TIDEWATER MIDSTREAM AND INFRASTRUCTURE LTD. ANNOUNCES FOURTH QUARTER 2023 RESULTS, OPERATIONAL UPDATE AND JOINT DEVELOPMENT AGREEMENT FOR SUSTAINABLE AVIATION FUEL

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(TSX:TWM)

CALGARY, AB, March 14, 2024 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) has filed its consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the period ended December 31, 2023.

Tidewater Midstream and Infrastructure Ltd. logo (CNW Group/Tidewater Midstream and Infrastructure Ltd.)
Tidewater Midstream and Infrastructure Ltd. logo (CNW Group/Tidewater Midstream and Infrastructure Ltd.)

FOURTH-QUARTER AND YEAR-END 2023 HIGHLIGHTS

  • On December 22, 2023, Tidewater closed the sale of its Pipestone natural gas plant ("Pipestone Phase I"), Pipestone expansion project ("Pipestone Phase II", collectively "Pipestone"), Dimsdale natural gas storage facility ("Dimsdale") and associated gathering and other infrastructure, to AltaGas Ltd. ("AltaGas") for $665 million (the "Transaction") before closing adjustments. As consideration for the Transaction, Tidewater received $328.3 million in cash and 12,466,437 AltaGas common shares. Cash proceeds from the Transaction were used to settle credit facility debt of approximately $275 million and working capital of approximately $53.3 million.

  • On January 9, 2024, Tidewater monetized its AltaGas shares for net proceeds of $341.6 million. The share proceeds were used to further reduce credit facility debt by $293 million and working capital of $48.6 million.

  • In 2023, Tidewater Renewables Ltd. ("Tidewater Renewables") completed a feasibility assessment for an expansion of its renewable fuel facilities. In the first quarter of 2024 Tidewater Renewables and Tidewater entered into a joint development agreement related to a new 6,500 bbl/day renewable diesel and sustainable aviation fuel ("SAF") project in British Columbia, whereby both parties have the right to participate in up to 50% of the project upon a final investment decision. Front-end engineering design work on the SAF facility has begun, with the cost to be covered through government support in the form of capital emissions credits.

  • In the fourth quarter of 2023, Tidewater Renewables achieved a transformational milestone with the Renewable Diesel and Renewable Hydrogen ("HDRD Complex") commencing commercial operations in November 2023. Commercial operations progressed during the first quarter of 2024 and the facility has been operating at its design capacity since late February 2024. Tidewater expects the HDRD Complex to achieve a utilization rate of approximately 65% in the first quarter of 2024 and to continue to operate reliably at design capacity going forward.

  • Tidewater Renewables has secured purchasers for the HDRD Complex's operating emission credit production through the second quarter of 2024.

  • Consolidated net loss attributable to shareholders was $331.8 million during the fourth quarter of 2023, compared to a net loss attributable to shareholders of $30.0 million during the 2022 comparative period. Full year consolidated net loss attributable to shareholders was $385.9 compared to net income attributable to shareholders of $8.5 million during the full year in 2022. The higher losses reported in 2023 are primarily a result of higher unrealized losses on derivative contracts, non-cash impairment charges taken during the fourth quarter of 2023 and the second quarter 2023 turnaround at the Prince George Refinery ("PGR") impacting full year results.

  • Fourth quarter 2023 consolidated adjusted EBITDA(1) was $21.4 million for the quarter, compared to $60.4 million during the fourth quarter of 2022. Full year 2023 consolidated adjusted EBITDA(1) was $162.9 million, compared to $249.8 million during 2022. The  quarter over quarter  decrease was primarily due to lower refining margins and reduced diesel demand related to warmer weather in the fourth quarter of 2023, realized losses on derivative contracts, as well as a maintenance outage at Pipestone during the quarter, with full year 2023 results also impacted by the PGR turnaround during the second quarter of 2023.

  • Subsequent to the Transaction close, the Corporation took a non-cash impairment charge of approximately $418 million on its midstream assets.