Pacific Energy Partners, L.P.

Pacific Energy Partners, L.P.

March 03, 2005 21:16 ET

Pacific Energy Partners, L.P. Announces Completion of General Partner Purchase by LB Pacific, LP




MARCH 3, 2005 - 21:16 ET

Pacific Energy Partners, L.P. Announces Completion of
General Partner Purchase by LB Pacific, LP

LONG BEACH, Calif.--(CCNMatthews - Mar 3, 2005) -

Pacific Energy Partners, L.P. (NYSE:PPX) (the "Partnership") announced
that LB Pacific, LP ("LB Pacific"), an entity formed by Lehman Brothers
Merchant Banking Group ("LBMB"), has completed the previously announced
purchase of The Anschutz Corporation's ("TAC") 36.6% interest in the
Partnership. The transaction was consummated following the receipt of
regulatory approvals, pursuant to a purchase and sale agreement entered
into on October 29, 2004.

The acquisition by LB Pacific includes a 100% ownership interest in
Pacific Energy GP, Inc. (the "General Partner"), which owns (i) a 2%
general partner interest in the Partnership and the incentive
distribution rights, and (ii) 10,465,000 subordinated units of the
Partnership, representing a 34.6% limited partner interest in the
Partnership. These interests represent TAC's entire ownership in the

Philip F. Anschutz and Clifford P. Hickey, of TAC, have resigned as
directors of the General Partner, effective with the closing of the
transaction. The four existing independent directors, David L. Lemmon,
John C. Linehan, Jim E. Shamas and William L. Thacker, and Irvin Toole,
Jr., who will continue to serve as President and Chief Executive
Officer, were appointed to serve as directors of Pacific Energy
Management LLC ("PEM"), a newly created entity that will operate and
manage the Partnership. Douglas L. Polson resigned as an executive
officer and employee of the General Partner, effective with the closing
of the transaction, but was also appointed as a director of PEM. LB
Pacific has appointed, as new directors of PEM, Christopher R. Manning,
Forrest E. Wylie, Joshua A. Collins and Jeffrey C. Weber.

Mr. Manning was appointed Chairman of the Board. He will succeed Mr.
Polson, who has served as Chairman since the Partnership's formation in
December 2001 and initial public offering in July 2002. Mr. Wylie was
appointed Vice Chairman of the Board. In addition, Khalid A. Muslih was
appointed Vice President, Corporate Development.

Christopher R. Manning is a Principal of LBMB and a Managing Director of
Lehman Brothers. Mr. Manning joined the Natural Resources Group of
Lehman Brothers in 1997 and joined LBMB in 2000. Prior to joining Lehman
Brothers, Mr. Manning was Chief Financial Officer of The Wing Group, a
developer of international power projects. Prior to The Wing Group, Mr.
Manning was in the investment banking department of Kidder, Peabody &
Co. Mr. Manning is currently a director of RSI Holding Corporation.

Joshua A. Collins is a Principal of LBMB and a Senior Vice President of
Lehman Brothers. Mr. Collins joined LBMB in 1996. Prior to joining LBMB
he was an infantry officer and Captain in the U.S. Marine Corps. Mr.
Collins is currently a director of Phoenix Brands LLC, Blount
International Inc. and Enduring Resources, LLC.

Jeffrey C. Weber is a Principal of LBMB and a Vice President of Lehman
Brothers. Prior to joining LBMB in 2000, Mr. Weber was an aviation
officer and Captain in the U.S. Army.

Prior to his employment with PEM today, Forrest E. Wylie was President
and Chief Financial Officer of NuCoastal Corporation since May 2002.
Prior to NuCoastal, Mr. Wylie served as Senior Vice President, Natural
Gas Trading, for both The Coastal Corporation and its successor, El Paso
Merchant Energy. Mr. Wylie also held senior positions at Engage Energy,
Transocean Sedco Forex and American Exploration Company.

Prior to his employment with PEM today, Khalid A. Muslih served as
Commercial Officer, Mergers & Acquisitions, of NuCoastal Corporation
since July 2002. Prior to joining NuCoastal, Mr. Muslih held positions
with El Paso Corporation, The Coastal Corporation, Coastal States
Refining and Marketing, Inc. and Coastal States Management Corporation.

Messrs. Wylie and Muslih bring significant natural gas expertise to the
Partnership's management team, and will enhance its efforts to grow in
that business area.

"As the ownership of the General Partner by TAC ends, we express our
appreciation to Phil Anschutz for his vision and tenacity that made
Pacific Energy possible, and for his wise counsel as the Partnership
expanded its business," stated Irv Toole, President and Chief Executive
Officer of the Partnership. "We are also appreciative of Clifford
Hickey's service on the Board and for the keen intellect he displayed in
that role. Finally, a large thanks goes to Doug Polson for his service
as Chairman, but more importantly for the key role he played in the
founding and development of the Partnership."

Mr. Toole continued, "We are pleased and excited to welcome LB Pacific
as the owner of the general partner of Pacific Energy and look forward
to working with Chris Manning and his associates at LBMB to build on our
success to date. LBMB brings considerable knowledge and experience in
the energy industry, coupled with financial strength. Together with the
additions to our management team noted above, we are looking forward to
further expansion and diversification of the Partnership."

Chris Manning, President of LB Pacific, commented, "We are excited to be
entering into this partnership with Pacific Energy and we are
enthusiastic about the opportunities available to Pacific Energy. We
look forward to working with management to enhance the value of the

As previously announced, approximately 145,000 restricted Partnership
units outstanding under the Partnership's long-term incentive plan
vested concurrently with the closing of the general partner sale. This
results in a non-recurring expense of approximately $3.1 million in the
first quarter of 2005. Since this is a non-recurring item, and as stated
in the Partnership's fourth quarter 2004 earnings release, this expense
was not included in the previously announced recurring earnings guidance
of $1.38 to $1.46 per limited partner unit for 2005.


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 and other related products in California and the
Rocky Mountain region, including Alberta, Canada. Pacific Energy
generates revenues primarily by transporting crude oil on its pipelines
and by leasing capacity in its storage facilities. Pacific Energy also
buys, blends and sells crude oil, activities that are complementary to
its pipeline transportation business.

For additional information on the Partnership, please visit the Pacific
Energy Partners, L.P. website at


Lehman Brothers Merchant Banking Group is part of the Private Equity
Division of Lehman Brothers Inc., member SIPC. Lehman Brothers has a
long history in private equity investing with total assets under
management of approximately $6.5 billion. The Private Equity Division
leverages the breadth and depth of Lehman Brothers' global presence and
expertise across a wide range of products, industries, and geographies.
Lehman Brothers creates and raises funds and invests in asset classes
where the firm has strong capabilities, proprietary deal flow, and an
excellent reputation, offering attractive investment opportunities to
its institutional and individual investing clients. Currently, more than
200 professionals cover five core asset classes: Private Funds
Investments, Merchant Banking, Venture Capital, Real Estate and Fixed
Income-Related Funds.

Lehman Brothers Holdings Inc. (ticker symbol: LEH), an innovator in
global finance, serves the financial needs of corporations, governments
and municipalities, institutional clients, and high-net-worth
individuals worldwide. Founded in 1850, Lehman Brothers maintains
leadership positions in equity and fixed income sales, trading and
research, investment banking, private equity and wealth and asset
management services. The firm is headquartered in New York, with
regional headquarters in London and Tokyo and operates in a network of
offices around the world. For further information about Lehman Brothers'
services, products and recruitment opportunities, visit its Web site at

This news release may include "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934. All statements other than
statements of historical fact included or incorporated herein may
constitute forward-looking statements. Although the Partnership 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 affect
the Partnership's operations and financial performance. Among the
factors that could cause results to differ materially are those risks
discussed in the Partnership's filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year ended
December 31, 2003.


Contact Information

    Pacific Energy Partners, L.P.
    Aubrye Harris, 562-728-2871
    FAX: 562-728-2881 (FAX)