Tourmaline Oil to buy Bonavista Energy for $1.45-billion

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The half-cash-half-stock transaction will boost production at Tourmaline – already the country’s largest natural gas producer – by roughly 10 per cent, the company says

A Bonavista pump jack in a farmer's field with the Rocky Mountains in the backdrop just north of Calgary, Alta, Oct. 24, 2019.The half-cash-half-stock transaction will boost production at Tourmaline – already the country’s largest natural gas producer – by roughly 10 per cent and is expected to add $450-million in annual net operating income for the next three years, the company said Monday. Tourmaline will also acquire Bonavista’s $1.

The Bonavista deal is the latest example of an accelerating trend of consolidation among oil and gas producers across Canada and the United States. His company had been eyeing Bonavista for more than two years, he said. Caught early in the pandemic with nearly $1-billion in debt and rapidly falling prices, Bonavista delisted from the Toronto Stock Exchange in late 2020.

“They ended up doing a good job eliminating their debt, and there is an attractive free cash flow yield,” Mr. Rose said. “And we think we can lay our lower cost structure on it and generate that much more free cash flow.”

 

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