Tammi Price - Vice President of Investor Relations and Corporate Development Stew Hanlon - President and Chief Executive Officer Don Fowlis - Chief Financial Officer

Linda Ezergailis - TD Securities Ben Pham - BMO Capital Markets Patrick Kenny - National Bank Financial Andrew Kuske - Credit Suisse Robert Quan - RBC Capital Markets Steven Paget - FirstEnergy Ashok Dutta - Platts Dan Healing - Calgary Herald

Thank you, Melanie, and thanks everyone for joining us this morning. During today's call, forward-looking statements may be made.

These statements relate to future events or the company's future performance and will use words such as expect, should, estimate, forecast, believe, or similar terms. Forward-looking statements speak only as of today's date and undue reliance should not be placed on them as they are subject to risks and uncertainties, which could cause actual results to differ materially from those described in such statements.

The company assumes no obligation to update any forward-looking statements made in today's call. Any reference during today's call to non-GAAP financial measures such as EBITDA, adjusted EBITDA, pro forma adjusted EBITDA, or distributable cash flow is a reference to financial measures, excluding the effect of certain items that would impact comparability.

For further information on forward-looking statements or non-GAAP financial measures used by Gibson, please refer to the 2015 four quarter and year-end Management's Discussion and Analysis issued yesterday by the company, and in particular the sections entitled Forward-Looking Statements and Non-GAAP Financial Measures. All financial amounts mentioned in today's call are in Canadian dollars unless otherwise stated.

Participating on today’s call are Stew Hanlon, President and CEO; and Don Fowlis, Chief Financial Officer. Also joining us today is Sean Brown, who will officially be assuming the role of Gibson’s new CFO at the end of business today.

The format for the call will be that Stew will provide an overview of our results and Don will highlight a few items regarding our financial position and capital spending. This will be followed by a question-and-answer session.

Cam Deller, our Manager, Investor Relations and I will be available after the call to answer analyst modeling questions. With that, I'll turn it over to Stew.

Thanks, Tammi, and good morning, everyone. Before we get started this morning, I would like to officially welcome Sean Brown to the Gibson’s family as our new Chief Financial Officer.

As we announced in February, Sean has joined us from BMO Capital Markets. He has many years of experience in the Canadian energy infrastructure sector and a history with Gibson’s that goes all the way back to our IPO.

I and we look forward to his leadership and contribution to Gibson’s success. I'm pleased to have this opportunity to discuss our fourth quarter results, which are highlighted by the generation of $101 million in adjusted EBITDA, which contributed to the annual 2015 adjusted EBITDA of $386 million.

Our performance in 2015 represents an approximate 15% reduction over our record 2014 results largely in line with our expectations given the industry headwinds we faced. Reviewing industry conditions in the fourth quarter, WTI prices declined 9% over the third quarter to average approximately $42 per barrel and Canadian heavy oil prices declined 15% over the third quarter to average approximately $37 per barrel.

Generally speaking, fourth quarter commodity prices dropped below a sustainable level for most producers in North America and as expected, activity levels declined in nearly all of our operating areas. Further impacting activity levels in the fourth quarter was the fact that many of our producer customers chose to wind down operations earlier than normal for the Christmas holiday as a cost-saving measure.

These factors combine to negatively impact certain of our activity-based segments in the fourth quarter. Throughout 2015 and into the current year, we have responded to the challenging energy sector conditions with cost alignment initiatives.

These include an approximate 15% reduction in overall staffing levels across the organization and optimization of operations throughout the business. Example of this is a consolidation of certain physical locations as well as management oversight within our truck transportation and environmental services segments in the U.S.

We also decreased our annual corporate, general and administrative costs by approximately 15%. After normalizing for onetime severance costs and the loss in the year on financial instruments, which we used to hedge our stock-based compensation.

Strong performances in our Terminals & Pipelines and Propane and NGL Marketing and Distribution segments both of which were as expected due to recent capital investment and lower sensitivity to activity levels counteracted some of the performance pressures felt in other business segments. We believe this performance offset between business segments provides a unique benefit to Gibson’s shareholders offering cash flow diversification, countercyclical exposure and multiple avenues for growth over the long run.

As we consider the severity and duration of this current downturn in the global energy industry, I'm extremely pleased with our overall fourth quarter performance and how our business has weathered the storm over the past 18 months. I'll now discuss the individual segments in more detail.

Our Terminals & Pipelines business achieved record quarterly segment profit with $40 million generated in the fourth quarter. Continued volume growth at our Hardisty Terminal plus an earlier than scheduled commissioning of our project to enhance pipeline connectivity to the Athabasca system contributed to strong sequential revenue growth in the fourth quarter.

Additionally, segment profitability improved over the third quarter. This improvement was aided by the capture greater economies of scale in our Terminal operations and reduced repair and maintenance costs compared to the prior period.

I'm tremendously proud of the operating achievements of this business segment in 2015 with both storage capacity and throughput volumes reaching record levels. We continue to progress the expansion of our Hardisty assets in 2015, commissioning 900,000 barrels of storage capacity on the east side of our Terminal.

Also in the year, we commission two projects that enhanced pipeline connectivity. One, a connection to the recently twinned Cold Lake system and most recently, as I previously mentioned, another to the Athabasca system.

All of these infrastructure projects are underpinned by long-term take or pay contracts with strong creditworthy customers. The commissioning of these projects contributed materially to achieving record volumetric throughput at our Hardisty Terminal in the fourth quarter of over 600,000 barrels a day and increase storage capacity at our Hardisty Terminal by 18% to 6 million barrels at the end of 2015.

Accomplishments so far in 2016 include the completion of the storage optimization project at our Edmonton Terminal, which will increase fee-based revenue at the Terminal and enhance our ability to capture quality arbitrage opportunities within our marketing segment. Looking forward, we are making excellent progress on our ongoing Terminal expansion plans consisting of 2.9 million barrels of storage under development at Hardisty and an additional 300,000 barrels of storage and related rail infrastructure under development at Edmonton.

These projects are principally underpinned by highly visible production from specific oil sands projects that are currently under development or are in a production ramp up phase. Despite today's challenging oil price environment we remain confident in the near and medium term growth profile of oil sands production given the resiliency of our customers project development plans and their financial strength to withstand near-term oil price volatility.

Our key oil sands customers have the capacity to take a long-term view on oil prices given the reserve life profile of their major development projects. In the interim, they are realizing material operating and capital cost efficiencies in the current deflationary environment.

Similarly, here at Gibsons we are also realizing favorable capital efficiencies and benefiting from increased certainty with completion schedules of our infrastructure growth projects currently under construction. Taking all of these developments into consideration, we expect to see strong segment profit growth in our Terminals & Pipelines business in 2016 and again in 2017.

Our environmental services business faced continued challenges in the fourth quarter, generating segment profit of $11 million. These results were expected given the particular weakness evidenced in the Bakken drilling and completion activities and its impact on our business in particular on our production services business line.

While competitive pressures at continued customer requests for rig reductions, pressured overall segment profitability, we were able to maintain relatively stable gross margins as a percentage of sales on a quarter-over-quarter basis, due to our aggressive cost reduction efforts throughout the year. Considering further weakness in crude oil prices to date in 2016, we expect to see additional capital spending restraint amongst our customers and continued pressure on our more activity reliant business line throughout the remainder of this year.

In response, we have continued to drive further cost alignments into our environmental services business in the first quarter of 2015, identifying a further $4 million to $5 million in annualized run rate savings. Our strategy remains in place to continue to shift the profile of our environmental services business towards more stable, reduction related revenue sources.

In the interim, we are positioning the business to capitalize on the rebound when prices and oil field activities return to more sustainable levels. Truck transportation generated segment profit of $11 million in the fourth quarter of 2015, essentially flat over the prior year quarter as similar headwinds persisted.

Specifically, fourth quarter volumes declined modestly over third-quarter levels due to weakness in certain U.S. markets.

While volumes were impacted throughout 2015 by lower drilling and completion activity, competition in the marketplace and production curtailments in certain basins, I'm pleased to note that the rate of decline has moderated in recent months and loading schedules are stabilizing in certain operating areas. Gibson’s truck transportation operation is one of the largest independent crude oil haulers in North America and offers a high degree of scale, logistical expertise, and flexibility that should enable us to outperform smaller competitors throughout this commodity price cycle.

In the interim, we have and will continue to proactively reduce our costs and position ourselves to strive when conditions become more favorable. Complementing our variable cost structures that enabled stable growth margins as a percentage of revenue we reduced overhead expenses by 13% in the fourth quarter of 2015 over the same period in 2014.

We will continue to reduce our operating costs as we progress through 2016. Our Propane and NGL Marketing distribution segment delivered record fourth-quarter results with $31 million in segment profit.

These results were achieved, despite the impact of unseasonably warm weather in Western Canada. Despite these with the challenges, the industrial propane business proved its financial resiliency in the quarter, posting stable profit margins on a per unit basis.

Our wholesale propane and NGL business continued to capitalize on a strategy to employ a larger fleet of pressurized rail cars, which delivered volumetric gains and generated strong segment profit contribution. Overall, we are very pleased with the record fourth quarter and annual results this business segment delivered in 2015.

We look forward to the possibility of benefiting from a more normal weather pattern in the back half of this year as the current El Nino event dissipates. Our Processing and Wellsite Fluids business faced difficult conditions in the fourth quarter generating segment profit of $7 million.

Reflecting continued weak demand for Wellsite Fluids fourth quarter sales volumes of frac fluid were down 55% over the same period in 2015. Despite these challenges, the business benefited from low input costs and demonstrating its counter cyclical characteristics delivered steady segment profit when measured as a percentage of sales.

Overall, I am pleased with how this segment performed on an annual basis, which is testament to the teams proficiency in managing feedstocks, operating cost and product slates to maximize the performance of this asset. Our outlook for the segment in 2016 incorporate similar business conditions as 2015, with an expectation of strong road asphalt demand in the summer months being offset by continued weak Wellsite Fluid demand.

Our marketing segment generated $12 million in the fourth quarter contributing to full-year results of $35 million. We are pleased with this outcome as we successfully navigated through several summer months were industry conditions were challenged by forced hire supply disruptions and rapidly narrowing oil price differentials.

Reflecting improved business conditions in the fourth quarter, marketing results were in line with our expectations and posted similar segment profit levels to quarterly run rates achieved in 2014. Now looking into 2016, although we expect continuing challenges in this business environment, we are confident that marketing's overarching strategy to maximize asset utilization in our other business segments will provide the best long-term returns to our shareholders.

So in summary, I am happy with the financial and operating results we generated in the fourth quarter of 2015. Certainly well faced with numerous challenges in 2015, our business model has proven to withstand a week environment comparatively well.

Gibsons has made good progress on adjusting to the marketplace dynamics and we are well positioned for success as we execute on a capital expenditure and operational plans for 2016. Now I'll pass it over to Don who will discuss our capital expenditures and financial position.

Don?

Alright, thanks, Stew. Initially I'd like to highlight Gibson’s capital expenditures in the fourth quarter, where we spent $87 million on growth capital and $9 million and maintenance capital.

Our growth capital expenditures were primarily directed towards the following key initiatives. The Statoil tank and expensing of related infrastructure at Edmonton, the storage tank expansion project on the east side of the Hardisty Terminal, and the Athabasca pipeline connection enhancement project at Hardesty.

These expenditures contributed to total growth capital spending of $346 million during 2015, which turned out to be approximately 12% below our guidance levels. The shortfall from guidance is primarily directed or related to minor timing differences that's also reflected out the increasing capital efficiencies we're experiencing.

As a reminder, in December of last year, we announced growth capital expenditure guidance for 2016 in the range of $200 million to $300 million. The $200 million low end of the range represents projects that are currently underway within our Terminals & Pipelines segment, the majority of which are underpinned by long-term fixed fee contracts.

The $300 million high end of the range includes an additional $100 million for projects that are currently being negotiated or are under consideration. While the recent secondary decline in oil prices in 2016 will certainly have a negative impact to our customers’ cash flow and their investment plans, our 2000 growth capital budget will proceed as planned it supports the long-term development objectives of some of our largest and most creditworthy customers.

I am pleased to report that Gibsons continues to maintain a strong balance sheet. In this regard, at the end of 2015, our debt to debt plus capital ratio was 45%.

Our leverage ratio total net debt for trailing 12 month pro forma adjusted EBITDA was 3.2 times and our interest coverage ratio was 4.6 times. Gibsons has sufficient liquidity to execute our business plan.

At year-end, we had $83 million of cash and $432 million available under our $500 million Revolving Credit Facility that has an August 2020 maturity date. The first tranche of our outstanding long-term debt does not mature until July 2020.

These lengthy time horizons provide us with ample financial flexibility going forward. The Company declared dividends of $161 million in 2015 while distributable cash flow for the year was $220 million.

Thus dividends declared represented 73% of distributable cash flow or 64% on a net cash basis if you consider drip in STP participation levels in the first half of the year prior to these programs being suspended. As announced yesterday, we are modestly increasing the Company's quarterly dividend by 3% to $0.33 per common share.

The decision was largely based on the high degree of certainty we have regarding incremental cash flow associated with the Terminal infrastructure we currently have under construction. As our expansion projects at our key terminals all enter service by the latter half of 2017, we expect to see our payout ratio move back more in line with our longer-term target of 50% to 60%.

In addition, after we complete these projects, the stability of our cash flow will continue to improve with the percentage of waiting of long-term fixed fee revenue increasing significantly. That concludes my comments.

I will turn it back to Stew.

Thanks very much, Don. In closing, 2015 was a year of challenges yet remarkable accomplishments for Gibsons.

In the first half of the year, we announced new commercial agreements to build incremental storage capacity at our Hardisty Terminal. We then continued the successful delivery of new tankage and enhanced pipeline connectivity projects to our customers on time and on budget.

Delivery of these projects not only offers our customers the crude oil infrastructure that is critical to their ongoing operations, they also serve, as Don mentioned, to grow and strengthen our cash flow profile. Additionally, we drove meaningful cost reductions into all areas of our business as we successfully adjusted to the lower activity environment.

And finally, we remain focused and disciplined with our capital allocation. And notwithstanding the extremely difficult industry conditions faced by all those involved in the energy sector, our outlook for Gibsons remains positive.

We have weathered many storms over the company's 60 plus year history and we remain confident in our ability to continue to provide shareholder solutions that also deliver long-term growth and attractive returns for our shareholders. Now, notwithstanding the fact that Don successfully removed this from the script, I'd like to take this opportunity to formally thank Don Fowlis for his 23 years of extraordinary service to Gibsons.

It has been a privilege to work with a man with his capability, a man with his integrity and a man whom I'm very, very proud to call my friend. Don has been instrumental to our success.

He leaves GEI in a position of strength and with an abundance of opportunities in front of us. So Don, on behalf of myself and the management team, and most importantly the shareholders of Gibson Energy, thank you very much for 23 years of extraordinary service.

Thank you very much, Stew.

That concludes our prepared comments. Melanie, at this time, we’d like to open the call up for questions.

Thank you. First of all, Don, I wanted to congratulate you on a successful career and wish you all the best in your retirement.

Thank you, Linda.

Now I just have a question about your 15% staff reduction. Can you give us a sense of where it was in the organization?

Was it maybe a little bit more heavily weighted in your business development group for example? You gave us some sense of management changes and is that a permanent rebase in terms of doing things differently or do we think that might flex up again as oil prices recover and activity levels recover?

Yes, it is really across the board, Linda. I would say that the first impacts and the earliest on impacts were certainly in more activity late in parts of our business.

As we watched the rig count fall in the U.S. and in Canada as an example, those crews that were dedicated to providing particularly environmental services impact at the rig site were first impacted, but we have throughout the year been proactive in terms of reducing headcount throughout most of the areas of our G&A.

We have the luxury of having the vast majority of our truck fleet, the tractors employed in our truck fleet being owner operators and so notwithstanding the fact that you see a 15% reduction in our headcount. We have also being able to right size what otherwise would be a fairly high fixed cost because it is almost a purely variable cost within our truck transportation business as well.

Second part of your question is this more permanent in nature, our outages you never let a good crisis go to waste and so we have taken this opportunity to make sure that we are driving efficiencies into the business which we assume will be largely permanent in nature so that we can take advantage of those greater efficiencies as we start to see the commodity price cycle return.

Okay, thank you. And just as a follow-up in terms of your capital optimization, can you talk about some of the offsetting factors?

I mean you're facing FX headwinds as it relates to anything you are procuring in U.S. dollars but can you talk about what other savings you're being able to do to more than offset that potentially?

Yes. Most of the savings are in the construction phase of these operations.

As Don said, we're not only seeing better pricing but we're also gaining more certainty in pricing and so what otherwise about two years ago what would have been a time and materials based contract now we can do on a fixed cost contract. So that allows us to have greater certainty with respect to the pricing of some of these big capital bills that we have.

We're also seeing, quite frankly, higher quality as we're able to take advantage of the fact that we can now employ the A Team in some of these projects. And so I'd say essentially better, faster and cheaper across the board.

And still more than offsetting the FX headwind?

Absolutely, yes.

Great, thank you.

Thank you, good morning. I had a question about your credit facility expansion.

There is some commentary in the report about some covenant changes. Could you expand on that a little bit more?

Your interest rates changing there and there was some potential I guess from your side that your prior covenants didn't give you guys enough flexibility look into 2016?

I think when we do our modeling and we look at 2016, certainly as we do our stress testing, we didn't foresee the need and necessity to go out for covenant relief. Having said that, it was essentially something that we knew we could achieve and so almost as an abundance of caution we decided to have that conversation with our banks relatively supportive and benign conversations.

No changes really with respect to interest rates or any additional costs to GEI. It just provides us with like I said an abundance of caution type of flexibility should we need that as we go down the road.

Certainly, in times of uncertainty, you want to make sure that you've got as much flexibility as is possible and so we thought that was a prudent move.

Okay. Do you have anything to do with the goodwill impairment or potential for further impairment?

Do you guys got debt to capital restriction as well?

There is no debt to capital restriction, Ben. Our covenant more relates to our net debt to the trailing 12 month pro forma adjusted EBITDA and then there is an interest coverage covenant as well.

So the goodwill impairment really has no impact.

Okay, that's helpful. Thanks, everybody.

Good morning, guys and to Don, congratulations once again.

Thanks, Pat.

Just back on the new debt covenant there, it seems to be a fair bit of cushion here relative to where you're at today at 3.2 times and I guess where you might be covered over the next year or so. Just wondered if you could comment on how much of that buffer relates to the potential volatility within your base business versus boosting dry powder for new growth opportunities or acquisitions?

Thanks.

Yes, like I said, it was really an abundance of caution move on our part. Certainly we have signaled that we are going to be extremely disciplined when it comes to M&A activity restricting anything to sort of infrastructure opportunities that may come about.

I would suggest that anything material we probably would have to think in terms of additional financing regardless and so the covenant relief was mostly just again as a hopefully not necessary buffer against continued uncertainty as we move through 2016. Certainly with respect to the volatility underpinning our base businesses and notwithstanding the fact in my prepared commentary I did highlight we do continue to see pressures particularly in the first half of this year as - if you just think in terms of crude oil pricing averaging $42, $43 in the fourth quarter, we are averaging $32, $33 in the first quarter.

Your rig count has dropped both in Canada and the U.S. So the business hasn't gotten any easier but we don't expect material degradation in any of our cash flow streams.

And certainly as we continue to bring on our infrastructure we'll see that cash flow grow and the stability of the cash flow grow as we move through the back half of this year and into 2017. So the covenant relief is really just like I said it was available to us and we decided that as an abundance of caution measure it was something prudent to do.

Okay. And then with respect to the dividend being tapped to appear in conjunction with the covenants being relaxed maybe can you talk about just the strategy of smoothing out the dividend growth over time versus hoarding as much cash as possible until some of these larger projects are online and then perhaps doing a larger increase at that time?

Thanks.

We have a policy of addressing the dividend on an annual basis. The $0.01 or 3% increase in our dividend is not material in terms of the overall cash outlay supporting the dividend.

So from a perspective of the liquidity and balance sheet resiliency, it's really a non-event. It was more important for us to signal to the market that we remain very, very confident in the stability of our cash flow stream and the ability to support and sustain the distribution.

It's something that as I said in previous meetings, if we then can look back five years from today and say look at regardless of commodity price cycles, regardless of the fact that this is a cyclical business we do manager our business and run it in such a manner that we can promise and sustain a policy of consistent and regular dividend increases throughout commodity price cycles. And so we thought it was an important signal to the market and to our shareholders that we have very, very high level of confidence in the stability of our cash flow streams.

Okay, thanks, Stew. And may be just lastly for Don, looks like the fourth quarter spend came in $45 million, $50 million below previous CapEx guidance.

So I was wondering if you can maybe quantify the delta in terms of how much of that was just timing of spend that should show up here in early 2016 versus capital efficiencies? And whether or not do you expect those efficiencies to continue through 2016?

Yes. I'd say it's probably more related to timing than capital efficiencies if you're looking on a percentage basis.

But in reality, we are experiencing like Steward mentioned both increases in quality, increases in timing. We had a great winter.

So we see savings continuing through. We had some savings in 2015 and we see that continuing in 2016.

We have had a couple of projects now that we're forecasting to be under budget from what we originally had targeted. So we are seeing those savings, Pat.

Okay, thanks, guys. I'll jump back in the queue.

Thanks, Pat.

Thank you, good morning. Could you give us some commentary and some color just on your outlook on the propane market?

Clearly with a lot of liquids rich production, there's an abundance of propane hitting the market and you’re clearly taking advantage of moving some of those volumes. Could you give us maybe a sense of how big that opportunity is for you and maybe quantify a bit?

Without getting too specific, Andrew, I'd suggest certainly as we move into 2016, we don't see a material change with respect to that business over what we had experienced in 2015. As you know, an abundance of supply in the marketplace and its impact in terms of relatively low propane prices, particularly as a percentage of crude oil we're almost indifferent to that because we are essentially a fixed price provider of logistical solutions both in the wholesale side as well as on the industrial side.

As I had mentioned in my prepared comments, we do look forward to the anticipation of the El Nino event which is normally followed by more normal weather patterns and that will have hopefully a positive impact across the North American propane base as we move into the winter season in 2016. From a more macro perspective, we are starting to see a fair bit of volume moving offshore and so we characterize this as being sort of the shortest long market we've ever seen and we would expect that the logistics and marketing opportunities from our wholesale group utilizing a very large fleet of rail cars and the talent of the men and women that are in that group should provide us with opportunities as we move through 2016.

Like I said, we don’t see a material change from performance in 2015.

And then maybe just a follow-up to that, given your asset positioning, how do you see yourselves versus your competition in that space? You've got a unique set of assets from a logistical standpoint.

So how do you think you stack up versus some of the competitors?

We are a fairly large provider of logistical solutions within that space. I think we are probably the largest for propane in Canada not between our industrial and our wholesale divisions.

The assets we employ include a series of relatively small rail and truck facilities across the northern tier U.S., as well as the aforementioned rail car fleet and strategically positioned in NGL, LPG marketers across North America. So, we don't have large-scale storage that we can utilize, but we do have contractual relationships with storage operators across America.

So, I think we're just in a position to exploit pretty strong market knowledge and pretty strong market positioning, as well as a logistical fleet that is capable of moving large-scale volumes from markets where it's particularly long to markets where that propane is needed.

Okay, that's helpful and then if I may just one additional question. In some of the Business lines like environment services and also trucking, clearly they are challenging market conditions right now, but are you gaining market share relative to others?

There's a lot of mom-and-pop businesses in those worlds, do you feel you are gaining some market share at the expense of others?

Yes. Overall markets have been shrinking and so on a relative basis, I’d say that we have been successful in terms of gaining market share.

We are starting to see situations now where as competitors are falling by the wayside and we're able to step in and take over with respect to specific hauls on the truck transportation side as an example. We’re also seeing in the environmental services side now, companies that are going out for bid being as concerned almost about with the service companies ability to complete a project as they are with respect to pricing and so, although as mentioned in my prepared remarks pricing pressures remain strong within both of those segments.

We would expect that as we move through 2016, particularly through the first half of 2016 where we do expect to see continued low commodity prices and continued low rig utilization that we will gain market share through attrition as opposed to through acquisition.

Okay that's great. Thank you.

Thank you.

Good morning. First of best wishes Don in retirement.

Thanks, Robert.

You're welcome. If I could start with rail, out of Hardesty I'm just wondering if there are any conversations that maybe accelerated given the growing profile of oil sands production and the recent delay in the line three replacement projects?

Any discussions that we have been entering into and continue would of course be confidential. I think from a macro perspective, what I can say, Robert that's probably a bit of a longer-term outlook maybe not even longer maybe medium-term.

Our point of view has always been that sort of by mid-2017 we're going to start to see pressures downstream of Hardesty with respect to take away capacity. And, we have the capability today of moving 120,000 barrels a day out of that facility with relatively short lead times, certainly less than a year we can be in a position to double the capacity or even more so.

I think people right now are looking more at making sure that they are situated to survive in a very, very low commodity price environment, particularly there is a Western Canadian producer with differentials where they are positioning themselves from that perspective and will get into more of the logistics sort of post 2017 discussions as we move perhaps into the back half of this year.

Got it. How aggressive do you want to be around that business with respect to, as you think about where the growing production volumes are coming from, some of them will be coming directly into Hardesty, which positions you really well.

But a number of those volumes will start or will flow initially into Edmonton where there are other competing rail options. How far, how aggressive you want to be on both returns to secure the volumes, but then obviously you have the benefits of driving volume through Hardesty and then through your pipeline connection into the rail Terminal?

Yes, I don't think we would change our point of view with respect to the risk profile that we be prepared to take on for any infrastructure investment and we think that we're particularly well-suited and well situated at Hardesty. You are correct a lot of volumes are going to go first to Edmonton and they have the capability of getting on a rail car there as well, but Hardesty, every single grade of crude oil that’s produced in Western Canada shows up every single day.

And so from a market optionality perspective and a long-term survivability perspective we continue to think that that is still the best place to have a unit train rail facility. So, if we are correct in seeing another million barrels a day of fluid coming out of the WCSB particularly on the oil sands over the next four, five years, I think there's going to be a lot more opportunity for rail both out of Edmonton and Hardesty, which I think will both remain very key hubs.

Great and then just turning to the 2016 capital, given the flexibility you have if the business environment doesn't improve from where we are right now, do you anticipate spending anything material above that $200 million?

The $200 million represents the projects that we have currently contracted and are committed to. I've stated previously that we continue to have constructive dialogue with customers with respect to their infrastructure needs beyond what we have announced.

To the extent that we would be announcing additional projects, the expenditure for those projects would be commensurate with the signing of additional contracts. And would likely, through the balance of 2016, involve several construction activities as well as the ordering of lifelong lead times and so the $200 million we think is relatively well locked in.

Any expenditures over top of that would be not tremendously material, would be my point of view.

Got it. And then if I can just ask one last question coming back to the credit covenant amendment, and I know, Stew you’ve talked about it being out of the abundance of caution I'm just wondering to close leap on one last aspect that could be a little bit more offensive in nature have you considered buying back some of the public bonds?

Is that something that could be done with the ability to borrow a little bit more here?

Robert, I mean we thought about that. There may be a time when the note call in I think in July of 2016 that we’d look at doing something, extending it out or refinancing it, but right now, that's not really a priority for us.

So, it's not the reason we went to think we're going to borrow on our revolver to pay off notes. That’s not a strategy we're employing.

I would further that just by saying one of the abundance of caution, thought processes we have is that this is still an uncertain world and certainly when you are in a period of uncertainty you want to maintain that as much flexibility as you can and from our perspective, liquidity is certainly a key aspect of that flexibility.

Understood. Thank you very much.

Alright. Thank you.

Thank you. Good morning and well done on your cost reductions and best wishes to Don.

Thank you.

Thanks, Steven.

It appears you’ve increased your depreciation rate considerably. I don't know if I'm right or not, but if I am, could you please comment on the drivers behind this decision?

I think more the amortization, I think increased Steven on the intangible assets, we took an change in estimate on those and wrote off, accelerated some of the amortization around some of our customer relationships down in the U.S. that were booked as part of the acquisition a few years ago of beyond the energy services.

I think that's probably what's driving that.

That's a very detailed and welcome answer. Thank you, Don.

Overall, given all your puts and takes in the segments, what do you say that your outlook for 2016 EBITDA is flat to 2015’s adjusted EBITDA of $390 million?

Yes, I think certainly when we do our internal forecasting we see puts and takes. As I had mentioned, we see continued pressure in our EPS and TT segments probably more so in ES then TT.

As we move through 2016, we will see what the market conditions will allow us to do. But the weakness in some of those areas will be offset at least very materially in respect to the continued growth we'll have from our terminals business.

So without giving specific guidance, I would say that our expectation overall is that 2016 is going to be approximately the same kind of year as 2015 was both from a macro perspective as well as from our perspective in terms of navigating through what continues to be fairly stormy waters.

Thank you, Stew. We might say that trucks are going to keep on trucking.

Finally, how much of the Canadian propane market by volume is served by Gibson or CanWest and the other major propane provider whose name will not be said?

We think in Western Canada we are roughly equal with the other – with the largest propane company, Superior. We don't have lot of – we have nonmaterial assets in operations East of the Manitoba border, so if we divide Western Canada and Eastern Canada into two equal buckets, we would probably be 40% of Western Canada and that would make us about 20% of the Canadian marketplace on an industrial basis.

We do move and market a tremendous amount of Western Canadian supply primarily to U.S. retailers as well and so like I had mentioned on the call we are probably the largest put for propane in Canada, but we also manage to supply out of Bellevue and out of Conway and other key supply points in North America.

So a long answer, Steven, to give you an answer – to answer your question that I don't really know the answer too. How is that?

It's great. Thank you.

Thank you, everyone. Those are my questions.

Okay, thanks.

Hi, good morning. I just wanted to seek your opinion on two things.

Could you just walk me through your crude by rail business as it is now? You did mention about the capacity of 120, but what is the current load that you carry [indiscernible]?

We specifically don't give a lot of granular guidance with respect to that out of respect to the shippers that do ship crude by rail out of our Hardisty unit train facility. What I can tell you is that the facility is 100% contracted with take or pay capacity and so we are being paid as if 100% of that capacity was being utilized.

From a macro perspective, I don't think it's any surprise to anybody that crude by rail particularly out of Western Canada is challenged by low commodity prices and wide differentials and the relative cost of moving a barrel by rail as opposed to moving a barrel by pipe. And so, we certainly are not moving 100% of the capacity that we have through that facility.

Our other capability from a crude by rail perspective includes very large manifest rail loading capacities at Edmonton – our largest facility at Edmonton as well as our smaller facilities [indiscernible], et cetera. And I think our volume performance there is relatively in line with other crude by rail service providers.

It has certainly been diminished from the 2014 timeframe when we had a fairly large crude pricing differentials and higher commodity prices. So crude by rail today in Western Canada is challenged, but I’m not in a position to give you specific numbers as to what we are shipping.

Okay, that's all right. Stew, your partner on this, the U.S.

Development Group, it kind of took a backseat with the application for the expansion. Why was that done?

I think USD Partners just are trying to make sure that we are shovel ready if and when the call comes, so they wanted to proceed through some of regulatory issues that we need to clear as we do move towards hopefully what at some point in the future will be an expansion decision. But they own and operate the unit train loading facility itself, we own and operate all of the infrastructure that connects our terminal to the unit train loading facility.

And so those are two sort of separate work streams and separate permitting processes as we go forward. So I think our partner was just trying to make sure that they were shovel ready if and when the call comes.

Okay. And another quick question.

With the low WCS prices just extremely low and the kind of expectation was that producers would go in for more deeper cuts that really hasn't happened across the board. Do you anticipate at all a spike in storage demand?

I think the concentration [ph] across the energy space with respect to storage levels is very real and that's not a Western Canadian phenomenon necessarily that's downstream of Western Canada and literally throughout the world. We don't see – we haven't seen a lot of stress on the storage capacities within Western Canada as most of the storage that we employ at Hardisty as an example is working stock storage and so the desire is to get your barrels downstream of Edmonton and Hardisty to supply points where you can more readily take advantage of contango in the marketplace if that’s what you want to do and/or make sure that you've got ready access to markets when you find a market that you want to sell into.

And so, I think what we'll see is continued pressure on storage at Cushing, the U.S. Gulf Coast, we are starting to see builds with respect to floating storage offshore, that sort of thing.

But from our perspective particularly what we – the storage we build is long-term contracted working stock storage and so we haven't seen any particular pressure there.

Okay. Thank you very much.

Thank you.

Good morning.

Good morning, Dan.

I have two questions. First of all when you are talking about expanding the Hardisty rail terminal next year, what would some of the factors be that would lead to that decision?

I don't want to portray that as being a decision that’s been made. My answer there was speculative in nature.

I said that we probably wouldn't see the demand for expansion until next year. Some of the factors that would underpin that would be the same factors that underpinned our decision to move forward in the first place and that would be customer demand.

One we're building large-scale infrastructure like the infrastructure that will support an expansion to the unit train facility. We typically underpin at least the majority of the demand with long-term contracts that will allow us to ensure that we get the return that we expect from that investment over an appropriate time horizon.

And so we'll wait for our customers to ask for it and when they are in a position, when they need that asset and do ask for it, we're certainly in a position to move forward.

Okay. If I could reworded a bit, what do you think would happen before your customers ask for that sort of expansion?

Well, I think, two things probably. Number one, we are going to see continued volume growing in the WCSB, that’s almost guaranteed as these long-lived and long-dated oilsands projects continue to come on stream.

As I said, that will manifest itself in terms of congestion from pipeline capacity coming out of Western Canada. That's not – given the difficulty we are having with pipeline expansion projects.

And so, we will see demand driven in part by just the need and necessity to continue to move barrels out of Western Canada, but that's probably going to be augmented to the extent that we do see hopefully within that timeframe that I talked about higher commodity prices, which allow barrels to move by rail out of Western Canada on an economic basis. Because certainly at $34 with a $16 WCS to WTI differential, you're really talking about a $16 US barrel coming out of Western Canada today and the better part of $10 a barrel to move crude by rail to the U.S.

Gulf Coast. And so that doesn't leave a lot for the producer.

So two things, number one, continued growth, which is almost certain and then return to more normal commodity prices.

Okay, thanks. My other question was a numbers question.

You said that Gibson has reduced staff by 15% since last year. AIF last year said that you had around 2,900 staff, so 15% is somewhere between 400 and 500.

Is that a good number to use and also is that all permanent staff or would that include contractors?

That would be staff that we would count as being employees, permanent in nature though – as I said in response to the earlier question, first of all, that's pretty accurate number. Secondly, it would involve a combination of hourly staff that we would employ in our field level operations throughout North America, pretty evenly split between U.S.

and Canada as well as certain select reductions in G&A and overhead.

Okay. Thank you very much.

Thank you.

Thanks again for your interest in Gibson’s. As mentioned earlier, Cam and I are available after the call if there are more questions.

Have a good day, everyone.