Plains GP Holdings, L.P. (NYSE:PAGP) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 05:00 pm ET


Plains GP Holdings, L.P. (NYSE:PAGP) Q3 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to the PAA and PAGP Third Quarter 2019 Earnings Call. [Operator Instructions]. And at this time I'd like to turn the conference over to Roy Lamoreaux Vice President of Investor Relations and Communications. Please go ahead sir.

Roy Lamoreaux

Thank you Eduardo, Good afternoon and welcome to Plains All American's Third Quarter 2019 Earnings Conference Call. Today's slide presentation is posted on the Investor Relations news and events section of our website at plans all American calm. By to contains important disclosures regarding forward looking statements and non GAAP financial measures. The appendix includes condensed consolidating balance sheet information for PGP. Today's call will be hosted by Willie Chang, Chief Executive Officer and Al Swanson, Executive Vice President and Chief Financial Officer. Additionally, Harry Belafonte is president and chief Commercial Officer, Derek Jeremy global executive vice president commercial, and Chris Chandler, Executive Vice President Chief Operating Officer, along with other members of our senior management team are available for the q&a portion of today's call.

With that, I'll now turn the call over to Willie.

Willie Chiang

Thanks Roy. Good afternoon everyone and thank you for joining our call. Let me begin by hitting the high points of the information that we released this afternoon. We're pleased to report solid third quarter earnings results. As outlined on Slide 3 these results exceeded expectations in our fee-based segments and reflect the continuation of strong performance in our Supply and Logistics or S&L segment. As Al will discuss more in detail we have increased our 2019 full year adjusted EBITDA guidance by $100 million to plus or minus $3.075 billion. And we have decreased our 2019 growth capital program by $150 million to $1.35 billion. Additionally our preliminary guidance for 2020 adjusted EBITDA is approximately $2.55 billion to $2.6 billion. This is composed of $2.5 billion for our fee-based businesses reflecting fee-based growth of approximately $100 million which includes offsetting an estimated $85 million of expected impacts from the competitive environment. Our preliminary adjusted EBITDA guidance for our S&L segment is $50 million to $100 million. Our preliminary 2020 growth capital guidance is $1.35 billion and we expect meaningful reduction on our capital investment programs in 2021 and beyond as we complete our current capital program. Let me put our preliminary 2020 guidance into context with respect to the Permian production growth. During 2018 Permian production grew by approximately one million barrels a day and we expect 2019 growth of approximately 800000 barrels a day. For the full year 2020 we expect Permian production to grow on average approximately 500000 barrels a day which is about 100000 barrels a day on average less than our prior estimate as we have further calibrated the anticipated impact of producer capital discipline on drilling and completion activity. I would note that we expect 2020 Permian production to end the year 300000 to 400000 barrels a day higher than year-end 2019.

Additionally, our preliminary guidance for 2020 adjusted EBITDA is approximately 2.55 to 2.6 billion. This is