May 11, 2020 [Houston Chronicle] – Houston pipeline and storage terminal operator Plains All American Pipeline saw its first quarter financial results take nearly a $4 billion swing from the previous year largely on a reduction in the value of its assets.
The company lost $2.8 billion in the first quarter of 2020 compared with a $970 million profit a year earlier. Revenue was nearly steady at $8.3 billion. Plains’ bottom line was hit by a $3.2 billion write down in the value of its assets.
Although the first quarter started out strong for Plains, CEO Willie Chiang said the coronavirus pandemic created an “unprecedented energy supply and demand imbalance.”
“The North American energy supply chain has responded swiftly with significant reductions to refinery utilization, drilling and completion activity and shut-ins of existing production in multiple areas,” Chiang said.
Plains was not immune to the market imbalance. In addition to cutting $1.3 billion of capital spending and stock buybacks from the 2020 budget, the company also has pledged to sell more than $600 million of assets.
Although volumes and fees collected for use of the company’s pipelines and storage tanks increased year over year, Plains took a hit on record low prices for crude oil and natural gas liquids such as ethane, propane, butane and pentane.
The company’s supply and logistics division, which buys crude oil and natural gas liquids and sells them to refiners and other buyers, reported pre-tax earnings of $141 million compared to $278 million one year earlier.
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