Acquisition activity in 2020 will be funded via the additional funds raised through the creation of Topaz Energy Corp. (“Topaz”). Including the Tourmaline-owned equity position in Topaz, the Company has access to over $800 million for select acquisition activity. Production and cash flow(3) realized through acquisition activities will be incremental to the five-year plan.
The 2019 production exit target of 315,000 – 320,000 boepd was achieved during the second week of December, with total corporate production reaching a record 317,000 boepd. The total liquid (oil, condensate, NGLs) production exit target of 68,000 bpd was also achieved in the same early December time frame, which includes 31,000 bpd of light oil and condensate.
Subsequently, an unplanned production interruption at the Pembina Saturn deep-cut facility in the Alberta Deep Basin, commencing on December 10, has reduced current NGL production by approximately 11,200 bpd. This interruption, originally expected to last two days, has now been extended until early January 2020 to replace a turbine in the sales gas compressor. The outage, combined with a seven-day turnaround at Saturn in October 2019 intended for preventative maintenance, will reduce total quarterly liquid production by approximately 3,500 bpd and overall quarterly average production volumes by approximately 2,500 boepd.
Planned and unplanned shut-ins on the NEBC Enbridge system during Q4 for pipeline integrity inspections and associated cleaning tool runs have further reduced fourth quarter production by approximately 2,500 boepd. Tourmaline expects Q4 2019 average production of approximately 302,000 boepd incorporating these unscheduled mid-stream outages, an increase of over 12,000 boepd compared to the Q3 2019 average of 289,594 boepd.
Tourmaline will enter 2020 already producing at the forecast 2020 production range of 315,000 – 320,000, which includes an increased downtime provision for these unscheduled third-party interruptions equivalent to what was experienced in 2019.
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(1) |
“Free cash flow” is defined as cash flow less total net capital expenditures. Total net capital expenditures is defined as total capital spending before acquisitions and non-core dispositions. Free cash flow is prior to any dividend payments. See “Non-GAAP Financial Measures” in this news release and in the Company’s Q3 2019 Management’s Discussion and Analysis. |
(2) |
See “Non-GAAP Financial Measures” in this news release and in the Company’s Q3 2019 Management’s Discussion and Analysis. |
(3) |
“Cash flow” is defined as cash provided by operations before changes in non-cash operating working capital. See “Non-GAAP Financial Measures” in this news release and in the Company’s Q3 2019 Management’s Discussion and Analysis. |