CALGARY, March 25, 2019 /CNW/ - Tidewater Midstream
and Infrastructure Ltd. ("Tidewater" or the
"Corporation") is pleased to announce that it has entered
into an asset purchase and sale agreement whereby the Corporation
has divested of its Pipestone Gas Plant's 32MW cogeneration units
to Kineticor Resource Corp. ("Kineticor"), a privately held
power developer focused on thermal generation in Canada. Under the terms of the sale, the
Corporation received a cash payment of $85
million and Kineticor assumed ownership of the cogeneration
units which are currently onsite. In conjunction with the
divestiture, the Corporation entered into a long-term energy
services agreement whereby Kineticor will supply power to
Tidewater's Pipestone Gas Plant once construction is complete in
exchange for fixed energy fee payments. The Corporation also
entered into an operating agreement, whereby Tidewater will manage
the final construction of the cogeneration units and the day-to-day
operations once in service. This will ensure that the cogeneration
units, which will be highly integrated with the Pipestone Gas
Plant, will be managed safely and efficiently for both Kineticor
and Tidewater. The sale of the cogeneration units was contemplated
in the original Pipestone Gas Plant economics and Tidewater's
previous guidance of $30 to
$35 million of Adjusted EBITDA
contribution from the project is unchanged given Tidewater's
progress in contracting volumes at the plant. Expected Adjusted
EBITDA contribution is based on approximately 100 MMcf/day of
contracted volume at market rates.
Tidewater has received significant customer interest for
additional sour gas processing, natural gas storage and liquids
handling capacity at Pipestone. As
a result, Tidewater plans to utilize a portion of the proceeds from
the sale of the cogeneration units to begin scoping these future
expansions which are subject to final investment decision. The
remaining proceeds from the sale will be used to fund Tidewater's
ongoing growth capital program through 2019. The Pipestone Gas
Plant remains on budget and is expected to be commissioned in the
third quarter of 2019.
The Corporation's Business
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 ("NGL") and crude oil 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
through the acquisition and development of oil and gas
infrastructure including: gas plants, pipelines, railcars, trucks,
export terminals and storage facilities.
Cautionary Notes
Advisory Regarding Forward-Looking Statements
In the interest of providing Tidewater's shareholders and
potential investors with information regarding Tidewater, including
management's assessment of Tidewater's future plans and operations,
certain statements in this press release are "forward-looking
information" within the meaning of applicable Canadian securities
legislation ("forward-looking statements"). In some cases,
forward-looking statements can be identified by terminology such as
"anticipate", "believe", "continue", "could", "estimate", "expect",
"forecast", "intend", "may", "objective", "ongoing", "outlook",
"potential", "project", "plan", "should", "target", "would", "will"
or similar words suggesting future outcomes, events or performance.
The forward-looking statements contained in this press release
speak only as of the date thereof and are expressly qualified by
this cautionary statement.
Specifically, this news release contains forward-looking
statements relating to but not limited to: anticipated completion
of construction of the cogeneration unit at the Pipestone Gas Plant
and future operation of the cogeneration unit; management's plans
with respect to Tidewater's use of the proceeds from the
cogeneration unit sale; future supply of power at the Pipestone Gas
Plant; construction and operation of the Pipestone Gas Plant;
potential expansion of the Pipestone Gas Plant; and projected
Adjusted EBITDA from the Pipestone Gas Plant.
Such forward-looking statements of information are based on a
number of assumptions which may prove to be incorrect. In
addition to other assumptions identified in this document,
assumptions have been made regarding, among other things: general
economic and industry trends; the Corporation's ability to secure
natural gas supplies; anticipated timelines and budgets being met
in respect of the Corporation's projects and operations, including
specifically with respect to the Pipestone Gas Plant; receipt of
regulatory approvals for the Corporation's capital projects; that
counterparties will comply with contracts in a timely manner; that
there are no unforeseen material costs relating to the facilities
which are not recoverable from customers; customer demand for
processing at the Pipestone Gas Plant; future capital expenditures
to be made by the Corporation; the ability to obtain additional
financing on satisfactory terms; the ability of Tidewater to
successfully market its products; the Corporation's future debt
levels and the ability of the Corporation to repay its debt when
due; that any third-party projects relating to the Corporation's
growth projects will be sanctioned and completed as expected; and,
the Corporation's ability to obtain and retain qualified staff and
equipment in a timely and cost-effective manner.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors including but not limited to:
general economic, political, market and business conditions,
including fluctuations in interest rates, foreign exchange rates
and stock market volatility; regulatory approvals of the
Corporation's capital projects; activities of producers and
customers, procurement of natural gas supplies; the regulatory
environment and decisions and First Nations and landowner
consultation requirements; operational matters, including potential
hazards inherent in the Corporation's operations and the
effectiveness of health, safety, environmental and integrity
programs; transportation of hazardous materials; fluctuations in
commodity prices, inventory levels and supply/demand trends;
actions by governmental authorities, including changes in
government regulation including environmental, tariffs and
taxation; changes in operating and capital costs, including
fluctuations in input costs; competition for, among other things,
business, capital, acquisition opportunities, requests for
proposals, materials, equipment, labour and skilled personnel;
environmental risks and hazards, including risks inherent in the
transportation of NGLs which may create liabilities to the
Corporation in excess of the Corporation's insurance coverage, if
any; non-performance or default by counterparties to agreements
which the Corporation has entered into in respect of its business;
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; effects of weather conditions; reliance on key
personnel; technology and security risks; technical and processing
problems; 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 Annual Information Form 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 news 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.
Non-GAAP Measures
This news 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 and
items that are considered non-recurring in nature.
Tidewater 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.
Management utilizes Adjusted EBITDA to set objectives and as a key
performance indicator of the Corporation's success. 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.
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.