Tourmaline Oil acquires two private producers
Tourmaline Oil Corp. says it is buying two privately held oil and gas companies producing 76,000 barrels of oil equivalent per day for a total of about $526 million in cash and shares.
Including debt, it says the value of the deals is $770 million.
The Calgary-based producer, Canada’s biggest natural gas producer and a frequent asset buyer in the past few years, says it has agreed to pay $144 million, composed of $73.75 million cash, 1.5 million Tourmaline shares and the assumption of $44 million in debt, to buy Modern Resources Inc.
It says it has agreed to pay $626 million, including 24.2 million Tourmaline shares and the assumption of about $200 million in debt, for Jupiter Resources Inc.
Tourmaline says it plans to sell for $130 million a gross overriding royalty on the Modern and Jupiter lands in northwestern Alberta to Topaz Energy Corp., a subsidiary it recently took public with a $217.5 million initial public offering.
Tourmaline reported net earnings of $4.8 million on revenue of $518 million in the third quarter, down from earnings of $15.8 million on revenue of $440 million in the same period last year.
It said production grew three per cent to 298,000 boe/d from 290,000 boe/d.
Tourmaline says it expects its production at the end of 2020 to be about 400,000 boe/d with the successful completion of the two acquisitions.
According to their websites, Modern Resources is owned by ARC Financial Corp. and EnCap Investments L.P., while Jupiter Resources is an independent company which counts Apollo Global Management as an investor.