CALGARY, AB–(Marketwired – February 22, 2016) – Tourmaline Oil Corp. (TSX: TOU) (“Tourmaline” or the “Company”) enjoyed another record year of material, profitable reserve additions with ever-improving efficiencies.
HIGHLIGHTS
- Proved plus probable reserves (“2P”) increased to 1,108.3 mmboe during 2015, a 30% increase over 2014 reserves of 855.8 mmboe and a 36% increase (22% per diluted share) before taking into account annual production of 56.4 mmboe. Total proved (“TP”) reserves increased 48% and proved developed producing (“PDP”) reserves increased by 80% over 2014 before taking into account annual production of 56.4 mmboe.
- Tourmaline now has 2P reserves of 5.7 TCF of natural gas and 159.3 mmbbls of oil, condensate and liquids at January 1, 2016.
- 2P reserve replacement of approximately 550% for 2015 based on 2P reserve additions of 308.9 mmboe before taking into account 2015 annual production of 56.4 mmboe.
- 2015 2P finding, development and acquisition (“FD&A”) cost of $5.89/boe including changes in future development capital (“FDC”), 2015 TP FD&A cost of $8.43/boe including FDC and 2015 PDP FD&A cost of $13.42/boe, all are the lowest in the Company’s seven year history.
- In 2015, Tourmaline’s E&P capital program of approximately $1.45 billion generated over 90,000 boe/d of new production resulting in capital efficiency of approximately $15,500 boe/d, an improvement of 26% over 2014 E&P capital efficiency of approximately $20,900 boe/d.
- After seven years, Tourmaline now has 1.1 billion boe of independently recognized 2P reserves at year end 2015, essentially all of which will be serviced by Company-owned infrastructure. The Company has also produced 162.6 mmboe during the first seven years of operation.
- A 2P reserve addition of 308.9 mmboe in 2015 was generated even though 93.1 net wells (108 gross) of the 181.3 net wells (221 gross) rig released in 2015 were locations already included in the 2014 report.
- 2015 2P recycle ratio of 2.6 times based on 2P FD&A of $5.89/boe (including FDC) and 2015 estimated cash flow per boe of $15.09.
- 2015 2P reserve value (PV10 before tax) increase of $580.0 million over 2014 despite dramatically lower commodity prices. The estimated 2P reserve NAV (PV10 before tax) at year end 2015 was $37.26/per diluted share.
- Positive technical revisions of 42.5 mmboe were reported in 2015 representing the fourth year in a row of positive technical revisions.
- Year end 2015 PDP reserves of 263.2 mmboe as a percentage of 2P reserves in 2015 improved to 23.8% from 20.8% in 2014.
- Fourth quarter 2015 production averaged 179,610 boepd, a 37% increase over the fourth quarter of 2014. Full year 2015 average production of 154,403 boepd represented a 37% increase (29% per diluted share) over 2014 average production of 112,929 boepd.
- Q1 2016 average production remains on target, ranging between 190,000-200,000 boepd, having recently reached production as high as 204,000 boepd.
- Tourmaline now produces over 1.0 bcf/day of natural gas and has recognized future reserves of over one billion boe.
- The Company spudded its first well February 9, 2009, and has subsequently drilled a total of 722 wells in its three, expansive core areas. The future drilling inventory is expanding more rapidly than the Company is drilling on an annual basis.
- The Company has only booked 999 net locations (1,196 gross) in the 2015 reserve report of a well-defined future development drilling inventory of 10,591 gross locations. The infrastructure skeleton, which is now complete in all three core areas, essentially reaches all of the future locations.
- Tourmaline has maintained a very strong balance sheet and financial position throughout its seven year history, and intends to maintain a top quartile debt to cash flow ratio.
- Q4 2015 capital expenditures of $325.5 million were 23% lower than Q3 2015 with significant further reductions for the first of half of 2016 with an E&P budget currently set at $350 million.
2015 RESERVE SUMMARY
The following tables summarize the Company’s gross reserves defined as the working interest share of reserves prior to the deduction of interest owned by others (burdens). Royalty interest reserves are not included in Company gross reserves. Company net reserves are defined as the working net carried, and royalty interest reserves after deduction of all applicable burdens.
Reserves and Future Net Revenue Data (Forecast Prices and Costs)
| Summary of Oil and Gas Reserves and | ||||||||||||||||||||
| Net Present Values of Future Net Revenue | ||||||||||||||||||||
| as of December 31, 2015 | ||||||||||||||||||||
| Forecast Prices and Costs (1) |
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| Light & Medium Crude Oil |
Conventional Natural Gas | Shale Natural Gas (2) |
Natural Gas Liquids | Total Oil Equivalent | ||||||||||||||||
| Reserves Category | Company Gross (Mbbls) |
Company Net (Mbbls) |
Company Gross (MMcf) |
Company Net (MMcf) |
Company Gross (MMcf) |
Company Net (MMcf) |
Company Gross (Mbbls) |
Company Net (Mbbls) |
Company Gross (Mboe) |
Company Net (Mboe) |
||||||||||
| Proved Developed Producing | 6,799 | 5,858 | 968,183 | 891,976 | 412,736 | 381,537 | 26,275 | 20,857 | 263,227 | 238,967 | ||||||||||
| Proved Developed Non-Producing | 201 | 178 | 52,860 | 48,113 | 70,163 | 65,789 | 3,262 | 2,749 | 23,967 | 21,911 | ||||||||||
| Proved Undeveloped | 14,037 | 11,746 | 1,176,582 | 1,101,882 | 649,202 | 587,093 | 38,531 | 33,030 | 356,866 | 326,272 | ||||||||||
| Total Proved Reserves | 21,037 | 17,783 | 2,197,624 | 2,041,971 | 1,132,100 | 1,034,420 | 68,068 | 56,636 | 644,059 | 587,151 | ||||||||||
| Total Probable Reserves | 21,270 | 17,682 | 1,557,770 | 1,444,852 | 806,566 | 712,250 | 48,894 | 39,429 | 464,219 | 416,628 | ||||||||||
| Total Proved Plus Probable Reserves | 42,306 | 35,465 | 3,755,394 | 3,486,824 | 1,938,666 | 1,746,670 | 116,962 | 96,065 | 1,108,279 | 1,003,779 | ||||||||||
| Reserves Category | Net Present Values Of Future Net Revenue ($000s) | |||||||||||||||||||||||
| Before Future Income Taxes Discounted at (%/year) |
After Future Income Taxes Discounted at (3) (%/year) |
Unit Value Before Income Tax Discounted at 10%/year |
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| 0 | 5 | 10 | 15 | 20 | 0 | 5 | 10 | 15 | 20 | ($/Mcfe) | ($/Boe) | |||||||||||||
| Proved Developed Producing | 4,456,875 | 3,455,951 | 2,824,461 | 2,397,253 | 2,091,396 | 4,456,875 | 3,455,951 | 2,824,461 | 2,397,253 | 2,091,396 | 1.97 | 11.82 | ||||||||||||
| Proved Developed Non-Producing | 421,765 | 304,524 | 235,340 | 190,322 | 159,011 | 421,765 | 304,524 | 235,340 | 190,322 | 159,011 | 1.79 | 10.74 | ||||||||||||
| Proved Undeveloped | 5,126,177 | 3,192,880 | 2,100,691 | 1,429,915 | 990,620 | 3,883,262 | 2,449,482 | 1,623,165 | 1,105,974 | 761,394 | 1.07 | 6.44 | ||||||||||||
| Total Proved Reserves | 10,004,817 | 6,953,355 | 5,160,492 | 4,017,490 | 3,241,027 | 8,761,901 | 6,209,958 | 4,682,966 | 3,693,549 | 3,011,800 | 1.46 | 8.79 | ||||||||||||
| Total Probable Reserves | 9,703,591 | 5,121,938 | 3,086,513 | 2,033,597 | 1,425,243 | 7,134,504 | 3,729,770 | 2,218,997 | 1,441,214 | 995,195 | 1.23 | 7.41 | ||||||||||||
| Total Proved Plus Probable Reserves | 19,708,408 | 12,075,293 | 8,247,005 | 6,051,088 | 4,666,270 | 15,896,406 | 9,939,727 | 6,901,964 | 5,134,763 | 4,006,995 | 1.37 | 8.22 | ||||||||||||
Notes:
- Tables may not add due to rounding.
- Shale Natural Gas is now required to be presented separately from Conventional Natural Gas as its own product type pursuant to National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). While the Tourmaline Montney reserves do not strictly fit the definition of “shale gas” as defined in NI 51-101 because the natural gas is not “primarily adsorbed” as stated within the definition, the Montney reserves have been included as shale gas for purposes of this disclosure. In previous years, Montney gas has been classified as product type “Natural Gas”.
- The after-tax net present value of the Company’s oil and gas properties reflects the tax burden on the properties on a stand-alone basis. It does not consider the corporate tax situation, or tax planning. It does not provide an estimate of the value at the level of the Company which may be significantly different. The Company’s financial statements and the management’s discussion and analysis should be consulted for information at the level of the Company.
| Total Future Net Revenue ($000s) | ||||||||||||||||
| (Undiscounted) | ||||||||||||||||
| as of December 31, 2015 | ||||||||||||||||
| Forecast Prices and Costs | ||||||||||||||||
| Reserves Category | Revenue | Royalties | Operating Costs |
Capital Development Costs | Abandonment and Reclamation Costs |
Future Net Revenue Before Income Taxes |
Income Taxes |
Future Net Revenue After Income Taxes (1) |
||||||||
| Proved Producing | 7,468,158 | 763,039 | 2,101,406 | – | 146,838 | 4,456,875 | – | 4,456,875 | ||||||||
| Proved Developed Non-Producing | 721,317 | 74,507 | 167,923 | 49,846 | 7,277 | 421,765 | – | 421,765 | ||||||||
| Proved Undeveloped | 10,979,420 | 1,117,691 | 2,019,465 | 2,634,212 | 81,874 | 5,126,177 | 1,242,915 | 3,883,262 | ||||||||
| Total Proved | 19,168,895 | 1,955,238 | 4,288,795 | 2,684,058 | 235,988 | 10,004,817 | 1,242,915 | 8,761,901 | ||||||||
| Total Probable | 17,418,562 | 2,067,187 | 3,714,388 | 1,839,137 | 94,259 | 9,703,591 | 2,569,087 | 7,134,504 | ||||||||
| Total Proved Plus Probable | 36,587,457 | 4,022,425 | 8,003,183 | 4,523,195 | 330,247 | 19,708,408 | 3,812,002 | 15,896,406 | ||||||||
Note:
- The after-tax net present value of the Company’s oil and gas properties reflects the tax burden on the properties on a stand-alone basis. It does not consider the corporate tax situation, or tax planning. It does not provide an estimate of the value at the level of the Company, which may be significantly different. The Company’s financial statements and the management’s discussion and analysis should be consulted for information at the level of the Company.
| Summary of Pricing and Inflation Rate Assumptions | ||||||||||||||||||
| Forecast Prices and Costs (1) |
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| Year | Inflation(2)% | Crude Oil and Natural Gas Liquids Pricing | ||||||||||||||||
| Bank of Canada Average Noon Exchange Rate $US/$Cdn(3) |
NYMEX WTI Near Month Futures Contract Crude Oil at Cushing Oklahoma | Light, Sweet Crude Oil (40 API, 0.3%S) at Edmonton Then Current $Cdn/Bbl |
Alberta Natural Gas Liquids (Then Current Dollars) |
|||||||||||||||
| Constant 2016 $ $US/Bbl |
Then Current $US/ Bbl |
Spec Ethane $Cdn/Bbl |
Edmonton Propane $Cdn/Bbl |
Edmonton Butane $Cdn/Bbl |
Edmonton Pentanes Plus $Cdn/Bbl |
|||||||||||||
| 2016 | 0.7 | 0.7350 | 44.67 | 44.67 | 55.89 | 8.35 | 9.76 | 38.73 | 60.16 | |||||||||
| 2017 | 1.3 | 0.7667 | 54.47 | 55.20 | 66.47 | 10.24 | 15.88 | 46.91 | 70.95 | |||||||||
| 2018 | 1.8 | 0.8017 | 61.51 | 63.47 | 73.21 | 11.35 | 24.09 | 52.58 | 78.05 | |||||||||
| 2019 | 1.8 | 0.8167 | 67.57 | 71.00 | 81.35 | 12.41 | 30.49 | 59.42 | 86.58 | |||||||||
| 2020 | 1.8 | 0.8333 | 69.87 | 74.77 | 84.57 | 13.03 | 33.69 | 62.81 | 90.00 | |||||||||
| 2021 | 1.8 | 0.8417 | 71.80 | 78.24 | 87.88 | 13.53 | 34.95 | 65.25 | 93.46 | |||||||||
| 2022 | 1.8 | 0.8417 | 73.67 | 81.75 | 92.01 | 14.10 | 36.45 | 68.33 | 97.79 | |||||||||
| 2023 | 1.8 | 0.8417 | 75.55 | 85.37 | 96.24 | 14.73 | 38.06 | 71.46 | 102.23 | |||||||||
| 2024 | 1.8 | 0.8417 | 75.88 | 87.32 | 98.17 | 15.17 | 38.79 | 72.90 | 104.29 | |||||||||
| 2025 | 1.8 | 0.8417 | 75.87 | 88.90 | 99.94 | 15.49 | 39.50 | 74.22 | 106.16 | |||||||||
| 2026+ | 1.8 | 0.8417 | 75.90 | 1.8%/yr | 1.8%/yr | 1.8%/yr | 1.8%/yr | 1.8%/yr | 1.8%/yr | |||||||||
| Year | Natural Gas and Sulphur Pricing | |||||||||||||||||||||
| Henry Hub Nymex Near Month Contract |
Midwest Price @ Chicago Then Current $US/ MMbtu |
AECO/NIT Spot Then Current $Cdn/ MMbtu |
Alberta Plant Gate | Sumas Spot $US/ MMbtu |
British Columbia | |||||||||||||||||
| Spot | ARP $/ MMbtu |
Alliance $/MMbtu |
Westcoast Station 2 $/MMbtu |
Spot Plant Gate $MMbtu |
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| Constant 2015 $ $US/ MMbtu |
Then Current $US/MMbtu |
Constant 2016 $ $/MMbtu |
Then Current $MMbtu |
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| 2016 | 2.45 | 2.45 | 2.54 | 2.57 | 2.35 | 2.35 | 2.35 | 2.00 | 2.35 | 1.91 | 1.73 | |||||||||||
| 2017 | 2.98 | 3.02 | 3.11 | 3.14 | 2.88 | 2.92 | 2.92 | 2.55 | 2.90 | 2.70 | 2.52 | |||||||||||
| 2018 | 3.29 | 3.40 | 3.49 | 3.47 | 3.15 | 3.25 | 3.25 | 2.89 | 3.27 | 3.14 | 2.95 | |||||||||||
| 2019 | 3.55 | 3.73 | 3.83 | 3.80 | 3.40 | 3.57 | 3.57 | 3.22 | 3.60 | 3.51 | 3.32 | |||||||||||
| 2020 | 3.69 | 3.95 | 4.05 | 3.99 | 3.51 | 3.76 | 3.76 | 3.40 | 3.83 | 3.70 | 3.51 | |||||||||||
| 2021 | 3.78 | 4.12 | 4.22 | 4.13 | 3.58 | 3.90 | 3.90 | 3.57 | 4.01 | 3.84 | 3.65 | |||||||||||
| 2022 | 3.86 | 4.28 | 4.37 | 4.30 | 3.66 | 4.06 | 4.06 | 3.74 | 4.17 | 3.98 | 3.79 | |||||||||||
| 2023 | 3.94 | 4.45 | 4.54 | 4.48 | 3.75 | 4.23 | 4.23 | 3.94 | 4.34 | 4.16 | 3.97 | |||||||||||
| 2024 | 3.97 | 4.57 | 4.67 | 4.60 | 3.79 | 4.36 | 4.36 | 4.08 | 4.47 | 4.28 | 4.09 | |||||||||||
| 2025 | 3.98 | 4.66 | 4.75 | 4.70 | 3.79 | 4.45 | 4.45 | 4.18 | 4.56 | 4.38 | 4.19 | |||||||||||
| 2026+ | 3.98 | +1.8%/yr | +1.8%/yr | +1.8%/yr | 3.81 | +1.8%/yr | +1.8%/yr | +1.8%/yr | +1.8%/yr | +1.8%/yr | +1.8%/yr | |||||||||||
Notes:
- Crude oil and natural gas benchmark reference pricing, inflation and exchange rates utilized by GLJ in the GLJ Reserve Report and Deloitte in the Deloitte Reserve Report, were an average of forecast prices and costs published by GLJ, Sproule Associates Ltd. and McDaniel & Associates Consultants Ltd. as at December 31, 2015 (each of which is available on their respective websites at www.gljpc.com, www.sproule.com and www.mcdan.com).
- Inflation rates used for forecasting prices and costs.
- Exchange rates used to generate the benchmark reference prices in this table.
Reserves Performance Ratios
The following tables highlight Tourmaline’s reserves, F&D and FD&A costs as well as the associated recycle ratios. Throughout the year, Tourmaline experienced significant improvements in overall efficiencies resulting in 2P FD&A cost reductions, including FDC, of 43% to $5.89 per boe from $10.40 per boe in 2014.
Reserves, Capital Expenditures and Cash Flow(1)(2)
| As at December 31, | 2015 | 2014 | 2013 | |||
Reserves (Mboe) |
||||||
| Proved Producing | 263,227 | 177,811 | 122,327 | |||
| Total Proved | 644,059 | 472,296 | 316,461 | |||
| Proved Plus Probable | 1,108,279 | 855,794 | 590,099 | |||
Capital Expenditures ($ millions) |
||||||
| Exploration and Development | 1,451 | 2,031 | 1,167 | |||
| Net Acquisitions (Dispositions) | 451 | (250) | 149 | |||
| Total Capital Expenditures | 1,902 | 1,782 | 1,315 | |||
Cash Flow ($/boe) |
||||||
| Cash Flow | 15.09 | 22.54 | 19.29 | |||
| Cash Flow – Three Year Average | 18.47 | 19.93 | 18.32 | |||
Notes:
- Cash flow is defined as cash provided by operations before changes in non-cash operating working capital. See “Non-GAAP Financial Measures” below and in the Company’s most recently filed Management’s Discussion and Analysis for further discussion.
- 2015 Financial numbers are unaudited.
Finding and Development Costs
| Finding and Development Costs, Excluding FDC | 2015 | 2014 | 2013 | 2013-2015 Avg. |
||||
Total Proved |
||||||||
| Reserve Additions (MMboe) | 187.1 | 190.1 | 85.3 | |||||
| F&D Costs ($/boe) | 7.76 | 10.68 | 13.68 | 10.05 | ||||
| F&D Recycle Ratio(1) | 1.9 | 2.1 | 1.4 | 1.8 | ||||
Total Proved Plus Probable |
||||||||
| Reserve Additions (MMboe) | 260.2 | 300.7 | 158.0 | |||||
| F&D Costs ($/boe) | 5.58 | 6.75 | 7.38 | 6.47 | ||||
| F&D Recycle Ratio(1) | 2.7 | 3.3 | 2.6 | 2.9 | ||||
| Finding and Development Costs, Including FDC |
2015 | 2014 | 2013 | 2013-2015 Avg. |
||||
Total Proved |
||||||||
| Change in FDC ($ millions) | (42.7) | 935.8 | 388.7 | |||||
| Reserve Additions (MMboe) | 187.1 | 190.1 | 85.3 | |||||
| F&D Costs ($/boe) | 7.53 | 15.61 | 18.24 | 12.82 | ||||
| F&D Recycle Ratio(1) | 2.0 | 1.4 | 1.1 | 1.4 | ||||
Total Proved Plus Probable |
||||||||
| Change in FDC ($ millions) | (190.5) | 1,430.3 | 878.1 | |||||
| Reserve Additions (MMboe) | 260.2 | 300.7 | 158.0 | |||||
| F&D Costs ($/boe) | 4.84 | 11.51 | 12.94 | 9.41 | ||||
| F&D Recycle Ratio(1) | 3.1 | 2.0 | 1.5 | 2.0 | ||||
| Finding, Development and Acquisition Costs | ||||||||
| Finding, Development and Acquisition Costs, Excluding FDC |
2015 | 2014 | 2013 | 2013-2015 Avg. | ||||
Total Proved |
||||||||
| Reserve Additions (MMboe) | 228.1 | 197.1 | 94.6 | |||||
| FD&A Costs ($/boe) | 8.34 | 9.04 | 13.91 | 9.62 | ||||
| FD&A Recycle Ratio(1) | 1.8 | 2.5 | 1.4 | 1.9 | ||||
Total Proved Plus Probable |
||||||||
| Reserve Additions (MMboe) | 308.9 | 306.9 | 179.4 | |||||
| FD&A Costs ($/boe) | 6.16 | 5.80 | 7.33 | 6.29 | ||||
| FD&A Recycle Ratio(1) | 2.5 | 3.9 | 2.6 | 2.9 | ||||
| Finding, Development and Acquisition Costs, Including FDC |
2015 | 2014 | 2013 | 2013-2015 Avg. | ||||
Total Proved |
||||||||
| Change in FDC ($ millions) | 21.7 | 919.3 | 341.1 | |||||
| Reserve Additions (MMboe) | 228.1 | 197.1 | 94.6 | |||||
| FD&A Costs ($/boe) | 8.43 | 13.71 | 17.52 | 12.09 | ||||
| FD&A Recycle Ratio(1) | 1.8 | 1.6 | 1.1 | 1.5 | ||||
Total Proved Plus Probable |
||||||||
| Change in FDC ($ millions) | (84.1) | 1,410.8 | 808.3 | |||||
| Reserve Additions (MMboe) | 308.9 | 306.9 | 179.4 | |||||
| FD&A Costs ($/boe) | 5.89 | 10.40 | 11.84 | 8.97 | ||||
| FD&A Recycle Ratio(1) | 2.6 | 2.2 | 1.6 | 2.1 | ||||
Note:
- The recycle ratio is calculated by dividing the cash flow per boe by the appropriate F&D or FD&A costs related to the reserve additions for that year.