Earnings call transcript: Tourmaline Oil Q2 2025 beats EPS but stock dips

Tourmaline Oil Corp. (TOU) reported its Q2 2025 earnings, showcasing a significant earnings per share (EPS) beat but disappointing revenue results. The company’s EPS came in at $1.35, surpassing the forecast of $0.9742 by 38.58%. However, revenue fell short of expectations, reaching $1.51 billion against a forecast of $1.65 billion, an 8.48% miss. Despite the positive earnings surprise, Tourmaline Oil’s stock price fell by 6.36%, closing at $62.93. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value calculation.

Key Takeaways

• Tourmaline Oil reported an EPS of $1.35, significantly beating expectations.
• Revenue missed forecasts by 8.48%, totaling $1.51 billion.
• The stock price declined by 6.36% after the earnings release.
• New LNG supply agreement and infrastructure expansion plans announced.
• Export restrictions and gas price challenges impact market sentiment.

Company Performance

Tourmaline Oil demonstrated robust operational performance in Q2 2025, with a 10% increase in average production compared to the previous year, reaching 620,757 barrels of oil equivalent (BOE) per day. The company continues to lead in Northeast BC as the largest liquids producer, leveraging its low-cost operations and strong infrastructure. InvestingPro data shows the company maintains a FAIR overall financial health score, with particularly strong metrics in profitability and growth potential.

Financial Highlights

• Revenue: $1.51 billion, below the forecast of $1.65 billion.
• Earnings per share: $1.35, exceeding the forecast of $0.9742.
• Free cash flow: $317 million or $0.83 per diluted share.
• Special dividend declared: $0.35 per share.

Earnings vs. Forecast

Tourmaline Oil’s EPS of $1.35 represented a 38.58% surprise over the expected $0.9742, highlighting the company’s effective cost management and operational efficiency. However, the revenue miss of 8.48% suggests challenges in meeting sales expectations.

Market Reaction

Despite the strong EPS performance, Tourmaline Oil’s stock fell by 6.36%, closing at $62.93. This decline is notable given the earnings beat, indicating investor concerns over the revenue shortfall and broader market conditions. The stock remains within its 52-week range, with a high of $70.73 and a low of $54.37.

Outlook & Guidance

Tourmaline Oil aims to increase production to 850,000 BOEs per day by early next decade, supported by infrastructure expansion, including new gas plants and hydrocarbon liquid hubs. The company projects over 40% cash flow growth and plans to improve free cash flow to $2.5-3 billion annually.

Executive Commentary

CEO Mike Rose emphasized the company’s long-term growth potential, stating, "We’ll have a company that can continue to produce at these levels and more importantly generate annual free cash flow of this magnitude for literally decades." VP of Capital Markets, Jamie, highlighted the impact of gas prices on cash flow, noting, "If you were to move AECO around like plus a dollar, that’s over $500 million of incremental free cash flow."

Risks and Challenges

• Revenue shortfall suggests potential sales challenges.
• Export restrictions may continue to impact gas prices.
• Market volatility affecting investor sentiment.
• Capital expenditure flexibility needed due to commodity price fluctuations.

Q&A

Analysts focused on Tourmaline Oil’s infrastructure capital expenditure plans and the timing flexibility of its development plans. Discussions also covered the company’s production profile and potential for increased transportation capacity to the Gulf Coast.

Full transcript - Tourmaline Oil Corp. (TOU) Q2 2025:

Sylvie, Conference Call Operator: Good morning, ladies and gentlemen, and welcome to the Tourmaline Q2 twenty twenty five Results Conference Call. At this time, note that all participant lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Also note that this call is being recorded on Thursday, 07/31/2025. And I would like to turn the conference over to Scott Kircher.

Please go ahead, sir.

Scott Kircher, Chief Legal Officer, Tourmaline: Thank you, Sylvie, and welcome everyone to our discussion of Tourmaline’s financial and operating results as at 06/30/2025 and for the three and six months ended June 2024. My name is Scott Kirker and I’m the Chief Legal Officer here at Tourmaline. Before we get started, I refer you to the advisories on forward looking statements contained in the news release as well as the advisories contained in the Tourmaline annual information form and our MD and A available on SEDAR and on our website. I also draw your attention to the factors and assumptions in those advisories. I’m here with Mike Rose, Termeleve’s President and Chief Executive Officer Brian Robinson, our Chief Financial Officer and Jamie, Termeleve’s Vice President of Capital Markets.

We’ll start with Mike speaking to some of the highlights of the last quarter and our year so far. And after his remarks, we’ll be open for some questions. Mike, please go ahead.

Mike Rose, President and Chief Executive Officer, Tourmaline: Thanks Scott and good morning everyone and we’re happy to review our Q2 results and then answer some questions. Highlights, second quarter average production was 620,757 BOEs per day, and that was at the midpoint of the guidance range that we provided on May 7 and up 10% from the 2024. Second quarter cash flow was CAD823 million or CAD2.16 per diluted share on total EP expenditures of CAD490 million and that generated free cash flow of $317,000,000 for the quarter or $0.83 per diluted share. We’ve entered into a new long term LNG feed gas supply agreement with Uniper, we’ll talk more on that in a moment. We’ve released an updated EP plan that outlines growth from our current production levels of approximately 650,000 BOEs per day to 850,000 BOEs per day in the next decade.

Early in the next decade and this build out is fully funded by cash flow and it will result in 2,500,000,000.0 to $3,000,000,000 of annual free cash flow at flat pricing on a maintenance budget by the end of the EP plan. Given the continued strong free cash flow generation in Q2, the company has elected to declare and pay a special dividend of $0.35 per share on August 20 to shareholders of record on August 8. Briefly on financial results, second quarter twenty twenty five earnings were very strong at $515,000,000 or $1.35 per diluted share. The full year 2025 EP capital budget remains unchanged and the range remains unchanged at 2,600,000,000.0 to $2,850,000,000 We anticipate commodity prices to improve over the current strip in the 2025 with the ramp up of the LNG Canada facility on the West Coast resulting in hopefully higher free cash flow in the second half relative to first half. We continue to maintain a very strong balance sheet.

Net debt at 06/30/2025 was approximately 0.5 times net debt to ’25 forecast cash flow. On the production front, as mentioned second quarter average production was a little over 620,000 BOEs per day and that was achieved despite reductions related to wildfires in the Peace River High Complex, low commodity price related periodic shut ins in Northeast BC and multiple frac activity deferrals into the second half of this year given low pricing. Full year 2025 average production of 635,000 to 650,000 BOEs per day is now expected given the EP activity deferrals first from Q2 to Q3 and now from Q3 into Q4 as we target higher pricing to bring new production on. The ’25 exit average production of 680,000 to 690,000 BOEs per day and a preliminary ’26 average production range of 690,000 to seven and ten thousand BOEs per day is currently anticipated. In the five year plan, we use the very bottom of that range to be conservative.

Looking at the ’25 capital program, Q2 EP capital spending was $70,000,000 less than forecast primarily due to those aforementioned activity deferrals. And we’ll continue to monitor local natural gas prices and defer capital from Q3 into Q4 of this year or into 2026 as required as we always optimize free cash flow. Briefly on marketing, our average realized natural gas price in the second quarter of this year was CAD3.34 per Mcf and that’s 94% above the AECO five a benchmark price of a 1.72 per Mcf Canadian. We continue to benefit from our diversified marketing portfolio and our strategic hedging program. We have an average of 1.1 Bcf per day hedged for the balance of this year at a weighted average fixed price of 4.48 per Mcf Canadian.

We’re pleased to disclose our third Gulf Coast LNG agreement. We’ve entered into a long term LNG feed gas supply agreement with Uniper. Tourmaline will supply 80,000 MMBtu per day of natural gas in The US Gulf Coast for an eight year term, and that begins November 2028. We have secured long term firm transportation to The US Gulf Coast with TC Energy, and that allows Tourmaline’s natural gas from both the Alberta Deep Basin and or the BC Montney complexes to directly access European natural gas markets. The firm transportation begins in November 2025 and that gives us the flexibility to sell locally in The Gulf or enter into short term LNG feed gas supply deals prior to the start of the Uniper agreement.

We are excited to provide more details regarding all our multi year Northeast BC Montney development project, certainly one of the largest EP projects in the Western Canadian Sedimentary Basin. We have been systematically consolidating and delineating the Northeast BC Montney gas condensate complex for over five years and we’re now entering the next phase. We’re in the significant financial benefits of all those activities, which began during COVID will be fully realized. We expect to add 1.1 Bcf per day of new gas production and over 50,000 barrels per day of condensate and NGLs over the next six year period. And this project will develop Tourmaline’s most profitable inventory.

It’s the lowest capital cost, lowest operating cost, most liquid rich, highest margin inventory we have and it will improve all of the company’s operating metrics as production from this new development project becomes a larger proportion of the corporate production base. The build out consists of two new deep cut gas plants, one in the North Montney, one in the South Montney, expansion of four existing gas processing complexes, three new hydrocarbon liquid hubs, five water recycling facilities, electrification of four of the gas processing plants, as well as several pipeline corridors connecting the company’s larger resource base to its existing and the new gas processing complex. Recall we’ve been building, gathering and processing infrastructure across Northeast BC and the Alberta Deep Basin since the company started including over 10 new processing facilities. So we’re good at this and our cost management is very strong. This BC Montney development project has a strong focus on liquids growth and margin improvement and the company already is the largest liquids producer in Northeast BC and will continue to grow those volumes.

The infrastructure build out actually commenced in 2024 with several components already built or underway and they’re disclosed in the press release. The first significant production addition to come from all this is expected in 2026 with the Aitken C38C plant expansion And we feel that’s a good time to add new basin volumes given that phase one of LNG Canada should be at full volume certainly by that point. The next production addition is phase one of the ground birch 15 to 25 deep cut gas plant and that’s planned for the 2027. And importantly, both of those projects have all the necessary permits and long lead procurement is underway. Tourmaline expects production growth of 30% to 850,000 BOEs per day by 02/1931, cash flow growth of over 40% and free cash flow improvement of over 2.5 times at flat pricing to 2,500,000,000.0 to $3,000,000,000 of free cash flow per annum once the overall project is completed and the EP program starts to trend towards maintenance capital levels.

We’ve updated our multi year EP growth plan as well. And that as you can see through to 2031 grows current average production levels from six and fifty thousand to 850,000 BOEs per day. Once the Northeast BC infrastructure build out is completed early next decade, the production growth rate is expected to drop and the company intends to migrate towards a maintenance capital level, which we currently estimate at about 2,500,000,000.0 per annum to maintain 850,000 BOEs per day. Associated free cash flow will grow to the 2,500,000,000.0 to 3,000,000,000 per annum mark at the flat price deck and it does underscore the significant overall improvements that this BC Montney development project will impart. And at that point, we’ll have a company that can continue to produce at these levels and more importantly generate annual free cash flow of this magnitude for literally decades given we control the largest future drilling inventory in North America.

And we’ve always taken a long term view as we’ve built this company that includes building and owning your own infrastructure as that improves realized margins and partially insulates us against ongoing price volatility. So really this is just another planned step in the evolution of the company, will be a material larger, more profitable company right about the time that we expect the continent to be getting short on resource. And importantly, we’ll continue to prioritize free cash flow on an annual basis as the new EP plan is executed and we’ll adjust the pace of capital spending accordingly. We can slow down if prices aren’t cooperating or we can accelerate if prices are ahead of where we’re expecting. That doesn’t seem to happen very often, but we do maintain our strong natural gas outlook for the second half of this decade.

Just briefly on E and P, our 25 well results in both the Northeast BC Montney and the Alberta Deep Basin continue to outperform prior years with above forecast deliverability from multiple assets spread across both gas complexes. And this has allowed us to reduce capital spending and maintain in part production targets. With lower local gas prices thus far in ’25, we’ve already deferred some BC frac activities into Q4 and we have released one of the Deep Basin drilling rigs for the balance of at least this year. And of note, multiple new pool successes in several formations in the South Deep Basin via the second half twenty twenty four, first half twenty twenty five EP program are evolving into a significant new growth project for the company. We plan several delineation wells over the next twelve months to further refine this multi objective development and it’s certainly not included in the current EP plan.

And I think that’s it for the prepared remarks, and we’re more than happy to answer any questions you may have.

: Thank you.

Sylvie, Conference Call Operator: And Thank you. Your first question will be from Kelly Akamyne at Bank of America. Please go ahead.

Kelly Akamyne, Analyst, Bank of America: Hey, good morning, guys, Mike and team. Look, thank you for the updated plan. I think this has been both telegraphed by you and your team versus our estimates, and we found this very much in line. I’m hoping that I can get you to address maybe a couple of things here. First, when I’m looking at slide number eight, some of the midstream projects associated with this build out, maybe you could have some better definition.

So, wondering if there are moving parts and what those moving parts could mean for the plan. And then our broad read of this is that this is probably the most conservative version. Where do you think that you could improve on this plan? Is it something like liquids yield? Is it capital?

Or is it synergies from prior deals?

Mike Rose, President and Chief Executive Officer, Tourmaline: Well, we’ll work backwards with that. Yes, and good morning. Where we can improve is significantly on the realized liquids margins. We’ve included the base minimum of $1 per barrel improvement and we fully expect to do significantly better than that. I don’t know what you were looking for as far as further detail on all of the existing plant expansions or new builds.

We’ve been kind of carefully planning this out for multiple years, we kind of know exactly what we’re going to build. So we can certainly take that offline and provide more detail for you, but maybe you can let us know what you’re thinking there.

Kelly Akamyne, Analyst, Bank of America: I guess, broadly, I’m looking at slide number eight and specifically at ground birch in Convoy where the build out is up to a certain number. It seems like that up to number is still kind of in flux. So maybe talk about what would motivate up to that number or somewhere in between?

Mike Rose, President and Chief Executive Officer, Tourmaline: Well, there’s going to be two sort of plant projects in ground birch. There’s the phase one deep cut, which will be 300,000,000 a day and that will handle the liquid rich gas. And then on the ex Strathcona assets, we will expand that 60,000,000 a day gas plant that they had to 150,000,000 a day and that will handle the dry gas component of the inventory that we’re going to develop there. And then we have an opportunity in Phase two to take the ground bird to deep cut plant to higher levels.

Kelly Akamyne, Analyst, Bank of America: Thank you, Mike. That’s helpful. My second question is, is it really about hedging? When you think about the big capital commitment over this period, does that motivate you to hedge maybe a tad more aggressively? Or given what your base case is for AKE over the next several years, are you more motivated to perhaps hedge less and lean into the macro?

Mike Rose, President and Chief Executive Officer, Tourmaline: Yeah. Well, we have those discussions daily, as you can imagine. You know, right now, we’re probably just gonna stick with the existing plan and incur any current year, we end up 30 to 35% hedged by the time that year is happening. If you look out ’26 isn’t at that level yet and that’s mostly because we haven’t seen the prices that we like. But if you look historically, that’s typically what we’ve done.

And we typically just because we’ve had weaker prices in the Western Canadian sedimentary basin that hedging tends to be summer focused and focus more on those hubs rather than our export hubs in The U. S. So that you kind of nailed it, is the AECO outlook going to be significantly better so that maybe you don’t hedge as much 2627. And I’d say the jury’s out on making that decision at this point.

Kelly Akamyne, Analyst, Bank of America: Got it. Thanks for the color, Mike.

Mike Rose, President and Chief Executive Officer, Tourmaline: Thank you.

Sylvie, Conference Call Operator: Next question will be from Sam Burwell at Jefferies. Please go ahead.

Sam Burwell, Analyst, Jefferies: Hey, good morning guys. I just wanted to get a sense of whether 2026 is the heaviest year of infrastructure CapEx spend. Is it materially more than 2025 and 2027? Just trying to get a better sense of the infrastructure CapEx trajectory.

Jamie, Vice President of Capital Markets, Tourmaline: Yes, it’s Jamie speaking. It’s generally level loaded across the plan. Frankly, we’re kind of building one to sometimes one and a bit gas plants in any given year. So this next several quarters is focused around the Aiken C38 build out. In 2026, there is long lead spend now incorporated for ground Birch and that build out has been completed in 2027.

And then we’re getting into some of the Phase two elements of both the North And South Montney. Importantly, though, this infrastructure build out does tail off in the 02/1930, 2031 timeframe. And you can see that free cash flow expand as that capital drops.

Sam Burwell, Analyst, Jefferies: Okay, got it. Then a follow-up on the deferrals obviously makes sense given the AECO pricing you’re seeing now. But the CapEx guidance was unchanged. So I’m just wondering if there is a downside bias to 2025 CapEx or perhaps there are volumes that show up in, say, 2026 where the capital is deployed in 2025. So just trying to reconcile the production guidance with the CapEx guidance for 2025.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yes, I think that’s a distinct possibility. We’ll probably migrate towards the lower end of capital and we’ve as we announced in the press release, we are continuing to defer some capital activity out of Q3 later in the year. We’re still targeting if pricing improves in Q4 and we might get into a discussion on this call on where AECO is going to go here over the next couple of months. We can very quickly pivot and execute a significant piece of the program in Q4 hit or exceed that exit target of 680,000 to 690,000 BOEs a day. So maybe a little more U shaped production profile than we’ve seen in previous years for us and that’s strictly related to continuing weaker than expected summer gas prices.

And those are, a large part of that is being caused by export restrictions out of our basin due to maintenance. So there was maintenance at the East Gate through July and that’s continuing and there’s significant maintenance on the West Gate In an aggregate, it’s backing up close to a Bcf a day into the basin, kind of at exactly the wrong time. And it’s significantly more than the export backup than we were observing due to maintenance last summer. So it’s a bit of an aberration and we think by September, well, we know by September that all goes away and perhaps you can start seeing the more clearly the impact of pulling increasing volumes west on CGL to LNG Canada. Anything you want to add Jamie?

Jamie, Vice President of Capital Markets, Tourmaline: I would say like the flip side of that is it coils the spring on how tight next year can get. And you’re starting to see that being reflected in some of the basis markets you’ve seen Chicago tighten up, we’ve seen even Cal26, AECO hub tighten up a bit here just in the last 10 sessions. And so the lack of ability to export this summer helps drain the storage capacity in the markets we would otherwise be exporting to namely the Pac Northwest, California market and the Chicago market. And those markets have had generally a pretty hot summer, especially in the East. And that makes the 26 setup that much more interesting.

I think the other thing we’ll be watching carefully, of course, is the LNG Canada ramp up, which frankly so far has been very strong, seeing pulls up to $400,000,000 a day implied by the cargoes and the visible scrapes we see well over $100,000,000 a day now at the July. And we understand that ramp to continue to go well through the back half of this year.

Sam Burwell, Analyst, Jefferies: Okay. Very, very helpful. Much appreciated, guys.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yes. Thank you.

Sylvie, Conference Call Operator: Next question will be from Josh Silverstein at UBS. Please go ahead.

Josh Silverstein, Analyst, UBS: Yes. Thanks. Good morning, guys. Just for the long term plan and the build out here, can you just talk about how much flexibility or optionality you have in the development plan? Can you adjust the project slate or timing depending on commodity prices?

If you can offer us a little bit more color there, that’d be great.

Mike Rose, President and Chief Executive Officer, Tourmaline: We have a significant amount of flexibility. We’re not projecting first production of any material nature really until 2026 with the Aiken startup. And I don’t think there’s an opportunity to move that to mid year, but we can certainly have flexibility on when ground birch starts and when all the phase two components actually start. I mean, we’ve sort of got in the habit the last two and a half years of just deferring everything because prices haven’t cooperated. So we’re kind of looking forward to the other side of this, maybe prices are better than it’s been forecast for ’26 and ’27 and we can accelerate several of the items in there.

Josh Silverstein, Analyst, UBS: Got it. And then I also wanted to ask on the shareholder return profile, given all the CapEx that the free cash flow really is kind of back end weighted here. Are you limiting the potential growth in shareholder returns through this period? And then I see the buyback in that kind of chart in the back has kind of been pushed back out five years from now as well versus essentially earlier you were thinking about maybe ’26 or ’27. Thanks.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yeah, I mean, we’ve got a big project to execute here between ’25 and ’31. So the focus really is on per share growth and dividend yield. If we were just talking about if prices are better than expected, then that growth of free cash flow to over 2,000,000,000 per annum come sooner and that can open up other options for shareholder returns.

Jamie, Vice President of Capital Markets, Tourmaline: It has put some numbers on that, Josh. If you were to move AECO around like plus a dollar, that’s over $500,000,000 of incremental free cash flow for Tourmaline. And so I think it really does, we are definitely well open to an improving gas price market in ’26, And that can influence how we return cash to shareholders.

: Got it. Thanks, guys.

Sylvie, Conference Call Operator: Thank you. Next question will be from Jamie Kubik at CIBC. Please go ahead.

: Yeah, good morning and thanks for taking my question. A specific one actually, with respect to Slide six and the updated EP plan, there’s a great amount of detail on the infrastructure inclusions that you have in this plan. Can you talk a little bit about perhaps the percentage of new capital in the EP plan that is infrastructure weighted versus maybe new drilling capital compared to what was previously included? Thanks.

Jamie, Vice President of Capital Markets, Tourmaline: Yes. So we did include facility capital for both Groundburg and the North Montney that wasn’t included before. But also we also included the drilling and completion capital associated with that extra 100,000 BOE today. And so in general, for the next several years, we’re going to be allocating 3,000,000 to sometimes $350,000,000 of infrastructure capital per year. And then the D and C CapEx would be basically pushing at that 2,500,000,000.0 to $2,600,000,000 level.

Once North Montney Phase 2 is completed, that infrastructure capital will thin. It’s going to thin to roughly $100,000,000 a year, sometimes less. And then also as declines are coming down through the plan, which is important, we’d be roughly at 32%, 33% decline rate today. Because of the way the BC Montney production contributes to the business and the advantageous nature of how those type curves shape, the client still we see coming down through the end of the plan into the high to mid 20s. That allows that DC capital also to decelerate.

And so that’s how you get to the $2,500,000,000 at the end.

: Okay. Maybe I’ll ask another one here. Just with respect to the liquids mix and the production profile, I guess, how is that trending this year versus your expectations and how do you think that might change in the back half of 2025 or into 2026? Thanks.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yes, I think ultimately the mix won’t change. There’ll be short term aberrations in any given year, but ultimately it’s pretty much that 75% gas, 25% total liquid and that’s where it is at the end of the plant. We’re down a little on liquids this year. We had an extended turnaround in the Peace River High Complex, which reduced liquids for a longer period than we had forecast for Q2. And then just the sequence of the pad drilling in the BC Montney, several of the early pads were in gassier areas and some of the deferrals were when we were saving capital in Q2 were a couple of the liquid rich pads.

We subsequently completed those. So you’ll see total liquids production trend up here through the balance of the year.

: Great. I’ll sneak in one more here. Just with respect to shut ins, Tourmaline did mention in its disclosures that you did have some shut ins in Q2 related to natural gas. I guess, is that something that you’re thinking about extending through Q3 by much just given where Station two and AECO pricing have gotten to? And how should we think about that part going forward?

Mike Rose, President and Chief Executive Officer, Tourmaline: We’re certainly looking, we actually have a little bit of gas shut in today. We’ll see where prices go through the balance of August, but we certainly left that as an option for us in August anyway. We expect September pricing to be better. And the shut ins have been strictly on the BC Montney, generally the North Montney. Gas that goes through third party with higher OpEx.

And of course, part of the infrastructure build out is that gas comes into our own facilities in the future with much lower OpEx.

: Okay, thanks. I’ll turn it back.

Sylvie, Conference Call Operator: Thank you. Next question will be from Aaron Bukowski at TD Cowen. Please go ahead.

Jamie Kubik, Analyst, CIBC: Thanks. Good morning. A couple of small questions from me. The first is on margin expansion. You’ve obviously discussed margin expansion as you grow out in Northeast BC, some of that comes from higher revenue, some of it comes from lower costs.

Of the dollar per BOE cost savings that you talked about, what would roughly the split be between OpEx savings and transportation cost savings if you have that available?

Mike Rose, President and Chief Executive Officer, Tourmaline: Yeah. It’s about fiftyfifty, Aaron. And we’ll see if we can do better on the OpEx, but that’s what we’re modeling in right now. So $0.50 on each. Thanks.

Jamie Kubik, Analyst, CIBC: And my second question is on the transport to The Gulf. I guess to what extent do you see Tourmaline being able to get more physical transport capacity down to The Gulf in the coming years?

Mike Rose, President and Chief Executive Officer, Tourmaline: Well, it’s something we work really hard at and I would expect sometime in the next two or three years we’ll find another pathway down there on existing pipes with lower tolls. There might be some further brownfield work that seems to be on the table again south of the border, which might help that exercise. But our marketers spend a lot of time trying to cobble together transportation routes from The Gulf all the way back into the Basin.

Aaron Bukowski, Analyst, TD Cowen: Perfect. Thanks, Mike.

Sylvie, Conference Call Operator: Thank you. Next question will be from Philip Lemoreux at Lemoreux Vineyard. Please go ahead.

Scott Kircher, Chief Legal Officer, Tourmaline0: Hi, Mike. In years past, when we had board meetings down in Tucson with Ron Wiggum and Andy and Lee and John Ellich, I remember we were running debt at about two and a half times cash flow thereabouts and talked about whether we should put a cap or suggest a cap of don’t go over three times cash flow. And now you’re running 0.5 paying a huge dividend, a very attractive dividend if people have their eyes open. And it’s just amazing what you’ve accomplished. So I just wanted to thank you for what you’ve done.

Jamie, Vice President of Capital Markets, Tourmaline: Well, thanks, Bill. Yeah.

Sylvie, Conference Call Operator: Thanks. Thank you. And your next question will be from Faye Lee at Odlum Brown. Please go ahead.

Aaron Bukowski, Analyst, TD Cowen: Hi, Mike. It’s Faye here. I’m just saying on slide five, your five year plan. In 2031, you have, like, about 2,600,000,000.0 in your capital program. I’m assuming if this was a six year plan that the production there would be some production growth in 2032.

Did I confirm that? And if that’s the case, I’m just wondering, do you have if you can give me some sense of what sustaining capital call it would be to keep production flat and at $8.50? Just wonder what that number would be if it’s not 2,600,000,000.0.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yeah. You bet, Fai. Yeah. We’re modeling $2,500,000,000 to maintain that 850,000 BOEs per day. And the answer to the first part of your question is, yes, there probably will be some modest growth going forward 2032 and beyond.

In that the last slide in the deck we do depict that to some extent but we do show the production growth rate dropping from that 5% to 6% into the 1% to 2% per annum range. And so, I mean, I think that’s the type of production growth that you can think about for the years past the existing six point five year plan.

Aaron Bukowski, Analyst, TD Cowen: Okay, great. Thanks. That’s very helpful.

Mike Rose, President and Chief Executive Officer, Tourmaline: Thanks, Mike.

Sylvie, Conference Call Operator: Thank you. And at this time, Mr. Kirker, we have no further questions registered. Please proceed.

Scott Kircher, Chief Legal Officer, Tourmaline: Thank you, Sylvie. Thanks, everyone, for attending the conference call. We’ll see you again next quarter.

Sylvie, Conference Call Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.

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