Gibson Energy Q2 Earnings Call Highlights

Gibson Energy (TSE:GEI) reported record infrastructure adjusted EBITDA in the second quarter of 2026, supported by higher network utilization, contributions from its newly acquired Chauvin Pipeline system and optimization initiatives. The company also said its marketing business benefited from strong refined-products crack spreads and crude-market volatility.

President and Chief Executive Officer Curtis Philippon said the company surpassed one year without a recordable injury among employees and contractors during the quarter. He described the North American energy-infrastructure outlook as more constructive than it was a quarter earlier, citing market-access announcements and pipeline developments in Canada as catalysts for customer discussions.

“The strategic importance of secure, reliable North American energy has never been more clear,” Philippon said. He added that Gibson’s terminals and land positions in Hardisty, Edmonton and Bruderheim position the company to support changing customer infrastructure requirements.

Record infrastructure performance

Senior Vice President and Chief Financial Officer Riley Hicks said infrastructure adjusted EBITDA reached a record $169 million in the second quarter, up $17 million from the second quarter of 2025 and $9 million above the company’s previous quarterly record, set in the fourth quarter of 2025.

The performance reflected approximately 8 million barrels of additional throughput across Gibson’s portfolio compared with the prior-year quarter, stronger utilization and the contribution from Chauvin, which Gibson acquired on May 1.

Gibson said the Chauvin Pipeline system extends its Hardisty position and provides contracted cash flow backed by long-term agreements with Teine Energy. The company has begun work on a project to directly connect Chauvin to its Hardisty terminal and expects completion in the first half of 2027.

Engineering is also underway for a Chauvin expansion that would increase effective capacity by 50%, to 45,000 barrels per day from 30,000 barrels per day. Gibson expects to reach a final investment decision on that project by year-end.

In the U.S., Gibson said its Wink-to-Gateway integration project remains on track to enter service by the end of the third quarter. The first phase of pipeline-twinning work has been completed, which the company said improves its ability to move supply simultaneously from the Eagle Ford and Permian basins into its Gateway terminal.

Marketing gains, though volatility remains

Marketing adjusted EBITDA was $15 million in the quarter, compared with $8 million a year earlier. Hicks said the gains were driven largely by refined-products operations, as stronger crack spreads increased margins on distillate sales. Slightly weaker-than-expected asphalt demand partly offset those gains.

The company said enhancements completed during its 2025 turnaround improved product diversity at its Moose Jaw facility and supported improved margins on asphalt sales. Philippon said changes made with customers to expand the range of products supplied from the facility contributed to the quarter’s results and should continue to benefit the business in the third quarter.

Year-to-date, marketing contributed $18 million of adjusted EBITDA. Gibson said it is tracking toward the upper end of its previously provided full-year marketing adjusted EBITDA range of $0 million to $40 million.

However, executives said a backwardated crude market limits certain crude-marketing opportunities, while refined-products earnings are subject to seasonal effects in the fourth quarter. Hicks said the company continues to view the $0 million to $40 million range as appropriate despite the stronger recent results.

At its Gateway terminal in South Texas, Philippon said geopolitical uncertainty, freight rates, vessel availability and shifting trade flows have created a volatile crude-export environment. Gibson added five new customers during the quarter, including supermajors, through short-term opportunities at Gateway. The company expects contracted third-quarter Gateway volumes to be similar to the second quarter, although actual loaded volumes will depend on vessel arrivals.

Cash flow, leverage and cost initiatives

On a consolidated basis, Gibson reported adjusted EBITDA of $169 million, matching its prior quarterly record and increasing $22 million from the second quarter of 2025. Distributable cash flow totaled $96 million, up $15 million year over year, with record infrastructure earnings partly offset by higher financing costs and current income taxes.

Second-quarter general and administrative expense was $16 million, below Gibson’s previous quarterly guidance of $17 million to $18 million, aided by certain one-time cost savings. The company continues to expect organizational restructuring and other efficiency efforts to generate approximately $10 million of sustainable annualized savings in 2027.

• Reported net debt-to-adjusted EBITDA was 4.2 times at quarter-end.
• Infrastructure leverage was 4.4 times at quarter-end.
• Including a full 12 months of Chauvin’s contribution, overall leverage was 3.9 times and infrastructure-only leverage was 4.1 times.
• Gibson expects leverage to return to its long-term target range of 3.0 to 3.5 times in early 2027.

The company’s dividend payout ratio was 88% at quarter-end, temporarily affected by shares issued for the Chauvin acquisition before a full year of related cash-flow contribution. The infrastructure-only payout ratio was 83%, below Gibson’s target of 100%.

During the quarter, Gibson extended its $1 billion revolving credit facility to June 2031 and issued $400 million of senior unsecured notes. Hicks said DBRS and S&P reaffirmed the company’s investment-grade credit ratings with stable outlooks.

Growth outlook centered on Canadian infrastructure

Philippon said new pipeline egress from Western Canada could increase demand for storage, noting that historically each new barrel of pipeline egress has required about four barrels of storage capacity. About half of TMX heavy-crude volumes currently move through Gibson’s Edmonton terminal, according to the company.

While the company has not increased its previously outlined expectation to deploy more than $1 billion in growth capital over five years, Philippon said additional tankage has become more probable. He said broader egress capacity would also support opportunities involving producer partnerships, pipelines and optimization projects, while discussions around diluent recovery units have become less active pending greater clarity on pipeline options.

Gibson said it is seeing increased customer interest in contracting storage capacity, though management noted that tanks remain at low utilization levels in a backwardated market. Philippon said the company has been cautious about committing spare capacity for lengthy periods as it assesses the evolving market.

Management said it expects to meet its infrastructure growth objectives primarily through organic projects, while continuing to evaluate bolt-on acquisitions similar to Chauvin. The company said anticipated organic growth has been incorporated into its expectation of returning leverage to target levels in early 2027.

About Gibson Energy (TSE:GEI)

Gibson is a leading liquids Infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of liquids and refined products, as well as waterborne vessel loading. Headquartered in Calgary, Alberta, the Company’s operations are located across North America, with core terminal assets in Hardisty and Edmonton, Alberta, Ingleside and Wink, Texas, and a facility in Moose Jaw, Saskatchewan. Gibson shares trade under the symbol GEI and are listed on the Toronto Stock Exchange.