May 11, 2005 |
PAA Announces Expanded Credit Facilities |
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
(Houston – May 11, 2005) Plains All American Pipeline, L.P. (NYSE: PAA) today announced that it has expanded the amount that it may borrow under its two credit facilities by $450 million. Phillip D. Kramer, Executive Vice President and CFO of the Partnership, noted that these modifications are part of the Partnership's proactive effort to maintain significant liquidity and position the Partnership to continue to optimize its extensive and strategically located asset base in a high crude oil price environment.
The Partnership increased the aggregate capacity under its senior unsecured credit facility from $750 million to $900 million. The facility includes a sub-facility for Canadian borrowings that was increased from $300 million to $360 million. The credit facility may be further increased to an aggregate capacity of $1.25 billion at the option of the Partnership and subject to obtaining additional commitments from lenders.
In addition, the Partnership's hedged inventory facility was increased from $500 million to $800 million. The hedged inventory facility is an uncommitted working capital facility, which is used to finance the purchase of hedged crude oil inventory for storage when market conditions warrant. Borrowings under the hedged inventory facility are secured by the inventory purchased under the facility and the associated accounts receivable, and are repaid from the proceeds from the sale of the inventory.
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: abrupt or severe production declines or production interruptions in outer continental shelf production located offshore California and transported on our pipeline systems; the success of our risk management activities; 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; declines in volumes shipped on the Basin Pipeline, Capline Pipeline and our other pipelines by the Partnership or 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 and 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); 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.
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