Plains (PAA) Q3 2026 Earnings Call Transcript

DATE

Friday, Nov. 6, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations - Blake Fernandez
• Chairman, Chief Executive Officer, and President - Willie Chiang
• Executive Vice President and Chief Financial Officer - Al Swanson

TAKEAWAYS

• Adjusted EBITDA attributable to PAA -- $711 million in the third quarter, representing a 6% increase year over year driven by Cactus III contributions and Permian Basin volume growth.
• Full-Year Adjusted EBITDA Guidance -- $2.83 billion to $2.93 billion, with management indicating the final result is expected to be at or slightly above the $2.88 billion midpoint.
• Permian Basin Production Growth -- 200,000 barrels a day for 2026 on an exit-to-exit basis, reaching the high end of the company's previous guidance range.
• Midland Basin Acreage Dedication -- 270,000 acres, secured through a new 10-year agreement with a large integrated producer.
• Expected Midland Basin Volumes -- 225,000 barrels a day gross, with production under the new dedication expected to commence in the fourth quarter of 2027.
• Total Permian Basin Dedicated Acreage -- 5.3 million acres, following the inclusion of the new Midland Basin agreement.
• Silver Creek Acquisition Cost -- $585 million in aggregate cash consideration for a gathering system and related assets in the Powder River Basin.
• Silver Creek Transportation Volume -- 125,000 barrels a day, underpinned by 915,000 dedicated acres and long-term contractual commitments.
• Capital Structure Optimization Accretion -- $60 million annually, or $0.09 per common unit, to distributable cash flow following the redemption of preferred units.
• Junior Subordinated Notes Offering -- $1.5 billion, including $700 million of 6.75% Series A notes and $800 million of 7% Series B notes.
• Pro Forma Leverage Ratio -- 3.6x at the end of the third quarter, reflecting recent debt issuances and preferred security redemptions.
• Quarterly Cash Distribution -- $0.42 per unit, or $1.67 per unit on an annualized basis, representing a current yield of approximately 7%.
• Cactus III Synergies -- $50 million, successfully captured following the acquisition of the pipeline system.
• Organizational Efficiency Target -- $50 million, with the company on track to deliver these savings by the end of 2026.
• Net Income attributable to PAA -- $363 million for the third quarter, compared to $441 million in the same period last year.
• Crude Oil Segment Growth -- $370 million for the full year 2026, representing an estimated 16% increase compared to 2025.
• Permian Basin Rig Count -- 30 rigs added during the current year, supported by drilling efficiencies and enhanced recovery techniques.
• Permian Basin Pipeline Utilization -- 90% capacity for pipelines to the coast, with management anticipating brownfield expansions will be necessary in 2028 or 2029.
• Implied Distributable Cash Flow per Common unit -- $0.67 in the third quarter, an increase from $0.61 reported in the third quarter of 2025.
• Adjusted Free Cash Flow -- $458 million for the third quarter, an increase from $303 million in the prior year period.
• Cactus III Capacity Expansion -- 75,000 barrels a day, added during the summer to align with market demand.
• Silver Creek Transaction Multiple -- 9 to 10 times EBITDA for the first 12 months, with the acquisition expected to compress well within the company's cost of capital thereafter.
• Capital Expenditures -- $124 million net to PAA in the third quarter, comprising $96 million for investment capital and $28 million for maintenance.
• Net Cash from Operating Activities -- $669 million for the third quarter, compared to $817 million in the same period last year.
• Permian Basin Exit Production Growth -- 200,000 barrels a day to 300,000 barrels a day for the foreseeable future, driven by activity from a concentrated number of producers.

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RISKS

• Swanson stated, "The real change is the market opportunities that we've experienced in 2Q and 3Q that's really driving the $10 million lower number," referring to a projected sequential decline in Adjusted EBITDA for the fourth quarter.

SUMMARY

Plains All American Pipeline, L.P. (NASDAQ:PAA) reported third-quarter adjusted EBITDA attributable to PAA of $711 million, reflecting the company's strategic focus as a premier crude oil midstream provider following the divestiture of its Canadian natural gas liquids business. Management indicated that production growth in the Permian Basin is trending toward the high end of previous estimates, while the Silver Creek acquisition provides immediate scale in the Rockies platform. The company stated it is on track to deliver $50 million in organizational efficiencies and has captured $50 million in synergies from its Cactus III acquisition. The company reported that recent capital structure optimization, including the redemption of preferred securities, will provide meaningful accretion to distributable cash flow moving forward.

• Chiang stated, "North America remains critical to help meet global energy needs," as global demand remains resilient despite geopolitical volatility.
• Goebel stated, "The pipes to the coast are close to 90% full now," noting that current ratable growth suggests no immediate requirement for a large greenfield pipeline.
• Goebel stated, "We can see the Powder River Basin as the next growth wedge in the Rockies," identifying the region as a primary driver of future upstream production.
• Chiang noted that the crude oil business has become more durable and predictable following the sale of the natural gas liquids assets earlier in the year.
• Goebel explained that the Midland Basin acreage dedication consists of existing production, with the timing of associated earnings linked to the completion of system connections.
• Chiang noted that future Permian growth will likely involve a series of brownfield expansions to align with market demand rather than one singular large-scale project.

INDUSTRY GLOSSARY

• Adjusted EBITDA: A non-GAAP measure representing earnings before interest, taxes, depreciation, and amortization, adjusted for specific items to improve period-to-period comparability.
• Brownfield Expansion: An infrastructure project that expands or upgrades existing facilities rather than constructing entirely new assets.
• Cactus III Pipeline: A crude oil pipeline system serving the Permian Basin, recently expanded to increase transport capacity.
• Cushing: A major oil trading hub in Oklahoma that serves as the delivery point for West Texas Intermediate crude oil futures.
• Distributable Cash Flow (DCF): The amount of cash available for distribution to common unitholders after accounting for maintenance capital and other items.
• Egress: The ability of a production region to transport energy commodities to market centers or export hubs.
• Midland Basin: A sub-basin of the Permian Basin in West Texas characterized by high oil content and extensive drilling activity.
• Minimum Volume Commitment (MVC): A contractual guarantee where a customer agrees to transport a specific volume of commodities or pay a fee for the deficiency.
• NGL: Natural gas liquids, which are hydrocarbons such as ethane, propane, and butane that are separated from natural gas.
• Permian Basin: A major sedimentary basin in West Texas and southeast New Mexico known for significant oil and natural gas production.
• Powder River Basin: A structural basin in Montana and Wyoming that serves as a growing region for oil and natural gas midstream activity.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Plains All American Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Blake Fernandez: Thank you, Marvin. Good morning, and welcome to the Plains All American third quarter 2026 earnings call. Today's slide presentation is posted on the Investor Relations website under the News and Events section at ir.plains.com. 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 2. An overview of today's call is provided on Slide 3. A condensed consolidating balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chiang, Chairman and CEO and President; Al Swanson, Executive Vice President and CFO, along with other members of our management team.

With that, I'm going to turn the call over to Willie.

Willie Chiang: Thank you, Blake. Good morning, everyone, and thank you for joining us. This morning, we reported strong third quarter adjusted EBITDA attributable to Plains of $711 million. Al will provide additional details on the quarterly results in his portion of the call. Our business is operating well, and we continue to demonstrate steady growth as we executed on the three initiatives that we established at the beginning of the year. First, we closed on the sale of our Canadian NGL business in May, which completes our shift to a premier crude oil midstream company and improves the quality of our cash flow and our opportunities for growth going forward.

Second, we have captured $50 million of synergies in connection with the Cactus III Pipeline acquisition. And third, we remain on track to deliver $50 million of efficiencies across the organization by year-end 2026. As we outlined on Slide 4, we have multiple levers to efficiently grow the business through a combination of organic and inorganic investment opportunities that complement our existing asset base. To further expand on the organic growth projects that we detailed in the second quarter, we're pleased to announce a 10-year agreement with a large integrated producer to further build out our Permian Midland gathering system.

This new agreement includes 270,000 dedicated acres, and it provides additional growth opportunities to the POP JV, bringing our total dedicated acreage in the Permian to more than 5.3 million acres. Outside of the Permian, we successfully closed the Silver Creek acquisition, which we have renamed Silver Spur on October 1. This further expands our presence within the Powder River Basin, where substantial drilling location with attractive economics support robust producer development into the future. Silver Spur is a strategic addition to our Rockies platform. The system currently transports approximately 125,000 barrels a day, underpinned by a diversified customer base and includes 915,000 dedicated acres with long-term contractual commitments.

By integrating these gathering assets into our existing network, we enhance our customer offering with long-term -- long haul connectivity to Cushing, creating commercial and operational synergies that support long-term cash flow growth. During the quarter, we also took steps to optimize our balance sheet with a successful junior subordinated notes offering and the subsequent redemption of our preferred securities. Al will provide more detail, but these transactions meaningfully simplify our capital structure and are accretive to distributable cash flow moving forward. On the macro front, the geopolitical landscape remains volatile with ongoing disruptions to global oil supply and damage to energy infrastructure.

Global demand has remained resilient and oil inventories, including strategic petroleum reserves, continue depleting, which is supporting the crude oil futures curve. Through this environment, North America remains critical to help meet global energy needs. More specific to the Permian, we expect production growth to be towards the high end of our previous range, about 200,000 barrels a day on a year-end exit-to-exit basis for 2026. Improving natural gas egress, higher rig counts over the past 6 months, continued developments of various formations in the Permian and continued advancements in drilling efficiencies and enhanced recovery techniques should and will provide momentum into 2027. We will provide a more formal outlook for 2027 Permian growth on our call in February.

With that, I'll turn the call over to Al to cover our quarterly performance and other financial matters.

Al Swanson: Thanks, Willie. Slide 5 contains adjusted EBITDA walks that provide additional details on our performance. Please note that 3Q reporting removes the NGL segment and includes one single consolidated segment for the entire company, which aligns with the sale of our Canadian NGL business that closed in May. For the third quarter, we reported adjusted EBITDA of $711 million, reflecting the benefit of operating efficiencies, annual tariff rate escalations and a reduction in environmental remediation expenses relative to the second quarter. As highlighted on Slide 6, we are on track to achieve our guidance targets for the year and narrowing the EBITDA range to plus or minus $50 million with a midpoint of $2.88 billion.

Based on prevailing macro environment, we would expect to be at or slightly above the midpoint of the range for the year. A summary of 2026 guidance and key assumptions are on Slide 7. We will provide guidance for 2027 on our call in February. Slide 8 illustrates strong distributable cash flow generation. In September, we successfully raised $1.5 billion of 30-year junior subordinated notes, which mature in 2056, consisting of $700 million of 6.75% Series A notes, which are callable in 5 years and $800 million of 7% Series B notes, which are callable in 10 years.

Subsequently, we used the proceeds along with cash on hand and commercial paper borrowings to redeem all of our Series A and Series B preferred units. This capital structure optimization is expected to increase annual distributable cash flow to common unitholders by approximately $60 million or $0.09 per unit while maintaining leverage within our targeted range. With that, I will turn the call back to Willie.

Willie Chiang: Thank you, Al. I'm pleased with our performance year-to-date and the continued execution on our key initiatives. Our crude oil business, with a more durable and predictable cash flow stream post-NGL sale, really positions us well for a variety of macro market conditions. As we show on Slide 9, we continue to execute our efficient growth strategy. The three announcements this quarter again demonstrate the multiple levers that we have to drive growth, including organic investments, inorganic bolt-on M&A and balance sheet optimization. We remain committed to capital discipline, maintaining a stable and flexible balance sheet and continuing to return cash to unitholders. With that, I'll turn the call back to Blake to lead us into Q&A.

Blake Fernandez: Thanks, Willie. [Operator Instructions] With that, Marvin, we're ready for questions.

Operator: [Operator Instructions] Our first question comes from the line of Manav Gupta of UBS.

Manav Gupta: I wanted to ask you a little bit more on the 270,000-acre Midland dedication. As you ramp towards the 225 target of volumes, how should we think about the earnings uplift that this opportunity provides?

Jeremy Goebel: Manav, this is Jeremy Goebel. We're going to give you some more guidance on that in February. But think of that as existing production. So it's not a ramp to production. It's just a matter of timing for connection. So that contribution will likely be late 2027, early 2028, when the connection is done, but we'll give you more guidance on capital and timing next year. But we're excited about the opportunity to partner with a top-tier producer and look forward to providing those services over a long period of time and expanding our Midland footprint.

Manav Gupta: Perfect, sir. The second question I wanted to ask you, I mean, we understand there's crude volatility, but what are you hearing from the producers generally in the Permian? Do they expect to continue to grow production? We know the big guys, Exxons of the world, definitely want to grow. And what we are trying to solve from our side is, when does the Permian egress start to get tightened again? Is it late 2028? Is it 2029? When do you see to the point where these existing Permian pipes, even with the Cactus III expansion, are like almost 90% full?

Jeremy Goebel: Got it. Manav, that is a great question. What I would say is the volatility you experience every day in waking up and seeing a headline and crude move $8 to $10, they're experiencing the same. So from a planning perspective, I think you can expect 200,000 to 300,000 barrels a day of growth for the foreseeable future based on the activity you see today. You've added 30 rigs this year. You've gotten more efficient this year. You're just starting to add completion crews. So the 200,000 barrels a day of growth that we've seen through this year, we would expect that to continue. The pipes to the coast are close to 90% full now.

I think what you would see is the total basin will grow 200,000 to 300,000 barrels a day. The basin will clear for several more years. But I think your timing is appropriate for additional brownfield expansions in that '28 to '29 time period to see additional capacity come to market. So there's no need for a greenfield large pipeline at this time based on the ratable growth that we see and the smaller number of players driving growth, it seems like it's going to be orderly and that growth will happen over that time period. But your -- sometime in 2028 to early 2029, I think you'll see additional brownfield expansions.

But by and large, I think rates are constructive, dialogue is constructive with counterparties. We continue to re-contract the pipes that we have now and look forward to continue growing the business.

Willie Chiang: Manav, this is Willie. I just wanted to add one thing. Your question is spot on. It's very difficult to predict the exact timing of it because just of the global volatility. But as I sit back and we think about what's going on in the world, global demand has remained fairly resilient. There's a lot of noise in the supply chains. If you look at where the resources are and where the demand centers are for the world, it all points to North America really being an incremental producer. So the capacity that we've got out of the Permian is meaningful, and we've got the ability to expand Cactus III.

And as we've said before, we're going to match that expansion capacity to what the demand is to get to the water, but I think it really sets up for a strong macro environment going forward. Trying to analyze and pick exactly when it's going to happen, is very, very difficult, but we'll be patient, and we stand ready to be able to meet the needs.

Operator: Our next question comes from the line of Julien Dumoulin-Smith of Jefferies.

Julien Dumoulin-Smith: Can you hear me okay?

Willie Chiang: We can hear you loud and clear.

Julien Dumoulin-Smith: Excellent. Look, a couple of things, maybe just zeroing in and nitpicking, just on the quarter itself, 4Q was implied here, how do you think a little bit about just implying down? Is there any specific drag here on the -- like forthcoming quarter? And then thinking a little bit more strategically to the last question here, what do you think the timing of evaluating that Cactus III expansion is vis-a-vis, you talk about that '28 timeline for a brownfield expansion? When do you start moving on that, and we're getting a little bit more detail on -- I presume that's the brownfield expansion you're getting at here.

Al Swanson: Julien, this is Al. I'll do the first part. Implied, obviously, in our guidance is about $700 million for the fourth quarter, down about $10 million from the third quarter. The real change is the market opportunities that we've experienced in 2Q and 3Q that's really driving the $10 million lower number plus the inclusion of Silver Creek for the fourth quarter. If you recall, our view is Silver Creek's an asset that's going to grow meaningfully over the next few years. 4Q included in our forecast is without the benefit of some of that growth, some transition services costs, integration costs, et cetera, and without the synergies.

So those two basically offset the step down in some of the market opportunities that we captured kind of as the war started for second quarter and third quarter.

Jeremy Goebel: Julien, for your second part, the shorter answer is we're continually evaluating them. Just as you saw this summer, we added 75,000 barrels a day. We're looking at incremental ability to add as the market demands. And so I think you'll see us ramp over that time period. There are segments of pipe we have to build to access additional markets. So it's not -- I don't know that you'll see one grand announcement, just a series of announcements to get the pipeline ready. And then as contracts and rates are appropriate, we'll add the additional capacity. So it's not -- I don't think it's going to be one step change another 300,000 barrels a day.

I think you're going to see a series of expansions that go based on market demand.

Julien Dumoulin-Smith: Got it. Excellent. And you picked up what I was trying to put down on that 4Q and on the Silver Creek piece and the contribution. But maybe talking about the PRB more broadly here. I mean obviously, you're acquiring here. How do you think about diversification in that geography here, post midterms, et cetera? Anything that you'd flag in terms of just this is more strategic repositioning and adding on the margin maybe, but any points to complement your latest position there?

Jeremy Goebel: Thanks, Julien. We're very excited about the Silver Spur asset. I think the Powder River Basin is one that's been candidly evaluated for over some time period, and they're just starting to figure it out. So I think it's going to ramp into 2028. We have to continue to build out the system now through 2027, but there's a series of MVCs. There's 915,000 of acreage dedications. There's 4 to 5 producers that are already telling us that the wells are better and they cost less, and they're looking to potentially add a rig into the system. So we can see the Powder River Basin as the next growth wedge in the Rockies.

And that positions well for us not only on the Silver Spur asset from a gathering standpoint, but it also from a pull-through benefit to our pipelines and terminals in the Guernsey area headed south through to Cushing. So it's an integrated play for us. It's a growth on a stand-alone basis but also an integrated play. So we're excited about the opportunity to work with some of our large producers that are also there.

Operator: Our next question comes from the line of Jeremy Tonet of JPMorgan Securities.

Francina Kolluri: This is Francina on for Jeremy. Just wanted to zoom in a bit more on that kind of Silver Creek contribution point in 4Q. How would you kind of maybe frame or size run rate contributions and then the kinds of projects that might be incremental to kind of reach that run rate in terms of thinking about capital needs to really capture that low-hanging fruit?

Jeremy Goebel: So think of the fourth quarter as transition. There's a transition services agreement, which has some additional costs that will go away. So typically, it takes us a few months to shed costs, so we'll go into next year. It will be inside that cost of capital very quickly at our long-term run rate. So we have to -- from a -- there's an investment that needs to be made between now and the end of 2027. So it will really catch its legs in the 2028 and forward. Like I said, a series of MVCs and acreage dedications, but we'll be shedding costs, adding market opportunities, doing some pull-through benefits on the asset through 2027.

So that will be the transition year, and it will really -- 2028 forward will be a great thing for the asset. But it's inside of 10x when we start, and it compresses well inside of our cost of capital outside of that. So it's not -- from an EBITDA standpoint, you can think of this as roughly 9 to 10x in the first 12 months. And after that, it gets well inside of that.

Francina Kolluri: That's very helpful. And then I just wanted to maybe talk more broadly about the M&A landscape. A lot of your peers have taken on packages this year. And so is there anything that's remaining, anything that looks interesting at this point?

Willie Chiang: Yes. I'll go ahead and take that one. This is Willie. Clearly, we've done a lot of bolt-on M&A or bolt-on acquisitions. So I'll speak about bolt-ons and then broader activities. We've actually been the ones that have been executing on a lot of these bolt-ons. We look at everything. I would tell you that I think the bolt-on opportunities are probably a little less than what the pace we've gone in the past. I think we've done 15 of these over the last 3, 4 years. So it's been very critical to our piece. A broader M&A is obviously an opportunity. But right now, we focus on our crude business. We've got -- anything we do focuses on returns.

So if we think about assets that we might bring in or things we may do, it's really focused around capital discipline and returns. And it's with that lens that we think about broader M&A, but look at everything, well positioned. Opportunities come our way, we'll be able to hopefully capture them.

Operator: Our next question comes from the line of AJ O'Donnell of TPH Research.

Andrew John O'Donnell: I was just hoping if I could just sneak in one more question about the new Midland dedication. Just wondering, as far as the makeup of the volumes, are there any MVC components that are built into that? And then if you could talk about any of the volumes that are currently producing because I thought you said it was existing production. Are any of those volumes currently moving on your intra-basin or long-haul systems?

Willie Chiang: Jeremy?

Jeremy Goebel: AJ, this is Jeremy. What I would say is these are acreage dedications consistent with the rest of the system on the contract structure. The vast majority of this would be going into existing systems just into the Midland complex to say whether a specific barrel's flowing through us. They're not providing any meaningful contribution to us today. And so this is just something that is a new contract from the gathering system for us.

Andrew John O'Donnell: Okay. Maybe just going back to the Permian macro. If we start to see this kind of compounding multiple hundred thousands of barrels of growth over the next few years, where do you see the most upside? Or what part of your system do you get most excited about? Is it like the incremental C3 expansions that you can do or market-based opportunities on your marketing affiliate? Or is the highest torque, maybe higher utilization on your northbound assets out of the Permian?

Jeremy Goebel: AJ, it's a great question. I'd say it's a bit of all of the above because filling the pipes is one thing. What we really get excited about is longer term, the additional improvements that the industry makes on recoveries, sustaining this for long periods of time, which is what we hear over and over again from our producer customers. The excitement around the surfactants, the excitement around the different completion techniques, the investments Exxon, Chevron, and the other integrators are made to extending the tail, that's what really gets us excited is that the long-term recoveries.

There's a lot of gas and a lot of NGLs, and there's a lot of excitement, but that's going to make those commodities worth a lot less. These still are going to be oil reservoirs driven by oil. So there's a real investment being made to continue to drive additional recovery. So on the oil side, flattening out the curve, having less capital to go chase this, big free cash flow generation and a stable balance and -- on the margin rates going out on the long-haul business is a plus, but the gathering business should be better. The long-haul business should be better, market-based opportunities around it.

So it's just an integrated platform that we have to serve our customers, and we look forward to expanding with them.

Operator: Our next question comes from the line of John McKay of Goldman Sachs.

John Mackay: I'll go back to the Midland dedication, congrats on that. I just want to make sure we're thinking about it correctly. I know we'll get color later on kind of associated EBITDA and any associated spend. But given this is production that's already flowing elsewhere, I mean, is there an acquisition opportunity here for you guys over time on kind of whatever this production is touching right now?

Jeremy Goebel: John, I'd say at this point, that's inappropriate for us to talk about. But from our standpoint, we look forward to executing under the contract that we have today.

John Mackay: All right. Fair enough. And -- sorry go ahead. Please go ahead.

Willie Chiang: I'm sorry. John, this is Willie. I mean as I think about it at a high level, right, our whole business is integrated. So we've got gathering, intra-basin, long haul. So the thought of getting another 900,000 dedicated acres into the system, this is just what we do.

John Mackay: No, absolutely. That makes sense. Maybe I...

Willie Chiang: I'm sorry. I was quoting -- I misquoted the -- it's 270,000 acres here versus the 900 (sic) [ 900,000 ] was up in Silver in the Powder River. My apologies on that.

John Mackay: Absolutely. And maybe just on that point, you've probably increased the size of the dedicated acreage on the JV by looks like 30% since you kind of put it together about 5 years ago. I think we're just past that 5-year anniversary. Can you take this opportunity to give us your view on kind of the longer-term strategic plan here? Is there an opportunity to kind of buy in the other piece at some point? Is this going to be a kind of vehicle you can kind of continue to grow in? Maybe just give us an update now that we're kind of 5 years past the launch of it.

Jeremy Goebel: Sure. We've had a great partnership with Stonepeak and the Oryx team, and we'll continue to have a great partnership with them. That's their decision on when they decide to get out. But we've proven with them that we can grow, like you said, 30% growth over 5 years is really a 50% growth from where you started like when you think about it. So it's been a great run. It will continue to be a great run. We're happy for them to grow with us. But just like everything else, we've bought a lot of our partnerships in when that's the right time if that works, great. If they want to stay outstanding, great.

If a new partner comes in, we're prepared to work in any scenario. And we continue to grow as we've proven with them as a partner, we can grow with them or if the opportunity comes, we could do that. So I think there's no obligation to do it. There's an opportunity to do it, but there's no different than the opportunity to buy in other partners that we've had across our system.

Operator: Our next question comes from the line of Praneeth Satish of Wells Fargo.

Praneeth Satish: So I know it's still early, but maybe you can help us think through some of the puts and takes for 2027 EBITDA. I know you've got a few tailwinds here, $50 million cost synergies or cost efficiencies in the full year, Silver Creek, Cactus III, probably going to see volume growth on the oil side with the flush volumes coming in. So you put that all together, it does seem like you could see some reasonable growth in '27. So maybe what are some of the key headwinds that are kind of offsetting factors that we should think about when modeling '27 growth?

Willie Chiang: Al?

Al Swanson: Hi, this is Al. Yes, I mean, we've articulated kind of the four things, and I think you answered a meaningful part of our -- of the question. Clearly, PLA, we came in this year pretty highly hedged in the low 60s, we'll probably be in the low- to mid-60s by the time we exit with realized prices this year. Clearly, it's setting up for meaningful improvement there, $10 a barrel is a little over $40 million. So that's a definite tailwind. Clearly, the production growth, the $200,000 a day, that 1,000 (sic) [ 100,000 ] barrels a day that Jeremy mentioned, a lot of that came late.

We expect that to benefit '27 in addition to the excess rigs and the '27 growth itself. So we see the Permian volumes as a benefit. Clearly, the investment capital, whether it's our true investment expansion capital like the recent Cactus expansion, in addition, the Silver Creek acquisition as well. Those benefits will come to '27. And then the additional efficiency gains that we've talked about, the incremental $50 million, probably the one caveat or "headwind" we would point to, if you're taking that the last three quarters of this year, the crude is right around $700 million a quarter.

If you were just taking that, annualizing it and then putting all this growth on it, clearly, we've had some market benefits in those numbers. So we would encourage you to maybe dial in a little bit of taking out some of those market opportunities. Maybe we'll see the opportunity to get those in '27, but it wouldn't be -- we wouldn't come into the year expecting to see a repeat of some of that opportunities.

Praneeth Satish: Got you. No, that's helpful. And then there are several proposed Western Canadian egress projects that could bring more barrels into the Mid-Continent. I think at least one project that would go directly into Cushing. And I don't think they're expanding capacity from Cushing down. So I guess as you look across your asset footprint, and I don't know whether it's Capline or other systems, do you see any opportunities to participate or capture that incremental flow?

Jeremy Goebel: Praneeth, that's a great question. And certainly, any of the crude projects we're looking to see if we can benefit, complement, participate, so we'll keep you posted along the way, but we're constantly looking at opportunities to see if we can either partner with good projects, participate, create new projects. So we'll have more updates in the next 6 months if any of that comes to fruition. But certainly, things that complement us, we're actively looking at on the organic side as well as the acquisition side.

Operator: I'm showing no further questions at this time. I'd like to turn it back to Willie Chiang, Chairman and CEO, for closing remarks.

Willie Chiang: Great. Well, listen, thanks for your ongoing support questions, and we look forward to seeing you on the road soon. Have a safe day. Thanks.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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