​Tourmaline Oil swings 1,185% increase in net earnings in 2017

Image: Joey Podlubny/JWN

Tourmaline Oil Corp.’s 2017 results are strikingly different from its results for 2016.

The company issued its annual financials this week, including a massive 1,185 percent increase in its net earnings to $346.77 million in 2017, compared to a net loss of $31.97 million in 2016.

Like many other players Tourmaline, which has operations in the Montney and Deep Basin oil and gas plays, is increasingly targeting higher value “liquids,” or oil, condensate and NGLs and natural gas prices remain weak.

“Over the past two years, Tourmaline has increased its focus on the liquids opportunities throughout the exploration and production portfolio, growing overall liquids production by over 100 percent in the past 18 months to 50,000 bbls/d currently,” the company said.

Even so, Tourmaline remains highly weighted to natural gas, which represented 84 percent of its total volumes in 2017 compared to 87 percent in 2016.

The company produced an average of 242,325 boe/d in 2017, up from 185,672 boe/d in 2016. The increase contributed to higher cash flow of $1.21 billion in 2017 compared to $731.80 million in 2016.

Contributing to Tourmaline’s strong results in 2017 were its gas diversification and hedging strategies, which the company said provided a 42 percent price premium over the AECO benchmark.

Among the stars in Tourmaline’s asset portfolio are liquids-rich Montney wells at Sunrise-Dawson in northeast B.C., an area where Tourmaline has accelerated drilling and supporting infrastructure.

On average it costs $2.86 million to drill, complete and equip these 1,500-meter laterals, Tourmaline said, which yields an average 197 percent internal rate of return.

“These wells are amongst the most profitable subsurface targets in the Western Canadian Sedimentary Basin,” the company said.

Tourmaline has 18 of these Montney wells shut-in awaiting facility capacity. The company is working on a sweetening and debottlenecking facility project at Sunrise-Dawson that will add 3,500 bbls/d of condensate production during the fourth quarter of 2018.

Overall the company said it has approximately 37 wells to tie-in and bring on-production during March and early April 2018.

Current production is 270,000 to 275,000 boe/d and Tourmaline expects it to average 270,000 to 280,000 boe/d for the full year 2018.

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