Gibson Energy Announces 2023 Capital Budget
All financial figures are in Canadian dollars unless otherwise noted
Gibson Energy Inc. announced today its target for growth capital expenditures in 2023 of between $100 million and $125 million, depending on the timing of the sanction of certain growth opportunities. Additionally, the Board of Directors has approved the allocation of between $30 million and $35 million in replacement capital expenditures in 2023.
“We continue to advance discussions with several customers for the sanction of additional infrastructure opportunities,” said Steve Spaulding, President and Chief Executive Officer. “On an unrisked basis, these projects would drive investment in 2023 to within our $150 million to $200 million growth capital target range. Reflecting that the timing of the individual sanction decisions of these opportunities remains variable, we currently expect to deploy between $100 million and $125 million in growth capital in 2023 on a risked basis with additional capital commitments being carried into 2024.”
Gibson remains fully-funded for all sanctioned capital and well within its Financial Governing Principles given the continued growth of its long-term, stable Infrastructure cash flows. At the end of the third quarter of 2022, the Company’s Net Debt to Adjusted EBITDA ratio(1) of 2.7x was below the bottom end of its 3.0x – 3.5x target range and its Dividend Payout ratio(1) on a trailing twelve-month basis of 64% was also below the Company’s 70% – 80% target range. With an internal funding capacity above both its 2023 growth capital outlook and its annual $150 million to $200 million growth capital target, Gibson remains disciplined in its deployment of capital and well positioned to continue to return capital to shareholders in accordance with its capital allocation philosophy.
“Given our solid financial position and strong business performance, we have been able to increase return of capital to shareholders through the targeted repurchase of up to $150 million in common shares in 2022, representing nearly 4.5% of our outstanding shares,” said Sean Brown, Senior Vice President and Chief Financial Officer. “This repurchase is in addition to the return of approximately $215 million of capital to shareholders in 2022 through our quarterly dividend payments, which implies a current yield on our common shares of over 6%. We continue to see the potential to return excess capital to shareholders in 2023, with an initial target of up to $100 million in share repurchases through the year, which would represent the repurchase of over 7% of our shares on a cumulative basis.”
Inclusion in ESG Index
As Gibson continues to advance its sustainability journey, the Company is pleased to have been added to the GLIO/GRESB ESG Index, the world’s first specialist ESG-filtered listed infrastructure index. Gibson is committed to maintaining a leading ESG profile and has continued its progress through recent initiatives that would include a focus on safety, further embedding ESG into its culture and business as well as achieving targets of having at least one racial and ethnic minority and/or Indigenous person on the Board as well as Senior Management and of 40% women representation on the Board, ahead of a 2025 target date.