Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) has filed its consolidated interim financial statements and Management Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2025.

Second Quarter 2025 Highlights

Subsequent Events

CEO Quote:

The first half of 2025 has proven a difficult start to the year. We are encouraged by the quarter over quarter improvements in operating results, however our business continues to be impacted by lower refined product margins and producer shut-ins affecting our midstream operations. To this end, we continue to focus on increasing our liquidity and are making good progress on our non-core asset sale program. Year-to-date, we have announced or completed over $37 million of non-core asset sales and during the second quarter we repaid approximately $20.0 million on our Senior Credit Facilities, increasing our available liquidity. We will continue to update the market as we progress with additional dispositions. During the second quarter of 2025, Tidewater announced that it had entered into an agreement to acquire the Western Pipeline. I am proud of all the work our team has done preparing to integrate the Western Pipeline within our downstream operations in anticipation of closing the Western Pipeline Transaction during the third quarter. As previously mentioned, the acquisition of the Western Pipeline is expected to provide meaningful cost reductions that will further enhance Tidewater's ability to optimize its feedstock procurement and capital programs through fully integrating the pipeline's operations and integrity programs within our broader downstream operations and capital programs. Looking to the second half of the year, we continue to focus on improving product margins at our downstream business and increasing throughput at our midstream facilities while managing costs across our operations. â?? Stated Jeremy Baines, CEO.

CONSOLIDATED AND DECONSOLIDATED FINANCIAL HIGHLIGHTS

 

 

CAPITAL EXPENDITURES

Maintenance capital expenditures of $4.7 million and $6.3 million for the three and six months ended June 30, 2025, were largely related maintenance work at the Brazeau River Complex and Fractionation Facility (the "BRC") and pre-turnaround work at the renewable diesel and renewable hydrogen complex (the "HDRD Complex") in preparation for the third quarter scheduled maintenance.

Tidewater's consolidated full-year 2025 capital program is focused on maintaining safe and reliable operations and is expected to range between $15 million - $20 million, exclusive of maintenance capital in relation to the Western Pipeline, consistent with previous guidance.

DOWNSTREAM

PGR

During the second quarter of 2025, throughput at the PGR was 9,942 bbl/day, consistent with 9,936 bbl/d during the first quarter of 2025, and 17% lower than the second quarter of 2024. The second quarter of 2025 had lower throughput compared to the second quarter of 2024 largely due to operational and feedstock-composition adjustments that were required to process higher-density feedstock. Throughput is expected to return to normal levels following the completion of the semi-annual heat exchanger cleaning that is scheduled for the fourth quarter.

The Prince George crack spread averaged $85/bbl during the second quarter of 2025, a 2% increase from the first quarter of 2025 and a 6% increase from the second quarter of 2024. The increase in crack spread in both periods was primarily due to lower feedstock costs partially offset by lower gasoline and diesel pricing.

As previously disclosed, Tidewater's offtake agreement with Cenovus Energy Inc. (the "Offtake Agreement") expired on November 1, 2024, following which Tidewater began marketing diesel and gasoline volumes from the PGR directly to its customers. Current wholesale discounts are wider than those at the time the Offtake Agreement was entered into, largely stemming from the oversupply of diesel in Western Canada as well as North American supply and demand fundamentals. Tidewater is working to optimize its netbacks on its diesel and gasoline. While Tidewater is focused on Western Canadian markets, in the event the Corporation is unable to place all its products in Western Canada, it may be required to export the balance to potentially lower margin markets.

PGR Historical Performance:

HDRD Complex

For the three months ended June 30, 2025, the HDRD Complex achieved an average utilization rate of 2,164 bbl/d, or 72% of design capacity. This compares to 2,925 bbl/d, or 98% of design capacity, during the same period in the prior year.

Utilization during the second quarter of 2025 remained relatively consistent with the first quarter of 2025. The decrease compared to the same periods in 2024 was primarily attributable to a minor fire incident on April 1, 2025, at the main renewable diesel process unit within the HDRD Complex. The fire was promptly contained, with the affected area safely isolated and stabilized. As a result, operations at the HDRD Complex were temporarily suspended, but successfully resumed on April 14, 2025. Following the restart, utilization rates steadily improved, supported by disciplined ramp-up procedures and robust operational oversight.

Tidewater Renewables continues to expect the HDRD Complex to achieve an average throughput of between 2,200 to 2,400 bbl/d for the full year 2025, inclusive of the planned turnaround activity during the third quarter of 2025, supported by ongoing operational optimizations and improving market conditions.

On May 5, 2025, Tidewater Renewables was advised that the Canadian International Trade Tribunal (the "Tribunal") had issued a decision to terminate its preliminary injury inquiry related to Tidewater Renewables' countervailing (anti-subsidy) and anti-dumping duty complaint concerning imports of renewable diesel from the U.S. which was filed by Tidewater Renewables with the Canada Border Services Agency ("CBSA") on December 30, 2024 (the "Complaint"). This decision ends the investigation initiated by the CBSA on March 6, 2025, which originated from the Complaint. The Tribunal subsequently released reasons for its decision on May 23, 2025. The Corporation has reviewed the Tribunal's reasons for its decision and is currently evaluating its available options and legal remedies.

MIDSTREAM

Midstream Gas Plant Volumes

Brazeau River Complex and Fractionation Facility

The BRC gas processing facility had throughput of 95 MMcf/day in the second quarter of 2025, relatively consistent with 94 MMcf/day during the first quarter of 2025, and 5 MMcf/day higher than the second quarter of 2024. As previously disclosed, Plant 3 of the BRC facility ("Plant 3") was temporarily shut down for maintenance and repairs. The repair work was completed during the second quarter of 2025 and Plant 3 was restarted as expected in late June. As a result of the maintenance, straddle volumes coming through the facility were lower during this period. During the second quarter of 2024, a scheduled three-week turnaround at the BRC was completed and gas processing and liquids fractionation activities were limited during this maintenance period and resulted in lower volumes coming through the facility.

The BRC fractionation facility utilization averaged 85% in the second quarter of 2025, compared to 82% in the first quarter of 2025 and 68% in the second quarter of 2024. Utilization was higher in the second quarter of 2025 compared to the first quarter of 2025 primarily due to higher trucked in volumes. The lower fractionation facility utilization during the second quarter of 2024 was due to the scheduled turnaround discussed above. Utilization of the BRC fractionation facility may vary as it is dependent on a combination of natural gas processing rates and associated NGL recoveries, in addition to truck-in supply volumes.

Margins on gas storage activities at the BRC during the second quarter of 2025 were higher compared to both the first quarter of 2025 and the second quarter of 2024. Near-term natural gas pricing weakness led to strong spread capture during the current quarter through additional park and loan transactions.

Ram River Gas Plant

On January 7, 2025, management made the decision to temporarily lay-up the Ram River Gas Plant, including sulfur handling activities, in order to manage ongoing operating costs and to allow for gas prices to recover and gas flow from producers to resume. Management's intent is to restart the facility when commodity prices strengthen and gas flow from producers restarts. Natural gas prices are forecasted to recover in late 2025 from the lows in 2024, and gas processing operations are expected to resume when producer activity restarts. Sulfur handling activities resumed at the end of March.

SECOND QUARTER 2025 EARNINGS CALL

In conjunction with the earnings release, the Corporation and Tidewater Renewables Ltd. will hold a joint conference call to review both companies second quarter 2025 results on Thursday, August 14, 2025 at 10:00 am MDT (12:00 pm EDT).

To access the conference call by telephone, dial 1-437-900-0527 (local / international participant dial in) or 1-888-510-2154 (North American toll-free participant dial in). A question and answer session for analysts will follow the management's presentation.

A live audio webcast of the conference call will be available by following this link: https://app.webinar.net/jJOA5b0xdzY 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 join the Tidewater Midstream and Infrastructure Ltd. earnings call.

ABOUT TIDEWATER MIDSTREAM

Tidewater is traded on the TSX under the symbol "TWM". Tidewater's business objective is to build a diversified midstream and infrastructure company across the North American gas processing, natural gas liquids ("NGL"), petroleum refining, and renewables markets. The Corporation's strategy is to profitably grow and create shareholder value by acquiring and building high quality, strategically located infrastructure. To achieve its business objective, Tidewater is focused on providing customers with a full service, vertically integrated value chain through the acquisition and development of energy infrastructure, including downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, storage, and various renewable initiatives. To complement its infrastructure asset base, the Corporation also markets crude oil, refined products, natural gas, NGLs and renewable products and services to customers across North America.

Tidewater's key midstream assets include: the BRC, a full-service natural gas and NGL processing facility with natural gas storage pools, and the Ram River Gas Plant, a sour natural gas processing facility with sulfur handling solutions and rail connections.

Tidewater's downstream assets supply refined products to a niche market and provide an asset base for renewables initiatives. The key downstream assets include the PGR, the sole light oil refinery within the interior British Columbia market and the HDRD Complex owned by Tidewater Renewables Ltd. The PGR refines crude oil feedstock into gasoline and diesel and is where the Corporation's co-processing activities take place. The HDRD Complex is also located in Prince George, adjacent to the PGR. Tidewater is a majority shareholder in Tidewater Renewables Ltd., a multi-faceted energy transition company focusing on the production of low carbon fuels. Tidewater Renewables' common shares are publicly traded on the TSX under the symbol "LCFS".

NON-GAAP MEASURES

Throughout this news release and in other materials disclosed by the Corporation, Tidewater uses a number of non-GAAP financial measures, non-GAAP financial ratios, capital management measures, and supplemental financial measures when assessing its results and measuring overall performance. The intent of these non-GAAP measures and ratios is to provide additional useful information to investors and analysts. Certain of these financial measures and ratios do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures and ratios presented by other entities. As such, these non-GAAP measures and ratios should not be considered in isolation or used as a substitute for measures and ratios of performance prepared in accordance with GAAP. Except as otherwise indicated, these financial measures will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. The following are the Corporation's non-GAAP financial measures, non-GAAP ratios, capital management measures, and supplementary financial measures.

Non-GAAP Financial Measures

Consolidated and deconsolidated adjusted EBITDA

Consolidated adjusted EBITDA is calculated as net (loss) income before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, gains and losses on the sale of assets, and other items considered non-recurring in nature, plus the Corporation's proportionate share of EBITDA in its equity investments. Deconsolidated adjusted EBITDA is calculated as consolidated adjusted EBITDA less the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables.

In accordance with IFRS, Tidewater's jointly controlled investments are accounted for using equity accounting. Under equity accounting, net earnings from investments in equity accounted investees are recognized in a single line item in the consolidated statement of net (loss) income and comprehensive (loss) income. The adjustments made to net (loss) income, as described above, are also made to share of profit from investments in equity accounted investees.

Consolidated adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. In addition to its use by management, Tidewater also believes consolidated adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions, and others to evaluate the financial performance of the Corporation and other companies in the midstream industry. From time to time, the Corporation issues guidance on this key measure. As a result, consolidated adjusted EBITDA is presented as a relevant measure in this news release and the MD&A to assist analysts and readers in assessing the performance of the Corporation as seen from management's perspective. In addition to reviewing consolidated adjusted EBITDA, management reviews deconsolidated adjusted EBITDA to highlight the Corporation's performance, excluding the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables. Investors should be cautioned that consolidated adjusted EBITDA and deconsolidated adjusted EBITDA should not be construed as alternatives to net (loss) income, net cash provided by 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.

The following table reconciles net loss, the nearest GAAP measure, to adjusted EBITDA:

Distributable cash flow and deconsolidated distributable cash flow attributable to shareholders

Distributable cash flow is calculated as net cash provided by (used in) operating activities before changes in non-cash working capital, plus cash distributions from investments, transaction costs, non-recurring transactions, and less other expenditures that use cash from operations. Also deducted is the distributable cash flow of Tidewater Renewables that is attributed to non-controlling interest shareholders. Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations.

Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short-term debt or cash flows from operating activities. Transaction costs are added back as they can vary significantly based on the Corporation's acquisition and disposition activity. Non-recurring transactions that do not reflect Tidewater's ongoing operations are also excluded. Lease payments, interest and financing charges, and maintenance capital expenditures, including turnarounds, are deducted as they are ongoing recurring expenditures which are funded from operating cash flows.

Deconsolidated distributable cash flow is calculated by subtracting the portion of Tidewater Renewables' distributable cash flow that is attributed to shareholders of Tidewater from distributable cash flow attributable to shareholders.

The following table reconciles net cash provided by (used in) operating activities, the nearest GAAP measure, to distributable cash flow and deconsolidated distributable cash flow:

Non-GAAP Financial Ratios

Tidewater uses non-GAAP financial ratios to present aspects of its financial performance or financial position, primarily distributable cash flow per share.

Distributable cash flow and deconsolidated distributable cash flow per share

Distributable cash flow per share is calculated as distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Deconsolidated distributable cash flow per share is calculated as deconsolidated distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Management believes that these measures provide investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.

Capital Management Measures

Consolidated and deconsolidated net debt

Consolidated net debt is defined as bank debt, second lien debt, and convertible debentures, less cash. Consolidated net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength.

In addition to reviewing consolidated net debt, management reviews deconsolidated net debt to highlight Tidewater's financial flexibility, balance sheet strength and leverage. Deconsolidated net debt is calculated as consolidated net debt less the portion attributable to Tidewater Renewables.

Consolidated and deconsolidated net debt exclude working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on deconsolidated net debt to deconsolidated adjusted EBITDA, consistent with its credit facility covenants as described in the LIQUIDITY AND CAPITAL RESOURCES section of the Corporation's MD&A.

The following table reconciles consolidated and deconsolidated net debt:

Supplementary Financial Measures

"Growth capital" expenditures are generally defined as expenditures which are recoverable or incrementally increase cash flow or earnings potential of assets, expand the capacity of current operations or significantly extend the life of existing assets. This measure is used by the investment community to assess the extent of discretionary capital spending.

"Maintenance capital" expenditures are generally defined as expenditures which support and/or maintain the current capacity, cash flow or earnings potential of existing assets without the associated benefits characteristic of growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure is used by the investment community to assess the extent of non-discretionary capital spending. Maintenance capital is included in the calculation of distributable cash flow.

Deconsolidated "net (loss) income attributable to shareholders" is comprised of net income or loss attributable to shareholders, as determined in accordance with IFRS, less the net income or loss of Tidewater Renewables attributed to the shareholders of Tidewater.

Deconsolidated "net (loss) income attributable to shareholders â?? per share" is calculated by dividing deconsolidated "net income or loss attributable to shareholders" by the basic weighted average number of Tidewater common shares outstanding for the period.

Deconsolidated "Total capital expenditures" is comprised of consolidated capital expenditures, as disclosed in Tidewater's statement of cash flows, less the capital expenditures of Tidewater Renewables.

Operational Definitions

"bbl/d" means barrels per day;

"MMcf/d" means million cubic feet per day.

"BC LCFS Credits" are tradable certificates awarded to fuel producers, importers, or users who produce or use fuels with a carbon intensity lower than the required standard set by the British Columbia government. These credits are earned when the carbon emissions of fuel are below the established threshold, and they can be bought and sold in a market to help companies meet their regulatory obligations. The purpose of these credits is to incentivize the use of cleaner, low-carbon fuels and to help reduce the overall greenhouse gas emissions in the transportation sector.

"CFR Emission Credits" means credits generated under the Canadian Clean Fuel Regulation.

"crack spread" refers to the general price differential between crude oil and the petroleum products refined from it.

"refinery yield" (expressed as a percentage) represents the percentage of finished product produced from inputs of crude oil and renewable feedstock as well as intermediates. Refinery yields are an important measure of refinery performance indicating the outputs that running a particular feedstock and intermediates through a refinery configuration will produce.

"throughput" with respect to a natural gas plant, means inlet volumes processed (including any off-load or reprocessed volumes); with respect to a pipeline, the estimated natural gas or liquid volume transported therein; and with respect to NGL processing facilities, means the volume of inlet NGLs processed.

"U.S." meaning the United States of America, its territories and possessions, any state of the United States and the District of Columbia

Advisory Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of Tidewater based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon.

In particular, this news release contains forward-looking statements pertaining to but not limited to the following:

Although the forward-looking statements contained in this news release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this news release, the Corporation has assumptions regarding, but not limited to:

The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to:

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 AIF and in other documents on file with the Canadian securities regulatory authorities. Additionally, the Corporation faces certain risks as the majority shareholder of Tidewater Renewables including, without limitation, liquidity risk, commodity price risk (including in respect of the markets for BC LCFS Credits, CFR Emission Credits and other carbon credits, rebates, tax credits, grants and other incentives), equity risk, credit risk and risks related to changes in environmental regulations, economic, political or market conditions and the regulatory environment.

Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation's current and future operations and such information may not be appropriate for other purposes.

The Corporation's actual results performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any off them do occur, what benefits the Corporation will derive therefrom. Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this news release. 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, other than as required by applicable securities law. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Further information about factors affecting forward-looking statements and management's assumptions and analysis thereof is available in filings made by the Corporation with Canadian provincial securities commissions available on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at www.sedarplus.ca.  

The financial outlook information contained in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Additionally, the financial outlook information contained in this news release is subject to the risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this news release. Accordingly, readers are cautioned that the financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein. The financial outlook information contained in this news release was approved by management as of the date hereof and was provided for the purpose of providing further information about Tidewater's current expectations and plans for the future. 

SOURCE Tidewater Midstream and Infrastructure Ltd.

SOURCE: Tidewater Midstream and Infrastructure Ltd.

For further information please contact: Michael Gracher, Manager, Investor Relations,
Tidewater Midstream & Infrastructure Ltd., mgracher@tidewatermidstream.com

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