Operator: Good afternoon, ladies and gentlemen, and welcome to the Tidewater Midstream and Infrastructure Limited and Tidewater Renewables Limited Q2 2026 financial results conference call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call, you require immediate assistance, please press zero for the operator. This call is being recorded on Thursday, 08/13/2026. And I would now like to turn the conference over to Mr. Ian Quartly, CFO. Please go ahead.
Ian Quartly: Thank you, Ina, and welcome, everyone, to the joint conference call for the second quarter 2026 results of both Tidewater Midstream and Infrastructure Limited and Tidewater Renewables Limited. Joining me today is our CEO, Jeremy R. Baines, who will provide an update on our operational performance regulatory tailwinds, favorable market conditions we have seen to start the year. I will follow with the financial results and details on the increased 2026 guidance. And then we will open the line for your questions. This morning, both Tidewater Midstream and Tidewater Renewables reported results for the second quarter ended 06/30/2026. A copy of the news releases financial statements and MD&As may be accessed on SEDAR plus or on the respective company's websites. Before we get started, I would like to note that today's call is being recorded for the benefit of individual shareholders, the media, and other interested parties who may want to review the call at a later time. The recorded call will be available through Precision. Some of the comments made today may be forward looking in nature, but based on Tidewater's current expectations, judgments and projections. Forward looking statements we express today are subject to risks and uncertainties which can cause actual results to differ from expectations. Further, some of the information provided refers to non GAAP measures. To know more about these forward looking statements, non GAAP measures and risk factors, please see the company's various financial reports, which are available on the company's website and on SEDAR+ I will now turn the call over to Jeremy.
Jeremy R. Baines: Thanks, Ian, and good morning to everybody. And thank you for joining us today. I am going to start off my remarks talking about Tidewater Renewables. During the second quarter, the HDRD complex achieved record average daily throughput of 3.31 thousand barrels per day, representing a 111% utilization rate The team has done a fantastic job completing a number of very low cost debottlenecking initiatives, which along with flawless facility reliability, enabled the HDRD complex to consistently operate above nameplate capacity. This was extremely important to produce above nameplate capacity during a quarter when we realized record margins on the sale of the renewable diesel sold at US import parity pricing from the facility. We also captured an additional $0.16 per liter of margin from the biofuels production incentive, which led to the record financial results that Ian will discuss later on the call. On the regulatory front, during the first quarter of 2020, Tidewater Renewables received conditional approval from Natural Resources Canada for the biofuel production incentive program. On July 7, the contribution agreement was executed which secures total funding in line with the full annual production capacity of the HDRD complex. We expect to receive both first and second quarter cash contributions totaling $13.8 million during the third quarter of 2020 6 with subsequent contributions to be received quarterly in arrears, providing a consistent boost to our cash flow and liquidity. Moving next to the sustainable aviation fuel project. Which continues to progress towards a final investment decision during the Q4 of this year. On 06/19/2026, Tidewater Renewables executed a new initiative agreement with the government of British Columbia which will provide additional BCLCFS credits to support the funding of critical pre FID activities. These pre FID activities are expected to allow Tidewater Renewables to preserve project schedule, maintain vendor and fabrication capacity availability, mature engineering deliverables, support regulatory advancement, and position the project for efficient execution post FID. Tidewater Renewables expects to receive BCLCFS credits in Q3 and Q4 of 2026 as certain project milestones are achieved. Now moving over to Tidewater Midstream. Throughput at the Prince George Refinery averaged 10 thousand barrels per day in the second quarter, due to a planned 17-day partial facility outage during April to complete scheduled equipment cleaning and other maintenance activities. Excluding the impact of the scheduled outage, throughput at PGR averaged 12.1 thousand barrels per day or 101% of design capacity. Market conditions for refined products were at historically high levels during the second quarter due to global energy supply disruptions and the reduction of global refining capacity particularly in the Middle East and Russia. As a result, the Prince George crack spread averaged $118 per barrel in the second quarter of 2020, a 16% increase from the first quarter of 2020. Looking ahead to the second half of the year and beyond, the refining macro environment remains very constructive. Globally, there is approximately 10% of refining capacity offline and most of that is due to damaged equipment that will take an extended time to repair or rebuild. At the same time, inventories of refined products are at historically low levels. As previously disclosed, Tidewater Midstream hedged approximately 50% of crack spread exposure between April and December 2026. Subsequent to the second quarter, during the second half of July, Tidewater entered into additional hedges for approximately 40% of its crack spread exposure for 2027, at fixed prices significantly above both mid cycle pricing and 2026 realized hedge pricing. Tidewater's hedging program is designed to manage commodity price volatility, and establish a baseline for the corporation's free cash flow. At the BRC gas processing throughput averaged a 105 million cubic feet per day during the second quarter of 2020, an 8% decrease over the previous quarter The lower throughput was primarily due to NGTL curtailments that limited producer volumes coming through the facility which also decreased fractionation facility utilization to 76% in Q2 compared to 90% in Q1 of 2026. We continue to hold active discussions with prospective and existing customers as we focus on increasing utilization at the BRC. The Red River gas plant remains temporarily curtailed while sulfur handling operations continue to operate. Current market prices, especially for sulfur, are at levels that are highly economic for sour gas producers and our intent is to restart the gas plant when production in the area resumes. Looking ahead, we continue to remain focused on driving operational excellence enhancing margins and executing on strategic initiatives, including maximizing utilization at the PGR and HDRD Complex, Strengthening commercial platforms and offtakes, Advancing our SAF project while managing Capital Prudently, Increasing Our Midstream facility utilizations at BRC and Ram River, progressing noncore asset sales to unlock liquidity, and we continue to advocate for a fair regulatory and trade environment. We believe these building blocks position us for both revenue growth and margin expansion during the second half of 2026. With that, I will now turn it to Ian for the financial review.
Ian Quartly: Thanks, Jeremy. Tidewater Renewables generated record adjusted EBITDA of $56 million during the second quarter. This performance was underpinned by the HDRD complex running above nameplate Capacity Which Allowed Us To Capture The Improving Market Pricing By Leveraging our offtake contracts That Are Indexed To US import pricing benchmarks. Included in the $56 million of adjusted EBITDA is $7.7 million of expected proceeds recognized during the second quarter from the biofuels production incentive and $7.7 million of adjusted EBITDA from the equity investment in the cattle company. Primarily due to an increase in cattle prices. Tidewater Midstream generated deconsolidated adjusted EBITDA of $32.9 million in the second quarter of 2020, an increase of $7.3 million from the first quarter of 2020. This performance was primarily driven by stronger crack spreads at Prince George refinery which were partially offset by realized losses on the crack spread hedges. At the Tidewater Consolidated Group level, second quarter adjusted EBITDA of $88.9 million was a quarterly record and a $39.2 million increase over the first quarter of 2020. Moving now to the credit facilities and leverage. Where both Tidewater Renewables and Tidewater Midstream made significant progress towards our debt reduction and deleveraging targets during the second quarter. Consolidated net debt decreased by $44.4 million during the second quarter due to a $30.9 million debt reduction in Tidewater Midstream in addition to a $13.5 million debt reduction at Tidewater Renewables. When combined with the higher adjusted EBITDA reported in the second quarter, this has resulted in significant reductions in each company's leverage. Tidewater Renewables reported a debt to adjusted EBITDA ratio of 1.47x at June 30, and Tidewater Midstream reported a debt to adjusted EBITDA ratio of 2.3x. On a consolidated basis, the debt to adjusted EBITDA ratio of 1.7x is now back within the target range of 1.2x to 2.5x. With the release of the second quarter financial results this morning, we also announced increases to full year 2026 adjusted EBITDA guidance. Consolidated adjusted EBITDA is now forecast to be between $230 million and $250 million an increase of 20% over the midpoint of the previous guidance. Tidewater Renewables adjusted EBITDA guidance was increased to between $130 million and $140 million and Tidewater Midstream's deconsolidated adjusted EBITDA guidance was increased to between $100 million and $110 million The primary drivers for the increased adjusted EBITDA guidance are higher facility utilization, sustained strength in forward market crack spreads, and improved pricing for renewable diesel and emission credits. Forecasted 2026 capital expenditures remain unchanged, at $2 million to $3 million for Tidewater Renewables and $20 million to $25 million for Tidewater Consolidated. This capital guidance includes both growth and maintenance capital and is net of the BCLCFS credits expected to be received under the executed agreements for capital projects. By maintaining a disciplined capital program, the resulting free cash flow will be primarily directed towards debt reduction. That concludes our prepared remarks. Tina, please open the line for questions.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. And should you wish to cancel your request, please press star followed by the 2. If you are using a speaker phone, please lift the handset before pressing any keys. 1 moment please for your first question. Thank you. And your first question comes from the line of Robert Hope from Scotiabank.
Rob Hope: First question is on the SAF project. So as we take a look at a Q4 potential sanctioning of the project, can you update us with any, you know, we will call it, key milestones we should be looking for as well as, sizing and cost to the and the potential in service data of the asset?
Jeremy R. Baines: Yes, great. Thanks for the question, Robert. So milestones, we have been very consistent on this. We need the regulatory environment to support the project. there is really 2 pieces to that. We are waiting for the targeted amendments that ECCC is looking at around the CFR and how they treat SAF there. But we are expecting to see those come out sometime here I am guessing, in the third quarter. And then the second piece would be, some other regular programs around the support for a SAF industry in Canada that we will be watching for. With those, we would go ahead and FID the project later this year. Capital cost is about a $1.2 billion build out is what we are we are at. We have got a very detailed and solid Class 3 FEED on that.
Rob Hope: Appreciate that. Then maybe moving over to the hedging program, can you update us on how you are thinking about the level of hedging that is appropriate for Tidewater? So it does appear that 50% is kind of the number for 2026. You have already got 40% for 2027. You know, is could we see potentially, you know, you layering on above that depending on what the forward market looks like? Or you know, is that kind of 50-ish percent open, you know, the sweet spot for the company?
Jeremy R. Baines: Yeah. that is a good question. We have been sort of monitoring the situation and obviously we are in a fairly attractive crack spread environment. And you know, we wanted to put a baseline of cash flow under the business for the year until we met some of our debt reduction goals. And so that led us to the 50% hedge program in 2026 We have started layering in for 2027. We like where the forward, cracks are in 2027. So putting some certainty under those, we think, is prudent. You know, I do not see us maybe opportunistically in certain points if we could go above 50%, but 50% seems to be the right sort of spot for us to just make sure we, you know, take some of the volatility out of revenues. Thank you.
Operator: Thank you. Once again, Your next question comes from the line of Maurice Choy from RBC Capital Markets.
Maurice Choy: Thanks. Good morning, everyone. Just want to talk about funding for a moment. The net debt to EBITDA clearly has come down very nicely into target ranges. And I guess in the past, you direct a lot of attention to raising new capital through, I guess, noncore asset sales, for example. You know, when you think about your funding plan, and how much cash you are generating, is there still a need to, you know, go about some of those initiatives, or should we think about this balance sheet meant to support initiatives like the SAF, for example, other growth projects?
Jeremy R. Baines: No. Good question. Thank you, Maurice. So 2 things. We will continue to pursue the noncore asset sales that we have talked about in the past, and we are on track to the guidance we have given the market there. We have done a deep review over the last couple of years of all of our assets and any assets that are not generating an appropriate return and do not fit our strategy. We are actively working to core up and, sell those assets. So we will continue on that front. it is really a matter more of do these assets fit our strategy, but most importantly, do they generate an appropriate return? And so the assets we are selling, some of them are negative period. Like, do not generate any return. But do have some value to others. And so we are continuing on that path and on track As far as funding going forward, yes. Obviously, we have been very careful in managing our capital programs over the last couple years. I think the team has done a very good job in implementing a new risk based framework, ensuring that every dollar we spend generates an appropriate return or an appropriate reduction in risk. So we will continue to do that. The big item, I think, that you are probably thinking about is our SAF project. And you know, we do you know, assuming the regulatory environment gets to the spot that we would like that we need for us to go ahead and FID that project. We see that, the ability to finance and fund that program, we expect to get the same level of support for that project as we did on the, RD plant on a relative basis. We do see that, an ability to over a 3-year build period for that project contribute funds out of cash flow from operations to fund that bill. You know, as the project goes here, we feel pretty comfortable with our ability to do that. We do have other alternatives We have got a First Nations partner that is taking a look at a small stake in that project who is very supportive of the project. there is others who have expressed an interest in partnering with us, so we have that option as well. So we feel like we are in good shape. To meet our key funding programs. Obviously, we will always continue to treat our capital and our spending there, ensuring that we are getting an appropriate risk adjusted return on it.
Maurice Choy: Thanks. And maybe just a quick clarification on that part. You mentioned a 3-year build You can probably fund that out of your own operating cash flows. So it sounds like do not necessarily need other funding partners, but you probably welcome the collaboration and reconciliation. But is that fair?
Jeremy R. Baines: Yeah, right now, obviously, we are working with a potential First Nations partner. We would like them to join the project if they so choose to invest. Otherwise, we believe through the Part 3 agreements and cash flow from operations, we have the ability to do this whole SAF project on our own. it is a 3-year build out online in 2030, and we will have a meaningful impact on our cash flows at that time. So that is the base case, but we do have a lot of other alternatives available to us to consider as we move forward on that project.
Maurice Choy: Understood. Maybe just thinking more holistically of the Tidewater complex. You know, obviously, when Tidewater Renewables was first created, it was under a very different environment, different market expectations, different outlook. And we are where we are today. And I just wonder, Jeremy, if you could just you know, reset our views as to why you still think this is the right construct today? Perhaps what variables could change for you to reconsider the structure itself?
Jeremy R. Baines: So when we look at the business, and I think I have been saying this from day 1, we see it as a fuels business and a midstream business. We have a great team that has very good experience across both of those lines of business. Both building, owning, operating, We continue to see constructive environments around both of those business streams. We see a very supportive regulatory environment, supporting renewable fuels. We have seen global, events that are very supportive of our conventional fuels refining business. And we continue to see the build out and development of a great resource in Western Canada that supports the demand for our midstream services. So we are very comfortable with our businesses. We have 2 companies We have generated significant efficiencies operating them. And we, you know, we continue to work to be generate cash flow for all our shareholders and optimize the businesses. Understood.
Operator: Thank you. Thank you. Once again, should you have a question, There are no further question at this time. I will now hand the call back to mister Ian Quartly for any closing remarks.
Ian Quartly: Thanks everyone for joining the call. The team is available to address any of your outstanding items with our contact information in the bottom of each company's press release.
Operator: Thank you. This concludes today's call. Thank you for participating. You may all disconnect.
