Plains All American Sees Strong Q4 Results, Sets Stage for Future Growth
Plains All American (PAA) and its general partner, Plains GP Holdings (PAGP), reported a strong fourth quarter of 2024, exceeding expectations and setting the stage for future growth. In a recent conference call, Willie Chiang, Chairman and CEO, highlighted the company's impressive results and provided an update on their outlook for 2025.
According to the conference call transcript, PAA reported adjusted EBITDA of $729 million in the fourth quarter, exceeding initial guidance by approximately $105 million or 4%. This brings the full-year adjusted EBITDA to $2.78 billion, which is also above the high end of their guidance range. Chiang stated that this strong performance was driven by "another strong quarter of execution," with all segments performing well.
Looking ahead to 2025, PAA provided adjusted EBITDA guidance of $2.8 billion to $2.95 billion, representing approximately 3% growth year-over-year at the midpoint of their guidance range. This is expected to be driven by continued growth in Permian crude production, with volumes increasing by 200,000 to 300,000 barrels a day from 2024 to year-end 2025. Overall basin volumes are expected to grow to approximately 6.7 million barrels a day by the end of 2025.
Chiang emphasized that this growth sets up for "a very constructive long-haul market over the next several years" as volumes grow towards full utilization of efficient operating capacity. He also highlighted the company's Permian gathering joint venture, which continues to benefit from embedded operational synergies and consistent producer activity on their over 4.7 million dedicated acres.
In addition to their strong Q4 results and guidance for 2025, PAA announced several recent transactions that exemplify their efficient growth strategy. These include the acquisition of Ironwood Midstream Energy, the remaining 50% interest in Midway Pipeline, and a subsidiary of their Permian joint venture acquiring the Medallion Delaware Basin crude gathering business.
These transactions demonstrate PAA's focus on expanding their integrated asset base while streamlining operations and generating attractive returns for unitholders. The company also announced a 20% increase in the quarterly distribution payable on February 14, with an annualized basis of $1.52 per unit, representing a yield of approximately 7.5% based on current equity prices.
