CALGARY, AB, Aug. 9, 2021 /CNW/ - Tourmaline Oil Corp.
(TSX: TOU) ("Tourmaline" or the "Company") is pleased
to announce that it has agreed to issue $200
million aggregate principal amount of senior unsecured notes
due February 12, 2029 (the
"Notes"). The Notes will be issued at par for
aggregate gross proceeds of $200
million and will bear interest at a fixed rate of 2.529% per
annum, payable semi-annually on the 12th day of February
and August of each year, commencing on February 12, 2022.
Tourmaline continues its strategy of diversifying its sources of
low-cost capital and continuing its progression as one of the
largest, most efficient producers of oil and gas in Canada.
The Notes have been assigned a provisional rating of BBB (High),
with a stable trend, by DBRS Limited (DBRS Morningstar).
The Notes will be direct, unsecured obligations of Tourmaline
and will rank equally with all other present and future unsecured
and unsubordinated indebtedness of the Company. The Notes are
being offered in Canada on a
private-placement basis in reliance upon exemptions from the
prospectus requirements under applicable securities legislation
(the "Offering").
The Notes, offered on a best-efforts basis through a syndicate
of agents co-led by Scotiabank, CIBC Capital Markets and National
Bank Financial, are expected to be issued on or about August 11, 2021, subject to customary closing
conditions. The net proceeds of the Offering will be used to
repay existing indebtedness and for general corporate purposes. The
Company continues to forecast year end 2021 net debt(1)
to cash flow(2) of 0.4 times.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any of the Notes in any
jurisdiction. The Notes have not been approved or disapproved
by any regulatory authority. The Notes have not been and will
not be registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act"), or any state
securities laws, and may not be offered or sold within the United States unless an exemption from the
registration requirements of the U.S. Securities Act is
available.
____________________________
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(1)
|
"Net debt" is
defined as bank debt and senior unsecured notes plus working
capital deficit (adjusted for the fair value of financial
instruments, short-term lease liabilities, short-term
decommissioning obligations and unrealized foreign exchange in
working capital deficit). See "Non-GAAP Financial Measures" in this
news release and in the Company's Q2 2021 Management's Discussion
and Analysis.
|
(2)
|
"Cash flow" is
defined as cash provided by operations before changes in non-cash
operating working capital. See "Non-GAAP Financial Measures"
in this news release and in the Company's Q2 2021 Management's
Discussion and Analysis.
|
Reader Advisories
CREDIT RATINGS
Credit ratings are intended to provide investors with an
independent measure of credit quality of an issue of securities.
Credit ratings are not recommendations to purchase, hold or sell
securities and do not address the market price or suitability of a
specific security for a particular investor. There is no assurance
that any rating will remain in effect for any given period of time
or that any rating will not be revised or withdrawn entirely by a
rating agency in the future if, in its judgment, circumstances so
warrant.
CURRENCY
All financial figures are in Canadian dollars.
Forward-Looking Information
This news release contains forward-looking information and
statements (collectively, "forward-looking information")
within the meaning of applicable securities laws. The use of any of
the words "forecast", "expect", "anticipate", "continue",
"estimate", "objective", "ongoing", "on track", "may", "will",
"project", "should", "believe", "plans", "intends" and similar
expressions are intended to identify forward-looking information.
More particularly and without limitation, this news release
contains forward-looking information concerning: the anticipated
timing and closing of the Offering, and there can be no assurance
that the Offering will be completed within anticipated timeframe or
at all; the size and terms of the Offering; the expected use of the
net proceeds of the Offering; the forecast 2021 exit net debt to
cash flow ratio; and any other future events or developments
described herein including the Company's business as described
under the heading "About Tourmaline Oil Corp." below. The
forward-looking information is based on certain key expectations
and assumptions made by Tourmaline, including expectations and
assumptions concerning the following: prevailing and future
commodity prices and currency exchange rates; the degree to which
Tourmaline's operations and production will be disrupted by
circumstances attributable to the COVID-19 pandemic and the
responses of governments and the public to the pandemic; the
ability to maintain an investment grade credit rating; applicable
royalty rates and tax laws; interest rates; future well production
rates and reserve volumes; operating costs, the timing of receipt
of regulatory approvals; the performance of existing wells; the
success obtained in drilling new wells; anticipated timing and
results of capital expenditures; the sufficiency of budgeted
capital expenditures in carrying out planned activities; the
timing, location and extent of future drilling operations; the
benefits to be derived from acquisitions; the state of the economy
and the exploration and production business including the impacts
of the COVID-19 pandemic and the responses of governments and the
public to the pandemic thereon; the availability and cost of
financing, labour and services; and ability to market crude oil,
natural gas and natural gas liquids successfully. Without
limitation of the foregoing, future dividend payments, if any, and
the level thereof is uncertain, as the Company's dividend policy
and the funds available for the payment of dividends from time to
time is dependent upon, among other things, free cash flow,
financial requirements for the Company's operations and the
execution of its growth strategy, fluctuations in working capital
and the timing and amount of capital expenditures, debt service
requirements and other factors beyond the Company's control.
Further, the ability of Tourmaline to pay dividends will be subject
to applicable laws (including the satisfaction of the solvency test
contained in applicable corporate legislation) and contractual
restrictions contained in the instruments governing its
indebtedness, including its credit facility.
Although Tourmaline believes that the expectations and
assumptions on which such forward-looking information is based are
reasonable, undue reliance should not be placed on the
forward-looking information because Tourmaline can give no
assurances that it will prove to be correct. Since forward-looking
information addresses future events and conditions, by its very
nature it involves inherent risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a
number of factors and risks. These include, but are not limited to:
the risks associated with the oil and gas industry in general such
as operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertain
impacts of COVID-19 on Tourmaline's business, and the societal,
economic and governmental response to COVID-19; the uncertainty of
estimates and projections relating to reserves, production,
revenues, costs and expenses; health, safety and environmental
risks; commodity price and exchange rate fluctuations; interest
rate fluctuations; marketing and transportation; loss of markets;
environmental risks; competition; incorrect assessment of the value
of acquisitions; failure to complete or realize the anticipated
benefits of acquisitions or dispositions; ability to access
sufficient capital from internal and external
sources; uncertainties associated with counterparty credit
risk; failure to obtain required regulatory and other approvals;
and changes in legislation, including but not limited to tax laws,
royalties and environmental regulations. Readers are cautioned that
the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could
affect Tourmaline, or its operations or financial results, are
included in the Company's most recently filed Management's
Discussion and Analysis (See "Forward-Looking Statements" therein),
Annual Information Form (See "Risk Factors" and "Forward-Looking
Statements" 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).
The forward-looking information contained in this news release
is made as of the date hereof and Tourmaline undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, unless expressly required by applicable securities
laws.
FINANCIAL OUTLOOKS
Also included in this news release are estimates of Tourmaline's
2021 exit net debt to cash flow ratio which is based on, among
other things, the various assumptions as to production levels,
capital expenditures, annual cash flows and other assumptions
disclosed in this news release and including Tourmaline's estimated
average production of 435,000 boepd for 2021. Commodity price
assumptions for natural gas (NYMEX (US) - $3.21/mcf for 2021; AECO - $3.47/mcf for 2021), and crude oil (WTI (US) -
$66.02/bbl for 2021) and an exchange
rate assumption of $0.80 (CAD/US) for
2021. To the extent such estimate constitutes a financial outlook,
it was approved by management and the Board of Directors of
Tourmaline on August 9, 2021 and is
included to provide readers with an understanding of Tourmaline's
anticipated net debt to cash flow ratio based on the capital
expenditure, production and other assumptions described herein and
readers are cautioned that the information may not be appropriate
for other purposes.
NON-GAAP FINANCIAL MEASURES
This news release includes references to "cash flow" and "net
debt" which are financial measures commonly used in the oil and gas
industry and do not have a standardized meaning prescribed by
International Financial Reporting 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 term "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, to pay dividends or to repay debt. Investors are
cautioned that these non-GAAP measures should not be construed as
an alternative to net income or cash from operating activities
determined in accordance with GAAP as an indication of the
Company's performance. Cash flow is defined as cash provided by
operations before changes in non-cash operating working
capital. Net debt is defined as bank debt and senior
unsecured notes plus working capital deficit (adjusted for the fair
value of financial instruments, short-term lease liabilities,
short-term decommissioning obligations and unrealized foreign
exchange in working capital deficit). See "Non-GAAP Financial
Measures" in the most recent Management's Discussion and Analysis
for the definition and description of these terms.
About Tourmaline Oil Corp.
Tourmaline is an investment grade Canadian senior crude oil and
natural gas exploration and production company focused on providing
strong and predictable long-term growth and a steady return to
shareholders through an aggressive exploration, development,
production and acquisition program in the Western Canadian
Sedimentary Basin by building its extensive asset base in its three
core exploration and production areas and exploiting and developing
these areas to increase reserves, production and cash flows at an
attractive return on invested capital.
SOURCE Tourmaline Oil Corp.