May 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 May 10, 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 > 12 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 ~$60 million with visibility to ~$90 million in the next 18-24 months while maintaining a strong balance sheet with Debt to EBITDA of 1-2x Targeting 20% EBITDA/share growth over next 12 months Current net debt of ~$30 MM with recently increased $180 MM credit facility 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 with 350 wells being licensed within 60 mile radius of Tidewater s largest deep cut gas plant (BRC) in past 6 months. Tidewater planning 50 Mmcf/day expansion due to demand for cost of $10 million Edmonton assets continue to increase cashflow with the successful reactivation of the Fort Saskatchewan Ethane Extraction Plant and the build out of Tidewater s first rail facility Tidewater continues to expand its Montney core area with a recent BC acquisition and its Pipestone Montney infrastructure/egress hub and is currently scoping its Pipestone Sour Gas Plant 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 Continue to See Significant Acquisition, Organic Growth Opportunities and Synergies with Acquired Assets 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 Opportunities to acquire top-tier midstream assets in strategic locations at discounted valuations. Ongoing review of new opportunities to further enhance the NGL Connectivity Strategy In May 2017 acquired 300km of NGL pipelines and 70 MMcf/day deep cut facility 2 3 Optimize Through Organic Investments Increase Capabilities of Infrastructure Enable Tidewater to own a strategic integrated value chain from well head to end market and/or tidewater Increase third party throughput and/or improve liquids capture/pricing of NGLs for all related parties Significant opportunities within acquired assets to continue to generate incremental EBITDA at > 20% IRR Commenced 50 MMcf/day expansion at largest facility for $10 million due to customer demand 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 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 Focused on building out large scale Montney infrastructure and related egress 100 railcar NGL facility at Edmonton to be completed at end of May at industry leading cost and timeline 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 ~$30 million on $180 million dollar credit facility Minimal debt vs. comparable average of 4.5x, payout ratio of ~23% vs. average of ~70% 2 Underlying Stable Cash Flow Producing m Infrastructure Assets Protection obtained from vendors, contracts, competitive positioning to ensure go forward cash flow > 60% 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 EBITDA of ~$60 million Visibility to ~$90 million in the next 18-24 months while maintaining a strong balance sheet with Debt to EBITDA of 1-2x 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 12.3x 5
Tidewater Facilities and Connectivity 6
Overview of Deep Basin Assets Brazeau River Complex continues to be Tidewater s core asset where activity is at all-time highs with 350 wells being licensed in last 6 months Tidewater recently consolidated to 100% ownership prior to recent plans to expand by 50 MMcf/day for $10 million due to customer demand Tidewater has entered into a second processing agreement in principle with a customer who is a well capitalized, medium sized producer on a 10 year basis for the majority of the remaining capacity of the BRC Tidewater is also marketing all related NGLs for the producer, consistent with Tidewater s goal of working with producers to achieve improved NGL netback pricing, while also diversifying its customer base and strengthening its related contracts Includes a 3-4 well commitment and reserve dedication on 55,000 acres of highly prospective lands 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 Tidewater recently expanded Alder Flats by 10 MMcf/day and Alder Flats is currently processing all-time high amounts of natural gas and NGLs Deep Basin Processing Facilities & Pipelines 7
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 is currently railing in NGLs from refiners through a third party rail facility and trucking the NGLs to the BRC. 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 ~ 300km of NGL pipelines that have the potential to be tied into Tidewater s existing assets at Edmonton Edmonton Processing Facilities & Pipelines 8
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 has commenced injections Tidewater has received significant support from multiple producers in the Pipestone area to license and construct a 50-100 MMcf/d sour 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 has received significant producer support of other organic capital projects including material egress options for producers in the Deep Basin and Montney and expansion into the Montney in British Columbia. Over the next 2 to 3 years, Tidewater will attempt to tie in new British Columbia Montney NGL and station 2 natural gas infrastructure into its existing Pipestone Alliance and TransCanada connected Montney infrastructure Montney Processing Facilities & Pipelines 9
Tidewater has a Solid Infrastructure Business With a Strengthening Customer Base > 60% of EBITDA backed by take-or-pay contracts, long term agreements and/or reserve dedications with > 50 customers Interest from several new investment grade counter parties to backstop Tidewater infrastructure Tidewater continues to work hard to strengthen customer base and contracts Top Producers Utilizing the Core Facilities Core Facility Throughput (MMcf/d) Take-or-pay Reserve Dedication Take or Pay: Years Remaining TCPL Extraction Producer #1 60 65 Yes No 10+ Yes Yes 2 Producer #2 Producer #3 Producer #4 Producer #5 Producer #6 Producer #7 Producer #8 Producer #9 Producer #10 Producer #11 Producer #12 Producer #13 25 20 18 18 11 9 6 6 6 6 5 5 Yes Yes n.a. Yes No 1 Yes Yes 5 Yes No 1 No Yes n.a. No Yes n.a. Yes Yes 4 Yes No 2 Yes No 5 Yes No 10 Yes Yes 7 Yes No 5-10 10
EBITDA ($MM) EBITDA Growth Since Inception Focused on per share EBITDA growth of ~ 20% over next 12 months Research analysts forecasting further EBITDA growth through 2017 EBITDA Growth 1 $20.0 $17.0 $17.8 $0.08 $15.0 $14.4 $14.7 $0.06 $11.8 $10.0 $5.0 $5.0 $7.1 $7.3 $9.3 $9.5 $0.04 $0.02 EBITDA per Share ($/sh.) ($0.2) 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4 ($5.0) ($0.02) EBITDA EBITDA per Share 1 Forward looking EBITDA estimates as per FactSet street consensus as at May 12, 2017. 11
C$ 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 EBITDA Growth $100 $90 $80 $70 EBITDA from previously announced acquisitions Pro Forma EBITDA Current TWM Status Total EBITDA Net Debt 1 $69 $71 $75 $66 $90 $100 $60 $50 $40 $55 $42 $42 $46 $49 $54 $54 $50 $56 $58 $66 $66 $30 $20 $24 $24 $26 $28 $28 $20 $25 $20 $54 $16 $10 $0 - ($5) ($2) ($10) ($20) ($25) ($17) ($12) ($23) ($21) ($15) ($30) IPO BRC Acquisition & Financing Pipeline Acquisition Peace River Gas Plant & Arch Gas Plant Propane Acquisition 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 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 $470 $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 ~328 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 $433 million $30 million $463 million ~1 Bcf/day / ~700 MMcf/day ~4,000 km / ~3,000 km > $2.0 billion $0.04/sh. Current Yield 1 ~3.0% 1 As at May 12, 2017. 13
Tidewater Midstream Trading Comparables Tidewater s EV/EBITDA multiple of 6.2x trades at a large discount to its peer mean of 12.3x EV/EBITDA Tidewater Midstream Trading Comparables 18E / 17E Payout Net Debt / Share Market Enterprise EBITDA EV / EBITDA Ratio Dividend CAFD Yield EBITDA Debt/ Credit Company Price 1 Cap. 2 Value 2,3 Growth 4 2018E 4 2018E 4 Yield 2018E 4,5 2018E 4 Total Cap. 6 Rating ($/Sh.) ($MM) ($MM) (%) (x) (%) (%) (%) (x) (%) Enbridge Income Fund Holdings Inc. $33.32 $25,315 $39,782 10% 13.3x 74% 6.2% 8.3% 5.4x 51% Baa2 Pembina Pipeline Corp. $43.70 $17,684 $23,202 20% 12.7x 56% 4.4% 7.9% 2.6x 36% BBB Inter Pipeline Ltd. $27.19 $10,028 $15,813 3% 13.2x 65% 6.0% 9.2% 5.1x 65% BBB+ AltaGas Ltd. $30.92 $5,208 $10,097 40% 9.5x 95% 6.8% 7.2% 7.1x 44% BBB Keyera Corp. $40.12 $7,465 $9,181 17% 11.1x 47% 4.0% 8.4% 2.6x 48% n.a. Veresen Inc. $18.54 $5,815 $9,195 14% 14.2x 82% 5.4% 6.6% 4.3x 57% BBB Mean 18% 12.3x 70% 5.4% 7.9% 4.5x 50% Median 16% 13.0x 70% 5.7% 8.1% 4.7x 50% Tidewater Midstream $1.32 $433 $463 17% 6.2x 23% 3.0% 13.0% 0.4x 7% 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 May 12, 2017. 2 Includes options and warrants using the Treasury Method. 3 EV includes non-recourse debt and preferred shares. TWM net debt includes produces from assumed exercise of over-allotment option. 4 Based on consensus equity research estimates. TWM 2017E EBITDA based on management 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