U.S. Oil Production

[dan_s]

From PAA conference call. This is why U.S. production decline will accelerate as we move through the year.

"With that observation in mind, I wanted to share some important details that provide context for our 2016 guidance adjustment. First, as illustrated on slide four, based on PAA's fundamental analysis of wells at each of the key oil basins, we estimate that approximately 55% of U.S. onshore lower 48 production at year end 2015 was derived from wells completed during 2014 and 2015.

Decline rates vary by basin but the average annual decline for the majority of horizontal oil wells treated with high-volume hydraulic fracturing and shale resource plays generally ranges from 65% to 80% in the first year following initial production, and 30% to 40% in the second year. As a result, these significant production declines require high activity levels to maintain or increase production in these regions. "