Investor Presentation August 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* 2.3 billion Enterprise Value* 3.4 billion Dividend per share 0.32/quarter Current Dividend yield* 6.9% 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 with sufficient liquidity Growth opportunities focused on…
Corporate Profile 12% CAGR in annual distributable cash flow per share Cash Flow (2011 to 2014) Growth 795 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 13 million bbl/d Other 12 60% increase since 2009 U.S. Offshore 65% 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 - Water and Waste Management Demand 1,800 1,600 Water Production (m3) 2.9X Maturing base production = increased 3.1X 1,400 Gas Production (m3 e3) watercuts Oil Production (m3) 1,200 2.7X Dominance of horizontal…
Strategy We Solve Problems Focus on midstream infrastructure for oil and liquids production Engage multiple times throughout the value chain - Touch the barrel Provide integrated customer solutions Minimize direct commodity price…
Midstream Solutions for Oil and Liquids Production Gibson Energy Montney Alberta Oilsands Growth-oriented Duvernay Solutions-based Cardium Midstream energy infrastructure company Viking Shaunavon 225 operating locations…
Touch the Barrel Multiple Times TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 13
Provide Integrated Customer Solutions Terminals Processing & Environmental Truck Transportation Marketing and Pipelines Distribution Segments Services TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 14
Minimize Direct Commodity Price Exposure Purposefully structured over the past 60+ years Take or Pay operations underpinned by long term contracts Fee based operations dominate revenue profile Margin based operations accept minimal…
Growth Profile Corporate history resulted in an underdeveloped asset base Enhanced access to capital facilitating growth profile Now capitalizing on growth opportunities Executed the largest growth capital program to date in 2014…
2015 - 2016 Growth Capital 2015 growth capital budget 395 Million Preliminary 2016 growth capital budget 400 Million Total 795 Million Growth Capital 2015 2016 450 450 400 -15 400 85% of 2015-2016 -5 -20 -10 -5 growth…
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 Gibson Hardisty Storage Capacity 10 9 8 7 Investment emphasis has increased current storage (mmbbl) 6 5 GEI enters public market 4 capacity by 3x since initiating 3 2 expansion in…
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…
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 Profile Terminals and Pipelines dominates growth profile into 2016 Balance between business segments offers diversification benefits Integration between business segments enhances asset utilization 2014 Segment Profit1…
Cash Flow Quality Continued infrastructure focus increases take-or-pay based revenue 2014 Segment Profit 2016 Segment Profit Take or Pay based Margin based 13% Take or Pay based 23% Margin based 25% 31% Fee based 56%…
Acquisition Upside Completed 30 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 Canada Current…
Strong Balance Sheet Provides Stability and Supports Growth and Yield Corporate credit ratings: Standard and Poors: BB (Positive), Moodys: Ba2 (Stable) Consolidated debt to EBITDA of 2.5x (as at June 30, 2015) Cash balance of 171M…
Sustainable Total Return Conservative dividend payout ratio at 50%-60% of distributable cash flow Greater than 2x increase in distributable cash flow since IPO Dividend increased five times since IPO average of 6% Recent capital…
APPENDICES TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 32
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 4.3 solutions Top 20 customers employ an average of 3.7 solutions Growth opportunity: Convert low touch customers toward multiple solutions 40 Business…
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…
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 Potential Tanks under development Potential tank locations TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 38
Edmonton Terminal Long Term Potential Tanks under development Potential tank locations Polaris initiating pump station TSX: GEI Gibson Energy Inc. Integrated Midstream Solutions 39
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 Marke t Cap E Pote ntial Buye rs Purchases, sells, stores and blends crude oil and condensate (USmm) (1) Provides essential physical aggregation services to small and medium-sized producers Transactions are structured…
Differential Volatility Provides Marketing Opportunities Twelve month moving average of stream differentials 15.00 10.00 Moving Average Stream Differentials vs. WTI (US/B) 5.00 0.00 (5.00) Gibson Butane (10.00)…
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 Net Debt*/2015 Company EV Current Yield EV / 2015 EBITDA* EBITDA* Enbridge 93,846 3.4% 15.9 6.1 TransCanada 68,801 4.2% 12.1 5.2 Pembina 16,750 4.9% 17.3 3.3 Inter Pipeline 13,600 5.6% 14.3…
Distributable Cash Flow (millions) Q2 2015 LTM Segment Profit* 453.9 Adjustments: Corporate G&A (40.3) Current income tax (43.8) Cash interest expense (81.2) Upgrade and replacement capital (55.9) Other 18.0…
Gibsons Senior Executive A. Stewart Hanlon, President and CEO Mr. Hanlon joined Gibsons in April 1991 as Controller of Canwest Propane and in his 23-year tenure with Gibsons has filled senior roles in finance, business development and…
Gibsons Board Of Directors James M. Estey, Chairman of the Board and Independent Director Chair of the Corporate Governance, Compensation and Nomination Committee and Member of the Audit Committee Mr. Estey is the retired President…
Loading...
