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Operator: Good morning, everyone, and welcome to the Gibson Energy Fourth Quarter and Full Year 2025 Conference Call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Beth Pollock, Vice President, Capital Markets and Corporate Development. Ms. Pollock, please go ahead.
Beth Pollock: Thank you, [ Towanda ], and good morning. Thank you for joining us to discuss Gibson Energy's Fourth Quarter and Full Year 2025 results. Joining me on the call today are Curtis Philippon, President and Chief Executive Officer; and Riley Hicks, Senior Vice President and Chief Financial Officer. Additional members of our senior management team are also present to assist with the question-and-answer portion of the call. Listeners are reminded that today's call will reference non-GAAP financial measures and forward-looking information, which are subject to certain assumptions and risks. Descriptions and reconciliations of these measures as well as related disclosures are available in our investor presentation and continuous disclosure documents on SEDAR+ and on our website. I will now turn the call over to Curtis.
Curtis Philippon: Thank you, Beth, and good morning, everyone. I'm pleased to discuss Gibson's fourth quarter and full year 2025 results. I'll begin with a few highlights and then turn it over to Riley to walk through our financial results and balance sheet before I conclude the call with some closing remarks. At the outset of 2025, we established 5 strategic priorities: safety, gateway execution, growth, high-performance teams and cost discipline. Over the course of 2025, we delivered on our key objectives across each of these areas, exiting the year delivering Infrastructure segment growth and a clear line of sight to the next phase of our growth as outlined at our December Investor Day. From a safety perspective, we surpassed 10 million hours without a lost time injury and safely completed 2 major turnarounds at our Moose Jaw Facility and the Hardisty Diluent Recovery Unit. Most notably, we are proud to finish 2025 as the top-performing midstream company in North America on the key metric of total recordable injury frequency. At Gateway, we successfully executed both the dredging project and the Cactus II pipeline connection, increasing throughput to a new high watermark of 815,000 barrels per day in January of 2026 and delivering on our 15% to 20% run rate EBITDA growth objective in the fourth quarter that was established when we acquired the asset in 2023. During the fourth quarter, we sanctioned the $50 million Wink-to-Gateway integration project, which will enhance supply optionality and increase throughput capacity. The project is expected to enter service in the third quarter. The cost focus campaign was a success. In 2025, we generated more than $25 million of recurring and nonrecurring cost savings, increasing DCF per share by 8%. This efficient and cost competitive focus sets us up well for continued success. Finally, on the people front, we've built a strong team that delivered on our goals this year. This group is passionate about supporting our customers exceptionally well and is well positioned to lead us into a successful 2026. Turning to the financials. Our 2025 results reflect the successful execution of our crude oil infrastructure strategy. We delivered record infrastructure adjusted EBITDA of $622 million for the full year, including a new quarterly high watermark in the fourth quarter. Infrastructure throughput across our core terminals increased approximately 13% or 95 million barrels year-over-year. This performance was driven primarily by higher volumes at Gateway and Edmonton as well as the completion of the dredging, Cactus II and Baytex Infrastructure Capital Projects during the year. The strength and quality of our cash flows improved as we renewed several major long-term contracts all between 10 and 20 years in duration across our Edmonton and Hardisty terminals. These take-or-pay extensions increased our contract backlog by approximately $500 million. The renewals supported by high-quality counterparties included senior integrated energy companies and a multinational refiner, reinforce the strength and sustainability of our cash flows. Complementing our infrastructure growth, last week, we announced that we had entered into an agreement to acquire Teine Energy's Chauvin crude oil infrastructure assets for $400 million. This acquisition is expected to close in the second quarter of 2026, subject to regulatory approvals. The Chauvin pipeline will strengthen our Hardisty platform by extending our connectivity into the prolific Mannville Stack, adding long-term contracted cash flows and providing near-term expansion opportunities, including the Gibson Hardisty Connection Project, which was announced and conditionally sanctioned subject to regulatory approvals. The transaction was executed at a mid-7x multiple with a clear path to less than 7x as we execute on identified growth and optimization opportunities. We expect the transaction to be mid-single-digit accretive to distributable cash flow per share with the proceeds of the $215 million equity financing that closed yesterday. The acquisition will be leverage neutral with our investment-grade credit ratings confirmed by both DBRS and S&P. At Investor Day, we outlined a clear road map to deliver over 7% annual infrastructure EBITDA growth over the next 5 years. The progress achieved in 2025, combined with our recent Chauvin acquisition and its associated growth projects positions us well to execute on this plan. I'll now turn the call over to Riley.
Riley Hicks: Thank you, Curtis. 2025 was a strong year for Gibson, and I'll walk through our fourth quarter and full year financial results, followed by an update on our financial position and capital allocation priorities. Our focus remains unchanged: disciplined financial management, maintaining a strong balance sheet and adhering to our financial principles. These principles helped lead us to a strong fourth quarter and a record year from an infrastructure standpoint, reflecting the quality and resilience of our crown jewel asset base. In the fourth quarter, Infrastructure delivered record adjusted EBITDA of approximately $160 million, driven by contributions from recently completed capital projects, continued strong performance across our terminal network and the full quarter benefit of the Gateway dredging work completed earlier in 2025. Touching quickly on our Marketing segment. The business continued to operate in a challenging environment during the quarter. Tight heavy oil differentials, limited crude storage opportunities and seasonal asphalt storage reduced available arbitrage during the quarter. As a result, marketing adjusted EBITDA was approximately $1 million. While this is at the low end of our previously communicated guidance range, it represents a $6 million improvement over the fourth quarter of last year. As we think about our business holistically, marketing now represents a smaller portion of consolidated EBITDA, underscoring the increasing stability and contracted nature of our cash flow profile. Looking ahead, we are reiterating our previously communicated marketing guidance range of $0 million to $10 million per quarter. Market conditions in Canada remain efficient, and we have not seen a structural shift away from crude backwardation. On a consolidated basis, Gibson generated adjusted EBITDA of approximately $145 million in the fourth quarter, reflecting strong infrastructure performance and an increase of $15 million compared to the prior year. Distributable cash flow for the quarter was approximately $79 million, representing an increase of $8 million compared to the fourth quarter of 2024. Turning to our full year results. 2025 was a great year for Gibson. Infrastructure adjusted EBITDA totaled $622 million, up from $601 million last year, driven mainly by higher volumes at Gateway and Edmonton, the success of our cost savings initiative and contributions from key capital projects coming online. Marketing adjusted EBITDA totaled approximately $15 million for the year, reflecting a challenging environment for both crude marketing and our refined products business. As a result, consolidated adjusted EBITDA was $581 million and distributable cash flow was approximately $337 million. Looking at our current financial position, we remain aligned with our financial principles, maintaining a strong balance sheet and meaningful capital flexibility. We remain prudent capital allocators focused on maximizing long-term shareholder value through investing in high-quality infrastructure projects as shown by our strategic acquisition of the Chauvin infrastructure assets. Following the announcement of this acquisition, alongside 2 actionable growth projects, we have now adjusted our 2026 growth capital outlook to reflect $100 million of organic growth capital. This includes capital related to our previously sanctioned Wink-to-Gateway integration project. The change in outlook reflects our continued focus on disciplined customer-backed infrastructure growth while ensuring we preserve our balance sheet strength. At year-end, net debt to adjusted EBITDA was approximately 3.9x, reflecting the timing of capital deployment and lower marketing contributions in 2025. With full year EBITDA contributions from recently completed projects and a reduction in growth capital to $100 million in 2026, we expect leverage to trend down lower over the course of the year. On an infrastructure adjusted basis, leverage was approximately 4x, which is consistent with our commitment to maintain infrastructure leverage at or below that level. Importantly, as part of our recent transaction, both S&P and DBRS have reaffirmed our stable investment-grade credit ratings. Our dividend payout ratio was approximately 84% on a trailing 12-month basis. Over the long term, we continue to target a sustainable payout range of 70% to 80% of distributable cash flow. On an infrastructure-only basis, the payout was 78%, which is comfortably below our target of less than 100%. As our Infrastructure segment continues to grow and become a larger proportion of our earnings, we expect our consolidated payout ratios to migrate towards our long-term range. The continued growth of our high-quality infrastructure cash flows during the year supports our seventh consecutive annual dividend increase, bringing the quarterly dividend to $0.45 per share, an increase of 5% year-over-year. We remain focused on delivering long-term value for our shareholders as we enter 2026 from a position of strength. I will now pass the call back to Curtis for his closing remarks.
Curtis Philippon: In closing, we made meaningful progress in 2025 as we executed on our 5 key priorities: safety, Gateway execution, growth, high-performance teams and cost discipline. We also delivered record infrastructure results marked by a new high watermark in Q4. As we start 2026, we are once again focused on 5 strategic priorities: maintaining our industry-leading safety performance, increasing the utilization of our assets, growing our infrastructure business, advancing technology and AI-driven initiatives to drive efficiency and further enhancing the high-performance ownership culture. We also look forward to integrating the Chauvin Pipeline into our portfolio, subject to regulatory approvals. With continued discipline and focus, we are confident Gibson is well positioned for its next phase of infrastructure-led growth and to deliver on the Investor Day strategy from a position of strength. With that, I'll turn the call back to the operator to open the line for questions.
Operator: [Operator Instructions] our first question comes from the line of Aaron MacNeil with TD Cowen.
Aaron MacNeil: Curtis, presumably, you looked at a lot of opportunities prior to pursuing the Teine acquisition. How should we think about M&A for Gibson going forward? Would you describe this as a bit of a unique opportunity? Or was there a bit more depth to the M&A opportunity set?
Curtis Philippon: We definitely look at a lot of different things. I'd say a year ago, we were very focused on Gateway execution. And it was important for us to be delivering on that significant acquisition we did back in 2023. And so a year ago, although we were looking at a lot of things, we were cautious on that. We want to make sure we delivered well on Gateway. But over the last year, we proved that we could deliver well on Gateway. I think that ability to go deliver on that project, combined with at a macro level, we look at the opportunity set out there, we see some interesting opportunities for M&A. That got us more active over the last 6 months looking at a wide range of different opportunities. In particular, we are looking for things that are crude focused, connected to our current platform and ideally just continue to drive that same contract profile, customer quality profile that we're looking for. So I think there's a few things out there we looked hard at. Chauvin is just a perfect fit. Hardisty is our backyard. That's where we've been for 70 years. It is the core crown jewel of the Gibson asset base. And so when the opportunity came up to add Chauvin to the story and help extend the reach of that Hardisty platform, that was the most attractive one that we want to act on.
Aaron MacNeil: Makes sense. Switching gears and fully appreciating that you've reiterated the $0 to $10 million marketing guidance, but we're starting to observe some positive signals for this business, including higher apportionment levels on Enbridge Mainline storage levels ticking up, wider heavy oil differentials, although maybe not for the same reasons you've seen in the past. But appreciating that this is all early days, what would you sort of guide us to in terms of looking for market signals or variables that we should be looking at as we think about the outlook for the segment?
Curtis Philippon: I think it's fair to say we're encouraged by some slightly wider dips and a few positive indicators out there. I would completely agree with your assessment, though this is early days. If you look at our track record over the last year, we've been firmly in that $0 million to $10 million a quarter range. I expect that's where we're going to be in 2026 as well. There's still very low levels of storage out there right now. And so each of these volatility events that happened that in the past maybe drove higher marketing earnings have a much more muted effect in an environment where you have very low crude inventories. And so I think that will persist through the year is what my expectations are. And so I think you'll see a fairly muted year for marketing. The big thing you would look for is we're still a very backwardated market. And so I think that would be the one thing to maybe watch for. If you get into a contango market, that's a significant shift. And we've been in this backwardated market for quite a long period of time. In time, that will change, and there will be contango opportunities that provide a great opportunity for Gibson to use its assets well to capitalize on that. But until you see that, I think you'll still be in that $0 million to $10 million range.
Operator: Our next question comes from the line of Jeremy Tonet with JPMorgan Securities.
Unknown Analyst: This is [ Eli ] on for Jeremy. Just wanted to start on the expansion opportunities at Chauvin. Can you just provide some incremental color on the timing and return profile here and how these stack up against other opportunities across the portfolio and also get you to the kind of that 5 to 7 acquisition multiple that you highlighted?
Curtis Philippon: Thanks, [ Eli ]. As -- we messaged that right out of the gate, we see a number of interesting growth projects that come with Chauvin. It's one of the really attractive things about Chauvin is it really gives us a nice runway of growth projects over the next few years. But immediately out of the gates, once we're closed, there's 2 projects that we see acting on. One is the Hardisty Connection project to connect the Chauvin pipeline into our Hardisty Gibson Facility. And so that is one that we will sanction immediately after regulatory closing. We expect that is roughly a 12-month process from that period from when we officially sanction it. And then the second one is the expansion project. And the expansion project is exciting. It's -- the pipeline is currently operating at near full at sort of 30,000 barrels a day capacity. And we see an opportunity to expand that to 45,000 barrels a day and have some pretty, I think, an interesting opportunity with that. So the timing on that is realistically anywhere from 18 to 24 months from the closing of the transaction for all of the work involved with the preparation and the execution of that expansion. Overall, we've messaged that we did this acquisition at a mid-7x multiple. Those 2 projects are strong, and those 2 projects will immediately drive this acquisition into a sub-7x multiple range.
Unknown Analyst: Awesome. And then I know the transaction was leverage neutral, and you have added some kind of attractive growth CapEx that you can continue to chip away at. But can you just kind of post transaction close, reframe the overall capital allocation waterfall and how you kind of see growth CapEx shaping up versus other competing priorities and maybe just whether buybacks remain part of the story longer term?
Riley Hicks: Yes. Thanks, [ Eli ]. It's Riley. When we think about capital allocation, our priorities, they really haven't changed. So we think about funding our business first, which means maintaining a strong balance sheet, investing in infrastructure growth and funding our dividend. And so as we sit today, buybacks are certainly a great tool that we can have in our toolkit. But as we look at our balance sheet today, we'll need to see that kind of get back into our 3 to 3.5x range before we would start to consider those buybacks. And then they would have to compete for capital allocation with the great infrastructure projects that we see ahead of us. So we're going to continue to be prudent and disciplined and invest in our business.
Operator: Our next question comes from the line of Sam Burwell with Jefferies.
George Burwell: Just another one on the Chauvin acquisition. Just curious like what attributes of the asset make you most confident in being able to sanction the expansion? Is it just the amount of volumes that are currently trucked or the production growth profile or anything else? And then sort of piggybacking on to that, is there an opportunity to meaningfully take up the take-or-pay portion of the capacity on the pipeline?
Curtis Philippon: Sam. What gets us excited is this is our backyard. So we know it quite well. We know the customers quite well in that area, and we know the geology in that area is driving a lot of great activity there. So the pipe is already running at near capacity. We see a very actionable path that you can expand that capacity and achieve some very good utilization even on the expanded pipe. So we feel very confident on that. As far as shifting it to a take-or-pay structure on the expanded capacity, absolutely, that's part of our strategy. We're still very early days. The transaction is not even closed yet. But I think with a midstreamer now owning the pipe, I think you see a slightly different strategy coming in now for us to be able to partner with our customers to perhaps look at different take-or-pay structures. And I would point that specifically, we see a lot of really interesting opportunities to extend the reach of the pipe and that there's a number of our customers that are currently needing to truck the last leg into the Chauvin pipe to get access to it. And we think there's a really interesting opportunity for us to help them find a netback win by extending the pipe reach and tie that in perhaps to some take-or-pay structure on the contract as well.
George Burwell: Okay. That certainly makes sense. And the next one sort of touches on Venezuela. And obviously, it's still very, very early, but I was curious for your view on whether you think that more Venezuelan barrels hitting PADD III coming on to the Gulf Coast and presumably taking the PADD III slate heavier might offer you greater opportunities around more exports from Gateway of light crudes and possibly making expansion projects down there more viable.
Curtis Philippon: Yes. Interesting. I think Venezuela, obviously, we're watching Venezuela closely. I think it's interesting. One, I think as everybody is saying, I think there's still a lot of question marks around what exactly plays out in Venezuela, and there's still a lot of work to do to actually see a sustained increase in production that and a sustained shift in where those volumes are going to have a meaningful impact on that. I'd say Gibson is in a unique position to see upside around that, though, both in -- if there is an impact on dips, potentially, there's an impact for Gibson's marketing business that you perhaps see from Venezuela crude coming into there. Perhaps you could make the leap to increasing activity around Gateway. One of the interesting observations some of our customers have made around Gateway is that just the -- perhaps some of the change in flows and the fact that the U.S. has a greater influence on those flows of crude coming out of Venezuela just increases the amount of ship traffic in the area that's sort of controlled by customers and sort of the entities that are out of the U.S. And that's helpful for our gateway customers for getting ease of access to ships to have efficient shipping out of Gateway. And it's a bit of a unique unexpected upside that we're hearing from our customers of perhaps some sort of shipping efficiency increasing with the Venezuela changes.
Operator: Our next question comes from the line of Robert Hope with Scotiabank.
Robert Hope: So I want to go back to M&A. So Teine was a nice tuck-in. How does the M&A pipeline look for further tuck-ins? Are you seeing nice deal flow? Or do you want to take a little time to integrate that asset before getting back on the hunt?
Curtis Philippon: We're going to keep -- we'll keep looking at it. I think at a macro level, Rob, what I think is super interesting is that there's been such a rush towards gas assets in the overall market that I think that creates an interesting opportunity for Gibson that has a crude-focused strategy that there are some excellent crude assets out there that are potentially not the top focus for some companies that are perhaps shifting a bit more towards some gas-focused assets. And we love those crude assets. We think those crude assets with the right attributes in the right location are going to be things that are going to be great assets for the rest of our lifetime, and we'll be active in looking at those, both in Canada and in the U.S. In saying all that, we're a pretty disciplined operator. And so Chauvin was a big deal for us. We're going to be focused in 2026 on executing well on integrating that in and making sure we deliver on everything around that. And so -- we'll keep looking, but I would caution that if you look at our pace, our last big deal back in 2023, we did this one this year. I wouldn't look for us to dramatically increase the pace of M&A activity. We'll be active and look at it. It really does take 2 people to get a deal done, though. So we'll see on what actually transpires.
Robert Hope: All right. Appreciate that. Switching gears. At the December Investor Day, you spoke about 7% plus infrastructure growth out to 2030. How does the Teine acquisition and the associated accretion change your thinking there? Do you view this growth outlook as significantly derisked? Or are you looking at potentially upside versus the prior outlook?
Curtis Philippon: When we talked about those numbers back in December, obviously, Chauvin was fairly well advanced at that time. And so we looked at the Chauvin asset or similar type assets as part of the story of how you got to this confidence around an over 7% infrastructure EBITDA per share growth rate. And so I would say that this nicely supports and derisks and is sort of perfectly aligned with the strategy we laid out at the Investor Day, but it doesn't sort of dramatically increase that rate. We still have that same confidence that sort of above 7% is what you should be expecting.
Operator: [Operator Instructions] Our next question comes from the line of Maurice Choy with RBC Capital Markets.
Maurice Choy: Just wanted to come back to the philosophy of transactions. You mentioned earlier that strategically and from a risk perspective, crude focus connected to current platforms and having similar contract and counterparty profiles were important to you. Can you also speak philosophically to the financial and funding priorities when you look at some of these wide range of opportunities?
Riley Hicks: Yes. Sure, Maurice. It's Riley here. So when we think about funding, obviously, we go back to kind of our financial positioning and maintaining our flexibility. And so when we looked at this one specifically, given where our leverage was, we felt it was most prudent to do a leverage-neutral transaction. To the extent our balance sheet was in a different position and we were a little bit less levered, we would have maybe thought about not doing equity and doing it fully from the balance sheet. But everything is going to be done in the context of maintaining or improving our investment-grade credit ratings. And so that's really the critical factor. That's massively important to our strategy. And so we think about funding in that context.
Maurice Choy: Understood. And then maybe along the same vein here on the leverage for the year, I recall that pre-transaction around midyear this year, you would have reached your 3 to 3.5x debt-to-EBITDA target range. And I recognize that the Chauvin transaction is leverage neutral. I just wanted to know what your outlook is for this metric. Any steps you consider to be in that range, especially if marketing does stay flat this year?
Riley Hicks: Yes. I think we're seeing marketing remain muted. And so likely getting back to that 3.5% range is kind of as we go through 2026 now. I will say, though, given where our infrastructure leverage is, we're quite confident with our balance sheet and where we're positioned today. Marketing is in a trough, and we still remain well below our kind of our infrastructure leverage targets. And importantly, we did discuss with both S&P and DBRS on the back of this transaction, our profile, and they're quite comfortable with where we are and reaffirmed our rating. So we will see us delever through the year, but it's likely through 2026 and not fully done in the first half now.
Operator: Our next question comes from the line of Benjamin Pham with BMO.
Benjamin Pham: I just go back to the Chauvin transaction and the multiple that you highlighted, the mid-7x. I'm curious, my question is more when we look at transactions in North America and even looking at acquisitions versus organic growth. We don't typically see multiples being similar in that vein. Can you share context on maybe just your observations of acquisitions and the multiples? And any specific characteristics that resulted in a quite attractive multiple for Chauvin?
Curtis Philippon: On the multiple side, I think it's a fair -- it was a fair price for both ourselves and Teine. And I think from -- I don't want to comment too much on Teine's perspective, but I think I think it was important for both of us to recognize that this is a long-term agreement that we're entering into a 15-year agreement with partnering with Teine, and they were doing the same thing. And it was important -- the purchase price is one thing, but the overall relationship and having a great commercial relationship to go grow that business over the next 15 years was also very critical. And so we spent probably more time on that aspect of the transaction and talking about how we grow this business together was a key factor. And I think when you look at all that together, where we got to on price was a fair swap for both sides.
Benjamin Pham: And maybe to tack on to that, I mean your overall observations, you've looked at a lot of acquisitions. I mean, is the valuations between M&A and organic growth, is that narrowing over time? Or is this nature of [indiscernible] is a very unique situation that popped up for you?
Curtis Philippon: I think it will depend on the particular asset and its characteristics. This one is -- this was sort of right up the fairway directly tied into Hardisty had some unique attributes that made it made sense and with some immediately actionable growth projects that allowed us to be directly in that 5 to 7 build multiple that lines up with our organic capital. That's a great story. I think as you look forward at other M&A opportunities, it will depend on their characteristics. There will be situations where you'd consider going above that range for the right type of crown jewel assets with the right type of contract profile, but it really is on a case-by-case basis. We obviously are very focused on that 5% to 7% range is how we think about it. And we have some great use of organic growth capital that we're quite comfortable staying focused on as well if the right M&A opportunity isn't available.
Benjamin Pham: Understood. And continue to Maurice's question on the balance sheet and where things were going. How do you think about perhaps balancing over equitizing this deal and delevering earlier and setting yourself up for the next wave of organic growth for M&A versus maybe just being more what you did the leverage neutral and maintaining that 5% accretion on the deal?
Riley Hicks: Yes, it's a great question, Ben. And so I think when we looked at over-equitizing, what we found on a deal of this size is it really just didn't move the needle enough to make it make sense. So you're just trying to balance the accretion levels versus your balance sheet. And for this one, we could have overequitized, but it really wouldn't have moved the needle enough on leverage to make it make sense to give up that accretion. So that's kind of how we landed where it was. On maybe a bit of a bigger deal, it might have made more sense to over-equitize and delever quicker.
Operator: Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Beth for closing remarks.
Beth Pollock: Thanks, [ Towanda ], and thank you for joining us today. Supplemental materials are available on our website at gibsonenergy.com. If you have any additional questions, please contact our Investor Relations team. Have a great day.
Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.