Canada’s Tourmaline Oil reports Q3 production gains
Tourmaline Oil, Canada’s largest natural gas producer, said November 1 it increased corporate production by 4% in Q3 2023, with natural gas output up 3% and liquids production 7% higher.
But weaker commodity prices, higher operating expenses and increased transportation costs all contributed to a sharp drop in net earnings for the period, to C$274.7mn (US$199.2mn) from C$2.1bn in the same period a year ago.
Cash flow fell to C$878.5mn from C$1.05bn, which Tourmaline generated free cash flow of $332.3mn, which underpinned a special dividend of C$1/share paid on November 1. Free cash flow for 2023 is expected to reach C$1.9bn, down from C$3.5bn in 2022.
Tourmaline’s total production averaged 502,524 barrels of oil equivalent (boe)/day in Q3 2023, up from 481,897 boe/day in Q3 2022. Natural gas production increased to 2.32bn ft3/day from 2.24bn ft3/day, while crude oil, condensate and natural gas liquids output rose to 116,138 barrels/day from 108,457 barrels/day.
Tourmaline’s average realised natural gas price in Q3 2023, at C$4.56/’000 ft3, was substantially higher than the AECO 5A benchmark price of C$2.64/’000 ft3 but 15% lower than the Q3 2022 average of C$5.37/’000 ft3.
Although Tourmaline has hedged about 910mn ft3/day of production, it has about 809mn ft3/day of forecast Q4 production unhedged and exposed to export markets, with 68% of that total exposed to premium markets on the US Gulf Coast, Western US, JKM and Sumas.
Tourmaline’s exposure to Western US markets will increase by 82mn ft3/day in November, and by the end of this year, its total natural gas exports are expected to average 1.08bn ft3/day.
Tourmaline also said it has joined the NeeStaNan venture as an industry supporter. Led by several First Nations in Alberta, Saskatchewan and Manitoba, NeeStaNan is a project to develop a utility corridor consisting of rail lines and pipelines to tidewater on Hudson’s Bay in Manitoba. It also envisions an electrified LNG facility, Tourmaline said.