Tapping liquids-rich Canadian unconventional natural gas and a continent-wide marketing program paid off for Tourmaline Oil Corp. in the first three months of this year.

AECO may 5

As the top natural gas producer drilling only in Canada, the Calgary explorer scored a 30% gain to 1.91 Bcf/d in the quarter from 1.47 Bcf/d a year earlier. Liquids production grew by 47% to 91,971 b/d from 62,569 b/d.

With a C$1 billion ($800 million) capital budget, the company expects to continue growing throughout this year.

An environmental, low-emissions twist is to be added to hydraulic fracturing used on Alberta and British Columbia gas development too. A joint venture with contractor Trican Well Service Ltd. plans to replace diesel with natural gas as pump engine fuel.

Emissions cuts, cost savings and supply conservation are also continuing by a water management program of long-distance deliveries, electric-powered well site hardware, and elimination of diesel-fueled heaters.

Tourmaline gas fetched an average C$3.86/Mcf ($3.09) in 1Q2021, thanks to North America-wide market diversification and price hedging.

“Natural gas fundamentals for 2021 and 2022 continue to improve,” the company said.

“Approximately 55% of Tourmaline’s natural gas volumes are exposed to spot prices in markets on the western half of the continent,” from PG&E, Malin, Sumas, Westcoast and Aeco, “where fundamentals continue to be most supportive.”

Tourmaline’s production and sales performance enabled an 11% corporate debt reduction to C$1.63 billion ($1.3 billion) from C$1.83 ($1.46 billion) in the same period of 2020.

Net earnings in 1Q2021 were C$247.8 million ($198.2 million, or C83 cents/share (66 cents). It reversed year-ago losses of C$35.8 million ($28.6 million) or minus C13 cents (minus 10 cents).