- Tourmaline is pleased to announce that it has completed the sale of a series of primarily undeveloped assets across all three core-operated areas during the first quarter of 2018. Total proceeds of approximately $72.0 million were received with no impact on current production. Total disposed proved-plus-probable reserves were 2.2 mmboe valued at $18.6 million (net present value at December 31, 2017 discounted at 10% – before tax). The undeveloped assets were not scheduled for development within the next five years.
- Proceeds from the dispositions will be utilized to initially reduce existing corporate debt by $72.0 million.
- The Company has elected to accelerate a Peace River High facility project into 2H 2018 that will allow for incremental oil production in the Lower Montney and Charlie Lake. The $20.0 million (net) facility project will add approximately 3,000 bpd of oil production (net) and 5.0 mmcfpd of associated gas (net) prior to year-end 2018. Tourmaline will also drill an additional six Lower Montney horizontal oil wells during the second half of 2018, for an estimated net capital cost of $15.0 million. The accelerated Peace River High facility project and associated drilling program is anticipated to further increase the Company’s liquids production profile for 2019 up to an average production of 63,000 bpd from 60,000 bpd currently forecasted with liquids production anticipated to reach 75,000 bpd by Q4 2019. During the second quarter, the Company will decide if this project will be funded via a reallocation from the current gas development budget or if the 2018 capital program will be increased by $35.0 million.
All amounts in this news release are stated in Canadian dollars unless otherwise specified.
The reserves data set forth above is based upon the reports of GLJ Petroleum Consultants Ltd. (“GLJ”) and Deloitte LLP, each dated effective December 31, 2017, which have been consolidated into one report by GLJ and adjusted to apply certain of GLJ’s assumptions and methodologies and pricing and cost assumptions. The consolidated report includes 100% of the reserves and future net revenue attributable to the properties of Exshaw Oil Corp., a subsidiary of the Company, without reduction to reflect the 9.4% third-party minority interest in Exshaw. The price forecast used in the reserve evaluations is an average of the January 1, 2018 price forecasts for GLJ, Sproule Associates Ltd. and McDaniel & Associates Consultants Ltd., each of which is available on their respective websites, www.gljpc.com, www.sproule.com and www.mcdan.com, and will be contained in the Company’s Annual Information Form for the year ended December 31, 2017, which will be filed on SEDAR (accessible at www.sedar.com) on or before March 31, 2018.
There are numerous uncertainties inherent in estimating quantities of crude oil, natural gas and NGL reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable crude oil, natural gas and NGL reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable crude oil, NGL and natural gas reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary.
The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to effects of aggregations. The estimated values of future net revenue disclosed in this news release do not represent fair market value. There is no assurance that the forecast prices and cost assumptions used in the reserve evaluations will be attained and variances could be material.