ALBERTA

Tourmaline ups 2013 production guidance, capital budget; plans $202.8M financing

02/20/2013 10:27 EST | Updated 04/22/2013 05:12 EDT
CALGARY - Tourmaline Oil Corp. (TSX:TOU) is increasing its 2013 capital budget by $90 million and says it expects an increase in daily production of some 5,000 barrels of oil equivalent per day.

The Calgary-based intermediate oil and natural gas producer said Wednesday that it is currently operating 10 to 11 drilling rigs and the increase in its capital budget to $740 million from $650 million will allow that to continue for the balance of the year.

Production guidance has been increased to 80,000 barrels of oil equivalent per day from 75,000.

Tourmaline says that to help pay for the increase in capital spending, it had entered into bought-deal financings for total gross proceeds of $119.6 million, but within hours announced an increase in the total offering to more than $202.8 million.

Under the revised deal with a syndicate of underwriters led by Peters & Co. Ltd., Tourmaline now will issue five million common shares, up from three million, at the same price of $34.25 per share for gross proceeds of $171.25 million. It will also issue 750,000 flow-through common shares, up from 400,000, at $42.15 per share for gross proceeds of $31.6 million.

The underwriters will have an option to purchase up to an additional 15 per cent of the common shares.

In conjunction with the offering, certain officers, directors, employees of Tourmaline and their associates intend to participate by purchasing up to 30,000 common shares and up to 75,000 flow-through shares, the company said in a release.

"The net proceeds of the (common share) financing will be used to temporarily reduce indebtedness, which will then be available to be redrawn and applied to fund the expanded 2013 capital program," it said.

Tourmaline will use the proceeds of the flow-through financing to incur eligible Canadian exploration expenses prior to December 31, 2014.

On the Toronto Stock Exchange, Tourmaline shares were down 93 cents, or 2.645 per cent, at $34.30 in trading near midday Wednesday.

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