Plains Gp Holdings, L.p. · NASDAQ:PAGP
Plains Gp Holdings, L.p — Q4 2023 Earnings Presentation
31 slides from Plains Gp Holdings, L.p's earnings presentation, Feb 9, 2024
Slide 1: Investor Presentation Fourth-Quarter 2023
Investor Presentation Fourth-Quarter 2023
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% $1.45B Enterprise Distribution 2023(G) Value Yield(1) Free Cash Flow Investment Grade Credit Rating Operating Profile >8 MMb/d >6 MMb/d >1 MMb/d Total Pipeline Permian Pipe
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 2023(G) Adj. EBITDA: $2.60 - $2.65B $50 - $100MM from high-end of prior guidance range +/- 20% NGL NGL Activities +/- 80% Crude Oil ( +/- 60% Perm
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 indepe
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 Free Cash Flow 2023(G): +/- $1.45B FCF / $450MM FCFaD Balance Sheet
Slide 7: Leading Distribution Yield Across Sectors
Leading Distribution Yield Across Sectors Targeting multi-year, sustainable distribution growth Distribution / Dividend Yield(1) Distribution Growth Distribution Estimates (2) Yield (3) Wells Fargo Research ~8.0% +12.4% 4.1% 3.7% 3.4% 2.7% 2.1% 2.1% +4.1% 1.7% 1.6% 1.5% 0.9% 0.8% 0.7% Real Energy Ut
Slide 8: Macro Fundamentals & Asset Overview
Macro Fundamentals & Asset Overview NASDAQ: PAA & PAGP 8
Slide 9: World Needs "All of the Above" Sources of Energy
>10 Billion World Needs “All of the Above” Sources of Energy In 2100 Traditional energy sources account for >80% of primary global energy consumption 9.7 Billion In 2050 180,000 7.9 Billion Other In 2022 160,000 Nuclear Historical Energy Transition Considerations Hydro 140,000 - Most shifts lasted o
Slide 10: Upstream Underinvestment & Limited Spare Capacity
Upstream Underinvestment & Limited Spare Capacity Driving reliance on North American supply growth Prolonged Upstream Underinvestment (1) OPEC+ Spare Capacity is Limited(2) (+/- 2.5% of Global Crude Oil Demand) (Mb/d) ($ Billions invested) 7,000 $900 $800 6,000 $700 5,000 $600 Increases partially 4,
Slide 11: World Needs North American Energy Supply
World Needs North American Energy Supply The Permian Basin is the crude growth engine Top Liquids(1) Producing Nations (plus Permian) N.A. Oil Production Outlook Through 2025(2) (MMb/d) 20 20.3 Permian Basin 15 Other U.S. 11.9 Other US Shale 11.2 10 8.1 5.9 Canada 5.3 5.0 5 Permian 3.5 3.4 3.2 2.5 O
Slide 12: 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 Wink
Slide 13: Executing Bolt-on Opportunities
Executing Bolt-on Opportunities PERMIAN JV Enhancing & extending relationships with new & existing customers PERMIAN LONG-HAUL OMOG JV LLC LM ENERGY SOUTHERN DELAWARE LARGE-SCALE SUPPLY Midland AGGREGATION Basin >4.4 MM dedicated acres; average contract tenor of +/- 6 years Significant drilling & co
Slide 14: Capturing Permian Volume Growth
Capturing Permian Volume Growth Integrated system with operating leverage to capture Permian growth Gathering Intra-Basin Long-Haul Acreage dedications driving growth Supporting downstream movements Demand driving utilization higher ▪ Substantial Midland & Delaware Basin ▪ Supporting downstream move
Slide 15: Crude Oil Segment Detail
Crude Oil Segment Detail Capturing growth via operating leverage 2021 2022 2023(G) Crude Oil Segment (Mb/d) 2023(G): +/- $2,125MM Adj. EBITDA(2) Includes +/- $200MM from Storage Terminals(3) Gathering 1,643 2,346 2,625 Intra-Basin 1,740 2,084 2,200 Permian ~15% Long-Haul 1,029 1,208 1,485 Canada / (
Slide 16: 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 17: Strategically Located Fractionation & Straddle Capacity
Strategically Located Fractionation & Straddle Capacity Growth in Canadian gas production benefits Plains’ Empress & Fort Sask facilities (1) WCSB Gas Forecast (Bcf/d) ▪ Increasing gas production & east gate border 19.3 17.3 flows drives increasing utilization of PAA’s Empress & Ft. Sask facilities
Slide 18: NGL Segment Detail
NGL Segment Detail 2023(G): +/- $480MM Adj. EBITDA(3) ▪ Majority of EBITDA generated by C3+ frac spread benefit ~10% Unhedged C3+ Fractionation & Marketing – Pro-actively hedge Frac Spread exposure ~40% – Purchase AECO natural gas & sell spec products (C3+) on Fee For Service Mont Belvieu pricing(1)
Slide 19: NGL Segment Frac Spread & Hedging Profile
NGL Segment Frac Spread & Hedging Profile 2024 Considerations Hedging Profile (2021 – 2023(G)) (1) ▪ Hedged over 2/3 of our expected 2024 C3+ spec product sales at a (table data reflects full-year averages) 2021 2022 2023(G) spread >$0.60/ gallon ▪ Expect a volumetric benefit in 2024 from absence of
Slide 20: Financial Overview
Financial Overview NASDAQ: PAA & PAGP 20
Slide 21: Raising Full-Year 2023 Guidance
Raising Full-Year 2023 Guidance Strong year-to-date performance and contribution from bolt-on acquisitions Adj. EBITDA attributable to PAA Free Cash Flow (FCF) $2.60 - $2.65B $1.45B(1) (includes A&D activity) Year-End Leverage Ratio Investment Capital (Net to PAA) <3.5x $325MM 2023(G): Furnished Nov
Slide 22: Free Cash Flow Priorities
Free Cash Flow Priorities Committed to significant return of capital, continued capital discipline & financial flexibility 2023(G) Capital Allocation Represents +/- $1.45B of Free Cash Flow Targeting multi-year, sustainable distribution growth FCFaD & opportunistic repurchases +/- $450 (Available fo
Slide 23: Disciplined Capital Investments
Disciplined Capital Investments Capital-efficient expansion & debottlenecking opportunities ($ millions) $2,500 Capital Overview Investment Capital ▪ Maintaining capital discipline through rigorous vetting and (Net to PAA) $2,000 Maintenance Capital hurdle rate well in excess of WACC (Net to PAA) ▪
Slide 24: Lowering Long-Term Leverage Ratio Target Range
Lowering Long-Term Leverage Ratio Target Range Maintaining flexibility for returns to equity holders & disciplined investment opportunities Balance sheet leverage vs. leverage ratio target range Includes 50% debt treatment for preferred equity NEW Leverage Ratio Target Range Reducing leverage target
Slide 25: Delivering on Increasing Returns of Capital to Equity Holders
Delivering on Increasing Returns of Capital to Equity Holders Targeting multi-year, sustainable distribution growth ($/Unit; Common Distribution Coverage) 2024: +$0.20/unit annualized (+19%) vs. 2023 (Payable Feb-24)(1) $1.27 $1.07(~220%) Future Considerations $0.87 (~265%) ▪ Subject to board approv
Slide 26: Senior Note Maturity Profile – Investment Grade Credit Rating
Senior Note Maturity Profile – Investment Grade Credit Rating Recently upgraded to BBB at S&P and positive outlook at Moody’s Senior Note Debt (face value): ~$8.0 Billion Average Tenor: ~10 years Percentage Fixed: ~100% Average Rate on Senior Notes: ~4.6% Retired $1.1 Billion of (1) Senior Notes in
Slide 27: Key Takeaways from our Presentation
Key Takeaways from our Presentation Positioned Well for the Future North American Hydrocarbons Key to Meeting Global Demand 1 Permian Basin driving US supply growth 2 Capturing Growth via Operating Leverage Significant growth in Permian tariff volumes Generating Significant Free Cash Flow ` 3 2023(G
Slide 28: Appendix
Appendix
Slide 29: Financial & Operational Metrics
Financial & Operational Metrics Financial ($MM, except per-unit metrics) 2023(G)(1) Adjusted EBITDA attributable to PAA $2,600 - $2,650 Crude Oil Segment $2,125 NGL Segment $480 Other $20 Implied DCF to Common $1,650 Distribution Coverage (Common) 220% Year-End Leverage Ratio <3.5x (2) Cash Flow fro
Slide 30: Permian Gathering Bolt-On Acquisitions
Permian Gathering Bolt-On Acquisitions Enhancing Permian footprint through supply aggregation & system liquidity Overview of Transactions ▪ Permian JV acquired Rattler Midstream's Southern Midland Delaware Basin crude gathering system(1) and LM Basin Energy’s Touchdown crude gathering system(2) – Ag
Slide 31: Investor Presentation Fourth-Quarter 2023
Investor Presentation Fourth-Quarter 2023