Tidewater Midstream and Infrastructure Ltd. Announces Fourth Quarter 2020 Results and Operational Update

CALGARY, AB, March 11, 2021 /CNW/ – Tidewater Midstream and Infrastructure Ltd. (“Tidewater” or the “Corporation“) (TSX: TWM) is pleased to announce that it has filed its annual consolidated financial statements and Management’s Discussion and Analysis (“MD&A“) for the year ended December 31, 2020.

FOURTH-QUARTER 2020 HIGHLIGHTS

• The Corporation’s full year performance continues to highlight the resiliency and stability of its integrated business model, given the challenges faced due to the global pandemic. Adjusted EBITDA increased to $48.8 million in the fourth quarter of 2020 as compared to $40.0 million in the fourth quarter of 2019, resulting in 22% Adjusted EBITDA growth. Adjusted EBITDA also increased by $1.2 million as compared to the third quarter of 2020 resulting in 3% Adjusted EBITDA growth. Net income attributable to shareholders was $7.1 million for the fourth quarter of 2020 as compared to net loss of $12.6 million in the fourth quarter of 2019. The increase is a result of realized and unrealized gains on derivative contracts.
• Net cash provided by operating activities totaled $54.6 million for the fourth quarter of 2020, with distributable cash flow of $13.5 million and a payout ratio of 25%.
• The Corporation has received material interest from external capital providers to develop various renewable energy and clean fuels projects. Tidewater has also had significant support from the BC and federal governments on their renewable initiatives and the Corporation wishes to thank the BC and federal governments for their support. With the increasing BC low carbon fuel standard credit prices and the commencement of the Canadian Clean Fuel Standard in 2022, the economics of these projects continue to display attractive returns and complement Tidewater’s asset base. The Corporation has a vital role to play in the long-term renewable energy transition in Canada and is currently developing clean fuels through its existing hydrogen and carbon capture assets, its ability to blend ethanol and renewable diesel and its current canola co-processing project. Tidewater is also evaluating opportunities in various renewable energy initiatives including renewable diesel, co-processing, renewable hydrogen, blue hydrogen, renewable natural gas, carbon capture, and other renewable energy projects.
• The Corporation, together with its partner TransAlta Corporation (“TransAlta”), continues to move forward on its sale of the Pioneer Pipeline to ATCO Gas and Pipelines Ltd. (“ATCO”) for gross proceeds of $255 million (the “Pioneer Transaction”). Net cash proceeds to Tidewater will be approximately $135 million which includes certain ancillary assets and completion of budgeted restoration work to be paid for by TransAlta. The transaction is subject to customary conditions for a transaction of this nature including regulatory approvals by the Alberta Utilities Commission and the Alberta Energy Regulator. Regulatory approval is anticipated in the second quarter of 2021 and Tidewater remains proactive in its efforts to complete the transaction on a timely basis.
• Tidewater’s top priorities remain free cash flow generation and debt reduction. Tidewater is committed to reducing leverage throughout 2021 with a target of 3.0x to 3.5x Net Debt to annualized Adjusted EBITDA, with closing of the Pioneer Transaction.
• The current market environment is showing positive signs of increased producer activity and increasing demand for the Corporation’s services and underutilized capacity. Tidewater continues to see strong demand at PGR as a result of large infrastructure projects in central and northern British Columbia. Throughput at PGR remains strong at over 12,000 bbls/day with combined gasoline and diesel production over 10,500 bbls/day. The PGR crack spread, a measure of refining margins, has continued to rise and has been at its highest point since the first quarter of 2020. The Pipestone Gas Plant had its strongest run times in December and cashflow generation to date during the fourth quarter.

Environmental, Social and Governance

• Tidewater remains committed to improving its Environmental, Social and Governance (“ESG”) performance and disclosure by reducing emissions with responsible and efficient energy infrastructure investment, enhancing environmental performance and improving disclosure through the posting of Tidewater’s ESG metrics on its website. In November 2020, as part of its commitment to enhancing disclosures, Tidewater published a significant increase in ESG metrics and corporate policy disclosures which highlight several improving trends. This information is available at tidewatermidstream.com/esg/. Under this section, Tidewater has provided an overview of its recent ESG accomplishments, identified key relevant metrics to track, recognized improvement opportunities, and published goals to improve overall sustainability.
• In January 2021, the Government of Canada’s $750 million Emissions Reduction Fund endorsed two small scale Tidewater projects given their goal to eliminate or lower routine venting of methane rich natural gas. This will result in a reduction of GHG emissions with the projects expected to be online by the end of 2021.
• With Tidewater’s integrated network of infrastructure assets, it is well positioned to be an impactful contributor in reducing GHG emissions. A key contribution includes the construction and operation of the Pioneer Pipeline, which provided the infrastructure for TransAlta to convert their coal fired power generation stations to clean natural gas provided by the BRC. Further, PGR is one of the only refineries in Western Canada that can utilize renewables to reduce its carbon footprint including canola oil, biodiesel and ethanol.

Selected financial and operating information is outlined below and should be read with Tidewater’s consolidated financial statements and related MD&A as at and for the year ended December 31, 2020 which are available at www.sedar.com and on our website at www.tidewatermidstream.com.

Consolidated Financial Highlights

(in thousands of Canadian dollars except per share information)			Three months ended December 31,					Year ended December 31,
				2020		2019			2020			2019
Revenue		$		274,913	$	266,247	$		979,406	$		692,268
Net income (loss) attributable to shareholders (1)		$		7,075	$	(12,610)	$		(33,771)	$		(6,746)
Basic net income (loss) attributable to shareholders per share (1)		$		0.02	$	(0.04)	$		(0.10)	$		(0.02)
Diluted net income (loss) attributable to shareholders per share (1)		$		0.02		(0.04)	$		(0.10)			(0.02)
Adjusted EBITDA (2)		$		48,778	$	39,987	$		179,759	$		109,673
Net cash provided by operating activities		$		54,609	$	68,219	$		205,574	$		91,520
Distributable cash flow (3)		$		13,545	$	17,483	$		47,171	$		56,370
Distributable cash flow per common share – basic (3)		$		0.04	$	0.05	$		0.14	$		0.17
Distributable cash flow per common share – diluted (3)		$		0.03	$	0.05	$		0.14	$		0.17
Dividends declared		$		3,391	$	3,374	$		13,538	$		13,343
Dividends declared per common share		$		0.01	$	0.01	$		0.04	$		0.04
Total common shares outstanding (000s)				339,098		337,376			339,098			337,376
Payout ratio (4)				25%		19%			29%			24%
Total assets (1)		$		1,863,655	$	1,829,584	$		1,863,655	$		1,829,584
Net debt (5)		$		854,016	$	842,046	$		854,016	$		842,046
Notes:
1	Amounts for the three months and year ended December 31, 2019 have been restated. Refer to the “Voluntary Change in Accounting Policy” in Tidewater’s MD&A and Note 2(d) to the Consolidated Financial Statements for the year ended December 31, 2020.
2	Adjusted EBITDA is calculated as net income before interest, taxes, depreciation, share-based compensation, unrealized gains/losses, non-cash items, transaction costs, items that are considered non-recurring in nature and the Corporation’s proportionate share of EBITDA in their equity investments. Adjusted EBITDA is not a standard measure under GAAP. See “Non-GAAP Measures” in the Corporation’s MD&A for a reconciliation of Adjusted EBITDA to its most closely related GAAP measure.
3	Distributable cash flow is calculated as net cash used in operating activities before changes in non-cash working capital and after any expenditures that use cash from operations. Distributable cash flow per common share is calculated as distributable cash flow over the weighted average number of common shares outstanding for the three-month period and year ended December 31, 2020. Distributable cash flow and distributable cash flow per common share are not standard measures under GAAP. See “Non-GAAP Measures” in the Corporation’s MD&A for a reconciliation of distributable cash flow and distributable cash flow per common share to their most closely related GAAP measures.
4	Payout Ratio is calculated by expressing dividends declared to shareholders for the period as a percentage of distributable cash flow attributable to shareholders. This measure, in combination with other measures, is used by the investment community to assess the sustainability of the current dividends. Payout Ratio is not a standard measure under GAAP. See “Non-GAAP Financial Measures” in the Corporation’s MD&A for a reconciliation of Payout Ratio to its most closely related GAAP measure.
5	Net debt is defined as bank debt, convertible debentures and notes payable, less cash. Net Debt is not a standard measure under GAAP. See “Non-GAAP Measures” in the Corporation’s MD&A for a reconciliation of Net Debt to its most closely related GAAP measure.

OUTLOOK AND CORPORATE UPDATE

Tidewater is well positioned to weather the current economic environment and remains focused on cash flow generation, increasing liquidity and reducing leverage. Tidewater is positive about the longer-term outlook for commodity prices in 2021 and beyond. Increased investor interest in the energy sector with the expectation of a global recovery along with fiscal stimulus programs has increased the attractiveness of commodities during the first quarter of 2021. Improving crude oil, natural gas, NGL and refined product pricing in the first quarter of 2021 is encouraging for the continuing strength of the Corporation’s business.

Tidewater’s forecasted payout ratio is expected to range from 20% to 25% with the remainder of Distributable Cash Flow used to reduce leverage. The proceeds from the Pioneer Transaction will significantly reduce leverage with net proceeds of approximately $135 million. A large portion of Tidewater’s cashflow is generated from take-or-pay contracts and long-term agreements with over 50% generated from investment grade counterparties. Tidewater remains committed to its target net debt to annualized Adjusted EBITDA of approximately 3.0x – 3.5x in 2021 with the completion of the Pioneer Transaction.

Prince George Refinery

PGR is a 12,000 bbl/day light oil refinery that predominantly produces low sulphur diesel and gasoline to supply the greater Prince George region. PGR has significant onsite storage capacity of greater than 1.0 MMbbl and flexible logistics, with pipeline, rail and truck connectivity in place. The Prince George region is generally in short supply of refined products and the refinery’s location within the region makes it a critical piece of infrastructure with a significant logistical advantage to address demand in northern British Columbia.

PGR has significant advantages given its location as the Prince George market faces logistical and economic challenges given transport costs and the lack of offloading facilities in the area. Additionally, the refinery supplies the majority of the regional demand, which is comprised of major local industries such as forestry, mining and oil and gas.

During the fourth quarter of 2020, total throughput exceeded the refinery’s nameplate capacity at approximately 12,187 bbl/day, consistent with the third quarter of 2020.

Tidewater’s refined product yields at PGR were as follows:

	Q4 2020	Q3 2020	Q2 2020	Q1 2020
Crude Throughput	12,187 bbl/day	11,825 bbl/day	10,500 bbl/day	11,124 bbl/day
Refinery Yield (1)
Gasoline yield	39%	44%	42%	42%
Diesel yield	49%	43%	43%	46%
Other (2)	12%	13%	15%	12%
(1)	Refinery yield includes crude and intermediates.
(2)	Other refers to heavy fuel oil (HFO), LPG and feedstock consumed to fuel the refinery.

Tidewater’s refining margins are largely driven by commodity prices, particularly the cost of crude feedstock and other raw materials, along with market prices for refined products. During the fourth quarter of 2020, Tidewater realized improved margins on diesel as a result of increased pricing which was partially offset by lower demand due to the implementation of new COVID-19 restrictions in December. Gasoline prices and volumes decreased slightly quarter over quarter as a result of seasonal demand. Overall, margins at the refinery increased approximately 10% from the third quarter as a result of strong diesel pricing.

Tidewater is encouraged by the resilience of the PGR asset in an unprecedented time with full-year crack spreads holding steady around $55/bbl. This demonstrates the refinery’s long-term value in servicing the markets in which it operates.

Tidewater is progressing on its Canola co-processing project and expects it to be online in late 2021. The project is supported by the BC government and will produce both renewable gasoline and renewable diesel.

The Corporation continues to evaluate various renewable initiatives at PGR. These include expanding existing hydrogen assets, renewable hydrogen and the potential for a large-scale renewable diesel project with current support from the provincial government. Renewable diesel results in an approximate 80% – 90% reduction in greenhouse gas (“GHG”) emissions compared to regular conventional diesel and performs better in colder temperatures as compared to biodiesel.

Tidewater is also pursuing numerous low capital and high rate of return debottleneck and optimization opportunities within its downstream business unit.

Pipestone Gas Plant

The Pipestone Gas Plant is designed to process approximately 100 MMcf/day of sour natural gas. This asset includes two acid gas injection wells, a saltwater disposal well, and sales gas pipelines directly connected to the Pipestone Gas Storage Facility, as well as the Alliance and TC Energy pipeline systems. The facility is also pipeline connected to Pembina for the C2+ and C5+ liquid streams.

The Pipestone Gas Plant processed an average volume of 72 MMcf/day in the fourth quarter of 2020 which is consistent with the third quarter of 2020. Facility availability for the quarter averaged 77% which was impacted by an unplanned outage in early October. The Pipestone Gas Plant is fully contracted with over 80% committed on take-or-pay arrangements.

Pioneer Pipeline

The Pioneer Pipeline is currently jointly owned and operated by Tidewater and TransAlta. The asset is held for sale, subject to closing of the Pioneer Transaction which is subject to customary conditions in a transaction of this nature including regulatory approvals by the Alberta Utilities Commission and the Alberta Energy Regulator. Following the execution of the purchase and sale agreement, the parties filed applications for regulatory approval. Regulatory approval is anticipated in the second quarter of 2021 and Tidewater remains proactive in its efforts to complete the transaction on a timely basis.

Upon the closing of the Pioneer Transaction, the Pioneer Pipeline will be integrated into NOVA Gas Transmission Ltd.’s (“NGTL”) and ATCO’s Alberta integrated natural gas transmission systems to provide reliable natural gas supply to TransAlta’s power generating units at Sundance and Keephills.

Tidewater has entered into a Project and Expenditure Authorization Agreement with NGTL at the Rat Creek West Meter Station for the natural gas liquids extraction service (OS-Ext) that will allow Tidewater to extract higher value liquids from the natural gas stream prior to delivery of natural gas at the TransAlta facilities. Tidewater does not expect any facility modifications or capital expenditures to be required to implement this service. It is expected that with this service Tidewater will be able to materially increase throughput subject to market conditions. It is anticipated that this service will commence concurrent with the close of the Pioneer Transaction.

Brazeau River Complex and Fractionation Facility

The BRC is a core asset for Tidewater, offering a full suite of services to producers, including C2, C3, C4 and C5 pipeline connections, NGL fractionation capacity, sweet and sour deep-cut gas processing capability, truck loading and offloading facilities, natural gas storage facilities and two natural gas egress solutions given the BRC’s connection to the NGTL system and the Pioneer Pipeline.

Throughput at the BRC for the fourth quarter of 2020 was in-line with the previous quarter. Overall supply volumes at the fractionation facility decreased approximately 450 bbl/day in the fourth quarter of 2020 relative to the prior quarter largely driven by slightly lower gas supply and stable truck in volumes.

Due to the recent improvement in AECO gas prices, the Corporation continues to see increased activity in the Deep Basin area near the BRC, which has led to the tie-in of additional raw gas volumes to the BRC from a mid-sized producer which came online in the fourth quarter of 2020, and strong production volumes amongst the existing customer base. Tidewater works diligently with producers to improve netbacks by fully utilizing the BRC’s facilities.

Natural Gas Storage

Tidewater operates natural gas storage reservoirs at three different facilities: Dimsdale Paddy A (Pipestone Gas Storage Facility), Brazeau Nisku F, and Brazeau Nisku A. The Pipestone Gas Storage Facility and Brazeau Nisku A are owned through joint ventures with a private Canadian entity and are accounted for as equity investments.

After a successful summer season with expanded injection capabilities, the Pipestone Storage Facility exited October with record inventories in the ground. Similarly, both Brazeau Nisku A and Brazeau Nisku F storage pools continued to build inventories into October while continuing to meet the Pioneer Pipeline delivery obligations and realizing liquids value benefit through cycling.

The Alberta natural gas market in the fourth quarter was characterized by relatively low price volatility. While there was early price strength in the second half of October that allowed the facilities to begin withdrawal activity early, mild weather generally kept prices range-bound between $1.90 – $2.50 CAD/GJ with levels trending lower through November and December.

The facilities continued to perform well in the period as Tidewater moved into withdrawal mode. A well reactivation project at Brazeau Nisku A performed in the fourth quarter further increased reservoir deliverability.

The Pipestone Gas Storage Facility is fully contracted with take-or-pay contracts spanning up to eight-years with multiple investment grade counterparties. The facility represents a significant contribution to Tidewater’s fee-for-service gas storage business and offers producers at the Pipestone Gas Plant significant optionality where the plant has three egress solutions including connections to the TC Energy and Alliance systems and gas storage.

CAPITAL PROGRAM

During 2019, Tidewater commissioned three of the largest capital projects in the Corporation’s history: the Pioneer Pipeline, Pipestone Gas Plant and Pipestone Gas Storage Facility. The Corporation’s focus in 2020 was on small-scale optimization and commissioning projects.

Tidewater’s 300 bbl/day Canola co-processing project at PGR is expected to come online in the fourth quarter of 2021 which will produce both renewable diesel and gasoline. Total capital for the project is approximately $10 million and includes significant support from the BC government.

Tidewater’s focus over the next 12 months is to employ the related cashflow generated from its 2019 large completed capital projects and PGR, as well as proceeds from the Pioneer Transaction, towards deleveraging with a target net debt to Adjusted EBITDA ratio of approximately 3.0x – 3.5x. To date, Tidewater has not committed to a significant capital program in 2021, however continues to evaluate smaller capital projects with the potential to generate returns in excess of 50%.

FOURTH QUARTER 2020 EARNINGS CALL  

In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater senior management review its fourth quarter 2020 results via conference call on Thursday, March 11, 2021 at 11:00 am MDT (1:00 pm EDT).

To access the conference call by telephone, dial 647-427-7450 (local / international participant dial in) or 1-888-231-8191 (North American toll free participant dial in). A question and answer session for analysts will follow management’s presentation.

A live audio webcast of the conference call will be available by following this link: https://produceredition.webcasts.com/starthere.jsp?ei=1428134&tp_key=4c348ce0d6 will also be archived there for 90 days.

For those accessing the call via Cision’s investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the Tidewater Midstream and Infrastructure Ltd. earnings call.

ABOUT TIDEWATER

Tidewater is traded on the TSX under the symbol “TWM”. Tidewater’s business objective is to build a diversified midstream and infrastructure company in the North American natural gas, natural gas liquids, crude oil and refined product space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater plans to achieve its business objective by providing customers with a full service, vertically integrated value chain, including gas plants, pipelines, railcars, trucks, export terminals, storage and downstream facilities.

Additional information relating to Tidewater is available on SEDAR at www.sedar.com and at www.tidewatermidstream.com.

Advisory Regarding Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively referred to herein as, “forward-looking statements”) within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of Tidewater based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as “seek”, “anticipate”, “budget”, “plan”, “continue”, “forecast”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “will likely result”, “are expected to”, “will continue”, “is anticipated”, “believes”, “estimated”, “intends”, “plans”, “projection”, “outlook” and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to but not limited to the following:

• targeted Net Debt to Adjusted EBITDA of 3.0x to 3.5x in 2021 with the closing of the Pioneer Transaction;
• expected volatility of financial markets and commodity prices into 2021;
• guidance with respect to forecasted Adjusted EBITDA;
• continued consistent performance of the Corporation’s facilities into 2021;
• the pace of reintegration of the Corporation’s workforce to its business offices;
• forecasted payout ratio and the projected use of Distributable Cash Flow to reduce leverage;
• projections with respect to net debt to Adjusted EBITDA subsequent to the completion of the Pioneer Transaction;
• the Corporation’s ability to benefit from the combination of growth opportunities and the ability to grow through capital projects;
• the long-term impact of COVID-19 on the Corporation’s business, financial position, results of ‎operations and/or cash flows;‎
• supply and demand for services;
• budgets, including future capital, operating or other expenditures and projected costs;
• estimated throughputs;
• the Corporation’s continuing evaluation of opportunities to develop future low-carbon fuel and renewable energy projects at the PGR and expansion and optimization opportunities at the PGR;
• the successful integration of acquisitions and projects into the Corporation’s existing business;
• the anticipated closing of the transaction to sell the Pioneer Pipeline to ATCO, the sale of certain ancillary assets to TransAlta Corporation, the Corporation’s expectations regarding timing to close such transactions, the Corporation’s expectations regarding receipt of regulatory approval for such transactions;
• anticipated integration of the Pioneer Pipeline into NGTL’s and ATCO’s Alberta integrated natural gas transmission systems;
• projected use of proceeds from the sale of the Pioneer Pipeline;
• projections with respect to the returns on proposed small capital projects;
• the Corporation’s focus on generating cash flow, increasing liquidity and reducing leverage;
• the Corporation’s guidance of forecasted Adjusted EBITDA for the full year 2021;
• forecasts with respect to future environmental and climate change compliance obligation costs;
• Tidewater’s expectations to pay dividends from distributable cash flow; and
• expectations that net cash provided by operating activities, cash flow generated from growth projects and cash available from Tidewater’s Senior Credit Facility and other sources of financing will be sufficient to meet its obligations and financial commitments and will provide sufficient funding for anticipated capital expenditures.

Although the forward-looking statements contained in this press release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, the Corporation has assumptions regarding, but not limited to:

• Tidewater’s ability to execute on its business plan;
• the timely receipt of all governmental and regulatory approvals sought by the Corporation including with respect to the anticipated sale of the Pioneer Pipeline;
• general economic and industry trends, including the duration and effect of the COVID-19 pandemic;
• that any third-party projects relating to the Corporation’s divestitures will be sanctioned and completed as expected;
• future natural gas, crude oil and NGL prices;
• continuing government support for existing policy initiatives;
• processing and marketing margins;
• future capital expenditures to be made by the Corporation;
• foreign currency, exchange and interest rates;
• that there are no unforeseen events preventing the performance of contracts;
• the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under the Corporation’s insurance policies;
• that there are no unforeseen material changes related to the Corporation’s planned divestitures and that counterparties will comply with contracts in a timely manner;
• Husky volume demands from the PGR are consistent with forecasts;
• that formal agreements with counterparties will be executed in circumstances where letters of intent or similar agreements have been executed and announced by Tidewater and that such transactions will close as expected;
• the amount of future liabilities relating to lawsuits and environmental incidents;
• oil and gas industry expectation and development activity levels and the geographic region of such activity;
• the Corporation’s ability to obtain and retain qualified staff and equipment in a timely and cost-effective manner;
• assumptions regarding amount of operating costs to be incurred;
• that there are no unforeseen material costs relating to the facilities which are not recoverable from customers;
• distributable cash flow and net cash provided by operating activities are consistent with expectations;
• the ability to obtain additional financing on satisfactory terms;
• the availability of capital to fund future capital requirements relating to existing assets and projects;
• the ability of Tidewater to successfully market its products; and
• the Corporation’s future debt levels and the ability of the Corporation to repay its debt when due.

The Corporation’s actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to:

• changes in demand for refined products;
• general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates stock market volatility and supply/demand trends;
• activities of producers and customers and overall industry activity levels;
• failure to negotiate and conclude any required commercial agreements;
• non-performance of agreements in accordance with their terms;
• failure to execute formal agreements with counterparties in circumstances where letters of intent or similar agreements have been executed and announced by Tidewater;
• failure to close transactions as contemplated and in accordance with negotiated terms;
• risks of health epidemics, pandemics, public health emergencies, quarantines, and similar outbreaks, including COVID-19, which may have sustained material adverse effects on the Corporation’s business financial position results of operations and/or cash flows;
• the regulatory environment and decisions, and First Nations and landowner consultation requirements;
• risks and impacts related to widespread epidemic or pandemic outbreaks, including COVID-19;
• climate change initiatives or policies or increased environmental regulation;
• that receipt of third party, regulatory, environmental and governmental approvals and consents relating to Tidewater’s capital projects can be obtained on the necessary terms and in a timely manner;
• that the resolution of any particular legal proceedings could have an adverse effect on the Corporation’s operating results or financial performance;
• competition for, among other things, business capital, acquisition opportunities, requests for proposals, materials, equipment, labour, and skilled personnel;
• the ability to secure land and water, including obtaining and maintaining land access rights;
• operational matters, including potential hazards inherent in the Corporation’s operations and the effectiveness of health, safety, environmental and integrity programs;
• actions by governmental authorities, including changes in government regulation, tariffs and taxation;
• changes in operating and capital costs, including fluctuations in input costs;
• legal risks and environmental risks and hazards, including risks inherent in the transportation of NGLs and refining of light crude oils which may create liabilities to the Corporation in excess of the Corporation’s insurance coverage, if any;
• actions by joint venture partners or other partners which hold interests in certain of the Corporation’s assets;
• reliance on key relationships and agreements;
• construction and engineering variables associated with capital projects, including the availability of contractors, engineering and construction services, accuracy of estimates and schedules, and the performance of contractors;
• the availability of capital on acceptable terms;
• changes in the credit-worthiness of counterparties;
• adverse claims made in respect of the Corporation’s properties or assets;
• risks and liabilities associated with the transportation of dangerous goods;
• risks and liabilities resulting from derailments;
• effects of weather conditions;
• reliance on key personnel;
• technology and security risks, including cybersecurity;
• potential losses which would stem from any disruptions in production, including work stoppages or other labour difficulties, or disruptions in the transportation network on which the Corporation is reliant;
• technical and processing problems, including the availability of equipment and access to properties;
• changes in gas composition; and
• failure to realize the anticipated benefits of recently completed acquisitions.

The foregoing lists are not exhaustive.  Additional information on these and other factors which could affect the Corporation’s operations or financial results are included in the Corporation’s most recent AIF and in other documents on file with the Canadian Securities regulatory authorities.

The above summary of assumptions and risks related to forward-looking statements in this press release is intended to provide shareholders and potential investors with a more complete perspective on Tidewater’s current and future operations and such information may not be appropriate for other purposes. There is no representation by Tidewater that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Tidewater does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

Any financial outlook or future-oriented financial information, as defined by applicable securities legislation, has been approved by management of Tidewater as of March 10, 2021. A financial outlook or future-oriented financial information is provided for the purpose of providing information about management’s current expectations and goals relating to the future of Tidewater. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Corporation’s actual results’ performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any off them do so, what benefits the Corporation will derive therefrom.  Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this press release.  All forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Further information about factors affecting forward-looking statements and management’s assumptions and analysis thereof is available in filings made by the Corporation with Canadian provincial securities commissions available on the System for Electronic Document Analysis and Retrieval (“SEDAR“) at www.sedar.com.

Non-GAAP Measures

This press release refers to “Adjusted EBITDA” which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada (“GAAP”).  Adjusted EBITDA is calculated as income or loss before interest, taxes, depreciation, share-based compensation, unrealized gains/losses, non-cash items, transaction costs, items that are considered non-recurring in nature and the Corporation’s proportionate share of EBITDA in their equity investments.

Tidewater’s management believes that Adjusted EBITDA provides useful information to investors as it provides an indication of results generated from the Corporation’s operating activities prior to financing, taxation and non-recurring/non-cash impairment charges occurring outside the normal course of business. Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. In addition to its use by management, Tidewater also believes Adjusted EBITDA is a measure widely used by security analysts, investors and others to evaluate the financial performance of the Corporation and other companies in the midstream industry.  Investors should be cautioned that Adjusted EBITDA should not be construed as alternatives to earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Corporation’s performance and may not be comparable to companies with similar calculations.

“Distributable cash flow” is a non-GAAP financial measure and is calculated as net cash used in operating activities before changes in non-cash working capital plus cash distributions from investments, transaction costs, non-recurring expenses and after any expenditures that use cash from operations. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short term debt or cash flows from operating activities. Deducted from distributable cash flow are maintenance capital expenditures, including turnarounds as they are ongoing recurring expenditures. Transaction costs are added back as they vary significantly quarter to quarter based on the Corporation’s acquisition and disposition activity. It also excludes non-recurring transactions that do not reflect Tidewater’s ongoing operations.

Management of the Corporation believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations and to evaluate the adequacy of internally generated cash flow to fund dividends.

For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the “Non-GAAP Measures” section of Tidewater’s most recent MD&A which is available on SEDAR.

SOURCE Tidewater Midstream and Infrastructure Ltd.

For further information: Joel MacLeod, Chairman, President and CEO, Tidewater Midstream & Infrastructure Ltd., Phone: 587.475.0210, Email: jmacleod@tidewatermidstream.com

Related Links

http://www.tidewatermidstream.com

 

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