Tourmaline Oil to Acquire Crew Energy for $1.3 Billion
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Tourmaline Oil has entered into a definitive arrangement agreement with Crew Energy to acquire all of the issued and outstanding common shares of Crew in exchange for 18.778 million Tourmaline common shares and the assumption of net debt of approximately $240 million, including all transaction costs, for total consideration of approximately $1.3 billion.
The acquisition is expected to close in early October 2024, subject to customary closing conditions.
“Dale and his team at Crew have done a tremendous job over the past 21 years assembling one of the premier, concentrated Montney asset bases in NEBC, with significant upside. Tourmaline’s scale, execution capability, and ability to generate strong FCF in all parts of the commodity cycle will allow Crew shareholders to realize the material embedded upside on an accelerated timeline,” said Mike Rose, president and CEO of Tourmaline.
The acquisition represents a further important component of the company’s continuing NEBC consolidation strategy that builds on its long-term EP organic growth plan. It provides a significant high-quality addition to Tourmaline’s South Montney asset base. The Crew assets provide a significant future growth opportunity which, coupled with Tourmaline’s extensive, well-defined BC Montney development inventory, will facilitate the company evolving into Canada’s largest and most efficient Montney producer.
Tourmaline already is the largest Alberta Deep Basin producer; the BC/AB Montney and the Alberta Deep Basin are widely regarded as Canada’s two premier natural gas plays. In addition, the acquisition complements Tourmaline’s continued growth towards a 750,000 boepd Canadian senior producer over the next five years, with further growth opportunities extending into the next decade.
Tourmaline believes this is an opportune time for consolidating natural gas assets prior to imminent major growth in the North American LNG business and acceleration of natural gas-powered electrical generation requirements across the continent.
Tourmaline Oil is Canada’s largest and most active natural gas producer dedicated to producing the lowest-cost natural gas in North America. They are an investment grade exploration and production company providing strong and predictable operating and financial performance through the development of its three core areas in the Western Canadian Sedimentary Basin. With their existing large reserve base, decades-long drilling inventory, relentless focus on execution and cost management, and industry-leading environmental performance, they are excited to provide shareholders an excellent return on capital, and an attractive source of income through its base dividend and surplus free cash flow distribution strategies.
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