Tidewater Midstream and Infrastructure Ltd.

Good afternoon, ladies and gentlemen, and welcome to the Tidewater Midstream and Infrastructure LTD Q3 2024 Financial Results Conference Call. At this time, all lines are in a listen-only 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 the star 0 for the operator. This call is being recorded on Thursday, November 14, 2024. I would now like to turn the conference over to Michael Grasher, Manager of Investor Relations. Please go ahead.

Thank you, operator, and welcome everyone to Tidewater Midstream's third quarter 2024 results conference call. I'm Michael Grasher, Manager of Investor Relations, and joining me today are Jeremy Baines, CEO, and Aaron Ames, Tidewater Midstream's interim CFO. Also with us and available during the question and answer session is Sean Heaney, EVP, Planning and Strategy. Before we begin, please note that matters discussed on this call include forward-looking statements under applicable securities laws with respect to Tidewater Midstream and infrastructure LPD, including but not limited to statements regarding investments and acquisitions by the company, commercial arrangements of the company, the business strategies and operational activities of the company, the markets and industries in which the company operates, cost and expense management, the company's leverage and plans for debt and leverage reduction, financing of the company's indebtedness, the value of the company's assets, and the future growth objectives, targets, and financial and operating performance of the company and its businesses. Such statements are based on factors and assumptions that management believes are reasonable at the time they were made and information currently available. Forward-looking statements we may express or imply today are subject to risk and certainties, which can cause the actual results to differ from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see Tidewater Midstream's financial reports, which are available at www.tidewatermidstream.com and on CDAR. And with that, I will now pass the call over to Jeremy to go over the highlights of the quarter.

Thanks, Michael, and thanks to everyone for joining us today. I would like to start the call with an operational update for our downstream division, followed by an update on the transaction we completed during Q3 between Tidewater Midstream and Tidewater Renewables. And I will conclude with a midstream update and my plans for the business. From an operational perspective, our Prince George Refinery and HDRD facilities continue to operate very well. At PGR, we average throughput of 11,664 barrels per day, which was 9% lower than the prior year, primarily due to a third-party outage during the quarter, which decreased volume of crude feedstock entering the facility. At HDRD, we averaged throughput of 2,849 barrels per day during the quarter, which was consistent with the previous quarter. During the third quarter, crack spreads averaged approximately $84 per barrel, which was lower than in the third quarter of 2023, which averaged $87 per barrel. So far, the start of Q4 has seen crack spreads averaging in the $75 to $80 per barrel range. In November, our contracted offtake agreement with Synovus ended and we have successfully transitioned to marketing our refined products in-house. Tidewater has entered into agreements with purchasers in respect of the sale of the vast majority of its diesel and gasoline volumes produced at the PGR and HDRD for the remainder of 2024 and is in the process of marketing its diesel and gasoline volumes for 2025. Current market discounts are wider than those at the time the Synovus offtake agreement was entered into, largely stemming from the oversupply of imported diesel in Western Canada. These wider discounts are expected to yield lower margins until the government addresses the unfair trade environment. We continue to engage in discussions with the government of British Columbia and the federal government to encourage them to implement changes that level the playing field with renewable and biodiesel producers in the U.S., who continue to take advantage of subsidies in both the US and Canada and are flooding the Canadian market with renewable diesel. This is impacting not only the BCLCFS credit prices, but also putting pressure on fuel prices. Tidewater Renewables has also engaged the External Trade Law Council for the purposes of advising on and preparing a trade remedy complaint against renewable diesel imports from the US that management believes are unfairly priced and having a significant negative impact on the competitiveness of our domestic operations. Based on available information and advice, management believes that a trade case against renewable diesel imports from the US has a reasonably high likelihood of success. Filing of a complaint may occur before the close of 2024, and if a government investigation initiates and concludes that unfairly traded imports are harming Canadian production, duty relief would then be available in 2025. I will now provide an update on the related party transaction we completed during the third quarter between Tidewater Midstream and Tidewater Renewables. As a reminder, during the first and second quarters of 2024, Tidewater Renewables forward sold BC LCFS credits at an average price of approximately $450 per credit to various counterparties. As we exited the second quarter, it became apparent that subsidized U.S. product was going to have an impact on Canadian low-carbon fuel credit prices. The BC credit market is proving to be an attractive outlet for U.S. producers of renewable fuel who are able to take advantage of U.S. subsidies and earn Canadian compliance credits. The importation of substantial volumes of subsidized U.S. renewable diesel into BC has significantly reduced the demand by BC LCFS obligated parties for compliance credits. The result has been that Tidewater Renewables was unable to economically contract BC LCFS credit sales for the third quarter of 2024. The inability to generate any credit-based revenue would have had significant negative implications for Tidewater Renewables' underlying business and liquidity. To remedy the liquidity issue at Tidewater Renewables, Tidewater Ministry acquired various assets from Tidewater Renewables. In addition, Tidewater Midstream and Tidewater Renewables entered into an agreement for the purchase and sale of credits under which Tidewater Midstream agreed to purchase BCLCFS credits from Tidewater Renewables. Tidewater Renewables used the proceeds of these transactions to repay its first lien debt and established a contracted purchaser for the BCLCFS commission credits it produces. On the midstream side of the business, the Brezzo River Complex operated very well following the Q2 turnaround. As a result of lower producer volumes due to lower AECO natural gas pricing, the facility averaged 124 million cubic feet a day compared to 154 million cubic feet per day in the same period last year. This was partially offset by higher throughput at our straddle plant. Our Ram River gas processing facility averaged throughput of 31 million cubic feet per day in the third quarter of 2024 compared to 110 million cubic feet per day in the third quarter of 2023. Gas processing activities at the Ram River gas plant has been temporarily curtailed due to producers shutting in their volumes as a result of depressed natural gas prices. Natural gas prices are expected to recover during 2025 and gas processing operations are expected to resume as producer activity restarts. Sulfur handling activities continue to be operational. Overall, as a result of these short-term headwinds, we will stay laser focused on safe, efficient, and reliable operations while maintaining liquidity and protecting the balance sheet by reducing costs and capital spending. Longer term, I am bullish on the output for natural gas. Natural gas will be critical in the transition to lower carbon energy generation and to meet the energy demands of the world, especially in our data-intensive future. I will now turn the call over to Aaron to go through the financial results and our revised outlook.