TOURMALINE DELIVERS RECORD PRODUCTION, INCREASES 2P RESERVES TO 5.5 BILLION BOE, ANNOUNCES A 43% INCREASE TO THE BASE DIVIDEND AND DECLARES A SPECIAL DIVIDEND
Canada NewsWire
CALGARY, AB, March 5, 2025
CALGARY, AB, March 5, 2025 /CNW/ - Tourmaline Oil Corp. (TSX: TOU) ("Tourmaline" or the "Company") is pleased to release financial and operating results for the full-year and fourth quarter of 2024.
HIGHLIGHTS
-- Full-year 2024 cash flow(1) ("CF") was $3.2 billion ($8.93 per diluted
share(2)). Fourth quarter 2024 CF was $850.3 million ($2.27 per diluted
share).
-- 2025 forecast free cash flow(3) ("FCF") of $1.4 billion ($3.62 per
diluted share(4)) based on current strip pricing(5), up from previous
guidance of $1.1 billion(6). At current strip pricing, the Company
forecasts it will generate 2025 CF of $4.3 billion ($11.53 per diluted
share).
-- Full-year 2024 net earnings were $1.3 billion ($3.51 per diluted share).
-- The Company announces a quarterly base dividend increase of 43% to $0.50
per share effective Q1 2025 and a special dividend of $0.35/share.
Tourmaline believes that with continued improvements in realized pricing,
the Company is well positioned to increase returns to shareholders in
2025 relative to 2024, in addition to pursuing a growth capital budget.
-- First quarter 2025 production range of 630,000-635,000 boepd is currently
anticipated.
-- Proved developed producing ("PDP") reserves(7) increased 29% in 2024
after accounting for production.
-- Proved plus probable ("2P") reserves increased 14% to 5.5 billion boe in
2024 after accounting for production.
-- Exit 2024 net debt(8) was $1.7 billion (0.4 times 2025 forecast cash
flow). The Company intends to deleverage throughout 2025 and remains
committed to a long-term net debt target of $1.5 billion (which is
approximately 0.30 to 0.35 times 2025 forecast net debt to cash flow).
PRODUCTION UPDATE
-- Fourth quarter 2024 average production was 605,413 boepd, up 9% from Q4
2023. Full-year 2024 average production of 579,173 boepd was up 11% over
full-year 2023 average production of 520,366 boepd.
-- 2024 average liquids production (oil, condensate, NGLs) of 138,584 bbls/d
was up 17% over 2023 liquids production of 118,808 bbls/d.
-- In addition to being Canada's largest and most active natural gas
producer, Tourmaline is the largest NGL producer and the third largest
condensate producer in Canada(9). Condensate and NGL production volumes
are expected to increase significantly over the next 5 years with the
Company's North Montney, West Doe-Groundbirch, South Montney, and North
Deep Basin growth projects. These projects are not fully captured in the
Company's current five-year EP plan but will be as the timelines are
solidified.
-- The 2025 forecast production range of 635,000 to 665,000 boepd remains
unchanged; the Company expects to finalize the second half 2025 EP
capital program during the second quarter.
-- First quarter 2025 production of 630,000 to 635,000 boepd is currently
anticipated. The Company has approximately 51 wells to bring
on-production in March which is expected to result in a first quarter
exit in excess of 640,000 boepd.
FINANCIAL HIGHLIGHTS
-- Improving strip prices have increased full-year forecast 2025 CF to $4.3
billion from previous guidance of $4.1 billion and full-year forecast
2025 FCF to $1.4 billion, from previous guidance of $1.1 billion, as
disclosed in November 2024.
-- Full-year 2024 CF was $3.2 billion ($8.93 per diluted share) and
full-year 2024 FCF was $1.0 billion ($2.75 per diluted share).
-- Fourth quarter 2024 CF was $850.3 million ($2.27 per diluted share on Q4
2024 average production of 605,413 boepd). Q4 2024 FCF was $96.7 million
($0.26 per diluted share).
-- Full-year 2024 earnings were $1.3 billion ($3.51 per diluted share).
-- Given the strong growth in the base business over the past three years,
through a combination of high margin, organic growth and accretive
acquisitions, Tourmaline's Board of Directors has elected to increase the
base quarterly dividend from $0.35 to $0.50 per share, a 43% increase,
effective Q1 2025.
-- Tourmaline's Board of Directors has also declared a special dividend of
$0.35 per share to be paid on March 25, 2025 to shareholders of record on
March 13, 2025. Tourmaline intends to pay special dividends in all four
quarters of 2025, inclusive of this Q1 2025 special dividend. Tourmaline
believes that with continued improvements in realized pricing, the
Company is well positioned to increase returns to shareholders in 2025
relative to 2024, in addition to pursuing a growth capital budget.
-- Tourmaline paid $3.32 per share in combined base and special dividends in
2024, a 5.3% trailing yield based on an average 2024 share price of
$62.37.
-- Full-year 2024 capital expenditures were $1.9 billion, including Q4 2024
capital expenditures of $460.2 million.
-- Exit 2024 net debt was $1.7 billion, approaching the Company's long-term
net debt target of $1.5 billion (which is approximately 0.30 to 0.35
times 2025 forecast net debt to cash flow). This does not include the
value of the Company's Topaz shares, which was $911.5 million based on a
December 31, 2024 closing Topaz share price of $27.85. Maintaining
balance sheet strength puts the Company in a strong position to deal with
any new macro challenges and to take advantage of opportunities that
might arise.
2024 RESERVES
-- Year-end 2024 PDP reserves of 1.35 billion boe were up 29% after
accounting for 2024 annual production of 212 million boe. Total proved
("TP") reserves of 2.91 billion boe were up 19% after accounting for 2024
production. 2P reserves of 5.50 billion boe were up 14% after accounting
for 2024 production.
-- For the second consecutive year, the EP program had an increased emphasis
on conversions to PDP rather than 2P reserve growth compared to previous
years.
-- After 16 years of operations, Tourmaline now has 24.84 TCF of economic 2P
natural gas reserves and 1.36 billion barrels of 2P oil, condensate and
NGL reserves, all of which are pipeline-connected to markets across North
America. At year-end 2024, 84% of the current estimated drilling
inventory was not booked in the 2024 year-end reserve report.
-- Year-end 2024 oil, condensate, and NGL 2P reserves of 1.36 billion
barrels represent the second largest conventional liquids reserve base in
Canada, based on public disclosure.
-- Tourmaline has only booked 3,972 gross locations of a total drilling
inventory of 25,462 gross locations (16% of the overall inventory) to
achieve year-end 2024 2P reserves of 5.50 billion boe.
-- Tourmaline replaced 330% of its 2024 annual production of 212.0
million boe with 2P additions of 698.8 million boe, including 2024
production.
-- Tourmaline's 2024 PDP finding and development ("F&D") costs were $8.45
per boe including changes in future development capital ("FDC"), yielding
a PDP reserve recycle ratio(10)(11) of 1.8 times.
-- TP FD&A costs in 2024 were $9.44 per boe, including changes in FDCs.
3-year TP FD&A costs are $10.23 per boe, including changes in FDC.
-- 2P FD&A costs in 2024 were $7.28 per boe, including changes in FDC,
yielding a 2P recycle ratio of 2.1 times. 3-year 2P FD&A costs were $9.03
per boe, including changes in FDC. The 2024 2P FD&A costs continue to
reflect the increased focus on conversions to PDP. Approximately 81% of
the 256.5 net wells rig released in 2024 were conversions from
undeveloped reserves to developed reserves. Delays in acquiring new
surface disturbance permits in HV1 areas in NEBC limited the ability to
drill delineation pads and book 2P reserves. The Company expects this
situation to improve in 2025.
-- Tourmaline's 2P reserve value (before taxes) equates to $114.20 per
diluted share (after tax reserve value of $87.61 per diluted share) using
the January 1, 2025 engineering price deck at a 10% discount rate. TP
reserve value (before tax) is $75.17 per diluted share and $59.18 per
diluted share (after tax). PDP reserve value is $44.42 per diluted share
(before tax) and $37.12 per diluted share (after tax).
2025 CAPITAL PROGRAM
-- The full-year 2025 EP capital budget range remains unchanged at $2.60 to
$2.85 billion. The Company expects steadily improving natural gas prices
in 2025. Should the price recovery materialize later in the year, the
capital program will be sequenced accordingly.
-- Facility and pipeline expenditures of $300.0 million remain in the total
2025 EP capital budget, including the ongoing NEBC North Montney Phase 1
infrastructure buildout, electrification pre-builds for the 2026-2027
West Doe and Groundbirch gas plant projects, and certain long-lead time
facility pre-orders.
-- The Company expects to finalize the sequencing of the entire future NEBC
infrastructure buildout during 2025 (expected to include up to four new
gas processing facilities in aggregate). The Groundbirch development is
now expected to consist of two separate 200 mmcfpd deep-cut plants, to be
installed in the 2027 to 2029 time frame.
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