Investor Presentation May 2015 Integrated Midstream Solutions
Corporate Profile One of Canadas oldest but newest energy infrastructure companies TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 3
Corporate Profile Incorporated 1950 Initial Public Offering 2011 TSX Symbol GEI Market Capitalization* 3.5 billion Enterprise Value* 4.7 billion Dividend per share 0.32/quarter Current Dividend yield* 4.6% TSX: GEI Gibson…
Corporate Profile Well established company Integrated capability along the midstream value chain Low direct exposure to commodity price volatility Strong balance sheet and sufficient liquidity Growth opportunities targeted at…
Corporate Profile Cash Flow 12% CAGR in annual distributable cash flow per share (2011 to 2014) Growth 885 million in planned growth capital expenditures (2015 + preliminary 2016 budget) Dividend increased five times since…
Growth Drivers - Increasing North American Oil Production 16 Current -2020 14 Current Production 12 million bbl/d Other 12 50% increase since 2009 U.S. Offshore 70% of U.S. 10 production growth Million Bbl/day sourced…
Growth Drivers Canadian Oil Sands Development Massive resource offers low geological and geopolitical risk Long reserve life profile insulates development from near term oil price volatility Visible growth profile with large scale…
Growth Drivers - Oil Sands Diluent Demand Canadian bitumen/heavy oil production requires diluent for transportation Insufficient WCSB diluent requires industry solutions Gibsons is well positioned to offer supply, terminal services…
Growth Drivers North American Market Imbalances Oil market production and distribution dynamics have shifted Infrastructure constraints can create wide and volatile regional price differences Gibsons is well positioned to: Ensure…
Growth Drivers - Water and Waste Management Demand 1,800 1,600 Water Production (m3) 2.9X Maturing base production = increased 1,400 Gas Production (m3 e3) 3.1X watercuts Oil Production (m3) 1,200 2.7X Dominance of…
Gibsons Strategy We Solve Problems Focus on midstream infrastructure for oil and liquids production Provide integrated customer solutions Engage multiple times throughout the value chain - Touch the barrel Minimize commodity price…
Midstream Solutions for Oil and Liquids Production Gibson Energy Montney Alberta Oilsands Growth-oriented Duvernay Solutions-based Cardium Integrated midstream energy company Viking Shaunavon Low direct exposure to commodity…
Touch the Barrel Multiple Times TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 14
Provide Integrated Customer Solutions Terminals Processing & Environmental Truck Transportation Marketing and Pipelines Distribution Segments Services TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 15
Minimize Commodity Price Exposure Purposefully structured over the past 60+ years Business operations designed to limit price exposure Fee based businesses dominate revenue growth profile Margin based businesses accept minimal price…
Growth Profile Corporate history resulted in an underdeveloped asset base Enhanced access to capital facilitating growth profile Gibsons is now capitalizing on its growth opportunities Gibsons executed its largest growth capital…
2015 - 2016 Growth Capital 2015 growth capital budget 435 Million Preliminary 2016 growth capital budget 450 Million Total 885 Million 80% of 2015-2016 growth capital targets infrastructure projects in Terminals & Pipelines and…
Terminals and Pipelines - Overview The majority of all Alberta oil exports aggregate in Edmonton and/or Hardisty Gibsons owns and operates key terminal, blending and injection assets in both locations Hardisty asset base offers…
Terminals & Pipelines Hardisty Terminal Terminal Storage Inbound Pipelines 6.0M bbls Enbridge 2,3,4 Athabasca Cold Lake Cold Lake Twin Growth Projects Bow River ECHO 2.9 M bbls storage under Bellshill Provost construction Hamilton…
Hardisty Terminal Growth Projects Enhanced Athabasca pipeline connectivity East 400,000 bbl tank terminal expansion (commissioned Feb 2015) 500,000 bbl tank Enhanced Cold Lake (commissioned pipeline connectivity Mar…
Terminals & Pipelines Edmonton Terminal Polaris Diluent Pipeline Terminal Storage 0.5M bbls Growth Projects Storage under construction 0.3M bbls + 22 car rail loading facility Storage optimization project Inbound…
Edmonton Terminal Growth Projects Storage Optimization Polaris 300,000 Pump bbl tank Station TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 23
Environmental Services Growth Projects Construct and expand oil production processing, recovery and disposal (PRD) infrastructure Approximately 60% of 2015 & 2016 Environmental Services growth capital allocated to PRD assets…
Environmental Services Growth Projects PRD Infrastructure: receipt of oilfield waste streams process to separate water and solid wastes recover clean crude oil for end markets disposal of residual waste Approved engineered…
Infrastructure Projects Development Timeline 2014 2015 2016 2017 PRD Waste Facility (North Dakota Bakken) Hardisty 400,000 bbl tank Commissioned date Hardisty Enhanced Feeder Pipeline Connectivity (Cold Lake) Expected in-service…
Cash Flow Quality Continued infrastructure focus increases take-or-pay based revenue 2014 Segment Profit 2016 Segment Profit Take or Pay based 17% Take or Pay based 13% Margin based Margin based 29% 31% Fee based 56%…
Diversified and Stable Cash Flow Balance between business segments offers diversification benefits Integration between business segments enhances asset utilization Historical EBITDA growth achieved irrespective of oil prices 500…
Strong Credit Metrics and Balance Sheet Cash balance of 173M (as at March 31, 2015) 500M revolving credit facility committed to August 2019 Corporate credit ratings: Standard and Poors: BB (Positive), Moodys: Ba2 (Stable) Interest…
Financial Structure to Provide Stability and Support Growth Staggered debt maturities provide financial flexibility and mitigate refinancing risk Senior Unsecured Notes Amount: US550M Revolving Credit Facility Maturity: July 15,…
Cash Flow Growth 12% CAGR in Distributable Cash Flow per share since IPO (2011-2014) 2014 capital investments and acquisitions converting to cash flow in 2015 Future growth facilitated by a portfolio of organic investment projects…
Dividend Growth Quarterly dividend reviewed by Board of Directors Target long-term dividend payout ratio at 50%-60% of Distributable Cash Flow Dividend increased five times since IPO 1.30 1.28 Increase in Dividend Dividend per…
APPENDICES TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 34
Business Strategy Leverage and expand integrated asset base to capture synergies and provide stable cash flow stream Partner with high quality customers to provide long-term stable revenue streams Maintain discipline when investing…
Integrated Business Segments Terminals & Pipelines 6.5M bbls crude storage in Hardisty & Edmonton Exclusive access to the 120,000 bpd Hardisty unit train loading facility Diesel rail loading capacity at Edmonton of 36,000 bpd 400 km…
Customer Profile North American Scope Top 10 customers employ an average of 4.5 solutions Top 20 customers employ an average of 3.7 solutions Growth opportunity: Convert low touch customers toward multiple solutions Marketing 84…
Terminals & Pipelines Two major crude oil terminals, over 400 km of pipelines and over 60 injection stations positioned in key U.S. crude oil plays 95% fee-based revenue in 2014, 52% of which is under long-term take or pay contracts,…
Hardisty Terminal Long Term Outlook Tanks under development Potential tank locations TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 39
Railing Crude on Unit trains From Hardisty is Sustainable and Attractive No Pipeline or Pipeline Capacity Flexible Rail Options Pipeline (at capacity) 3/barrel Pipeline (doesnt exist) & Barge No Cost Available HARDISTY, AB…
Edmonton Terminal Long Term Outlook Tanks under development Potential tank locations Polaris initiating pump station TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 41
Truck Transportation Key component of Gibsons business model, integrating the business segments Provides exclusive delivery points with certain Gibsons terminals and injection stations only accepting oil trucked in by a…
Environmental Services Facilitates additional touch points along the energy value chain Barriers to entry including regulatory environment and high permitting costs U.S. division provides environmental, production and other…
Environmental Services - Overview Environmental Services Role in the Oil and Gas Value Chain Drilling Site Environmental cleaning Cleaning equipment Waste management Fluid management equipment Fluid services Waste Site Fluid…
Processing and Distribution Segments Crude oil purchased by Gibsons marketing group is delivered to Gibsons Moose Jaw facility to be processed into road asphalt, roofing flux, tops and / or wellsite fluids Approximately 1.0 million…
Marketing Purchases, sells, stores and blends crude oil and condensate Provides essential physical aggregation services to small and medium-sized producers Transactions are structured to minimize commodity risk Commodity price…
Differential Volatility Provides Marketing Opportunities Twelve month moving average of stream differentials 15.00 10.00 5.00 Moving Average Stream Differentials vs. WTI (US/B) 0.00 (5.00) Gibson Butane (10.00)…
Other Major Projects in 2015 Segment Description Million Processing & Distribution Moose Jaw facility and rail loading expansion. Tanks for 37 well site fluids at Rimbey and Edson Truck Transportation New repair and logistics depot,…
Financial Strategy Acquisition Upside Completed 29 acquisitions investing greater than 1 billion since 2001 Cal-Gas and Stittco acquisitions in 2014 position the company as the industrial propane market share leader in Western…
Business Segment Peers Environmental Processing and Terminals Trucking Marketing Services Distribution Enbridge Mullen Clean Harbors Superior Plus Tidal Energy Midstream TransCanada Reimer Forbes Energy Parkland Pembina…
Peer Group Valuation Comparison EV Net Debt* / 2015 Company ( millions) Current Yield EV / 2015 EBITDA* EBITDA* Enbridge 99,367 2.9% 16.3 5.6 TransCanada 71,589 3.7% 14.1 5.5 Pembina 17,661 4.2% 18.2 2.1 Inter Pipeline 15,035…
Distributable Cash Flow (millions) Q1 2015 LTM Segment Profit* 464.0 Adjustments: Corporate G&A (37.6) Current income tax (42.5) Cash interest expense (76.1) Upgrade and replacement capital (59.1) Other 15.6…
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