25
December 2017 Investor Presentation
December 2017
Investor Presentation
Forward Looking StatementsCertain statements contained in this presentation constitute forward-looking information and statements (collectively, “forward-looking statements”) including, but not limited to, statementsconcerning the future payment of dividends by Gibson Energy Inc. and management’s expectations with respect to the business and financial prospects and opportunities of Gibson Energy Inc. orits subsidiaries (“Gibson” or the “Company”). These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words ‘‘anticipate’’, ‘‘plan’’, ‘‘contemplate’’, ‘‘continue’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘propose’’, ‘‘might’’, ‘‘may’’, ‘‘will’’, ‘‘shall’’, ‘‘project’’, ‘‘should’’,‘‘could’’, ‘‘would’’, ‘‘believe’’, ‘‘predict’’, ‘‘forecast’’, ‘‘pursue’’, ‘‘potential’’ and ‘‘capable’’ and similar expressions are intended to identify forward-looking statements. These statements involveknown and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although theCompany believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentationshould not be unduly relied upon. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of regulatory decisions, competitivefactors in the industries in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company. The forward-looking statementscontained in this presentation represent the Company’s expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to updateor revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Actual results could differmaterially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in"Forward-Looking Statements" and "Risk Factors" included in the Company's Annual Information Form dated March 7, 2017 as filed on SEDAR and available on the Gibson website atwww.gibsonenergy.com.
This presentation contains statistical data, market research and industry forecasts that were obtained from government or other industry publications and reports or based on estimates derivedfrom such publications and reports and management’s knowledge of, and experience in, the markets in which the Company operates. Government and industry publications and reports generallyindicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. Often, such information isprovided subject to specific terms and conditions limiting the liability of the provider, disclaiming any responsibility for such information, and/or limiting a third party’s ability to rely on suchinformation. None of the authors of such publications and reports has provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with thispresentation. Actual outcomes may vary materially from those forecast in such reports or publications, and the prospect for material variation can be expected to increase as the length of theforecast period increases. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified due to limits on the availability and reliabilityof data inputs, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any market or other survey. Accordingly, the accuracy, currency andcompleteness of this information cannot be guaranteed. The Company has not independently verified any of the data from third party sources referred to in this presentation or ascertained theunderlying assumptions relied upon by such sources. This presentation may also contain references to non-GAAP measures. These measures have been described and presented in order to provideshareholders and potential investors with additional information regarding Gibson’s liquidity and its ability to generate funds to finance its operations. Readers are encouraged to review our mostrecent Management’s Discussion and Analysis, available at www.gibsonenergy.com for a full discussion of the use of each measure.
Gibson | Integrated Midstream Solutions | TSX: GEI 2
A North American Midstream Energy Company
≈ Strategically positioned infrastructure assets≈ Critical solutions along the crude oil production value chain≈ High-quality, stable cash flows dominated by Infrastructure segment≈ Attractive shareholder value proposition
Gibson | Integrated Midstream Solutions | TSX: GEI 3* Based on November 30, 2017 closing price of $17.28 per share
Incorporated 1950
Initial Public Offering 2011
TSX Symbol GEI
Market Capitalization* $2.5 billion
Enterprise Value* $3.6 billion
Dividend per Share $0.33/quarter
Current Dividend Yield* ~7.5%
Strategically Positioned Assets
≈ Streamlined operating footprint focused on key oil producing basins throughout North America
≈ Edmonton and Hardisty oil terminals remain critically important growth platforms
≈ Well positioned to capture incremental infrastructure growth opportunities
Gibson | Integrated Midstream Solutions | TSX: GEI 4*September 30, 2017 LTM pro forma sale of Industrial Propane and Environmental Services U.S. (est. close Q1 2018)
AlbertaOilsandsMontney
Duvernay
Cardium Viking
Shaunavon
Bakken/Three Forks
Greater GreenRiver
D-J/Niobrara
Permian
Eagle Ford Gulf Coast
Tuscaloosa Marine
Utica ShaleLiquids
Mid-Continent
EdmontonTerminal
HardistyTerminal
81%
9%
10%
Pro Forma Segment Profit*
Infrastructure
Logistics
Wholesale
Critical Solutions Along the Crude Oil Production Value Chain
Touching 1 out of 4 barrels of Canadian crude oil produced every day
Gibson | Integrated Midstream Solutions | TSX: GEI 5Pro forma sale of Environmental Services U.S. (est. close Q1 2018)
Wellhead EndMarkets
Gibson’s network of fixed midstream infrastructure that collects, stores and processes oil and other liquid hydrocarbon production and by-products before eventual distribution to end-use markets including: 9.8 M bbl capacity oil and liquids
terminals at Hardisty and Edmonton Rail loading/unloading facilities ~ 65 Injection stations 400 km of gathering pipelines 14 processing, recovery and
disposal (PRD) and dry oil terminals 19,000 bpd Moose Jaw facility
Gibson's suite of logistical and ancillary wellsite services that enable oil and liquids production to access fixed midstream infrastructure.One of North America’s largest independent hydrocarbon logistics providers: Crude oil & condensate Propane & NGLs Produced water Emulsions ~ 2,000 specialized trailers
Gibson's broad, physical market transactional capabilities that enable the distribution of hydrocarbon products to end markets throughout North America with access to ~ 2,800 rail carsTransactional capabilities encompass the purchase and sale of ~ 350,000 bpd of hydrocarbon products including: Crude oil Condensate/Diluent NGLs Roofing flux Road asphalt Distillates
Key Infrastructure Assets
Gibson | Integrated Midstream Solutions | TSX: GEI 6
Edmonton
Hardisty
ExportGathering
Pipelines
≈ The majority of all Alberta oil exports aggregate in Edmonton and/or Hardisty
≈ Gibson owns and operates key terminal, blending and injection assets in both locations
≈ Currently undertaking a multi-year infrastructure build-out at both terminals
Expected Oil Sands growth of ~0.8 million barrels per day to 2022
Hardisty Terminal
Edmonton Terminal
Canadian Oil Sands Development
Gibson | Integrated Midstream Solutions | TSX: GEI 7
≈ Massive resource offers low geological and geopolitical risk≈ Long reserve life profile insulates development from near term oil price
volatility≈ Visible production growth profile to 2022 from expansion projects currently
under construction≈ Gibson is currently developing terminal infrastructure to accommodate
new production in the 2018-2019 timeframe≈ Gibson is in discussion with customers for 2019-2022 terminal
infrastructure requirements
$0
$20
$40
$60
$80
$100
0.91.11.31.51.71.92.12.32.52.72.93.13.33.53.7
2014 2015 2016 2017E 2018E 2019E 2020E 2021E
WTI
(U$/
bbl)
Prod
uctio
n (m
mbp
d)
Oil Sands Production Profile
Historical Production Forecast Production*
WTI Price Forward WTI Strip (Dec 2017)
(*Source: BMO Capital Markets)
PeaceRiver Athabasca
ColdLake
Source: BMO Capital Markets, Public Announcements
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2017 2018E 2019E 2020E 2021E 2022E
Prod
uctio
n G
row
th (m
mbp
d)
Oil Sands Production Growth
Other Horizon Kearl Lake Christina Lake Sunrise Surmont Foster Creek Fort Hils
0%10%20%30%40%50%60%70%80%90%100%
0
2
4
6
8
10
12
(mm
bbl)
Storage Capacity Market Share
Hardisty Terminal – 12% Capacity Increase in 2019
Gibson | Integrated Midstream Solutions | TSX: GEI 8
Inbound PipelinesEnbridge 2,3,4Athabasca Athabasca TwinCold LakeCold Lake TwinBow River ECHOBellshill Provost Hamilton Lake
Outbound PipelinesEnbridge 2,3,4,67 Express KeystoneBow River South
Unit train loading facility owned and operated by USD Partners
Terminal Storage
8.9 mmbbls barrels of current capacity
1.1 mmbbls of tankage under construction
Edmonton Terminal – Poised to Double in 2018
Gibson | Integrated Midstream Solutions | TSX: GEI 9
Outbound PipelinesEnbridge Mainline & TransMountain
Inbound PipelinesLight & Heavy Southern Lights Keyera Condensate Keyera Iso-Octane
Polaris Diluent Pipeline
CN Rail Line CP Rail Line
Pipeline Alley
900,000 bbls of current capacity
800,000 bbls of tankage under construction
Terminal Storage
Focus Capital on Fee-Based Infrastructure Assets
Over 90% of 2017E and 2018E growth capital allocated to Infrastructure
Gibson | Integrated Midstream Solutions | TSX: GEI 10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017E 2018E
% o
f Gro
wth
Cap
ital a
lloca
ted
to In
fras
truc
ture
Increased Stability of Cash Flows Through Focuson Infrastructure Business
Gibson | Integrated Midstream Solutions | TSX: GEI 11
>80%Of segment profit
from Infrastructure(Pro Forma IP and ES US Sale)
21%
19%
18%
24%
18%
81%
9%
10%
2013 Q3 2017 LTM
Infrastructure Wholesale
Logistics
Terminals & Pipelines
Processing & Distribution
Truck Transportation
Environmental Services
Marketing
(Pro Forma IP and ES US Sale)
0
20
40
60
80
100
120
140
160
180
2012 2013 2014 2015 2016 Q3 2017 LTM
$ (m
illio
ns)
Fixed-fee Segment Profit
Increased Stability of Cash Flows Through Focuson Infrastructure Business≈ Continued Infrastructure focus increases contracted, fixed-fee based revenue≈ Fixed-fee component has increased over 2.8x* since initiating terminal expansions in 2012
Gibson | Integrated Midstream Solutions | TSX: GEI 12
*Most recent LTM Fixed-Fee Segment Profit / 2012 Fixed-Fee Segment Profit pro forma sale of Environmental Services U.S. (est. close Q1 2018). Fixed-fee revenues are not dependent on volumes delivered.
Fixed-fee revenues from Intercompany contracts represented 21% of total segment revenue in the LTM period ended September 30, 2017.
Focus on Contracted Cash Flow Streams
57%33%
1%
9%
Q3 2017 LTM Pro Forma Segment Profit*
Fixed-fee Fee-for-service Fixed-margin Product margin
≈ Over 55% of Segment Profit is under long term, fixed-fee contracts
≈ Fee-for-service business lines are weighted to crude oil production volumes – over 50% from stable Infrastructure business
≈ Fixed fee and fee-for-service business comprises ~90% of Segment Profit
≈ Product margin business lines focused on driving volumes to Gibson's assets
Gibson | Integrated Midstream Solutions | TSX: GEI 13*September 30, 2017 LTM pro forma sale of Industrial Propane and Environmental Services U.S. (est. close Q1 2018). Fixed-fee cash flows are not dependent on volumes delivered.
Fixed-fee revenues from Intercompany contracts represented 21% of total segment revenue in the LTM period ended September 30, 2017.
Growth Opportunities
≈ Focused on growth opportunities backstopped by long-term, fixed-fee contracts≈ $270 - $320 million forecast for organic growth projects (2017 – 2018)(1)
≈ ~95% of 2018 growth capital focused on opportunities at Hardisty and Edmonton terminals
Gibson | Integrated Midstream Solutions | TSX: GEI 14(1) See appendix for additional information
$120
<$170$150
$0
$100
$200
$300
$400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E
($M
M)
Growth Capital Expenditures
Edmonton
Hardisty
Hardisty
Hardisty
Hardisty
Hardisty
Edmonton
Hardisty
Growth Project Development Timeline≈ Phased commissioning schedule of contracted infrastructure offers strong visibility to cash flow growth through 2019
≈ Edmonton tank project advancing ahead of schedule and expected to be commissioned and generating earnings in Q1 2018
≈ 2019 tanks at Hardisty include two fully contracted 300,000 bbl tanks and one 500,000 bbl operational tank
Gibson | Integrated Midstream Solutions | TSX: GEI 15
2015 2016 2017 2018 2019
300,000 bbl tank, Rail Loading Facility
300,000 bbl Operational tank
2 x 400,000 bbl tanks
2 x 400,000 bbl tanks
400,000 bbl tank
500,000 bbl tank
Suncor 400,000 and 500,000 bbl tanks
2 x 300,000 and 1 x 500,000 bbl tanks
Commissioned date
Partial commission date
Expected in-service date
U.S. Growth – Pipeline Injection Stations≈ ~65 injection stations in key U.S. basins
including prime locations in Texas and Oklahoma
≈ Asset footprint is difficult toreplicate – new injection stations no longer permitted on many of the mainline pipelines
≈ Assets became available for third party and Gibson's use in November 2017
≈ Well positioned to facilitate new, small-scale gathering line and terminal opportunities in combination with renewed producer focus
Gibson | Integrated Midstream Solutions | TSX: GEI 16
Capital Structure Enhancements
Gibson | Integrated Midstream Solutions | TSX: GEI 17
3.6xNet Debt/EBITDA
September 30, 2017
$600million raised in
5.25% unsecured notes to refinance
existing notes
~$35million/year saved
through debt repayment and refinancing
$357million reduction in
long-term debt
$500million senior unsecured credit facility amended
and extended
Capital Structure EnhancementsDetails:≈ Applied proceeds from sale of Industrial Propane and notes issuance to reduce debt and enhance liquidity to fund
growth programs through redemption of our higher coupon long term debt ($250 million 7.00% notes and US$550 million 6.75% notes)
≈ Issued $600 million of 5.25% senior unsecured notes due July 15, 2024 to refinance remaining 7.0% and 6.75% notes
≈ Amended our $500 million senior unsecured revolving credit facility to provide more favorable covenant thresholds, reduce interest costs and extend its maturity to March 2022
Impacts and Benefits:≈ Strengthened our balance sheet and resulted in a more appropriate capitalization with a net reduction in long
term debt ($357 million)≈ Extended the maturity profile of our long term debt≈ Improved dividend payout ratio with annual run-rate interest cost savings, starting in 2018, of approximately $35
million≈ Enhanced liquidity to fund planned 2017 and 2018 growth capital expenditures:
≈ Net cash retained from sales proceeds and refinancing initiative plus $500 million undrawn revolving credit facility
≈ Credit facility carries maximum Total Net Debt to EBITDA covenant of 4.85x until the end of 2017
Gibson | Integrated Midstream Solutions | TSX: GEI 18
Conservative Capital Structure
Extended maturity profile and reduced total long term debt outstanding
Gibson | Integrated Midstream Solutions | TSX: GEI 19
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2017 2018 2019 2020 2021 2022 2023 2024
Prin
cipa
l Am
ount
of D
ebt O
utst
andi
ng(in
$m
illio
n, in
issu
ed c
urre
ncy)
Long Term Debt Profile(1)
Amount Maturity Coupon
Unsecured Convertible Debentures(2) C$100M July 15, 2021 5.25%
Senior Unsecured Notes C$300M July 15, 2022 5.375%
Senior Unsecured Credit Facility C$500M Mar. 7, 2022 Floating
Senior Unsecured Notes C$600M July 15, 2024 5.25%
(1) Long term debt profile shown pro forma the redemption of the US$211.2M notes due 2021, settled on October 30
(2) Implied conversion price of $21.65
68%
25%
3% 4%
Capital Structure
Common EquitySenior Unsecured NotesUnsecured Convertible DebenturesSenior Unsecured Credit Facility
Summary of Key Investment Highlights
Gibson | Integrated Midstream Solutions | TSX: GEI 20
Strategic footprint in key oil / liquids basins across North America
Continued evolution of the GEI business model towards one dominated by Infrastructure
Significant increase in the quality and stability of cash flows resulting from focus on Infrastructure
Infrastructure cash flows contractually backed by long-term fixed fee contracts
Well capitalized and positioned for growth
Attractive sustainable dividend
Experienced management team with strong operating history
Appendices
2018 Capital Expenditure Budget
≈ The 2018 budget reflects Gibson’s focus on growing its core Infrastructure platform
≈ Gibson expects to sanction one to two tanks per year in a flat oil price environment
≈ In addition, Gibson will actively look to leverage its existing asset base to secure $50 - $100 million in infrastructure growth projects
Gibson | Integrated Midstream Solutions | TSX: GEI 22(1) Logistics excludes $5 - $10 million for U.S. Environmental Services, which is expected to be divested in the first quarter of 2018
Hardisty Terminal – Long Term Potential
Gibson | Integrated Midstream Solutions | TSX: GEI 23
Tanks underdevelopment
Future 300 KBBLTanks
Potential tanklocations
Future 400 KBBLTank
Future 500 KBBLTank
Edmonton Terminal – Long Term Potential
Gibson | Integrated Midstream Solutions | TSX: GEI 24
Tanks underdevelopment
Future 300 KBBLTanks
Polaris initiatingpump station
Future 400 KBBLTank
Future 500 KBBLTank
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$40.00
$60.00
$80.00
$100.00
$120.00
($35.00)
($30.00)
($25.00)
($20.00)
($15.00)
($10.00)
($5.00)
$0.00
$5.00
$10.00
$15.00
Mov
ing
Aver
age
WTI
Pric
e (U
S$/B
)
Mov
ing
Aver
age
Stre
am D
iffer
entia
ls vs
WTI
(US$
/B)
Twelve Month Moving Average of Stream Differentials
Gibsons Butane Condensate MSW MSO WCS WTI (Right Axis)
Grade Differentials Provide Wholesale Opportunities
Gibson | Integrated Midstream Solutions | TSX: GEI 25
