Contacts: Phillip D. Kramer Executive Vice President and CFO 713/646-4560 – 800/564-3036
Brad A. Thielemann Manager, Special Projects 713/646-4222 – 800/564-3036
FOR IMMEDIATE RELEASE
Plains All American to Acquire Natural Gas Liquids Businesses from Andrews Petroleum, Inc.
(Houston – March 15, 2006) Plains All American Pipeline, L.P. (NYSE: PAA) announced today that through its subsidiary, Plains LPG Services, L.P., it has signed a definitive agreement to acquire 100% of the equity interests of Andrews Petroleum, Inc. and Lone Star Trucking, Inc. for approximately $205 million. The transaction is expected to close in the next 30 days, subject to receipt of regulatory approval and satisfaction of customary closing conditions.
Andrews and Lone Star provide isomerization, fractionation, marketing and transportation services to producers and customers of natural gas liquids ("NGLs") throughout the Western United States. The primary assets consist of 200,000 barrels of NGL storage; a processing facility with butane isomerization capacity of 14,000 barrels per day and NGL fractionation capacity of 9,600 barrels per day; a rail rack with the ability to service 30 tankcars; a truck rack with the ability to service seven trucks; a fleet of over 50 tractor trailers and office facilities in California. The Partnership noted that the earnings before interest, taxes, depreciation and amortization ("EBITDA") generated by these companies were approximately $22.4 million in 2005. EBITDA is a non-GAAP financial measure. Combined net income of these companies in 2005 was $17.3 million, with interest expense of $0.2 million, taxes of $0.3 million and depreciation and amortization of $4.6 million.
These assets will provide us with a strong competitive position in the PADD V liquefied petroleum gas market and meaningfully build upon our existing propane, butane and natural gasoline platform in the Western United States," said W. David Duckett, President of Plains LPG Services, L.P. Duckett also noted that the Partnership is contemplating further expansion in this region, including a potential expansion of the aforementioned processing facility.
John Andrews, President of Andrews Petroleum, Inc., stated, "We are excited to begin our new partnership with Plains All American. We firmly believe that the additional resources Plains can provide to our business will allow us to expand our reach with customers and solidify our position as a leading provider of natural gas liquids in the Western United States."
Plains LPG Services, L.P. is a liquefied petroleum gas marketing and asset based company that is a wholly owned, indirect subsidiary of Plains All American Pipeline, L.P.
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.
Simmons & Company International served as exclusive financial advisor to Andrews Petroleum, Inc. in connection with this transaction. O'Melveny & Myers LLP served as counsel to Andrews Petroleum and its affiliates in relation to this transaction. Vinson & Elkins LLP served as counsel to Plains All American in connection with this transaction.
Forward Looking Statements Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding the timing and expected benefits of the acquisition of Andrews Petroleum and Lone Star Trucking. These statements are based on management's current expectations and estimates; actual results may differ materially due to certain risks and uncertainties. For example, the timing of the acquisition and the ability of the Partnership to achieve expected results may be affected by successful completion of the acquisition and integration of the acquired operations. Other risks and uncertainties that may affect actual results include refinery downtime, unusual weather patterns, continued creditworthiness of, and performance by, our counterparties, the effects of competition, the success of our risk management activities, commodity price fluctuations, regulatory changes, and other factors and uncertainties inherent in the Partnership's business as 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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