Sunday 6 October 2019

Tidewater Shares Fall After Announcement About Buying Oil Refinery

Husky Energy Inc. has agreed to sell its light oil refinery in Prince George, B.C., for $215 million cash plus adjustments to Tidewater Midstream and Infrastructure Ltd.

Shares in Tidewater Midstream and Infrastructure Ltd. fell sharply Friday after it announced it would buy this small light oil refinery in Prince George, B.C., from Husky Energy Inc.

Husky shares rose slightly. Tidewater shares fell by almost 11 per cent to as low as $1.00 on the Toronto Stock Exchange.

Tidewater Midstream is a Canadian integrated midstream and infrastructure company headquartered in Calgary, Alberta. They are in the business of:
  • Natural Gas Processing
  • Liquids Upgrading and Marketing
  • Fractionation at Tidewater's BRC Fractionation Facility
  • Storage and Transportation
  • Rail Logistics
  • Retail Propane
  • Storage Inlcuding Tidewater's Pipestone Gas Storage Facility
Tidewater main operations and core processing plants are located in the Deep Basin, Edmonton and Montney regions of Alberta & British Columbia. Tidewater's strategically positioned assets transport and market hydro-carbons to local and global markets. The company’s core business is processing natural gas and upgrading, transporting and storing petroleum products produced in northern Alberta and B.C.

This kind of market reaction is because of it being an unexpected acquisition in a somewhat new business line. Investors also have concerns about the plan to fund the purchase entirely with debt. However, the deal offers synergistic opportunities to expand petrochemical liquids value chain in northern B.C.

Analysts say the sale price is near the upper end of the estimate of $180 million to $225 million.

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