Canada’s Tourmaline surges in Q1
Tourmaline Oil, Canada’s largest natural gas producer, said May 5 it had record cash flow and free cash flow in Q1 2021, quarterly average production that was ahead of guidance and net earnings of C$247.8mn (US$202.1mn), reversing the year-ago loss of C$35.8mn.
Cash flow rose to C$629.3mn from C$283.7mn, while a record C$233.5mn of free cash flow was generated in Q1, which Tourmaline used to fund a quarterly dividend increase to C$0.16/share from C$0.14/share and reduce net debt by C$153.1mn in the quarter. At the end of the quarter, net debt was C$1.63bn, down 11% year-on-year and 8.6% lower than at the end of 2020.
Total production averaged a record 411,579 barrels of oil equivalent (boe)/day in Q1, a 33% increase from the same period a year ago. Natural gas production rose 30%, to 1.9bn ft3/day, while liquids production jumped 47%, to 91,971 b/day.
Production gains largely reflected Tourmaline’s active acquisition programme in 2020, when it acquired Polar Star Canadian Oil and Gas, Chinook Energy, Modern Resources and Jupiter Resources.
Realised gas prices averaged C$3.86/’000 ft3, a 58% increase over Q1 2020. The increase, Tourmaline said, reflected “significantly higher” benchmark prices across all the major hubs utilised by the company in its marketing programme.
“Natural gas fundamentals for 2021 and 2022 continue to improve,” Tourmaline said. “Approximately 55% of Tourmaline’s natural gas volumes are exposed to spot prices in markets on the western half of the continent (PG&E, Malin, Sumas, Stn 2, AECO) where fundamentals continue to be most supportive. Completion of the ongoing NGTL (Nova Gas Transmission Limited) buildout and Canadian west coast LNG are expected to further strengthen pricing at these hubs.”