(Houston – December 10, 2010) Plains All American Pipeline, L.P. (NYSE: PAA) today announced that Vulcan Energy Corporation, an affiliate of Vulcan Capital (collectively “Vulcan”) has entered into definitive agreements to sell its 50.1% ownership interest in PAA’s general partner. Vulcan Capital is the private investment group that oversees the portfolio investments of Paul G. Allen.
Substantially all of the interest being sold will be acquired by existing owners of PAA’s general partner or their affiliates. Purchasers include a subsidiary of Occidental Petroleum (NYSE: OXY) – 13%; a fund affiliated with The Energy & Minerals Group (EMG) – 25%; funds affiliated with Kayne Anderson
and First Reserve – 9%; and various investors – 4%.
Following closing of the transaction, owners of PAA’s general partner will include OXY – 35%; Kayne Anderson and affiliates – 27%; Lynx Holdings and its affiliate, EMG – 26%; and PAA
Management, LLC – 5%. Seven investors with interests of varying sizes will hold the remaining 7%. The transactions are expected to be completed by December 31, 2010.
Following the closing of the transaction, two new directors will be appointed to the board of directors of PAA’s general partner and two existing directors will step down from the board. Joining the board will be Vicky Sutil for Occidental and John Raymond for EMG. Leaving the board will be Geoff McKay, the director previously designated by Vulcan, and one at-large director. The size of the board will remain unchanged at eight directors.
Following the transaction, Vulcan is expected to remain PAA’s largest common unitholder with aggregate beneficial ownership of approximately 16.3 million common units. Subject to certain other conditions, as long as Vulcan retains beneficial ownership of at least 12 million PAA common units, Vulcan will have the right to appoint a board observer. Following closing, Mr. McKay will be appointed as Vulcan’s observer.
“We want to thank Paul Allen and Vulcan for their sponsorship and support since making their initial investment in PAA in early 2004,” said Greg L. Armstrong, PAA’s Chairman and CEO. “Looking forward, we are pleased with the resulting ownership profile of PAA’s general partner. We believe the ownership composition and the owners’ long-term focus and commitment will ensure that PAA continues to have strong governance and support for continuing to execute its fundamental business strategy and growth objectives,” said Armstrong.
Plains All American Pipeline, L.P. is a publicly-traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its general partner interest and majority
equity ownership position in PAA Natural Gas Storage, L.P. (NYSE: PNG), PAA is also engaged in the development and operation of natural gas storage facilities. PAA is headquartered in Houston, Texas.