Integrated Oil and Midstream "Crude Draws continue, ADM's Plant Tour, an..."

Research evidence excerpt

Integrated Oil and Midstream "Crude Draws continue, ADM's Plant Tour, an..."

Valuation Method and Risk Statement

Risks - Economic recession could impact demand for refined products, which in-turn will lead

to lower margins. Higher D6 (ethanol RIN) prices would impact refining margin capture.

Weaker ethylene chain margins would be headwind to Chemical earnings. Higher feedstock

prices (animal tallow, used cooking oil) driving lower renewable diesel margins. Higher RD

feedstock prices (animal tallow, used cooking oil) would drive lower renewable diesel

margins.

Archer-Daniels-Midland Co:

Our price target is based on NTM multiple our EBITDA, less net debt, less NCI.

Downside Risks: Inability to grow the nutrition business. Cancellations of RD planned

capacity, which impacts demand for feedstocks. Negative ethanol fuel margins. Unplanned

outages (rain, flooding, political unrest), which directly impacts volumes. Lower soy crush

spread.

Upside Risks: Higher Soy crush spread and higher ethanol margins

Plains All American Pipeline:

Risks include, but are not limited to: abrupt or severe production declines or production

interruptions in outer continental shelf production located offshore California and

transported on the All American Pipeline; declines in volumes shipped on the Basin Pipeline

and PAA's other pipelines by third party shippers; the availability of adequate supplies of and

demand for crude oil in the areas in which PAA operates; the effects of competition; the

impact of crude oil price fluctuations; continued credit worthiness of, and performance by,

PAA's counterparties; successful third party drilling efforts in areas in which PAA operates

pipelines or gathers crude oil; regulatory changes; unanticipated shortages or cost increases