TIDEWATER MIDSTREAM AND INFRASTRUCTURE LTD. ANNOUNCES THIRD QUARTER 2025 RESULTS AND OPERATIONAL UPDATE
(TSX: TWM)
CALGARY, AB, Nov. 13, 2025 /CNW/ – Tidewater Midstream and Infrastructure Ltd. (“Tidewater” or the “Corporation” when referred to the consolidated group, and “Tidewater Midstream” when referring to the legal entity) (TSX: TWM) has filed its consolidated interim financial statements and Management Discussion and Analysis (“MD&A”) for the three and nine month periods ended September 30, 2025.
Third Quarter 2025 Highlights
- Consolidated net loss attributable to shareholders was $34.1 million during the third quarter of 2025, compared to a net loss attributable to shareholders of $7.3 million during the third quarter of 2024. The larger net loss was primarily due to lower refined product sales volumes and margins at the Corporation’s downstream assets, lower sales volumes and realized pricing for emission credits, and unfavourable changes in the fair value of derivative contracts, partially offset by lower depreciation and general and administrative costs, and higher income from equity investments.
- Consolidated adjusted EBITDA(1) was $16.2 million during the third quarter of 2025, compared to $29.2 million during the third quarter of 2024. The decrease in adjusted EBITDA was largely due to the same factors described above for the consolidated net loss attributable to shareholders.
- On September 5, 2025, the Government of Canada announced its intention to introduce a new $370 million Biofuels Production Incentive, designed to support the stability and resiliency of domestic biodiesel and renewable diesel producers. The program is expected to provide per-litre production incentives from January 2026 to December 2027, for up to 300 million litres per facility. With expected renewable diesel production of between 150 million to 170 million litres per year, management believes Tidewater Renewables Ltd. (“Tidewater Renewables”) is well-positioned to benefit from the Biofuels Production Incentive, supporting improved cash flow and returns over the eligible period.
- On September 25, 2025, Tidewater completed the previously announced transaction with Pembina Pipeline Corporation and certain of its affiliates (collectively ” Pembina”) to acquire the north segment of Pembina’s Western Pipeline System (the “Western Pipeline”), through a wholly owned limited partnership for total cash consideration of approximately $1.2 million, as well as the assumption of certain future abandonment and reclamation obligations and liabilities estimated at approximately $30.0 million (undiscounted value) (the “Western Pipeline Transaction”). Tidewater expects the Western Pipeline Transaction to yield significant cost improvements compared to historical metrics, while further enhancing Tidewater’s ability to optimize its feedstock procurement at the PGR.
|
___________________________________ |
|
|
Subsequent Events
- On November 12, 2025, Tidewater Midstream and the Government of British Columbia executed an initiative agreement that will provide Tidewater Midstream with BC LCFS Credits to support the production of low-carbon renewable diesel and renewable gasoline from the hydrotreater co-processing unit at the PGR. The BC LCFS Credits awarded under the initiative agreement are expected to fund approximately 50% of the cost of the renewable feedstocks required to operate the hydrotreater co-processing during 2026 and 2027, at previously achieved rates of 300 bbl/d. In addition, the sale of low-carbon transportation fuels into the British Columbia market will generate CFR Emission Credits and additional BC LCFS credits for Tidewater Midstream.
- On October 21, 2025, Tidewater completed the sale of its Sylvan Lake gas plant and associated gathering infrastructure to Parallax Energy Operating Inc. for total proceeds of approximately $5.5 million, subject to customary adjustments. Proceeds from the transaction were used to repay amounts outstanding on the Tidewater Midstream senior credit facility.
- The scheduled turnaround at Tidewater Renewables’ renewable diesel & renewable hydrogen complex (the “HDRD Complex”) commenced as planned in early September and was completed in mid-October. Originally expected to last approximately three weeks, the turnaround was extended due to higher than anticipated fouling in the hydrodeoxygenation reactor beds.
- Following the scheduled turnaround, the HDRD Complex experienced a short unplanned outage from October 15, 2025 to October 29, 2025 due to an identified equipment anomaly. The issue was temporarily repaired, and the affected component is currently being rebuilt, with installation expected to occur during a seven-day outage before year end 2025. With the temporary repair in place, utilization has averaged approximately 2,330 bbl/d to date in November, with rates expected to return to full capacity in December 2025.
CEO Quote:
“While the third quarter of 2025 presented some operational challenges for the Corporation, there were also a number of positive developments. We are very pleased to have successfully closed the Western Pipeline Transaction, which is expected to provide meaningful cost reductions and enhance Tidewater’s ability to optimize its feedstock procurement and capital programs through fully integrating the pipeline’s operations and integrity programs within our broader downstream operations and capital programs. The previously announced Sylvan Lake disposition was successfully closed in October, and we are continuing to progress several additional non-core asset sales. Looking forward to the remainder of 2025 and into 2026, we continue to focus on improving product margins at our downstream business and increasing throughput at our midstream facilities while managing costs across our operations. We welcome the announcement by the Government of Canada regarding its intention to introduce a $370 million Biofuel Production Incentive program and believe Tidewater Renewables is positioned to be a beneficiary of the program.” – stated Jeremy Baines, CEO.
CONSOLIDATED AND DECONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
|||||||
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Net loss attributable to shareholders |
|
|
$ |
(13.2) |
|
|
$ |
(7.3) |
|
Net loss attributable to shareholders per share – basic (1) |
|
|
$ |
(0.61) |
|
|
$ |
(0.34) |
|
Adjusted EBITDA (2) |
|
|
$ |
15.5 |
|
|
$ |
29.2 |
|
Distributable cash flow attributable to shareholders (1) |
|
|
$ |
(3.2) |
|
|
$ |
(1.2) |
|
Distributable cash flow per share – basic (1)(2) |
|
|
$ |
(0.15) |
|
|
$ |
(0.06) |
|
Net debt (4) |
|
|
$ |
383.2 |
|
|
$ |
566.5 |
|
Total capital expenditures |
|
|
$ |
2.4 |
|
|
$ |
3.9 |
|
(1) |
On August 28, 2025, further to the special resolution approved by Tidewater Midstream shareholders, the Corporation completed a common share consolidation at a ratio of 20-for-1. As a result, the comparative periods in this news release have been retroactively restated to reflect the share consolidation. |
|
(2) |
Non-GAAP financial measures. See the “Non-GAAP Measures” section of this news release. |
|
(3) |
Deconsolidated results exclude the results of Tidewater Renewables. See the “Non-GAAP Measures” section of this news release for information on deconsolidated measures. |
|
(4) |
Capital management measure. See the “Non-GAAP Measures” section of this news release. |
|
|
|
|||||||
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Net loss attributable to shareholders |
|
|
$ |
(43.1) |
|
|
$ |
(23.3) |
|
Net loss attributable to shareholders per share – basic (1) |
|
|
$ |
(2.00) |
|
|
$ |
(1.08) |
|
Adjusted EBITDA (2) |
|
|
$ |
45.8 |
|
|
$ |
114.3 |
|
Distributable cash flow attributable to shareholders (2) |
|
|
$ |
(16.1) |
|
|
$ |
8.6 |
|
Distributable cash flow per share – basic (1)(2) |
|
|
$ |
(0.75) |
|
|
$ |
0.40 |
|
Net debt (4) |
|
|
$ |
383.2 |
|
|
$ |
566.5 |
|
Total capital expenditures |
|
|
$ |
17.9 |
|
|
$ |
33.7 |
|
(1) |
On August 28, 2025, further to the special resolution approved by Tidewater Midstream shareholders, the Corporation completed a common share consolidation at a ratio of 20-for-1. As a result, the comparative periods in this news release have been retroactively restated to reflect the share consolidation. |
|
(2) |
Non-GAAP financial measures. See the “Non-GAAP Measures” section of this news release. |
|
(3) |
Deconsolidated results exclude the results of Tidewater Renewables. See the “Non-GAAP Measures” section of this news release for information on deconsolidated measures. |
|
(4) |
Capital management measure. See the “Non-GAAP Measures” section of this news release. |
CAPITAL EXPENDITURES
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Growth capital (1) |
|
|
$ |
0.4 |
|
|
$ |
13.9 |
|
Maintenance capital (1) |
|
|
|
3.5 |
|
|
|
19.8 |
|
Total capital expenditures |
|
|
$ |
3.9 |
|
|
$ |
33.7 |
|
Capital emission credits awarded (2) |
|
|
$ |
(9.3) |
|
|
$ |
(42.9) |
|
(1) |
Supplementary financial measures. See the “Non-GAAP Measures” section of this news release. |
|
(2) |
During the three and nine months ended September 30, 2025, $NIL and $1.3 million of capital emission credits were monetized, respectively. (Three and nine months ended September 30, 2024 – $2.4 million and $23.6 million, respectively.) |
Maintenance capital expenditures of $7.3 million and $13.6 million for the three and nine months ended September 30, 2025, respectively, were largely related to the scheduled third quarter turnaround at the HDRD Complex and maintenance work at the BRC.
Tidewater’s consolidated full-year 2025 capital program is focused on maintaining safe and reliable operations and is expected to range between $15 million – $20 million consistent with previous guidance, now inclusive of maintenance capital in relation to the Western Pipeline.
DOWNSTREAM
Prince George Refinery (“PGR”)
During the third quarter of 2025, throughput at the PGR was 10,313 bbl/day, a 4% increase from 9,942 bbl/d during the second quarter of 2025, and 12% lower than the third quarter of 2024. The third quarter of 2025 had lower throughput compared to the third quarter of 2024 largely due to operational and feedstock-composition adjustments that were required to process higher-density feedstock. Throughput levels have normalized following the completion of the semi-annual heat exchanger cleaning completed in early October.
The Prince George crack spread averaged $90/bbl during the third quarter of 2025, a 6% increase from the second quarter of 2025 and a 7% increase from the third quarter of 2024. The increase from the second quarter of 2025 was primarily due to higher diesel pricing, offset in part by higher feedstock costs. The increase in crack spread from the third quarter of 2024 was primarily due to lower feedstock costs partially offset by lower gasoline and diesel pricing.
Gasoline sales volumes remained relatively consistent with the second quarter of 2025, however, diesel sales volumes in the third quarter of 2025 decreased compared to the second quarter of 2025 as diesel inventories built during the first quarter of 2025 were significantly reduced during the second quarter and lower throughput in the third quarter of 2025 limited the quantity of diesel available from the PGR during the period.
As previously disclosed, Tidewater’s offtake agreement with Cenovus Energy Inc. (the “Offtake Agreement”) expired on November 1, 2024, following which Tidewater began marketing diesel and gasoline volumes from the PGR directly to its customers. Current wholesale discounts are wider than those at the time the Offtake Agreement was entered into, largely stemming from the oversupply of diesel in Western Canada as well as North American supply and demand fundamentals. Tidewater is working to optimize its netbacks on its diesel and gasoline. While Tidewater is focused on Western Canadian markets, in the event the Corporation is unable to place all its products in Western Canada, it may be required to export the balance to potentially lower margin markets.
PGR Historical Performance
|
|
|
|
|
|
|
|
|
|
Daily throughput (bbl) |
12,399 |
12,022 |
11,664 |
10,963 |
9,936 |
9,942 |
|
|
Refinery Yield (1) |
|
|
|
|
|
|
|
|
Diesel |
46 % |
46 % |
42 % |
40 % |
42 % |
43 % |
|
|
Gasoline |
41 % |
39 % |
43 % |
44 % |
43 % |
41 % |
|
|
Other (2) |
13 % |
15 % |
15 % |
16 % |
15 % |
16 % |
|
|
(1) |
Refinery yield includes crude, canola and intermediates. |
|
(2) |
Other refers to heavy fuel oil (HFO), liquified petroleum gas and feedstock consumed to fuel the refinery. |
HDRD Complex
For the three months ended September 30, 2025, the HDRD Complex achieved an average utilization rate of 2,011 bbl/d, or 67% of design capacity. This compares to 2,849 bbl/d, or 95% of design capacity, during the same period in the prior year.
The decrease in utilization during the third quarter of 2025 was primarily due to planned turnaround activities carried out in September 2025. The turnaround was originally expected to last approximately three weeks but was extended by an additional two weeks due to greater than anticipated fouling in the hydrodeoxygenation reactor beds. Despite the delay, the turnaround was completed safely, with operations resuming on October 14, 2025.
Shortly after operations resumed, an equipment anomaly was identified which required the HDRD Complex to take an unplanned outage. The issue was temporarily repaired, resulting in a delay of approximately two weeks, and operations resumed on October 29, 2025. A ramp-up period followed the restart, during which utilization improved steadily, supported by a disciplined ramp-up process and strong operational oversight. With the temporary repair in place, current utilization rates have stabilized at approximately 2,330 bbl/d. The affected component is being rebuilt and is expected to be installed during a seven-day outage before year end 2025.
MIDSTREAM
Midstream Gas Plant Volumes
|
|
|
|
|
|
|
|
|
|
Gross throughput (MMcf/d) |
302 |
253 |
217 |
218 |
177 |
172 |
|
|
BRC(1) |
134 |
90 |
124 |
132 |
94 |
95 |
|
|
Ram River |
96 |
93 |
31 |
15 |
11 |
9 |
|
|
Other(2) |
72 |
70 |
62 |
71 |
72 |
68 |
|
|
(1) BRC Inlet volumes include volumes at the BRC straddle plant. (2) Other volumes include throughput at Tidewater’s extraction facilities |
Brazeau River Complex and Fractionation Facility (“BRC”)
The BRC gas processing facility had throughput of 124 MMcf/day in the third quarter of 2025, 29 MMcf/day higher than 95 MMcf/day during the second quarter of 2025, and consistent with the third quarter of 2024. The increase in throughput from the second quarter of 2025 is largely due to higher straddle volumes coming through the facility following the completion of the maintenance work and the restart of Plant 3 in late June.
The BRC fractionation facility utilization averaged 85% in the third quarter of 2025, compared to 85% in the second quarter of 2025 and 82% in the third quarter of 2024. Utilization was higher in the third quarter of 2025 compared to the third quarter of 2024 primarily due to incremental trucked in volumes. Utilization of the BRC fractionation facility may vary as it is dependent on a combination of natural gas processing rates and associated NGL recoveries, in addition to truck-in supply.
Margins on gas storage activities at the BRC during the third quarter of 2025 were higher compared to both the second quarter of 2025 and the third quarter of 2024. Near-term natural gas pricing weakness led to strong spread capture during the current quarter through additional park and loan transactions.
Ram River Gas Plant
On January 7, 2025, management made the decision to temporarily lay-up the Ram River Gas Plant, including sulfur handling activities, in order to manage ongoing operating costs and to allow for gas prices to recover and gas flow from producers to resume. Despite sulfur handling operations returning to service late in the first quarter of 2025, the gas plant has remained offline throughout the year. Management’s intent is to restart the facility when commodity prices strengthen and gas flow from producers restarts.
THIRD QUARTER 2025 EARNINGS CALL
In conjunction with the earnings release, the Corporation and Tidewater Renewables will hold a joint conference call to review both companies third quarter 2025 results on Thursday, November 13, 2025 at 10:00 am MDT (12:00 pm EDT).
To access the conference call by telephone, dial 1-437-900-0527 (local / international participant dial in) or 1-888-510-2154 (North American toll-free participant dial in). A question and answer session for analysts will follow the management’s presentation.
A live audio webcast of the conference call will be available by following this link: https://app.webinar.net/6xnpNqKGb51 and 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 join the Tidewater Midstream and Infrastructure Ltd. earnings call.
ABOUT TIDEWATER MIDSTREAM
Tidewater is traded on the TSX under the symbol “TWM”. Tidewater’s business objective is to build a diversified midstream and infrastructure company across the North American gas processing, natural gas liquids (“NGL”), petroleum refining, and renewables markets. The Corporation’s strategy is to profitably grow and create shareholder value by acquiring and building high quality, strategically located infrastructure. To achieve its business objective, Tidewater is focused on providing customers with a full service, vertically integrated value chain through the acquisition and development of energy infrastructure, including downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, storage, and various renewable initiatives. To complement its infrastructure asset base, the Corporation also markets crude oil, refined products, natural gas, NGLs and renewable products and services to customers across North America.
Tidewater’s key midstream assets include: the BRC, a full-service natural gas and NGL processing facility with natural gas storage pools, and the Ram River Gas Plant, a sour natural gas processing facility with sulfur handling solutions and rail connections.
Tidewater’s downstream assets supply refined products to a niche market and provide an asset base for renewables initiatives. The key downstream assets include the PGR, the sole light oil refinery within the interior British Columbia market and the HDRD Complex owned by Tidewater Renewables. The PGR refines crude oil feedstock into gasoline and diesel and is where the Corporation’s co-processing activities take place. The HDRD Complex is also located in Prince George, adjacent to the PGR. Tidewater is a majority shareholder in Tidewater Renewables, a multi-faceted energy transition company focusing on the production of low carbon fuels. Tidewater Renewables’ common shares are publicly traded on the TSX under the symbol “LCFS”.
NON-GAAP MEASURES
Throughout this news release and in other materials disclosed by the Corporation, Tidewater uses a number of non-GAAP financial measures, non-GAAP financial ratios, capital management measures, and supplemental financial measures when assessing its results and measuring overall performance. The intent of these non-GAAP measures and ratios is to provide additional useful information to investors and analysts. Certain of these financial measures and ratios do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures and ratios presented by other entities. As such, these non-GAAP measures and ratios should not be considered in isolation or used as a substitute for measures and ratios of performance prepared in accordance with GAAP. Except as otherwise indicated, these financial measures will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. The following are the Corporation’s non-GAAP financial measures, non-GAAP ratios, capital management measures, and supplementary financial measures.
Non-GAAP Financial Measures
Consolidated and deconsolidated adjusted EBITDA
Consolidated adjusted EBITDA is calculated as net (loss) income before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, gains and losses on the sale of assets, and other items considered non-recurring in nature, plus the Corporation’s proportionate share of EBITDA in its equity investments. Deconsolidated adjusted EBITDA is calculated as consolidated adjusted EBITDA less the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables.
In accordance with IFRS, Tidewater’s jointly controlled investments are accounted for using equity accounting. Under equity accounting, net earnings from investments in equity accounted investees are recognized in a single line item in the consolidated statement of net (loss) income and comprehensive (loss) income. The adjustments made to net (loss) income, as described above, are also made to share of profit from investments in equity accounted investees.
Consolidated 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 consolidated adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions, and others to evaluate the financial performance of the Corporation and other companies in the midstream industry. From time to time, the Corporation issues guidance on this key measure. As a result, consolidated adjusted EBITDA is presented as a relevant measure in this news release and the MD&A to assist analysts and readers in assessing the performance of the Corporation as seen from management’s perspective. In addition to reviewing consolidated adjusted EBITDA, management reviews deconsolidated adjusted EBITDA to highlight the Corporation’s performance, excluding the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables. Investors should be cautioned that consolidated adjusted EBITDA and deconsolidated adjusted EBITDA should not be construed as alternatives to net (loss) income, net cash provided by 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.
The following table reconciles net loss, the nearest GAAP measure, to adjusted EBITDA:
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Net loss |
|
|
$ |
(5.3) |
|
|
$ |
(15.3) |
|
Depreciation |
|
|
|
21.2 |
|
|
|
65.7 |
|
Finance costs and other |
|
|
|
20.1 |
|
|
|
60.0 |
|
Share-based compensation |
|
|
|
1.8 |
|
|
|
4.6 |
|
Impairment expense |
|
|
|
4.6 |
|
|
|
4.6 |
|
Loss (gain) on sale of assets |
|
|
|
(0.9) |
|
|
|
(0.9) |
|
Unrealized loss (gain) on derivative contracts |
|
|
|
(18.9) |
|
|
|
(16.0) |
|
Realized gain on marketable securities |
|
|
|
– |
|
|
|
(5.0) |
|
Transaction costs |
|
|
|
3.0 |
|
|
|
4.3 |
|
Non-recurring expenses |
|
|
|
2.3 |
|
|
|
11.6 |
|
Adjustment to share of profit from equity accounted investments |
|
|
|
1.3 |
|
|
|
0.7 |
|
|
|
|
$ |
29.2 |
|
|
$ |
114.3 |
|
Less: Consolidated adjusted EBITDA attributable to Tidewater Renewables |
|
|
|
(13.7) |
|
|
|
(68.5) |
|
|
|
|
$ |
15.5 |
|
|
$ |
45.8 |
Distributable cash flow and deconsolidated distributable cash flow attributable to shareholders
Distributable cash flow is calculated as net cash provided by (used in) operating activities before changes in non-cash working capital, plus cash distributions from investments, transaction costs, non-recurring transactions, and less other expenditures that use cash from operations. Also deducted is the distributable cash flow of Tidewater Renewables that is attributed to non-controlling interest shareholders. Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal 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. Transaction costs are added back as they can vary significantly based on the Corporation’s acquisition and disposition activity. Non-recurring transactions that do not reflect Tidewater’s ongoing operations are also excluded. Lease payments, interest and financing charges, and maintenance capital expenditures, including turnarounds, are deducted as they are ongoing recurring expenditures which are funded from operating cash flows.
Deconsolidated distributable cash flow is calculated by subtracting the portion of Tidewater Renewables’ distributable cash flow that is attributed to shareholders of Tidewater from distributable cash flow attributable to shareholders.
The following table reconciles net cash (used in) provided by operating activities, the nearest GAAP measure, to distributable cash flow and deconsolidated distributable cash flow:
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Net cash (used in) provided by operating activities |
|
|
$ |
(48.9) |
|
|
$ |
(50.4) |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
Changes in non-cash operating working capital |
|
|
|
70.2 |
|
|
|
142.5 |
|
Transaction costs |
|
|
|
3.0 |
|
|
|
4.3 |
|
Non-recurring expenses |
|
|
|
2.3 |
|
|
|
11.6 |
|
Interest and financing charges |
|
|
|
(13.2) |
|
|
|
(38.9) |
|
Payment of lease liabilities and other, net of |
|
|
|
(8.6) |
|
|
|
(27.8) |
|
Maintenance capital |
|
|
|
(3.5) |
|
|
|
(19.8) |
|
Tidewater Renewables’ distributable cash flow |
|
|
|
(2.5) |
|
|
|
(12.9) |
|
|
|
|
$ |
(1.2) |
|
|
$ |
8.6 |
|
Tidewater Renewables’ distributable cash |
|
|
$ |
(2.0) |
|
|
$ |
(24.7) |
|
|
|
|
$ |
(3.2) |
|
|
$ |
(16.1) |
Non-GAAP Financial Ratios
Tidewater uses non-GAAP financial ratios to present aspects of its financial performance or financial position, primarily distributable cash flow per share.
Distributable cash flow and deconsolidated distributable cash flow per share
Distributable cash flow per share is calculated as distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Deconsolidated distributable cash flow per share is calculated as deconsolidated distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Management believes that these measures provide investors an indicator of funds generated from the business that could be allocated to each shareholder’s equity position.
|
|
|
|
||||||
|
|
|
|
|
2024 |
|
|
|
2024 |
|
Distributable cash flow attributable to |
|
|
$ |
(1.2) |
|
|
$ |
8.6 |
|
Deconsolidated distributable cash flow |
|
|
$ |
(3.2) |
|
|
$ |
(16.1) |
|
Weighted average common shares |
|
|
|
21.5 |
|
|
|
21.5 |
|
Distributable cash flow per share – basic and |
|
|
$ |
(0.06) |
|
|
$ |
0.40 |
|
Deconsolidated distributable cash flow per |
|
|
$ |
(0.15) |
|
|
$ |
(0.75) |
|
(1) |
On August 28, 2025, further to the special resolution approved by Tidewater Midstream shareholders, the Corporation completed a common share consolidation at a ratio of 20-for-1. As a result, the comparative periods in this news release have been retroactively restated to reflect the share consolidation. |
Capital Management Measures
Consolidated and deconsolidated net debt
Consolidated net debt is defined as bank debt, second lien debt, and convertible debentures, less cash. Consolidated net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation’s overall financial strength.
In addition to reviewing consolidated net debt, management reviews deconsolidated net debt to highlight Tidewater’s financial flexibility, balance sheet strength and leverage. Deconsolidated net debt is calculated as consolidated net debt less the portion attributable to Tidewater Renewables.
Consolidated and deconsolidated net debt exclude working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on deconsolidated net debt to deconsolidated adjusted EBITDA, consistent with its credit facility covenants as described in the LIQUIDITY AND CAPITAL RESOURCES section of the Corporation’s MD&A.
The following table reconciles consolidated and deconsolidated net debt:
|
|
|
|
|
September |
|
Tidewater Midstream Senior Credit Facility |
|
|
$ |
283.3 |
|
Tidewater Renewables Senior Credit Facility |
|
|
|
8.3 |
|
Tidewater Renewables Second Lien Credit Facility |
|
|
|
175.0 |
|
Convertible debentures – principal |
|
|
|
100.0 |
|
Cash |
|
|
|
(0.1) |
|
|
|
|
$ |
566.5 |
|
Less: Tidewater Renewables Senior Credit Facility |
|
|
|
(8.3) |
|
Less: Tidewater Renewables Second Lien Credit Facility |
|
|
|
(175.0) |
|
Add: Tidewater Renewables cash |
|
|
|
– |
|
|
|
|
$ |
383.2 |
Supplementary Financial Measures
“Growth capital” expenditures are generally defined as expenditures which are recoverable or incrementally increase cash flow or earnings potential of assets, expand the capacity of current operations or significantly extend the life of existing assets. This measure is used by the investment community to assess the extent of discretionary capital spending.
“Maintenance capital” expenditures are generally defined as expenditures which support and/or maintain the current capacity, cash flow or earnings potential of existing assets without the associated benefits characteristic of growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure is used by the investment community to assess the extent of non-discretionary capital spending. Maintenance capital is included in the calculation of distributable cash flow.
Deconsolidated “net (loss) income attributable to shareholders” is comprised of net income or loss attributable to shareholders, as determined in accordance with IFRS, less the net income or loss of Tidewater Renewables attributed to the shareholders of Tidewater.
Deconsolidated “net (loss) income attributable to shareholders – per share” is calculated by dividing deconsolidated “net income or loss attributable to shareholders” by the basic weighted average number of Tidewater common shares outstanding for the period.
Deconsolidated “Total capital expenditures” is comprised of consolidated capital expenditures, as disclosed in Tidewater’s statement of cash flows, less the capital expenditures of Tidewater Renewables.
Operational Definitions
“bbl/d” means barrels per day;
“MMcf/d” means million cubic feet per day.
“BC LCFS Credits” are tradable certificates awarded to fuel producers, importers, or users who produce or use fuels with a carbon intensity lower than the required standard set by the British Columbia government. These credits are earned when the carbon emissions of fuel are below the established threshold, and they can be bought and sold in a market to help companies meet their regulatory obligations. The purpose of these credits is to incentivize the use of cleaner, low-carbon fuels and to help reduce the overall greenhouse gas emissions in the transportation sector.
“CFR Emission Credits” means credits generated under the Canadian Clean Fuel Regulation.
“crack spread” refers to the general price differential between crude oil and the petroleum products refined from it.
“refinery yield” (expressed as a percentage) represents the percentage of finished product produced from inputs of crude oil and renewable feedstock as well as intermediates. Refinery yields are an important measure of refinery performance indicating the outputs that running a particular feedstock and intermediates through a refinery configuration will produce.
“throughput” with respect to a natural gas plant, means inlet volumes processed (including any off-load or reprocessed volumes); with respect to a pipeline, the estimated natural gas or liquid volume transported therein; and with respect to NGL processing facilities, means the volume of inlet NGLs processed.
“U.S.” meaning the United States of America, its territories and possessions, any state of the United States and the District of Columbia
“utilization” or “utilization rate” means the throughput of a facility or unit divided by its design capacity.
Advisory Regarding Forward-Looking Statements
Certain statements contained in this news 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 news release should not be unduly relied upon.
In particular, this news release contains forward-looking statements pertaining to but not limited to the following:
- the Government of Canada’s intention to introduce the Biofuels Production Incentive, the expected program parameters and the effect of the program on Tidewater Renewables;
- the expected effect of the Western Pipeline Transaction on the Corporation’s business;
- the expected receipt of BC LCFS Credits under the initiative agreement between Tidewater Midstream and the Government of British Columbia, including the anticipated use of such BC LCFS Credits to fund the cost of renewable feedstocks required to operate the hydrotreater co-processing unit;
- the expected timing of installation of repaired equipment at the HDRD Complex;
- the expected timing for the return to full capacity at the HDRD Complex following the unplanned outage;
- the Corporation’s focus on progressing its non-core asset sale program;
- the Corporation’s focus on improving product margins at its downstream business and increasing throughput at its midstream facilities while managing costs across its operations;
- expectations for the Corporation’s capital program for 2025;
- the Corporation’s efforts to optimize its netback on its diesel and gasoline;
- the Corporation’s marketing efforts;
- the potential requirement for the Corporation to export its products outside of Western Canada to potentially lower margin markets;
- variations in utilization of the BRC fractionation facility and the cause thereof;
- the resumption of operations at the Ram River Gas Plant; and
- the Corporation’s business objective, strategy and operational objectives.
Although the forward-looking statements contained in this news 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 news release, the Corporation has assumptions regarding, but not limited to:
- the Corporation’s ability to execute on its business plan;
- the effect of Tidewater Renewables’ business operations on Tidewater;
- the timely receipt of all governmental and regulatory approvals sought by the Corporation;
- future commodity prices, including natural gas, crude oil, NGL and renewable energy prices;
- the market for BC LCFS Credits and CFR Emission Credits;
- general economic and industry trends;
- impacts of commodity prices and demand on the Corporation’s working capital requirements;
- continuing government support for existing policy initiatives;
- processing and marketing margins;
- impacts of seasonality and climate disruptions;
- future capital expenditures to be made by the Corporation;
- foreign currency, exchange and interest rates, and expectations relating to inflation;
- that there are no unforeseen events preventing the performance of contracts;
- the availability of equipment and personnel required for Tidewater to execute its business plan;
- the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under the Corporation’s insurance policies;
- volume demands from the PGR and HDRD Complex are consistent with forecasts;
- successful negotiation and execution of agreements with counterparties;
- oil and gas industry exploration and development activity 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;
- the amount of operating costs to be incurred;
- that there are no unforeseen costs relating to the facilities, 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 operations and future capital requirements relating to existing assets and projects;
- the ability of Tidewater to successfully market its products;
- the ability of Tidewater to successfully progress its non-core asset sale program
- the successful integration of acquisitions and projects into the Corporation’s existing business;
- the Corporation’s future debt levels and the ability of the Corporation to repay its debt when due; and
- the other assumptions set forth in the Corporation’s most recent annual information form available under the Corporation’s profile on SEDAR+ at www.sedarplus.ca.
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 and renewable products;
- general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates, stock market volatility, BC LCFS Credit market volatility; supply/demand trends, armed hostilities, acts of war, terrorism, cyberattacks, trade disruptions, diplomatic developments and inflationary pressures;
- 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;
- the imposition of tariffs and the corresponding impact on producer activity and the supply and demand for the Corporation’s products;
- failure to close transactions as contemplated and in accordance with negotiated terms;
- the conflict in Ukraine and the Middle East and the corresponding impact on supply chains and the global economy;
- 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;
- changes in environmental and other laws and regulations or the interpretations of such laws or regulations;
- cost of compliance with applicable regulatory regimes, including, but not limited to, environmental laws and regulations, including greenhouse gas emissions;
- Indigenous and landowner consultation requirements;
- 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 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;
- losses of key customers;
- 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 and derailments;
- effects of weather conditions (such severe weather or catastrophic events including, but not limited to, fires, floods, lightning, earthquakes, extreme cold weather, storms or explosions);
- reputational risks;
- 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 acquisitions, dispositions and capital projects.
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 annual information form and in other documents on file with the Canadian securities regulatory authorities. Additionally, the Corporation faces certain risks as the majority shareholder of Tidewater Renewables including, without limitation, liquidity risk, commodity price risk (including in respect of the markets for BC LCFS Credits, CFR Emission Credits and other carbon credits, rebates, tax credits, grants and other incentives), equity risk, credit risk and risks related to changes in environmental regulations, economic, political or market conditions and the regulatory environment.
Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation’s current and future operations and 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 occur, 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 news release. 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, other than as required by applicable securities law. All forward-looking statements contained in this news 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.sedarplus.ca.
The financial outlook information contained in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available. Additionally, the financial outlook information contained in this news release is subject to the risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Accordingly, readers are cautioned that the financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein. The financial outlook information contained in this news release was approved by management as of the date hereof and was provided for the purpose of providing further information about Tidewater’s current expectations and plans for the future.
SOURCE Tidewater Midstream and Infrastructure Ltd.
