Plains GP Holdings, L.P. Announces Significant Acquisitions and Distribution Increase

Plains GP Holdings, L.P., a Delaware-based company and a subsidiary of Plains All American Pipeline, L.P. (PAA), recently disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission dated January 7, 2025, a series of strategic moves aimed at growth and optimization.

In collaboration with Plains All American Pipeline, L.P., Plains GP Holdings shared details of three bolt-on acquisitions totaling approximately $670 million in net cash proceeds to Plains. These acquisitions include the procurement of Ironwood Midstream Energy, Medallion Midstream’s Delaware Basin crude oil gathering business, and the acquisition of Midway Pipeline LLC from a subsidiary of CVR Energy.

Moreover, Plains GP Holdings revealed plans to enhance its capital structure with the purchase of approximately 18% of its outstanding PAA Series A Preferred Units. The company is set to buy back these units at “par” for around $330 million, further reinforcing its balance sheet strength and financial flexibility.

A key highlight of the recent developments is the announcement of a 20% increase in Plains’ annualized distribution rate, translating to a rise from $0.3175 per unit to $0.38 per unit. This move underscores Plains’ commitment to maximizing returns for its unitholders and signifies confidence in the company’s operational efficiency and growth trajectory.

Willie Chiang, Chairman and CEO of Plains, emphasized the strategic alignment of these acquisitions with the company’s growth objectives, aiming to bolster its integrated footprint and drive sustainable value creation. Chiang stated that the acquisitions are designed to enhance the existing assets and accelerate the return of capital to the unitholders, marking a significant advancement in Plains’ capital allocation strategy.

As per the communication, the transactions are anticipated to close in the coming months, subject to customary closing conditions. Upon completion, Plains expects its leverage ratio to stand at or below the low end of the target range, signaling a robust financial position for the company moving forward.

Plains All American Pipeline, L.P., a publicly traded master limited partnership, boasts a diversified portfolio of midstream energy infrastructure assets and logistics services catering to crude oil and natural gas liquids. The company operates extensive pipeline systems and infrastructure across key energy-producing regions in the U.S. and Canada, handling significant volumes of crude oil and NGL on a daily basis. More information about Plains is available on their website.

Investor Relations Contacts:
– Blake Fernandez
– Michael Gladstein
– Email: [email protected]
– Phone: (866) 809-1291

The Form 8-K filing gives investors and stakeholders valuable insights into Plains GP Holdings’ strategic initiatives, financial decision-making, and commitment to enhancing shareholder value through growth and optimization strategies. It also highlights the company’s dedication to maintaining strong financial discipline and creating long-term value for its stakeholders.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Plains GP’s 8K filing here.

Plains GP Company Profile

Plains GP Holdings, L.P., through its subsidiary, Plains All American Pipeline, L.P., owns and operates midstream infrastructure systems in the United States and Canada. It operates in two segments, Crude Oil and Natural Gas Liquids (NGLs). The company engages in the gathering and transporting crude oil and NGLs using pipelines, gathering systems, and trucks.