Contacts: Phillip D. Kramer Executive Vice President and CFO 713/646-4560 – 800/564-3036
A. Patrick Diamond Director, Strategic Planning 713/646-4487 – 800/564-3036
FOR IMMEDIATE RELEASE
Plains All American Pipeline Announces Pending Ownership Changes at its General Partner
(Houston – August 4, 2005) Plains All American Pipeline, L.P. (NYSE: PAA) today announced pending changes in the ownership of its general partner, which will result in increased ownership stakes for all of its continuing general partner owners. In addition, two members of the general partner have agreed to enter into voting agreements, which management believes will ensure the continuation of a strong and balanced governance of the Partnership.
Sable Investments, L.P., a 19.0% owner in the Partnership's general partner, has agreed to sell its interest to the remaining general partner owners. Such transaction is the result of a right of first refusal exercised by all of the remaining owners in response to an offer to purchase the Sable interest. The transaction is expected to close on or before August 15, 2005. The pending change in the composition of the ownership of the Partnership's general partner is detailed in the table below, which sets forth the approximate percentage ownership of PAA's general partner before and after the sale of the Sable interest, based on pro rata allocations of the Sable interest to the remaining general partner owners.
|
|
Before |
|
After |
Vulcan Energy Corporation |
|
44.00% |
|
54.32% |
Kayne Anderson affiliated entities |
|
16.42% |
|
20.27% |
ENCAP affiliated entities |
|
9.00% |
|
11.11% |
PAA Management, L.P. |
|
4.00% |
|
4.94% |
Wachovia Investors, Inc. |
|
3.38% |
|
4.18% |
Strome affiliated entities |
|
3.20% |
|
3.95% |
Lynx Holdings, L.P. |
|
1.00% |
|
1.23% |
Sable Investments, L.P. |
|
19.00% |
|
0.00% |
Total |
|
100.000% |
|
100.000% |
In conjunction with the transaction, PAA's general partner will enter into an excess voting rights agreement with Vulcan Energy Corporation. Specifically, Vulcan will agree that, with respect to any action taken by the members for the election or removal of an independent director, Vulcan will vote all of its membership interest in excess of 49.9% in the same manner as, and proportionate to, the votes of all membership interests other than Vulcan's. In addition, Lynx Holdings, L.P., will similarly agree that, in the same circumstances, it will vote all of its 1.23% membership interest in the same manner as, and proportionate to, the votes of all membership interests other than Vulcan's and Lynx Holdings'. Also in connection with the transaction, the Chief Executive Officer and the Chief Operating Officer of Plains All American GP LLC will agree to waive certain change-of-control payment rights that would otherwise be triggered as a result of the increase in Vulcan's ownership interest in the general partner to over 50%.
"Our continuing general partner owners, including senior members of PAA's management team, have demonstrated their confidence in the future outlook of Plains All American by agreeing to increase their ownership stake in our general partner," said Greg L. Armstrong, Chairman and Chief Executive Officer of the Partnership. "As part of the transaction, Vulcan Energy Corporation and Lynx Holdings, which will collectively own approximately 56% of our general partner, will enter into voting rights agreements that preserve the strong and balanced corporate governance and oversight capabilities of our board of directors. We believe that all of our stakeholders will continue to benefit from the support and financial strength of this group of general partner owners."
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from results anticipated in the forward-looking statements. These risks and uncertainties include, among other things: the success of our risk management activities; abrupt or severe production declines or production interruptions in outer continental shelf production located offshore California and transported on our pipeline systems; the availability of, and ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets or businesses; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; declines in volumes shipped on the Basin Pipeline, Capline Pipeline and our other pipelines by third party shippers; the availability of adequate third party production volumes for transportation and marketing in the areas in which we operate; successful third-party drilling efforts in areas in which we operate pipelines or gather crude oil; demand for various grades of crude oil and resulting changes in pricing conditions or transmission throughput requirements; fluctuations in refinery capacity in areas supplied by our transmission lines; the effects of competition; continued credit worthiness of, and performance by, our counterparties; the impact of crude oil price fluctuations; the impact of current and future laws, rulings and government regulations; shortages or cost increases in power supplies, materials or labor; weather interference with business operations or project construction; the currency exchange rate of the Canadian dollar; fluctuation in the debt and equity capital markets (including the price of our units at the time of vesting under our LTIP); general economic, market or business conditions; and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil and liquefied petroleum gas ("LPG") discussed in the Partnership's filings with the Securities and Exchange Commission.
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. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA." The Partnership is headquartered in Houston, Texas. End |