Tourmaline acquires Bonavista Energy – see deal metrics, pro forma asset base and a review of what Bonavista has been up to since going private – BOE Intel

The Alberta Deep Basin was in focus again yesterday, as Tourmaline announced that it is acquiring Bonavista Energy for $1.45 billion. Tourmaline will pay half cash ($725 MM), and half common shares ($725 MM) to acquire more than 60,000 BOE/d of production. This transaction comes right on the heels of Peyto announcing that it was buying Repsol’s Canadian assets which were largely centered around the Deep Basin as well. The transaction metrics for the two acquisitions are in Figure 1 below.

See our full M&A database on BOE Intel here.

Figure 1 – Recent Deep Basin transaction metrics

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Tourmaline cites this acquisition as immediately accretive to its 2024 estimated free cash flow yield, and as a result has bumped its base dividend by 7.7% as well as announcing a $1/share special dividend for Q4. It further consolidates Tourmaline’s Deep Basin position, an area where it is already the largest producer.

For those who were wondering what Bonavista has been up to since its go-private recapitalization, click on the link below. Our team recently did a private company review of Bonavista and its assets.

BOE Intel Private Company Review – Bonavista Energy Corp.

Figures 2 and 3 below show how the Bonavista assets fit together with the existing Tourmaline assets.

Figure 2 – Crown mineral rights held by Tourmaline and Bonavista

Figure 3 – New acquisition slide from Tourmaline corporate presentation

Source: Tourmaline Oil Corp. (prismic.io)

Interestingly this is not the first time in the recent past that Tourmaline has bought assets from Bonavista. As shown with BOE Intel’s well licence transfer tool in Figure 4, Tourmaline had previously acquired 187 licences from Bonavista in northeast BC in April 2022 (date of licence transfer). The production from those licences as of the month of transfer was ~1,428 BOE/d.

Figure 4 – Well licence transfers from Bonavista to Tourmaline in April 2022

Figures 5 and 6 below are slides from the July 2023 edition of Bonavista’s corporate presentation, since taken down. These slides provide a nice breakdown of production by area and by commodity type for Bonavista, although with slightly dated information. It is probably worth pointing out the success that Bonavista was having with its liquids rich targets in the Garrington Glauc (bottom right graph Figure 6).

We can also glean a little bit of financial information from these slides as well. Using Bonavista’s 2022 EBITDA figures from the slide in Figure 5 would suggest Tourmaline was able to acquire Bonavista for ~2.7x 2022 EBITDA.

Figure 5 – Bonavista corporate presentation slide – July 2023

Source: Bonavista corporate presentation – July 2023

Figure 6 – Bonavista corporate presentation slide – July 2023

Source: Bonavista corporate presentation – July 2023