Tidewater Midstream and Infrastructure Ltd.

Good afternoon, ladies and gentlemen, and welcome to the Tidewater Midstream and Infrastructure Limited Q1 2025 Financial Results Conference Call. At this time, all lines are in 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 star zero for the operator. This call is being recorded on Thursday, May 8, 2025. Now, I would like to turn the call over to your first speaker today, Michael Gracher. Please go ahead, sir.

Thank you, John, and welcome everyone to Tidewater Mainstream's First Order 2025 Results Conference Call. I'm Michael Gracher, Manager, 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 Shagnini, EVP Finance Strategy, and Ian Portley, VP Finance. Before we begin, please note that matters discussed on the call include forward-looking statements under applicable securities laws with respect to Tidewater Midstream and infrastructures, 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 lever production, refinancing of the company's indebtedness, and 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 that they were made and information currently available. 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 learn more about these forward-looking statements and non-GAAP measures, please see Tidewater-Minstream'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 quarter.

Thanks, Michael. Thanks to everyone for joining us today. Q1 was a difficult quarter as a result of wider discounts on refined products and producer shut-ins affecting our midstream operations. We remain very focused on improving our cash flow and operating results. At this end, a few days ago, we announced an agreement to purchase the north segment of Pembina's western pipeline. The western pipeline is a 377-kilometer crude oil pipeline originating in Taylor, British Columbia and terminating at our Prince George refinery. The western pipeline is the key transportation conduit tying the Prince George refinery into the northeastern British Columbia crude supply region. As part of the transaction, Tidewater and Pembina will enter into an interconnection agreement upon closing, which will allow Tidewater to continue to access existing crude sources at the terminal located in Taylor, British Columbia for the next 25 years. This is expected to provide PGR with a reliable and lower cost source of feedstock compared to historical operations. At PGR, throughput averaged 9,936 barrels per day, which was 9% lower than Q4 2024 and 20% lower than the first quarter of 2024. The decrease for both periods was largely due to third-party facility and pipeline maintenance that decreased the volume of crude feedstock coming into the facility, as well as inventory management. Throughput is expected to return to normal levels over the course of the year. HDRD had an average throughput of approximately 2,239 barrels per day compared to 2,116 barrels per day during the same period in the prior year, and 2,677 barrels per day during the fourth quarter of 2024. While utilization was relatively consistent with the first quarter of 2024, the decrease from the fourth quarter of 2024 reflects excess supply of refined products in Western Canadian market, somewhat muted demand and inclement weather affecting rail logistics. As previously noted, during the fourth quarter, the five-year offtake agreement with Synovus, which provided the sale of the majority of refined product volumes for PGR, expired, and the company has now transitioned to marketing all refined products produced at both the HDRD and PGR facilities in-house. Whilst Tidewater has made significant progress in marketing its diesel and gasoline volumes, Current market discounts are significantly wider than those at the time the Synovus offtake agreement was entered into, largely stemming from the oversupply of diesel in Western Canada. We have taken steps to improve our cost structure, including the recently announced acquisition of the Western Pipeline, and we are focused on improving our utilization. We also expect that the BC government's changes to the Low Carbon Fuels Act will continue to provide, over time, improved refined product margins for our Tidewater Renewables sub-HDRD facility. On May 5th, 2025, the Canadian International Trade Tribunal issued a decision to terminate its preliminary injury inquiry in respect of Tidewater Renewables countervailing anti-subsidy and anti-dumping duty complaint relating to imports of renewable diesel from the United States. While we are disappointed with the tribunal's decision, Tidewater Renewables remains committed to free and fair trade in Canada's renewable diesel market. Our view remains that the facts support a finding that unfair trade practices by the United States have caused the flood of subsidized and dumped renewable diesel into Canada. This flood of imports has significantly injured Tidewater, currently the sole Western Canadian producer of renewable diesel. Tidewater Renewables is carefully reviewing its options in respect of the Tribunal's decision with the support of its External Trade Law Council. Upon receipt of the Tribunal's reasons expected on May 23rd, the corporation will assess all available options and legal remedies, including but not limited to promptly filing an amended or new complaint to CBSA. In spite of this hopefully temporary setback to our trade case, we have seen significant improvement as a result of Canadian renewable blend requirements as part of the new BCLCFS regulations, along with California LCFS and D4 RIN prices, increasing the import parity price of U.S. renewable diesel available into the British Columbia market. This has seen a significant increase in our margins at our facility, and we expect this to hold for the rest of the year. On the midstream side of the business, the Brazil River Complex operated exceedingly well. The BRC gas processing facility had throughput of 94 million cubic feet a day in the first quarter of 2025, 38 million cubic feet a day lower than the fourth quarter of 2024, and 40 million cubic feet per day lower than the first quarter of 2024. The lower throughput was primarily due to lower straddle volumes coming through the facility as a function of an outage at Plant 3 of the facility and the discontinuation of our sour gas processing after the second quarter of 2024. We are seeing increasingly positive demand for processing capacity in the area and hope to be able to make some announcements later in the year on that front. As we discussed at year end, gas processing activities at the Ram River gas plant have been temporarily curtailed with sulfur handling activities continuing to be operational. We continue to focus on controlling costs at the facility with the intent to restart the facility as ACO pricing improves and produce restart operations. We also continue to remain focused on our liquidity, and we've made great progress on non-core asset sales and deleveraging. On March 25, 2025, we announced that the company completed the previously announced sale of the BRC Roadway Network for total proceeds of $24 million, of which $22.5 million was received and used to repay outstanding debt. We also continue to advance our non-core asset sales programs and will update the market as progress is made. Before I turn the call over to Aaron to go through our financial results, I wanted to let you know that effective May 18, 2025, Aaron will be stepping down as interim CFO due to personal circumstances. On behalf of myself, the Board of Directors, and Tidewater, we would like to give a great big thank you to Aaron for his dedication and hard work helping the corporation progress its strategy during his tenure. The Board of Directors will be conducting a comprehensive search to identify and evaluate internal and external candidates for the role of Chief Financial Officer. With Aaron's departure in Court League, currently Tidewater Renewal's Chief Financial Officer and Tidewater's Vice President of Finance will be appointed Interim Chief Financial Officer effective May 18, 2025. Aaron will remain with the corporation and serve as Special Advisor to the CEO to ensure a smooth transition of responsibilities until June 13, 2025. Ian will also continue to serve as Tidewater Renewables Chief Financial Officer, an office he has held since May of 2024. We'll now turn the call over to Aaron to go through our financial results.