Earnings call transcript: Gibson Energy Q2 2025 beats forecasts with strong revenue

Gibson Energy Inc. (GEI) reported its second-quarter 2025 earnings, exceeding market expectations with a significant earnings per share (EPS) surprise and a robust revenue performance. The company posted an EPS of $0.37, surpassing the forecast of $0.2794, which represents a 32.43% surprise. Revenue reached $2.76 billion, far above the anticipated $1.75 billion, marking a 57.71% surprise. Following the earnings announcement, Gibson Energy’s stock price rose by 1.41%, closing at $24.8. According to InvestingPro data, the company maintains a significant 5.28% dividend yield and has raised its dividend for 5 consecutive years, demonstrating strong shareholder returns.

Key Takeaways

• Gibson Energy’s Q2 EPS of $0.37 exceeded expectations by 32.43%.
• Revenue for the quarter was $2.76 billion, a 57.71% surprise over forecasts.
• The stock price increased by 1.41% in response to the earnings report.
• Infrastructure and marketing segments showed solid performance.
• The company remains optimistic about future infrastructure growth.

Company Performance

Gibson Energy demonstrated strong performance in Q2 2025, with significant gains in both revenue and EPS. This performance reflects the company’s strategic focus on expanding its infrastructure capabilities and optimizing its operations. The infrastructure segment maintained stable EBITDA, while the marketing segment performed at the top end of its guidance. The company also reported a substantial increase in throughput and market share in key areas.

Financial Highlights

• Revenue: $2.76 billion, significantly above the forecast of $1.75 billion.
• Earnings per share: $0.37, compared to the forecast of $0.2794.
• Adjusted EBITDA: $146 million, a $13 million decrease year-over-year.
• Distributable Cash Flow: $81 million, down $20 million year-over-year.
• Debt to EBITDA Ratio: 4.0x, above the target range.

Earnings vs. Forecast

Gibson Energy’s Q2 results outperformed market expectations, with EPS at $0.37 versus a forecast of $0.2794, leading to a 32.43% surprise. Revenue also exceeded expectations, with a 57.71% surprise. This positive performance is a result of strong operational efficiency and strategic investments in infrastructure.

Market Reaction

Following the earnings announcement, Gibson Energy’s stock rose by 1.41%, closing at $24.8. The stock’s movement reflects investor confidence in the company’s strong financial performance and future growth prospects. The current stock price remains within its 52-week range, indicating a stable market position.

Outlook & Guidance

Looking forward, Gibson Energy targets over 5% growth in infrastructure EBITDA per share over the next five years. The company aims to return to its target leverage range by early 2026 and is exploring potential expansions, including a third dock at the Gateway terminal. The marketing segment’s guidance for 2025 is set between $20 million and $40 million.

Executive Commentary

CEO Curtis Filton highlighted the strategic advantages of the Ingleside location for crude export, stating, "Ingleside is the most cost-effective place to export crude out of The U.S." He also emphasized the company’s progress, noting, "We’re on track to exceed the $25,000,000 target."

Risks and Challenges

• High debt-to-EBITDA ratio, currently above the target range.
• Muted marketing environment due to low inventory levels.
• Tight commodity differentials limiting storage opportunities.
• Potential delays in infrastructure projects.
• Macroeconomic pressures affecting commodity prices.

Q&A

During the earnings call, analysts focused on the growth potential of the Gateway terminal, the recovery outlook for the marketing segment, and trends in Permian production. The company also discussed cost reduction initiatives and their impact on future profitability.

Full transcript - Gibson Energy Inc. (GEI) Q2 2025:

Conference Operator: Good morning, everyone, and welcome to the Gibson Energy Second Quarter twenty twenty five Conference Call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Beth Pollack, Vice President, Capital Markets and Risk. Ms. Pollack, please go ahead.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy: Thank you. Good morning, and welcome to our second quarter earnings call. Joining me today from Gibson Energy are Curtis Filton, President and Chief Executive Officer and Riley Hicks, Senior Vice President and Chief Financial Officer. The rest of our management team is also present to help with questions and answers as required. Listeners are reminded that today’s call refers to non GAAP measures, forward looking information, and is subject to certain assumptions and adjustments and may not be indicative of actual results.

Descriptions and qualifications of such measures and information are set out in our investor presentation available on our website and our continuous disclosure documents available on SEDAR plus With that, I will turn the call over to Curtis.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Thanks, Beth. Good morning and thank you for joining us today to discuss our second quarter financial and operating results. Q2 was a great execution quarter for Gibson. We achieved many key milestones including the safe and efficient execution of several major capital projects. These efforts underscore the momentum we have across our five strategic priorities, safety, gateway execution, growth, cost focus and building high performance teams.

During the second quarter, we completed the Gateway dredging project and turnarounds at the Moose Jaw facility and the Hardisty DRU, with all projects safely executed on time and on or under budget. We also made significant progress on the Cactus II connection at Gateway and advanced construction on the crude infrastructure in the Duvernay being built as part of our new long term producer partnership with Baydex. Both are on track and are expected to come online as planned in Q3 and Q4 respectively. I’d like to thank Marcus Engel’s team at Gateway, Ken Martin and Cody Johnson’s team at the DRU and our Moose Jaw team. It was impressive to see the pride these teams took in the preparation and safe execution of their projects.

Their hard work set us up for a strong quarter. These projects will open up additional capabilities for Gibson going forward. These major projects are completed with zero recordable incidents and we’re proud of our continued top quartile safety performance. Gibson has now achieved a new milestone of over nine point five million hours without a lost time injury. Our safe operations provide a critical infrastructure bridge to enable the reliable flow of energy to key markets across North America and globally.

We continue to grow with our customers and year to date, we have safely moved over two sixty million barrels in Canada and over 120,000,000 barrels in The U. S, representing year over year increases of 65% respectively. Turning our focus to Gateway, during the second quarter, we completed dredging and observed the benefits of the project immediately with the draft now increased to 52 feet, we’re able to load VLCCs up to 1,600,000 barrels and Suezmax vessels in full up to 1,100,000 barrels, increasing revenue per loading window and increasing average volumes for VLCC and Suezmax vessels by more than 20%. Following the completion of the project, average throughput at Gateway rose from approximately 600,000 barrels per day to over 700,000 barrels per day and with a new record of 755,000 barrels per day achieved in June. Higher volumes at the terminal resulted in our Corpus Christi market share increasing to over 30%, a new high for Gateway.

Looking forward, we expect the positive momentum to continue into the 2025. The Cactus II connection is on track to come online in Q3. This connection constructed to meet our customer needs will provide them with long term access to an incremental 700,000 barrels per day of crude supply. Completing this connection is an important step to unlock further growth potential at Gateway. To date, we’ve grown to over 30% market share in Corpus, while only having access to two thirds of the supply.

Access to this additional supply enables more options for our current customers, increases operational efficiencies and expands the pool of customers for Gateway. Commercially, we see an infrastructure EBITDA per share growth rate of greater than 5% over the next five years. To drive this growth program, we’ve been adding key talent to our teams in Canada and The United States, including the recent addition of a new Senior Commercial Director in Canada, Ryan Highland. Across our business, we also made significant progress with respect to our We Are All Owners cost focus campaign. If you recall, we set a target of realizing over $25,000,000 of run rate cost savings by the 2025 and to do it with high levels of participation.

We’re on track to exceed the $25,000,000 target and the participation across the organization has been impressive with 80% of Gibson employees implementing a change that contributes to this cost challenge. This is a great example of the power of the ownership culture at Gibson. Over 95% of Gibson employees are shareholders and it helps drive a differentiated performance culture that is aligned with shareholders. During the quarter, we realized the mix of one time and run rate cost savings across all areas. From a distributable cash flow perspective, this amounted to approximately $9,000,000 or $05 per share, bringing the total year to date DCF impact to over $15,000,000 or $09 per share.

Financially, the strength of our infrastructure business was showcased in Q2 as we finished the quarter with 146,000,000 in adjusted EBITDA and $81,000,000 in distributable cash flow. Continued strong infrastructure performance in Canada at both Edmonton and Hardisty as well as in The U. S. At Gateway following the completion of the dredging project offset the cash flow impact of business interruptions at Gateway, Moose Jaw and DRU, while capital projects are completed and the muted marketing environment. Overall, Q2 was an important quarter for Gibson, as we successfully advanced our crude infrastructure strategy with the strong execution of major capital projects.

We’re looking forward to maintaining this momentum through the second half of the year. With this, I’ll pass it over to Riley, who will discuss our financial performance in more detail.

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: Thank you, Curtis, and good morning, everyone. As discussed, the second quarter was another strong quarter for our core business. In our Infrastructure segment, we reported adjusted EBITDA of $153,000,000 consistent with the same period last year and close to the high watermark of $155,000,000 achieved during the first quarter. These solid results were driven by continued strong demand for services at both Edmonton and Hardisty as well as increased throughput at Gateway, which helped to mitigate the impact of minor business interruptions during the execution of our dredging project and the planned turnarounds at both Moose Jaw and the Hardisty DRU. Marketing results continued to improve during the quarter with adjusted EBITDA of $8,000,000 landing at the top end of our prior guidance range of 0 to $10,000,000 This represents an $8,000,000 improvement over our first quarter results, although it remains $12,000,000 below the same period last year.

Marketing performance reflected continued tight commodity differentials, limited storage opportunities and the impact to our refined products business resulting from the planned turnaround at our Moose Jaw facility. Looking forward, with increased visibility into the second half of the year, we remain confident in our full year marketing outlook of 20,000,000 to $40,000,000 consistent with the guidance we shared on our first quarter call. As for the third quarter, we expect marketing performance to be substantially in line with second quarter results. While crude marketing is expected to benefit from an improved WTI price structure, this impact will partially be offset by tight grade differentials driven by egress capacity out of the basin. Further, while crack spreads impacting our refined products segment have improved, this will be partially offset by reduced North American drilling rig activity, which will impact sales of our drilling fluid products.

On a consolidated basis, second quarter adjusted EBITDA of 146,000,000 was $13,000,000 lower than the same period last year, primarily driven by the muted marketing results. Looking at distributable cash flow, we generated $81,000,000 in the second quarter, a $20,000,000 decrease compared to the 2024. As noted earlier, this is primarily due to the lower marketing performance, which was only partially offset by the success of our cost savings initiatives, which have resulted in $9,000,000 of operating G and A and replacement cost savings during the quarter. Turning to our financial position, we remain committed to our financial governing principles and maintaining both a strong balance sheet and a sustainable growing dividend. As expected, our debt to adjusted EBITDA ratio of four times was above our long term target range of three to 3.5 times, while infrastructure leverage of 3.8 times remained below our target of less than four times.

On a consolidated payout ratio of 83% was slightly above our target range of 70 to 80%, while our infrastructure only payout ratio of 73% was below our target of less than 100%. Our consolidated metrics are temporarily above our long term targets, reflecting the impact of a heavy capital program during the 2025 combined with softer marketing results and is fully aligned with our expectations heading into the year. The majority of our twenty twenty five growth capital projects are now complete and with line of sight to a more stable marketing environment, we have a clear pathway to having both consolidated leverage and payout back within our target ranges by early twenty twenty six. Finally, and in support of our conservative financial profile and our commitment to our investment grade rating, DBRS has maintained our solid BBB low rating with a stable trend, reaffirming their comfort with our long term financial plan. With this, I will now pass the call back to Curtis for a few closing remarks.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Thanks, Riley. To close, we are pleased to have ended the 2025 with another solid quarter. We achieved key milestones through the execution of major infrastructure capital projects. We generated strong quarterly infrastructure segment EBITDA, which benefited from the new tanks at Edmonton and increased throughput at Gateway. We delivered improved marketing segment EBITDA.

We maintained a strong and sustainable balance sheet and while infrastructure adjusted metrics remain within targeted levels, we are cognizant that consolidated leverage and payout metrics are currently above and have line of sight to both returning within target ranges by early twenty twenty six. And finally, we’ve made considerable advances with respect to the Cactus II connection and the new Duvernay infrastructure as part of our producer partnership setting us up for a strong second half of the year.

Conference Operator: Thank you. Our first question comes from the line of Jeremy Tonet from JPMorgan Securities LLC.

Eli, Analyst, JPMorgan Securities LLC: Hi, good morning. This is Eli on for Jeremy. Congrats on a strong quarter. Maybe just wanted to start on the progress of commercialization at you know, post the SGT GT. Just if you

Curtis Filton, President and Chief Executive Officer, Gibson Energy: can talk about some of

Eli, Analyst, JPMorgan Securities LLC: the longer term growth opportunities you see at Gateway, whether those are vertically integrated Permian bolt ons or what that opportunity sale looks like?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Sure. Thanks. Good morning, Eli. We were pretty excited about what we’re doing right now at Gateway. So the dredging just recently completed and with this cactus tie in, you’re going to see those benefits being something we’re working on over the next few years, really, like there’s some immediate volume increases that we’re seeing, but the big benefits come from us fully utilizing this new capacity and re contracting customers at higher MVCs in the future now that we’re able to fully load Suezmax vessels and fill VLCC is too much larger capacity.

So I think you’re going to see us use that over the next few years, like there’s a lot of wood the chop still to fully realize the benefits that we got out of the capital projects we completed this year. Longer term, you get pretty excited about what else you can do with gateway that there’s obviously interesting vertical integration options that you can have now that you have this gateway platform, this type of incredible capability out of Ingleside. So we’ll watch for that and even longer term, we’ve talked about that as crude exports increase in The U. S. Ingleside is the most cost effective place to export crude out of The U.

S. And we see a good path to building a third dock at that location as well to facilitate that as exports grow in The US and I think that’s still a number of years out, but that’s still a very attractive project, I think in time for Gibson. Got it, that’s helpful.

Eli, Analyst, JPMorgan Securities LLC: And then maybe shifting over to marketing, I appreciate that there’s kind of some push and pull factors that you see progressing through the, you know, second half of the year. But maybe, you know, just confidence in a turnaround in ’26 and, you know, understanding what that could look like for the business, what would drive sort of stronger performance next year and what you guys are seeing now? Thanks.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: I think you’re seeing a lot of factors all coming together this year that sort of temporarily have our marketing segment pretty muted this year. We’re pleased to see the sequential improvement we’re seeing quarter over quarter as things are improving. As you get into 2026, I expect that you continue to see that happen, things do improve and whether that’s egress efficiency, refinery crack spreads or even things like drilling fluid demand. So we see some line of sight to things improving as you get into 2026. But I still would say that we’re still cautiously watching that as it’s progressing, it is improving, but it’s still a little bit out and really the marketing business depends on macro impacts.

I think we’ve done quite well to capitalize on macro events. And I think if you go forward, you’ll see us do that in ’26 as well. I think the one interesting thing in ’25 is there’s been a lot of macro events that have happened in ’25, but because of exceptionally low inventory levels in the basin, some of the impact of those macro events have been fairly muted and so it’s not that these events have stopped happening, it’s just that because of very low inventory levels driven by this very efficient egress currently, you’re not seeing the same scale of marketing opportunity. I think as you go forward, you see some of that return to more historical norms that you’re going have a little bit more inventory, you’re going to have a little bit more efficiency challenges around egress and you’re going to continue to see macro impacts. I would argue that’s something that’s going to only increase in time and sort of increase opportunities for the marketing segment.

Eli, Analyst, JPMorgan Securities LLC: Got it. And then just really quick one last one, if we could. Was there any sort of change in July volumes at Gateway? I think there were some folks looking at seaborne exports data showing a drop. I’m not sure if you’re seeing anything there, sorry.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: There’s always going to be a little bit of weather related timing things that will come up for an export terminal, nothing notable to comment on.

Analyst, RBC Capital Markets: Got it. Thanks.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Aaron MacNeil from TD Cowen.

Aaron MacNeil, Analyst, TD Cowen: Hey, good morning all. Thanks for taking my questions. Curtis, on Gateway, you disclosed the record volumes growth in excess of 20% versus when you acquired the asset on a volume basis and we’re yet to see the impact of Cactus II, so volumes could continue to increase. In that context or in the context of your 15% to 20% EBITDA growth target, do you think we could see Gibson exceed this range? Or do you think that there’s some nuances in terms of why growth at the asset level in terms of volumes may not translate into EBITDA?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: I think so, volumes were already seeing the volumes up ticking already today with cactus tie and that will help us and what you’ll see another increase in volume, we have one customer in particular that initially backstop connection that will bring additional volume to gateway. So you’ll see a bit of an uptick related to volume. I would say, one from an EBITDA impact, we feel very good about what we’ve been messaging that in Q4 that we will meet or exceed the 15% to 20% EBITDA growth rate that we said that we are targeting is when we did the Gateway acquisition that we’re going to hit that run rate increase by Q4 this year, feel very good about that. But I would also say that boy, we would have just got gateway connected the cactus too, so we’re still pretty early days on fully realizing the benefits of that connection and so I think as you get into ’26, you’re going to see us use that in an even bigger way and find additional efficiencies. We’ll see what it does on the volume perspective, we’re always on the volume side, we’re always relying on the activity of our customers, But what we’ll find is that there’s just a lot more efficiencies that we can drive with additional capacity connections.

I think just drives some good EBITDA opportunities in there and we’ll see what it does to volume. I’d expect a small uptick in volume with the Cactus connection.

Aaron MacNeil, Analyst, TD Cowen: Gotcha. Okay. And then maybe to not to beat a dead horse here, but maybe to follow on Eli’s question on the marketing outlook. What assumptions do we need to believe in terms of the heavy differential or two eleven crack spread or inventory levels in order to get to the lower end of the previous guidance range?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: I think on the marketing side, one of the big things I would look at is, is there production growth coming in Western Canada? I think we see that, that we’re seeing Western Canadian production growth coming at us and that will inevitably lead to some tightening of egress and that will increase marketing opportunities. And so that’s for us, that’s probably one of the big levers. There’s a number of different levers in this business we’re able to pull on, but that’s one to watch for sure.

Aaron MacNeil, Analyst, TD Cowen: Thanks. I’ll turn it back.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Robert Hope from Scotiabank.

Robert Hope, Analyst, Scotiabank: Good morning, everyone. I appreciate the commentary on the South Texas growth outlook. Maybe moving north on the border, can you give us an update on how the next wave of growth projects are progressing across the business?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Good morning, Rob. For the growth in Canada, next wave of projects, the big one right now that’s live is the producer partnership agreement with Baytec. So that’s progressing really well and we expect that that will be fully online by the end of Q4. That sets a bit of a template out there that I expect that there’s some other interesting projects that we can get into and there’s also additional phases potentially with Baytex that we could get into with that as we get into 2026. And so that’s one interesting growth like in Canada to watch with just to remind everybody, we love the nature of that agreement and that good guaranteed take or pay long term agreement on that infrastructure, but importantly, the barrels are driven to our core facilities in Edmonton in this case and just drive additional throughput through our facilities and just a great way to help out our customer as well.

So we love that type of agreement, we’d be happy to do more of that with Paytex and with other producers and so we see some good opportunity around that. And then the second part of the growth in Canada, I think near term that I get excited about right now is there’s a number of optimization type projects that we’ve been chipping away some fairly significant major capital projects at Gibson over the last eighteen months and I would argue, we’ve got a bit of a backlog of some of these optimization projects that we’ve got to get around to and no one of these is that significant for that we’ll talk about in great detail, they’re typically projects that are sort of anywhere from one to fifteen million dollars but good excellent return projects that also help out our customers and are sort of on the lower end of the five to seven payback range as well and so nice projects to get done that we’ve got a bit of a backlog that we’re working through in engineering and our BD team right now.

Robert Hope, Analyst, Scotiabank: I appreciate that. And then just in terms of capital allocation, commentary that the debt to EBITDA will remain a little bit above target this year getting back to the range next year. How are you thinking about share buybacks just given the continued media outlook for marketing and where the leverage is?

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: Yes, thanks, Rob. It’s Riley here. As we think about capital allocation and share buybacks specifically, they’re always going to be executed within the context of our balance sheet. So as we sit here today and look at our leverage profile, we wouldn’t expect to be executing any buybacks here in 2025. And it looks like more likely a 2026 buyback program.

Ben, Analyst, BMO: Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Maurice Choi from RBC Capital Markets.

Analyst, RBC Capital Markets: Thank you and good morning everyone. Just wanted to speak about the five to seven times build multiples that you’ve referenced in terms of capital deployment. You’ve been clear that you’re going to be remaining disciplined and you also highlight that some of your opportunities are at the lower end of that range. Not that you need it, but when you look at M and A, what are some of the must haves for you to go beyond this five to seven times?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: We for sure are focused on the organic opportunities, we see a nice set of opportunities that are in that five to seven build multiple. M and A though is something we constantly look at and so one of the big things that we look at is there an integration with our current assets in some way and that’s important that we look at. Is there a connection, obviously crude focus that tied to our current assets are very interesting things we spend time looking at. The other big thing is I would say is Gibson has done a phenomenal job over the years to accumulate what I call sort of crown jewel assets. So these are truly differentiated assets that are best in class and are integral to the energy story in North America and will be that for the rest of our lifetime.

And so those types of assets are often they cost you something to get to acquire. And so those are the types of things that we’ll look at. And so in the case of gateway, that was one of those assets. So we looked at it and said, that is a incredible strategic fit that has a long term role to play a significant role to play in The U. S.

Energy picture. And we saw the value stepping above that five to seven build multiple for sure to go acquire that asset and so it would require things like that, the things that we think are truly additional crown jewels to add to the story that have just that long runway in front of them with strong contracted cash flows in particular as well.

Analyst, RBC Capital Markets: And just a quick follow-up to that, consideration is there between an opportunity in Canada versus The US?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Now that we’ve got this platform on both sides of the border, it’s interesting. We had asked this question a lot and I see good opportunity on both sides of the border. US with the gateway platform, there’s lots of interesting things to do around that. But on the Canadian side of the border, we’ve been in business in Canada for seventy years. We know this market exceptionally well, have a great footprint and a lot of great relationships with the customers.

So there’s good opportunities on both sides that maybe I’ll give you the wishy washy answer that more, but I think I saw, I see it, I think there’s good opportunities both on the capital deployment and on the M and A side on both sides of the border.

Eli, Analyst, JPMorgan Securities LLC: Great. And just to finish off on marketing. Curtis, I know that on

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: the last

Analyst, RBC Capital Markets: Q1 call, suggested that you may reach the low end of the 80,000,000 to $120,000,000 marketing guidance next year. Can you reconfirm this outlook or given your comments earlier about the macro as well as the need to see production growth, do you sense that this outlook has materially changed?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: It’s constructive that we’re seeing that it’s sort of quarter over quarter improving. So it gives you confidence that you’re tracking towards that. So it’s probably a little bit too early to come out and say confidently, it’s absolutely back in that range, but we’re pleased with how this is tracking and some of the good work being done by our marketing team this year to add additional capabilities to our marketing effort and whether it’s at the refinery or some of our U. S. Marketing activities that we’re doing just to sort of expand the toolbox a little bit.

I think that also gives you some good confidence that we’re trending in the right way for that.

Analyst, RBC Capital Markets: Understood. Thank you very much.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Sam Berwell from Jefferies.

Sam Berwell, Analyst, Jefferies: Hey, good morning guys. Apologies for another gateway related question, but wondering if we could dig in a little bit more on how you might be able to take share from the existing facilities in Corpus. I understand that you guys have a nicely advantaged position. But just curious, is that a function of existing contracts rolling off? Or was the lack of connection to Cactus II something that was really holding back?

And just curious how quickly any sort of share gains might be able to be realized.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Yeah, When you look at Gateway and it looks specifically at Ingleside, Ingleside is just going to win. Ingleside is the most advantage location to export crude out of The U. S. You will see consistently more crude moving out to ide and so you’re going to see both ourselves and our neighbor do quite well with that. This is by far the most advantage location to the bulk of crude exports are exiting The U.

S. On VLCCs and Suezmax vessels. This is by far the best location to load those vessels in The U. S. And so you’ll see volume continue to shift in that direction.

It was really important for us to get the dredging completed in the Cactus connection completed and so we’ve sort of all the advantages and to available to our customers. And then I’d agree with your comment that the other factor is really just time that there is a certain amount of contracts rolling off at other locations and volume able to shift over to gateway.

Sam Berwell, Analyst, Jefferies: Okay, understood. And then just sort of for the rest of the year, mean, are there any maintenance items or construction related matters that might influence volumes? I mean, notwithstanding the comment that you already made about sort of normal course of business month to month volatility, but any sort of data items to call out there?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: We completed all the major turnarounds for the year, so we have a number of tank turnarounds, but those tend to have very minimal impact. So there is maintenance work that’s going on for the remainder of the year, but nothing that has a material impact on the results.

Sam Berwell, Analyst, Jefferies: Got it. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Patrick Kenny from National Bank Financial.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy0: Thank you. Good morning, everyone. Just hard to see and on the pullback in volumes and I guess overall demand for storage being experienced at the terminal. I know Trans Mountain is mainly to blame here pulling barrels west, but I’m just curious if there might be any other factors at play driving that trend as well and how you’re thinking about mitigating the impact over the near term and just your overall outlook for Hardisty rebounding through the back half of the year and into 2026? Thanks.

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Hardisty is having a very solid year for us actually. So we’re definitely seeing the impact of Trans Mountain and we’ve been very impressed with the volumes that our Edmonton facility has been moving on Trans Mountain, but I’d also say that we’ve quite where we see our customers in the oil sands with very good projects that are bringing more and more volume online. And so I expect you’ll see that impact positively impacting Hardisty over the next couple of years. See 600,000 barrels of capacity growth in Canada between now and ’28 and I think that’s a good chunk of that volume increase is going to come through Gibson facilities and will be a beneficiary of that both in Edmonton and in Hardisty. Also in Hardisty, we would note that we just recently welcomed Strathcona into the Hardisty Rail Terminal and so that is a great new partner for us in that facility.

We’re excited about what we can do with that partner on the rail facility. That’s still very early days, but that’s I think an interesting positive relationship that we look to grow.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy0: Yes. And on the customer front, I guess, the potential acquisition of MAG here, depending on how things play out. Just wondering if you have any thoughts, Curtis, on what a takeout could mean for your business just in terms of presenting perhaps new commercial opportunities or on the flip side, if you might need to manage any downside risks associated with a change in ownership?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Yes, we’re just, we’re watching that like everybody Pat and just curious to see how plays out. I think it goes to show that these oil sands assets are very attractive and I think there’s going be a lot of interest in those assets and just the growth potential. You look at North America and the most attractive areas of oil growth are clearly the oil sands and I that’s a great macro story for Gibson and we’re watching how this MEG story plays out as well.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy0: Last one for me, guess for Riley. So you had the notes mature in July and looks like you just utilized your bank lines for now. But just wonder what the plan is to refi those notes timing wise, whether or not you

Ben, Analyst, BMO: have

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy0: any concerns about what terms you can tap the markets at here over the near term?

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: Yes, thank you. No real concerns about refinancing the notes. We did put them on our revolver for the short term as we head into kind of the summer months here. We’ll look to refinance those in the fall here at the long term notes. So no step change in what we’re doing on the financing side.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy0: Okay, that’s great. I’ll leave it there. Thanks.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Robert Catellier from CIBC Capital Markets.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy1: Hi, good morning. I just wanted to go back to the marketing for a second here. Curtis, you touched on the fact that your U. S. Assets can contribute over the long term.

I’m wondering what you think is possible there. What do you think those U. S. Assets can eventually contribute to the marketing business?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Good morning, Rob. On The U. S. Marketing side, where I get the most interested in that is, I think our customers are craving more supply options at Gateway and I actually view the marketing business as a key way for us to increase the utilization at Gateway. We move a significant volume to fill VLCCs out of that location.

One of the bottlenecks for our customers is being able to get access to the supply they need when they need it. I think we were early days and doing a bit of this, but we’re working and helping our customers through our marketing business to help increase and give them access to more supply. I think that’s the key thing there. There is obviously a marketing EBITDA benefit out of doing that, but I would say more importantly for us is it’s a way for us to really provide a service to our customers and increase that utilization even further at Gateway.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy1: Okay, that makes sense. And then, I wonder if you could give us your view on the outlook for the Permian volumes going forward, think there’s some competing views out there, but what are you hearing from the major producers in the area about their plants and how that informs your outlook?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: It’s interesting to watch, you see rig counts and frac spread counts sort of dropping to very low levels. From our perspective, one Ingleside is the most cost effective place to export barrels and so we’re not chasing the sort of the incremental Permian production growth barrel to get to Ingleside. And so it’s interesting for us to watch what happens in the Permian, but it doesn’t impact what gateway does for volumes. We will find the most efficient barrels going to market will come through Gateway and regardless of what Permian production does, we’re going to have great activity out at Ingleside of Gateway. But when we watch the Permian, I still would have a strong view that the Permian is an incredible resource and there’s a lot of great companies out there, a lot of great resource, a lot of great people in the Permian.

I do think it will be muted in the near term, but I’d be a view that the Permian has got a lot of legs left in it still that there’s still some very good growth years to come out of the Permian, but we’ll watch that. It’s not something that we need for the success of Gateway, but I believe there’s a lot more to come still from the Permian.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy1: Maybe finally for Riley. I’m wondering how the Budget Reconciliation Act in The U. S. Impacts your U. S.

Strategy, the cash tax outlook in particular?

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: Yes, it’s a great question. I think as we looked at the one big beautiful bill, we obviously saw some impacts from section eight ninety nine back up pulled from the bill. And so that would have been the major impact to us as Gibson. We do sit back and look at our kind of tax planning strategy for the long term. And we’ll be going through that process over the next few months to ensure that we’re set up for success in the future.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy1: Okay. Thanks, everyone.

Conference Operator: Thank you. Our next question comes from the line of Benjamin Pham from BMO.

Ben, Analyst, BMO: Hi, thanks. Good morning. I wanted to go back to your leverage guidance early twenty twenty six target of hitting that ranges that you have there. Can you comment on what you’re assuming in the marketing side of things to achieve that? And then better question I had on the leverage is once you do reach there, what do you plan or target in terms of being within the portions of the range?

Or do you eventually plan to be below the ranges over time?

Riley Hicks, Senior Vice President and Chief Financial Officer, Gibson Energy: Yeah, thanks Ben. I think when we think about getting our leverage back down to where we like it within that three to 3.5 times in early twenty twenty six, that would assume still remaining a pretty muted marketing assumption in there. So that doesn’t require marketing getting back to the midpoint of our long term range. In that scenario, we would deleverage quite a bit quicker. So when we think about where our range is at, that we like the three to 3.5 times, We think that gives us lots of financial flexibility.

I think anything below that is probably a little bit under levered and we’d look to buy back shares at that point. So being within that range gives us lots of flexibility to kind of execute our long term capital allocation priorities.

Ben, Analyst, BMO: Okay. Got it. And the next question on the growth side. Example of a project you’re quite positive on is the third dock. I mean, you said you mentioned perhaps a couple of years out, and you mentioned a couple of smaller projects.

So you think about ’26 then, do you anticipate that it’s going to be more a year of cash harvesting and maybe more of these these single digit projects and something that’s larger in terms of sanctioning?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: Yep, Ben, just for clarity on the third dock, I’d say the third dock is still more than a couple of years out. I think there’s, we were doing some good work on that on regulatory and things like that to keep that advancing. Realistically long term for third dock, need to see that trend on the Permian production increasing, you need to see pipes, the Corpus getting some expansions. And so there’s a couple of things that are that we want to see before we’re moving forward with that. We’d also like to we would need a customer backstopping that as well.

So I wouldn’t put that in your model for the next couple of years, but the near term growth, there’s a number of these projects. I don’t know that I’d go to a sort of a cash harvesting sort of strategy for ’26. There’s a number of good projects we’ve got in the queue for ’26. These producer partnerships are quite interesting. These optimization projects are quite interesting and then additional tank capacity at really at a few different locations are still things that we’re looking hard at for ’26 and that we’ll see as we see it depending on timing of customer award will dictate that.

Ben, Analyst, BMO: And Claire said, thanks a lot for that context. Also want to clarify the third doc, mean, we see it a few years out, is more cash generation or is

Analyst, RBC Capital Markets: that more

Ben, Analyst, BMO: FID in a few years and then the cash comes later subsequently?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: You’re going to need to see Permian expansion, Corpus pipe expansion before you’re at the point of FID. So you’re still at least a couple of years out, I believe from an FID situation. So that’s just to be clear on that. I think there’s a lot of work we’re able to do in the near term though to sort of advance the engineering on that and the regulatory side of that, so that we’re sort of effectively shovel ready on that project as demand comes for that. But that’s something we’re going be working out in the background.

Ben, Analyst, BMO: Okay, got it. Maybe one final one, if I may on the cost reduction side of things. You’ve messaged potentially exceeding the $25,000,000 Can you share what portion that is recurring? And then of that $25,000,000 is there a portion that flows back to your customers versus the GI shareholder?

Curtis Filton, President and Chief Executive Officer, Gibson Energy: So in the ’25, I’m glad you asked about the $25,000,000 This is one of my favorite initiatives for the year. We’ve just seen such tremendous participation across the entire company and in every department in the company, people really challenging costs and where do we find opportunities and boy, there’s been wins all over the place from eliminating waste to sort of working with our vendors to find better solutions and now we’re moving to this next phase of actually implementing process changes and technology changes and capital projects to drive additional levels of cost savings. So it is one of the big success stories of the year for us. I couldn’t be prouder of the team for the great work that people are doing around this. So we feel very confident that we’ll be by the end of the year achieving the $25,000,000 of run rate savings that when I think about $25,000,000 of run rate savings, I look at that as sort of Gibson run rate savings and there’s a mix of DCF and EBITDA impacting things, but true those savings for us.

I also would, I think you’re picking up on a good thing as well. Some of these savings we’ve found are also in some of our capital projects. So we’ve thought about different ways of doing some of our capital project execution. We found some real savings, which I believe going forward provide us with an interesting opportunity for us to increase our competitiveness with our customers, still drive great returns with our cut for on our projects, but also offer a great low cost solution for our customers as we’re developing projects with them. There is absolutely a customer benefit to this program as well.

Ben, Analyst, BMO: Okay, got it. Thank you.

Conference Operator: Thanks. Thank you. There are no further questions. I would now like to hand the call back to Beth.

Beth Pollack, Vice President, Capital Markets and Risk, Gibson Energy: Thank you. And thank you for joining us for Gibson Energy’s Q2 twenty twenty five earnings call. Additional supplementary information is available on our website, gibsonenergy.com. For follow-up questions, please reach out to investor. Relationsgibsonenergy dot com.

Thank you.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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