Tourmaline Oil could become Canada’s biggest natural gas producer by the end of this year.
Based on estimates in the company’s latest corporate presentation, released on March 6, Tourmaline will produce 1.65 bcf (47 mcm) per day of gas by the end of 2019, overtaking current leading producer Canadian Natural Resources Ltd (CNRL). In its own production outlook for 2019, released on March 7, CNRL said it anticipated producing 1.48-1.58 bcf (41.9-44.7 mcm) per day of gas.
However, both companies are downplaying the importance of being the country’s biggest natural gas producer.
“The goal is to be the most efficient and the most low-cost,” said Tourmaline’s founder, president and CEO, Mike Rose.
This was a sentiment echoed by CNRL’s president, Tim Mackay, who commented: “It doesn’t have any appeal to ourselves. It’s all about value creation.”
Currently, CNRL’s output stands at 1.54 bcf (43.6 mcm) per day, down from 1.66 bcf (47.0 mcm) per day a year earlier. In its fourth-quarter results, the company attributed its gas production declines to a number of factors. These included “strategic decisions to reduce drilling and development activities, curtail and shut in production as a result of low natural gas prices, reduced production rates at the Pine River plant, operated by a third party, and natural field declines”. Meanwhile, Tourmaline’s natural gas production is on the rise, growing 7% year on year in 2018 to 1.30 bcf (36.8 mcm) per day from 1.22 bcf (34.6 mcm) per day.
Rose credited Tourmaline’s pursuit of efficiencies with its rapid production growth, with the company having overtaken both Encana and Shell Canada in terms of output.
“What we’ve done over the last five years is figure out how to drill the least expensive gas wells,” he said.
Tourmaline could become the country’s leading gas producer in the second quarter of 2019 when its 200 mmcf (5.7 mcm) per day Gundy gas plant becomes operational.