Tidewater Midstream and Infrastructure Ltd.

Good afternoon, ladies and gentlemen, and welcome to the Tidewater Midstream Q1 Financial Results Conference Call, at this time online during listening mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 12, 2022. I would now like to turn the conference over to Mr. Tom Hans, Director of Investor Relations. Please go ahead, sir.

Thank you, and welcome everyone to Tidewater Midstream's first quarter results conference call. I am Tom Hems, Director of Investor Relations, and on the call with me today is Joel McLeod, Tidewater's Chairman and CEO, Doug Beamer, Tidewater's VP of Corporate Finance, and Brian Newmarch, our new Chief Financial Officer. Before passing off the call to Joel to review some highlights, I do want to just quickly remind you that Some of the comments made today may be forward-looking in nature and are based on Tidewater's current expectations, estimates, judgments, and projections. Forward-looking statements we may express or imply today are subject to risk and uncertainties, which can cause actual results to differ from expectations. Further, some of the information provided refers to non-GAAP measures. To know more about these forward-looking statements and non-GAAP measures, please see the company's various financial reports. which are available at tidewatermidstream.com and on CDAR. And with that, I'll pass it off to Joel McLeod to discuss some highlights from the quarter.

Thank you, Tom. Good morning, and thank you for joining our Q1 2022 conference call. We are pleased to have now delivered 12 consecutive record quarters of adjusted EBITDA growth and delivered $57 million of adjusted EBITDA in Q1 2022. This represents a 12% increase in per share adjusted EBITDA year over year. We also delivered record distributable cash flow of $22.3 million, which resulted in a payout ratio of 15%. Our 2022 consolidated adjusted EBITDA is expected to range from $230 to $245 million, with deconsolidated adjusted EBITDA expected to range between $180 and $190 million. We continue on our goal of deleveraging with $673 million of outstanding consolidated net debt as at March 31, 2022, representing a 21% or $184 million reduction compared to the first quarter of 2021. Our business continues to perform well, and we are currently seeing outperformance, which we expect to continue through Q2 and throughout 2022 and into 2023. The main drivers of the outperformance being increased producer activities, increased volumes, higher margins, including crack spreads at Prince George, which are currently around $90 a barrel. This outperformance is accelerating deleveraging, which is extremely helpful, where our two immediate priorities are our notes refinancing and our FID of our Pipestone Montney sour deep cut phase 2 plant, which does include carbon capture. We continue to progress the refinancing of our senior unsecured notes payable and second lien term loan and expect to close the refinancing before June 30th, 2022. An announcement of the plan is expected to be made in the near term. We remain focused on improving our financial position and enhancing go-forward liquidity, as well as funding future profitable growth opportunities. Our credit syndicate remains incredibly supportive with the potential to grow our current credit facility with the outperformance and continued record quarters, and we wish to thank our credit syndicate for all of their support. We are proceeding with an expansion of the Pipestone Natural Gas Plant, which we'll refer to as Pipestone Phase 2, adding 100 million cubic feet a day of sour natural gas processing to the facility, with the final investment decision expected to be announced in the near term. The expansion will enlarge our footprint in the liquids-rich Montney region with our existing capacity and natural gas storage assets. The expansion will be supported by 10-year take-or-pay commitments as well as extensions on existing take-or-pay commitments of up to 10 years at the current facility. We do wish to thank our largest shareholder in Birch Hill for all their support of the Pipestone expansion. We have seen material interest from private equity, financial partners, industry peers, and infrastructure funds and continue to evaluate multiple attractive financing options for Pipestone Phase 2. We'll jump over to the Prince George Refinery for a quick update. During the first quarter of 2022, total throughput at the refinery was approximately 11,745 barrels a day, approximately 4% below the previous quarter due to extended scheduled maintenance at our main feedstock pipeline, which is operated by a third party. Those issues have now been resolved, which has been great to see. The Prince George crack spreads average more than 70 barrels a day for the first quarter of 2022, a 17% increase from the 2021 average of $60 a barrel. The increase in the Prince George crack spread is partially offset by increased regulatory compliance costs related to the BC LCFS program. The planned maintenance is scheduled for the second quarter of 2022 for our annual exchanger cleaning. This planned maintenance, in addition to the scheduled maintenance on the company's main feedstock pipeline, is expected to result in refinery throughput being similar to the first quarter's average throughput. The maintenance, we're pleased to update that the maintenance is now complete, and the refinery has been at expected throughput rates for the past three weeks, while our crack sprints are at all-time highs now, and we expect to see material outperformance at Prince George in Q2 and throughout 2022. We also continue to progress various low-capital, quick-payout, de-bottlenecking initiatives at Prince George. We'll now jump over to Pipestone. Pipestone, as most of you are aware, is strategically located within the Alberta-Montney Fairway. The Pipestone Natural Gas Plant processed volumes of 97 million cubic feet a day in the first quarter of 2022, with a 60% increase from the first quarter of 2021 and consistent with the fourth quarter of 2021. Facility availability for the first quarter of 2022 averaged 93%, an increase of 9% from the first quarter of 2021, and consistent with the fourth quarter of 2021, despite colder than normal first quarter temperatures. The Pipestone Natural Gas Plan's next scheduled turnaround is in the third quarter of 2022, which is expected to decrease third quarter throughput by approximately 20%. Given the level of upstream activity within the Montney region of Pipestone, the Pipestone Natural Gas Plants remains fully contracted with over 85% of capacity committed to take-or-pay arrangements. Pipestone continues to be one of the most active areas in Western Canada, especially given the regulatory challenges within British Columbia. We are seeing producers allocate materially more capital to the Pipestone area. Further, although the Montney is driving 80% of the activity around Pipestone, it is great to see another play in the Charlie Lake continuing to pick up activity right in our backyard. Natural gas egress is starting to become a challenge for producers and the value of our Pipestone gas storage facility continues to increase as it offers an immediate egress solution for our customers and producers and is connected to both TransCanada and Alliance. Over to Brazel River. The Braswell River Fractionation Facility maintained steady operations during the first quarter of 2022 by maintaining stable plant production and trucking volumes. The Fractionation Facility utilized isation average 87%, a 12% increase from the first quarter of 2021, and a slight decrease of 6% from the fourth quarter of 2021. The Braswell River Fractionation Facility will undergo and has now undergone, but we'll give you an update here on our planned maintenance, our turnaround. The fractionation facility continues to serve as a key asset for us and our NGO marketing business. Throughput at the BRC gas processing facility for the first quarter of 2022 decreased by 13% compared to the first quarter of 2021, a decrease of 20% compared to the fourth quarter of 2021, primarily due to third-party equipment constraints and related trends out to demand. The corporation expects these constraints to be resolved, and we have seen throughputs improve materially, especially as we wrapped up turnaround here. Management does expect a similar second quarter throughput with potential for some related constraints. Tidewater Midstream continues to look for opportunities to increase third-party throughput by working with producers to improve netbacks by increasing utilization of the BRC's facilities. We now, as of the last 48 hours or so, have completed and very proud of the team, completed our planned BRC turnaround in the last few days, and we are extremely proud of the team where we had zero safety incidents and finished ahead of schedule and under budget. So great start to our turnaround where we have multiple turnarounds, including RAM and Pipestone. But great job by the team, and thanks to everyone. Activity in the deep basin continues to increase materially and create significant opportunities for Brazzo River and Ram River and our related gas storage assets. We're seeing activity in the deep basin nearing 10-year highs and definitely very exciting for our deep basin assets, which are today somewhat underutilized. Over to our subsidiary, just a quick update on Tidewater Renewables. 69% owned subsidiary saw material outperformance in Q1 as well, which is great to see. Delivered $12.7 million of EBITDA and expects the outperformance to continue through 2022 and into 2023. 80% of Tidewater Renewable's EBITDA is backed by 10-15 year agreements. Tidewater Renewable remains confident in its 300% growth of adjusted EBITDA in 10-12 months with the Renewable Diesel Facility coming online. Again, we would like to reiterate a record quarter of adjusted EBITDA and distributable cash flow for shareholders. Further, we do expect a 13-consecutive record adjusted EBITDA quarter in Q2 and continued outperformance in 2022 and into 2023 for our shareholders. We are also confident in near-term execution of our notes refinancing and Pipestone Phase 2 FID. I do want to thank our staff, board, shareholders, credit syndicate partners and customers. for all of your support. I'll pass it over to our VP Finance, Mr. Beamer, and he'll walk you through the financial highlights of our Q1. Thanks again.