Q1 2025 Plains GP Holdings LP Earnings Call

May 9, 2025

Operator: Good day, and thank you for standing by. Welcome to the PAA and PAGP Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Operator: Good day and thank you for standing by. Welcome to the PAA and PAGP Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' 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, you will then hear an automated message advising you your hand is raised. I would now like to hand the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Good day, and thank you for standing by and welcome to the PAA and PAGP first quarter 2025 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one.

Speaker Change: On your telephone you will then hear an automated message advising you. Your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Blake Fernandez: Thank you, Michelle. Good morning. Welcome to Plains All American Q1 2025 Earnings Call. Today's slide presentation is posted on the investor relations website under the news and events section at ir.plains.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 2. An overview of today's call is provided on slide 3. A condensed consolidating balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chiang, Chairman and CEO, Al Swanson, Executive Vice President and CFO, along with other members of the management team. With that, I will turn the call over to Willie.

Blake Fernandez: Thank you Michele good morning, and welcome to Plains, All American first quarter 2025 earnings call. Today's slide presentation is posted on the Investor Relations website under the news and events section at IR Dot claims Dot com an audio replay will also be available following today's call.

Blake Fernandez: Important disclosures regarding forward looking statements and non-GAAP financial measures are provided on slide two.

Blake Fernandez: An overview of today's call is provided on slide three a condensed consolidating balance sheet for PAGP and other reference materials are in the appendix today's call will be hosted by Willie Chiang Chairman and CEO Al Swanson Executive Vice President and CFO, along with other members of the management team.

Speaker Change: That I will turn the call over to Willy Thank.

Willie Chiang: Thank you, Blake Fernandez. Good morning, everyone, and thank you for joining us. This morning, we reported solid Q1 performance with an adjusted EBITDA attributable Plains of $754 million, which Al Swanson will cover in more detail. Before providing an update on our efficient growth initiatives, I would like to offer some thoughts on the current market and policy environment. The ongoing uncertainty on trade tariffs is weighing on economic forecasts and creating significant volatility. Additionally, the dissension among OPEC members and the prospects of incremental supply coming to market has resulted in a lower-priced commodity than anticipated at the beginning of the year. Nevertheless, we believe a lower price environment will ultimately reinforce the cyclical nature of the commodity markets, leading to a constructive medium- to long-term outlook. Slide 4 outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time.

Willie Chiang: Thank you Blake good morning, everyone and thank you for joining US. This morning, we reported solid first quarter performance with an adjusted EBITDA attributable plains of a $754 million, which al will cover in more detail.

Willie Chiang: Before providing an update on our efficient growth initiatives I'd like to offer some thoughts on the current market and policy environment. The ongoing uncertainty on trade tariffs is weighing on economic forecasts and creating significant volatility.

Willie Chiang: Additionally, the dissension among OPEC members and the prospects of incremental supply coming to market has resulted in a lower price commodity than anticipated at the beginning of the year. Nevertheless.

Willie Chiang: We believe a lower price environment will ultimately reinforced the cyclical nature of the commodity markets, leading to a constructive medium to long term outlook.

Willie Chiang: Slide 4 outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time.

Willie Chiang: Slide four outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time.

Willie Chiang: Despite the given and the current market volatility, our business remains resilient. Assuming a $60 to $65 WTI environment persists for the remainder of the year, we would expect both our 2025 EBITDA guidance and Permian growth outlook could be in the lower half of the respective ranges. Our NGL segment remains largely insulated from lower commodity prices, with approximately 80% of our estimated C3-plus spec products sales hedged for 2025. In this environment, we believe it's more important than ever to remain focused on what we can control. As a result, we continue to execute on our efficient growth strategy, generating significant free cash flow, maintaining a highly flexible balance sheet where our leverage ratio remains towards the low end of our target range, and returning capital to our unitholders. Turning to a few highlights.

Willie Chiang: Despite the given the current market volatility our business remains resilient, assuming a $60 to $65 WT environment persists for the remainder of the year. We would expect both our 2025 EBITDA guidance and Permian growth outlook could be in the lower half of their respective ranges.

Willie Chiang: Our NGL segment remains largely insulated from lower commodity prices with approximately 80% of our estimated C. III plus spec products sales hedged for 2025.

Willie Chiang: In this environment, we believe it is important more important than ever to remain focused on what we can control as a result, we continue to execute on our efficient growth strategy generating significant free cash flow, maintaining a highly flexible balance sheet or our leverage ratio remains towards the low end of our target range and <unk>.

Willie Chiang: Returning capital to our unit holders.

Willie Chiang: Turning to a few highlights in our NGL segment are transitioned to more fee based earnings continues with our 30000 barrel a day fractionation bottleneck project at Fort SaaS, having been placed into service during the second quarter, along with other expansions of our NGL and condensate gathering systems being completed throughout the year.

Willie Chiang: In our NGL segment, our transition to more fee-based earnings continues with our 30,000 barrel a day fractionation bottleneck project at Fort Sask having been placed into service during the Q2, along with other expansions of our NGL and condensate gathering systems being completed throughout the year. These projects are supported by long-term customer commitments and enhance our integrated NGL value chain. In our crude segment, we had two small strategic transactions. We acquired the remaining 50% equity in the Cheyenne Pipeline in the Rockies. This asset serves as a vital connection between Guernsey and downstream crude oil pipelines, Saddlehorn and White Cliffs, which Plains owns an equity interest in. In May, we acquired Black Knight Midstream, a Midland-based crude gathering system, for approximately $55 million. Both transactions complement our existing asset base and build upon our track record of successful bolt-on transactions.

Willie Chiang: These projects are supported by long term customer commitments and enhance our integrated NGL value chain.

Willie Chiang: In our crude segment, we had two small strategic transactions, we acquired the remaining 50% equity in the Cheyenne pipeline in the Rockies. This asset serves as a vital connection between Guernsey and downstream crude oil pipelines saddle horn and white cliffs, which plains owns an equity interest in <unk>.

Willie Chiang: May we acquired Black Knight Midstream Midland Basin crude gathering system for approximately $55 million.

Willie Chiang: Both transactions complement our existing asset base and build upon our track record of successful bolt-on transactions.

Willie Chiang: Both transactions complement our existing asset base and build upon our track record of successful bolt on transactions.

Willie Chiang: As shown on slide 5, over the last several years, we've successfully deployed approximately $1.3 billion into bolt-on acquisitions. We continue to believe these opportunities present attractive risk-adjusted returns. Our balance sheet flexibility provides financial capacity to continue to progressing the opportunity set. Before turning the call over to Al, I do want to say thank you and acknowledge our colleague, Harry Pefanis, our president and co-founder of the company. Harry's played an integral part in building Plains since its inception decades ago. We're very thankful for his relentless focus on developing lasting relationships, customer service, and operational excellence, together with an unwavering commitment to integrity, accountability, and teamwork. We wish Harry the very best in his retirement. With that, I'll turn the call over to you, Al.

As shown on slide five over the last several years, we have successfully deployed approximately $1 3 billion into bolt on acquisitions. We continue to believe these opportunities present attractive risk adjusted returns and our balance sheet flexibility provides financial capacity to continue to progressing the opportunity set.

Willie Chiang: Before turning the call over to Al I do want to say, thank you and acknowledge our colleague Eric <unk>, our president and co founder of the company Ares played an integral part in building planes since its inception decades ago, we're very thankful for his relentless focus on developing lasting relationships customer service and operate.

Willie Chiang: <unk> excellence together with an unwavering commitment to integrity accountability and teamwork, we wish Harry that very very best in his retirement with that I'll turn the call over to you well. Thanks.

Al Swanson: Thanks, Willie. We reported Q1 Crude Oil Segment adjusted EBITDA of $559 million, which was impacted by winter weather and higher than expected refinery downtime. These events drove volumes below expectations in Q1. However, we have seen a recovery in April and May with a healthy ramp in our gathering volumes across our system. Moving to our NGL Segment, we reported segment adjusted EBITDA of $189 million, which benefited from higher frac spreads and NGL sales volumes driven by stronger border flows. Slide six and seven in today's presentation contain segment-adjusted EBITDA walks that provide additional details on our Q1 performance. With regard to trade tariffs, I would like to provide an update since our last earnings call. Currently, the energy product imported into the United States from our Canadian operations are exempt under the USMCA, limiting the direct impact of tariffs on our business.

Al Swanson: Thanks, Lily we reported first quarter crude oil segment, adjusted EBITDA of $559 million.

Willie Chiang: Which was impacted by winter weather and higher than expected refinery downtime. These events drove volumes below expectations in the quarter. However, we have seen a recovery in April and May with the healthy ramp in our gathering volumes across our system.

Willie Chiang: Moving to our NGL segment, we reported segment adjusted EBITDA of $189 million, which benefited benefited from higher frac spreads and sale NGL sales volumes driven by stronger border flows.

Willie Chiang: Slides six and seven in today's presentation contains segment adjusted EBITDA walk that provide additional details on our first quarter performance with.

Al Swanson: With regard to trade tariffs, I would like to provide an update since our last earnings call. Currently, the energy product imported into the United States from our Canadian operations are exempt under the USMCA, limiting the direct impact of tariffs on our business.

Willie Chiang: With regard with regard to trade tariff I would like to provide an update since our last earnings call currently the energy product imported into the United States.

Willie Chiang: From our Canadian operations are exempt under the U S MCA limiting the direct impact of tariff on our business.

Al Swanson: While there is a fair amount of uncertainty in the markets today, you will see on slide 8, we left our key assumptions unchanged for the year, including a $75 per barrel WTI price and 200,000 to 300,000 barrels per day of year-over-year Permian growth. Key sensitivities are provided within the slide, allowing investors to analyze various scenarios. As illustrated on slide 9, we expect to generate strong cash flow this year with adjusted free cash flow of about $1.1 billion, which excludes changes in assets and liabilities and is reduced by approximately $635 million for acquisitions. With that, I'll turn the call back to Willie.

Willie Chiang: While there is a fair amount of uncertainty in the markets. Today, you will see on slide eight we left our key assumptions unchanged for the year, including a $75 per barrel <unk> price and 200 to 300000 barrels per day of year over year Permian growth key sensitive.

Willie Chiang: <unk> are provided within the slide, allowing investors to analyze various scenarios as illustrated on slide nine we expect to generate strong cash flow. This year with adjusted free cash flow of about $1 1 billion, which excludes changes in assets and liabilities and is reduced by approximately.

Willie Chiang: <unk> $635 million for acquisitions with that I will turn the call back to Willy.

Willie Chiang: Thank you, Al. We're off to a solid start for the year, albeit in a more volatile and uncertain market. As shown on slide 10, we continue to make progress on our key financial objectives and are well-positioned to execute our strategy in a highly volatile environment. In summary, our strong balance sheet offers financial capacity and flexibility. We continue to demonstrate capital discipline while executing on our efficient growth strategy, including our focus on bolt-on acquisitions, and we remain committed to returning cash to our unitholders. Before we hand it back to Blake, Harry, would you like to make a few comments?

Thank you al.

We're off to a solid start for the year, albeit in a more volatile and uncertain market as shown on slide 10, we continue to make progress on our key financial objectives and are well positioned to execute our strategy in a highly volatile environment in summary, our strong balance sheet offers financial capacity and flexibility.

Willie Chiang: We continue to demonstrate capital discipline, while executing on our efficient growth strategy, including our focus on bolt on acquisitions.

Willie Chiang: And we remain committed to returning cash to our unit holders before we hand back to Blake Gary would you like to make a few comments.

Harry Pefanis: Yes. Thank you, Willie. I appreciate that. Before we go to Q&A, first I'd like to thank Willie for his kind remarks and his leadership. I've enjoyed working with him over these last 10 years. He has a great team, and I can tell you the team is as strong as it's ever been. I'd also like to thank all of you for joining us on our quarterly earnings call and your continued interest in Plains. With that, I'll turn it over to Blake to lead us into Q&A.

Willie Chiang: Yes. Thank you.

Blake Gary: I appreciate that and this before we go to Q&A.

Willie Chiang: I think really for us kind remarks, and his leadership I've enjoyed working with him over the last 10 years.

Willie Chiang: Yes, it's a great team, but I can tell you the team is as strong as it's ever been.

Blake Gary: I'd also like to thank all of you.

Blake Gary: For joining us on our quarterly earnings call and your continued interest in plains.

Blake Gary: With that I'll turn it over to Blake.

Blake Fernandez: Thanks, Harry, and again, congrats. As we enter the Q&A session, please limit yourself to 2 questions. 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 after the call to address additional questions. Michelle, I think we're ready to go to the Q&A session, please.

Speaker Change: So into Q&A, Thanks area and again, congrats as we enter the Q&A session. Please limit yourself to two questions 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.

Speaker Change: Our team will also be available after the call to address additional questions Michelle.

Speaker Change: Michelle I think we are ready to go to the Q&A session. Please.

Operator: Thank you. As a reminder to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. One moment for our first question. Our first question is going to come from the line of Gabriel Moreen with Mizuho. Your line is open. Please go ahead.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for our first question.

Speaker Change: Our first question is going to come from the line of Gabriel Moreen with Mizuho. Your line is open. Please go ahead.

Gabriel Moreen: Hey, good morning, everyone, congrats to Harry on the retirement and an excellent career at Plains. Wanted to ask first about capital allocation in the current environment. It seems like you're still committed to the distribution growth in 2026. Given volatility in the unit price and the like, I was wondering if there's any thoughts in the shifting of the mindset to maybe spend more on buybacks versus distribution growth, again, given all the volatility out there?

Gabriel Moreen: Hey, good morning, everyone and congrats to hurry on all of the retirement of an excellent current planes.

Gabriel Moreen: I wanted to ask first about capital allocation in the current environment. It seems like Youre still committed to the distribution growth in 2026.

Gabriel Moreen: All told me in the unit price and the way I was wondering if theres any thoughts from the shift shifting our mindset to maybe spend more on buybacks versus distribution growth again, given all the volatility out there.

Al Swanson: Gabe, this is Al. I'll take a shot at it. No really change in our view with regard. Focus will continue to be on distribution growth as the primary method for returning cash to shareholders. Unit repurchases are a component of our capital allocation. No change there. Opportunistic and market dislocation. We did buy a small amount in April, just as we were going into blackout. It was only about $7.5 million worth. I think it was about 475,000 units. It's a component, but I want to say there's been no change in our thinking around opportunistic and market dislocation. We'll see what the future brings.

Al Swanson: Gabe This is al I'll take a shot at it.

Al Swanson: No really change in our in our view.

Al Swanson: With regard focus will be continue to be on distribution growth is the primary method for returning cash to shareholders.

Al Swanson: Unit repurchases are a component of our.

Al Swanson: Our capital allocation no change there opportunistic and market dislocation.

Al Swanson: We did buy a small.

Al Swanson: In April just as we're going into blackout, it was only about $5 million.

Speaker Change: I think it was about 475000 unit, it's a component, but I want to say there has been no change in our thinking around opportunistic in market dislocation. So we'll see what the future brands.

Gabriel Moreen: Got it. Thanks, Al. Appreciate that. Maybe if I could ask sort of on the M&A landscape. You've clearly had continued success here with these tuck-in deals. Just with all the volatility out there, the latest you're seeing in terms of whether that volatility is kind of a catalyst to do more deals, or do you think it's kind of been an impediment to price discovery in the current environment?

Speaker Change: Got it thanks, I appreciate that and then.

Speaker Change: Maybe if I can ask sort of on the M&A landscape.

Speaker Change: You've clearly been have continued success here with these tuck in deals just with all the volatility out there.

Speaker Change: The latest you're seeing in terms of whether that volatility is kind of a catalyst to do more deals or do you think it's kind of been an impediment to price discovery in the current environment.

Willie Chiang: Yeah, Gabe, this is Willie. I'll take that one. Clearly, more volatile markets create a little more questions. What I would tell you is that good deals always take time to get to win-win. I think we're positioned very well to be able to do that because of the nature of where we sit in the value chain. We think we still have a pretty ample supply of opportunities out there, and we continue to chase them. Maybe the only other thing to mention is, in an environment like this, capital discipline is absolutely critical, and we take a real hard look at risk-adjusted returns, but we expect to be able to get to more win-win deals throughout the year.

Willie Chiang: Yes, Gabe this is Willie I'll take that one.

Willie Chiang: Clearly, but more volatile markets create a little more questions and what I would tell you is that good deals always take time to get to win win and I think we're positioned very well to be able to do that because of the nature of what we sit in the value chain. We think we still have a pretty ample supply of opportunities out there and we continue to chase them.

Willie Chiang: And we will.

Willie Chiang: Maybe the only other thing that dimension is in an environment like this capital discipline is absolutely critical and we take a real hard look at risk adjusted returns, but we expect to be able to get to more win win deals throughout the year.

Gabriel Moreen: Appreciate it. Thanks, Willie.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

Willie Chiang: I appreciate it thanks a lot.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

Manav Gupta: Good morning. Looks like you were able to bring up your fractionation complex in Canada. Help us understand the cadence of earnings in Canada now that this plant is up and running.

Speaker Change: Good morning looks like you were able to pick up their fractionation complex in Canada. So help us understand the cadence of earnings in Canada now.

Speaker Change: This time is up and running.

Chris Chandler: Manav, it's Chris Chandler. Yeah, we're excited to bring up the expanded capacity of 30,000 barrels a day at our PFS facility in Edmonton, Alberta. We brought it up just ahead of our new commercial contracts taking effect. They don't all ramp to full volume immediately. They'll ramp over the remainder of this year and a little into next year. This is also part of a multi-project effort where we're doing some additional connectivity and gathering investments along that value chain that'll also come online throughout 2025. I think you'll see that gradually contribute throughout the year and on a kind of full run rate basis starting in 2026.

Speaker Change: Okay.

Speaker Change: Manav, it's Chris Chandler so.

Speaker Change: Yes.

Speaker Change: We're excited to bring up the expanded capacity of 30000 barrels a day at our PFS.

Speaker Change: Facility in Edmonton, Alberta.

Speaker Change: We brought it up just ahead of our new commercial contracts taking effect.

Speaker Change: Ill ramp to full volume immediately although ramp over the remainder of this year and a little into next year.

Speaker Change: This is also part of a multi project effort, where we're doing some additional connectivity.

Speaker Change: <unk>.

Speaker Change: Gathering investments along that value chain that will also come online throughout 2025 so.

Speaker Change: You will see that gradually contribute throughout the year.

Speaker Change: Kind of full run rate basis, starting in 2026.

Manav Gupta: Perfect. Can we get a few more details about the Black Knight Midstream Permian Basin, the deal you did for about $55 million, the benefits of the deal, and why you decided to go ahead with that one? Thank you.

Speaker Change: Okay.

Speaker Change: Can you get a few more details about the black Knight Midstream Permian basin, the dilutive of about $55 million at the benefits of the deal and why you decided to go ahead with that Glenn. Thank you.

Chris Chandler: Sure. It's right in the middle of our Northern Midland Basin gathering footprint. It's a position that we operated on behalf of the producer and their affiliate. We negotiated a transaction with them. It's got some long-term capital synergies helping us to get to other positions that are on the other side of that. It's in the absolute core of the Northern Midland Basin. The producer on the system is one of their top assets, so we feel very comfortable with the rock, the resource, the inventory, the purchasing multiple that we did, and it's a good, as Willie said, a win-win. It's a good win for our private equity partner that developed the asset, and it's a great win for Plains longer term to own this asset.

Speaker Change: Sure.

Speaker Change: Right in the middle of our northern Midland Basin gathering footprint.

Speaker Change: Position that we operate on behalf of the.

Speaker Change: The producer and their affiliate.

Speaker Change: And we negotiated the transaction with them that's got some long term capital synergies, helping us to get to other physicians that are on the other side of that it's in the absolute core of the northern Midland Basin.

Speaker Change: The producer on the system at one of their top assets. So we feel very comfortable with the rock resource inventory.

Speaker Change: The purchasing multiple that we did and it's a good.

Speaker Change: As he said a win win is a good win for our private equity partner that.

Speaker Change: The asset is a great way for planes longer term to own this asset.

Manav Gupta: Thank you.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

Michael Blum: Thanks. Good morning, everyone. Wondering if you can give us your latest thoughts on conversations with producers, what they're telling you, and just your latest outlook on Permian volumes. I realize you kept the guidance at 200,000 to 300,000 barrels, but curious where you think that's sort of really trending, and also for 2026. Thanks.

Michael Blum: Thanks, Hey, good morning, everyone I Wonder if you can give us your latest.

Speaker Change: Latest thoughts on conversations with producers what they are telling you and just your latest outlook on Permian volumes I realize you kept the guidance at 200 300000 barrels but.

Speaker Change: Where do you think that sort of really trying to make and also for 26. Thanks.

Chris Chandler: Sure, Michael. I'll stick to 2025, but what I can tell you is we've already grown over 100,000 barrels a day from the end of last year to now. The 200,000 barrels a day does not seem very Herculean as a growth expectation for this. I'd say by and large, the producers are in a very similar situation. It's a bit of wait and see. The volatility just started 1 month ago. You don't make 2 or 3-year plans based on 1 month of activity. You've seen some rebounds in it. I think in the next 3 months, it's a function of time and it's a function of flat price. It's a short period of time at this price. If it sustains for a longer period of time here, you will see some flattening out.

Speaker Change: Sure Michael.

Speaker Change: And 20 fives, but what I can tell you as you have already grown over 100000 barrels a day from the <unk>.

Speaker Change: Last year to now so the 200000 barrels a day without seeing very herculean as a growth expectation for this I would say by and large.

Speaker Change: Lasers are very in a very similar situation, it's a bit of wait and see the volatility just started a month ago and so you don't make two or three year plans based on one month of activity and you've seen some rebound in that so I think.

Speaker Change: And the next three months, it's a function of time and it's a function of flat pricing. So it's a short period of time at this price if it's sustained for a longer period of time here you will see some flattening out.

Chris Chandler: If it goes below this, below $55 a barrel, you've heard from the producer community, you would start to go to flat and maybe even decline. If it gets above $65 for an extended period of time, you'll see it go the other way. You'll see it back to growth. From our standpoint

Speaker Change: If it goes below this hit below $55 barely heard from the producer community you can start to go to flat and maybe even decline against above $65 for an extended period of time, you'll see it go the other way youll see it back to growth. So from our standpoint, there is a bit of wait and see at this point Youre right in this position, where you shouldnt see much dear.

Jeremy Goebel: There's a bit of wait and see at this point. You're right in this position where you shouldn't see much difference in activity for the next three to six months. Six-plus months, you might see some deferral of completions and maybe some rigs go down. It's very consistent with what you've heard from the upstream community. That's what they're telling us as well. Like I said, our guidance here is just predicated on what could happen in the price range, but the volatility literally started a month ago, so it's a function of time and price.

Chris Chandler: There's a bit of wait and see at this point. You're right in this position where you shouldn't see much difference in activity for the next three to six months. Six-plus months, you might see some deferral of completions and maybe some rigs go down. It's very consistent with what you've heard from the upstream community. That's what they're telling us as well. Like I said, our guidance here is just predicated on what could happen in the price range, but the volatility literally started a month ago, so it's a function of time and price.

Speaker Change: And activity for the next three to six months six plus months you might see some deferral of completions and maybe some rigs go down but it is very consistent what you've heard from the upstream community, that's what they're telling us as well so like I said.

Speaker Change: Our guidance here is just predicated on what could happen in that price range, but the volatility literally started months ago. So it's a function of time and price.

Willie Chiang: Yeah. Michael, this is Willie. I think the key point in this is when you think about 2025, with the sensitivities that we've given, the impacts to us are very modest, could be very modest. Really, the broader thing is to stay engaged and understand what's going on in the rest of the world. This is going to be a 2026 plus issue if it becomes an issue. As we've outlined on our slide deck, I actually think this is just going to reinforce the cyclability and the cycles of commodities. As prices go lower, tend to bring more activity in, and prices go higher, it's the other way around.

Willie Chiang: And Michael This is Willie I think.

Speaker Change: The key point and this is when you think about 25 with.

Willie Chiang: With the sensitivities that we've given the impacts to us are very modest.

Willie Chiang: Could be very modest and.

Willie Chiang: And really the broader thing is to stay engaged and understand what's going on in the rest of the world is going to be at 26 plus.

Willie Chiang: Issue if it if it becomes an issue, but as we outlined on our slide deck I actually think we.

Just just going to reinforce their cyclicality.

Willie Chiang: The cycle ability and the cycles of commodities as prices go lower tend to tend to bring more activity and prices go higher it's the other way around.

Michael Blum: Great. Understood. Appreciate that. Then, second question, just wanted to ask how should we think about the acquisition multiples you paid for the 2 bolt-on deals this quarter? Thanks.

Willie Chiang: Great understood I appreciate that and then some.

Speaker Change: Second question I, just wanted to ask how should we think about the acquisition multiples you paid for the two bolt on deals this quarter. Thanks Glenn.

Chris Chandler: Jeremy, go ahead and take that.

Willie Chiang: Jeremy, go ahead and take that.

Jeremy Goebel: As opposed to multiples, they both hit our return thresholds or higher. Willie mentioned capital discipline. The first was a reduction in future MVCs in exchange for taking ownership of the asset from a partner, and we priced in our rates of return there. We've done as well or better filling the pipeline after the fact. That's the first one. The gathering transaction, once again, our goal is to earn our base return with limited synergy allocation and then compress that multiple with synergies. I'd say both of them fit the model of the previous 12 acquisitions.

Willie Chiang: <unk> take that so as opposed to multiple.

Speaker Change: Both hit our return thresholds required.

Willie Chiang: And capital discipline.

Speaker Change: The first was <unk>.

Speaker Change: <unk> future Mdc's in exchange for taking ownership of the asset from a partner and we priced in our rates of return there and.

Speaker Change: We've done as well or better filling the pipeline after the fact.

Speaker Change: So that's the first one the gathering transaction once again, our goal is to earn our base return.

Speaker Change: With limited synergy allocation in the compressed that multiple with synergies I'd say both of them fit the model of the previous 12 acquisition.

Michael Blum: Thanks.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Jeremy Tonet with JP Morgan. Your line is open. Please go ahead.

Speaker Change: Thanks.

Speaker Change: Thank you and our next question.

Speaker Change: Our next question is going to come from the line of Jeremy Tonet with Jpmorgan. Your line is open. Please go ahead.

Robin Reddy: Hey, good morning. This is Robin Reddy, on for Jeremy. The materials highlighted expectations for $300 to 400 million of annual growth CapEx. Maybe just wondering how you think about CapEx spend at this point and how much might be locked in for 2026?

Speaker Change: Hey, good morning, this is robin ready.

Speaker Change: Jeremy the materials highlighted.

Speaker Change: Patients for $300 million to $400 million of annual growth Capex.

Speaker Change: Maybe just wondering how you think about capex spend at this point and how much might be locked in for <unk>.

Chris Chandler: Hi, Robin Reddy, this is Chris Chandler. We left our investment capital guidance for 2025 unchanged at $400 million net to Plains. We just wrapped up the expansion project at Fort Saskatchewan that we mentioned, and we have some related NGL supply and connectivity projects that'll happen later this year. On the Permian side, where the rest of our capital is largely allocated, that connection capital and gathering spend is designed to pace our producers. We do typically schedule that work 6 to 12 months out, so we're nearly into 2026 on that segment. If we were to see a large change in activity from the producers, we could adjust our capital and would obviously do so in response to anything that happens in that area.

Speaker Change: 2026.

Chris Chandler: Hi, Robin this is Chris Chandler.

Chris Chandler: Our investment capital guidance for 2025 unchanged at $400 million net to planes, we just wrapped up the expansion project at Fort SaaS that we mentioned and we have some related NGL supply and connectivity projects that will happen later this year.

Chris Chandler: On the Permian side, where the rest of our capital is largely allocated that connection capital and gathering spend is designed to pace our producers.

Chris Chandler: But we do typically schedule of that work six to 12 months out so were nearly in the 2026 on that segment, but if we were to see a.

Chris Chandler: A large change in activity from the producers.

Chris Chandler: We could adjust our capital would obviously do so in response to anything that happens in that area.

Chris Chandler: As for 2026, we haven't and won't provide guidance yet, but we are feeling comfortable that that capital spend will be in our long-term capital guidance range of $300 to 400 million net to Plains.

Chris Chandler: As for 2026, we haven't and won't provide guidance yet, but we are.

Chris Chandler: Feel uncomfortable that.

Chris Chandler: That capital spend will be in our long term capital guidance range of $300 million to $400 million at the planes.

Robin Reddy: Got it. Thank you. Then on the frac spread, for the hedging, it looks like it's stepped up to 80%. Just wondering if we could get your latest thoughts on the hedging philosophy this year and moving forward.

Chris Chandler: Okay.

Speaker Change: Got it. Thank you and then on the Frac spread.

Chris Chandler: For the hedging it looks like stepped up to 80% in.

Chris Chandler: I was just wondering if we get your latest thoughts on the hedging philosophy this year and moving forward.

Chris Chandler: Jeremy?

Willie Chiang: Jeremy?

Jeremy Goebel: Yeah. It's consistent. We take a fundamental view. We recognize the need to maintain steady cash flow. We set targets, and we continue to execute. We're opportunistic around hedging. Because of the backwardated market, we're more hedged in the front end than the back end, but that's been consistent with the last several years. I don't think anything's changed in the last several years in the strategy.

Jeremy Tonet: Jeremy Yes.

Chris Chandler: And we take our fundamental view, we recognize the need to maintain.

Chris Chandler: Maintain steady cash flow when you set targets and we continue to execute our opportunistic around hedging.

Chris Chandler: Because of the backward dated market, where more hedged than the front end and the back end, but thats been consistent with the last several years I don't think anything's changed in the last several years in this strategy.

Robin Reddy: Thank you.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Sunil Sibal with Seaport Global. Your line is open. Please go ahead.

Chris Chandler: Thank you.

Chris Chandler: Thank you and one for our next question.

Speaker Change: Our next question is going to come from the line of Sunil Sibal with Seaport Global Your line is open. Please go ahead.

Sunil Sibal: Yeah. Hi, good morning, everybody, and congrats to Harry on a successful career at Plains. My first question was related to the sensitivity that was provided with regard to the Permian production. I was curious, is the underlying assumption there that the marginal barrel is moving to a particular market, i.e., Cushing or Houston, and that's kind of primary driver of that sensitivity? Is that sensitivity based on your full-year volumes? Obviously you have almost four months plus of 2025 already in. We should think about that sensitivity on full-year volumes or more like eight-month volumes?

Speaker Change: Yes, hi, good morning, everybody and congrats to you on a successful.

Speaker Change: <unk>.

Speaker Change: Well My first question was related to the sensitivity that was provided.

Speaker Change: Permian production.

Speaker Change: I was curious.

Speaker Change: Is the underlying assumption there that the mazo is moving to a particular market.

Speaker Change: <unk>.

Speaker Change: Mr Houston, and Thats kind of the primary driver of that sensitivity.

Speaker Change: And then.

Speaker Change: Sensitivity based on full year volumes obviously.

Speaker Change: Almost four months plus of.

What are you already kind of already in so we should think about that sensitivity on full year volumes are more like eight months volumes.

Jeremy Goebel: Sunil, this is Jeremy. That guidance was for the full year. Like I had said earlier, we've already grown over 100,000 barrels a day. The view of 200 to 300 still stands for exit to exit 2024 to 2025. As to the Permian Basin, the supply push, the market's going to price where the marginal barrel goes. We don't necessarily have assumptions up front. The prices will dictate that. It's a supply push market, and they have a $60 to $80 commodity they're moving. That last $0.50 is just going to be dictated by the consumer, not necessarily the producer.

Jeremy Tonet: Sunil This is Jeremy that guidance was for the full year and like I had said earlier.

Jeremy Tonet: Having grown over 100000 barrels a day. So the view of 200 to 300 still stands for exit to exit 'twenty four 'twenty five as to the Permian basin that supply post the market has got a price for the marginal barrel goes so they don't necessarily have assumptions upfront that prices will dictate that but it's a supply push market.

Jeremy Tonet: At $60 to $80 commodity Theyre moving that last 50 is just going to be dictated by the consumer not necessarily their producers.

Sunil Sibal: Okay. Thanks for that. One clarification. For full year 2025, you're guiding in the NGL segment 45,000 barrels per day of spec.

Speaker Change: Okay. Thanks for that and then one clarification so thoughtfully.

Speaker Change: 25, Youre guiding in the NGL segment 45000 Boes per day off spec sales.

Sunil Sibal: sales. I presume there is a fair bit of seasonality in that. How much of that would take in Q1?

Speaker Change: Presume there is it fair pertussis mattered in that so how much of that to date in Q1.

Jeremy Goebel: Sunil, I think that's a follow-up question for the IR team, but the seasonality, we use our 8 million barrels of storage to optimize when we sell. The market tells us when to sell those commodities. We produce those back sales. Condensate is sold ratably. Butane and propane are the two that are sold seasonally, but that's a function of price and timing and maximizing value. That's probably a better follow-up question for the IR team.

Speaker Change: So Neil I think Thats a follow up question for the IR team, but the seasonality we use our 8 million barrels of storage to optimize when we sell to the market tells us when to sell those commodities that we produced back sales.

Speaker Change: Condensate is sold Ratably butane and propane are the two that are sold seasonally but that's a function of price and timing.

Willie Chiang: Yeah. Sunil, this is Willie. You'll remember the typical saddle that we have with colder months, obviously more propane's typically sold, so again, our IR team can follow up with you on that.

Speaker Change: Maximizing value, but that's probably a better follow up question from the IR team.

Speaker Change: So Neil this is Willie Youll remember the typical sale that we have.

Speaker Change: Colder months, obviously more propane typically sold in so again, our IR team can follow up with you on that.

John Mackay: Thanks for that.

Sunil Sibal: Thanks for that.

Jeremy Goebel: Thank you.

Willie Chiang: Thank you.

Operator: Thank you. One moment for our next question. Our next question will be from the line of A.J. O'Donnell with TPH&Co.. Your line is open. Please go ahead.

Speaker Change: Thanks for that.

Speaker Change: Thank you thank.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will be from the line of a J O'donnell with Tpa <unk>. Your line is open. Please go ahead.

AJ O'Donnell: Morning, everyone. I was just wondering if I could start on some of the prepared comments about the volume recovery in April and May. Just wondering if you could provide some additional details around that, where you're seeing that along your system, and maybe how that could translate into higher long-haul throughput for the remainder of the year. Thanks.

A.J. O'Donnell: Morning, everyone. I was just wondering if I could start on some of the prepared comments about the volume recovery in April and May. Just wondering if you could provide some additional details around that, where you're seeing that along your system, and maybe how that could translate into higher long-haul throughput for the remainder of the year. Thanks.

Speaker Change: Good morning, everyone.

Speaker Change: I was just wondering if I could start on.

Speaker Change: Some of the prepared comments about the volume recovery in April and May.

Speaker Change: Just wondering if you could provide some additional details around that where youre seeing that are longer system and.

Speaker Change: Maybe how that could translate into.

Speaker Change: Higher long haul throughput for the remainder of the year.

Jeremy Goebel: A.J., hi, this is Jeremy. Thanks for the question. Some of that recovery was you had a strong Q4, then you had weather events in January and February, which kept production down. Some of that was just production coming back online, also with deferral of completions just to get around the weather. This is very typical. You have the best weather periods here in the spring and the fall, and so you see a lot of completions. As we said earlier, the impact of prices, we really haven't seen any impact of prices so far, and we don't expect it for the next month or two.

Jeremy Tonet: Hi, This is Jeremy thanks for the question some of that recovery was you had a strong fourth quarter and then you had weather events in January and February which kept production down. So some of that was just.

Jeremy Tonet: Production coming back online also as deferral of completions just to get around the weather. So it's very typical you have the best best weather periods here in the spring and the fall and so you'll see a lot of completion, so that surge completions. So as we said earlier the impact of prices, we really haven't seen any impact of prices so far in <unk>.

Jeremy Goebel: I think Al was just stating that while volumes were a little bit down in Q1, that was really a function of intrabasin, which is the lowest margin part of our value chain, and that's really feeding some of the long haul, and the long haul down there was driven by downstream demand. To get to your question on long haul, as you get to the summer driving season and refineries ramp back up, you're going to see a pickup in those refining markets, and their demand for crudes. You'll see more crude. It's an interrelated question.

Jeremy Tonet: <unk> expected for the next month or two so I think Alex just stating that while volumes were a little bit down in the first quarter that was really a function of.

Jeremy Tonet: Intra basin, which is the lowest margin part of our value chain and that's really feeding some of the long haul and that was.

Speaker Change: Long held down there was driven by downstream demand so to get to your question on long haul as you get to the summer driving season, our refineries ramped back up youre going to see a pickup in those refining markets and their demand for cruise Youll see more crude Jonathan interrelated question.

AJ O'Donnell: Okay. Appreciate the detail there. Then maybe just one more on the longer term outlook. Granted, we're all kind of theorizing about what's going to happen over the next 6 to 12 months here, with all the backdrop of volatility. Just curious if you guys could provide maybe some updated views about how you're thinking around total Permian long-haul utilization filling up. I know there were some materials provided in a previous investor deck where you're talking about that 80% threshold and pipes hitting that. Yeah, just any comments about how you're thinking about the forward market there.

A.J. O'Donnell: Okay. Appreciate the detail there. Then maybe just one more on the longer term outlook. Granted, we're all kind of theorizing about what's going to happen over the next 6 to 12 months here, with all the backdrop of volatility. Just curious if you guys could provide maybe some updated views about how you're thinking around total Permian long-haul utilization filling up. I know there were some materials provided in a previous investor deck where you're talking about that 80% threshold and pipes hitting that. Yeah, just any comments about how you're thinking about the forward market there.

Jeremy Tonet: Uh huh.

Speaker Change: Okay I appreciate the detail there.

Speaker Change: And then maybe just one more kind of the longer term outlook.

Speaker Change: All right granted.

Speaker Change: We're all kind of theorizing about what's going to happen over the next.

Speaker Change: Six to 12 months here with all the backdrop of volatility, but just curious if you guys could provide maybe some updated views about how youre thinking around total Permian long haul utilization filling up.

Speaker Change: I know there were some.

Speaker Change: Materials provided in our previous investor deck, where youre talking about the 80% threshold in pipe cutting them out.

Speaker Change: Yes, just any comments about how youre thinking about the forward market there.

Jeremy Goebel: Yeah. A.J., that's really a function of production. I think everybody has their own views of production. I think Willie said it in the beginning, which is this is probably not a pause. This is not the stop of growth. You hear different views on that, but our view is the world's going to need this crude oil for a period of time. There's a great resource. There's very well-capitalized producers. They're saying pause at the $55 to 60 range, and we've seen prices pause, which means as you see things recover on the demand side, and you get more certainty around investment and decisions associated with the tariffs and all that settles out, you see demand recover, you see the need for more crude oil recover. This is all related. We're not going to make long-term statements.

Speaker Change: A J, that's really a function of production.

Speaker Change: So I think everybody has their own views of production I think whether you said at the beginning which is this is.

Speaker Change: Probably not a part of it is not to stop of growth you hear different views on that but our view is the world is going to need this crude oil for a period of time. There is a great resource is very well capitalized producers. They are saying pause at $55 50 range and you've seen prices pause, which means as you think see things recover on the demand side.

Speaker Change: Get more certainty around investment in decisions associated with the tariffs and all that settles out you see demand recovery to the need for more crude oil recover. This is all related so we're not going to make long term statements utilization of the pipeline is related to <unk>.

Jeremy Goebel: Utilization of pipelines is related to volumes, our longer term growth profile and expectation for the Permian hasn't changed, I don't think that's changed materially at all. It just might be a timing thing.

Speaker Change: The volumes, but longer term our longer term growth profile and expectations for the Permian Hasnt changed, but I don't think thats changed materially.

Willie Chiang: A.J., I'd just reinforce that. When you think about the current volatility, you've got the tariffs and OPEC, right? Those are the two things that are the catalyst for volatility. I think a lot of our business plan and everyone else's business plan is going to really rest on when that ultimately gets resolved. No one knows the answer to that. We'll just have to keep following it.

Speaker Change: It just might be a timing thing.

Speaker Change: A J just to reinforce that it's when.

Speaker Change: When you think about the current volatility you have got the tariffs tariffs and OPEC alright. Those are the two things that are.

Speaker Change: The catalyst for volatility and I think a lot of our business plan and everyone else's business plan is going to really rest on when that when that ultimately gets resolved and no. One no one knows the answer to that so we'll just have to keep following.

AJ O'Donnell: Thank you very much.

A.J. O'Donnell: Thank you very much.

Willie Chiang: Thank you.

Operator: Thank you. One moment for our next question. Our next question is going to be from the line of John Mackay with Goldman Sachs. Your line is open. Please go ahead.

Speaker Change: Okay.

Speaker Change: Thank you very much thank.

Speaker Change: Thank you. Thank you one moment our next question.

Speaker Change: Our next question is going to be from the line of John Mackey with Goldman Sachs. Your line is open. Please go ahead.

John Mackay: Hey team. Thanks for the time. We've talked a lot about the upstream side, but you guys are also really tied in on the demand side as well. I'd just be curious if you have any read on real-time demand signals and any sign of slowdown specifically you're seeing either on the refining side or on the export side. Thanks.

Speaker Change: Tim Thanks for the time.

Speaker Change: Talked a lot about the upstream side, but you guys are also really tied in on the demand side as well I'd just be curious if you have any any read on kind of real time demand signals and any signs of slowdown specifically youre seeing either on the refining side more on the export side. Thanks.

Jeremy Goebel: Yeah. Those are two different questions. I'd say that very healthy is the global refining markets. Candidly, you haven't seen gasoline prices move much, but you've seen crude prices go down, so crack spreads are very strong, and we're seeing all the refineries come out of turnarounds and run very strong. I'd say that's a part of the reason for lower volumes in Q1 was driven by lower movements to refineries. That's all picking up. That part of the business is very healthy. On the export side, that changes month to month, and even within one-week periods within given months. You've seen some slowdown on movements internationally, but the barrels have to move, so they get priced to move.

Speaker Change: So those are two different questions I'd say the.

Speaker Change: It very healthy the global refining markets.

Speaker Change: And candidly you havent seen gasoline prices move much but you've seen crude prices go down to crack spreads are very strong and we're seeing all the refineries come out of the turnarounds and run very strong. So I'd say, that's a part of the reason for lower volumes in the first quarter was driven by lower movements tube refineries. That's all picking up so that part of the business is very.

Speaker Change: Healthy on the export side that changes month to month, and even within one week periods and given months you've seen.

Jeremy Goebel: Like I said, the Permian is $60 to 80 commodity, and that's going to push to the water, and that's going to price to be sold.

Speaker Change: Some slowdown on movement internationally, but the price of the barrels have to move so they get priced to move but like I said, the Permian is $60 $80 commodity and thats kind of pushed to the water and the price to be sold so I'd say, we're seeing healthy margins globally for refining. So that's that's the thing to pay it.

Willie Chiang: We're seeing healthy margins globally for refining. That's the thing to pay attention to on a forward basis, that demand appears to be healthy.

Jeremy Goebel: We're seeing healthy margins globally for refining. That's the thing to pay attention to on a forward basis, that demand appears to be healthy.

John Mackay: I appreciate that. Thanks. Maybe just going back to, I think it was Gabe's question, and Willie, you commented a little bit more here, but just on capital allocation. I think now at the end of the quarter, you're still at the bottom end of the leverage range. Just curious how you guys are thinking about kind of managing within that range, given the potential for the backdrop on the macro side to get a little softer. Is that changing your view at all on where you want to be in that specifically?

Speaker Change: Pension too on a forward basis that demand appears to be healthy.

Speaker Change: I appreciate that thanks, and maybe just going back to.

Speaker Change: I think it was <unk> question and will you commented a little bit more here, but just on capital allocation.

Speaker Change: And I think now at the end of the quarter Youre still at the bottom end of the leverage range. Just curious how you guys are thinking about kind of managing within that range.

Speaker Change: Given the potential for the backdrop on the macro side to go all soft or is that changing your.

Willie Chiang: John, I'll start. Al can certainly add. We've been very clear about our capital allocation plan. One, we're committed to returning cash to the unit holders. We've got our targeted increase to a coverage limit that we've announced years ago. We're going to execute on that. We are also very optimistic and continue to work on the bolt-ons. We think that opportunity set is out there. That is really the primary focus on the highest return options for cash. Those two are going to drive it. Our leverage is at the lower end. If there were some transactions that made sense, we've always said that we would allow the leverage to go up with the understanding and the planning that it doesn't stay up.

Speaker Change: View at all on where you want to be in that specifically.

Speaker Change: John I'll start out and certainly add but we've been very clear about our capital allocation plan. One we're going to we're committed to returning cash to the unitholders and we've got our targeted increase until.

Speaker Change: Until coverage limit that we've announced years ago, and we're going to execute on that we are also very optimistic and continue to work on the bolt ons and we think that opportunity set is out there and that is really the primary.

Speaker Change: Focus on the highest return options for cash so.

Speaker Change: Those two are going to drive our leverage.

Speaker Change: Is that the lower end if there were some transactions that made sense, we've always said that.

Speaker Change: We would we would allow the leverage to go up with the with the understanding that the planning that it doesn't stay up so we're using that leverage range and really to our benefit as we think about what we might might be able to do as far as growing in a capital disciplined way al anything that they do.

Willie Chiang: We're using that leverage range really to our benefit as we think about what we might be able to do as far as growing in a capital disciplined way. Al, anything to add?

Al Swanson: Yeah. The only thing I would add is, it is a range, the leverage range. We don't have the stated desire to be at the bottom end or below on a sustained basis. We do look at the ability to use some of that capacity for strategic quality investments as we look go ahead. We just recently, in the last year, got BBB rated at all three agencies. We do not view and have no interest in putting leverage at a point that would jeopardize any of those ratings.

Speaker Change: Only thing I would add is it is a range the leverage range.

Speaker Change: We don't have the stated desire to be at the bottom end or below.

Speaker Change: On a sustained basis, so that we do look at the ability to use some of that capacity for strategic quality investments.

Speaker Change: As we look go ahead.

Speaker Change: We just recently.

Speaker Change: In the last year got Triple B rated at all three agencies.

Speaker Change: We do not view and have no interest in putting.

John Mackay: I appreciate it, guys. Thank you.

Speaker Change: Leverage at a point that was.

Speaker Change: Jeopardize any of those ratings.

Operator: Thank you. 1 moment for our next question. Our next question is going to come from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

Speaker Change: I appreciate the color. Thank you.

Speaker Change: Thank you and one moment our next question.

Speaker Change: Our next question comes from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

Theresa Chen: Morning. I wanted to go back to the comment about M&A opportunities and the volatile landscape effectively creating more opportunities within this part of your capital allocation strategy. Are you seeing more sellers come to market at this juncture? Do you expect this to happen as the year unfolds, depending on where pricing goes? If there are more sellers coming to market, would you expect a more rapid pace of acquisitions, just given the state of your leverage, your balance sheet, and you might only have a short window to execute? How do you view that?

Theresa Chen: Good morning, I wanted to go back to the comment about M&A opportunities in the volatile landscape and effectively creating.

Speaker Change: More opportunities.

Speaker Change: This part of our capital allocation strategy.

Speaker Change: Are you seeing more sellers come to market at this juncture or do you expect this to happen as the year unfolds, depending on where pricing goes.

Speaker Change: And if there are more sellers coming to market, but you expected more rapid pace of acquisitions, just given the state of your.

Speaker Change: Collaboration and your balance sheet and only have a short window to execute how do you view that.

Willie Chiang: Hey, Theresa, it's Willie. The answer to your question is, I think it's a pretty broad range of opportunities. If you looked at the list of things that we've done, I would argue that some of those transactions were done because of where perhaps a refiner was in the cycle and wanting to monetize. We've had similar discussions with upstream folks on where do they want to deploy capital and how do they monetize. This truly is kind of a back and forth with our partners on an everyday basis on how do you win and how do we get to something. The thing I would point out is, and I think you understand our system well, because of the network that we have and the relationships we have with a lot of these partners, we can create value in many different ways.

Willie Chiang: Hey, Theresa its Willy.

Speaker Change: The answer to your question is.

Speaker Change: I think it's a pretty broad range of opportunities I mean, if you looked at the list of things that we've done I would argue that some of those transactions were done because of where perhaps a refiner wasn't the cycle and wanting to monetize and we've had similar discussions with upstream folks on where do they want to deploy capital.

Speaker Change: And how do they monetize so this truly is kind of a back and forth with our partners on an everyday basis on how do you win and how do we get to something in the thing I would point out is and I think you understand our system well because of the network that we have in.

Willie Chiang: The thing I would point out is, and I think you understand our system well, because of the network that we have and the relationships we have with a lot of these partners, we can create value in many different ways.

Willie Chiang: Lots of times it's not just simply a bid ask on the asset. It's a bid ask on the asset, but we have more opportunities to create value that create win-win situations. I know it's a little bit general, but hopefully it gives you the dynamics of all the different things that we look at.

Speaker Change: And the relationships, we have with a lot of these partners we can create value in many different ways. So lots of times, it's not just simply a bid ask on the asset. It's a bid ask on the asset, but we have more opportunities to create value I think create win win situations. So I know, it's a little bit general, but hopefully it gives you the dynamics.

Theresa Chen: Thank you so much.

Willie Chiang: Thanks, Theresa.

Speaker Change: Of all the different things that we look at.

Operator: Thank you. I'm showing no further questions at this time, and I would like to hand the conference back over to Willie Chiang for closing remarks.

Speaker Change: Thank you so much.

Speaker Change: Thanks, Teresa and thank you and I'm showing no further questions at this time I would like to hand, the conference back over to Willie Chiang for closing remarks.

Willie Chiang: Thanks, Michelle. Well, thanks everyone for dialing in. Strong start to the quarter. We look forward to seeing you on the road and then giving you more updates. Have a great day.

Willie Chiang: Thanks, Michele well, thanks, everyone for dialing in.

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

Willie Chiang: Strong start to the corner, we look forward to seeing you on the road and giving you more updates have a great day.

Operator: Welcome to the PAA and PAGP Q1 2025 Earnings Conference Call. I would now like to hand the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

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

Okay.

Willie Chiang: Yes.

Willie Chiang: [music].

Willie Chiang: Okay.

Willie Chiang: Yes.

Willie Chiang: [music].

Willie Chiang: Okay.

Willie Chiang: [music].

Willie Chiang: Okay.

Willie Chiang: [music].

Willie Chiang: Yes.

Willie Chiang: [music].

Willie Chiang: Yes.

Willie Chiang: [music].

Willie Chiang: Okay.

Willie Chiang: Sure.

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Willie Chiang: Okay.

Willie Chiang: Yes.

Willie Chiang: Okay.

Willie Chiang: Sure.

Willie Chiang: [music].

Speaker Change: Good day, and thank you for standing by welcome to the PAA and PAGP first quarter 2025 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Speaker Change: A question during the session you will need to press star one on your telephone you will then hear an automated message advising you. Your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Blake Fernandez: Thank you, Michelle. Good morning, and welcome to Plains All American Q1 2025 earnings call. Today's slide presentation is posted on the investor relations website under the News & Events section at ir.plains.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 2. An overview of today's call is provided on slide 3. A condensed consolidating balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chiang, Chairman and CEO, Al Swanson, Executive Vice President and CFO, along with other members of the management team. With that, I will turn the call over to Willie.

Speaker Change: An audio replay will also be available following today's call.

Blake Fernandez: Important disclosures regarding forward looking statements and non-GAAP financial measures are provided on slide two.

Speaker Change: An overview of today's call is provided on slide three a condensed consolidating balance sheet for PAGP and other reference materials are in the appendix today's call will be hosted by Willie Chiang Chairman and CEO Al Swanson Executive Vice President and CFO, along with other members of the management team with that I will turn the call over to Willy. Thank.

Willie Chiang: Thank you, Blake. Good morning, everyone, and thank you for joining us. This morning, we reported solid Q1 performance with an adjusted EBITDA attributable Plains of $754 million, which Al will cover in more detail. Before providing an update on our efficient growth initiatives, I'd like to offer some thoughts on the current market and policy environment. The ongoing uncertainty on trade tariffs is weighing on economic forecasts and creating significant volatility. Additionally, the dissension among OPEC members and the prospects of incremental supply coming to market has resulted in a lower-priced commodity than anticipated at the beginning of the year. Nevertheless, we believe a lower price environment will ultimately reinforce the cyclical nature of the commodity markets, leading to a constructive medium- to long-term outlook. Slide 4 outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time.

Thank you Blake good morning, everyone and thank you for joining US. This morning, we reported solid first quarter performance with an adjusted EBITDA attributable plains of a $754 million, which al will cover in more detail.

Speaker Change: Before providing an update on our efficient growth initiatives I'd like to offer some thoughts on the current market and policy environment. The ongoing uncertainty on trade tariffs is weighing on economic forecasts and creating significant volatility additions.

Speaker Change: Additionally, the dissension among OPEC members and the prospects of incremental supply coming to market has resulted in a lower priced commodity than anticipated at the beginning of the year. Nevertheless.

Speaker Change: We believe a lower price environment will ultimately reinforced the cyclical nature of the commodity markets, leading to a constructive medium to long term outlook.

Willie Chiang: Despite the given and the current market volatility, our business remains resilient. Assuming a $60 to $65 WTI environment persists for the remainder of the year, we would expect both our 2025 EBITDA guidance and Permian growth outlook could be in the lower half of the respective ranges. Our NGL segment remains largely insulated from lower commodity prices with approximately 80% of our estimated C3+ spec products sales hedged for 2025. In this environment, we believe it's more important than ever to remain focused on what we can control. As a result, we continue to execute on our efficient growth strategy, generating significant free cash flow, maintaining a highly flexible balance sheet where our leverage ratio remains towards the low end of our target range, and returning capital to our unit holders. Turning to a few highlights.

Speaker Change: Slide four outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time.

Speaker Change: Despite the given the current market volatility our business remains resilient, assuming a $60 to $65 WT environment persist for the remainder of the year. We would expect both our 2025 EBITDA guidance and Permian growth outlook could be in the lower half of their respective ranges.

Speaker Change: Our NGL segment remains largely insulated from lower commodity prices with approximately 80% of our estimated three plus spec products sales hedged for 2025.

Speaker Change: In this environment, we believe it is important more important than ever to remain focused on what we can control as a result, we continue to execute on our efficient growth strategy generating significant free cash flow, maintaining a highly flexible balance sheet or our leverage ratio remains towards the low end of our target range.

Willie Chiang: In our NGL segment, our transition to more fee-based earnings continues with our 30,000 barrel a day fractionation bottleneck project at Fort Sask having been placed into service during Q2, along with other expansions of our NGL and condensate gathering systems being completed throughout the year. These projects are supported by long-term customer commitments and enhance our integrated NGL value chain. In our crude segment, we had two small strategic transactions. We acquired the remaining 50% equity in the Cheyenne Pipeline in the Rockies. This asset serves as a vital connection between Guernsey and downstream crude oil pipelines, Saddlehorn and White Cliffs, which Plains owns an equity interest in. In May, we acquired Black Knight Midstream, a Midland-based and crude gathering system, for approximately $55 million. Both transactions complement our existing asset base and build upon our track record of successful bolt-on transactions.

Speaker Change: And returning capital to our unit holders.

Speaker Change: Turning to a few highlights in our NGL segment are transitioned to more fee based earnings continues with our 30000 barrel a day fractionation bottleneck project at Fort <unk>.

Speaker Change: Having been placed into service during the second quarter, along with other expansions of our NGL and condensate gathering systems being completed throughout the year.

Speaker Change: These projects are supported by long term customer commitments and enhance our integrated NGL value chain.

Speaker Change: In our crude segment, we had two small strategic transactions, we acquired the remaining 50% equity in the Cheyenne pipeline in the Rockies. This asset serves as a vital connection between Guernsey and downstream crude oil pipelines saddle horn and white cliffs, which plains owns an equity interest in <unk> and <unk>.

Speaker Change: May we acquired Black Knight Midstream Midland Basin crude gathering system for approximately $55 million.

Willie Chiang: As shown on slide 5, over the last several years, we've successfully deployed approximately $1.3 billion into bolt-on acquisitions. We continue to believe these opportunities present attractive risk-adjusted returns, and our balance sheet flexibility provides financial capacity to continue to progressing the opportunity set. Before turning the call over to Al, I do want to say thank you and acknowledge our colleague, Harry Pefanis, our President and Co-founder of the company. Harry's played an integral part in building Plains since its inception decades ago. We're very thankful for his relentless focus on developing lasting relationships, customer service, and operational excellence, together with an unwavering commitment to integrity, accountability, and teamwork. We wish Harry the very best in his retirement. With that, I'll turn the call over to you, Al.

Speaker Change: Both transactions complement our existing asset base and build upon our track record of successful bolt on transactions.

Speaker Change: As shown on slide five over the last several years, we have successfully deployed approximately $1 3 billion into bolt on acquisitions. We continue to believe these opportunities present attractive risk adjusted returns and our balance sheet flexibility provides financial capacity to continue to progressing the opportunity set.

Speaker Change: Before turning the call over to Al I do want to say, thank you and acknowledge our colleague Erik <unk>, our president and co founder of the company Ares played an integral part in building planes since its inception decades ago.

Speaker Change: Thankful for his relentless focus on developing lasting relationships customer service and operational excellence together with an unwavering commitment to integrity accountability and teamwork, we wish Harry the very very best in his retirement with that I'll turn the call over to <unk>.

Al Swanson: Thanks, Willie. We reported Q1 Crude Oil segment adjusted EBITDA of $559 million, which was impacted by winter weather and higher than expected refinery downtime. These events drove volumes below expectations in the quarter. However, we have seen a recovery in April and May with a healthy ramp in our gathering volumes across our system. Moving to our NGL segment, we reported segment adjusted EBITDA of $189 million, which benefited from higher frac spreads and NGL sales volumes driven by stronger border flows. Slide 6 and 7 in today's presentation contain segment-adjusted EBITDA walks that provide additional details on our Q1 performance. With regard to trade tariffs, I would like to provide an update since our last earnings call. Currently, the energy product imported into the United States from our Canadian operations are exempt under the USMCA, limiting the direct impact of tariffs on our business.

Speaker Change: Thanks, Lily we reported first quarter crude oil segment, adjusted EBITDA of $559 million, which was impacted by winter weather and higher than expected refinery downtime.

Speaker Change: These events drove volumes below expectations in the quarter. However, we have seen a recovery in April and May with the healthy ramp in our gathering volumes across our system moving to our NGL segment, We reported segment adjusted EBITDA of $189 million, which benefited benefited from higher frac spreads and sale.

Speaker Change: NGL sales volumes driven by stronger border flows slide six and seven in today's presentation contains segment adjusted EBITDA walk that provide additional details on our first quarter performance.

Speaker Change: With regard with regard to trade tariff I would like to provide an update since our last earnings call currently the energy product imported into the United States.

Speaker Change: From our Canadian operations are exempt under the U S MCA limiting the direct impact of tariff on our business.

Speaker Change: While there is a fair amount of uncertainty in the markets. Today, you will see on slide eight we left our key assumptions unchanged for the year, including a $75 per barrel WCS price at 200 to 300000 barrels per day of year over year Permian growth key sensitive.

Speaker Change: <unk> are provided within the slide, allowing investors to analyze various scenarios as illustrated on slide nine we expect to generate strong cash flow. This year with adjusted free cash flow of about $1 $1 billion.

Willie Chiang: Which excludes changes in assets and liabilities and is reduced by approximately $635 million for acquisitions with that I'll turn the call back to Willy.

Willie Chiang: Thank you, Al. We're off to a solid start for the year, albeit in a more volatile and uncertain market. As shown on slide 10, we continue to make progress on our key financial objectives and are well-positioned to execute our strategy in a highly volatile environment. In summary, our strong balance sheet offers financial capacity and flexibility. We continue to demonstrate capital discipline while executing on our efficient growth strategy, including our focus on bolt-on acquisitions, and we remain committed to returning cash to our unit holders. Before we hand it back to Blake, Harry, would you like to make a few comments?

Al Swanson: Thank you al.

Al Swanson: We're off to a solid start for the year, albeit in a more volatile and uncertain market as shown on slide 10, we continue to make progress on our key financial objectives and are well positioned to execute our strategy in a highly volatile environment in summary, our strong balance sheet offers financial capacity and flexibility.

Al Swanson: We continue to demonstrate capital discipline, while executing on our efficient growth strategy, including our focus on bolt on acquisitions and we remain committed to returning cash to our unitholders before we hand back to Blake Gary would you like to make a few comments.

Harry Pefanis: Yes. Thank you, Willie. Appreciate that. Before we go to Q&A, first I'd like to thank Willie for his kind remarks and his leadership. I've enjoyed working with him over this last 10 years. He has a great team, and I can tell you the team is as strong as it's ever been. I'd also like to thank all of you for joining us on our quarterly earnings call and your continued interest in Plains. With that, I'll turn it over to Blake to lead us into Q&A.

Blake Gary: Well I appreciate that and this before we go to Q&A.

Speaker Change: First I'd like to thank Lilly for his kind remarks, and his leadership I've enjoyed working with them over the last 10 years.

Blake Gary: He has a great team and I can tell you the team is as strong as it's ever been.

Blake Gary: I'd also like to thank all of you for.

Blake Gary: Joining us on our quarterly earnings call and your continued interest in plains.

Blake Fernandez: With that I'll turn it over to Blake at least into Q&A. Thanks area and again, congrats as we enter the Q&A session. Please limit yourself to two questions 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 after the call to address.

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. Our first question is going to come from the line of Gabriel Moreen with Mizuho. Your line is open. Please go ahead.

Speaker Change: Additional questions Michelle we're ready to go to the Q&A session. Please.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for our first question.

Gabriel Moreen: Hey, good morning, everyone, and congrats to Harry on the retirement and an excellent career at Plains. Wanted to ask first about capital allocation in the current environment. It seems like you're still committed to the distribution growth in 2026. Given volatility in the unit price and the like, I was wondering if there's any thoughts in the shifting of a mindset to maybe spend more on buybacks versus distribution growth, again, given all the volatility out there?

Speaker Change: Our first question is going to come from the line of Gabriel Moreen with Mizuho. Your line is open. Please go ahead.

Gabriel Moreen: Hey, good morning, everyone and congrats to hurry on all of the retirement of an excellent current planes.

Gabriel Moreen: I wanted to ask first about capital allocation in the current environment. It seems like Youre still committed to the distribution growth in 2026 with given volatility in the unit price and the way it was.

Gabriel Moreen: Was wondering if there was any cost from the shift shifting the mindset to maybe spend more on buybacks versus distribution growth again, given all the volatility out there.

Al Swanson: Gabe This is al I'll take a shot at it.

Al Swanson: No really change in our in our view.

Al Swanson: With regard focus will be continue to be on distribution growth is the primary method for returning cash to shareholders.

Al Swanson: Unit repurchases are a component of our of our capital allocation no change there opportunistic and market dislocation.

Al Swanson: We did buy a small in April just as we're going into blackout. It was only about $7 $5 million worth I think it was about 475000 units, it's a component, but I want to say there has been no change in our thinking around opportunistic in market.

Al Swanson: <unk>, So we will see what the future brings.

Al Swanson: Got it thanks al appreciate that and then.

Speaker Change: Maybe if I could ask sort of on the M&A landscape, you've clearly been have continued success here with these tuck in deals.

Al Swanson: Just with all the volatility out there.

Willie Chiang: Yeah, Gabe, this is Willie. I'll take that one. Clearly, more volatile markets create a little more questions, and what I would tell you is that good deals always take time to get to win-win, and I think we're positioned very well to be able to do that because of the nature of where we sit in the value chain. We think we still have a pretty ample supply of opportunities out there, and we continue to chase them. Maybe the only other thing to mention is, in an environment like this, capital discipline is absolutely critical, and we take a real hard look at risk-adjusted returns, but we expect to be able to get to more win-win deals throughout the year.

Al Swanson: The latest you're seeing in terms of whether that volatility is kind of a catalyst to do more deals.

Al Swanson: Been an impediment to price discovery in the current environment.

Willie Chiang: Yes, Gabe this is Willie I'll take that.

Speaker Change: Clearly, but more volatile markets create a little more questions and what I would tell you is that good deals always take time to get to win win and I think we're positioned very well to be able to do that because of the nature of what we sit in the value chain. We think we still have a pretty ample supply of opportunities out there and we continue to chase.

Willie Chiang: And.

Willie Chiang: Maybe the only other thing to dimension is in an environment like this capital discipline is absolutely critical and we take a real hard look at risk adjusted returns, but we expect to be able to get to more to win deals throughout the year.

Gabriel Moreen: Appreciate it. Thanks, Willie.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

Willie Chiang: I appreciate it thanks a lot.

Manav Gupta: Good morning. Looks like you were able to bring up your fractionation complex in Canada. Help us understand the cadence of earnings in Canada now that this plant is up and running.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will come from the line of Manav Gupta with UBS. Your line is open. Please go ahead.

Speaker Change: Good morning looks like you were able to pick up their fractionation complex in Canada. So help us understand the cadence of earnings in Canada now.

Speaker Change: At this time this up and running.

Speaker Change: Okay.

Speaker Change: Manav, it's Chris Chandler.

Speaker Change: Yes.

Speaker Change: We're excited to bring up the expanded capacity of 30000 barrels a day at our PFS.

Speaker Change: <unk> facility in Edmonton, Alberta.

Speaker Change: We brought it up just ahead of our new commercial contracts taking effect.

Speaker Change: Ill ramp to full volume immediately although ramp over the remainder of this year and a little into next year.

Speaker Change: This is also part of a multi project effort, where we're doing some additional connectivity.

Speaker Change: And.

Speaker Change: Gathering investments along that value chain that will also come online throughout 2025. So so I think youll see that gradually contribute throughout the year.

Manav Gupta: Perfect. Can we get a few more details about the Black Knight Midstream Permian Basin? The deal you did for about $55 million, the benefits of the deal, and why you decided to go ahead with that one? Thank you.

Speaker Change: Kind of full run rate basis, starting in 2026.

Speaker Change: Okay.

Chris Chandler: Sure. It's right in the middle of our Northern Midland Basin gathering footprint. It's a position that we operated on behalf of the producer and their affiliate, and we negotiated the transaction with them. It's got some long-term capital synergies helping us to get to other positions that are on the other side of that. It's in the absolute core of the Northern Midland Basin. The producer on the system is one of their top assets, so we feel very comfortable with the rock, the resource, the inventory, the purchasing multiple that we did, and as Willie said, a win-win. It's a good win for our private equity partner that developed the asset, and it's a great win for Plains longer term to own this asset.

Speaker Change: Can we get a few more details about the black Knight Midstream Permian basin, the dilutive of about $55 million.

Speaker Change: Of the deal and why you decided to go ahead with that Glenn Thank you.

Speaker Change: Sure.

Speaker Change: Right in the middle of our northern Midland Basin gathering footprint.

Speaker Change: Position that we operate on behalf of the producer.

Speaker Change: Producer and their affiliates.

Speaker Change: We negotiated the transaction with them that's got some long term capital synergies, helping us to get to other physicians that are on the other side of that is in the absolute core of the northern Midland Basin.

Speaker Change: The producer on the system.

Speaker Change: One of their top assets, so we feel very comfortable with the rock resource inventory.

The purchasing multiple that we did and it's a good.

Manav Gupta: Thank you.

Speaker Change: As well as get a win win as a headwind for our private equity partner that.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

Speaker Change: Develop the asset.

Speaker Change: Great way from playing longer term to own this asset.

Speaker Change: Thank you.

Michael Blum: Thanks. Good morning, everyone. Wondering if you can give us your latest thoughts on conversations with producers, what they're telling you, and just your latest outlook on Permian volumes. I realize you kept the guidance at 200 to 300,000 barrels. Curious where you think that's sort of really trending. Also for 2026. Thanks.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open. Please go ahead.

Michael Blum: Thanks, Hey, good morning, everyone I Wonder if you can give us your latest.

Michael Blum: Our latest thoughts on conversations with producers, what they're telling you and just your latest outlook on Permian volumes I realize you kept the guidance at 230 to 300000 barrels but.

Jeremy Goebel: Sure, Michael. I'll stick to 2025, but what I can tell you is we've already grown over 100,000 barrels a day from the end of last year to now. The 200,000 barrels a day does not seem very Herculean as a growth expectation for this. I'd say by and large, the producers are in a very similar situation. It's a bit of wait and see. The volatility just started 1 month ago. You don't make 2 or 3-year plans based on 1 month of activity, and you've seen some rebound in it. I think in the next 3 months, it's a function of time and it's a function of flat price. It's a short period of time at this price. If it sustains for a longer period of time here, you will see some flattening out.

Michael Blum: Where do you think that sort of really trend and also for 26.

Michael Blum: Sure Michael I'll take the 25, but what I can tell you as you have already grown over 100000 barrels a day from the end of last year to now so the 200000 barrels a day. This outing very herculean as a growth expectation for this I would say by and large.

Speaker Change: The producers are very in a very similar situation is a bit of wait and see the volatility started a month ago and so you don't make two or three year plans based on one month of activity and you've seen some write downs and so I think.

Speaker Change: And the next three months, it's a function of time and Thats a function of flat price until it's a short period of time at this price if it's sustained for a longer period of time here you will see some flattening out.

Jeremy Goebel: If it goes below this, below $55 a barrel, you've heard from the producer community, you would start to go to flat and maybe even decline. If it gets above $65 for an extended period of time, you'll see it go the other way. You'll see it back to growth. From our standpoint, there's a bit of wait and see at this point. You're right in this position where you shouldn't see much difference in activity for the next 3 to 6 months. 6-plus months, you might see some deferral of completions and maybe some rigs go down, but it's very consistent what you've heard from the upstream community. That's what they're telling us as well. Like I said, our guidance here is just predicated on what could happen in the price range, but the volatility literally started 1 month ago.

Speaker Change: If it goes below this fit below $55 barely heard from the producer community you can start to go to flat and maybe even decline against above $65 for an extended period of time, you'll see it go the other way you will see it back to growth. So from our standpoint, there is a bit of a wait and see at this point you are right in this position where you shouldnt see much.

Speaker Change: Difference in activity for the next three to six months six plus months you might see some deferral of completions and maybe some rigs go down but it is very consistent what you've heard from the upstream community, that's what they're telling us as well so like I said.

Jeremy Goebel: It's a function of time and price.

Willie Chiang: Michael, this is Willie. I think the key point in this is when you think about 2025, with the sensitivities that we've given, the impacts to us are very modest, could be very modest. Really the broader thing is to stay engaged and understand what's going on in the rest of the world. This is going to be a 2026 plus issue if it becomes an issue. As we've outlined on our slide deck, I actually think this is just going to reinforce the cycle ability and the cycles of commodities. As prices go lower, tend to bring more activity in, and prices go higher, it's the other way around.

Speaker Change: Our guidance here is just predicated on what could happen in that price range, but the volatility literally started months ago. So it's a function of time and price.

Willie Chiang: And Michael This is Willie I think.

Willie Chiang: The key point on this is when you think about 25%.

Willie Chiang: With the sensitivities that we've given the impacts to us are very modest.

Willie Chiang: Would be very modest.

Willie Chiang: And really the broader thing is to stay engaged and understand what's going on in the rest of the world is going to be at 26 plus.

Willie Chiang: Issue if it if it becomes an issue, but as we outlined on our slide deck I actually think we.

Willie Chiang: Just just going to reinforce their cyclicality.

Michael Blum: Great. Understood. Appreciate that. Second question, just wanted to ask how should we think about the acquisition multiples you paid for the two bolt-on deals this quarter? Thanks.

Willie Chiang: The cycle ability and the cycles of commodities.

Willie Chiang: Rice's go lower tend to tend to bring more activity and prices go higher it's the other way around.

Willie Chiang: Great I understood I appreciate that and then.

Chris Chandler: Jeremy, go ahead and take that.

Jeremy Goebel: As opposed to multiples, they both hit our return thresholds or higher. As Willie mentioned, capital discipline. The first was a reduction in future MVCs in exchange for taking ownership of the asset from a partner, and we priced in our rates of return there. We've done as well or better filling the pipeline after the fact. That's the first one. The gathering transaction, once again, our goal is to earn our base return with limited synergy allocation and then compress that multiple with synergy. I'd say both of them fit the model of the previous 12 acquisitions.

Willie Chiang: Second question I, just wanted to ask how should we think about the acquisition multiples you paid for the two bolt on deals this quarter. Thanks, Glenn take that so as opposed to multiple they both hit our return thresholds or higher volume.

Willie Chiang: Mentioned capital discipline.

Willie Chiang: First was.

Willie Chiang: <unk> and future <unk> in exchange for taking ownership of the asset from a partner and we priced in our rates of return there and we've done as well or better filling the pipeline. After the fact that the so that's the first one the gathering transaction once again, our goal is to earn our base return.

Michael Blum: Thanks.

Willie Chiang: <unk>.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Jeremy Tonet with JP Morgan. Your line is open. Please go ahead.

Willie Chiang: With limited synergy allocation into compressed that multiple with synergies. So I'd say both of them fit the model of the previous 12 acquisition.

Willie Chiang: Thanks.

Robin Reddy: Hey, good morning. This is Robin Reddy on for Jeremy. The materials highlighted expectations for $300 to 400 million of annual growth CapEx. Maybe just wondering how you think about CapEx spend at this point and how much might be locked in for 2026.

Willie Chiang: Thank you and our next question.

Speaker Change: Our next question is going to come from the line of Jeremy Tonet with Jpmorgan. Your line is open. Please go ahead.

Robin Ready: Hey, good morning, this is robin ready.

Speaker Change: Jeremy the materials highlighted.

Robin Ready: Expectations for $300 million to $400 million of annual growth Capex.

Chris Chandler: Hi, Robin, this is Chris Chandler. We left our investment capital guidance for 2025 unchanged at $400 million net to Plains. We just wrapped up the expansion project at Fort Saskatchewan that we mentioned, and we have some related NGL supply and connectivity projects that'll happen later this year. On the Permian side, where the rest of our capital is largely allocated, that connection capital and gathering spend is designed to pace our producers. We do typically schedule that work 6 to 12 months out, so we're nearly into 2026 on that segment. If we were to see a large change in activity from the producers, we could adjust our capital and would obviously do so in response to anything that happens in that area.

Robin Ready: Maybe just wondering how you think about capex spend at this point.

Robin Ready: How much might be locked in for.

Robin Ready: 2026.

Robin Ready: Hi, Robin This is Chris Chandler, we left our investment capital guidance for 2025 unchanged at $400 million net to planes. We just wrapped up the expansion project at Fort SaaS that we mentioned and we have some related NGL supply and connectivity projects that will happen later this year.

Robin Ready: The Permian side or the rest of our capital is largely allocated that connection capital and gathering spend is designed to pace our producers.

But we do typically schedule of that work six to 12 months out so were nearly in the 2026 on that segment, but if we were to see a large change in activity from the producers.

Robin Ready: We could adjust our capital would obviously do so in response to anything that happens in that area.

Robin Ready: As for 2026, we haven't and won't provide guidance yet, but we are.

Robin Reddy: Got it. Thank you. Then on the frac spread, for the hedging, it looks like it stepped up to 80%. Just wondering if we could get your latest thoughts on the hedging philosophy this year and moving forward.

Robin Ready: Feel uncomfortable that.

Robin Ready: Our capital spend will be in our long term capital guidance range of 300 to 400 million that the planes.

Chris Chandler: Jeremy?

Robin Ready: Sure.

Robin Ready: Got it. Thank you and then on the Frac spread for the hedging it looks like stepped up to 80% in.

Robin Ready: Just wondering if you can get your latest thoughts on the hedging philosophy this year and moving forward.

Jeremy Tonet: Jeremy Yes.

Jeremy Tonet: And we take a fundamental view, we recognize the need to maintain.

Speaker Change: <unk> maintained steady cash flow set targets and we continue to execute so we're opportunistic around hedging.

Robin Reddy: Thank you.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Sunil Sibal with Seaport Global. Your line is open. Please go ahead.

Speaker Change: Because of the backward dated market, where more hedged than the front end and the back end, but thats been consistent with the last several years I don't think anything's changed in the last several years in this strategy.

Sunil Sibal: Yeah. Hi, good morning, everybody, and congrats to Harry on a successful career at Plains. My first question was related to the sensitivity that was provided with regard to the Permian production. I was curious, is the underlying assumption there that the marginal barrel is moving to a particular market, i.e., Cushing or Houston, and that's kind of primary driver of that sensitivity? Is that sensitivity based on your full year volumes or obviously you have almost 4 months plus of 2025 already in, so we should think about that sensitivity on full year volumes or more like 8-month volumes?

Speaker Change: Thank you.

Speaker Change: Thank you and one moment for our next question.

Speaker Change: Our next question is going to come from the line of Sunil Sibal with Seaport Global Your line is open. Please go ahead.

Sunil Sibal: Yes, hi, good morning, everybody and congrats too heavy on a successful claim.

Speaker Change: <unk>.

Speaker Change: Well first question was related to the sensitivity.

Speaker Change: Got it.

Speaker Change: Permian production.

Speaker Change: I was curious.

Speaker Change: Is the underlying assumption there that the mazo is moving to a particular market.

Speaker Change: Pushing.

Speaker Change: The Houston and Thats kind of primary driver of that sensitivity.

Speaker Change: And then is that sensitivity based on full year volumes obviously.

Jeremy Goebel: Sunil, this is Jeremy. That guidance was for the full year, and like I had said earlier, we've already grown over 100,000 barrels a day. The view of 200 to 300 still stands for exit to exit 2024 to 2025. As to the Permian Basin, the supply push, the market's going to price where the marginal barrel goes. We don't necessarily have assumptions up front. The prices will dictate that, but it's a supply push market, and they have a $60 to $80 commodity they're moving. That last $0.50 is just going to be dictated by the consumer, not necessarily the producer.

Speaker Change: Almost four months plus of.

Speaker Change: According to already have fiber already.

Speaker Change: We should think about that sensitivity on full year volumes on more like eight months volumes.

Jeremy Tonet: Sunil This is Jeremy that guidance was for the full year and Buckeye et said earlier.

Jeremy Tonet: <unk> already grown over 100000 barrels a day. So the view of 200 to 300 still stands for exit to exit 'twenty four to 'twenty five.

Jeremy Tonet: The Permian basin that supply post the market's kind of price for the marginal barrel goes so they don't necessarily have assumptions upfront that prices will dictate that but as a supply push market and they have a $60 to $80 commodity theyre moving that last 50 is just going to be paid by the consumer not necessarily the producer.

Sunil Sibal: Okay, thanks for that. One clarification, for full year 2025, you're guiding in the NGL segment $45,000 per day of spec sales. I presume there is a fair bit of seasonality in that. How much of that do you take in Q1?

Speaker Change: Okay. Thanks for that and then one clarification so fully.

Jeremy Tonet: 25.

Jeremy Goebel: Sunil, I think that's a follow-up question for the IR team, but the seasonality, we use our 8 million barrels of storage to optimize when we sell. The market tells us when to sell those commodities. We produce the spec sales. Condensate is sold ratably. Butane and propane are the two that are sold seasonally, that's a function of price and timing and maximizing value. That's probably a better follow-up question for the IR team.

Jeremy Tonet: In the NGL segment, 45000 Boes per day off spec sales.

Jeremy Tonet: I presume there is it fair pertussis amantadine that so how much of that data in Q1.

Jeremy Tonet: So Neil I think Thats a follow up question for the IR team, but the seasonality we use our 8 million barrels of storage to optimize when we sell to the market tells us to set when to sell those commodities that we produce the spec sales.

Jeremy Tonet: Condensate is sold Ratably butane and propane are the two that are sold seasonally but thats a function of price and timing.

Willie Chiang: Yeah, Sunil, this is Willie. You'll remember the typical schedule that we have with colder months, obviously more propane is typically sold. Again, our IR team can follow up with you on that.

Jeremy Tonet: That's amazing value, but that's probably a better follow up question from the IR team.

John Mackay: Thanks for that.

Willie Chiang: And so Neil this is Willie I'll remember the typical sale that we have.

Jeremy Goebel: Thank you.

Operator: Thank you. One moment for our next question. Our next question will be from the line of A.J. O'Donnell with TPH&Co.. Your line is open. Please go ahead.

Willie Chiang: Colder months, obviously more propane typically sold so again, our IR team can follow up with you on that.

Speaker Change: Thanks for that.

Willie Chiang: Thank you thank.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will be from the line of a J O'donnell with Tpa <unk>. Your line is open. Please go ahead.

Speaker Change: Good morning, everyone.

Speaker Change: I was just wondering if I could start on.

Speaker Change: Some of the prepared comments about the volume recovery in April and May.

Speaker Change: Just wondering if you could provide some additional details around that where youre seeing that are longer system, and maybe how that could translate into <unk>.

Jeremy Goebel: A.J., hi, this is Jeremy. Thanks for the question. Some of that recovery was you had a strong Q4, then you had weather events in January and February, which kept production down. Some of that was just production coming back online, also a deferral of completions just to get around the weather. This is very typical. You have the best weather periods here in the spring and the fall, and so you see a lot of completions, that surge of completions. As we said earlier that the impact of prices, we really haven't seen any impact of prices so far, and we don't expect it for the next month or two.

Speaker Change: Higher long haul throughput for the remainder of the year. Thanks.

Hi, This is Jeremy thanks for the question some of that recovery was you had a strong fourth quarter and then you had weather events in January and February which kept production down. So some of that was just.

Speaker Change: Production coming back online also as deferral of completions just to get around the weather.

Speaker Change: It's very typical you have the best the best weather periods here in the spring and the fall and so you see a lot of inflation, so that surge of completion so.

Jeremy Goebel: I think Al was just stating that while volumes were a little bit down in the Q1, that was really a function of intrabasin, which is the lowest margin part of our value chain, and that's really feeding some of the long haul, and the long haul down there was driven by downstream demand. To get to your question on long haul, as you get to the summer driving season and refineries ramp back up, you're going to see a pickup in those refining markets and their demand for crude. You'll see more crude. It's an interrelated question.

Speaker Change: So as we said earlier the impact of prices, we really haven't seen any impact of prices. So far Madonna expected for the next month or two so I think Alex just stating that while volumes were a little bit down in the first quarter that was really a function of intra.

Speaker Change: Intra basin, which is the lowest margin part of our value chain and that's really feeding some of the long haul and that was the long held down there was driven by downstream demand so to get to your question on long haul as you get to the summer driving season, our refineries ramp back up youre going to see a pickup in those refining markets and their demand for cruise Youll see.

AJ O'Donnell: Okay. Appreciate the detail there. Then maybe just one more on kind of the longer term outlook. Granted, we're all kind of theorizing about what's going to happen over the next 6 to 12 months here with all the backdrop of volatility. Just curious if you guys could provide maybe some updated views about how you're thinking around total Permian long-haul utilization filling up. I know there were some materials provided in a previous investor deck where you're talking about that 80% threshold and pipes hitting that. Yeah, just any comments about how you're thinking about the forward market there.

Jonathan: More crude Jonathan interrelated question.

Jonathan: Okay I appreciate the detail there.

Jonathan: And then maybe just one more kind of the longer term outlook.

Jonathan: All right granted.

Jonathan: We're all kind of theorizing about what's going to happen over the next.

Jonathan: Six to 12 months here with all the backdrop of volatility which is.

Jonathan: Curious if you guys could provide maybe some updated views about how youre thinking around total Permian long haul utilization filling up.

Jeremy Goebel: Yeah. A.J., that's really a function of production. I think everybody has their own views of production. I think Willie said it in the beginning, which is this is probably not a pause. This is not the stop of growth. You hear different views on that, but our view is the world's going to need this crude oil for a period of time. There's a great resource. There's very well-capitalized producers. They're saying pause at the 55 to 60 range, and you've seen prices pause, which means as you see things recover on the demand side, and you get more certainty around investment and decisions associated with the tariffs and all that settles out. You see demand recover, you see the need for more crude oil recover. This is all related. We're not going to make long-term statements.

Jonathan: I know there were some materials provided in our previous investor deck, where you talked about the 80% threshold in pipe cutting them out.

Jonathan: Yes, just any comments about how youre thinking about the forward market there.

Speaker Change: A J, that's really a function of production.

Speaker Change: So I think everybody has their own views of production I think Willie said at the beginning which is.

Speaker Change: Probably not a pause is not to stop what growth you hear different views on that but our view is the world is going to need as crude oil for a period of time. There is a great resource is very well capitalized producers. They are saying paused. The 55 to 60 range in ethane prices pause, which means as you think see things recover on the demand side.

Jeremy Goebel: Utilization of pipelines is related to volumes, but our longer-term growth profile and expectations of the Permian hasn't changed. I don't think that's changed materially at all. It just might be a timing thing.

Speaker Change: Get more certainty around the investment in decisions associated with the tariffs and all that settles out you see demand recovery to the need for more crude oil recover. This is all related so we're not going to make long term statements utilization of the pipeline as it related to <unk>.

Speaker Change: Volumes to offer term are our longer term growth profile and expectations for the Permian Hasnt changed so I don't think thats changed materially it's just.

Speaker Change: It might be a timing thing.

Speaker Change: A J I would just reinforce that.

Speaker Change: When you think about the current volatility you've got the tariffs tariffs and OPEC alright. Those are the two things that are in the.

Speaker Change: The catalyst for more volatility and I think a lot of our business plan and everyone else's business plan is going to really rest on when that when that ultimately gets resolved and no. One no one knows the answer to that so we'll just have to keep volume.

AJ O'Donnell: Thank you very much.

Jeremy Goebel: Thank you.

Operator: Thank you, and one moment for our next question. Our next question is going to be from the line of John Mackay with Goldman Sachs. Your line is open. Please go ahead.

John Mackay: Hey team, thanks for the time. We've talked a lot about the upstream side, but you guys are also really tied in on the demand side as well. I'd just be curious if you have any read on kind of real-time demand signals and any sign of slowdown specifically you're seeing either on the refining side or on the export side. Thanks.

Speaker Change: Thank you very much.

Speaker Change: Thank you. Thank you and one moment our next question.

Speaker Change: Our next question is going to be from the line of John Mackey with Goldman Sachs. Your line is open. Please go ahead.

Speaker Change: Hey, Tim Thanks for the time.

Speaker Change: <unk> talked a lot about the upstream side, but you guys are also really tied in on the demand side as well I'd just be curious if you have any.

Jeremy Goebel: Yeah. Those are two different questions. I'd say that it's very healthy as the global refining markets. Candidly, you haven't seen gasoline prices move much, but you've seen crude prices go down. Crack spreads are very strong, and we're seeing all the refineries come out of turnarounds and run very strong. I'd say that's a part of the reason for lower volumes in Q1 was driven by lower movements to refineries. That's all picking up. That part of the business is very healthy. On the export side, that changes month to month and even within 1-week periods within given months. You've seen some slowdown on movements internationally, but the barrels have to move, so they get priced to move.

Speaker Change: Any read on kind of real time demand signals and any sign of slowdown specifically youre seeing either on the refining side or on the export side. Thanks.

Speaker Change: So those are two different questions I'd say that.

Speaker Change: It very healthy as well.

Speaker Change: Local refining markets and.

Speaker Change: Candidly you havent seen gasoline prices move much but you've seen crude prices go down for crack spreads are very strong and we're seeing all the refineries come out of turnaround and run very strong. So I'd say, that's a part of the reason for lower volumes in the first quarter was driven by lower movements to refineries. That's all picking up so that part of the business is very healthy.

Jeremy Goebel: Like I said, the Permian is $60 to $80 commodity, and that's going to push to the water, and it's going to price to be sold. I'd say we're seeing healthy margins globally for refining. That's the thing to pay attention to on a forward basis, that demand appears to be healthy.

Speaker Change: On the export side that changes month to month and even within one week periods within given months you've seen.

Speaker Change: Some slowdown on the movements internationally, but the price of the barrel path to move so they get priced to move but like I said, the Permian is $60 $80 commodity and thats kind of pushed to the water and the price to be sold so I'd say, we're seeing healthy margins globally for refining so that's good.

John Mackay: I appreciate that. Thanks. Maybe just going back to, I think it was Gabe's question, and Willie, you commented a little bit more here. Just on capital allocation, I think now at the end of the quarter, you're still at the bottom end of the leverage range. Just curious how you guys are thinking about managing within that range, given the potential for the backdrop on the macro side to get a little bit softer. Is that changing your view at all on where you want to be in that specifically?

Speaker Change: That's the thing to pay attention to on a forward basis that demand appears to be healthy.

Speaker Change: I appreciate that thanks, and maybe just going back to.

Speaker Change: I think it was Gabe question and will you come to a little bit more here, but just on capital allocation.

Speaker Change: And I think now at the end of the quarter Youre still at the bottom end of the leverage range. Just curious how you guys are thinking about kind of managing within that range.

Willie Chiang: John, I'll start and Al can certainly add. We've been very clear about our capital allocation plan. One, we're committed to returning cash to the unit holders, and we've got our targeted increase to a coverage limit that we've announced years ago, and we're going to execute on that. We are also very optimistic and continue to work on the bolt-ons, and we think that opportunity set is out there, and that is really the primary focus on the highest return options for cash. Those two are going to drive it. Our leverage is at the lower end. If there were some transactions that made sense, we've always said that we would allow the leverage to go up with the understanding and the planning that it doesn't stay up.

Speaker Change: Given the potential for the backdrop on the macro side to go all software is that changing your view.

Speaker Change: View at all on where you want to be in that specifically.

Speaker Change: Those two are going to drive it our leverage is at the lower end. If there were some transactions that made sense, we've always said that.

Willie Chiang: We're using that leverage range really to our benefit as we think about what we might be able to do as far as growing in a capital disciplined way. Al, anything to add?

Speaker Change: We would we would allow the leverage to go up with the with the understanding that and the planning that it doesn't stay up so.

Al Swanson: The only thing I would add is it is a range, the leverage range. We don't have the stated desire to be at the bottom end or below on a sustained basis. We do look at the ability to use some of that capacity for strategic quality investments as we look go ahead. We just recently, in the last year, got BBB rated at all three agencies. We do not view and have no interest in putting leverage at a point that would jeopardize any of those ratings.

Speaker Change: We're using that leverage range really to our benefit as we think about what we might might be able to do as far as growing in a capital disciplined way al anything that the only thing I would add is it is the range the leverage range.

Speaker Change: We don't have the stated desire to be at the bottom end or below on a sustained basis. So so we do look at the ability to use some of that capacity for strategic quality investments.

Speaker Change: As we look go ahead.

Speaker Change: We just recently in.

John Mackay: I appreciate it, caller. Thank you.

In the last year got Triple B rated at all three agencies, we do not view and have no interest in putting.

Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

Speaker Change: Leverage at a point that would jeopardize any of those ratings.

Theresa Chen: Morning. I wanted to go back to the comment about M&A opportunities and the volatile landscape effectively creating more opportunities within this part of your capital allocation strategy. Are you seeing more sellers come to market at this juncture, or do you expect this to happen as the year unfolds depending on where pricing goes? If there are more sellers coming to market, would you expect a more rapid pace of acquisitions, just given the state of your leverage, your balance sheet, and you might only have a short window to execute? How do you view that?

Speaker Change: I appreciate the color. Thank you.

Speaker Change: Thank you and one moment our next question.

Speaker Change: Our next question is going to come from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.

Theresa Chen: Good morning, I wanted to go back to the comment.

About M&A opportunities in the volatile landscape and effectively creating.

Theresa Chen: More opportunities.

Theresa Chen: As part of our capital allocation strategy.

Theresa Chen: Are you seeing more sellers come to market at this juncture or do you expect this to happen as the year unfolds, depending on where pricing does.

Theresa Chen: And if there are more sellers coming to market, what you expected more rapid pace of acquisitions, just given the state of <unk>.

Theresa Chen: Elaboration on your balance sheet and only have a short window to execute how do you view that.

Willy: Hey, Theresa its Willy.

Willy: The answer to your question is.

Speaker Change: I think it's a pretty broad range of opportunities.

Speaker Change: You looked at the list of things that we've done I would argue that some of those transactions were done because of where perhaps a refiner wasn't the cycle and wanting to monetize and we've had similar discussions with upstream folks on where do they want to deploy capital and how do they monetize. So this truly is kind of a back and forth.

Speaker Change: Fourth with our partners on an everyday basis on how do you win and how do we get to something in the thing I would point out is and I think you understand our system well because of the network that we have.

Theresa Chen: Thank you so much.

Willie Chiang: Thanks, Theresa.

Operator: Thank you. I'm showing no further questions at this time, and I would like to hand the conference back over to Willie Chiang for closing remarks.

Speaker Change: Great win win situations. So I know, it's a little bit general, but hopefully it gives you the dynamics of all the different things that we look at.

Willie Chiang: Thanks, Michelle. Well, thanks everyone for dialing in. Strong start to the quarter. We look forward to seeing you on the road and giving you more updates. Have a great day.

Thank you so much.

Speaker Change: Thanks, Teresa and thank you and I'm showing no further questions at this time I would like to hand, the conference back over to Lee Chen for closing remarks.

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

Thanks, Michelle well, thanks to everyone for dialing in.

Lee Chen: Strong start to the quarter, we look forward to seeing you on the road in and giving you more updates have a great day.

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

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