Plains All American Pipeline Updates Acquisition Activities for 4Q11

Plains All American Pipeline has completed two acquisitions and entered into definitive agreements for two additional acquisitions since the beginning of the 2011 fourth quarter. Aggregate consideration for these four acquisitions is approximately $620 million.

The two completed transactions include the acquisitions of a South Texas crude oil and condensate gathering system and a Canadian trucking operation. The Partnership has signed definitive agreements with Western Refining (Western) to purchase a multi-product storage facility in Yorktown, Va. and a pipeline in the Permian Basin. The two transactions with Western are subject to receipt of regulatory approvals and customary closing conditions and are expected to close by December 31, 2011.

"These four transactions are bolt-on acquisitions and provide an excellent complement to our existing infrastructure," said Greg L. Armstrong, Chairman & CEO of Plains All American. "We expect to generate meaningful synergies as we interconnect and integrate these assets into our operations. Including our planned expansion activities, we currently expect to invest an additional $100 million to $150 million in these assets over the next 24 months."

Armstrong also provided comments with respect to PAA's adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") for the fourth quarter of 2011. Armstrong stated that although these acquisitions are not expected to have any meaningful impact on its fourth-quarter results, PAA expects Adjusted EBITDA for the fourth quarter to exceed the midpoint of its quarterly guidance by approximately 10% to 15%. This expected performance is the result of strong fundamentals, generally favorable market conditions and solid execution in all three business segments. This updated outlook does not incorporate potential adjustments for equity compensation expense due to variances in PAA's year-end unit price or its probability assessment with respect to future distribution levels. In a Form 8-K furnished on November 2, 2011, the Partnership provided a guidance range for adjusted EBITDA for the fourth quarter of 2011 of $395 million to $425 million, with a midpoint of $410 million.

Acquisition Descriptions

The Partnership recently closed the acquisition of 100 percent of the member interests in Velocity South Texas Gathering, LLC (Velocity) from Velocity Midstream Partners, LLC. The assets acquired include approximately 120 miles of crude oil and condensate gathering and transportation pipelines currently in advanced stages of construction in the Eagle Ford area of South Texas.

Upon completion, this gathering system will have a throughput capacity of approximately 150,000 barrels per day and an aggregate of 185,000 barrels of condensate storage capacity located at Catarina and Gardendale. The system, which extends through portions of Dimmit, Webb and La Salle counties, is underpinned by long-term acreage dedications or volume commitments from several large producers. The pipeline system has the ability to be expanded up to 185,000 barrels per day and both terminal locations have room for future expansion.

The Gardendale storage hub will have access to PAA's Eagle Ford pipeline as well as other transportation alternatives, including third party pipelines, truck and rail. Over the next 18 to 24 months, PAA expects to complete current construction, extend the system to access additional condensate barrels and other crude oil-oriented portions of the Eagle Ford resource play, and increase terminal capacity at Gardendale from 150,000 barrels to 250,000 barrels.

Simmons & Company International served as financial advisor to PAA in its acquisition of the member interests in Velocity and Evercore Partners served as the financial advisor to Velocity Midstream Partners, LLC.

In early October, the Partnership also closed the acquisition of a small trucking operation in Canada.

The first transaction with Western includes a 6.6 million barrel crude oil, refined products and LPG storage and distribution terminal located on an idled refinery site in Yorktown, Va. Over the next 18 to 24 months, PAA plans to disassemble and sell surplus equipment located at the acquired site and enhance the connectivity and performance of the Yorktown terminal. The facility will have access to a number of transportation alternatives, including the Colonial Pipeline, deep-water port access on the York River capable of receiving and loading ships and barges, and access to rail and truck loading and unloading facilities. The Yorktown facility will be capable of terminalling and storing crude oil, refined products, propane, butane, ethanol and other bio-diesel fuels.

The second transaction with Western includes an 82-mile, 16-inch pipeline segment and associated connections and tankage in New Mexico. The pipeline will provide up to 100,000 barrels per day of crude oil transportation capacity from southeastern New Mexico (an area with increased drilling activity) to the Jal, New Mexico station, the origination of PAA's Basin Pipeline system.

PAA owns a network of approximately 16,000 miles of liquids pipelines, approximately 90 million barrels of liquids storage capacity and handles more than 3 million barrels of physical product on a daily basis.


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