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Tourmaline Oil (TSE:TOU)
TSX:TOU
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Tourmaline Oil
(TSX:TOU)
70Outperform
Positive Factors
Financial Health
Tourmaline has a strong balance sheet, a low-cost structure, and an impressive free cash flow profile, justifying its premium valuation.
Shareholder Returns
Tourmaline increased its quarterly base dividend and announced a special dividend, believing that a more constructive gas outlook will allow it to increase shareholder returns.
Negative Factors
Production and Earnings
Tourmaline reported Q4/24 cash flow results that fell short of consensus on slightly lower production.
Tourmaline Oil (TOU) vs. S&P 500 (SPY)
Market Cap
C$24.32B
Dividend Yield1.99%
Average Volume (3M)2.55M
Price to Earnings (P/E)18.4
Beta (1Y)0.79
Revenue Growth-8.29%
EPS Growth-30.52%
CountryCA
Employees389
SectorEnergy
Sector Strength76
IndustryFossil Fuels
Share Statistics
EPS (TTM)3.52
Shares Outstanding374,274,440
10 Day Avg. Volume4,575,362
30 Day Avg. Volume2,545,684
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)N/A
Price to Sales (P/S)4.92
Price to Cash Flow (P/CF)9.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$76.86Price Target Upside15.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Tourmaline Oil Business Overview & Revenue Model
Company DescriptionTourmaline Oil Corp. is a Canadian energy company primarily engaged in the exploration, development, production, and marketing of oil and natural gas. Headquartered in Calgary, Alberta, the company operates within the oil and gas sector, focusing on natural gas production and associated liquids. Tourmaline is recognized for its large-scale natural gas projects and its commitment to sustainable and efficient energy production.
How the Company Makes MoneyTourmaline Oil Corp. generates revenue through the production and sale of natural gas, crude oil, and natural gas liquids (NGLs). The company's primary revenue streams include the sale of these hydrocarbons to various markets, including domestic and international consumers. Tourmaline operates large-scale projects across several prolific areas in Western Canada, allowing it to capitalize on its extensive resource base. Additionally, the company benefits from infrastructure ownership, which facilitates efficient transportation and marketing of its products. Tourmaline's strategic partnerships and joint ventures with other energy firms also contribute to its revenue by optimizing operations and expanding market reach.
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. Overall, the financial health is strong, but attention should be given to sustaining growth and enhancing cash flow conversion.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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.65B | 5.65B | 8.68B | 5.12B | 2.14B | Gross Profit |
| 3.52B | 2.44B | 6.33B | 3.84B | 892.18M | EBIT |
| 1.78B | 2.24B | 4.58B | 2.59B | -13.59M | EBITDA |
| 3.29B | 3.53B | 7.11B | 3.42B | 1.81B | Net Income Common Stockholders |
| 1.26B | 1.74B | 4.49B | 2.03B | 618.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 719.54M | -10.15M | -11.17M | 220.17M | Total Assets |
| 22.31B | 20.10B | 18.89B | 15.29B | 12.79B | Total Debt |
| 1.30B | 1.13B | 629.26M | 880.74M | 1.95B | Net Debt |
| 1.30B | 1.13B | 639.42M | 891.91M | 1.73B | Total Liabilities |
| 6.77B | 6.08B | 5.21B | 3.69B | 3.51B | Stockholders Equity |
| 15.54B | 14.02B | 13.69B | 11.61B | 8.81B |
| Cash Flow | Free Cash Flow | |||
| 470.63M | 1.67B | 2.74B | 864.19M | 47.91M | Operating Cash Flow |
| 2.73B | 4.41B | 4.69B | 2.85B | 1.13B | Investing Cash Flow |
| -1.64B | -2.60B | -1.97B | -1.38B | -1.16B | Financing Cash Flow |
| -1.09B | -1.80B | -2.72B | -1.69B | 257.30M |
Tourmaline Oil Technical Analysis
Positive
66.43
Price Trends
66.97
Negative
65.07
Positive
62.65
Positive
Market Momentum
-0.65
Positive
47.79
Neutral
67.40
Neutral
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 66.43 is above the 20-day moving average (MA) of 66.22, below the 50-day MA of 66.97, and above the 200-day MA of 62.65, indicating a neutral trend. The MACD of -0.65 indicates Positive momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 67.40 is Neutral, 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 (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$3.11B | 10.49 | 11.55% | 8.12% | -14.63% | -18.40% | |
71 Outperform | C$1.44B | 25.42 | 0.70% | 7.94% | -8.89% | -82.18% | |
70 Outperform | C$24.32B | 18.36 | 8.55% | 1.99% | -8.29% | -30.52% | |
70 Outperform | C$15.55B | 13.95 | 14.67% | 2.79% | -9.83% | -27.76% | |
64 Neutral | $1.20B | 22.24 | 5.44% | ― | -11.46% | -53.06% | |
60 Neutral | $1.54B | 71.40 | 1.37% | ― | -2.31% | -78.23% | |
57 Neutral | $8.37B | 5.59 | -4.20% | 7.40% | 0.23% | -68.56% |
* Energy Sector Average
Performance Comparison
TSE:TOU
Tourmaline Oil
65.46
7.71
13.35%
TSE:BIR
Birchcliff Energy
5.73
0.71
14.10%
TSE:ARX
ARC Resources
25.92
3.48
15.49%
TSE:KEL
Kelt Exploration
6.34
0.47
8.01%
TSE:AAV
Advantage Energy
9.41
-0.56
-5.62%
TSE:PEY
Peyto Exploration & Dev
16.27
3.23
24.77%
Tourmaline Oil Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: 3.06% | Next Earnings Date: Apr 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.Highlights
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.
Lowlights
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 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
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.