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Tourmaline Oil (TSE:TOU)
:TOU
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Tourmaline Oil
(TSX:TOU)
Rating:73Outperform
Price Target:―
Positive Factors
Acquisition
Tourmaline announced it has purchased another two Montney producers that will add ~20 mboe/d.
Dividend Increase
The company hiked its base dividend by 43% based on expectations for improving profitability.
Market Strategy
Tourmaline's marketing and diversification program provided a realized natural gas price that was significantly higher than AECO.
Negative Factors
Capital Expenditure
Tourmaline plans to defer some planned frac activity from Q2/25 into Q3/25 due to the weakness in Station 2 pricing.
Cash Flow
Tourmaline reported Q4/24 cash flow results that fell short of consensus on slightly lower production.
Financial Performance
Tourmaline announced weaker-than-expected CFPS results despite production coming in higher than expected.
Tourmaline Oil (TOU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$25.68B
Dividend Yield2.1%
Average Volume (3M)2.36M
Price to Earnings (P/E)19.6
Beta (1Y)0.74
Revenue Growth-8.29%
EPS Growth-30.52%
CountryCA
Employees458
SectorEnergy
Sector Strength68
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.56
Shares Outstanding386,744,500
10 Day Avg. Volume2,340,648
30 Day Avg. Volume2,363,024
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)1.68
Price to Sales (P/S)0.00
P/FCF Ratio8.36
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$76.06Price Target Upside14.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Tourmaline Oil Business Overview & Revenue Model
Company DescriptionTourmaline Oil Corp. acquires, explores for, develops, and produces oil and natural gas properties in the Western Canadian Sedimentary Basin. It holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex. The company was incorporated in 2008 and is headquartered in Calgary, Canada.
How the Company Makes MoneyTourmaline Oil Corp. generates revenue primarily through the exploration, production, and sale of natural gas and crude oil. The company's key revenue streams include the extraction and sale of these resources to domestic and international markets. Tourmaline benefits from long-term contracts and spot market sales, which provide flexibility and pricing advantages. Additionally, the company invests in infrastructure such as gas processing facilities and pipelines, enhancing operational efficiency and reducing costs. Strategic acquisitions and partnerships also play a significant role in expanding its asset base and increasing production capacity, contributing to its overall earnings.
Tourmaline Oil Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q3-2024)
| % Change Since: 5.62%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance and successful operational milestones, including increased production and strategic acquisitions. However, challenges were noted with low gas prices affecting production and the need for flexibility in future capital planning due to market volatility.Q3-2024 Updates
Positive Updates
Strong Financial Performance
Q3 cash flow was $742 million or $2.09 per diluted share. Net earnings were $355 million or $1 per diluted share. Free cash flow for the quarter was $152.5 million.
Dividend and Special Dividend Announcement
Declared a special dividend of $0.50 per common share. Total dividends distributed this year amount to $3.25 per share, implying a 5% trailing yield.
Production Increase
Q3 '24 average production was a little over 557,000 BOEs a day, marking an 11% increase over Q3 '23. Fourth quarter production is anticipated between 600,000 and 620,000 BOEs per day.
Successful Transactions and Acquisitions
Closed the transaction with Topaz Energy Corp. and received $278 million of proceeds. Completed the acquisition of Crew Energy.
Deep Basin Well Productivity
Deep Basin well productivity in 2024 has been the best in the last 5 years, with a 20% increase in gas and 40% increase in condensate on IP-90s compared to the previous 4 years.
Environmental Initiatives
Opened new CNG fueling stations in Calgary and Grand Prairie as part of the joint venture with clean energy fuels, aiming for 7 stations operational by the end of 2025.
Negative Updates
Impact of Low Gas Prices
Q3 production was reduced by unplanned third-party outages and low gas price-related frac and production start-up deferrals.
Net Debt and Adjusted Target
Exit Q3 '24 net debt was $1.7 billion. Adjusted long-term net debt target to $1.5 billion due to business growth.
Volatile Commodity Price Environment
Board approved a flexible '25 EP capital budget range between $2.6 billion and $2.85 billion due to uncertainty in commodity prices.
Company Guidance
During the Tourmaline Q3 2024 earnings call, the company provided detailed guidance on its financial and operational performance. The third quarter saw cash flow of $742 million, translating to $2.09 per diluted share, and net earnings of $355 million or $1 per diluted share. A special dividend of $0.50 per share was declared, contributing to a total dividend distribution of $3.25 per share for the year. Tourmaline reported a Q3 average production of 557,000 BOEs per day, marking an 11% increase from Q3 2023, and set a Q4 production target of 600,000-620,000 BOEs per day. The company anticipates a 2025 average production range of 635,000-665,000 BOEs per day, with a midpoint of 650,000 BOEs per day. Capital expenditure for 2025 is projected between $2.6 billion and $2.85 billion, with plans to drill approximately 365 wells. Tourmaline's net debt stood at $1.7 billion by the end of Q3, with a revised long-term target of $1.5 billion. The company highlighted strong well productivity in the Deep Basin and plans to capitalize on potential improvements in natural gas prices, supported by its hedging strategy and market diversification efforts.Tourmaline Oil Financial Statement Overview
Summary
Tourmaline Oil demonstrates a commendable financial performance with strengths in profitability and financial stability. The company has effectively managed its operating margins and maintained a solid balance sheet with low leverage. However, variability in revenue growth and free cash flow generation indicates areas for potential improvement.Income Statement
Tourmaline Oil's income statement shows a strong gross profit margin and net profit margin, indicative of effective cost management and profitability. Despite a decline in revenue from 2022 to 2023, the company maintained stable EBIT and EBITDA margins, demonstrating operational efficiency. However, the revenue growth rate has been inconsistent, with significant fluctuations over recent years, posing potential risks to future profitability.75
Positive
Balance Sheet
The company's balance sheet reflects a healthy financial position with a low debt-to-equity ratio, underscoring prudent financial leverage. A strong equity ratio indicates a robust balance sheet foundation. Return on equity remains solid, suggesting effective use of shareholder funds to generate profits. Overall, Tourmaline Oil exhibits a stable financial structure, with limited risk from high leverage.80
Positive
Cash Flow
Cash flow analysis shows Tourmaline Oil has positive free cash flow, albeit with a declining growth rate, which may impact its ability to fund expansions or pay dividends. The operating cash flow to net income ratio is favorable, indicating efficient cash generation from operations. However, the free cash flow to net income ratio suggests room for improvement in converting earnings to free cash flow.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.91B | 5.65B | 4.84B | 8.68B | 5.12B | 2.14B | Gross Profit |
| 3.71B | 3.52B | 4.27B | 6.33B | 3.84B | 892.18M | EBIT |
| 1.74B | 1.78B | 2.24B | 5.96B | 2.59B | -13.59M | EBITDA |
| 3.31B | 3.29B | 3.53B | 7.12B | 3.42B | 1.81B | Net Income Common Stockholders |
| 1.23B | 1.26B | 1.74B | 4.49B | 2.03B | 618.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 0.00 | 719.54M | -10.15M | -11.17M | 220.17M | Total Assets |
| 22.41B | 22.31B | 20.10B | 18.89B | 15.29B | 12.79B | Total Debt |
| 1.22B | 1.30B | 1.13B | 629.26M | 880.74M | 1.95B | Net Debt |
| 1.22B | 1.30B | 1.13B | 639.42M | 891.91M | 1.73B | Total Liabilities |
| 6.91B | 6.77B | 6.08B | 5.21B | 3.69B | 3.51B | Stockholders Equity |
| 15.49B | 15.54B | 14.02B | 13.69B | 11.61B | 8.81B |
| Cash Flow | Free Cash Flow | ||||
| 654.02M | 470.63M | 1.67B | 2.74B | 864.19M | 47.91M | Operating Cash Flow |
| 3.18B | 2.73B | 4.41B | 4.69B | 2.85B | 1.13B | Investing Cash Flow |
| -1.77B | -1.64B | -2.60B | -1.97B | -1.38B | -1.16B | Financing Cash Flow |
| -1.41B | -1.09B | -1.80B | -2.72B | -1.69B | 257.30M |
Tourmaline Oil Technical Analysis
Positive
66.39
Price Trends
62.01
Positive
63.94
Positive
62.73
Positive
Market Momentum
0.76
Negative
64.63
Neutral
82.80
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TOU, the sentiment is Positive. The current price of 66.39 is above the 20-day moving average (MA) of 63.71, above the 50-day MA of 62.01, and above the 200-day MA of 62.73, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 64.63 is Neutral, neither overbought nor oversold. The STOCH value of 82.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TOU.
Tourmaline Oil Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $18.03B | 13.58 | 17.25% | 2.36% | 2.20% | 13.50% | |
73 Outperform | C$25.68B | 19.55 | 8.35% | 2.10% | -8.29% | -30.52% | |
71 Outperform | $1.51B | 28.36 | 4.98% | ― | 0.73% | -36.49% | |
69 Neutral | $2.01B | 14.60 | 6.10% | 1.59% | -18.20% | 260.40% | |
68 Neutral | C$4.11B | 13.82 | 11.17% | 6.40% | 2.80% | -7.94% | |
67 Neutral | $2.03B | 78.00 | -1.90% | ― | 12.70% | -131.99% | |
58 Neutral | $7.55B | 3.49 | -4.45% | 10.15% | 0.79% | -49.51% |
* Energy Sector Average
Performance Comparison
TSE:TOU
Tourmaline Oil
66.39
5.89
9.74%
TSE:BIR
Birchcliff Energy
7.39
1.63
28.21%
TSE:ARX
ARC Resources
30.83
7.31
31.06%
TSE:KEL
Kelt Exploration
7.58
1.47
24.06%
TSE:AAV
Advantage Energy
12.14
1.73
16.62%
TSE:PEY
Peyto Exploration & Dev
20.65
7.19
53.42%
Tourmaline Oil Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Tourmaline Oil Reports Record Production and Dividend Increase
Positive
Mar 5, 2025
Tourmaline Oil Corp. announced record production levels and an increase in 2P reserves to 5.5 billion BOE for 2024. The company reported a substantial increase in cash flow and net earnings, with a forecasted free cash flow of $1.4 billion for 2025. Tourmaline also declared a 43% increase in its base dividend and a special dividend, highlighting its strong financial performance and commitment to enhancing shareholder value. The anticipated production for the first quarter of 2025 is set between 630,000-635,000 boepd, positioning the company for continued growth and stability in the market.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.