Here are 1-3 brief analogies to describe South Bow (SOBO):

• Kinder Morgan for crude oil and refined product storage.
• The Plains All American Pipeline of energy storage terminals.

• Crude Oil: South Bow is engaged in the production and sale of various grades of crude oil from its reserves.
• Natural Gas: The company extracts and markets natural gas for commercial and industrial use.
• Natural Gas Liquids (NGLs): South Bow also produces and sells natural gas liquids, including propane, butane, and condensate, which are often co-produced with natural gas.

South Bow (symbol: SOBO) sells primarily to other companies within the energy sector, providing crucial infrastructure and services related to crude oil. While South Bow does not publicly disclose specific customer names that account for a significant portion of its revenue (implying a diversified customer base), their clientele can be categorized as follows:

• Crude Oil Producers: These are companies engaged in the exploration, development, and production of crude oil. They utilize South Bow's infrastructure for the storage, processing, and transportation of their crude oil from production areas to market hubs or refineries.
• Crude Oil Refiners: Companies that operate crude oil refineries and process raw crude into various refined products like gasoline, diesel, and jet fuel. They depend on South Bow's services for the reliable receipt, storage, and throughput of crude oil feedstock for their operations.
• Crude Oil Marketers and Traders: These firms are involved in the buying, selling, and trading of crude oil and refined products on a wholesale basis. They leverage South Bow's terminal, storage, and blending services for logistical efficiency, inventory management, and market arbitrage.

As South Bow does not identify specific major customers by name in its public filings, we cannot list individual customer companies or their symbols.

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Bevin Wirzba, President and Chief Executive Officer

Bevin Wirzba is the President and Chief Executive Officer of South Bow, which became an independent public company on October 1, 2024, following its spinoff from TC Energy Corporation. Prior to leading South Bow, he was an integral part of the TC Energy Executive Leadership Team, where he was responsible for strategy and corporate development and led TC Energy's Canadian Natural Gas and Liquids transportation businesses. During his tenure at TC Energy, he oversaw the successful mechanical completion of the Coastal GasLink pipeline project. Earlier in his career, Mr. Wirzba served as Senior Vice-President, Business Development and Capital Markets at ARC Resources Ltd. and as a Managing Director at RBC Dominion Securities. He also held various multi-disciplinary roles with Chevron Corp. across North America and internationally.

Van Dafoe, Senior Vice-President and Chief Financial Officer

Van Dafoe is the Senior Vice-President and Chief Financial Officer at South Bow, bringing over 30 years of experience in the energy industry. In his current role, he is responsible for finance, accounting, tax, risk management, capital markets, and information technology activities. Before joining South Bow, Mr. Dafoe held the position of Senior Vice-President and Chief Financial Officer at ARC Resources Ltd. Prior to ARC, he accumulated extensive experience in various finance and management roles within the energy sector.

Richard Prior, Senior Vice-President and Chief Operating Officer

Richard Prior serves as the Senior Vice-President and Chief Operating Officer of South Bow.

Lori Muratta, Senior Vice-President and General Counsel

Lori Muratta holds the position of Senior Vice-President and General Counsel at South Bow.

Kevin Engel, Vice-President, Finance & Marketing

Kevin Engel is the Vice-President, Finance & Marketing at South Bow.

The key risks to South Bow's business (SOBO) primarily revolve around its operational integrity and the regulatory environment, its significant debt burden, and the concentration of its earnings within a single primary asset subject to market dynamics and competition.

1. Operational Incidents and Regulatory Scrutiny: South Bow's Keystone pipeline has a history of operational incidents, most notably a rupture in North Dakota in April 2025 that led to a spill and subsequent regulatory orders for the company to pump oil at lower pressure. This exposure to regulatory scrutiny and the potential for future operational disruptions remains a significant wildcard for the company, with regulatory decisions and requirements identified as known risks. While South Bow has responded to incidents and aims to incrementally lift pressure restrictions in 2026, the ongoing nature of these challenges can impact pipeline throughput and financial performance.

2. Elevated Leverage: South Bow carries an elevated level of debt, with analysts citing it as a notable risk. The company debuted with a debt-to-EBITDA ratio of 5.0x, which is higher than many peers, and has approximately USD $7.9 billion in long-term debt. This high debt profile limits the company's financial flexibility to pursue incremental growth opportunities or enhance shareholder returns. South Bow has expressed a commitment to reducing its leverage to four times by late 2027.

3. Earnings Concentration and Market Competition: The company's earnings are largely concentrated in its single primary asset, the Keystone pipeline system. This concentration exposes South Bow to market uncertainties and competitive pressures within the crude oil transportation sector. There is currently more crude oil pipeline capacity in Western Canada than there is supply to fill it, which is expected to keep demand for uncommitted capacity on Keystone low in the near term. Additionally, the Keystone pipeline has faced political controversies in the past, underscoring potential external influences on its operations.

The accelerating global energy transition, driven by increasing adoption of electric vehicles (especially in heavy-duty transport), renewable energy sources, and government policies aimed at decarbonization, poses an emerging threat to the long-term demand for crude oil transportation infrastructure. As demand for crude oil potentially peaks and begins a sustained decline sooner and more rapidly than historically anticipated, South Bow's existing pipeline assets could face reduced utilization, lower tariffs, and potentially become stranded before the end of their design life, fundamentally eroding their economic value.

Here are the expected drivers of future revenue growth for South Bow (SOBO) over the next 2-3 years:

1. Cash Flows from the Blackrod Connection Project: South Bow anticipates that cash flows associated with the Blackrod Connection Project will begin in the second half of 2026 and increase through 2027. This project is expected to contribute to deleveraging and serve as a new source of revenue and EBITDA.
2. Growth in Uncommitted Capacity/Spot Volumes: While recent demand for uncommitted capacity has been lower, South Bow's management has indicated that strengthening supply growth in Western Canada could lead to tighter egress volumes in 2026, potentially increasing growth in uncontracted or spot volumes on its pipeline system.
3. Stability from Highly Contracted Assets: A significant portion (90%) of South Bow's normalized EBITDA is secured by highly contracted agreements, which provides a stable and predictable revenue base for the company, mitigating market volatility. This contracted nature ensures consistent cash flows.
4. Operational Efficiencies and Strategic Growth through ERP Migration: South Bow is transitioning to its own Enterprise Resource Planning (ERP) system, a move management believes will enhance workflows, sharpen focus, and enable the pursuit of both organic and inorganic growth opportunities. This operational improvement could indirectly drive revenue by optimizing resource allocation and facilitating strategic expansion.
5. Robust Western Canada Supply: Analyst commentary points to a robust supply of resources in Western Canada as a supportive factor for South Bow's long-term growth, projecting a 2-3% EBITDA compound annual growth rate. This underlying market strength provides a favorable environment for sustained pipeline throughput and associated revenues.

Share Issuance

• On October 1, 2024, South Bow completed its spin-off from TC Energy, resulting in 207,570,409 common shares being issued to TC Energy shareholders on a pro rata basis, where they received 0.2 of a South Bow common share for each TC Energy share held.
• The company issued 470,700 shares for $9 million upon the exercise of stock options in 2024.
• In the first quarter of 2025, an additional 179,522 shares were issued for $4 million through the exercise of stock options, bringing the total common shares outstanding to 208,220,631 as of March 31, 2025.

Inbound Investments

• During the three months ended March 31, 2024, prior to its spin-off, South Bow (as TC Energy's Liquids Pipelines business) received $145 million in contributions from its Former Parent, TC Energy.

Capital Expenditures

• South Bow's capital expenditures for the three months ended March 31, 2025, amounted to $32 million, primarily allocated to the Blackrod Connection Project and other maintenance capital expenditures.
• The Blackrod Connection Project has an estimated total capital cost of approximately $180 million and is expected to be ready for in-service in early 2026, supported by long-term committed contracts.
• The company anticipates that its net debt-to-normalized EBITDA ratio will increase modestly throughout 2025 due to ongoing investments in the Blackrod Connection Project and one-time costs associated with the spin-off.