Q3 2025 Plains GP Holdings LP Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the PAA and PAGP Q3 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Good day, and thank you for standing by. Welcome to the paa and pagp third 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'll need to press star 1, 1 on your telephone.

You will then hear an automated message. Advising. Your hand is raised.

To withdraw your question. Please press star 1 1 again.

Please be advised that today's conference is being recorded.

Blake Fernandez: Thank you, Andrea. Good morning, welcome to Plains All American Q3 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 the call today. 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 consolidated balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chiang, Chairman, CEO, and President, and Al Swanson, Executive Vice President and CFO, along with other members of our management team. With that, I'll turn the call over to Willie.

I would now like to hand the conference over to your first Speaker today, Blake Fernandez vice president of investor relations. Please go ahead.

Thank you, Andrea. Good morning and welcome to planned All-American. Third quarter 2025 earnings call.

Today, slot presentation is posted on the investor relations website under the news and events section at ils.com. An audio replay will also be available.

Following the call today.

Important disclosures regarding forward-looking statements and non-gaap financial measures are provided on. Slide 2.

An overview of today's calls provided on slide 3. A condensed. Consolidating balance sheet for pagp and other reference materials are in the appendix.

Willie Chiang: Thank you, Blake. Good morning, everyone. Thanks for joining us. Earlier this morning, we reported solid Q3 adjusted EBITDA attributable to Plains of $669 million, which Al Swanson will cover in more detail. It's an exciting time for Plains as we continue our multi-year strategy of building the premier North American pure play crude midstream company. Over the past few years, our team has successfully executed on our strategy by meaningfully lowering our leverage profile, maximizing free cash flow, and optimizing across our broad system, all while remaining capital disciplined and returning cash to our unitholders through meeting and beating our targeted annual distribution increases. With the pending sale of our NGL assets expected to close early next year, our portfolio will become even more crude-focused with a more stable and durable cash flow stream.

Today's call will be hosted by Willie Chang, German CEO and president. And I also want an Executive, Vice President and CFO along with other members of our management team with that, turn the call over to Willie.

Thank You, Blake and good morning, everyone. Thanks for joining us earlier. This morning, we reported solid third quarter, adjusted of a DOT tributable to planes of 669 million, which Al will cover in more detail.

It's an exciting time for planes. As we continue our multi-year strategy of building the premier North American Pure Play, crude Mystery Company.

Over the past few years, our team is successfully executed on our strategy by meaningfully lowering, our leverage profile, maximizing free cash flow and optimizing across our broad system. All while remaining Capital disciplined and returning cash to our unit holders through meeting and beating our targeted annual distribution increases.

Willie Chiang: As discussed on our previous calls, the NGL sale is a win-win transaction at an attractive valuation for Plains, our capital allocation priority has been to re-deploy those proceeds to a strong return DCF accretive bolt-ons while staying within our targeted leverage range over the long term. To that point, we are pleased to announce that we now own and operate 100% of the entity that owns the EPIC Crude pipeline. This past Friday, we closed on the previously announced acquisition of a 55% non-operated interest in EPIC from Diamondback and Kinetik. On Monday this week, we signed and closed the acquisition of the remaining 45% operated interest in EPIC Crude Holdings from a portfolio company of Ares private equity funds for approximately $1.3 billion, inclusive of approximately $500 million of debt.

With the pending sales of our NGL assets expected to close early next year. Our portfolio will become even more fruit focused with a more stable and durable cash flow stream.

As discussed on our previous calls. The NGL sale is a win-win transaction at an attractive valuation for planes and our Capital allocation priority has been to

Re employ those proceeds to a strong, return DCF for Creative bolt-ons while staying within our targeted, leverage range, over the long term.

To that point, we're pleased to announce that we now own and operate. A 100% of the entity that owns the epoch crude pipeline.

This past Friday, we closed on the previously announced acquisition of a 55% non-operated interest in Epic, from Diamondback in Connecticut.

Willie Chiang: As part of the 45% transaction, Plains has also agreed to a potential earn-out payment of up to $157 million tied to the sanctioning of potential expansions of the pipeline system by year-end 2028. The EPIC acquisitions are summarized on slide 4. These transactions are highly synergistic and very strategic to Plains' existing footprint and are expected to generate a mid-teens unlevered return. We anticipate a 2026 adjusted EBITDA multiple of approximately 10x, which we expect to improve meaningfully over the next few years. Going forward, we intend to rename the pipeline system Cactus III, which complements our integrated Cactus long-haul system that we have operated for years.

And on Monday this week we signed and closed the acquisition of the remaining 45% operated interest in Epic. Crude Holdings from a portfolio company of Aries, private Equity Funds for approximately 1.3, billion inclusive, approximately 500 million of debt.

As part of the 45% transaction planes has also agreed to a potential earnout payment of up to 157 million tied, to the sanctioning of potential expansions of the pipeline system by year end 2028.

The Epic Acquisitions are summarized on slide 4. These transactions are highly synergistic and very strategic to Plains' existing footprint and are expected to generate a mid-teens unlevered return.

We anticipate a 2026 adjusted epidemic multiple of approximately 10x which we expect to improve meaningfully over the next few years.

Going forward, we intend to rename the pipeline system, Cactus 3, which complements our integrated Cactus Long Haul system, that we have operated for years.

Willie Chiang: The acquisition of the remaining 45% of EPIC gives us the opportunity to assume operatorship, which accelerates and increases the synergy capture of the full pipeline, including meaningful cost, capital, and operational synergies, while improving the takeaway flexibility of our crude system to meet customer needs. Near term, we're poised to benefit from contractual step-ups, reduced operating costs and overhead, quality optimization opportunities, and utilizing the broader Plains Permian and Eagle Ford asset base to drive volumes to EPIC Crude's downstream assets. Longer term, the potential expansion capacities of the system provide Plains and its customers with additional egress to the US Gulf Coast and will generate strong returns as demand dictates further expansions. Regarding the divestiture of our NGL business, we're on schedule to complete the transaction by the end of Q1 2026.

Of the remaining, 45% of Epic gives us the opportunity to assume operator ship, which accelerates and increases the Synergy capture of the full pipeline, including meaningful cost capital and operational synergies. While improving the takeaway, flexibility of our crude system to meet customer needs

Near-term, we're poised to benefit from contractual step-ups reduced, operating costs, and overhead.

Quality optimization opportunities and utilizing the broader planes, permanent and Eagle for an asset base to drive volumes to Epic Croods Downstream assets.

longer term the potential expansion capacity of the system provide planes and its customers with additional egress to the US Gulf Coast and will generate strong returns as demand, dictates further expansions,

Willie Chiang: We have received 2 of the 3 required regulatory approvals, U.S. Hart-Scott-Rodino and the Canada Transportation Act, while the approval process for the Competition Bureau Canada is ongoing. Importantly, the majority of the proceeds to be received upon closing of the divestiture have effectively been redeployed through our acquisition of EPIC, which will result in an accretive and more durable cash flow stream. Due to timing differences between the closing of the transactions, we do anticipate our leverage ratio will temporarily exceed the upper end of our target range until the NGL divestiture is finalized, at which point we expect our leverage ratio to trend towards the midpoint of our target range of 3.5. With that, I'll turn the call over to Al to cover our quarterly performance and financial matters.

Regarding the destitute of our NGL business, we're on schedule to complete the transaction by the end of the first quarter 2026. We have received 2 of the 3 required regulatory approvals: USHEARTS, Scott, Reino, and the Canadian Transportation Act, while the approval process for the Canadian Competition Bureau is ongoing.

Importantly, the majority of the proceeds to be received upon closing of the domestic church have. Effectively been redeployed through our acquisition of Epic, which will result in an accretive and more durable cash flow stream.

Due to timing differences between the closing of the transactions. We do anticipate our leverage ratio will temporarily exceed. The upper end of our target range until the NGL destitute is finalized at which point we expect the leverage ratio to Trend towards the, the midpoint of our target range of 3.5

Al Swanson: Thank you, Willie. For Q3, we reported Crude Oil segment adjusted EBITDA of $593 million, which benefited from higher volumes and contributions from recently completed bolt-on acquisitions, as well as the impact of annual tariff escalation. This was partially offset by certain Permian long-haul contract rates resetting to market in September. Please note that Q4 should serve as a baseline representing the full impact of lower contract rates out of the Permian. Moving to the NGL segment, we reported adjusted EBITDA of $70 million, which was down sequentially due to lower sales volume tied to temporary downtime on a third-party transmission system, as well as the startup of LNG Canada. Slide 5 and 6 in today's presentation contain adjusted EBITDA walks that provide additional details on our performance.

With that, I'll turn the call over to Al to cover our quarterly performance and financial matters.

Thank you Lily for the third quarter. We reported crude oil segment adjusted. EBA of 593 million which benefited from higher volumes and contributions from Recently completed both on Acquisitions as well as the impact of annual tariff escalation.

This was partially offset by certain Parian Long Haul contract rates. Resetting to Market in September. Please note that the fourth quarter should serve as a baseline representing the full impact of lower contract rates out of the Parian.

Moving to the NGL segment we reported adjusted Eva of 70 million dollars which was down sequentially due to the lower sales. Volume tied to Temporary downtime on a third party transmission system as well as the startup of LNG Canada.

Al Swanson: We are narrowing our full year 2025 adjusted EBITDA guidance range to $2.84 to $2.89 billion to reflect lower realized crude prices and contributions from our completed acquisition of EPIC. Please note the benefit from EPIC for the remainder of the year is forecast to be approximately $40 million. A summary of our 2025 guidance metrics and assumptions are located on slide 7. Overall, capital spending remains consistent with our prior forecast. Growth capital spending for the year is expected to be approximately $490 million. The $15 million increase is primarily associated with new lease connects and capital associated with acquisitions. While the 2025 maintenance capital is trending closer to $215 million, representing a $15 million decrease from our last forecast.

Slide 5 and 6 in today's presentation contain adjusted EVA doll walks that provide additional details on our performance.

We are narrowing our full-year 2025 adjusted EBITDA guidance range. It's $2.84 billion to $2.89 billion to reflect lower realized crude prices and contributions from our completed acquisition of Epic. Please note the benefit from Epic for the remainder of the year is forecast to be approximately $40 million.

A summary of our 2025 guidance metrics and assumptions are located on slide 7.

Al Swanson: In September, we issued $1.25 billion of senior unsecured notes, consisting of $700 million due in 2031 at a rate of 4.7%, and $550 million due in 2036 at a rate of 5.6%. Proceeds were used to repay the senior notes that matured in October and to partially fund the EPIC acquisition. With that, I'll turn the call back to Willie.

Overall Capital spending remains consistent with our prior forecast growth, Capital spending for the year is expected to be approximately 490 million. The 15 million dollar increase is primarily associated with new lease connects and capital associated with Acquisitions. While the 2025 maintenance capital is trending closer to 215 million dollars. Representing a 15 million dollar decrease from our last forecast in September, we issued 1.25 billion dollars of senior unsecured notes, consisting of a 700 million dollar uh 700 million dollars. Due in 2031 at a rate of 4.7% and 550 million dollars. Due in 2036. At a rate of 5.6% proceeds, were used to repay the senior notes that matured in October and the partially funded the Epic Acquisitions with that altar.

Willie Chiang: Thanks, Al. We've made significant progress on our journey of becoming the premier crude midstream provider over the last several months, and we believe there are significant opportunities to continue to create value for unit holders through initiatives that are within our control. As seen on slide 8, the combined benefits from bolt-on M&A, synergy capture, and streamlining efforts across the broader organization will provide Plains self-help tailwinds through the near-term volatility. As part of our 2026 guidance in February, we intend to share additional details on these initiatives. Our strategy centers on the view that crude oil will remain essential to global energy and society for decades, as outlined on slide 9.

Starting to call back to Willie. Thanks Al. We've made significant progress on our journey of becoming the premier crude Ministry provider of the last several months.

And we believe there are significant opportunities to continue to create value for a unit holders through initiatives that are within our control.

As seen on slide 8.

The combined benefits from bolt-on m&a. Synergy capture and streamlining efforts across the broader, organization will provide planes self-help, Tailwind through the near-term, volatility,

as part of our 2026 guidance in February, we intend to share additional details on these initiatives.

Willie Chiang: Despite near-term volatility, we remain confident in our ability to navigate current market dynamics, and we expect improving fundamentals longer term, anchored by continued global energy demand growth, coupled with underinvestment in organic oil supply growth and diminishing OPEC plus spare capacity. I'll now turn over the call to Blake to help lead us into Q&A.

Our strategy centers on The View that crude oil remain essential to Global energy and Society for decades as outlined on slide 9,

Blake Fernandez: Thanks, Willie. 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 time this morning. The IR team is also available after the call to address any additional questions. Andrea, we're ready to open up the call for questions, please.

In our ability to navigate current market dynamics and we expect improving fundamentals longer term anchored. By continued Global energy demand growth. Coupled with underinvestment in a in organic oil supply growth in diminishing OPEC plus bare capacity. I'll now turn it over to call to Blake to help lead us into Q&A. Thanks Willie 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. And our time this morning, they are our team is also available after the call to address any additional questions. Andrea. We're ready to open up the call for questions, please.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to 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. Please stand by while we compile the Q&A roster. Our first question comes from Michael Blum with Wells Fargo. Please go ahead.

Thank you. At this time. We will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced to withdraw your question. Please, press star, 1 1 1, again please, stand by while we compile the Q&A roster,

Our first question comes from Michael Blum with Wells. Fargo. Please go ahead.

Michael Blum: Thanks. Good morning, everyone. Wanted to ask on the EPIC deal. Can you give us a little more detail on the synergy capture? How much of that is gonna be cost savings versus commercial synergies? Where do you see the timeline where you capture those synergies and then reach that mid-teens return?

Thanks again, good morning everyone. Um, wanted to ask on the uh epic video. Um, can you give us a little more detail on the Synergy capture? How much of that is going to cost savings uh versus commercial synergies?

And and where do you see the timeline where you capture those synergies and then reach that mid teens return?

Willie Chiang: Michael, good morning. This is Willie. First thing I want to do is I want to compliment our team. If you think about these transactions, these are never perfect timing, and they're hard to do. We were able to do the two portions, and particularly with the 45% just announced, it gives us the ability to have more control over every question that you asked. I would also refer you to slide 4. If you look at the map and you see how integrated it is with the system, I think that helps illustrate the number of ways that we can win. There are a lot of ways we can do this.

Willie Chiang: There's a lot of cost structure savings, there's overhead savings, and a lot of this will be immediate, and we'll be able to capture it in 2026. If you think about the expansion opportunities, it's not one step change function on expansion because we operate it, we'll be able to dictate partial expansions as we go in whatever market demands will be. There's a lot of different ways to win, and it's not simply the expansion. I would tell you, a good portion of it is the cost synergies, capital synergies, the integration with our existing systems. Jeremy, do you have anything to add to that?

Michael good morning, this is Willie. Uh, first thing I want to do is I want to compliment our team. If you think about these transactions, these are never perfect timing and they're hard to do and we were able to, um, do the 2 portions and particularly with the 45% just announced, uh, it gives us the ability to have more control over. Every question that you asked, I would also refer you to slide 4. And if you look at the map and you see how integrated it is with the system, I think that helps illustrate the number of ways that we can win. Um, there are a lot of ways we can do this. There's a, there's a lot of cost structure savings. There's overhead savings. And a lot of this uh will be immediate and we'll be able to capture it um uh in 2026. And if you think about the expansion opportunities it's not 1. Step change function on expansion. Um because we operate it. Uh, we'll be able to uh, dictate uh, partial expansions as we go and whatever. Um, Market demands will be. So there's a lot of different ways to win.

Jeremy Goebel: No. Just from a timing standpoint, I think Willie hit a lot of it. Just the compression and multiple to next year is step-ups in contract and cost savings. Things that are almost immediate and contractual. Beyond that is all the things Willie talked about. We're very confident in the ability to compress this over time and part synergies, part expansions. Just recognize, we sell a substantial amount of barrels at Midland, and we can move those barrels. We have demand from customers to go to the docks. The docks are willing to expand and ready to expand. There's additional markets that we're not connected to in Corpus, that we can move barrels from Midland today that we sell into that pipeline. As Willie mentioned, we can expand the pipeline system, we can capture cost synergies.

And it's not simply the expansion and I would tell you a good portion of it is the cost synergies. Uh capital synergies and integration with our existing systems Jeremy. Do you have anything to add to that? No, just from a Time exam point. I think Willie hit a lot of it, but uh, just the compression in multiple to next year is step-ups and contract and cost savings. So things that are almost immediate and

Jeremy Goebel: There's a lot we can do immediately, and that's contractual. That will compress to the 10 times we announced. The compression beyond that, a lot of that's in our control as well.

Willie Chiang: Remember, Michael, we operate in that quarter, right? Hence, the Cactus III. It's not that we have to learn new ways of doing business. This really fits hand in glove with our existing system.

Beyond that. That is all the things Willie talked about. So we're very confident in the ability to compress this over time, a part synergies but uh part expansions, and just recognize we sell a substantial amount of barrels at Midland and we can move those barrels. We have demand from customers to go to the the docks. The docks are willing to expand and ready to expand. There's additional markets that we're not connected to in Corpus that we can move barrels from Midland today that we sell into that pipeline. So as Willie mentioned, we can expand the pipeline system. We can capture cost synergies. There's a lot we can do immediately and that's contractual that will compress to the 10 timeslot.

And remember, Michael, we we operate in that quarter, right? Hence, the cactus 3. So it's not that we have to uh to learn new ways of doing business. Uh, this really fits hand and glove with our existing system.

Michael Blum: Great. Thanks for all that. Second question, just with your the sale of your Canadian NGL business and now this EPIC acquisition, can you refresh us on your expectations for capital return and whether this extends the runway now to deliver the outsized distribution growth you've been providing now for a while?

Great, thanks for all that. Um second question just with your the sale of your uh Canadian and jail business and now this epic acquisition, do you just refresh? Um can you refresh us on your expectations for for Capital return? And whether this extends the runway now, to deliver the outsized distribution growth, you've been providing now for a while

Al Swanson: Michael, this is Al. Our view is that we will continue to increase distributions by $0.15 until we hit our targeted coverage. The year where we're transacting here, part of it'll depend on when does the NGL sale close. We expect to continue to grow the company in 2026, 2027, and beyond. Again, once we hit our target coverage level, you know, we will revert back to a DCF growth concept. Again, we expect to be able to grow. Again, if you think of the embedded growth in EPIC from today through next year, that's pretty significant. Again, as that multiple, you know, kind of compresses from 10% to 15% unlevered, we see significant growth on this asset.

Al Swanson: Really no change in our approach there.

Embedded growth in in Epic from today, through through next year, that's pretty significant. Um and again as that multiple you know, kind of compresses from 10 to a 15% on lever, we see significant growth on this asset.

Willie Chiang: Yeah. Michael, this is Willie again. We've got quite a bit to digest here. I think what you can see is we continue to look at a lot of things. If we were to transact on things, they'd likely be smaller bolt-ons that fit into the system as we've talked before. We've got plenty of things to get accomplished here over the next six months.

so really no change in our in, in our approach, their

And Michael. This is Willie again. Um, we've got quite a bit to digest here. So I think what you can see is we'll be looking, we continue to look at a lot of things. Um, but if we were to transact on things, they'd likely be smaller bolt-ons that fit into the system as we've talked before, um, we've got plenty of things to get he had accomplished here over the next 6 months.

Michael Blum: Thank you.

Willie Chiang: Thank you.

Thank you.

Thank you.

Operator: Next question comes from Keith Stanley with Wolfe Research. Please go ahead.

Next question, comes from Keith Stanley with wolf research. Please go ahead.

Keith Stanley: Hi. Good morning. Wanna follow up on the distribution question first that Michael just asked. Al, on your answer, you referenced how there's some noise potentially next year related to the Canadian NGL sale. You know, to the extent you weren't at the coverage threshold for a $0.15 increase next year 'cause of timing factors related to that sale and redeployment of proceeds, would that impact how you look at the distribution? Would you see through that and look more at kind of where the run rate DCF would be?

Al Swanson: I'll take a shot, and Willie, jump in. Yeah. Clearly, we would look through noise to run rate as to how we would think about that. Clearly, if the NGL asset doesn't close early in the year and takes, we'll have more DCF. Some of that noise necessarily wouldn't be a limitation per se. But again, our view would be to look beyond the current year as we evaluate this. Clearly, management and the board have robust discussions around distributions and what we're expecting to do. Clearly, the first call on that will be early January when we announce our distribution for February.

Hi, good morning. Want to follow up on the distribution. Uh, question first, uh, that Michael just asked. So Ali on your answer, you, you reference, how there's some noise potentially next? Year related to the Canadian NGL sale? So, you know, to the extent you weren't at the coverage threshold for a 15-cent increase next year, because of timing factors related to that sale and redeployment of proceeds. Would that impact how you look at the distribution? Or would you see through that and look more at kind of where the Run rate DCF would be

Willie Chiang: Keith, Willie here. You know our coverage target is 160% of DCF to coverage. That gives us a little bit of flexibility, and as Al said, we always play for the long term. Our focus is return of cash to our unit holders. I think a lot of that would play into it, and I would agree with everything that Al said.

Um, I'll take a shot and will Willie jump in. Yeah, clearly, we would look, look through noise to run rates, um, as to how we would, we would think about that, clearly, if the NGL asset doesn't close early in the year and and takes, we'll have more DCF. So some of that noise necessarily wouldn't be a limitation per se, um, but, but again, our, our view would be to to look beyond the the current year as we evaluate this clearly management. And the board have robust discussions around uh distributions and what we're expecting to do and clearly the the first call on that will be early January when we announced our distribution for February.

And Keith Willie here. Um, you know, our coverage Target is 160% uh, of of DCF, uh, to coverage. Um, so that gives us a little bit of flexibility in his outsid. We always play for the long term. Our focus is return, a cap cash to, to, to our unit holders. So,

I think a lot of that would play into it and I would agree with everything that Al said,

Keith Stanley: Thanks for that clarification. The second question, going back to EPIC, can you give some color on the duration of the contracts and how you would characterize rates on that pipeline relative to market? It sounds like 2026, there's somewhat of a recontracting benefit already that gets you to the 10x.

thanks for that clarification. The second question, going back to Epic.

Can you give some?

Jeremy Goebel: Sure, Keith. This is Jeremy. There's a substantial portion of the pipeline that's contracted for long term, and I believe that was announced in the restructuring last year that EPIC did. The balance of the pipe has medium duration contracts. We feel comfortable in our ability to work with those shippers to either extend those contracts or add new shippers to those contracts. We're just taking over this week, so it'd be premature to talk about everything associated with it. I'd say we like where we sit. The rates are at current market rates, that they're not meaningfully above market rates, which means longer term, we expect this to be a stable and growing cash flow profile, which leads to Michael's question earlier about DCF accretion between the sale of the NGL and this business.

Color on the duration of the contracts and how you would characterize rates on that pipeline relative to the market. It sounds like 2026. There's somewhat of a recontracting benefit already that gets you to the 10x.

Sure, Keith this is Jeremy. Uh, there's a substantial portion of the pipeline that's contracted for long term and I believe that was announced, uh, in the restructuring last year that epic did. Uh, the balance of the pipe has medium duration, contracts. We feel comfortable in our ability to work with those shippers to uh, either extend those contracts or add new shippers to those contracts. Uh, we're just taking over this week. So it would be premature to talk about everything associated with it. But I'd say we like, where we sit

Jeremy Goebel: We think that will be substantially DCF accretive over tri-time, the trade of those two assets.

The the rates are at current market rates that they're not meaningfully above Market rates which means longer term. We'd expect this to be a stable and growing cash flow profile which at least to to Michael's question earlier about DCF operation between the sale of the NGL and this business we think that will be substantially DCF of creative over time that that trade in those 2 assets.

Chris Chandler: Keith, I might just help. I think publicly previously we said the portfolio had a weighted average duration through 2028. With EPIC, this should extend that out to October of 2029, in case that's helpful.

And Keith, I might just help. Um I think publicly previously we said the portfolio had a weighted average duration through 2028 with epic. This should extend that out to October of 29 in case that's helpful.

Keith Stanley: It is. Thank you.

Operator: Thank you. Our next question comes from AJ O'Donnell with TPH&Co.. Please go ahead.

It is. Thank you.

Thank you.

Our next question comes from AJ. O'Donnell with tph, please go ahead.

AJ O'Donnell: Morning, everyone. I just wanted to go back to EPIC and, you know, now with three pipelines in the Permian to Corpus Christi corridor under your control, how are you thinking about portfolio optimization and maybe like what kind of opportunities there are to move flows across your pipelines and/or reduce operating costs among the three assets?

Uh, morning everyone. Um

I just wanted to talk, go back to Epic and you know, now with uh, 3 pipeline in the, perming the Corpus Christi cord or under your control,

how are you thinking about?

Portfolio, optimization and maybe you like, what kind of opportunities there are to move closer to your pipelines and or reduce operating costs among the 3 assets.

Jeremy Goebel: AJ, this is Jeremy. Great question. All of the above, it all depends on market conditions, right? As the pipes get tighter or looser, you're gonna do different things. You can obviously optimize operating costs, variable costs across the pipeline system. You can offer flexibility across the pipeline system between common shippers that access more markets and push barrels into different connections. You can optimize capital across the system. You can optimize tankage. There's a lot you can do with. Chris' team's gonna do a great job, they've been actively involved in the diligence system of the system. I think we're very excited with that. We're just scratching the surface. It extends beyond the long-haul business.

Jeremy Goebel: This is optimizing flows through the POP JV to get to the origins, the quality at all those locations, as well as in the Eagle Ford. This touches hundreds of miles across multiple assets for us. We think there's a lot of ways, even on the operating costs, aside from the initial cost reductions we'll see to optimize our costs across the system, our quality optimization and connectivity across the system, and flexibility for our customers. The same thing that's allowed us to grow a strong position in the gathering business in the Permian, we can apply all those same things and extend the runway from the gathering business through the long-haul business to the docks, to the markets at Corpus, and throughout the Eagle Ford as well.

List or you're going to do different things. So you can, obviously optimized operating costs. Uh, variable costs across the pipeline system. You can offer flexibility across the pipeline system between common shippers to access more markets and push barrels into different connections. You can optimize Capital across the system, you can optimize tankage. There's a lot you can do with and Chris's teams going to do a great job and they've been actively involved in the diligence system of the system. So I think we're very excited with that. We're just scratching the surface, it extends beyond the Long Haul business. This is optimizing flows through the pop JV to get to the origins. It quality at all those locations as well as in the eagleford. So, this touches hundreds of miles across multiple assets for us. So, we think there's a lot of ways even on the operating costs.

From the initial cost reductions we'll see to optimize our costs across the system. Our quality optimization and connectivity across the system and flexibility for our customers. So the same thing that's allowed us to grow a strong position of the Gathering business. And the Parian, we can apply all those same things and extend the runway from the Gathering business, through the Long Haul, business to the docks, to the markets at Corporation.

And throughout the eagleford as well.

AJ O'Donnell: Okay. Great. Appreciate that detail. Maybe just one more on EPIC, and thinking about potential capital requirements to achieve some of these synergies. You know, excluding larger projects such as, you know, powering the pipeline up to the full design capacity, what kind of additional capital requirements do you see for making, you know, these connections either in the Eagle Ford or downstream? Are they relatively small in nature, or could we potentially see, you know, CapEx moving a little bit higher next year, beyond the normal range?

Okay, great, appreciate that detail. Um, maybe just 1 more on Epic.

and thinking about potential Capital requirements to achieve some of these synergies, um, you know, excluding larger projects, such as, you know,

Powering the pipeline up to the full design capacity, what kind of, uh, additional Capital requirements. Do you see for making, uh, you know, these connections either in the eagle forward or Downstream? Are they relatively small in nature or could we potentially see, you know, capex, moving a little bit higher next year, uh, beyond the normal range.

Chris Chandler: AJ, this is Chris Chandler, and I'll take that. The short answer is the investments for the activities you talked about are expected to be on the modest side. Our near-term capital spending related to EPIC is certainly gonna be directed towards that synergy capture. I think about connecting the systems throughout, whether it's at the origin for supply optionality, or throughout, for operating and quality optimization. So, you know, we see some good opportunities there, but it won't be significant from a capital standpoint. The update to the guidance we gave for 2025 certainly incorporates what I just mentioned there, and our guidance in 2026 and beyond will capture that as well. We don't expect it to be significant.

Hey, Jay, this is Chris Chandler and I I'll take that. Um, the, the short answer is the the Investments, uh, for the activities. You talked about are expected to be on the modest side. Uh, our near-term Capital spending related to Epic, is certainly going to be directed towards that Synergy capture. I think about connecting the systems, uh, throughout whether it's at the origin for Supply, optionality or throughout, uh, for operating and quality optimization.

So you know we we see some some good opportunities there but it won't be significant from a capital standpoint. The uh update to the guidance we gave in for 2025 certainly incorporates, uh, what I just mentioned there and our guidance in 26 and Beyond, I'll, I'll capture that as well but we don't expect it to be significant.

AJ O'Donnell: Okay. Thanks, Chris. Appreciate the comments. Thank you all.

Jeremy Goebel: Thanks, AJ.

Okay, thanks Chris. Appreciate the comments. Thank you all.

Thanks AJ.

Operator: Our next question comes from Brandon Bingham with Scotiabank. Please go ahead.

Our next question comes from Brandon Bingham, with Scotia Bank. Please go ahead.

Brandon Bingham: Hey, good morning. Thanks for taking the questions here. Just wanted to maybe look into 2026 a little bit, if we could, as operator commentary so far this earnings season seems a little mixed with some guys talking about flat crude and others kind of still blowing and going to a certain extent and everything in between. Just wondering what you guys are hearing currently or seeing from your customer base and kind of how that fits with, you know, this year's expected Permian growth. It also looks like the Permian volumes guide is implying a decent step up in Q4. Just anything that you guys can comment on as we set up for 2026.

Hey, good morning. Thanks for taking the questions here. I just wanted to maybe look into 2026 a little bit, if we could. Operator commentary so far this earnings season seems a little mixed, with some guys talking about black crude and others kind of still blowing and going to a certain extent, and everything in between. So, I’m just wondering what you guys are hearing currently or seeing from your customer base.

and kind of how that fits with you know, this year's expected permanent growth and and you know it also looks like the Permian volumes guide is implying a decent step up in 4 q so just anything that you guys can comment on as we set up for 2026.

Jeremy Goebel: Hey, Brandon, let me start with that. For the reasons that you described, it's really hard to kind of get a good gauge on 2026. My observations have been, you've got two of the large majors that are very steady and continuing to grow. There's others that have, you know, taken the stoplight approach and may be a little more hesitant. I think it's a very difficult call on where oil prices are near term. Longer term, we're very bullish the Permian, we're very bullish Canada, we're very bullish North American oil growth. I think there's a lot of signals that have to play out through that. You know, if you think about where our portfolio is

Hey Brandon, let me start with that. For the reasons that you described, it's really hard.

To kind of get a good gauge on 2026. My observations have been, uh, You've Got 2 of the large Majors, um, that are um,

Very, very steady and continuing to grow. There's a, there's others that have, you know, taken the stop light approach and maybe a little more hesitant. I think it's a very difficult call on where oil prices are near-term, uh, longer term. We're very bullish. Um, the Permian we're very bullish Canada, we're very bullish, North American oil growth. Um, but I think there's a lot of signals that have to play out through that. Um,

Willie Chiang: You know, I made a comment in my in the prepared comments. You think about global demand continuing to grow, which I do believe it will, because it's gonna be, we need oil for all the different reasons that we all know, creating quality of life. The thing that I've been watching for quite some time is drill bit or organic investment. If you look at the trends, now these are not my numbers, but other people that study this. If you look at the last trends, organically, we're not replacing reserves, right? It's, it's below 100%. You can't do that for an extended period of time. That's why we're very, very bullish on North American oil sources.

These are not my numbers, but other people that study this, if you look at the last Trends uh organically we're not replacing reserves, right? It's uh, it's below 100%.

Willie Chiang: I think the whole restructuring of the flows of trade from barrels going into the North America to leaving is gonna continue. I would say we're in mid-innings on the efficiency of being able to do that with oil. Certainly, we're doing it, Plains isn't doing it, but you got NGLs, you've got gas. All that is an export story. I think there's a lot of opportunities to win going forward. Calling 2026 is a really tough one, and that's why we have decided to go to February to be able to give you the best intelligence that we've got. Sorry for the long-winded answer, but hopefully it lets you know how we feel about it and where we fit in the long-range outlook.

And, uh, you can't do that for an extended period of time. So that's why we're very, very bullish on, um, on North American Oil sources. And I think the whole restructuring of the flows of trade from barrels, going into the North America to Leading is going to continue. And uh I would say we're in mid, mid Innings on the efficiency of being able to do that with oil. Certainly we're doing it. Not we planes Us in doing it but you got ngls. You've got gas all that is is an export story, but I think there's a lot of opportunities to win going forward, but calling 2026 is a really tough 1 and that's why we have decided to go to February, to be able to give you the best intelligence that we've got. So sorry for the long-winded answer, but hopefully it, uh, lets you know how we feel about it and where we fit in the uh the long range Outlook.

Brandon Bingham: Yeah, very helpful. Thank you. Just a quick one. The sales proceeds are effectively utilized now for the most part. Could you just maybe discuss your thoughts on pref retirement and how it fits into the capital allocation strategy moving forward and just kind of what the pecking order is? I think you discussed a little bit in your prepared remarks, but just any updates there.

Yeah, very helpful. Thank you. Uh, and then just a quick 1, the the sales proceeds are effectively utilized now for the most part. So could you just maybe discuss your thoughts on?

Press retirement and how it fits into the capital allocation strategy moving forward and just kind of what the hecking order is. I I think you discussed a little bit and you're prepared remarks but just any updates there.

Al Swanson: Sure. This is Al. Yeah, since we announced the sale in June, we've now deployed $3.1 billion via the acquisitions, the BridgeTex acquisition earlier in the year and now $2.9 billion here. So effectively, the proceeds will go to debt reduction. That will allow us to get to roughly the midpoint of our leverage range, shift ahead after closing and reducing debt and being at the midpoint. We'll go back to our normal capital allocation, which will look at return cash to shareholders through distributions as well as bolt-on acquisitions, retirement of the pref, and/or opportunistic common repurchases.

Sure. This is Al. Um yeah since we announced the sale in in June, we've now deployed 3.1 billion dollars via the Acquisitions. The the bridge Tax Act physician earlier in the year and now 2.9 billion here. Um, so effectively, the proceeds will will go to debt reduction, um, that will allow us to, to get to roughly the midpoint of our, our leverage range. Um shift shift ahead after after closing and and reducing debt and being at the midpoint, then we'll go back to uh our normal Capital allocation, which we'll look at

Al Swanson: Quite honestly, when you're sitting at the midpoint of the leverage range and still seeing potential opportunities to deploy capital with good return, we'll be more biased towards looking at the bolt-ons at that point.

Distribute return cash to shareholders through distributions as well as uh, uh, bolt-on Acquisitions, uh, retirement of the press Andor opportunistic, common repurchases. But quite honestly, when you're sitting at the midpoint of the leverage range,

And still seeing potential opportunities to deploy Capital with good returns. We'll be more biased towards looking at the boltons at that point.

Brandon Bingham: Makes sense. Thank you.

Makes sense. Thank you.

Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Sunil Sibal with Seaport Global. Please go ahead.

1 moment for our next question.

Our next question comes from Sunil Sabal with Seaport Global. Please go ahead.

Sunil Sibal: Morning, and thanks for all the clarification. Just a quick one from me. You know, now that you've transitioned to a pure play crude, the DCF coverage ratio of 1.6x, could you talk about that in terms of how you think about that in more medium to longer term with the new business mix?

Good morning, and thank you for all the clarification. So just a quick one from me; now that you've transitioned to a pure play crew,

the the DCF coverage ratio of 1.6 X, could you talk about that in terms of how you think about that in more medium to longer term with the new business, Max,

Willie Chiang: Yeah. Sunil Sibal, this is Willie Chiang. The coverage that we set on 1.60, you'll recall, I think it was late 2022 that we announced that. It's something our board looks at regularly. Clearly, without the NGL assets and the more durable cash flow stream that we have, that's something else we can look at. We still expect to be conservative in our approach. No change to the 1.60. As we go forward, the way I would characterize it, we've got a lot more levers that we can work with as we go forward and get a better triangulation of what the future brings.

Yes, and Neil. This is Willie, uh, the coverage that we set on 160 you'll recall. I think it was late 22, that we announced that, um, it's something our board looks at regularly clearly without the NGL assets. And um, we in the more durable cash flow stream that we have, um, that's something else we can look at, uh, but we still expect to be, uh, conservative in our approach. Um, no no change to the 160, but as we go forward, the way I would characterize it is we got a lot more levers that we can work with as we go forward and get a better triangulation of what the future brings.

Sunil Sibal: Okay. Thanks for that. When you look at your crude portfolio in Permian post the EPIC, could you talk a little bit about, you know, your operating leverage in the system vis-a-vis, you know, between your gathering and in-basin pipeline and the long haul? Where do you see the most operating leverage?

Okay, thanks for that. And then, when you look at your crude portfolio in Permian post, the Epic, uh, could you talk a little bit about, you know, your operating leverage in the system Visa is, you know, between your Gathering and in base in Pipeline, and the Long Haul.

Where do you see the most operating Leverage?

Jeremy Goebel: Sure. Sunil Sibal, this is Jeremy Goebel. We've been working on contracting. You saw additional volumes on basin through the summer. We've done more contracting there. With the acquisition of BridgeTex, we've worked with them to put more barrels on that system. We're executing with operating leverage now. Despite the fall off in contractual rates, we're backfilling that using operating leverage. We see a lot of opportunity to do that with EPIC, that creates a new opportunity for us to use operating leverage in a substantial way, given that the rest of our system is heavily contracted. Within the gathering system, there's a few underutilized laterals within the EPIC. We'll work with our POP JV partners to fill those up. That creates capital avoidance opportunities and the ability to reduce operating expenses through it.

Jeremy Goebel: EPIC's providing us additional operating leverage in the gathering intrabasin and the long-haul system for us to then go fill through the long-term contracts we have on the gathering business. We're excited about the pull-through benefits for the entire system.

Partners to fill those up so that creates Capital avoidance opportunities and the ability to uh, reduce operating expenses through it. So ethics, providing us additional operating leverage in the Gathering intra Basin and the Long Haul system for us to then go Phil uh, through the long-term contracts we have on the Gathering business. So we're excited about the pull through benefits for the entire system.

Willie Chiang: Hey, Sunil, this is Willie. You asked about the Permian. I might make a broader comment on North America. You know, when you think about the broader macro, there's been a lot of chatter in North America, particularly around Canadian crude, ability to get more Canadian crude to markets. You're very aware of the expansion that has happened on or the new line of TMX going to the West. Canada has vast resources that could get produced if there are more export routes to markets. When you think about our system, and other systems across North America, you know, one of the challenges are if you can stitch all that together, there's a lot of ability to get to global markets, primarily by going south through the US.

Willie Chiang: As you know, we have a large pipeline called Capline that goes from Patoka down to the Gulf Coast that's got a lot of spare capacity, to your point on leverage. We haven't taken our eye off the ball of being able to solve a broader problem of oil that might be in the next inning or even the next inning to be able to get more energy and oil to global markets. With the footprint we have, we've got a lot of flexibility around that also.

Hey senal. This is Willie. You didn't you asked about the Parian. I might make a broader comment on North America you know when you think about the broader macro um there's been a lot of chatter um in North America particularly around Canadian crew um ability to get more Canadian crew to markets and you're very aware of uh the expansion that has happened on or the new line of TMX going to the West. Um, Canada has vast resources. That could get produced if they're more, uh, export routes to to markets. And when you think about our system, uh, and others systems across North America, you know, 1 of the challenges are. If, if you can stitch all that together, there's a lot of ability to get to um, to to Global markets primarily by going south through the US. And as you know, we have a a large pipeline called CAP line that goes from ptoa down to the Gulf Coast. That's got a lot of spare capacity to your point on Leverage. So um,

We haven't taken our health, the ball of being to be able to, um, to solve a broader problem of oil that might be in the next inning, or even the next inning to be able to get more energy and oil to, uh, to Global markets. And with the footprint we have, we've got a lot of flexibility around that also

Sunil Sibal: Got it. Thanks, folks.

Willie Chiang: Thank you.

got it. Thanks folks.

Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Jeremy Tonet with J.P. Morgan Securities. Please go ahead.

1 moment for our next question.

Our next question comes from Jeremy tonette with JP Morgan Securities. Please go ahead.

Jeremy Tonet: Hi. Good morning.

Willie Chiang: Good morning, Jeremy.

Hi, good morning.

Jeremy Tonet: Just wanted to pick up with, thoughts you might be able to share on 2026. Granted, as you said with the Permian, it's too early to really, you know, have much specificity there. Just wondering at a high level outside the Permian for other basins that you're in, if you could provide any kind of high level thoughts as far as direction of travel in volumes there over time, that would be helpful.

good morning, Jeremy

Willie Chiang: Sure. Jeremy, what we've seen this year is a slight decline in the Rockies and Mid-Continent regions across the gathering assets. Some in the Eagle Ford as well, modest. We see activity levels being able to sustain that. Some of that was, you had significant growth in the DJ and Bakken from blowing down drilled but uncompleted wells. That's out the system, so we see more stable production in the next year in those regions. In the Permian, we see maintenance level activity for the short term, but we see significant leverage to increasing that. You've seen it. Everybody's reducing capital, but maintaining production. You can see through this Q4 so far in the earnings that efficiencies are there and the ability to drive. We see resource expansion in New Mexico and other locations.

Uh just wanted to pick up with uh thought you might be able to share on 2026 and granted. As as you said with the Permian it's too early to really, you know, have much specificity there. But just wondering at a high level outside the permium for other basins that you're in, if you could provide any kind of high-level thoughts as far as direction of travel Inn in volumes there over time, uh that would be helpful.

Sure, uh, Jeremy what we've seen this year is, uh, slight decline in the Rockies and and Mid-Continent regions across the Gathering assets. Uh, so I'm in the the eagleford as well modest. We see activity levels being able to sustain that some of that was uh you had significant growth in the DJ and bachan from uh blowing down drill non-compete Wells. That's out the system. So we see more stable production in the next year in those regions.

Willie Chiang: Longer term, it's giving us more confidence in the ability to grow the Permian and maintain the other basins at a lower break-even price. That gives us some confidence, but that's the near-term look.

Herman, we see maintenance level activity, for the, the short term but we see significant leverage to increasing that. You've seen it. Everybody's reducing Capital, but maintaining production. So you can see through this fourth quarter so far in the earnings that efficiencies are there and the ability to drive. We see resource expansion in New Mexico and other locations. So, longer term, it's giving us more confidence in the ability to grow, the Parian and maintain the other basins at a lower Break Even price. So uh, that gives us some confidence, but that's a near-term. Look.

Jeremy Tonet: Got it. That's helpful. Thanks. Just a smaller question, if I could, on the Keyera sale. How are you guys going about managing FX risk there, given the volatility we're seeing in FX?

Got it. That's helpful, thanks. And just a smaller question. If I could on the uh Kiara sale. Um, how are you guys going about managing FXX there? Given the volatility we're seeing in FX

Al Swanson: We fully hedged that basically at the time of the transaction. We did a deal contingent structure that effectively locked down the rate. If for some reason the transaction didn't happen, we're not exposed to the adverse movement that could have happened.

Um we we fully hedge that uh, basically at the time of the transaction. So uh we we did a deal contingent structure that effectively locked down the rate and if for some reason the the the transaction didn't happen, uh, we're not exposed to the adverse movement that could have happened.

Jeremy Tonet: Got it. Very helpful. I'll leave it there. Thank you.

Willie Chiang: Thanks, Jeremy.

Got it very helpful. I'll leave it there. Thank you.

Thanks, Jeremy.

Operator: Thank you. Our next question comes from Manav Gupta with UBS. Please go ahead.

Thank you.

Our next question comes from manav Gupta with UBS. Please go ahead.

Willie Chiang: Manav, you there?

Manav Gupta: I have a question. Can you hear me now? Hello?

Can you hear me now?

Willie Chiang: Yep, we can hear. Go ahead.

Manav Gupta: Okay. Quick follow-up. I think you answered it in a way, but I just wanted to follow up. There are some good deals out there, and you have been very prudent and very smart about these bolt-on deals. I'm just trying to understand if there is a good deal out there which meets all your threshold criteria, even if you're slightly above the midpoint of your leverage targets, would you hold back or you probably are okay with moving towards the top end and closing on a good opportunity which you think should not be just let go just because you're slightly over the midpoint of leverage? If you could talk a little bit about that.

Willie Chiang: Yeah, Manav, thanks for the question. Well, we always look for opportunities to grow the enterprise value. I would like to think that our judgment would be good enough to be able to sift through what I would call short-term noise versus long-term noise. If it was characterized as you did, it was something that met all of our thresholds, was strategic with a high risk of being able to execute it, that's something we would absolutely consider.

Moving towards the top end and and closing on a good opportunity which I think should not be. Just let go, just because you're slightly over the midpoint of Leverage. If you could talk a little bit about that.

Yeah, I mean, um, thanks for the question. Well, we always look for opportunities to grow the Enterprise Value. And um, I would like to think that our judgment would be good enough to be able to, to sift through what I would call, short-term noise versus long-term noise. And if it was characterized as you did, it was something that met all of our thresholds with strategic with, uh, with a high risk of being able to execute it. That's something we would absolutely consider.

Manav Gupta: A quick follow-up on Keyera. What is the gating item here, if you could, which needs to be done before the deal can be closed? If you could help us understand that a little better.

Willie Chiang: Well, I wish I could help you understand it better, as I'm not an expert in this. It's the Canadian Competition Bureau and the process that they go through similar to our FTC HSR process.

And a quick follow up on on Kira. What is the gating item here if you could, uh, which which needs to be done before? The deal can be closed. If you could help us understand that a little better,

Well, I wish I could help you understand it better, as I'm not an expert in this. But it's the Canadian Competition Bureau in the process that they go through, similar to our FTC HSR process.

Manav Gupta: Okay. Thank you so much.

Willie Chiang: Which is ongoing. You bet, Manav.

Manav Gupta: Thank you.

Okay, thank you so much. This is ongoing you bet my now

Willie Chiang: Thank you.

Thank you.

Thank you.

Operator: Next question comes from Jean Ann Salisbury with Bank of America. Please go ahead.

Jean Ann Salisbury: Hi. Good morning. Just one for me. As you're considering whether or not to expand EPIC, can you give us an update of the relative attractiveness of Houston and Corpus for export? It seems like over the next few years, there are rollouts on pipelines to both destinations that would be competing for recontracting. I know Corpus has historically been more desirable, but is that narrowing at all with the Houston Ship Channel expansion?

Next question comes from Gene and Salisbury with Bank of America. Please go ahead.

Hi, good morning. I just wanted for me um as you're considering whether or not to expand epic. Can you give us an update of the relative attractiveness of Houston and Corpus for export? Um it seems like over the next few years. There are rolloffs on pipelines to both destinations that would be competing for recontracting. Um I know Corpus has historically been more desirable uh but is that narrowing at all with the Houston Ship Channel expansion?

Jeremy Goebel: Jean Ann, this is Jeremy. I would say nothing's materially changed. Certainly both ports are competing. You've seen expansions at Corpus as well. The Ingleside dredging's been done. The channel's largely been dredged. It's way more efficient than it's ever been. For me, Corpus is getting more and more efficient, even more so than Houston from a large ship standpoint. The quality differential is a big one just because it's only Permian barrels touching the docks versus touching a lot of barrels that come from the Mid-Continent. There's a quality benefit and a logistical benefit, and that continues to hold the advantage. That's why you see the premium at, on the water at Corpus versus Houston. Pricing is also indicating the preference for Corpus over Houston.

Uh, Gina and this is Jeremy, I would say nothing's materially changed, uh, certainly, both ports are are competing you've seen expansions of Corpus as well, the the angle side dredging has been done. The channels, largely been dredged, it's way more efficient than it's ever been so for me Corpus is getting more and more efficient even more so than Houston from a from a large ship standpoint but the quality differential is a big 1 just because it's only permanent barrels touching the docks versus touching a lot of barrels that come from the Mid-Continent. So there's a quality benefit and a logistical benefit and that continues to hold the advantage. That's why you see the premium of it on the water at Corpus versus Houston. And so pricing is all

indicating the

Jean Ann Salisbury: Great. Thanks, Jeremy. Very clear. I'll leave it there.

The preference for Corpus over Houston.

Great. Thanks, Jeremy. Very clear. I'll leave it there.

Operator: Thank you. Our next question comes from John Mackay with Goldman Sachs. Please go ahead.

Thank you.

Our next question comes from John McKay with Goldman Sachs. Please go ahead.

John Mackay: Hey, everyone. Thanks for the time. Willie, I wanted to pick up on your comments around potential involvement on some incremental Canadian crude egress. Could you maybe just talk to us about what some of the moving pieces are? I know you don't have a kind of formal project yet, but would love to hear a little bit more color on maybe what you guys are thinking.

Willie Chiang: Well, fundamentally you've got resources that are trapped, and you've got If you think about the Canadian down to the US Gulf Coast, you got refiners that wanna run that heavy barrel. You've got different players with different strengths and weaknesses. There are some large long-haul lines out of Canada that could have expansion capacities. You get to the border, and there's a number of different options. You can get barrels from the border to key hubs, and Patoka is one of them. You've got a large unutilized capacity at Capline that could ultimately be a solution. That's not to say it's the only solution.

Hey, everyone, thanks for the time. Uh, Willie I wanted to pick up on your comments around potential involvement on some incremental Canadian crude egress. Could you maybe just just talk to us about what some of the moving pieces are, I know you don't have a kind of formal project yet, but would love to hear a little bit more color on on, maybe what you guys are thinking.

Willie Chiang: My point on this is really just to reinforce, when we talk about a midstream, a crude-focused midstream business, this is exactly the things that we are looking at of how we might participate in being able to get low-cost, reliable solutions to additional markets without having to build a brand new long-haul line from source to destination. Hopefully that helps, John.

Well, fundamentally you've got you got resources that that are trapped and you've got, if you think about the Canadian down to the to the US Gulf Coast, uh you got refiners that want to run that heavy barrel. Um and you've got different players with different strengths and weaknesses. Uh, there are some large Long Haul lines out of Canada um uh that could have expansion capacities, then you get to the border and there's a number of different options. You can get barrels from the border to key hubs, uh, and poke is 1 of them. And you've got a large unutilized capacity at capline, that could ultimately be a solution. That's not to say, it's the only solution. But my point on this is really just to reinforce when we talk about a Midstream, a crude focused Midstream business. This is exactly the things that we are looking at of how we might participate in being able to get low-cost uh, rely.

Reliable Solutions, uh, to to the to additional markets without having to build a brand new Long Haul line from source to destination. Hopefully, that helps John

John Mackay: No, that's clear. Thank you. The second one will be quick, I think. It's for Al. Just on the EPIC debt, would you guys just expect to kind of refinance that at some point, or could that be a, I guess, net use of cash from the Plains side?

No, it's clear. Thank you. And and the second 1 will be quick, I think, thanks for all just on the Epic get is that um, would you guys just expect to kind of refinance that at some point? Or could that be a? I guess net use of cash from the plain side.

Al Swanson: Yeah. Our plan is, the base plan was we assumed it's now ours. Our view was, depending on the timing of these closing and us being, owning 100%, which happened obviously on the early track, our view is to repay it with the proceeds from the NGL sale. It will be going away. The question is how quickly. Our view will be now that we've closed and depending on how long we think, if the NGL transaction doesn't close until maybe later in Q1, we might look to do a term loan up at the parent to funnel the proceeds down to repay it earlier. The economics may support doing that. It's a function of how long the term loan needs to be out.

Um yeah. Our our plan is uh the base plan was we assumed it and so it's it's now ours. And our view was depending on the timing of these closing and us being owning a 100% which happened obviously on the early track.

Al Swanson: That's something we'll explore now that we can catch our breath a little bit after getting the thing signed up and closed.

Along. We think if it if the NGL transaction doesn't close until maybe later in the first quarter, we might look to do a Term Loan up at the parent to and funnel the proceeds down, uh, to repay it earlier. The economics May support doing that, it it's a function of how long this, how long the term loan needs to be out. So that's something, we'll explore. Now that we can catch our breath a little bit after after getting the thing, signed up and closed.

John Mackay: That's clear. Appreciate the time.

That's clear, appreciate the time.

Operator: Thank you. I'm showing no further questions at this time. I'd now like to turn it back to management for closing remarks.

Willie Chiang: Well, listen, everyone, thanks for joining us this morning. We'll look forward to giving you further updates and seeing you on the road in the near term. Have a great day.

Thank you. I'm showing no further questions at this time. I'd now like to turn it back to management for closing remarks.

Well, listen everyone, thanks for joining us. This uh morning. We'll look forward to giving you further updates and seeing you on the road in the near term. Have a great day.

Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Thank you for your participation. In today's conference, this concludes the program. You may now disconnect