Current Report Filing (8-k)
July 13 2021 - 6:16AM
Edgar (US Regulatory)
0001070423
false
PLAINS ALL AMERICAN PIPELINE LP
0001070423
2021-07-12
2021-07-12
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
PLAINS ALL AMERICAN PIPELINE LP
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) –
July 12, 2021
Plains All American Pipeline, L.P.
(Exact name of registrant as specified in
its charter)
Delaware
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1-14569
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76-0582150
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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333 Clay Street, Suite 1600, Houston,
Texas 77002
(Address of principal executive offices)
(Zip Code)
713-646-4100
(Registrant’s telephone number, including
area code)
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Units
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PAA
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Nasdaq
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of
the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth
company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01
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Entry Into a Material Definitive Agreement.
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On July 12, 2021,
subsidiaries of Plains All American Pipeline, L.P. (“PAA” or the “Registrant”), a wholly-owned subsidiary of
Plains GP Holdings, L.P. (“PAGP”), and Oryx Midstream Holdings LLC (together with certain affiliates,
“Oryx”), a portfolio company of Stonepeak Infrastructure Partners (“Stonepeak”)1, executed a
definitive merger agreement (the “Merger Agreement”) pursuant to which they intend to merge, in a cashless transaction,
their respective Permian Basin assets, operations and commercial activities into a newly formed strategic joint venture, Plains Oryx
Permian Basin LLC (the “Joint Venture”). The Joint Venture will have no debt and will be owned 65% by PAA and 35% by
Oryx. PAA will serve as operator of the Joint Venture.
Key terms and conditions
of the Merger Agreement include the following:
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·
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Pursuant to the Merger Agreement and subject to satisfaction of the closing
conditions described below, PAA and Oryx intend to combine their respective Permian Basin gathering businesses and form the Joint Venture
through a series of merger and contribution transactions.
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·
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The Merger Agreement includes customary and reciprocal representations and
warranties by each party.
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·
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Closing is subject to various conditions, including the following:
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o
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Completion by Oryx of a proposed refinancing of debt at its equity owner level.
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o
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Receipt of regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”).
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o
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Satisfaction of other customary closing conditions.
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·
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At closing, the parties will execute an LLC agreement forming the Joint Venture,
the key terms of which are as follows:
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o
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Ownership and Governance.
Subject to the tiered modified sharing arrangement described below, the Joint Venture will
be owned 65% by PAA and 35% by Oryx. The Joint Venture will be managed by a five-member Board
including three PAA representatives and two Oryx representatives. PAA will serve as operator
of the Joint Venture, and a joint operating committee that includes representatives from PAA and Oryx will provide oversight
on material Joint Venture operating and commercial decisions. The Joint Venture will be consolidated
into PAA’s financial statements.
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o
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Distributions. Quarterly distributions of available cash (cash on hand at end of
quarter less reserves) from the Joint Venture to PAA and Oryx will be subject to a tiered modified sharing arrangement
(“MSA”) for up to 10 years. Under the MSA, distributions will be allocated as follows:
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Available Cash
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Distribution Percentages
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Tier
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(Annualized)
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PAA
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Oryx
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1
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Up to $300mm
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50
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%
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50
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%
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2
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$300mm - $428mm
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100
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%
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0
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%
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3
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$428mm - $815mm
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65
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%
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35
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%
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4
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$815mm and above
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70
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%
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30
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%
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Upon termination of the MSA, quarterly distributions of available cash will be paid 65% to PAA and 35% to Oryx.
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o
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Area of Mutual Interest.
Joint Venture members and their affiliates (other than Stonepeak and its non-Oryx portfolio
companies) will be restricted from developing, acquiring or owning any assets related to
gathering and marketing crude oil and condensate in the Permian Basin, subject to certain
exceptions.
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o
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Future Downstream Projects.
For a period of seven years after closing, the Joint Venture will have certain limited investment
rights with respect to material downstream projects pursued by either member.
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o
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Transfer of Interests and
Related Provisions. In general, each Joint Venture member will be free to transfer
all, but not less than all, of its respective interest in the Joint Venture; however, under
certain circumstances and subject to certain limitations, (1) if Oryx desires to transfer
its interest, is subject to a permitted foreclosure by certain lenders or is anticipated
to be the subject of a change of control, PAA will have the right to make an offer and negotiate
to acquire Oryx’s interest, and (2) if PAA desires to transfer its interest or undergoes
a change of control, Oryx will have certain tag-along rights.
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Subject to satisfaction
of closing conditions, including receipt of regulatory approvals, the transactions contemplated by the Merger Agreement are expected to
close in the fourth quarter of 2021.
The foregoing description
of the Merger Agreement is qualified in its entirety by reference to such Merger Agreement, a copy of which is filed herewith as Exhibit
2.1 and is incorporated herein by reference.
1 Affiliates of Stonepeak own approximately
8.9% of PAA’s outstanding Series A Preferred Units, which equates to less than 1% of PAA’s outstanding common units and common
unit equivalents combined.
Item 7.01
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Regulation FD Disclosure.
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In accordance with General
Instruction B.2 of Form 8-K, the information presented herein under Item 7.01 shall not be deemed “filed” for the purpose
of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such
information be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
each as amended.
On July 13, 2021, PAA
and PAGP issued a press release announcing the execution of the Merger Agreement. A copy of the press release is furnished as Exhibit
99.1 hereto.
Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits
Exhibit
Number
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Description
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2.1*
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Agreement
and Plan of Merger dated as of July 12, 2021 by and among Plains Pipeline, L.P., Plains Marketing, L.P., Oryx Midstream Holdings
LLC, Middle Cadence Holdings LLC, POP HoldCo LLC, Oryx Wink Oil Marketing LLC, Oryx Permian Oil Marketing LLC, Plains Oryx Permian
Basin LLC, Plains Oryx Permian Basin Marketing LLC and Plains Oryx Permian Basin Pipeline LLC.
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99.1
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Press Release Dated July 13, 2021.
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104
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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*
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Certain schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation
S-K. The Registrant agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 13, 2021
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PLAINS ALL AMERICAN PIPELINE, L.P.
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By:
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PAA GP LLC, its general partner
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By:
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Plains AAP, L.P., its sole member
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By:
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Plains All American GP LLC, its general partner
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By:
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/s/ Richard McGee
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Name:
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Richard McGee
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Title:
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Executive Vice President, General Counsel & Secretary
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