CALGARY, May 6, 2020 /CNW/ - Tourmaline Oil Corp.
(TSX:TOU) ("Tourmaline" or the "Company") is pleased to
release financial and operating results for the first quarter
of 2020 and provide updates regarding 2020 budget and dividend.
HIGHLIGHTS
- Q1 2020 cash flow(1) was $283.7 million ($1.05/diluted share) on Q1 E&P capital
spending of $306.2 million.
- Q1 2020 production averaged a record 308,349 boepd, a 5%
increase over Q1 2019 (1,475 mmcfpd natural gas and 62,569 bpd oil,
condensate, NGLs).
- Full-year average production of 305,000 – 310,000 boepd is now
forecast (representing 6% year-over-year growth) yielding estimated
full-year cash flow of $1.0 billion
based on strip pricing(2).
- Reduced full-year 2020 EP capital budget from the
originally-planned $925 million to a
maintenance capital budget of $800
million with approximately $400
million available for the second half of 2020 – facilitating
a forecast 2020 exit rate of 315,000 – 320,000 boepd.
- Q1 2020 operating costs of $2.97/boe, down 15% from Q1 2019 and 9% from
average 2019 operating costs of $3.28/boe.
2020 EP CAPITAL PROGRAM AND GUIDANCE
- Tourmaline has reduced its 2020 EP capital expenditure budget
from the originally-planned $925
million to a maintenance capital level of $800 million.
- Full-year average production of 305,000 – 310,000 boepd is now
forecast (representing 6% year-over-year growth), yielding
estimated full-year cash flow of $1.0
billion based on strip pricing.
- Q1 2020 EP spending was $306.2
million, less than originally planned. The Company plans Q2
EP spending of approximately $100
million, also less than originally planned, yielding 1H 2020
EP spending of approximately $400
million, providing considerable capital flexibility for the
2H of 2020.
- The 2020 Tourmaline aggregate dividends of $130 million and the net Topaz aggregate
dividends of $17 million will be paid
from the estimated 2020 free cash flow(3) of
$173 million.
- 2021 average production of 320,000 boepd is now anticipated on
EP spending of $900 million yielding
cash flow of $1.27 billion
($4.70/diluted share) and estimated
free cash flow of $337 million.
- Tourmaline estimates that it will have $1.1 billion of available liquidity at
December 31, 2020 on aggregate credit
capacity of $2.875 billion including
a revolver and term loan with a maturity of June 2024.
- Estimated 2020 exit net debt(4)-to-cash flow of 1.8
times based on 2020 forecast cash flow.
- Tourmaline's cash flow is most sensitive to natural gas prices
and Cdn/US dollar differential. The Company believes that the
significant capital spending reductions which have been announced
by most oil and gas producers in the past two weeks will result in
a decreased supply of natural gas, strengthening prices in 2021. A
CAD $0.10/mcf increase in the annual
NYMEX natural gas price increases annual cash flow by approximately
$50 million.
- Tourmaline has an estimated up to $1.0
billion of Topaz equity that can be realized to fund
2020-2021 acquisition activities as well as reduce short-term debt.
A second-half 2020 Topaz public liquidity event is anticipated as
the Company believes conditions will be favourable to such a
transaction once stability returns to the global financial
markets.
PRODUCTION UPDATE AND OUTLOOK
- Q1 2020 production averaged a record 308,349 boepd, a 5%
increase over Q1 2019 (1,475 mmcfpd natural gas and 62,569 bpd oil,
condensate, NGLs).
- Tourmaline's maintenance EP capital budget of $800 million, along with the two corporate
acquisitions completed to date, is expected to yield 2020 average
production of 305,000 – 310,000 boepd.
- The Company has deferred a subset of the originally-planned Q2
EP activity until 2H 2020 and is also planning to fill natural gas
storage positions in California
and Dawn (6,000 boepd in Q2). This will yield anticipated Q2
average production volumes of 295,000 – 300,000 boepd. Injected
storage volumes will be recovered in Q4 2020 when prices are
expected to be higher, thus not affecting overall full-year 2020
average production levels.
- 2020 EP activity will be phased so as to yield strong Q4 and
exit 2020 production volumes. Current Q4 2020 average production
estimates are 310,000 – 315,000 boepd with a 2020 anticipated exit
of 315,000 – 320,000 boepd. The Company will be positioned to
deliver strong year-over-year cash flow and production growth in
2021.
- Given the very low NGL prices, Tourmaline has reduced liquids
recovery at several operated plants thus far in Q2, reducing NGL
liquids production volumes by approximately 2,000 bpd; the
associated gas volume increase is 4.2 mmcfpd.
- Should weak liquid prices and stronger-than-forecast natural
gas prices continue, the Company can evolve the overall production
mix from the current 80:20 gas:liquid split to 83:17 by late
2020/early 2021.
Q1 2020 FINANCIAL RESULTS
- Q1 2020 cash flow was $283.7
million ($1.05/diluted share)
on Q1 E&P capital spending of $306.2
million.
- Given the very low oil prices prevailing at the end of Q1 2020,
Tourmaline has incurred a $250
million non-cash impairment for the Peace River High
complex. The two gas-weighted core complexes, NEBC and the Alberta
Deep Basin, did not incur any impairments.
- Q1 operating costs were $2.97/boe, below new 2020 forecast costs of
$3.30/boe and were down 15% from Q1
2019 and 9% from average 2019 operating costs of $3.28/boe.
ACQUISITION UPDATE
- Tourmaline acquired Polar Star Canadian Oil and Gas Inc.
("Polar Star") on February 14, 2020,
for total cash consideration of $12
million, including the assumption of working capital. The
acquired British Columbia assets
include: approximately 2,500 boepd of production; 2P reserves of
80.7 million boe; 106,000 net acres of Montney land; and a compressor station.
- Tourmaline closed the acquisition of Chinook Energy Inc.
("Chinook") on April 21, 2020, for
total cash consideration of approximately $24.4 million, including assumed net debt. The
Chinook NEBC assets include: approximately 3,500 boepd of
production; 35.6 mmboe of 2P reserves; 54,000 acres of Montney land; a gas plant; a compressor
station; and a 190 mmcfpd regional 12-inch pipeline.
- Tourmaline will initially focus on optimizing production and
reducing field costs, with the expectation that the Chinook/Polar
Star assets will generate approximately $10
million to $12 million of cash
flow annually at current gas prices. Tourmaline has reduced the
operating costs of the acquired assets by approximately 45% to
date. Minimal development of the assets is expected in the next two
years, while Tourmaline assembles a regional facility plan as a key
aspect of the future development of these assets, including a
Gundy-scale, deep cut facility
(200 mmcfpd, 15,000 bopd condensate and natural gas liquids).
MARKETING UPDATE
- Tourmaline is Canada's largest
natural gas producer with forecast total average 2020 natural gas
production of 1.5 bcf/day, including 530 mmcfpd transported and
sold at six NYMEX-priced hubs.
- Currently, Tourmaline has an average of 336 mmcfpd hedged for
Q2 to Q4 of 2020 at a weighted-average fixed price of CAD
$2.38/mcf; an average of 158 mmcfpd
hedged at a basis to NYMEX of $(0.12)
USD/mcf; and an average of 403 mmcfpd incremental volume
exposed to export markets, including Dawn, Chicago, Ventura, Sumas, Malin and PGE.
- Natural gas fundamentals for 2021 are steadily improving.
Tourmaline has been able to execute hedges above our 2021 AECO gas
price assumption of CAD $2.62 /mcf
and will continue to benefit from the strength in the forward
natural gas price curve.
- Tourmaline has diversification to the US and other hubs
amounting to 615 mmcfpd in exit 2022 and 660 mmcfpd in exit
2023.
- At present, Tourmaline has NYMEX WTI hedges of 13,611 bbls/d in
place for the period April 2020 –
December 2020 at a weighted-average
price of USD $46.47/bbl and 4,500
bbls/d for calendar year 2021 at a weighted-average price of USD
$51.23/bbl.
- For the period of April 2020 –
December 2020, Tourmaline also has
sold forward physical and financial condensate basis differentials
of 10,000 bbls/d at a weighted-average price of WTI less USD
$(7.32)/bbl.
- Tourmaline has 210,000 bbls of oil and condensate storage
across the three operated core complexes providing additional
flexibility in a very volatile liquid-pricing environment.
EP UPDATE
- Tourmaline is currently operating three drilling rigs and plans
to operate 8 to 10 drilling rigs during the second half of
2020.
- Timing of 2H 2020 frac activity is flexible and will be
controlled in part by Q3 and Q4 2020 commodity prices. The Company
will maximize gas volumes in conjunction with anticipated improving
winter 2020/21 natural gas prices.
- Tourmaline drilled a total of 39.7 net wells during the first
quarter.
- The Company set new pacesetter drill-and-complete capital cost
records in all three core-operated complexes, reducing average
completed well costs by approximately 5% thus far in 2020.
Tourmaline expects further capital cost reductions in 2H 2020.
- Tourmaline is on track to realize record EP capital
efficiencies in 2020 of $6,500 -
$7,000/boepd.
- Tourmaline drilled one of the first pads in Western Canada utilizing high line power in
the Peace River High complex. This initiative completely eliminates
diesel from the lease - the next step in emissions reduction beyond
bi-fuel. Approximately 5,400 litres/day of diesel equivalent were
eliminated, significantly reducing CO2 , NOx
and SO2 emissions as well as leading to a monthly
per-pad cost saving of $70,000.
Tourmaline will continue to employ this methodology in future
operations as part of the Company's plan to reduce overall
emissions intensity by a further 25%.
OPERATING ENVIRONMENT AND THE COVID-19 PANDEMIC
- Since December 31, 2019, the
outbreak of the COVID-19 pandemic has had a significantly negative
impact on economic conditions around the world. During this period
of uncertainty, the Company is committed to maintaining its strong
balance sheet and financial liquidity. At March 31, 2020, the Company has $1.3 billion in unutilized borrowing capacity on
its credit facilities, all of which is covenant based and not
directly tied to changes in the Company's oil and gas reserves,
insulating the Company's borrowing capacity against large swings in
commodity price decks used to calculate reserve values. At
March 31, 2020, the Company was not
in breach of any covenants and has room under those covenants to
allow for an increase in future borrowings to navigate through
these uncertain times, if required. The Company has been actively
monitoring all Government announcements to determine its
eligibility for any relief that is being provided through this
highly volatile and challenging period. The Company currently
believes it has sufficient liquidity through cash flow to execute
the remainder of the 2020 capital budget.
- In response to the COVID-19 pandemic, the Company is following
all rules and regulations as set out by the relevant health
authorities and has implemented many health and safety protocols
into its operations. Tourmaline and its staff have been able to
adapt to the new work environment without significant disruptions
at any operated facility or in day-to-day operations.
- For more details on how Tourmaline has responded to the
COVID-19 pandemic please see 'Operating Environment and the
Covid-19 Pandemic' in the Company's Q1 2020 Management's Discussion
and Analysis available on Tourmaline's website and on SEDAR.
__________________________
|
(1)
|
"Cash flow" is
defined as cash provided by operations before changes in non-cash
operating working capital. See "Non-GAAP Financial Measures"
in this news release and in the Company's Q1 2020 Management's
Discussion and Analysis.
|
(2)
|
Based on oil and gas
commodity strip pricing at April 23, 2020.
|
(3)
|
"Free cash flow" is
defined as cash flow less total net capital expenditures.
Total net capital expenditures is defined as total capital spending
before acquisitions and non-core dispositions. Free cash flow
is prior to dividend payments. See "Non-GAAP Financial
Measures" in this news release and the Company's Q1 2020
Management's Discussion and Analysis.
|
(4)
|
"Net debt" is defined
as bank debt plus working capital (adjusted for the fair value of
financial instruments and lease liabilities). See "Non-GAAP
Financial Measures" in this news release and in the Company's Q1
2020 Management's Discussion and Analysis.
|
CORPORATE SUMMARY – FIRST QUARTER 2020
|
Three Months Ended
March 31,
|
|
2020
|
2019
|
Change
|
OPERATIONS
|
|
|
|
Production
|
|
|
|
Natural gas
(mcf/d)
|
1,474,681
|
1,439,212
|
2%
|
Crude oil, condensate
and NGL (bbl/d)
|
62,569
|
53,565
|
17%
|
Oil equivalent
(boe/d)
|
308,349
|
293,434
|
5%
|
Product
prices(1)
|
|
|
|
Natural gas
($/mcf)
|
$
|
2.45
|
$
|
3.59
|
(32)%
|
Crude oil, condensate
and NGL ($/bbl)
|
$
|
34.54
|
$
|
41.43
|
(17)%
|
Operating expenses
($/boe)
|
$
|
2.97
|
$
|
3.49
|
(15)%
|
Transportation costs
($/boe)
|
$
|
4.35
|
$
|
3.81
|
14%
|
Operating
netback(3) ($/boe)
|
$
|
10.79
|
$
|
16.65
|
(35)%
|
Cash general and
administrative
expenses ($/boe)(2)
|
$
|
0.58
|
$
|
0.46
|
26%
|
FINANCIAL
($000, except share and per share)
|
|
|
|
Total revenue from
commodity sales
and realized gains
|
524,915
|
664,301
|
(21)%
|
Royalties
|
16,929
|
31,623
|
(46)%
|
Cash
flow(3)
|
283,718
|
419,242
|
(32)%
|
Cash flow per share
(diluted)(3)
|
$
|
1.05
|
$
|
1.54
|
(32)%
|
Net earnings
(loss)
|
(35,812)
|
87,710
|
(141)%
|
Net earnings (loss)
per share (diluted)
|
$
|
(0.13)
|
$
|
0.32
|
(141)%
|
Capital expenditures
(net of dispositions)
|
317,614
|
384,384
|
(17)%
|
Weighted average
shares outstanding (diluted)
|
270,940,484
|
272,043,159
|
-%
|
Net
debt(3)
|
(1,838,128)
|
(1,713,032)
|
7%
|
(1)
|
Product prices
include realized gains and losses on risk management and financial
instrument contracts.
|
(2)
|
Excluding interest
and financing charges.
|
(3)
|
See "Non-GAAP
Financial Measures" in this news release and in the Company's Q1
2020 Management's Discussion and Analysis.
|
Conference Call Tomorrow at 9:00 a.m. MT
(11:00 a.m. ET)
Tourmaline will host a conference call tomorrow, May 7, 2020 starting at 9:00 a.m. MT (11:00 a.m.
ET). To participate, please dial 1-888-231-8191
(toll-free in North America), or
international dial-in 647-427-7450, a few minutes prior to the
conference call.
Conference ID is 9696365.
Reader Advisories
CURRENCY
All amounts in this news release are stated in Canadian dollars
unless otherwise specified.
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information and
statements (collectively, "forward-looking information") within the
meaning of applicable securities laws. The use of any of the words
"forecast", "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "on track", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information. More particularly
and without limitation, this news release contains forward-looking
information concerning Tourmaline's plans and other aspects of its
anticipated future operations, management focus, objectives,
strategies, financial, operating and production results and
business opportunities, including the following: anticipated
petroleum and natural gas production and production for various
periods including estimated production levels for 2020 and 2021 and
2020 exit production; capital expenditure budgets for various
periods including 2020 and 2021; estimated cash flow for various
periods including 2020 and 2021; estimated free cash flow for 2020
and 2021; estimated available liquidity and credit capacity at
December 31, 2020; estimated 2020
exit net debt-to-cash flow; expectations for future natural gas
price increases; expectations for a Topaz liquidity event and the
timing and proceeds that could be realized therefrom; future
capital efficiencies to be realized; the future declaration and
payment of dividends and the timing and amount thereof including
the aggregate amount of dividends to be paid in 2020 and the
availability of free cash flow to fund such dividends; cost
reduction initiatives; projected operating and drilling costs
including anticipated reductions in operating costs; the timing for
facility expansions and facility start-up dates; the benefits to be
derived from the Chinook and Polar Star acquisitions and annual
cash flow to be generated from such acquired assets; the benefits
to be derived from high line power in drilling operations including
reductions in CO2 , NOx and SO2
emissions and monthly per-pad cost savings; the Company's plan to
reduce overall emissions intensity; as well as Tourmaline's future
drilling prospects and plans, business strategy, future development
and growth opportunities, prospects and asset base. The
forward-looking information is based on certain key expectations
and assumptions made by Tourmaline, including expectations and
assumptions concerning the following: prevailing and future
commodity prices and currency exchange rates including in the case
of 2020 production estimates, commodity price assumptions for
natural gas (NYMEX (US) - $2.15/mcf
and $2.71/mcf for 2020 and 2021,
respectively, AECO - $2.24/mcf and
$2.62/mcf for 2020 and 2021,
respectively), and crude oil (WTI (US) - $31.04/bbl and $32.29 for 2020 and 2021, respectively) and an
exchange rate assumption of $0.72 and
0.71 (US/CAD) for 2020 and 2021, respectively; the degree to which
Tourmaline's operations and production will be disrupted by
circumstances attributable to the COVID-19 pandemic and the
responses of governments and the public to the pandemic; applicable
royalty rates and tax laws; interest rates; future well production
rates and reserve volumes; operating costs, the timing of receipt
of regulatory approvals; the performance of existing wells; the
success obtained in drilling new wells; anticipated timing and
results of capital expenditures; the sufficiency of budgeted
capital expenditures in carrying out planned activities; the
timing, location and extent of future drilling operations; the
benefits to be derived from acquisitions; the state of the economy
and the exploration and production business including the impacts
of the COVID-19 pandemic and the responses of governments and
the public to the pandemic thereon; the availability and cost of
financing, labour and services; and ability to market crude oil,
natural gas and NGL successfully. Without limitation of the
foregoing, future dividend payments, if any, and the level thereof
is uncertain, as the Company's dividend policy and the funds
available for the payment of dividends from time to time is
dependent upon, among other things, free cash flow, financial
requirements for the Company's operations and the execution
of its growth strategy, fluctuations in working capital and the
timing and amount of capital expenditures, debt service
requirements and other factors beyond the Company's control.
Further, the ability of Tourmaline to pay dividends will be subject
to applicable laws (including the satisfaction of the solvency test
contained in applicable corporate legislation) and contractual
restrictions contained in the instruments governing its
indebtedness, including its credit facility.
Statements relating to "reserves" are also deemed to be forward
looking information, as they involve the implied assessment, based
on certain estimates and assumptions, that the reserves described
exist in the quantities predicted or estimated and that the
reserves can be profitably produced in the future.
Although Tourmaline believes that the expectations and
assumptions on which such forward-looking information is based are
reasonable, undue reliance should not be placed on the
forward-looking information because Tourmaline can give no
assurances that it will prove to be correct. Since forward-looking
information addresses future events and conditions, by its very
nature it involves inherent risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a
number of factors and risks. These include, but are not limited to:
the risks associated with the oil and gas industry in general such
as operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertain impacts
of COVID-19 on Tourmaline's business, and the societal, economic
and governmental response to COVID-19; the uncertainty of estimates
and projections relating to reserves, production, revenues, costs
and expenses; health, safety and environmental risks; commodity
price and exchange rate fluctuations; interest rate fluctuations;
marketing and transportation; loss of markets; environmental risks;
competition; incorrect assessment of the value of acquisitions;
failure to complete or realize the anticipated benefits of
acquisitions or dispositions; ability to access sufficient capital
from internal and external sources; uncertainties associated with
counterparty credit risk; failure to obtain required regulatory and
other approvals; and changes in legislation, including but not
limited to tax laws, royalties and environmental regulations.
Readers are cautioned that the foregoing list of factors is not
exhaustive.
Additional information on these and other factors that could
affect Tourmaline, or its operations or financial results, are
included in the Company's most recently filed Management's
Discussion and Analysis (See "Forward-Looking Statements" therein),
Annual Information Form (See "Risk Factors" and "Forward-Looking
Statements" therein) and other reports on file with applicable
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com) or Tourmaline's website
(www.tourmalineoil.com).
The forward-looking information contained in this news release
is made as of the date hereof and Tourmaline undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, unless expressly required by applicable securities
laws.
FINANCIAL OUTLOOK
Also included in this news release are estimates of Tourmaline's
2020 exit net debt-to-cash flow ratio as well as 2020 and 2021 free
cash flow, which are based on, among other things, the various
assumptions as to production levels, capital expenditures, annual
cash flows and other assumptions disclosed in this news release and
including Tourmaline's estimated average production of 305,000 –
310,000 boepd for 2020 and 320,000 for 2021. Commodity price
assumptions for natural gas (NYMEX (US) - $2.15/mcf and $2.71/mcf for 2020 and 2021, respectively, AECO -
$2.24/mcf and $2.62/mcf for 2020 and 2021, respectively), and
crude oil (WTI (US) - $31.04/bbl and
$32.29 for 2020 and 2021,
respectively) and an exchange rate assumption of $0.72 and 0.71 (US/CAD) for 2020 and 2021,
respectively. To the extent such estimates constitute financial
outlooks, they were approved by management and the board of
directors of Tourmaline on May 6,
2020 and are included to provide readers with an
understanding of Tourmaline's anticipated 2020 exit net
debt-to-cash flow ratio and cash flow and free cash flow based on
the capital expenditure, production and other assumptions described
herein and readers are cautioned that the information may not be
appropriate for other purposes. In particular, readers are
cautioned that estimates for 2021 are provided for illustration
only as budgets and forecasts beyond 2020 have not been finalized
and are subject to a variety of factors including prior year's
results.
NON-GAAP FINANCIAL MEASURES
This news release includes references to "free cash flow", "cash
flow", "net debt" and "net capital expenditures" which are
financial measures commonly used in the oil and gas industry and do
not have a standardized meaning prescribed by International
Financial Reporting Standards ("GAAP"). Accordingly, the Company's
use of these terms may not be comparable to similarly defined
financial measures presented by other companies. Management uses
the term "free cash flow", "cash flow", "net debt" and "net capital
expenditures" for its own performance measures and to provide
shareholders and potential investors with a measurement of the
Company's efficiency and its ability to generate the cash necessary
to fund a portion of its future growth expenditures, to pay
dividends or to repay debt. Investors are cautioned that these
non-GAAP financial measures should not be construed as an
alternative to net income or cash from operating activities
determined in accordance with GAAP as an indication of the
Company's performance. Free cash flow is calculated as cash flow
less total net capital expenditures and is prior to dividend
payments. Cash flow is defined as cash provided by operations
before changes in non-cash operating working capital. Net
debt is defined as bank debt plus working capital (adjusted for the
fair value of financial instruments and lease liabilities).
Net capital expenditures is defined as the sum of E&P capital
program and other corporate expenditures, net of non-core
dispositions. See "Non-GAAP Financial Measures" in the most
recently filed Management's Discussion and Analysis for additional
information regarding these non-GAAP financial measures including
reconciliations to the most directly comparable GAAP financial
measures.
OIL AND GAS METRICS
This news release contains certain oil and gas metrics which do
not have standardized meanings or standard methods of calculation
and therefore such measures may not be comparable to similar
measures used by other companies and should not be used to make
comparisons. Such metrics have been included in this document to
provide readers with additional measures to evaluate the Company's
performance; however, such measures are not reliable indicators of
the Company's future performance and future performance may not
compare to the Company's performance in previous periods and
therefore such metrics should not be unduly relied upon.
SUPPLEMENTAL INFORMATION REGARDING PRODUCT TYPES
This news release includes references to Tourmaline's 2020 and
2021, 2020 exit rate, Q1, Q2 and Q4 2020 average daily production
and average daily production from recently completed acquisitions.
The following table is intended to provide supplemental information
about the product type composition for each of the production
figures that are provided in this news release:
|
Light and
Medium
Crude Oil(1)
|
|
Conventional
Natural Gas
|
|
Shale Natural
Gas
|
|
Natural Gas
Liquids(1)
|
|
Oil Equivalent
Total
|
|
Company Gross
(Bbls)
|
|
Company Gross
(Mcf)
|
|
Company Gross
(Mcf)
|
|
Company Gross
(Bbls)
|
|
Company Gross
(Boe)
|
2020 Average
Production
|
29,340
|
|
888,227
|
|
567,630
|
|
35,517
|
|
307,500
|
Q1 2020 Average
Daily
Production
|
27,870
|
|
934,363
|
|
540,318
|
|
34,699
|
|
308,349
|
Q2 2020 Average
Daily
Production
|
28,983
|
|
880,827
|
|
527,857
|
|
33,736
|
|
297,500
|
Q4 2020 Average
Daily
Production
|
29,793
|
|
860,009
|
|
612,297
|
|
37,323
|
|
312,500
|
2020 Exit Rate
Production
|
30,270
|
|
873,769
|
|
622,094
|
|
37,920
|
|
317,500
|
2021 Average
Daily
Production
|
28,792
|
|
879,658
|
|
635,980
|
|
38,602
|
|
320,000
|
Polar Star
Production
|
229
|
|
-
|
|
12,328
|
|
216
|
|
2,500
|
Chinook
Production
|
218
|
|
-
|
|
17,973
|
|
287
|
|
3,500
|
(1)
|
For the purposes
of this disclosure, condensate has been combined with Light and
Medium Crude Oil as the associated revenues and certain costs of
condensate are similar to Light and Medium Crude Oil.
Accordingly, NGLs in this disclosure exclude
condensate.
|
RESERVES DATA
Reserves have been evaluated by independent reserve evaluators
as at December 31, 2018 as follows:
Polar Star 2P reserves of 80.7 mmboe by Sproule Associates Ltd. and
Chinook 2P reserves of 35.6 mmboe by McDaniel & Associates
Consultants Ltd. for a combined 2P reserves total of 116.3 mmboe.
Reserves are working interest gross reserves before deduction of
royalties payable to others and without including any royalty
interests.
There are numerous uncertainties inherent in estimating
quantities of crude oil, natural gas and NGL reserves and the
future cash flows attributed to such reserves. The reserve
and associated cash flow information set forth above are estimates
only. In general, estimates of economically recoverable crude oil,
natural gas and NGL reserves and the future net cash flows
therefrom are based upon a number of variable factors and
assumptions, such as historical production from the properties,
production rates, ultimate reserve recovery, timing and amount of
capital expenditures, marketability of oil and natural gas, royalty
rates, the assumed effects of regulation by governmental agencies
and future operating costs, all of which may vary materially.
For those reasons, estimates of the economically recoverable crude
oil, NGL and natural gas reserves attributable to any particular
group of properties, classification of such reserves based on risk
of recovery and estimates of future net revenues associated with
reserves prepared by different engineers, or by the same engineers
at different times, may vary. The Company's actual
production, revenues, taxes and development and operating
expenditures with respect to its reserves will vary from estimates
thereof and such variations could be material.
The estimates of reserves and future net revenue for individual
properties may not reflect the same confidence level as estimates
of reserves and future net revenue for all properties, due to
effects of aggregations. The estimated values of future net
revenue disclosed in this news release do not represent fair market
value. There is no assurance that the forecast prices and
cost assumptions used in the reserve evaluations will be attained
and variances could be material.
BOE EQUIVALENCY
Per barrel of oil equivalent amounts have been calculated using
a conversion rate of six thousand cubic feet of natural gas to one
barrel of oil equivalent (6:1). Barrel of oil equivalents
(boe) may be misleading, particularly if used in isolation. A
boe conversion ratio of 6 mcf:1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the
wellhead. In addition, as the value ratio between natural gas
and crude oil based on the current prices of natural gas and crude
oil is significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
INITIAL PRODUCTION RATES
Any references in this news release to initial production rates
are useful in confirming the presence of hydrocarbons; however,
such rates are not determinative of the rates at which such wells
will continue production and decline thereafter and are not
necessarily indicative of long-term performance or ultimate
recovery. While encouraging, readers are cautioned not to
place reliance on such rates in calculating the aggregate
production for the Company. Such rates are based on field
estimates and may be based on limited data available at this
time.
GENERAL
See also "Forward-Looking Statements", and "Non-GAAP Financial
Measures" in the most recently filed Management's Discussion and
Analysis.
CERTAIN DEFINITIONS:
bbl
|
barrel
|
bbls/day
|
barrels per
day
|
bbl/mmcf
|
barrels per million
cubic feet
|
bcf
|
billion cubic
feet
|
bcfe
|
billion cubic feet
equivalent
|
bpd or
bbl/d
|
barrels per
day
|
boe
|
barrel of oil
equivalent
|
boepd or
boe/d
|
barrel of oil
equivalent per day
|
bopd or
bbl/d
|
barrel of oil,
condensate or liquids per day
|
CO2
|
carbon
dioxide
|
gj
|
gigajoule
|
gjs/d
|
gigajoules per
day
|
mbbls
|
thousand
barrels
|
mmbbls
|
million
barrels
|
mboe
|
thousand barrels of
oil equivalent
|
mboepd
|
thousand barrels of
oil equivalent per day
|
mcf
|
thousand cubic
feet
|
mcfpd or
mcf/d
|
thousand cubic feet
per day
|
mcfe
|
thousand cubic feet
equivalent
|
mmboe
|
million barrels of
oil equivalent
|
mmbtu
|
million British
thermal units
|
mmbtu/d
|
million British
thermal units per day
|
mmcf
|
million cubic
feet
|
mmcfpd or
mmcf/d
|
million cubic feet
per day
|
MPa
|
megapascal
|
mstb
|
thousand stock tank
barrels
|
NGL or
NGLs
|
natural gas
liquids
|
NOx
|
nitrogen
oxide
|
SO2
|
sulphur
dioxide
|
tcf
|
trillion cubic
feet
|
MANAGEMENT'S DISCUSSION AND ANALYSIS AND CONSOLIDATED
FINANCIAL STATEMENTS
To view Tourmaline's Management's Discussion and Analysis and
Interim Condensed Consolidated Financial Statements for the periods
ended March 31, 2020 and 2019, please
refer to SEDAR (www.sedar.com) or Tourmaline's website at
www.tourmalineoil.com.
ABOUT TOURMALINE OIL CORP.
Tourmaline is a Canadian senior crude oil and natural gas
exploration and production company focused on long-term growth
through an aggressive exploration, development, production and
acquisition program in the Western Canadian Sedimentary Basin.
SOURCE Tourmaline Oil Corp.