Corporate Presentation May 2019 - Tourmaline Oil...R26 R24 R22 R20 R18 R16 R14 R3 R1W6 T57 T55 Smoky...
Transcript of Corporate Presentation May 2019 - Tourmaline Oil...R26 R24 R22 R20 R18 R16 R14 R3 R1W6 T57 T55 Smoky...
Corporate Presentation
May 2019
Current Status
Production Overview • 2019 average production forecast of 300,000 boepd
• 1H 2019 production 290,000-300,000 boepd, 2H 2019 production 310,000 – 320,000 boepd
• 2019 average liquid production of 66,000 bpd
Three Major Core Areas • Alberta Deep Basin: largest land position/largest producer
• NEBC Montney Gas/Condensate: Canada’s third largest Montney producer by 2H 2019
• Peace River Triassic Oil: Three large, regional, light oil and gas resource plays
• All three core areas completely de-risked via 1,400 wells drilled by Tourmaline since
February 2009
Reserves • 2P gas reserves of 11.7 TCF (Jan 1, 2019)
• 2P liquid reserves of 505.2 mmbbls (Jan 1, 2019)
Drilling Inventory • Approximately 6,865 horizontal locations in the Deep Basin; 3,565 hz Montney locations in
NEBC; 1,850 locations in Peace River High Charlie Lake core area (see Schedule A)
Financial Position • Net Debt $1.71 billion (March 31, 2019)
• Top quartile debt to cash flow ratio will be maintained
• EP Capital budgets generate free cash flow for 2019 and beyond
• Continued strong earnings reflect Tourmaline’s capability to generate growing full cycle
returns for shareholders
Shares OS • 272.1 million (March 31, 2019)
• Insiders have purchased over 22% of OS (fully diluted) (D&O ownership 8.0%)
May 2019
2
Historical EP Performance
0
2
4
6
8
10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Reserves p
er S
hare (B
OEs)
Reserves Growth Per Share*
0
50
100
150
200
250
300
350
400
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Productio
n p
er Thousand Shares
(B
OEs)
Production Growth Per Share*
$3.00
$4.00
$5.00
$6.00
$7.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2009-2018 Op Costs/BOE
Mar 2019
3
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cash Flo
w per Share ($
)
Cash Flow Per Share
• 2010-2018 Production growth per share CAGR of 29%. • 2P Reserve Value of $15.9 billion after 10 years.
• Lowest capital costs and low cash costs allow Tourmaline to grow profitably on a full cycle basis at natural gas prices above CAD$1.80/mcf.
* debt adjusted
A History of Full Cycle Profitability
May 2019
*
0.00
1.00
2.00
3.00
4.00
5.00
6.00
-
50
100
150
200
250
300
350
400
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
AEC
O (
$/m
cf)
Earn
ings
be
fore
tax
($ m
illio
ns)
Earnings before taxes (000,000s)
AECO (CAD$/mcf)
• Tourmaline focusses on generating earnings and full cycle profitability/returns.
• Tourmaline has increased cash flow by 425% per share since the November 2010 IPO.
• The EP strategy focusses on selecting premium subsurface targets and continually reducing
capital and cash costs as the development plans are executed.
• The focus on economic sweet spots will yield superior returns.
• Tourmaline can generate full cycle returns at gas prices above CAD$1.80/mcf.
* Q4 2014 earnings enhanced by the sale of 25% of the Peace River High Complex.
4
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
TOU ECA CNQ ARX VII CVE PEY POU BIR HSE BNP AAV NVA VET SRX IMO KEL BXE PNE CR CPG
Production (M
mcf/d)
2016A 2017A 2018E 2019E 2020E
Source: Peters and Co
Largest WCSB Gas Producers
5
Mar 2019
Tourmaline will be the largest
natural gas producer in Canada
(Based on 2019 Estimates)
A Significant Liquids Producer
Mar 2019
Increased volumes accessing Saturn
deep cut and acceleration of new
liquid rich targets (Cardium, Viking,
Falher D).
Acceleration of Montney Turbidite
development with incremental condensate
production through the new Doe 2-11 plant
(2H Mar, 2017 start-up).
2-3 active rigs on the Peace River
High yielding record oil volumes for
the overall complex.
Tourmaline has doubled liquids production over the past 1.5 years with strong liquids growth across all three operated
complexes. The 2019 liquid production growth rate of 35-40% is amongst the highest in the Canadian oil and gas sector.
Deep Basin NEBC Peace River High
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Q3 2016 Q4 2016 Q1 2017 Q2 2017 2018 2019 Ave (E) Q4 2019 (E)
20,138 28,028
34,215 36,127
47,540
66,000 72,500
Oil
and
NG
Ls (
bb
l/d
)
Liquids Production Growth
6
Balanced Revenue and Cash Flow Streams
Through Product, Marketing and Transportation Diversification
May 2019
7
• Tourmaline consistently outperforms the quarterly AECO index price (every year for seven years)
• Tourmaline’s transportation diversification strategy allows for direct participation in natural gas price rallies at multiple
hubs (Dawn, Chicago, Ventura, San Francisco, etc)
• Oil, condensate and NGLs now generate over 1/3 of the Company’s revenue. These volumes are expected to grow by a
further 50% over the next 15 months.
AECO &
Station 2
16%
Fixed Price
9%
NYMEX
Basis
11%
NYMEX-Based Delivery
23%
NGL
10%
Oil and Condensate
31%
2019 BUDGETED REVENUE
Current 5 Year Plan(1)
Prod’n
BOEPD
After-tax
Cash Flow
$MM(2)(3)
After-tax
CFPS -
Diluted
E&P Capital
Program(4)
$MM
Free Cash
Flow(5)
$MM
Dividend
$MM
Ending
(Net Debt)(3)
$MM
2019E 300,000 $1,521 $5.58 $1,200 $290 ($125) ($1,554)
2020E 322,000 $1,665 $6.11 $1,155 $475 ($131) ($1,206)
2021E 337,000 $1,764 $6.47 $1,278 $449 ($131) ($887)
2022E 361,000 $1,834 $6.73 $1,322 $473 ($131) ($544)
2023E 377,000 $1,974 $7.24 $1,407 $526 ($131) ($149)
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May 2019
(1) 5 year plan derived by utilizing, among other assumptions, historical Tourmaline production performance and current cost assumptions inflated at 2.5% annually after 2019. 2020 and beyond provided for illustration only. Budgets and
forecast beyond 2019 have not been finalized and are subject to a variety of factors including prior year’s results.
(2) Price assumptions: Gas price - $3.00 2019 NYMEX US, $3.10 2020-2023 NYMEX US, $1.80 2019 AECO, $2.00 2020 AECO, 2.25 2021-2022 AECO, $2.50 2023 AECO. Oil price - $60.00/bbl 2019 WTI US, $55.00/bbl 2020-2023
WTI US.
(3) See “Non-GAAP Measures” in Forward Looking Statement Advisories.
(4) E&P Capital Program is defined as total capital spending before acquisitions, dispositions and other corporate expenditures.
(5) Free Cash Flow is defined as Cash Flow less Total Net Capital Expenditures. Total Net Capital Expenditures is defined as the sum of E&P Capital Program and other corporate expenditures, net of non-core dispositions . Free Cash
Flow is prior to dividend payments.
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2016 2017 2018 2019 2020 2021 2022 2023
Boe/d Spirit River
NEBC
Deep Basin
Feb 2019
AlbertaNE
BC
Fir
Wild
River
Cardium
Viking
Mannville/Notikewin
Falher
Cadomin
Dunvegan
Nikinassin
Bluesky
Gething
Wilrich
Gething
T43
T45
T47
T49
T51
T53
T55
T57
T59
T61
T63
T65
R10R12R14R16R18R20R22R24R26
R1W6R3
R5R7R9
• Current Production 185,000-190,000 boepd
• Current Reserves 1,041.4 mmboe (Jan 1, 2019)
• Tourmaline Land Base 1.77 million acres
• Drilling Inventory 2,486 locations (vertical)
(~1.5wells per section only)
6,865 hz locations
T. 51
Tourmaline Gas Plant
Tourmaline Lands
Possible Facility Locations
Alberta Deep Basin
Hinton
Ansell
Marsh
Harley
Minehead
Smoky
Cecilia
Musreau
/Kakwa
Lovett
Brazeau
Edson
Sundance
TCPL Main Line
Leland
Tourmaline has reached production levels of
185,000 – 190,000 boepd from the Deep Basin
through the drilling of only 580 hz wells to date.
The Company has a future hz drilling inventory of
over 6,865 locations.
T59
Oldman
2015 Significant New Discoveries
9
Mar 2019
Alberta Deep Basin
Liquids Rich Cardium Fairway
T43
T45
T47
T49
T53
T55
T57
T59
R14R16R18R20R22R24R26
R1W6R3
T57
T55
T59
Smoky
Cabin
Creek
Stolberg
Anderson
Tourmaline Gas Plant
Tourmaline Lands
Tourmaline Cardium Locations
Tourmaline Pipelines
Liquids Rich Cardium Fairway
Cardium Faults
10-25-50-23W5 PAD (1 Vert + 1 Hztl)
IP 90 - 28.5 mmcfpd, 360 bbls/day cond.
CR - 16.2 mmcfpd, 260 bbls/d
CUM - 10.2 bcf, 200 mstb
EUR - 28.5 bcf, 493 mbbls
Tourmaline Cardium Wells 2017-2018
Tourmaline Cardium Wells
The combination of extensive 3D seismic coverage
and the lowest cost drilling/completion capability
make the liquids rich Cardium play a significant
new incremental opportunity in the overall
Tourmaline Deep Basin portfolio.
10
Only the initial Cardium delineation locations are
depicted, the potential location inventory is
significantly larger. Note that each depicted surface
location represents two hz wells (hanging wall/footwall)
12-36-50-23W5 Pad (1 Hztl)
IP 90 - 15 mmcfpd
CR - 5.9 mmcfpd
CUM - 6.30 bcf, 184 mbbls
EUR - 14.95 bcf, 429 mbbls
16-20-50-22W5 PAD (2 Hztls)
02/05-29 - 16.9 mmcf/d, 620 bpd cond.
03-21 – 17.1 mmcf/d, 670 bpd cond.
72 hour test average rates Feb 2019
6-1-51-23W5 PAD (2 Hztls)
IP 90 - 21.7 mmcfpd
CR - 11.9 mmcfpd
CUM - 4.3 bcf, 92 mstb
EUR - 24.3 bcf, 441 mbbls
NEBC Montney Gas/Condensate Complex
TCPL Mainline
Westcoast
McMahon
Gas Plant
Feb 2019
11
* See Schedule A
Current Prod. 375-400 mmcf/d
12,500-13,500 bpd condensate
4,000-4,500 bpd ngl
Current Reserves 1,230.6 mmboe (Jan 1, 2019)
Montney Drilling In excess of 3,565 horizontal
Inventory* locations.
Tourmaline is the 4th
largest Montney producer in
NEBC with production in excess of 85,000 boepd.
TOU Land
TOU Pipelines
Major Pipelines
TCPL North
Morntney 2019
Spectra Ft.
Nelson
Mainline
3-18 Sunrise Gas Plant
75 MMCF/D
A-21-I Gundy
Comp. Station
10 MMCF/D
2-11 Doe Gas Plant
Start-up Mar 30, 2017
60 MMCF/D
13-25 Doe Gas Plant
100 MMCF/D
1-32 Doe
Comp. Station
TOU 12 MMCF/D
B-67-H Sundown Gas Plant
50 MMCF/D
Mid-2018 expansion to
150 mmcfpd
C-60-A Gas Plant
200 MMCF/D
Q4 2019
Black Swan
Comp. Station, dehy
25 mmcf/d
TOU Gas Plants
TOU Compressor Station
TOU Wells
2018/2019 NEBC Development Plan
2018 Drilling • 57 wells (D,C,T)
2018 Facilities • Doe 2-11 sweetening facility will
add 3,500 boepd of primarily
condensate production in Q4 2018
• Production acceleration at Gundy
in Q4
2019 Facilities • 200 mmcfpd deep cut plant at
Gundy in late Q2 2019
• 15,000-17,500 bpd condensate
and ngls
Gundy Ck Montney Development
Mar 2019
AltaGas North
Gathering Line
Pembina
Gundy
Line
2017
Alliance
TCPL North
Montney Line
2019
A-21-I Gundy
Comp. Station
10 MMCF/D
C-60-A Gas Plant
200 MMCF/D
June 2019
Gundy
Current Production: 15,000-17,500 BOEPD
No of wells drilled by TOU: 50
Free Liquid Content: 30-100 bbls/mmcf
Completed well cost: $3.3-3.7M
TWP 8894-B-9
94-B-16 94-A-13
Spectra Fort
Nelson Mainline
12
South Gundy
Townsend Tie-In
40-50 MMCF/D
Construction of Phase 1 Deep Cut Gas Plant has commenced in
the field, a 50,000 boepd operated production increment to be
realized by Tourmaline in June 2019.
Spectra Fort
Nelson Mainline 2.0
bcf/d (Sales)Tourmaline Land
Tourmaline Montney Well
Tourmaline Future Padsite
Tourmaline 2017 Drilled Wells
Tourmaline 18/19 Schedule Wells
Tourmaline Pipelines
Tourmaline Proposed Gas Plant
A-078-A PAD Avg Rate Number Avg Free Avg Total
9 wells to Date of Days Cond Yield Liquid Yield
Rig Released June 2017 (mmcf/d) (bbl/mmcf) (bbl/mmcf)
Upper Montney Lobe 5.2 434 31.3 46.5
Middle Montney Lobe 3.7 457 33.6 48.9
Lower Montney Lobe 2.9 400 30.5 45.6
B-093-I PAD Avg Rate Number Avg Free Avg Total
11 wells to Date of Days Cond Yield Liquid Yield
Rig Released Nov 2017 (mmcf/d) (bbl/mmcf) (bbl/mmcf)
Upper Montney Lobe 9.2 66 46.4 91.8
Upper Middle Montney Lobe 4.1 140 58.3 94.4
Middle Montney Lobe 5.9 99 48.5 81.1
Lower Montney Lobe 4.6 80 52.1 85.7
A-032-I PAD Avg Rate Number Avg Free Avg Total
6 wells to Date of Days Cond Yield Liquid Yield
Rig Released Sept 2018 (mmcf/d) (bbl/mmcf) (bbl/mmcf)
Upper Montney Lobe 8.4 119 99.9 139.4
Upper Middle Montney Lobe 7.6 103 87.6 126.2
Middle Montney Lobe 3.4 122 90.7 131.3
Lower Montney Lobe 3.0 84 101.9 143.2
C-023-I PAD Avg Rate Number Avg Free Avg Total
7 wells to Date of Days Cond Yield Liquid Yield
Rig Released Aug 2017 (mmcf/d) (bbl/mmcf) (bbl/mmcf)
Upper Montney Lobe 7.3 406 18.2 29.3
Upper Middle Montney Lobe 2.9 400 23.3 35.8
Middle Montney Lobe 2.1 388 26.3 39.9
Lower Montney Lobe 2.5 423 18.2 29.3
A-078-A PAD
B-093-I PAD
A-032-I PAD
C-023-I PAD
Mar 2019
Gundy Horizontal Well Performance
Nov 2018
13
2017/2018 average completed well costs of $3.3-3.5 million, and along with Sunrise-Dawson, the least expensive for the entire Canadian Montney sector.
Gundy Creek Phase 1 Construction
May 2019
14
Tourmaline Long Term NEBC Montney Growth
Aug 2018
Sunrise,Dawson,
Sundown,Gundy
Doe 2-11
S. Gundy Tie-in
Gundy
Phase One
Gundy
Phase Two
Sundown
Phase One
Development
50,000
75,000
100,000
125,000
150,000
175,000
200,000
Current Q4 2018 2H 2019 2020 2020-2022
(Gas Price Contingent)
Productio
n (
boepd)
(Assumes all
volumes directed
to TOU facility)
• Tourmaline can grow to a 200,000 boepd NEBC
Montney producer within the current 5 year plan
time frame.
• Gundy Phase Two and Sundown developments are
not in the current five year plan, both projects are
completely de-risked with 20 years of drilling
inventory and will produce into Tourmaline operated
infrastructure. Both could be on-stream by 2020.
15
Tourmaline Montney
Efficiency + Execution
Apr 2019
16
Select Montney Peers
ARC Resources, Birchcliff, EnCana, NuVista, Painted Pony, Paramount & Seven Generations
0
200
400
600
800
1,000
1,200
1,400
Montney Net Production (MMCFE/d)
Source: Goldman Sachs except for Tourmaline (Q2/19E)
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
Corporate 2019E D/CF(1)
Source: All data Peters & Co except for PPY (Scotia)
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Montney D&C Costs ($MM)
Source: Publicly Available Information
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
Montney Op Costs per BOE
Source: Publicly Available Information
Encana Operating costs converted to CAD + $0.80
incremental cost per MCF for processing(1) See “Non-GAAP Measures” in Forward Looking Statement Advisories.
Mar 2019
T. 79
R. 9 R. 7 R. 5
T. 77
T. 83
T. 81
T. 75
R. 11
Tourmaline 2017 Upper Charlie Lake HZ
Tourmaline HZ Wells
Tourmaline Gas Plant
Tourmaline HZ Well Locations
Legend
Tourmaline Lands
* See Schedule A
16-14 Lwr Ch Lk New Pool Test 90 day production rates
841 bopd, 1.9 mmcf/d, 1,158 boepd
Cum oil 80,330 bbls in first 103 days
17
3-10 Spirit River
Gas Plant
12-6 Mulligan
Oil Battery
5-14 Mulligan
Oil Battery
15-13 Mulligan
Oil Battery
6-3 Spirit River
Oil Battery
Tourmaline Battery Site
Upper
Charlie
Lake
Type Log 6-11-77-8 W6
Lower
Charlie
Lake
Tourmaline Lower Charlie Lake HZ
Tourmaline Montney HZ
Lower Charlie Lake Fairway
Upper Charlie Lake Fairway
Progress 1-4 Lwr MNTN Q4 2016 IP90: 466 BOPD,
2.5 MMSCF/D, 891 BOEPD
Mulligan 8-15 Upper Trcl Pad Q3 201690 day production rates
1-21: 285 bopd, 0.3 mmcf/d, 335 boepd
4-13: 631 bopd, 1.0 mmcf/d, 798 boepd
5-13: 594 bopd, 0.5 mmcf/d, 678 boepd
8-21: 349 bopd, 0.5 mmcf/d, 429 boepd
12-13: 533 bopd, 0.6 mmcf/d, 642 boepd
6-10 Lwr Ch Lk Pad Q3 201690 day production rates
5-9: 156 bopd, 0.7 mmcf/d, 273 boepd
12-9: 149 bopd, 1.1 mmcf/d, 329 boepd
13-9: 246 bopd, 1.7 mmcf/d, 536 boepd
11-11: 285 bopd, 1.9 mmcf/d, 604 boepd
Mulligan 5-30 Upper Trcl Pad Q3 20175 day production rates
12-20: 257 bopd, 0.4 mmcf/d, 327 boepd
12-36: 550 bopd, 0.5 mmcf/d, 632 boepd
8-19: 228 bopd, 0.3 mmcf/d, 284 boepd
Spirit River 15-15 Upper Trcl Pad Q1 201710 day production rates
14-22: 876 bopd, 0.7 mmcf/d, 989 boepd
15-22: 507 bopd, 0.6 mmcf/d, 608 boepd
16-22: 873 bopd, 1.5 mmcf/d, 1129 boepd
Peace River High
• 1,850 Horizontal Locations* along Regional Play Fairway
• Current Reserves of 185.8 mmboe (Jan 1, 2019 GLJ)
• Regional pool defined by 225 horizontal and 140 existing
vertical wells
• 300-550 mboe 2P reserves per horizontal Charlie Lk/Montney
• $2.2-$2.4M Charlie Lk horizontal drill complete cost
• Upper Charlie Lake wells are profitable on a full cycle basis
at $25/bbl (U.S. WTI)
• 12 Lower Charlie Lake delineation wells in 2018
• 15 Lower Montney oil tests in 2018
Peace River High Complex Triassic Oil
Charlie Lake and Montney Plays
Valhalla pad (L. Montney)Well 1: 905 bopd, 5.9 mmcf/d (26 d)
Well 2: 532 bopd, 5.1 mmcf/d (7d)
Spirit R Acq
(Q4 2018)
3,264 ha
6.82 mmboe
800 boepd
Peace River High
Charlie Lk Oil
Montney
Gas/Cond
R. 15W5R. 1W6R. 15W6
T45
T55
T65
T75
T85
Alberta Deep
Basin
Chinook
Ridge
AlbertaNE
BC
Tourmaline Mid-Stream Assets
The infrastructure skeleton in all three core operated complexes is now complete.
This infrastructure is essentially all new and in the ‘growth’ areas of the WCSB.
Mar 2019
Legend
Tourmaline Lands
Tourmaline Gas Plant Site
Tourmaline Compressor
Tourmaline Oil Battery
Tourmaline Main Laterals
Main Sales Pipelines
• Current Tourmaline gas processing capacity of
1.45-1.50 bcf/day.
Two oil processing batteries with combined
processing capacity of 48,000 bpd.
Oil, condensate and ngl storage
capability of 275,000 bbls.
12 MW gas fired electrical
generating capacity.
4,425 km of Tourmaline
Operated Pipelines
18
• 18 Working interest gas plants, 15 of which
are 100% owned and operated
• 15 compressor stations
Water Infrastructure
• 8 Major Frac Water source/
Recycling Facilities,
450,000 m3 capacity
SundownSpirit River
Sunrise-
Dawson
Mulligan/Earring
Hinton
Ansell
EdsonMarsh
Harley
Fir
Minehead
Horse
Cecilia
Musreau/
Kakwa
Lovett
Brazeau
Kaybob
Gundy
Third Party Revenue Growth
2019 (F) $50-55M
2020 (Target) $65-75M
A significant, growing business
for Tourmaline.
This revenue is in addition to the estimated
$300MM(+) per year of cash flow that is
effectively preserved by owning the operated
infrastructure and not processing gas through
third party/midstream plants.
12,750
18,500
20,000
25,000
31,500(+)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1H 2018 2H 2018 1H 2019 2H 2019 2020
(preliminary est)
Condensate P
roduction (bbls/day)
Current Base
Deep Basin Kca
Deep Basin Wroe Compressor
Project
Dawson 2-11 Facility
South Gundy Townsend Tie-In
Deep Basin Kca/KV/Kf
Gundy Deep Cut
Deep Basin Facility Mods
Kca/Kv/Kcf
Gundy Phase 2
Production totals reflect anticipated
total condensate production by the
end of the specified period. (750 bpd)
(3,500 bpd)
(750 bpd)
(750 bpd)
(5,000 bpd)
(1,500 bpd)
(5,000 bpd)
(1,500 bpd)
20,000 bpd corporate condensate
production milestone achieved in
late October 2019.
Tourmaline Condensate Production Outlook
2018-2020Nov 2018
(not included in 5 year plan)
19
Historical Reserves Summary
Feb 2019
Reserves
2012 2013 2014 2015 2016 2017 2018
(mmboe) (mmboe) (mmboe) (mmboe) (mmboe) (mmboe) (mmboe)
PDP 91.9 122.3 177.8 263.2 352.1 436.5 473.5
TP 249.2 316.5 472.3 644.1 859.2 1056.0 1206.7
2P 438.1 590.1 855.8 1108.3 1747.2 2216.6 2457.8
2012 2013 2014 2015 2016 2017 2018
(/boe) (/boe) (/boe) (/boe) (/boe) (/boe) (/boe)
2P FDA(i)
$10.35 $11.84 $10.40 $5.89 $5.94 $3.76 $5.15
With FDC
(i) See February 2019 press release for full FD&A disclosures
(ii) Reserves figures include the Company’s working interest share of reserves prior to the
deduction of interest owned by others (burdens) and include royalty interest reserves
owned by the Company.
0
500
1000
1500
2000
2500
3000
PDP TP 2P
MM
BO
E
Reserves (GLJ)
2014 2015 2016 2017 2018
4.35
6.19
7.658.25
12.71
15.1015.93
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
2012 2013 2014 2015 2016 2017 2018*
$ B
illion (*Jan 201
9 P
ricing)
Reserves Value (GLJ, 2P)
• Total Proved Reserve life index a reasonable 11
years.
• 2P FDC realistic, at approximately 4.5 years of
future projected cash flow. Historically
Tourmaline has systematically converted the 2P
reserves to PDP reserves in the 4.0-4.5 year
time frame.
• Material, positive technical revisions each of the
last six years.
• Considerable reserve value/NAV increase
opportunity with improving gas prices.
20
0
200
400
600
800
1000
MM
bo
e
Independently Recognized Canadian 2P Reserves
May 2018
Tourmaline has booked only 14% of
existing drilling inventory (2,074 of
14,471 locations – See Schedule A).
Tourmaline has historically converted
2P reserves to PDP reserves in
approximately 4 years. YE 2017 2P
reserves are 2.2 billion boe.
0
2
4
6
8
10
12
TC
F
Natural Gas (1)
Conventional
Oil & Liquids
(1) Based on Canadian Reserves from public information.
21
Gas Development Location
Inventory and EconomicsMar 2019
22
Notes:
(1) Average operating expenses over the initial five years of production.
(2) Internal Rate of Return calculation is based on monthly cash flows.
(3) Independent Reserve Engineer Jan 1, 2019 escalated price forecast, adjusted for transportation, quality and heat content.
(4) See Schedule A.
AB Deep
Basin
Vertical
Outer
Foothills
Vertical
AB Deep
Basin
Horizontal
B.C. Gundy
Montney
Horizontal
B.C.
Montney
Horizontal
PRH
Charlie Lake
Horizontal
PRH
Montney
Horizontal
Total Well Costs
(Drill, Case, Complete, $ Million) 2.40 3.70 4.10 3.30 2.80 2.20 3.40
Average Reserves/Well (bcfe) 2.3 5.8 5.4 8.3 5.5 2.1 4.6
Year 1 Production Rate 1.2 mmcfepd 2.9 mmcfepd 4.0 mmcfepd 5.6 mmcfepd 4.0 mmcfepd 197 boepd 461 boepd
Development Cost/boe $6.32 $3.83 $4.56 $2.39 $3.06 $6.27 $4.48
Operating Expenses/boe (1) $3.23 $2.45 $2.27 $3.05 $1.73 $7.72 $6.23
Net Present Value @ 10% (000's) $524 $4,020 $3,497 $10,835 $8,254 $3,587 $6,149
Internal Rate of Return (2)
16% 38% 40% 300% 221% 93% 89%
Payback Period (months) 25 25 25 6 8 14 15
Year 1 Gas Price (3) $1.73 $1.67 $1.73 $1.20 $1.60 $1.78 $1.78
Future Development Locations(4)
2,036 450 6,865 1,611 1,954 1,214 636
The TOU Engineering Execution Machine
Sep 2017
6.8
6.0
5.5
3.43.6
5.7
5.3
4.2
2.8 2.7
4.5
4.1
3.5
2.5 2.4
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2013 2014 2015 2016 2017
Capit
al
Cost (
$M
M)
Drill & Complete Costs
(Equipping not included)
South Deep Basin
NEBC (South Complex)
PRH
Tourmaline has the lowest completed per stage
well costs in the overall Montney play in
Western Canada and the Alberta Deep Basin.
• Since Feb 2009, Tourmaline has drilled 1035 wells across all three core operated complexes.
(Deep Basin 535 wells, NEBC 276 wells, PRH oil 224 wells)
• Through continuous engineering design improvements in all aspects of drilling and completions
operations, Tourmaline has realized a cost reduction of over 50% in all 3 complexes since 2012.
• Tourmaline has the internal staff capability to efficiently operate 22(+) drilling rigs, the current 5
year financial outlook assumes a 16/17 rig program.
23
Continuous Cost Reduction Strategy
$6.34
$5.58
$4.43$4.35
$4.87
$4.37
$3.31$3.19
$3.33
$3.00
$3.50
$4.00
$4.50
$5.00
$5.50
$6.00
$6.50
$7.00
2010 2011 2012 2013 2014 2015 2016 2017 2018
$/boe
Operating Costs
$1.29
$1.02
$0.79$0.74
$0.60
$0.45 $0.44 $0.46$0.49
$0.00
$0.50
$1.00
$1.50
2010 2011 2012 2013 2014 2015 2016 2017 2018
$/boe
General and Administrative Costs
• Tourmaline has the lowest effective interest rate/borrowing costs in the North American energy sector.
• The staff required to effectively operate a 300,000 boepd company growing to 350,000 boepd has already
been assembled.
Mar 2019
24
2019 Guidance
May 2019
25
2019(1)
Production – Boe/d 300,000
Cash Flow(i)
- $MM $1,521
CFPS - Diluted(i)
$5.58
E&P Capital Program(ii)
- $MM $1,200
Free Cash Flow(iii)
- $MM $290
Exit Net Debt(i)
- $MM $1,554
Debt to CF 1.0x
(1) Price Assumptions: Gas price - $3.00/mmbtu 2019 NYMEX US, $1.80/mcf 2019 AECO; 2019 Oil price - $60.00/bbl WTI US.
(i) See “Non-GAAP Measures” in the Forward Looking Statement Advisories section of this presentation.
(ii) E&P Capital Program is defined as total capital spending before acquisitions, dispositions and other corporate expenditures.
(iii) Free Cash Flow is defined as Cash Flow less Total Net Capital Expenditures. Total Net Capital Expenditures is defined as the sum of E&P
Capital Program and other corporate expenditures, net of non-core dispositions. Free Cash Flow is prior to dividend payments.
2019 Natural Gas Transportation
and Marketing Overview
29%
AECO
TCPL Mainline
10%
Kingsgate
California
~300 MMcf/d*
US Midwest/Other
~85 Mmcf/d
Station 2
26
41%
20%
10%
29%
Q2-Q4 2019 Average Natural Gas Portfolio
Diversification
US/Other Markets Hedges Stn 2 Aeco
(2)
(1) US/Other Markets access 28% physical markets + 13% of Nymex Basis
Differentials
(2) ~30% of Station 2 exposed at 7A/Hunt
(1)
Dawn
~115 Mmcf/d
May 2019
2019 Exit: 540 mmcf/d of gas will be to US/Other Markets
*Exit volumes
Highlights and Outlook
Apr 2019
• Tourmaline now a Senior with production exceeding 300,000 boepd.
• Tourmaline is the largest producer of Canadian natural gas and is a top ten Canadian liquids
producer (excluding oil sands/thermal).
• Continued strong earnings in 2018 as the Company focuses on full cycle profitability and returns.
• Tourmaline can provide growth and pay a dividend from excess annual free cash flow.
• The Company has achieved a step change reduction in the commodity prices required for full
cycle profitability across all three operated areas.
• Tourmaline has a diversified revenue base resulting from rapidly growing liquids volumes and a
strong gas transportation and marketing portfolio that provides multiple pricing points at hubs
across North America.
• Continued strong reserve growth in 2018 with Company reserves of 2.46 billion boe (Jan 1, 2019)
(11.7 tcf of natural gas and 505.2 mmboe of liquids - oil, condensate, ngl).
• Three expansive resource plays, completely derisked, with Tourmaline infrastructure in place and
85% of drilling inventory currently unbooked in the reserve report.
• Achieved 50% well cost reductions over the last 5 years, targeting a further 10% reduction in
2019/2020.
• The list of industry-leading Tourmaline operated ‘top’ wells continues in all 3 core areas.
27
APPENDIX
Return Metrics Price to Earnings
0x
10x
20x
30x
40x
50x
60x
Price to Earnings M
ultiple
Price / 2019E Earnings Per Share (United States)
0x
20x
40x
60x
80x
100x
Price to Earnings M
ultiple
Price / 2019E Earnings Per Share (Canada)
Source Bloomberg
Metrics based on the average for each respective sector (as at April 8, 2019).
29
Natural Gas Flows From Western Canada
30
$10.2 MM
$10.6 MM
$12.0 MM
$5.3 MM
$6.0 MM
$3.5 MM
$3.9 MM
$4.5 MM
15.5 Bcfe
9.7 Bcfe
12.8 Bcfe
4.3 Bcfe
7.8 Bcfe
6.9 Bcfe
4.1 Bcfe
5.4 Bcfe
0
2
4
6
8
10
12
14
16
18
Marcellus* Haynesville* Utica* Duvernay Montney
(Industry Average)
TOU BC Montney ** Deep Basin
(Industry Average)
TOU Deep Basin
Well Costs DC,T (CAD) Vs. EUR by Play Type
Completed Well Cost $CDN EUR (Bcfe)
*USD Converted into CAD ($1USD = $1.32CAD)
** Montney is the average BCFE type curve of South MNTN and Gundy
Source: Scotiabank "September 2018 - The Playbook" except for Tourmaline Figures
$0.66/mcf
$1.10/mcf
$0.94/mcf
$1.25/mcf
$0.77/mcf
$0.95/mcf
$0.83/mcf
$0.51/mcf
Completed Well Costs and EUR By
N. American Play TypeMar 2019
31
Tourmaline vs Natural Gas Peers
Cash Costs Per BOEMar 2019
32
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
Tourmaline (USD)* Canada Peer Average (USD)** US Peer Average***
Costs P
er B
OE
Tourmaline Vs. US Gas Weighted Peers
Cash Costs in USD* per BOE (Q3/18)
Operating Transportation G&A Interest
$6.24
$9.52
*CAD Converted into USD ($1USD = $1.32 CAD)
** Peer average consists of 7 Canada Peers of which weighted gas production > 50% (AAV, ARX, BIR, CR, PEY, POU and PPY)
***Peer average consists of 7 United States Peers weighted gas Production > 50% (AR, CHK, CNK, COG, EQT, RRC and SWN)
$7.89
Doe 2-11 Condensate/NGL Facility
A 3,000-3,500 boepd project started up in late September 2018
Sep 2018
33
EP Growth Plan
(Original Business Plan)
• Primary growth mechanism will be a conventional EP Program (including
Resource plays).
• Build 2-3 core EP areas during initial three years of operations.
• Strive for large land positions, operatorship and infrastructure control in
those core areas.
• Achieve profitable annual growth via low operating cost/high netback
properties.
• Operate with a relatively small, technically strong staff.
• Dispose of non-core assets on a continuous basis, as appropriate.
Sept 2008
34
This is essentially the same business plan that was executed for Duvernay Oil Corp. (2001-2008)
Banshee Alberta Gas Plant
35
• Simple, easy to construct dew point plants tied to
the main TCPL sales system
• Total cost (2 phases) of $80M, capacity of 130
mmcfpd with enhanced liquids recovery capability
Top Alberta Gas Wells
(September to November)Jan 2019
Source: NBF
0
100
200
300
400
500
600
700
800
900
1000
Tou
rmal
ine
02-1
9-0
50
-20
W5
Tou
rmal
ine
10-1
4-0
58
-01
W6
Tou
rmal
ine
12-1
7-0
49
-19
W5
Tou
rmal
ine
12-0
8-0
50
-20
W5
Tou
rmal
ine
13-1
8-0
50
-20
W5
Ad
van
tage
09-1
9-0
75
-10
W6
Bo
nav
ista
14-0
2-0
44
-28W
4
Tou
rmal
ine
02-2
3-0
58
-01
W6
Tou
rmal
ine
10-1
8-0
49
-19
W5
Tou
rmal
ine
13-1
8-0
50
-20
W5
Tou
rmal
ine
14-0
6-0
50
-20
W5
Enca
na
04-1
8-0
63
-20
W5
Enca
na
01-1
8-0
63
-20
W5
Enca
na
01-1
8-0
63
-20
W5
Tou
rmal
ine
04-2
8-0
52
-22
W5
CTD
(m
mcf
pd
)
Liquids
Gas
36
Tourmaline Environmental Performance
• Tourmaline strives to continually improve all aspects of environmental performance including the
impact of its operations on air, land and water.
• Tourmaline ranks as a ‘top decile’ performer under the new Ab Government carbon emission
framework and despite the Company’s size and extensive facility capacity has zero ‘large emitter’
sites.
• Tourmaline is Canada’s second largest natural gas producer, by far the ‘cleanest’ of the fossil fuel
group, and has constructed a network of new, state of the art facilities to process and transport
this gas.
• Tourmaline is at the forefront of multi-well pad drilling in Western Canada, dramatically reducing
the surface impact of full cycle resource play development in all three core operated areas.
• Tourmaline has systematically reduced CO2
and CH4
emissions by conducting all well testing in-
line and directly into Tourmaline facilities.
• Tourmaline is steadily expanding the use of CNG for drilling operations, reducing diesel usage.
• Tourmaline is an industry leader in non-potable frac water sourcing with six frac water
source/recycling facilities (>300,000 m3
capacity) avoiding the use of fresh water in frac
operations. Tourmaline is one of the first operators in B.C to utilize produced water in frac
operations and will be the first company in Alberta to employ this practice.
• Since inception Tourmaline has been an active participant in CAPP’s initiatives on environment,
health and safety and social responsibility under their Responsible Canadian Energy program.
37
GHG Emissions – Peer Comparison
Jul 2018
Tourmaline has the lowest GHG emissions intensity (CO2/boe) among Canadian Senior E&P peers
Notes:1. Based on CDP (Carbon Disclosure Project) data and includes Scope 1 and Scope 2 emissions unless otherwise stated under "Notes“.2. Represents 2016 data. 2017 data not yet available.3. Encana excluded since Encana does not disclose Scope 2 emissions, so figures are not comparable.4. Suncor intensity data has been derived from company website disclosure (Sustainability Reports).5. Imperial CDP intensity disclosure includes only Scope 1 emissions so it is likely understated in graph relative to peers.
0.000
0.010
0.020
0.030
0.040
0.050
0.060
0.070
0.080
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
CNRL
807,045
Suncor
725,100
Husky
334,000
Imperial
378,000
Cenovus
295,414
Crescent Point
173,329
MEG
77,245
Tourmaline
233,278
CO
2Intensity
(tonnes C
O2(e)/boe)
Gross C
O2
Em
issions
(tonnes C
O2(e))
Canadian E&P GHG Emissions 2016
Q1 2017 Production
38
BC Water Management
• 100% of all water flowed back from completion operations is recycled
• 90% of all water sourced for stimulation operations is recycled
• 187,000m3
of produced water storage capacity
– 3 produced water ponds South Montney and 1 North Montney
• 46 km of permanent pipeline infrastructure to transfer water to and from pads to produced water
pits
39
Natural Gas Substitution in Operations
• Raw Natural Gas cost (Feb 2017) ~$0.10/DLE (Diesel Equivalent Liter) vs $0.69/L rack price
for marked diesel
• 12 Drilling Rigs and all BC completion operations use a combination of NG/Diesel
• Drilling Rigs achieving ~40-50% displacement of diesel
• 6.8M liters of diesel displaced since May 2016
• $1.4M savings
Other benefits:
• 30% lower CO2
emissions – 2,800 tonnes avoided
• 75% lower NOx
emissions
• 90% lower particulate emissions
• 99% lower SOx
emissions
40
Tourmaline Technology Curve/Future
Concepts, Requirements & Opportunities
• Utilizing gas fired turbines to reduce
costs for drilling, completions, facilities
• Develop predictive reservoir/reserve tools
for horizontal clastic gas wells
• Refine drilling techniques/cost savings for
frontal foothills Wilrich/Notikewin hz drlg
• Understanding controls on Wilrich
deliverability/develop predictive tools
• Paleozoic/New Deep Play concepts
• Improved horizontal stimulation techniques, new
approaches to maximize deliverability and
recovery
• New shale/source rock plays
• Improved Wilrich seismic imaging in strat
settings and Outer Foothills settings
• Cost saving via novel frac water sourcing/recycling
• Alternative hz frac programs/processes
– Concurrent pairs, delayed flow-backs etc.
• Pasquia Hills oil shale recovery
mechanisms
• Ball drop/sliding sleeve completion technique
in vertical wells
• Novel drilling technology to reduce time/cost
in drilling builds
• New mud systems to reduce drilling times
• AI applications in geophysical interpretation, reservoir
prediction and predictive drilling problem identification.
41
Schedule A
DRILLING LOCATIONS
Estimated Drilling Inventory
This presentation discloses drilling locations in four categories: (i) proved undeveloped locations; (ii) probable undeveloped
locations; (iii) unbooked locations; and (iv) an aggregate total of (i), (ii) and (iii). Of the 14,766 (gross) locations disclosed in this
presentation, 1,192 are proved undeveloped locations, 37 are proved non-producing locations, 1,012 are probable undeveloped
locations, 2 are probable non-producing and 12,523 are unbooked. Proved producing wells, proved undeveloped locations,
proved non-producing locations, probable undeveloped locations and probable non-producing locations are booked and derived
from the Company's most recent independent reserves evaluation as prepared by GLJ and Deloitte LLP as of December 31, 2018
and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are
internal estimates based on the Company's prospective acreage and an assumption as to the number of wells that can be drilled
per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources
(including contingent and prospective). Unbooked locations have been identified by management as an estimation of the
Company's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and
reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no
certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on
which the Company will actually drill wells, including the number and timing thereof is ultimately dependent upon the
availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results,
additional reservoir information that is obtained and other factors. While a certain number of the unbooked drilling locations
have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other
unbooked drilling locations are farther away from existing wells where management has less information about the
characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if
drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.
The following provides additional information on the Company's estimation of unbooked locations.
42
Schedule A continued
43
Deep Basin Vertical well count :
Approximately 2,582 gross prospective sections at approximately 1.5 wells per section minus 10% for areas
that are inaccessible or limited by spacing requirements minus approximately 1,000 existing wells. Includes
450 locations in the Outer Foothills area.
Total Vertical Locations ~ 2,486
Deep Basin Horizontal well count :
Approximately 2,582 gross prospective sections in the Deep Basin at approximately 3 wells per section in
multiple horizons i.e. the Wilrich, Falher, Notikewin, Cardium, Dunvegan, Viking, Bluesky, Gething,
Cadomin, or Nikanassin. Less existing horizontals, less 20% of existing vertical producers. In some instances
there will be less than 3 wells per section at full development and in other cases there will be more than 3.5
wells per section due to the fact that there are multiple horizons. Total Horizontal Locations ~ 6,865
NE BC Well count :
300 gross sections in NE BC at 12-16 wells per sections in multiple lobes (2-5 depending upon location)
yielding 3,565 locations.
TOTAL NE BC = 3,565 locations
Spirit River well count:
602 gross sections within the Charlie Lake/Montney Fairway x 2-4 wells per section = 2,188 wells
Minus approximately 338 existing wells
Total Spirit River ~ 1,850 wells
Total gross locations ~ 14,766
Schedule B
44
Prospective locations are unbooked locations that are not included in inventory. Unbooked locations are internal estimates based
on the Company's prospective acreage and an assumption as to the number of wells that can be drilled per section based on
industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and
prospective). Unbooked locations have been identified by management as an estimation of the Company's multi-year drilling
activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no
certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will
result in additional oil and gas reserves, resources or production. The drilling locations on which the Company will actually drill
wells, including the number and timing thereof is ultimately dependent upon the availability of funding, regulatory approvals,
seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and
other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close
proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing
wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty
whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil
and gas reserves, resources or production.
Forward Looking Information
Certain information contained in this presentation constitutes forward-looking information within the meaning of applicable securities laws.
This information relates to future events or the Company's future performance. All information other than information of historical fact is
forward-looking information. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend",
"propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue",
"potential" and "capable" and similar expressions are intended to identify forward-looking information. This information involves known
and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such
forward-looking information. No assurance can be given that these expectations will prove to be correct and such forward-looking
information should not be unduly relied upon. This information speaks only as of the date of this presentation or, if applicable, as of the date
specified in those documents specifically referenced herein. In addition, this presentation may contain forward-looking information
attributed to third-party sources.
Without limitation of the foregoing, this presentation contains forward-looking information pertaining to the following: the reserve potential
of the Company's assets; the anticipated production from the Company's assets and anticipated future cash flows from such assets; the
Company's growth strategy and opportunities; the Company's capital exploration and development programs and future capital
requirements; the estimated quantity and value of the Company's proved and probable reserves; expectations regarding the ability to raise
capital and to continually add to reserves; the Company's estimates of future interest and foreign exchange rates; the Company's
environmental considerations; the Company's assumptions regarding commodity prices; the Company's expectations regarding reduction in
its operating costs; the timing of commencement of certain of the Company's operations and the level of production anticipated by the
Company; the potential for production disruption and constraints; supply and demand fundamentals for crude oil and natural gas; the
Company's access to adequate pipeline and other gathering, transportation and processing capacity; the Company's access to third-party
infrastructure; the Company's drilling and recompletion plans; the Company's expected capital expenditures; expected debt levels and
credit facilities; industry conditions pertaining to the oil and gas industry; the Company's plans for, and results of, exploration and
development activities; the planned construction of the Company's gathering, transportation and processing facilities and related
infrastructure; the timing for receipt of regulatory approvals; the Company's treatment under governmental regulatory regimes and tax
laws and potential changes in such regimes and laws; the Company's future general and administrative expenses; and the Company's
expectations regarding having adequate human resource staffing.
45
With respect to forward-looking information contained in this presentation, assumptions have been made regarding, among other things:
future crude oil and natural gas prices; future interests rates and currency exchange rates; the Company's ability to obtain qualified staff
and equipment in a timely and cost–efficient manner; the regulatory framework governing royalties, taxes and environmental matters; the
Company's ability to market production of oil and natural gas successfully; the Company's future production levels; the applicability of
technologies for recovery and production of the Company's reserves; the recoverability of the Company's reserves; future capital
expenditures to be made by the Company; future cash flows from production meeting the expectations stated in this presentation; future
sources of funding for the Company's capital program; the Company's future debt levels; geological and engineering estimates in respect of
the Company's reserves; the geography of the areas in which the Company is conducting exploration and development activities; the impact
of competition on the Company; and the Company's ability to obtain financing on acceptable terms.
Actual results could differ materially from those anticipated in this forward-looking information as a result of a number of factors including
the risk factors set forth in the Company's reports and documents on file with Canadian securities regulatory authorities at www.sedar.com
or the Company's website at www.tourmalineoil.com, which risk factors should not be construed as exhaustive. See specifically "Forward-
Looking Statements" and "Risk Factors" in the Company's most recently filed Annual Information Form and "Forward-Looking
Statements" in the Company's most recently filed Management's Discussion and Analysis.
Included in this presentation are estimates of the Company's 2019-2023 cash flow and cash flow per share which are based on various
assumptions as to production levels, commodity prices and other assumptions and in the case of the years other than 2019 are provided for
illustration only and are based on budgets and forecasts that have not been finalized and are subject to a variety of contingencies including
prior years' results. To the extent such estimates constitute a financial outlook, they were approved by management of the Company in
March 2019 and are included to provide readers with an understanding of the Company's anticipated cash flow based on the capital
expenditures and other assumptions described and readers are cautioned that the information may not be appropriate for other purposes.
In addition, information relating to "reserves" is deemed to be forward-looking information, as it involves the implied assessment, based on
certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated, and that the reserves described
can be profitably produced in the future. See also "Statement of Reserves Data and Other Oil and Gas Information" and "Certain Reserves
Data Information" in the Company's Annual Information Form.
Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed herein or
otherwise and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of
new information, future events or otherwise, unless specifically required to do so pursuant to applicable law.
Forward Looking Information
46
Forward Looking Statement Advisories
Oil and Gas Advisories
Certain crude oil and natural gas liquids ("NGLs") volumes have been converted to millions of cubic feet equivalent ("mmcfe") or
thousands of cubic feet equivalent ("mcfe") on the basis of one barrel ("bbl" of crude oil or NGLs to six thousand cubic feet ("mcf") of
natural gas. Also, certain natural gas volumes have been converted to barrels of oil equivalent ("boe"), thousands of boe ("mboe") or
millions of boe ("mmboe") using the same equivalency measure. Such equivalency measures may be misleading, particularly if used in
isolation. A conversion ratio of one bbl to six mcf is based on an energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current
prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
This presentation contains disclosure regarding finding and development costs. The aggregate of the exploration and development costs
incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect
total finding and development costs related to reserves additions for that year.
The estimated net present values disclosed in this presentation do not represent fair market value.
Unless otherwise expressly stated, the information in this presentation pertaining to future drilling locations or drilling inventories is based
solely on internal estimates made by management and such locations have not been reflected in any independent reserve or resource
evaluations and have not been recognized as reserves or resources as defined in NI 51-101. See Schedule A - Drilling Locations.
Similarly, unless otherwise expressly stated, the information in this presentation pertaining to targeted reserve volumes from future drilling
is intended to indicate that in making its internal drilling decisions, the Company seeks to target drilling locations that, based on previous
drilling results and its own internal assessments, it believes will on average ultimately generate the indicated volumes.
Non-GAAP Measures
This presentation includes references to financial measures commonly used in the oil and gas industry such as "cash flow" and "net debt",
which do not have standardized meaning prescribed by Generally Accepted Accounting Standards (“GAAP"). Accordingly, the Company’s
use of these terms may not be comparable to similarly defined measures presented by other companies. Management uses the terms “cash
flow”, and “net debt”, for its own performance measures and to provide shareholders and potential investors with a measurement of the
Company’s efficiency and its ability to generate the cash necessary to fund a portion of its future growth expenditures or to repay debt.
However, investors are cautioned that these measures should not be construed as an alternative to net income determined in accordance with
IFRS as an indication of the Company's performance. For these purposes, "cash flow" is defined as cash provided by operations before
changes in non-cash working capital and "net debt" is defined as long-term bank debt plus working capital (adjusted for the fair value of
financial instruments and future taxes). Additional information on these terms are included in the Company's most recently filed
Management's Discussion and Analysis (See “Non-GAAP Financial Measures" therein) and other reports on file with applicable securities
regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Tourmaline's website
(www.tourmalineoil.com).
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