Mike Rose, CEO of Tourmaline Oil Corp, photographed in his Calgary office on Thursday, January 06, 2011.Chris Bolin/The Globe and Mail
Tourmaline Oil Corp. has a record of raising money when equity markets are stingy, and the Calgary-based company said on Tuesday it is doing just that – selling a big chunk of stock for the third time in less than a year.
Tourmaline, led by CEO Mike Rose, has entered into a bought deal worth at least $157-million. The mid-size oil and gas producer will use the funds to reduce short-term debt, and apply the remainder to its $900-million capital spending budget.
The financing is being led by Peters & Co. Ltd., and comprises the sale of 3.3 million shares at $47.50 apiece. Underwriters have the option of buying an additional 15 per cent.
The offering follows a $194-million stock sale in October and a $233-million one last March.
Mr. Rose and his management team have managed to repeatedly tap equity markets. That puts them among a mere handful of firms in the oil patch, during a period in which overall debt and equity financings have been slightly over a third of what they were in the last boom year, 2007.
Much of that access to financing has to do with a record of impressive production additions, and interest among would-be buyers. In 2008, Mr. Rose sold his last company, Duvernay Oil, to Royal Dutch Shell PLC for $5.9-billion.
Early this month, Tourmaline announced it finished the year producing more than 111,000 barrels of oil equivalent a day, up nearly 60 per cent from the previous year. It has forecast 2014 production to average 118,000 barrels of oil equivalent a day.
In the Montney region of northeastern British Columbia, Tourmaline expects to be producing 250 million cubic feet of gas and up to 6,000 barrels of condensate a day by the third quarter of this year.
Shares in Tourmaline closed up 40 cents at $48.90 on the Toronto Stock Exchange on Tuesday. They have climbed 9 per cent so far this year.
Jeffrey Jones