Ladies and gentlemen, thank you for standing by, and welcome to the PAA PNG Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. Now I'll turn the call over to your host, Roy Lamoreaux. Please go ahead.

Good morning. My name is Roy Lamoreaux, Director of Investor Relations. We welcome you to Plains All American Pipeline and PAA Natural Gas Storage's First Quarter 2012 Results Conference Call. The slide presentation for today's call is available under the Conference Call tab in the Investor Relations section of our website at www.paalp.com and www.pnglp.com. I would mention that throughout the call, we will refer to the companies by their New York Stock Exchange ticker symbols of PAA and PNG, respectively. As a reminder, Plains All American owns the 2% general partner interest and all of the incident distribution rights and approximately 62% in the limited partner interest in PNG, which accordingly, is consolidated into PAA's results. In addition to reviewing recent results, we'll provide forward-looking comments on the partnership's outlook for the future. In order to avail ourselves to the Safe Harbor precepts that encourage companies to provide this type of information, we direct you to the risks and warnings set forth in the partnership's most recent and future filings with the Securities and Exchange Commission. Today's presentation will also include references to certain non-GAAP financial measures such as EBIT and EBITDA. The non-GAAP reconciliation sections of our websites reconcile certain non-GAAP financial measures to the most directly comparable GAAP financial measures and provide a table of selected items that impact comparability of the partnership's reported financial information. References to adjusted financial metrics exclude the effect of these selected items. Also for PAA, all references to net income are references to net income attributable to Plains. Today's call will be chaired by Greg L. Armstrong, Chairman and CEO of PAA and PNG. Also participating in the call are: Harry Pefanis, President and COO of PAA; Dean Liollio, President of PNG; and Al Swanson, Executive Vice President and CFO of PAA and PNG. In addition to these gentlemen and myself, we have several other members of our management team present and available for the question-and-answer session. With that, I will turn the call over to Greg.

Thanks, Roy. Good morning, and welcome to everyone. PAA delivered very strong first quarter results underpinned by solid fundamental performance and further enhanced by favorable market conditions. Yesterday, after market close, Plains All American announced first quarter adjusted EBITDA of $472 million. These results exceeded the midpoint of our guidance range by $72 million or 18%, and were $52 million above the high end of our guidance range. In comparison to last year's first quarter, adjusted EBITDA, adjusted net income and adjusted net income per diluted unit for the first quarter of 2012 increased 36%, 58% and 53%, respectively. These results and additional information are summarized on Slide 3. PAA's first quarter results were driven by solid performance in all 3 segments with Supply and Logistics segment being the largest contributor to the overperformance. As shown on Slide 4, our first quarter results marked the 41st consecutive quarter that PAA has delivered results in line with or above guidance. In April, PAA declared a 7.7% year-over-year increase in our annualized run rate distribution to $4.18 per common unit. As shown on Slide 5, PAA has increased its distribution in each of the last 11 quarters and 30 out of the last 32 quarters. As reflected on Slide 6, during the remainder of today's call, we will discuss our segment performance relative to guidance, our expansion capital program, our acquisition and integration activities and our financial position. We will also address the drivers and major assumptions supporting our financial and operating guidance for the second quarter of 2012. We will address similar information for PNG. At the end of the call, I will provide a recap, as well as some comments regarding our outlook for the future. And with that, I'll turn the call over to Harry.

Thanks, Greg. During my section of the call, I'll review our first quarter operating results compared to the midpoint of our guidance issued on February 8, discuss the operational assumptions used to generate our second quarter guidance and discuss our 2012 capital program and acquisition activities. As shown on Slide 7, adjusted segment profit for the Transportation segment was $173 million, which was $25 million above the midpoint of the guidance. Volumes for this segment of 3,170,000 barrels per day were above guidance by approximately 60,000 barrels per day, which combined with our higher pipeline loss allowance volumes accounted for approximately $18 million of the overperformance. Operating expenses were approximately $8 million lower than our guidance, primarily due to combination of: One, $4 million reversal of accrued expenses associated with the Rainbow pipeline released in 2011; and secondly, a shift in the timing of certain maintenance and integrity expenses. On a per unit basis, adjusted segment profit was $0.60 per barrel. Adjusted segment profit for the Facilities segment was $100 million or $5 million above the midpoint of our guidance. Volumes of 91 million barrels were in line with the guidance, generating adjusted segment profit per barrel of $0.37, which was slightly above the midpoint of guidance. Primary contributors to our financial performance were higher throughput fees and other ancillary fees at several of our crude oil and LPG terminals, as well as favorable performance from our gas processing assets. Adjusted segment profit for the Supply and Logistics segment was $197 million or $41 million above the midpoint of our guidance. Our volumes of 932,000 barrels per day were in line with the guidance. Adjusted segment profit per barrel was $2.33 or $0.49 per barrel above the midpoint of our guidance. Our financial overperformance for the quarter was due to…

Thanks, Harry. In my part of the call, I will review PNG's first quarter operating and financial results and our financial position as of March 31, 2012, provide an update on PNG's operations and capital program and review our second quarter and full year 2012 guidance. Let me begin by discussing the results we released yesterday afternoon. As shown on Slide 12, PNG delivered first quarter 2012 results in line with the guidance we provided in February. Adjusted EBITDA for the first quarter of 2012 totaled $227.8 million, resulting in adjusted net income of $17.1 million and adjusted net income per diluted unit of $0.23. In comparison to last year's first quarter results, adjusted EBITDA, adjusted net income and adjusted net income per diluted unit for the first quarter of 2012 increased 43%, 40% and 15%, respectively. Financially, PNG continues to be well-positioned. Included on Slide 13 is a condensed capitalization table for PNG at March 31, 2012, highlighting PNG's long-term debt to capitalization ratio of 27.4%, and a long-term debt-to-adjusted-EBITDA ratio of 3.9x and $131 million of committed liquidity. Operationally, we are on track to complete our 2012 capital program on time and on budget. Our 2012 expansion capital plan calls for expenditures to range between $55 million and $60 million. We expect to place a total of approximately 16 Bcf of working storage capacity in service in 2012, increasing our average working capacity for 2012 to 84 Bcf, representing an 18% increase over our 71 Bcf average working capacity in 2011. This increase in capacity will consist of a 5th cavern at Pine Prairie that is scheduled to be placed into service in the second quarter, and 4th cavern at Southern Pine which is scheduled to go into service in the third quarter, along with capacity created by…

Thanks, Dean. The first items I want to review are PAA's recent financing activity and our capitalization of liquidity following the closing of the BP NGL acquisition. We have been very active since holding our earnings conference call in February 9, as we have raised an aggregate of $1.7 billion of long-term capital. In early March, we completed a public offering of 5.75 million common units, which raised $455 million. As we have indicated in recent conference calls, we intend to file a continuous equity offering program that will allow us to raise equity capital on an ongoing basis while minimizing disruption to the market and lowering our cost. We believe this program will enhance our ability to timely finance the equity needs associated with our ongoing expansion capital programs. In mid-March, we accessed the debt capital markets raising an aggregate of $1.25 billion through the sale of $750 million of 10-year senior notes, and $500 million of 30-year senior notes. The 10-year notes and 30-year notes were priced to yield 3.67% and 5.17%, respectively. Following the closing of these transactions, we terminated the $1.2 billion, 364-day liquidity facility that we put in place in December 2011. In order to close the BP NGL acquisition on April 1, which was a Sunday, we pre-funded $1.63 billion into an escrow account on March 30, 2012. Accordingly, although the acquisition did not technically close until the first day of the second quarter, as illustrated on Slide 17, PAA's capitalization as of March 31, 2012, is substantially representative of the capitalization immediately after the closing of the transaction. Since we had already secured the long-term financing for the transaction, the only material element of our capitalization that changed between March 31 and closing is that the $1.682 billion of restricted cash and deposits…

Thanks, Al. PAA delivered very strong performance for the first quarter of 2012, and we believe we are well-positioned to continue to perform well throughout the balance of the year and to accomplish our 2012 goals, including delivering year-over-year distribution growth of roughly 8% to 9%. Our guidance for 2012 reflects a continuation of strong industry fundamentals but does not assume that market conditions will be as favorable in the second half of 2012 as they were in 2011, or have been in the first half of 2012. Accordingly, as a result of PAA's proven business model and strategic flexible asset base, there's an upward bias to our annual guidance should the favorable market conditions that we are currently experiencing continue throughout the second half of the year. Looking beyond 2012, we believe PAA is well positioned to continue to deliver attractive results as we realize the contributions from the $1.9 billion of capital we've invested in 2011, the $2.7 billion that we have already invested or expect to invest in 2012, as well as future years capital programs and acquisitions. As always, we will remain focused on prudently financing our growth while maintaining a solid capital structure and a high level of liquidity. Prior to opening the call up for questions, I wanted to mention that we will be holding our joint PAA and PNG 2012 Analyst Meeting on May 30 in Houston, followed by tour of PAA's Midland Assets -- Area Assets. If you've not received an invitation but would like to attend, please contact our Investor Relations team at (713) 646-4489. Once again, thank you for participating in today's call and for your investment in PAA and PNG. We look forward to updating you on our activities during our second quarter results call in August, and hopefully, see many of you at our Analyst Meeting on May 30. Operator, we're now ready to open the call up for questions.

[Operator Instructions] Your first question is from the line of Darren Horowitz, Raymond James. Darren Horowitz - Raymond James & Associates, Inc., Research Division: Greg, a couple questions for you. The first, as it relates to what you referenced in your prepared commentary, around everything that you all are doing in the Permian Basin. When you're looking at Permian production forecast trends and you're talking to producers, I think the consensus is it that demand for takeaway capacity is certainly outpacing what is currently there and possibly currently under construction, especially given the volume nominations that you mentioned on Basin and the upside on Mesa once that West Texas system is expanded. So I'm curious. As you look across North and South Sprayberry, what are you doing with the bars still [ph] in line. How much more incremental CapEx do you think is necessary in order to keep pace with the production ramp over the next 18 to 24 months?

Darren, if you allow me to, I think I'm probably trying to extend the time period for the capital expenditures to probably a 3 to 5-year period. As a practical matter, there's -- any capital that you start spending right now to try and solve the problem is unlikely to have a big impact on that 18-month period that you referenced, but more likely to have an impact on a 24-plus month there. Wouldn't you agree, Harry?

Yeah, I would.

So I'd probably say this. I think in talking with the producers and our customers and potential customers, we are looking for a fairly significant increase in net production, that being net of declines in the area. And as we look out, I think if you can envision the balance between supply and demand. It's going to look a little bit like a saw blade from time to time. There will be times when production exceeds takeaway capacity. And then all of a sudden, you'll bring on some incremental capacity, whether that's West Texas Gulf or incremental things that we do in the area or the Longhorn pipeline. And all of a sudden, you'll have takeaway capacity in excess of production but if the production continues to rise, then it won't last for long. And all of a sudden, you'll end up with another tooth of that production curve moving up there. So I think there's probably order of magnitude over that 3 to 5-year period. Another $300 million to $500 million of capital probably is going to need to be spent in that area. Again, I extended your time period a little bit but hopefully, that's response to your question. Darren Horowitz - Raymond James & Associates, Inc., Research Division: No, it is. It's helpful. I mean, I think looking across your asset base, if you just step aside from the Bakken for a minute, this area and a lot of what's going on in the Mississippi line seems to be one of the biggest aspects of underinvestment relative to production to the drill bit, right?

Yes, I would say this. I think you can look in West Texas and probably convince yourself that production is going to go from recently, it was under 100 million barrels a day. Currently, it's well over 1 million. And 2 million barrels a day is not out of the question.

It's probably one of the most active areas as far as rigs are concerned. Just to give you a quick update, just sort of where we see takeaway capacity. There's probably been 60,000, 70,000 barrels a day of takeaway capacity added from say, March to May. When West Texas Gulf gets their expansion completed year end, it'll be another 60,000 to 80,000 barrels a day takeaway capacity. Magellan comes out of Longhorn first part of 2013, I think it's starting off at 75,000 and ramping up to 225,000 through 2013. So there's some meaningful takeaway capacity that's going to be added in the next 12 to 18 months. Darren Horowitz - Raymond James & Associates, Inc., Research Division: Yes. And then just shifting over to the Bakken for a minute. My last question. I'm just trying to get a sense, I mean, looking at the difference in great quality pricing of the Bakken barrel relative to others. It seems like that's one of the biggest orb of opportunities in regional dips that we see right now. And I'm wondering, is the thought process still there, to move those barrels into Patoka and then leverage that Yorktown rail facility and possibly expand that beyond that 60,000 a day over time? Is that the longer term focus, Greg?

This is Harry. Let me take a crack part of that. Our first step is going to be moving volume into Patoka through our Bakken North pipeline project, should be online by the end of the year. We got rail at -- rail capacity at Yorktown. We've got rail capacity in St. James. And we've got a couple of other rail projects that we haven't disclose here but that are in the works. So we think a combination of moving crude into Patoka and then moving it on rail to some of these coastal facilities is going to be probably the most economic and the most efficient way to move the increasing Bakken production.

Darren, I would also say and I may sound a little bit at risk of sounding like one of these new shows that always tries to tell you a little bit of a teaser and more news than at ten. But one of the things that we're going to try to do at our Analyst Meeting is demonstrate or actually highlight what we think some of the dynamics are that are going to cause disruptions, not only volumetrically in terms of just takeaway capacity but the quality of the crude is going to play a bigger and bigger role. And so I think what Harry is alluding to is we don't think there's any silver bullet solution to any one of these areas, just the opposite. We think you're going to need maximum flexibility. And you may see crude move east certain times and during certain situations and actually move south or west in other situations. And I think PAA's asset base is probably as well-positioned and we're biased, but probably better-positioned than anybody else's, to be able to help balance those markets, to get the barrels from where they're at to where they most likely should be, not just get to them out of the area. And that's part of what we're go to try to highlight in our Analyst Day at May 30.

Our next question is from the line of Brian Zarahn, Barclays.

Just keeping on the subject for product flows, one of your Capline, a fellow Capline owners talk about publicly the reversal is being examined. Can you talk a little bit more about the thought process behind potentially reversing it? How long it would take, other types of intricacies to keep serving existing customers?

I can't. Threshold issues, thereby needs to focus in on 3 owners in the pipeline and a little bit like it takes the UN to do anything. Everybody has to agree before anybody can do anything. So it will require an alignment of interest between BP, Marathon and Planes to be able to make anything happen. If you assume that issue away, I think then quite candidly, it depends on what -- how fast something can happen depends a little bit on what the design solution was. If you're simply trying to reverse Capline and all 3 owners are in agreement, it's actually not the wrong process.

That was all you we're going to do, is just turn the pumps around.

But the issue, Brian, is more complex than that because there are certain flows that are currently going on Capline that you'd to reroute, that continue to go north. So now you're basically saying, do I want to convert existing infrastructure and it maybe a little bit of a gerrymandered solution there to try and get it back up to supply those markets? Or do I need to build a smaller line going North to offload some of the crude of Capline that's currently moving North being converted [ph] to big part of Capline that bring it South. And so -- and those -- that solution range depend on what you come out with could be anywhere from 12 to 18 months to upwards of 24 months plus.

You also need some additional capacity to bring crude into Patoka in order to really make Capline Universal makes sense.

From the north.

From the north, yes.

And I know you provide your volumes on the Capline but do you have a sound set of the other owners, what kind of volumes we're seeing, I'm trying to get a sense of the utilization of the system?

I think it's public information. I think overall utilization is probably 50%, a little less.

30% to 40% probably, that's -- various guidelines. We have direct access to our tripper volumes but not direct access to total volumes.

Okay and then just doing back to the Permian. Can you give a little more color on your comments in the basin expansion, you said it's mostly completed. Do you expect to add all the additional capacity on that system?

Do we expect the rest of the capacity?

I wasn't too clear on the comments earlier about -- can you talk a little more about where the basin expansion is, is it entirely completed or how much and what's the current capacity on the system now?

Current capacity is 450,000. Well, actually, it's probably just slightly under 450,000. Hardly, the capacity is 450,000. We've got probably 10,000 barrels a day or so, weeks to get it all the way up to full capacity. We'll probably finish those as we conduct maintenance activities -- scheduled maintenance activities on the line throughout the year. So -- but we don't really want to take the pipeline down to 6 weeks.

I saw on your release, you have basin volumes almost 500,000 barrels a day, was the other 50,000 from another system or...

No, it's the way tariff volumes are measured, okay? We can have volumes come in at Midland go off at Wichita Falls. We can have volumes come in at Colorado City. So they can go in -- we have tariff revenues. We have tariff volumes of 495,000 barrels total, okay? Our share of basin stays is 87% of the 450,000. So our share is little under 300,000 or 400,000 barrels a day. So that's really got -- volumes for collecting a tariff is embedded in that 495,000 barrels a day.

Next question is from the line of Ted Durbin, Goldman Sachs.

Just on the guidance here, on the Supply and Logistics, you're looking for pretty significant margin decline here, sort of down the $1 a barrel, you've been above $2 a barrel here for the last 2 or 3 quarters. I'm just wondering how are you seeing the market change? Is this just being conservative here or is there's some seasonality you're trying to forecast? But why the big drop off in terms of the margin guidance?

Well, if you look at it, unfortunately, there's a lot of dynamics that goes into that average number, okay? It include NGLs. So there were pretty significant margins in our isobutane activities. Propane, a lot of it is driven by seasonality, and when during the season it was withdrawn. So remember, fourth quarter last year, we had a little lower propane margins. First quarter this year was a little higher. So all that gets sort of baked into the average margin. We're booking. We still think it was a pretty solid margins in the crude business stemming into the second quarter. I don't really have the vision to say that those type of margins will continue into the third and fourth quarter. You've got to see why we're reversing, that's going to take some of the differentials out of between the Mid-Continent and the Gulf Coast. Get some of the pipelines expanding in the Permian Basin, which may impact the differentials we see on the Permian basin. So clearly, the second half of the year is going to be a little less. It will probably be closer to more normal margins on the first half.

Okay, that's helpful. And then just your thoughts on participating in some of the larger scale pipeline projects, I mean, you've had some multibillion dollar announcements over the last few months out of the Bakken through the Mid-Continent. I'm just wondering if you changed your philosophy there. Any desire to participate in the larger scale projects or do you prefer to stick with the smaller scale of stuff that you've historically done?

I think there's a clear bias to staying with the more flexible projects. A lot of these larger scale projects that we've seen happen in a couple of cases in the industry, where the bigger projects by the time you actually get those implemented and engineered, the markets change. And so it's not to say they're not underpinned by good long-term contract but quite candidly, you need more than 10-year contracts to support some of these big expenditures. So I think our bias, Ted, is going to be toward the smaller sizes. I mean, clearly, if we were to undertake something like a Capline, that's a big project. And it might depend on how much new construction they need to try and move volumes north. You could certainly tip into the billion dollar range and so we wouldn't back away from something like that. But I think a lot of ours are going to be more in the $200 million to $500 million sweet spot. And those are projects that can be done fast and also have tremendous versatility. There's not probably a pipeline that we built that we haven't had a backup plan that says, if the market changes, what else can we do with this? And if a refinery shuts down and we're using that line to supply the refinery that we don't have a backup plan as to how you reverse that pipeline and use it to take away excess production or bring in products? So it's just harder on those bigger, bigger projects to have a backup plan with clarity as to how you're going to do it. So I think you're correct in assuming that our bias is probably not to change our philosophy. That's not to say we wouldn't participate in something. But it's just it's going to be the rare exception, not the norm.

Next question is from the line -- [Operator Instructions] Next question from the line of Ross Payne, Wells Fargo.

I hear you mentioned this a little bit before, but Seaway is getting ready to be reversed. What kind of impact do you guys see that having on your systems over the next couple of quarters?

I don't think Seaway is going to have a direct impact on our systems other than we'll see more crude fall out of Cushing into the Gulf Coast. I would expect that some of our customers that have a terminal at Cushing would move crude into Seaway. So I think our systems will be relatively unimpacted by Seaway.

Yes, I'm sorry, our systems -- if you're talking about pipeline systems in our terminals probably are unaffected, it's probably the right way. I think we're certainly allowing in our guidance that the impact on our supply and logistics, it may change some of the margins there. And Ted asked the question, is it a conservatism that we built in there. And the answer is I'd probably say it's a caution that we've built it that probably borders on conservatism. We think there's probably more upside than there is downside to the guidance, which is typically our case of trying to underpromise and overperform. So I think the real question is what happens when they first open that line up. And I would also just -- personal observation, and that's all it is, is that I think the quality of the crude that first fills that pipeline as it comes down in the Gulf Coast may be different than the quality of the crude that fills it 6 months to a year from now, just because I think there's some balancing in markets that's having to take place with all this pent-up crude that's in Cushing.

So basically, Supply and Logistics may feel some of this with the basis differential dropping but that's already plugged into your guidance?

By anticipation, that is baked into our guidance, correct.

Next question is from the line of John Edwards, Crédit Suisse. John Edwards - Crédit Suisse AG, Research Division: Just a quick question, Greg. Maybe if you could talk a little bit about this, I don't know if you'll delay this until your Analyst Day. But just you raised your CapEx guidance this quarter and just -- what's a reasonable run rate going forward for us to be thinking about?

I think on a run-rate basis, we're probably still talking about something in the area of $500 million to $700 million range. I think, for example, if we're able to grow the capital budget in 2012 by accelerating some things or adding new projects to it, that may carry over into a higher number for 2013, and then getting back though, probably to that $500 million to $700 million range for 2014. And if we can accelerate -- cannot accelerate some of these projects into 2012, that probably means 2013 is a little bit higher than it would have been. So probably, $700 million plus in 2013 is a number that you'd want to put out there almost irrespective. But again, we're not trying to say we can see visibility for an ever changing crude oil environment for the next 5 years. I think we're going to see some head takes and some dips and spikes come out of this. I just think PAA's going to be as well-positioned as anybody to implement some of the highest return projects by simply leveraging our existing asset base. So I think it's -- we're going to grow, we're going to grow pretty impressively but we cannot start putting a little bit of fuzziness on just how big that could be because that's all upside from where we're at.

Next question is from the line of Curt Launer, Deutsche Bank.

I just wanted to follow-up relative to the BP acquisition. You gave us the integration milestones. Also I wanted to ask your impressions relative to operating and financial factors that you're finding as you get more and more into that. Other companies that are involved around that area, specifically Empress have recently reported disappointing results given low gas prices, volumes, propane prices and the like. So if you could give us any kind of an update as to what you're finding there operationally and financially, I'd appreciate that?

Thanks, Curt. Yes, I would say, there's no question that conditions in Canada in general and around, Empress particular, are probably extremely challenging. We dialed in pretty much those in anticipation a very difficult conditions into our guidance. So I would -- not our guidance but our expectations, our acquisition modeling. And if you may recall, from that conference call that we had announced, we basically said, we're going to be changing the way that those assets are managed. And so a lot of what we're planning on doing hasn't deteriorated at all, in fact, is if anything, I'd say we're probably as excited or more so about what we think we can do with these assets going forward than we were when we announced the acquisition. Again, no question. It's very challenging around Empress and it can have a drag on not only our results but others in the area but we anticipated that drag when we made the acquisition, did our model. And we've built that drag to our forecast for 2012, which is included in our guidance.

Understood. And if I could just have a quick follow-up here relative to it. Does any of that relate to contractual control with BP as the former owner or anything else that you've done to restructure contracts to make them more fee-based?

No, not really. A lot of what we do is just a different way we're going to be managing the assets. I think we're certainly open to a little bit more fee-for-service base. There's a lot of storage, a lot of pipeline capacity and other facilities that we have that just were not previously made available to competitors or to the public. It was more run as a pure proprietary system. And so it's really rationalizing those assets, especially when you realize, Kurt, that in the U.S., we're going to be -- we're starting net long natural gas and we're net long natural gas liquids. And if you take away the 49th parallel, that's one market. So the question is how do you rationalize 22 million barrels of storage and 240,000 barrels a day of fractionation and pipeline capacity? And we think that makes a lot of sense to basically open those assets up to more of a fee-based commercial approach as opposed to proprietary trading approach.

Kurt, let me just add. Just what Greg said is true. Volume gas lines are down, fraction premiums are up, propane pipes are soft. And so anybody that's in sort of that Empress complex is seeing weaker margins than they've seen historically, we're no different. I think what Greg is saying is we had baked most of that into our forecast and our assumptions for 2012. So we don't have historicals to compare it to unlike some of the other operators. But if it is softer but it's just baked in.

[Operator Instructions] We do have a question from the line of Selman Akyol, Stifel, Nicolaus. Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division: Just as a follow-up on the BP question there. you said you took over 5 million barrels of inventory there and I was just wondering how that related to your expectations going into the transaction and then how quickly you'll be able to work through those?

Yes, I actually -- point of clarification, when we actually signed the agreement, I think we had right at about 10 million barrels of inventory, 5 million of which we consider to be line filled or long term. In other words, so it's kind of a neutral inventory position that really don't go below that level. So that was the 5 million barrels that Al mentioned in his part of the presentation, was that simply gets added to what we have at PAA, which was already about 14 million barrels of line fill that it takes just to run the business. And so that 5 million is added to it. The other 5 million barrels, a portion of that was worked down between the October 1 effective date and through closing and the balance of that has been fully hedged. So there really is no excess inventory to manage as we sit here today. There certainly was -- it was managed by BP during the period from October 1 through the effective date through the closing on April 1, and then when we took over, we basically hedged the balance of that.

At this time, we have no additional questions in queue.

If there are no additional questions, we will end the call. I would though encourage those again to join us for our May 30 Analyst Presentation, and we look forward to updating you if you're not there on the next call. Thank you very much.

Ladies and gentlemen, that does conclude your conference. We do thank you for joining while using AT&T Executive TeleConference. You may now disconnect. Have a good day.