2016 Investor Day Houston, TX May 25, 2016 Significant Capabilities, Leveraged To Recovery
PAA / PAGP 2016 Investor Day Agenda Topic Presenter Welcome & Opening Remarks Ryan Smith Crude Oil Industry Overview Greg Armstrong U.S. Crude Oil Fundamentals Jeremy Goebel State of the Midstream Harry Pefanis U.S. Value Chain…
PAA: A Leading Crude Oil Midstream Service Provider In The U.S. & Canada (1) Unmatched Capabilities in Serving the Industrys Supply Push & Demand Pull Needs --PAA Handles 4.6 mmb/d of Crude Oil & NGLs-- Note: Map includes…
PAAs Historical Investor Day Themes: A Logical Progression 2013 2014 (mb/d) Strong Planning For (/bbl) 10,000 Fundamentals, Growth, Prepared 120 Opportunities, & For Periodic Execution Disruptions 9,000 100 2015 An…
Suggested Takeaways From Todays Meeting Todays Theme PAA: Significant Capabilities, Leveraged To Recovery Industry Takeaways Intermediate to long-term crude oil fundamentals very constructive for PAA Future of the midstream will look…
Continuing To Evaluate Structure Simplification Alternatives We continue to evaluate a potential simplification transaction between PAA and its general partner Currently actively engaged with the three largest owners of our general…
Crude Oil Industry Overview Greg Armstrong Chairman & CEO www.plainsallamerican.com NYSE: PAA & PAGP 10
The Stage Is Being Set For A Meaningful Recovery In Crude Oil Prices And Surge In Drilling / Completion Activities World petroleum demand is at/near record levels; yet production capacity above demand is at/near trough levels…
A Very Significant Portion Of U.S. Production Comes From Wells Completed In The Last Two Years and a material decrease in completion activity will have an extended adverse impact on prior forecasts for long-term production levels At…
Illustration Of The Impact That Sharp Decline Rates & Reduced Activity Levels Have On Production Lower 48 Onshore Production Declines Rig Count Total Lower 48 US Oil Rigs (Exc. GOM) (mb/d) 2,000 Total L48 Onshore Production…
High Inventory Levels Provide A Near Term Buffer, But Can Be Meaningfully Reduced In A Short Period of Time (Growth = continued oversupply at the margin; Absolute level = overhang on the market) U.S. Crude Oil Inventory vs. WTI…
PAAs 2016 BOY Outlook Shows Near Term Inventory Levels Remain Elevated, But Improving 2H16 Dotted purple lines based on estimates prepared by PAA in late 2015 (mbls) DOE Total Crude Stocks (excl. SPR) (mb/d) U.S. Weekly Oil…
Various Sources Project Global Oil Supply / Demand To Rebalance At The Margin Over The Next Year +/- (mmb/d) (mmb/d) 100 4 World Oil Consumption (left axis) Energy Information Administration World Oil Supply (left axis) Supply…
Limited Capability To Ramp Up Quickly We Were Just At 1,600 Rigs 17 Months Ago Oil rig count as of May 13, 2016 = 300 rigs1 Three primary impediments workforce; equipment; leverage Massive layoffs among both E&P and service…
Not All Equipment, Labor and Locations Are Equal Ramp Up Time Will Likely Take Longer Than Ramp Down Time Currently operating with / in the best of the best equipment, labor and locations Activity ramp up may involve time delays,…
Key Considerations The stage is being set for a meaningful recovery in crude oil prices Beyond absorption of some ready, idle capabilities, there will be a delay between when significant demand for increased drilling and completion…
U.S. Crude Oil Fundamentals Jeremy Goebel Vice President, Acquisitions & Strategic Planning www.plainsallamerican.com NYSE: PAA & PAGP 20
PAAs Three Production Forecasts - Major Assumptions These cases are not projections of when prices will recover, but illustrations of production profiles resulting from assumed increases in activity levels at given points in time…
Resulting U.S. Production Forecasts Observation: The longer OPEC / Saudi Arabia can delay the resumption of U.S. D&C activity, the less U.S. production they will have to compete with for long-term market share (e.g. A lower trough rig…
Comparison Of Historical And Projected Scenario B Rig Counts (Excluding DUC Incr/(Decr), Rig Activity Is A Directional Indicator Of Completion Activity) Rig Count PAA Projected Total Lower 48 US Oil Rigs (Exc. GOM) Scenario B Case…
Comparing The 2009 Cycle vs. The Current Cycle So Far & PAAs Scenario B Activity Forecast Rig Count Oil Cycle Comparison Total US Rig Count 2,500 2009 Cycle Current Cycle Scenario B 10 Months 2,000 20 Months and Growing Average…
Lower 48 Onshore Growth: Comparison Of PAAs Scenario B To Historical Trajectory Higher Base Decline Offsets Portion Of Improved Efficiency 2011 to 2015 Actual Volume Growth 2017 to 2020 Projected Volume Growth* Average Rig Count:…
Eagle Ford Decline Profile Scenario B Case Eagle Ford Production Declines 1,800 5 Years Eagle Ford SandEagle Historical Deliveries Ford vs. New Sand Well Completions Deliveries Total Eagle Ford Production (mb/d) 1,600 70%…
Williston Decline Profile Scenario B Case Williston Production Declines 1,600 Historical Williston Williston vs. Sand Deliveries Sand Deliveries New Well Completions 80 250 60% from Total Williston Production (mb/d) 1,400…
DJ Basin Decline Profile Scenario B Case 500 DJ Production Declines DJ Basin Historical Sand Deliveries vs.Deliveries DJ Sand New Well Completions 450 25 200 Total DJ Production (mb/d) 400 80% from 2020 2014/2015 180 3…
Permian Basin Decline Profile Scenario B Case Permian Production Declines Historical Permian Permian vs. Sand Deliveries Sand Deliveries New Well Completions 3,000 140 350 Total Permian Production (mb/d) 2,500 55% from 120…
PAAs Assets Are Well Positioned To Participate In A Recovery Delaware Basin Central Basin Midland Basin Legend Trunkline Gathering New Pipeline Additions www.plainsallamerican.com NYSE: PAA & PAGP Note: Basin shading is…
State Of The Midstream Harry Pefanis President & COO www.plainsallamerican.com NYSE: PAA & PAGP 31
State Of The Midstream 2016 Is A Challenging Year Between 2010 and 2019, 50 major crude oil pipeline projects have been completed or are pending/under construction Projects total an estimated 37 billion of capital investment 12 mmb/d…
The Current Cycle Is Different Than 2009 In 2009, PAA was one of the few MLPs with both a merchant and pipeline business Today, the space is far more crowded: Oil Majors backing pipelines, (1) competing with existing industry…
Near-Term Expectations Continuation of a competitive environment for new volumes Potential for producer bankruptcies to create disruptions Midstream capital projects will likely be limited to: Completion of existing projects…
Intermediate / Long-Term Expectations Very constructive intermediate to long-term outlook for the crude oil industry very positive for PAA U.S. & Canada have an extensive crude oil and natural gas resource base that will continue to…
Intermediate / Long-Term Expectations Significant amount of undrilled inventory throughout North America Undrilled Inventory In Selected Resource Plays Area HZ Est. of 2014 2015 Major U.S. Drilling Acreage Wells Drilled Undrilled…
At PAA, Three Simple Goals For 2016: In addition to our constant goal of running a safe, compliant and environmentally responsible operation, we have three simple goals: 1. Maintain a solid balance sheet, sound credit metrics and ample…
Key 2016 Initiatives By Segment During This Transitional Period Overriding Initiatives Continued pursuit of operational excellence through leadership, collaboration, continuous improvement and personal responsibility Operate in a…
Commitment To Operational Excellence PAA is committed to prudently ( millions) Total Maintenance and Integrity Spend ( millions) 600 3,500 maintaining its assets for the long term Canada Continued high level of investment in 500…
Line 901 Update Refugio Beach May 19, 2015 (day 0) May 22, 2015 (day 3) June 6, 2015 (day 17) www.plainsallamerican.com NYSE: PAA & PAGP 110A Insert
Line 901 Update Release occurred on May 19, 2015 Released 3,000 barrels (recovered 1,100 barrels) Responded in force with a commitment to do the right thing and do it quickly several executive and senior officers arrived at…
Line 901 Update Related Developments: May 17, 2016 -- PAA and one of its employees were indicted for alleged violations of law in connection with the oil release Included 4 Felony counts for the violation of various statutes relating…
Q&A www.plainsallamerican.com NYSE: PAA & PAGP 40
U.S. Value Chain Positioning Willie Chiang EVP and COO US www.plainsallamerican.com NYSE: PAA & PAGP 41
PAA Is A Leader Across The Entire Crude Oil Midstream Value Chain In Almost Every Region Primarily fee-equivalent Primarily fee-based activities merchant activities Multiple commercial optimization opportunities…
Lease Gathering Is A Key Component Of PAAs Unique Crude Oil Value Chain Interconnected System (Margin data is illustrative and intended for directional purposes only) One barrel can generate multiple fees as it moves through the…
PAAs Integrated Assets Are Located In All Major U.S. And Canadian Crude Oil Production Areas And Substantially All Inland And Coastal Crude Oil Terminal / Interchange Locations PAA Assets (1) Yellow highlighted Pipelines (active…
Current Multi-Year Capital Program Will Further Enhance PAAs Asset Footprint Multi-Year Organic Growth Capital Program MVC / Contractual Pipeline 2.0 Billion Support Strategy 2015 2016 (G) 2017(P) Red River & Caddo Pipelines* Yes…
Integrated System Serving Multiple Markets Bakken / Patoka Canadian Crude to St. James Cushing to Broom Cushing Diamond STACK Memphis Yellow highlights Stack Injection Station represent significant SCOOP Scoop…
Substantial Capacity Across The System Leverages PAA To An Industry Recovery Available Capacity 100 mb/d 0-100 mb/d Substantially Full - With Low to No Capex - PAA Handles 4.6 mmb/d of Crude Oil & NGLs Note: Map includes 3rd…
Significant Operating Leverage To North American Crude Oil Production Growth With Low-to-No Incremental Capex Production volume growth in each of the Transportation & Facilities (1) (600mm) basins can potentially fill a large portion…
PAA Continuing To Execute On Planned Asset Sales Executing Planned Asset Sales Currently anticipating 500-600mm in sales proceeds for 2016 Year-To-Date closed four transactions for approximately 350mm BOA pipeline and other…
U.S. Transportation Capabilities Sam Brown Senior Vice President www.plainsallamerican.com NYSE: PAA & PAGP 51
2016 Initiative: Maximizing Utilization Of Transportation Segment Assets PAA is focused on optimizing assets in the current environment, which is driven by an extensive network of activities, significant operational capabilities and…
How Did We Get Here Where Are We Going Pre-Shale Renaissance pipeline investments executed primarily through acquisitions Complementary multi-year organic growth capital program followed in response to rise of shale resource…
Continuous Investment In Growing Safe & Reliable Transportation Systems (1) (2) 2009 2015 PAA Transportation Assets PAA Transportation Assets Pipeline Miles Since 09 Pipeline Miles: 16k Pipeline Miles: 18k Miles Added: 6k Field…
The Permian Basin Is A Model For PAAs Supply Push Pipeline Interconnectivity Significant Export Capabilities (1) Cushing Borger Basin Pipeline: 375 mb/d capacity, a manifold-type connection to all major export pipelines Cactus…
Zoomed-In View Of PAAs Extended Reach Within The Permian Basin WASSON C. CITY LYNCH JAL MIDLAND WINK ODESSA BLACKTIP DRIVER Legend Trunkline COATES CRANE Gathering WOLFBONE New Pipeline Additions…
2016 Pipeline Projects Largely Demand Pull Oriented And Supported By PAAs Existing Facilities Presence Demand pull pipeline growth opportunities largely driven by PAAs operationally flexible facilities located at major market…
PAA Pipeline Integrity Programs It is important for PAAs transportation assets to deliver safe, consistent and reliable results PAA maintains a consistent and enhanced comprehensive suite of integrity management and risk screening…
U.S. Facilities Capabilities John Keffer Senior Vice President www.plainsallamerican.com NYSE: PAA & PAGP 59
PAAs Significant Facility Presence Spans All Major North American Crude Oil Production & Liquids Rich Areas As Well As Inland And Coastal Terminal & Market Interchange Locations PAA Facilities Capabilities(1)(2) Liquid Storage: 135…
Long-Term Value For Customers Driven By Connectivity To End Markets And Delivery Of Reliable / Superior Service PAAs Crude Oil Terminals Provide: Operational advantages for refiners and producers New pipelines adding connectivity…
Inland Facilities: Market Hubs & Producing Areas Significant Connectivity With Room For Expansion Cushing, OK St. James, LA Patoka, IL Midland, TX PAA 1000 Acres PAA Dock 2,200 Acres PAA Capline Terminal XOM Empire…
Upfront Planning, Design & Investment Provides Continued Growth Opportunities (mmbls) 85 Tanks, 25 Cushing, OK 23 mmbls (mmbls) 14 St. James, LA Patoka, IL --Approaching 12x Growth -- PAA Crude Oil Storage Capacity 12 20…
Coastal Marine Terminals: Dual Import / Export Capability Is Key To Total Flexibility St. James, LA Mobile, AL 45 draft 45 draft Avg. Capacity of Ships Capable of Referenced Ship Loading / Unloading (bbls) Corpus Christi, TX…
PAA Facilities Integrity Programs Facility Integrity Management Program (FIMP) Developed to mitigate risk of potential facility releases Conduct comprehensive facility visual and non-destructive testing (NDT) inspections Action Plan…
Canadian Assets & Capabilities Jason Balasch, President Plains Midstream Canada www.plainsallamerican.com NYSE: PAA & PAGP 66
Canadian Crude Supply Outlook Canadian Conventional Crude Supply* Average of 75 crude rigs running in 2015 (mb/d) (62% lower than 13 or 14) Believe Canadian activity will remain depressed until mid-2017, but our trough in production…
Canadian Crude Connectivity To U.S. Lower 48 Plains Canadian Crude Oil Asset Overview 2,860 miles active pipelines 392 mb/d pipeline volumes 4.8 mmbls tankage 680 truck units 600 railcars Yellow highlights represent…
Canadian Crude Connectivity To U.S. Lower 48 Estimated In-Service Date: PAA Saddlehorn Q3 2016 Energy Transfer Dakota Access Q4 2016 Enbridge Sandpiper Q1 2019 TransCanada Energy East Undetermined Note: Map for illustrative purposes…
Canadian NGL Supply Outlook mbl/d Canadian C3+ Supply* Less decrease than conventional crude; recent investment in facilities now coming online offsetting some production declines has resulted in a 45 mb/d increase in C3+ from…
PMC NGL Assets Note: Map for illustrative purposes only. Not all www.plainsallamerican.com NYSE: PAA & PAGP PAA and 3rd Party assets are shown. 71
PMC NGL Assets And Connectivity Note: Map for illustrative purposes only. Not all www.plainsallamerican.com NYSE: PAA & PAGP PAA and 3rd Party assets are shown. 72
PMC NGL Assets - Supply Total Current Supply Mix Supply % (mb/d) Field Supply 63 58% Straddle Supply 43 39% Other Processing 3 3% Mix Supply 109 100% Empress Assets +15 to Straddle Supply Total Supply with Mix Supply % Empress…
Total 3rd Party Supply TOTAL 3rd PARTY PURCHASES (2016G) 153 mb/d CAD WEST 22 CAD EAST 4 USA NE USA WEST 44 31 USA MID-WEST 36 USA SE 16 (2016G) Guidance furnished via form 8-K on May 4, 2016. Note: Map for…
Total LPG Sales TOTAL LPG SALES (2016G) 262 mb/d CAD WEST 47 CAD EAST 66 USA NE USA WEST 43 41 USA MID-WEST 38 USA SE 27 (2016G) Guidance furnished via form 8-K on May 4, 2016. Note: Map for illustrative purposes…
PMC North American LPG Balance TOTAL LPG SALES (2016G) 262 mb/d CAD WEST CAD EAST USA WEST USA MID- USA NE WEST USA SE (2016G) Guidance furnished via form 8-K on May 4, 2016. Note: Map for illustrative purposes only. Not…
PMC Equity LPG Distribution Primary Trucking Area Storage Hub Primary Trucking Area Storage Hub Storage Hub Primary Trucking Area Rail Note: Map for illustrative purposes only. Not all www.plainsallamerican.com…
PMC Equity LPG Distribution with Pending Empress Acquisition Primary Trucking Area Empress Assets Storage Hub Primary Trucking Area Storage Hub Storage Hub Primary Trucking Area Rail Empress Acquisition Assets…
Fort Saskatchewan Expansion Plans - 625 mm Strategic Midstream Asset NGL hub with multiple fractionation, storage and marketing options Provides staging for NGL shipments to our eastern NGL system Expansion projects enhance…
Fort Saskatchewan Capacity Growth April 2012 BP Acquisition Approved Projects Land Footprint 380 total acres 855 total acres Capacity 45 mb/d C3+ 85 mb/d C3+ Caverns 5.2 mmbls Caverns 7.2 mmbls Storage Brine 2.5 mmbls Brine…
PMC Operational Excellence Initiatives PMC has developed an Operational Management System (OMS) to guide sustainable and disciplined operations throughout the organization Pipeline Integrity Management Risk Assessment and Management…
Adding Value Through Optimization Of Our Existing Asset Base Access to capital and backing for new investment opportunities has diminished across the industry; Plains Midstream Canada is no exception. Implementing and optimizing the…
Financial Overview Al Swanson EVP and CFO www.plainsallamerican.com NYSE: PAA & PAGP 85
PAAs Financial Strategy Fund growth capital with at least 55% equity and excess cash flow Minimize capital market risk: early/pre-funding is a priority Target a credit profile of: LT Debt / Book Capitalization Ratio 50% LT Debt /…
2016 Investments & Sources / Uses Of Cash ( Millions) Sources Series A Preferred Units 1,600 Asset Sales (assumed midpoint of range) 550 2,150 Uses Expansion Capital Program (1,500) Canadian NGL Acquisition (1) (150) (1,650)…
PAA Long-Term Debt Maturity Profile As of March 31, 2016 Total Long-Term Debt: 9.2 Billion Wtd. Avg. Wtd. Avg. Face Value (As of March 31) Tenor Rate Average Tenor: 13 years 2009 3.4 B 12 years 6.7% Percentage Fixed: 100% 2012 5.8 B 11…
PAA: A Track Record Of Commitment & Financial Discipline During A Period Of Substantial Growth ( billions) 20.0 LT Debt to Adj. EBITDA(1) 18.3 18.5 5.0x Although our leverage has been 18.0 17.0 impacted by the current Total…
PAA Also Has A Solid Track Record Of Maintaining Significant Liquidity ( millions) -- As of 3/31/16, PAA had 3.8 Billion 5,000 of available liquidity -- 4,500 4,000 3,500 (In mm) 3,000 2,500 2,000 1,500 1,000…
PAA Historical Performance And 2016 Guidance A Continuing Trend Of Increasing Fee-Based Cash Flow 2,500 PAA Annual Adjusted EBITDA by Segment ( millions) Consistent growth in fee-based Adj. EBITDA 2,000 651 568 441 Transportation…
Significant Increase In PAAs Fee-Based Percentage Driven By Capital Investments Fee-Based Adj. EBITDA Composition of PAA Adjusted EBITDA ( in millions) ( millions) 1,733 Capital 1,547 1,599 Strong S&L segment results S&L…
EBITDA Growth Supported By Minimum Volume Commitments (MVCs) From Credit Worthy Counterparties EBITDA Growth from Select Capital Credit Quality of Revenue from MVCs Projects Supported by MVCs 415mm 6% 16% Revenue (mm)…
Overall Credit Profile Of PAAs Customer Base Supply & Logistics Segment (85% of exposure) Revenue Breakdown of Primarily attributable to our crude oil activities Top 100 Customers selling oil to refiners Exposure 60 days or less right…
DCF & Distribution Coverage 12-Year Historical WTI Crude Oil Price ( millions) Distribution Coverage 117%(1) (/bbl) Shale Oil 1,800 0.86x 160 14% 1.4x 0.88x Development Era 1.6x 1.1x YoY Distribution Grow th 140 12%…
PAGPs Tax Attributes Continue To Benefit Investors 12/31/2014 12/31/2015 3/31/2016 Deferred Tax Asset - mm 1,705 1,835 1,907 PAGP Shares Outstanding - mm 207 229 267 DTA/Share 8.24 8.01 7.14 PAGP is not expected to be a tax-paying…
PAA Thoughts Regarding The Viability And Sustainability Of The MLP Model Conventional MLP Distribution/Financing Model Grow sustainable cash flow Distribute very substantial portion to unitholders Execute Grow Business…
PAA Exceeds The Criteria Of A Sustainable MLP Results In A Unique Long Term Value Proposition PAA Has: 1. The most integrated crude oil pipeline & terminal system in the U.S. 2. Minimal direct exposure to commodity prices 3.…
PAAs Significant Capabilities Provide Flexibility And Optionality To PAA And Its Customers Mid- West Gulf Eagle East Permian Canada Rockies Williston Continent Coast Coast Ford Coast Strategic Locations Crude Oil Multiple Pipeline…
Overview Of PAA Asset Capabilities By Product Platform NGL Crude Oil(1) Pipelines (active miles) 1,100 miles Pipelines (active miles) 18.1k miles Pipeline Tariff Volumes 178 mb/d Pipeline Tariff Volumes(2) 4.4 mmb/d Storage Capacity…
Cactus Pipeline (Supply Push) Supply Push PAAs Cost: 490mm Description: 20, 310 mile pipeline from McCamey, TX to Gardendale, TX Ownership: 100% PAA Pipeline connects Permian producers to the Eagle Ford and access to waterborne…
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