CIBCEQUITY RESEARCH
November 4, 2021 Earnings Update
TOURMALINE OIL CORP.
Q3/21 Results: Ahead Of Expectations And Free Cash Flow Outlook Remains Stout
Our Conclusion
Tourmaline posted a better-than-expected quarter, with operating metrics that beat our estimates and consensus. With Q4/21 shaping up to be one of the strongest quarters for natural gas pricing in years, we expect the company to exit the year on a strong note. While Q4/21 cash flows are effectively spoken for with TOU’s special dividend announcement in September, we expect TOU is likely to include another special dividend for Q1/22. At current strip, we estimate 2022 FCF per share will exceed $8.50/share, the majority of which is likely to be returned to shareholders.
Our model adjustments are relatively minor with this update, and we
therefore maintain our Outperformer rating and $60/share price target.