PLAINS GP HOLDINGS LP Q2 FY2024 earnings call

• Reported second quarter adjusted EBITDA attributable to PAA of $674 million, exceeding expectations.
• Raised the midpoint of full year 2024 adjusted EBITDA guidance by $75 million to a range of $2.725 billion to $2.775 billion.
• Production outlook remains unchanged at an increase of 200,000 to 300,000 barrels a day.
• Facilitated and acquired a 0.7% interest in the Wink-to-Webster Pipeline Company for ~$20 million. Since the second half of 2022, completed eight bolt-on acquisitions totaling ~$535 million net to Plains.
• In 2024, expects to generate approximately $1.55 billion of adjusted free cash flow, allocate ~$1.15 billion to common and preferred distributions, and self-fund $375 million growth capital and $250 million maintenance capital. Issued $650 million of senior unsecured notes to repay maturing note.

The Crude Oil segment contributed to adjusted EBITDA net to PAA of $674 million, reflecting higher tariff volumes and market-based opportunities. The NGL segment experienced favorable iso-to-normal butane spread and higher frac spreads on unhedged C3+ spec product sales. Both segments benefited from lower than expected operating expenses. The Crude Oil segment's performance was driven by higher tariff volumes and market-based opportunities, while the NGL segment's was aided by favorable spreads and unhedged product sales.

• Raised full-year 2024 adjusted EBITDA guidance midpoint by $75 million to $2.725 billion to $2.775 billion.
• Production outlook remains unchanged at 200,000 to 300,000 barrels a day increase.
• Continues to pursue bolt-on acquisitions that complement existing asset base, with strong returns and incremental growth opportunities.

Q: On Crude segment guide and producer efficiencies, A: Producer efficiencies are positive but not sole source of guidance increase; production growth in line with expectations with some regional variations (e.g., Midland outperforming, Delaware impacted by infrastructure constraints and lower natural gas prices).

Q: On NGL segment fee-based business, A: Entered 15+ year contract replacing frac spread exposure, moving to more predictable NGL value chain but will continue straddle business.

Q: On M&A opportunity set, A: Unique position to capture synergies in bolt-on acquisitions, disciplined approach to M&A with focus on win-win solutions and good returns.

Q: On capital allocation and distributions, A: Consider returns of capital to unitholders, annual review of distributions with focus on sustainable EBITDA.

Q: On Permian egress and volumes, A: Infrastructure constraints and natural gas prices impact, but deferrals into next year and contracting discussions reflect positive trends for business long-term.

Q: On hedging NGLs, A: Continuously monitor and hedge forward, opportunistic with market signals and rolling hedging program.