Tourmaline earnings up on strong hedging strategy
Tourmaline Oil, Canada’s largest independent natural gas producer, said November 6 its net earnings were 29% higher in Q3 2024 compared to a year ago, and attributed the gain to strong realised natural gas prices and its multi-year market diversification strategy.
Net earnings for the quarter were 29% higher than a year ago, at C$355.2mn compared to C$274.7mn, even though cash flow was off 16%, at C$741.9mn, and commodity sales from production were down 29%, to C$935.4mn.
Natural gas production in Q3 averaged 2.55bn ft3/day, up from 2.32bn ft3/day a year earlier, while oil and liquids production was 13% higher, at 131,634 barrels per day. Total production averaged 557,365 barrels of oil equivalent (boe)/day, up 11% from Q3 2023.
Tourmaline’s average realised natural gas price in Q3 2024 was C$3.19/’000 ft3, down from C$4.56/’000 ft3 in Q3 2023, but significantly higher than the AECO 5A benchmark price in Alberta of C$0.70/’000 ft3 in the third quarter this year.
For the remainder of this year, Tourmaline has an average of 1.01bn ft3/day of production hedged at a weighted average of C$4.01/’000 ft3 and another 1.08bn ft3/day unhedged and exposed to export markets, with 60% of that exposed to premium export markets on the US Gulf Coast, western North America and the Japan Korea Marker.
For 2025, 947mn ft3/day is hedged at a weighted average price of C$4.58/’000 ft3, with 1.04bn ft3/day unhedged and exposed to export markets.