CALGARY, ALBERTA--(Marketwire - Dec. 19, 2012) - Tourmaline Oil Corp. (TSX:TOU) ("Tourmaline" or the "Company") is pleased to report continued success in the Company's ongoing 2012 EP program which has generated strong production growth throughout the operated property portfolio. Tourmaline now expects to exit 2012 at 70,000 boepd, an increase from previous exit guidance of 63,000-65,000 boepd.
The Company currently expects to average 75,000 boepd in 2013, representing approximately 50% growth over 2012 expected average production of between 50,000 and 51,000 boepd. In addition, Tourmaline has approximately 15,000 boepd of tested production awaiting tie-in. The Company is currently operating 10 drilling rigs and will continue to operate between 9 and 10 rigs during the first quarter of 2013. Tourmaline will revisit 2013 average annual production guidance during the second quarter of 2013 after assessing new results from the winter program, as well as the impact of ongoing major facility projects at Sunrise-Dawson, BC and Spirit River, AB that are expected to be completed in the second quarter.
Full year 2013 EP capital spending guidance remains at $650.0 million and the debt to cash flow ratio will be maintained at less than 1.0 times. The Company has entered into an agreement to dispose of its non-producing Elmworth property, along with its partner, Perpetual Energy Inc., for gross proceeds of $155.0 million or $77.5 million net subject to closing adjustments and transaction costs. The transaction is expected to close on or prior to March 1, 2013. The proceeds from the transaction are incremental to the current 2013 capital and financial plan, and provide the Company with additional financial flexibility.
This press release contains forward-looking information within the meaning of applicable securities laws. The use of any of the words "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 anticipated petroleum and natural gas production, cash flows, debt to cash flow ratios, drilling rigs to be operated, capital spending, disposition initiatives and the use of proceeds therefrom, the timing for facility expansions, 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; future well production rates and reserve volumes; the timing of receipt of regulatory approvals; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the successful completion of acquisition and dispositions; and the availability and cost of labour and services. 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; 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. Additional information on these and other factors that could affect Tourmaline, or its operations or financial results, are included in Tourmaline's most recent Management's Discussion and Analysis (See "Forward-Looking Statements" therein) and other reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Tourmaline's website (www.tourmalineoil.com).
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.
Additional Reader Advisories
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 conversion on a 6:1 basis may be misleading as an indication of value.
"Cash flow" as used in this press release is a financial measure commonly used in the oil and gas industry, which does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). Management believes that in addition to net income, cash flow is a useful supplemental measure as it is a measure of a company's ability to generate the cash necessary to repay debt or fund future growth through capital investment. However, investors are cautioned that this measure should not be construed as an alternative to net income determined in accordance with IFRS as an indication of Tourmaline performance. The method of calculating this measure may differ from other companies and, accordingly, it may not be comparable to similar measures used by other companies. For these purposes, "cash flow" is defined as cash provided by operations before changes in non-cash working capital.
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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.