All financial figures are in Canadian dollars unless otherwise noted
CALGARY, Alberta, Dec. 04, 2018 (GLOBE NEWSWIRE) — Gibson Energy Inc. (“Gibson” or the “Company”), (TSX: GEI), announced today that its Board of Directors has approved a 2019 growth capital expenditure budget in the range of $200 million to $250 million, with nearly all investment directed towards sanctioned growth projects. Additionally, the Board of Directors has approved the allocation of approximately $30 million to $35 million in replacement capital expenditures.
“Our 2019 capital expenditure budget reflects our oil infrastructure focus and provides further visibility to exceeding our 10% distributable cash flow per share growth objective into 2020 through the addition of high-quality, long-term cash flows,” said Steve Spaulding, President and Chief Executive Officer. “We remain fully funded for all of our sanctioned capital, and we expect that our funding capacity will grow as we continue to realize strong performance throughout our business. Similar to 2018, we expect that our sanctioned capital program will grow over the course of 2019 as we seek to sanction two to four tanks per year on a run rate basis and pursue additional infrastructure investment opportunities in both Canada and the U.S.”
Gibson’s 2019 capital expenditure budget is expected to be allocated as follows:
|Growth Capital ($ millions)|
|Moose Jaw Expansion||$15||–||$20|
(1) Inclusive of acquisition costs
|Replacement Capital ($ millions)|
|Moose Jaw Facility||$5||–||$10|
|U.S. & Canadian Pipelines||$0||–||$5|
The company now expects 2018 capital expenditures to be between $250 million and $275 million, inclusive of approximately $42 million in acquisitions. The decrease is a result of a refined strategy for the connection of the Pyote system into the Wink hub as well as the Company realizing approximately $20 million in cost savings on its capital projects over the course of the year.
Gibson remains fully funded for all sanctioned capital through a combination of disposition proceeds and retained distributable cash flow from combined operations in excess of dividends declared through the first nine months of the year invested at target leverage. Once all existing capital projects are placed into service by the end of the first quarter of 2020, Gibson expects to be positioned to fund its target 10% distributable cash flow per share growth without the need for external equity, while the Company’s funding position would continue to strengthen in the interim to the extent distributable cash flow continues to exceed dividends.
Gibson is a Canadian-based oil infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of crude oil and refined products. Headquartered in Calgary, Alberta, the Company’s operations are focused around its core terminal assets located at Hardisty and Edmonton, Alberta, and also include the Moose Jaw Facility and an infrastructure position in the U.S.
Gibson shares trade under the symbol GEI and are listed on the Toronto Stock Exchange. For more information, visit www.gibsonenergy.com.