When Plains Resources Inc. went public in 1981, its total revenues were $500,000. Twenty years later, the Houston upstream and midstream company's revenues were $6.6 billion. "We had two well-run race cars and needed two pit crews and drivers," says Plains executive Greg Armstrong. Speaking at an Independent Petroleum Association of America luncheon in Houston, he detailed the evolution of Plains over the years, including this year's corporate restructuring that is expected to increase growth opportunities for the upstream and midstream segments. Currently chairman and chief executive officer of Plains All American Pipeline LP, Armstrong was chief executive officer of the E&P and midstream companies before the restructuring. The growth of each segment has been impressive, he says. Beginning in 1980, executives focused on building production. They realized that the company's strength lay in exploitation rather than exploration. "We were in the top quartile [of exploration companies], but if you're not in the top 2%, you're road-kill." Between 1992 and 2001, pursuing an exploitation strategy, the company spent $688.3 million and added 286.3 million barrels of oil equivalent in reserves-or $2.40 per BOE. The company's compound annual growth rate was 25%. In the midstream segment, Plains executives chose a more challenging path than some of their competitors, deciding to transport oil rather than natural gas. With more than 50 grades and qualities of crude, the logistical challenges can be great. "That's a headache to someone else. It's an opportunity for us." The strategy was a success, spurring an overall return on investment of 4.9-to-1 between 1992 and 1998. It soon became apparent that the corporate structure needed to be changed to continue growth of both segments. Plains Resources was conducting its upstream activities through four wholly owned subsidiaries. Its midstream activities were conducted through its 100% ownership in Plains All American Inc., which was the general partner of, and held a 54% effective ownership interest in the pipeline business, a master limited partnership.