Le Lézard
Classified in: Mining industry, Oil industry, Business, Covid-19 virus
Subject: DIV

TOURMALINE INCREASES 2023 CASH FLOW GUIDANCE AND PROVIDES A PRODUCTION AND MARKETING UPDATE


CALGARY, AB, Sept. 12, 2022 /CNW/ - Tourmaline Oil Corp. (TSX: TOU) ("Tourmaline" or the "Company") is pleased to provide a production and marketing update.

2023 OUTLOOK
PRODUCTION UPDATE

_______________________________

  1. Based on oil and gas commodity strip pricing at August 31, 2022.
  2. This news release contains certain specified financial measures consisting of non-GAAP financial measures. See "Non-GAAP and Other Financial Measures" in    this news release for information regarding the following non-GAAP financial measure used in this news release: "cash flow".  Since this specified financial measure does not have a standardized meaning under International Financial Reporting Standards ("GAAP"), securities regulations require that, among other things, it be identified, defined, qualified and, where required, reconciled with their nearest GAAP measure and compared to the prior period. See "Non-GAAP and Other Financial Measures" in this news release and in the Company's most recently filed Management's Discussion and Analysis (the "Q2 MD&A"), which information is incorporated by reference into this news release, for further information on the composition of and, where required, reconciliation of this measure.
  3. "Cash flow" is a non-GAAP financial measure defined as cash flow from operating activities adjusted for the change in non-cash working capital (deficit).  

 

MARKETING UPDATE
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: forecast 2023 cash flow; forecast 2023, Q3 2022, Q4 2022 and full year 2022 average production levels; the amount of natural gas planned for export at various periods; the planned amount of volumes to be injected into storage and the timing for the withdraw of such volumes; and anticipated future commodity prices including expectations for natural gas prices in the winter months.  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; 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 and the benefits to be derived therefrom; 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 is 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.

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 natural 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.

In addition, wars (including the war in Ukraine), hostilities, civil insurrections, pandemics, epidemics or outbreaks of an infectious disease in Canada or worldwide, including COVID-19 or other illnesses could have an adverse impact on the Company's results, business, financial condition or liquidity.  Ongoing military actions between Russia and Ukraine have the potential to threaten the supply of oil and gas from the region. The long-term impacts of the actions between these nations remains uncertain.  If the pandemic is further prolonged, including through subsequent waves, or if additional variants of COVID-19 emerge which are more transmissible or cause more severe disease, or if other diseases emerge with similar effects, the adverse impact on the economy could worsen. It remains uncertain how the macroeconomic environment, and societal and business norms will be impacted following the COVID-19 pandemic. In addition, in 2022, industry has been impacted by significant cost inflation, rising interest rates, labour shortages and supply constraints, and the Company expects these pressures will continue through the balance of the year and into next year.  The Company will continue to actively monitor inflationary pressures and supply chain constraints and their impact on the Company's business.

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.

BOE EQUIVALENCY

In this news release, production and reserves information may be presented on a "barrel of oil equivalent" or "BOE" basis. BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  In addition, as the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

FINANCIAL OUTLOOKS

Also included in this news release are estimates of Tourmaline's 2023 cash flow, which is based on, among other things, the various assumptions as to production levels, capital expenditures, annual cash flows and other assumptions disclosed in this news release and including Tourmaline's estimated 2023 average daily production of 545,000 boepd, 2023 commodity price assumptions for natural gas ($6.60/mcf NYMEX US, $6.06/mcf AECO, $56.27/mcf JKM US), crude oil ($82.42/bbl WTI US) and an exchange rate assumption of $0.76 (US/CAD). Further, readers are cautioned that such estimate is provided for illustration only and are based on budgets and forecasts that have not been finalized or approved by the Board of Directors and are subject to a variety of additional factors and contingencies including prior years' results. To the extent such estimate constitutes a financial outlook, it was approved by management and the Board of Directors of Tourmaline on September 12, 2022 and is included to provide readers with an understanding of Tourmaline's anticipated 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.

NON-GAAP AND OTHER FINANCIAL MEASURES

This news release contains the term cash flow which is considered "non-GAAP financial measures", This term does not have a standardized meaning prescribed by GAAP. Accordingly, the Company's use of this term may not be comparable to similarly defined measures presented by other companies. Investors are cautioned that this measure should not be construed as an alternative to net income determined in accordance with GAAP and these measures should not be considered to be more meaningful than GAAP measures in evaluating the Company's performance.

Non-GAAP Financial Measures
Cash Flow

Management uses the term "cash flow" for its own performance measure and to provide shareholders and potential investors with a measurement of the Company's efficiency and its ability to generate the cash necessary to fund its future growth expenditures, to repay debt or to pay dividends. The most directly comparable GAAP measure for cash flow is cash flow from operating activities.  A summary of the reconciliation of cash flow from operating activities to cash flow for the most recently filed quarter, is set forth below:


Three Months Ended
June 30,

Six Months Ended
June 30,

(000s)

2022

2021

2022

2021

Cash flow from operating activities (per GAAP)

$1,351,481

$    494,673

$ 2,465,130

$ 1,244,802

Change in non-cash working capital

2,445

75,559

(35,228)

(45,245)

Cash flow

$1,353,926

$    570,232

$ 2,429,902

$ 1,199,557

 

OIL AND GAS METRICS

This news release contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this document to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the Company's future performance and future performance may not compare to the Company's performance in previous periods and therefore such metrics should not be unduly relied upon.

SUPPLEMENTAL INFORMATION REGARDING PRODUCT TYPES

This news release includes references to current, Q3 2022, Q4 2022, and full years 2022 and 2023 average daily production.  The following table is intended to provide supplemental information about the product type composition for each of the production figures that are provided in this news release:


Light and Medium
Crude Oil(1)

Conventional
Natural Gas

Shale Natural Gas

Natural Gas
Liquids(1)

Oil Equivalent
Total


Company Gross
(Bbls)

Company Gross
(Mcf)

Company Gross
(Mcf)

Company Gross
(Bbls)

Company Gross
(Boe)

Q3 2022 Average Daily
Production
...............

43,600

1,224,900

993,300

69,200

482,500

Q4 2022 Average Daily
Production..................

47,600

1,346,800

1,080,200

75,400

527,500

2022 Average Daily
Production
...............

44,800

1,296,600

1,050,000

71,100

507,000

2023 Average Daily
Production
...............

47,900

1,349,200

1,162,400

78,500

545,000







(1) For the purposes of this disclosure, condensate has been combined with Light and Medium Crude Oil as the associated revenues and certain costs of condensate are similar to Light and Medium Crude Oil. Accordingly, NGLs in this disclosure exclude condensate.


 

GENERAL

See also "Forward-Looking Statements", and "Non-GAAP Financial Measures" in the most recently filed Management's Discussion and Analysis.

CERTAIN DEFINITIONS:

1H

2H

bbl

bbls/day

bbl/mmcf

bcf

bcfe    

bpd or bbl/d

boe    

boepd or boe/d

bopd or bbl/d

CCUS    

DUC 

EP    

gj    

gjs/d    

JKM  

mbbls

mmbbls    

mboe      

mboepd    

mcf  

mcfpd or mcf/d     

mcfe    

mmboe    

mmbtu    

mmbtu/d

mmcf    

mmcfpd or mmcf/d

MPa    

mstb    

natural gas

NCIB  

NGL or NGLs 

tcf

 

first half

second half

barrel

barrels per day

barrels per million cubic feet

billion cubic feet

billion cubic feet equivalent

barrels per day

barrel of oil equivalent

barrel of oil equivalent per day

barrel of oil, condensate or liquids per day

carbon capture, usage and storage

drilled but uncompleted wells

exploration and production

gigajoule

gigajoules per day

Japan Korea Marker

thousand barrels

million barrels

thousand barrels of oil equivalent

thousand barrels of oil equivalent per day

thousand cubic feet

thousand cubic feet per day

thousand cubic feet equivalent

million barrels of oil equivalent

million British thermal units

million British thermal units per day

million cubic feet

million cubic feet per day

megapascal

thousand stock tank barrels

conventional natural gas and shale gas

normal course issuer bid

natural gas liquids

trillion cubic feet

 

ABOUT TOURMALINE OIL CORP.

Tourmaline is Canada's largest and most active natural gas producer dedicated to producing the lowest-emission and lowest-cost natural gas in North America. We are an investment grade exploration and production company providing strong and predictable operating and financial performance through the development of our three core areas in the Western Canadian Sedimentary Basin. With our existing large reserve base, decades-long drilling inventory, relentless focus on execution and cost management, and industry-leading environmental performance, we are excited to provide shareholders an excellent return on capital, and an attractive source of income through our base dividend and surplus free cash flow distribution strategies.

SOURCE Tourmaline Oil Corp.


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News published on 12 september 2022 at 08:00 and distributed by: