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Tourmaline Grows Year-End Reserves and Reserve Value by Over 40%; Increases 2014 Guidance

 Tourmaline Grows Year-End Reserves and Reserve Value by Over 40%; Increases  2014 Guidance  NEWS RELEASE TRANSMITTED BY Marketwired  FOR: Tourmaline Oil Corp.  TSX SYMBOL:  TOU  FEBRUARY 19, 2014  Tourmaline Grows Year-End Reserves and Reserve Value by Over 40%; Increases 2014 Guidance  CALGARY, ALBERTA--(Marketwired - Feb. 19, 2014) - Tourmaline Oil Corp. (TSX:TOU) ("Tourmaline" or the "Company") is pleased to provide the following operations and financial update and highlights from its year-end 2013 independent reserve evaluation.  Reserve Highlights  /T/  --  Total year-end 2013 Proved plus Probable (2P) reserves of 590.1 mmboe  after only five full years of operation.  --  Total 2P reserve additions of 179.4 mmboe in 2013, representing 41%  growth over 2012 total 2P reserves before 2013 production (30% per  diluted share).  --  Year-end 2013 2P reserve value of $6.2 billion (10% discount, before  tax), representing 42% growth over year-end 2012 2P reserve value of $  4.3 billion, a net present value increase in 2013 of $1.9 billion vs.  $1.7 billion in 2012.  --  Year-end 2013 total corporate liquids (oil and natural gas liquids)  reserves of 85.6 mmbbls represent a 67% increase over 2012 liquids  reserves.  --  2013 2P finding, development and acquisition costs (FD&A) of $11.84/boe  including future development capital (FDC) and $7.33/boe excluding FDC.  --  Three-year 2P FD&A of $11.65/boe (including FDC) and $7.20/boe  (excluding FDC).  --  2013 Recycle Ratio of 1.9 based on 2013 2P FD&A of $11.84/boe (including  FDC) and 2014 forecast funds from operations per boe of $22.83.  --  2013 reserve replacement ratio of 6.6 times.  --  Peace River High Charlie Lake reserves were increased by 101% in 2013  over 2012.  --  Current 2P FDC represents 2.5 years of estimated future cash flow.   /T/  Production Update  /T/  --  Tourmaline exceeded its year-end 2013 exit production guidance of  110,000 boepd, and expects to reach the 118,000 boepd production level  in March 2014.  --  Current full year 2014 average production guidance has been increased to  120,000 boepd, representing approximately 60% growth over average 2013  production of 74,796 boepd.  --  Full year 2013 average production of 74,796 boepd represented a 47%  increase over full year 2012 production of 50,804 boepd.  --  Fourth quarter 2013 production averaged 86,089 boepd, a 50% increase  over the fourth quarter 2012 average production rate of 57,230 boepd.  --  Record fourth quarter liquids production of 11,700 bopd represented a  74% increase over fourth quarter of 2012.  --  Tourmaline expects to tie-in approximately 55 wells during the first  quarter of 2014.   /T/  EP Update  /T/  --  Tourmaline is currently operating 17 drilling rigs, including 12 rigs in  the Alberta Deep Basin complex, 2 rigs in the B.C. Montney gas  condensate complex and 3 rigs in the Peace River High Charlie Lake oil  complex. The Company now expects to operate 16 drilling rigs after  break-up, up from 13 rigs in the original second half 2014 forecast.  --  Tourmaline completed an acquisition in December adjacent to the  Company's recent new Montney gas condensate discovery for $71.1 million.  The acquisition added approximately 900 bopd of new production and  approximately 55 new horizontal Montney locations.  --  Charlie Lake reserves on the Peace River High were increased to 49.75  mmboe, a 101% increase over 2012 reserves of 24.75 mmboe. Tourmaline  expended $53.0 million in 2013 consolidating land on this new regional  oil play, and in aggregate 514 sections were acquired on the trend. The  Company believes that the regional pool could ultimately yield in excess  of 500 mmboe, the Company controls over 75% of the prospective trend as  currently mapped. The Company plans to complete four concurrently  stimulated horizontal well pairs prior to break-up.  --  The Company's Paleozoic exploratory well at Sunset B.C. has been cased  to TD and will be completed prior to break-up.  --  The Company's initial drilling program in the Alberta Deep Basin Montney  trend has resulted in two vertical and one horizontal gas well in the  Smoky-Resthaven-Kakwa areas thus far. All three wells will be completed  and tested prior to break-up. The Company has over 100 sections of  Montney rights in the northern portion of the Deep Basin core area.   /T/  Financial Update  /T/  --  The total 2013 cash consideration invested in capital expenditures, net  of dispositions was $ 1,315.4 million including $ 43.0 million for new  lands and $ 386.6 million for facilities and pipelines (approximately  32.7% of the total cash capital expenditures).  --  With completion of the equity financing during the first quarter of  2014, Tourmaline is expanding the 2014 capital budget to $1.0 billion  from $900 million, and increasing full year 2014 average production  guidance to 120,000 boepd.  --  Tourmaline is expecting 2014 funds from operations in excess of $1.0  billion based on an AECO natural gas price of $3.86/mcf, an increase of  approximately 90% over 2013.   Summary of Oil and Gas Reserves                        And Net Present Values of Future Net Revenue                  As of December 31, 2013 Forecast Prices and Costs               RESERVES SUMMARY                                                              Light & Medium Oil        Natural Gas       Company    Company    Company    Company  Gross        Net      Gross        Net Reserves Category                   (Mbbls)    (Mbbls)     (MMcf)     (MMcf) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Developed Producing            3,667      2,872    631,986    565,592 Proved Developed Non-Producing          930        791     54,385     48,959 Proved Undeveloped                    8,731      6,763    936,637    840,267 Total Proved                         13,329     10,426  1,623,008  1,454,818 Total Probable                       13,631     10,417  1,403,117  1,234,509 Total Proved Plus Probable           26,960     20,844  3,026,125  2,689,327  Summary of Oil and Gas Reserves                        And Net Present Values of Future Net Revenue                  As of December 31, 2013 Forecast Prices and Costs               RESERVES SUMMARY                                                              Natural Gas Liquids  Total Oil Equivalent   Company    Company    Company    Company  Gross        Net      Gross        Net Reserves Category                   (Mbbls)    (Mbbls)    (Mbbls)    (Mbbls) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Developed Producing           13,191     10,429    122,189    107,566 Proved Developed Non-Producing        1,119        918     11,113      9,869 Proved Undeveloped                   18,168     15,041    183,005    161,848 Total Proved                         32,478     26,387    316,308    279,283 Total Probable                       26,112     20,942    273,596    237,111 Total Proved Plus Probable           58,590     47,329    589,904    516,394  /T/  Company Gross reserves are 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.  /T/  Net Present Values of Future Net Revenue ($000s)     Before Future Income Taxes Discounted At (%/year)    Reserves Category             0%         5%        10%        15%        20% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Developed                                                              Producing             2,779,057  2,240,278  1,895,605  1,657,092  1,482,098 Proved Developed Non-                                                         Producing               279,546    215,341    176,736    151,050    132,697 Proved Undeveloped     3,676,325  2,445,553  1,741,193  1,295,977    993,673 Total Proved           6,734,928  4,901,172  3,813,534  3,104,119  2,608,467 Total Probable         6,774,423  3,745,904  2,375,651  1,639,449  1,196,359 Total Proved Plus                                                             Probable             13,509,351  8,647,075  6,189,185  4,743,568  3,804,826  Unit Value Before    Income Tax        Discounted at 10%/year Reserves Category                                         ($/boe)   ($/Mcfe) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Developed                                                              Producing                                                  17.62       2.94 Proved Developed Non-                                                         Producing                                                  17.91       2.98 Proved Undeveloped                                          10.76       1.79 Total Proved                                                13.65       2.28 Total Probable                                              10.02       1.67 Total Proved Plus                                                             Probable                                                   11.99       2.00  Net Present Values of Future Net Revenue ($000s)     After Future Income Taxes Discounted At (%/year)    Reserves Category             0%         5%        10%        15%        20% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Developed                                                              Producing             2,779,057  2,240,278  1,895,605  1,657,092  1,482,098 Proved Developed Non-                                                         Producing               279,546    215,341    176,736    151,050    132,697 Proved Undeveloped     2,846,061  1,900,303  1,353,442  1,004,305    765,184 Total Proved           5,904,664  4,355,922  3,425,783  2,812,447  2,379,979 Total Probable         5,091,389  2,780,002  1,732,747  1,171,411    835,480 Total Proved Plus                                                             Probable             10,996,053  7,135,924  5,158,530  3,983,858  3,215,459  Total Future Net Revenue ($000s) (Undiscounted)                As of December 31, 2013 Forecast Prices and Costs               Operating   Development Reserves Category          Revenue     Royalties         Costs         Costs ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Producing         4,605,451       579,305     1,190,166             2 Proved Developed                                                              Nonproducing              466,683        57,716       106,143        21,356 Proved Undeveloped       7,576,785       950,509     1,197,441     1,721,691 Total Proved            12,648,919     1,587,530     2,493,750     1,743,049 Total Probable          12,436,375     1,775,109     2,391,086     1,453,369 Total Proved Plus                                                             Probable               25,085,294     3,362,639     4,884,837     3,196,418  Total Future Net Revenue ($000s) (Undiscounted)                As of December 31, 2013 Forecast Prices and Costs               Future Net                              Revenue                              Abandonment        Before                      Future  and     Deducting        Future   Net Revenue  Reclamation Future Income        Income  After Future Reserves Category            Costs         Taxes         Taxes  Income Taxes ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Proved Producing            56,921     2,779,057             -     2,779,057 Proved Developed                                                              Nonproducing                1,922       279,546             -       279,546 Proved Undeveloped          30,819     3,676,325       830,264     2,846,061 Total Proved                89,662     6,734,928       830,264     5,904,664 Total Probable              42,388     6,774,423     1,683,034     5,091,389 Total Proved Plus                                                             Probable                  132,049    13,509,351     2,513,299    10,996,053  Crude Oil and Natural Gas Liquids                       Price Forecast                                 As of January 1, 2014                             Alberta Natural   Gas Liquids     ------------------  Bank of                                                 Canada                                                 Average                                                 Noon      WTI                               Edmonton  Exchange  Cushing  Edmonton Edmonton Edmonton Pentanes  Inflation   Rate   Oklahoma Par Price Propane   Butane    Plus    Year        %     $US/$Cdn  $US/bbl  $Cdn/bbl $Cdn/bbl $Cdn/bbl $Cdn/bbl ---------------------------------------------------------------------------- ----------------------------------------------------------------------------  2014 Full                                                                    Year       2.0     0.950     97.50    92.76    57.83    73.22    105.20   2015       2.0     0.950     97.50    97.37    58.42    75.95    107.11   2016       2.0     0.950     97.50    100.00   60.00    78.00    107.00   2017       2.0     0.950     97.50    100.00   60.00    78.00    107.00   2018       2.0     0.950     97.50    100.00   60.00    78.00    107.00   2019       2.0     0.950     97.50    100.00   60.00    78.00    107.00   2020       2.0     0.950     98.54    100.77   60.46    78.60    107.82   2021       2.0     0.950    100.51    102.78   61.67    80.17    109.97   2022       2.0     0.950    102.52    104.83   62.90    81.77    112.17   2023       2.0     0.950    104.57    106.93   64.16    83.40    114.41   2024+       2.0     0.950   +2.0%/yr  +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr  Natural Gas                                  Price Forecast                                As of January 1, 2014                             Midwest        AECO/NIT        SUMAS       NYMEX        @ Chicago         Spot           Spot       Year        $US/MMBtu      $US/MMBtu      $Cdn/MMBtu     $US/MMBtu    --------------------------------------------------------------------------- ---------------------------------------------------------------------------  2014 Full Year      4.25           4.35           4.03           4.20       2015           4.50           4.60           4.26           4.45       2016           4.75           4.85           4.50           4.70       2017           5.00           5.10           4.74           4.95       2018           5.25           5.35           4.97           5.20       2019           5.50           5.60           5.21           5.45       2020           5.63           5.73           5.33           5.58       2021           5.74           5.84           5.44           5.69       2022           5.86           5.96           5.55           5.81       2023           5.97           6.07           5.66           5.92       2024+         +2.0%/yr       +2.0%/yr       +2.0%/yr       +2.0%/yr     FD&A          FD&A                                  Including     Excluding   F&D Including F&D Excluding  Changes in    Changes in    Changes in    Changes in   FDC           FDC           FDC           FDC      2013                     $/boe         $/boe         $/boe         $/boe     ----------------------------------------------------------------------------  Proved                   $17.52        $13.91        $18.24        $13.68    Proved Plus Probable     $11.84        $7.33         $12.94        $7.38      FD&A          FD&A                                  Including     Excluding   F&D Including F&D Excluding  Changes in    Changes in    Changes in    Changes in   FDC           FDC           FDC           FDC      2012                     $/boe         $/boe         $/boe         $/boe     ----------------------------------------------------------------------------  Proved                   $14.06        $9.11         $12.61        $8.21     Proved Plus Probable     $10.35        $5.80         $8.87         $5.29      FD&A          FD&A                                 2011-2013              Including     Excluding   F&D Including F&D Excluding  Changes in    Changes in    Changes in    Changes in  Weighted                  FDC           FDC           FDC           FDC      Average                  $/boe         $/boe         $/boe         $/boe     ----------------------------------------------------------------------------  Proved                   $16.58        $12.54        $16.07        $12.16    Proved Plus Probable     $11.65        $7.20         $11.32        $6.86      /T/  Reader Advisories  Currency  All amounts in this news release are stated in Canadian dollars unless otherwise specified.  Reserves Data  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, 2013, 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 complete GLJ January 1, 2014 price forecast used in the reserve evaluations is available on its website at 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.  There are numerous uncertainties inherent in estimating quantities of crude oil, natural gas and natural gas liquids (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 Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material.  All evaluations and reviews of future net revenue are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. 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 and utilizes the Company's tax pools. It does not consider the corporate tax situation, or tax planning. It does not provide an estimate of the after-tax value 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.  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 press 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.  The reserve data provided in this news release presents only a portion of the disclosure required under National Instrument 51-101. All of the required information will be contained in the Company's Annual Information Form for the year ended December 31, 2013, which will be filed on SEDAR (accessible at on or before March 31, 2014.  Unaudited Financial Information  Certain financial and operating results included in this news release such as finding, development and acquisition costs, finding and development costs, recycle ratio, funds from operations, capital expenditures,  and production information are based on unaudited estimated results. These estimated results are subject to change upon completion of the audited financial statements for the year ended December 31, 2013, and changes could be material. Tourmaline anticipates filing its audited financial statements and related management's discussion and analysis for the year ended December 31, 2013 on SEDAR on or before March 31, 2014.  Per share reserve information is based on the total common shares outstanding, after accounting for outstanding Company options, at year end 2013 and 2012, respectively.  Non-IFRS Financial Measures  This press release includes references to financial measures commonly used in the oil and gas industry such as "funds from operations", and "recycle ratio" which do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). Management believes that in addition to net income and cash flow from operating activities, these non-IFRS financial measures are useful supplemental measures in assessing Tourmaline's ability to generate the cash necessary to repay debt or fund future growth through capital investment. Readers are cautioned, however, that these measures should not be construed as an alternative to net income or cash flow from operating activities determined in accordance with IFRS as an indication of Tourmaline's performance. Tourmaline's method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. For these purposes, Tourmaline defines funds from operations as cash provided by operations before changes in non-cash operating working capital and defines recycle ratio as estimated 2014 funds from operations per boe divided by 2013 FD&A (including FDC) per boe.   BOE Equivalency  In this press release, production and reserves information may be presented on a "barrel of oil equivalent" or "BOE" basis. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, as the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.  F&D and FD&A Costs  In addition to F&D, the Company uses FD&A as a measure of the efficiency of its overall capital program including the effect of acquisitions and dispositions.  The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.  Forward-Looking Information  This press release contains forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "forecast", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward looking information concerning Tourmaline's plans and other aspects of its anticipated future operations, management focus, objectives, strategies, financial, operating and production results and business opportunities including estimated and future anticipated 2014 funds from operations and funds from operations per boe, estimated volumes and value of oil and gas reserves and production volume estimates, future oil and natural gas prices, operating costs and production efficiencies as well as Tourmaline's future drilling and completion prospects and plans, including the number and type of wells to be drilled in core areas, business strategy, future development and growth opportunities, prospects and asset base. The forward-looking information is based on certain key expectations and assumptions made by Tourmaline, including expectations and assumptions concerning: prevailing commodity prices and currency exchange rates; interest rates; applicable royalty rates and tax laws; future well production rates and reserve volumes; the timing of receipt of regulatory approvals which include tie-in approvals; the performance of existing wells and recently drilled and tested wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services, the state of the economy and the exploration and production business; the availability and cost of financing; and ability to market oil and natural gas successfully.  Statements relating to "reserves" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.  Undue reliance should not be placed on the forward-looking information because Tourmaline can give no assurances that it will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to reserves, production, revenues, costs and expenses; health, safety and environmental risks; commodity price, currency exchange rate and interest rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Readers are cautioned that the foregoing list of factors is not exhaustive.  Also included in this press release are estimates of Tourmaline's 2014 funds from operations per boe, which is based on Tourmaline's estimated 2014 funds from operations of $1 billion and average production of 120,000 boepd. Tourmaline's estimated 2014 funds from operations is based on the various assumptions as to production levels, capital expenditures, and other assumptions disclosed in this press release and including commodity price assumptions for natural gas (AECO - $3.86/mcf) (2014), and crude oil (WTI (US) - $97.00/bbl) (2014) and an exchange rate assumption of $0.97 (US/CAD) for 2014. To the extent such estimate constitutes a financial outlook, it was approved by management and the Board of Directors of Tourmaline on February 19, 2014 and is included to provide readers with an understanding of Tourmaline's anticipated funds from operations based on the capital expenditure and other assumptions described herein and readers are cautioned that the information may not be appropriate for other purposes.  Additional information on these and other factors that could affect Tourmaline, or its operations or financial results, can be found in Tourmaline's most recent Annual Information Form and Annual and Quarterly Management's Discussion and Analysis on file with applicable securities regulatory authorities and may be accessed through the SEDAR website ( or Tourmaline's website (  The forward-looking information contained in this press release is made as of the date hereof and Tourmaline undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless expressly required by applicable securities laws.  Certain Definitions:  /T/  bbls       barrels                                            boe        barrel of oil equivalent                           boepd      barrel of oil equivalent per day                   bopd       barrel of oil, condensate or liquids per day       mmboe      millions of barrel of oil equivalent               mbbls      thousand barrels                                   mcf        thousand cubic feet                                mmcf       million cubic feet                                 mmcfpd     million cubic feet per day                         mcfe       thousand cubic feet equivalent                     mmbtu      million British thermal units                       /T/  About Tourmaline Oil Corp.  Tourmaline is a Canadian intermediate crude oil and natural gas exploration and production company focused on long-term growth through an aggressive exploration, development, production and acquisition program in the Western Canadian Sedimentary Basin.  -30- FOR FURTHER INFORMATION PLEASE CONTACT:  Tourmaline Oil Corp. Michael Rose Chairman, President and Chief Executive Officer (403) 266-5992 or Tourmaline Oil Corp. Brian Robinson Vice President, Finance and Chief Financial Officer (403) 767-3587 or Tourmaline Oil Corp. Scott Kirker Secretary and General Counsel (403) 767-3593 or Tourmaline Oil Corp. Suite 3700, 250 - 6th Avenue S.W. Calgary, Alberta  T2P 3H7 (403) 266-5992 (403) 266-5952  INDUSTRY:  Energy and Utilities - Oil and Gas   SUBJECT:  DRM