Plains to acquire 55% interest in EPIC crude holdings

Plains All American Pipeline (PAA) and Plains GP Holdings (PAGP) announced that a wholly owned subsidiary has entered into a definitive agreement to acquire from subsidiaries of Diamondback Energy and Kinetik Holdings, a 55% non-operated interest in EPIC Crude Holdings, the entity that owns and operates the EPIC Crude Oil Pipeline, in a transaction valued at approximately $1.57 billion, inclusive of approximately $600 million of debt. Additionally, Plains has agreed to a potential $193 million earnout payment should an expansion of the pipeline to a capacity of at least 900,000 barrels per day be formally sanctioned before year-end 2027. The transaction is expected to be immediately accretive to distributable cash flow with synergistic opportunities expected to result in mid-teens unlevered returns. The remaining 45% interest in EPIC Crude Holdings is owned by a portfolio company of Ares Management Corporation, which also serves as operator.