SOURCE: Tourmaline Oil Corp.

Tourmaline Oil Corp.

September 08, 2014 08:15 ET

Tourmaline Plans to Grow Production by Over 40,000 boepd During Q4 2014

CALGARY, AB--(Marketwired - September 08, 2014) - Tourmaline Oil Corp. (TSX: TOU) ("Tourmaline" or the "Company") is pleased to provide an operations update.

The Company plans to add 43,000 boepd of new sustained production during the balance of 2014 through completion and start-up of five new facility projects. The first of these projects, the compression and dehydration facility at Sundown B.C., commenced production during the first week of September and will allow for 50 mmcfpd of incremental production during the fourth quarter. The Musreau, Alberta and Doe, B.C. 50 mmcfpd plant expansions are both on schedule to commence production during the first week of October. Construction of the Spirit River 3-10 sour gas injection plant will be completed by October 15 and start-up of the sour gas injection site and electrical power generation capability at the plant will be completed during the second half of October with the plant achieving full production in early November. The Wild River 50 mmcfpd plant expansion is currently under construction and remains on schedule for an early December start-up. The associated Berland-Wild River pipeline lateral will be completed in October. This lateral will provide incremental natural gas volumes for the 100 mmcfpd Wild River plant expansion in 2015.

These significant production additions during the last four months of the year will allow the Company to achieve full-year 2014 average production guidance of 120,000 boepd and a 2014 exit volume of 150,000 - 155,000 boepd.

Tourmaline continues to operate 20 drilling rigs and has drilled 68 new wells since spring break-up. Strong well results continued in all three core operated areas.

Highlights include:

  • 45 horizontal wells drilled and completed in the Alberta Deep Basin through to September 2014. Of the 33 wells that have 30 days of production history, 32 have exceeded the internal Company 30-day IP template of 5 mmcfpd. The average 30-day IP of these 33 wells is 10.6 mmcfpd.

  • The initial Triassic Doig horizontal at Sundown B.C. production tested at 15.2 mmcfpd at a flowing casing pressure of 14.5 MPa during a 3-day test. The Company has a very large inventory of Doig horizontal locations in B.C. that complement the existing Montney inventory. 

  • The initial Dunvegan duplex vertical new pool wildcat in the Alberta Deep Basin production tested at 17.3 mmcfpd at a flowing pressure of 9.7 MPa during a 3-day production test. Multiple step-out locations are planned on the original 3D seismic defined feature and the Company has captured additional identical 3D defined features elsewhere in the Deep Basin. The Dunvegan duplex play is one of several high potential new plays that the Company is pursuing in the Deep Basin, complementing the enormous existing Cretaceous development drilling inventories.

  • Tourmaline is the fifth largest Triassic Montney producer in Western Canada through ongoing development of the Sunrise-Dawson-Sundown area, where the Company just completed drilling the 110th horizontal liquids-rich Montney well. The Sunrise-Dawson-Sundown complex, however, is only the first of four Montney EP areas that the Company plans to develop. Tourmaline has extensive land holdings and drilling inventories in the Montney play areas at Kakwa-Resthaven Alberta, the emerging liquids rich Montney play at Pouce-Coupe-Progress, and the developing Montney EP area at Blueberry-Inga-Red Creek in British Columbia. The Company plans multiple horizontal wells in these three emerging areas during the next 18 months to complement the ongoing activity at Sunrise-Dawson.

  • On the Peace River High Charlie Lake oil complex, the 1-22 Earring well is producing at 570 bbls/day oil and 500 mcfpd of natural gas after the first seven days of production. This is the third well at Earring, located at the northern end of the 70 mile long Charlie Lake pool. The Company expects to have an additional 25 wells on production from the complex by year end.

  • The Company has increased full-year 2014 capital spending guidance by $100 million to $1.35 billion due to the acceleration of the second Wild River facility expansion from 2015 to 2014, and the drilling of approximately 25 more wells in 2014 than originally planned in the 15-rig program. This has resulted in an increase in 2015 preliminary production guidance from 159,000 boepd to 164,500 boepd. 

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, capital spending, 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.

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.

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 (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

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.

 
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
mcfpd thousand cubic feet per day
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.

Contact Information

  • For further information, please contact:

    Tourmaline Oil Corp.
    Michael Rose
    Chairman, President and Chief Executive Officer
    (403) 266-5992
    info@tourmalineoil.com

    OR

    Tourmaline Oil Corp.
    Brian Robinson
    Vice President, Finance and Chief Financial Officer
    (403) 767-3587
    robinson@tourmalineoil.com

    OR

    Tourmaline Oil Corp.
    Scott Kirker
    Secretary and General Counsel
    (403) 767-3593
    kirker@tourmalineoil.com

    OR

    Tourmaline Oil Corp.
    Suite 3700, 250 - 6th Avenue S.W.
    Calgary, Alberta T2P 3H7
    Phone: (403) 266-5992
    Facsimile: (403) 266-5952
    Website: www.tourmalineoil.com