Tourmaline Oil buys two competing gas producers for $ 526 million

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Tourmaline Oil Corp. is buying two private natural gas producers for $ 526 million as the company implements its strategy of acquiring assets in gas-rich regions as rivals struggle.

Tourmaline has announced that it is acquiring Jupiter Resources Inc. for $ 426 million, or 24.2 million of its common shares. He will also assume $ 200 million in debt from Jupiter. The target company produces approximately 67,000 barrels of oil equivalent per day in the North Deep Basin region of northwestern Alberta.

Tourmaline, of Calgary, is also buying Modern Resources Inc. for $ 100 million, including $ 73.8 million in cash and 1.5 million shares of Tourmaline. He will also assume $ 44 million in debt.

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Modern, backed by private equity firms ARC Financial and EnCap Investments, produces 9,000 barrels of oil equivalent per day on its Deep Basin lands which are adjacent to Jupiter’s.

Tourmaline CEO Mike Rose said the current environment, in which many companies are still struggling after the energy market collapsed in the spring, has offered great opportunities to recover assets in its major operating regions. These are Deep Basin and Montney in Alberta and British Columbia.

The acquisitions will increase Tourmaline’s 2021 production target by 25% to 400,000 barrels of oil equivalent per day, the company said. He also forecast $ 2 billion in cash flow for next year.

Tourmaline has also said it will sell the gross top royalty interest on the land it buys to its new public spin-off, Topaz Energy Corp., for $ 130 million. Topaz raked in $ 218 million in revenue when it went public last month.

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