TIDEWATER MIDSTREAM AND INFRASTRUCTURE LTD. ANNOUNCES AN AGREEMENT TO SELL ITS PIPESTONE AND DIMSDALE ASSETS FOR $650 MILLION

(TSX: TWM)

CALGARY, AB, Aug. 31, 2023 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) is pleased to announce it has entered into an agreement with AltaGas Ltd. ("AltaGas") to sell its Pipestone natural gas plant ("Pipestone Phase I"), Pipestone expansion project ("Pipestone Phase II", collectively "Pipestone"), Dimsdale natural gas storage facility ("Dimsdale") and associated gathering and other infrastructure for $650 million (the "Transaction"), subject to customary post-closing adjustments.

"We believe the Transaction unlocks significant value for our shareholders while strengthening our balance sheet to better address opportunities across our diversified portfolio of energy and energy transition infrastructure assets," said Rob Colcleugh, Interim CEO of Tidewater.

Tidewater expects to use net proceeds from the Transaction for general corporate purposes, including the repayment of amounts on its senior credit facility. Following the Transaction, the Corporation will continue to focus on surfacing value across its remaining midstream, downstream, and renewable fuels assets.

• Improves Financial Strength and Liquidity
• Transaction de-levers Tidewater's balance sheet and provides significant financial flexibility
• Net of Transaction consideration, Tidewater expects to have minimal credit facility draws
• Tidewater will continue to take actions to improve corporate efficiency, profitability and cash flow per share
• Enhances Tidewater Value
• Highly accretive transaction metrics
• Following the successful turnaround of its Prince George refinery ("PGR"), Tidewater's business is positioned to benefit from the full throughput of its diversified asset base and is expected to deliver material near-term growth in consolidated cash flow from its ownership in Tidewater Renewables which is in the final stages of commissioning its renewable diesel ("HDRD") facility
• PGR continues to generate strong returns within one of North America's most attractive refining markets
• As Canada's first renewable diesel refinery, the currently commissioning HDRD facility is a highly strategic component of Tidewater's future growth portfolio and will establish Tidewater Renewables as a leader within the energy transition landscape
• Tidewater's remaining midstream assets are expected to benefit from strong demand for natural gas processing, extraction/fractionation, storage and marketing services across Western Canada
• The Corporation will remain focused on capital efficiency and will evaluate growth initiatives that support existing assets while maximizing cash flow per share

Subject to completion of customary conditions, AltaGas will acquire Pipestone and Dimsdale for total consideration of $650 million plus the assumption of power leases at Pipestone. The form of consideration will be $325 million in cash and $325 million in AltaGas common shares. Tidewater will receive approximately 12.5 million AltaGas common shares. Assets disposed of as part of the Transaction represent $55 - $60 million of Tidewater's normalized 2023 adjusted EBITDA.

The Transaction is subject to closing adjustments and conditions customary for a transaction of this nature and is not subject to any financing condition. The Transaction is also subject to a positive final investment decision ("FID") on the Pipestone Phase II project. To facilitate reaching FID, AltaGas and Tidewater have entered into an agreement to create a new joint venture (the "Pipestone Joint Venture") to advance the final steps required to develop and construct the project. The terms of the Pipestone Joint Venture will permit the parties to continue to collaborate on the Pipestone Phase II project, even if the Transaction does not proceed.

The Transaction has been unanimously approved by the Boards of Directors of both Tidewater and AltaGas. Closing is expected to occur in the fourth quarter of 2023 subject to satisfaction of all closing conditions. Tidewater expects to provide its updated guidance and strategic outlook following Transaction close.

In addition to Tidewater's asset sales, the Corporation is announcing several changes to its Executive Leadership Team including:

• Jeff Scott, Executive Vice President, Downstream Commercial
  Jeff comes to Tidewater after 24 years with Suncor in its Supply, Trading and Optimization organization where he served as Director, Crude Marketing followed by General Manager, Product Supply.
  
  
• Matt Millard, Executive Vice President, Downstream Operations
  Matt has been with Tidewater since it acquired the Prince George Refinery from Husky in 2019. He has spent the last 17 years working at the Prince George Refinery for Husky in increasingly senior leadership roles.
  
  
• Jared Gurevitch, Executive Vice President, Midstream Commercial
  Jared has been with Tidewater since 2017 and has 11 years of experience in midstream commercial and marketing roles with his latest being VP, Midstream Marketing for the Corporation.
  
  
• John McGougan, Executive Vice President, Midstream Operations
  John has over 30 years of experience in the upstream and midstream sectors primarily with Talisman and then Repsol. He is highly experienced in all aspects of facilities construction, maintenance, safety and asset integrity and has been Tidewater's VP Operations, Midstream since 2019.
  
  
• Shawn Heaney, Executive Vice President, Planning and Strategy
  Shawn has over 10 years of capital markets and energy industry experience, most recently on the Energy & Power investment banking team at Bank of America. For the past two years he held the role of VP, Strategic Initiatives for Tidewater.

Tidewater would like to thank departing executives Jarvis Williams, Brent Booth, Terrence Dumont and Jeff Ketch for their leadership since the founding days of Tidewater and for ensuring a smooth transition for the new team.

National Bank Financial and CIBC Capital Markets are acting as financial advisors to Tidewater and have provided a verbal opinion to the Tidewater board of directors to the effect that the consideration to be received by Tidewater under the Transaction is fair, from a financial point of view. Torys LLP is acting as legal counsel to Tidewater on the Transaction.

Tidewater is traded on the TSX under the symbol "TWM". Tidewater's business objective is to profitably grow and create shareholder value in the North American natural gas, natural gas liquids, crude oil, refined product and renewable energy value chain. Its operations include downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, storage, and various renewable initiatives. To complement its infrastructure asset base, the Corporation also markets crude, refined product, natural gas, natural gas liquids and renewable products and services to customers across North America.

Tidewater is a majority shareholder of Tidewater Renewables, an energy transition company focusing on the production of low carbon fuels. Tidewater Renewables' common shares are publicly traded on the TSX under the symbol "LCFS".

Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of the Corporation based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to but not limited to the following: the expected closing of the Transaction and expected timing thereof; the expected use of the net proceeds of the Transaction; the expectation that the Transaction unlocks significant value for our shareholders while strengthening our balance sheet; the Corporation's focus on surfacing value across its remaining midstream, downstream, and renewable fuels assets; Tidewater's expectation to have minimal credit facility draws; Tidewater will continue to take actions to improve corporate efficiency, profitability and cash flow per share; Tidewater's expectation to deliver material near-term growth in consolidated cash flow from its ownership in Tidewater Renewables'; the HDRD facility will establish Tidewater Renewables as a leader within the energy transition landscape; Tidewater's expectation to benefit from strong demand for natural gas processing, extraction/fractionation, storage and marketing services across Western Canada; the Corporation will remain focused on capital efficiency and will evaluate growth initiatives that support existing assets while remaining focused on maximizing cash flow per share; and the Corporation's expectations regarding the provision of an updated guidance and strategic outlook.

Although the forward-looking statements contained in this press release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, the Corporation has made assumptions regarding, but not limited to: the satisfaction of all closing conditions to the Transaction within the anticipated timeframe; the expected timing of completion of the Transaction; management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Transaction; current business and economic trends; the Corporation's ability to execute on numerous G&A and corporate efficiency initiatives to further streamline operations and increase profitability; the PGR continuing to generate attractive returns; Tidewater's de-levered balance sheet and enhanced cost structure allowing Tidewater's remaining strategic midstream assets to take advantage of continued demand for natural gas processing, extraction/fractionation, storage and marketing services across Western Canada; and a final investment decision being made on the Pipestone Phase II project.

The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to: risks relating to satisfaction of the conditions to, and completion of, the Transaction; failure to close the Transaction as contemplated and in accordance with negotiated terms; and failure to realize the anticipated benefits of the Transaction. Readers are cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this press release. Additional information on other factors which could affect the Corporation's operations or financial results are included under the heading "Risk Factors" in the Corporation's annual information for the year ended December 31, 2022, which can be accessed either on Tidewater's website at www.tidewatermidstream.com or under Tidewater's System for Electronic Document Analysis and Retrieval ("SEDAR+") profile on www.sedarplus.ca.

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, other than as required by applicable securities law. All forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Tidewater Midstream and Infrastructure Ltd.

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