Tourmaline Oil Corp (Alberta) T.TOU

Alternate Symbol(s): TRMLF

Energy Oil & Gas E&P

Tourmaline Oil Corp. is a Canada-based crude oil and natural gas exploration and production company. The Company is focused on long-term growth through an aggressive exploration, development, production and acquisition program in the Western Canadian Sedimentary Basin. It operates in three basins, which include the Alberta Deep Basin, NEBC Montney Gas/Condensate and Peace River Triassic Oil. The Company has ownership interests in 16 natural gas plants in the Alberta Deep Basin. It owns and operates five natural gas processing facilities with an aggregate capacity of approximately 325 million cubic feet per day (MMcf/d) with related gas gathering systems and NGL handling infrastructure at NEBC Montney Gas basin. The Company owns and operates two oil batteries at the Peace River Triassic Oil basin, which handles approximately 48,000 barrels per day of fluids and the associated natural gas is delivered to a third party for processing.

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Tourmaline Oil Corp (Alberta)

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Post by TimeBuilderon Jul 28, 2021 6:49pm

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Post# 33618516

Q 2 Highlights

HIGHLIGHTS

Second quarter 2021 cash flow (1) of $1.89 per diluted share, record free cash flow (2) of $343.9 million , and average production of 410,339 boepd, exceeding the high end of expectations despite challenging operating conditions in June's heat wave.
The updated five-year plan, at current strip pricing (3) , delivers $1.8 billion of FCF in 2022 and $7.0 billion over the full five-year duration of the plan. The 2022 free cash flow equates to over $5.50 per basic share, a FCF yield of 16% (4) and reduces the 2022 total payout ratio (5) to 48%.
Received a credit rating upgrade from BBB to BBB (high), in July 2021 , by DBRS Morningstar.
The Company now expects to achieve year-end 2021 net debt (6) of approximately $1 billion (less than 0.4 times debt to cash flow, and less than one times annual FCF). As at July 15, 2021 , Tourmaline's Topaz equity ownership was valued at $939.7 million (7) , which essentially offsets the estimated year-end net debt.
With incremental volumes on the GTN Malin/PG&E system and the Company's recently announced Gulf Coast LNG pathway in 2023, Tourmaline will have 905 mmcfpd exposed to export markets on firm, long-term transport agreements at exit 2023. Tourmaline's largest export market, PG&E California, is currently trading at $5.50 /mmbtu (US).

PRODUCTION UPDATE

Second quarter 2021 average production was 410,339 boepd (414,387 boepd prior to storage injections in California and Dawn), a 37% increase over Q2 2020 (299,369 boepd).
The Company anticipates average third quarter production to range between 450,000 - 460,000 boepd.
The Company expects to reach the 500,000 boepd production level in Q2 2022 primarily through the completion of Gundy Phase 2, the Nig Creek expansion, and the ongoing Laprise development program.
2021 average production of approximately 430,000 – 445,000 boepd is anticipated, including all acquisitions and associated incremental capital spending on those assets.

FINANCIAL RESULTS

Second quarter 2021 cash flow was $570.2 million ( $1.89 per diluted share) compared to $225.2 million ( $0.83 per diluted share) in Q2 2020.
Second quarter 2021 after tax net earnings were $420.8 million ( $1.40 per diluted share) compared to $20.1 million ( $0.07 per diluted share) in second quarter of 2020.
The Company delivered free cash flow of $343.9 million on EP capital spending of $215.9 million in Q2 2021.
Full-year 2021 cash flow of $2.78 billion is now expected with estimated free cash flow of $1.47 billion .
The Company received a credit rating upgrade in July 2021 , following the close of the Black Swan acquisition, to BBB (high) from BBB, by DBRS Morningstar, for both the Issuer Rating and the Senior Unsecured Notes. According to DBRS Morningstar, the rating upgrades reflect the improvement in both the Company's business risk and financial risk profiles. The credit rating upgrade is expected to result in lower effective interest rates on Company debt which are already extremely low and in the top tier at 1.72% for the second quarter of 2021.