Calgary-based Tourmaline Oil’s shares tumble on disappointing Q2 and production guidance changes

The corporate logo for Tourmaline Oil Corp. is shown in this handout photo.
The corporate logo for Tourmaline Oil Corp. is shown in this handout photo. THE CANADIAN PRESS/HO, Tourmaline Oil Corp.

Shares in Tourmaline Oil Corp. tumbled by as much as 16 per cent on Thursday morning after it missed second-quarter expectations and warned it expects to produce fewer barrels of petroleum liquids and more dry gas this year.

The Calgary-based company’s shares fell as low as $14.54 from Wednesday’s close of $17.40 after it reported production during the three months ended June 30 of 280,500 barrels of oil equivalent per day, up eight per cent from the same period in 2018.

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Analyst Kristopher Zack of Desjardins said in a report that was below expectations of 287,000 boe/d and the liquids component of 52,000 boe/d — though a 13 per cent increase from the year-earlier report — was also lower than expected.

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He added cash flow per share of 83 cents, a reduction of 17 per cent from $1 in the second quarter of 2018, also fell short of consensus expectations of 96 cents.

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Tourmaline said in a news release it now expects to average liquids production of 61,000 barrels per day this year, down from an earlier estimate of 66,000 bpd, but still a 28 per cent increase over 2018.

It said full-year total production guidance is unchanged at 300,000 boe/d despite cutting $25 million from its capital spending budget to leave it at $1.125 billion.

The company said second-quarter production was hit by the deferral of about 60 million cubic feet per day of natural gas due to delays in starting up new wells and the injection into storage in Ontario and California of about 1.6 billion cf/d of gas. Both measures are designed to avoid current low gas prices in hopes of higher prices later this year.

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It added unplanned interruptions on the Enbridge pipeline system in B.C. reduced average volumes by an additional 3,500 boe/d.

The company’s realized liquids price averaged $39.08 per barrel in the second quarter, while natural gas sold for $2.07 per thousand cubic feet.