CALGARY, Alberta, Dec. 06, 2017 (GLOBE NEWSWIRE) --
Agreement with TransAlta to construct Inter-Alberta Pipeline Network
Tidewater Midstream and Infrastructure Ltd. (“Tidewater”) (TSX:TWM) and TransAlta Corporation (“TransAlta”)
(TSX:TA) (NYSE:TAC) announced today that the two companies have entered into a Letter of Intent (“LOI”) for Tidewater to construct
a 120 km natural gas pipeline from its Brazeau River Complex (“BRC”) to TransAlta’s generating units at Sundance and
Keephills. The pipeline is expected to cost approximately $150 million and is supported by a 15 year take or pay agreement
with TransAlta.
The pipeline will provide initial capacity of 130 MMcf/d by 2020, and have expansion capability to 340 MMcf/d,
which represents approximately 50% of TransAlta’s gas requirements at full capacity of the generating units at Sundance and
Keephills. Under the LOI, TransAlta has the option to invest up to 50% in the pipeline.
“Construction of the natural gas pipeline supports our strategy of being a low-cost provider of firm, clean and
reliable energy”, said Dawn Farrell, President and Chief Executive Officer of TransAlta. “In addition, having greater access to
natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage
of low natural gas prices and reduce our carbon costs.”
“Tidewater is excited to enter into a long term arrangement with TransAlta which is supported by a 15 year take
or pay agreement that provides oil and gas producers throughout Western Canada with direct connectivity to a new, large demand
source”, said Joel MacLeod, President and Chief Executive Officer of Tidewater. “This agreement with TransAlta enables Tidewater to
transport production direct from the wellhead through Tidewater’s extensive natural gas processing and storage infrastructure
network direct to an end market.”
Proposed issuance of senior unsecured notes
Tidewater intends to issue, subject to market and other conditions, a proposed private placement of senior
unsecured notes (the “Notes”).
Tidewater intends to use the net proceeds from the offering for a non-permanent repayment of indebtedness under
Tidewater’s existing credit facility, drawn to fund its various capital projects, and for general corporate purposes.
The Notes will not be qualified for distribution to the public under the securities laws of any province or
territory of Canada and may not be offered or sold in Canada, directly or indirectly, other than pursuant to applicable private
placement exemptions. The Notes will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This press
release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes in any jurisdiction.
Deep Basin and Montney region acquisition
Tidewater’s previously announced acquisition of certain assets in the Deep Basin and Montney region for net cash
consideration of $34 Million, subject to customary adjustments, has closed in escrow. Final closing of the transaction is
subject to regulatory license transfer approvals and is expected to occur in December 2017. An immaterial portion of the
assets is being held in escrow pending resolution of a right of first refusal challenge.
Closing of credit facility increase
Tidewater is pleased to announce that an increase to its credit facility has closed. Tidewater’s banking
syndicate increased this credit facility from $180 million to $250 million.
Tidewater'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.
Cautionary Notes
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 press release contains forward-looking statements relating to but not limited to: plans to
construct a 120 km natural gas pipeline from Tidewater’s Brazeau River Complex to TransAlta’s Sundance and Keephills facility and
expected costs of such project and associated take or pay agreement; expectations regarding initial capacity of the planned
pipeline and expansion capability; TransAlta’s expected gas requirements; potential future investment in the pipeline project; a
proposed offering of Notes by Tidewater; the timing and completion of the proposed offering of Notes, and the use of proceeds from
the offering of Notes; the anticipated closing of the Deep Basin and Montney acquisition including timing thereof and
regulatory approval of related licence transfers; and pending resolution of rights of first refusal in connection to the Deep
Basin/Montney acquisition.
These forward-looking statements are based on certain key assumptions including: legislative or regulatory
developments, including as it pertains to the Alberta capacity market; the Federal and/or Provincial governments not implementing
legislation or regulations facilitating the conversion from coal generation to gas generation; changes in economic and competitive
conditions; inability to secure natural gas supply and the construction of a natural gas pipeline on terms satisfactory to
Tidewater; Tidewater’s ability to execute on its business plan; operating activities; general market and other conditions; the
ability of Tidewater to market natural gas liquids to current and new customers; the timely receipt of required governmental and
regulatory approvals; future natural gas liquids prices; laws and regulations continuing in effect (or, where changes are proposed,
such changes being adopted as anticipated); royalty rates, taxes and capital, operating, general & administrative and other costs;
general business, economic and market conditions; with respect to current and planned development projects, expansions, planned
capital expenditures, completion dates and capacity expectations: that third parties will provide any necessary support; that any
third-party projects relating to Tidewater’s growth projects will be sanctioned and completed as expected; that any required
commercial agreements can be negotiated and effected; that all required regulatory and environmental approvals can be obtained on
the necessary terms and in a timely manner; that counterparties will comply with contracts in a timely manner; and that there are
no unforeseen events preventing the performance of contracts or the completion of the relevant facilities; the ability of Tidewater
to generate sufficient cash flow from operations and other sources to meet current and future obligations, including costs of
anticipated projects and repayment of debt; the ability of Tidewater to obtain equipment, services, supplies and personnel in a
timely manner and at an acceptable cost to carry out its activities; and anticipated timelines and budgets being met in respect of
Tidewater’s projects. Readers are cautioned that such assumptions, although considered reasonable by Tidewater at the time of
preparation, may prove to be incorrect.
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: risks related to regulatory approval; the ability of
management to execute its business plan; risks inherent in Tidewater’s marketing operations, including credit risk; fluctuations in
crude oil, natural gas liquids and natural gas prices; health, safety and environmental risks; uncertainties as to the availability
and cost of financing; the possibility that governmental policies or laws may change or governmental approvals may be delayed or
withheld; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour
and services; and other risks and uncertainties described elsewhere in this document or in Tidewater’s other filings with Canadian
securities regulatory authorities.
The above summary of assumptions and risks related to forward-looking statements in this press release has been
provided in order 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.
Tidewater Midstream & Infrastructure Ltd. Joel MacLeod Chairman, President and CEO 587.475.0210 jmacleod@tidewatermidstream.com
