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2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P.

Plains All American Pipeline, L.P. · Feb 11, 2014 · 71 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 1
    2014 Credit Suisse Energy Summit Al Swanson Executive Vice President & CFO February 11, 2014
  2. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 2
    Plains All American Structure Two Ways to Invest (NYSE: PAA & PAGP) (1) General Partner General Partner Owners Public PAGP Series A Shareholders 21% Structured as a limited partnership, Investors Occidental Petroleum 23% but has…
  3. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 3
    Plains All American Current Profile Two Large Cap Companies (NYSE: PAA & PAGP) Financial Profile(1) PAA Assets(3) Total Enterprise Value 41.9 B Pipelines (active miles)(4) 18,000 miles PAA Equity Market Cap 18.2 B Liquids…
  4. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 4
    PAAs Integrated Assets Are Located Throughout North America in Substantially All the Major Producing Crude Oil & Liquids Rich Areas as well as Inland and Coastal Terminal & Interchange Locations PAA Handles 3.5 MMBLS/day of Crude…
  5. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 5
    PAAs Activities Are Conducted on Four Product Platforms Crude Oil is the Largest by Far Areas of involvement Illustrative Adj. Net Revenue reflected in Yellow Crude Oil Contribution NGL 20% Crude oil 75% (Leased) Natural…
  6. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 6
    PAA Conducts its Activities Through Three Segments Each Underpinned by Substantial Assets Reporting Segments(1) Adjusted Segment Profit (5) Supply & Logistics (Margin Based -- includes fee-based equivalent + upside) 800 Trucks, 925…
  7. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 7
    PAA Has Delivered Solid Performance Throughout Volatile Markets and Fluctuating Petroleum Supply and Demand NYMEX Crude Oil Prices PAA Adjusted EBITDA : U.S. Petroleum Consumption 150.00 Actual Performance vs. Guidance(1) 21,000…
  8. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 8
    North American Crude Oil Markets Current Environment is Very Attractive for PAA
  9. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 9
    US & Canadian Production Growth Expected to Continue Majority of Increase is Light / Medium Sweet & Condensate US & Canada Expected to Continue to Lead However, variations in crude the World in Crude Oil Production Growth quality &…
  10. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 10
    Projected North American PAA is a Top Provider of Flexible Midstream Assets Crude Oil Production Growth In Substantially All Major N.A. Crude Oil Resource Plays 4Q2013 YE2017 Volume Growth Driving Increased Infrastructure…
  11. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 11
    EXAMPLE 1 -- Permian Basin: PAAs Largest Asset Footprint; An Area of Significant Strength & Flexibility Direct Connectivity to Cushing, Corpus Christi and Indirect Connectivity to Houston/Other Markets Crude Oil Assets/Activities(1)…
  12. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 12
    EXAMPLE 2 -- Eagle Ford: Flexible Footprint Provides Pipeline, Rail and Barge Access Crude Oil Assets/Activities(1) Crude Oil Production (MBbls/d)(2) Expected JV Pipeline Capacity: 470 MBbls/d 1,600 +35% Expected Pipeline…
  13. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 13
    PAA Has a Sizable Presence in Most of the Major N.A. Crude Oil Market Hub / Demand Areas Including Rail PAA Also Has a Meaningful Presence in Key Natural Gas and Canadian NGL Market Hubs (In billions of barrels) Summary of Capacity at…
  14. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 14
    Solid Industry Fundamentals + Asset Base + Business Model Support Continued High Levels of Organic Capital Investment Annual Levels of Organic Investment 2,000 Strong Visibility for 1,800 - Growth 1,600 1,630 1,000 - 1,600…
  15. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 15
    Acquisitions Expected to be Additive to Organic Growth PAA Remains Active, but Disciplined Acquisitions Total: 10 Billion (2001-2013) 2.0 2006 2012 3.1B 2.3B 1.5 2007 2012 In billions Avg: 900 MM/yr 1.0 2001 2005 Avg: 300…
  16. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 16
    PAA Current Capitalization & Liquidity Substantial Liquidity & Debt Capacity Capitalization (in millions) 12/31/13 12/31/12 Long-term Debt 6,715 6,320 Partners' capital 7,703 7,146 Total book capitalization 14,418 13,466 Credit…
  17. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 17
    Generating Meaningful Excess Cash Flow 2.2 Billion Excess Cash Flow To Be Reinvested Over 11 Year Period (in millions) 11-Year DCF 9.4 billion 11-Year Distribution Coverage 130%(1) 1,600 1,400 1,200 24% 1,000 800 600 76%…
  18. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 18
    Consistent Execution Of PAAs Strategy Has Driven Attractive Distribution Growth & Total Returns Over Multi-Year Period Annualized Year-end Distributions(1) Target Increased in 37 of 39 quarters 10% Growth 2.75 2.50 2.40 2.25…
  19. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 19
    PAA Growth In Distributions & Unit Count Will Drive Distribution Growth at PAGP Execution of PAA plan to deliver 10% PAA distribution growth(1) in 2014 leads to 25% PAGP growth PAA Distributions Paid & Unit Count (2) Cash Received by…
  20. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 20
    PAA/PAGP Investment Considerations Strategically located, geographically diverse & operationally flexible assets Well positioned to benefit from dynamic crude markets and service high-growth liquids resource plays Proven business…
  21. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 21
    Appendix
  22. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 22
    Plains GP Holdings (NYSE: PAGP)
  23. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 23
    Summary Of The Up-C Structure IPO was structured utilizing the Up-C (Umbrella Partnership-Corporation) structure Public investors receive dividends from their Class A share ownership in PAGP (C-Corp taxation) Existing Owners receive…
  24. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 24
    Summary of Plains GP Holdings (PAGP) Distributions from PAAs General Partner (AAP) (in millions, except per unit and per share data) Q4 2013 (1) PAA Distribution/LP Unit 0.61500 GP Distribution/LP Unit 0.29730 Total Distribution/LP…
  25. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 25
    Condensed Consolidating Balance Sheet of Plains GP Holdings (PAGP) (in millions) December 31, 2013 Consolidating (1) PAA Adjustments PAGP ASSETS Current assets 4,964 1 4,965 Property and equipment, net 10,819 22 10,841 Goodwill…
  26. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 26
    Indicative Tax Calculation Annualized As a result of the step-up in basis, PAGP is After-Tax Cash Flows to PAGP Investors expected to have tax amortization of Taxable Distributed Cash Flow from AAP(1) 86 approximately 202 million per…
  27. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 27
    Illustration of PAGP Structural Leverage to PAAs Distribution Growth ( in millions) 1,000 Decrease in Distribution Increase in Distribution 815 800 746 Q3 13 Distributions to AAP 677 (Annualized) 609 600 540 472 403…
  28. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 28
    PAGP Distributions Levered to Growth at PAA PAGP Growth 2.0x PAA Growth (at Current PAA Level) PAGP Distribution Leveraged to PAGP Distribution also Grows as PAA Underlying PAA Distribution Growth Unit Count Grows (Linear Relationship)…
  29. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 29
    Overview of PAA Segments
  30. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 30
    Overview of PAA Segment Profitability 2014(G) Adjusted EBITDA: 2.15 Billion Supply and Logistics Transportation 26% 43% Facilities 31% Margin-Based Fee-Based Revenues Fee-Based Revenues Revenues (Includes…
  31. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 31
    Principal Drivers of Segment Performance Supply and Transportation Facilities Logistics Principal Throughput volumes Leased capacity Volumes (lease Performance gathering and NGL Drivers Tariffs per barrel Lease rates & sales)…
  32. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 32
    PAA Historical Results & 2014 Guidance Consistent Growth In Fee-Based Segments ( in millions) PAA Adjusted EBITDA by Segment 2,292 2,250 2,107 2,150 Baseline Supply and 1,875 893 555 Logistics Profitability 1,598 855 1,500 1,106…
  33. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 33
    Transportation Segment Outlook Transportation Segment Adjusted Segment Profit (MM) 4,500 0.80 930 0.75 4,000 760 3,500 742 0.70 595 0.63 502 549 0.65 MMBbl / Day 3,000 0.58 0.56 0.60 2,500 0.53 0.50 0.55 2,000 0.47…
  34. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 34
    Facilities Segment Outlook Facilities Segment Adjusted Segment Profit (MM) 140 0.55 629 665 120 0.50 502 100 0.44 0.44 MMBbl / Month 381 0.45 80 284 0.39 0.39 217 0.40 60 0.34 0.35 40 0.30 20 0.30 0 0.25 2009 2010…
  35. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 35
    Supply & Logistics Segment Outlook Supply & Logistics Segment Adjusted Segment Profit (MM) 1,400 2.55 2.33 2.27 555 2.35 1,200 893 2.15 1.94 855 1,000 613 1.95 MMBbl / Day 800 287 277 1.75 600 1.55 1.29 1.35 400…
  36. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 36
    Overview of Supply and Logistics Baseline(1) (Predictable) Adjusted Segment Profit Composition of Supply and Logistics Baseline PAA Adj. Segment Profit(2) Adjusted Segment Profit by Activity Supply & Transportation Logistics 15%…
  37. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 37
    PAA Expects Annual Baseline Supply and Logistics Adjusted Segment Profit of 525 - 585 Million Supply & Logistics Adjusted Segment Profit 855 893 900 613 525 - 585 MM 600 280 300 0 Avg. 2007 - 2010 2011 2012 2013 2014 (G)…
  38. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 38
    Overview of Supply and Logistic Segment 15% Activities 65% 20% Activity Overview / Comments Crude Oil Lease Represents 65% of baseline segment cash flow Gathering PAA purchases crude at well-head to deliver (sell) to refiner /…
  39. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 39
    Overview of Supply and Logistic Segment 15% Activities (Continued) 65% 20% Activity Overview / Comments NGL Sales Contribution varies, but is 15% of baseline segment profit Average 200 mb/d* Includes supply-based Canadian NGL…
  40. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 40
    Overview of Crude Oil Lease Gathering
  41. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 41
    Lease Gathering is an Essential Part of the Crude Oil Value Chain Producers want: Ability to sell production at the lease at a fair price (would rather deploy capital into drilling and producing versus owning midstream assets)…
  42. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 42
    PAAs Role in the Gathering & Marketing Process Lease Gathering Role Refinery Supply Role Step 1*: Step 2: Step 3: Step 4: Step 5: PAA buys PAA transports PAA administers PAA pays tariffs PAA delivers crude oil the crude oil to the…
  43. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 43
    PAA Lease Gathering is a Fee-Equivalent Activity Essential Service Provides Durable Baseline Cash Flow in Variety of Markets -- Values Provided for Illustration Purposes Only-- PAA PAA Pipeline Production Market Terminal Area…
  44. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 44
    Gathering Business Complements Transportation & Facilities Businesses & Provides Expansion Opportunities Benefits to Ongoing Business Gathered barrels can base load PAAs pipeline systems Gathering business able to ship historical…
  45. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 45
    Additional PAA Information
  46. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 46
    Mid-Continent: Area of Historical & Continued Strength; Cushing Assets Provide Significant Connectivity and Flexibility Crude Oil Assets/Activities(1) Barrels Transported: 250 MBbls/d Storage Capacity: 22 MMBbls 1st Purchaser…
  47. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 47
    Rocky Mountains / Bakken Area: Highly Flexible Asset Base Including Pipeline & Rail Crude Oil Assets/Activities(1) Barrels Transported: 400 MBbls/d Storage Capacity: 2 MMBbls 1st Purchaser Gathered Barrels: 150 MBbls/d Expected Crude…
  48. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 48
    Canada: Strong and Growing Crude Oil & NGL Asset Base Crude Oil Assets/Activities(1) Natural Gas Liquids Barrels Transported: 430 MBbls/d Assets/Activities(1) Pipeline Miles: 3,120 NGL Pipeline Miles: 1,250 Storage Capacity: 4.6…
  49. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 49
    PAA Uses Its Crude Oil Rail Assets In Conjunction With Its North American Crude Oil Pipeline and Terminal Network To Bridge Regional Supply/Demand & Volume/Quality Imbalances Standalone rail assets have benefits (and limitations)…
  50. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 50
    Permian Basin: PAA Assets Provide Necessary Connectivity to New Export Pipelines New long-haul pipelines have been/are being constructed to relieve volumetric bottlenecks PAA assets providing 1.1 MMBbls/d of capacity to connecting…
  51. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 51
    At Same Levels of Drilling Activity/Productivity, Production Growth Expected to Slow Materially by 2017 as Growth Offset by Production Declines Production Contribution per Year PDP + 2013P 2014P 2015P 2016P 2017P 10,000 9,000…
  52. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 52
    PAAs Fully Loaded Weighted Average Cost of Capital Illustrative Calculation Equity Cost Debt Cost Distribution Rate 3.20 10-Yr Fixed Rate Debt Cost 2.8% (current rate + 30%) PAA Credit Spread 1.25% GP Burden (adj. for 30% LP growth)…
  53. 2014 Credit Suisse Energy Summitt – Plains All American Pipeline, L.P. – slide 53
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