stock offerings, and interest coverage of 3.0 to 1.0. We are currently in compliance with these financial covenants. If we do not comply with these covenants on a continuing basis, the lenders have the right to refuse to advance additional funds under the facility and/or declare any outstanding principal and interest immediately due and payable.

      On June 19, 2003, we filed a shelf registration statement to issue up to $200.0 million of common stock, debt securities, preferred stock, and/or warrants. The SEC declared the shelf registration statement effective December 18, 2003. We have not drawn on the shelf offering. Generally, the shelf is effective for two years from the effective date.

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      The following table summarizes our contractual obligations and commercial commitments as of December 31, 2004.

		Payments Due by Period
				Less
				than
		Total		1 Year		1-3 Years		3-5 Years		More than 5 Years
		(In thousands)
Contractual obligations
	Bank debt (commitment fees)	$	553	$	425	$	128	$	—	$	—
	Other(1)		11,658		3,718		6,000		1,940		—
	Office lease		4,709		489		1,316		1,358		1,546
Total		$	16,920	$	4,632	$	7,444	$	3,298	$	1,546

(1)  Other includes scheduled payments pursuant to a 3-D seismic license agreement.

      On December 31, 2004, our current assets exceeded our current liabilities by $44.1 million. Our current ratio was 1.64 to 1.00.

Results of Operations

      In 2004, we achieved net income totaling $61.0 million or $2.23 basic income per share, and $2.14 diluted income per share, compared to net income of $42.9 million or $1.61 basic income per share and $1.53 diluted income per share in 2003. The increase in net income resulted primarily from increased oil and gas production and sales prices. In addition to oil and gas production and sales prices, certain accounting policies discussed below can cause our net income to vary significantly from period to period because of events or circumstances which trigger recognition of expenses for unsuccessful wells or impairments of properties. Further, we calculate certain expenses using estimates of oil and gas reserves that can vary significantly.

Oil and Gas Sales Revenue

      The following table discloses the net oil and gas production volumes, sales, and sales prices for each of the three years ended December 31, 2004, 2003, and 2002.

				% Increase					% Increase
	2004			(Decrease)			2003		(Decrease)			2002
	(Revenue information in thousands)
Oil volume (MBbls)		1,675			(6	)%		1,775		3	%		1,729
Oil revenue	$	65,941			26	%	$	52,233		24	%	$	41,969
Price per Bbl	$	39.37			34	%	$	29.43		21	%	$	24.27
Increase in oil revenue due to:
Change in prices	$	17,644					$	8,922
Change in production volume		(3,936	)					1,342
Total increase in oil revenue	$	13,708					$	10,264
Gas volume (MMcf)		28,057			16	%		24,149		38	%		17,448
Gas revenue	$	167,564			29	%	$	130,346		123	%	$	58,412
Price per Mcf	$	5.97			11	%	$	5.40		61	%	$	3.35
Increase in gas revenue due to:
Change in prices	$	13,765					$	35,768
Change in production volume		23,453						36,166
Total increase in gas revenue	$	37,218					$	71,934

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      Oil sales revenue during 2004 increased by $13.7 million, or 26%, compared to 2003 because average oil prices increased by $9.94 per barrel, or 34%, which more than offset a 100,000 barrel (6%) decline in oil production. During 2003, oil sales revenue increased by $10.3 million, or 24%, compared to 2002 because oil production increased by 46,000 barrels, or 3%, and average oil prices increased by $5.16 or 21%. The increase in oil production came primarily from new properties in the offshore Gulf of Mexico partially offset by natural depletion of the existing producing properties in the Gulf Coast area and the sale of certain properties in South Texas in April 2002.

      Gas sales revenue during 2004 increased by $37.2 million or 29% compared to 2003 because of higher average gas prices and increased production. Average gas prices increased 11% from $5.40 per Mcf in 2003 to $5.97 per Mcf in 2004, while production increased by 3.9 Bcf, or 16%, to 28.1 Bcf primarily because of gas production from new properties in the offshore Gulf of Mexico. During 2003, gas sales revenue increased by $71.9 million, or 123% because of higher average gas prices and production. Average gas prices climbed from $3.35 per Mcf in 2002 to $5.40 per Mcf, or 61%, in 2003. Gas production increased by 6.7 Bcf, or 38%, primarily because of higher gas production from the offshore Gulf of Mexico.

      During 2002, we sold certain South Texas properties at a $4.1 million gain. This gain in 2002 accounts for the decrease in other income during 2003 when compared to 2002.

Operating Costs and Expenses

      Total operating costs during 2004 increased by $4.1 million, or 20%, compared to 2003, due to the increase in the number of operating properties. However, operating costs per Mcfe increased by only $0.06, or 10%, to $0.66 during 2004. The following table presents the major components of our operating costs and operating costs per Mcfe.

	Years Ending December 31,
	2004				2003				2002
	Total		Per Mcfe		Total		Per Mcfe		Total		Per Mcfe
	(In thousands, except per Mcfe amounts)
Direct operating expense	$	18,406	$	0.49	$	15,709	$	0.45	$	11,664	$	0.42
Overhead & company labor		536		0.01		346		0.01		266		0.01
Workovers		2,525		0.07		1,597		0.04		1,434		0.05
Ad valorem taxes		34		0.00		74		0.00		28		0.00
Production taxes		871		0.02		870		0.03		680		0.02
Transportation		2,641		0.07		2,314		0.07		2,078		0.08
Total	$	25,013	$	0.66	$	20,910	$	0.60	$	16,150	$	0.58

Exploration Expenses — Successful-Efforts Method of Accounting

      During 2004, exploration expenses decreased by $2.9 million, or 11%, compared to 2003 primarily because of an $11.2 million (46.7%) decrease in dry hole costs. Exploration expenses for 2003 increased by $9.8 million, or 63%, because of increased dry hole costs compared to 2002 and a $628,000 increase in seismic expenses over 2002. During the last three years we have drilled 73 exploration wells, of which 23 considered dry holes, resulting in a 68% success ratio on exploratory wells. Our dry hole costs charged to expense during this period totaled $51.6 million out of total exploratory drilling costs of $180.5 million.

Depreciation, Depletion and Amortization of Oil and Gas Properties

      We calculate depreciation, depletion and amortization expense (“DD&A”) using the estimates of proved oil and gas reserves. We segregate the costs for individual or contiguous properties or projects and record DD&A of these property costs separately using the units-of-production method. Downward revisions in reserves increase the DD&A per unit and reduce our net income; likewise, upward revisions lower the DD&A per unit and increase our net income. Depreciation, depletion and amortization expense recorded in 2004 increased by $17.1 million, or 31%, compared to the prior year. On a per Mcfe basis, depreciation, depletion and amortization per Mcfe increased to $1.91 in 2004 from $1.60 in 2003 reflecting the increased costs for finding reserves in the Gulf of Mexico. Depreciation, depletion and amortization expense increased by

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$17.2 million, or 45% for the year ended December 31, 2003, compared to the prior year, and depreciation, depletion and amortization per Mcfe increased to $1.60 from $1.38 in 2002 reflecting the increased cost of finding reserves in the Gulf of Mexico.

Asset Retirement Obligations

      We adopted Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”), effective January 1, 2003. The statement requires that we estimate the fair value for our asset retirement obligations (dismantlement and abandonment of oil and gas wells and offshore platforms) in the periods the assets are first placed in service. We then adjust the current estimated obligation for estimated inflation and market risk contingencies to the projected settlement date of the liability. The result is then discounted to a present value from the projected settlement date to the date the asset was first placed in service. As of January 1, 2003, we record the present value of the asset retirement obligation as an additional property cost and as an asset retirement liability. We recorded a combination of the amortization of the additional property cost (using the unit-of-production method) and the accretion of the discounted liability as a component of our depreciation, depletion and amortization of oil and gas properties.

      We base our initial liability on estimates of current costs to dismantle and abandon our existing platforms and wells on historical experience, industry practice, and external estimates of the cost to abandon similar platforms and wells subject to federal and state regulatory requirements. We increase the current liability estimate using a 3% annual inflation factor over the estimated productive life of the individual property and further increase the inflated liability by 5% for market cost risk. The liability is discounted using United States Treasury Securities with constant maturities that approximate the number of years of productive life for the property plus a 2.5% adjustment for credit risk. Revisions to the liability could occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding abandonment of wells.

      Prior to our adoption of SFAS 143, we accrued an estimated dismantlement, restoration and abandonment liability using the unit-of-production method over the life of a property and included the accrued amount in depreciation, depletion and amortization expense. The total accrued liability ($5.5 million at December 31, 2002) was reflected as additional accumulated depreciation, depletion and amortization of oil and gas properties on our balance sheet.

      In conformity with SFAS 143 we recorded the cumulative effect of this accounting change as of January 1, 2003, as if we had used this method in the prior years. At January 1, 2003, we increased our oil and gas properties by $9.0 million, recorded $11.8 million as an Asset Retirement Obligation liability and reduced our accumulated depreciation by $2.8 million ($5.5 million accrued dismantlement in prior years less accumulated depreciation, depletion and amortization of $2.7 million on the increased property costs). The adoption of the new standard had no material effect on our net income. The following pro forma data summarize our net income and net income per share for the years ended December 31, 2003 and 2002, as if we had adopted the provisions of SFAS 143 on January 1, 2001, including aggregate pro forma asset retirement obligations on that date:

		Years Ended December 31,
		2003		2002
		(In thousands, except per-
		share amounts)
Net income, as reported		$	42,924	$	11,332
Pro forma adjustment to reflect retroactive adoption of SFAS 143			34		(85	)
Pro forma net income		$	42,958	$	11,247
Net income per share:
	Basic — as reported	$	1.61	$	0.45
	Basic — pro forma	$	1.61	$	0.44
	Diluted — as reported	$	1.53	$	0.42
	Diluted — pro forma	$	1.53	$	0.41

20

Impairment of Oil and Gas Properties

      Because we account for our proved oil and gas properties separately, we also assess our assets for impairment property by property rather than in one pool of total oil and gas property costs. This method of assessment is another feature of the successful-efforts method of accounting. Certain unforeseeable events such as significantly decreased long-term oil or gas prices, failure of a well or wells to perform as projected, insufficient data on reservoir performance, and/or unexpected or increased costs may cause us to record an impairment expense on a particular property. We base our assessment of possible impairment using our best estimate of future prices, costs and expected net cash flow generated by a property. We estimate future prices based on NYMEX 12 month strips, adjusted for basis differential and escalate both the prices and the costs for inflation if appropriate. If these estimates indicate impairment, we measure the impairment expense as the difference between the net book value of the asset and its estimated fair value measured by discounting the future net cash flow from the property at an appropriate rate. Actual prices, costs, discount rates, and net cash flow may vary from our estimates. We recognized impairment expenses during the last three years as follows:

	For the Years Ended
	December 31,
	2004		2003		2002
	(In thousands)
Unproved properties	$	1,130	$	1,136	$	1,640
Proved properties		9,746		3,311		6,441
Total impairment expense	$	10,876	$	4,447	$	8,081

      We estimate the amount of individually insignificant unproved properties which will prove unproductive by amortizing the balance of our individual immaterial unproved property costs (adjusted by an anticipated rate of future successful development) over an average lease term. Individually significant properties will continue to be evaluated periodically on a separate basis for impairment. We will transfer the original cost of an unproved property to proved properties when we find commercial oil and gas reserves sufficient to justify full development of the property. The impairment of unproved properties for the prior two years resulted from the actual (due to unsuccessful exploration results) or impending forfeiture of leaseholds.

      We analyze our proved properties for impairment indicators based on the proved reserves as determined by our internal reserve engineers. The properties impaired in 2004 primarily consisted of properties in the Gulf of Mexico which totaled $4.2 million and properties in the onshore Gulf Coast totaling $5.5 million, and in 2003 included two properties in the Gulf of Mexico which totaled $2.4 million and one in the onshore Gulf Coast which totaled $855,000. During 2002, we impaired two proved properties in the offshore Gulf of Mexico that accounted for $3.5 million and two proved properties in the onshore Gulf Coast that accounted for $2.9 million. The impairments resulted primarily from wells depleting sooner than originally estimated or capital costs in excess of those anticipated.

General and Administrative Expenses

      General and administrative expenses during 2004 decreased by $355,000, or 4% compared to 2003. General and administrative expenses decreased by $0.03 per Mcfe to $0.21 in 2004 from $0.24 in 2003. General and administrative expense in 2003 increased by $1.5 million. Stock based compensation expense which is included in general and administrative expense totaled $1.4 million in 2004, $1.6 million in 2003 and $1.6 million in 2002.

Interest and Financing Expense

      Interest and financing expense decreased during the past two years because of lower interest rates and lower outstanding debt.

21

Income Taxes

      During 2004, income taxes increased by $9.3 million compared to 2003 and increased by $17.5 million during 2003 compared to 2002 as a result of increased income before taxes. The effective tax rate increased slightly in 2003 due to an increase in the provision for deferred state income taxes.

New Accounting Pronouncements

      In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which is a revision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). SFAS 123R supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and amends Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R will require all share-based payments to employees, including grants of employee stock options, to be recognized in our Consolidated Statements of Income based on their fair values. Pro forma disclosure is no longer an alternative. SFAS 123R must be adopted no later than July 1, 2005, and permits us to adopt its requirements using one of two methods:

      A “modified prospective” method in which compensation cost is recognized beginning with the effective date based on the requirements of SFAS 123R for all share-based payments granted after the effective date and based on the requirements of SFAS 123 for all awards granted to employees prior to the adoption date of SFAS 123R that remain unvested on the adoption date.

      A “modified retrospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate either all prior periods presented or prior interim periods of the year of adoption based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures.

      We have elected to adopt the provisions of SFAS 123R on July 1, 2005, using the modified prospective method. As permitted by SFAS 123, we currently account for share-based payments to employees using the intrinsic value method prescribed by APB 25 and related interpretations. Therefore, we do not recognize compensation expenses associated with employee stock options. Currently, since all of our outstanding stock options have vested prior to the adoption of SFAS 123R, we will not recognize any expenses associated with these prior stock option grants. However, the adoption of SFAS 123R fair value method could have a significant impact on our future results of operations for future stock or stock option grants but no impact on our overall financial position. Had we adopted SFAS 123R in prior periods, the impact would have approximated the impact of SFAS 123 as described in the pro forma net income and income per share disclosures in Notes to Consolidated Financial Statements, Note 1 — Summary of Significant Accounting Policies — Stock Options. The adoption of SFAS 123R will have no effect on our outstanding stock grant awards.

      SFAS 123R also requires the tax benefits of tax deductions in excess of recognized compensation expenses to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement may reduce our future cash provided by operating activities and increase future cash provided by financing activities, to the extent of associated tax benefits that may be realized in the future. While we cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows from such excess tax deductions was $4.1 million during the year ended December 31, 2004.

22

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

      A vast majority of our production is sold on the spot markets. Accordingly, we are at risk for the volatility of commodity prices inherent in the oil and gas industry.

      Occasionally we sell forward portions of our production under physical delivery contracts that by their terms cannot be settled in cash or other financial instruments. Such contracts are not subject to the provisions of Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities.” Accordingly we do not provide sensitivity analysis for such contracts. We currently have no such arrangements in place.

23

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	25
Consolidated Balance Sheets as of December 31, 2004 and 2003	26
Consolidated Statements of Income for 2004, 2003, and 2002	27
Consolidated Statements of Stockholders’ Equity for 2004, 2003, and 2002	28
Consolidated Statements of Cash Flows for 2004, 2003, and 2002	29
Notes to Consolidated Financial Statements	30

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Remington Oil and Gas Corporation:

      We have audited the accompanying consolidated balance sheets of Remington Oil and Gas Corporation and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004. 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 audits.

      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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and subsidiaries at December 31, 2004 and 2003, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 14, 2005 expressed an unqualified opinion thereon.

      As discussed in Note 1 to the consolidated financial statements, in 2003 the Company adopted Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations.”

/s/ Ernst & Young LLP

Dallas, Texas

March 14, 2005

25

REMINGTON OIL AND GAS CORPORATION

CONSOLIDATED BALANCE SHEETS

			At December 31,
			2004			2003
			(In thousands,
			except share data)
ASSETS
	Current assets
		Cash and cash equivalents	$	58,659		$	31,408
		Accounts receivable		49,582			43,004
		Prepaid expenses and other current assets		5,199			2,846
	Total current assets			113,440			77,258
	Properties
		Oil and gas properties (successful-efforts method)		744,215			609,599
		Other properties		3,145			3,450
		Accumulated depreciation, depletion and amortization		(409,591	)		(333,011	)
	Total properties			337,769			280,038
	Other assets
		Other assets		1,905			2,089
	Total other assets			1,905			2,089
Total assets			$	453,114		$	359,385
LIABILITIES AND STOCKHOLDERS’ EQUITY
	Current liabilities
		Accounts payable and accrued expenses	$	69,339		$	58,311
	Total current liabilities			69,339			58,311
	Long-term liabilities
		Notes payable		—			18,000
		Asset retirement obligations		16,030			12,446
		Deferred income taxes		53,785			28,751
	Total long-term liabilities			69,815			59,197
	Total liabilities			139,154			117,508
	Commitments and contingencies (Note 4)
	Stockholders’ equity
		Preferred stock, $0.01 par value, 25,000,000 shares authorized Shares issued — none
		Common stock, $.01 par value, 100,000,000 shares authorized, 27,883,698 shares issued and 27,849,339 shares outstanding in 2004, 26,946,768 shares issued and 26,912,409 shares outstanding in 2003		279			269
		Additional paid-in capital		132,334			120,925
		Restricted common stock		6,749			3,156
		Unearned compensation		(5,593	)		(1,668	)
		Retained earnings		180,191			119,195
	Total stockholders’ equity			313,960			241,877
Total liabilities and stockholders’ equity			$	453,114		$	359,385

See accompanying Notes to Consolidated Financial Statements.

26

REMINGTON OIL AND GAS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

		Years Ended December 31,
		2004		2003		2002
		(In thousands, except
		per-share amounts)
Revenues
	Gas sales	$	167,564	$	130,346	$	58,412
	Oil sales		65,941		52,233		41,969
	Interest income		349		161		198
	Gain on sale of assets and other income		275		312		4,287
Total revenues			234,129		183,052		104,866
Costs and expenses
	Operating costs and expenses		25,013		20,910		16,150
	Exploration expenses		22,551		25,416		15,623
	Depreciation, depletion, and amortization		72,810		55,694		38,528
	Impairment of oil and gas properties		10,876		4,447		8,081
	General and administrative		8,053		8,408		6,912
	Interest and financing expense		894		1,635		2,145
Total costs and expenses			140,197		116,510		87,439
Income before taxes			93,932		66,542		17,427
	Income taxes		32,936		23,618		6,095
Net income		$	60,996	$	42,924	$	11,332
Basic income per share		$	2.23	$	1.61	$	0.45
Diluted income per share		$	2.14	$	1.53	$	0.42

See accompanying Notes to Consolidated Financial Statements.

27

REMINGTON OIL AND GAS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common
	Stock			Additional			Restricted
	$0.01 Par			Paid in			Common			Unearned			Treasury			Retained
	Value			Capital			Stock			Compensation			Stock			Earnings
	(In thousands)
Balance December 31, 2001	$	227		$	56,698		$	8,055		$	(4,581	)	$	—		$	64,939
Net income																	11,332
Amortization of unearned compensation											1,389
Common stock issued		36			57,375			(2,587	)					(977	)
Tax benefit from exercise of stock options					1,754
Balance December 31, 2002		263			115,827			5,468			(3,192	)		(977	)		76,271
Net income																	42,924
Amortization of unearned compensation											1,318
Forfeit contingent stock grant shares								(206	)		206
Common stock issued		7			4,998			(2,106	)					(808	)
Tax benefit from exercise of stock options					1,884
Treasury stock retired		(1	)		(1,784	)								1,785
Balance December 31, 2003		269			120,925			3,156			(1,668	)		—			119,195
Net income																	60,996
Amortization of unearned compensation											1,251
Stock grant								5,176			(5,176	)
Common stock issued		11			7,970			(1,583	)					(645	)
Tax benefit from exercise of stock options					4,083
Treasury stock retired		(1	)		(644	)								645
Balance December 31, 2004	$	279		$	132,334		$	6,749		$	(5,593	)	$	—		$	180,191

See accompanying Notes to Consolidated Financial Statements.

28

REMINGTON OIL AND GAS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Years Ended December 31,
		2004			2003			2002
		(In thousands)
Cash flow provided by operations
Net income		$	60,996		$	42,924		$	11,332
Adjustments to reconcile net income
	Depreciation, depletion, and amortization		72,810			55,694			38,528
	Deferred income tax expense		25,034			23,443			6,095
	Amortization of deferred finance charges		183			207			228
	Impairment of oil and gas properties		10,876			4,447			8,081
	Dry hole costs		12,787			23,993			14,828
	Cash paid for dismantlement and restoration liability		(1,712	)		(1,631	)		(247	)
	Stock based compensation		1,427			1,565			1,609
	Tax benefit from exercise of stock options		4,083			—			—
	Gain on sale of properties		—			—			(4,095	)
Changes in working capital
	(Increase) in accounts receivable		(6,570	)		(10,483	)		(13,099	)
	Decrease (increase) in prepaid expenses and other current assets		(2,360	)		2,313			(5,131	)
	Increase in accounts payable and accrued expenses		11,028			10,743			13,291
Net cash flow provided by operations			188,582			153,215			71,420
Cash from investing activities
	Payments for capital expenditures		(148,908	)		(115,714	)		(99,865	)
	Proceeds from property sales		—			—			7,739
Net cash (used in) investing activities			(148,908	)		(115,714	)		(92,126	)
Cash from financing activities
	Proceeds from notes payable		—			—			17,000
	Payments on notes payable and other long-term payables		(18,000	)		(22,573	)		(54,393	)
	Purchase common stock		(645	)		(808	)		(977	)
	Commitment fee on line of credit		—			(294	)		—
	Common stock issued		6,222			2,653			54,628
Net cash provided by (used in) financing activities			(12,423	)		(21,022	)		16,258
Net increase (decrease) in cash and cash equivalents			27,251			16,479			(4,448	)
	Cash and cash equivalents at beginning of period		31,408			14,929			19,377
Cash and cash equivalents at end of period		$	58,659		$	31,408		$	14,929
Cash paid for interest		$	948		$	1,702		$	2,552
Cash paid for taxes		$	580		$	175		$	—

See accompanying Notes to Consolidated Financial Statements.

29

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

      Remington Oil and Gas Corporation is an independent oil and gas exploration and production company incorporated in Delaware. We have working interest ownership rights in properties in the offshore Gulf of Mexico and onshore Gulf Coast. We acquired the following subsidiaries in 1998: CKB Petroleum, Inc., CKB & Associates, Inc., Box Brothers Realty Investments Company, CB Farms, Inc., and Box Resources, Inc. We consolidate 100% of the assets, liabilities, equity, income and expense of the subsidiaries and eliminate all inter-company transactions and account balances for the periods of consolidation. We own 100% of the outstanding capital stock of all of the subsidiaries. The primary operating subsidiary, CKB Petroleum, Inc., owns an undivided interest in a pipeline that transports our oil from our South Pass blocks, offshore Gulf of Mexico, to Venice, Louisiana. We account for our undivided interests in properties using the proportionate consolidation method, whereby our share of assets, liabilities, revenues and expenses are included in our financial statements.

Use of Estimates in the Preparation of Financial Statements

      Management prepares the financial statements in conformity with accounting principles generally accepted in the United States. This requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Some of the more significant estimates include oil and gas reserves, useful lives of assets, impairment of oil and gas properties, and future dismantlement and restoration liabilities. Actual results could differ from those estimates. We make certain reclassifications to prior year financial statements in order to conform to the current year presentation.

Cash and Cash Equivalents

      Cash equivalents consist of highly liquid investments that mature within three months or less when purchased. Our cash equivalents consist primarily of institutional money market funds. We record cash equivalents at cost, which approximates their market value at the balance sheet date.

Concentration of Credit Risk

      Our financial instruments that are potentially subject to a concentration of credit risk are principally cash and trade receivables. Substantially all of our cash and cash equivalents at December 31, 2004 and 2003 exceeded the $100,000 federally insured limit for amounts deposited at financial institutions. At December 31, 2004, 3 companies accounted for approximately 59% of our total accounts receivable, and at December 31, 2003, 3 companies accounted for approximately 65% of our total accounts receivable. Oil and gas are fungible commodities in high demand from numerous customers; however, during 2004 we sold oil and gas to 4 major customers who accounted for 27%, 20%, 18% and 12% of our total revenues. The sale of oil and gas to 4 major customers accounted for 17%, 16%, 14% and 13% of our total oil and gas revenues in 2003. We do not believe that the loss of any of these customers would have a material adverse effect on our financial position or results of operations because we believe that they can be replaced due to the high demand for oil and gas.

Property and Equipment

      We follow the successful-efforts method to account for oil and gas exploration and development expenditures. Under this method, we capitalize expenditures for leasehold acquisitions, drilling costs for productive wells and unsuccessful development wells. We amortize the capitalized costs using the units-of-production method, converting to gas equivalent units by using the ratio of 1 barrel of oil equal to 6 Mcf of gas.

30

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Workovers that establish new production are capitalized and workovers that restore production are charged to operating expense.

      Prior to 2003, we capitalized a discounted total of scheduled payments related to our licenses to use a library of 3-D seismic data. The amount capitalized was amortized to expense over the estimated minimum useful life of 4 years using a straight line method. In the fourth quarter of 2003, we completed a further review of the contracts and it was determined that as of the fourth quarter 2003, we would charge exploration expense as the invoices are paid. This change in our method of accounting for 3-D seismic data license did not have a material effect on our current or prior financial statements. During the second quarter of 2004, we acquired an additional license to access a library of 3-D seismic data covering the deeper water trends of the Gulf of Mexico. The agreement provides for a schedule of payments beginning with the delivery of the first data in May 2004 and ending in July 2008. Because of our unilateral right to terminate the license agreement, we do not consider any of the payments scheduled in the contract to be an incurred liability until the scheduled invoice date.

      We review our oil and gas properties for impairment whenever events or circumstances indicate that the net book value of these properties may not be recoverable. If the net book value of a property is greater than the estimated undiscounted future net cash flow from the same property, the property is considered impaired. We base our assessment of possible impairment using our best estimate of future prices, costs and expected net cash flow generated by a property. The impairment expense is equal to the difference between the net book value and the fair value of the asset. We estimate fair value by discounting, at an appropriate rate, the future net cash flows from the property.

      The impairment of unproved leasehold costs includes amortization of the aggregate individually insignificant properties (adjusted by an estimated rate of future successful development) over an average lease term or, if events or circumstances indicate, a specific impairment of individually significant properties.

      Other properties include improvements on the leased office space and office computers and equipment. We depreciate these assets using the straight-line method over their estimated useful lives, which range from 3 to 12 years.

Capitalization of Exploration Drilling Costs

      We drill exploratory wells with the expectation that the final well bore will be capable of producing oil and gas reserves. The costs of drilling an exploratory well are capitalized as uncompleted wells pending the determination of whether the well has found proved reserves. If proved reserves are not found, these capitalized costs are charged to expense. On the other hand, the determination that proved reserves have been found results in the continued capitalization of the drilling costs of the well and its reclassification as a well containing proved reserves. It may be determined that an exploratory well may have found hydrocarbons at the time drilling is completed, but it may not be possible to classify the reserves at that time. In this case, we continue to capitalize the drilling costs as an uncompleted well until the earlier to occur of one year from the date drilling is completed or suspended, or the reserves are deemed to be proved. At that time the well is either reclassified as a proved well or is considered impaired and its costs, net of any salvage value, are charged to expense.

      Occasionally, we may salvage a portion of an unsuccessful exploratory well in order to continue exploratory drilling in an effort to reach the target geological structure/formation. In such cases, we charge only the unusable portion of the well bore to dry hole expense. We will continue to capitalize the costs associated with the salvageable portion of the well bore and add the costs to the new exploratory well. In certain situations drilling is temporarily suspended and the well bore may be carried for more than one year because drilling to the depth of the target reserves is not yet complete. This may be due to the need to obtain, and/or analyze the availability of, equipment or crews or other activities necessary to pursue the targeted reserves or evaluate new or reprocessed seismic and geological data. If, after we analyze the new information and conclude that we will not reuse the well bore or if the well is determined to be unsuccessful after we

31

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

complete drilling, we will charge the capitalized costs to dry hole expense. Total capitalized exploratory drilling costs were $12.8 million for the year ended December 31, 2004, and $7.8 million for the year ended December 31, 2003.

      The following table shows the number of wells and the associated capitalized costs for wells in areas requiring a major capital expenditure before production can begin, where additional drilling efforts are not underway or firmly planned for the future and wells in areas not requiring major capital expenditures before production can begin, where more than one year has elapsed since the completion of drilling as of the end of the December 31, 2004 and 2003.

	At December 31,
	Well2004		Cost		Well2003		Cost
	(In thousands, except well
	numbers)
Exploration wells requiring major capital expenditures		—	$	—		—	$	—
Exploration wells not requiring major capital expenditures and capitalized for more than one year		1		4,445		—		—
Total		1	$	4,445		—	$	—

      At December 31, 2004, we are carrying the costs of three exploratory wells that do not have proved reserves associated with them. Of the three, two wells are salvaged well bores that we will reenter and continue exploration drilling. Only one of these wells has been carried for more than one year. It did not originally reach the drilling target due to mechanical failure. We are waiting for additional reprocessed seismic data to further define the drilling target. The remaining well is waiting for completion of infrastructure on a contiguous block.

      We do not believe that the application of the proposed FASB Staff Position No. FAS 19-a of the Financial Accounting Standards Board would have changed our results of operations for any of the three years ending December 31, 2004, 2003 and 2002. The following table presents exploratory costs deferred by year as of December 31, 2004.

	At December 31, 2004
	Costs Deferred by Period
			Less
			than				2 or more
	Total		1 Year		1 Year		Years
	(In thousands)
Capitalized exploration costs	$	12,777	$	8,332	$	4,445	$	—

      The following table shows the changes in capitalized exploratory drilling costs pending the determination of proved reserves, capitalized exploratory drilling costs that have been capitalized to wells and equipment, and the capitalized exploratory drilling costs charged to dry hole expense.

	At December 31,
	2004					2003				2002
	Wells		Cost			Wells		Cost		Wells			Cost
	(In thousands, except well numbers)
Beginning Balance		2	$	7,778			—	$	—		2		$	4,692
Reclassified to wells & facilities		—		—			—		—		(1	)		(1,510	)
Dry hole expense		—		(2,861	)		—		—		(1	)		(3,182	)
Additions to capitalized costs		1		7,860			2		7,778		—			—
Total		3	$	12,777			2	$	7,778		—		$	—

32

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Assets

      Other assets include the long-term portion of prepaid pension expenses (see Note 7 — Employee Benefit Plans-Pension Plan), and the long-term portion of net unamortized credit facility origination fees. The origination fees are amortized on a straight-line basis over the term of the credit facility. We charge the amortized amount to interest and financing costs. In addition, other assets also include a long-term account receivable totaling $385,000 at December 31, 2004, and $376,000 at December 31, 2003, which is CKB Petroleum’s claim under Collateral Assignment Split Dollar Insurance Agreements among CKB Petroleum and Don D. Box (a former officer and member of the Board) and two of his brothers.

Accounts Payable and Accrued Expenses

      Accounts payable and accrued expenses were as follows:

	At December 31,
	2004		2003
	(In thousands)
Accounts payable — trade	$	59,656	$	41,330
Income taxes payable		3,240		—
Advance billings		1,970		11,266
Royalties and other revenue payable		4,473		5,670
Total accounts payable and accrued expenses	$	69,339	$	58,266

Oil and Gas Revenues

      When oil and gas is produced, we sell it immediately. Consequently, we recognize oil and gas revenue in the month of actual production based on our share of the revenues. Our actual sales have not been materially different from our entitled share of production, and we do not have any significant gas imbalances.

Transportation costs

      We include transportation costs in operating costs and expenses. During the years ended December 31, 2004, 2003, and 2002, we incurred transportation costs totaling $2.6 million, $2.3 million, and $2.1 million, respectively.

Stock Options

      In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”). SFAS 148 amends Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), to provide alternative methods of transition to SFAS 123’s fair value method of accounting for stock-based employee compensation.

      SFAS 148 also amends the disclosure provisions of SFAS 123 and Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. While SFAS 148 does not amend SFAS 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions of SFAS 148 are applicable to all companies with stock-based employee compensation, regardless of whether they account for that compensation using the fair value method of SFAS 123 or the intrinsic value method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”).

33

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Through June 30, 2005, we will continue to apply the accounting provisions of APB 25 and related interpretations to account for stock-based compensation and have adopted the disclosure requirements of SFAS 123 and SFAS 148. Accordingly, we measure compensation cost for stock options as the excess, if any, of the quoted market price of our stock at the date of the grant over the amount an employee must pay to acquire the stock. All of our options are granted with exercise prices at or above the quoted market price on the date of grant.

      The following table summarizes relevant information as to the reported results under our intrinsic value method of accounting for stock awards, with supplemental information as if the fair value recognition provision of SFAS 123 had been applied:

		For Years Ended December 31,
		2004		2003		2002
		(In thousands, except
		per-share amounts)
As reported:
	Net income	$	60,996	$	42,924	$	11,332
	Basic income per share	$	2.23	$	1.61	$	0.45
	Diluted income per share	$	2.14	$	1.53	$	0.42
Stock based compensation (net of tax at statutory rate of 35%) included in net income as reported		$	928	$	1,017	$	1,046
Stock based compensation (net of tax at statutory rate of 35%) if using the fair value method as applied to all awards		$	6,711	$	3,146	$	2,531
Pro forma (if using the fair value method applied to all awards):
	Net income	$	55,213	$	40,795	$	9,847
	Basic income per share	$	2.02	$	1.53	$	0.39
	Diluted income per share	$	1.94	$	1.46	$	0.36
Weighted average shares used in computation
	Basic		27,408		26,628		25,294
	Diluted		28,441		27,987		27,122

      During 2004, we accelerated the vesting dates for 128,324 stock options granted during 2002, and 39,999 stock options granted during 2003, from the original vesting dates in 2005 and 2006 to vesting dates in December 2004. All stock options were in the money at the time the vesting dates were accelerated. The acceleration of the vesting increased the stock based compensation using the fair value method under SFAS 123 by $1.1 million, net of tax at the statutory rate of 35%. As a result of this acceleration all of our outstanding stock options are vested at December 31, 2004.

      The fair value of each option grant for the years ended December 31, 2004, 2003, and 2002, is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	For Years Ended December 31,
	2004			2003			2002
Expected life (years)		7			7			10
Interest rate		4.07	%		3.73	%		4.17	%
Volatility		63.70	%		65.27	%		61.62	%
Dividend yield		0	%		0	%		0	%

      As required, the pro forma disclosures above include options granted since January 1, 1995. All of our outstanding or previously-exercised options were granted after 1995.

34

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment Reporting

      We operate in only one business segment.

General and Administrative Expenses

      We report our general and administrative expenses net of reimbursed overhead costs that we allocate to working interest owners of the oil and gas properties that we operate.

Income Taxes

      Income tax expense or benefit includes both current income taxes and deferred income taxes. Current income tax expense or benefit equals the amount expected to be calculated on our income tax return for that year. Deferred income tax expense or benefit equals the change in the net deferred income tax asset or liability from the beginning of the year plus the tax benefit derived from the exercise of employee stock options. We determine the amount of our deferred income tax asset or liability by multiplying the enacted tax rates by the temporary differences, net operating or capital loss carry-forwards plus any tax credit carry-forwards. The tax rates used are the effective rates applicable for the year in which we expect the temporary differences or carry-forwards to reverse.

      In December 2004, the Financial Accounting Standards Board issued FASB Staff Position No. FAS 109-1 (“FAS 109-1”), “Application of FASB Statement No. 109, ‘Accounting for Income Taxes,’ to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004.” The American Jobs Creation Act of 2004 (the “AJCA”) introduces a special 9% tax deduction on qualified production activities. FAS 109-1 clarifies that this tax deduction should be accounted for as a special tax deduction in accordance with FASB Statement No. 109. Pursuant to the AJCA, we will not be able to claim this tax benefit until the first quarter of fiscal 2006. We do not expect the adoption of these new tax provisions to have a material impact on our consolidated financial position, results of operations or cash flows.

Income per Common Share

      We compute basic income per share by dividing net income by the weighted average number of common shares outstanding for the period. Diluted income per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shares in the net income of the company. The following table presents our calculation of basic and diluted income per share.

		For Years Ended December 31,
		2004		2003		2002
		(In thousands, except
		per-share amounts)
Net income available for basic income per share		$	60,996	$	42,924	$	11,332
Basic income per share		$	2.23	$	1.61	$	0.45
Diluted income per share		$	2.14	$	1.53	$	0.42
Weighted average common shares for basic income per share			27,408		26,628		25,294
	Dilutive stock options outstanding (treasury stock method)		837		1,099		1,378
	Common stock grant		196		260		450
Total common shares for diluted income per share			28,441		27,987		27,122
Non-dilutive stock options outstanding			749		1,235		1,174

35

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Adopted and New Accounting Policies

      In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which is a revision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). SFAS 123R supersedes Accounting Principles Bulletin Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and amends Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R will require all share-based payments to employees, including grants of employee stock options, to be recognized in our Consolidated Statements of Operations based on their fair values. Pro forma disclosure is no longer an alternative. SFAS 123R must be adopted no later than July 1, 2005, and permits us to adopt its requirements using one of two methods:

      A “modified prospective” method in which compensation cost is recognized beginning with the effective date based on the requirements of SFAS 123R for all share-based payments granted after the effective date and based on the requirements of SFAS 123 for all awards granted to employees prior to the adoption date of SFAS 123R that remain unvested on the adoption date.

      A “modified retrospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate either all prior periods presented or prior interim periods of the year of adoption based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures.

      We have elected to adopt the provisions of SFAS 123R on July 1, 2005, using the modified prospective method. As permitted by SFAS 123, we currently account for share-based payments to employees using the intrinsic value method prescribed by APB 25 and related interpretations. Therefore, we do not recognize compensation expenses associated with employee stock options. Currently, since all of our outstanding stock options have vested prior to the adoption of SFAS 123R, we will not recognize any expenses associated with these prior stock option grants. However, the adoption of SFAS 123R fair value method could have a significant impact on our future results of operations for future stock or stock option grants but no impact on our overall financial position. Had we adopted SFAS 123R in prior periods, the impact would have approximated the impact of SFAS 123 as described in the pro forma net income and income per share disclosures. The adoption of SFAS 123R will have no effect on our outstanding stock grant awards.

      SFAS 123R also requires the tax benefits of tax deductions in excess of recognized compensation expenses to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement may reduce our future cash provided by operating activities and increase future cash provided by financing activities, to the extent of associated tax benefits that may be realized in the future. While we cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows from such excess tax deductions were $4.1 million during the year ended December 31, 2004.

      We adopted Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”), effective January 1, 2003. The statement requires that we estimate the fair value of our asset retirement obligations (dismantlement and abandonment of oil and gas wells and offshore platforms) in the periods the assets are first placed in service. We then adjust the current estimated obligation for estimated inflation and market risk contingencies to the projected settlement date of the liability. The result is then discounted to a present value from the projected settlement date to the date the asset was first placed in service. We record the present value of the asset retirement obligation as an additional property cost and as an asset retirement liability. We record a combination of the amortization of the additional property cost (using the unit of production method) and the accretion of the discounted liability as a component of our depreciation, depletion and amortization of oil and gas properties.

36

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Prior to this adoption, we accrued an estimated dismantlement, restoration and abandonment liability using the unit of production method over the life of a property and included the accrued amount in depreciation, depletion and amortization expense. The total accrued liability ($5.5 million at December 31, 2002) was reflected as additional accumulated depreciation, depletion and amortization of oil and gas properties on our balance sheet.

      In conformity with SFAS 143, we recorded the cumulative effect of this accounting change as of January 1, 2003, as if we had used this method in the prior years. At January 1, 2003, we increased our oil and gas properties by $9.0 million, recorded $11.8 million as an Asset Retirement Obligation liability and reduced our accumulated depreciation by $2.8 million ($5.5 million accrued dismantlement in prior years less accumulated depreciation, depletion and amortization of $2.7 million on the increased property costs). The adoption of the new standard had no material effect on our net income. The following pro forma data summarize our net income and net income per share for the years ended December 31, 2003 and 2002, as if we had adopted the provisions of SFAS 143 on January 1, 2001, including aggregate pro forma asset retirement obligations on that date:

		Years Ended December 31,
		2003		2002
		(In thousands, except per-
		share amounts)
Net income, as reported		$	42,924	$	11,332
Pro forma adjustment to reflect retroactive adoption of SFAS 143			34		(85	)
Pro forma net income		$	42,958	$	11,247
Net income per share:
	Basic — as reported	$	1.61	$	0.45
	Basic — pro forma	$	1.61	$	0.44
	Diluted — as reported	$	1.53	$	0.42
	Diluted — pro forma	$	1.53	$	0.41

Note 2 — Oil and Gas Properties

      The following table summarizes the capitalized costs on our oil and gas properties, all of which are located in the United States.

	At December 31,
	2004								2003
	Proved			Unproved		Total			Proved			Unproved		Total
	(In thousands)
Oil and gas properties	$	717,316		$	26,899	$	744,215		$	590,257		$	19,342	$	609,599
Accumulated depreciation, depletion and amortization		(407,134	)		—		(407,134	)		(330,432	)		—		(330,432	)
Net oil and gas properties	$	310,182		$	26,899	$	337,081		$	259,825		$	19,342	$	279,167

37

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      We recognized impairment expenses shown in the table below:

	For Years Ended December 31,
	2004		2003		2002
	(In thousands)
Unproved properties	$	1,130	$	1,136	$	1,640
Proved properties		9,746		3,311		6,441
Total impairment expense	$	10,876	$	4,447	$	8,081

      We estimate the amount of individually insignificant unproved properties which will prove unproductive by amortizing the balance of our individually immaterial unproved property costs (adjusted by an anticipated rate of future successful development) over an average lease term. Individually significant properties will continue to be evaluated periodically on a separate basis for impairment. We will transfer the original cost of an unproved property to proved properties when we find commercial oil and gas reserves sufficient to justify full development of the property. The impairment of unproved properties for the prior two years primarily resulted from the actual (due to unsuccessful exploration results) or impending forfeiture of leaseholds.

      We analyze proved properties for impairment indicators based on the proved reserves as determined by our internal reserve engineers. The proved properties impaired during 2004 included two properties in the Gulf of Mexico which totaled $4.2 million and two onshore Gulf Coast properties which totaled $5.5 million. The proved properties impaired in 2003 primarily consisted of two properties in the Gulf of Mexico which totaled $2.4 million and one property in the onshore Gulf Coast, and the proved properties impaired in 2002 included two properties in the Gulf of Mexico which totaled $3.5 million and two in the onshore Gulf Coast which totaled $2.9 million. The impairments resulted primarily from wells depleting sooner than originally estimated or capital costs in excess of those anticipated.

      The following table summarizes our asset retirement obligation. The year ended December 31, 2002, and the beginning balance in 2003 is presented on a pro forma basis as if the provisions of SFAS 143 had been applied when the properties were placed in service:

	At December 31,
	2004			2003			2002
	(Unaudited in thousands)
Beginning of period	$	12,446		$	11,807		$	8,305
New properties and changes in estimates		4,267			1,393			3,114
Settlement of liabilities		(1,712	)		(1,631	)		(247	)
Loss on settlement of liabilities		21			—			—
Accretion of liability		1,008			877			635
End of period	$	16,030		$	12,446		$	11,807

38

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 3 — Notes Payable and Other Long-Term Payables

Bank Credit Facility

      As of December 31, 2004, our amended credit facility of $150.0 million had a borrowing base of $100.0 million. The following schedule reflects certain information about the line of credit for the last two years.

	At December 31,
	2004		2003
	(In thousands)
Borrowing base	$	100,000	$	100,000
Outstanding balance		—		18,000
Available amount	$	100,000	$	82,000

      We pledged our oil and gas properties as collateral for this line of credit. We accrue and pay interest at varying rates based on premiums ranging from 1.5 to 2.25 percentage points over the London Interbank Offered Rates. We pay commitment fees of 0.375% on the unused amount of the line of credit. Interest, if any, only is payable quarterly through May 3, 2006, at which time the line expires and all principal becomes due, unless the line is extended or renegotiated.

      The most significant financial covenants in the line of credit include maintaining a minimum current ratio (as defined in the credit agreement) of 1.0 to 1.0, a minimum tangible net worth of $85.0 million plus 50% of net income (accumulated from the inception of the agreement) and 100% of any non-redeemable preferred or common stock offerings, and interest coverage of 3.0 to 1.0. We are in compliance with these financial covenants. If we do not comply with these covenants, the lenders have the right to refuse to advance additional funds under the facility and/or declare all principal and interest immediately due and payable.

      The banks review the borrowing base semi-annually and may decrease or propose an increase to the borrowing base at their discretion relative to the new estimate of proved oil and gas reserves.

Fair Value of Indebtedness

      We estimate that the fair value of our long-term indebtedness, including the current maturities of such obligations, was approximately $18.0 million at December 31, 2003. We based the fair value on current rates available for our bank debt. The book value of our other long-term indebtedness approximates fair value.

39

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 4 — Commitments and Contingent Liabilities

      We currently lease approximately 17,000 square feet of office space in Dallas, Texas. However, we have commitments to lease an additional 8,000 square feet by May 2006. The non-cancelable operating lease expires in March 2012. The following table reflects our rent expense for the past three years and the commitment for the future minimum rental payments.

Year	(In thousands)
2002	$	441
2003	$	441
2004	$	441
2005	$	489
2006	$	644
2007	$	672
2008	$	678
2009	$	680
After 2009	$	1,546

      We have no material pending legal proceedings.

      Effective May 12, 2004, we entered into an executory contract with a third party under which we acquired a license to use 3-D seismic data owned by the vendor covering approximately 1,200 blocks in the Gulf of Mexico. We do not acquire ownership of the data, but simply a non-exclusive license to use the data. The term of the agreement, subject to a mutual right of termination by either party, is 20 years from delivery of the data. At the end of the 20 year term, the license shall be renewed for an additional 20 year term at no charge unless the parties agree to terminate the agreement. The following table reflects the expense for 2004 and the amount of future payments for each specified year under the contract.

Year
	(In thousands)
2004	$	4,219
2005	$	3,718
2006	$	3,000
2007	$	3,000
2008	$	1,940

      The licensor delivered to us all the 3-D seismic data under the agreement within the first three months of execution, as contemplated in the agreement, and we have full access to the data. In addition to the terms of the agreement described above, under the agreement the licensor has ongoing warranty and indemnity responsibilities as to intellectual property matters and the obligation to deliver to us certain data tapes and support data upon our request. Further, we believe that under the terms of the agreement we have the unilateral right to terminate the agreement by non-payment of two scheduled quarterly payments and because there is no provision restricting termination of the agreement, and that upon such termination we have no further obligations under the agreement, except for the return of the data to the licensor.

Note 5 — Common Stock, Preferred Stock and Dividends

      We have 100.0 million shares of common stock and 25.0 million shares of “blank check” preferred stock authorized. The par value of the common stock and preferred stock is $0.01 per share. The Board of Directors can approve the issue of multiple series of preferred stock and set different terms, voting rights, conversion features, and redemption rights for each distinct series of preferred stock.

40

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      We have reserved approximately 4.0 million shares of common stock for our 1997 Stock Option Plan and for our Non-Employee Director Stock Purchase Plan. In addition, we have reserved 2.0 million shares of common stock for our 2004 Stock Incentive Plan approved by our stockholders on May 24, 2004. Both plans are discussed in more detail in Note 6 — Stock Based Compensation Expense. Dividend payments are currently prohibited by our line of credit agreement.

Note 6 — Stock Based Compensation Expense

1997 Stock Option Plan

      The Compensation Committee of the Board of Directors, comprising three independent directors, administers the 1997 Stock Option Plan. This committee has the discretion to determine the participants, the number of shares granted to each person, the exercise price of the common stock covered by each option, and most other terms of the option. Options granted under the plan may be either incentive stock options or non-qualified stock options. The committee may issue options for up to 3.75 million shares of common stock, but no more than 937,500 shares to any individual. Forfeited options are available for future issuance. In accounting for stock options granted to employees and directors, we have chosen to continue to apply the accounting method promulgated by Accounting Principles Board Opinion No. 25 (“APB 25”) rather than apply an alternative method permitted by Statement of Financial Accounting Standards No. 123 (“SFAS 123”). Under APB 25, at the time of grant we do not record compensation expense on our income statement for stock options granted to employees or directors.

      A summary of our stock option plan as of December 31, 2004, 2003, and 2002, and changes during the years ending on those dates is presented below:

	At December 31,
	2004					2003					2002
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding at beginning of year		2,334,333		$	10.93		2,552,219		$	8.68		2,598,700		$	6.72
Granted		30,000			23.24		360,000			18.66		400,000			17.20
Exercised		(835,894	)		7.58		(559,553	)		5.44		(440,978	)		4.87
Forfeited		—			—		(18,333	)		16.82		(5,503	)		9.04
Outstanding at end of year		1,528,439		$	13.00		2,334,333		$	10.93		2,552,219		$	8.68
Options exercisable at year-end		1,528,439		$	13.00		1,592,667		$	7.81		1,613,554		$	6.54
Weighted-average fair value of options granted during the year				$	15.23				$	12.33				$	12.64

      The options outstanding at December 31, 2004, have a weighted-average remaining contractual life of 6.33 years and exercise prices ranging from $3.125 to $23.89 per share. A breakdown of the options outstanding at December 31, 2004, by price range is presented below:

					Weighted Average				Weighted Average
			Weighted Average		Remaining Life		Number		Price of Options
Option Price Range	Number		Exercise Price		(Years)		Exercisable		Exercisable
$3.13 - $4.25		279,558	$	3.80		5.16		279,558	$	3.80
$5.38 - $6.94		146,430	$	6.39		2.72		146,430	$	6.39
$9.00 - $15.32		397,682	$	12.77		5.44		397,682	$	12.77
$16.73 - $23.89		704,769	$	18.16		8.05		704,769	$	18.16

41

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The effect on our net income if we recorded the estimated compensation costs for the stock options using the estimated fair value as determined by applying the Black-Scholes option pricing model is included in Note 1 — Summary of Significant Accounting Policies — Stock Options.

      During 2004, we accelerated the vesting dates for 128,324 stock options granted during 2002, and 39,999 stock options granted during 2003, from the original vesting dates in 2005 and 2006 to vesting dates in December 2004. All stock options were in the money at the time the vesting dates were accelerated. The acceleration of the vesting increased the stock based compensation using the fair value method under SFAS 123 by $1.1 million, net of tax at statutory rate of 35%. As a result of this acceleration all of our outstanding stock options are vested at December 31, 2004.

Non-Employee Director Stock Purchase Plan

      The Non-Employee Director Stock Purchase Plan allows the non-employee members of the Board to receive their directors’ fees in shares of restricted common stock instead of cash. The number of shares received will be equal to 150% of the cash fees divided by the closing market price of the common stock on the day that the cash fees would otherwise be paid. The director cannot transfer the common stock until the earlier of one year after issuance or the termination of a director resulting from death, disability, removal, or failure to be nominated for an additional term. The director can vote the shares of restricted stock and receive any dividend paid.

Employee and Director Stock Grants and Our 2004 Stock Incentive Plan

      In June 1999, the Board of Directors approved a contingent stock grant to our employees and directors. In order for the grant to become effective, the price of our stock had to increase from $4.19 per share to a trigger price of $10.42 per share and close at or above $10.42 per share for 20 consecutive trading days within 5 years of the grant date. On January 24, 2001, the stock price closed above the trigger price for the twentieth consecutive trading day. On that date, we measured the total compensation cost at $8.1 million which was the total number of shares granted multiplied by the market price on that date. We recorded $8.1 million as restricted common stock, and unearned compensation.

      In May 2004, the stockholders approved the Remington Oil and Gas Corporation 2004 Stock Incentive Plan. This plan is administered by the Compensation Committee of the Board of Directors. Under this plan the Committee may issue stock options, purchased stock, bonus stock, stock appreciation rights, phantom stock, restricted stock awards, performance awards and other stock or performance based awards. All employees and non-employee directors are eligible to participate. In October 2004, the Board approved a stock grant of an aggregate 200,000 shares to employees and non-employee directors. The shares under this grant vest one-fifth each October of the years 2005 through 2009. There is no trigger price or conditions under this stock grant other than a written stock grant agreement between us and the grantee, and the passage of time and continued employment or service of a director for vesting purposes. We recorded $5.2 million as restricted common stock and as unearned compensation.

      Unearned compensation is reported as a separate reduction in stockholders’ equity on the balance sheet and is amortized to stock compensation expense on a straight line basis that conforms to the vesting schedule of the shares. During each of the years ended December 31, 2004, 2003 and 2002, we amortized $1.3 million, $1.3 million and $1.4 million, respectively, to stock based compensation expense. The total compensation expense may decrease if a grant fails to vest in accordance with its terms.

42

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      A summary of all stock grants as of December 31, 2004, 2003 and 2002, and changes during the years ending on those dates is presented below:

	At December 31,
	2004					2003					2002
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Price		Shares			Price		Shares			Price
Outstanding at beginning of period		259,636		$	12.16		447,192		$	12.16		662,592		$	12.16
Grants		200,000			25.88					—					—
Exercised		(130,254	)		12.16		(173,228	)		12.16		(212,761	)		12.16
Forfeited		—			—		(14,328	)		12.16		(2,639	)		12.16
Outstanding at end of year		329,382		$	20.49		259,636		$	12.16		447,192		$	12.16

43

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 7 — Employee Benefit Plans

Pension Plans

      Remington and CKB Petroleum, Inc. each have a noncontributory defined benefit pension plan. The retirement benefits available are generally based on years of service and average earnings. We fund the plans with contributions at least equal to the minimum funding provisions of employee benefit and tax laws, but usually no more than the maximum tax deductible contribution allowed. Plan assets consist primarily of equity and fixed income securities. The following tables set forth significant information about the plans, the reconciliation of the benefit obligation, plan assets, and funded status for the pension plans.

			At December 31,
			2004			2003
			(In thousands)
Reconciliation of the change in projected benefit obligation
	Beginning projected benefit obligation		$	6,032		$	4,833
		Service cost		591			415
		Interest cost		373			322
		Amendments		—			42
		Actuarial loss		298			633
		Benefits paid		(211	)		(213	)
	Ending projected benefit obligation		$	7,083		$	6,032
Reconciliation of the change in plan assets
	Beginning market value		$	5,989		$	4,506
		Actual return on plan assets		574			846
		Employer contributions		174			850
		Benefit payments		(211	)		(213	)
	Ending market value		$	6,526		$	5,989
Funded status and amounts recognized in the balance sheet
	Excess of assets over projected benefit obligation		$	(557	)	$	(43	)
	Unrecognized net actuarial loss			2,498			2,458
	Unrecognized prior service costs			36			39
	Adjusted net prepaid benefit cost recognized		$	1,977		$	2,454
Accumulated benefit obligation			$	5,907		$	5,077
Assumptions used to determine benefit obligations
	Discount rate			6.00	%		6.00	%
	Rate of compensation increase			3.00	%		3.00	%

          Cash flows

Contributions

We do not expect to make contributions to the pension plans in 2005.

44

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Estimated future benefit payments

We expect to pay the following benefit payments, which reflect expected future service, as appropriate, and assume that future retirees will elect a lump-sum form of benefit.

	(In thousands)
2005	$	204
2006		999
2007		193
2008		187
2009		850
2010 through 2014		1,637

      The net periodic pension cost recognized in our income statements includes the following components:

			For Years Ended
			December 31,
			2004			2003			2002
			(In thousands)
Components of net periodic pension cost
		Service cost	$	591		$	415		$	291
		Interest cost on projected benefit obligation		373			322			263
		Expected return on plan assets		(471	)		(352	)		(219	)
		Recognized net actuarial loss		155			154			62
		Amortization of prior service costs		3			3			—
	Net periodic pension cost		$	651		$	542		$	397
Assumptions used to determine net periodic pension costs
	Discount rate			6.00	%		6.50	%		7.25	%
	Expected return on plan assets			8.00	%		8.00	%		8.00	%
	Rate of compensation increase			3.00	%		3.00	%		3.00	%

      To estimate the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical returns on equities and debt securities.

      The accumulated benefit obligation represents the present value of the benefits earned to the measurement date, with benefits computed based on current compensation levels. The projected benefit obligation is the accumulated benefit obligation increased to reflect expected future compensation.

      Remington’s aggregate projected benefit obligation at December 31, 2004, was $6.4 million and the aggregate fair value of plan assets was $5.7 million. On December 31, 2004, Remington had a prepaid benefit cost of $1.6 million. CKB Petroleum’s aggregate projected benefit obligation at December 31, 2004, was $676,000 and the aggregate fair value of plan assets was $841,000. On December 31, 2004, CKB Petroleum had a prepaid benefit cost of $414,000.

45

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Plans asset allocation (Plans’ assets are held in trust.)

		At December 31,
		2004			2003
Asset category
	Equity securities		71.2	%		63.6	%
	Debt securities		19.7	%		20.6	%
	Money funds		9.1	%		15.8	%
	Total		100.0	%		100.0	%

      Money fund balances were disproportionately high at each year end because we made large contributions to the pension trusts during the last few days of each year. These funds were allocated to equity and debt securities and utilized for regular distributions to retirees during the early part of the next year. See the discussion of our investment policy below.

      Plan fiduciaries set investment policies, strategies, and guidelines for the pension trusts. These include

•  A long-term average annual rate of return of at least 8%.

•  Asset allocations ranging from 75% equities and 25% debt securities to 25% equities and 75% debt securities. Recommended long-term average allocation is 60% equities and 40% debt securities.

•  Permissible investments include publicly-traded common and preferred stocks, convertible bonds, fixed income securities, guaranteed investment contracts, and money market funds. Transactions are not permitted in futures contracts or options.

•  Broad diversification of plan assets.

      Plan fiduciaries have appointed an investment advisor and asset managers. A Plan Administration Committee, comprising three company executive officers, meets with the investment advisor at least quarterly to review overall investment performance, asset manager performance, current asset category allocations, recommended asset category allocations for the coming quarter, and sources of liquidity for distributions to retirees for the coming quarter. During the latter part of 2002 the committee, with the assistance of the investment advisor, set the target allocation at 75% equities and 25% debt securities and has maintained that target allocation continuously since then.

Employee Severance Plan, Post Retirement Benefits and Post Employment Benefits

      Our employee severance plan provides severance benefits ranging from 2 months to 18 months of the employee’s base salary if the employee is terminated involuntarily. The plan incorporates the provisions and terms of any individual contract or agreement that an employee may have with the company. Certain of the executive officers have individual employment contracts with the company.

      We have never paid postretirement benefits other than pensions, and we are not obligated to pay such benefits in the future. Future obligations for postemployment benefits are immaterial. Therefore, we have not recognized any liability for them.

46

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Income Taxes

      The following table provides a summary of our income tax expense:

		For Years Ended December 31,
		2004		2003		2002
		(In thousands)
Current
	Federal	$	7,755	$	175	$	—
	State		147		—		—
			7,902		175		—
Deferred
	Federal		24,688		23,113		6,095
	State		346		330		—
			25,034		23,443		6,095
Total income tax expense		$	32,936	$	23,618	$	6,095

      Total income tax expense differs from the amount computed by applying the federal income tax rate to net income before income taxes as follows:

	For Years Ended December 31,
	2004			2003		2002
	(In thousands)
Federal income tax expense at statutory rate	$	32,876		$	23,290	$	6,095
State income tax expense		493			328		—
Other		(433	)		—		—
Total income tax expense	$	32,936		$	23,618	$	6,095

      The following table reflects the significant components of our net deferred tax liability.

		At December 31,
		2004			2003
		(In thousands)
Deferred tax liabilities
	Oil and gas properties	$	(54,611	)	$	(35,429	)
Total deferred tax liabilities			(54,611	)		(35,429	)
Deferred tax assets
	Federal net operating loss carryforwards		—			4,130
	Federal alternative minimum tax credit carry forwards		—			479
	Asset retirement obligation		684			1,980
	Other assets		142			89
Total deferred tax assets			826			6,678
Net deferred tax (liability)		$	(53,785	)	$	(28,751	)

47

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table presents a summary of our oil and gas expenditures during the last three years.

	For Years Ended December 31,
	2004		2003		2002
	(Unaudited, in thousands)
Unproved acquisition costs	$	10,878	$	2,370	$	4,215
Proved acquisition costs		1,554		1,466		—
Exploration costs		80,970		54,138		45,381
Development costs		65,080		58,475		50,904
Discounted estimate of future asset retirement costs		4,267		9,963		—
Total	$	162,749	$	126,412	$	100,500

Note 9 — Oil and Gas Reserves and Present Value Disclosures (Unaudited)

      The estimates of oil and gas reserves were prepared by us and audited by Netherland, Sewell & Associates, an independent reserve engineering firm. The determination of these reserves is a complex and interpretative process that is subject to continued revision as additional information becomes available. In many cases, a relatively accurate determination of reserves may not be possible for several years due to the time necessary for development drilling, testing and studies of the reservoirs. We do not file reserve estimates with any other federal authority or agency.

      The quantities of proved oil and gas reserves presented below include only the amounts which we reasonably expect to recover in the future from known oil and gas reservoirs under the current economic and operating conditions. Proved reserves include only quantities that we can commercially recover using current prices, costs, existing regulatory practices and technology. Therefore, any changes in future prices, costs, regulations, technology or other unforeseen factors could significantly increase or decrease proved reserve estimates. Our proved undeveloped reserves are generally brought on line within 12 months. Alternatively, they are associated with long life fields where economics dictate waiting for an existing wellbore available for sidetrack, or waiting to mobilize a platform rig for operations. Accordingly, proved undeveloped reserves in major fields may be carried for many years. The following table presents our net ownership interest in proved oil and gas reserves.

		At December 31,
		2004						2003						2002
		Oil			Gas			Oil			Gas			Oil			Gas
		Bbls			Mcf			Bbls			Mcf			Bbls			Mcf
		(In thousands)
Beginning of period			11,619			142,432			13,114			124,967			13,865			111,920
	Revisions of previous estimates		1,862			(12,801	)		(363	)		(5,754	)		(596	)		(4,271	)
	Extensions, discoveries and other		5,093			49,125			337			42,676			1,678			39,603
	Reserves purchased		—			—			306			4,692			—			—
	Reserves sold		—			—			—			—			(104	)		(4,837	)
	Production		(1,675	)		(28,057	)		(1,775	)		(24,149	)		(1,729	)		(17,448	)
End of period			16,899			150,699			11,619			142,432			13,114			124,967
Proved developed reserves			6,858			89,376			7,071			76,475			7,977			71,481

      The following tables represent value-based information about our proved oil and gas reserves. The standardized measure of discounted future net cash flows results from the application of specific criteria applicable to the value-based disclosures of all oil and gas reserves in the industry. Due to the imprecise nature

48

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of estimating oil and gas reserve quantities and the uncertainty of future economic conditions, we cannot make any representation about interpretations that may be made or what degree of reliance that may be placed on this method of evaluating proved oil and gas reserves.

      We compute future cash revenue by multiplying the year-end commodity prices, or contractual pricing if applicable, by estimated future production from proved oil and gas reserves. We use year-end West Texas Intermediate posted prices per barrel and Gulf Coast spot market prices per MMBtu adjusted by property for energy content, quality, transportation fees, and regional price differentials.

	Years Ended December 31,
	2004		2003		2002
West Texas Intermediate posted price (per barrel)	$	40.25	$	29.25	$	28.00
Gulf Coast spot market price (per MMbtu)	$	6.18	$	5.97	$	4.74

      We estimated the costs based on the prior year costs incurred for individual properties, or similar properties if a particular property did not have production during the prior year. Future income tax expense was determined by applying the current statutory tax rate to the estimated future net cash flow from all properties. Finally, we discounted the future net cash flow, after tax, by 10% per year to arrive at the standardized measure of discounted future net cash flows presented below.

	At December 31,
	2004			2003			2002
	(In thousands)
Oil and gas revenues	$	1,581,927		$	1,206,775		$	946,813
Production costs		(192,761	)		(165,733	)		(150,084	)
Development, dismantlement and abandonment costs(1)		(150,596	)		(140,175	)		(116,944	)
Income tax expense		(323,492	)		(223,929	)		(166,864	)
Net cash flow		915,078			676,938			512,921
10% annual discount		(276,229	)		(190,642	)		(161,879	)
Standardized measure of discounted future net cash flows	$	638,849		$	486,296		$	351,042

(1)  Based on our Netherland, Sewell & Associates’ audited reserve report for January 1, 2005, we estimate that the amount of capital required to convert proved undeveloped reserves to proved developed reserves will be $104.0 million of the $125.0 million of future development costs, including $55.9 million in 2005, $15.1 million in 2006 and $5.5 million in 2007. Our actual expenditures may differ from these estimates. Capital expenditures incurred to develop proved undeveloped reserves were $21.8 million in 2004, $28.4 million in 2003 and $28.5 million in 2002.

49

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table summarizes the principal sources of change in the standardized measure of discounted future net cash flows from year to year.

	At December 31
	2004			2003			2002
	(In thousands)
Standardized measure of discounted cash flows at beginning of year	$	486,296		$	351,042		$	199,983
Sales and transfers of oil and gas produced, net of production costs		(208,492	)		(161,670	)		(84,231	)
Net changes in prices and production costs		76,957			134,883			198,760
Net changes in estimated development costs		(40,570	)		(13,169	)		(4,229	)
Net changes in income tax expense		(63,665	)		(47,324	)		(79,090	)
Extensions, discoveries and improved recovery less related costs		321,813			141,970			123,755
Proved oil and gas reserves purchased		—			13,998			—
Proved oil and gas reserves sold		—			—			(6,997	)
Previously estimated development costs incurred during the year		32,932			28,477			22,893
Revisions of previous quantity estimates		(6,579	)		(34,006	)		(24,244	)
Other changes		(25,026	)		36,991			(15,556	)
Accretion of discount		65,183			35,104			19,998
Standardized measure of discounted future net cash flows end of year	$	638,849		$	486,296		$	351,042

50

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 10 — Quarterly Financial Information (Unaudited)

		For Years Ending
		December 31,
		2004		2003
		(In thousands, except
		per-share data)
First Quarter
	Net revenues(1)	$	46,057	$	42,304
	Net income	$	11,001	$	11,687
	Basic net income per share	$	0.41	$	0.44
	Diluted net income per share	$	0.39	$	0.42
Second Quarter
	Net revenues(1)	$	58,265	$	45,780
	Net income	$	14,988	$	12,264
	Basic net income per share	$	0.55	$	0.46
	Diluted net income per share	$	0.53	$	0.44
Third Quarter
	Net revenues(1)	$	59,904	$	46,867
	Net income	$	15,639	$	10,068
	Basic net income per share	$	0.57	$	0.38
	Diluted net income per share	$	0.55	$	0.36
Fourth Quarter
	Net revenues(1)	$	69,279	$	47,627
	Net income	$	19,368	$	8,904
	Basic net income per share	$	0.70	$	0.33
	Diluted net income per share	$	0.67	$	0.32

(1)  Net revenues include only oil and gas sales revenue.

51

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

      None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

      As of the end of the period covered by this report, our management, including our Chief Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, our management, including the Chief Executive Officer and the Principal Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Further, during the period covered by this report, there was no significant change in internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Changes in internal control over financial reporting.

      There have been no changes in our internal controls over financial reporting (as defined in rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

      The management of Remington Oil and Gas Corporation (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the control of the Company’s Chief Executive Officer and the Senior Vice President/Finance to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles.

      As of December 31, 2004, management assessed the effectiveness of the Company’s internal control over financial reporting based on criteria for effective internal control over financial reporting established in “Internal Control — Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2004, based on those criteria.

      Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an attestation report on management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004. The report, which expresses unqualified opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, is included in this Item under the heading “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.”

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Stockholders of

Remington Oil and Gas Corporation:

      We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Remington Oil and Gas Corporation (the “Company”), a Delaware corporation, maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the

52

effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

      A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the COSO criteria.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2004 and 2003 and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004 of the Company and our report dated March 14, 2005 expressed an unqualified opinion thereon.

Ernst & Young LLP

Dallas, Texas

March 14, 2005

Item 9B.      Other Information.

      On May 24, 2004, our stockholders approved the Remington Oil and Gas Corporation 2004 Stock Incentive Plan. By resolution at its October 14, 2004, meeting, the Compensation Committee of the Board of Directors, a committee composed entirely of independent directors, approved restricted stock grant transactions totaling 200,000 shares to be issued in accordance with the 2004 Stock Incentive Plan. The Board of Directors by Unanimous Consent in lieu of Meeting, dated October 14, 2004, ratified the action of the Compensation Committee. All of our directors, officers, and other employees, except one, received grants. In accordance with the 2004 Stock Incentive Plan the grants are subject to written agreements between the

53

Company and each grantee. These stock grant agreements have not yet been finalized and have not been executed by either the respective grantee or the Company.

PART III

Item 10. Directors and Executive Officers of the Registrant.

      We have adopted a code of ethics (our “Code of Business Conduct and Ethics” previously filed with the Commission and accessible on our website) that applies to all directors and employees including our Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer.

      The remainder of the information required by Item 10, Directors and Executive Officers of the Registrant, will be included in our definitive proxy statement for the annual meeting of stockholders to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 no later than 120 days after the end of the fiscal year covered by this Form 10-K, and such portion of the proxy statement is hereby incorporated by reference.

Item 11. Executive Compensation.

      The information required by Item 11, Executive Compensation, will be included in our definitive proxy statement for the annual meeting of stockholders to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 no later than 120 days after the end of the fiscal year covered by this Form 10-K, and such portion of the proxy statement is hereby incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

      The information required by Item 12, Security Ownership of Certain Beneficial Owners and Management, will be included in our definitive proxy statement for the annual meeting of stockholders to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 no later than 120 days after the end of the fiscal year covered by this Form 10-K, and such portion of the proxy statement is hereby incorporated by reference.

Item 13. Certain Relationships and Related Transactions.

      The information required by Item 13, Certain Relationships and Related Transactions, will be included in our definitive proxy statement for the annual meeting of stockholders to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 no later than 120 days after the end of the fiscal year covered by this Form 10-K, and such portion of the proxy statement is hereby incorporated by reference.

Item 14. Principal Accountant Fees and Services.

      The information required by Item 14, Principal Accountant Fees and Services, will be included in our definitive proxy statement for the annual meeting of stockholders to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 no later than 120 days after the end of the fiscal year covered by this Form 10-K, and such portion of the proxy statement is hereby incorporated by reference.

54

PART IV

Item 15. Exhibits, Financial Statement Schedules.

      (a) Documents filed as part of this report:

      (1) Financial Statements included in Item 8:

      (i) Independent Registered Public Accounting Firm’s Report

      (ii) Consolidated Balance Sheets as of December 31, 2004 and 2003

      (iii) Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002

      (iv) Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002

      (v) Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002

      (vi) Notes to Consolidated Financial Statements

      (vii) Supplemental Oil and Natural Gas Information (Unaudited) (Included in the Notes to Consolidated Financial Statements)

      (2) Financial Statement Schedules

      Financial statement schedules are omitted as they are not applicable, or the required information is included in the financial statements or notes thereto.

      (3) Exhibits

Exhibit
Number			Exhibit
	3	.1####	Restated Certificate of Incorporation of Remington Oil and Gas Corporation.
	3	.3###	By-Laws as amended of Remington Oil and Gas Corporation.
	10	.1++	Pension Plan of Remington Oil and Gas Corporation as Amended and Restated Effective January 1, 2000.
	10	.2++	Amendment Number One to the Pension Plan of Remington Oil and Gas Corporation.
	10	.3***	Amendment Number Two to the Pension Plan of Remington Oil and Gas Corporation.
	10	.4***	Amendment Number Three to the Pension Plan of Remington Oil and Gas Corporation.
	10	.5+++	Amendment Number Four to the Pension Plan of Remington Oil and Gas Corporation.
	10	.6*	Box Energy Corporation Severance Plan.
	10	.7##	Box Energy Corporation 1997 Stock Option Plan (as amended June 17, 1999 and May 23, 2001).
	10	.8*	Box Energy Corporation Non-Employee Director Stock Purchase Plan.
	10	.9#	Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and two executive officers.
	10	.10#	Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and an executive officer.
	10	.11+	Employment Agreement effective January 31, 2000, by and between Remington Oil and Gas Corporation and James A. Watt.
	10	.12***	Form of Employment Agreement effective April 30, 2002, by and between Remington Oil and Gas Corporation and an executive officer.
	10	.13****	Form of Amendment to the Employment Agreements by and between Remington Oil and Gas Corporation and each of James A. Watt and an executive officer.
	10	.14**	Form of Contingent Stock Grant Agreement — Directors.
	10	.15**	Form of Contingent Stock Grant Agreement — Employees.

55

Exhibit
Number			Exhibit
	10	.16**	Form of Amendment to Contingent Stock Grant Agreement — Directors.
	10	.17**	Form of Amendment to Contingent Stock Grant Agreement — Employees.
	10	.18####	Remington Oil and Gas Corporation 2004 Stock Incentive Plan.
	14	.1###	Code of Business Conduct and Ethics.
	21	####	Subsidiaries of the registrant.
	23	.1####	Consent of Ernst & Young LLP.
	23	.2####	Consent of Netherland, Sewell & Associates, Inc.
	31	.1####	Certification of James A. Watt, Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2####	Certification of Frank T. Smith, Jr., Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1####	Certification of James A. Watt, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2####	Certification of Frank T. Smith, Jr., Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1997 filed with the Commission on March 30, 1998.

#	Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 1999 filed with the Commission on November 12, 1999.
+	Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1999 filed with the Commission on March 29, 2000.

**  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2000 filed with the Commission on March 16, 2001.

##	Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2001 filed with the Commission on November 9, 2001.
++	Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2001 filed with the Commission on March 21, 2002.
***	Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2002 filed with the Commission on March 31, 2003.

###  Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended June 30, 2003 filed with the Commission on August 11, 2003.

+++  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2003 filed with the Commission on March 12, 2004.

****  Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2004 filed with the Commission on October 28, 2004.

####  Filed herewith.

56

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Remington Oil and Gas Corporation

By:  /s/ James A. Watt

James A. Watt

Chairman and Chief Executive Officer

Date: March 15, 2005

      Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Directors:

/s/ John E. Goble, Jr. John E. Goble, Jr. Director	/s/ William E. Greenwood William E. Greenwood Director	/s/ Robert P. Murphy Robert P. Murphy Director
/s/ David E. Preng David E. Preng Director	/s/ Thomas W. Rollins Thomas W. Rollins Director	/s/ Alan C. Shapiro Alan C. Shapiro Director
/s/ James A. Watt James A. Watt Director

Officers:

/s/ James A. Watt
  James A. Watt
Chairman and Chief Executive Officer /s/ Frank T. Smith, Jr.
  Frank T. Smith, Jr.
Senior Vice President/ Finance
(Principal Financial Officer) /s/ Edward V. Howard
  Edward V. Howard
Vice President/ Controller
(Principal Accounting Officer)

Date: March 15, 2005

57

EXHIBIT INDEX

Exhibit
Number			Exhibit
	3	.1####	Restated Certificate of Incorporation of Remington Oil and Gas Corporation.
	3	.3###	By-Laws as amended of Remington Oil and Gas Corporation.
	10	.1++	Pension Plan of Remington Oil and Gas Corporation as Amended and Restated Effective January 1, 2000.
	10	.2++	Amendment Number One to the Pension Plan of Remington Oil and Gas Corporation.
	10	.3***	Amendment Number Two to the Pension Plan of Remington Oil and Gas Corporation.
	10	.4***	Amendment Number Three to the Pension Plan of Remington Oil and Gas Corporation.
	10	.5+++	Amendment Number Four to the Pension Plan of Remington Oil and Gas Corporation.
	10	.6*	Box Energy Corporation Severance Plan.
	10	.7##	Box Energy Corporation 1997 Stock Option Plan (as amended June 17, 1999 and May 23, 2001).
	10	.8*	Box Energy Corporation Non-Employee Director Stock Purchase Plan.
	10	.9#	Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and two executive officers.
	10	.10#	Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and an executive officer.
	10	.11+	Employment Agreement effective January 31, 2000, by and between Remington Oil and Gas Corporation and James A. Watt.
	10	.12***	Form of Employment Agreement effective April 30, 2002, by and between Remington Oil and Gas Corporation and an executive officer.
	10	.13****	Form of Amendment to the Employment Agreements by and between Remington Oil and Gas Corporation and each of James A. Watt and an executive officer.
	10	.14**	Form of Contingent Stock Grant Agreement — Directors.
	10	.15**	Form of Contingent Stock Grant Agreement — Employees.
	10	.16**	Form of Amendment to Contingent Stock Grant Agreement — Directors.
	10	.17**	Form of Amendment to Contingent Stock Grant Agreement — Employees.
	10	.18####	Remington Oil and Gas Corporation 2004 Stock Incentive Plan.
	14	.1###	Code of Business Conduct and Ethics.
	21	####	Subsidiaries of the registrant.
	23	.1####	Consent of Ernst & Young LLP.
	23	.2####	Consent of Netherland, Sewell & Associates, Inc.
	31	.1####	Certification of James A. Watt, Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2####	Certification of Frank T. Smith, Jr., Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1####	Certification of James A. Watt, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2####	Certification of Frank T. Smith Jr., Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1997 filed with the Commission on March 30, 1998.

#  Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 1999 filed with the Commission on November 12, 1999.

58

+  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1999 filed with the Commission on March 29, 2000.

**  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2000 filed with the Commission on March 16, 2001.

##	Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2001 filed with the Commission on November 9, 2001.
++	Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2001 filed with the Commission on March 21, 2002.
***	Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2002 filed with the Commission on March 31, 2003.

###  Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended June 30, 2003 filed with the Commission on August 11, 2003.

+++  Incorporated by reference to the Company’s Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2003 filed with the Commission on March 12, 2004.

****  Incorporated by reference to the Company’s Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2004 filed with the Commission on October 28, 2004.

####  Filed herewith.

59 EX-3.1 2 d23100exv3w1.htm RESTATED CERTIFICATE OF INCORPORATION

EXHIBIT 3.1

RESTATED CERTIFICATE OF INCORPORATION

OF

REMINGTON OIL AND GAS CORPORATION

      Remington Oil and Gas Corporation, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

      FIRST: The name of the corporation as stated in its original Certificate of Incorporation was Box Energy Corporation which was changed by a Certificate of Amendment filed December 5, 1997 to the present name of the corporation, Remington Oil and Gas Corporation.

      SECOND: The date of filing of the corporation’s original Certificate of Incorporation with the Secretary of State of Delaware was February 20, 1991.

      THIRD: This Restated Certificate of Incorporation was duly adopted by the Directors and adopted by the shareholders of Remington Oil and Gas Corporation in accordance with sections 245 and 251(b)(3) of the General Corporation Law of the State of Delaware and restates and further amends the provisions of the Certificate of Incorporation of Remington Oil and Gas Corporation.

      FOURTH: The Restated Certificate of Incorporation of Remington Oil and Gas Corporation shall be amended and restated to read in full as follows:

ARTICLE I

      The name of this corporation is Remington Oil and Gas Corporation.

ARTICLE II

      The address of the corporation’s registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover 19901, County of Kent. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc.

ARTICLE III

      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 (the “Delaware General Corporation Law”).

ARTICLE IV

      A. Classes of Stock. The aggregate number of shares which the corporation shall have the authority to issue is 125,000,000, divided into 100,000,000 shares of common stock of the par value of $.01 per share, and 25,000,000 shares of preferred stock of the par value of $.01 per share.

      B. Preferred Stock. The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of the Article IV, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of shares of each such series and the qualifications, limitations or restrictions thereof.

1

      The authority of the Board with respect to each series shall include, but not be limited to, determination of the following:

      1. The number of shares constituting that series and the distinctive designation of that series;

      2. The dividend rate on the shares of that series, whether dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

      3. Whether that series shall have voting rights in addition to the voting rights provided by law and, if so, the terms of such voting rights;

      4. Whether that series shall have conversion privileges and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;

      5. Whether or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

      6. Whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amounts of such sinking fund;

      7. The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series;

      8. Any other relative rights, preferences and limitations of that series.

      Dividends on outstanding shares of Preferred Stock shall be paid or declared and set apart for payment before any dividends shall be paid or declared and set apart for payment on the common shares with respect to the same dividend period.

      If, upon any voluntary or involuntary liquidation, dissolution or winding up of the corporation, the assets available for distribution to holders of shares of Preferred Stock of all series shall be insufficient to pay such holders the full preferential amount to which they are entitled, then such assets shall be distributed ratably among the shares of all series of Preferred Stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto.

      C. Common Stock. All preferences, voting powers, relative, participating, optional or other special rights and privileges, and qualifications, limitations or restrictions of the Common Stock are expressly made subject and subordinate to those that may be fixed with respect to any shares of the Preferred Stock.

      Except as otherwise required by law or this Restated Certificate of Incorporation, each holder of Common Stock shall have one vote in respect to each share of Common Stock held by such holder of record on the books of the corporation for election of directors and on all matters submitted to a vote of stockholders of the corporation.

      Subject to the preferential rights of the Preferred Stock, the holders of shares of Common Stock shall be entitled to receive, when and if declared by the Board of Directors, out of the assets of the corporation which are by law available therefor, dividends payable either in cash, in property or in shares of capital stock.

      In the event of any dissolution, liquidation or winding up of the affairs of the corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of the Preferred Stock, holders of Common Stock shall be entitled, unless otherwise provided by law or this Restated Certificate of Incorporation, to receive all of the remaining assets of the corporation of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them respectively.

2

ARTICLE V

      No action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. Special meetings of the stockholders of the corporation may be called only by the chairman of the Board or the President of the corporation or by a resolution adopted by the affirmative vote of a majority of the Board of Directors.

ARTICLE VI

      The number of directors which shall constitute the whole Board of Directors of this corporation shall be specified in the Bylaws of this corporation, subject to the provisions of this Article VI. Each director shall serve until the next annual meeting of stockholders and his successor is duly elected and qualified, or his death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Newly created directorships resulting from an increase in the number of directors and any vacancies of the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office (and not by the stockholders), even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders and until such director’s successor shall have been duly elected and qualified.

      Election of directors need not be by written ballot unless the Bylaws of the corporation shall so provide.

ARTICLE VII

      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 and its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law; (iii) under section 174 of the Delaware General Corporation Law; or (iv) for any transaction from which the director derived an improper personal benefit.

      Each person who is or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter 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 or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgment, 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, officer, employee or agent and shall incur to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in the second paragraph hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. The right to indemnification conferred in this section shall be a contract right and shall include the right to be paid by the corporation any expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in

3

which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) 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 under this section or otherwise. The corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers.

      The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Restated Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

      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 the Delaware General Corporation Law.

ARTICLE VIII

      The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the corporation provided, however, that any adoption, amendment or repeal of Bylaws of the corporation by the Board of Directors shall require the approval of at least sixty-six and two-thirds percent (66²/3%) of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any resolution providing for adoption, amendment or repeal is presented to the Board). The stockholders shall also have power to adopt, amend or repeal Bylaws of the corporation, provided, however, that in addition to any vote of the holders of any class or series of stock of this corporation required by law or by this Restated Certificate of Incorporation the affirmative vote of the holders of at least sixty-six and two-thirds percent (66²/3%) of the voting power of all of the then outstanding shares of the stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for such adoption, amendment or repeal by the stockholders of any provisions of the Bylaws of the corporation.

ARTICLE IX

      Notwithstanding any other provision of this Restated Certificate of Incorporation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66²/3%) of the voting power of all of the then outstanding shares of the stock of the corporation entitled to vote generally in the election of Directors voting together as a single class, shall be required to amend in any respect or repeal this Article IX or Articles V, VI, VII and VIII.

      FIFTH: This Restated Certificate of Incorporation was duly adopted by the Board of Directors of this Corporation.

      SIXTH: This Restated Certificate of Incorporation was approved by the holders of the necessary number of outstanding shares of the corporation entitled to vote, as required by the General Corporation Law of the State of Delaware.

4

      IN WITNESS WHEREOF, said Remington Oil and Gas Corporation has caused its corporate seal to be hereunto affixed and the certificate to be signed by its President, James A. Watt, and its Secretary, J. Burke Asher, this 23rd day of December, 1998.

REMINGTON OIL AND GAS

CORPORATION

By  /s/ James A. Watt

James A. Watt, President

ATTEST:

By  /s/ J. Burke Asher

J. Burke Asher, Secretary

5 EX-10.18 3 d23100exv10w18.htm 2004 STOCK INCENTIVE PLAN

EXHIBIT 10.18

Remington Oil and Gas Corporation

2004 Stock Incentive Plan

May 24, 2004

1

Remington Oil and Gas Corporation

2004 Stock Incentive Plan

Table of Contents

Article I  Introduction			4
	1.1	Purpose	4
	1.2	Definitions	4
	1.3	Shares Subject to the Plan	7
	1.4	Administration of the Plan	7
	1.5	Amendment and Discontinuance of the Plan	7
	1.6	Granting of Awards to Participants	7
	1.7	Term of Plan	8
	1.8	Leave of Absence	8
Article II  Non-Qualified Stock Options			8
	2.1	Eligibility	8
	2.2	Exercise Price	8
	2.3	Terms and Conditions of Options	8
	2.4	Option Repricing	9
	2.5	Amendment	9
	2.6	Acceleration of Vesting	10
Article III  Incentive Options			10
	3.1	Eligibility	10
	3.2	Exercise Price	10
	3.3	Dollar Limitation	10
	3.4	10% Stockholder	10
	3.5	Options Not Transferable	10
	3.6	Compliance with 422	10
	3.7	Limitations on Exercise	10
Article IV  Purchased Stock			11
	4.1	Eligible Persons	11
	4.2	Purchase Price	11
	4.3	Payment of Purchase Price	11
Article V  Bonus Stock			11
Article VI  Stock Appreciation Rights and Phantom Stock			11
	6.1	Stock Appreciation Rights	11
	6.2	Phantom Stock Awards	12
Article VII  Restricted Stock			12
	7.1	Eligible Persons	12
	7.2	Restricted Period and Vesting	12

2

Remington Oil and Gas Corporation

2004 Stock Incentive Plan-continued

Article VIII  Performance Awards				13
		8.1	Performance Awards	13
		8.2	Performance Goals	13
Article IX  Other Stock or Performance-Based Awards				15
Article X  Certain Provisions Applicable to All Awards				15
	10.1		General	15
	10.2		Stand-Alone, Additional, Tandem, and Substitute Awards	15
	10.3		Term of Awards	16
	10.4		Form and Timing of Payment under Awards; Deferrals	16
	10.5		Vested and Unvested Awards	16
	10.6		Exemptions from Section 16(b) Liability	16
	10.7		Securities Requirements	16
	10.8		Transferability	17
	10.9		Rights as a Stockholder	17
	10.1		0 Listing and Registration of Shares of Common Stock	17
	10.1		1 Termination of Employment, Death and Disability	17
	10.1		2 Change in Control	18
Article XI  Withholding for Taxes				18
Article XII  Miscellaneous				19
	12.1		No Rights to Awards	19
	12.2		No Right to Employment	19
	12.3		Governing Law	19
	12.4		Severability	19
	12.5		Other Laws	19

3

Remington Oil and Gas Corporation

2004 Stock Incentive Plan-continued

Article I

Introduction

1.1     Purpose. The Remington Oil and Gas Corporation 2004 Stock Incentive Plan (the “Plan”) is intended to promote the interests of Remington Oil and Gas Corporation, a Delaware corporation, (the “Company”) and its stockholders by encouraging Employees and Non-Employee Directors of the Company or its Affiliates (as defined below) to acquire or increase their equity interests in the Company, thereby giving them an added incentive to work toward the continued growth and success of the Company. The Board of Directors of the Company (the “Board”) also contemplates that through the Plan, the Company and its Affiliates will be better able to compete for the services of the individuals needed for the continued growth and success of the Company.

1.2     Definitions. As used in the Plan, the following terms shall have the meanings set forth below:

“Affiliate” means (i) any entity in which the Company, directly or indirectly, owns 10% or more of the combined voting power, as determined by the Committee, (ii) any “parent corporation” of the Company (as defined in section 424(e) of the Code), (iii) any “subsidiary corporation” of any such parent corporation (as defined in section 424(f) of the Code) of the Company and (iv) any trades or businesses, whether or not incorporated which are members of a controlled group or are under common control (as defined in Sections 414(b) or (c) of the Code) with the Company.

“Awards” means, collectively, Options, Purchased Stock, Bonus Stock, Stock Appreciation Rights, Phantom Stock, Restricted Stock, Performance Awards, or Other Stock or Performance Based Awards.

“Bonus Stock” is defined in Article V.

“Cause” for termination of any Participant who is a party to an agreement of employment with or services to the Company shall mean termination for “Cause” as such term is defined in such agreement, the relevant portions of which are incorporated herein by reference. If such agreement does not define “Cause” or if a Participant is not a party to such an agreement, “Cause” means (i) the willful commission by a Participant of a criminal or other act that causes or is likely to cause substantial economic damage to the Company or an Affiliate or substantial injury to the business reputation of the Company or Affiliate; (ii) the commission by a Participant of an act of fraud in the performance of such Participant’s duties on behalf of the Company or an Affiliate; or (iii) the continuing willful failure of a Participant to perform the duties of such Participant to the Company or an Affiliate (other than such failure resulting from the Participant’s incapacity due to physical or mental illness) after written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to the Participant by the Committee. For purposes of the Plan, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done or omitted to be done by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company or an Affiliate, as the case may be.

“Change in Control” shall be deemed to have occurred upon any of the following events:

(i) A merger or consolidation to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such a merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation;

4

Remington Oil and Gas Corporation

2004 Stock Incentive Plan-continued

(ii) The acquisition or holding of direct or indirect beneficial ownership (as defined under Rule 13d-3 of the Exchange Act) of securities of the Company representing the aggregate 30% or more of the total combined voting power of the Company’s then issued and outstanding voting securities by any person, entity or group of associated persons or entities acting in concert, other than S-Sixteen Holding Company, any employee benefit plan of the Company or of any subsidiary of the Company, or any entity holding such securities for or pursuant to the terms of any such plan, beginning from and after such time S-Sixteen Holding Company shall no longer have direct or indirect beneficial ownership (as so defined) of securities of the Company representing in the aggregate a larger percentage of the total combined voting power of the Company’s then issued and outstanding securities than that held by any other person, entity or group;

(iii) The sale of all or substantially all of the assets of the Company to any person or entity that is not a wholly owned subsidiary of the Company; or

(iv) The approval by the stockholders of the Company of any plan or proposal for the liquidation of the Company or its material subsidiaries, other than into the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder.

“Committee” means the Compensation Committee appointed by the Board to administer the Plan or, if none, the Board; provided however, that with respect to any Award granted to a Covered Employee which is intended to be “performance-based compensation” as described in Section 162(m)(4)(c) of the Code, the Committee shall consist solely of two or more “outside directors” as described in Section 162(m)(4)(c)(i) of the Code.

“Common Stock” means the common stock of the Company, no par value (stated value $.01 per share).

“Covered Employee” shall mean the Chief Executive Officer of the Company or the four highest paid officers of the Company other than the Chief Executive Officer as described in Section 162(m)(3) of the Code.

“Disability” means an inability to perform the Participant’s material services for the Company for a period of 180 consecutive days during any 365-day period as a result of incapacity due to mental or physical illness, which is determined to be permanent. A determination of Disability shall be made by a physician satisfactory to both the Participant (or his guardian) and the Company, provided that if the Participant (or his guardian) and the Company do not agree on a physician, the Participant and the Company shall each select a physician and these two together shall select a third physician, whose determination as to Disability shall be binding on all parties. Eligibility for disability benefits under any policy for long-term disability benefits provided to the Participant by the Company shall conclusively establish the Participant’s disability.

“Effective Date” means the date that is (i) adopted by the Board; and (ii) approved by shareholders of the Company, provided that such shareholder approval occurs not more than one-year prior to or after the date of such adoption. The provisions of the Plan are applicable to all Awards granted on or after the Effective Date.

“Employee” means any common law employee of the Company or an Affiliate.

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“Employment” includes any period in which a Participant is an Employee to the Company or an Affiliate.

“Fair Market Value or FMV Per Share”. The Fair Market Value or FMV Per Share of the Common Stock shall be the closing price on the New York Stock Exchange or other national securities exchange or over-the-counter market, if applicable, for the date of the determination, or if no trade of the Common Stock shall have been reported for such date, the closing sales price quoted on such exchange for the most recent trade prior to the determination date. If shares of the Common Stock are not listed or admitted to trading on any exchange, over-the-counter market or any similar organization as of the determination date, the FMV Per Share shall be determined by the Committee in good faith using any fair and reasonable means selected in its discretion.

“Incentive Option” means any option that satisfies the requirements of Code Section 422 and is granted pursuant to Article III of the Plan.

“Non-Employee Director” means persons who are members of the Board but who are not Employees of the Company or any Affiliate. Non-Employee Director shall include any non-elected director emeritus serving in an advisory capacity to the Board.

“Non-Qualified Option” shall mean an option not intended to satisfy the requirements of Code Section 422 and which is granted pursuant to Article II of the Plan.

“Option” means an option to acquire Common Stock granted pursuant to the provisions of the Plan, and refers to either an Incentive Stock Option or a Non-Qualified Stock Option, or both, as applicable.

“Option Expiration Date” means the date determined by Committee, which shall not be more than ten years after the date of grant of an Option.

“Optionee” means a Participant who has received or will receive an Option.

“Other Stock or Performance-Based Award” means an award granted pursuant to Article IX of the Plan that is not otherwise specifically provided for, the value of which is based in whole or in part upon the value of a share of Common Stock.

“Participant” means any Non-Employee Director or Employee granted an Award under the Plan.

“Performance Award” means an Award granted pursuant to Article VIII of the Plan, which, if earned, shall be payable in shares of Common Stock, cash or any combination thereof.

“Purchased Stock” means a right to purchase Common Stock granted pursuant to Article IV of the Plan.

“Phantom Shares” means an Award of the right to receive shares of Common Stock issued at the end of a Restricted Period that is granted pursuant to Article VI of the Plan.

“Restricted Period” shall mean the period established by the Committee with respect to an Award during which the Award either remains subject to forfeiture or is not exercisable by the Participant.

“Restricted Stock” shall mean any share of Common Stock, prior to the lapse of restrictions thereon, granted under Article VII of the Plan.

“Spread” means the amount determined pursuant to Section 6.1(a) of the Plan.

“Stock Appreciation Rights” means an Award granted pursuant to Article VI of the Plan.

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1.3     Shares Subject to the Plan. The aggregate number of shares of Common Stock that may be issued under the Plan shall not exceed 2,000,000 shares of Common Stock (subject to adjustment as described below). In addition, during any calendar year, the number of shares of Common Stock issued or reserved for issuance as options under the Plan to any one Participant plus the number of such shares underlying Stock Appreciation Rights that may be granted to that same Participant shall not exceed 250,000 shares. Notwithstanding the above, however, in the event that at any time after the Effective Date the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the aggregate number and class of securities available under the Plan shall be ratably adjusted by the Committee. Upon the occurrence of any of the events described in the immediately preceding sentence, in order to ensure that after such event the shares of Common Stock subject to the Plan and each Participant’s proportionate interest shall be maintained substantially as before the occurrence of such event, the Committee shall, in such manner as it may deem equitable, adjust (i) the number of shares of Common Stock with respect to which Awards may be granted, (ii) the number of shares of Common Stock subject to outstanding Awards, and (iii) the grant or exercise price with respect to an Award. Such adjustment in an outstanding Option shall be made (i) without change in the total price applicable to the Option or any unexercised portion of the Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices) and (ii) with any necessary corresponding adjustment in exercise price per share. The Committee’s determinations shall be subject to approval by the Board. In the event the number of shares to be delivered upon the exercise or payment of any Award granted under the Plan is reduced for any reason whatsoever or in the event any Award (or portion thereof) granted under the Plan can no longer under any circumstances be exercised or paid, the number of shares no longer subject to such Award shall thereupon be released from such Award and shall thereafter be available under the Plan for the grant of additional Awards. Shares that cease to be subject to an Award because of the exercise of the Award, or the vesting of a Restricted Stock Award or similar Award, shall no longer be subject to any further grant under the Plan. Shares issued pursuant to the Plan (i) may be treasury shares, authorized but unissued shares or, if applicable, shares acquired in the open market and (ii) shall be fully paid and nonassessable. No fractional shares shall be issued under the Plan; payment for any fractional shares shall be made in cash.

1.4     Administration of the Plan. The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee shall interpret the Plan and all Awards under the Plan, shall make such rules as it deems necessary for the proper administration of the Plan, shall make all other determinations necessary or advisable for the administration of the Plan and shall correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award under the Plan in the manner and to the extent that the Committee deems desirable to effectuate the Plan. No member of the Committee shall vote or act upon any matter relating solely to himself. Grants of Awards to any Participant, the terms thereof and any amendment thereto shall be subject to approval by the Board.

1.5     Amendment and Discontinuance of the Plan. The Board may amend, suspend or terminate the Plan; provided, however, no amendment, suspension or termination of the Plan may without the consent of the holder of an Award terminate such Award or adversely affect such person’s rights with respect to such Award in any material respect; provided further, however, that any amendment which would constitute a “material revision” of the Plan (as that term is used in the rules of the New York Stock Exchange) shall be subject to shareholder approval.

1.6     Granting of Awards to Participants. Subject to approval of the Board, the Committee shall have the authority to grant, prior to the expiration date of the Plan, Awards to such Employees and Non-

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Employee Directors as may be selected by it on the terms and conditions hereinafter set forth in the Plan. In selecting the persons to receive Awards, including the type and size of the Award, the Committee may consider any factors that it may deem relevant.

1.7     Term of Plan. If not sooner terminated under the provisions of the Plan, the Plan shall terminate upon, and no further Awards shall be made, after the tenth (10th) anniversary of the Effective Date.

1.8     Leave of Absence. If an Employee is on military, sick leave or other bona fide leave of absence, such person shall be considered an “Employee” for purposes of an outstanding Award during the period of such leave provided it does not exceed 90 days, or, if longer, so long as the person’s right to re-employment is guaranteed either by statute or by contract. If the period of leave exceeds 90 days, the employment relationship shall be deemed to have terminated on the 91st day of such leave, unless the person’s right to re-employment is guaranteed by statute or contract.

Article II

Non-Qualified Stock Options

2.1     Eligibility. All Employees and Non-Employee Directors shall be eligible for grants of Options according to the terms set forth below. Each Non-Qualified Option granted under the Plan shall be evidenced by a written agreement between the Company and the individual to whom Non-Qualified Options were granted.

2.2     Exercise Price. The exercise price to be paid for each share of Common Stock deliverable upon exercise of each Option granted under this Article II shall not be less than the FMV Per Share on the date of grant of such Option. The exercise price for each Option granted under Article II shall be subject to adjustment as provided in Section 2.3(d).

2.3     Terms and Conditions of Options. Options shall be in such form as the Committee may from time to time recommend and the Board shall approve, shall be subject to the following terms and conditions and may contain such additional terms and conditions as are not inconsistent with this Article II:

(a) Option Period and Conditions and Limitations on Exercise. No Option shall be exercisable later than the Option Expiration Date. To the extent not prohibited by other provisions of the Plan, each Option shall be exercisable at such time or times as may be determined at the time such Option is granted.

(b) Manner of Exercise. In order to exercise an Option, the person or persons entitled to exercise it shall deliver to the Company payment in full for (i) the shares being purchased, and (ii) unless other arrangements have been made with the Committee, any required withholding taxes. The payment of the exercise price for each Option shall either be (i) in cash or by check payable and acceptable to the Company, (ii) with the consent of the Committee, by tendering to the Company shares of Common Stock having an aggregate Fair Market Value as of the date of exercise that is not greater than the full exercise price for the shares with respect to which the Option is being exercised and by paying any remaining amount of the exercise price as provided in (i) above, or (iii) with the consent of the Committee and subject to such instructions as the Committee may specify, at the person’s written request the Company may deliver certificates for the shares of Common Stock for which the Option is being exercised to a broker for sale on behalf of the person, provided that the person has irrevocably instructed such broker to remit directly to the Company on the person’s behalf the full amount of the exercise price from the proceeds of such sale. In the event that the Optionee elects to make payment as allowed under clause (ii) above, the Committee may, upon confirming that the Optionee owns the number of additional shares being tendered, authorize the issuance of a new

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certificate for the number of shares being acquired pursuant to the exercise of the Option less the number of shares being tendered upon the exercise and return to the person (or not require surrender of) the certificate for the shares being tendered upon the exercise. If the Committee so requires, such person or persons shall also deliver a written representation that all shares being purchased are being acquired for investment and not with a view to, or for resale in connection with, any distribution of such shares.

(c) Options not Transferable. Except as provided below, no Non-Qualified Option granted hereunder shall be transferable other than by (i) will or by the laws of descent and distribution or (ii) pursuant to a domestic relations order and, during the lifetime of the Participant to whom any such Option is granted, and it shall be exercisable only by the Participant (or his guardian). Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or to subject to execution, attachment or similar process, any Option granted hereunder, or any right thereunder, contrary to the provisions hereof, shall be void and ineffective and shall give no right to the purported transferee. With Committee approval, the Participant (or his guardian) may transfer, for estate planning purposes, all or part of a Non-Qualified Option to one or more immediate family members or related family trusts or partnerships or similar entities.

(d) Adjustment of Options. In the event that at any time after the Effective Date the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares and the exercise price as provided in Section 1.3.

(e) Listing and Registration of Shares. Each Option shall be subject to the requirement that if at any time the Committee determines that the listing, registration, or qualification of the shares subject to such Option under any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the issue or purchase of shares thereunder, such Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained and the same shall have been free of any conditions not acceptable to the Committee.

2.4     Option Repricing. With Board and shareholder approval, the Committee may grant to holders of outstanding Non-Qualified Options, in exchange for the surrender and cancellation of such Non-Qualified Options, new Non-Qualified Options having exercise prices lower (or higher with any required consent) than the exercise price provided in the Non-Qualified Options so surrendered and canceled and containing such other terms and conditions as the Committee may deem appropriate.

2.5     Amendment. Subject to Board approval, the Committee may, without the consent of the person or persons entitled to exercise any outstanding Option, amend, modify or terminate such Option; provided, however, such amendment, modification or termination shall not, without such person’s consent, reduce or diminish the value of such Option determined as if the Option had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination. Subject to Board approval, the Committee may at any time or from time to time, in the case of any Option which is not then immediately exercisable in full, accelerate the time or times at which such Option may be exercised to any earlier time or times.

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2.6     Acceleration of Vesting. Any Option granted hereunder which is not otherwise vested shall vest (unless specifically provided to the contrary in the document or instrument evidencing an Option granted hereunder) upon (i) termination of an Employee or removal of a Non-Employee Director without Cause; (ii) termination or removal of an Employee or Non-Employee Director for any reason within one (1) year from the effective date of the Change in Control; or (iii) death or Disability of the Participant.

Article III

Incentive Options

The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Article III, all the provisions of Article II shall be applicable to Incentive Options. Options which are specifically designated as Non-Qualified Options shall not be subject to the terms of this Section III.

3.1     Eligibility. Incentive Options may only be granted to Employees.

3.2     Exercise Price. The exercise price per Share shall not be less than one hundred percent (100%) of the FMV Per Share on the option grant date.

3.3     Dollar Limitation. The aggregate Fair Market Value (determined as of the respective date or dates of grant) of shares of Common Stock for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted.

3.4     10% Stockholder. If any Employee to whom an Incentive Option is granted owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any “parent corporation” of the Company (as defined in Section 424(e) of the Code) or any “subsidiary corporation” of the Company (as defined in Section 424(f) of the Code), then the exercise price per share shall not be less than one hundred ten percent (110%) of the FMV Per Share on the date of grant and the option term shall not exceed five (5) years measured from the date of grant. For purposes of the immediately preceding sentence, the attribution rules under Section 424(d) of the Code shall apply for purposes of determining an Employee’s ownership.

3.5     Options Not Transferable. No Incentive Option granted hereunder shall be transferable other than by will or by the laws of descent and distribution and shall be exercisable during the Optionee’s lifetime only by such Optionee.

3.6     Compliance with 422. All Options that are intended to be Incentive Stock Options shall be designated as such in the Option grant and in all respects shall be issued in compliance with Code Section 422.

3.7     Limitations on Exercise. No Incentive Option shall be exercisable more than three (3) months after the Optionee ceases to be an Employee for any reason other than death or Disability, or more than one (1) year after the Optionee ceases to be an Employee due to death or Disability.

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Article IV

Purchased Stock

4.1     Eligible Persons. Subject to approval by the Board, the Committee shall have the authority to sell shares of Common Stock to such Employees and Non-Employee Directors of the Company or its Affiliates as may be selected by it, on such terms and conditions as it may establish, subject to the further provisions of this Article IV. Each issuance of Common Stock under this Plan shall be evidenced by an agreement which shall be subject to applicable provisions of this Plan and to such other provisions not inconsistent with this Plan as the Committee may recommend and the Board may approve for the particular sale transaction.

4.2     Purchase Price. Subject to approval by the Board, the price per share of Common Stock to be purchased by a Participant under this Plan shall be determined by the Committee, and may be less than, but shall not greater than the FMV Per Share at the time of purchase.

4.3     Payment of Purchase Price. Payment of the purchase price of Purchased Stock under this Plan shall be made in full in cash.

Article V

Bonus Stock

The Committee may, from time to time and subject to the provisions of the Plan and approval by the Board, grant shares of Bonus Stock to Employees or Non-Employee Directors. Such grants of Bonus Stock shall be in consideration of performance of services by the Participant without additional consideration except as may be required by the Committee or pursuant to Article XI. Bonus Stock shall be shares of Common Stock that are not subject to a Restricted Period under Article VII.

Article VI

Stock Appreciation Rights and Phantom Stock

6.1     Stock Appreciation Rights. All Employees and Non-Employee Directors shall be eligible to receive grants of Stock Appreciation Rights on the following terms and conditions.

(a) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the FMV Per Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee (the “Spread”). Notwithstanding the foregoing, the Award may provide, that the Spread covered by a Stock Appreciation Right may not exceed a specified amount.

(b) Rights Related to Options. A Stock Appreciation Right granted in connection with an Option shall entitle a Participant, upon exercise thereof, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of the amount of the Spread computed pursuant to Subsection 6.1(a) hereof. That Option shall then cease to be exercisable to the extent surrendered.

(c) Right Without Option. A Stock Appreciation Right granted independent of an Option shall provide for an exercise price per share of Common Stock that is not less than one hundred percent (100%) of the FMV Per Share of Common Stock on the date of grant of the Stock Appreciation Right and shall be exercisable as set forth in the Award agreement governing the Stock Appreciation Right and shall not be transferable (other than by will or the laws of descent and distribution).

(d) Terms. The Award shall set forth the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part (including based on

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achievement of performance goals and/or future service requirements), the method of exercise, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.

6.2     Phantom Stock Awards. All Employees and Non-Employee Directors shall be eligible to receive grants of Phantom Stock Awards, which are rights to receive cash or Common Stock equal to the Fair Market Value of specified number of shares of Common Stock at the end of a specified deferral period, subject to the following terms and conditions:

(a) Award and Restrictions. Satisfaction of a Phantom Stock Award shall occur upon expiration of the deferral period specified for such Phantom Stock Award or, if permitted by the terms of the Award, as elected by the Participant. In addition, Phantom Stock Awards shall be subject to such restrictions (which may include a risk of forfeiture), if any, as the Committee (with Board approval) may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, installments or otherwise, as the Committee (with Board approval) may determine. Phantom Stock Awards shall not be transferable (other than by will or the laws of descent and distribution).

(b) Forfeiture. Except as otherwise may be set forth in any Award, employment or other agreement pertaining to a Phantom Stock Award, upon termination of employment or services during the applicable deferral period or portion thereof to which forfeiture conditions apply, all Phantom Stock Awards that are at that time subject to deferral (other than a deferral at the election of the Participant) shall be forfeited; provided that the Committee (with Board approval) may provide, by rule or regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Phantom Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee (with Board approval) may in other cases waive in whole or in part the forfeiture of Phantom Stock Awards.

(c) Performance Goals. To the extent that any Award granted pursuant to this Article VI is intended to constitute performance-based compensation for purposes of Section 162(m) of the Code, the grant or settlement of the Award shall be subject to the achievement of performance goals determined and applied in a manner consistent with Section 8.2.

Article VII

Restricted Stock

7.1     Eligible Persons. All Employees and Non-Employee Directors shall be eligible to receive grants of Restricted Stock.

7.2     Restricted Period and Vesting.

(a) The Restricted Stock shall be subject to such forfeiture restrictions (including, without limitation, limitations that qualify as a “substantial risk of forfeiture” within the meaning given to that term under Section 83 of the Code) and restrictions on transfer by the Participant and repurchase by the Company as shall be set forth in such Award. Prior to the lapse of such restrictions the Participant shall not be permitted to transfer such shares. The Company shall have the right to repurchase or recover such shares for the amount of cash paid therefor, if any, if (i) the Participant shall terminate Employment from or services to the Company prior to the lapse of such restrictions under circumstances that do not cause such restrictions to lapse or (ii) the Restricted Stock is forfeited by the Participant pursuant to the terms of the Award.

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(b) Notwithstanding the foregoing, unless the Award specifically provides otherwise, all Restricted Stock not otherwise vested shall vest upon (i) termination of an Employee or removal of a Non-Employee Director without Cause; (ii) termination or removal of an Employee or Non-Employee Director for any reason within one (1) year from the effective date of a Change in Control; or (iii) death or Disability of the Participant.

(c) Each certificate representing Restricted Stock awarded under the Plan shall be registered in the name of the Participant and, during the Restricted Period, shall be left in deposit with the Company and a stock power endorsed in blank until such time as the restrictions on transfer have lapsed. The grantee of Restricted Stock shall have all the rights of a stockholder with respect to such shares including the right to vote and the right to receive dividends or other distributions paid or made with respect to such shares. Any certificate or certificates representing shares of Restricted Stock shall bear a legend similar to the following:

The shares represented by this certificate have been issued pursuant to the terms of the Remington Oil and Gas Corporation 2004 Stock Incentive Plan (as amended and restated) and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such plan or award dated                     , 20     .

Article VIII

Performance Awards

8.1     Performance Awards. All Employees and Non-Employee Directors shall be eligible to receive Performance Awards. Performance Awards may be based on performance criteria measured over a period of not less than one year and not more than ten years. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to increase the amounts payable under any Award subject to performance conditions except as limited under Section 8.2 in the case of a Performance Award granted to a Covered Employee.

8.2     Performance Goals. The grant and/or settlement of a Performance Award shall be contingent upon terms set forth in this Section 8.2.

(a) General. The performance goals for Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee and approved by the Board. In the case of any Award granted to a Covered Employee, performance goals shall be designed to be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder (including Treasury Regulations sec. 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance are such that the achievement of performance goals is “substantially uncertain” at the time of grant. Performance Awards shall be granted and/or settled upon achievement of any one or more such performance goals. Performance goals may differ among Performance Awards granted to any one Participant or for Performance Awards granted to different Participants.

(b) Business Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, divisions or business or geographical units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used in establishing performance goals for Performance Awards granted to a Participant:

(i) Total shareholder return;

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(ii) Return on assets, equity, capital, capital employed, or investment;

(iii) Pre-tax or after-tax profit levels, including: earnings per share; earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; net operating profits after tax, and net income;

(iv) Cash flow, free cash flow, and cash flow return on investment;

(v) Operational measures including growth in reserves from the prior period and percentage or absolute increase in production from the prior period;

(vi) Levels of cost including finding and development costs, and cash costs (interest expense, G&A, and LOE) expressed in relationship to Mcfe/produced during the Performance Period.

Any of the above goals shall be determined on the absolute or relative basis or as compared to the performance of a published or special index including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies.

(c) Performance Period; Timing for Establishing Performance Goals. Achievement of performance goals in respect of Performance Awards shall be measured over a performance period of not less than one year and not more than ten years, as specified in the Award. Such periods will be established by the Committee and approved by the Board. Performance goals in the case of any Award granted to a Participant shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

(d) Settlement of Performance Awards; Other Terms. After the end of each performance period, the Committee shall determine the amount, if any, of Performance Awards payable to each Participant based upon achievement of business criteria over a performance period. The Committee may not exercise discretion to increase any such amount payable in respect of a Performance Award to a Covered Employee if such Award states that it is intended to comply with Section 162(m) of the Code. The Award shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of Performance Awards.

(e) Written Determinations. All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award, and the achievement of performance goals relating to Performance Awards shall be made in writing in the case of any Award granted to a Participant and shall be subject to approval by the Board. The Committee may not delegate any responsibility relating to any Performance Awards to a Covered Employee.

(f) Status of Performance Awards under Section 162(m) of the Code. It is the intent of the Company that Performance Awards granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) of the Code and regulations thereunder (including Treasury Regulations sec. 1.162-27 and successor regulations thereto) shall, if so designated by the Committee, constitute “performance-based compensation” within the meaning of Section 162(m) of the Code and regulations thereunder. Accordingly, the terms of this Section 8.2 shall be interpreted in a manner consistent with Section 162(m) of the Code and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of a Performance Award, who is likely to be a Covered

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Employee with respect to that fiscal year. If any provision of the Plan as in effect on the date of adoption or any agreements relating to Performance Awards that are designated as intended to comply with Section 162(m) of the Code does not comply or is inconsistent with the requirements of Section 162(m) of the Code or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

Article IX

Other Stock or Performance-Based Awards

All Employees and Non-Employee Directors are eligible to receive Other Stock or Performance-Based Awards, which shall consist of a right which (i) is not an Award described in any other Article and (ii) is denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock (including, without limitation, securities convertible into shares of Common Stock) or cash as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and approval by the Board, the Committee shall determine the terms and conditions of any such Other Stock or Performance-Based Award.

Article X

Certain Provisions Applicable to All Awards

10.1     General. Awards shall be evidenced by a written agreement or other document and may be granted on the terms and conditions set forth herein. All Awards and any amendments thereto shall be subject to the approval of the Board. Any Award or the exercise thereof, shall be subject to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee (with Board approval) shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant and terms permitting a Participant to make elections relating to his or her Award. The terms, conditions and/or restrictions contained in an Award may differ from the terms, conditions and restrictions contained in any other Award. Subject to approval by the Board, the Committee may amend an Award; provided, however, no amendment of an Award may, without the consent of the holder of the Award, adversely affect such person’s rights with respect to such Award in any material respect. Subject to the approval of the Board and the terms of the Plan or Award, the Committee shall retain the power and discretion to accelerate or waive, at any time, any term or condition of an Award that is not mandatory under the Plan; provided, however, that the Committee shall not have a discretion to accelerate or waive any term or condition of an Award that is intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code if such discretion would cause the Award not to so qualify. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of the Delaware General Corporation Law, no consideration other than services may be required for the grant of any Award.

10.2     Stand-Alone, Additional, Tandem, and Substitute Awards. Subject to Section 2.4 of the Plan, Awards granted under the Plan may be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company or an Affiliate, or any other right of a Participant to receive payment from the Company or any Affiliate. Such additional, tandem and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award, the Committee shall require the surrender of such other Award for cancellation in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any

15

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Affiliate. Any such action contemplated under this Section 10.2 shall be effective only to the extent that such action will not cause (i) the holder of the Award to lose the protection of Section 16(b) of the Securities Exchange Act of 1934 and rules and regulations promulgated thereunder, or (ii) any Award that is designed to qualify payments thereunder as performance-based compensation as defined in Section 162(m) of the Code to fail to qualify as such performance-based compensation.

10.3     Term of Awards. In no event shall the term of any Award exceed a period of ten years (or such shorter terms as may be required in respect of an Incentive Option under Section 422 of the Code).

10.4     Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award agreement, payments to be made by the Company upon the exercise of an Option or other Award or settlement of an Award may be made in a single payment or transfer. The settlement of any Award may, subject to any limitations set forth in the Award agreement, be accelerated and cash paid in lieu of shares in connection with such settlement. Awards granted pursuant to Article VI or VIII of the Plan may be payable in shares to the extent permitted by the terms of the applicable Award agreement. Installment or deferred payments may be provided for in the Award agreement or permitted with the consent or at the election of the Participant. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of amounts in respect of installment or deferred payments denominated in shares. Any deferral shall only be allowed as is provided in a separate deferred compensation plan adopted by the Company. The Plan shall not constitute an “employee benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

10.5     Vested and Unvested Awards. After the satisfaction of all of the terms and conditions set by the Committee with respect to an Award of (i) Restricted Stock, a certificate, without the legend set forth in Section 7.2(a), for the number of shares that are no longer subject to such restrictions, terms and conditions shall be delivered to the Employee, (ii) Phantom Stock, to the extent not paid in cash, a certificate for the number of shares equal to the number of shares of Phantom Stock earned, and (iii) Stock Appreciation Rights or Performance Awards, cash and/or a certificate for the number of shares equal in value to the number of Stock Appreciation Rights or amount of Performance Awards vested shall be delivered to the Participant. The number of shares of Common Stock which shall be issuable upon exercise of a Stock Appreciation Right or earning of a Performance Award shall be determined by dividing (1) by (2) where (1) is the number of shares of Common Stock as to which the Stock Appreciation Right is exercised multiplied by the Spread or the amount of Performance Award that is earned and payable, as applicable, and (2) is the FMV Per Share of Common Stock on the date of exercise of the Stock Appreciation Right or the date the Performance Award is earned and payable, as applicable.

10.6     Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the Securities Exchange Act of 1934 shall be exempt from Section 16(b) of the Securities Exchange Act of 1934 pursuant to an applicable exemption (except for transactions acknowledged by the Participant in writing to be non-exempt). Accordingly, if any provision of this Plan or any Award agreement does not comply with the requirements of Rule 16b-3 as then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b) of the Securities Exchange Act of 1934.

10.7     Securities Requirements. No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then-applicable requirements imposed by federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction and by any stock market or exchange upon which the Common Stock may be listed, have been fully met. As a condition precedent to

16

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2004 Stock Incentive Plan-continued

the issuance of shares pursuant to the grant or exercise of an Award, the Company may require the grantee to take any reasonable action to meet such requirements. The Company shall not be obligated to take any affirmative action in order to cause the issuance or transfer of shares pursuant to an Award to comply with any law or regulation described in the second preceding sentence.

10.8     Transferability.

(a) Non-Transferable Awards. Except as otherwise specifically provided in the Plan, no Award and no right under the Plan, contingent or otherwise, other than Purchased Stock, Bonus Stock or Restricted Stock as to which restrictions have lapsed, will be (i) assignable, saleable, or otherwise transferable by a Participant except by will or by the laws of descent and distribution or pursuant to a domestic relations order, or (ii) subject to any encumbrance, pledge or charge of any nature. No transfer by will or by the laws of descent and distribution shall be effective to bind the Company unless the Committee shall have been furnished with a copy of the deceased Participant’s will or such other evidence as the Committee may deem necessary to establish the validity of the transfer. Any attempted transfer in violation of this Section 10.8(a) shall be void and ineffective for all purposes.

(b) Ability to Exercise Rights. Except as otherwise specifically provided under the Plan, only the Participant or his guardian (if the Participant becomes Disabled), or in the event of his death, his legal representative or beneficiary, may exercise Options, receive cash payments and deliveries of shares, or otherwise exercise rights under the Plan. The executor or administrator of the Participant’s estate, or the person or persons to whom the Participant’s rights under any Award will pass by will or the laws of descent and distribution, shall be deemed to be the Participant’s beneficiary or beneficiaries of the rights of the Participant hereunder and shall be entitled to exercise such rights as are provided hereunder.

10.9     Rights as a Stockholder.

(a) No Stockholder Rights. Except as otherwise provided in Section 7.2(c), a Participant who has received a grant of an Award or a transferee of such Participant shall have no rights as a stockholder with respect to any shares of Common Stock until such person becomes the holder of record. Except as otherwise provided in Section 7.2(c), no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued.

10.10     Listing and Registration of Shares of Common Stock. The Company, in its discretion, may postpone the issuance and/or delivery of shares of Common Stock upon any exercise of an Award until completion of such stock exchange listing, registration, or other qualification of such shares under any state and/or federal law, rule or regulation as the Company may consider appropriate, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the shares in compliance with applicable laws, rules and regulations.

10.11     Termination of Employment, Death and Disability.

(a) Termination of Employment. Except as otherwise provided in the Award or in this Section 10.11, if Employment of an Employee or service of a Non-Employee Director is terminated under circumstances that do not cause the Participant to become fully vested in the Award, any nonvested Award granted pursuant to the Plan outstanding at the time of such termination and all rights thereunder shall wholly and completely terminate and no further vesting shall occur. Any vested Award shall expire on the earlier of (A) the expiration date set forth in the Award; or (B) the

17

Remington Oil and Gas Corporation

2004 Stock Incentive Plan-continued

expiration of twelve (12) months after the date of termination of Employment or service in the case of any Award other than an Incentive Option or three (3) months after the date of termination of Employment in the case of an Incentive Option; provided, however, that in the event of death or Disability of a Participant after termination of employment or service and before the expiration of such Award the expiration of the Award shall occur twelve months after the date of such death or Disability; and provided further, however, that in the event of termination of an Employee or removal of a Director for Cause, such Awards shall expire at 12:01 a.m. on the date of termination.

(b) Continuation. The Committee, subject to the approval of the Board, may provide for the continuation of any Award for such period and upon such terms and conditions as are determined by the Committee and approved by the Board in the event that a Participant ceases to be an Employee or Non-Employee Director.

10.12     Change in Control. Unless otherwise provided in the Award and subject to approval by the Board, in the event of a Change in Control:

(i) the Committee may accelerate vesting and the time at which all Options and Stock Appreciation Rights then outstanding may be exercised;

(ii) the Committee may waive all restrictions and conditions of all Restricted Stock and Phantom Stock then outstanding with the result that those types of Awards shall be deemed satisfied, and the Restriction Period or other limitations on payment in full with respect thereto shall be deemed to have expired, as of the date of the Change in Control or such other date as may be determined by the Committee; and

(iii) the Committee may determine to amend Performance Awards and Other Stock or Performance-Based Awards, or substitute new Performance Awards and Other Stock or Performance-Based Awards in consideration of cancellation of outstanding Performance Awards and any Other Stock or Performance-Based Awards, in order to ensure that such Awards shall become fully vested, deemed earned in full and promptly paid to the Participants as of the date of the Change in Control or such other date as may be determined by the Committee, without regard to payment schedules and notwithstanding that the applicable performance cycle, retention cycle or other restrictions and conditions shall not have been completed or satisfied.

Notwithstanding the above provisions of this Section 10.12, the Committee shall not be required to take any action described in the preceding provisions of this Section 10.12 and any decision made by the Committee not to take some or all of the actions described in the preceding provisions of this Section 10.12 shall be final, binding and conclusive with respect to the Company and all other interested persons.

Article XI

Withholding for Taxes

Any issuance of Common Stock pursuant to the exercise of an Option or payment of any other Award under the Plan shall not be made until appropriate arrangements satisfactory to the Company have been made for the payment of any tax amounts (federal, state, local or other) that may be required to be withheld or paid by the Company with respect thereto. Such arrangements may, at the discretion of the Committee, include allowing the person to tender to the Company shares of Common Stock owned by the person, or to request the Company to withhold shares of Common Stock being acquired pursuant to the Award, whether through the exercise of an Option or as a distribution pursuant to the Award, which have an aggregate FMV Per Share as of the date of such withholding that is not greater than the sum of all tax

18

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2004 Stock Incentive Plan-continued

amounts to be withheld with respect thereto, together with payment of any remaining portion of such tax amounts in cash or by check payable and acceptable to the Company.

Notwithstanding the foregoing, if on the date of an event giving rise to a tax withholding obligation on the part of the Company the person is an officer or individual subject to Rule 16b-3, such person may direct that such tax withholding be effectuated by the Company withholding the necessary number of shares of Common Stock (at the tax rate required by the Code) from such Award payment or exercise.

Article XII

Miscellaneous

12.1     No Rights to Awards. No Participant or other person shall have any claim to be granted any Award, there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards and the terms and conditions of Awards need not be the same with respect to each recipient.

12.2     No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

12.3     Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal law and the laws of the State of Delaware, without regard to any principles of conflicts of law.

12.4     Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Participant or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

12.5     Other Laws. The Company may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance of transfer or such shares or such other consideration might violate any applicable law.

19 EX-21 4 d23100exv21.htm SUBSIDIARIES

Exhibit 21

REMINGTON OIL AND GAS CORPORATION
LIST OF SUBSIDIARIES OF THE REGISTRANT

CKB Petroleum, Inc. (incorporated in Texas).

Other subsidiaries are omitted because, if considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary as of December 31, 2004.

EX-3.1

exv3w1

EX-10.18

exv10w18

EX-21

exv21

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement of Remington Oil and Gas Corporation, on Form S-4 (File No. 333-61513) and in the Registration Statement of Remington Oil and Gas Corporation on Form S-3 (File 333-106258) and in the Registration Statements of Remington Oil and Corporation on Forms S-8 (File No. 333-74880, 333-74878, 333-88111 and 333-88115) of our reports dated March 14, 2005, with respect to the consolidated financial statements of Remington Oil and Gas Corporation, Remington Oil and Gas Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Remington Oil and Gas Corporation included in this Annual Report (Form 10-K) for the year ended December 31, 2004.

/s/ ERNST & YOUNG LLP

Dallas, Texas
March 14, 2005

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

We consent to the incorporation by reference in the Registration Statements of Remington Oil and Gas Corporation (the “Company”) on Form S-4 (File No.  333-61513), and in the Registration Statement of the Company on Form S-3 (File No. 333-106258) and in the Registration Statement of the Company on Forms S-8 (File No. 333-74880, 333-74878, 333-88111 and 333-88115), and the related prospectuses of the reference of Netherland, Sewell & Associates, Inc. in the Annual Report of the Company filed on Form 10-K for the year ended December 31, 2004, filed with the Securities and Exchange Commission on or about March 15, 2005.

Netherland, Sewell & Associates, Inc.
By:	/s/ G. Lance Binder
	G. Lance Binder
	Executive Vice President

Dallas, Texas
March 15, 2005

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, James A. Watt, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Remington Oil and Gas Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 15, 2005

/s/ James A. Watt
James A. Watt
Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Frank T. Smith, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Remington Oil and Gas Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 15, 2005

/s/ Frank T. Smith, Jr.
Frank T. Smith, Jr.
Senior Vice President/Finance (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Remington Oil and Gas Corporation (the “Company”) on Form 10-K for the period ending December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James A. Watt, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James A. Watt  

James A. Watt 

Chairman and Chief Executive Officer 

March 15, 2005

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and
not for any other purpose.

A signed original of this written statement required by Section 906 has been provided to Remington Oil and Gas Corporation and will be retained by Remington Oil and Gas Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Remington Oil and Gas Corporation (the “Company”) on Form 10-K for the period ending December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank T. Smith, Jr., Senior Vice President/Finance (Principal Financial Officer) of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Frank T. Smith, Jr.  

Frank T. Smith, Jr. 

Senior Vice President/Finance (Principal Financial Officer) 

March 15, 2005

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and
not for any other purpose.

A signed original of this written statement required by Section 906 has been provided to Remington Oil and Gas Corporation and will be retained by Remington Oil and Gas Corporation and furnished to the Securities and Exchange Commission or its staff upon request.