Tourmaline adds to Montney position with C$1.3bn acquisition
Tourmaline Oil, Canada’s largest natural gas producer, will get larger still with the C$1.3bn (US$950mn) acquisition of Crew Energy it announced August 12.
Tourmaline will complete the acquisition by issuing some 18.778mn Tourmaline shares and assuming Crew’s net debt of about C$240mn. Crew shareholders will receive about 0.115 Tourmaline shares for each Crew share held, suggesting an implied Crew share price of some C$6.69/share, which is a 72% premium to the August 9 closing price.
The transaction, which requires judicial, regulatory and Crew shareholder approval, is expected to close on or about October 1, 2024.
“We are excited about this transformative transaction with Tourmaline, which reflects the successful culmination of Crew’s focused efforts to delineate and grow our high-quality Montney asset base, while providing Crew shareholders continued exposure to the assets, participation in a dividend and the ability to benefit from future growth and value creation,” Crew CEO Dale Shwed said. “As Canada’s leading natural gas producer and a well-capitalised, investment-grade organisation, Tourmaline has a proven track record of developing large-scale and impactful resource projects which will now include Crew’s assets in Groundbirch and the Greater Septimus area, with the financial capacity to do so on an accelerated timeframe.”
Tourmaline said the acquisition pairs well with its ongoing consolidation in northeast BC and will facilitate its evolution into “Canada’s largest and most efficient” Montney producer.
“Tourmaline already is the largest Alberta Deep Basin producer; the BC/AB Montney and the Alberta Deep Basin are widely regarded as Canada’s two premier natural gas plays,” it said.
The Crew assets are located immediately adjacent to Tourmaline existing South Montney complex and bring some 473.2mn barrels of oil equivalent proved plus probable reserves and more than 700 Tier 1 drilling locations.
The assets produce about 129.6mn ft3/day of shale gas and 8,400 barrels/day of crude oil and natural gas liquids. In Q2 this year, Tourmaline reported natural gas production of 2.54bn ft3/day.