Canadian independent Tourmaline Oil Corp. broke production records in 4Q2020 after a pair of acquisitions boosted its output.

Tourmaline production

The independent which has assets in British Columbia and Alberta, said recently it exited the quarter producing more than 400,000 boe/d after acquiring smaller Canadian players Jupiter Resources Inc. and Modern Resources Inc. in December. The deals added about 76,000 boe/d of production from the northern portion of Alberta’s Deep Basin.

In its 4Q2020 earnings report, Tourmaline said production is currently averaging 405,000-410,000 boe/d, “at the higher end” of its 2021 full-year guidance range of 390,000-410,000 boe/d. 

In addition, Tourmaline said all three of its operated exploration and production complexes have already achieved production records in 1Q2021. The Alberta Deep Basin complex is currently producing 252,000 boe/d, while northeastern British Columbia is producing 135,000 boe/d, and the Peace River High complex in Alberta is producing 23,000 boe/d. 

During a call to discuss the quarterly results, CEO Michael Rose said the company also boosted production in December by accelerating some drilling and completion activities instead of taking the usual two- to three-week break over the holidays. It also pulled some completion activities scheduled for January into December, allowing the company to reduce its 2021 capital spending budget by C$25 million ($20 million) to C$1.08 billion ($860 million). 

More recently, Rose said Tourmaline ran 12 drilling rigs and up to four completions teams across its assets in January and February. Activity is expected to taper heading into spring break-up.

On average, Tourmaline pumped 336,325 boe/d during 4Q2020. Full-year 2020 average production was 310,598 boe/d. The company produced 1.6 Bcf/d of natural gas during the quarter, an 11% improvement year/year, and 70,990 bbl/d of crude oil, condensate and natural gas liquids, a 19% improvement.

Tourmaline expects 1Q2021 output to average 400,000-405,000 boe/d. Natural gas output is forecast to average about 1.85-1.9 Bcf/d in 2021. Combined oil, condensate and natural gas liquids (NGL) production is expected to average about 85,000-90,000 bbl/d in 2021.

Tourmaline reported 4Q2020 net earnings of C$629.2 million ($503.8 million), or C$2.28/share ($1.83/share) compared with net earnings in 4Q2019 of C$61.3 million ($49.1 million), or C23 cents/share (18 cents).

The company realized average natural gas prices of C$3.19/Mcf ($2.55/Mcf) in 4Q2020, a 15% improvement over last year. However, realized crude, condensate and NGL prices of C$33.85/bbl ($27.11/bbl), a 12% decline.