Plains Cuts Capital Program by 33 Percent
Oil market headwinds have prompted Plains All American to make select updates to its current capital program and operations activity. The changes include:
- Reducing its 2020/2021 capital program by $750 million, or 33%
- Decreasing its share distributions payable in May by 50% (a reduction of $525 million)
- Completing an additional $165 million asset sale
“We are taking a number of actions in response to the current dynamic and uncertain market conditions to further strengthen our balance sheet and further enhance our liquidity and long-term financial flexibility,” Willie Chiang, Chairman and CEO, said in a written statement. “These actions include significantly reducing and continuing to challenge our capital program, reducing our distribution, progressing asset sales, and reducing costs, while remaining focused on operating safely and responsibly.”
“Importantly, we ended the first quarter with approximately $2.5 billion of committed liquidity and no near-term needs to access either the debt or equity capital markets,” added Al Swanson, Executive Vice President and CFO.
Total expansion capital for 2020/2021 is now targeted to be $1.55 billion, or $1.35 billion (47%) lower when eliminating $600 million of assumed JV project financing for the Red Oak project, which has been deferred. First-quarter 2020 expansion capital expenditures are estimated to be $350 million.
Regarding the asset sales program, the April 1 sale brings year-to-date proceeds to approximately $245 million. An additional $195 million asset sale is expected to close later in the year, according to the company.
Plains All American Pipeline owns a network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada.
To contact the author, email email@example.com.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.