Q1 2024 Plains All American Pipeline LP and Plains GP Holdings LP Earnings Call

May 3, 2024

Operator: Thank you for standing by, and welcome to PAA and PAGP's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again.

Thank you for standing by.

Speaker Change: Welcome to D. A N P E G P's first quarter 'twenty 'twenty four earnings conference call. At this time, all participants are in a listen only mode.

Speaker Change: After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone to remove yourself from the queue. You May Press Star one again I would now like to hand, the call over to Blake Fernandez VP Investor Relations. Please go ahead.

Blake Michael Fernandez: I would now like to hand the call over to Blake Fernandez, VP, Investor Relations. Please go ahead. Thank you, Lateef. Good morning. And welcome to Plains All American's first quarter 2024 earnings call. Today's slide presentation is posted on the Investor Relations website under the news and events section at plains.com. An audio replay will also be available following today's call.

Blake Michael Fernandez: Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on slides 2 and 3. A condensed Consolidating Balance Sheet for PAGP and other reference materials are in the appendix.

Blake Michael Fernandez: Thank you Latif and good morning, and welcome to Plains, All American first quarter 2024 earnings call.

Today's slide presentation is posted on the Investor Relations website under the news and events section of claims Dot Com an audio replay will also be available. Following today's call important disclosures regarding forward looking statements and non-GAAP financial measures are provided on slide two.

Blake Michael Fernandez: An overview of today's call is provided on slide three.

Blake Michael Fernandez: <unk> consolidated balance sheet for PAGP and other reference materials are in the appendix.

Blake Michael Fernandez: Today's call will be hosted by Chairman and CEO Willie Chiang, Executive Vice President and CFO Al Swanson, as well as other management members. With that, I will now turn the call over to Willie. Thank you, Blake. Good morning, everyone, and thank you for joining us.

Blake Michael Fernandez: Today's call will be hosted by chairman and CEO, Willie Chiang Executive Vice President and CFO Al Swanson as well as other management members with that I will now turn the call over to Willy. Thank you Blake good morning, everyone and thank you for joining us.

Wilfred C.W. Chiang: Our strategy remains consistent and is anchored around capital discipline, generating free cash flow, return of capital to our investors, and financial flexibility. And consistent with those themes, earlier this morning, we reported first quarter results that were in line with our expectations, which reflects progress towards our full year 2024 targets and provides us with confidence in our ability to deliver on the plan that we laid out in February. For the first quarter of 24, and as illustrated on slides 3 and 4, we reported adjusted EBITDA tribunal PAA of $718 million.

Our strategy remains consistent and is anchored around capital discipline generating free cash flow return of capital to our investors and financial flexibility and consistent with those themes earlier. This morning, we reported first quarter results that are in line with our expectation, which reflects progress towards our full.

Wilfred C.W. Chiang: And we reaffirmed our 2024 adjusted EBITDA outlook. Al will share additional details on our quarterly performance and the 2024 outlook in his portion of the call. As noted in our press release this morning and as illustrated on slide five, we have increased contract volumes and extended the terms on certain contracts such that our weighted average contract duration of our Permian long haul portfolio is approximately five years, which takes us through 2028. This includes new contracts or extensions on Cactus 1, Cactus 2, Basin, and Sunrise.

Year, 2024 targets and provides us with confidence in our ability to deliver on the plan that we laid out in February for.

Blake Michael Fernandez: For the first quarter of 'twenty, four and as illustrated on slides three and four we reported adjusted EBITDA attributable to PAA of $718 million and we reaffirmed our 2024 adjusted EBITDA outlook al will share additional details on our quarterly performance and the 2024 outlook in his portion of the call.

Wilfred C.W. Chiang: This also includes transactions related to 200,000 barrels of daily Cactus 1 capacity that have been finalized on terms that are consistent with rates in the range of $1.25 to $1.50 per barrel that will become effective in September of 2025. Today's announcement is a win-win for both Plains and our partners, and it strikes a good balance between term commitments and maintaining flexibility to capture higher margins from uncontracted long-haul capacity over time.

As noted in our press release this morning, and as illustrated on slide five we have increased contract volumes and extended the term on certain contracts such that our weighted average contract duration of our Permian long haul portfolio is approximately five years, which takes us through 2028. This includes new contracts or extensions on cactus one cactus.

Blake Michael Fernandez: Two based on in Sunrise. This also includes transactions related to 200000 barrels a day.

Cactus one capacity that has been finalized on terms that are consistent with the rates in the range of $1 25 to $1 50 per barrel that will become effective in September of 2025.

Today's announcement is a win win for both planes and our partners and it strikes a good balance between term commitments and maintaining flexibility to capture higher margins from <unk> on contracted long haul capacity over time.

Wilfred C.W. Chiang: While we are not providing formal guidance for 2026, we would expect continued underlying growth in the business and contributions from efficient growth investments to offset the lower contracted rates, which results in a broadly flat adjusted EBITDA in 2026 as compared to 2024 guidance for the crude sector. In summary, we believe these actions should provide greater clarity and confidence in the outlook for our crude oil segment and our ability to continue to generate significant free cash flow over multiple years. Consistent with our efficient growth strategy, and as summarized on slide six, Plains acquired an additional 10% interest in the Saddlehorn Pipeline Company, LLC, and the MidCon terminal asset for an aggregate cash consideration of approximately $110 million.

Blake Michael Fernandez: While we are not providing formal guidance for 'twenty six we would expect continued underlying growth in the business and contributions from efficient growth investments to offset the lower contracted rates, which results in a broadly flat adjusted EBITDA in 2026 as compared to 2024 guidance for the crude segment.

Blake Michael Fernandez: In summary, we believe these actions should provide greater clarity and confidence in the outlook for our crude oil segment and our ability to continue to generate significant free cash flow over multiple years.

Blake Michael Fernandez: Consistent with our efficient growth strategy and are summarized on slide six planes acquired an additional 10% in the saddle Horn pipeline company LLC.

Blake Michael Fernandez: And the mid Con terminal asset for an aggregate cash consideration of approximately $110 million. These bolt on acquisitions are expected to generate unlevered returns in line with our return threshold of approximately three to 500 basis points above our weighted average cost of capital. In addition to enhancing our position in both the Rockies and the mid con with that.

Wilfred C.W. Chiang: These bolt-on acquisitions are expected to generate unlevered returns in line with our return threshold for approximately 300 to 500 basis points above our weighted average cost of capital, in addition to enhancing our position in both the Rockies and the MidCon. With that, I'll turn the call over to Al. Thanks, Willie.

Blake Michael Fernandez: That I will turn the call over to al. Thanks, Wally We reported first quarter adjusted EBITDA net to PAA of $718 million slides 10, and 11 in today's appendix contain walks that provide details on our first quarter performance our outlook for the balance of the year remains essentially unchanged and we are reaffirming.

Al P. Swanson: Slides 10 and 11 in today's appendix contain blocks that provide details on our first quarter. Our outlook for the balance of the year remains essentially unchanged. And we are reaffirming our adjusted EBIDTA guidance range of 2.625 to $2.725 billion for 2020. We continue to believe the Permian will grow 200,000 to 300,000 barrels a day with a back half weighted ramp providing momentum for the remainder of 2020. The NGL segment remains highly hedged, with frac spreads at approximately $0.65 per gallon.

Al P. Swanson: Our adjusted EBITDA guidance range of $2 65 to $2 $75 billion for 2024, we continue to believe the Permian will grow 200 to 300000 barrels a day with a back half weighted ramp providing momentum for the remainder of 2024.

Al P. Swanson: NGL segment remains highly hedged with Frac spreads at approximately 65 per gallon for 2024.

Al P. Swanson: A detailed overview of our 2024 guidance and key assumptions, to remain generally consistent with our February guidance, are on slide 12 within today's presentation. For 2024, we expect to generate $1.55 billion of adjusted free cash flow, excluding changes in assets and liabilities, and including $110 million of bolt-on acquisition, and approximately $1.15 billion to be allocated to common and preferred distribution. We will also continue to self-fund our targeted $375 million and $230 million of growth and maintenance capital, respectively, net to PAA, which is consistent with our February guidance and includes capital for POPJB well connections and interbasin improvement, as well as capital related to our previously announced Ford FAST debauchment.

Al P. Swanson: Detailed overview of our 2020 for guidance and key assumptions, which remained generally consistent with our February guidance are on slide 12 within today's appendix for 2024, we expect to generate $155 billion of adjusted free cash flow, excluding changes in assets and liabilities and including the one.

Al P. Swanson: $110 million of bolt on acquisitions with approximately $115 billion to be allocated to common and preferred distributions.

Al P. Swanson: We will also continue to self fund, our targeted $375 million and $230 million of growth and maintenance capital respectively. Net to PAA, which is consistent with our February guidance and includes capital for pop JV, well connections and inter basin improvements as well as capital related to our previous.

Al P. Swanson: We announced support fast Debottleneck project with that I'll turn the call back to Willy.

Al P. Swanson: With that, I'll turn the call back. Thank you, Al. Over the last several years, we have made considerable progress across several initiatives, including running a safe, responsible, and reliable business, remaining capital disciplined, generating meaningful free cash flow, and increasing the return of capital to our unit holders while maintaining financial flexibility. Our business model and asset footprint span key supply basins in North America and provide infrastructure solutions to supply global energy demand in the United States.

Thank you al over the last several years, we have made considerable progress.

Across several initiatives, including running a safe responsible and reliable business.

Willy: Remaining capital disciplined.

Willy: <unk> meaningful free cash flow and increasing the return of capital to our unit holders, while maintaining financial flexibility our.

Our business model and asset footprint Spanky supply basins in North America, and provides infrastructure solutions to supply global energy demand needs.

Al P. Swanson: The combination of our asset base and our strategic initiatives really creates a unique value proposition for our current and potential unit holders, including a double-digit adjusted free cash flow yield and a distribution yield of approximately 7 to 7.5 percent with a multi-year targeted annual increase of 15 cents a unit.

Willy: Combination of our asset base and our strategic initiatives really creates a unique value proposition for our current and potential unit holders, including a double digit adjusted free cash flow yield and a distribution yield of approximately seven to seven 5% with a multiyear targeted annual increase of 15 a unit.

Wilfred C.W. Chiang: We're pleased to be able to provide an update on our Permian long-haul contracting efforts, which reflects our commitment and focus on being the partner of choice and creating win-win solutions for our customers and partners. Recontracting of our long-haul capacity has been a focal point for investors, and we view the developments that we share with you today as a significant milestone, offering better visibility and clarity around the contractual support for the performance of our Permian long-haul portfolio in the coming year. The bottom line is that we're well positioned to continue to generate significant free cash flow well into the future. I'll now turn the call over to Blake to lead us in the Q&A. Thanks, Willie.

Willy: We're pleased to be able to provide the update on our Permian long haul contracting efforts, which reflects our commitment and focus on being the partner of choice and creating win win solutions for our customers and partners.

Willy: Re contracting of our long haul capacity has been a focal point for investors and we view the developments that we share with you today is a significant milestone offering better visibility and clarity around the contractual support for the performance of our Permian long haul portfolio in the coming years. The bottom line is we are well positioned to continue to generate significant.

Free cash flow well into the future I'll now turn the call over to Blake to lead us into Q&A. Thanks, Willie as we enter the Q&A session. Please limit yourself to one question and one follow up for those with additional questions. Please feel free to return to the queue.

Blake Michael Fernandez: As we enter the Q&A session, please limit yourself to one question and one follow-up. For those with additional questions, please feel free to return to the queue. This will allow us to address questions from as many participants as possible in our available time this morning. The IR team will also be available to address any additional questions.

Blake Michael Fernandez: This will allow us to address questions from as many participants as practical in our available time this morning.

Blake Michael Fernandez: The IR team will also be available to address any additional questions.

Operator: Lateef, we're ready to open the call for questions. Thank you. As a reminder, to ask a question, you may press star 11 on your telephone.

Blake Michael Fernandez: Latif, we're ready to open the call for questions. Please.

Latif: Thank you as a reminder to ask a question you May press star one on your telephone.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Michael Blum of Wells Fargo. Your question, please, Michael. Good morning, Michael.

Latif: Please standby, while we compile the Q&A roster.

Our first question comes from the line of Michael Blum of Wells Fargo. Your question. Please Michael.

Michael Jacob Blum: So, I guess the first question I wanted to ask was just, I guess, on the guidance. You had a strong Q1, you had the bolt-on acquisition. So, maybe just talk through why not increase the 24 guidance and the same line of thinking there. You know, are you, would you say you're on track to beat the 15 cents per year of distribution growth, given that it seems like you have the bolt-on, and the business is running well? Yeah, Michael, thanks for the question. This is Willie. It is early in the year.

Michael Jacob Blum: Mike Thanks.

Michael Jacob Blum: Good morning.

Michael Jacob Blum: So I guess the first question I wanted to ask was just.

Michael Jacob Blum: I guess on the guidance you had a strong Q1, the bolt on acquisitions so maybe.

Michael Jacob Blum: Maybe just talk through why not increase the 24 guidance and same line of thinking there.

Yes.

Michael Jacob Blum: Are you would you say you're on track to beat the 15 per year of distribution growth given that it seems like you got the bolt on.

Michael Jacob Blum: This is running well.

Michael Jacob Blum: Yes, Michael Thanks for the question this is Willie.

Wilfred C.W. Chiang: We're confident about being in that range and really just don't want to get too far ahead without seeing a few more things, but we do remain confident of our performance this year. And I would characterize it as cautiously optimistic that we'll be able to perform well within that range. Okay, I understand. Thank you. And then I wonder if you can comment on the rate for the contract extensions for Cactus 2 and Sunrise Basin. Were those largely consistent with prior rates and just extended the duration, or did you also see changes in the rate? Michael, good morning. This is Jeremy Goebel.

Wilfred C.W. Chiang: It is early in the year, we're confident about being in the range and really just don't want to get too far ahead without seeing a few more things, but we do remain confident.

Our performance this year and I would I would characterize it as cautiously optimistic that.

Wilfred C.W. Chiang: That will be able to perform well into the range.

Speaker Change: Okay understood. Thank you and then.

Speaker Change: I'm wondering if you can comment on the rates for the contract extensions for Cactus II in Sunrise basin with those largely consistent with prior rates and just extending the duration or did you also see changes in the rates there.

Michael Good morning. This is Jeremy Goebel, what I'd say on the rates in the mid continent. The reason we were looking to contract those on a long term rate as it got towards tariff. So effectively folks are paying tariff to get there and that's the right balance for us for a long term rate on Capex too.

Jeremy L. Goebel: What I'd say on the rates of the mid-continent, the reason we were looking to contract those on a long-term rate is it got towards tariffs. So effectively, folks were paying tariffs to get there, and that's the right balance for us for the long term. On Cactus II, the extensions were associated with..., contract extensions associated with their options to extend.

Jeremy L. Goebel: So they basically elected to extend their options. Thank you. Our next question comes from the line of Tristan Richardson of Scotiabank. Your line is open, Tristan. Bye, Tristan. Please make sure your line is unmuted and you can speak to your phone.

Speaker Change: The extensions are associated with.

Speaker Change: Contract extensions associated with their debt options to extend so they basically elected their options to extend the existing contracts.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Tristan Richardson of Scotiabank. Your line is open Tristan.

Speaker Change: Oh.

Tristan Richardson: Hi, Tristan.

Tristan Richardson: Christine Please Mr. Your line is muted speaker phone lift your handset.

Tristan Richardson: Okay.

Operator: Tristan, are you on or muted? Shall I go to the next question? Yeah, thank you. Okay, thank you. One moment.

Tristan Richardson: Tristan are you on.

Tristan Richardson: Or muted.

So to your question, yes. Thank you okay. Thank you one.

Speaker Change: One moment.

Operator: Our next question comes from the line of Spiro Dounis of Citi. Your question, please, Spiro. Morning, everybody. So maybe I just want to go back to the 2026 comment. Willie, I totally appreciate you not giving guidance today, but just kind of want to understand maybe what underwrites some of the view and how it's flat over time, just thinking about things like how you think about basin growth over the next few years and then just other things around M&A. Obviously, you've been active on the bolt-on front.

Speaker Change: Our next question.

Speaker Change: It comes from the line of Spiro <unk> of Citi. Your question. Please spiral.

Spiro Michael Dounis: I assume no M&A from here. And then also, you mentioned some lines of spot upside on some of these open volumes. I imagine that's all upside to that view as well.

Speaker Change: Okay.

Spiro: Good morning, everybody.

Spiro: So maybe just want to go back to the 2026 comment really totally appreciate youre not giving guidance today.

Spiro: But just kind of want to understand maybe what underwrite some of the view on sort of flat over time, just thinking about things like how do you think about facing growth over the next few years and then just other things around M&A, obviously, you've been active on the bolt on front I assume assumes no M&A from here and then also you mentioned some lines of spot upsell.

Spiro: And some of these open volumes I imagine that's all upside that back to you as well.

Wilfred C.W. Chiang: Yes, Spiro, it's, as you well understand, there's a lot of variables that go into this, and it would be, it would not be a good guidance if we could try to look to 26 to see all those things, as you know, the tightness in supply and demand on the capacity, operating costs, production. There's a lot of things that go into, and while I'm not going to break out everything there, what we were trying to do is, as we think about our business in 26, without significant changes of where we are today, not large investments that we put in, not growth, you know, not spikes in production, you know, we've kind of talked about two to 300,000 barrels a day of growth in the Permian, kind of over the next number of years.

Speaker Change: Yes Spiro.

Speaker Change: As you well understand theres a lot of variables that go into this and it would be it wouldn't be it would not be a good guidance. If we if we could try to look to 'twenty six to see all of those things as you know that tightness in supply and demand on the capacity operating cost production. There is a lot of things that go into and while I'm not going to break out everything.

Speaker Change: There what we were trying to do is as we think about our business and 26 without significant changes of where we are today not large investments that we've put in.

Speaker Change: Not gross not spikes in production, we've kind of talked about two to 300000 barrels a day of growth in the Permian kind of over the next number of years.

Wilfred C.W. Chiang: It's really trying to put a normalized view on 2026, based on how we're operating today, and the point of this was really to try to quantify the impact, not exactly, but there are some folks that believe that the renegotiation would have resulted in, you know, a significant reduction to the point where we couldn't catch up. And what we're trying to say is really, we're going to be So, as we get closer, we'll be able to give better forecasts on that, but again, it's really just to quantify what we think the range is.

Speaker Change: It's really trying to put a normalized view on 2026 based on how we're operating today.

Speaker Change: And the point of this was really to try to to.

Quantify the impact not exactly but there are some folks that believe that the renegotiation would have resulted in a significant reduction to the point, where we couldn't catch up and were trying to say is really we're going to be generally flat in 2026, which is really the first full year after the contract renegotiation and it's all.

Speaker Change: It is our job is to work hard on on improving that so as we get closer we'll be able to give better better forecast on it but again its really to quantify what we think the ranges we expect to be broadly broadly flat with 2024 and 26.

Wilfred C.W. Chiang: We expect to be broadly flat in 2024 and 2026, and there could be upsides, just as there could be downsides, and more resolution will come as we see more. Okay, understood. Appreciate that, Willie.

And there could be upsides, just as there could be downsides in more resolution will come as we see more.

Al P. Swanson: Second question, maybe just going to NGL, just curious how you guys are thinking about the hedging strategy out for 2025. And then, more broadly or longer term, curious if there's any opportunities over time to reduce that commodity exposure through contracts? So the first part of the question is we're actively monitoring our hedging profile, and we try to be up. Liquidity decreases significantly after you get outside six to nine months, so it's while it's very largely back. So for us, we're being opportunistic. It doesn't make sense to hedge at this point on a forward basis. We have some because it was higher, but it's minimal.

Speaker Change: Okay understood appreciate that Willie.

Speaker Change: The second question, maybe just go into NGL.

Speaker Change: Just curious how you guys are thinking about the hedging strategy.

Speaker Change: For 2025, and then more broadly are longer term curious if theres any opportunities over time to reduce that commodity exposure through contracts.

Speaker Change: So on the first part of the question is were actively monitoring our hedging profile and we will try to be opportunistic.

Speaker Change: Liquidity increases significantly after you get outside of the six to nine months, so and it's.

Speaker Change: Very largely backward dated so for us remain opportunistic it doesn't make sense to hedge at this point on a forward basis, we have some because it was higher but minimal.

Al P. Swanson: And so, in our opinion, it's to be opportunistic. As the liquidity gets higher, market views get higher, and as the front end of the crude markets rolls up, and as gas prices moderate, you get to points where we'll hedge again. But at this point, we're not gonna give you any guidance on it, but that just gives you an assessment of right now. The forward curve isn't suggesting we should do it. And Spiro, as you know, we've got some additional capacity that's coming on in Fort Saskatchewan, and that is consistent with your question on how do we get and shift more towards a fee-based consistent cash flow stream. So that's always our objective. It's just you have to be smart about how you go about it and pick the right times to contract.

Our opinion, it's opportunistic as the liquidity gets higher in market views get hired as the front end of the crude market's rollout and as gas prices moderate and get to points, where we will hedge again, but at this point, but I can give any guidance on it but that just gives you an assessment of right now the forward curve is suggesting we should do it and liquidity.

Speaker Change: Not there to do anything asos and Spiro as you know we've got some additional capacity that's coming on in Fort Saskatchewan and that is consistent with your question on how do we get shift more towards a fee based consistent cash flow stream. So that's always our objective. It's just you've got to be smart about how you go about it.

Speaker Change: And pick the right times to contracting.

Keith T. Stanley: Perfect. I'll leave it there for today. Thanks, gentlemen. Thank you. Our next question comes from the line of Keith Stanley of Wolf Research. Your line is open.

Speaker Change: Alright, perfect I'll leave it there for today, thanks gentlemen.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: It comes from the line of Keith Stanley.

Keith T. Stanley: Research Your line is open to Keith.

Keith T. Stanley: Thanks. Hi. Good morning.

Keith T. Stanley: Thanks, Hi, good morning.

Jeremy L. Goebel: When you look at the portfolio now after today's announcement... Are there any assets that at all that you would call out aside from maybe bridge tax where contract rates are still meaningfully above market? Or are we at the point now where your contract rates are? All pretty much, you know, more or less in line with where the market is Jeremy. I would say that you're BridgeTex is the one that's outstanding.

Keith T. Stanley: When you look at the portfolio now after today's announcement are there are there assets.

Keith T. Stanley: At all that you would call out aside from maybe Briggs tax where contract rates are still meaningfully above market or are we at the point now where contract rates are all pretty much more or less in line with where the market would be.

Keith This is Jeremy I would say that your assessment is correct.

Jeremy L. Goebel: We don't operate the pipeline. It would be a better question for 1.0. But one thing I would say is BridgeTex demands... So one thing to pay attention to is Wink-to-Webster just extended to Beaumont, which has led to more... Tech, you've got The Downtime on Wink-to-Webster. So longer term, we see that as a healthy pipeline with, and we control the capacity between Midland and Colorado to benefit from those volumes. This is Al.

Jeremy: At Bridgetex is the one that is outstanding we don't operate the pipeline that would be a better question for whatever but one thing I would say as bridgetex demand is increasing.

Jeremy: So one thing to pay attention to is linked to western just extended development, which has led to more demand for brands that you've got the downtime on wink to Webster in June so longer term, we see that as a healthy pipeline with opportunity and we.

Jeremy: We control the capacity between Midland, Colorado City, and we see benefits as those volumes increase as well.

Al P. Swanson: The only thing I would add to what Jeremy said is that we assumed and made our assumption in this broadly flat 2020, the bridge tax impact. Okay, that's helpful. And then just a small clarification, I think it was Spiro's question, just the 2026 crude segment EBITDA being flattish. I just want to make sure that doesn't include any bolt-on acquisition assumptions or use of free cash in that way, right? It's more just organic growth through. Nothing major.

Jeremy: This is Alan the only thing I would add to what Jeremy said is we assumed and made our assumption in the broadly flat 2026.

Alan: The bridge tax impacts as well.

Speaker Change: Okay. That's helpful. And then just a small clarification I think it was spiro's question just the.

Alan: The 2026 crude segment EBITDA being being flattish I just want to make sure that doesn't include any bolt on acquisition assumptions or use of free cash in that way right. It's more just organic growth through the company.

Speaker Change: Nothing major.

Speaker Change: Okay.

Speaker Change: Got it.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Our next question.

Keith T. Stanley: Okay, thank you. Thank you. Our next question comes from the line of Sunil Sibal of Seaport Global. Please go ahead, Sunil.

Speaker Change: It comes from the line of.

Sunil K. Sibal: Sunil Sibal.

Sunil K. Sibal: Seaport Global please go ahead.

Sunil K. Sibal: Yeah, hi. Good morning, guys. Can you hear me all right?

Yes, Hi, good morning, guys can you give me all right.

Operator: Yep, we can, Sunil. Thanks. So, on the Permian recontracting.

Sunil K. Sibal: Yes, we can sunil.

Wilfred C.W. Chiang: So thanks for that update. And I was kind of curious, you know, since this was a major milestone. And now that you have this behind you, how does that, if any, impact your kind of, you know, longer-term capital allocation strategy? Yeah, the capital allocation strategy doesn't change, right?

Sunil K. Sibal: Thanks.

Sunil K. Sibal: And so on.

Sunil K. Sibal: On the Permian.

Speaker Change: <unk>. So thanks for that update and I was kind of curious you know since this was a major milestone.

Speaker Change: And now that you have.

Speaker Change: Behind you.

Speaker Change: Does that if any impact here to kind of longer term capital allocation strategy.

Speaker Change: Yeah, the capital allocation strategy doesn't change our.

Wilfred C.W. Chiang: Our leverage is where we want it to be. We set a new range. For our maximized free cash flow, we expect our CapEx to be in that $300,000 to $400,000 range per year.

Speaker Change: <unk> Leverages, where we want it to be we set a new range or maximize free cash flow expect our capex to be in that $3 to 400000.

Speaker Change: $3 to $400 million range per year, we do look for opportunities that are high synergy high return of synergy opportunities for bolt ons and we'll continue to look for those opportunities because we think they're accretive and we can we can execute on that and then the focus is again return of capital to work to unit holders.

Wilfred C.W. Chiang: We do look for opportunities that are high synergy, high return synergy opportunities for bolt-ons. And we'll continue to look for those opportunities because we think they're creative, and we can execute them on that. And then the focus is, again, the return of capital to unit holders. And I think, yeah, Tristan did ask the question, you know, if we perform better, we would certainly consider an increase above our target, as we have done in the last couple of years.

Speaker Change: And I think yes, Tristan did ask the question.

Speaker Change: If we perform better and we would certainly consider.

Speaker Change: An increase above our target as we have done in the last couple of years.

Wilfred C.W. Chiang: And then on Permian, seems like, you know, weather-related events kind of led to a sequential decline in your volumes. I was kind of curious, you know, where things stand today. Have you seen enough recovery from those?

Understood and then on Permian. It seems like you had no weather related events kind of led to a sequential decline in Europe.

Volumes I was kind of curious where things stand today.

Speaker Change: Have you seen enough recovery from those obviously are recruiting.

Jeremy L. Goebel: Obviously, you're reiterating your full year expectations, but I was just kind of curious about the near term. What are you seeing in the basin? Neal, this is Jeremy. There was an impact in January and February for about two weeks, but volumes have recovered. There's been some issues with gas outages throughout the basin that have caused some impacts, but by and large, it's in line with expectations. There was big growth in the fourth quarter of last year, which we expected to be flattish in the first part of this year and growth in the second half of this year, and so we're not changing our outlook at all based on this. This is normal.

Speaker Change: Spectation, but I was just kind of curious multi outcome.

Speaker Change: What have you seen in the basin.

Speaker Change: And Neil this is Jeremy.

Speaker Change: There was an impact in January and February for about two weeks associated with the phrase.

Jeremy: Volumes have recovered there has been some issues with gas outages throughout the basin that have caused some impact but by and large it's in line with expectations.

Jeremy: There was a big growth big.

Jeremy: <unk> growth in the fourth quarter of last year, which we expected flattish in the first part of this year and growth in the second half of the year and so we're not changing our outlook at all based on the normal impacts of averages.

Jeremy L. Goebel: Okay, and just one clarification. So based on what we are seeing in gas prices and gas constraints, you are not expecting anything, you know, any change to the second half level of growth. I understand there is a gas pipeline coming online. So that, essentially, in your mind, helps resolve the constraint and kind of gets us the second half uptick in production. Is that fair?

Speaker Change: Okay, and just one clarification so based on what we are seeing in gas prices and gas constraints.

Speaker Change: You are not expecting anything.

Speaker Change: And it seems so thats second half level of growth I understand there is a gas pipeline.

Speaker Change: Coming online so that essentially near mine hubs because all the constrained then.

Speaker Change: The second half uptick in production is that correct.

Jeremy L. Goebel: The best data is very fair. That's one way to look at it. The other is that when gas prices are low, it doesn't impact all shippers, right? Some of them have further transport, and the vast majority do.

Speaker Change: It is very fair and that's one way to look at it. The other is what gas prices are low it doesn't impact all shippers right some of that FERC transport and the vast majority of <unk>.

Speaker Change: Yes.

Speaker Change: Molecules of gas trying to get out of the basin. The other part of it is gas prices are like that in those capital allocation to oil you're areas lower GOR areas generally beneficial for us so it's not all of that.

Jeremy L. Goebel: It's just those last molecules of gas trying to get out of the basin. The other part of it is, when gas prices are like that, it moves capital allocation to oilier areas, lower GOR areas, which is generally beneficial for us, so it's not all bad news from HISTOR. Thank you. Thank you, Sunil. Thank you. Our next question comes from the line of Zach Van Everen of TPH and Company. Please go ahead, Zach

Speaker Change: Understood. Thank you.

Speaker Change: Thank you Sunil.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Okay.

Speaker Change: Comes from the line of Zach than ever.

Speaker Change: <unk> Company. Please go ahead Zach.

Zach Van Everen: Perfect. Thanks for taking my question, guys. Starting with the Saddlehorn transaction, can you guys provide any insight into the contract profile underpinning the pipe? Are those fairly long dated, or will there be some rolling in the next few years?

Zach: Perfect. Thanks for taking my question guys, starting with the saddle Horn transaction can you guys provide any insight into the contract profile underpinning the fight for those fairly long dated or there'll be some rolling in the next few years.

Jeremy L. Goebel: I think that's a question for the Operator 1-0, but we'd say we're very comfortable with the acquisition price and the long term. Okay, perfect. And then one, you know, kind of outside of your business realm, but you know, we're seeing more and more producers and midstream talk about 2026 being a very potentially constrained year on the gas side. You know, have any of your producers expressed any concerns or, you know, talked through the outer years with gas constraints, maybe coming back in 2026?

Speaker Change: I think that's a question for the operator, one out but we can say, we're very comfortable with the acquisition price and long term outlook for this outlook.

Speaker Change: Okay, perfect and then one kind of outside of your business realm, but.

Speaker Change: We're seeing more and more producers and midstream talked about 2026, being a very potentially constrained year on the gas side.

Speaker Change: If any of your producers expressed any concerns or talk through the outer years with gas constraints, maybe coming back in 2026.

Jeremy L. Goebel: I think, in general, all the conferences and calls we've seen so far indicate that there's a general need for another pipeline. Historically, new pipelines get sanctioned, and we expect that to happen. If anything were transient, it would be quarters, it wouldn't be years, and in our view, remember, we're just talking about the last pipe; we're not talking about the whole base of production. So if you delay 100,000 barrels a day in growth for six months, that's 100,000 barrels a day at that time, close to 6.5 million barrels a day. It's a very minor impact on total production.

I think in general all the conference calls you've seen that so far is that there is a general need for another pipeline.

Speaker Change: And historically, new pipelines get sanctioned and we would expect that to happen.

Speaker Change: Anything would be trained and it would be quarter that wouldnt be years and in our view remember we're just talking about the last pipe, we're not talking about the whole base of production. So if you delay a 100000 barrels a day of growth six months, that's 100000 barrels a day out of at that time close to $6 5 million barrels a day, it's a very minor impact the total base.

Zach Van Everen: Gotcha. Perfect. Well, I appreciate it, guys. Thanks. Thanks, Zach.

Speaker Change: Got you perfect I appreciate it guys. Thanks.

Speaker Change: Thanks.

Speaker Change: Thank you.

Zach Van Everen: Thank you. Our next question... comes from the line of Naomi Marafatia of UBS. Hi, good morning.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Naomi <unk> of UBS.

Naomi Marafatia: I appreciate all the color and answers to the question thus far on the recontracting through 2025. But can you talk about perhaps how the five-year contract structure in 2028 leaves a massive amount of flexibility in the future prospects of the business, particularly around exports? Can you talk about the opportunity set that you're looking at? This is Jeremy.

Naomi: Hi, good morning.

Naomi: I appreciate all the color on that.

Naomi: So the question on.

Naomi: On the re contracting for 2025, but can you talk about perhaps how the five year contract structure in 2020, it needs a massive amount of flexibility in the future prospects of the business, particularly around exports can you talk about the opportunity set that you're looking at.

Jeremy L. Goebel: I'm not sure I completely understand the question, but what I would say is it's staggered. We gave you the average end of the duration. The durations move over different years, and we like to stagger contracts, and our intent is to continue to stay with long-term exporters and refiners in our contracting. So we're managing that profile. We'll actively manage it. We see opportunities where the long-haul pipes will be needed. The Permian oil in place is a big number, and we'll have production for a long time. So this doesn't concern us one bit. This was how we were able to get to the right balance of time, tenure, and rate, and we'll continue to manage that profile. And Naomi, this is Willie.

Jeremy: This is Jeremy.

Jeremy: Not sure I completely understand the question, but what I would say is it's.

Jeremy: Staggered work, we gave you the average under the duration the durations move over different years, and we liked the staggered contracts and our intent is to continue to stay with long term ex borders and refiners that are contracting for managing that profile, we'll actively manage it we see opportunity set for the long haul hyattsville they needed them.

Jeremy: And oil and places a big number and we will have production for a long time. So it doesn't concern us one bit. This was how we were able to get to the right balance of time tenure and rate and we'll continue to manage that profile over time.

Jeremy: And Naomi this is Willie as we talk with our with our customers and our partners on this this all fits their profile production and if you think about it you've got a limited amount of infrastructure, that's going to these markets now and we would like to think that the relationships are strong and <unk>.

Wilfred C.W. Chiang: As we talk with our customers and our partners about this, this all fits their profile of production. And if you think about it, you've got a limited amount of infrastructure that's going to these markets now. And we would like to think that the relationships are strong and that the customers will be sticky because the offering that we have fits what they want to do, and so it's not a matter of people wanting to shift to completely different markets. I would think that, as we are good partners, that we'll continue to have those, and it's really a renegotiation of term, tenure, and tariff at that time. That is helpful.

Jeremy: And that the customers will be sticky because.

Jeremy: The offering that we have fits what they want to do.

Jeremy: And so it's not a matter of people wanting to shift a completely different markets.

Jeremy: I would think that.

Jeremy: We are good partners and we will continue to have those and it's really a renegotiation of chairman and tenure and tariff at that time.

Naomi Marafatia: Maybe as a follow-up, how should we think about Permian production cadence for the remainder of the year? Should we expect further gathering bolt-on transactions to drive production given the increased activity? I think we've shared that our expectations for the Permian really are two to three hundred thousand barrels a day of growth from the end of the year to the end of the year, twenty-three to twenty-four, and it's really the back half, Q3 and Q4, that we'll see the increase. Great. Thanks for all the calls. Have a great rest of your day.

Speaker Change: That is helpful.

Speaker Change: Maybe as a follow up how should we think about bromine production cadence for the remaining of the U S should we expect for gathering bolt on transactions to drive production given the increased activity.

Speaker Change: I think we've we've shared that our expectations for the Permian really are two to 300000 barrels a day of growth from the end of the year to the end of the year.

Speaker Change: 3% to 24, and it's really back half.

Speaker Change: Q3, and Q4 that we will see the increase.

Speaker Change: Okay. Thanks.

Speaker Change: I have a page rest of your day.

Speaker Change: Thanks Neil.

Speaker Change: Thank you.

Naomi Marafatia: Thanks, Naomi. Thank you. Our next question comes from the line of Neal Dingmann of Truist Security. Good morning, guys. Thanks for the time. My first question is on your Canadian assets, specifically. You've had some nice market-based results in recent quarters on the Canadian crude spreads and NGL markets. I'm just wondering, how are those continuing to trend?

Speaker Change: Our next question comes from the line.

Neil: Of note Dingman of <unk> Securities.

Neal David Dingmann: Are they still up and to the right as they've been? So our view is the same as our outlook for the year. We tend to bring those down on the market base. TMX starts up, so it's in our views, impact, and it's included in our guide.

Dingman: Hi, Good morning, guys. Thanks for the time My first question is on your Canadian assets, specifically, you've had some nice market base results in past quarters on the Canadian crude spreads and NGL markets. I'm. Just wondering how are those continuing to trend or are they still up into the right as they have been.

So our view is the same as our outlook for the year, we tried to bring those down on a market based opportunities as <unk> starts up.

Dingman: Our views impacted it's included in our guidance and what I would say is we view that as positive long term for our Canadian assets as more production growth and Youre, probably in a constrained environment again in two to three years. So we think more volume will be good for those assets on both the NGL and the crude side and while there may be fewer market based opportunities that could lead to higher <unk>.

Jeremy L. Goebel: What I would say is we view that as positive long-term for our Canadian assets, as more production growth and you're probably in a constrained environment again in two to three years. So we think more volume will be good for those assets on both the NGL and accrued sides. And while there may be fewer market-based opportunities, it could lead to higher tariffs. That's great to hear. Then just a quick, quick one, just what you just were mentioned on the permit. Oh, go ahead. Sorry.

Aerospace opportunities.

Speaker Change: That's great to hear and then just quick one just what you just mentioned for me to add as Oh go ahead, sorry that movement to the West coast is going to reorganize how things move with in the U S to make up for that for those barrels out coming into the U S. So that can create other opportunities for some of our other pipes in the mid continent.

Jeremy L. Goebel: That movement to the West Coast is going to reorganize how things move. The U.S. has to make up for that, so those barrels are not coming into the U.S., so that could create other opportunities for some of our other pipelines. Great, great ad. And then I was just asking on, you just mentioned Permian growth, is the majority of that still going to come from Dell? I think last quarter you talked about maybe 170 Dell rigs versus 120 Midland.

Speaker Change: Great Great and then I was just asking on you just mentioned on Permian growth is is the majority of that's still going to come from the Delta I think last quarter, you talked about maybe 170 del rigs versus the 120, Midland and so is that still kind of.

Speaker Change: We anticipate that being the case for the remainder of the year.

Jeremy L. Goebel: So is that still kind of, you know, anticipate that being the case for the remainder of the year? Yes, the activity balance hasn't really changed very much, but we do see some growth in the Midland Basin, but we think it will be disproportionate. Helpful. Thank you all.

Speaker Change: Yes, the activity balance hasn't really changed very much but we do see some growth in the Midland basin, but we think it will be disproportionately in the Delaware basin.

Speaker Change: Helpful. Thank you all.

Jeremy L. Goebel: Thank you. Our next question comes from the line of Jeremy Tenet of J.P. Morgan Securities. Please go ahead, Jeremy.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Jeremy Tonet of JP Morgan Securities. Please go ahead Jeremy.

Speaker Change: Yeah.

Jeremy L. Goebel: Hi, good morning. Good morning, Jeremy. I just want to come back to the recontracting if I could.

Jeremy L. Goebel: Hi, good morning.

Jeremy L. Goebel: I want to better understand, I guess, when you say terms consistent with rates, what that means exactly. Does that mean that there's a higher amount contracted at a lower rate, or is there something else? Just wondering why it's consistent with rates and not just those are the rates.

Jeremy L. Goebel: Good morning, Jeremy.

Jeremy L. Goebel: Just wanted to come back to the re contracting if I couldnt wanted to better understand I guess.

Jeremy L. Goebel: When you say if.

Jeremy L. Goebel: Terms consistent with rates what that means exactly does that mean like there is a higher amount contracted at a lower rate or is there something else I'm. Just wondering why it's consistent with rates and not just those are the right.

Jeremy L. Goebel: Well, it's a mix of what we have, and we don't really want to get into the specifics of every pipe and what the tariff is. But I think the key point on that, Jeremy, is when you look at the recently built pipes, they're $1.25 to $1.50, and essentially, what we're telling you is that we've been able to recontract successfully with our partners at rates that are competitive with And going forward, I think it's a reset in that we have fewer that are far out of market as we go forward, and as the basin tightens, we would expect that there could be some pressure upward. Got it. That's very helpful. Thank you. And then I just wanted to come back to the guidance, if I could.

Speaker Change: Well, it's a mix of what we've got and it's we don't really want to get into the specifics of every pipe and what the tariff is I think the key point on that Jeremy is if when you look at the recently built pipes, it's above 25% above 50, and essentially what we're telling you is that we've been able to re contract successfully with our partners at at rates.

Speaker Change: That are competitive with that and going forward I think it's a reset and that we don't have we have less at are far out of market as we go forward and as the basement tightens, we would expect that there could be some pressure upwards on that.

Speaker Change: Got it that's very helpful. Thank you and then just wanted to come back to the guidance if I could appreciate that early in the year.

Al P. Swanson: I appreciate that it's early in the year and you don't want to move it just yet, but with the acquisitions, you know, presumably bringing upside to results for the year, are there other, I guess, headwinds that have materialized so far that would be an offset or just trying to better understand the gives and takes or, just as the year progresses, would you account for that upside later? Jeremy, this is Al.

Speaker Change: Don't want to move it just yet but with the acquisitions.

Speaker Change: <unk>, bringing upside to results for the year are there other I guess headwinds that have materialized. So far that would be an offset or just trying to better understand the gives and takes are just as the year progresses.

Speaker Change: Account for that upside later.

Al P. Swanson: The acquisition of the 110, the impact that will be seen this year would be very modest and well within the range we have. Our base business is performing in line with expectation, as Willie mentioned in his prepared remarks. So, you know, if you run the math on $110 million and recognize that it's only a partial year, it was not enough to allow for our business to perform in line with what we do.

Al P. Swanson: Jeremy This is al.

Al P. Swanson: The acquisition of the 110.

Al P. Swanson: The impact that will be seen this year would be very modest and well with inside the range. We have our base businesses performing in line with expectation as Willy mentioned on on.

Al P. Swanson: His prepared remarks so.

Al P. Swanson: If you run the math on $110 million and recognize that it's only a partial year. It was not enough for us to allow for in our business, but our business is performing in line with what we expected.

Al P. Swanson: Hey Jeremy, this is Will again. Just a clarification, the specific $1.25 to $1.50 was really around Cactus One. However, we've got other pipelines that are in the mix, and we have a weighted average concept that we look at, but the $1.25 to $1.50 was really just the Cactus One recontract. Got it.

Al P. Swanson: Hey, Jeremy This is Willie you just a clarification the specific dollars 25 to about 50 that wasn't really around Texas. One. However, we've got other pipelines that are in the mix and we have a weighted average concept that we look at but it really the $1 25 to about $50 related to the cactus one re contracting.

Got it very helpful. Thank you. Thank.

Speaker Change: Thank you.

Speaker Change: Sure.

Speaker Change: Thank you.

Speaker Change: Our next question.

Wilfred C.W. Chiang: Very helpful. Thank you. Thank you. Our next question comes from the line of John Mackay of Goldman Sachs. Hey, guys. Good morning.

Speaker Change: Comes from the line of John Mackay and <unk>.

John Ross Mackay: Ms sacks.

John Ross Mackay: Hey, guys. Good morning, Thanks for the time.

John Ross Mackay: Thanks for the time. I just figured now that you're having some of these conversations with your shippers around kind of back half of a decade volumes and rates, would just be curious if there's anything you can share on how the market's developing for kind of Houston versus Corpus dynamics, whether or not some of the big export projects proposed out there are kind of playing into those conversations yet. I appreciate it, but I would say they had absolutely no impact on the discussions that we had.

John Ross Mackay: I just figured now that you are having some conversations with our shippers around kind of back half of the decade volumes and rates would just be curious is there anything you can share on how the market's developing for four kind of Houston versus corpus dynamics.

John Ross Mackay: There are not some are some of the big export projects proposed out there are kind of playing into those conversations yet.

Speaker Change: Got it.

Speaker Change: I would say they had absolutely no impact on the discussions that we had I think that view.

Jeremy L. Goebel: You have to think about, there's already a couple million barrels a day headed to the, and close to three headed to Corpus, right? Those balances may not change very much, and you have production growth in between. We're talking about a project three to four years from now where you could have half a million to 800,000 barrels of daily more production. I think you're going to move inland, less efficient docks offshore, maybe take some production growth, but you'll still be full to core production. So it didn't impact the discussions at all, and it's more of an and as opposed to or.

Speaker Change: The offshore export facilities get built.

Speaker Change: Think about there is already a couple of million barrels a day and in the Houston and close to three headed into core business right. So.

Speaker Change: Those balances may not change very much NGL production growth in between we're talking about a project three years to four years from now where you could have half a million to 800000 barrels a day more production I think youre going to move inland less efficient docks offshore maybe take some production growth, but youll still be full to corpus so it didn't impact that.

Speaker Change: Discussions at all and it's more of an end as opposed to or.

John Ross Mackay: All right, that's fair. Maybe just one last one, maybe just another comment on the weather challenges or otherwise in the first quarter so we understand kind of the general Permian trajectories intact.

Speaker Change: Alright, that's fair maybe just one last one maybe just another comment on the weather challenges or otherwise in first quarter.

Jeremy L. Goebel: Just when we're looking at kind of Permian gathering versus long haul, was there more of an impact on one versus the other? And maybe just how we think about, you know, a 2Q trajectory versus a second half pickup. Thanks. This is Jeremy.

Speaker Change: Understand kind of general Permian trajectories in tact, just when we're looking at kind of Permian gathering versus long haul was there more of an impact on one versus the other.

Speaker Change: And maybe just how do we think about <unk> trajectory versus.

Speaker Change: A second half pickup.

Jeremy L. Goebel: The way I look at this is the gathering was more impacted by weather; the markets impacted the long haul. It's just a matter of, was it better for our shippers to buy at Midland, buy at the end of the pipe, or at the dock? And so sometimes they'll just change their behaviors and how they ship, and it could be a measure of what inventories are in Cushing and what demands and turnarounds are in Cushing. So I'd say the long haul is impacted by the market. The gathering was more impacted by the weather,

Speaker Change: This is Jeremy the way I'd look at this as the gathering was more impacted by whether the markets impacted the long haul, it's just a matter of or the bid or is it better for our shippers to buy at Midland by at the end of the pipe or at the dock and so sometimes they will just change their behaviors and how they ship and it could be.

Speaker Change: What are inventories in Cushing and water demand and turnaround in Cushing. So I'd say the long haul is impacted by market. The gathering was more impacted by.

Speaker Change: The.

Speaker Change: That weather.

John Ross Mackay: All right. Got it. Thank you. Thank you. Our next question comes from the line of Theresa Chen of Barclays. Hi Theresa.

Speaker Change: Alright got it thank you.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Theresa Chen of Barclays.

Theresa Chen: Hi, Theresa.

Theresa Chen: Morning, thank you for taking my questions. First, I wanted to ask about the upcoming maintenance on linked Webster and how that might translate to incremental throughput on the basin pipeline, and maybe you're pushing assets given the slot capacity there. Is that an opportunity for incremental earnings, either from a throughput and volumetric perspective or through marketing optimization? Theresa, this is Jeremy. The way I look at it is the 10 days of scheduled downtime. There are ways to get it out, right?

Theresa Chen: Good morning, Thank you for taking my question.

Theresa Chen: First I wanted to ask about the upcoming maintenance Ronald Wink to Webster and how that might translate to incremental.

Theresa Chen: We put on basin pipeline and meeting your pushing assets given the slack capacity, there or is that an opportunity for incremental earnings either from Goldman.

Theresa Chen: Holden metric perspective or marketing optimization.

Theresa Chen: So Theresa this is Jeremy though and look at it is the 10 days of scheduled downtime.

Speaker Change: There is ways to get it out a lot of that will.

Jeremy L. Goebel: A lot of that will go, the export pipes to the Gulf Coast will be full, there's some capacity there. The barrels do need to get to Colorado City, which we can... The barrels will likely flow onto bridge decks as a result of Windsor-Webster being down. So you see more bridge deck flows, more Colorado City flows, and when it gets to Colorado City, you're likely to see more mason flows. So I think all three of those could happen, plus you'll see significant flows through all the...

Jeremy L. Goebel: Export pipes to the Gulf coast will be full or some capacity, there, but I do need to get to Colorado City, which we can assist with available likely flow onto bridge tax as a result of wink to Webster being down do you see more breakfast expose more Colorado city flows and when it gets to Colorado City, we're likely to see more basin flows. So I think all three.

Jeremy L. Goebel: Those could happen plus youll see.

Jeremy L. Goebel: Significant flows through all the corporate types.

Jeremy L. Goebel: And on the WCS front, as TMX is line filling, we're seeing the differentials come in at this point. Can you give some color on how that's impacting your marketing activities? And maybe, just broadly, looking past this, if you have a rule of thumb on the magnitude of impact that, you know, differentials on WCS specifically impact the crude segment just from a quarter to quarter basis, that would be helpful. Thanks. I don't think we'll give specific guidance, but what I would say is it will be included in our outlook. I'd say there are plenty of ways for us.

Jeremy L. Goebel: Understood.

Jeremy L. Goebel: And on the WCS as Tnx's line, selling and we're seeing the differentials come in at this point give some color on how that's impacting your marketing activities, maybe just broadly looking passes.

Jeremy L. Goebel: Do you have a rule of thumb on the magnitude of impact that differential on WCS, specifically impacts the crude segment to just from a quarter to quarter basis that'd be helpful.

Jeremy L. Goebel: I don't think we will give specific guidance, but what I would say it will be included in our outlook.

There's plenty of ways for us to optimize around our assets between rates other than WCS WCS is one component of the marketing activities in Canada.

Jeremy L. Goebel: Optimized around our assets between grades other than WCS. WCS is one component of the marketing strategy, Canada, but there also will be storage opportunities and other things as it starts up. Pipes as complicated as that will have difficulty starting up, and that will create opportunities. Also, flow changes of that magnitude away from the U.S., so it may end up with more tariff-based opportunities, less market-based opportunities, but we would expect a market-based opportunity to come back as Canadian production. Theresa, this is Willie.

But there also will be storage opportunities and other things as it starts up no pipe tightened as complicated as that will have difficulty starting up and it'll create opportunities also flow changes of that magnitude away from the U S. So it may end up more tariff based opportunities less market based opportunities, but we would expect the market based opportunities to come.

Jeremy L. Goebel: Back as Canadian production growth.

Wilfred C.W. Chiang: I think the key point on this is we've always said with the shift in flow, you know, it's 400,000 to 600,000 barrels a day potentially. Short term, there could be some blips. Long term, we think it's very healthy because it sends good price signals to the Canadians to develop more resources and it's quite frankly, you know, a great opportunity for the Canadian resource base to increase. This is Al

Jeremy L. Goebel: Theresa This is Willie I think the key point on this is we've always said with the with the shift in flow $4 to 600000 barrels a day potentially.

Al P. Swanson: Term there could be some blips long term, we think its very healthy because it sounds good price signals to the Canadians to to develop more resource and it's quite frankly, a great opportunity for that for the Canadian resource base start to increase and this is al. The only thing I would add is that it's actually coming online and this stuff is happening pretty well in line with.

Al P. Swanson: The only thing I would add is that it's actually coming online, and this stuff is happening pretty well in line with what we assumed in our original February. Got it. Thank you. Thank you. I would now like to turn the conference back to Willie Chiang for closing remarks, sir.

Al P. Swanson: What we assumed in our original February guidance.

Speaker Change: Got it thank you.

Speaker Change: Thank you I would now like to turn the conference back to Willie Chiang for closing remarks, Sir.

Wilfred C.W. Chiang: Thank you. As always, we enjoy visiting with you. Thanks for dialing in and for your ongoing attention and support of what we're doing. We look forward to seeing you out on the road. Talk to you soon.

Wilfred C.W. Chiang: Thank you as always we enjoy visiting with you. Thanks for dialing in and your your ongoing attention and support of what we're doing we look forward to seeing you out on the on the road talk to you soon.

Operator: This concludes today's conference call. Thank you for participating. You may now go on. Thank you for watching!

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

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Operator: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Thank you for standing by and welcome to PAA and PAGP's first quarter 2024 earnings conference call. At this time all participants are in a listen-only mode.

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Blake Michael Fernandez: I would now like to hand the call over to Blake Fernandez, VP, Investor Relations. Please, go ahead. Thank you, Lateef. Good morning. And welcome to Plains All American's first quarter 2024 earnings call. Today's slide presentation is posted on the Investor Relations website under the news and events section at plains.com. An audio replay will also be available following today's call.

Speaker Change: Thank you for standing by and welcome to PAA and PAGP first quarter 2024 earnings Conference call. At this time, all participants are in a listen only mode.

Speaker Change: After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone to remove yourself from the queue. You May press star one again.

Blake Michael Fernandez: Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on slide 2. An overview of today's call is provided on slide 3. The Condensed Consolidating Balance Sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Chairman and CEO Willie Chiang, Executive Vice President and CFO Al Swanson, as well as other management members. With that, I will now turn the call over to Willie. Thank you, Blake. Good morning, everyone, and thank you for joining us.

Speaker Change: Now I'd like to hand, the call over to Blake Fernandez VP Investor Relations. Please go ahead. Thank.

Blake Michael Fernandez: Thank you Latif and good morning, and welcome to Plains, All American first quarter 2024 earnings call.

Blake Michael Fernandez: Today's slide presentation is posted on the Investor Relations website under the news and events section of claims Dot Com an audio replay will also be available following todays call an important disclosures regarding forward looking statements and non-GAAP financial measures are provided on slide two.

Blake Michael Fernandez: An overview of today's call is provided on slide three.

Blake Michael Fernandez: A condensed consolidating balance sheet for PAGP and other reference materials are in the appendix.

Wilfred C.W. Chiang: And we reaffirmed our 2024 adjusted EBITDA outlook. Al will share additional details on our quarterly performance and the 2024 outlook in his portion of the call. As noted in our press release this morning and as illustrated on slide 5, we have increased contract volumes and extended the terms on certain contracts such that our weighted average contract duration of our Permian Long-Haul Portfolio is approximately five years, which takes us through 2028. This includes new contracts or extensions on Cactus 1, Cactus 2, Basin, and Sunrise.

Wilfred C.W. Chiang: Our strategy remains consistent and is anchored around capital discipline generating free cash flow return of capital to our investors and financial flexibility and consistent with those themes earlier. This morning, we reported first quarter results that are in line with our expectation, which reflects progress towards our <unk>.

Wilfred C.W. Chiang: Year, 2024 targets and provides us with confidence in our ability to deliver on the plan that we laid out in February for.

Wilfred C.W. Chiang: For the first quarter of 'twenty, four and as illustrated on slides three and four we reported adjusted EBITDA attributable to PAA of $718 million and we reaffirmed our 2024 adjusted EBITDA outlook and we will share additional details on our quarterly performance and the 2024 outlook in his portion of the call.

Wilfred C.W. Chiang: As noted in our press release this morning, and as illustrated on slide five we have increased contract volumes and extended the term on certain contracts such that our weighted average contract duration of our Permian long haul portfolio is approximately five years, which takes us through 2028. This includes new contracts or extensions on cactus one cactus.

Wilfred C.W. Chiang: Two based on in Sunrise. This also includes transactions related to 200000 barrels a day.

Wilfred C.W. Chiang: Cactus one capacity that has been finalized on terms that are consistent with the rates in the range of $1 25 to $1 50 per barrel that will become effective in September of 2025.

Wilfred C.W. Chiang: Today's announcement is a win win for both planes and our partners and it strikes a good balance between term commitments and maintaining flexibility to capture higher margins from <unk> on contracted long haul capacity over time.

Wilfred C.W. Chiang: While we are not providing formal guidance for 2006, we would expect continued underlying growth in the business and contributions from efficient growth investments to offset the lower contracted rates, which results in a broadly flat adjusted EBITDA in 2026 as compared to 2024 guidance for the crude segment.

Wilfred C.W. Chiang: In summary, we believe these actions should provide greater clarity and confidence in the outlook for our crude oil segment and our ability to continue to generate significant free cash flow over multiple years.

Wilfred C.W. Chiang: Consistent with our efficient growth strategy and are summarized on slide six planes acquired an additional 10% in the saddle Horn pipeline company LLC.

Wilfred C.W. Chiang: And the mid Con terminal asset for an aggregate cash consideration of approximately $110 million. These bolt on acquisitions are expected to generate unlevered returns in line with our return threshold of approximately three to 500 basis points above our weighted average cost of capital. In addition to enhancing our position in both the Rockies and the mid con with that.

Wilfred C.W. Chiang: These bolt-on acquisitions are expected to generate unlevered returns in line with our return threshold of approximately 300 to 500 basis points above our weighted average cost of capital, in addition to enhancing our position in both the Rockies and the MidCon. With that, I'll turn the call over to Al. Thanks, Willie.

Wilfred C.W. Chiang: I'll turn the call over to al. Thanks, Willie We reported first quarter adjusted EBITDA net to PAA of $718 million slides 10, and 11 in today's appendix contain walks that provide details on our first quarter performance our outlook for the balance of the year remains essentially unchanged and we are reaffirming.

Al P. Swanson: Slides 10 and 11 in today's appendix contain slides that provide details on our first quarter. Our outlook for the balance of the year remains essentially unchanged, and we are reaffirming our adjusted EBIDTA guidance range of 2.625. $3.725 billion for 2020. We continue to believe the Permian will grow 200,000 to 300,000 barrels a day with a back half weighted ramp providing momentum for the remainder of 2020. The NGL segment remains highly hedged, with frac spreads at approximately $0.65 per gallon.

Al P. Swanson: Our adjusted EBITDA guidance range of $2 65 to $2 75 billion for 2024, we continue to believe the Permian will grow 200 to 300000 barrels a day with a back half weighted ramp providing momentum for the remainder of 2012 before the <unk>.

Speaker Change: NGL segment remains highly hedged with Frac spreads at approximately 65 per gallon for 2024.

Al P. Swanson: A detailed overview of our 2024 guidance and key assumptions, to remain generally consistent with our February guidance, is on slide 12 within today's. For 2024, we expect to generate $1.55 billion of adjusted free cash flow, excluding changes in assets and liabilities, and including $110 million of bolt-on acquisitions, approximately $1.15 billion to be allocated to common and preferred distribution. We will also continue to self-fund our targeted $375 million.

Speaker Change: Detailed overview of our 2020 for guidance and key assumptions, which remained generally consistent with our February guidance are on slide 12 within today's appendix for 2024, we expect to generate $1 $55 billion of adjusted free cash flow, excluding changes in assets and liabilities and including the one.

Speaker Change: $110 million of bolt on acquisitions with approximately $115 billion to be allocated to common and preferred distributions.

Speaker Change: We will also continue to self fund, our targeted $375 million and $230 million of growth and maintenance capital respectively. Net to PAA, which is consistent with our February guidance and includes capital for pop JV, well connections and intra basin improvements as well as capital related to our previous.

Al P. Swanson: $230 million of growth and maintenance capital, respectively, net to PAA, which is consistent with our February guidance and includes capital for POPJB well connections and intrabasin improvement, as well as capital related to our previously announced Ford FAST debauchment. With that, I'll turn the call back. Thank you, Al.

Speaker Change: We announced support fast Debottleneck project with that I'll turn the call back to Willy.

Wilfred C.W. Chiang: Over the last several years, we have made considerable progress across several initiatives, including running a safe, responsible, and reliable business; remaining capital disciplined, generating meaningful free cash flow, and increasing the return of capital to our unit holders while maintaining financial flexibility. Our business model and asset footprint span key supply basins in North America and provides infrastructure solutions to supply global energy demand in the United States. The combination of our asset base and our strategic initiatives really creates a unique value proposition for our current and potential unit holders, including a double-digit adjusted free cash flow yield and a distribution yield of approximately 7 to 7.5 percent, with a multi-year targeted annual increase of 15 cents a unit.

Willy: Thank you al over the last several years, we have made considerable progress.

Willy: Across several initiatives, including running a safe responsible and reliable business.

Willy: <unk> capital disciplined.

Willy: Generating meaningful free cash flow and increasing the return of capital to our unit holders, while maintaining financial flexibility are.

Our business model and asset footprint Spanky supply basins in North America, and provides infrastructure solutions to supply global energy demand.

Willy: Combination of our asset base and our strategic initiatives really creates a unique value proposition for our current and potential unit holders, including a double digit adjusted free cash flow yield and a distribution yield of approximately 7% to seven 5% with a multiyear targeted annual increase of 15 a unit.

Wilfred C.W. Chiang: We're pleased to be able to provide an update on our Permian long-haul contracting efforts, which reflects our commitment and focus on being the partner of choice and creating win-win solutions for our customers and partners. Recontracting of our long-haul capacity has been a focal point for investors, and we view the developments that we share with you today as a significant milestone, offering better visibility and clarity around the contractual support for the performance of our Permian long-haul portfolio in the coming years. The bottom line is that we're well positioned to continue to generate significant free cash flow well into the future. I'll now turn the call over to Blake to lead us in the Q&A. Thanks, Willie.

Blake Michael Fernandez: This will allow us to address questions from as many participants as practical in our available time this morning.

The IR team will also be available to address any additional questions.

Operator: Lateef, we're ready to open the call for questions. Thank you. As a reminder, to ask a question, you may press star 11 on your telephone.

Blake Michael Fernandez: Latif, we're ready to open the call for questions. Please thank.

Latif: Thank you as a reminder to ask a question you May press star one on your telephone.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Michael Blum of Wells Fargo. Your question, please, Michael. Good morning, Michael.

Latif: Please standby, while we compile the Q&A roster.

Latif: Our first question comes from the line of Mark.

Bloom of Wells Fargo. Your question please Michael.

Michael Jacob Blum: So, I guess the first question I wanted to ask was just, I guess, on the guidance. You had a strong Q1, you had the bolt-on acquisition. So, maybe just talk through why not increase the 24 guidance and the same line of thinking there. Would you say you're on track to beat the $0.15 per year of distribution growth, given that it seems like you have the bolt-on, and the business is running well? Yeah, Michael, thanks for the question. This is Willie. It is early in the year.

Mark: Good morning, Michael Thanks.

Michael: Good morning.

Michael Jacob Blum: So I guess the first question I wanted to ask was just.

I guess on the guidance you had a strong Q1, yes, the bolt on acquisitions so.

Michael: Just talk through why not increase the 24 guidance and same line of thinking there.

Michael: Are you would you say you're on track to beat the 15 per year of distribution growth given that it seems like you have the bolt on business is running well.

Michael: Yes, Michael Thanks for the question this is Willie.

Wilfred C.W. Chiang: We're confident about being in that range and really just don't want to get too far ahead without seeing a few more things, but we do remain confident of our performance this year, and I would characterize it as cautiously optimistic that we'll be able to perform well within that range. Okay. Thank you. And then I wonder if you can comment on the rate for the contract extensions for Cactus 2 and Sunrise Basin. Were those largely consistent with prior rates and just extended the duration, or did you also see changes in the rate? Michael, good morning. This is Jeremy Goebel.

Our performance this year and I would I would characterize it as cautiously optimistic.

And we will be able to perform well under the range.

Speaker Change: Okay understood. Thank you and then.

Wondering if you can comment on the rates for the contract extensions for Cactus II in Sunrise basin, where those largely consistent with prior rates and just extend the duration or did you also see changes in the rates there.

Speaker Change: Michael Good morning. This is Jeremy Goebel, what I'd say on the rates in the mid continent. The reason we were looking to contract those on a long term rate as it got towards tariff. So effectively folks are paying tariff to get there and that's the right balance for us for a long term rate on Capex too.

Jeremy L. Goebel: What I'd say on the rates of the Mid-Continent, the reason we were looking to contract those on a long-term rate is it got towards tariffs. So effectively, folks are paying tariffs to get there, and that's the right balance for us for the long term. On CACSIS-2, the extensions were associated with... contract extensions associated with their options to extend.

Speaker Change: The extensions are associated with.

Speaker Change: Contract extension is associated with their debt options to extend so they basically elected their options to extend the existing contracts.

Speaker Change: Thank you.

Thank you.

Speaker Change: Our next question.

Jeremy L. Goebel: So they basically elected to extend their options. Thank you. Our next question comes from the line of Tristan Richardson of Scotiabank. Your line is open, Tristan. Bye, Tristan. System, please make sure your line is unmuted and, if you have a speakerphone... Tristan, are you on or muted?

Speaker Change: Comes from the line of Tristan Richardson of Scotiabank. Your line is open interest in that.

Speaker Change: Paul.

Tristan Richardson: Hi, Tristan.

Tristan Richardson: Okay.

Kristin please Mr. Your line is immediate speaker phone lift your handset.

Okay.

Kristen are you on.

Kristin: Or muted.

Operator: Shall I go to the next question? Yeah, thank you. Okay, thank you. One moment.

Kristin: So to your question, yes. Thank you okay. Thank you one.

Speaker Change: One moment.

Speaker Change: Okay.

Operator: Our next question comes from the line of Spiro Dounis of Citi. Your question, please, Spiro. Good morning, everybody.

Speaker Change: Our next question.

Speaker Change: It comes from the line of Spiro <unk> of Citi. Your question. Please spiral.

Spiro Michael Dounis: So maybe I just want to go back to the 2026 comment. Willie, I totally appreciate you not giving guidance today. But just kind of want to understand maybe what underwrites some of the view and how flat it is over time, just thinking about things like how you think about basin growth over the next few years, and then just other things around M&A. Obviously, you've been active on the bolt-on front.

Spiro: Is that fair.

Good morning, everybody.

Spiro: So maybe just want to go back to the 2026 comment really totally appreciate youre not giving guidance today.

Spiro: But just kind of want to understand maybe what underwrite some of the view on sort of flat over time, just thinking about things like how do you think about pacing growth over the next few years and then just other things around M&A, obviously, you've been active on the bolt on front I assume assumes no M&A from here and then also you mentioned some lines of spot ups.

Wilfred C.W. Chiang: I assume no M&A from here. And then also, you mentioned some lines of spot upside on some of these open volumes. I imagine that's all upside to that view as well.

Spiro: Some of these open volumes I imagine that's all upside to that to you as well.

Wilfred C.W. Chiang: Yes, Spiro, there are, as you well understand, a lot of variables that go into this, and it would not be, it would not be a good guide if we could try to look to 26 to see all those things, as you know, the tightness in supply and demand on the capacity, operating costs, and production. There's a lot of things that go into it, and while I'm not going to break out everything there, what we were trying to do is, as we think about our business in 26, without significant changes to where we are today, not large investments that we've put in, not gross, you know, not spikes in production.

Speaker Change: Yes, Spiro, it's as you well understand theres a lot of variables that go into this and it would be it wouldn't be it would not be a good guidance. If we if we could try to look to 'twenty six to see all of those things as you know that tightness in supply and demand on the capacity operating cost production. There is a lot of things that.

Speaker Change: Go into and while I'm not going to break out everything there. What we were trying to do is as we think about our business and 26 without significant changes of where we are today not large investments that we've put in.

Not gross.

Speaker Change: Spikes in production, we've kind of talked about two to 300000 barrels a day of growth in the Permian kind of over the next number of years, it's really trying to put a normalized view on 2026 based on how we're operating today and the point of this was really to try to to.

Wilfred C.W. Chiang: You know, we've kind of talked about two to three hundred thousand barrels a day of growth in the Permian, kind of over the next number of years. It's really trying to put a normalized view on 2026, based on how we're operating today, and the point of this was really to try to quantify the impact, not exactly, but there are some folks that believe that the renegotiation would have resulted in, you know, a significant reduction to the point where we couldn't catch up, and what we're trying to say is really, we're going to be generally flat in 2026, which is really the first full year after the contract renegotiation, and it's always our jobs to work hard on improving that.

Speaker Change: To quantify the impact not exactly but there are some folks that believe that the renegotiation would have resulted in a significant reduction to the point, where we could catch up and were trying to say is really we're going to be generally flat in 2026, which is really the first full year after the contract renegotiation and it's all.

Speaker Change: It was our job is to work hard on on improving that so as we get closer we'll be able to get better better forecast on it but again its really to quantify what we think the ranges we expect to be broadly broadly flat with 2024 and 26 and.

Wilfred C.W. Chiang: So, as we get closer, we'll be able to give better forecasts on that, but again, it's really just to quantify what we think the range is. We expect it to be broadly flat between 2024 and 2026, and there could be upsides just as there could be downsides, and more resolution will come as we see more. Okay, understood. Appreciate that, Willie.

Speaker Change: And there could be upsides, just as there could be downsides in more resolution will come as we see more.

Wilfred C.W. Chiang: Second question, maybe just going to NGL, just curious how you guys are thinking about the hedging strategy out for 2025. And then, more broadly or longer term, curious if there's any opportunities over time to reduce that commodity exposure through contracts? So the first part of the question is we're actively monitoring our hedging profile, and we try to be up. Liquidity decreases significantly after you get outside six to nine months, so and it's while it's very largely back, so for us, we're being opportunistic. It doesn't make sense to hedge at this point on a forward basis. We have some because it was higher, but it's minimal.

Speaker Change: Okay understood I appreciate that.

Speaker Change: Second question, maybe just go into NGL.

Speaker Change: Just curious how you guys are thinking about the hedging strategy.

Speaker Change: For 2025, and then more broadly are longer term curious if theres any opportunities over time to reduce that commodity exposure through contracts.

Speaker Change: Okay.

Speaker Change: On the first part of the question is we are actively monitoring our hedging profile and we try to be opportunistic.

Speaker Change: Liquidity decreases significantly as you get outside six to nine months, so and it's.

Speaker Change: Very largely backward dated so for us remain opportunistic it doesn't make sense to hedge at this point on a forward basis, we have some because it was higher but minimal.

Al P. Swanson: And so, in our opinion, it's opportunistic. As the liquidity gets higher, market views get higher, and at the front end of the crude curve, markets roll up. And as gas prices moderate, you get to points where we'll hedge again. But at this point, we're not going to give any guidance on that.

Speaker Change: Our opinion, it's opportunistic as the liquidity gets higher market views get higher in the front end of the crude market's rollout and as gas prices moderate and get to points, where we'll hedge again, but at this point, but I can give any guidance on it but that just gives you an assessment of right now the forward curve is suggesting we should do it and liquidity.

Al P. Swanson: But that just gives you an assessment of right now. The forward curve isn't suggesting we should do it. And Spiro, as you know, we've got some additional capacity that's coming on in Fort Saskatchewan, and that is consistent with your question on how do we get and shift more towards a fee-based consistent cash flow stream. So that's always our objective. It's just you have to be smart about how you go about it and pick the right times to contract.

Speaker Change: Out there to do anything asos and Spiro as you know we've got some additional capacity that's coming on in Fort Saskatchewan and that is consistent with your question on how do we get shift more towards a fee based consistent cash flow stream. So that's always our objective.

Speaker Change: You got to be smart about how you go about it and pick the right times to contracting.

Al P. Swanson: Perfect. I'll leave it there for today. Thanks, gentlemen. Thank you. Our next question comes from the line of Keith Stanley of Wolf Research. Your line is open.

Speaker Change #100: Alright, perfect I'll leave it there for today, thanks gentlemen.

Speaker Change #100: Thanks.

Speaker Change #101: Thank you.

Speaker Change #102: Our next question.

Speaker Change #102: It comes from the line of Keith Stanley.

Keith T. Stanley: Research Your line is open to Keith.

Keith T. Stanley: Thanks. Hi. Good morning.

Keith T. Stanley: Thanks, Hi, good morning.

Keith T. Stanley: When you look at the portfolio now after today's announcement... Are there any assets that at all that you would call out aside from maybe bridge techs where contract rates are still meaningfully above market? Or are we at the point now where your contract rates are? All pretty much, you know, more or less in line with where the market is Jeremy. I would say that you're a BridgeTex is the one that's outstanding. We don't operate the pipeline, it would be a better question for 1.0, but one thing I would say is BridgeTex demands. So one thing to pay attention to is Wink-to-Webster just extended to Beaumont, which has led to more... Tech, you' So, longer term, we see that as a healthy pipeline with... And we control the capacity between Midland and Colorado, so we benefit from those volumes. This is Al.

Keith T. Stanley: When you look at the portfolio now after today's announcement are there are there assets.

At all that you would call out aside from maybe Briggs tax where contract rates are still meaningfully above market or are we at the point now where contract rates are all pretty much more or less in line with where the market would be.

Keith T. Stanley: Keith This is Jeremy I would say that your assessment is correct.

Jeremy: At Bridgetex is the one that's outstanding we don't operate the pipeline that would be better question for whatever but one thing I would say as bridgetex demand is increasing.

Jeremy: So one thing to pay attention to as Wayne West or just extended development, which has led to more demand for brands that you have.

Jeremy: Got the downtime on Wink to Webster engineers, so longer term, we see that as a healthy pipeline with opportunity and.

Jeremy: We control the capacity between Midland and Colorado City that we see benefits as those volumes increase as well.

Jeremy L. Goebel: The only thing I would add to what Jeremy said is that we assumed and made our assumption in this broadly flat 2020, the bridge tax impact. Okay, that's helpful. And then, just a small clarification, I think it was Spiro's question, just the... The 2026 crude segment EBITDA being flattish, I just want to make sure that doesn't include any bolt-on acquisition assumptions or use of free cash in that way, right? It's more just organic growth through. Nothing major.

Jeremy: This is Alan the only thing I would add to what Jeremy said is we assumed and made our assumption in the broadly flat 2026.

Alan: The bridge tax impacts as well.

Alan: Okay.

Alan: And then just a small clarification I think was spiro's question just the the.

Nothing major.

Speaker Change #103: Got it.

Speaker Change #104: Okay. Thank you.

Speaker Change #105: Thank you.

Speaker Change #106: Our next question.

Keith T. Stanley: Okay, thank you. Thank you. Our next question comes from the line of Sunil Sibal of Seaport Global. Please go ahead, Sunil. Hi, good morning, guys. Can you hear me all right?

Speaker Change #106: It comes from the line of Sunil Sibal.

Sunil K. Sibal: The Seaport Global Please go ahead Sydney.

Sunil K. Sibal: Yes, Hi, good morning, guys can you hear me all right.

Sunil K. Sibal: Yep, we can, Sunil. Thanks. So on the Permian recontracting, so thanks for that update. And I was kind of curious, you know, since this was a major milestone. And now that you have this behind you, how does that, if any, impact your kind of, you know, longer-term capital allocation strategy? Yeah, the capital allocation strategy doesn't change, right?

Sunil K. Sibal: Yes, we can so neal.

Sunil K. Sibal: Thanks.

Sunil K. Sibal: On.

Sydney: On the Permian.

Speaker Change #108: Contracting so thanks for that update and it was kind of curious you know.

Speaker Change #108: Major milestone.

Speaker Change #108: And now that you have.

Speaker Change #108: Just behind you how does that if any impact here to kind of.

Speaker Change #108: <unk> capital allocation strategy.

Speaker Change #109: Yes, the capital allocation strategy doesn't change our.

Wilfred C.W. Chiang: Our leverage is where we want it to be. We set a new range. For our maximized free cash flow, we expect our CapEx to be in that $300,000 to $400,000 range per year.

Speaker Change #109: <unk> Leverages, where we want it to be we set a new range or maximize free cash flow expect our capex to be in that $3 to 400000.

Speaker Change #109: $3 million to $400 million range per year, we do look for opportunities that are high synergy high return of synergy opportunities for bolt ons and we'll continue to look for those opportunities because we think they are accretive and we can we can execute on that and then the focus is again return of capital to work to unit holders.

Wilfred C.W. Chiang: We do look for opportunities that are high synergy, high return synergy opportunities for bolt-ons, and we'll continue to look for those opportunities because we think they're creative and we can execute them on that. And then the focus is, again, on return of capital to unit holders. And I think, yeah, Tristan did ask the question, you know, if we perform better, we would certainly consider an increase above our target, as we have done in the last couple of years.

Speaker Change #109: And I think yes, Tristan did ask the question.

If we perform better and we would certainly consider.

Speaker Change #109: An increase above our target as we have done in the last couple of years.

Wilfred C.W. Chiang: And then on Permian, seems like you know, weather-related events kind of led to a sequential decline in your volumes. I was kind of curious, you know, where things stand today. Have you seen enough recovery from those?

Speaker Change #110: Understood and then on Permian. It seems like you had no weather related events kind of led to a sequential decline.

Speaker Change #110: Volumes I was kind of curious where things stand today.

Speaker Change #110: Have you seen enough recovery from those obviously recruiting you had X.

Jeremy L. Goebel: Obviously, you're reiterating your full year expectations, but I was just kind of curious about the near term. What are you seeing in the basin? This is Jeremy. There was an impact in January-February for about two weeks, so it's here. Volumes have recovered. There's been some issues with gas outages throughout the basin that have caused some impact, but by and large, it's in line with expectations. There was big growth in the fourth quarter of last year, which we expected to be flattish in the first part of this year and growth in the second half of this year, and so we're not changing our outlook at all based on this. This is normal.

Speaker Change #110: But I was just kind of curious multiyear Tom.

Speaker Change #110: What have you seen in the basin.

Speaker Change #110: And Neil this is Jeremy.

Speaker Change #110: There was an impact in January February for about two weeks associated with the phrase.

Jeremy: Volumes have recovered there has been some issues with gas outages throughout the basin that have caused some impact but by and large it's in line with expectations.

Jeremy: There was a big growth big growth in the fourth quarter of last year, which we expected flattish in the first part of this year and growth in the second half of the year and so we're not changing our outlook at all based on the normal impacts of averages.

Speaker Change #111: Okay, and just one clarification so based on what we are seeing in gas prices and gas constraints.

Speaker Change #111: No.

You are not expecting anything.

Speaker Change #111: Any change so that's second half level to go with I understand there is a gas pipeline coming online so that essentially near mine hubs because all the <unk>.

Speaker Change #111: Constrained then.

Speaker Change #111: The second half uptick in production is that correct.

Jeremy L. Goebel: That is very fair. That's one way to look at it. The other is that when gas prices are low, it doesn't impact all shippers, right? Some of them have other transport, and the vast majority do.

Speaker Change #112: That is very fair and that's one way to look at it. The other is what gas prices are low it doesn't impact all shippers.

Speaker Change #112: Some of that FERC transport and the vast majority do is set the plat.

Speaker Change #112: Molecules of gas trying to get out of the basin. The other part of it is gas prices are like that in those capital allocation to oil youre areas lower GOR areas generally beneficial for us so it's not all of that.

Speaker Change #113: Understood. Thank you.

Sunil K. Sibal: Thank you. Thank you, Sunil. Thank you. Our next question comes from the line of Zach Van Everen of TPH and Company. Please go ahead, Zach.

Speaker Change #114: Thank you Sunil.

Speaker Change #115: Thank you.

Speaker Change #116: Our next question.

Speaker Change #116: Okay.

Speaker Change #116: Come from the line of Zach than ever in CPA tool company.

Please go ahead Zach.

Perfect. Thanks for taking my question guys, starting with the saddle Horn transaction can you guys provide any insight into the contract profile underpinning the pie for those fairly long dated or where there'll be some rolling in the next few years.

Speaker Change #117: I think thats a question of the operator, one out but we can say, we're very comfortable with the acquisition price and long term outlook for this outlook.

Speaker Change #117: Yes.

Speaker Change #118: Okay, perfect and then one kind of outside of your business realm, but.

Speaker Change #119: We're seeing more and more producers and midstream talked about 2026, being you're very potentially constrained year on the gas side have any of your producer has expressed any concerns or talk through the outer years with gas constraints, maybe coming back in 2026.

Jeremy L. Goebel: I think in general, all the conferences and calls we've seen so far are that there's a general need for another pipeline. Historically, new pipelines get changed, and we expect that to happen. And anything would be transient. It would be quarters. It wouldn't be years.

Speaker Change #119: I think in general all the conference calls you've seen that so far is that there is a general need for another pipeline.

Speaker Change #119: And historically new pipeline, Okay. Thanks, and then we expect that to happen.

Speaker Change #119: Anything would be trained and it would be quarter, there wouldnt be years and in our view remember we're just talking about the last pipe, we're not talking about the whole base of production. So if you delay a 100000 barrels a day of growth six months, that's 100000 barrels a day out of at that time close to $6 5 million barrels a day, it's a very minor impact to the total basin.

Jeremy L. Goebel: And in our view, remember, we're just talking about the last pipe. We're not talking about the whole base of production. So if you delay 100,000 barrels a day in growth for six months, that's 100,000 barrels a day out of, at that time, close to 6.5 million barrels a day. It's a very minor impact on the total.

Zach Van Everen: Gotcha. Perfect. Well, I appreciate it, guys. Thanks. Thanks, Zach.

Speaker Change #120: Got you perfect I appreciate it guys. Thanks.

Speaker Change #121: Thanks, Ed.

Speaker Change #121: Okay.

Speaker Change #122: Thank you.

Speaker Change #122: Okay.

Naomi Marafatia: Thank you. Our next question... comes from the line of Naomi Marafatia of UBS. Hi, good morning.

Speaker Change #123: Our next question.

Comes from the line of Nuomi, Mario <unk> of UBS.

Jeremy L. Goebel: Appreciate all the color and answers to the question, Pesar, on the recontracting through 2025. But can you talk about, perhaps, how the five-year contract structure in 2028 leaves a massive amount of flexibility in the future prospects of the business, particularly around exports? Can you talk about the opportunity set that you're looking at? This is Jeremy.

Hi, good morning.

Nuomi, Mario: I appreciate all the color that color.

Nuomi, Mario: So the question on the re contracting for 2025, but can you talk about perhaps how the five year contract structure in 2020, it needs a massive amount of flexibility in the future prospects of the business, particularly around exports can you talk about the opportunity set that you're looking at.

Nuomi, Mario: Yes.

Jeremy L. Goebel: I'm not sure I completely understand the question, but what I would say is it's staggered. We gave you the average end of the duration. The durations move over different years, and we like to stagger contracts. And our intent is to continue to stay with long-term exporters and refiners in our contracting. So we're managing that profile. We'll actively manage it. We see opportunity shifts. The long-haul pipes will be needed. The Permian oil in place is a big number, and we'll have production for a long time. So this doesn't concern us one bit.

Jeremy: This is Jeremy.

Not sure I completely understand the question, but what I would say is.

Jeremy: It's staggered work, we gave you the average and the duration of the durations move over different years, and we liked the staggered contracts and our intent is to continue to stay with long term ex borders and refiners that are contracting.

Jeremy: Managing that profile, we'll actively manage it we see opportunities to long haul pipes will be needed to Permian oil in place is a big number and we will have production for a long time. So it doesn't concern us one bit. This was how we were able to get to the right balance of time tenure and rate and we will continue to manage that profile over time.

Wilfred C.W. Chiang: This was how we were able to get to the right balance of time, tenure, and rate. And we'll continue to manage that profile. Naomi, this is Willie.

Wilfred C.W. Chiang: As we talk with our customers and our partners about this, this all fits their profile of production. And if you think about it, you've got a limited amount of infrastructure that's going to these markets now. And we would like to think that the relationships are strong and that the customers will be sticky because the offering that we have fits what they want to do, and so it's not a matter of people wanting to shift to completely different markets. I would think that, you know, as we are good partners, that we'll continue to have those, and it's really a renegotiation of term, tenure, and tariff at that time. That is helpful.

Jeremy: And that the customers will be sticky because.

Jeremy: <unk>.

Jeremy: The offering that we have fits what they want to do.

Jeremy: And so it's not a matter of people wanting to shift to completely different markets.

Jeremy: I would think that.

Jeremy: We are good partners and will continue to have those and it's really a renegotiation of chairman and tenure and tariff at that time.

Speaker Change #125: That is helpful.

Speaker Change #125: Maybe as a follow up how should we think about Permian production cadence for the remaining of the U S should we expect for gathering bolt on transactions to drive production given the increased activity.

Speaker Change #125: I think we've shared that our expectations for the Permian really are two to 300000 barrels a day of growth from the end of the year to the end of the year 'twenty three 'twenty four and it's really back half.

Speaker Change #125: Q3, and Q4 that will see the increase.

Speaker Change #126: Great. Thanks, Thanks have.

Speaker Change #127: Have a great rest of your day.

Thanks Neil.

Speaker Change #128: Thank you.

Our next question comes from the line.

Neil: Of note Dingman of <unk> Securities.

Neal David Dingmann: Are they still up and to the right as they've been? So our view is the same as our outlook for the year. We tended to bring those down on the market-based... TMX starts up, so it's in our views, impact, it's included in our guidance. What I would say is we view that as positive long-term for our Canadian assets. It's more production growth, and you're probably going to be in a constrained environment again in two to three years.

Good morning, guys. Thanks for the time My first question on your Canadian assets, specifically, you've had some nice market based results.

Dingman: In past quarters on the Canadian crude spreads and NGL markets I'm. Just wondering how are those continuing to trend or are they still up into the right as they've been.

Speaker Change #129: So our view is the same as our outlook for the year, we tended to bring those down on the market based opportunities as <unk> starts up.

Speaker Change #129: <unk> impact is included in our guidance.

Speaker Change #129: And what I would say is we view that as positive long term for our Canadian assets as more production growth and Youre, probably in a constrained environment again in two to three years. So we think more volume will be good for those assets on both the NGL and the crude side and while there may be fewer market based opportunities that could lead to higher tariff based opportunities.

Jeremy L. Goebel: So we think more volume will be good for those assets on both the NGLA and the crude side. And while there may be fewer market-based opportunities, it could lead to higher tariffs. That's great to hear. Then just a quick, quick one, just what you just were mentioned on the permit. Oh, go ahead.

Speaker Change #130: That's great to hear and then just a quick quick one just what you just mentioned that for me to add as Oh go ahead, sorry that movement to the West coast is going to reorganize how things move in the U S to make up for that for those barrels not coming into the U S. So that can create other opportunities for some of our other pipes in the mid continent.

Jeremy L. Goebel: Sorry. That movement to the West Coast is going to reorganize how things move. The U.S. has to make up for that.

Jeremy L. Goebel: So those barrels are not coming into the U.S., so that can create other opportunities for some of our other pipes. Great, great ad. And then I was just asking about the Permian growth you just mentioned. Is the majority of that still going to come from the Dell? I think last quarter you talked about maybe 170 Dell rigs versus 120 Midland.

Speaker Change #130: Great Great and then I was just asking on you just mentioned on Permian growth is is the majority of that is still going to come from the Delta I think last quarter, you talked about maybe 170 del rigs versus 120 Midlands. So is that still kind of.

Jeremy L. Goebel: So is that still kind of, you anticipate that being the case for the remainder of the year? Yes, the activity balance hasn't really changed very much, but we do see some growth in the Midland Basin, but we think it will be disproportionate. Helpful. Thank you all.

Speaker Change #131: We anticipate that being the case for the remainder of the year.

Speaker Change #131: Yes, the activity balance hasn't really changed very much but we do see some growth in the Midland basin, but we think it will be disproportionately in the Delaware basin.

Speaker Change #132: Helpful. Thank you all.

Speaker Change #133: Thank you.

Speaker Change #134: Our next question.

Jeremy L. Goebel: Thank you. Our next question comes from the line of Jeremy Tenet of JPMorgan Securities. Please go ahead, Jeremy.

Speaker Change #134: Comes from the line of Jeremy Tonet Jpmorgan Securities. Please go ahead Jeremy.

Jeremy L. Goebel: Hi, good morning. Good morning, Jeremy. I just want to come back to the recontracting if I could.

Jeremy L. Goebel: Hi, good morning.

Jeremy L. Goebel: Good morning, Jeremy.

Jeremy L. Goebel: I just wanted to come back to the <unk>, if I could wanted to better understand I guess.

Jeremy L. Goebel: When you say it.

Well, it's a mix of what we've got and it's we don't really want to get into the specifics of every pipe and what the tariff is I think the key point on that Jeremy is if when you look at the recently built pipes.

Jeremy L. Goebel: About 25% above 50, and essentially what we're telling you is that we've been able to re contract successfully with our partners at at rates that are competitive with that and going forward I think it's a reset and that we don't have we have less at are far out of market as we go forward and as the basin tightens, we would expect that there could be some pressure upwards on that.

Jeremy L. Goebel: Got it. That's very helpful. Thank you. And then I just wanted to come back to the guidance, if I could. I appreciate that it's early in the year and you don't want to move it just yet, but with the acquisitions, you know, presumably bringing upside to results for the year, are there other, I guess, headwinds that have materialized so far that would be an offset or just trying to better understand the gives and takes or, just as the year progresses, would you account for that upside later? Jeremy, this is Al.

Speaker Change #135: Got it that's very helpful. Thank you and then just wanted to come back to the guidance if I could I. Appreciate that's early in the year and you don't want to move it just yet, but with the acquisitions, presumably bringing upside to results for the year are there other I guess headwinds that have materialized. So far that would be an offset or just trying to better understand.

Speaker Change #135: Stan the gives and takes there just as the year progresses.

Would account for that upside later.

Al P. Swanson: Jeremy This is al.

Al P. Swanson: The acquisition of the 110.

Al P. Swanson: The impact that will be seen this year would be very modest and well with inside the range. We have our base businesses performing in line with expectation as Willy mentioned on.

Al P. Swanson: In his prepared remarks so.

Al P. Swanson: If you run the math on $110 million and recognize that it's only a partial year. It was not enough for us to have.

Al P. Swanson: Allow for in our business, but our business is performing in line with what we expected.

Al P. Swanson: But our business is performing in line with what we expect. Hey Jeremy, this is Will again. Just a clarification, the specific $1.25 to $1.50 that was really around Cactus One. However, we've got other pipelines that are in the mix, and we have a weighted average concept that we look at, but the $1.25 to $1.50 was really just the Cactus One re-contract. Got it. Very helpful. Thank you. Thank you. Our next question comes from the line of John Mackay of Goldman Sachs. Hey guys, good morning.

Al P. Swanson: Hey, Jeremy This is Willie you just a clarification the specific dollars 25 to <unk> 50 that was really around cactus. One. However, we've got other pipelines that are in the mix and we have a weighted average concept that we look at but it really does.

Wilfred C.W. Chiang: 25% above 50 is related just the cactus one re contracting.

Speaker Change #136: Got it very helpful. Thank you.

Speaker Change #137: Thank you.

Our next question.

Comes from the line of John <unk> of Goldman Sachs.

Wilfred C.W. Chiang: Thanks for the time. I just figured now that you're having some of these conversations with your shippers around kind of back half of a decade volumes and rates, would just be curious if there's anything you can share on how the market's developing for kind of Houston versus Corpus dynamics, whether or not some of the big export projects proposed out there are kind of playing into those conversations yet. I appreciate it. Yeah, I would say they had absolutely no impact on the discussions that we had.

Speaker Change #137: Yes.

John Ross Mackay: Hey, guys. Good morning, Thanks for the time.

John Ross Mackay: I just figured now that you are having some conversations with shippers around kind of back half of the decade volumes and rates.

John Ross Mackay: Just be curious is there anything you can share on how the market's developing for four kind of Houston versus corpus dynamics, whether or not some some of the big export projects proposed out there are kind of playing into those conversations yet I appreciate it.

Speaker Change #138: I would say they had absolutely no impact on the discussions that we had I think the view.

Jeremy L. Goebel: You have to think about, there's already a couple million barrels of paint headed, close to three headed to Corpus, right? Those balances may not change very much, and you have production growth in between. We're talking about a project three to four years from now where you could have half a million to 800,000 barrels of daily more production. I think you're going to move inland, less efficient docks offshore, maybe take some production growth, but you'll still be full to core production.

Speaker Change #138: Offshore export facilities get built you have to think about there is already a couple of million barrels a day and in the Houston and close to three headed into Cortland right. So.

Speaker Change #138: Those balances may not change very much and you have production growth in between we're talking about a project three years to four years from now where you could have half a million to 800000 barrels a day more production I think youre going to move inland less efficient docks offshore maybe take some production growth, but youll still be full to corpus so it didn't impact.

Jeremy L. Goebel: So it didn't impact the discussions at all, and it's more of an and as opposed to or. All right, that's fair. Maybe just one last one. Maybe just another comment on the weather challenges or otherwise in the first quarter so that we understand kind of general Permian trajectories intact.

Active discussions at all and it's more of an end as opposed to or.

Alright.

Maybe just one last one maybe just another comment on the weather challenges or otherwise in first quarter.

Speaker Change #138: Understand kind of general Permian trajectories in tact.

John Ross Mackay: Just when we're looking at kind of Permian gathering versus long haul, was there more of an impact on one versus the other? And maybe just how we think about, you know, a 2Q trajectory versus a second half pickup. Thanks. This is Jeremy.

Speaker Change #138: We're looking at kind of Permian gathering versus long haul was there more of a impact on one versus the other.

Speaker Change #138: And maybe just how we think about <unk> trajectory versus <unk>.

Speaker Change #138: Second half pickup.

Jeremy L. Goebel: The way I look at this is the gathering was more impacted by weather, the markets impacted the long haul. It's just a matter of whether it was better for our shippers to buy at Midland, buy at the end of the pipe, or at the dock. And so sometimes they'll just change their behavior and how they ship, and it could be a measure of what the inventories are in Cushing and what the demands and turnarounds are in Cushing. So I'd say the long haul is impacted by the market, but the gathering was more impacted by the weather. All right. I got it.

Speaker Change #138: This is Jeremy the way I'd look at this as the gathering was more impacted by whether the markets impacted the long haul. It's just a matter of where the bid was it better for our shippers to buy at Midland by at the end of the pipe or is the dock and so sometimes they will just change their behaviors and how they ship and it could be a measure.

Speaker Change #138: Of what our inventories in Cushing and water demand and turnaround in Cushing. So I'd say the long haul is impacted by market. The gathering was more impacted by.

Speaker Change #138: The bellwether.

Speaker Change #138: Bellwether.

Alright got it thank you.

Speaker Change #139: Thank you.

Speaker Change #140: Our next question.

John Ross Mackay: Thank you. Thank you. A nice question comes from the line of Theresa Chen of Barclays. Hi Theresa.

Comes from the line of Theresa Chen of Barclays.

Theresa Chen: Hi, Theresa.

Theresa Chen: Morning, thank you for taking my questions. First, I wanted to ask about the upcoming maintenance on Winked Webster and how that might translate to incremental throughput on the basin pipeline and maybe your pushing assets given the slot capacity there. Is that an opportunity for incremental earnings, either from a throughput and volumetric perspective or through marketing optimization? Theresa, this is Jeremy. The way I look at it is the 10 days of scheduled downtime. There are ways to get it out, right?

Theresa Chen: Good morning, Thank you for taking my question.

First I wanted to ask about the.

Theresa Chen: Upcoming maintenance bundled wink Webster and how that might translate to incremental.

Theresa Chen: On basin pipeline, and maybe you're pushing assets given the slack capacity, there or is that an opportunity for incremental earnings either.

Following metric perspective or marketing optimization.

Theresa Chen: Theresa This is Jeremy though and look at it is the 10 days of scheduled downtime.

Theresa Chen: There is ways to get it out a lot of that will.

Jeremy L. Goebel: A lot of that will go, the export pipes to the Gulf Coast will be full, there's some capacity there. The barrels do need to get to Colorado City, which we can. The barrels will likely flow onto bridge decks as a result of Wing-2-Webster being down. So you see more bridge deck flows, more Colorado City flows, and when it gets to Colorado City, you're likely to see more basin flows. So I think all three of those could happen, plus you'll see significant flows through all the...

Jeremy: Export pipes to the Gulf coast will be full or some capacity there that do need to get to Colorado City, which we can assist with available likely flow onto Briggs tax as a result of length Webster being down so you'll see more breakfast expose more Colorado city flows and when it gets to Colorado City, we're likely to see more basin flows. So I think all three.

Are those could happen plus youll see it.

Jeremy: Significant flows through all the corpus pipes.

Jeremy L. Goebel: And on the WCS front, as TMX is line-filling, we're seeing the differentials come in at this point. Can you give some color on how that's impacting your marketing activities? And maybe, just broadly, looking past this, if you have a rule of thumb on the magnitude of impact that, you know, differentials on WCS specifically impact the crude segment just from a quarter-to-quarter basis, that'd be helpful.

Jeremy: Understood.

Jeremy: And on the WCS as Tnx's lines Helane, we're seeing.

Jeremy: <unk> come in at this point.

Jeremy: Color on how that's impacting your marketing activities and maybe just broadly looking passes.

Jeremy: You have a rule of thumb on.

Jeremy: The magnitude of impact that differential on WCS, specifically impacts the crude segment to just from a quarter to quarter basis that'd be helpful.

Jeremy L. Goebel: Thanks, Theresa. I don't think we'll give specific guidance, but what I would say is it will be included in our outlook. I'd say there are plenty of ways for us, optimized around our assets between grades other than WCF. WCF is one component of the marketing, Canada, but there also will be storage opportunities and other things as it starts up. Pipelines as complicated as that will have difficulties starting up, and that will create opportunities. Also, flow changes of that magnitude away from the U.S.

Speaker Change #141: Thanks, Rick I don't think we will give specific guidance, but what I would say it will be included in our outlook I'd say there is plenty of ways for us to optimize around our assets between grade rather than WCS WCS is one component of the marketing activities in Canada.

Speaker Change #141: There also will be storage opportunities and other things as it starts up no pipe type is complicated that we will have difficulty starting up and it'll create opportunities also flow changes of that magnitude away from the U S. So it may end up more tariff based opportunities less market based opportunities.

Speaker Change #141: Wed expect the market based opportunities to come back as Canadian production growth.

Wilfred C.W. Chiang: So it may end up more tariff-based opportunities, less market-based opportunities, but we would expect the market-based opportunities to come back as Canadian production. Theresa, this is Willie, I think the key point on this is we've always said with the shift in flow, you know, it's four to six hundred thousand barrels a day, potentially, short term there could be some blips, long term we think it's very healthy because it sends good price signals to the Canadians to develop more resource and it's quite frankly a great opportunity for the Canadian resource base to increase.

Speaker Change #141: Theresa This is Willie I think the key point on this is we've always said with the with the shifting flow four to 600000 barrels a day potentially short term there could be some blips long term, we think its very healthy because it sounds good price signals to the Canadians to to develop more resource and it's quite frankly, a great opportunity for them.

Speaker Change #141: The Canadian resource base to increase and this is al the only thing I would add is that it's actually coming online and this stuff is happening pretty well in line with what we assumed in our original February guidance.

Wilfred C.W. Chiang: This is Al. The only thing I would add is that it's actually coming online, and this stuff is happening pretty well in line with what we assumed in our original February. Got it. Thank you. Thank you. I would now like to turn the conference back to Willie Chiang for his closing remarks, sir. Thank you. As always, we enjoy visiting with you. Thanks for dialing in and for your ongoing attention and support of what we're doing. We look forward to seeing you out on the road. Talk to you soon. This concludes today's conference call. Thank you for participating. You may now disconnect.

Got it thank you.

Speaker Change #141: Okay.

Speaker Change #141: Thank you I would now like to turn the conference back to Willie Chiang for closing remarks, Sir.

Wilfred C.W. Chiang: Thank you as always we enjoy visiting with you thanks for dialing in and your your.

Wilfred C.W. Chiang: Your ongoing attention and support of what we're doing we look forward to seeing you out on the on the road talk to you soon.

Speaker Change #142: And this concludes today's conference call. Thank you for participating you may now disconnect.

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