Tourmaline Oil Corp. (TO: TOU) has provided an operations and financial update and highlights from its year-end 2012 independent reserve evaluation.
Total year-end 2012 Proved plus Probable (2P) reserves of 438 million barrels of oil equivalent after four full years of operation.
Total 2P reserve additions of 186.6 million barrels of oil equivalent in 2012, representing 69% growth over 2011 total 2P reserves before 2012 production with 54% per share. Similarly, proved reserves grew by 80% in 2012 over 2011 with 63% per share.
Year-end 2012 2P reserve value of C $4.3 billion with 10% discount before tax, representing 61% growth over year-end 2011 2P reserve value, despite a difficult gas price environment during the year and lower overall natural gas prices utilized in the 2012 independent report. The net present value increase in 2012 is C $1.65 billion.
2012 2P finding, development and acquisition costs of C $10.35 per barrel of oil equivalent including future development capital (FDC) and C $5.80 per barrel of oil equivalent excluding FDC, down from C $13.34 per barrel of oil equivalent in 2011 including changes in FDC. 2012 total proved FD&A costs were C $14.06 per barrels of oil equivalent including FDC, down from C $19.71 per barrels of oil equivalent in 2011.
Year-end 2012 proved developed producing reserves of 92 million barrels of oil equivalent and 11.1 million barrels of oil equivalent proved developed non-producing reserves. The majority of the non-producing reserves will come on-stream during Q2 2013 via the ongoing new facility projects at Sunrise-Dawson, B.C., and Spirit River, Alberta.
First quarter 2013 drilling and tie-ins are expected to add a further 13 million barrels of oil equivalent of proved developed producing reserves during the quarter.
2012 Recycle Ratio of 2.25 based on 2012 2P finding, development and acquisition costs of C $10.35 per barrels of oil equivalent including FDC and 2013 forecast funds from operations per barrel of oil equivalent of C $23.26.
Tourmaline exceeded its year-end 2012 exit production guidance of 70,000 barrels of oil equivalent per day, and expects to reach the 75,000 barrels of oil equivalent per day production level, on a sustained basis, in March 2013.
Current full year 2013 average production guidance is 75,000 barrels of oil equivalent per day, representing 50% growth over average 2012 production of 50,803 barrels of oil equivalent per day.
The company will bring 13,000 barrels of oil equivalent per day of currently shut-in production on-stream in mid-May via a new gas plant in Dawson/Doe, B.C. and an expanded facility at Spirit River.
The company also has an additional 21 wells to tie-in and bring on-stream during the first quarter, throughout the operated E&P portfolio.
Tourmaline is currently operating 11 drilling rigs, with eight rigs in the Deep Basin, two rigs at Spirit River, and one rig in NEBC. A total of 28 to 30 new wells are planned for 1Q 2013.
Seven of the eight Deep Basin rigs are drilling horizontal wells and 2013 will be the first year in which the company will realize the benefit of Deep Basin horizontal drilling for the full year.
The most recent Wilrich horizontal at Horse in the Deep Basin tested at a final test rate of 26.1 million cubic feet per day at 18.7 megapascals at the conclusion of a three-day test period.
The most recent Spirit River pool expansion horizontal has averaged 836 barrels of oil per day and 2.7 million cubic feet per day of gas during the first seven days of production.
Fourth quarter 2012 production averaged 57,229 barrels of oil equivalent per day, a 51% increase over 4Q 2011 average production rate of 37,912 barrels of oil equivalent per day.
Full year 2012 average production of 50,803 barrels of oil equivalent per day represents a 64% increase over the 2011 full year average production rate of 31,007 barrels of oil equivalent per day.
Funds from operations were C $93.8 million for 4Q 2012, a 28% increase over 4Q 2011.
Operating expenses for 4Q 2012 continued to be strong at C $4.10 per barrel of oil equivalent resulting in full-year 2012 operating expenses of C $4.43 per barrel of oil equivalent, a 21% decrease compared to 2011 operating expenses of C $5.58 per barrel of oil equivalent.
Fourth quarter capital spending on E&P activities was C $214.4 million and was C $606.7 million including corporate and property acquisitions.
The company estimates net debt as at Dec. 31, to be C $464.3 million.
The sale of the company's Elmworth assets for a net C $77.5 million remains on schedule to close in March 2013. The company has reclassified C $33 million out of PP&E into current assets as an asset held for sale in its Dec. 31 financial statements.
Tourmaline is a Calgary-based intermediate crude oil and natural gas E&P company focused on long-term growth through an aggressive exploration, development, production and acquisition program in the Western Canadian Sedimentary Basin.