Q1 2025 Plains GP Holdings LP Earnings Call

May 9, 2025

Operator: Good day, 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 speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. 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.

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 on.

Speaker Change: 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.

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 two. 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 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.

Speaker Change: 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 price 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 planes up $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 priced 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 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+ 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.

Willie Chiang: Despite the given the current market volatility our business remains resilient, assuming a $60 to $65 <unk> 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's 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.

Willie Chiang: Returning capital to our unit holders.

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 Saskatchewan, 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 Basin 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: 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: 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: In May we acquired Black Knight midstream at 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: As shown on slide five, 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.

Willie Chiang: 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 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.

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 <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. 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. Slides 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.

Speaker Change: 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.

Speaker Change: 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.

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

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.

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.

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.

Speaker Change: Per barrel <unk> price and a 200 to 300000 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 nine we expect to generate strong cash flow this year with adjusted <unk>.

Willie Chiang: 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 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 unit holders. Before we hand back to Blake, Harry, would you like to make a few comments?

Willie Chiang: We're off to a solid start for the year, albeit in a more volatile and uncertain market.

Willie Chiang: 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 with.

Speaker Change: 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. Listen, 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.

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

Willie Chiang: I'd also like to thank all of you for.

Willie Chiang: Joining us on our quarterly earnings call and your continued interest in plains.

That I will 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 to 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: IR 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 star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one 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 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, but given volatility in the unit price and the way.

Gabriel Moreen: 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.

Gabriel Moreen: Gabe This is al I'll take a shot at it.

Gabriel Moreen: No really change in our in our view.

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

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

Gabriel Moreen: We did buy a small.

Gabriel Moreen: In April just as we're going into blackout, there was only about $7 $5 million.

Gabriel Moreen: I think it was about 475000 units.

The component, but I want to say there has been no change in our thinking around <unk>.

Gabriel Moreen: 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 maybe.

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

Speaker Change: 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.

Speaker Change: 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, and 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: 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 a 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 maybe.

Maybe the only other thing that.

Willie Chiang: 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.

Manav Gupta: 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.

Speaker Change: That discount is up and running.

Chris Chandler: Manav, it's Chris Chandler. 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 full run rate basis starting in 2026.

Speaker Change: Okay.

Speaker Change: Manav, it's Chris Chandler so 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: <unk> ramped 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 I think youll see that gradually contribute throughout the year.

Speaker Change: On a full run rate basis, starting in 2026.

Willie Chiang: 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.

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 we get a few more details about the black Knight Midstream Permian basin, the beautiful 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 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 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 it's right.

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

Speaker Change: <unk> that we operate on behalf of the.

Speaker Change: The producer and their affiliates 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: That producer on the system.

Speaker Change: One of their top assets, so we feel very comfortable and they're off to resource the inventory.

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

Speaker Change: That's why we said a win win it's a good win for our private equity partner that.

Speaker Change: Develop the asset.

Speaker Change: Great way from playing longer term debt on this asset.

Willie Chiang: Thank you.

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 comes 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 really trending. Also for 2026. Thanks.

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

Michael Blum: 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 203 300000 barrels but.

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

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, and 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.

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 two or three-year plans based on one month of activity, and you've seen some rebounds in it. I think in the next three 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: 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 sort of a 200000 barrels a day does not seem 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, 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 write downs and 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 sustains 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, 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.

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, 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, 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 that fit below $55 barely heard from the producer community you can start to go to flat and maybe even decline.

Speaker Change: $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 a wait and see at this point you are right in this position where you shouldnt 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, but it's very consistent.

Speaker Change: 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.

Chris Chandler: It's a function of time and price.

Michael Blum: Yeah.

Michael Blum: 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 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. As prices go higher, it's the other way around.

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 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. As prices go higher, it's the other way around.

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: 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.

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

Willie Chiang: <unk> 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. 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 I understood I appreciate that and then.

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.

Willie Chiang: I mean-

Willie Chiang: I mean- Go ahead and take that.

Chris Chandler: Go ahead and take that.

Willie Chiang: As opposed to multiples, they both hit our return thresholds or higher. As Willie mentioned, capital discipline. The first was.

Chris Chandler: 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. 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: Glenn take that so as opposed to multiple.

Willie Chiang: Both hit our return thresholds or hire Willy mentioned capital discipline.

Jeremy Goebel: A reduction in future MVCs in exchange for taking ownership of the asset from a partner. 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: The first was <unk>.

Willie Chiang: And in the future Mdc's 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.

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

Willie Chiang: With limited synergy allocation in the compressed that multiple with synergies. So 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 JPMorgan. Your line is open. Please go ahead.

Willie Chiang: Thanks.

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 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.

Robin Ready: Hey, Good morning, this is robin ready on for Jeremy.

Robin Ready: Materials highlighted expectations for $300 million to $400 million of annual growth Capex.

Robin Ready: Maybe just wondering how you think about capex spend at this point and how much might be locked in for.

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: 2026.

Speaker Change: Hi, Robin this is Chris Chandler.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: A large change in activity from the producers.

Speaker Change: 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 capital spend will be in our long-term capital guidance range of $300 to 400 million net to Plains.

Speaker Change: As for 2026.

Speaker Change: Haven't and won't provide guidance, yet, but we are.

Speaker Change: Feel uncomfortable that.

Speaker Change: That capital spend will be in our long term capital guidance range of 300 to 400 million that the planes.

Robin Reddy: Got it. Thank you. 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.

Speaker Change: Sure.

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

Speaker Change: Just wondering if we get your latest thoughts on the hedging philosophy this year and moving forward.

Jeremy Goebel: Jeremy? 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.

Chris Chandler: 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.

Speaker Change: And we take a fundamental view, we recognize the need to maintain.

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

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.

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: 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: 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 say, Houston, and that is kind of primary driver of that sensitivity? Then 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?

Sunil Sibal: Yes, hi, good morning, everybody and congrats to have you on a successful claims.

Speaker Change: Wow.

Speaker Change: Question was related to the sensitivity it does provide.

Speaker Change: I did.

Speaker Change: The Permian production.

Speaker Change: I was curious is.

Speaker Change: Is the underlying assumption there that the marginal barrel.

Speaker Change: Moving to a particular market.

Speaker Change: Michigan.

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

Speaker Change: Then.

Speaker Change: Sensitivity based on full year volumes obviously.

Speaker Change: Almost four months plus of.

Speaker Change: According to already have fiber already in so we should think about that sensitivity on full year volumes on 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, 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.

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

Jeremy Tonet: Already grown over 100000 barrels a day, so that 200 to 300 still stands for exit to exit 'twenty four 'twenty five.

Speaker Change: The Permian basin that supply post the market has got a price for the marginal barrel go. So we don't necessarily have assumptions upfront prices will get pay 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 dictated 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 barrels per day of spec sales. I presume there is a fair bit of seasonality in that. How much of that accrued in Q1?

Okay. Thanks for that and then one clarification so fully.

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

Speaker Change: Assume there is a fair bit of seasonality in that so how much of that data in Q1.

Jeremy Goebel: Sunil, I think that's a follow-up question for the IR team. 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.

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 to set when to sell the commodities that we produce the spec sales.

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

Speaker Change: Maximizing value, but that's probably a better follow up question for the hour.

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

Speaker Change: And so Neil this is Willie Youll remember the typical sale that we have with colder months.

Speaker Change: Obviously more propane typically sold and so but again, our IR team can follow up with you on that.

Sunil Sibal: Thanks for that.

Jeremy Goebel: Thank you.

Willie Chiang: Thank you.

Operator: Thank you. Our next question will be from the line of AJ O'Donnell with TPH.

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. 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.

Speaker Change: Good morning, everyone.

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.

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

Jeremy Goebel: AJ, 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 is 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, 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 <unk>.

Jeremy Tonet: Production coming back online also as deferral of completions just get around the weather. So 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 completions. So as we said earlier the impact of prices, we really haven't seen any impact of prices so far Mcdonnell.

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 crude. You'll see more crude. It's an interrelated question.

Jeremy Tonet: The effective 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 the.

Jeremy Tonet: Our 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 more crude Jonathan interrelated question.

AJ O'Donnell: Okay. I appreciate the detail there. Maybe just one more on the longer-term outlook. Granted, we're all 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. Just any comments about how you're thinking about the forward market there.

Jeremy Tonet: Okay I appreciate the detail there.

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

Jeremy Tonet: All right granted.

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

Jeremy Tonet: 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.

Jeremy Tonet: There were some materials provided in our previous investor deck, where youre talking about the 80% threshold in pipe cutting them out.

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

Jeremy Goebel: Yeah, AJ, 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. 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.

Jeremy Tonet: A J, that's really a function of production.

Jeremy Tonet: Everybody has their own views of production I think whether you said at the beginning which is.

Jeremy Tonet: Probably not a pause is not to stop of growth you hear different views on that but our view is the world's going to need as crude oil for a period of time. There is a great resource very well capitalized producers. They are saying Pas 55 to 60 range and you've seen prices pause, which means as you think see things recover on the demand side and you get.

Jeremy Tonet: 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 as it related to <unk>.

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

Jeremy Tonet: To volumes, but longer term our longer term growth profile and expectations for the Permian Hasnt changed so I don't think thats changed materially.

Willie Chiang: AJ, 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, and 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, and no one knows the answer to that. We'll just have to keep following it.

Jeremy Tonet: It just might be a timing thing.

Jeremy Tonet: A J I would just reinforce that.

Jeremy Tonet: When you think about the current volatility you have got the tariffs tariffs and OPEC right. Those are the two things that are.

Jeremy Tonet: 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.

Jeremy Tonet: When that ultimately gets resolved and no one no one knows the answer to that.

AJ O'Donnell: Thank you very much.

Jeremy Tonet: We'll just have to keep volume.

Willie Chiang: 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.

Jeremy Tonet: Thank you very much.

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

John Mackey: Tim Thanks for the time.

John Mackey: 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 sign of slowdown specifically youre seeing either on the refining side or 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. 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 the 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.

John Mackey: So those are two different questions I'd say.

John Mackey: It very healthy the global refining markets.

John Mackey: 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 turnaround and run very strong. So I'd say, that's 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.

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

John Mackey: Some slowdown on movement 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.

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.

John Mackey: That's the thing to pay attention to onboard 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. 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 softer. Is that changing your view at all on where you want to be in that specifically?

John Mackey: I appreciate that thanks, and maybe just going back to.

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

John Mackey: 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.

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

John Mackey: We view at all on where you want to be in that specifically.

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.

John Mackey: John I'll start out and certainly add.

John Mackey: 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.

John Mackey: 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 focus on the highest return options for cash so.

John Mackey: <unk>.

John Mackey: Those two are going to drive it our leverage.

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

John Mackey: 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.

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?

John Mackey: 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 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.

John Mackey: Or anything that.

John Mackey: The only thing I would add is it is the range the leverage range.

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

John Mackey: On a sustained basis. So so we do look at the ability to use some of that capacity for strategic quality investments.

John Mackey: As we look go ahead.

John Mackey: We just recently.

John Mackey: In the last year got Triple B rated at all three agencies.

John Mackey: We do not view and have no interest in putting.

John Mackey: Leverage at a point that would jeopardize any of those rating.

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

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

John Mackey: I appreciate the color. Thank you.

John Mackey: 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: 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: Good morning, I wanted to go back to the comment.

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

Speaker Change: More opportunities.

Speaker Change: As 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 does.

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

Speaker Change: Elaboration on 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.

Willy: Hey, Theresa its Willy.

Speaker Change: 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.

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 that create win win situations. So I know, it's a little bit general, but hopefully it gives you the dynamics.

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.

Theresa Chen: Thank you so much.

Of all the different things that we look at.

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: Thank you so much.

Speaker Change: Thanks, Teresa and thank you and 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.

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.

Speaker Change: Thanks, Michelle well, thanks to everyone for dialing in.

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

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Welcome to the PAA and PAGP First Quarter 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.

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

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

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Speaker Change: Good day, and thank you for standing by welcome to the PAA and PAGP first quarter 2025 earnings Conference call.

Speaker Change: 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 on your telephone you will then hear an automated message devising new your hand is raised to withdraw your question. Please press star one again, please be advised that today's conference is being recorded.

Blake Fernandez: I would now like to hand, the conference over to your speaker today like 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 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 planes Dot com an audio replay will also be available following today's call.

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

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.

Speaker Change: 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.

Speaker Change: Additionally, the dissension among OPEC members and the prospect of incremental supply coming to market has resulted in a lower price 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.

Speaker Change: 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+ 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: 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 the respective ranges.

Speaker Change: Our NGL segment remains largely insulated from lower commodity prices with approximately 80% of our estimated see 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 and.

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 Saskatchewan 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: 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 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.

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>.

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

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

Willie Chiang: As shown on slide five, 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: 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, we're very thankful for his relentless focus on developing lasting relationships customer service and.

Speaker Change: <unk> excellence together with an unwavering commitment to integrity accountability and teamwork, we wish her the very very best in his retirement with that I'll turn the call over to <unk>. 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 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 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.

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. 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.

Speaker Change: Gathering volumes across our system moving.

Speaker Change: <unk>, 6% to 7% in today's presentation contains segment adjusted EBITDA walk that provide additional details on our first quarter performance with.

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 market 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 sensitivity.

Speaker Change: These 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 unit holders. Before we hand it back to Blake, Harry, would you like to make a few comments?

Willy: 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.

Willy: A summary of our strong balance sheet offers financial capacity and flexibility.

Speaker Change: 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 back to Blake Gary would you like to make a few comments.

Harry Pefanis: Yes. Thank you, Willie. Appreciate that. Listen, 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: Yes. Thank you.

Speaker Change: That before we go to Q&A first I would like to thank Lilly for his kind remarks, and his leadership I've enjoyed working with them over this last 10 years.

Speaker Change: He has a great team, but I can tell you the team is as strong as it's ever been.

Speaker Change: I'd also like to thank all of you for.

Speaker Change: Joining us on our quarterly earnings call and your continued interest in plains.

Blake Fernandez: Thanks, Harry, 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 additional questions. Michelle, I think we're ready to go to the Q&A session, please.

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

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, but given volatility in the unit price and the like, I was wondering if there's any thoughts on 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: Wanted to ask first about capital allocation in the current environment. It seems like Youre still committed to the distribution growth in 2026, but given volatility in the unit price and the way I was wondering if there was any thoughts from the shift shifting our mindset to maybe spend more on buybacks versus distribution growth again, given all the volatility out.

Al Swanson: Gabriel Moreen, this is Al Swanson. I'll take a shot at it. No real 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.

Gabriel Moreen: Sure.

Speaker Change: Gabe This is al I'll take a shot at it.

Gabriel Moreen: No really change in our in our view.

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

Gabriel Moreen: Unit repurchases are a component of our.

Gabriel Moreen: Our capital allocation no change there opportunistic and market dislocation.

Gabriel Moreen: We did buy a small.

Al Swanson: Worth, I think it was about 475,000 units. It's a component. I want to say there's been no change in our thinking around opportunistic and market dislocation. We'll see what the future brings.

Gabriel Moreen: In April just as we're going into blackout, there was only about $7 $5 million.

Gabriel Moreen: 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 <unk>.

Gabriel Moreen: Got it. Thanks, Al. Appreciate that. Maybe if I could ask sort of on the M&A landscape, you 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. Do you think it's kind of been an impediment to price discovery in the current environment?

Gabriel Moreen: Opportunistic in market dislocation, so we'll see what the future brings.

Gabriel Moreen: Got it thanks Al appreciate that and then maybe.

Gabriel Moreen: 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.

Gabriel Moreen: Just with all the volatility out there.

Gabriel Moreen: 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 and 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.

Willie Chiang: Maybe the only other thing the.

Willie Chiang: Dimension is in an environment like this capital discipline is absolutely critical and we've taken 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.

Willie Chiang: Thank you one moment for our next question.

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.

Manav Gupta: 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 pick up their fractionation complex in Canada. So help us understand the cadence of earnings in Canada now.

Chris Chandler: Manav, it's Chris Chandler. Yeah, we were 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.

Manav Gupta: At this time this up and running.

Manav Gupta: Okay.

Manav Gupta: Manav, it's Chris Chandler so yes.

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

Manav Gupta: Facility in Edmonton, Alberta.

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

Manav Gupta: All ramped to full volume immediately although ramp over the remainder of this year and a little into next year.

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

Manav Gupta: <unk>.

Manav Gupta: 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: On a full run rate basis, starting in 2026.

Manav Gupta: Okay.

Speaker Change: Can we 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.

Manav Gupta: Sure.

Manav Gupta: In the middle of our northern Midland Basin gathering footprint.

Manav Gupta: <unk> that we operate on behalf of the.

Manav Gupta: The producer and their affiliates 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 is in the absolute core of the northern Midland Basin.

Manav Gupta: The producer on the system as one of their top assets. So we feel very comfortable with the rock resource inventory.

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

Manav Gupta: That's why we said a win win is a good win for our private equity partner that.

Manav Gupta: Thank you.

Manav Gupta: Develop the asset and it's a great way for playing longer term to own this asset.

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.

Manav Gupta: Thank you.

Manav Gupta: Thank you one moment for our next question.

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. Curious where you think that's sort of really trending and also for 2026. Thanks.

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: 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 203 300000 barrels but where.

Chris Chandler: Sure, Michael. I'll stick to 2025, but what I can tell you is you'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 a 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 without seeing very herculean as a growth expectation for this I would say by and large.

Michael Blum: The producers are very in a very similar situation is a bit of wait and see the volatility just started a month ago and so you don't make two or three year plan is based on one month of activity and you've seen some rebound in that so I think in.

Michael Blum: 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.

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, 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, 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 a month ago.

Michael Blum: Sustains for a longer period of time here, you will see some flattening out.

Michael Blum: 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.

Michael Blum: Endpoint, there was a bit of a wait and see at this point Youre right in this position where you shouldnt 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, but it's very consistent what you've heard from the upstream community.

Michael Blum: They are telling us as well so like I said.

Chris Chandler: It's a function of time and price.

Michael Blum: Our guidance here is just predicated on what could happen in the price range, but the volatility literally started months ago. So 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 outlined on our slide deck, I actually think we.

Willie Chiang: And Michael This is Willie I think.

Michael Blum: The key point on this is when you think about 25%.

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

Michael Blum: Would be very modest.

Michael Blum: 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: This is just going to reinforce the cycle ability and the cycles of commodities. As prices go lower, tend to bring more activity in. As prices go higher, it's the other way around.

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

Michael Blum: This just just going to reinforce there's cyclicality.

Michael Blum: The cycle ability and the cycles of commodities and 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. 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.

Michael Blum: Great I 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.

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.

Glenn: Glenn take that so as opposed to multiple they both hit our return thresholds or higher.

Speaker Change: Mentioned capital discipline.

Speaker Change: The first was.

Speaker Change: A reduction in future Mdc's in exchange for taking ownership of the asset from a partner and we priced in a range of return there and we've done as well or better affiliate 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.

Speaker Change: <unk>.

Speaker Change: 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.

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 J.P. Morgan. Your line is open. Please go ahead.

Speaker Change: Thanks.

Speaker Change: Thank you one moment our next question.

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: 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 on for Jeremy the materials highlighted.

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

Robin Ready: Maybe just wondering how you think about capex spend at this point and how much might be locked in for.

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 Sass 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: 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: 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.

Robin Ready: 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.

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.

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.

Robin Ready: Haven't and won't provide guidance, yet, but we are.

Robin Ready: Feel uncomfortable that.

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

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

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

Chris Chandler: Jeremy?

Robin Ready: Just wondering if we 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.

Jeremy Tonet: Maintain steady cash flow when we set targets and we continue to execute so we're opportunistic around hedging.

Jeremy Tonet: 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 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.

Speaker Change: Thank you.

Jeremy Tonet: Thank you and one moment for our next question.

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 say 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 four months plus of 2025 already in, so we should think about that sensitivity on full year volumes or more like eight-month volumes?

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 claims.

Speaker Change: Well, we're part of the question was related to the sensitivity that was provided.

Speaker Change: The Permian production.

Speaker Change: I was curious as.

Speaker Change: Is the underlying assumption there that the mazo.

Speaker Change: Moving to a particular market.

Speaker Change: Cushing.

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

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

Speaker Change: Almost four months plus of.

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. 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: According to already have fiber already in so we should think about that sensitivity on full year volumes on more like eight months volumes.

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

Speaker Change: We've already grown over 100000 barrels a day. So the view of 200 to 300 still stands for exit to exit 'twenty four 'twenty five.

Speaker Change: So the Permian basin that supply post the market's kind of price for the marginal barrel ago. So you don't necessarily have assumptions upfront 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 dictated by the consumer not necessarily the producers.

Sunil Sibal: Okay. Thanks for that. One clarification. For full year 2025, your guiding in the NGL Segment 45,000 barrels per day of spec sales. I presume there is a fair bit of seasonality in that. How much of that would take in Q1?

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

Speaker Change: <unk> portfolio.

Speaker Change: 25.

Speaker Change: In the NGL segment, 45000 Boes per day off spec sales.

Speaker Change: I presume there is a fair pertussis amantadine that so how much of that data in Q1.

Speaker Change: 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 saddle that we have. The colder months, obviously, more propane's typically sold. 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: And so Neil this is Willie Youll remember the typical sale that we have with.

Sunil Sibal: Thanks for that.

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

Jeremy Goebel: Thank you.

Operator: Thank you. Our next question will be from the line of AJ O'Donnell with TPH.

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. 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.

Speaker Change: And maybe how that could translate into.

Jeremy Goebel: AJ, hi, this is Jeremy. Thanks for the question. Some of that recovery was you had a strong Q4. 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. It is very typical. You have the best weather periods here in the spring and the fall. You see a lot of completions. That surge 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.

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

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

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 crude. You'll see more crude. It's an interrelated question.

Jeremy Tonet: Perspective 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 the long held down there was driven by downstream demand so to get to your question on long haul as you get to December driving season, our refineries ramp back up youre going to see a pickup in those refining markets and their demand for cruise.

AJ O'Donnell: Okay. Appreciate the detail there. 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 six 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 the 80% threshold and pipes hitting that. Just any comment about how you're thinking about the forward market there.

Jeremy Tonet: You'll see more crude Jonathan interrelated questions.

Jeremy Tonet: Okay I appreciate the detail there.

Jeremy Tonet: And then maybe just one more on kind of the longer term outlook.

Jeremy Tonet: Granted like we're all kind of theorizing about what's going to happen over the next you know.

Jeremy Tonet: Six to 12 months here with all the backdrop with volatility, but just curious if you guys could provide maybe some updated views about how you were thinking around total Permian long haul utilization filling up I know there were some materials provided in our previous investor deck, where you talked about the 80%.

Jeremy Goebel: Yeah. AJ, 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, so we're not going to make long-term statements.

Jeremy Tonet: Thresholds typesetting that yeah, just any comment about how you're thinking about the forward market there.

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

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

Speaker Change: Probably not a pause 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, 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 can see things recover on the demand side that you get.

Speaker Change: More certainty around investment in decisions associated with the tariffs and all that settles out you see demand recovery you see the need for more crude oil recover. This is all related so we're not going to make long term statements utilization of pipelines is related to to volumes, but longer term our longer term growth profile and expectations that are Permian hasnt changed.

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.

Willie Chiang: AJ, 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 the volatility, and 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, and no one knows the answer to that. We'll just have to keep following it.

Speaker Change: I don't think that's changed materially.

Speaker Change: It might be a timing thing.

Speaker Change: A J just to reinforce that it's when you think about the current volatility you've got the tariffs tariffs and OPEC alright. Those are the two things that are the are the.

Speaker Change: 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 it.

AJ O'Donnell: Thank you very much.

Willie Chiang: 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.

Speaker Change: Okay.

Speaker Change: Thank you very much.

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

Tim: Tim Thanks for the time.

John Mackey: 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 or 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 1-week periods within given months. You've seen some slowdown on movements internationally. The barrels have to move, so they get priced to move. 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.

John Mackey: So those are two different questions I'd say the.

John Mackey: It very healthy the global refining markets.

John Mackey: And candidly you havent 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 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.

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

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

Jeremy Goebel: 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.

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 are 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?

John Mackey: 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 <unk>.

Willie Chiang: John Mackay, 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. 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: Software is that changing your view.

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 unit holders and we've got our targeted increase.

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 focus on the highest return options for cash so.

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 discipline way. Al, anything to add?

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.

Speaker Change: Using that leverage range really to our benefit as we think about what we might it might be able to do as far as growing in a capital disciplined way Alan anything that.

Speaker Change: The only thing I would add is it is a range that leverage range.

Speaker Change: I don't have the stated desire to be at the bottom end or below 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, we do not view and have no interest in putting.

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

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.

Speaker Change: I appreciate the color. Thank you.

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

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: 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 effectively creating.

Speaker Change: More opportunities.

Theresa Chen: 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 and if there are more sellers coming to market, which you expected more rapid pace of acquisitions, just given the state of your leverage and your bag.

Speaker Change: <unk> and only have a short window to execute how do you view that.

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.

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.

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: Of all the different things that we look at.

Thank you so much.

Speaker Change: Thanks to recent 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.

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.

Speaker Change: Thanks, Michelle well, thanks to everyone for dialing in.

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

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

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

Speaker Change: Yes.

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