Canada NewsWire
CALGARY, Nov. 8, 2017
CALGARY, Nov. 8, 2017 /CNW/ - Tourmaline Oil Corp. (TSX:TOU) ("Tourmaline" or the "Company") is pleased to release strong financial and operating results for the third quarter of 2017.
PRODUCTION UPDATE
EP UPDATE
Q3 FINANCIAL RESULTS
CAPITAL PROGRAM AND FINANCIAL OUTLOOK
2H 2017 Capital Program
2018 Program and Updated Five-Year Growth Plan
______________________________________ | |
(1) |
"Cash flow" is defined as cash provided by operations before changes in non-cash operating working capital. See "Non-GAAP Financial Measures" in the Company's Q3 2017 Management's Discussion and Analysis. |
(2) |
"Free cash flow" is defined as cash flow less capital expenditures. |
CORPORATE SUMMARY – THIRD QUARTER 2017
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
2017 |
2016 |
Change |
2017 |
2016 |
Change | ||||||||||
OPERATIONS |
|||||||||||||||
Production |
|||||||||||||||
Natural gas (mcf/d) |
1,187,462 |
895,256 |
33% |
1,192,748 |
969,089 |
23% | |||||||||
Crude oil and NGL (bbl/d) |
38,995 |
20,138 |
94% |
36,464 |
22,095 |
65% | |||||||||
Oil equivalent (boe/d) |
236,905 |
169,347 |
40% |
235,255 |
183,610 |
28% | |||||||||
Product prices(1) |
|||||||||||||||
Natural gas ($/mcf) |
$ |
2.52 |
$ |
2.80 |
(10)% |
$ |
2.95 |
$ |
2.28 |
29% | |||||
Crude oil and NGL ($/bbl) |
$ |
37.63 |
$ |
39.98 |
(6)% |
$ |
39.69 |
$ |
37.37 |
6% | |||||
Operating expenses ($/boe) |
$ |
3.00 |
$ |
3.26 |
(8)% |
$ |
3.24 |
$ |
3.46 |
(6)% | |||||
Transportation costs ($/boe) |
$ |
3.01 |
$ |
2.82 |
7% |
$ |
2.90 |
$ |
2.23 |
30% | |||||
Operating netback(3) ($/boe) |
$ |
12.27 |
$ |
12.69 |
(3)% |
$ |
14.06 |
$ |
10.28 |
37% | |||||
Cash general and administrative expenses ($/boe)(2) |
$ |
0.46 |
$ |
0.49 |
(6)% |
$ |
0.47 |
$ |
0.46 |
2% | |||||
FINANCIAL |
|||||||||||||||
($000, except share and per share) |
|||||||||||||||
Revenue |
410,591 |
304,480 |
35% |
1,356,505 |
830,711 |
63% | |||||||||
Royalties |
12,265 |
11,985 |
2% |
59,525 |
27,105 |
120% | |||||||||
Cash flow(3) |
251,327 |
185,531 |
35% |
857,531 |
479,259 |
79% | |||||||||
Cash flow per share (diluted)(3) |
$ |
0.93 |
$ |
0.79 |
18% |
$ |
3.18 |
$ |
2.09 |
52% | |||||
Net earnings (loss) |
50,580 |
24,738 |
104% |
258,694 |
(91,592) |
382% | |||||||||
Net earnings (loss) per share (diluted) |
$ |
0.19 |
$ |
0.10 |
90% |
$ |
0.96 |
$ |
(0.40) |
340% | |||||
Capital expenditures |
465,466 |
224,448 |
107% |
1,054,383 |
688,315 |
53% | |||||||||
Weighted average shares outstanding (diluted) |
269,439,702 |
229,507,106 |
17% | ||||||||||||
Net debt(3) |
(1,772,158) |
(1,389,401) |
28% |
(1) Product prices include realized gains and losses on financial instrument contracts. |
(2) Excluding interest and financing charges. |
(3) See "Non-GAAP Financial Measures" in the Company's Q3 2017 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, November 9, 2017 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 91799506.
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 growth for various periods; the commencement of the payment of dividends and the timing and amount thereof; drilling inventory or locations; cash flow; cash flow per share; free cash flow; net debt to cash flow levels; production levels supported by certain of the Company's reserves and drilling inventory; capital spending; cost reduction initiatives; projected operating and drilling costs; the timing for facility expansions and facility start-up dates; 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; 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 successful completion of acquisitions and dispositions; the state of the economy and the exploration and production business; 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 will be 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 statements, 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 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; 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 year-end 2017 and 2018 net debt to cash flow levels, 2017 and 2018 capital spending, 2017 cash flow, 2017 cash flow per share and 2018 free cash flow, which are based on, among other things, the various assumptions as to production levels, capital expenditures, and other assumptions disclosed in this news release and including Tourmaline's estimated 2017 average production of 240,000-250,000 boepd, 2018 average production of 270,000-280,000 boepd and commodity price assumptions for natural gas (AECO - $2.25/mcf for 2017 and AECO - $2.50/mcf for 2018), and crude oil (WTI (US) - $51.00/bbl for 2017 and WTI (US) - $52.00/bbl for 2018) and an exchange rate assumption of $0.78 (US/CAD) for 2017 and $0.80 (US/CAD) for 2018. To the extent such estimates constitute a financial outlook, they were approved by management and the Board of Directors of Tourmaline on November 8, 2017 and are included to provide readers with an understanding of Tourmaline's anticipated net debt to cash flow levels, capital spending 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.
INITIAL PRODUCTION (IP) RATES
Any references in this news release to IP rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter and are not necessarily indicative of long-term performance or ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Such rates are based on field estimates and may be based on limited data available at this time.
ESTIMATED DRILLING INVENTORY
Certain information in this news release is based on assumptions regarding the Company's drilling locations, which are based on four categories: (i) proved undeveloped locations; (ii) probable undeveloped locations; (iii) unbooked locations; and (iv) an aggregate total of (i), (ii) and (iii). Of the Company's 15,016 undrilled locations, 906 are proved undeveloped locations, 20 are proved non-producing locations, 893 are probable undeveloped locations, nil are probable non-producing and 13,197 are unbooked. Proved producing wells, proved undeveloped locations, proved non-producing locations, probable undeveloped locations and probable non-producing locations are booked and derived from the Company's most recent independent reserves evaluation as prepared by GLJ Petroleum Consultants Ltd. and Deloitte LLP as of December 31, 2016 and account for drilling locations that have associated proved and/or probable reserves, as applicable.
Unbooked locations are internal estimates based on the Company's prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and prospective). Unbooked locations have been identified by management as an estimation of the Company's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and natural gas reserves, resources or production. The drilling locations on which the Company will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and natural gas reserves, resources or production.
PACESETTER WELLS
Tourmaline uses the term "pacesetter" well in its description of its drilling results at the Gundy property. A pacesetter well in this context refers to the fastest well drilled by Tourmaline in the area, measured from spud to rig release.
GENERAL
See also "Forward-Looking Statements", "Boe Conversions" and "Non-GAAP Financial Measures" in the Company's Q3 2017 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 |
FCP |
final circulating pressure |
gj |
gigajoule |
gjs/d |
gigajoules per day |
mbbls |
thousand barrels |
mmbbls |
million barrels |
mboe |
thousand barrels of oil equivalent |
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 |
mstboe |
thousand stock tank barrels of oil equivalent |
NGL or NGLs |
natural gas liquids |
MANAGEMENT'S DISCUSSION AND ANALYSIS AND INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
To view Tourmaline's Management's Discussion and Analysis and Interim Condensed Consolidated Financial Statements for the periods ended September 30, 2017 and 2016, please refer to the SEDAR (www.sedar.com) as well as 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.
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