Plains All American Pipeline on May 5 raised its profit forecast for the year by 3.4%, partly as higher oil and gas prices are expected to boost production and volumes shipped on pipelines from the top U.S. shale field.
U.S. shale companies are ramping up output as crude prices have climbed over $100 a barrel, and output is projected to hit a record 5.1 million bpd in May, according to U.S. government data, boosting volumes on pipelines.
The pipeline operator increased full-year adjusted earnings guidance by $75 million to about $2.28 billion and expects its Permian gathering volume to grow around 280,000 barrels per day in 2022.
Plains said it added additional 45,000 barrels a day of contracted short-term volumes to its Permian long-haul pipelines.
"We expect U.S. shale production, led by the Permian, will continue to be crucial to supplying and meeting global energy demand," Chief Executive Officer Wilfred Chiang said on an earnings call.
Crude oil pipeline tariff volumes rose 32% to average 7.2 million barrels per day, with Permian climbing 39%.
Still, earnings from its crude oil business fell 4% compared with the year-ago quarter as the company sold its natural gas storage facilities in August and registered gains a year earlier from hedged power costs related to a winter storm.
Adjusted net income attributable to Plains rose 15% to $266 million, helped by higher prices for natural gas liquids and increased fractionation spreads.
On a per unit basis, earnings fell 1 cent short of Refinitiv IBES analysts' estimate of 32 cents per unit.
Plains also raised its annual common distribution by 15 cents to 87 cents per unit and said it repurchased $25 million of units in the first quarter.
Recommended Reading
Matador Hoards Dry Powder for Potential M&A, Adds Delaware Acreage
2024-04-24 - Delaware-focused E&P Matador Resources is growing oil production, expanding midstream capacity, keeping debt low and hunting for M&A opportunities.
ONEOK CEO: ‘Huge Competitive Advantage’ to Upping Permian NGL Capacity
2024-03-27 - ONEOK is getting deeper into refined products and adding new crude pipelines through an $18.8 billion acquisition of Magellan Midstream. But the Tulsa company aims to capitalize on NGL output growth with expansion projects in the Permian and Rockies.
Making Bank: Top 10 Oil and Gas Dealmakers in North America
2024-02-29 - MergerLinks ranks the key dealmakers behind the U.S. biggest M&A transactions of 2023.
Continental Resources Makes $1B in M&A Moves—But Where?
2024-02-26 - Continental Resources added acreage in Oklahoma’s Anadarko Basin, but precisely where else it bought and sold is a little more complicated.
Tivoli Midstream Buys Southeast Texas Coast Infrastructure
2024-04-29 - Tivoli Midstream acquired the Chocolate Bayou from Ascend Performance Materials, including storage and land for development.