CALGARY, Jan. 25, 2012 /CNW/ - Tourmaline Oil Corp. (TSX: TOU)
("Tourmaline" or the "Company") is pleased to provide the following
production, capital spending and EP activity updates.
Current production has reached 47,000 boepd, achieving the original full
year 2012 average production target ahead of schedule. Ongoing tie-ins
during the next week are expected to increase production levels to
50,000 boepd or greater. Current oil, condensate and natural gas
liquids production is approximately 6,500 boepd, and is expected to
reach the 10,000 boepd level by the fourth quarter of 2012. Driven by
continued strong drilling results and field execution, full year 2012
average production guidance has been increased to 50,000 boepd.
Tourmaline's year over year 2012 vs 2011 average production growth is
now well in excess of 50%.
2012 Capital Program
Given the current natural gas price environment, the Company is reducing
planned 2012 capital spending to $400 million, down from the originally
planned $490 million. First quarter 2012 capital spending of $150.0
million is currently anticipated. Full year 2012 forecast cash flow is
$429.6 million, down from original 2012 guidance of $440.7 million.
Lower natural gas prices, partially offset by increased production
levels and a higher proportion of oil and liquids, are responsible for
the modestly reduced cash flow.
Tourmaline has maintained a strong balance sheet and expects ongoing net
debt to cash flow ratios to remain in the six to eight month range.
Tourmaline's ongoing drilling and completion results continue to
significantly exceed type curve expectation in all operated areas.
Recent production test1 highlights from the December-January period include:
Kakwa 13-25 Wilrich horizontal tested liquids rich gas at average rates
of 22.8 mmcfpd at a flowing pressure of 18.5 MPa.
Sunrise b4-25 and c4-25 tested liquids rich Montney gas at average rates
of 24.2 and 28.9 mmcfpd, respectively.
The Spirit River 15-4 Charlie Lake horizontal tested oil at average
rates of 650 bopd with 1.0 mmcfpd of associated gas.
Anderson 8-6 vertical tested liquids rich gas from the
Notikewin-Falher-Wilrich section at average rates of 10.1 mmcfpd at a
flowing pressure of 3.3 MPa.
Wild River 13-25 Wilrich horizontal tested liquids rich gas at rates of
13.8 mmcfpd at a flowing pressure of 5.9 MPa.
1 Three day tests or longer. Production tests are not necessarily
indicative of long-term performance or ultimate recovery.
The Company is currently operating nine drilling rigs; the operated
fleet will be reduced to six rigs by early March 2012. Tourmaline is
not planning to operate drilling rigs during break-up in the second
quarter this year; drilling operations will resume in July. Tourmaline
will move a second rig into Spirit River in February accelerating
development of the expanding horizontal light oil opportunity there.
With the start-up of the Musreau plant and expanded Sunrise gas plant,
the majority of the ongoing infrastructure construction plan is
complete; hence, facility expenditures will be significantly lower in
2012. Tourmaline now has processing capacity of 275-300 mmcfpd in the
Alberta Deep Basin and 75 mmcfpd in the Dawson-Sunrise BC complex.
This owned and operated gas plant and pipeline network allows the
Company to realize steadily lower operating costs and improving
Tourmaline's updated corporate presentation is available on its website
About Tourmaline Oil Corp.
Tourmaline is a Canadian intermediate crude oil and natural gas
exploration and production company focused on long-term growth through
an aggressive exploration, development, production and acquisition
program in the Western Canadian Sedimentary Basin.
This news release includes references to financial measures commonly
used in the oil and gas industry such as "cash flow" and "net debt",
which do not have any standardized meaning prescribed by International
Financial Reporting Standards ("IFRS"). Management believes that in addition to net income, cash flow and
net debt are useful supplemental measures as they are a measure of a
company's ability to generate the cash necessary to repay debt or fund
future growth through capital investment. However, investors are
cautioned that these measures should not be construed as an alternative
to net income determined in accordance with IFRS as an indication of
Tourmaline performance. The method of calculating these measures may
differ from other companies and, accordingly, they may not be
comparable to similar measures used by other companies. For these
purposes, "cash flow" is defined as cash provided by operations before
changes in non-cash working capital and "net debt" is defined as
long-term bank debt plus working capital (adjusted for the fair value
of financial instruments and future taxes).
This press release contains forward-looking information within the
meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends" and
similar expressions are intended to identify forward-looking
information. More particularly and without limitation, this press
release contains forward looking information concerning Tourmaline's
anticipated petroleum and natural gas production, production growth and
production mix, capital spending levels and the timing thereof,
anticipated cash flow levels and debt to cash flow ratios, the number
of drilling rigs to be operated, facility expenditure levels, operating
costs and production efficiencies as well as Tourmaline's future
drilling prospects and plans, including the number and type of wells to
be drilled in core areas, business strategy, future development and
growth opportunities, prospects and asset base. The forward-looking
information is based on certain key expectations and assumptions made
by Tourmaline, including expectations and assumptions concerning:
prevailing commodity prices and currency exchange rates; applicable
royalty rates and tax laws; future well production rates and reserve
volumes; the timing of receipt of regulatory approvals; the performance
of existing wells and recently drilled and tested wells; the success
obtained in drilling new wells; the sufficiency of budgeted capital
expenditures in carrying out planned activities; and the availability
and cost of labour and services. Undue reliance should not be placed on
the forward-looking information because Tourmaline can give no
assurances that they will prove to be correct. Since forward-looking
information addresses future events and conditions, by its very nature
it involves inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to: the risks
associated with the oil and gas industry in general such as operational
risks in development, exploration and production; delays or changes in
plans with respect to exploration or development projects or capital
expenditures; the uncertainty of estimates and projections relating to
reserves, production, costs and expenses; health, safety and
environmental risks; commodity price and currency exchange rate
fluctuations; marketing and transportation; loss of markets;
environmental risks; competition; incorrect assessment of the value of
acquisitions; failure to realize the anticipated benefits of
acquisitions; ability to access sufficient capital from internal and
external sources; failure to obtain required regulatory and other
approvals; and changes in legislation, including but not limited to tax
laws, royalties and environmental regulations. Readers are cautioned
that the foregoing list of factors is not exhaustive.
Also included in this press release are estimates of Tourmaline's 2012
cash flow, which are based on the various assumptions as to production
levels, capital expenditures, and other assumptions disclosed in this
press release and including commodity price assumptions (Gas: AECO -
$3.25/mcf and Oil: WTI - $100 US) as well as exchange rate assumptions of $0.98 (US/CDN). To the extent such estimates constitute a
financial outlook, they were approved by management of Tourmaline on
January 20, 2012 and are included to provide readers with an
understanding of Tourmaline's anticipated cash flow based on the
capital expenditures and other assumptions described herein and readers
are cautioned that the information may not be appropriate for other
Additional information on these and other factors that could affect
Tourmaline, or its operations or financial results, can be found in
Tourmaline's most recent Annual Information Form and Annual and
Quarterly Management's Discussion and Analysis on file with applicable
securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com) or Tourmaline's website (www.tourmalineoil.com).
The forward-looking information contained in this press release is made
as of the date hereof and Tourmaline undertakes no obligation to update
publicly or revise any forward-looking information, whether as a result
of new information, future events or otherwise, unless expressly
required by applicable securities laws.
Disclosure provided in respect of barrels of oil equivalent (boe) may be
misleading, particularly if used in isolation. A boe conversion ratio
of 6 mcf:1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. As the value ratio between natural gas and
crude oil based on the current prices of natural gas and crude oil is
significantly different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of value.
In this press release: boepd means boe per day; mcf means thousand cubic
feet, bbl means barrel; bopd means barrels per day; mmcf means million
cubic feet; mmcfpd means million cubic feet per day; mboe means
thousand boes; and MPa means megapascals.
SOURCE Tourmaline Oil Corporation
For further information:
Tourmaline Oil Corp.
Chairman, President and Chief Executive Officer
(403) 266-5992; firstname.lastname@example.org OR
Tourmaline Oil Corp.
Vice President, Finance and Chief Financial Officer
(403) 767-3587; email@example.com OR
Tourmaline Oil Corp.
Secretary and General Counsel
(403) 767-3593; firstname.lastname@example.org OR
Tourmaline Oil Corp.
Suite 3700, 250 - 6th Avenue S.W.
Calgary, Alberta T2P 3H7
Phone: (403) 266-5992
Facsimile: (403) 266-5952