Gibson Energy Inc. · TSX:GEI
Gibson Energy — Investor Presentation (November 2020)
26 slides from Gibson Energy's investor presentation, November 2020
Slide 1: Investor Presentation
GIBSON ENERGY INVESTOR PRESENTATION November 2020
Slide 2: Company Snapshot
Company Snapshot Continue to build a leading oil-focused infrastructure business GEI $2.9B TSX LISTED MARKET CAPITALIZATION(1) $4.3B ~80% TAKE-OR-PAY / ENTERPRISE STABLE FEE-BASED VALUE(1) EBITDA(2) ~90% S&P: BBB – TERMINALS REVENUE FROM INVESTMENT GRADE DBRS: BBB (low) COUNTERPARTIES ~6.9% ~10% YIE
Slide 3: Oil Infrastructure Focused
Oil Infrastructure Focused ~70% of 2020E EBITDA from core Terminals and ~80% Infrastructure 2020E EBITDA Breakout(1) OILSANDS ~70% Terminals ~80% Infrastructure EDMONTON TERMINAL 1.7 mmbbl existing storage Marketing ~20% VIKING EDMONTON HARDISTY Other MOOSE JAW HARDISTY TERMINAL Infrastructure 12 mm
Slide 4: Focused Strategy
Focused Strategy Premier oil infrastructure assets to underpin DCF per share and dividend growth Leverage Terminals Position Complementary Growth ▪ Terminals to represent ~70% of ▪ Target deploying at least $200 – EBITDA(1) Oil $300mm in Infrastructure capital per Infrastructure year to reach target
Slide 5: Complete Transformation of Business
Complete Transformation of Business Repositioned from diverse mix of business lines to focused energy infrastructure 2014(1,2) 2017(1,2) 2020E(2,3) ~75% Terminals & ~25% Terminals & Pipelines ~55% Terminals & Pipelines Pipelines Segment EBITDA(1) From T&P and Infrastructure ~30% Infrastructure ~65%
Slide 6: Financial Governing Principles
Financial Governing Principles Committed to maintaining a strong financial position by managing to key targets Committed Target Performance High Quality >80% segment profit from take-or-pay and high- Cash Flows Contract ~80% in 2020E(1) Quality of quality fee-for-service contracts Structure Creditwo
Slide 7: Funding Position and Maturity Profile
Funding Position and Maturity Profile Fully-funded, significant available liquidity and no maturities of size near-term ▪ Fully-funded for all sanctioned capital, with internal funding capacity well in excess of 2020 growth capital spend ▪ To the extent capital funding capacity not fully utilized in
Slide 8: Segment Profit & Cash Flow by Contract Structure
Segment Profit & Cash Flow by Contract Structure Segment Profit and cash flow heavily weighted to high quality businesses ▪ Through divesting non-core, commodity exposed businesses, Gibson has significantly improved its weighting to higher quality contract structures, resulting in the highest cash f
Slide 9: Counterparty Credit Exposure
Counterparty Credit Exposure Infrastructure accounts for majority of EBITDA; terminals primarily IG customers Nature of Credit Exposures by Business Segment(1) 100% ▪ Infrastructure represents ~80% of 2020E Segment Profit and is backed by long-term, take-or-pay and stable fee-based contracts with pr
Slide 10: Strong Financial Position
Strong Financial Position Leverage and payout ratio currently below target ranges ▪ Maintain two Investment Grade ratings(1) ▪ Rating of BBB (low) with stable trend from DBRS Morningstar, reaffirmed April 2020 ▪ Rating of BBB- with stable outlook by S&P, reaffirmed July 2020 ▪ Long-term funding mode
Slide 11: Contract Quality & Balance Sheet Comparison
Contract Quality & Balance Sheet Comparison Attractive contract quality and best-in-class leverage relative to peer group Proportion Take-or-Pay & Fee-for-Service(1) Net Debt / LTM Adjusted EBITDA(2) (%) (x) 100% 8.0x 80% 6.0x 60% 4.0x 40% 2.0x 20% 0% 0.0x Peer A Peer B GEI Peer C Peer A Peer B Peer
Slide 12: Long-Term Capital Allocation Priorities
Long-Term Capital Allocation Priorities Near-term focus on remaining fully-funded and preserving balance sheet strength ▪ Target payout ratio of 70% – 80% over the long-term Fund Dividend Fund the Business ▪ Dividend to be fully covered by stable, long-term Infrastructure cash flows ▪ Significant va
Slide 13: Hardisty Terminal – Best-in-Class Connectivity
Hardisty Terminal – Best-in-Class Connectivity Replicating Gibson’s competitive position not possible and cost prohibitive ▪ Flexibility offered by Gibson’s existing best-in-class connectivity provides a wide moat at Hardisty ▪ Key consideration for customers as it helps production volumes reach mar
Slide 14: Hardisty Terminal – Competitive Advantages
Hardisty Terminal – Competitive Advantages Replicating Gibson’s competitive position not possible and is cost prohibitive ▪ Located at the heart of the Hardisty footprint Land Position ▪ 240 acres of land holdings adjacent to existing tankage plus additional land surrounding ensures decades of runni
Slide 15: Hardisty Terminal – Overview
Hardisty Terminal – Overview Continue to grow at Hardisty at an attractive 5x – 7x EBITDA build multiple COLD LAKE N HARDISTY TOP OF THE HILL Gibson connection to HARDISTY EAST 210 mbbl/d rail facility WEST HARDISTY Additional Phases TERMINAL Expect sanction run rate to remain at 2 – 4 per year base
Slide 16: DRU at Hardisty – On-Strategy Infrastructure
DRU at Hardisty – On-Strategy Infrastructure High-quality infrastructure project leveraging and extending Hardisty position First DRU in ▪ 50%/50% joint venture between Gibson and USD Western Canada ▪ Agreement in place with ConocoPhillips Canada for 50,000 bbl/d of inlet capacity ▪ Infrastructure r
Slide 17: DRU at Hardisty – Full Market Access Solution
DRU at Hardisty – Full Market Access Solution Full market access solution to support construction of first DRU in Western Canada OIL SANDS 1 Bitumen production from the oil sands shipped as dilbit via pipelines to Gibson’s Hardisty Terminal EDMONTON DRU at Hardisty separates the majority of blended
Slide 18: DRU Hardisty – Location and Construction
DRU Hardisty – Location and Construction Targeting mid-2021 in-service at a cost of $125mm to $175mm net to Gibson ▪ Targeting in-service date in mid-2021 ▪ Total capital cost of the initial 50,000 bbl/d phase, net to Gibson, estimated to be between $125mm and $175mm ▪ Currently envision roughly two
Slide 19: Edmonton Terminal
Edmonton Terminal Edmonton Terminal an attractive cash flow stream, although smaller scale ▪ Edmonton Terminal benefits from advantageous positioning located next to two major refineries, access to both the CN and CP railway lines and being near both major egress pipelines ▪ Provides flexibility to
Slide 20: Marketing Capabilities
Marketing Capabilities Creates value for customers and drives volumes to Gibson’s Infrastructure assets ▪ Refined Products leases the Moose Jaw Facility from the Refined Infrastructure segment, sourcing feedstocks and marketing the Products refined products that are produced by the facility ▪ Physic
Slide 21: Segment Profit Outlook
Segment Profit Outlook Infrastructure to grow to ~80% of total segment profit by 2020E ▪ Significant growth in the core Infrastructure segment over time, with a ~20% CAGR between 2011 and 2020E ▪ Infrastructure expected to generate segment profit of $360 – $380mm in 2020E and a ~$400mm annual run-ra
Slide 22: Distributable Cash Flow Outlook
Distributable Cash Flow Outlook Sustained growth in core Infrastructure driving meaningful per share growth Distributable Cash Flow With Illustrative Breakout By Business(1) (C$mm, C$/share) Line of sight to delivering DCF CAGR of $400 ~10% between 2017A and 2020E… $2.50 $2.00 $300 …with future proj
Slide 23: Key Takeaways
Key Takeaways Continue to deliver on all facets of the strategy; will remain disciplined Delivery Since January 2018 Investor Day Go Forward Deliverables Sanction 2 – 4 Tanks Infrastructure ▪ Continue to target investing $200 – $300mm per year per Year (vs. 1 – 2) Growth over the long-term ▪ Expect
Slide 24: Appendix
GIBSON ENERGY APPENDIX
Slide 25: Infrastructure Growth Capital
Infrastructure Growth Capital Invested $1.75B in Infrastructure 2011-2020E, including 11.5 mmbbl of tankage Infrastructure Growth Capital Expenditure 2011A - 2020E (C$mm) 2020E ~$300mm $243 $221 $219 $229 $184 $147 $101 $62 $41 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2 Tanks, 0.6 mmbbl In
Slide 26: Forward-Looking Statement Notice
Forward-Looking Statement Notice The forward-looking statements contained in this presentation represent Gibson’s expectations as of the date hereof, and are subject to change after such date. Gibson disclaims any intention or obligation to update or revise any forward-looking statements whether as
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