Tourmaline in C$1.45bn deal for Deep Basin producer
Tourmaline Oil, Canada’s largest natural gas producer, said October 16 it had entered into a definitive agreement to acquire all of the shares of Deep Basin producer Bonavista Energy for C$1.45bn (US$1.06bn) in cash and Tourmaline shares.
The deal, subject to customary regulatory and stock exchange approvals, is expected to close in the second half of November 2023.
Half of the transaction price ($725mn) will be paid in Tourmaline shares, with the other half paid in cash, less Bonavista’s net debt.
The acquisition, Tourmaline said, represents a continuation of its ongoing consolidation strategy in the Deep Basin, complementing its long-term organic growth plan and adding decades of drilling inventory.
“The Bonavista assets are a natural extension of Tourmaline’s existing operations in the Deep Basin where the company is already the largest producer,” Tourmaline said.
The acquisition includes low-decline, long-life production of more than 60,000 barrels of oil equivalent (boe)/day and is expected to generate net operating income of about C$450mn/year through 2024 at current strip pricing.
In Q1 2023, Bonavista produced about 245.5mn ft3/day of natural gas from its two core areas in the Deep Basin, while Tourmaline’s Q2 2023 natural gas production averaged 2.31bn ft3/day from the Deep Basin and the BC Montney.
The deal also includes 459mn boe of 2P reserves, 656.7 net horizontal drilling locations and 1.2mn net acres of land rights.
Alongside the Bonavista acquisition, Tourmaline said it would increase its quarterly base dividend to C$1.12/share from C$1.04/share, effective with the Q4 2023 dividend and pay a Q4 2023 special dividend of C$1/share.