Plains to buy 55% interest in EPIC Crude Holdings, transaction valued at $1.57B

Plains All American Pipeline (PAA) and Plains GP Holdings (PAGP) announced earlier that a wholly owned subsidiary has entered into a definitive agreement to acquire from subsidiaries of Diamondback Energy (FANG) and Kinetik Holdings (KNTK), 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 $1.57B, inclusive of approximately $600 million of debt. Additionally, Plains has agreed to a potential $193M 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 (ARES), which also serves as operator. “We are excited to work with the EPIC Management team. This transaction strengthens our position as the premier crude oil midstream provider, complements our asset footprint and enhances our customer offering. The combination of our stake in EPIC Crude Holdings coupled with our existing integrated Permian and Eagle Ford assets enhances our commitment to offering a high level of connectivity and flexibility for our customers. By further linking our Permian and Eagle Ford gathering systems to Corpus Christi, we are enhancing market access and ensuring our customers have reliable, cost-effective routes to multiple demand centers,” said Willie Chiang, Chairman, CEO and President. The transaction is expected to be completed by early 2026, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.