Mr. Rob Colcleugh reports

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

Tidewater Midstream and Infrastructure Ltd. has entered into an agreement with AltaGas Ltd. to sell its Pipestone natural gas plant (Pipestone phase I), Pipestone expansion project (Pipestone phase II), Dimsdale natural gas storage facility, and associated gathering and other infrastructure for $650-million, subject to customary postclosing 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 chief executive officer 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 mid-stream, downstream and renewable fuels assets.

Transaction benefits:

• Improves financial strength and liquidity:
  • Transaction delevers 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 mid-stream 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.

About the transaction

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-million to $60-million of Tidewater's normalized 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

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 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.

Executive leadership changes

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 -- Mr. Scott 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 -- Mr. Millard has been with Tidewater since it acquired the Prince George refinery from Husky in 2019. He has spent the past 17 years working at the Prince George refinery for Husky in increasingly senior leadership roles.
• Jared Gurevitch, executive vice-president, midstream commercial -- Mr. Gurevitch has been with Tidewater since 2017 and has 11 years of experience in mid-stream commercial and marketing roles with his latest being vice-president, mid-stream marketing, for the corporation.
• John McGougan, executive vice-president, mid-stream operations -- Mr. McGougan has over 30 years of experience in the upstream and mid-stream 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 vice-president, operations, mid-stream, since 2019.
• Shawn Heaney, executive vice-president, planning and strategy -- Mr. Heaney has over 10 years of capital markets and energy industry experience, most recently on the energy and power investment banking team at Bank of America. For the past two years he held the role of vice-president, 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.

Advisers and fairness opinion

National Bank Financial and CIBC Capital Markets are acting as financial advisers 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.

About Tidewater Midstream and Infrastructure Ltd.

Tidewater is traded on the Toronto Stock Exchange 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.

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