Tourmaline Achieves Remarkable Growth in Free Cash Flow and Expansion Plans
Tourmaline Oil Corp: Outstanding Performance in Q2 2025
Tourmaline Oil Corp. (TSX: TOU) has recently announced impressive financial and operational results for the second quarter of 2025, showcasing robust performance that aligns with their projected growth trajectory. This update includes an updated multi-year Exploration and Production (EP) growth plan, a newly signed long-term liquefied natural gas (LNG) feed gas supply agreement, and the declaration of a special dividend for shareholders.
Key Highlights from Financial Results
During the second quarter, Tourmaline achieved an average production rate of 620,757 barrels of oil equivalent per day (boepd), representing a 10% increase compared to the same quarter last year. The cash flow for this period was reported at an impressive $822.8 million, amounting to $2.16 per diluted share, resulting in a free cash flow of $316.9 million ($0.83 per diluted share) after accounting for capital expenditures of $505.2 million.
Long-Term LNG Supply Agreement
In a strategic move to secure its future, Tourmaline has entered into a long-term LNG feed gas supply agreement with Uniper, facilitating the supply of 80,000 mmbtu of natural gas per day to the U.S. Gulf Coast starting in November 2028. This arrangement aims to leverage international price exposure to the Dutch Title Transfer Facility (TTF).
Updated EP Growth Plan
The updated EP growth plan articulates a pathway for Tourmaline's production to reach an average of 850,000 boepd by the early 2030s, with these developments projected to be fully funded by generated cash flow. The anticipated annual free cash flow by the end of the growth plan period is estimated to be between $2.5 billion to $3 billion, maintaining a disciplined approach to capital expenditure levels.
Special Dividend Declaration
Reflecting its strong cash generation capacity, Tourmaline's board of directors has declared a special dividend of $0.35 per share, intended to further reward its shareholders. This dividend is set to be paid on a future date to be announced, with shareholders of record being those noted shortly before the payment date. Alongside, the ongoing quarterly base dividend payment, set at $0.50 per share, signifies Tourmaline's ongoing commitment to providing returns.
Financial Stability and Strong Position
Tourmaline's financial health remains robust, with key indicators such as net debt reported at $1.9 billion. This positions the company to navigate potential commodity price fluctuations in future periods, particularly with anticipations of improved pricing due to the operations of new LNG facilities. The company's prudent financial management strategies aim to ensure continued shareholder value and operational efficiency.
Frequently Asked Questions
What are the key financial metrics from Tourmaline's Q2 2025 report?
Tourmaline reported a production rate of 620,757 boepd, cash flow of $822.8 million, and a free cash flow of $316.9 million.
What is the new LNG supply agreement about?
The agreement involves supplying 80,000 mmbtu of natural gas per day to the U.S. Gulf Coast for eight years, starting in November 2028.
How much is the special dividend declared?
The special dividend is set at $0.35 per share for shareholders of record, reflecting the company's commitment to return capital.
What is the updated EP growth plan for Tourmaline?
The updated plan outlines growth from 650,000 boepd to 850,000 boepd by early next decade, fully funded by cash flow.
How is Tourmaline's financial stability positioned for future operations?
With a net debt of $1.9 billion and substantial free cash flow generation, Tourmaline aims to navigate market fluctuations effectively while maintaining shareholder value.
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