Q4 2025 Tidewater Renewables Ltd Earnings Call

March 26, 2026

Speaker #2: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press *0 for the operator.

Speaker #2: This call is being recorded on a March 26, 2026. I would now like to turn the conference over to Ian Courtley. Please go ahead.

Operator: I would now like to turn the conference over to Ian Quartly. Please go ahead.

Ian Quartly: Thanks, Vincent, and welcome everyone to the Joint Conference Call for the Q4 2025 results of both Tidewater Midstream and Infrastructure Limited and Tidewater Renewables Limited. Joining me today is our CEO, Jeremy Baines, who will provide an update on operations during the quarter. I will follow with the financial results and 2026 guidance, and then we'll open the line for your questions. This morning, both Tidewater Midstream and Tidewater Renewables reported results for the Q4 ended 31 December 2025. A copy of the news releases, financial statements, MD&As, and annual information forms may be accessed on SEDAR+ or on your respective company's websites. Before we get started, I'd like to note that today's call is being recorded for the benefit of individual shareholders, the media, and other interested parties who may want to review the call at a later time.

Speaker #2: Thanks, Vincent. And welcome, everyone, to the joint conference call for the fourth quarter 2025 results of both Tidewater Ministry and Infrastructure Limited and Tidewater Renewables Limited.

Speaker #2: Joining me today is our CEO, Jeremy Baines, who will provide an update on operations during the quarter. I will follow with the financial results and 2026 guidance, and then we'll open the line for your questions.

Speaker #2: This morning, both Tidewater Midstream and Tidewater Renewables reported results for the fourth quarter ended December 31, 2025. A copy of the news releases, financial statements, MD&As, and annual information forms may be accessed on Cedar Plus or on your respective company's websites.

Speaker #2: Before we get started, I'd like to note that today's call is being recorded for the benefit of individual shareholders, as well as media and other interested parties who may want to review the call at a later time.

Ian Quartly: The recorded call will be available through Cision. Some of the comments made today may be forward-looking in nature and are based on Tidewater's current expectations, judgments, and projections. Forward-looking statements we express today are subject to risks and uncertainties, which can cause actual results to differ from expectations. Further, some of the information provided refers to non-GAAP measures. To know more about these forward-looking statements, GAAP measures, and risk factors, please see the company's various financial reports, which are available on the company's website and on SEDAR+. I'll turn the call over to Jeremy.

Speaker #2: The recorded call will be available through Cisions. Some of the comments made today may be forward-looking in nature and are based on Tidewater's current expectations, judgments, and projections.

Speaker #2: Forward-looking statements we express today are subject to risks and uncertainties, which can cause actual results to differ from expectations. Further, some of the information provided refers to non-GAAP measures.

Speaker #2: To know more about these forward-looking statements, GAAP measures, and risk factors, please see the various companies' financial reports, which are available on the company's website and on Cedar Plus.

Speaker #2: I'll now turn the call over to Jeremy.

Jeremy Baines: Thank you, Ian, and thanks to everyone for joining us today. I'll begin with Tidewater Renewables, followed by Tidewater Midstream, covering regulatory and strategic developments, operational performance, and commercial updates. Starting with regulatory developments, on 5 September 2025, the Government of Canada announced a CAD 370 million biofuels production incentive program to address the economic challenges caused by US subsidies and policies. The details of the incentive program were communicated to eligible program recipients, which includes Tidewater Renewables, in December 2025. The program will provide non-repayable cash support from January 2026 to December 2027 at an incentive rate of CAD 0.16 per liter for the first 170 million liters produced annually.

Speaker #3: Thank you, Ian, and thanks to everyone for joining us today. I'll begin with Tidewater Renewables, followed by Tidewater Midstream, covering regulatory and strategic developments, operational performance, and commercial updates.

Speaker #3: Starting with regulatory developments, on September 5, 2025, the Government of Canada announced a $370 million biofuels production incentive program to address the economic challenges caused by the U.S.

Speaker #3: Subsidies and policies. The details of the incentive program were communicated to eligible program recipients, which includes Tidewater Renewables. In December of 2025, the program will provide non-repayable cash support from January 2026 to December 2027 at an incentive rate of $0.16 per liter for the first 170 million liters produced annually.

Jeremy Baines: With the HDRD Complex expected to produce between 150 million and 170 million liters annually during this period, Tidewater Renewables is ideally positioned to receive between CAD 24 million and 27 million in both 2026 and 2027. In addition, the Government of Canada also announced its intention to make targeted amendments to the Clean Fuel Regulations. To further support Canada's biofuel sector, there are two amendments currently being evaluated. The first is a minimum renewable domestic content approach, similar to the policy implemented by the Government of British Columbia in early 2025. The second is a credit multiplier approach whereby domestically produced low-carbon fuels would receive a higher ratio of CFR emission credits than imported fuels. Tidewater supports both proposed amendments and is well-positioned to benefit from either or a combination of both if implemented. Moving to operations at the HDRD Complex.

Speaker #3: With the HDRD complex expected to produce between 150 million and 170 million liters annually during this period, Tidewater Renewables is ideally positioned to receive between $24 million and $27 million in both 2026 and 2027.

Speaker #3: In addition, the Government of Canada also announced its intention to make targeted amendments to the Clean Fuel Regulations to further support Canada's biofuel sector.

Speaker #3: There are two amendments currently being evaluated. The first is a minimum renewable domestic content approach, similar to the policy implemented by the Government of British Columbia in early 2025.

Speaker #3: The second is a credit multiplier approach, whereby domestically produced low-carbon fuels would receive a higher ratio of CFR emission credits than imported fuels. Tidewater supports both proposed amendments and is well positioned to benefit from either or a combination of both if implemented.

Speaker #3: Moving to operations at the HDRD complex, the planned turnaround and subsequent equipment failure reduced throughput to 48% of design capacity for the fourth quarter of 2025.

Jeremy Baines: The planned turnaround and subsequent equipment failure reduced throughput to 48% of design capacity for Q4 2025. As previously communicated, the equipment repair was successfully completed on 12 December 2025, and utilization has been near nameplate capacity during the first few months of 2026. Now let's move over to Tidewater Midstream, starting with regulatory and strategic developments. During Q4, Tidewater Midstream executed two initiative agreements with the Government of British Columbia to provide BC LCFS credits to support the production of low-carbon renewable diesel and renewable gasoline from the hydrotreater and FCC co-processing units at the Prince George Refinery.

Speaker #3: As previously communicated, the equipment repair was successfully completed on December 12, 2025, and utilization has been near nameplate capacity during the first few months of 2026.

Speaker #3: Now let's move over to Tidewater Midstream, starting with regulatory and strategic developments. During the fourth quarter, Tidewater Midstream executed two initiative agreements with the Government of British Columbia to provide BCLCFS credits to support the production of low-carbon renewable diesel and renewable gasoline from the hydrotreater and FCC co-processing units at the Prince George refinery.

Jeremy Baines: The BC LCFS credits awarded under the initiative agreements are expected to fund a significant portion of the cost of the renewable feedstocks required to operate the co-processing units for the next two years at rates up to 300 barrels per day for each of the units. In addition, the sale of co-processed low-carbon transportation fuels into the British Columbia market will generate CFR emission credits and additional BC LCFS credits for Tidewater Midstream. On the strategic front, Tidewater took over full operational control of the acquired Western Pipeline system during Q4 2025. Our team has done an excellent job integrating the pipeline into our existing operational systems and processes, and we expect to fully realize the operational synergies and CAD 10 to 15 million of annual cost savings we announced previously.

Speaker #3: The BCLCFS credits awarded under the initiative agreements are expected to fund a significant portion of the cost of the renewable feedstocks required to operate the co-processing units for the next two years.

Speaker #3: At rates up to 300 barrels per day for each of the units. In addition, the sale of co-processed low-carbon transportation fuels into the British Columbia market will generate CFR emission credits and additional BCLCFS credits for Tidewater Midstream.

Speaker #3: On the strategic front, Tidewater took over full operational control of the acquired Western Pipeline System during the fourth quarter of 2025. Our team has done an excellent job integrating the pipeline into our existing operational systems and processes, and we expect to fully realize the operational synergies and $10 to $15 million of annual cost savings we announced previously.

Jeremy Baines: In January 2026, Tidewater announced that it had entered into long-term agreements for gas handling and NGL supply at the Brazeau River Complex. Under these agreements, Tidewater will process up to 75 million cubic feet per day of natural gas at the BRC from dedicated producer facilities and will receive the marketing rights to the ethane, propane, and butane for initial terms of approximately 5 years. These are important agreements for Tidewater as they provide significant gas volume to the BRC facility from dedicated producer facilities on a long-term basis. We also continue to advance our non-core asset sales program. On 21 October 2025, the Sylvan Lake gas processing facility was sold for cash proceeds of CAD 5.5 million. In December 2025, we received the final CAD 1.5 million of cash proceeds from the sale of the BRC roads.

Speaker #3: In January of 2026, Tidewater announced that it had entered into long-term agreements for gas handling and NGL supply at the Brazil River Complex. Under these agreements, Tidewater will process up to 75 million cubic feet per day of natural gas at the BRC from dedicated producer facilities and will receive the marketing rights to the ethane, propane, and butane for initial terms of approximately five years.

Speaker #3: These are important agreements for Tidewater as they provide significant gas volume to the BRC facility from dedicated producer facilities on a long-term basis. We also continue to advance our non-core asset sales program.

Speaker #3: On October 21, the Silver Lake Gas Processing Facility was sold for cash proceeds of $5.5 million. In December 2025, we received the final $1.5 million of cash proceeds from the sale of the BRC roads.

Jeremy Baines: In February 2026, Tidewater Renewables received CAD 2.1 million as final proceeds from the sale of the renewable natural gas partnership. We continue to work on further divestiture opportunities, including growing market interest in repurposing energy sites for data center developments. We look forward to updating the market as discussions progress. Next, let's turn to operations at the Prince George Refinery. Throughput at the PGR averaged 10,809 barrels per day in Q4 2025, a 5% increase from Q3 2025. The semi-annual heat exchanger cleaning was completed in October, and throughput levels averaged approximately 11,900 barrels per day during November and December 2025.

Speaker #3: And in February 2026, Tidewater Renewables received $2.1 million as final proceeds from the sale of the renewable natural gas partnership. We continue to work on further divestiture opportunities, including growing market interest in repurposing energy sites for data center developments.

Speaker #3: We look forward to updating the market as discussions progress. Next, let's turn to operations at the Prince George refinery. Throughput at the PGR averaged 10,809 barrels per day in the fourth quarter of 2025.

Speaker #3: A 5% increase from the third quarter of 2025. The semi-annual heat exchanger cleaning was completed in October, and throughput levels averaged approximately 11,900 barrels per day during November and December 2025.

Jeremy Baines: Refined product margins improved during Q4 as the Prince George crack spread averaged CAD 94 per barrel, compared to CAD 90 per barrel during Q3 of 2025. During the start of 2026, the market conditions for refined products have significantly improved. The Prince George crack spread averaged CAD 94 per barrel in January and CAD 98 per barrel in February. During March, the crack spread widened further as a result of the ongoing conflict in Iran and has averaged CAD 113 per barrel in March month to date. As Ian will expand on later, throughout March, we have layered on 2-1-1 crack spread hedges for approximately 50% of forecasted production from April to December 2026 in order to capture the current market strength in the crack spreads. Now we'll move to our broader midstream operations.

Speaker #3: Refined product margins improved during the fourth quarter as the Prince George cracks spread averaged $94 per barrel, compared to $90 per barrel during the third quarter of 2025.

Speaker #3: During the start of 2026, the market conditions for refined products have significantly improved. The Prince George crack spreads averaged $94 per barrel in January and $98 per barrel in February.

Speaker #3: During March, the cracks spread widened further as a result of the ongoing conflict in Iran and has averaged $113 per barrel in March month to date.

Speaker #3: As Ian will expand on later, throughout March, we have layered on 211 crack spread hedges for approximately 50% of forecasted production from April to December 2026, in order to capture the current market strength in the crack spreads.

Speaker #3: Now we'll move to our broader Midstream operations. At the BRC gas processing facility, throughput averaged 102 million cubic feet per day in the fourth quarter.

Jeremy Baines: At the BRC gas processing facility, throughput averaged 102 million cubic feet per day in Q4, compared to 124 million cubic feet per day in Q3 of 2025. The decrease was largely due to lower straddle volumes. The Ram River gas plant remains temporarily curtailed while sulfur handling operations continue to operate. The current market prices for both natural gas and sulfur are at levels that we believe are highly economic for sour gas producers, and our intent is to restart the gas plant when production in the area resumes.

Speaker #3: Compared to 124 million cubic feet per day in the third quarter of 2025. The decrease was largely due to lower straddle volumes. The Iran River Gas Plant remains temporarily curtailed while sulfur handling operations continue to operate.

Speaker #3: The current market prices for both natural gas and sulfur are at levels that we believe are highly economic for sour gas producers, and are intended to restart the gas plant when production in the area resumes.

Jeremy Baines: Looking ahead, we remain focused on driving operational excellence, enhancing margins, and executing strategic initiatives, including maximizing efficiency at the PGR and HDRD Complex, strengthening commercial platforms and offtakes, advancing our SAF project while managing capital prudently, progressing non-core asset sales to unlock liquidity, and we will continue to advocate for a fair regulatory environment.

Speaker #3: Looking ahead, we remain focused on driving operational excellence, enhancing margins, and executing strategic initiatives, including maximizing efficiency at the PGR and HDRD complex. Strengthening commercial platforms and offtakes.

Speaker #3: Advancing our SAF project while managing capital prudently. Progressing non-core asset sales to unlock liquidity. And we will continue to advocate for a fair regulatory environment.

Jeremy Baines: We believe these building blocks position us for both revenue growth and margin expansion during 2026. With that, I'll now turn to Ian for the financial review.

Speaker #3: We believe these building blocks position us for both revenue growth and margin expansion during 2026. With that, I'll now turn to Ian for the financial review.

Ian Quartly: Thanks, Jeremy. During Q4 2025, Tidewater Renewables reported a net loss of CAD 13.8 million compared to a net loss of CAD 3.4 million for Q4 2024. Adjusted EBITDA was CAD -3.8 million for Q4 2025 compared to CAD 6.1 million in Q4 2024. Both the net income and adjusted EBITDA were impacted by the extended turnarounds and subsequent equipment repair, which resulted in lower sales volumes during the fourth quarter. In addition, there were lower contributions from the equity investments. Turning to Tidewater Midstream, the Q4 consolidated net loss attributable to shareholders was CAD 30 million compared to a consolidated net loss attributable to shareholders of CAD 3.3 million for Q4 2024.

Speaker #4: Thanks, Jeremy. During the fourth quarter of 2025, Tidewater Renewables reported a net loss of $13.8 million, compared to a net loss of $3.4 million for the fourth quarter of 2024.

Speaker #4: Adjusted EBITDA was -$3.8 million for the fourth quarter of 2025, compared to $6.1 million in the fourth quarter of 2024. Both net income and adjusted EBITDA were impacted by the extended turnaround and subsequent equipment repair, which resulted in lower sales volumes during the fourth quarter.

Speaker #4: In addition, there were lower contributions from the equity investment. Turning to Tidewater Midstream, the fourth quarter consolidated net loss attributable to shareholders was $30 million.

Speaker #4: Compared to a consolidated net loss attributable to shareholders of $3.3 million, for the fourth quarter of 2024. The larger net loss in the fourth quarter of 2025 was primarily due to the Tidewater Renewables extended turnaround previously mentioned and the absence of an impairment reversal in the current quarter.

Ian Quartly: The larger net loss in Q4 2025 was primarily due to the Tidewater Renewables extended turnaround previously mentioned and the absence of an impairment reversal in the current quarter. This was offset in part by favorable changes in the fair value of derivative contracts and lower interest rates. Consolidated adjusted EBITDA was CAD 3 million for Q4 2025 compared to CAD 20 million in the same period of 2024. The decrease was primarily due to lower gross margins in the current period and lower contributions from the equity investor, partially offset by lower losses on realized derivative contracts. As part of the year-end release, we have announced 2026 financial guidance. Tidewater's consolidated 2026 adjusted EBITDA is expected to range between CAD 150 million and CAD 170 million.

Speaker #4: This was offset in part by favorable changes in the fair value of derivative contracts and lower interest rates. Consolidated adjusted EBITDA was $3 million for the fourth quarter of 2025, compared to $20 million in the same period of 2024.

Speaker #4: The decrease was primarily due to lower gross margins in the current period and lower contributions from the equity investment, partially offset by lower losses on realized derivative contracts.

Speaker #4: As part of the year-end release, we have announced 2026 financial guidance. Tidewater's consolidated 2026 adjusted EBITDA is expected to range between $150 million and $170 million.

Ian Quartly: Consolidated capital expenditures, which includes both growth and maintenance capital, net of capitalized BC LCFS credits received under the SAF initiative agreement, is expected to range between CAD 20 million and CAD 25 million. Tidewater Renewables expects to deliver annual Adjusted EBITDA of between CAD 80 million and CAD 90 million and incur capital expenditures of between CAD 2 million and CAD 3 million. HDRD Complex is expected to benefit from stronger utilization and market prices and is on track to produce between 150 million and 170 million liters of renewable diesel in 2026. That is expected to qualify for the CAD 0.16 per liter Canadian Biofuels Production Incentive. The Prince George Refinery is also set to benefit from strong utilization as well as operational efficiencies, and cost reductions from the acquired Western Pipeline.

Speaker #4: Consolidated capital expenditures, which includes both growth and maintenance capital, net of capitalized BCL/CFS credits received under the SAF initiative agreement, are expected to range between $20 million and $25 million.

Speaker #4: Tidewater Renewables expects to deliver annual adjusted EBITDA of between $80 million and $90 million, and incur capital expenditures of between $2 million to $3 million.

Speaker #4: HDRD complex is expected to benefit from strong utilization and market prices. And is on track to produce between 150 and 170 million liters of renewable diesel in 2026 that is expected to qualify for the 16 cent per liter Canadian biofuels production incentive.

Speaker #4: The Prince George refinery is also set to benefit from strong utilization, as well as operational efficiencies and cost reductions from the acquired Western pipeline.

Ian Quartly: The restart of the coke processing units are also expected to provide a favorable benefit via reduced compliance costs, while the previously announced initiative agreements will assist Tidewater Midstream in funding feedstock procurement. The BC LCFS is expected to benefit from the commencement of recently executed agreements from gas handling and NGL supply and fractionation. The 2026 financial guidance does not include any EBITDA that would be generated from the resumption of gas processing at BRC. The favorable movements in North American crack spreads, refined product prices, and emission credit prices to start 2026 are expected to provide an additional windfall to the financial results of the Prince George Refinery on the HDRD complex. In an effort to protect cash flow and manage commodity price risk, Tidewater started to hedge in early March and continued to layer on additional positions throughout the month.

Speaker #4: The restart of the code processing units is also expected to provide a favorable benefit via reduced compliance costs. While the previously announced initiative agreements will assist Tidewater Midstream in funding feedstock procurement.

Speaker #4: The BRC is expected to benefit from the commencement of recently executed agreements for gas handling, and NGL supply and fractionation. The 2026 financial guidance does not include any EBITDA that would be generated from the resumption of gas processing at RAN.

Speaker #4: The favorable movements in North American cracks, rates, refined product prices, and emission credit prices to start 2026 are expected to provide an additional windfall to the financial results of the Prince George refinery and the HDRD complex.

Speaker #4: In an effort to protect cash flow and manage commodity price risk, Tidewater started to hedge in early March and continued to layer on additional positions throughout the month.

Ian Quartly: Currently, Tidewater Midstream is hedged on approximately 50% of its crack spread, its exposure for the balance of 2026, and Tidewater Renewables is hedged on approximately 50% of the HDRD Complex's revenue and feedstock purchases for the balance of 2026. The CAD 150 to 170 million of consolidated adjusted EBITDA guidance range is approximately a 400% increase from 2025's actual consolidated adjusted EBITDA. With a disciplined capital program of between CAD 20 and 25 million for 2026, the resulting cash flow is expected to be primarily directed towards debt reduction. Finally, on 23 March 2026, we took another significant step towards strengthening Tidewater Midstream's financial position by amending the senior credit facility.

Speaker #4: Currently, Tidewater Midstream is hedged on approximately 50% of its crack spread exposure for the balance of 2026. And Tidewater Renewables is hedged on approximately 50% of the HDRD complex's revenue and feedstock purchases for the balance of 2026.

Speaker #4: The $150 to $170 million consolidated adjusted EBITDA guidance range is approximately a 400% increase from 2025's actual consolidated adjusted EBITDA. With a disciplined capital program of between $20 and $25 million for 2026, the resulting cash flow is expected to be primarily directed towards debt reduction.

Speaker #4: And finally, on March 23rd, 2026, we took another significant step towards strengthening Tidewater Midstream's financial position by amending the senior credit facility. The maturity date for the $50 million operating facility and the $125 million syndicated facility were both extended from September 26th to August 2027.

Ian Quartly: The maturity dates of the CAD 50 million operating facility and the CAD 125 million syndicated facility were both extended from 26 September 2026 to August 2027. The Q1 2026 financial covenant ratios were amended to provide an extra turn on the senior debt to Adjusted EBITDA ratio and an extra half turn on both the debt to Adjusted EBITDA ratio and the Adjusted EBITDA to interest coverage ratio. The financial covenants for the Q1, Q2, and Q3 of 2026 will be calculated on an annualized basis instead of a trailing twelve-month basis to reflect the significant step change in the financial results of Tidewater Midstream in 2026. That concludes our prepared remarks. Vincent, please open the line for questions.

Speaker #4: The Q1 2026 financial covenant ratios were amended to provide an extra turn on the senior debt to adjusted EBITDA ratio, and an extra half turn on both the debt to adjusted EBITDA ratio and the adjusted EBITDA to interest coverage ratio.

Speaker #4: And the financial covenants for the first, second, and third quarters of 2026 will be calculated on an annualized basis, instead of a trailing 12-month basis, to reflect the significant step change in the financial results of Tidewater Midstream in 2026.

Speaker #4: That concludes our prepared remarks. Vincent, please open the line for questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. Your first question comes from Robert Hope with Scotiabank. Please go ahead.

Speaker #1: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star, followed by the one on your touchtone phone.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two.

Speaker #1: Your first question comes from Rob Hope with Scotiabank. Please go ahead.

Robert Hope: Hello, everyone. Thanks for taking my question. Maybe the first one is on the non-core sale. Can you give us an update on kind of what stage those discussions are at, and whether or not you have a longer-term target of how much incremental asset sales you'd like to get done?

Speaker #3: Hello, everyone. Thanks for taking my question. Maybe the first one is on the non-core sale. Can you give us an update on kind of what stage those discussions are at?

Speaker #3: And whether or not you have a longer-term target of how much incremental asset sales you'd like to get done?

Jeremy Baines: Yeah. Thanks, Rob, for the question. So last year we gave some guidance of what we were targeting for our non-core asset sales. We continue to be on track to hit that number. Timing is taking a little bit longer than we would like, but these are complex bespoke type discussions around the asset sales. We are in deep discussions around a very significant asset and have three non-binding LOIs, and we're working to turn it into one binding LOI. You know, we expect we'll be able to announce something this year, hopefully in H1 on that. We have another asset that we are in a similar point of negotiations with a third party that we're working to move to binding.

Speaker #4: Yeah, thanks, Rob, for the question. So, last year, we gave some guidance on what we were targeting for our non-core asset sales. We continue to be on track to hit that number.

Speaker #4: Timing is taking a little bit longer than we would like, but these are complex, bespoke-type discussions around the asset sales. We are in deep discussions around a very significant asset and have three non-binding LOIs, and we're working to turn it into one binding LOI.

Speaker #4: And we expect we'll be able to announce something this year, hopefully in the first half of the year on that. And we have another asset that we are in a similar point of negotiations with a third party that we're working to move to binding.

Jeremy Baines: Hopefully we'll be able to put something out early in Q2 on that one as well. We continue to be on track. Timing, just due to complexity of some of these assets, is taking us a little longer, but we expect to be able to deliver on the number we put out last year.

Speaker #4: And hopefully we'll be able to put something out early in the second quarter on that one as well. So we continue to be on track.

Speaker #4: Timing, just due to the complexity of some of these assets, is taking us a little longer, but we expect to be able to deliver on the number we put out last year.

Robert Hope: Good to hear. Appreciate the EBITDA and CapEx guidance. You know, as we look through our model and try to get to kind of a net debt number at the end of the year, assuming no asset sales, you know, are there any large changes in non-recurring expenses or working capital changes that we should watch out for? Really, we're just trying to get a better sense of where you think you'll be exiting the year on a net debt to EBITDA basis.

Speaker #3: Good to hear. Okay, and then appreciate the EBITDA and CapEx guidance. As we look through our model and try to get to kind of a net debt number at the end of the year, assuming no asset sales, are there any large changes in non-recurring expenses or working capital changes that we should watch out for?

Speaker #3: Really, we're just trying to get a better sense of where you think you'll be exiting the year on a net debt to EBITDA basis.

Jeremy Baines: Yeah. Rob, there's nothing unusual from a non-recurring or working capital perspective.

Speaker #4: Yeah, Rob, there's nothing unusual from a non-recurring or a working capital perspective.

Robert Hope: Okay. All right. Appreciate that. Thank you.

Speaker #3: Okay. All right, appreciate that. Thank you.

Operator: Your next question comes from the line of Maurice Choy with RBC Capital Markets. Please go ahead.

Speaker #1: Your next question comes from the line of Maurice Choi with RBC Capital Markets. Please go ahead.

Maurice Choy: Thanks, and good morning, everyone. Maybe I'll just pick up on the last question just now then. If you could give us an idea as to what your net debt to EBITDA numbers were for both companies analyzed basis as of the end of the year. Take one step further, could you just paint a picture for us what this trajectory looks like, and whether that be through the rest of this year or even into next year? Obviously a lot of cash flows are being directed towards repaying debt, so just if you could help us with that'd be great.

Speaker #5: Thanks, and good morning, everyone. Maybe I'll just pick up on the last question just now, then. If you could give us an idea as to what your net debt-to-EBITDA numbers were for both companies on an analyzed basis as of the end of the year, and take it one step further, could you just paint a picture for us of what this trajectory looks like, whether that be through the rest of this year or even into next year?

Speaker #5: Obviously, a lot of cash flows are being directed towards repaid debt. So just if you could help us with that, that'd be great.

Jeremy Baines: Yeah. Let me start, Ian. I'll jump in. You know, we've put out a number for guidance that we feel is extremely achievable. We have locked in the revenue sides at both companies, half of them to ensure we have some support on those numbers. We have not included in those numbers, like Ian said, a restart of RAM, which should be extremely helpful to that. You know, our methodology on our guidances, we have gone and used a mid-cycle crack spread, which is below where the current strip is today. We think it's very achievable and maybe probably cautious guidance. It's been very unpredictable over the last four weeks of where the forward market is for some of our products.

Speaker #4: Yeah, let me start and I'll jump in. We've put out a number for guidance that we feel is extremely achievable. We have locked in the revenue sides at both companies.

Speaker #4: Half of them to ensure we have some support on those numbers. We have not included in those numbers like Ian said, a restart of RAM, which could be extremely helpful to that.

Speaker #4: And our methodology on our guidance is, we have gone and used a mid-cycle crack spread, which is below where the current strip is today.

Speaker #4: So we think it's very achievable and maybe probably cautious guidance. It's been very unpredictable over the last four weeks of where the forward market is for some of our products.

Jeremy Baines: If you take our guidance and you take off our capital and you take off our interest expense, all of that will go to debt. It's a fairly meaningful number. Then on top of that, we do expect to progress our non-core asset sales, and there will be additional debt reduction related to that. If you take all of that together, you can you know come up with your estimate of what that net debt to EBITDA looks like. We feel very grounded in our guidance with we do see upside to it on that front.

Speaker #4: But if you take our guidance, and you take off our capital, and you take off our interest expense, all of that will go to debt.

Speaker #4: So, it's a fairly meaningful number. And then, on top of that, we do expect to progress our non-core asset sales, and there will be additional debt reduction related to that.

Speaker #4: So, if you take all of that together, you can come up with your estimate of what that net debt to EBITDA looks like. We feel very grounded in our guidance, but we do see upside to it on that front.

Maurice Choy: Thanks. Maybe as a quick follow-up, you know, philosophically, when you think about your capital program opportunities to improve your portfolio, do you see balance sheet as being a limiter for you? Presumably yes, for 2026, but, you know, at what point do you think of that as being, quote-unquote, "unleashed" and you're able to grow extensively?

Speaker #3: Thanks. And maybe as a quick follow-up—and philosophically, when you think about your capital program opportunities to improve your portfolio—do you see balance sheet as being a limiter for you?

Speaker #3: Presumably, yes, for 2026, but at what point do you think of that as being 'unleashed' and you're able to grow extensively?

Jeremy Baines: I think the reality is with, you know, the 2026 cash flow that we're generating from the business, on a consolidated basis, it's gonna have meaningful leverage reduction when you include asset sales. I don't feel that we, you know, in the short term, we might be somewhat constrained, but when you go beyond that, we have the ability to do a lot of things at the business. We should be fairly comfortable on our debt to EBITDA ratios, you know, over that period. We have supportive shareholders. We're starting to get some reasonable support in equity markets through our share price. You know, yeah, very short term constrained, but I don't see us being constrained for very long.

Speaker #4: Like I think the reality is with the 2026 cash flow that we're generating from the business on a consolidated basis, it's going to have meaningful leverage reduction when you include asset sales.

Speaker #4: So I don't feel that we, in the short term, we might be somewhat constrained, but when you go beyond that, we have the ability to do a lot of things at the business.

Speaker #4: We should be fairly comfortable on our debt-to-EBITDA ratios over that period. And we have supportive shareholders. We're starting to get some reasonable support in equity markets through our share price.

Speaker #4: So yeah, very short-term constrained, but I don't see us being constrained for very long. We do recognize we need to pay some debt down.

Jeremy Baines: We do recognize we need to pay some debt down. We've always said that, from the first day I've been here, and we continue to make good progress on that front.

Speaker #4: We've always said that from the first day I've been here, and we continue to make good progress on that front.

Maurice Choy: Understood. If I could finish off with just a broad discussion about your hedging policy. Obviously, you're a 50% hedge from April to December, and, Ian, I think you mentioned that you're progressively placing more hedges. Just could you give us an idea as to how you guys tend to approach this? Heading into any particular year, what tends to be the level of hedges that you place? Do you see this particularly as being special that this doesn't change how you approach it? Or do you think that you would like to be more hedged heading into and particularly moving forward?

Speaker #3: Understood. And if I could finish off with just a broad discussion about your hedging policy—obviously, you're at a 50% hedge from April to December.

Speaker #3: And Ian, I think you mentioned that you're progressively placing more hedges. Could you give us an idea as to how you guys tend to approach this?

Speaker #3: Heading into any particular year, what tends to be the level of hedges that you place? Do you see this as being this particular year as being special that this doesn't change how you approach it, or do you think that you would like to be more hedged heading into any particular year moving forward?

Jeremy Baines: Yeah. Over the last couple of years, since the new management took over, we've been very careful around ensuring hedging is done in an appropriate manner and is done with the appropriate focus on reducing risk. We felt that given our desire to ensure that we meet our leverage reduction goals, that given the I guess market circumstances that had presented themselves, we thought it was important to put some underpinning under the cash flows. There was extensive discussion with the board of directors around this, which is ongoing, and we felt it was appropriate to get this level in. Obviously, we're 50%. You know, right now markets are fairly favorable.

Speaker #4: Yeah, so over the last couple of years, since what they called new management took over, we've been very careful around ensuring hedging is done in an appropriate manner and is done with the appropriate focus on reducing risk.

Speaker #4: And we felt that given our desire to ensure that we meet our leverage reduction goals, that given the, I guess, market circumstances that had presented themselves, we thought it was important to put some underpinning under the cash flows.

Speaker #4: There was extensive discussion with the board of directors around this, which is ongoing. And we felt it was appropriate to get this level in.

Speaker #4: Obviously, we're 50%. Right now, markets are fairly favorable. We are looking at trying to go a little bit longer and just continue to put some underpinnings under the cash flow, but the curve is somewhat backward-dated.

Jeremy Baines: We are looking at trying to go a little bit longer, and just continue to put some underpinnings under the cash flow, but the curve is somewhat backwardated. Like, we will continue to look opportunistically around this. I think once we get our leverage in line, we will. This is a fairly special type of program that we've done just to make sure we hit our debt reduction goals here in the short term.

Speaker #4: And we will continue to look opportunistically around this. But I think once we get our leverage in line, we will—this is a fairly special type of program that we've done just to make sure we hit our debt reduction goals here in the short term.

Maurice Choy: Great. That makes sense. Thanks for that. Thanks so much for the answer. Congrats, Ian, on your permanent appointment at the midstream level.

Speaker #3: Great. That makes sense. And thanks for the answers, and congrats, Ian, on your permanent appointment at the midstream level.

Ian Quartly: Thanks, Maurice.

Speaker #4: Thanks, Marius.

Operator: Again, if you would like to ask a question, please press star one on your telephone. There are no further questions at this time. Go ahead.

Speaker #5: Again, if you would like to ask a question, please press *1 on your telephone. There are no further questions at this time. Go ahead.

Jeremy Baines: Thanks everyone for joining the call today. The team is available to address any outstanding items with their contact information at the bottom of each company's press release. Thank you.

Speaker #4: Okay, thanks, everyone, for joining the call today. The team is available to address any outstanding items, with the contact information at the bottom of each company's press release.

Speaker #4: Thank you.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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