Gibson Energy Q4 Earnings Call Highlights

Key Points

• Record Infrastructure results: Infrastructure delivered Q4 adjusted EBITDA of ~C$160M and FY C$622M, with throughput up ~13% and Gateway hitting a high of 815,000 bpd, and Gibson sanctioned a C$50M Wink‑to‑Gateway project to increase capacity.
• C$400 million Chauvin acquisition: Gibson agreed to buy Teine Energy’s Chauvin assets (expected close Q2 2026) at a mid‑7x multiple with a clear path to <7x via a Hardisty connection and pipeline expansion, and the deal is expected to be mid‑single‑digit accretive to DCF per share while remaining leverage‑neutral.
• Marketing weakness and capital posture: Marketing was muted (Q4 adjusted EBITDA ~C$1M) with guidance of C$0–10M per quarter, yet Gibson raised the quarterly dividend to C$0.45 (5% increase) while year‑end net debt/EBITDA was ~3.9x and buybacks remain contingent on leverage falling to ~3.0–3.5x.

Gibson Energy TSE: GEI used its fourth-quarter and full-year 2025 earnings call to highlight record results in its Infrastructure business, progress on major projects at its Gateway terminal, and a recently announced acquisition that management said is intended to extend the company’s Hardisty platform and support its longer-term growth plan.

Strategic priorities and operational highlights

President and CEO Curtis Philippon said the company began 2025 with five strategic priorities—safety, Gateway execution, growth, high-performance teams, and cost discipline—and “delivered on our key objectives” across those areas.

On safety, Philippon said Gibson surpassed 10 million hours without a lost-time injury and safely completed two major turnarounds at its Moose Jaw facility and the Hardisty Diluent Recovery Unit. He also said Gibson finished 2025 as the “top-performing midstream company in North America” on total recordable injury frequency.

At Gateway, the company completed the dredging project and the Cactus II pipeline connection. Philippon said these efforts helped lift throughput to a new “high water mark” of 815,000 barrels per day in January 2026 and supported the company’s targeted 15% to 20% run-rate EBITDA growth in the fourth quarter relative to the objective set when the asset was acquired in 2023.

During the quarter, Gibson sanctioned the $50 million Wink-to-Gateway Integration Project, which management said will enhance supply optionality and increase throughput capacity. The company expects the project to enter service in the third quarter (as stated on the call).

Philippon also pointed to cost discipline, saying Gibson generated more than C$25 million of recurring and non-recurring cost savings in 2025, which increased distributable cash flow (DCF) per share by 8%.

Financial results: Infrastructure strength, Marketing muted

Chief Financial Officer Riley Hicks said 2025 was a “record year from an Infrastructure standpoint.” In the fourth quarter, Infrastructure delivered record adjusted EBITDA of about C$160 million, which he attributed to recently completed capital projects, strong performance across the terminal network, and a full-quarter benefit from the Gateway dredging work completed earlier in 2025.

For the full year, Infrastructure adjusted EBITDA totaled C$622 million, up from C$601 million in the prior year. Philippon said Infrastructure throughput across the company’s core terminals increased roughly 13% year-over-year, or 95 million barrels, driven primarily by higher volumes at Gateway in Edmonton and the completion of the dredging, Cactus II, and Baytex infrastructure capital projects.

Marketing remained a smaller and more challenged contributor. Hicks said the segment faced tight heavy oil differentials, limited crude storage opportunities, and seasonal asphalt storage impacts that reduced available arbitrage. Marketing adjusted EBITDA was approximately C$1 million in the fourth quarter, which he said was at the low end of the company’s previously communicated guidance range but improved by C$6 million compared to the fourth quarter of last year. For 2025, Marketing adjusted EBITDA was about C$15 million.

On a consolidated basis, Gibson generated adjusted EBITDA of approximately C$145 million in the fourth quarter, up C$15 million year-over-year. Distributable cash flow for the quarter was about C$79 million, an increase of C$8 million compared to the fourth quarter of 2024. For the full year, consolidated adjusted EBITDA was C$581 million, and distributable cash flow was about C$337 million.

Looking ahead, Hicks reiterated Marketing guidance of C$0 million to C$10 million per quarter. In the Q&A portion of the call, Philippon said management was “encouraged by some slightly wider diffs” but expected Marketing to remain in that range in 2026, citing low crude inventory levels and an ongoing backwardated market. He said a shift to contango would be a key market signal that could create more opportunities to use Gibson’s assets.

Contract renewals and backlog expansion

Philippon said Gibson renewed several major long-term contracts—10 to 20 years in duration—across its Edmonton and Hardisty terminals. He said the take-or-pay extensions increased the company’s contract backlog by approximately C$500 million and involved “high-quality counterparties,” including senior integrated energy companies and a multinational refiner.

Chauvin acquisition and growth project runway

Management spent significant time discussing an agreement to acquire Teine Energy’s Chauvin crude oil infrastructure assets for C$400 million, which was announced the week prior to the call. Philippon said the deal is expected to close in the second quarter of 2026, subject to regulatory approvals, and is designed to strengthen Gibson’s Hardisty platform by extending connectivity into the Mannville Stack. He also described near-term expansion opportunities, including the Gibson Hardisty Connection Project, which he said was announced and “conditionally sanctioned,” subject to regulatory approvals.

Philippon said the transaction was executed at a mid-7x multiple, with “a clear path to less than 7x” through identified growth and optimization opportunities. In response to analyst questions, he said two projects are expected to move the effective multiple into a sub-7x range:

• Hardisty connection project: Management said it expects to sanction the project immediately after regulatory closing, with a roughly 12-month timeline from sanction to completion.
• Pipeline expansion project: Philippon said the pipeline is operating near its current capacity of about 30,000 barrels per day and that Gibson sees an opportunity to expand it to 45,000 barrels per day, with timing of approximately 18 to 24 months from transaction closing.

Philippon added that Gibson expects the acquisition to be mid-single-digit accretive to DCF per share, and noted the company completed a C$215 million equity financing “yesterday” (as referenced on the call). He said the acquisition would be leverage neutral and that investment-grade credit ratings were confirmed by DBRS and S&P.

Balance sheet, capital allocation, and dividend

Hicks said year-end net debt to adjusted EBITDA was approximately 3.9x, reflecting the timing of capital deployment and lower Marketing contributions in 2025. He said leverage is expected to trend down over 2026 with full-year contributions from completed projects and lower growth capital spending. On an infrastructure-adjusted basis, leverage was about 4x, consistent with the company’s commitment to maintain infrastructure leverage at or below that level. He also said S&P and DBRS reaffirmed stable investment-grade ratings.

Gibson adjusted its 2026 growth capital outlook to C$100 million of organic growth capital, which Hicks said includes spending related to the Wink-to-Gateway Integration Project.

On shareholder returns, Hicks said the dividend payout ratio was approximately 84% on a trailing 12-month basis, while the infrastructure-only payout was 78%. The company continues to target a long-term payout range of 70% to 80% of DCF. Gibson announced its seventh consecutive annual dividend increase, raising the quarterly dividend to C$0.45 per share, up 5% year-over-year.

In discussing capital allocation, Hicks said buybacks remain a potential tool but that the company would want to see leverage return to the 3x to 3.5x range before considering repurchases, and that buybacks would compete with infrastructure investment opportunities.

Philippon said Gibson entered 2026 with updated priorities including maintaining safety performance, increasing asset utilization, growing the infrastructure business, advancing technology and AI-driven efficiency initiatives, and further enhancing the company’s “high-performance ownership culture.”

About Gibson Energy TSE: GEI

Gibson Energy Inc is an oil infrastructure company that collects, stores, and processes crude oil and refined products. Reportable segments include marketing, which deals with buying, selling, and optimizing products such as crude oil, natural gas liquid, road asphalt, and oil-based mud product; and infrastructure, which makes up a system of oil terminals, rail loading facilities, pipelines, and an oil processing facility. Gibson Energy Inc services Canada and the United States, and the majority of revenue comes from the marketing segment.

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