Contacts: Phillip D. Kramer Executive VP and CFO 713-646-4560 / 800-564-3036
Brad A. Thielemann Manager, Special Projects 713-646-4222 / 800-564-3036
PAA Announces Closing of Andrews Acquisition and Provides Update on Equity Private Placement and Additional Acquisition Activities
(Houston – April 19, 2006) Plains All American Pipeline, L.P. (NYSE: PAA) announced today that its subsidiary, Plains LPG Services, L.P., has closed the previously announced acquisition of 100% of the equity interests of Andrews Petroleum, Inc. and Lone Star Trucking, Inc. (collectively, the "Andrews Acquisition"). The effective date of the Andrews Acquisition was April 18, 2006, and the total purchase price was approximately $205 million.
The Partnership also announced that it has provided notice to the institutional investors pursuant to the Common Unit Purchase Agreement dated March 16, 2006, that the conditions have been met for the purchase and sale of the additional 1.2 million common units that remain subject to the agreement. The transaction is scheduled to close by April 21, 2006. Net proceeds from the issuance, including the general partner's proportionate capital contribution and expenses associated with the issuance, will be approximately $51 million. Upon completion of the issuance, the Partnership will have approximately 77.3 million common units outstanding.
The Partnership also announced today that in four separate transactions it has completed the acquisition of, or has entered into definitive agreements to acquire, certain crude oil pipelines and gathering and transportation assets as well as a natural gas storage facility for aggregate consideration (net to the Partnership) of approximately $135 million, including approximately $25 million of crude oil and natural gas inventory.
The four transactions include the following:
(1) The purchase by Plains Marketing Canada, L.P. ("PMC") of the remaining 85% interest in the Cactus Lake crude oil and diluent pipelines that PMC operates in Canada;
(2) The purchase by PAA of an additional 9.5% interest in the PAA-operated Mesa Pipeline System;
(3) The purchase by a subsidiary of PAA/Vulcan Gas Storage, LLC of the Kimball natural gas storage facility, which is located in close proximity to PAA/Vulcan's Bluewater gas storage facility in Michigan. PAA owns a 50% interest and acts as the operator of PAA/Vulcan; and
(4) The purchase by PAA of crude oil gathering and transportation assets and related contracts in South Louisiana from SemCrude, L.P.
Greg L. Armstrong, Plains All American's Chairman and CEO, stated that these transactions and their impact on the Partnership's financial guidance will be discussed during the Partnership's next quarterly earnings conference call, which is currently scheduled to be held on May 3, 2006.
"As a result of PAA's strong capitalization and liquidity entering the year, retention of cash flow in excess of Partnership distributions and the recent equity private placement, the Partnership is financially well-positioned to consummate these acquisition transactions," said Armstrong "Absent any further acquisition or financing transactions, we project that our long-term debt-to-capitalization ratio at June 30, 2006, will remain very healthy at approximately 42% to 44%."
Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, in the United States and Canada. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the Partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA." The Partnership is headquartered in Houston, Texas.
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement.
Forward Looking Statements Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding acquisitions and potential future acquisitions, long-term debt-to-equity capitalization ratios, and the potential sale of additional common units. These statements are based on management's current expectations and estimates. Actual results may differ materially due to certain risks and uncertainties, including the closing of the pending acquisitions, the closing of the direct placement of common units, the stability of the capital markets, management's allocation of capital resources, and other risks and uncertainties as identified and discussed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the Securities and Exchange Commission.
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