Conference Call Scheduled for This Afternoon
– Friday, August 25, at 4:30 p.m. ET (3:30 p.m. CT)
Plains All American Pipeline, L.P. (NYSE:PAA) and Plains GP
Holdings (NYSE: PAGP) today announced planned actions related to
their leverage and distribution review and will host a conference
call to discuss these actions at 4:30 p.m. ET this afternoon.
“We are taking significant steps to strengthen our financial
position and enhance PAA’s long-term franchise value for all
stakeholders,” stated Greg Armstrong, Chairman and CEO of PAA. “PAA
has leading crude oil midstream positions in nearly all U.S.
regions and trading hubs and the premier network in the Permian
Basin. Additionally, we continue to generate meaningful
year-over-year growth in our fee-based segments and believe PAA has
very attractive long-term growth opportunities.
“We believe the steps we are taking represent a solid,
executable and measurable plan that will reduce debt by
approximately $1.4 billion and enable us to reach our targeted
credit metrics within the next 6 quarters. Additionally, these
actions will minimize, if not eliminate common equity issuance to
fund our current and future routine capital projects and position
PAA for sustainable multi-year distribution growth in 2019,
underpinned by healthy fee-based distribution coverage.”
At a meeting held on Thursday, August 24, PAA’s Board of
Directors endorsed the following:
1.
Intention to reset PAA’s and PAGP’s annualized distribution
per unit to $1.20, starting with the third-quarter distribution
payable in November 2017. This will reduce annual distribution
outflow by approximately $725 million per year, representing
approximately $1.1 billion over 6 quarters;
2.
Completion of pending and/or in progress non-core/strategic asset
sales totaling approximately $700 million;
3.
Reduction of hedged crude oil and NGL inventory volumes and related
debt by approximately $300 million (based on current prices);
4.
Fund PAA’s second-half 2017 and full-year 2018 expansion capital
program (which currently totals approximately $1.15 billion) with a
combination of non-convertible, perpetual preferred equity totaling
approximately $600 million and a portion of the asset sale
proceeds; and
5.
Apply retained cash flow and remaining asset sales proceeds to
steadily reduce total debt from $11.15 billion at June 30, 2017 to
approximately $9.7 billion by March 31, 2019.
Please join us for a conference call webcast and Q&A session
this afternoon at 4:30 p.m. ET (3:30 p.m. CT), where several
members of PAA’s management team will further discuss these actions
and the expected results therefrom.
Armstrong acknowledged the inconvenience of a Friday afternoon
press release and conference call, but noted that the timing was
driven by a desire to timely communicate this information to the
market following the board’s Thursday afternoon meeting and avoid
potential delays associated with Hurricane Harvey. The forecast is
calling for severe weather conditions and imminent flooding in
Houston over the weekend and into early next week.
Webcast Access Instructions
The conference call will be webcast live and is accessible
through either of the addresses below. Registering for the webcast
in advance is recommended.
www.plainsallamerican.com (Navigate to: Investor Relations/
either “PAA” or “PAGP”/ News & Events/ Conference Calls)
or
https://event.webcasts.com/starthere.jsp?ei=1160565&tp_key=234de45208
Webcast Replay Instructions
An audio replay in MP3 format will be available approximately
two hours after the end of the call at www.plainsallamerican.com
under the “Investor Relations” sections of the website (Navigate
to: Investor Relations/ either “PAA” or “PAGP”/ News & Events/
Conference Calls).
Forward Looking Statements
Except for the historical information contained herein, the
matters discussed in this release consist of forward-looking
statements that involve certain risks and uncertainties that could
cause actual results or outcomes to differ materially from results
or outcomes anticipated in the forward-looking statements. These
risks and uncertainties include, among other things, declines in
the volume of crude oil and NGL shipped, processed, purchased,
stored, fractionated and/or gathered at or through the use of our
assets, whether due to declines in production from existing oil and
gas reserves, reduced demand, failure to develop or slowdown in the
development of additional oil and gas reserves, whether from
reduced cash flow to fund drilling or the inability to access
capital, or other factors; the effects of competition; market
distortions caused by producer over-commitments to new or recently
constructed infrastructure projects, which impacts volumes,
margins, returns and overall earnings; unanticipated changes in
crude oil and NGL market structure, grade differentials and
volatility (or lack thereof); maintenance of our credit rating and
ability to receive open credit from our suppliers and trade
counterparties; environmental liabilities or events that are not
covered by an indemnity, insurance or existing reserves;
fluctuations in refinery capacity in areas supplied by our
mainlines and other factors affecting demand for various grades of
crude oil, refined products and natural gas and resulting changes
in pricing conditions or transportation throughput requirements;
the occurrence of a natural disaster, catastrophe, terrorist attack
(including eco-terrorist attacks) or other event, including attacks
on our electronic and computer systems; failure to implement or
capitalize, or delays in implementing or capitalizing, on expansion
projects, whether due to permitting delays, permitting withdrawals
or other factors; tightened capital markets or other factors that
increase our cost of capital or limit our ability to obtain debt or
equity financing on satisfactory terms to fund additional
acquisitions, expansion projects, working capital requirements and
the repayment or refinancing of indebtedness; the successful
integration and future performance of acquired assets or businesses
and the risks associated with operating in lines of business that
are distinct and separate from our historical operations; the
failure to consummate, or significant delay in consummating, sales
of assets or interests as part of our strategic divestiture
program; the currency exchange rate of the Canadian dollar;
continued creditworthiness of, and performance by, our
counterparties, including financial institutions and trading
companies with which we do business; inability to recognize current
revenue attributable to deficiency payments received from customers
who fail to ship or move more than minimum contracted volumes until
the related credits expire or are used; non-utilization of our
assets and facilities; increased costs, or lack of availability, of
insurance; weather interference with business operations or project
construction, including the impact of extreme weather events or
conditions; the availability of, and our ability to consummate,
acquisition or combination opportunities; the effectiveness of our
risk management activities; shortages or cost increases of
supplies, materials or labor; the impact of current and future
laws, rulings, governmental regulations, accounting standards and
statements, and related interpretations; fluctuations in the debt
and equity markets, including the price of our units at the time of
vesting under our long-term incentive plans; risks related to the
development and operation of our assets, including our ability to
satisfy our contractual obligations to our customers; factors
affecting demand for natural gas and natural gas storage services
and rates; general economic, market or business conditions and the
amplification of other risks caused by volatile financial markets,
capital constraints and pervasive liquidity concerns; and other
factors and uncertainties inherent in the transportation, storage,
terminalling and marketing of crude oil and refined products, as
well as in the storage of natural gas and the processing,
transportation, fractionation, storage and marketing of natural gas
liquids as discussed in the Partnerships' filings with the
Securities and Exchange Commission.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil, NGLs,
natural gas and refined products. PAA owns an extensive network of
pipeline transportation, terminalling, storage and gathering assets
in key crude oil and NGL producing basins and transportation
corridors and at major market hubs in the United States and Canada.
On average, PAA handles over 5 million barrels per day of crude oil
and NGL in its Transportation segment. PAA is headquartered in
Houston, Texas. More information is available at
www.plainsallamerican.com.
Plains GP Holdings is a publicly traded entity that owns an
indirect, non-economic controlling general partner interest in PAA
and an indirect limited partner interest in PAA, one of the largest
energy infrastructure and logistics companies in North America.
PAGP is headquartered in Houston, Texas. More information is
available at www.plainsallamerican.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170825005634/en/
Plains All American Pipeline, L.P. and Plains GP HoldingsRoy
Lamoreaux, (866) 809-1291VP, Investor Relations &
CommunicationsorBrett Magill, (866) 809-1291Manager, Investor
Relations
Plains GP (NYSE:PAGP)
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