Tourmaline to average 12-rig drilling fleet through 2018 as liquids growth accelerates

Image: Joey Podlubny/JWN

Tourmaline Oil Corp. will continue its push in 2018 to increase production of higher value liquids like oil, condensate and NGLs from Alberta and Northeast B.C. as growth exceeds expectations.

The company says its liquids production increased by 60 percent last year to current levels of about 48,000 bbls/d. By the end of 2018 that is expected to increase to up to 75,000 bbls/d, up significantly from Tourmaline’s mid-2017 forecast of 50,000 bbl/d in 2018 and 65,000 bbls/d in 2019.

"In the current pricing environment, the main driver of virtually all of the natural gas play economics is the associated natural gas liquids production," analysts with Peters & Co. wrote in a research note this week.

"The importance of producing natural gas liquids and the corresponding revenue will be a key theme over the next year, as the pricing for natural gas liquids has increased significantly, driven by crude oil prices."

Overall Tourmaline met its growth targets in 2017, exiting the year with average production of 263,000 boe/d, 30 percent higher than the previous year.

The company expects to be one of Canada’s top 10 liquids producers and number two natural gas producer by the end of 2019.

Right now Tourmaline has 14 drilling rigs operating and plans to drill approximately 67 new wells in the first quarter across its three complexes (Alberta Deep Basin, Northeast B.C. Montney, and Peace River High Charlie Lake/Montney oil). The company expects to run a 12-rig drilling fleet through for its full 2018 program.