CALGARY,
AB, Sept. 21, 2022 /CNW/ - Tidewater
Renewables Ltd. ("Tidewater Renewables" or the
"Corporation") (TSX: LCFS) is pleased to announce an
agreement to sell Federal Clean Fuel Regulation ("CFR")
credits (the "CFR Sale") that it will receive through the
production and sale of fuel produced at the Renewable Diesel &
Renewable Hydrogen Complex at Prince
George, BC (the "Complex") and the appointment of
Ray Kwan as the Corporation's new
CFO.
CFR Sale
As part of the CFR Sale, Tidewater Renewables has agreed to sell
a total of 25,000 CFR credits at $100
per credit. This agreement adds previously unrecognized value for
CFR credits and Tidewater Renewables will receive total proceeds of
$2.5 million over the term of this
agreement. The Corporation's current Run Rate EBITDA (1)
estimates for the Complex of $90 –
100 million exclude the impact of the outlined forward sale and any
value for the ongoing sale of CFR credits once the program is
implemented.
"This is Tidewater Renewables' second CFR credit sale with the
first being in June of 2022. These credit sales are significant for
Tidewater Renewables as they continue to validate our previous view
that CFR credits will represent an incremental revenue stream for
our clean fuel projects. Furthermore, at similar CFR credit
values, Tidewater Renewables' HDRD Complex has the potential of
generating more than $30 million of
incremental Run Rate EBITDA (1) assuming feedstock
prices, diesel prices and BC LCFS credit prices remain constant,"
said Joel MacLeod, Executive
Chairman and CEO.
The Corporation continues to work on other agreements to
monetize further CFR credits that it will receive from the
operation of the Complex, from its Canola Co-Processing Facility,
and from other projects.
(1)
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Run Rate EBITDA used
throughout this press release is a non-GAAP financial measure. See
the "Non-GAAP Measures" section of this press release and the
Corporation's most recent MD&A for information on each non-GAAP
financial measure.
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Appointment of New CFO
The Corporation's Board of Directors today appointed
Ray Kwan, as the Chief Financial
Officer of the Corporation. To help ensure a smooth transition, Mr.
Kwan will work closely with the Corporation's current President and
Chief Financial Officer, Joel Vorra,
who will remain with the Corporation in an advisory capacity for
the remainder of 2022. Mr. Kwan comes to Tidewater Renewables with
significant senior financial management experience, most notably in
the capital markets sector. Prior to joining Tidewater Renewables,
Ray worked primarily in banking with a focus on institutional
equity research, most recently as a Managing Director at BMO
Capital Markets. Mr. Kwan holds a BSc in Chemical Engineering from
the University of Alberta and holds a
Chartered Financial Analyst designation.
"It is very exciting to join a company that is at the forefront
of the energy transformation. I feel honored to join a strong
leadership team and look forward to working with the Corporation's
Board, shareholders, and stakeholders," said Mr. Kwan.
"Tidewater Renewables is a growth company with a dynamic
leadership team, and we are excited for Ray
Kwan to help drive the business on the road to the
Corporation's previously disclosed expected 2023 Run Rate EBITDA of
approximately $150 million," said
Joel Macleod, Executive Chairman and
CEO. "We are ecstatic to have Ray join the Tidewater Renewables
team. I have known Ray for over 10 years and have watched him
become one of the most respected energy minds in North America. Ray is highly regarded by
institutional investors with his 15 + years of experience and
multiple TopGun awards. Ray's success and experience with public
companies and capital markets in not only Calgary, but all of Canada and North
America, his financial expertise, and his leadership
qualities, will be an invaluable addition to the team. Mr. Vorra
was a founder at Tidewater Midstream and Infrastructure Ltd. and
his skills and leadership were fundamental in the creation of
Tidewater Renewables in 2021. We are thankful for his time at both
companies, and we are grateful that he has agreed to serve as an
advisor to mentor Ray and the entire leadership team."
The Government of Canada Clean
Fuel Regulations
The Government of Canada Clean Fuel Regulations ("CFR")
increase incentives for the development and adoption of clean
fuels, technologies, and processes to significantly reduce
pollution by making fuels cleaner over time. They require liquid
fossil fuel (gasoline and diesel) suppliers (referred to as
"primary suppliers") to gradually reduce the carbon intensity from
the fuels they produce and sell for use in Canada over time, leading to a decrease of
approximately 15% (below 2016 levels) in the carbon intensity of
gasoline and diesel used in Canada
by 2030. The Government of Canada
is supporting the development of a clean fuels sector through a
series of investments and initiatives that complement the CFR.
While primary suppliers are the only entities required to reduce
the lifecycle emissions of their fuels, the CFR create compliance
categories which allow primary suppliers as well as "voluntary
credit creators", such as Tidewater Renewables, to create credits
to ultimately be sold to primary suppliers to meet their gasoline
or diesel carbon intensity requirement.
Forward-Looking
Information
This news release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") that relate to the Corporation current
expectations and views of future events. These forward-looking
statements relate to future events or the Corporation's future
performance. Any statements that express, or involve discussions as
to, expectations, beliefs, plans, objectives, assumption or future
events or performance (often, but not always, through the use of
words or phrases such as "will likely result", "are expected to",
"expects", "will continue", "is anticipated", "anticipates",
"believes", "estimated", "intends", "plans", "forecast",
"projection", "strategy", "objective" and "outlook") are not
historical facts and may be forward -looking statements and may
involve estimates, assumptions and uncertainties which could cause
actual results or outcomes to differ materially from those
expressed in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this new release should not
be unduly relied upon. These statements speak only as of the date
of this new release. In particular and without limitation, this
news release contains forward-looking statements pertaining to
Tidewater Renewables' business as described under the heading
"About Tidewater Renewables" below; and the potential addition of
run rate EBITDA derived from the sale of CFR credits produced at
the HDRD Complex. Forward-looking information is based on a number
of assumptions and is subject to a number of risks and
uncertainties, many of which are beyond the Corporation's control,
which could cause actual results and events to differ materially
from those that are disclosed in or implied by such forward-looking
information. Such risks and uncertainties include, but are not
limited to, the factors discussed under "Risk Factors" in the
Corporation's supplemented PREP prospectus dated August 12, 2021, filed on SEDAR. Tidewater
Renewables' does not undertake any obligation to update such
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable laws.
Non-GAAP Measures
Run Rate EBITDA
"Run rate EBITDA" is defined as the expected EBITDA to be
generated by a specific asset or specific growth project
corresponding to a full year of operations at full capacity. Run
rate EBITDA excludes non-cash items including depreciation and
share-based compensation. The calculation of run rate EBITDA is
based in certain estimates and assumptions and should not be
regarded as a representation by the Corporation or any other person
that the Corporation will achieve such operating results.
Prospective investors should not place undue reliance on the
Corporation's run rate EBITDA and should make their own independent
assessment of the Corporation's future results or operations, cash
flows and financial condition.
Run rate EBITDA guidance related to the HDRD Complex includes
various assumptions including a renewable refinery margin of
$90/bbl. The renewables refinery
margin is derived from vegetable oil strip pricing for the
Corporation's feedstocks, which are 50% and 30% hedged through 2023
and 2024 respectively, current diesel strip pricing and average BC
LCFS sale prices over the past 12 months. The renewable refinery
margin currently excludes any incremental value from CFR
credits.
Run Rate EBITDA guidance for CFR Credits, which is excluded from
other guidance, assumes that CFR Credits can be sold at an average
price of $95 - $100/ credit, based on the Corporation's
announced sales.
ABOUT TIDEWATER
RENEWABLES
Tidewater Renewables is traded on the TSX under the symbol
"LCFS". Tidewater Renewables is a multi-faceted, energy transition
company. The Corporation is focused on the production of low carbon
fuels, including renewable diesel, renewable hydrogen, and
renewable natural gas, as well as carbon capture through future
initiatives. The Corporation was created in response to the growing
demand for renewable fuels in North
America and to capitalize on its potential to efficiently
turn a wide variety of renewable feedstocks (such as tallow, used
cooking oil, distillers corn oil, soybean oil, canola oil and other
biomasses) into low carbon fuels. Tidewater Renewables' objective
is to become one of the leading Canadian renewable fuel producers.
The Corporation is pursuing this objective through the
ownership, development, and operation of clean fuels projects and
related infrastructure, utilizing existing proven technologies.
Organically, Tidewater Renewables will seek to leverage the
existing infrastructure owned by Tidewater Midstream and
Infrastructure Ltd. and in-house operational and engineering
expertise, regarding the development of the Corporation's portfolio
of greenfield and brownfield capital projects as well as the
expansion of the Corporation's product offerings. Additional
information relating to Tidewater Renewables is available on SEDAR
at www.sedar.com and at www.tidewater-renewables.com.
SOURCE Tidewater Renewables Ltd