Plains All American Pipeline, L.P.

Good day, and thank you for standing by. Welcome to the PAA and PAGP fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations, Blake Fernandez.

Thank you, Andrew. Good afternoon, and welcome to the Plains All-American fourth quarter 2022 earnings call. My name is Blake Fernandez, and I recently joined Plains as Vice President of Investor Relations. The company's attractive asset base including its premier Permian operating system, coupled with a long-term capital allocation framework focused on increasing returns to equity holders, makes it an exciting time for the company. I look forward to engaging with all of you throughout the year. In today's material, we're providing forward guidance for 2023. In an effort to improve communication and forecasting, we've made a few updates, including an adjusted EBITDA range, which reflects potential volatility in the underlying commodity markets along with a volumetric outlook for each segment. The slide presentation is posted on the Investor Relations website under the News and Events section at planes.com, where an audio replay will also be available following today's call. Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on slide two. An overview of today's call is provided on slide three. A condensed consolidating balance sheet for PAGP and other reference materials are located in the appendix. Today's call will be hosted by Willie Chang, Chairman and CEO, and Al Swanson, Executive Vice President and CFO. Other members of our team will be available for Q&A, including Harry Pafanis, President, Chris Chandler, Executive Vice President and COO, Jeremy Goebel, Executive Vice President and CCO, and Chris Herbold, Senior Vice President, Finance and CAO. With that, I will now turn the call over to Willie.

Thanks, Blake. We are very pleased to have you join the Plains team. To all on the call, good afternoon everyone and thank you for joining us. Today we announced strong fourth quarter and full year results, exceeding our expectations in both our crude oil and NGL segments. 22 represented a positive inflection point for Plains. We executed on our goals and initiatives for the year, we captured meaningful Permian production growth on both our gathering and long haul systems, and our team was able to capture market-based opportunities via our integrated business model flexible asset base, as well as commodity price upside. In summary, fourth quarter and full year adjusted EBITDA attributable PAA was $659 million and $2.51 billion, respectively, with full year results exceeding our February guidance by $310 million, or approximately 14%. As a result, we achieved the low end of our targeted leverage range earlier than expected, which enabled us to announce our multi-year capital allocation and financial framework in November. Consistent with that framework, we subsequently announced a $0.20 per unit or approximately 23% annualized distribution increase in January to be paid later this month, bringing our yield to approximately 8.5% based on current trading levels. Additionally, we completed and or announced several win-win strategic transactions in both our crude oil and NGL segments, including our Cactus II pipeline, Advantage pipeline, Empress facility, and our Kier Fort Stask Minority JV Intrasale, which all further optimize our asset base and streamline our operations. We also achieved record health safety environmental performance by achieving or exceeding our 20% reduction targets in employee recordable injury rate and federally reportable release metrics. While we've made great progress in both of these areas and have achieved top quartile performance, we remain focused on continuous improvement with zero as our ultimate goal for both of these metrics. Looking to 2023, and as highlighted on slide four, we provided adjusted EBITDA attributable PAA guidance in a range of 2.45 to 2.55 billion. This reflects year-over-year growth in our crude oil segment underpinned by continued Permian production and tariff volume growth on our gathering and long-haul systems. Our guidance also factors in a reduction in our NGL segment, primarily driven by lower weighted average frac spreads and C3 plus spec product sales volumes, as well as the KR Fort Sask sale, which is expected to close this quarter. Al will provide additional color on our guidance in this portion of the call. As shown on slide five, we anticipate 2023 Fermi and crude oil production to grow plus or minus 500,000 barrels a day, exit to exit, based on an assumed 2022 exit production level of approximately 5.65 million barrels a day. Our updated forecast assumes an average horizontal oil rig count of 340, consistent with current levels. As part of our routine fundamentals forecasting process, we'll continue to monitor our assumptions regarding natural gas takeaway capacity and commodity prices as the year progresses. Our Permian JV system is well-positioned with more than 4 million long-term dedicated acres and operating leverage. As shown on slide 6, we expect to capture approximately 350,000 barrels a day of incremental gathering tariff volume for the full year 2023 versus 2022. For our long-haul systems, we're seeing higher utilization year over year, particularly on our Cactus 1 and Cactus 2 systems. On Cactus 1, we have contracted or hedged a substantial portion of our open capacity for 2023 at levels generally consistent with our prior expectations. We also expect to see similar year-over-year throughput from the Permian to Cushing on our basin pipeline. Furthermore, we anticipate additional volume on Wink to Webster due to an increase in MVCs. In our NGL segment, we continue to focus on optimizing the business as well as improving the predictability of our earnings. During 2022, we completed a transaction to obtain full ownership of our empress facility and announced a $270 million sale of our interest in Kiera Fort Sask at an attractive multiple and on terms that will improve our connectivity to the Plains Fort Sask complex. Additionally, we're advancing capital-efficient debodom linking and expansion projects around our Fort Saskatchewan facility, and we hope to be able to share additional detail with you over the coming quarters. With that, I'll turn the call over to Al.