Plains Gp Holdings, L.p. · NASDAQ:PAGP
Plains Gp Holdings, L.p — Q3 2023 Earnings Presentation
32 slides from Plains Gp Holdings, L.p's earnings presentation, Nov 3, 2023
Slide 1: Investor Presentation Third-Quarter 2023
Investor Presentation Third-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 ~7% $1.6B Enterprise Distribution 2023(G) Value Yield Free Cash Flow Investment Grade Credit Rating Operating Profile >8 MMb/d >6 MMb/d >1 MMb/d Total Pipeline Permian Pipeline
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: $2.45B - $2.55B Expect to be at the high-end +/- 17% NGL NGL Activities +/- 83% Crude Oil ( +/- 60% Permian) 2023(G): Furnish
Slide 5: Plains' Structure & Tax Attributes
Plains’ Structure & Tax Attributes Dual securities provide flexibility & optionality 1 for 1 Economic & Voting Rights Governance Overview 100% of Directors subject to public election PAA GP HOLDINGS LLC (PAGP GP) – Staggered 3-yr rolling basis (Unified Board of Directors) 75% of Directors indepe
Slide 6: Plains' Investment Opportunity
Plains’ Investment Opportunity Generating multi-year Free Cash Flow & increasing returns of capital to equity holders Attractive Current Yield of ~7% Meaningful coverage, targeting multi-year distribution growth Significant Free Cash Flow 2023(G): +/- $1.6B FCF / $600MM FCFaD Balance Sheet Strength
Slide 7: Leading Distribution Yield Across Sectors
Leading Distribution Yield Across Sectors Targeting multi-year, sustainable distribution growth Distribution / Dividend Yield(1) Distribution Growth Distribution Estimates (2) Yield 7.0% Wells Fargo Research ~7.0% +12.4% 3.7% 3.6% 3.3% 2.5% 2.0% 2.0% 1.6% 1.5% +3.6% 1.5% 0.9% 0.8% 0.7% Real Energy U
Slide 8: Macro Fundamentals & Asset Overview
Macro Fundamentals & Asset Overview NASDAQ: PAA & PAGP 8
Slide 9: World Needs "All of the Above" Sources of Energy
>10 Billion World Needs “All of the Above” Sources of Energy In 2100 Traditional energy sources account for >80% of primary global energy consumption 9.7 Billion In 2050 180,000 7.9 Billion Other In 2022 Nuclear 160,000 Historical Energy Transition Considerations Hydro - Most shifts lasted over a ce
Slide 10: Upstream Underinvestment & Limited OPEC+ Spare Capacity
Upstream Underinvestment & Limited OPEC+ Spare Capacity Driving reliance on North American supply growth Prolonged Upstream Underinvestment (1) OPEC+ Spare Capacity is Limited(2) (+/- 2.5% of Global Crude Oil Demand) (Mb/d) ($ Billions invested) 7,000 $900 $800 6,000 $700 5,000 $600 Increases partia
Slide 11: World Needs North American Energy Supply
World Needs North American Energy Supply The Permian Basin is the crude growth engine Top 10 Liquids(1) Producing Nations (plus Permian) N.A. Oil Production Outlook Through 2025(2) (MMb/d) YE’22-YE’25 = +1.7 MMb/d 20 20.3 Potential for future decline in Russian Permian Basin 15 production due to the
Slide 12: Plains' Premier Permian Crude Oil Infrastructure Position
Plains’ 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 FULLY INTEGRATED C. Ci
Slide 13: Permian Crude Gathering Footprint
Permian Crude Gathering Footprint Flow Assurance, Quality Control & Market Access PERMIAN JV PERMIAN LONG-HAUL LARGE-SCALE SUPPLY Midland Basin AGGREGATION 4.3MM dedicated acres; average contract tenor of +/- 6 years Significant drilling & completion activity on dedicated acreage C. City UNMATCHED S
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: 2023(G): Crude Operational Metrics
2023(G): Crude Operational Metrics Capturing Permian gathering, intra-basin & long-haul growth 2021 2022 2023(G) Crude Oil Segment (Mb/d) 2023(G): $2,080MM Adj. EBITDA(2) Includes +/-$200MM from Storage Terminals(3) Gathering 1,643 2,346 2,695 Intra-Basin 1,740 2,084 2,295 Permian ~15% Long-Haul 1,0
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 Increasing gas production & east gate border flows (Bcf/d) drives increasing utilization of PAA’s Empress & Ft. 17.3 19.3 Sask facilities
Slide 18: Plains Fort Saskatchewan & NGL Segment Updates
Plains Fort Saskatchewan & NGL Segment Updates Capital-efficient optimization & contracting improves long-term cash flow durability Advanced multiple initiatives resulting in more stable & durable long-term cash flow Sanctioned Fort Saskatchewan Train 1 debottleneck (~30 Mb/d expansion) & additi
Slide 19: NGL Segment 2023(G) Detail
NGL Segment 2023(G) Detail 2023(G): $420MM Adj. EBITDA(3) Majority of EBITDA generated by C3+ frac spread benefit ~10% Unhedged C3+ Fractionation – Pro-actively hedge Frac Spread exposure & Marketing ~40% – Purchase AECO natural gas & sell spec products (C3+) on Fee For Service Mont Belvieu pricin
Slide 20: NGL Segment Frac Spread & Hedging Profile
NGL Segment Frac Spread & Hedging Profile C3+ Spec Product Sales(1) (Mb/d) Hedging Profile (2021 – 2023(G)) (table data reflects full-year averages) 2021 2022 2023(G) 60 55 NGL Segment +/- 53 50 50 Unhedged C3+ Spec Product Sales(1) (Mb/d) 50 55 +/- 53 Volumes 40 % of C3+ Sales Hedged(2) 88% 81% +/-
Slide 21: Financial Overview
Financial Overview NASDAQ: PAA & PAGP 21
Slide 22: 2023(G): Key Financial Metrics
2023(G): Key Financial Metrics Executing against our 2023 Plan (now expect high-end of Adj. EBITDA range) Adj. EBITDA attributable to PAA Free Cash Flow $2.45B - $2.55B $1.6B(1) (now expected at high-end) Year-End Leverage Ratio Investment Capital (Net to PAA) <3.5x $325MM 2023(G): Furnished August
Slide 23: Free Cash Flow Priorities
Free Cash Flow Priorities Committed to significant returns of capital, continued capital discipline & financial flexibility 2023(G) Capital Allocation Represents +/- $1.6B of Free Cash Flow Targeting multi-year, sustainable distribution growth FCFaD & opportunistic repurchases +/- $600 (Available fo
Slide 24: Disciplined Capital Investments
Disciplined Capital Investments Capital-efficient expansion & debottlenecking opportunities ($ millions) $2,500 Capital Overview Investment Capital Maintaining capital discipline through rigorous vetting and (Net to PAA) $2,000 Maintenance Capital hurdle rate in excess of WACC (Net to PAA) Self-
Slide 25: Balance Sheet Stability & Financial Flexibility
Balance Sheet Stability & Financial Flexibility Creates additional flexibility for returns to equity holders & disciplined investment opportunities Achieved balance sheet leverage target Leverage Ratio 4.5x Investment Grade balance sheet Target Range Includes 50% debt treatment for Achieve & maintai
Slide 26: Senior Note Maturity Profile
Senior Note Maturity Profile Reducing absolute debt with excess Free Cash Flow Senior Note Debt (face value): ~$8.0 Billion Average Tenor: ~10 years Percentage Fixed: ~100% Average Rate on Senior Notes: ~4.6% 2023 maturities classified as STD; $400MM repaid in 1Q23 $1,000 $1,000 $750 $750 $750 $700
Slide 27: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation North American Hydrocarbons Key to Meeting Global Demand 1 Permian Basin driving US supply growth 2 Capturing Permian Basin Growth via Operating Leverage Significant growth in Permian tariff volumes Generating Significant Free Cash Flow ` 3 2023(G): +/- $1.6B FCF
Slide 28: Appendix
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Slide 29: 2023(G): Financial & Operational Metrics
2023(G): Financial & Operational Metrics Financial ($MM, except per-unit metrics) 2023(G)(1) Adjusted EBITDA attributable to PAA (Expect to be at the high-end) $2,450 - $2,550 Crude Oil Segment 2,080 NGL Segment 420 Implied DCF to Common $1,600 Distribution Coverage (Common) 215% Year-End Leverage R
Slide 30: Permian Gathering Bolt-On Acquisition
Permian Gathering Bolt-On Acquisition Capital disciplined & efficient growth transaction further enhances premier Permian footprint Transaction Overview / Highlights Permian JV acquired(1) the remaining 43% interest Midland Basin in the Northern Midland Basin gathering system from Diamondback – ~$
Slide 31: Definitions
Definitions Adjusted EBITDA: adjusted earnings before interest, taxes, depreciation and amortization (Consolidated) − Attributable to PAA where noted; Segment Adjusted EBITDA by definition is attributable to PAA Implied Distributable Cash Flow (DCF) Per Common Unit & Common Unit Equivalent (CUE)
Slide 32: Investor Presentation Third-Quarter 2023
Investor Presentation Third-Quarter 2023