Plains All American Pipeline expanded its holdings in the Permian and Eagle Ford Basins with three bolt-on acquisitions by $750 million in deals.
“These transactions further enhance Plains’ crude oil footprint in the Permian, Eagle Ford and Mid-Con at returns consistent with our bolt-on framework and provide incremental return of capital opportunities for our unitholders,” stated the company in its announcement.
One of the deals is the $475 million acquisition of Ironwood Midstream Energy which owns an Eagle Ford Basin gathering system from EnCap Flatrock Midstream. The transaction is expected to close in the first quarter of 2025 following satisfaction of customary closing conditions.
Plains also made a $160 million acquisition through its subsidiary Plains Oryx Permian Basin LLC of Medallion Midstream’s Delaware Basin crude oil gathering business from The Energy Minerals Group.
Earlier in December, a subsidiary of Plains acquired the remaining 50% interest in Midway Pipeline LLC from a subsidiary of CVR Energy for approximately $90 million. Plains has also agreed to purchase approximately 12.7 million units, or 18%, of its outstanding Series A Preferred Units at “par” ($26.25) for a purchase price of approximately $330 million from EnCap Flatrock Midstream. This transaction is expected to close in late January 2025.
“The bolt-on acquisitions announced today are an excellent strategic fit for Plains and allow us to progress our efficient growth strategy by adding high-quality assets adjacent to our existing integrated footprint,” said Willie Chiang, Chairman and CEO of Plains. “Importantly, these transactions create immediate value by delivering sustainable accretion to earnings, distributable cash flow and accelerating return of capital to unitholders. Our capital allocation framework remains intact, and we remain committed to financial flexibility, capital discipline, generating meaningful free cash flow and increasing return of capital to our unitholders as demonstrated today.”