Tourmaline Oil to acquire Deep Basin player Bonavista Energy for C$1.45bn

Tourmaline Oil Corp. (TSX: TOU) has struck a definitive share purchase agreement with all Bonavista Energy Corporation shareholders. The landmark deal, priced at CAD1.45 billion, consists of both cash and Tourmaline Oil common shares, summing up to a massive CAD 725 million each. The remainder will adjust for Bonavista Energy’s  net debt at the point of closure. This strategic acquisition is anticipated to finalize in the latter half of November 2023, subject to standard approvals.

Acquisition’s Strategic Implication for Tourmaline

Underlining Tourmaline’s growth-focused approach, the Bonavista Energy acquisition brings significant value. This step not only complements the company’s long-term EP organic growth plans but also magnifies its existing Deep Basin assets. Given Tourmaline’s stronghold in the Deep Basin as the top producer, Bonavista Energy’s assets naturally extend its operations. Post-acquisition, Tourmaline’s production is projected to soar over 600,000 boepd by the end of 2023. Further insights on this will be released during their Q3 results on November 1, 2023.

Diving Deep into Bonavista’s Assets

The acquired assets, boasting an average production of over 60,000 boepd, forecast a net operating income nearing $450 million annually from 2024 to 2026. These assets, with a rich reserve of 459 million boe as of October 1, 2023, hold immense potential for growth. Bonavista’s assets bring cost synergies to the table, complementing Tourmaline’s pursuits.

Unanimous Approval & Advisory Involvement

Both Bonavista Energy and Tourmaline’s Board of Directors have given their unanimous nod to this acquisition. Financial advisories of this significant move involved Peters & Co. Limited for Tourmaline and TPH&Co for Bonavista.

Tourmaline’s Enhanced Dividend Announcements

Reflecting robust financial health, Tourmaline Oil’s Board has approved a dividend hike for Q4 2023 to $1.12/share annually. Additionally, a special dividend of $1.00/share is set to benefit shareholders on November 1, 2023, with records as of October 24, 2023.