Tourmaline Oil (TSX: TOU) is increasing its control of the Alberta Deep Basin, announcing this morning the $1.45 billion acquisition of Bonavista Energy.
Already the largest producer in the region, the transaction is said to add decades of inventory to while complimenting a long term organic growth plan. The purchase will add over 60,000 boepd of production to Tourmaline’s portfolio, with the company now expecting to exit 2023 with production of over 600,000 boepd.
The assets also include 2P reserves of 459 million boe, 839 gross horizontal internally estimated drilling locations and 1.2 million net acres of land rights.
Tourmaline will pay a total of $1.45 for Bonavista, of which half will be in the form of shares and half in the form of cash, less Bonavista’s net debt at closing. The purchase is said to be accretive to 2024 free cash flow yield. The added assets are expected to generate net operating income of $450 million per year from 2024 through to 2026. Year to date cash costs for Bonavista through to June 30 were pegged at $10.29/boe, which includes operating costs of $6.14/boe.
The transaction is slated to close in the second half of November.
At the same time, Tourmaline has indicated it will be increasing its dividend by 7.7% to an annualized $1.12 per share, while at the same time announcing a special dividend that will be paid on November 1 of $1.00 per share, for shareholders of record on October 24.
Tourmaline Oil last traded at $69.46 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
