b'Our operations may also be adversely affected by laws and policies of the jurisdictions, includingthe jurisdictions where our oil and gas operating activities are located as well as the United Kingdomand the Cayman Islands and other jurisdictions in which we do business, that affect foreign trade andtaxation. Changes in any of these laws or policies or the implementation thereof could materially andadversely affect our financial position, results of operations and cash flows.More comprehensive and stringent regulation in the U.S. Gulf of Mexico has significantly increased costs anddelays in offshore oil and natural gas exploration and production operations.In the U.S. Gulf of Mexico, there have been a series of regulatory initiatives developed andimplemented at the federal level to address the direct impact of the incident and to prevent similarincidents in the future. Beginning in 2010 and continuing through the present, the Department ofInterior (DOI) through the Bureau of Ocean Energy Management (BOEM) and the Bureau ofSafety and Environmental Enforcement (BSEE), has issued a variety of regulations and Notices toLessees and Operators (NTLs), intended to impose additional safety, permitting and certificationrequirements applicable to exploration, development and production activities in the U.S. Gulf ofMexico. These regulatory initiatives effectively slowed down the pace of drilling and productionoperations in the U.S. Gulf of Mexico as adjustments were being made in operating procedures,certification requirements and lead times for inspections, drilling applications and permits, andexploration and production plan reviews, and as the federal agencies evolved into their present daybureaus. On April 17, 2015, BSEE published a proposed rule that would impose more stringentstandards on blowout preventers (BOP). In April 2016, BSEE issued a final version of this ruleeffective July 2016, though some requirements of the rule have delayed compliance deadlines. The finalrule addresses the full range of systems and equipment associated with well control operations, focusingon requirements for BOPs, well design, well control casing, cementing, real-time monitoring and subseacontainment. Key features of the well control regulations include requirements for BOPs, double shearrams, third-party reviews of equipment, real time monitoring data, safe drilling margins, centralizers,inspections and other reforms related to well design and control, casing, cementing and subseacontainment. On March 28, 2017, President Trump signed an executive order (the March 2017Executive Order) directing federal agencies to initiate rulemakings to suspend, revise or rescindcertain regulations relating to the energy industry as necessary to ensure consistency with the goals ofenergy independence, economic growth and cost-effective environmental regulation. In response to theMarch 2017 Executive Order and a subsequent executive order issued by President Trump in April 2017focusing on offshore energy development, in May 2018, BSEE published a proposal to relax certainrequirements of the July 2016 rule. The proposed rules comment period expired on August 6, 2018,but a final rule has not yet been published; this rule is likely to be subject to legal challenges.In addition to the array of new or revised safety, permitting and certification requirementsdeveloped and implemented by the DOI in the past few years, there have been a variety of proposalsto change existing laws and regulations that could affect offshore development and production, such as,for example, a proposal to significantly increase the minimum financial responsibility demonstrationrequired under the Oil Pollution Act of 1990. To the extent the existing regulatory initiativesimplemented and pursued over the past few years or any future restrictions, whether through legislativeor regulatory means or increased or broadened permitting and enforcement programs, fosteruncertainties or delays in our offshore oil and natural gas development or exploration activities, thensuch conditions may have a material adverse effect on our business, financial condition and results ofoperations.56'