Tourmaline Delivers Record Production, Increases 2P Reserves to 5.5 Billion BOE, Announces a 43% Increase to the Base Dividend and Declares a Special Dividend

Press Release

Calgary, Alberta – Tourmaline Oil Corp. (TSX:TOU) (“Tourmaline” or the “Company”) is pleased to release financial and operating results for the full-year and fourth quarter of 2024.

HIGHLIGHTS

Full-year 2024 cash flow(1) (“CF”) was $3.2 billion ($8.93 per diluted share(2)). Fourth quarter 2024 CF was $850.3 million ($2.27 per diluted share).
2025 forecast free cash flow(3) (“FCF”) of $1.4 billion ($3.62 per diluted share(4)) based on current strip pricing(5), up from previous guidance of $1.1 billion(6). At current strip pricing, the Company forecasts it will generate 2025 CF of $4.3 billion ($11.53 per diluted share).
Full-year 2024 net earnings were $1.3 billion ($3.51 per diluted share).
The Company announces a quarterly base dividend increase of 43% to $0.50 per share effective Q1 2025 and a special dividend of $0.35/share. Tourmaline believes that with continued improvements in realized pricing, the Company is well positioned to increase returns to shareholders in 2025 relative to 2024, in addition to pursuing a growth capital budget.
First quarter 2025 production range of 630,000-635,000 boepd is currently anticipated.

(1) This news release contains certain specified financial measures consisting of non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures. See “Non-GAAP and Other Financial Measures” in this news release for information regarding the following non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures used in this news release: “cash flow”, “capital expenditures”, “free cash flow”, “operating netback”, “operating netback per boe”, “cash flow per boe”, “cash flow per diluted share”, “free cash flow per diluted share”, “adjusted working capital” and “net debt”. Since these specified financial measures do not have standardized meanings under International Financial Reporting Standards (“GAAP”), securities regulations require that, among other things, they be identified, defined, qualified and, where required, reconciled with their nearest GAAP measure and compared to the prior period. See “Non-GAAP and Other Financial Measures” in this news release and in the Company’s Management’s Discussion and Analysis for the year ended December 31, 2024 (the “Annual MD&A”), which information is incorporated by reference into this news release, for further information on the composition of and, where required, reconciliation of these measures.

(1) “Cash flow per diluted share” is a non-GAAP financial ratio. Cash flow, a non-GAAP financial measure, is used as a component of the non-GAAP financial ratio. See “Non-GAAP and Other Financial Measures” in this news release and in the Annual MD&A.

(1) “Free cash flow” is a non-GAAP financial measure defined as cash flow less capital expenditures, excluding acquisitions and dispositions. Free cash flow is prior to dividend payments. See “Non-GAAP and Other Financial Measures” in this news release.

(1) Calculated as forecast 2025 FCF divided by diluted share count (based on 376 million diluted Common Shares).

(1) Based on oil and gas commodity strip pricing at February 14, 2025.

(1) As forecasted in the Company’s November 6, 2024 news release.

Proved developed producing (“PDP”) reserves(7) increased 29% in 2024 after accounting for production.
Proved plus probable (“2P”) reserves increased 14% to 5.5 billion boe in 2024 after accounting for production.
Exit 2024 net debt(8) was $1.7 billion (0.4 times 2025 forecast cash flow). The Company intends to deleverage throughout 2025 and remains committed to a long-term net debt target of $1.5 billion (which is approximately 0.30 to 0.35 times 2025 forecast net debt to cash flow).

PRODUCTION UPDATE

Fourth quarter 2024 average production was 605,413 boepd, up 9% from Q4 2023. Full-year 2024 average production of 579,173 boepd was up 11% over full-year 2023 average production of 520,366 boepd.
2024 average liquids production (oil, condensate, NGLs) of 138,584 bbls/d was up 17% over 2023 liquids production of 118,808 bbls/d.
In addition to being Canada’s largest and most active natural gas producer, Tourmaline is the largest NGL producer and the third largest condensate producer in Canada( 9 ). Condensate and NGL production volumes are expected to increase significantly over the next 5 years with the Company’s North Montney, West Doe-Groundbirch, South Montney, and North Deep Basin growth projects. These projects are not fully captured in the Company’s current five-year EP plan but will be as the timelines are solidified.
The 2025 forecast production range of 635,000 to 665,000 boepd remains unchanged; the Company expects to finalize the second half 2025 EP capital program during the second quarter.
First quarter 2025 production of 630,000 to 635,000 boepd is currently anticipated. The Company has approximately 51 wells to bring on-production in March which is expected to result in a first quarter exit in excess of 640,000 boepd.
FINANCIAL HIGHLIGHTS
Improving strip prices have increased full-year forecast 2025 CF to $4.3 billion from previous guidance of $4.1 billion and full-year forecast 2025 FCF to $1.4 billion, from previous guidance of $1.1 billion, as disclosed in November 2024.
Full-year 2024 CF was $3.2 billion ($8.93 per diluted share) and full-year 2024 FCF was $1.0 billion ($2.75 per diluted share).

(7) Reserves are “Company gross reserves”, which are defined as the working interest share of reserves prior to the deduction of interest owned by others (burdens). Royalty interest reserves are not included in Company gross reserves.

(7) “Net debt” is a capital management measure. See “Non-GAAP and Other Financial Measures” in this news release and in the Annual MD&A.

(7) Based on public disclosure.

Fourth quarter 2024 CF was $850.3 million ($2.27 per diluted share on Q4 2024 average production of 605,413 boepd). Q4 2024 FCF was $96.7 million ($0.26 per diluted share).
Full-year 2024 earnings were $1.3 billion ($3.51 per diluted share).
Given the strong growth in the base business over the past three years, through a combination of high margin, organic growth and accretive acquisitions, Tourmaline’s Board of Directors has elected to increase the base quarterly dividend from $0.35 to $0.50 per share, a 43% increase, effective Q1 2025.
Tourmaline’s Board of Directors has also declared a special dividend of $0.35 per share to be paid on March 25, 2025 to shareholders of record on March 13, 2025. Tourmaline intends to pay special dividends in all four quarters of 2025, inclusive of this Q1 2025 special dividend. Tourmaline believes that with continued improvements in realized pricing, the Company is well positioned to increase returns to shareholders in 2025 relative to 2024, in addition to pursuing a growth capital budget.
⦁ Tourmaline paid $3.32 per share in combined base and special dividends in 2024, a 5.3% trailing yield based on an average 2024 share price of $62.37.
Full-year 2024 capital expenditures were $1.9 billion, including Q4 2024 capital expenditures of $460.2 million.
Exit 2024 net debt was $1.7 billion, approaching the Company’s long-term net debt target of $1.5 billion (which is approximately 0.30 to 0.35 times 2025 forecast net debt to cash flow). This does not include the value of the Company’s Topaz shares, which was $911.5 million based on a December 31, 2024 closing Topaz share price of $27.85. Maintaining balance sheet strength puts the Company in a strong position to deal with any new macro challenges and to take advantage of opportunities that might arise.

2024 RESERVES

⦁ Year-end 2024 PDP reserves of 1.35 billion boe were up 29% after accounting for 2024 annual production of 212 million boe. Total proved (“TP”) reserves of 2.91 billion boe were up 19% after accounting for 2024 production. 2P reserves of 5.50 billion boe were up 14% after accounting for 2024 production.

⦁ For the second consecutive year, the EP program had an increased emphasis on conversions to PDP rather than 2P reserve growth compared to previous years.

⦁ After 16 years of operations, Tourmaline now has 24.84 TCF of economic 2P natural gas reserves and 1.36 billion barrels of 2P oil, condensate and NGL reserves, all of which are pipeline-connected to markets across North America. At year-end 2024, 84% of the current estimated drilling inventory was not booked in the 2024 year-end reserve report.

⦁ Year-end 2024 oil, condensate, and NGL 2P reserves of 1.36 billion barrels represent the second largest conventional liquids reserve base in Canada, based on public disclosure.

⦁ Tourmaline has only booked 3,972 gross locations of a total drilling inventory of 25,462 gross locations (16% of the overall inventory) to achieve year-end 2024 2P reserves of 5.50 billion boe.

⦁ Tourmaline replaced 330% of its 2024 annual production of 212.0 million boe with 2P additions of 698.8 million boe, including 2024 production.

⦁ Tourmaline’s 2024 PDP finding and development (“F&D”) costs were $8.45 per boe including changes in future development capital (“FDC”), yielding a PDP reserve recycle ratio(10)(11) of 1.8 times.

⦁ TP FD&A costs in 2024 were $9.44 per boe, including changes in FDCs. 3-year TP FD&A costs are $10.23 per boe, including changes in FDC.

⦁ 2P FD&A costs in 2024 were $7.28 per boe, including changes in FDC, yielding a 2P recycle ratio of 2.1 times. 3-year 2P FD&A costs were $9.03 per boe, including changes in FDC. The 2024 2P FD&A costs continue to reflect the increased focus on conversions to PDP. Approximately 81% of the 256.5 net wells rig released in 2024 were conversions from undeveloped reserves to developed reserves. Delays in acquiring new surface disturbance permits in HV1 areas in NEBC limited the ability to drill delineation pads and book 2P reserves. The Company expects this situation to improve in 2025.

⦁ Tourmaline’s 2P reserve value (before taxes) equates to $114.20 per diluted share (after tax reserve value of $87.61 per diluted share) using the January 1, 2025 engineering price deck at a 10% discount rate. TP reserve value (before tax) is $75.17 per diluted share and $59.18 per diluted share (after tax). PDP reserve value is $44.42 per diluted share (before tax) and $37.12 per diluted share (after tax).

2025 CAPITAL PROGRAM

⦁ The full-year 2025 EP capital budget range remains unchanged at $2.60 to $2.85 billion. The Company expects steadily improving natural gas prices in 2025. Should the price recovery materialize later in the year, the capital program will be sequenced accordingly.

⦁ Facility and pipeline expenditures of $300.0 million remain in the total 2025 EP capital budget, including the ongoing NEBC North Montney Phase 1 infrastructure buildout, electrification pre-builds for the 2026-2027 West Doe and Groundbirch gas plant projects, and certain long-lead time facility pre-orders.

⦁ The Company expects to finalize the sequencing of the entire future NEBC infrastructure buildout during 2025 (expected to include up to four new gas processing facilities in aggregate). The Groundbirch development is now expected to consist of two separate 200 mmcfpd deep-cut plants, to be installed in the 2027 to 2029 time frame.

MARKETING UPDATE

⦁ Tourmaline’s average realized natural gas price in 2024 was CAD $3.38/mcf, CAD $1.90/mcf above the average 2024 AECO 5A index price of CAD $1.48/mcf. The Company’s marketing diversification portfolio and strategic hedging program allow Tourmaline to consistently outperform local hub pricing on a sustained basis.

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