Tourmaline signs $1.3-billion deal to buy Crew Energy

EDMONTON — Tourmaline Oil Corp. continues to snap up natural gas assets, this time with a $1.3-billion deal that will see it acquire Montney-focused natural gas producer Crew Energy Inc.

Tourmaline — headed by CEO Mike Rose — has been undergoing a years-long aggressive exploration, development, production and acquisition program that has helped it cement its industry dominance.

The company is Canada’s largest natural gas producer by volume and the fifth largest natural gas-focused producer in North America.

It is already the largest player in Alberta’s Deep Basin, a prominent natural gas-producing area, and its acquisition of Crew Energy will make Tourmaline the largest natural gas producer in the Montney, an important natural gas play that spans northeast B.C. and northwest Alberta.

Tourmaline said Monday the deal — through which Crew shareholders will receive 0.114802 of a Tourmaline share in exchange for each Crew share held — will see Tourmaline acquire existing average production of 29,000 to 30,000 barrels of oil equivalent per day.

The company will also acquire reserves of 473.2 million boe and an extensive drilling inventory located adjacent to Tourmaline’s existing South Montney operations.

“The acquisition complements Tourmaline’s continued growth towards a 750,000 boe/d Canadian senior producer over the next five years, with further growth opportunities extending into the next decade,” Tourmaline said in a news release Monday.

Last year, Tourmaline acquired Bonavista Energy Corp.’s assets in a $1.45-billion deal.

While low natural gas prices have caused some North American producers to shut in production or delay or cancel projects, Tourmaline said Monday it remains confident in the long-term outlook for the commodity.

The company said imminent growth in the North American liquefied natural gas industry as well as the acceleration of natural gas-powered electrical generation requirements across the continent make this an “opportune time” to consolidate natural gas assets.

But it added it will wait for improved commodity prices before embarking on major capital projects and volume growth activities.

Tourmaline’s acquisition of Crew Energy is expected to close in October.

With the deal, the company’s 2024 production volume guidance increases to between 582,500 and 592,500 boe/d, up from a previously forecast range of 575,000-585,000 boe/d.

Tourmaline’s share price was up more than three per cent in late-morning trading Monday.