Tourmaline Oil (TOU) Q3 2024 earnings summary

Executive summary

• Q3 2024 cash flow reached $741.9 million (CAD 742 million, $2.09 per diluted share), with net earnings of $355.2 million ($1.00 per diluted share), up 29% year-over-year.

• Special dividend of $0.50 per share declared, bringing total dividends to $3.25 per share since December 2023 (5% trailing yield).

• Closed Crew Energy acquisition (October 2024) and Topaz Energy transaction (November 2024), receiving $278.2 million in proceeds.

• Q3 average production was 557,365 boepd, up 11% year-over-year and at the high end of guidance.

• Largest natural gas producer in Canada and fourth largest in North America, with 5.0 billion Boe 2P reserves and 22.7 Tcf gas reserves.

Financial highlights

• Q3 2024 cash flow: $741.9 million; CapEx: $591 million; E&P expenditures: $575 million.

• Free cash flow for Q3: $152.5 million ($0.43 per diluted share).

• Net debt at Q3 exit: $1.7 billion; long-term net debt target reduced to $1.5 billion (0.3–0.4x net debt to 2025 cash flow).

• 2025E cash flow forecast at $4.1B, free cash flow at $1.1B, and free cash flow yield of 5%.

• Dividend yield: 2% base, 5% including specials; total payout ratio for 2025 at 85%.

Outlook and guidance

• 2025 average production guidance: 635,000–665,000 boepd, with liquids production forecast at 162,000 bpd.

• 2025 E&P capital budget: $2.6–$2.85 billion, with flexibility for commodity price volatility.

• Anticipates generating over $1.1 billion in free cash flow annually through 2029 at current strip pricing.

• Plan to drill ~365 wells in 2025; North Montney Phase One to add 50,000 boepd over three years.

• 5–7% annual production growth targeted through 2029.