CALGARY, AB – Tourmaline Oil Corp. (TSX: TOU) (“Tourmaline” or the “Company”) is pleased to announce the completion of its previously announced acquisition of Jupiter Resources Inc. (“Jupiter”) whereby it acquired all of the issued and outstanding shares of Jupiter for total consideration of approximately $630 million, comprised of 24.2 million Tourmaline common shares, and the assumption of net debt of approximately $200.0 million, inclusive of all transaction costs.
The Jupiter acquisition, accretive on both a cash flow(1) and free cash flow(2) basis, adds approximately 67,000 boepd of average production in the Alberta Deep Basin with strong overall liquid production, currently 20,000 bpd (condensate and NGLs), estimated 2P reserves(3) of 357 mmboe, over 500 net sections of land (average working interest 84%), and working interests in three, two of which are operated, deep cut natural gas processing plants in the Resthaven and Kakwa areas. Current production was acquired for approximately $9,400/boepd, 2P reserves for $1.77 boe.
The greater Musreau-Resthaven-Kakwa portion of the Deep Basin, where these assets are located, yields amongst the highest EUR wells and liquid recoveries in the entire Deep Basin complex. Tourmaline has been delivering completed and equipped horizontal wells for 40% lower capital costs on immediately offsetting acreage, with similar EURs. The Company is operating one drilling rig on the lands acquired pursuant to the previously announced acquisition of Modern Resources Inc. and will have two drilling rigs active on the Jupiter assets by late December.
With the acquisition of Jupiter, Tourmaline’s current production is now in excess of 400,000 boepd.
|(1)||“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 2020 Management’s Discussion and Analysis.|
|(2)||“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 dividend payments. See “Non-GAAP Financial Measures” in this news release and the Company’s Q3 2020 Management’s Discussion and Analysis.|
|(3)||Jupiter 2P reserves of 357 mmboe as at December 31, 2019 have been evaluated by GLJ Petroleum Consultants, an independent reserve evaluator. Reserves are working interest gross reserves before deduction of royalties payable to others and without including any royalty interests.|
All amounts in this news release are stated in Canadian dollars unless otherwise specified.