Gibson Energy Inc. Announces 2013 Capital Spending

All financial figures are in Canadian dollars.

CALGARY, Dec. 11, 2012 /CNW/ - Gibson Energy Inc. ("Gibson" or the "Company"), TSX: GEI, is pleased to announce that its Board of Directors has approved a 2013 capital spending plan as follows:

• $304 million for internal growth investments and for the upgrade and replacement of existing assets;
• $235 million - or 77% - of the 2013 capital spending plan is directed towards growth investments of which $137 million - or 58% - is earmarked for the Terminals and Pipelines segment; and
• Significant investments are also planned for the Truck Transportation segment and the new Environmental Services segment.

"Gibson's 2013 capital spending is directly aligned with the Company's long-term objective of generating stable and growing cash flow for shareholders through an attractive dividend and a growing asset base," said Stewart Hanlon, Gibson's President and Chief Executive Officer.  "Planned spending is heavily weighted towards our Terminals and Pipelines segment, which should enable our integrated oil-levered assets to provide diversified cash flow and stability through various commodity and drilling cycles."

2013 Capital Spending Strategic Objectives

The strategic objectives of Gibson's 2013 capital spending program are:

• Continuing growth at the Hardisty Terminal via additional large tank construction, backstopped by long term contracts, and unit train rail opportunities;
• Growing the Edmonton Terminal by leveraging new feeder pipeline connectivity and applying the Hardisty Terminal business model for long-term contracted storage;
• Expanding Gibson's integrated service offerings in growing North American oil plays, such as the Western Canadian Sedimentary Basin, Bakken, Niobrara, Granite Wash, Eagleford, Tuscaloosa Marine and the Gulf of Mexico regions, by:
• Building and expanding on the investment platform the Company established with the acquisitions of Palko Environmental and Omni Energy Services in emulsion treating, water disposal and oilfield waste management;
• Exploring alternatives to expand the Terminal and Pipelines business in the United States; and
• Expanding Truck Transportation services to meet growing demand;
• Funding the capital program from cash on hand, cash flow from operations, availability under the revolving credit facility and, if necessary, new debt; and
• Preserving the Company's strong balance sheet to maintain financial flexibility.  The Company has not budgeted for acquisitions, but will evaluate opportunities as they arise.

2013 Capital Spending Highlights

(in millions)				Growth					Upgrade and Replacement					TOTAL
TERMINALS AND PIPELINES				$137					$11					$148
ENVIRONMENTAL SERVICES				55					14					69
TRUCK TRANSPORTATION				34					26					60
PROCESSING AND DISTRIBUTION				9					13					22
OTHER CORPORATE				-					5					5
TOTAL				$235					$69					$304

In 2013, approximately $235 million is allocated towards internal growth investments of which $141 million represents spending associated with previously approved projects.  A summary of growth capital by business segment is shown below:

• Terminals and Pipelines for $137 million, primarily related to construction of tanks at the Hardisty eastern lands, the expansion at the Edmonton Terminal and the development of unit train and manifest crude rail loading facilities. Of the total spend in the year, approximately $122 million relates to projects that are expected to be commissioned in early to mid-2014;
• Environmental Services for $55 million, primarily related to growth spend in the environmental and fluid handling business in the United States, expansion of current facilities and additional facility locations in Canada. This new business segment combines the Omni Energy Services U.S. assets with the Canadian Custom Treating and Terminal assets previously disclosed in the Terminal and Pipelines segment;
• Truck Transportation for $34 million, largely relates to growth in Canada and includes $13 million to purchase additional land in Alberta; and
• Processing and Distribution for $9 million, largely related to tanks and trucks for Canwest Propane and storage and rail facilities at Sexsmith, Alberta in support of our Wellsite Fluids business.

Upgrade and replacement capital is approximately $69 million in 2013. The planned spending will largely be focused on ensuring safety, reliability and efficiency of existing operations. Capital is higher than previous years due to the growth in assets across the Company and resultant EBITDA growth.  Included in the upgrade and replacement capital spend is $12 million related to the acquired Omni Energy Services' assets of which $4 million is considered non-recurring in nature.

The amount and allocation of capital spending for 2013 is subject to review and modifications by management on an ongoing basis throughout the year.  In addition, the Board of Directors regularly reviews the capital program during the year in light of business and economic conditions and may modify the 2013 capital spending plan as the year progresses.

2014 Growth Capital Spending Estimate

The Company only prepares detailed capital budgets for 2013 but has a strong indication of capital needs for the following year, which are:

• Estimated capital growth spending for 2014 is expected to be in excess of $200 million with approximately 60% to 65% of the spending allocated to the Terminals and Pipelines segment; and
• $160 million represents spending associated with projects approved in 2012 or expected to be approved in 2013.

About Gibson

Gibson is one of the largest independent midstream energy companies in Canada, and an integrated service provider to the oil and gas industry in the United States. Gibson is engaged in the movement, storage, blending, processing, marketing and distribution of crude oil, condensate, natural gas liquids, refined products, water and waste.  Gibson transports energy products by utilizing its network of terminals and pipelines, storage tanks, and trucks located throughout western Canada and through its significant truck transportation and injection station network in the United States.  Gibson also provides emulsion treating, water disposal and oilfield waste management services in Canada and the United States and is the second largest retail propane distribution company in Canada.

Gibson's primary objective is to generate stable and growing cash flows for shareholders through an attractive dividend and a growing asset base.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words ''anticipate'', ''plan'', ''contemplate'', ''continue'', ''estimate'', ''expect'', ''intend'', ''propose'', ''might'', ''may'', ''will'', ''shall'', ''project'', ''should'', ''could'', ''would'', ''believe'', ''predict'', ''forecast'', ''pursue'', ''potential'' and ''capable'' and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. The Company does not undertake any obligations to publicly update or revise any forward looking statements except as required by securities law.  Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in "Forward-Looking Statements" and "Risk Factors" included in the Company's Annual Information Form dated March 6, 2012 as filed on SEDAR and available on the Gibson website at www.gibsons.com.

SOURCE: Gibson Energy Inc.

Ken Hall
Vice President Investor Relations and Communications
[phone]
[email protected]