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Tourmaline Releases Enhanced Five-Year Development Plan Focusing on Significant Free Cash Flow Acceleration

CALGARY, May 29, 2019 /CNW/ – Tourmaline Oil Corp. (TSX:TOU) (“Tourmaline” or the “Company”) is pleased to provide details of an enhanced five-year development plan.

Tourmaline Oil Corp. (CNW Group/Tourmaline Oil Corp.)


  • Aggregate free cash flow increases by approximately $840 million to a total of approximately $3.05 billion over the five years.  Annual production and cash flow(2) are essentially unchanged from the previous plan.
  • Growth capital directed primarily to Gundy BC Montney development.  Tourmaline will proceed with the Gundy Phase 2 deep cut expansion to 400 mmcfpd with a Q4 2021 projected completion.  The incremental gas volumes will be delivered into what the Company believes will be a period of improved natural gas prices.
  • Alberta Deep Basin and Peace River High complexes will progress to maintenance capital mode with no incremental facility investments in the plan.
  • Capital efficiencies improve overall given reduced facility expenditures; improved operating netbacks(3) and annual production decline is reduced in the new plan.
  • The Gundy Phase 2 deep cut expansion is expected to increase Tourmaline’s total liquid volumes to approximately 85,000 bpd by Q4 2021 (oil, condensate, NGLs).
  • An aggregate $430.0 million of future facility expenditures have been removed from the previous five-year plan.


  • The combination of high-deliverability liquids-rich natural gas (50-100 bbls/mmcf of condensate and NGLs), the continually-reduced drill/complete capital costs, and the very low operating costs related to the sweet natural gas composition (<$3.00/boe) render Gundy to be one of the most profitable Montney sub-plays in the entire Basin.
  • The $150 million Phase 2 deep cut facility expansion will be spread over 2020/21, with approximately $40 million to be expended in 2020.
  • Tourmaline has sufficient future gas and liquid egress to transport the incremental volumes associated with the facility expansion.


  • The contiguous Tourmaline interconnected Alberta Deep Basin Cretaceous gas complex is effectively the largest current gas field in Alberta.
  • The Tourmaline Alberta Deep Basin asset achieved a production record of 205,000 boepd in March of 2019.  The Company plans to manage complex production in the 180,000-185,000 boepd range in 2H 2019/2020.
  • The Company believes it is prudent to defer significant gas volume growth from the Deep Basin until there is a sustained improvement in prevailing natural gas prices.
  • Tourmaline will maintain a 15-20 well DUC inventory in the Alberta Deep Basin to allow for rapid response to shorter cycle natural gas price improvements.


  • The Peace River High Alberta Triassic complex will be maintained in the 20,000-25,000 boepd (gross) production range, essentially keeping the existing infrastructure at capacity.
  • The complex can generate significant annual free cash flow on estimated annual maintenance capital of approximately $75 million.
  • The Peace River High is currently at maximum facility capacity.  The Company has no current plans to fund a large incremental infrastructure build-out at this time.



“Free cash flow” is defined as cash flow less total net capital expenditures.  Total net capital expenditures is defined as total capital spending before acquisitions and non-core dispositions.  Free cash flow is prior to dividend payments.  See “Non-GAAP Financial Measures” in this news release and the Company’s Q1 2019 Management’s Discussion and Analysis.


“Cash flow” is defined as cash provided by operations before changes in non-cash operating working capital.  See “Non-GAAP Financial Measures” in this news release and the Company’s Q1 2019 Management’s Discussion and Analysis.


“See “Non-GAAP Financial Measures” in this news release and the Company’s Q1 2019 Management’s Discussion and Analysis.

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