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Credit Facility Increase
Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) is pleased to announce that it has amended its existing Credit Facility (the "Amended Credit Facility") with its banking syndicate of six Canadian Financial Institutions (the "Syndicate"). The amendments provide additional stability to the Corporation's financial position.
Pursuant to the Amended Credit Facility, total availability under the Corporation's credit facility has increased from $250 million to $325 million. The Amended Credit Facility also contains an accordion feature which permits the Corporation to increase the size of its credit facility to an aggregate of $350 million from $325 million.
The Amended Credit Facility also contains adjustments to the Corporation's existing pricing grid, reducing overall borrowing costs as compared to the same leverage multiples in the previous credit agreement. Under the existing financial covenants and the amended interest rate pricing grid, the Corporation may also include up to 10% of projected annual EBITDA attributable to material projects currently under construction in its calculation of total EBITDA based on certain criteria. This will allow the Corporation more flexibility as its two major projects, Pipestone Montney Sour Gas Plant and TransAlta natural gas pipeline, are being completed. This is expected to reduce interest rates being charged based on the amended pricing grid.
The Amended Credit Facility also extended the maturity date from March 24, 2020 to August 23, 2021, which may be further extended for a period of up to one year with the consent of the Syndicate.
"We are grateful for the continued support of our lenders and the vote of confidence this represents for Tidewater and our team" said Joel Vorra, Tidewater's Chief Financial Officer. "The continued success of our midstream operations and the financial discipline we have exercised have put us in a strong financial position during the completion of our two major projects. Utilizing this financial flexibility, Tidewater will continue to pursue strategic projects, acquisitions and other opportunities."
Additional Arrangement at Pipestone Montney Plant
At the Pipestone Montney Sour Gas Plant, Tidewater entered a non-binding Memorandum of Understanding with a large oil and gas producer for firm volumes of 25 MMcf/d over a five-year term. With this additional arrangement, Tidewater is fully contracted at the Pipestone Montney Sour Gas Plant, increasing forecasted contracted EBITDA for the project by approximately 10-20%. The parties are working to conclude a definitive agreement with respect to this arrangement early in the fourth quarter of 2018.
The Pipestone Montney Sour Gas Plant remains subject to regulatory approval.
The Corporation's Business
Tidewater is traded on the TSX under the symbol "TWM". Tidewater's business objective is to build a diversified midstream and infrastructure company in the North American natural gas and natural gas liquids ("NGL") space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater plans to achieve its business objective by providing customers with a full service, vertically integrated value chain through the acquisition and development of oil and gas infrastructure including: gas plants, pipelines, railcars, trucks, export terminals and storage facilities.
Advisory Regarding Forward-Looking Statements
In the interest of providing Tidewater's shareholders and potential investors with information regarding Tidewater, including management's assessment of Tidewater's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward- looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.
Specifically, this news release contains forward-looking statements relating to but not limited to: expectations regarding regulatory approval of Tidewater's planned capital projects; planned commissioning in 2019 of Tidewater's planned Pipestone Montney Sour Gas Plant and TransAlta natural gas pipeline; management's expectation to execute a definitive agreement related to committed volumes at the Pipestone Montney Sour Gas Plant to formalize an executed Memorandum of Understanding; expectations of financial flexibility resulting from adjustments to the Corporation's existing pricing grid under its amended credit facility; expectations regarding funding of capital projects and projected in service dates; and, projections with respect to increasing EBITDA from the Pipestone Montney Sour Gas Plant resulting from a new take-or-pay commitment.
Such forward-looking statements of information are based on a number of assumptions which may prove to be incorrect. In addition to other assumptions identified in this document, assumptions have been made regarding, among other things: general economic and industry trends; oil and gas industry expectation and development activity levels; future natural gas, crude oil and NGL prices; receipt of regulatory approvals for the Corporation's proposed capital projects; that definitive agreements will be executed with counterparties that contain terms and conditions consistent with executed letters of intent, term sheets and memorandums of understanding; the Corporation's future debt levels and the ability of the Corporation to repay its debt when due; the Corporation's ability to execute on its business plan; and anticipated timelines and budgets being met in respect of the Corporation's projects and operations.
Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to: general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates and stock market volatility; a failure to conclude definitive agreements with counterparties that contain terms and conditions consistent with executed letters of intent and term sheets; activities of producers and customers; changes to the regulatory environment and decisions and First Nations and landowner consultation requirements; operational matters, including potential hazards inherent in the Corporation's operations and the effectiveness of health, safety, environmental and integrity programs; fluctuations in commodity prices, inventory levels and supply/demand trends; actions by governmental authorities, including changes in government regulation including environmental, tariffs and taxation; changes in operating and capital costs, including fluctuations in input costs; competition for, among other things, business, capital, acquisition opportunities, requests for proposals, materials, equipment, labour and skilled personnel; environmental risks and hazards, including risks inherent in the transportation of NGLs which may create liabilities to the Corporation in excess of the Corporation's insurance coverage, if any; non-performance or default by counterparties to agreements which the Corporation or one or more of its subsidiaries has entered into in respect of its business; construction and engineering variables associated with capital projects, including the availability of contractors, engineering and construction services, accuracy of estimates and schedules, and the performance of contractors; the availability of capital on acceptable terms; changes in the credit-worthiness of counterparties; effects of weather conditions; reliance on key personnel; technology and security risks; potential losses which would stem from any disruptions in production, including work stoppages or other labour difficulties; technical and processing problems; changes in gas composition; and failure to realize the anticipated benefits of recently completed acquisitions.
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 Annual Information Form and in other documents on file with the Canadian Securities regulatory authorities.
The above summary of assumptions and risks related to forward-looking statements in this news release is intended to provide shareholders and potential investors with a more complete perspective on Tidewater's current and future operations and such information may not be appropriate for other purposes. There is no representation by Tidewater that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and 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, except as may be required by applicable securities law.
Non-GAAP Financial Measures
This press release refers to "EBITDA" which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada("GAAP"). EBITDA is calculated as income or loss before interest, taxes, depreciation and amortization.
Tidewater Management believes that EBITDA provides useful information to investors as it provides an indication of results generated from the Corporation's operating activities prior to financing, taxation and non-recurring/non-cash impairment charges occurring outside the normal course of business. Investors should be cautioned that EBITDA should not be construed as an alternative to earnings, cash flow from 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.
For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP and Additional Measures" section of Tidewater's most recent MD&A which is available on SEDAR.
For further information: Tidewater Midstream & Infrastructure Ltd., Joel MacLeod, Chairman, President and CEO, 587.475.0210, firstname.lastname@example.org
CO: Tidewater Midstream and Infrastructure Ltd.
CNW 07:00e 11-SEP-18