October 2017
Forward Looking Information Advisory In the interests of providing Tidewater Midstream and Infrastructure Ltd. ( Tidewater or the Corporation ) shareholders and potential investors with information regarding Tidewater, including management s assessment of future plans and operations relating to the Corporation, this document contains certain statements and information that are forward-looking statements or information within the meaning of applicable securities legislation, and which are collectively referred to herein as forwardlooking statements. Forward-looking statements in this document include, but are not limited to statements and tables (collectively statements ) with respect to: the strategic acquisition and concurrent equity financing; subsequent acquisitions and strategies for acquisitions, capital projects and expenditures; strategic initiatives; anticipated producer activity and industry trends; and anticipated performance. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, as well as known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur and which may cause Tidewater s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by the forward-looking statements. These assumptions, risks and uncertainties include, among other things: receipt of third party, regulatory and governmental approvals and consents in respect of the strategic acquisition and concurrent equity financing; completion of the strategic acquisition and concurrent equity financing; Tidewater s ability to successfully implement strategic initiatives and whether such initiatives yield the expected benefits; future operating results; fluctuations in the supply and demand for natural gas, NGLs, and iso-octane; assumptions regarding commodity prices; activities of producers, competitors and others; the weather; assumptions around construction schedules and costs, including the availability and cost of materials and service providers; fluctuations in currency and interest rates; credit risks; marketing margins; potential disruption or unexpected technical difficulties in developing new facilities or projects; unexpected cost increases or technical difficulties in constructing or modifying processing facilities; Tidewater s ability to generate sufficient cash flow from operations to meet its current and future obligations; its ability to access external sources of debt and equity capital; changes in laws or regulations or the interpretations of such laws or regulations; political and economic conditions; and other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by Tidewater. Readers are cautioned that the foregoing list of important factors is not exhaustive. The forward-looking statements contained in this document are made as of the date of this document or the dates specifically referenced herein. For additional information please refer to Tidewater s public filings available on SEDAR at www.sedar.com. All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Any financial outlook or future-oriented financial information, as defined by applicable securities legislation, has been approved by management of Tidewater as of October 15, 2017. Such financial outlook or future-oriented financial information is provided for the purpose of providing information about management's current expectations and goals relating to the future of Tidewater. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Non-GAAP Financial Measures: This presentation refers to EBITDA and cash available for distribution (CAFD), which do not have any standardized meaning prescribed by generally accepted accounting principles in Canada ( GAAP ). We define EBITDA as means earnings before interest, taxes, depreciation and amortization. We define cash available for distribution (CAFD) as the amount of cash generated from operations, before changes in working capital and after deducting sustaining capital expenditures, scheduled principal repayments of debt and distributions to non-controlling interests. 2
Tidewater Summary Track Record of Success Previous two companies generated 20x returns for shareholders (Predator Midstream Ltd. and Predator Oil Ltd.) High Growth, Pure Play NGL Infrastructure Business Pursuing Canadian natural gas liquids ( NGLs ) and natural gas market opportunities through the acquisition and optimization of strategic midstream, pipeline, storage, rail, downstream, and export assets Capitalizing on Management s strong producer and downstream market access relationships, Tidewater can guarantee producers improved pricing for their NGLs > 14 acquisitions announced/completed since IPO and continue to see opportunity to purchase key midstream assets in strategic locations at deeply discounted valuations EBITDA increased from zero at IPO to current run rate of ~$65 million with visibility to ~$100 million in the next 18-24 months while maintaining a strong balance sheet with Debt to EBITDA of 1.5-2.5x Forecasting exit 2017 run rate EBITDA of ~$80 million with Debt to EBITDA at approximately 1.5x Targeting annual 20% EBITDA/share growth over next 24 months Current net debt of ~$70 MM and expected net debt at approximately $110 MM at year end with a recently increased credit facility of $250MM Continue to focus on strengthening customers and contracts with another 10-year processing agreement signed with August acquisitions inclusive of a $12 million capital commitment from vendor to bring new volumes to the acquired assets Physical assets providing natural cashflow hedge with natural gas storage and extraction plant assets generating significant EBITDA in low gas price environment Established three core areas in strategic locations (Deep Basin, Montney and Edmonton) Deep Basin currently Tidewater s largest core area where activity is at-all time highs. Tidewater planning 50 MMcf/day expansion at the BRC due to demand for a cost of $10 million Edmonton assets continue to increase cashflow with the successful reactivation of both the Fort Saskatchewan Ethane Extraction Plant and the Paddle River Extraction Plant Tidewater continues to expand its Montney core area with two recent BC Montney acquisitions and its Wapiti Pipeline acquisition in addition to its Pipestone Montney infrastructure/egress hub and is currently scoping its Pipestone Sour Gas Plant Recent acquisition provides large-diameter pipelines (10-18 ) to connect Tidewater s Montney core area to Tidewater s Deep Basin core area. Also provides large-scale unrestricted egress option for producers Proven Capital Project Execution Commissioned 10,000 bbl/day HD2 propane fractionation facility and relocation of turbo expander to BRC ahead of schedule and on-budget on industry leading timeline of 7 months and capital cost of $25 million for 10,000 bbl/day fractionation facility 3
Tidewater is a High Growth Midstream Company NGL Connectivity Strategy 1 Acquire Strategic Contracted Infrastructure Own key NGL/gas infrastructure and gas plants with proximity to multiple transportation options, coupled with take-or-pay and/or reserve dedication agreements Most recent acquisition was $51 million dollar purchase price to acquire assets with > $900 million of replacement value and generating 2018 EBITDA of ~ $10 million. Creating the backbone for the Tidewater network between the Montney and Deep Basin and includes 10 year reserve dedication 2 Optimize Through Organic Investments Enable Tidewater to own a strategic integrated value chain from well head to end market and/or tidewater Significant opportunities within acquired assets to continue to generate incremental EBITDA at > 20% IRR Recent acquisition includes large diameter pipelines in both Montney and Deep Basin core areas and create new egress options for producers 3 Increase Capabilities of Infrastructure Increase third party throughput and/or improve liquids capture/pricing of NGLs for all related parties Commissioned 10,000 bbl/d fractionation facility on industry leading timeline and cost in 7 months for $25 MM Relocation of existing acquired and idled turbo expander and commenced expansion at BRC Focused on building out large scale Montney infrastructure and related egress 4 Enhance Logistics Network & Market Access Infrastructure Various logistics infrastructure including rail, pipelines and trucking Various port and pipeline infrastructure to get us to export markets 100 railcar NGL facility at Edmonton constructed on time and on budget Recent acquisition includes large sales meter which is currently unrestricted creating immediate egress options for Tidewater s customers 4
... That Currently Provides a Low-Risk Attractive Investment Opportunity Attractive Investment Opportunity 1 Very Conservative Capital Structure Maintaining a low-risk and highly flexible capital structure Current net debt ~$70 million on recently increased $250 million dollar credit facility with projected year-end debt of $110MM with run rate exit 2017 EBITDA of ~ $80MM Minimal debt vs. comparable average of 4.9x, payout ratio of ~30% vs. average of ~70% 2 Underlying Stable Cash Flow Producing Infrastructure Assets Protection obtained from vendors, contracts, competitive positioning to ensure go forward cash flow > 75% of EBITDA backed by take-or-pay contracts, long term agreements and/or reserve dedications Continue to increase long term contracts and diversify to customers with strong balance sheets 3 Growing EBITDA, CFPS and Share Value Taking advantage of ongoing pipeline of acquisition and organic growth opportunities to increase per share value via creativity of management team Since the April 2015 IPO, EBITDA increased from zero to current proforma exit 2017 EBITDA of ~$80 million Visibility to ~$100 million of EBITDA in the next 18-24 months while maintaining a strong balance sheet with Debt to EBITDA of 1.5-2.5x through the execution and commissioning of capital program 4 Relatively Undervalued versus Comparable Companies Currently trading at an overly large discount to the comparables given more conservative capital structure and more easily achieved relative growth rates EV/EBITDA multiple of 6.2x vs. peer average of 14.3x 5
Tidewater Facilities and Connectivity 6
Overview of Acquired Assets The Acquisitions create a strategic backbone pipeline network providing connectivity between Tidewater s Montney and Deep Basin core areas The transaction is expected to generate an annualized EBITDA of ~$10 MM, which implies an EBITDA multiple of 5.1x alongside > 10% accretion and replacement value of > $900 million Key acquired assets 85% operated working interest in an unrestricted, TCPL connected ~600 MMcf/day rail connected, sour gas plant ( Ram River ) where Tidewater has significant interest from partners to create a petrochemical hub ~25% operated working interest in a 16 and 18 dry/sour gas trunk lines 25% operated interest in a 400 Mmcf/day and 200 Mmcf/day dehydration and compression facilities at Stoberg and Brazeau Interests in 5 other gas plants 50% operated interest in 12 inch sour Wapiti pipeline has potential to offer Montney producers near term egress Operated interest in > 500km of pipelines Tidewater Asset Map Overlay Acquisition supported by 10-year reserve dedication from intermediate producer and additional processing agreements with a large producer and a $12 million dollar capital commitment to bring new volumes to acquired assets 7
Overview of Deep Basin Assets Brazeau River Complex continues to be Tidewater s core asset where activity is at all-time highs Tidewater recently consolidated to 100% ownership prior to recent plans to expand by 50 MMcf/day for $10 million due to customer demand Tidewater recently increased a take-or-pay contract by 10 Mmcf/day to 30 Mmcf/day and also extended to term to December 2020 with an intermediate-sized producer Commissioned 10,000 bbl/day fractionation facility, capable of HD2 propane, at the BRC 45 days ahead of schedule on industry leading timeline of 7 months and at a cost of $25 million Tidewater commissioned 40 MMcf/day deep cut in May 2017 on an 8 month schedule for a cost of $15 million, significantly improving NGL recoveries at the BRC Tidewater is working on multiple egress/takeaway options on both natural gas and NGLs in and around the BRC to tie producers into Tidewater s own network at Edmonton Potential to connect newly acquired infrastructure to BRC and provide customers with new large scale egress solution Tidewater has commenced injections into its proven natural gas reservoir and is currently injecting approximately 25 Mmcf/day and exceeding expectations while offering producers an egress and improved natural gas price option at BRC With commercial support around natural gas storage by investment grade counterparties for long term agreements, Tidewater plans to deploy an additional $5 million of capital into natural gas storage in 2017 Deep Basin Processing Facilities & Pipelines 8
Overview of Edmonton Assets Tidewater has over 800 km of key pipelines and valuable rights of ways at Edmonton, 600 acres of heavy industrial land at Edmonton/Fort Saskatchewan, and 3 key extraction plant licenses Edmonton assets provide egress/takeaway options for natural gas and NGL production throughout the Deep Basin and Tidewater is now tied into some of the largest industrial consumers of natural gas in Western Canada Over the next 2 to 3 years, Tidewater plans to build out its Edmonton Energy Hub on its 600 acres of heavy industrial land and improve connectivity to major hubs at Edmonton Includes the potential for propylene and polypropylene production and/or iso-octane production as Tidewater has received several expressions of interest from various off-take and joint venture parties who Tidewater management has worked with in the past for these products Tidewater anticipates a significant improvement in margins by eliminating third party rail transloading fees, eliminating trucking costs and reduced pipeline tariffs at the Acheson facility Fort Saskatchewan Ethane Extraction plant successfully reactivated and online and on-time and on-budget at >100% IRR In May 2017 closed the acquisition of a 70 MMcf/day deep cut facility and successfully reactivated the facility in July 2017 ahead of schedule and under budget Edmonton Processing Facilities & Pipelines 9
Overview of Montney Assets Tidewater continues to receive interest to expand it s natural gas processing, NGL Marketing and various egress options at its core Montney area Tidewater finished construction of phase one of its TransCanada and Alliance connected infrastructure and related natural gas liquids hub and natural gas storage project on-time and on-budget and is currently injecting natural gas into it s natural gas storage facility Tidewater has received significant support from multiple producers in the Pipestone area to license and construct a 100 MMcf/day sour deep cut gas plant which would be backed by take-or-pay contracts and/or reserve dedications Tidewater has received multiple term sheets from investment grade counterparties and potential financial partners to develop a large scale Montney infrastructure/egress hub near Grande Prairie Tidewater closed NEBC Montney acquisition where it acquired 40% in an operating 30 MMcf/day sour plant in the heart of the Montney at Parkland as well as ~1,000 acres of surface land Tidewater s recent Wapiti Pipeline acquisition adds an operated 12 inch sour pipeline that could become significant egress option for Montney producers August 2017 Montney acquisition include various working interests in 150 km of pipelines in the Jedney, Blair and Altares area of NEBC, an interest in key sour gas processing and compression and approximately 50 net sections of prospective Montney rights in the Altares area of NEBC. Also included is a pipe connected condensate battery at Valhalla which includes 20,000 bbls of condensate storage Montney Processing Facilities & Pipelines 10
Tidewater has a Solid Infrastructure Business With a Strengthening Customer Base > 75% of EBITDA backed by take-or-pay contracts, long term agreements and/or reserve dedications with > 50 customers Tidewater continues to work hard to strengthen customer base and contracts and recent acquisition adds 10 year processing agreement Top Producers Utilizing the Core Facilities Core Facility Throughput (MMcf/d) Take-or-pay Reserve Dedication Take or Pay: Years Remaining TCPL Extraction 100 Yes No 10+ Producer #1 60 Yes Yes 1 Producer #2 50 No Yes 10 Producer #3 30 Yes Yes 3 Producer #4 20 Yes No 2 Producer #5 18 Yes Yes 5 Producer #6 18 Yes No 1 Producer #7 11 No Yes n.a. Producer #8 9 No Yes n.a. Producer #9 6 Yes Yes 4 Producer #10 6 Yes No 2 Producer #11 6 Yes No 5 Producer #12 6 Yes No 10 Producer #13 5 Yes Yes 7 Producer #14 5 Yes No 5-10 11
C$ Millions Positioned for Organic Growth Outperformance Balance sheet is well positioned to execute on un-risked organic growth opportunities Potential to add significant shareholder value over the next 2 years While maintaining a low risk capital structure EBITDA Growth $160 $150 $140 $130 $120 $110 $100 EBITDA from previously announced acquisitions Pro Forma EBITDA Current TWM Status Total EBITDA Net Debt 1 $110 $110 $150 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 ($10) ($20) ($5) - $24 $24 $26 ($25) ($17) ($12) $28 $28 $20 $25 $55 $42 $42 ($23) $46 ($21) $49 $20 $54 $54 $56 $50 $54 ($15) ($2) $58 $16 $69 $71 $66 $66 $80 $80 $80 ($30) IPO BRC Acquisition & Financing Pipeline Acquisition Peace River Arch Gas Plant Acquisition Gas Plant & Propane Acquisitions Edmonton Area Infrastrucutre Acquisition AltaGas Acquisition $80.5 MM Financing Acheson Plant, Land and Pipeline Acquisition and Rail Facility BRC Infra. Acquisition Remaining BRC Interest, Gathering Pipelines, Nat Gas Storage $69 MM Financing NEBC Processing Plant / NGL Trucking Q4 Processing Agreement / Pembina Restrictions Lifted / Fort Saskatchewan Reactivation / 70 MMcf Deep Cut + NGL Pipeline Acquisition & Reactivation Fractionation Facility & Relocation of Turbo Expander / BRC Expansion TransCanada and Alliance Connected Infrastructure Acquisition Total Remaining Capital Over Next 12-24 Months Capital Spent/ Required Capital $180 $8 $12 $22 $10 $87 n.a. $17 $15 $30 n.a. $13 $20 $50 $6 $51 $521 $80-$150 1 Cash flow for forward looking net debt calculated as EBITDA less growth capex, maintenance capex and dividends. 12
Tidewater Corporate Profile Stock Symbol Common Shares Outstanding TSXV: TWM ~329 million Insider Ownership (Fully Diluted) ~5.0% Market Capitalization 1 Net Debt Enterprise Value Total Midstream Processing Capacity (gross/net) and Length of Pipelines (gross/net) Replacement Value of Midstream Assets Annual Dividend $453 million $70 million $523 million >1.5 Bcf/day / >1 Bcf/day >4,000 km / >3,000 km > $2.0 billion $0.04/sh. Current Yield 1 ~2.9% 1 As at Oct. 13, 2017. 13
Tidewater Midstream Trading Comparables Tidewater s EV/EBITDA multiple of 6.2x trades at a large discount to its peer mean of 14.3x EV/EBITDA Tidewater Midstream Trading Comparables 18E / 17E Payout Net Debt / Share Market Enterprise EBITDA EV / EBITDA Ratio Dividend CAFD Yield EBITDA Debt/ Credit Company Price 1 Cap. 2 Value 2,3 Growth 4 2018E 4 2018E 4 Yield 2018E 4,5 2018E 4 Total Cap. 6 Rating ($/Sh.) ($MM) ($MM) (%) (x) (%) (%) (%) (x) (%) Enbridge Income Fund Holdings Inc. $32.15 $24,493 $39,960 14% 13.7x 71% 6.4% 9.1% 5.4x 52% Baa2 Pembina Pipeline Corp. $42.91 $17,462 $23,676 56% 12.5x 53% 4.8% 9.0% 3.4x 39% BBB Inter Pipeline Ltd. $26.12 $9,833 $15,470 3% 13.9x 68% 6.2% 9.1% 5.1x 63% BBB+ AltaGas Ltd. $28.28 $4,876 $9,709 38% 17.3x 92% 7.4% 8.0% 7.4x 43% BBB Keyera Corp. $38.88 $7,327 $9,543 26% 13.2x 52% 4.3% 8.3% 3.4x 54% n.a. Veresen Inc. $18.51 $5,806 $9,592 10% 15.2x 79% 5.4% 6.8% 5.0x 55% BBB Mean 25% 14.3x 69% 5.7% 8.4% 4.9x 51% Median 20% 13.8x 69% 5.8% 8.6% 5.0x 53% Tidewater Midstream $1.37 $453 $523 30% 6.2x 20% 2.9% 14.8% 0.8x 14% n.a. Tidewater is trading at a large discount to comparables despite a more conservative capital structure Source: Company reports and Bloomberg. Estimates based on consensus equity research. 1 As at Oct. 13, 2017. 2 Includes options and warrants using the Treasury Method. 3 EV includes non-recourse debt and preferred shares. 4 Based on consensus equity research estimates. 5 Cash available for distribution ( CAFD ) defined as cash from operations less maintenance capex, preferred dividend, non-controlling interest and amortization of debt payments. 6 Total capitalization value based on book value of equity plus net debt. 14