PAA - Earnings call transcript Q1 2022 | Plains All American Pipeline, L.P.

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Operator

Good day, and thank you for standing by. Welcome to the PAA and PAGP First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. turn over to today, your like Mr. would the to conference speaker I Lamoreaux. Roy Please go ahead.

Roy Lamoreaux

Good Executive welcome audio presentation CEO; afternoon, and American's appendix. turn Chief Goebel, Chino. of under you, Thank call on and Events forward-looking also With and also XXXX X available the following Chief call Relations over Vice Slide in section materials Executive including hosted Call. be Vice the Finance and Officer. I and Operating on President on News Accounting First financial Chris where to Slide located Earnings Today's and Officer; will measures posted or balance overview slide and non-GAAP The an is reference plains.com, Chief and condensed Willie. Investor Senior to and website is for replay Quarter All members available will President, call will Al Jeremy Today's team Herbold, now today's are call. and of sheet will X. ride statements our Financial Important Commercial -- Chris Chief consolidated Swanson, by for are that, and disclosures other the Q&A, be Officer; President the Vice today's an Other be regarding of consolidating Chairman Chandler, Willie President the provided Officer. Plains PAGP Chiang, Vice Executive and

Willie Chiang

you joining Thank you, good and us. Roy, and everyone, for afternoon, thank

PAA expectations. million, is a to attributable first strong adjusted the $XXX start year, our which to solid While quarter previous is off reporting EBITDA above our to business of

X.XXX asset guidance increasing portion year outlook provide Al and importance balance and the our billion Given everyday and on events a primarily abundance critical with need reliable of specifically, play associated focus highlighted technology. and price fundamentals for supply our the Current more innovative of role the year Permian, This North minus that a call We plays shale, constructive produced quarterly more results to with to by reaffirmed to environment commodity North is of demand. both year, industry skilled his segments. driven life, spurring decades will and and integrated hydrocarbons American XXXX base and labor force resources, we midstream believe energy EBITDA the in the our business benefits American in upside. of global the are our NGL the connecting for adjusted within or capital, million and model strong detail for a by and the with renewed responsibly access XX global full performance will biased the the of crude on plus energy energy. in our quarter call. The our security energy full higher for will critical and role remain a a have outlook safe,

a As Permian our In per year-end XXXX to executing day at least which systems we barrels for day of approximately Permian, we anticipate gathering the shown Slide incremental on year-end barrels levers on growth we XXX,XXX tariff continue of our returns. XXX,XXX to maximizing X, of on XXXX, expect an in production are capturing unitholder XXXX.

of result versus long-haul incremental contracted an and full a Permian year barrels in February. pipelines volumes have flexibility XX,XXX As our added our of we leverage, our to operating system expectations short-term day a

years. optimizing and existing to over long-haul our volume drives expect focus higher allow both on XXXX, price production a Permian systems. improving next expect facilities and This our gathering and As growing gas production in we and segment, continues our continued we growth NGL growth In several Western the additional meaningful NGL with beyond combined fundamentals, demand and our on capture operations debottlenecking supply environment. Canada

Additionally, salt-caverns the with of adding conduct MOU a government Atura we emerging which a subsidiary to Power, Power's aligns our continue with such capital-efficient is would hydrogen the Brighton facility. directly Windsor, announced station in storage could hydrogen recently opportunities support and province Ontario Atura Ontario. result recently generation storage Ontario Beach a energy the feasibility as outlined This strategy of capability pursuing at by study, which larger

generating expect cash cash manner financial maximize and a our returns. balanced significant in will we strategy, Regarding we allocate unitholder to free flow this continue to multiyear

also increase to million investments. we distribution cash repurchase program disciplined cumulatively continue making to while inception. per equity capital common and return since unit have of a Our holders debt repurchased $X.XX prioritize near-term and that we last equity announced increasing month, focus under $XXX will annualized In reduction regard, approximately our

and at Ukraine X has against drowning is multiyear the hovering the demand conflict slide of investment increased price reduced and multiyear tight contrasted tightness inventories the supply lows, all a recovery in backdrop on shown volatility. and resulting Russia As X, between a and causing demand and commodity a exacerbated down balance upstream further underpins higher The environment. price of market which commodity global

returns position reach key our Permian as by basins. other meeting with high US integrated us and system and that Plains' American existing shale pipelines flow our mid-XXXX energy approximately located both be and will cash crucial and to model business that, leverage the over by global free significant returns longer production, well operating and horizontal infrastructure levels contracted to distribution benefit Permian led of long-haul our with on continue highly positioned cash meaningful critical multiyear in our I will turn This generate dedicated to demand equity the of unitholder acreage, meaningful to Furthermore, producing We North and well flow. gathering cash as call strong near strong total coverage further drive term. increase million holders to and With leverage Al. to target with half capacity Permian, is system expect Permian acres supplying four the currently to rigs and supported in

Al Swanson

our on million, more XXXX commodity prices slides segment, detail of NGL first on seasonality, well merchant pipeline pipelines. in by increased guidance including Slide We've and XXXX volumes offset through volumes Wink-to-Webster startup and adjusted segment We spreads in oil adjusted the million volumes Capline including guidance of our walks, reported improved full and minus opportunities. A is or frac $X.XXX EBITDA and and quarter-over-quarter benefiting first benefit year which X barrels, higher allowance XX. on as $XXX by Willie. provide NGL by increase $XX factors, The Permian our reduced our pricing performance. our of the business as partially X the and increased EBITDA contain system and billion. our located Thanks, is improvements EBITDA higher of crude of to which several plus quarter year-over-year loss benefit summary driven X quarter adjusted the includes

our our $XX and detailed Line in As and million item release, EBITDA. treated increase with we recorded XXX a in adjusted excluded expense settle class been the reached in agreements from as XXX principle earnings comparability has incident, Line impacting an to associated lawsuits regarding action net selected two which

will California, The is insurance. be first $XXX for by a in is believe in pending We lawsuit million. settled federal substantially this reimbursed be which class to proposed action court

approximately in Court, through update to and flow our set slide The derivative balanced fees the are other XXX profile of attorney's the in focus Delaware these of terms. in reduction of approach XXX changes release. matters and $X More forth a and near the information free included settlement on on proposed press it and the million the debt a payment Line Line the second non-financial is financial overview our We remain pending in Chancery accruals allocating is An cash regarding in includes focused earnings current term. settlement reflects provided continued significant that a XX. generating on suit

impacts timing excluding and of guidance unchanged. XXX Line our insurance the relatively of the the our of anticipated free settlement is cash XXXX, For reimbursement, flow estimate

our reduced effect timing, of $XXX million. this Given guidance by we have

expected the are from the discretionary available or next XX allocated over which the Accordingly, of XXXX leverage was million. amount unit maintaining we be to we impact repurchases what months, is our our year-end at in plus to guidance guidance, and XXXX to for X.XX times. Importantly, indicated $XXX remains cash approximately February minus reverse

on last available framework of and allocation is summary repaid we In plus to minus consolidated on the capital is maintenance slide committed of X.X is or repurchased discretionary capital for outlook Our balance A million summarized remain of We year. capital potential over the capital XX. unchanged $XX of our repurchases notes units for discipline first quarter, investment up and senior XXXX million expect $XX program million. from XX. $XXX and slide million capital to common of million, $XXX leaving quarter the million plus and minus $XXX or

provide additional that, new turn call and and both historical to we in into feedback, Additionally, from today's which slides visibility appendix, forward-looking are segment, I'll to included have over crude in several designed With Willie. back perspective. to and our improved oil NGL a the response detail

Willie Chiang

Al. Thanks,

business JV Permian systems. positive fundamentals, a and Our in long-haul off on favorable our supported XXXX, by to environment a constructive start commodity increasing is and price volumes very

executing our XXXX goals As such, we against XX. outlined slide on positioned well remain to continue as

ourselves outlook Before on how positioned opening our for we've to XXXX beyond. like I'd comments longer-term and the call and share to some Q&A,

of Permian Permian As XX to oil the against current earlier, production global be our the I will outlook we increased critical out shows capacity Slide demand. stated believe meeting basin. takeaway

the of and roughly next per slight above systems. production day years, XXX,XXX bias update per increasing the million for by our benefit to to year, growth outlook year. growth this later incremental Our positive barrels several currently if we Any our February will XXXX. production XXX,XXX that, per day barrels over should appropriate, meaningful production X barrels have a We reflected forecast,

slightly nameplate or day, at a we of capacity XX% operating a Looking current is greater roughly the the barrels which, barrels X than Permian day efficient approximately X capacity. believe is million that takeaway, million

capacity and to As return more tightening normalized haul should increase, to will production utilization and spare water begin level. the a to long continue tariffs

this in $X.XX in to begun and to barrel prompt fact, from XXXX to forward the we've approximately of Midland a in spreads as see barrel today's doubling approximately Coast Gulf water $X.XX to by US barrel. early $X.XX per indicated markets, of innings month the to In the approximately tripling XXXX a

CapEx point is, meaningful with Plains have my in capacity base our minimal So and asset with system producing we critical ground basin, in pipe the a available has across requirements. a key

move from it's to and asset reliably improved model levels or energy today. us capturing and any production allows to integrated current expectations, Our and additional long-haul safely, from margins beyond our responsibly market business markets will accelerating current multiple benefit growth base whether

through acres. significant capital backed business requirements. and As XX% our illustrated We've Furthermore, multiyear XXXX. leverage free in environmental through successful to alignment continue position legacy Financially, high-return XX years, facilities and exercising further We've X our million optimize leverage assets have of to taken strategic the our business, on and system minimal since mid-XXXX. throughout opportunities. billion we optimize slide evaluating metrics XX, safety be base, to continued forming with our in for the business future targeted to alignment we've noncore operations continued long-term asset we our capital JV, joint cash assets in $X.X numerous operating are flow any some than a our and to improving by ventures asset debottlenecking JV over excellence, generating key dedicated strived commercial discipline, recently, gathering operating recent environment. we additional creating our steps expect Permian while achieve completing which and In sales by our most XXXX NGL and investing is focused by created greater continue

We a our returns equity holders. capital maintaining balanced overall ourselves our commitment rating allocation approach, continue to including to our increasing and taking to have positioned investment-grade

we positioned our of even are While meaningful on business, equity in levels, In the distribution now into we growth us future. and and strong for coverage we returns. well EBITDA we XXX%, current summary, believe have and capital-efficient giving focused at a growth capacity expect approximately are

So with call the that, turn to I'll Roy. over

Roy Lamoreaux

takeaways summary call Thanks, the key on provided today's Willie. are A of from XX. slide

address to As from to available one if question. question this This tracked the top have allow as question, afternoon. then Please and follow-up return our queue limit you in mentioned, one yourself the will to as questions many participants time we us additional

now Additionally, our available ready the we're to call for Chino, be questions. the Investor additional week plan to to throughout Relations open team address questions.

Operator

Instructions] from [Operator from Tonet right. Jeremy question All JPMorgan. First the line comes

live. now are You

Jeremy Tonet

Good afternoon.

Willie Chiang

Jeremy. Hey

Jeremy Tonet

Hey.

integration with off, start Just the you leading kind more guess, be going there? wanted to the do I opportunities, color, and I would how on helpful. of Oryx new see, guess, commercial is a progress And just or there integration bit guess, bit a more. to I

Willie Chiang

that? Jeremy, why don't you cover

Jeremy Goebel

-- JV, the to Look, as where a capture Goebel. ahead roughly synergy we Jeremy today, Jeremy is we it's an based formed had Thanks the on approximate standpoint as when outperforming expectations schedule. standpoint, This activity XX% it's for from so if question. well of from just

but getting We contracts and it's do with are to making and service. with going extending we certainly as safely more finalizing actively in it. operating grow but we'd we're that as integration process, we're see excited providing customers. closer the than We're opportunities, better about, It would to engagement offers talked say we continue I'd efficiently dare customer than sure more are expect to connectivity optionality. and to about well, I say service, position. Customers more planned but

customers, prove it's So, the for to ourselves as out think borne to the and JV well we'll shareholders continue good to customers I as the growth to the be of business. and look

Jeremy Tonet

point? whether opportunities at evolution figuring you And there kind guess, And there. something forward, converting And guess, do wondering, just you real? existing this about helpful be of I with talked other Got path to I could guess, assets? there. pivoting opportunities, see or opportunity I opportunity storage it. set about the how the energy very the deep That's that What's with hydrogen energy the then other evolution that's hydrogen out

Willie Chiang

Willie. is this Jeremy, Hey

Let talk a then of and comments, I will Chris couple about opportunity. me hydrogen the make know specifically

articulated base. emerging we broad our competency focus technologies assets, the pretty our of got asset in well and a As we've base is on our do around as areas with particularly integrate how asset before, as existing that we've

with do the So, when hydrogen we systems you in it things, about it's Chris, cover how the existing have. we connect you can piece? think

Chris Chandler

Chandler. been in there a hydrogen. And obviously, across is case, that able gas particular the opportunity the for when used energy. store It's wind the you Windsor well-proven to And caverns that or you turbines Station renewable night What's be Atura sure. sun about there's Chris with done salt existing has it caverns. right is our blowing, our used to energy, is hydrogen, the It's means boilers. in hydrogen. when decades. a And adjacent very to exciting for In that Yes, store can use This in can hydrogen this can excess as create renewable concept case, industry underground technology. our cost door be of power then like facility middle generate the isn't next efficiently to sits Power And or Ontario store assets or to hydrogen the power isn't shining existing can generation develop today. could repurpose new the caverns we be to

applied particular technology see certainly that be Ontario, technology And adoption. in evaluating beyond government And we're storage opportunity it So, for but location. position that similar Canada, that multiple our particular in with Canadian can areas across we just interested the everywhere. in opportunities

Jeremy Tonet

Got it. leave it very That’s there. helpful. Thanks. I’ll

Willie Chiang

Thanks, Jeremy

Operator

Michael is Wells Fargo. queue the on one Blum Next from

live. now are You

Michael Blum

Thanks. Good afternoon, everyone.

midstream I of and about on seeing now the of higher about your your also So the first and staying beyond. volumes production many discipline. are peers or Obviously, But wanted ask you across they're into to seems growth. systems E&Ps, message rest the volumes terms year of capital it in and public talking

try So just producer that. activity in to or seeing messaging? any And are Thanks. wanted to you reconcile change

Willie Chiang

Jeremy?

Jeremy Goebel

good What with Michael, the this is would it's afternoon, I is we stated what first Jeremy say consistent quarter. Goebel. in

We've completions. volumes to weather, soft, production surge saw of And about quarter the December, talking it's to operators, January profile. but independents first increase as driven somewhat due private last year the cadence second. due seen slower the quarter somewhat exit You total somewhat are integrated, largely you fourth were by than and in that

declining Permian. in areas the other and So are they in growing

Willie the other on we consistent we what basin said. line the seeing with across And that by above, the But talking we're So whole and acres had consistent, producer basin, a was based half we see consistent that's are dedicated where as what the roughly about. mix And to is with we see large, on within thought. activity Willie them. Permian basins slightly as is

us gives that So good pretty insight.

I'd it's far, be labor solved. manpower. are gas Natural and takeaway tracking. to we're things say watching So seems the getting

have always prices year. are the we when the but activity year to positive so said fourth brought next some And probably gets expected governors bias beginning the like they were where at level this we far So there good. came given of higher a versus so they from into on growth, quarter, that the

Willie Chiang

thing into Michael, is, going the might I back-end add piece in, only additional would the momentum loaded, the most And but about, Jeremy as is important lag you some be barrels of XXXX. is to talked pull activity

Michael Blum

Other segment. wanted it. I specifically NGL Got question to was guidance, about just ask the the

to the understood little versus wanted talk I Just sure Just volume through if that just you spreads. how of drivers make driven there could bit? a much is

thank – you. So

Willie Chiang

So I'd result And feedback of in additional the what Michael, some number I disclosure -- do of actually Jeremy we've think is two slides there, back that put kind you your to got. like ask some of as we perspective feedback a answer give or one business, question. at how and are the two to may Jeremy? walk we the through slides which look of think to I Goebel

Jeremy Goebel

everybody Sure, the an just it's flip overview Michael. can assets. of to XX, Slide If

I first east, Edmonton as NGLs on in thing to we the is Fort in move Sask, we think far west the see that near we West. gather the which general

buy for will or we fractionate Sarnia will that is our keyhole into plant. for at whole that on fractionation So move and and At which some PPTC markets in them transport Y for some as store part east out Y-grade some further further as fractionation basically local fractionate, third-party pipeline of well dot to additional the sale. annual third-party the That's for we exchange we sell Cochran NGLs market. in move Sarnia. We over, Y-grade there the on to aggregate and and gas, east NGLs grade next from supply, gather pull actually Empress, that's further we -- We straddle contracts take and extract keeping AECO largest business.

flows. it how that's So

business, that's about talk Straddle, where Sask get contract. around of of the Fort about that those the St. part on bigger the lot when when Clair, that the then a So, locations – and party. we that's Windsor Empress, we we for And third talk of would Cochrane be Y-grade third-party in two and keyhole

you XX. could flip Slide if then So, to

this at the for you gives If Slide breakdown. you XX, a look sense

West, with transport business fee-for-service at of day that and coming in around remaining storage as And storage a Cochrane roughly barrels XX,XXX X/X XX% So plant. and associated The fractionation, of the assets straddle. X/X is off around East at the the in XX%. assets the roughly that that's the Empress think and

So that's the main driver.

that So associated is the XX% rest the construct keyhole then fee-for-service it's Straddle, the business. with the and

Wille Chiang

Michael, help? does that

Michael Blum

helpful. very Yes, Thank you.

Wille Chiang

And will some there of XX we've that additional kind information you give profile there's had. hedge on that Slide the

I to better it so our business. allow will folks And understand think

Operator

right. All

Next one Ann on the Bernstein. queue is from Jean Salisbury

live. You are now

Jean Ann Salisbury

I added. else? Hi, XX about your really by you extra chart. I that agents you've XX%? or within talk your slides Can with kind you capacity number the drag-reducing to ask Is takeaway kind wanted operating mean something appreciate of no Slide that what of with efficient about

Wille Chiang

Essentially, it is.

you start As getting less efficient. pipelines, flow get the you into the on to higher rates start

be there significant you arbitrage you back and that utilized So when the efficiency look A point XXXX, capacity. very the earlier periods, roughly at go the and were if certainly, in very, normal would XX%. more was opportunity people time times in

Jean Ann Salisbury

Okay.

you fair that the is kind if versus I concern, the X the million rates a that guess, have right say would maintaining people's barrels production? day you that of now, it's target of -- So, just

Wille Chiang

other It's we out out, per an higher pointed guidance we shown updated – There there as our a for of others what the what's -- benefit and that is barrels Ann, I day shown that will about in the us roughly get systems. that systems, hard we expectation think the on production in sensitivity. is, And intended with would well as And is, our production. to growth way, gathering than some a this what's our of Jean have it's as profiles that's any growth. there clearly was Well, do, year that this upward that show in still upside increases. bias. are on slide for participate XXX,XXX to is haven't we view as the

environment. – participate to, widen then a comments and as volume of to would forward the expect us the the get call, what utilization more allows it is, definitely we And to that in my out that the starts arbitrage, growth. -- market that as earlier, back I the normalized back increases, would So component of more

-- and as benefit obviously with from go we So we forward rates. spot would that then

Jean Ann Salisbury

sense. you in any and a that, makes just That from on And on contracts? blending interested customers interest blending Yes. are you guess, here extending extending? are follow-up I And here and seeing I as similarly, guess

Wille Chiang

talk why about? don't you Jeremy,

Jeremy Goebel

Jean it's things. Ann, this combination is Jeremy. a I'd say of

rates at shorter-term active filling in are We space discussions market and spot on deals.

to of through higher. spot is in shorter normalized rates So view Gulf to get closer the to enter next taken what rates. when most at it then we those Coast the And year, current or keep is dialogues our and capacity those expectation rates we

time to right but it's to -- now is some, current a not look. the we enter market what step they're match -- long-term deals. the We're doing into So

be But on patients those I then and we're So $X.XX both on larger anything very $X.XX of the other extend us the we -- plus the some do us locking some level. to gathering about than side. when operator, year, It's look when our contracts, blend step that tariffs and and that may with you up comfortable $X.XX a maybe month-to-month. to not you talk if for they're in on think you

continue to longer we align the So those agreements term. to for extend

aligning they're sure rates. year is constructive than get very it's when So make customers way they matter and we're sure the a today volume it But they thing like and longer-term before can we can those have we look probably make we're we to today, we arrangements that extend around both aligned the dialogue with space, on system that on next comfortable a on that. on and happy the have have timing. just the the It's very we the system. And of said, a we'll

Jean Ann

Thanks. Thank you. That's really helpful.

Willie Chiang

Ann. Jean Thanks,

Operator

Neil from is Next one queue the on Bank of America. [indiscernible]

You are now live.

Unidentified Analyst

Hi. Thank you.

I you're well. on that with that follow-up XX normalized like Very the normalized upside as It in looks a up XX% about when you case, being Any more, color But rate that do at and utilization is? head that the useful. expect be? talked know against Just that you XXXX about the hit you what should or $X.XX Slide curve. rate what on XX% XXXX the is with you forward rate. rate

Willie Chiang

this Neil, Yeah, Willie. is

showing think see hit of seen one this of start typically the to different certain a So a start it's purposes an is ramping I tariff rate. us you don't tighter, increase. capacity point What binary achieve and is you equation up a where you and you'll gets as we've

you in The pipes, to more the to that costs been before be we going issues, what maybe cost. in higher as And -- the more go supply what You to chain gets built perhaps don't argue than might the round And increase. build a it what rate issues get to you and and and set of some be if that forward, the to a XXXX. were then last could And past. new about one pipeline, permitting you to it that by expect tariff were would be, steel have think have seeing with it ultimately, you you new build is challenging. has when pipes really start XX% incremental and

what on to on fee. have adjustment Jeremy, price do the upward tariff that? some add be even might might you there anything So

Jeremy Goebel

No. Yeah.

origin, assumption. And going based are is what to that's this correct think offered. in Willie on other I services be term,

industry not us. the is with and speculate constructive So dialogue that, we'd a -- indicating more the to but carrier a operator. more something between the healthy the forward market that's comfortable prefer and on And is getting

further view. guidance rates on if provide we'll longer-term that's our we closer, get So as

Unidentified Analyst

long-haul some cetera? That’s that the perfect. maybe Thanks as to crude. through you're just barrels for what kind close maybe able Just to being you the a the control short-term you whether drivers right now? et day barrel pipes, of the of XXX,XXX for Could its a or control walk of right color. ways the to And follow-up, capture now, blending are the upside commodity able through

Willie Chiang

a tell got loss we've allowance. system. immediate priced higher a you would is a got -- flexible There very process environment the what -- we've I pretty benefits And is of

on -- We price it's a have an that. capture higher increased

So that be quantify. would something to very that's easy

The between lot really a contango arbitrage, blending, pieces other market storage on of issues. depends

things out able when that we point -- opportunities. anything period other out have time whole are over a on add? that capture than Jeremy, we might be the capturing hard it's that a So to to being of there, opportunities those point long to organization specific are we focuses

Jeremy Goebel

just the that piece tariffs. activity say that's I'd long-term of other more Yeah. more out activity, is yields from an with standpoint dedications,

additional PLA higher capture. it's So tariffs,

spread there. On the NGL exposure business, obviously, the frac is

tariff long-term escalators. have those We have the also dedications,

So that there's number of it's -- a functions capture that.

cost capital if it there. some you Now is some that's insulated. capital smaller a But budget of large offset there's additional side, having have a operations budget, to extent by the cost on where

completely Willie, just inflation agree are ways supplemental prices. I or that higher those with So from of we do couple benefit a

Unidentified Analyst

Appreciate you. it. Thank it. Got

Jeremy Goebel

Thank you.

Operator

UBS. from Next on the line is Brian Reynolds

You're now live.

Brian Reynolds

$XX a Hi, guidance on raise. good evening everyone. question. guidance a quick The follow-up million Maybe just

really it with is crude to curious, terms of just volumes of the in no roughly gathering no kind NGL EBITDA just segment in long-haul Permian Just relates contribution? change,

Willie Chiang

talk that, were our some to I'm get We going guidance there to component term let Al a added shorter to in additional that able number. contracts done long-haul, about but is that.

both if that and So opportunities the there a you're to are frac partners. at formula it's add? in pricing what as it's look there on right, crude, the can point can't NGL, the I been said sometimes different there. anything you just We've Al, makes it's make reinforce in long-haul volumes I impacts earlier, able not spreads. in to to sense components for -- it short-term add volumes as -- well you PLA is some and But would

Al Swanson

it. covered you No, Yeah.

the pricing, lower it, primarily positive volumes, PLA had NGL's offset partially merchant Canada. summarized you crude by positive just think I so commodity-based more opportunities up in

Brian Reynolds

of appreciate roughly you're guidance. And payments with for deficiency per segment. saw long-haul per long-haul revision appears we into bit looks like maybe the day guidance the color. updated dive XX,XXX day a just little the I receiving XX,XXX It to But Great. a your barrel XXXX. that then the in upward volumes it deeper barrels in

XX,XXX anywhere On you years ramp, of Thanks. those about guidance levels the and forward XQ call, for up so update with MVC off the to kind pulled benefits Wink-to-Webster was where that Plains? put as soak could cetera. get barrels from to potentially whether of maybe talked guidance based I et matching above XXXX it XXXX X.X the we spot that for those the excess last two XX,XXX to was curious, Permian’s just a years to relates the

Willie Chiang

I the trying if those the your up a I volumes barrels-for-barrels, haul shifting anywhere, additional volumes question, isn't if Brian, question. think point answer able barrels capture. long on helps with is It that to of key the to were we your match tied understand are

Brian Reynolds

middle so, outlook of kind just end terms And is same Permian in as kind inflection as cadence the MBCs? year, of of relates it to the off production potential based next getting still of the last above of, earnings call, next to year of

Willie Chiang

capture -- the Well, regardless that, there's show what we're additional to understand MBCs, if it's I opportunities trying of to your is volumes. question, with XX

versus that that opportunities opportunities XXX,XXX system, So right? we’ll gathering gathering on a then barrels capture of when opportunities capturing. which piece day are So, the totaled clearly, on on are gathering had another in catch XX,XXX Permian got additional an we a Permian slides our present that's a February, growth we the And the the sector, barrels themselves. -- of other we've what in day the

no right? additional catch. to I and in guidance that the want was, the point, made able key that was have call is you to -- until about additional And guidance of production always part number, you've MBCs the fourth mathematically, think coming it our this up, mathematically to out that, would quarter MBCs walk don't to match theoretical there's capture we if just additional The planes opportunities you upgrade there fill volumes, there's comment be volumes with away people opportunities were on. but additional capture barrels. to for That's additional if an volume, got been So

Brian Reynolds

really that. I color everyone. a nail. appreciate the hit on extra you I Have the think great that evening on

Willie Chiang

Thanks.

Operator

Followill queue Next U.S. Becca the one from Capital on Advisors. is

now open. is line Your

Willie Chiang

Hi, Becca.

Becca Followill

guys. Hey, Hi.

this afternoon. lot a Just going on

So million Line XXX? cash free if was that that $XXX much flow. of on much just clarify working How And you of in the capital? could again was decrease how

Willie Chiang

Al?

Al Swanson

XXX. and the Primarily, timing Line reimbursed between time it we and the as modeled there be pay ultimately We will we believe we're insurance. assumed by time

We the performance stronger the are that that company. answer? modeling roughly in by working increased Does assuming some offset capital, we're

Becca Followill

that's If XXXX? return bleed Perfect. the insurance this return does of year, -- payments, into the the that or

Al Swanson

XXXX. of is that assuming will the No, into we're straddle -- collections some

be the theory, in flow -- our XXXX higher timing. due there a will benefit to in cash free So, will

Becca Followill

Okay. It’s Thank you. you. Thank all I needed.

Willie Chiang

Thanks, Becca.

Operator

question Securities. comes Sunil line Next Global Sibal from of from the Seaport

You’re live. now

Sunil Sibal

just for XX And the a couple go clarity. all folks. I the Yes. for again slide afternoon, Good of Hi. seconds. thanks wanted to back to

just unhedged February, between you up, current the hedge the moved prices So were February guidance have than better chart, getting a able a guidance, three because or it even your between pie to heading is of the been in you're significant and components upside? view, the you have at rates

Willie Chiang

Jeremy?

Jeremy Goebel

of this two. a layer Jeremy additional is Goebel. at year, rates, the we When volume, most it. But I the hedges are into actively monitor as and hedges it's said. coming say, we see We spike, Willie hedges. this had might some – we've the recent combination additional Sunil, prices in higher would

is the the Canada from flows markets of outperformance order part to Western So higher. been have Eastern

extract the So we NGLs, spot additional rates. at that's and all

year those next be So will combinations. this or some sales year,

at its the incremental is the capturing component, combination -- year. volume higher unhedged of some at the the levels, a additional volume which hedges on unhedged higher it's then and roughly for XX% prices of So remainder prices securing

Willie Chiang

predominant is XXXX make of the hedged. – spreads frac we And to Sunil, amount just sure,

Sunil Sibal

then Is And of a kind that. follow-up market also, that is or you unhedged? for to hedge the Okay. deep mostly enough XXXX to

Jeremy Goebel

Jeremy, is Think again. a this actively Sunil, it rolling as program. of monitor. We

– active around as So higher we we once into operation but manage it's to as it as associated, XXXX. We'll we have levels that. get And an do we're again, they and opportunistic manage earnings capture well. we're trying an further and XXXX, when guidance provide

to is So And that, update is but deep a in – XXXX, but pretty enough thin continue it's XXXX very active. on we'll we market. you there

Sunil Sibal

on remind lastly, as volumes allowance? way any on move margin to that And the us process bps think then get How loss the you it. is other you about sensitivity? typically Got good there is or the much you could PLA,

Jeremy Goebel

year, upon we its performance, million a – depending that. million PLA substantial Its barrels and operating X optimize around X to associated with continue to

it's big substantial. we a it's collect do So that, the footprint. but That's predominantly where in US

Sunil Sibal

Thanks. for Thanks that. it. Got

Willie Chiang

Thanks, Sunil.

Operator

the queue. over call I And back now there are to the will further no turn presenters. in questions

Willie Chiang

Yeah.

I the We've is So there's with And discussions an improve as further thank continue close on. to I'll that, just this on I and our call. And we've your for trying opportunity segments, we're do know many know to run lot as a going there's we and appreciated always, We've to improvements. disclosure make the our feedback. with the folks. business. had participation how you changed transparency Willie.

forward support the forward. to you as go and Thank appreciate much. we'll I So you we feedback, look and very updating

Operator

Thank you for concludes participating. today's call. This conference

You may

Plains All American Pipeline (PAA) 4 May 222022 Q1 Earnings call transcript