TOURMALINE DELIVERS STRONG FREE CASH FLOW IN Q2 2025, UPDATES EP PLAN, ANNOUNCES NEW LONG-TERM LNG FEED GAS SUPPLY AGREEMENT AND DECLARES SPECIAL DIVIDEND
Executive Summary
- Tourmaline reported Q2 2025 cash flow of $822.8 M and free cash flow of $316.9 M, generating a special dividend of $0.35 per share.
- Production averaged 620,757 boe/d (up 10% YoY) and the company released an updated EP growth plan targeting 850,000 boe/d by early‑next decade, fully funded by cash flow.
- Signed an 8‑year LNG feed‑gas supply agreement with Uniper to deliver 80,000 MMBtu/day beginning Nov 2028, providing exposure to the Dutch TTF price hub.
Key Details
- Financial Results
- Q2 2025 cash flow: $822.8 M ($2.16 per diluted share).
- Free cash flow: $316.9 M ($0.83 per diluted share).
- Net earnings: $514.6 M ($1.35 per diluted share), a 101% YoY increase.
- EP capital expenditures: $489.8 M; total capex: $505.2 M.
- Full‑year 2025 EP budget unchanged at $2.60–$2.85 B.
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Net debt (June 30 2025): $1.9 B (~0.5× cash flow).
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Production
- Q2 average: 620,757 boe/d (mid‑point of guidance, +10% YoY).
- Full‑year 2025 forecast: 635–650 k boe/d; exit‑year 2025: 680–690 k boe/d.
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Preliminary 2026 range: 690–710 k boe/d.
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EP Growth Plan
- Target production: ~850,000 boe/d early next decade (30% growth by 2031).
- Expected annual free cash flow at flat pricing: $2.5‑$3.0 B once maintenance‑level capital (~$2.5 B/yr) is reached.
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Plan funded entirely by operating cash flow; no external financing required.
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Long‑Term LNG Feed‑Gas Supply Agreement
- Counterparty: Uniper (German energy company).
- Volume: 80,000 MMBtu/day of natural gas delivered to the U.S. Gulf Coast.
- Term: 8 years, commencing November 2028.
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Pricing exposure linked to Dutch Title Transfer Facility (TTF).
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NEBC Montney Development Project
- Phase 1 & 2 will add ~1.1 bcf/d of gas and >50,000 bpd of liquids over six years.
- Infrastructure spend: ~$350 M (2024‑2025) for processing complexes, pipelines, water recycling, electrification, etc.
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First production from the project expected Q4 2026; Phase 1 Groundbirch plant slated for H2 2027.
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Dividend
- Special dividend: $0.35 per share payable August 20 2025 (record date Aug 8).
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Quarterly base dividend of $0.50 per share to be announced early September 2025.
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Capital Management
- Q2 EP capex was $70 M below forecast due to activity deferrals.
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Company will monitor natural‑gas prices and may defer additional capital from Q3 into Q4 2025 or Q1 2026 to protect 2H 2025 free cash flow.
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Market & Hedging
- Realized natural‑gas price: C$3.34/mcf (94% above AECO benchmark).
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Hedged volume for remainder of 2025: 1.1 bcf/d at weighted average fixed price C$4.48/mcf (incl. C$19.75/mcf in international markets, C$6.43/mcf in Western US).
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Operational Outlook
- Planned 2025 drilling program: 365 wells (full rig fleet operating from Q3).
- Anticipated commodity‑price improvement in H2 2025 with LNG Canada start‑up, supporting higher free cash flow.
Notable Quotes
“Our strong free‑cash‑flow generation enables us to fund our ambitious EP plan, return capital to shareholders and secure a long‑term LNG feed‑gas contract that diversifies our revenue base.” – Michael Rose, Chairman, President & CEO
All forward‑looking statements are subject to risks and uncertainties detailed in the release.