Apr 11, 2001 |
PAA to Acquire CANPET Energy Group Inc. |
(Houston and Calgary, Alberta – April 11, 2001) Plains All American Pipeline, L.P. (NYSE:PAA) has agreed to purchase CANPET Energy Group Inc., a Calgary-based crude oil and LPG marketing company for approximately US$42 million. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in approximately 30 to 45 days. “The acquisition of CANPET will complement the pending acquisition of Murphy Oil Company Ltd’s Canadian crude oil pipeline, gathering, storage and terminalling assets announced last month,” commented Harry Pefanis, President and Chief Operating Officer of Plains All American. “When fully integrated, the assets and activities from these two transactions will provide an attractive, synergistic platform on which to build and expand our presence in Canada and represents a meaningful step towards our goal of establishing a presence in Canada that is very similar to our presence in the U.S.” CANPET currently gathers approximately 75,000 barrels per day of crude oil and markets approximately 26,000 barrels per day of natural gas liquids. Tangible assets include a crude oil handling facility, tankage of approximately 130,000 barrels and working capital of approximately $8.5 million. The existing management team and staff of CANPET, led by Dave Duckett, will join Plains All American with the mandate to expand the Partnership’s market share in Canada. “Based on historical performance and reasonable market conditions, we anticipate CANPET will contribute approximately $7.5 million to annual earnings before interest, taxes, depreciation and amortization (“EBITDA”),” added Greg L. Armstrong, Chairman and Chief Executive Officer of Plains All American. “As we combine CANPET’s operations with the assets and activities from the Murphy acquisition over the next 12 months, we expect to phase in cost savings and revenue synergies that should generate an additional $1.5 million to $2.0 million of annual EBITDA.” Armstrong noted that the acquisition is expected to be accretive to cash flow for Plains All American Pipeline, L.P. in 2001 and subsequent years. Approximately $26 million of the purchase price will be paid in cash at closing and the balance will be paid for using Plains All American’s common units, subject to certain performance standards. The cash portion of the acquisition will be provided through borrowings on the Partnership’s bank credit facility. In connection with the Murphy acquisition, Plains All American has arranged with its lenders to increase the Partnership’s bank credit facility to $830 million. Consistent with its stated policy of maintaining a strong capital structure by funding acquisitions with a balance of debt and equity, the Partnership intends to refinance a portion of its bank facility with proceeds from future bond and equity financings. TD Securities Inc. acted as exclusive financial advisor to Plains All American Pipeline, L.P. with regards to this transaction. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, receipt of governmental approvals and consents from third parties, demand for various grades of crude oil and resulting changes in pricing conditions, successful third party drilling efforts and completion of announced oil-sands projects, availability of third party production volumes for transportation and marketing, regulatory changes, the availability of acquisition opportunities on terms favorable to the Partnership, fluctuations in the capital markets and the availability to Plains All American of credit on satisfactory terms, successful integration and future performance of the assets to be acquired, and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil 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, terminalling and storage, as well as crude oil gathering and marketing activities, primarily in California, Texas, Oklahoma, Louisiana and the Gulf of Mexico. Plains All American Inc., a wholly owned subsidiary of Plains Resources Inc., holds an effective 54% interest in the Partnership and serves as its General Partner. The Partnership’s common units are traded on the New York Stock Exchange under the symbol “PAA”. Plains Resources Inc.’s common shares are traded on the American Stock Exchange under the symbol “PLX”. The Partnership is headquartered in Houston, Texas. |
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