Feb 25, 2005 |
PAA Announces Private Placement of Common Units
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Contacts:
Phillip D. Kramer
Executive Vice President and CFO
713/646-4560 – 800/564-3036
A. Patrick Diamond
Manager, Special Projects
713/646-4487 – 800/564-3036
Plains All American Pipeline Announces Private Placement of Common Units
(Houston – February 25, 2005) Plains All American Pipeline, L.P. (NYSE: PAA) announced today the issuance and sale by the Partnership of 575,000 Common Units to a subsidiary of Vulcan Energy Corporation.
Net proceeds from the private placement, including the general partner's proportionate capital contribution and expenses associated with the sale, will be approximately $22.3 million. The Partnership intends to use the net proceeds from the private placement to fund a portion of its 2005 expansion capital program. Pending the incurrence of such expenditures, the net proceeds will be used to repay indebtedness under its revolving credit facilities.
The sale price for the Common Units was $38.13 per unit, which represents a 2.8% discount to the closing price of the units on February 24, 2005, and a 2.4% discount to the average closing price for the trailing ten trading day period. Vulcan's ownership interest in the Partnership remains unchanged by the private placement. The units purchased by Vulcan replace an equal number of units recently sold by Vulcan in connection with certain activities to optimize the structure of its holdings in PAA. A Partnership spokesperson stated that the transaction was opportunistic and attractive for both parties. The spokesperson also indicated that the 2.8% discount compared favorably to the 4.25% underwriting discount typically associated with public follow-on offerings of common units.
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein. The securities described herein have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
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, stability of the capital markets, 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, 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.
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