Additional Processing Fee Agreements at Pipestone
Montney Sour Deep-Cut Processing Facility and Five Year 17 Bcf
Commitment at Ram River Gas Plant
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CALGARY, March 22, 2018 /CNW/ -
Definitive Agreement with TransAlta
Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the
"Corporation") (TSX:TWM) is pleased to announce that it has entered
into a definitive agreement with TransAlta Corporation
("TransAlta") for the procurement of long lead items such as the
steel and associated valves to construct the 120 km natural gas
pipeline from its Brazeau River Complex ("BRC") to TransAlta's
generating units at Sundance and
Keephills (the "Development
Agreement"), as contemplated in the letter of intent previously
announced on December 6, 2017.
The Development Agreement pertains primarily to the early work and
procurement necessary to construct the pipeline and also describes
the key terms that will be contained in subsequent definitive
agreements to see the project to completion, including provision
for a fifteen year take-or-pay commitment by TransAlta and an
option for TransAlta to invest up to 50% in the pipeline.
Construction of the project remains subject to certain customary
conditions and regulatory approvals. The parties agreed in
the Development Agreement to negotiate in good faith and execute
the remaining definitive agreements over the summer, 2018
timeframe. The project remains on schedule and on budget.
Additional Processing Agreements at Pipestone Montney Sour
Deep-Cut Processing Facility
Tidewater is pleased to announce that it has entered into an
agreement with Kelt Exploration Ltd. ("Kelt") for a volume
commitment at Tidewater's proposed sour, deep-cut Montney gas plant in the Pipestone area near Grande Prairie (the "Pipestone Plant").
Kelt commits to 25.0 MMcf/d of firm raw gas processing under a
five-year take-or-pay arrangement at the Pipestone Plant.
Kelt has the option to convert a part of its take-or-pay
arrangement into an ownership interest of up to 15% in the
Pipestone Plant. The Pipestone Plant remains subject to
regulatory approval.
Tidewater has signed an additional agreement with a new customer
for a reserve dedication at the Pipestone Plant. Tidewater
currently has committed the majority of the volumes out of a plant
capacity of 100MMcf/d under take-or-arrangements or reserve
dedication agreements. Tidewater continues to work with
multiple producers to fully contract this facility. The Pipestone
Plant remains on schedule and on budget.
Five Year 17 Bcf Commitment at Ram River Gas plant
Tidewater is pleased to announce that it has entered into a
five-year, 17.2 net Bcf volume commitment with an investment grade
counterparty to process incremental net raw gas volumes of
approximately 15 MMcf/d which will decline over a five-year
timeframe at the Ram River gas plant.
Operations Update
Tidewater reiterates guidance of current run rate annualized
EBITDA of $80 million.
Tidewater expects to commence its planned maintenance and
turnaround operations in April, 2018 at the Brazeau River Complex
(the "BRC") which is scheduled to occur every four years. As a
result, throughput at the BRC will be reduced in the second quarter
of 2018.
Tidewater is pleased with its successful expansion of gas
storage operations at both Pipestone and the BRC where Tidewater is
currently contracted with an investment grade counterparty and
continues to see significant interest from other parties to
contract gas storage from Tidewater.
Tidewater has seen significant demand for low cost power and is
responding by contracting tolls for small scale industrial power
supply related to computer processing, which will be generating
approximately $1 million of
annualized EBITDA in the next 30 days, for zero capital investment
by Tidewater. Tidewater may, subject to significant future
contingencies, grow this opportunity to $5-$10 million of
annualized EBITDA over the next 12 to 18 months without investing
capital, but will evaluate future equity ownership given
significant upside potential.
Dividend Announcement
Tidewater is pleased to announce that its Board has declared a
dividend for the first quarter of 2018 of $0.01 per common share payable on or about
April 30th to shareholders
of record on March 29, 2018.
The ex-dividend date is March
28th, 2018. This dividend is an eligible
dividend for the purpose of the Income Tax Act (Canada).
Fourth Quarter, 2017 Earnings Call
Tidewater will release its fourth quarter and full year
financial results for fiscal 2017 on Thursday, March 29th, before the
market opens. In conjunction with the earnings release,
investors will have the opportunity to listen to Tidewater senior
management review its fourth quarter and full year results of
fiscal 2017 via conference call on Thursday,
March 29th at 11:00 am
MDT.
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:
http://event.on24.com/wcc/r/1624042-1/F8D075910E8A202D9870DFA3C5810BBD
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
be joined into the Tidewater Midstream and Infrastructure Ltd.
earnings call.
A digital rebroadcast will be available approximately two hours
after the conclusion of the live event on March 29th until April 5, 2018. To access the rebroadcast, please
dial 416-849-0833 or 1-855-859-2056 and enter pass code 1689684
#.
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 and
natural gas liquids ("NGL") 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
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of applicable Canadian securities
legislation (collectively, "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 press release contains forward-looking
statements relating to but not limited to: plans to construct a 120
km natural gas pipeline from Tidewater's BRC to TransAlta's
Sundance and Keephills facility and associated take or pay
agreement; potential future investment in the pipeline project;
negotiation and execution of definitive agreements related to the
pipeline project; capital costs with respect to the pipeline
project; future regulatory approval of Tidewater projects; future
development plans of the Pipestone Plant; a future option for an
anchor tenant in the Pipestone Plant to convert a part of its
take-or-pay arrangement into an ownership interest in the Pipestone
Plant; Tidewater's efforts to work with multiple producers to fully
contract the Pipestone Plant; expectations regarding gas storage
customers; projections with respect to guidance and run rate
EBITDA; anticipated reduction in throughput at the BRC; anticipated
EBITDA growth related to small scale industrial power supply; and,
potential for ownership in a computer processing entity.
These forward-looking statements are based on certain key
assumptions regarding our ability to execute on our business plan
including with respect to construction of the BRC to Sundance and Keephills and construction of the Pipestone
Plant; our operating activities and current industry conditions;
the timely receipt of required regulatory approvals; general
business, economic and market conditions; the ability of Tidewater
to obtain the required capital to finance its operations;
anticipated timelines and budgets being met with respect to
Tidewater's operations; future natural gas liquids prices and laws
and regulations continuing in effect (or, where changes are
proposed, such changes being adopted as anticipated). Readers are
cautioned that such assumptions, although considered reasonable by
Tidewater at the time of preparation, may prove to be
incorrect.
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: risks
related to regulatory approval; the ability of management to
execute its business plan; risks inherent in the Corporation's
marketing operations, including credit risk; fluctuations in crude
oil, natural gas liquids and natural gas prices; health, safety and
environmental risks; uncertainties as to the availability and cost
of financing; the possibility that governmental policies or laws
may change or governmental approvals may be delayed or withheld;
the sufficiency of budgeted capital expenditures in carrying out
planned activities; uncertainties regarding aboriginal claims and
in maintaining relationships with local populations and other
stakeholders; processing, pipeline, de-ethanization and
fractionation infrastructure outages, disruptions and constraints;
rail transportation curtailments, disruptions and constraints; the
availability and cost of labour and services; cryptocurrency price
volatility and uncertainty regarding world financial markets; risk
of cyber security threats; risk of cryptocurrency loss, theft or
restriction on access; uncertainty regarding regulations regarding
cryptocurrency; and other risks and uncertainties described
elsewhere in this document or in the Corporation's other filings
with Canadian securities regulatory authorities.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order 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 Financial Measures
This press release refers to "EBITDA" which does not have any
standardized meaning prescribed by generally accepted accounting
principles in Canada
("GAAP"). EBITDA is calculated as income or loss before
interest, taxes, depreciation and amortization.
Tidewater Management believes that 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. Investors
should be cautioned that EBITDA should not be construed as an
alternative 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 and Additional
Measures" section of Tidewater's most recent MD&A which is
available on SEDAR.
U.S. Securities Laws
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction. The
securities have not been and will not be registered under
the United States Securities
Act of 1933, as amended, or any state securities laws and may
not be offered or sold within the United
States unless an exemption from such registration is
available.
Not for distribution to U.S. Newswire Services or for
dissemination in the United
States. Any failure to comply with this restriction may
constitute a violation of U.S. securities laws.
SOURCE Tidewater Midstream and Infrastructure Ltd.