CALGARY, AB, July 29, 2020
/CNW/ - Tourmaline Oil Corp. (TSX: TOU) ("Tourmaline"
or the "Company") is pleased to release operating and
financial results for the second quarter (Q2) of 2020.
HIGHLIGHTS
- Q2 2020 cash flow(1) was $225.2 million ($0.83/diluted share) on Q2 EP capital spending of
$95.6 million.
- Q2 2020 delivered significant free cash flow(2) of
$121.3 million ($0.45/diluted share).
- Q2 2020 production averaged 299,369 boepd within guidance range
of 295,000 – 300,000 boepd and up 7% over Q2 2019 production of
280,547 boepd.
- Strong Q2 2020 cash costs (operating, transportation, general
and administrative and financing) of $8.72/boe, inclusive of $3.06/boe of operating costs, down 12% from Q2
2019 operating costs of $3.47/boe.
- During Q2 2020, the Company's average realized natural gas
price was CAD $2.41/mcf, including a
stable average AECO price of $2.00/mcf.
PRODUCTION UPDATE
- Q2 2020 production averaged 299,369 boepd, within guidance
range of 295,000 – 300,000 boepd and up 7% over Q2 2019 production
of 280,547 boepd.
- Second quarter volumes include the impact of the Company's
planned natural gas storage injections during the quarter (3,974
boepd). These volumes are expected to be sold during the fourth
quarter of 2020 at higher gas prices.
- Q3 2020 production of 295,000 – 300,000 boepd is currently
anticipated. Third quarter estimates include the impact of
significant scheduled maintenance on the TC Energy and Enbridge
systems and corresponding Tourmaline plant turnarounds timed to
these outages, continued California storage injections in July, and a
late start to Q3 field operations due to extremely wet field
conditions.
- Fourth quarter production of 320,000-325,000 is forecast as the
full-quarter production impact of the 42 new wells from Q3 will be
realized as well as the contribution from approximately 57
additional wells brought on production during Q4. Fourth quarter
revenue will also be positively impacted by withdrawing storage
volumes both in California and at
Dawn.
- A 2020 production exit of 322,500 – 327,500 boepd is now
estimated.
- Current 2021 production estimates (320,000 boepd) will be
revisited in conjunction with the release of the 2021 capital
program with Q3 2020 results in November. Ongoing 2020 acquisitions
and a robust 2H 2020 EP program are currently expected to increase
2021 production and cash flow.
Q2 2020 FINANCIAL RESULTS
- Q2 2020 cash flow was $225.2
million ($0.83/diluted share)
on Q2 EP capital spending of $95.6
million, essentially flat to Q2 2019 cash flow of
$226.5 million, despite a very
challenging oil and liquid price environment in the second quarter
of 2020.
- First half (1H) 2020 cash flow was $508.9 million ($1.88/diluted share). The Company is now
expecting full-year cash flow of $1.05
billion on current strip pricing(3), while
maintaining an $800 million
maintenance capital budget for 2020.
- Q2 2020 net earnings were $20.1
million ($0.07/diluted share)
underscoring the low-cost, profitable nature of Tourmaline's core
EP business.
- Q2 2020 operating costs were $3.06/boe, down 12% from Q2 2019 costs of
$3.47/boe.
CAPITAL PROGRAM
- 1H 2020 EP capital spending was $401.8
million, half of the full-year maintenance capital budget of
$800 million.
- Q2 EP capital spending was $95.6
million, significantly lower than cash flow generated of
$225.2 million, yielding free cash
flow of $121.3 million ($0.45/diluted share) for the quarter.
- The Q2 free cash flow was utilized to fully fund the dividend,
acquire Chinook Energy Inc. ("Chinook"), fund the Deep Basin
acquisitions, and reduce debt, all during one of the most difficult
quarters in the history of the industry.
- Net debt(4) at June 30, 2020 was $1.69
billion, down $148 million
from March 31, 2020, after accounting
for the funds received from the Topaz Energy Corp. ("Topaz")
financing.
- In the current five-year plan, net debt to cash flow trends
down to less than 1.0 times by exit 2021. Tourmaline plans to
maintain leverage between 1.0 and 1.5 times with excess free cash
flow allocated towards dividend increases and share buybacks.
ACQUISITION UPDATE
- Tourmaline completed the acquisition of Chinook during Q2 for
$24.5 million, including the
assumption of net debt. Production of 3,500 boepd was acquired
along with proved plus probable (2P) reserves of 35.6 mmboe.
Tourmaline has reduced Chinook's operating costs by approximately
45% since the acquisition and will incorporate Chinook's assets
into the Company's long-term BC Montney growth plans.
- Tourmaline has completed several small transactions in the
Alberta Deep Basin complex during the first seven months of 2020
for a total cash consideration of $38.3
million. The acquisitions added in aggregate approximately
3,200 boepd of production, 32 mmboe of 2P reserves, 67 net sections
of land, a gas plant interest, and an extensive tier 1 drilling
inventory. These high netback assets are all in close proximity to
Tourmaline infrastructure and are expected to be accretive on a
consolidated free cash flow basis in 2021 based on current strip
pricing. Tourmaline plans to continue with its Deep Basin
consolidation efforts and expects further opportunities for Topaz
as a result in 2021, which will further improve already strong
operating and financial metrics.
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 351 mmcfpd hedged for
2H 2020 at a weighted-average fixed price of CAD $2.37/mcf; an average of 156 mmcfpd hedged at a
basis to NYMEX of $(0.12) USD/mcf;
and an average of 398 mmcfpd incremental volume exposed to export
markets, including Dawn, Chicago,
Ventura, Sumas, Malin and PGE.
- Natural gas fundamentals for 2021 are steadily improving.
Approximately 75% of Tourmaline's natural gas volumes are sold on
the Western half of the continent (PGE, Malin, Sumas, Station 2,
AECO) where 2021 gas supply diminishment is anticipated to be the
greatest.
- Based on the current forward natural gas price curve,
Tourmaline currently has 68 mmcfpd hedged for 2021 at a
weighted-average price of $3.00
USD/mmbtu at PGE hub.
- Tourmaline has diversification to the US and other hubs
amounting to 615 mmcfpd exit 2022 and 660 mmcfpd exit 2023.
EP UPDATE
- Tourmaline, as planned in the 2020 maintenance capital budget,
is currently operating the full 10 rig drilling fleet across
Alberta and NEBC.
- The second half EP program will drill approximately 79 new
wells and complete approximately 99 wells including 24 DUCs from
the 1H program. An estimated 42 new wells will be brought on
production in Q3 and an additional 57 wells during Q4, yielding
strong Q4 and 2020 exit production growth.
- Ongoing, Company-optimized technology developments have reduced
aggregate drill/complete costs by 5-10% over the past 12 months.
Highlights include continuously improving frac designs, water
management initiatives, monobore drilling, and broader application
of rotary steerable technology in all three core complexes.
- The Company is pleased to report that it received $3.2 million in funding from ERA (Emissions
Reduction Alberta), in support of its expanding diesel replacement
initiatives through new technology development across all
core-operated complexes. Tourmaline continues to make significant,
measurable reductions in emissions and has defined emission
reduction targets and timelines.
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 June 30, 2020, the Company had $1.1 billion in unutilized borrowing capacity on
its credit facilities. At June 30,
2020, the Company was in compliance with all of its
covenants under its credit facilities and has room under those
covenants to allow for further deterioration of commodity prices or
an increase in future borrowings to navigate through these
uncertain times, if required. 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 applicable 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 Q2 2020 Management's Discussion
and Analysis available on Tourmaline's website at
www.tourmalineoil.com and on SEDAR at www.sedar.com.
_____________________________________
|
(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 Q2 2020 Management's
Discussion and Analysis
|
|
|
(2)
|
"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 Q2 2020 Management's Discussion and
Analysis
|
|
|
(3)
|
Based on oil and
gas commodity strip pricing at July 17, 2020
|
|
|
(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 Q2
2020 Management's Discussion and Analysis
|
CORPORATE SUMMARY – SECOND QUARTER 2020
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
OPERATIONS
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
Natural gas
(mcf/d)
|
1,425,199
|
1,371,325
|
4%
|
1,449,940
|
1,405,081
|
3%
|
Crude oil, condensate
and NGL (bbl/d)
|
61,836
|
51,993
|
19%
|
62,203
|
52,775
|
18%
|
Oil equivalent
(boe/d)
|
299,369
|
280,547
|
7%
|
303,860
|
286,955
|
6%
|
Product
prices(1)
|
|
|
|
|
|
|
Natural gas
($/mcf)
|
$
|
2.41
|
$
|
2.07
|
16%
|
$
|
2.43
|
$
|
2.84
|
(14)%
|
Crude oil, condensate
and NGL ($/bbl)
|
$
|
23.24
|
$
|
39.08
|
(41)%
|
$
|
28.92
|
$
|
40.27
|
(28)%
|
Operating expenses
($/boe)
|
$
|
3.06
|
$
|
3.47
|
(12)%
|
$
|
3.01
|
$
|
3.48
|
(14)%
|
Transportation costs
($/boe)
|
$
|
4.60
|
$
|
3.67
|
25%
|
$
|
4.48
|
$
|
3.74
|
20%
|
Operating
netback(3)($/boe)
|
$
|
8.20
|
$
|
9.60
|
(15)%
|
$
|
9.51
|
$
|
13.19
|
(28)%
|
Cash general and
administrative expenses($/boe)(2)
|
$
|
0.63
|
$
|
0.49
|
29%
|
$
|
0.60
|
$
|
0.48
|
25%
|
FINANCIAL
($000, except share and per share)
|
|
|
|
|
|
|
Total revenue from
commodity sales and realized gains
|
443,553
|
443,359
|
-%
|
968,468
|
1,107,660
|
(13)%
|
Royalties
|
11,375
|
16,194
|
(30)%
|
28,304
|
47,817
|
(41)%
|
Cash
flow(3)
|
225,177
|
226,458
|
(1)%
|
508,895
|
645,700
|
(21)%
|
Cash flow per share
(diluted)(3)
|
$
|
0.83
|
$
|
0.83
|
-%
|
$
|
1.88
|
$
|
2.37
|
(21)%
|
Net earnings
(loss)
|
20,106
|
154,940
|
(87)%
|
(15,706)
|
242,650
|
(106)%
|
Net earnings (loss)
per share (diluted)
|
$
|
0.07
|
$
|
0.57
|
(88)%
|
$
|
(0.06)
|
$
|
0.89
|
(107)%
|
Capital expenditures
(net of dispositions)
|
140,032
|
198,179
|
(29)%
|
457,646
|
582,563
|
(21)%
|
Weighted average
shares outstanding (diluted)
|
|
|
|
270,858,022
|
272,046,678
|
-%
|
Net
debt(3)
|
|
|
|
(1,689,823)
|
(1,717,182)
|
(2)%
|
|
(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 Q2 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, July 30, 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 9977275.
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; planned storage withdrawals realizing higher
commodity prices; capital expenditure budgets for various periods
including 2020; estimated cash flow for various periods including
2020; estimated available liquidity and credit capacity; estimated
2021 exit net debt-to-cash flow; expectations for future natural
gas price increases; expectations for future opportunities for
Topaz in 2021 and benefits to 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 Deep Basin acquisitions ; the benefits to be derived
from expanding diesel replacement initiatives through new
technology development across all core-operated complexes; 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 and 2021 production estimates, commodity price
assumptions for natural gas (NYMEX (US) - $1.91/mcf and $2.62/mcf for 2020 and 2021, respectively, AECO -
$2.08/mcf and $2.43/mcf for 2020 and 2021, respectively), and
crude oil (WTI (US) - $38.98/bbl and
$42.33 for 2020 and 2021,
respectively) and an exchange rate assumption of $0.73 and 0.74 (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
2021 exit net debt-to-cash flow ratio as well as 2020 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) - $1.91/mcf and $2.62/mcf for 2020 and 2021, respectively, AECO -
$2.08/mcf and $2.43/mcf for 2020 and 2021, respectively), and
crude oil (WTI (US) - $38.98/bbl and
$42.33/bbl for 2020 and 2021,
respectively) and an exchange rate assumption of $0.73 and 0.74 (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 July 29,
2020 and are included to provide readers with an
understanding of Tourmaline's anticipated 2021 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 exit
rate production, Q2 2020, Q3 2020, Q4 2020 and 2021 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)
|
Q2 2020 Average Daily
Production
|
27,972
|
|
889,489
|
|
535,710
|
|
33,864
|
|
299,369
|
Q3 2020 Average Daily
Production
|
29,810
|
|
856,448
|
|
543,645
|
|
34,341
|
|
297,500
|
Q4 2020 Average Daily
Production
|
31,464
|
|
868,024
|
|
645,053
|
|
38,856
|
|
322,500
|
2020 Exit Rate
Production
|
31,708
|
|
874,753
|
|
650,054
|
|
39,158
|
|
325,000
|
2021 Average Daily
Production
|
28,792
|
|
879,658
|
|
635,980
|
|
38,602
|
|
320,000
|
Deep Basin acquired
Production
|
190
|
|
17,442
|
|
-
|
|
103
|
|
3,200
|
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 follows: Chinook 2P reserves of 35.6 mmboe as at December 31, 2018 by McDaniel & Associates
Consultants Ltd. and Deep Basin 2P reserves of 32.0 mmboe as at
December 31, 2019 by McDaniel &
Associates Consultants Ltd. 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.
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
|
DUC
|
drilled but
uncompleted wells
|
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 June 30, 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.