Tidewater Renewables (TSE:LCFS) and Tidewater Midstream and Infrastructure Ltd. provided a combined update on fourth-quarter 2025 results and 2026 outlook, highlighting improved early-2026 operating conditions, new government incentives for renewable fuels, and a plan to direct 2026 cash flow primarily toward debt reduction.
Canadian incentives and regulatory developments in focus
Management emphasized recent Canadian policy developments aimed at supporting domestic biofuels production. The company noted that the Government of Canada announced a CAD 370 million Biofuels Production Incentive program on September 5, 2025, with program details communicated to eligible recipients—including Tidewater Renewables—in December 2025.
The company also said the federal government has indicated an intention to make targeted amendments to the Clean Fuel Regulations. Two approaches are under evaluation:
- a minimum renewable domestic content approach (similar to British Columbia’s early-2025 policy), and
- a credit multiplier approach that would provide domestically produced low-carbon fuels with a higher ratio of emission credits than imported fuels.
Management said Tidewater supports both concepts and believes it is well-positioned to benefit if either or both are implemented.
Operational update: HDRD turnaround impacts Q4, recovery in early 2026
At the HDRD Complex, management said a planned turnaround and subsequent equipment failure reduced fourth-quarter throughput to 48% of design capacity. The company reported that repairs were completed on December 12, 2025, and utilization was near nameplate capacity in the first few months of 2026.
Midstream developments: BC credits, pipeline integration, and Prince George conditions
For Tidewater Midstream, management highlighted two initiative agreements executed with the Government of British Columbia during the fourth quarter. The agreements provide BC LCFS credits to support production of low-carbon renewable diesel and renewable gasoline from the hydrotreater and FCC co-processing units at the Prince George Refinery (PGR). The company said the credits are expected to fund a significant portion of renewable feedstock costs needed to operate the co-processing units for the next two years, at rates up to 300 barrels per day for each unit.
Management also said that selling co-processed low-carbon transportation fuels into British Columbia is expected to generate Clean Fuel Regulation (CFR) emission credits and additional BC LCFS credits.
On integration efforts, Tidewater said it took full operational control of the acquired Western Pipeline system in the fourth quarter of 2025 and expects to realize previously announced synergies and CAD 10 million to CAD 15 million in annual cost savings.
In January 2026, Tidewater announced long-term agreements for gas handling and NGL supply at the Brazeau River Complex. Under the agreements, Tidewater will process up to 75 million cubic feet per day of natural gas from dedicated producer facilities and will receive marketing rights to ethane, propane, and butane for initial terms of about five years.
Management also provided an update on divestitures and other monetization efforts. During the quarter, the Sylvan Lake gas processing facility was sold for CAD 5.5 million in cash proceeds, and Tidewater received the final CAD 1.5 million of cash proceeds from the sale of BRC roads in December 2025. In February 2026, Tidewater Renewables received CAD 2.1 million of final proceeds from the sale of the Rimrock Renewables Limited Partnership. The company said it continues to evaluate additional divestitures and referenced market interest in repurposing energy sites for data center development.
Operationally at PGR, throughput averaged 10,809 barrels per day in the fourth quarter of 2025, a 5% increase from the third quarter. After semi-annual heat exchanger cleaning in October, throughput averaged approximately 11,900 barrels per day during November and December 2025. Refined product margins improved as the Prince George crack spread averaged CAD 94 per barrel in the fourth quarter, versus CAD 90 per barrel in the third quarter.
Management said market conditions improved further early in 2026, with the crack spread averaging CAD 94 per barrel in January and CAD 98 per barrel in February. In March, management said the crack spread widened further amid the ongoing conflict in Iran, averaging CAD 113 per barrel month-to-date at the time of the call. The company said it layered on 2-1-1 crack spread hedges for about 50% of forecasted production from April through December 2026 to capture current strength.
Across broader midstream operations, BRC gas processing throughput averaged 102 million cubic feet per day in the fourth quarter, down from 124 million in the third quarter, primarily due to lower straddle volumes. The Ram River gas plant remained temporarily curtailed, though sulfur handling operations continued. Management said it intends to restart the gas plant when production in the area resumes, noting that current natural gas and sulfur prices are believed to be highly economic for sour gas producers.
Financial results: losses in Q4 and 2026 guidance outlined
Tidewater Renewables reported a net loss of CAD 13.8 million for the fourth quarter of 2025, compared with a net loss of CAD 3.4 million for the fourth quarter of 2024. Adjusted EBITDA was CAD -3.8 million versus CAD 6.1 million a year earlier. Management attributed impacts to extended turnarounds and equipment repair that reduced sales volumes, as well as lower contributions from equity investments.
Tidewater Midstream reported a consolidated net loss attributable to shareholders of CAD 30 million, compared with a CAD 3.3 million net loss in the fourth quarter of 2024. Management said the wider loss was primarily due to the extended turnaround at Tidewater Renewables and the absence of an impairment reversal in the quarter, partially offset by favorable fair value changes in derivative contracts and lower interest rates. Consolidated adjusted EBITDA was CAD 3 million versus CAD 20 million in the prior-year period, driven by lower gross margins and lower contributions from an equity investment, partially offset by lower realized derivative losses.
For 2026, Tidewater guided to consolidated adjusted EBITDA of CAD 150 million to CAD 170 million and consolidated capital expenditures of CAD 20 million to CAD 25 million (including growth and maintenance, net of capitalized BC LCFS credits received under the SAF initiative agreement). Tidewater Renewables guided to annual adjusted EBITDA of CAD 80 million to CAD 90 million and capex of CAD 2 million to CAD 3 million. Management said HDRD is expected to produce 150 million to 170 million liters of renewable diesel in 2026 and qualify for the CAD 0.16 per liter federal incentive.
Management said the 2026 guidance does not include any EBITDA from a resumption of gas processing at Ram River.
Hedging, credit facility amendment, and asset sale timeline
Management said favorable movements in crack spreads, refined product prices, and emission credit prices early in 2026 were expected to provide an additional benefit to results at PGR and HDRD. To protect cash flow, Tidewater began hedging in early March and continued adding positions through the month. At the time of the call, management said:
- Tidewater Midstream was hedged on approximately 50% of its crack spread exposure for the balance of 2026, and
- Tidewater Renewables was hedged on approximately 50% of HDRD Complex revenue and feedstock purchases for the balance of 2026.
Management characterized the hedging program as a risk-reduction measure to help meet near-term leverage reduction goals, noting the curve was “somewhat backwardated” and that the company would continue to look for opportunities. Executives suggested the approach could change once leverage goals are achieved.
On March 23, 2026, Tidewater said it amended its senior credit facility, extending the maturity of the CAD 50 million operating facility and the CAD 125 million syndicated facility from September 2026 to August 2027. Management said Q1 2026 covenant ratios were amended to provide additional flexibility, and that covenant calculations for the first three quarters of 2026 would be annualized rather than based on a trailing twelve-month basis to reflect an expected step change in 2026 results.
In the Q&A, management said non-core asset sales remain on track versus targets shared previously, though timing has taken longer due to complexity. The company said it was in “deep discussions” around a significant asset with three non-binding letters of intent and was working to convert them into one binding LOI, with an expectation of announcing something in the first half of the year. Management also referenced another asset in similar negotiations that it hoped to update early in the second quarter.
Executives said they did not anticipate unusual non-recurring expenses or working capital changes, and reiterated that 2026 cash flow, combined with expected asset sale proceeds, is intended to support meaningful debt reduction.
About Tidewater Renewables (TSE:LCFS)
Tidewater Renewables is a multi-faceted, energy transition company. The Corporation is focused on the production of low carbon fuels, including renewable diesel and sustainable aviation fuel. The Corporation was created in response to the growing demand for renewable fuels in North America and to capitalize on its potential to efficiently turn a wide variety of renewable feedstocks (such as canola oil, soybean oil, used cooking oil, distillers corn oil, tallow, and other biomasses) into low carbon fuels.
