Tourmaline Closes the Acquisition of Santonia Energy, Increases Guidance and Updates EP Activities

Tourmaline Closes the Acquisition of Santonia Energy, Increases Guidance and 
Updates EP Activities 
FOR: Tourmaline Oil Corp. 
APRIL 24, 2014 
Tourmaline Closes the Acquisition of Santonia Energy, Increases Guidance and
Updates EP Activities 
CALGARY, ALBERTA--(Marketwired - April 24, 2014) - Tourmaline Oil Corp.
(TSX:TOU) ("Tourmaline" or the "Company") is pleased to
announce the completion of its previously announced acquisition of all of the
outstanding common shares of Santonia Energy Inc. ("Santonia")
pursuant to an arrangement (the "Arrangement") under the Business
Corporations Act (Alberta). Under the Arrangement, which was approved by
Santonia shareholders by greater than a 99% majority, Santonia shareholders
received 0.03012 of a Tourmaline common share for each Santonia common share
resulting in the issuance of approximately 3.2 million Tourmaline common
The acquisition of Santonia provides Tourmaline with a large, contiguous
production and land base immediately adjacent to the Company's existing
Deep Basin core area. The acquisition is part of an ongoing strategy to
continue to expand operations in the Deep Basin, one of the premier natural gas
and associated liquid play areas in Canada.  
Peters & Co. Limited acted as exclusive financial advisor to Tourmaline
with respect to the Arrangement. 
Production Update  
Tourmaline reached the 117,000 boepd production level during the third week of
April. The Company has an additional 16,000 boepd of already tied-in production
awaiting facility access or expansions. This 16,000 boepd of additional
production capacity is primarily at Spirit River AB., Sunrise-Dawson B.C., and
Horse-Smoky AB., and is anticipated to come on-stream during the second half of
2014 with the completion of ongoing facility projects in all three areas. With
current daily natural gas production of approximately 585 to 600 mmcfpd,
Tourmaline is now one of the top 5 largest natural gas producers in Canada.  
First quarter 2014 estimated average production of 102,600 boepd represents 19%
growth over the prior quarter and the second consecutive quarter where
quarterly production growth is in excess of 15%. Tourmaline remains on track to
achieve average production for 2014 of 120,000 boepd, representing 60% growth
over the average 2013 production of 74,796 boepd. The Company expects daily
average production in Q1 2014 of approximately 102,600 boepd; Q2 2014 average
production of 115,000-120,000 boepd; Q3 2014 average production of
120,000-125,000 boepd; and Q4 average production of 135,000-140,000 boepd.
These estimates are net of an assumed daily average unscheduled down-time
provision of 8,000 boepd for the remainder of the year. Unscheduled down-time
in Q1 2014 was 8,500 boepd, compared to an average of 5,000 boepd in 2013 with
the majority of the increase attributed to temporary production shut-ins due to
offsetting competitor completion and fracture stimulation operations. Given the
improved natural gas price environment, the Company expects this increased
industry activity to continue in its operated areas after spring break-up.  
The Company's facility projects at Spirit River AB., Doe B.C., and Musreau
AB., remain on schedule for a late Q3/early Q4 2014 start-up and are
anticipated to increase corporate daily production by approximately 25,000
boepd in aggregate.  
The Company also expects to complete a large pipeline lateral connecting the
Smoky-Berland complex to the Wild River plant during the third quarter, which
will allow currently shut-in volumes at Smoky to flow to the Tourmaline
facility at Wild River.  
Financial Update  
The Company is increasing financial estimates for 2014 due to stronger natural
gas prices and providing 2015 preliminary guidance due to the combined effects
of stronger production arising from the Santonia acquisition and anticipated
higher natural gas prices. Estimated 2014 cash flow has been increased 7% to
$1.09 billion, utilizing an AECO natural gas price of $4.64/mcf and WTI oil
price of US $97.40/bbl. This represents 106% growth over 2013 cash flow of
$526.8 million. Cash flow in 2015 is estimated at $1.48 billion, based on
estimated daily average production of 159,500 boepd, an AECO natural gas price
of $4.43/mcf and a WTI oil price of US $93.38/bbl.  
Capital spending for 2014 is now estimated at $1.1 billion, with incremental
spending anticipated to be incurred with the addition of one more rig in NEBC,
the Berland to Wild River pipeline lateral, and acceleration of the Wild River
plant expansion.  
With the recent increase in natural gas prices, Tourmaline has chosen to put in
place additional hedges resulting in approximately 217.6 mmcfpd hedged
production at an average price of $4.20/mcf or 36% of anticipated full year
2014 natural gas production.  
EP Update  
Tourmaline is currently operating 2 drilling rigs in NEBC, with the remaining
15 rigs shut down for break-up. The Company is planning to operate 18 drilling
rigs during the second half of 2014, with 12 rigs in the Alberta Deep Basin, 3
rigs pursuing Montney gas-condensate in NEBC, and 3 rigs pursuing the Triassic
Charlie Lake oil play on the Peace River High. 
Alberta Deep Basin 
First quarter 2014 drilling results in the Alberta Deep Basin were the best in
the Company's history. The Company drilled and completed 30 horizontal
wells targeting the Wilrich, Notikewin and Falher formations in the Deep Basin
tying in 28 of these wells during the first quarter. Of the 17 wells that have
been on production for greater than one month, 16 of them have 30-day IP rates
in excess of the Company's production/economic template of 5.0 mmcfpd. The
actual 30-day IP average of these 17 wells is 10.4 mmcfpd. As longer term
production performance data becomes available on the remaining wells, the
Company will consider updating its internal economic template to reflect
revised average production rates. The future horizontal drilling inventory has
been increased substantially thus far in 2014 through both additions at crown
land sales and the Santonia acquisition.  
One of the Deep Basin rigs will focus on a series of high potential locations
already identified on the Santonia land base during the second half of 2014. 
NEBC Montney Gas/Condensate  
Production in NEBC reached a record 35,000 boepd in mid-April, with an
additional 6,000 boepd shut-in awaiting the planned third quarter facility
expansions at Doe and Sundown. The Company has drilled two successful follow-up
wells to its previously announced Q4 2013 Lower Montney gas-condensate
discovery and will disclose further information once these wells are brought
on-stream. The Company is adding an additional rig in NEBC to pursue this
expanding, new opportunity. Tourmaline has also drilled an extended reach
horizontal in the Doig formation at Sundown, and will complete this well after
Peace River High Charlie Lake Oil  
Production from the overall Peace River High complex is expected to reach the
13,000 boepd level with the start-up next week of the initial battery at
Mulligan. Drilling operations are expected to recommence in June with an
additional 30 horizontal wells planned to be drilled, completed and on-stream
by year-end. The Company's new sour gas injection gas plant at Sprit River
remains on schedule for an early October 2014 start-up allowing Tourmaline to
bring on stream approximately 5,000 boepd of production that is currently
Exploration Program  
Completion operations on the Company's two potential Paleozoic gas
discoveries will commence as soon as access is possible after break-up. There
are a total of 7 prospective new pay zones in the Paleozoic to complete between
the two, cased exploration wells. 
Forward-Looking Information  
This press release contains forward-looking information within the meaning of
applicable securities laws. The use of any of the words "forecast",
"expect", "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 anticipated petroleum and natural gas production for
various periods, cash flows, capital spending, projected operating and drilling
costs, the timing for facility expansions and facility start-up dates, as well
as Tourmaline's future drilling prospects and plans, 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 exchange rates; applicable royalty
rates and tax laws; interest rates; future well production rates and reserve
volumes; operating costs the timing of receipt of regulatory approvals; the
performance of existing wells; the success obtained in drilling new wells;
anticipated timing and results of capital expenditures; the sufficiency of
budgeted capital expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the successful completion of
acquisitions and dispositions; 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, labor and services; 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
Although Tourmaline believes that the expectations and assumptions on which
such forward-looking information is based are reasonable, undue reliance should
not be placed on the forward-looking information because Tourmaline can give no
assurances that they 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, costs and expenses;
health, safety and environmental risks; commodity price and exchange rate
fluctuations; interest rate fluctuations; marketing and transportation; loss of
markets; environmental risks; competition; incorrect assessment of the value of
acquisitions; failure to complete or realize the anticipated benefits of
acquisitions or dispositions; 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
annual cash flow and capital spending as well as, preliminary guidance on 2015
anticipated cash flows, which are based on the various assumptions as to
production levels, including estimated average production of 120,000 boepd for
2014 and 159,500 boepd for 2015, capital expenditures, and other assumptions
disclosed in this press release and including commodity price assumptions for
natural gas (AECO - $4.64 /mcf for 2014 and $4.43/mcf for 2015), and crude oil
(WTI (US) - $97.40/bbl for 2014 and $93.38/bbl for 2015) and an exchange rate
assumption of (US/CAD) $0.92 for 2014 and $0.90 for 2015. To the extent any
such estimate constitutes a financial outlook, it was approved by management
and the Board of Directors of Tourmaline on April 24, 2014 and is included to
provide readers with an understanding of Tourmaline's anticipated cash
flows based on the capital expenditure and other assumptions described herein
and readers are cautioned that the information may not be appropriate for other
Additional information on these and other factors that could affect Tourmaline,
or its operations or financial results, are included in the Company's most
recently filed Management's Discussion and Analysis (See
"Forward-Looking Statements" therein), Annual Information Form (See
"Risk Factors" and "Forward-Looking Statements" therein)
and other reports 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
Additional Reader Advisories 
Boe Conversions  
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. 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 6:1 conversion basis
may be misleading as an indication of value. 
Production Tests  
Any references in this release to IP rates are useful in confirming the
presence of hydrocarbons, however, such rates are not determinative of the
rates at which such wells will continue to produce and decline thereafter and
are not necessarily indicative of long-term performance or ultimate recovery.
While encouraging, readers are cautioned not to place reliance on such rates in
calculating the aggregate production for the Company. Such rates are based on
field estimates and may be based on limited data available at this time. 
Non-GAAP Financial Measures  
This press release includes references to a financial measure commonly used in
the oil and gas industry, "cash flow" which does not have a
standardized meaning prescribed by International Financial Reporting Standards
("GAAP"). Management believes that in addition to net income and cash
flow from operating activities cash flow is a useful supplemental measure 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 this measure should not be construed as an alternative to net
income or cash flow from operating activities determined in accordance with
GAAP as an indication of Tourmaline's performance. Tourmaline's
method of calculating cash flow may differ from other companies and
accordingly, it may not be comparable to measures used by other companies. For
these purposes, Tourmaline defines "cash flow" as cash flow from
operating activities before changes in non-cash operating working capital.  
Certain Definitions  
bbls      barrels                                      
boe       barrel of oil equivalent                     
boepd     barrel of oil equivalent per day             
bopd      barrel of oil, condensate or liquids per day 
gjsd      gigajoules per day                           
mmboe     millions of barrels of oil equivalent        
mbbls     thousand barrels                             
mmcf      million cubic feet                           
mcf       thousand cubic feet                          
mmcfpd    million cubic feet per day                   
mmcfpde   million cubic feet per day equivalent        
mcfe      thousand cubic feet equivalent               
mmbtu     million British thermal units                
mstboe    thousand stock tank barrels of oil equivalent 
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. 
Tourmaline Oil Corp.
Michael Rose
Chairman, President and Chief Executive Officer
(403) 266-5992
Tourmaline Oil Corp.
Brian Robinson
Vice President, Finance and Chief Financial Officer
(403) 767-3587
Tourmaline Oil Corp.
Scott Kirker
Secretary and General Counsel
(403) 767-3593
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  
-0- Apr/24/2014 21:00 GMT
Press spacebar to pause and continue. Press esc to stop.