August 16, 2024 [Tank News]- Tourmaline Oil Corp. has entered into a definitive agreement to acquire all outstanding shares of Crew Energy Inc. for approximately $1.3 billion, including the assumption of $240 million in net debt. The acquisition will be completed through the exchange of 18.778 million Tourmaline common shares. The deal is expected to close in early October 2024, pending customary conditions.
This acquisition strengthens Tourmaline’s position in the South Montney region of Northeast British Columbia and supports its ongoing consolidation strategy in the area. The acquisition is immediately accretive to Tourmaline’s key financial and reserve metrics, and is expected to add over $200 million to its 2025 free cash flow. The Crew assets include low-decline production, significant reserves, and an extensive drilling inventory, with potential for future growth, particularly through the Groundbirch development project.
Tourmaline anticipates significant synergies from the acquisition, estimating an initial net present value of over $0.6 billion before tax. These synergies include capital cost improvements, enhanced liquids growth, and margin improvement opportunities. The company also expects the acquisition to support its growth towards becoming Canada’s largest Montney producer and aims to align major capital projects with improving commodity markets to maximise shareholder returns.
Tourmaline’s board of directors has also approved a 6 percent increase in the quarterly base dividend, effective Q3 2024, raising it from $0.33 per share to $0.35 per share annually. This marks a 25 percent increase in the base dividend for 2024. The Q3 dividend is expected to be declared in early September and paid on September 27, 2024.
The acquisition and dividend increase reflect Tourmaline’s commitment to growth, operational excellence, and delivering value to its shareholders.
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