Plains All American Pipeline, L.P. cuts cap ex, growth forecast as prices fall
February 6, 2015Houston, Texas:
Transportation player Plains All American Pipeline, L.P. (NYSE: PAA) trimmed its 2015 capital spending budget and curbed its planned growth Thursday in response to weak oil prices.
Houston-based Plains will trim its expansion capital spending down to $1.85 billion, a 9 percent drop from 2014 levels.
Plains All American Pipeline, L.P is a publicly traded master limited partnership (“MLP”). As an MLP, PAA makes quarterly distributions of its available cash to its Unitholders.
The company will also lower the midpoint of its 2015 adjusted earning target by 6.5 percent to $2.35 billion and cut its distribution growth target, Fuel Fix said.
Plains is currently targeting distribution growth of 7 percent for 2015.
“PAA is well positioned to manage through industry down cycles; however, we are not immune to the adverse impacts of a major step change in commodity prices that is accompanied by a similar change in producers’ activity levels,” CEO and chairman Greg Armstrong said.
Plains reported a fourth quarter net income of $389 million, a 26 percent spike over the same period last year.
After adjusting earnings to account for hedges, taxes and a $85 million write down the company booked about $362 million in net income, down slightly from its adjusted 2013 fourth quarter net income $371 million.
The company also announced plans Thursday to construct two new Delaware Basin pipelines and related gathering systems, expand its existing Blacktip station and construct a 20 inch loop line from Blacktip station to Wink, Texas.
Plains All American Pipeline is engaged in the transportation, storage, terminalling and marketing of crude oil, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids ("NGL"). They own and operate a diversified portfolio of strategically located assets that play a vital role in the movement of U.S. and Canadian energy supplies. On average they handle over 3.9 million barrels per day of crude oil and NGL through their extensive network of assets located in key North American producing basins, major market hubs and transportation gateways. The company is headquartered in Houston.