Iraq has raised the March official selling price (OSP) for Basra Light crude to Asia by $0.20 to minus $2.60 a barrel against the average of Oman/Dubai quotes from the previous month, the State Oil Marketing Organization (SOMO) said.

Basra Heavy to Asia in the same month was priced at minus $6.30 a barrel to Oman/Dubai quotes, SOMO said in an e-mailed statement late on Monday.

Iraq's OSPs came after Saudi Arabia made relatively modest changes to its crude prices for Asian buyer in March, in line with expectations, by lowering the price differentials for light grades, while raising those for heavier grades.

Saudi crude OSPs set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

Crude prices often offer a glimpse into whether Mideast OPEC producers will continue a strategy of keeping output high and defending market share, particularly as rival producer Iran ramps up crude shipments into an already oversupplied market despite low prices.

Iraq's March Basra Light OSP to the North and South American markets was set at the Argus Sour Crude Index (ASCI) minus $0.55 a barrel, up from the previous month, and the price of Kirkuk to the United States increased to ASCI plus $0.70 a barrel.

For Europe, the March OSP for Basra Light rose by $0.10 to dated Brent minus $4.95 a barrel and the March Kirkuk OSP rose to minus $4.50.

http://www.reuters.com/article/iraq-crude-prices-idUSL8N15O09S

Iran holds a stake in a refinery project in Malaysia and is considering taking stakes in projects in five other countries, the managing director of the National Iranian Oil Engineering and Construction Company (NIOEC) was quoted as saying on Monday.

Hamid Sharif Razi said the NIOEC holds a 30 percent stake in a 250,000 barrel a day refinery project in Malaysia, and was planning to take a 40 percent stake in a 300,000 barrel a day refinery in Indonesia, according to the Shana news agency.

The NIOEC is also in talks with South Africa, Sierra Leone, Brazil and India, he said, adding the purpose of the projects was to guarantee Iranian crude exports and, if necessary, a source of product imports.

http://www.reuters.com/article/oil-iran-refineries-idUSL8N15N1WX

Diamond Offshore Drilling Inc (DO.N), one of the world's top five offshore rig contractors, reported a better-than-expected quarterly profit as cost cutting pays off, and the company said it was suspending its dividend to add to cost savings.

A near-70 percent fall in crude oil prices since mid-2014 has pushed Diamond Offshore's oil and gas customers to lower spending and scale back drilling activity, forcing rig contractors to idle or even scrap rigs.

The dividend suspension comes after the company scrapped a special dividend of 75 cents last February.

The company, which initiated the special dividend in 2006, has paid a regular dividend of 12.5 cents per share every quarter since mid-2005.

Suspending the quarterly cash dividend will help Diamond Offshore save about $69 million annually, the company said on Monday.

"By conserving additional cash, we will have increased flexibility to manage the company through difficult market conditions and position ourselves for the eventual recovery in offshore drilling," Chief Executive Marc Edwards said in a statement.

In a bid to simplify operations and reduce downtime, Diamond Offshore said it was transferring the maintenance and service of well-control equipment to General Electric Co's (GE.N) oil & gas unit.

Under the 10-year service agreement, GE will buy the blowout preventer systems on four of Diamond Offshore's rigs located in the U.S. Gulf of Mexico for $210 million.

Loews Corp, which owns a majority stake in Diamond Offshore, swung to a loss in the fourth quarter.

Loews, controlled by New York's wealthy Tisch family was hurt by a $499 million impairment charge at Diamond Offshore and lower revenue from its insurance business, CNA Financial Corp.

Excluding the charge, Diamond Offshore's profit was 90 cents per share, above analysts' average estimate of 54 cents, according to Thomson Reuters I/B/E/S.

The Houston-based company posted a net loss of $245.4 million, or $1.79 per share in the quarter ended Dec. 31, compared with a profit of $98.8 million, or 72 cents per share, a year earlier.

Revenue fell about 18 percent to $555.6 million, while contract drilling expenses, excluding depreciation, fell by nearly 29 percent.

http://www.reuters.com/article/diamond-offshore-results-idUSL3N15N2B1

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Attached Files

National Oil Corp. in western Libya warned traders against loading “illicit” cargoes of oil at Hariga port in the eastern part of the country amid claims by a competing organization that it’s arranging such sales.

Six or seven foreign companies signed oil-purchase contracts from the port with people who “have no authority to sell Libyan oil,” the Tripoli-based NOC said in a statement, citing Ahmad Shawki, general manager for international marketing. It identified Loyd Capital and Netoil as among buyers attempting to load crude at Hariga. “The only authority legally empowered to sell Libyan crude oil is the National Oil Corporation, with its seat in Tripoli,” NOC said.

Libya, which holds Africa’s largest proven oil reserves, split into two administrations late in 2014, one in the west and an internationally recognized government in the east. It’s now in the process of setting up a Government of National Accord. The NOC in the west is recognized by traders such as Glencore Plc and Vitol Group as the official marketer of Libyan oil. It also claims United Nations recognition.

The eastern government set up a separate NOC administration and sent an official to OPEC meetings.

“Tripoli isn’t internationally recognized and so they don’t have the power to say who is and isn’t authorized to sell crude,” Loyd Capital Management LP Chief Executive Officer Edward Loyd said Friday in a phone interview. Loyd plans to send oil to refiners in two “western-leaning governments,” and three shipping companies have agreed to lift crude for Loyd on condition that it provides necessary documentation, he said.

Mustaffa Sanalla, chairman of the Tripoli NOC, said his organization is the one with UN recognition and potential buyers can get the situation clarified by their own governments’ Foreign Offices if in doubt. He cited two UN resolutions.

One of those was resolution 2259, in December, which called for support to “parallel institutions” to halt in order to preserve the integrity of the National Oil Corp. and other government institutions. That amounts to support for the Western NOC, according to Sanalla. Libya is in the process of forming a Government of National Accord.

The letter from NOC in Tripoli advised shipowners to “verify whether charterers’ contracts are legitimate, or run the risk of having their ships impounded.”

http://www.bloomberg.com/news/articles/2016-02-08/noc-in-west-libya-warns-about-illicit-oil-sales-from-east

Union Minister of State for Power, Coal, New and Renewable Energy Piyush Goyal on Monday said that the Government of India is willing to consider long term fixed price contracts with Australia for the supply of gas which will enable power producer to enter into a power supply contract at an affordable price.

"Two round table conference happened today and till now the dialogue has been formal. The India-Australia energy dialogue will give good results. The motive is to provide good quality electricity which is uninterrupted and reaches to the common man. India and Australia could work together for energy efficiency," Goyal told ANI here.

Goyal is leading a delegation for the 3rd India-Australia Energy Security dialogue in Australia.

While addressing a roundtable in Brisbane earlier today on the business opportunities for LNG (Liquefied Natural Gas) and Coal Bed Methane, Goyal stated that additionally, opportunities to control the entire value chain right from gas production, liquefaction, shipping, re-gasification and power generation can be evaluated at the current historic low prices of many of these activities.

Goyal highlighted that India is running one of the world's largest renewable energy programme which aims to increase the capacity 5 times to 175 GW over the next seven years which will require gas based plants which can act as spinning reserve and supply power during deficit times of day (like evenings) when renewable energy production reduces while stabilizing the grid.

He also stressed that since coal based power is available in India at less than 5 cents per unit, the LNG providers should consider supplying gas to India at a price that is comparable.

Pointing out that India is the fourth largest energy consumer in the world A.K. Jana, Executive Director, GAIL stated that India has also developed sufficient infrastructure in pipeline transportation, regasification facilities as well as end consumers facilities such as gas based power plants.

These facilities enable the consumption of around 300 MMSCMD, whereas the present consumption is less than 50% of the same. This provides good opportunities to countries which have a surplus of Natural Gas provided it is available at affordable prices.

In order to explore the opportunities to affordably supply Australian LNG to India, an LNG sub-group has been created under the joint leadership of a Joint Secretary, Ministry of Petroleum and Natural Gas and a senior Australian official.

http://news.yahoo.com/india-exploring-australian-gas-supplies-clean-affordable-power-132846826.html?soc_src=mediacontentstory&soc_trk=tw

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Statoil and Rosneft have commenced well testing at the North-Komsomolskoye field onshore Russia.

The companies have implemented a pilot operation of the horizontal wells with an average starting flowrate of 75t per day.

A spokesman said during well testing the companies are planning to undertake a complex of studies including hydrodynamic and tracer studies.

Laboratory investigations of the surface oil samples will also be implemented.

The data is expected to be used as the companies look at the strategy of the full-scale development of the North Komsomolskoye field.

https://www.energyvoice.com/oilandgas/101045/statoil-and-rosneft-commence-well-testing-at-the-north-komsomolskoye-field/

In spite of the oversupplied market, OPEC - led by Saudi Arabia - continues to pump in order to defend its market share against non-OPEC supply. With a coordinated change in strategy highly unlikely, prices will have to remain lower for longer to force the market to reach a new equilibrium.

However, a critical turning point - when a produced barrel no longer finds spare capacity within existing onshore storage - is approaching. According to the IEA, global oil stocks increased by 1 billion barrels in 2015, and the Agency expects a further increase of 285 million barrels over the course of this year.

In the case where onshore storage gets filled, the excess barrels will need to be stored in the form of floating storage, which is a more expensive option. Despite the high cost, this would not be without precedent: in 2009, trading companies stored circa 120 million barrels offshore in 64 tankers. In order to make this type of storage economical, the market would need to be in a state of 'super-contango' - a situation in which the front few crude spreads are wide enough to cover the costs of storage in tankers. This implies that prices may need to remain lower for longer than previously anticipated. Current market trends suggest that widespread filling of offshore storage is likely before significant erosion of supply takes place and the market eventually starts to rebalance.

http://www.oilvoice.com/n/Oversupplied-Market-Eying-Floating-Storage-Opportunities/4fb67cc79f15.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29

THE TRUSTEES at one of Britain’s biggest charities are being investigated by regulators over a high profile campaign against “toxic” fracking giants.

The Charity Commission has opened a compliance case into Friends of the Earth – after discovering the charity has continued to blast Cuadrilla, a company wanting to drill for gas in Lancashire.

Trustees told the Commission the propaganda from one of the biggest fundraisers in the country would stop last summer.

But hard-hitting ads have continued to come out – claiming Cuadrilla wants to use “toxic chemicals” and its actions could cause house prices to “plummet”.

The Commission is not investigating the ads.

But it is understood to be furious at the trustees for appearing to “lose control” and has demanded the board explains why they were misled.

The regulator could use new powers granted under the Charities Bill to pile pressure onto the charity. Ultimately it could request trustees are removed.

Energy Minister Andrea Leadsom last summer blasted the green lobby for delaying the fracking revolution by at least a year.

Speaking in September, she said eco-warriors were living in a fantasy world if they believed Britain could do without new reserves of shale gas.

Friends of the Earth has argued that its anti-fracking activity is put out by its limited company- rather than the main charitable, fundraising arm.

In an explosive letter to the Commission last month, Cuadrilla said this was laughable.

Chief exec Francis Egan said it was “deplorable” that the charity was trying to hide behind its non-charitable arm.

He added: “The public has had enough of charities which abuse the fundraising process.”

A Commission spokesman today said: “We have an ongoing engagement with Friends of the Earth Trust, particularly regarding its relationship to the non-charitable company, Friends of the Earth Limited.

“We cannot comment further whilst this engagement continues.”

The row comes just 72 hours after the Government said charities would no longer be able to lobby Ministers to change policies.

Friends of the Earth said the Commission was acting on the back of a complaint from Cuadrilla who seemed to be "trying to silence their opposition".

http://www.thesun.co.uk/sol/homepage/news/politics/6916994/Charity-watchdog-probes-Friends-of-the-Earth-over-campaign-against-toxic-fracking-giant.html

Oil production will fall by 92,000 b/d from February to March in key US onshore plays, the US Energy Information Administration said Monday.

The biggest forecast drop will be in the Eagle Ford, where EIA sees supply falling 50,000 b/d to 1.222 million b/d in March from 1.272 million b/d in February. The Bakken, where EIA expects production to fall to 1.1 million in March from 1.125 million b/d in February, and the Niobrara, where production is forecast to fall to 389,000 b/d in March from 404,000 b/d in February, are also expected to see substantial drops.

In addition, production in the Permian will climb to 2.04 million b/d in March, just 1,000 b/d more than the play's estimated production this month. Permian supply, which has grown despite declines in other US plays, appears to be nearing its first month-to-month decline since the EIA began tracking drilling productivity in late 2013.

The EIA has forecast month-to-month production declines in the Bakken, Eagle Ford and Niobrara since March 2015, but the projected drops appear to be more modest than those forecast by EIA late last year, despite persistent low prices and planned spending cuts by US producers.

In November, EIA forecast Eagle Ford production would fall by 78,000 b/d from November to December and in May EIA forecast Bakken production would fall by 31,000 b/d from May to June.

The new estimates Monday were included in the EIA's monthly Drilling Productivity Report, which looks at supply in seven onshore regions that have seen the most prolific growth recently. The report does not, for example, look at Gulf of Mexico or Alaska production.

Overall, EIA forecasts oil production to decline by 92,000 b/d from February to March in these regions, compared with the same time a year earlier when EIA forecast growth of 68,000 b/d.

EIA has shown production declines for 15 straight months, after the month-over-month forecast peaked at an estimated 125,000 b/d increase in December 2014.

Despite the expected decline, EIA continues to see improvements in rig efficiency in these seven regions, as new well oil production is expected to climb to an average of 504 b/d per rig in March from 500 b/d in February. A year ago, wells in these regions averaged 352 b/d, according to EIA.

The EIA's report comes as exploration and production companies plan for capital spending cuts as they release fourth-quarter earnings featuring billions of dollars in losses. North American producers plan to cut on average about 23% from 2015 spending levels, according to an analysis by IHS Energy. That analysis shows, however, that these companies will need to cut these spending levels by 50% in order to maintain the traditional ratio between capital spending and cash flow.

"Given that most companies made preliminary 2016 spending plans when the price outlook was comparatively higher, we expect to see further spending cuts announced throughout the fourth-quarter 2015 earnings cycle that reflect the current price environment," Paul O'Donnell, principal analyst at IHS Energy and author of the analysis, said in a statement.

http://www.platts.com/latest-news/oil/washington/us-oil-production-to-fall-92000-bd-in-march-in-21901829

North American oil and natural gas drillers will need to cut an additional 30 percent from their capital budgets to balance their spending with the cash coming in their doors even if crude rises to $40 a barrel, according to an analysis by IHS Inc.

A group of 44 North American exploration and production companies are planning to spend $78 billion on capital projects this year, down from $101 billion last year. Those companies need to cut another $24 billion this year to get their spending in line with a historical 130 percent ratio of spending to cash flow, IHS said Monday.

“These spending cuts will be particularly troublesome for the highly leveraged companies,” said Paul O’Donnell, principal analyst at IHS Energy. “These E&Ps are torn between slashing spending further to avoid additional weakening of their balance sheets, and the need to maintain sufficient production and cash flow to meet financial obligations.”

The analysis is based on IHS’s low-case price scenario of $40-a-barrel oil and $2.50-per-million-cubic-feet natural gas prices. IHS cited Concho Resources Inc., Whiting Petroleum Corp., WPX Energy Inc., and PDC Energy Inc. as examples of companies displaying the best spending discipline.

West Texas Intermediate for March delivery dropped 91 cents, or 3 percent, to $29.98 a barrel at 1:29 p.m. on the New York Mercantile Exchange. Crude prices are expected to average $41.13 this year, according to the median of 26 analyst estimates compiled by Bloomberg.

http://www.bloomberg.com/news/articles/2016-02-08/oil-drillers-must-slash-another-24-billion-this-year-ihs-says

Chesapeake Energy Corp., once led by an early pioneer of shale gas, saw its shares plummet 51 percent on Monday after reports that the company had hired restructuring and bankruptcy specialists at Kirkland & Ellis.

Chesapeake denied the reports, saying it “has no plans to pursue bankruptcy.”

“Kirkland & Ellis LLP has served as one of Chesapeake’s counsel since 2010 and continues to advise the company as it seeks to further strengthen its balance sheet following its recent debt exchange,” Chesapeake said.

Kirkland & Ellis declined to comment. Market intelligence firm Debtwire first reported the hire early Monday, according to Bloomberg.

The Oklahoma City oil and gas producer has some $11.6 billion in debt and a $500 million note due next month, according to regulatory filings. In the past year, its stock price has collapsed, tumbling 91 percent as the oil market crashed and domestic natural gas remained abundant and cheap.

Its stock-market value fell to $995 million on Monday. Before oil prices collapsed in 2014, the company was worth $18.8 billion. Chesapeake shares on Monday fell $1.56 to $1.50 a share — about 51 percent — on the New York Stock Exchange, and trading halted shortly before 10 a.m.

A few years ago, Chesapeake, then led by wildcatter Aubrey McClendon, had been one of the most aggressive companies in the U.S. shale land grab and become the nation’s second-largest natural gas producer after Exxon Mobil Corp., snapping up thousands of acres across the nation searching for natural gas trapped in once-inaccessible shale plays.

http://fuelfix.com/blog/2016/02/08/chesapeake-shares-cut-in-half-on-possible-restructuring/?utm_source=twitterfeed&utm_medium=twitter#36696101=0

U.S. oil and gas pipeline companies including Williams Companies Inc and Kinder Morgan Inc have contracts worth billions of dollars that might be at risk as Chesapeake Energy Corp aims to slash its debts amid collapsing energy prices.

Chesapeake said on Monday it had no plans to file for bankruptcy after sources told Reuters the firm, whose debt is eight times its market value, had asked its longtime counsel to look at restructuring options.

The way it deals with its financial woes could be a lifeline or death sentence for midstream pipeline companies. Often called the energy market's "toll takers," they have long-term contracts with producers such as Chesapeake to move, process and store energy products, experts said. Many of these companies are master-limited partnerships, or MLPs.

Chesapeake said it has commitments to pay about $2 billion a year for space on pipelines run by MLPs, federal filings show.

During the U.S. shale boom, investors flocked to MLPs, which were growing as much as 8 percent a year.

But investors have fled in droves out of fear that the companies will not maintain their hefty dividend-style distributions.

But with oil prices at their lowest in 12 years due to a global supply glut with OPEC unwilling to slow production, profits at energy companies have plummeted and analysts do not expect any significant price recovery until at least 2017.

CONTRACT RENEGOTIATION LIKELY

Williams has the most exposure to Chesapeake after buying Chesapeake's logistics assets for $6 billion in 2014, Jay Hatfield, portfolio manager of New York-based InfraCap, said.

Williams did not respond to requests for comment.

Other companies with contracts include Spectra Energy Partners LP, Columbia Pipeline Partners LP and Marathon Petroleum Corp's unit MPLX LP, according to SEC filings.

These long-term contracts, often referred to as minimum volume commitments, were supposed to protect MLPs from major oil and gas price drops, because they include so-called minimum volume commitments, where customers pay pipeline operators whether they move any oil or not.

But the latest leg down in crude's 19-month plunge has cast doubt over the perceived safety of those contracts as producers try to navigate the oil crisis.

Experts said they expect Chesapeake will try to renegotiate contract terms, which would be the first major test of these deals and the so-called midstream companies that flourished during the U.S. shale boom.

Another risk is it could file for bankruptcy protection, which could give it the option discontinuing or renegotiating commercial contracts.

Hatfield said he expects Williams will be forced to accept a 50-percent price cut in its contract price with Chesapeake, either through the courts or mutual renegotiation.

That translates to a drop of about $300 million in annual cash flow for the $4 billion company.

http://www.reuters.com/article/chesapeake-restructuring-pipelines-idUSL2N15N236

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Oil at $30 a barrel is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash.

Companies including Marathon Oil Corp., Noble Energy Inc., Callon Petroleum Inc., Pioneer Natural Resources Co., Rex Energy Corp. and Bonanza Creek Energy Inc. used a strategy known as a three-way collar that doesn’t guarantee a minimum price if oil falls below a certain level, company records show. While three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines.

"At the time people hedged, they did it without thinking that oil would go to $28," said Thomas Finlon, director of Energy Analytics Group LLC in Jupiter, Florida. "They didn’t have a realistic view about whether the market would crumble or not."

The three-way hedges risk worsening a cash shortfall for companies trying to survive the worst oil crash in 30 years. The insurance is all the more important after oil plummeted 43 percent in the past year to $26 a barrel in January, exacerbating the pressure on debt-burdened producers.

"In 2015, everyone was given a hall pass and had a little protection from hedges," said Irene Haas, an analyst with Wunderlich Securities. "But as we roll into 2016, the hedges aren’t as attractively priced anymore and the hedges aren’t going to exactly bail you out."

The U.S. shale boom was built on high oil prices and low-cost financing, which enabled drillers to spend more than they earned while making up the difference with debt. With oil at a 12-year-low, financing is much harder to come by. Locking in a minimum price for crude reassures investors and lenders that companies will have the cash to pay their debts.

Joseph Gatto, Jr., Callon’s chief financial officer, told investors at a conference in December that the company had hedged about 4,000 barrels a day in 2016, or 40 percent of its projected output, at a price of $56 a barrel.

About half of those contracts are worth significantly less at $30 a barrel because Callon employed three-ways, Securities & Exchange Commission records show. While the company is guaranteed $58.23 for 364,000 barrels in the first half of 2016, or about 2,000 barrels a day, the remaining 364,000 has lost value because the strategy sacrifices protection when prices fall below $40.

http://www.bloomberg.com/news/articles/2016-02-09/oil-drillers-exposed-in-three-way-hedges-as-crude-dips-below-30

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Jim Tisch said “chaos continues to reign over the energy market” after the slump in commodity prices fueled a fourth-quarter loss and stock decline at his Loews Corp.

“If these pricing levels persist over the next two years, we’ll be in a drastically under-supplied oil market,” Tisch said Monday in a conference call discussing results at New York-based Loews. “The natural-gas market is under the same dark cloud, as the entire energy industry is being affected by this precipitous downturn.”

Loews posted a net loss of $201 million for the three months ended Dec. 31, as the Diamond Offshore Drilling Inc. unit wrote down the value of rigs and halted its quarterly dividend. Loews fell 1.6 percent to $35.71 at 11:29 a.m., extending its decline for the year to 7 percent after slumping at least 8 percent in both 2014 and 2015.

Tisch took a more pessimistic tone than in late 2014 when he said “trouble is opportunity” for Diamond Offshore and said the company might have a chance to add to its fleet of rigs. Oil has dropped by more than half since those remarks to about $30 a barrel.

Stark Reality

“The reality for offshore drilling companies is stark,” he said Monday. “The drop in oil prices is causing oil companies to slash exploration and development budgets and reduce or cancel drilling contracts, decimating day rates and idling rigs. The market for rigs of all types, including new, ultra-deepwater drill ships, is currently, and will for the immediate future, be drastically oversupplied.”

He said there is still high demand for oil and that low prices will lead to less exploration and an eventual rebound. Loews also has a hotel business, the CNA Financial Corp. insurance unit, and Boardwalk Pipeline Partners LP, which transports and stores natural gas. Tisch agreed in 2014 to sell HighMount Exploration & Production LLC after being caught off guard by a decline in natural gas prices.

http://www.bloomberg.com/news/articles/2016-02-08/tisch-sees-dark-cloud-over-natural-gas-chaos-reigning-in-energy

Plains GP Holdings LP on Monday reported fourth-quarter profit of $25 million.

The Houston-based company said it had profit of 11 cents per share.

The results did not meet Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 18 cents per share.

The oil and gas holding company posted revenue of $5 billion in the period, which also missed Street forecasts. Three analysts surveyed by Zacks expected $8.17 billion.

For the year, the company reported profit of $118 million, or 53 cents per share. Revenue was reported as $23.15 billion.

Plains GP shares have declined 33 percent since the beginning of the year. In the final minutes of trading on Monday, shares hit $6.37, a fall of 76 percent in the last 12 months.

http://drillbitmedia.com/plains-gp-misses-street-4q-forecasts/

Armstrong, Chairman and CEO of Plains All American. “Our fourth-quarter results were negatively impacted by approximately $15 million associated with deficiencies on minimum volume commitments and an approximate $15 million shift in earnings recognition on certain NGL sales activities from the fourth quarter of 2015 to the first quarter of 2016. This earnings shift is primarily the result of delayed inventory draws due to unseasonably warm temperatures in certain parts of the U.S. and Canada as well as impacts of inventory pricing during the fourth quarter. Additionally, severe weather in West Texas and the Mid-continent resulted in volume shortfalls impacting results by approximately $5 million.”

Armstrong stated that the partnership is well positioned to manage through near-term challenges and to grow meaningfully in the intermediate and long-term as industry conditions improve.

“The $1.6 billion of proceeds from our recent preferred equity placement satisfies PAA’s equity financing needs for 2016 and substantially all of 2017 and enables PAA to complete its multi-year, multi-billion dollar capital expansion program, while maintaining substantial liquidity and a solid balance sheet.”

Armstrong continued, “PAA has visibility for incremental cash flow contributions over the next 24 months from the completion of these projects, the majority of which are backed by minimum volume commitments and other contractual support. These projects enhance PAA’s existing footprint and provide further significant leverage to a sustained increase in U.S. production levels with little to no incremental investment.”

http://www.businesswire.com/news/home/20160208006295/en/Plains-American-Pipeline-L.P.-Plains-GP-Holdings