01—Abstract
Summary
Summary of the 8-K filed September 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Plains All American Pipeline, L.P.
(Nasdaq: PAA) disclosed in an 8-K dated September 2, 2025 that a wholly-owned subsidiary entered into a definitive Purchase and Sale Agreement on August 30, 2025 to acquire a 55% non-operated interest in EPIC Crude Holdings, LP, the entity that owns and operates the EPIC Crude Oil Pipeline. The base purchase price is approximately $1.57 billiona, which includes approximately $600 million of debt. The sellers are subsidiaries of Diamondback Energy, Inc. and Kinetik Holdings Inc. The remaining 45% interest is owned by a portfolio company of Ares Management Corporation, which also serves as operator.
The pipeline provides long-haul crude oil takeaway from the Permian and Eagle Ford basins to the Gulf Coast market at Corpus Christi. The filing states EPIC Crude Holdings has approximately 800 miles of long-haul pipelines, operating capacity of over 600,000 barrels per day, approximately 7 million barrels of operational storage, and over 200,000 barrels per day of export capacity. A potential earnout payment of approximately $193 millionb is payable if an expansion to at least 900,000 barrels per day is formally sanctioned before the end of 2027.
The companies expect the transaction to close in the first quarter of 2026, subject to customary conditions including regulatory approvals. Management states the deal is expected to be immediately accretive to distributable cash flow, that pro forma leverage should remain within the target range excluding NGL divestiture proceeds, and that it will be financed with cash and debt. The accompanying press release, furnished as Exhibit 99.1, also refers to Hart-Scott-Rodino clearance as a closing condition.
02—Key points
Key Highlights
- Buyer will acquire a 55% non-operated interest in EPIC Crude Holdings, LP from subsidiaries of Diamondback Energy, Inc. and Kinetik Holdings Inc.
- Base purchase price of approximately $1.57 billion, including approximately $600 million of debt, subject to adjustments
- Potential earnout of approximately $193 million if expansion to at least 900,000 barrels per day is formally sanctioned before the end of 2027
- EPIC system includes approximately 800 miles of long-haul pipelines, over 600,000 barrels per day of operating capacity, and over 200,000 barrels per day of export capacity
- Management expects the deal to be immediately accretive to distributable cash flow and to keep pro forma leverage within target range, excluding NGL divestiture proceeds
- Transaction expected to close in the first quarter of 2026, subject to customary conditions including regulatory approvals
- Ares Management portfolio company retains the remaining 45% interest and serves as operator
03—Questions
Frequently Asked Questions
What is Plains acquiring in this transaction?
A wholly-owned subsidiary of Plains All American Pipeline, L.P. agreed to buy a 55% non-operated interest in EPIC Crude Holdings, LP, the entity that owns and operates the EPIC Crude Oil Pipeline, from subsidiaries of Diamondback Energy, Inc. and Kinetik Holdings Inc.
What is the total cost of the acquisition?
The base purchase price is approximately $1.57 billion, which includes approximately $600 million of debt and is subject to adjustments. Plains may also pay an earnout of approximately $193 million if a pipeline expansion to at least 900,000 barrels per day is formally sanctioned before the end of 2027.
How will the deal be financed and what is its expected financial impact?
Management states the transaction will be financed with cash and debt from a strong balance sheet. It expects the deal to be immediately accretive to distributable cash flow and to keep pro forma leverage within the target range, excluding NGL divestiture proceeds.
When is the transaction expected to close and what could delay it?
The transaction is expected to close in the first quarter of 2026. Closing is subject to satisfaction or waiver of customary conditions, including applicable regulatory approvals such as Hart-Scott-Rodino clearance.
What does the EPIC Pipeline do?
The EPIC Pipeline provides long-haul crude oil takeaway from the Permian and Eagle Ford basins to the Gulf Coast market at Corpus Christi.
04—Continue