Pacific Energy Partners, L.P. Reports Earnings for Second Quarter 2006

Pacific Energy Partners, L.P. (NYSE:PPX) ("Pacific
Energy" or the "Partnership") announced that net income for the three
months ended June 30, 2006, was $21.4 million, or $0.54 per limited
partner unit, compared to net income of $12.2 million, or $0.40 per
limited partner unit, for the three months ended June 30, 2005.
Recurring net income for the three months ended June 30, 2006 was
$20.3 million, or $0.51 per limited partner unit compared to recurring
net income of $12.2 million, or $0.40 per limited partner unit, for
the corresponding period in 2005. All per unit amounts in the text of
this news release are reported on a diluted basis.
   The increase in recurring net income for the quarter ended June
30, 2006, reflects the benefit of the September 30, 2005, acquisition
of refined products terminals and a refined products pipeline from
Valero L.P., increased margins from the crude oil marketing activities
conducted by the Partnership's Pacific Marketing and Transportation
subsidiary ("PMT"), higher crude oil pipeline deliveries to
Bakersfield, California refineries, lower repair and maintenance costs
associated with the California pipelines, and higher margins and
increased volumes on the Rangeland pipeline system in Alberta, Canada.
Partially offsetting these increases were higher interest expense
attributable to the financing of the Valero L.P. acquisition and
increased general and administrative costs. In addition, there were
approximately 32% more units outstanding compared to the 2005 quarter.
   Recurring net income for the second quarter of 2006 excludes $3.4
million of transaction costs related to the recently announced merger
with Plains All American Pipeline, L.P. ("Plains"), expected to close
later this year and a $4.6 million deferred tax benefit. Due to recent
legislation, both federal and Alberta corporate tax rates in Canada
are being reduced, and Pacific Energy's deferred tax liability balance
is required by accounting rules to be adjusted to the new rates.
   For the six months ended June 30, 2006, net income was $33.1
million, or $0.83 per limited partner unit, compared to $15.6 million,
or $0.58 per limited partner unit, for the six months ended June 30,
2005. Recurring net income for the six months ended June 30, 2006, was
$31.9 million, or $0.80 per limited partner unit, compared with $22.6
million, or $0.74 per limited partner unit, for the six months ended
June 30, 2005. Recurring net income for the first six months of 2006
reflects the benefit of six months of operations in 2006 from the
assets acquired from Valero L.P., increased margins from crude oil
marketing activities, increased volumes and higher margins for the
Rangeland pipeline system, higher revenue due to increased Bakersfield
refinery deliveries, and lower pipeline repair expenses in California.
Partially offsetting these increases were increased interest and
general and administrative expenses. In addition, there were
approximately 32% more units outstanding in the first half of 2006
versus 2005.
   Recurring net income for the six months ended June 30, 2006,
excludes the previously mentioned merger costs and deferred tax
benefit. Recurring net income for the six months ended June 30, 2005,
excludes a $2.0 million expense for the insurance deductible
associated with the remediation of the Pyramid Lake oil release, a
$3.1 million expense related to the accelerated vesting of restricted
units under Pacific Energy's long-term incentive plan as a result of
the change in control attributable to the purchase of the Pacific
Energy's general partner by LB Pacific, LP ("LB Pacific"), and $1.8
million of expense from this general partner transaction required to
be recorded as a partnership expense, with the general partner's
payment of it recorded as a capital contribution.
   "We are very pleased with our second quarter results. Our core
transportation and storage business performed well and continued to
grow. In addition the Partnership was able to realize the benefit of
favorable marketing margins for both PMT and Rangeland, which enabled
us to exceed previously announced guidance," stated Irv Toole,
President and CEO of Pacific Energy. "Organic growth projects in each
of our two business units continue to progress and remain a primary
focus of the Partnership."
   On July 17, 2006, Pacific Energy announced a cash distribution of
$0.5675 per unit for the second quarter of 2006, or $2.27 per unit
annualized. This is unchanged from the first quarter 2006 distribution
level but is 10.7% higher than the second quarter 2005 distribution
level. The distribution will be paid on August 14, 2006, to holders of
record as of July 31, 2006.
   Distributable cash flow available to the limited partners'
interest for the second quarter of 2006 was $25.1 million after
deducting $3.4 million in merger costs. On a diluted, weighted average
basis, there were 39,314,000 limited partner units outstanding during
the second quarter of 2006.
   Earnings before interest, tax, depreciation and amortization
expenses ("EBITDA") were $38.8 million in the second quarter of 2006.
   Pursuant to the terms of the partnership agreement, on August 14,
2006, 2,616,250 subordinated units owned by LB Pacific are expected to
convert on a one-for-one basis to common units. The conversion of the
subordinated units will not affect future cash distributions.

   OPERATING RESULTS BY SEGMENT

   WEST COAST BUSINESS UNIT

   Operating income was $22.0 million for the three months ended June
30, 2006, compared to $12.4 million in the corresponding period in
2005. This increase was primarily due to the addition of the Northern
California and East Coast terminals that were acquired on September
30, 2005, from Valero L.P., improved operating income from California
pipeline operations, and increased margins from crude oil marketing
activities.
   The Northern California terminals are operating at capacity, with
450,000 barrels of additional storage capacity currently under
construction at Martinez. This storage is scheduled to be operational
in the third quarter of 2006. Due to strong customer demand, Pacific
Energy has increased its capital budget to provide for the
construction of an additional 850,000 barrels of storage capacity at
Martinez. It is projected that $1.0 million of this increase will be
expended in 2006, with an additional $27.2 million expended in 2007 to
complete the project.
   The East Coast terminals are also operating at capacity. East
Coast terminal income increased due to the expansion of ethanol
facilities, which began operations in the second quarter of 2006, and
are expected to be fully operational in the fourth quarter of 2006 and
the start up of ultra low sulfur diesel and jet fuel handling
facilities.
   The impact of the long-haul pipeline volume decline in California
was more than offset by tariff increases on Line 2000 and Line 63,
lower repair and maintenance costs and a substantial increase in
Bakersfield delivery volumes. Volumes transported to Los Angeles for
the three months ended June 30, 2006, were approximately 10% lower
than in the second quarter of 2005. The primary reasons for the
reduction were natural production declines and a shift in some light
crude oil volumes north to the San Francisco area. Partially
offsetting this impact was a May 1, 2006 increase of $0.10 per barrel
on Line 2000, a temporary surcharge of $0.10 per barrel on Line 63
long-haul movements that was implemented on August 1, 2005, to recover
the costs of the Pyramid Lake oil release and other rain related
damages experienced in the first quarter of 2005, and the absence of
$1.4 million of rain related pipeline repair expenses incurred in the
second quarter of 2005. In addition, deliveries to Bakersfield
refineries more than doubled from the prior year's quarter as a result
of pipeline modifications in the San Joaquin Valley that were
completed on October 1, 2005, which increased delivery capacity to
those refineries.
   The Partnership's crude oil marketing income in the second quarter
of 2006 was significantly higher than in the prior year quarter.
Favorable margins, crude oil contracts acquired on July 1, 2005, and
increased crude oil volumes in the 2006 quarter contributed to the
improvement.
   Income for the Pacific Terminals' subsidiary remained unchanged
compared to the corresponding period in 2005. The reactivation of
300,000 barrels of storage at the Alamitos terminal, completed in July
2006, and reactivation of a second 300,000 barrel tank scheduled to be
completed in the fourth quarter of 2006, are expected to increase
revenue in the second half of the year.
   The Partnership continues to advance the development of the Pier
400 deepwater import terminal in the Port of Los Angeles. During the
quarter, efforts were focused on finalizing environmental mitigation
factors with the Port of Los Angeles and the Partnership's customers.
Due to the complexity of the environmental review process, the
Partnership now expects to receive the permits necessary to begin
construction mid-year 2007, and start-up is expected in the first
quarter of 2009. As previously announced, the total investment is
estimated at $315 million and provides for 4,000,000 barrels of
storage capacity that will be constructed in two phases. Long term
volume commitments have been signed by subsidiaries of Valero Energy
Corporation and ConocoPhillips, and it is anticipated that, with
additional customer commitments currently being finalized, the
estimated 250,000 barrels per day of offloading capacity will be fully
subscribed.

   ROCKY MOUNTAIN BUSINESS UNIT

   Operating income was $15.4 million for the three months ended June
30, 2006, compared to $9.0 million in the corresponding period in
2005. The $6.4 million increase was primarily due to increased volumes
on the Rangeland Pipeline, Western Corridor and Salt Lake City Core
systems, income contribution from the Rocky Mountain Products Pipeline
that was part of the Valero L.P. acquisition, and favorable crude oil
marketing margins.
   In March 2006, the Partnership completed construction of its
Edmonton, Alberta, initiating terminal, which provides direct access
to synthetic crude oil for delivery through the Partnership's pipeline
systems to U.S. Rocky Mountain refineries. During the second quarter
of 2006, construction was also completed on additional tankage along
this corridor to facilitate the movement of the synthetic crude oil.
However, the transportation of synthetic crude oil was significantly
lower than anticipated in the second quarter of 2006 due to
maintenance shutdowns at two major synthetic crude oil facilities in
Alberta. With these facilities now ramping up to full capacity,
synthetic crude oil movements in the third quarter of 2006 are
expected to increase.
   In the Rocky Mountain Business Unit, two major profit generating
capital projects, the Salt Lake City pipeline project and the Cheyenne
pipeline project, are proceeding on schedule and on budget. The first
phase of the Salt Lake City pipeline is scheduled to be completed in
December of 2006, and the second phase is expected to be completed in
the fourth quarter of 2007. Total cost of the project is approximately
$77 million and is supported by firm, 10-year transportation
agreements with four Salt Lake City refiners. The Cheyenne pipeline is
on schedule to be completed in the second quarter of 2007 at a cost of
approximately $59 million and is supported by a firm ten year
commitment by Frontier Oil and Refining Company to ship 35,000 barrels
per day and lease approximately 300,000 barrels of storage capacity at
Fort Laramie.

   CORPORATE ITEMS

   General and administrative expenses were $5.7 million in the
second quarter of 2006, approximately $2.0 million higher than in the
second quarter of 2005. This increase was associated with support of
newly acquired assets, professional fees, and the cost of the LB
Pacific option plan introduced in the first quarter of 2006, the cost
of which is required by generally accepted accounting principles to be
recorded as a Pacific Energy expense even though the plan is funded by
LB Pacific, not the Partnership.
   Interest expense was $10.1 million for the second quarter of 2006,
$4.2 million greater than in the comparable period in 2005, due to the
increase in debt for the Valero asset acquisition.
   For the six months ended June 30, 2006 total capital spending was
$42.5 million: $35.0 million was spent on expansion capital, $2.6
million was spent on sustaining capital (including $1.8 million in the
second quarter), and $4.9 million was spent on transition capital.

   LOOKING FORWARD

   For the quarter ending September 30, 2006, Pacific Energy is
forecasting recurring net income of $0.35 to $0.41 per unit and EBITDA
of $34 million to $38 million. Sustaining capital expenditures for the
third quarter of 2006 are expected to be $3 million to $4 million.
   For full year 2006, Pacific Energy is forecasting recurring net
income of $1.58 to $1.68 per unit and EBITDA of $140 million to $146
million. Total capital expenditures for the full year are projected to
be $162 million, including $148 million for expansion projects, $7
million for transition capital projects, and $7 million for sustaining
capital projects.
   The guidance for recurring net income for the third quarter and
full year 2006 does not include expenses related to the Plains merger
transaction or the deferred tax benefit resulting from the change in
Canadian tax rates. The guidance for EBITDA reflects $1.0 million and
$6.5 million, for the third quarter and full year, respectively, of
estimated Plains merger related expenses to be incurred prior to
closing.
   For more information about these non-GAAP (generally accepted
accounting principles) measures, see the schedules accompanying this
press release.

   MERGER WITH PLAINS ALL AMERICAN PIPELINE, L.P.

   On June 12, 2006, Pacific Energy and Plains announced the signing
of definitive agreements that provide for the merger of the two
partnerships and Plains' acquisition of Pacific Energy's general
partner. The partnerships recently announced that the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, had expired on July 31, 2006. In addition, Plains has
received a "no issues" letter from the Canadian Competition Bureau and
notice that the accompanying waiting period under the Competition Act
has expired. The completion of the transaction remains subject to the
approval of unitholders of both partnerships as well as approvals of
certain state utility commissions and the Investment Review Division
of Industry Canada. All required filings have been submitted. This
transaction is expected to close near the end of 2006. As a result of
this pending transaction, the CEO search previously initiated by the
Board of Directors of Pacific Energy's general partner has been
terminated, and Irv Toole, President and Chief Executive Officer of
Pacific Energy, will continue to serve until management of the
Partnership is assumed by Plains following the closing of the merger
transaction.

   OTHER MATTERS

   Pacific Energy will host a conference call at 2:00 p.m. EDT (11:00
a.m. PDT) on Thursday, August 3, 2006, to discuss the results of the
second quarter of 2006. Please join us at www.PacificEnergy.com for
the live broadcast or dial in at 800-446-2782 or 847-413-3235 passcode
14511288. The call, with questions and answers, will continue to be
available on Pacific Energy's web site following the call.

   About Pacific Energy:

   Pacific Energy Partners, L.P. is a master limited partnership
headquartered in Long Beach, California. Pacific Energy is engaged
principally in the business of gathering, transporting, storing and
distributing crude oil, refined products and other related products.
Pacific Energy generates revenues by transporting such commodities on
its pipelines, by leasing capacity in its storage facilities and by
providing other terminaling services. Pacific Energy also buys and
sells crude oil, activities that are generally complementary to its
crude oil operations. Pacific Energy conducts its business through two
business units, the West Coast Business Unit, which includes
activities in California and the Philadelphia, PA area, and the Rocky
Mountain Business Unit, which includes activities in five Rocky
Mountain states and Alberta, Canada.
   For additional information about the partnership, please visit
www.PacificEnergy.com.

   Investor Notice:

   Pacific Energy and Plains All American Pipeline, L.P. ("Plains")
have filed a joint proxy statement/prospectus and other documents with
the Securities and Exchange Commission ("SEC") with respect to the
proposed merger of Pacific Energy with and into Plains. Upon being
declared effective by the SEC, a definitive joint proxy
statement/prospectus will be sent to security holders of Pacific
Energy and Plains seeking their approval of the merger and related
transactions. Investors and security holders are urged to carefully
read the joint proxy statement/prospectus because it contains
important information, including detailed risk factors, regarding
Pacific Energy, Plains and the merger. Investors and security holders
may obtain a free copy of the definitive joint proxy
statement/prospectus, when it becomes available, and other documents
containing information about Pacific Energy and Plains, without
charge, at the SEC's web site at www.sec.gov. Copies of the definitive
joint proxy statement/prospectus, when it becomes available, and the
SEC filings that are incorporated by reference in the joint proxy
statement/prospectus may also be obtained free of charge by directing
a request to Pacific Energy or Plains. Pacific Energy or Plains and
the officers and directors of the respective general partners of
Pacific Energy or Plains may be deemed to be participants in the
solicitation of proxies from their security holders in connection with
the proposed transaction. Information about these persons can be found
in Pacific Energy's or Plains' respective Annual Reports on Form 10-K
filed with the SEC, and additional information about such persons may
be obtained from the joint proxy statement/prospectus.

   Cautionary Statement Regarding Forward-Looking Statements:

   This news release may include "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical fact included or
incorporated herein may constitute forward-looking statements.
Although Pacific Energy believes that the forward-looking statements
are reasonable, it can give no assurance that such expectations will
prove to be correct. The forward-looking statements involve risks and
uncertainties that may affect Pacific Energy's operations and
financial performance. Among the factors that could cause results to
differ materially are those risks discussed in Pacific Energy's
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2005, and
the definitive joint proxy statement/prospectus referred to in this
press release.
-0-
*T
                     PACIFIC ENERGY PARTNERS, L.P.
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                              (Unaudited)
            (Amounts in thousands, except per unit amounts)


                                     Three Months       Six Months
                                         Ended             Ended
                                        June 30,          June 30,
                                   ----------------- -----------------
                                    2006     2005     2006     2005
                                   -------- -------- -------- --------
Operating revenues:
  Pipeline transportation revenue  $34,800  $27,747  $68,657  $55,784
  Storage and distribution revenue  21,867   10,870   41,953   21,192
  Pipeline buy/sell transportation
   revenue                          11,427    8,116   21,126   17,222
  Crude oil sales, net of
   purchases                        10,720    6,042   17,529    7,824
                                   -------- -------- -------- --------
    Net revenues                    78,814   52,775  149,265  102,022
                                   -------- -------- -------- --------

Expenses:
  Operating                         31,655   25,292   65,074   47,046
  Line 63 oil release costs(1)          --       --       --    2,000
  General and administrative         5,714    3,700   12,587    8,872
  Depreciation and amortization     10,292    6,606   20,294   13,135
  Merger costs(2)                    3,417       --    3,417       --
  Accelerated long-term incentive
   plan compensation expense(3)         --       --       --    3,115
  Reimbursed general partner
   transaction costs(4)                 --       --       --    1,807
                                   -------- -------- -------- --------
    Total expenses                  51,078   35,598  101,372   75,975
                                   -------- -------- -------- --------

Share of net income of Frontier        475      490      873      847
                                   -------- -------- -------- --------

Operating income                    28,211   17,667   48,766   26,894

Net interest expense               (10,088)  (5,844) (19,176) (11,442)
Other income                           292      540      735      893
                                   -------- -------- -------- --------

Income before income tax expense    18,415   12,363   30,325   16,345
                                   -------- -------- -------- --------

Income tax benefit (expense):
  Current                           (1,409)     245   (1,803)    (487)
  Deferred(5)                        4,437     (388)   4,535     (217)
                                   -------- -------- -------- --------
                                     3,028     (143)   2,732     (704)
                                   -------- -------- -------- --------

Net income                         $21,443  $12,220  $33,057  $15,641
                                   ======== ======== ======== ========

Net income (loss) for the general
 partner interest(6)                  $392     $244     $373  $(1,458)
                                   ======== ======== ======== ========
Net income for the limited partner
 interests(6)                      $21,051  $11,976  $32,684  $17,099
                                   ======== ======== ======== ========

Weighted average units
 outstanding:
  Basic                             39,307   29,723   39,304   29,689
  Diluted                           39,314   29,742   39,322   29,708

Basic and Diluted net income per
 limited partner unit                $0.54    $0.40    $0.83    $0.58
                                   ======== ======== ======== ========







                     PACIFIC ENERGY PARTNERS, L.P.
                              (Unaudited)
                        (Amounts in thousands)

                 CONDENSED CONSOLIDATED BALANCE SHEETS


                                               June 30,   December 31,
                                                 2006         2005
                                             ------------ ------------
Assets
Current assets                                  $254,689     $192,115
Property and equipment, net                    1,237,794    1,185,534
Intangible assets                                 69,354       69,180
Investment in Frontier Pipeline Company            8,322        8,156
Other assets                                      17,791       21,467
                                             ------------ ------------
          Total assets                        $1,587,950   $1,476,452
                                             ============ ============
Liabilities and Partners' Capital
Current liabilities                             $205,138     $156,187
Long-term debt                                   635,368      565,632
Deferred income taxes                             32,833       35,771
Environmental and other long-term
 liabilities                                      22,578       20,623
Partners' capital                                692,033      698,239
                                             ------------ ------------
          Total liabilities and partners'
           capital                            $1,587,950   $1,476,452
                                             ============ ============

            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                        Six Months
                                                           Ended
                                                          June 30,
                                                     -----------------
                                                       2006     2005
                                                     -------- --------
Cash flows from operating activities:
  Net income                                         $33,057  $15,641
    Depreciation, amortization, non-cash employee
     compensation under long-term incentive plan,
     deferred income taxes and Frontier adjustment    16,507   17,076
  Working capital adjustments                         (7,476)  13,427
                                                     -------- --------
     Net cash provided by operating activities        42,088   46,144
Cash flows from investing activities:
  Acquisition                                         (2,365)      --
  Net additions to property and equipment            (42,524)  (9,877)
  Additions to pipeline linefill and minimum tank
   inventory                                         (16,419)      --
  Other                                                  168      (98)
                                                     -------- --------
     Net cash used in investing activities           (61,140)  (9,975)
Cash flows from financing activities:
  Distributions to partners                          (45,614) (30,658)
  Capital contribution from the general partner           --    2,438
  Proceeds from bank credit facilities               130,409   66,283
  Repayment of bank credit facilities                (60,950) (64,326)
  Deferred financing costs                                --     (600)
  Related parties                                       (141)    (686)
                                                     -------- --------
     Net cash provided by (used in) financing
      activities                                      23,704  (27,549)
  Effect of exchange rate changes on cash                107       74
Net increase in cash and cash equivalents              4,759    8,694
Cash and cash equivalents, beginning of period        18,064   23,383
                                                     -------- --------
Cash and cash equivalents, end of period             $22,823  $32,077
                                                     ======== ========






                    PACIFIC ENERGY PARTNERS, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 AND OPERATING HIGHLIGHTS BY SEGMENT

              Three Months Ended June 30, 2006 and 2005
                             (Unaudited)
                        (Amounts in thousands)


                              West     Rocky     Intersegment
                              Coast   Mountains      and
                            Business  Business   Intrasegment
                              Unit      Unit     Eliminations  Total
                            -------- ---------- ------------- --------
Three Months Ended June 30,
 2006:
  Revenues:
    Pipeline transportation
     revenue                $16,696    $20,422       $(2,318) $34,800
    Storage and terminaling
     revenue                 21,867         --                 21,867
    Pipeline buy/sell
     transportation revenue      --     11,427                 11,427
    Crude oil sales, net of
     purchases                9,195      1,648          (123)  10,720
                            -------- ----------               --------
    Net revenue              47,758     33,497                 78,814
                            -------- ----------               --------
  Expenses:
    Operating expenses       20,263     13,833        (2,441)  31,655
    Depreciation and
     amortization             5,507      4,785                 10,292
                            -------- ----------               --------
    Total expenses           25,770     18,618                 41,947
                            -------- ----------               --------
  Share of net income of
   Frontier                      --        475                    475
                            -------- ----------               --------
  Operating income(7)       $21,988    $15,354                $37,342
                            ======== ==========               ========

Operating Data (barrels per
 day, in thousands)
Line 2000 and Line 63
 pipeline systems             108.2
Rangeland pipeline system:
  Sundre - North                          21.5
  Sundre - South                          44.2
Western Corridor system                   27.9
Salt Lake City Core system               125.2
Frontier pipeline                         45.2
Rocky Mountain Products
 Pipeline(8)                              60.1

Three Months Ended June 30,
 2005:
  Revenues:
    Pipeline transportation
     revenue                $15,194    $14,006       $(1,453) $27,747
    Storage and terminaling
     revenue                 10,870         --                 10,870
    Pipeline buy/sell
     transportation revenue      --      8,116                  8,116
    Crude oil sales, net of
     purchases                5,866        206           (30)   6,042
                            -------- ----------               --------
    Net revenue              31,930     22,328                 52,775
                            -------- ----------               --------
  Expenses:
    Operating expenses       15,996     10,779        (1,483)  25,292
    Depreciation and
     amortization             3,529      3,077                  6,606
                            -------- ----------               --------
    Total expenses           19,525     13,856                 31,898
                            -------- ----------               --------
  Share of net income of
   Frontier                      --        490                    490
                            -------- ----------               --------
  Operating income(7)       $12,405     $8,962                $21,367
                            ======== ==========               ========

Operating Data (barrels per
 day, in thousands)
Line 2000 and Line 63
 pipeline systems             120.0
Rangeland pipeline system:
  Sundre - North                          23.1
  Sundre - South                          39.7
Western Corridor system                   22.2
Salt Lake City Core system               124.4
Frontier pipeline                         51.3
Rocky Mountain Products
 Pipeline(8)                                --






                    PACIFIC ENERGY PARTNERS, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 AND OPERATING HIGHLIGHTS BY SEGMENT

               Six Months Ended June 30, 2006 and 2005
                             (Unaudited)
                        (Amounts in thousands)


                              West     Rocky     Intersegment
                              Coast    Mountain      and
                            Business Business    Intrasegment
                              Unit      Unit     Eliminations  Total
                            -------- ---------- ------------- --------
Six Months Ended June 30,
 2006:
  Revenues:
    Pipeline transportation
     revenue                $33,859    $39,290       $(4,492) $68,657
    Storage and terminaling
     revenue                 41,953         --                 41,953
    Pipeline buy/sell
     transportation revenue      --     21,126                 21,126
    Crude oil sales, net of
     purchases               16,506      1,288          (265)  17,529
                            -------- ----------               --------
    Net revenue              92,318     61,704                149,265
                            -------- ----------               --------
  Expenses:
    Operating expenses       41,695     28,136        (4,757)  65,074
    Depreciation and
     amortization            11,006      9,288                 20,294
                            -------- ----------               --------
    Total expenses           52,701     37,424                 85,368
                            -------- ----------               --------
  Share of net income of
   Frontier                      --        873                    873
                            -------- ----------               --------
  Operating income(7)       $39,617    $25,153                $64,770
                            ======== ==========               ========

Operating Data (barrels per
 day, in thousands)
Line 2000 and Line 63
 pipeline systems             113.4
Rangeland pipeline system:
  Sundre - North                          23.1
  Sundre - South                          42.5
Western Corridor system                   26.2
Salt Lake City Core system               124.5
Frontier pipeline                         46.7
Rocky Mountain Products
 Pipeline(8)                              60.8

Six Months Ended June 30,
 2005:
  Revenues:
    Pipeline transportation
     revenue                $32,638    $26,461       $(3,315) $55,784
    Storage and terminaling
     revenue                 21,342         --          (150)  21,192
    Pipeline buy/sell
     transportation revenue      --     17,222                 17,222
    Crude oil sales, net of
     purchases                7,678        206           (60)   7,824
                            -------- ----------               --------
    Net revenue              61,658     43,889                102,022
                            -------- ----------               --------
  Expenses:
    Operating expenses       30,503     20,068        (3,525)  47,046
    Line 63 oil release
     costs(1)                 2,000         --                  2,000
    Depreciation and
     amortization             7,006      6,129                 13,135
                            -------- ----------               --------
    Total expenses           39,509     26,197                 62,181
                            -------- ----------               --------
  Share of net income of
   Frontier                      --        847                    847
                            -------- ----------               --------
  Operating income(7)       $22,149    $18,539                $40,688
                            ======== ==========               ========

Operating Data (barrels per
 day, in thousands)
Line 2000 and Line 63
 pipeline systems             129.2
Rangeland pipeline system:
  Sundre - North                          22.2
  Sundre - South                          43.9
Western Corridor system                   22.4
Salt Lake City Core system               116.7
Frontier pipeline                         44.8
Rocky Mountain Products
 Pipeline(8)                                --







                    PACIFIC ENERGY PARTNERS, L.P.

                             (Unaudited)
                        (Amounts in thousands)


     RECONCILIATION OF OPERATING INCOME BY SEGMENT TO CONDENSED
                   CONSOLIDATED STATEMENTS OF INCOME


                                     Three Months       Six Months
                                         Ended             Ended
                                        June 30,          June 30,
                                   ----------------- -----------------
                                    2006     2005     2006     2005
                                   -------- -------- -------- --------
Operating income by Business Unit:
  West Coast Business Unit         $21,988  $12,405  $39,617  $22,149
  Rocky Mountain Business Unit      15,354    8,962   25,153   18,539
                                   -------- -------- -------- --------
                                    37,342   21,367   64,770   40,688
General expenses and other income
 (expense):(7)
  General and administrative
   expense                          (5,714)  (3,700) (12,587)  (8,872)
  Merger costs(2)                   (3,417)      --   (3,417)      --
  Accelerated long-term incentive
   plan compensation expense(3)         --       --       --   (3,115)
  Reimbursed general partner
   transaction costs(4)                 --       --       --   (1,807)
  Interest expense                 (10,088)  (5,844) (19,176) (11,442)
  Other income                         292      540      735      893
  Income tax benefit (expense)(5)    3,028     (143)   2,732     (704)
                                   -------- -------- -------- --------
Net income                         $21,443  $12,220  $33,057  $15,641
                                   ======== ======== ======== ========


    LIMITED PARTNERS AND GENERAL PARTNER ALLOCATION OF NET INCOME

                                     Three Months       Six Months
                                         Ended            Ended
                                        June 30,         June 30,
                                   ----------------- -----------------
                                    2006     2005     2006     2005
                                   -------- -------- -------- --------

Net income for the limited partner
 interests:
Net income                         $21,443  $12,220  $33,057  $15,641
Costs allocated to general
 partner:
  LBP Option Plan costs(9)             369       --      880       --
  Senior Notes consent
   solicitation and other costs         --       --       --      893
  Severance costs                       --       --       --      914
                                   -------- -------- -------- --------
    Total costs allocated to
     general partner                   369       --      880    1,807
                                   -------- -------- -------- --------
Income before costs allocated to
 general partner                    21,812   12,220   33,937   17,448
Less: General partner incentive
 distribution rights paid             (331)      --     (586)      --
                                   -------- -------- -------- --------
Subtotal                            21,481   12,220   33,351   17,448
Less: General partner 2% ownership    (430)    (244)    (667)    (349)
                                   -------- -------- -------- --------
Net income allocated to limited
 partners                          $21,051  $11,976  $32,684  $17,099
                                   ======== ======== ======== ========

Net income for the general partner
 interest:
General partner 2% ownership          $430     $244     $667     $349
Incentive distribution payments to
 general partner                       331       --      586       --
Costs allocated to general partner    (369)      --     (880)  (1,807)
                                   -------- -------- -------- --------
Net income (loss) allocated to
 general partner                      $392     $244     $373  $(1,458)
                                   ======== ======== ======== ========






                    PACIFIC ENERGY PARTNERS, L.P.

                             (Unaudited)
           (Amounts in thousands, except per unit amounts)


       RECONCILIATION OF NET INCOME TO RECURRING NET INCOME(10)


                                     Three Months       Six Months
                                         Ended             Ended
                                        June 30,          June 30,
                                   ----------------- -----------------
                                     2006     2005     2006     2005
                                   -------- -------- -------- --------
Net income                         $21,443  $12,220  $33,057  $15,641
  Add: Line 63 oil release
   costs(1)                             --       --       --    2,000
  Add: Merger costs(2)               3,417       --    3,417       --
  Add: Accelerated long-term
   incentive plan compensation
   expense(3)                           --       --       --    3,115
  Add: Reimbursed general partner
   transaction costs(4)                 --       --       --    1,807
  Less: Deferred tax rate
   adjustment(5)                    (4,560)      --   (4,560)      --
                                   -------- -------- -------- --------
Recurring net income               $20,300  $12,220  $31,914  $22,563
                                   ======== ======== ======== ========
Recurring net income for the
 general partner interest             $369     $244     $350     $451
                                   ======== ======== ======== ========
Recurring net income for the
 limited partner interest          $19,931  $11,976  $31,564  $22,112
                                   ======== ======== ======== ========
Basic and diluted recurring net
 income per limited partner unit     $0.51    $0.40    $0.80    $0.74
                                   ======== ======== ======== ========


              RECONCILIATION OF NET INCOME TO EBITDA(11)

                                     Three Months       Six Months
                                         Ended             Ended
                                        June 30,          June 30,
                                   ----------------- -----------------
                                     2006     2005     2006     2005
                                   -------- -------- -------- --------
Net income                         $21,443  $12,220  $33,057  $15,641
Interest expense                    10,088    5,844   19,176   11,442
Depreciation and amortization       10,292    6,606   20,294   13,135
Income tax (benefit) expense        (3,028)     143   (2,732)     704
                                   -------- -------- -------- --------
EBITDA                             $38,795  $24,813  $69,795  $40,922
                                   ======== ======== ======== ========






                    PACIFIC ENERGY PARTNERS, L.P.

     RECONCILIATION OF NET INCOME TO DISTRIBUTABLE CASH FLOW(12)
                             (Unaudited)
                        (Amounts in thousands)


                                     Three Months       Six Months
                                         Ended             Ended
                                        June 30,          June 30,
                                   ----------------- -----------------
                                     2006     2005     2006     2005
                                   -------- -------- -------- --------

Net income                         $21,443  $12,220  $33,057  $15,641
Depreciation and amortization       10,292    6,606   20,294   13,135
Amortization of debt issue costs
 and accretion of discount on
 long-term debt                        616      478    1,222      937
Non-cash employee compensation
 under long-term incentive plan        190       --      496    1,429
Costs allocated to general
 partner(6)                            369       --      880    1,807
Deferred income tax expense
 (benefit)(5)                       (4,437)     388   (4,535)     217
Sustaining capital expenditures     (1,829)    (587)  (2,646)    (827)
                                   -------- -------- -------- --------
  Distributable cash flow(13)       26,644   19,105   48,768   32,339
Less: net (increase) decrease in
 operating assets and liabilities    9,524   10,336   (7,476)  13,427
Less: share of income of Frontier     (475)    (490)    (873)    (847)
Add: distributions from Frontier       200      650      622      650
Less: non-cash employee
 compensation under long-term
 incentive plan added (deducted)
 above                                (190)      --     (496)  (1,429)
Add: employee compensation under
 long-term incentive plan              190       --      546    2,886
Less: costs reimbursed by general
 partner                                --       --       --   (1,807)
Add: other non-cash adjustments     (1,649)      98   (1,649)      98
Add: sustaining capital
 expenditures                        1,829      587    2,646      827
                                   -------- -------- -------- --------
  Net cash provided by operating
   activities                      $36,073  $30,286  $42,088  $46,144
                                   ======== ======== ======== ========
  Total distributable cash flow    $26,644  $19,105  $48,768  $32,339
  General partner interest in
   distributable cash flow          (1,585)    (936)  (2,231)  (1,201)
                                   -------- -------- -------- --------
  Limited partner interest in
   distributable cash flow         $25,059  $18,169  $46,537  $31,138
                                   ======== ======== ======== ========






                    PACIFIC ENERGY PARTNERS, L.P.

    RECONCILIATION OF RECURRING NET INCOME GUIDANCE TO NET INCOME
                    GUIDANCE AND EBITDA GUIDANCE(14)
                             (Unaudited)

                        (Amounts in millions)

                                         Three Months       Year
                                             Ended          Ended
                                         September 30,  December 31,
                                              2006           2006
                                         ------------- ---------------
                                          Low    High    Low    High
                                         ------ ------ ------- -------
Recurring net income guidance(15)        $14.2  $16.5   $63.0   $66.8
  Less: Merger costs                      (1.2)  (0.8)   (7.0)   (6.0)
  Add: Deferred tax rate adjustment         --     --     4.6     4.6
                                         ------ ------ ------- -------
Net income guidance(16)                  $13.0  $15.7   $60.6   $65.4
  Add: Depreciation and amortization      10.2   10.6    41.2    41.7
  Add: Interest expense                   10.5   11.5    40.5    41.5
  Add: Income tax expense (benefit)(17)     --    0.2    (2.5)   (2.2)

                                         ------ ------ ------- -------
Earnings before interest, tax,
 depreciation and amortization (EBITDA)  $33.7  $38.0  $139.8  $146.4
                                         ====== ====== ======= =======






                    PACIFIC ENERGY PARTNERS, L.P.

                     NOTES TO FINANCIAL SCHEDULES
                             (Unaudited)

              (Amounts in millions, except volume data)


(1) On March 23, 2005, there was an oil release of approximately 3,400
    barrels in northern Los Angeles County. Although this event 
    involved an outlay of cash, we believe these costs are unusual and
    are not indicative of the Partnership's recurring earnings.

(2) On June 12, 2006, we announced that we had entered into a merger
    agreement with Plains All American Pipeline, L.P. ("PAA"), 
    pursuant to which we will be merged into PAA. PAA will acquire 
    common units (except for common units purchased from LB Pacific,
    LP) of Pacific Energy through a tax-free unit-for-unit merger in 
    which each unitholder of Pacific Energy will receive 0.77 newly 
    issued PAA common units for each Pacific Energy common unit. Under
    the terms of a separate agreement, PAA will acquire from LB 
    Pacific, LP and its affiliates ("LB Pacific") the general partner
    interest and incentive distribution rights of the Partnership as 
    well as 2.6 million common units and 7.8 million subordinated 
    units for a total of $700 million in cash.  For the three and six
    months ended June 30, 2006, we incurred $3.4 million in 
    professional fees and other costs directly related to the merger.

(3) On March 3, 2005, in connection with a change in control of the 
    Partnership's general partner, all restricted units outstanding 
    under the Long-Term Incentive Plan immediately vested pursuant to
    the terms of the grants. The Partnership recognized compensation 
    expense of $3.1 million relating to the accelerated vesting.  Of 
    this compensation expense, $0.6 million was considered operating
    expense and $2.5 million was general and administrative expense.

(4) In 2005, our general partner reimbursed us $1.8 million for 
    transaction costs incurred in connection with the change in 
    control of our general partner.  Generally accepted accounting 
    principles require us to record an expense with the reimbursement 
    shown as a partner's capital contribution.

(5) During the quarter ended June 30, 2006, we recognized into 
    earnings a $4.6 million deferred tax benefit to adjust our 
    deferred tax liability for recently enacted reductions in the
    Canadian provincial and federal income tax rates.

(6) See "General Partner and Limited Partners Allocation of Net 
    Income" schedule included herein.

(7) General and administrative expenses, merger costs, accelerated 
    long-term incentive plan expense, reimbursed general partner 
    transaction costs, net interest expense, other income and income
    tax expense are not allocated among the West Coast and Rocky 
    Mountain business units.

(8) The Rocky Mountain Products Pipeline was purchased on September 
    30, 2005.

(9) In January 2006, LB Pacific, LP ("LBP"), the owner of our General
    Partner, granted options under its LBP Option Plan (the "Plan") to
    certain of our officers and key employees. Under the Plan, 
    participants are granted options to acquire partnership interests
    in LBP.  We are not obligated to pay any amounts to LBP for the
    benefits granted or paid to our officers and key employees under 
    the Plan, although generally accepted accounting principles 
    require that we record an expense in the Partnership's financial
    statements with a corresponding increase in the general partner's
    capital account. For the three and six months ended June 30, 2006,
    we recorded compensation expense of $0.4 million and $0.9 million,
    respectively, relating to the LBP Option Plan.

(10)Recurring net income is a non-GAAP financial measure. This measure
    is used to more precisely compare year over year net income by 
    eliminating one-time, non-recurring charges.  You should not 
    consider recurring net income as an alternative to net income, 
    income before taxes, cash flow from operations, or any other 
    measure of financial performance presented in accordance with 
    accounting principles generally accepted in the United States.
    Our recurring net income may not be comparable to similarly titled
    measures of other entities.

(11)EBITDA is used as a supplemental performance measure by management
    to assess (i) the financial performance of our assets without 
    regard to financing methods, capital structures or historical cost
    basis, (ii) the ability of our assets to generate cash sufficient
    to pay interest cost and support our indebtedness, (iii) our 
    operating performance and return on capital as compared to those 
    of other companies in the midstream energy sector, without regard
    to financing and capital structure, and (iv) the viability of 
    projects and the overall rates of return on alternative investment
    opportunities.  You should not consider EBITDA as an alternative 
    to net income, income before taxes, cash flow from operations, or
    any other measure of financial performance presented in accordance
    with accounting principles generally accepted in the United 
    States.  Our EBITDA may not be comparable to similarly titled 
    measures of other entities.  Additional information regarding 
    EBITDA is included in our annual report on Form 10-K for the year 
    ended December 31, 2005.  For the three and six months ended June
    30, 2006, EBITDA has been reduced by $3.4 million for costs 
    directly related to the proposed merger with Plains All American
    Pipeline, L.P.  For the six months ended June 30, 2005, EBITDA has
    been reduced by $3.1 million of compensation expense relating to
    the accelerated vesting of our long term incentive compensation 
    plan, $2.0 million of oil release costs and $1.8 million of 
    general partner costs that was required by GAAP to be recorded in
    our income statement.  There was no unusual impact on EBITDA for 
    the three months ended June 30, 2005.

(12)Distributable Cash Flow provides additional information for 
    evaluating our ability to make the minimum quarterly distribution
    and is presented solely as a supplemental measure.  You should not
    consider Distributable Cash Flow as an alternative to net income,
    income before taxes, cash flow from operations, or any other 
    measure of financial performance presented in accordance with 
    accounting principles generally accepted in the United States.  
    Our Distributable Cash Flow may not be comparable to similarly 
    titled measures of other entities.  Additional information 
    regarding distributable cash flow is included in our annual report
    on Form 10-K for the year ended December 31, 2005.

(13)In September 2005, we changed the presentation of Distributable 
    Cash Flow.  The previously reported amount of $36.2 million for 
    Distributable Cash Flow for the six months ended June 30, 2005 has
    been reduced by $2.0 million of oil release costs and $1.9 million
    of cash costs associated with the accelerated vesting of units. 
    The change in presentation had no effect on the three months ended
    June 30, 2005.  For the three and six months ended June 30, 2006,
    Distributable Cash Flow has been reduced by $3.4 million for costs
    directly related to the proposed merger with Plain All American 
    Pipeline, L.P.

(14)The guidance for the three months ending September 30, 2006 and 
    for the twelve months ending December 31, 2006 are based on 
    assumptions and estimates that we believe are reasonable given our
    assessment of historical trends, business cycles and other 
    information reasonably available.  However, our assumptions and 
    future performance are both subject to a wide range of business 
    risks and uncertainties so no assurance can be provided that 
    actual performance will fall within the guidance ranges. Please
    see "Forward-Looking Statements" above. These risks and 
    uncertainties, as well as other unforeseeable risks and 
    uncertainties, could cause our actual results to differ materially
    from those in the table. This financial guidance is given as of 
    the date hereof, based on information known to us as of August 1,
    2006. We undertake no obligation to publicly update or revise any
    forward-looking statements.

(15)Recurring net income excludes $3.4 million of merger costs and a 
    $4.6 million deferred tax benefit to adjust our deferred tax 
    liability for recently enacted reductions in the Canadian 
    provincial and federal income tax rates.

(16)Included in the net income guidance for the year ended December
    31, 2006 is forecast general and administrative expense of $23
    million to $24 million.

(17)Included for the year ended December 31, 2006 is forecast cash tax
    expense of $2.7 million and forecast deferred tax benefit of $0.4
    million.
*T