Plains Gp Holdings, L.p. · NASDAQ:PAGP
Plains Gp Holdings, L.p — Q1 2024 Earnings Presentation
33 slides from Plains Gp Holdings, L.p's earnings presentation, May 3, 2024
Slide 1: Investor Presentation First-Quarter 2024
Investor Presentation First-Quarter 2024
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures Disclosure
Forward-Looking Statements & Non-GAAP Financial Measures Disclosure This presentation contains forward-looking statements, including, in particular, statements Investor Contacts about the performance, plans, strategies and objectives for future operations of Plains All American Pipeline, L.P. (“PA
Slide 3: Financial & Operating Profile
Financial & Operating Profile Large, integrated asset footprint; investment grade; attractive yield Financial Profile ~$21B ~8% $1.65B Enterprise Distribution 2024(G) Adj. Free Value Yield(1) Cash Flow(2) (ex. changes in Assets & Liabilities) Investment Grade Credit Rating Operating Profile >8 MMb/d
Slide 4: Critical Crude & NGL Infrastructure
Critical Crude & NGL Infrastructure Full-service supply aggregation, quality segregation, flow assurance, access to multiple markets Crude Oil Activities +/- 15% NGL NGL Activities 2024(G) Adj. EBITDA +/- 85% $2.625 - $2.725B Crude Oil 2024 Guidance: Furnished February 9, 2024. Non-rangebound metric
Slide 5: Plains' Structure & Tax Attributes
Plains’ Structure & Tax Attributes Dual securities provide flexibility & optionality Summary Ownership Structure(1) GOVERNANCE OVERVIEW PAA GP HOLDINGS LLC (PAGP GP) Unified Board Directors 75% of (Unified Board of Directors) responsible subject to Directors are for PAGP & PAA Public Election(3) ind
Slide 6: Plains' Investment Opportunity
Plains’ Investment Opportunity Generating multi-year Free Cash Flow & increasing returns of capital to equity holders Attractive Distribution Yield of ~8% (1) Meaningful coverage, targeting multi-year distribution growth Significant Adj. Free Cash Flow (2) 2024(G): +/- $1.65B Adj. FCF / $500MM Adj.
Slide 7: Leading Distribution Yield Across Sectors
Leading Distribution Yield Across Sectors Targeting multi-year, sustainable distribution growth (1) Distribution / Dividend Yield Distribution Growth Distribution Estimates (2) Yield (3) Wells Fargo Research ~8.0% +12.8% 3.7% 3.8% 3.5% 2.6% 2.0% 1.8% +4.3% 1.5% 1.5% 1.3% 0.8% 0.7% 0.6% Real Energy U
Slide 8: Macro Fundamentals & Asset Overview
Macro Fundamentals & Asset Overview NASDAQ: PAA & PAGP 8
Slide 9: World Needs "All of the Above" Sources of Energy
>10 Billion World Needs “All of the Above” Sources of Energy In 2100 Traditional energy sources account for >80% of primary global energy consumption 9.7 Billion In 2050 180,000 7.9 Billion Other In 2022 160,000 Nuclear Historical Energy Transition Considerations Hydro 140,000 - Most shifts lasted o
Slide 10: Balancing Act Continues
Balancing Act Continues OPEC+ cuts leading to observable draws in OECD Inventories OPEC+ Production Cuts Balancing Global Markets(1) OECD Inventories at Multi-Year Lows(2) Spare capacity has increased but who holds spare capacity may be more important Despite significant SPR release (Mb/d) (MMbbls)
Slide 11: Global E&P Capex Underinvestment
Global E&P Capex Underinvestment Operators have opted for value over volume ($ Billions invested) $900 $800 E&P investment ~30% below $700 2010 – 2014 Average $600 $500 $400 $300 $200 $100 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: IEA 11
Slide 12: World Needs North American Energy Supply
World Needs North American Energy Supply The Permian Basin is the liquids growth engine 20.3 Sanctioned Permian Basin Other U.S. Country 11.9 11.2 Other US Shale 8.1 5.9 Sanctioned 5.3 5.0 Country Permian 3.5 3.4 3.2 2.5 U.S. Saudi Arabia Russia Permian Canada Iraq China Brazil U.A.E. Kuwait Iran No
Slide 13: Permian Basin Growth Continues
Permian Basin Growth Continues Current activity, demonstrated performance & constructive commodity prices driving growth 2024 Forecast Assumptions Permian Basin Production Outlook (1) MMb/d Permian Basin Production Growth 200 - 300 (2) (‘23 Exit to ’24 Exit) Mb/d 6.4 6.1 Assumed Activity 300 - 320 (
Slide 14: Premier Permian Crude Oil Infrastructure Position
Premier Permian Crude Oil Infrastructure Position Operating leverage allows capture of growing production & enhances pull through on broader system Cushing STRATEGICALLY LOCATED CRITICAL CRUDE OIL GATHERING & TAKEAWAY INFRASTRUCTURE FROM THE PERMIAN BASIN Wichita Falls C. City FULLY INTEGRATED Midla
Slide 15: Capturing Permian Growth
Capturing Permian Growth Highly integrated system with operating leverage to capture Permian volumes Gathering Intra-Basin Long-Haul 2,643 2,920 2,346 2,084 2,210 2,220 1,503 1,560 1,208 2022 2023 2024(G) 2022 2023 2024(G) 2022 2023 2024(G) Acreage dedications driving growth Supporting downstream mo
Slide 16: Crude Oil Segment Detail
Crude Oil Segment Detail Capturing growth via operating leverage & bolt-on acquisitions Regional Breakdown Tariff Volumes (Mb/d) 2022 2023 2024(G) Includes +/-$200MM from Merchant Terminals Canada / Gathering 2,346 2,643 2,920 Rocky Mountain / Western Intra-Basin 2,084 2,210 2,220 15% Long-Haul 1,20
Slide 17: NGL Business & Value Chain Overview
NGL Business & Value Chain Overview Highly integrated & strategically positioned assets Field Supply Fractionation Storage Consumer Chemical Plants Straddle Transport Transport Diluent for International Heavy Crude Export Straddle Transport Fractionation Storage Market Access ~6 Bcf/d Capacity ~25 M
Slide 18: Strategically Located Fractionation & Straddle Capacity
Strategically Located Fractionation & Straddle Capacity Growth in Canadian gas production benefits Plains’ Empress & Fort Sask facilities WCSB Gas Forecast (1) Increasing gas production & east gate border (Bcf/d) flows drives increasing utilization of PAA’s Empress & Ft. Sask facilities 20.4 17.3
Slide 19: NGL Segment Detail
NGL Segment Detail C3+ Frac Spread substantially hedged for 2024 Majority of EBITDA generated by C3+ frac spread Unhedged C3+ benefit Fractionation & Marketing 5% – Purchase AECO natural gas & sell spec products (C3+) on 40% Fee for Service Mont Belvieu pricing(1) 2024(G): +/- $440MM(4) – +/- 56 M
Slide 20: NGL Segment Frac Spread & Hedging Profile
NGL Segment Frac Spread & Hedging Profile C3+ Spec Product Sales(1) (Mb/d) Hedging Profile: 2022 – 2024(G) 60 55 +/- 56 (table data reflects full-year averages) 2022 2023 2024(G) 52 50 NGL Segment Unhedged Volumes C3+ Spec Product Sales(1) (Mb/d) 55 52 +/- 56 40 % of C3+ Sales Hedged(2) 81% 87% +/-
Slide 21: Financial Overview
Financial Overview NASDAQ: PAA & PAGP 21
Slide 22: 2024 Key Objectives
2024 Key Objectives Consistent with Plains’ long-term strategy SAFE, RELIABLE & COMMITMENT MAINTAIN RESPONSIBLE TO CAPITAL DISCIPLINE FINANCIAL FLEXIBILITY OPERATOR Maintain Leverage Ratio Continuous Target Range Improvement GENERATE Return Thresholds INCREASE 3.25x - 3.75x well in excess of WACC of
Slide 23: 2024 Guidance Highlights
2024 Guidance Highlights Adj. EBITDA attributable to PAA Adj. Free Cash Flow excluding changes in Assets & Liabilities $2.625 - $2.725B $1.65B ~13% Yield(1) Long-term Leverage Ratio Target Range(2) Investment Capital (Net to PAA) 3.25x - 3.75x +/- $375MM 2024 Guidance: Furnished February 9, 2024. No
Slide 24: Free Cash Flow Priorities
Free Cash Flow Priorities Committed to capital discipline, significant return of capital & financial flexibility 2024(G) Capital Allocation +/- $1.65B of Adj. Free Cash Flow (excluding changes in Assets & Liabilities) Targeting multi-year, sustainable distribution growth Adj. FCFaD +/- $500 Availabl
Slide 25: Disciplined Capital Investments
Disciplined Capital Investments Capital-efficient expansion & debottlenecking opportunities ($ millions) $2,500 Capital Overview Investment Capital Maintaining capital discipline through rigorous vetting (Net to PAA) Maintenance Capital $2,000 (Net to PAA) Hurdle rate well in excess of WACC Se
Slide 26: Long-Term Leverage Ratio Target Range
Long-Term Leverage Ratio Target Range Maintaining flexibility for returns to equity holders & disciplined investment opportunities Balance sheet leverage vs. leverage ratio target range Includes 50% debt treatment for preferred equity Leverage Ratio Reduced leverage target range by 0.5x Target Range
Slide 27: Senior Note Maturity Profile – Investment Grade Credit Rating
Senior Note Maturity Profile – Investment Grade Credit Rating Recently upgraded to BBB at Fitch / S&P and positive outlook at Moody’s Senior Note Debt (face value): ~$7.3 Billion Average Tenor: ~10 years Percentage Fixed: ~100% Average Rate on Senior Notes: ~4.6% Expect to refinance all or a portion
Slide 28: Delivering on Increasing Returns of Capital to Equity Holders
Delivering on Increasing Returns of Capital to Equity Holders Targeting multi-year, sustainable distribution growth ($/Unit; Common Distribution Coverage) 2024: +$0.20/unit annualized (+19%) vs. 2023 (Payable Feb-24) $1.27 (~190%) $1.07 (~220%) Future Considerations $0.87 (~265%) Subject to board
Slide 29: Meaningful Progress on Long-Term Goals & Initiatives
Meaningful Progress on Long-Term Goals & Initiatives Plains is well positioned today & going forward Pre-2020 T O D AY (1) Midstream 1.0 Midstream 3.0 Average HSE Performance Improvement in Key HSE Metrics Multi-year build out in process Significant Operating Leverage Significant Investment Capital
Slide 30: Key Takeaways from our Presentation
Key Takeaways from our Presentation Positioned Well for the Future North American Hydrocarbons Key to Meeting Global Demand 1 Permian Basin driving US supply growth 2 Capturing Volume Growth via Operating Leverage Growth in Permian tariff volumes 3 Generating Significant Adj. Free Cash ` Flow(1) 202
Slide 31: Appendix
Appendix - ree — sane IPLAINS ry Se,
Slide 32: 2024(G): Financial & Operational Metrics & Assumptions
2024(G): Financial & Operational Metrics & Assumptions Financial ($MM, except per-unit metrics) 2024(G)(1) Adjusted EBITDA attributable to PAA $2,625 - $2,725 Crude Oil Segment 2,225 NGL Segment 440 Other 10 Distributable Cash Flow avaliable to Common Unitholders $1,700 Common Unit Distribution Cove
Slide 33: Investor Presentation First-Quarter 2024
Investor Presentation First-Quarter 2024