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.

TSX:TOU - Post by User

Tourmaline Oil Corp (Alberta)

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon Mar 03, 2022 8:42am

161 Views

Post# 34478329

RBC

Current and upside scenario targets are $60 and $68. GLTA

Tourmaline Oil Corp. Q4/21 - Strength in Numbers

Our constructive outlook remains intact following a roughly in-line quarter and another year of solid reserve additions (+12%/share 2P), with 2022 positioned to generate $3 bn in FCF (18% FCF yield). Tourmaline remains on our RBC Global Energy Best Ideas list - and we reiterate our Outperform rating.

Key points:

• Q4/21 volumes and CFPS - roughly in line. TOU reported Q4/21 production volumes of 485,078 boe/d (RBC: 485,000 boe/d; Street: 485,620 boe/d) driving CFPS of $2.88 that was slightly below our estimate of $3.03 (Street: $2.96). E&P capital expenditures of $422 million (incl. capitalized G&A) compared to our estimate of $411 million (Street: $402 million) ; variances are highlighted in Exhibit 1 and include slightly lower realizations, higher royalties and op cost including transport.

2022 outlook - reiterated. The 2022 EP capital program remains unchanged at $1,125 billion, and is expected to drive annual volumes of 500 - 510 mboe/d (unchanged). Based on our RBC price deck this outlook is set to generate roughly $3 billion in FCF at our price deck in 2022 (18% FCF yield) and we model in two additional dividend increases plus ~$600 million in share buybacks.
Operations – on solid footing. Key operational highlights are summarized in Exhibit 1 and include: (1) Gundy and Aitken facility expansions now on stream and processing at full capacity; (2) Conroy remains in early stages but could be on stream in 2025/2026; and (3) several new pad results including Charlie Lake (2,500 boe/d, 3 wells) and Smoky (65 mmcf/d, 2 wells). Overall operations are in good shape with capital efficiencies expected below $7,000/boe/d this year.
2021 Year-end 2P Reserves up 28% (+12%/share). TOU’s 2P reserve book increased by 28% (or +12%/share) to 4,243 mmboe (2020: 3,314 mmboe), owing in a large part to the acquisitions of Black Swan and Saguaro (+877 mmboe total acquisitions). Importantly, PDP reserves were added at a FD&A cost of $7.27/boe, which when combined with field netbacks of $18.19/boe yields a very respectable recycle ratio of 2.5x. Reserve details are noted on Exhibit 3 of this note.
Updating estimates - and highlighting 2023 JKM volumes. After adjusting for the quarter, our CFPS estimates increase by 1% in 2022 and 2023. Balance sheet metrics remain in very good shape, in our view, with D/CF mapping to 0.1x at 2022YE. Of note given recent global events, we highlight the company's 150 mmcf/d exposure to international (JKM) LNG pricing starting in 2023 - which we model as contributing roughly $1 bn to 2023 marketing revenues (roughly 13% of 2023 revenue).
Quarterly Conference Call. March 3rd at 9:00 a.m. MST (11:00 a.m. EST) | 1-888-664-6383| Confirmation # 68524395.