Plains All American profits plunge

Houston-based Plains All American Pipeline’s profits plunged in the third quarter as the energy industry struggles amid the global pandemic that has slashed crude oil demand.

Plains’ earnings fell 68 percent to $143 million in the third quarter from $449million during the same period last year, the company said Monday.

Still, it was the second-straight quarterly profit for Plains, after it lost $2.8 billion in the first quarter amid demand crushing lockdowns aimed at slowing the spread of COVID-19 and an international price war.

“We delivered third-quarter results favorable to our expectations,” said Willie Chiang, chairman and CEO of Plains.

Revenue declined bymore than 25 percent to $5.8 billion in the third quarter from $7.9 billion in the same quarter of 2019.

The company also announced a $500 million stock buyback program aimed to return capital to investors.

“Our current equity valuation does not reflect the strength of our asset base or the long-term durability of our business,” Chiang said in a statement.

Executives speaking Monday during a call with investors said they believed oil demand would return, even as the world transitions to cleaner energy sources aimed at reducing greenhouse gas emissions, which cause climate change.

“Any energy transition will be underpinned by a significant allocation to hydrocarbons, including oil, for multiple decades,” Chiang said.

Meanwhile, executives said, the Permian Basin, the West Texas and New Mexico oil field that sparked the fracking boom, would lead oil’s recovery in North America.

Plains officials also attempted to reassure investors on the eve of Tuesday’s presidential vote that if Democrat Joe Biden were elected, the change wouldn’t jeopardize the company’s profits.

“We recognize that a potential change in administration could create headwinds for the industry and for Plains,” he said. “However, it could also bring benefits, particularly for those with pipe in the ground.”