Tourmaline Oil Corp.

Scott Kirker - Secretary, General Counsel Mike Rose - President and CEO Brian Robinson - VP Finance and CFO

Thank you, operator and welcome everyone to our discussion of Tourmaline’s 2014 Q4 and yearend results. My name is Scott Kirker and I am the Secretary and General Counsel for Tourmaline.

Before we get started, I refer you to the advisory on forward-looking statements contained in the news release as well as the advisories contained in the Tourmaline Annual Information Form available on SEDAR. I would like to draw your attention in particular to the material factors and assumptions in those advisories.

I am here with Mike Rose, our President and Chief Executive Officer and with Brian Robinson, our Vice President of Finance and Chief Financial Officer. Mike Rose will start by speaking to some of the highlights and after his remarks, both Mike and Brian will be available for questions.

Go ahead, Mike.

Thanks Scott. Good morning, everybody.

Thanks for dialing in. We're very pleased with our continued strong earnings we released last night.

In 2014, we had record full year after-tax earnings of just under $0.5 billion or $2.41 per diluted share and that was up approximately 230% over 2013 and it underscores the fundamental full cycle profitability of our natural gas business. We have a very strong balance sheet, one of the strongest in the sectors.

We came into 2015 with a debt to cash flow of approximately 1.1 times and we'll continue to manage that. 2014 cash flow was $929 million, which was up 76% over 2013 and that calculates to 64% per deluded share.

Our 2014, production growth over '13 was 51% or 40% per deluded share and for 2015 we're forecasting production growth of 46% and we think that will be the largest growth rate for the large intermediates or companies with production greater than a 100,000 BOEs per day. Our Q4 2014, production was up 21% over the previous quarter Q3 of '14, so very strong sequential quarterly growth and we expect that to continue through 2015 on a quarterly basis.

Current production in 145,000 to 150,000 BOE per day range and we're aiming to achieve our average production target for 2015 of 164,500 BOEs per day in late April and that’s when we'll complete the ongoing tie-in and well start-up program. Strong netbacks in 2014 of $23.35 per BOE and that yield a date 2P recycle ratio of 2.2.

We do continue to work our way at our all-in cost structure. It was down to $8.07 per BOE in 2014 and that includes OpEx, transportation, G&A and all financing and interest expense cost and we believe that that is also one of the best in industry.

Very pleased with Q4 OpEx at $4.07 per BOE and that was down 25% from the previous quarter and we’re forecasting full-year 2015 operating cost to be down 10% to 15% over full-year 2014 cost, which we think will help considerably in this more challenging commodity price environment. We did release our year-end 2014 results about three weeks ago.

So I’ll just touch on a couple of highlights. Our total 2P reserve addition of 307 million BOE prior to production, represented 52% growth over '13 or 45% per dilute share and we believe we -- of the intermediate sector, had the largest net BOE addition in all three reserve category.

So PDP, total proved and 2P. Our yearend '14 2P reserve value was up to $7.7 billion.

So that was up 24% year-over-year or a net PV increase in '14 of about $1.5 billion and that was despite a significantly lower natural gas price deck in the independent engineering report. Our 2014 2P FD&A was down 12% to $10.40 per BOE over 2013 F&D and that also includes approximately $800 million in facility and infrastructure spending in 2014 that didn’t actually had a single BOE of new reserves.

And we had previously announced that our 2015 capital program had been reduced from an original $1.6 billion down to $1.2 billion CapEx in EP 2015 spending and that remains the case now. So those are the main highlights from 2014.

We think it was our best year from an EP reserve and financial standpoint and we love to answer any questions you might have.

No need to be sorry. Thanks very much everybody for attending.

I appreciate it. We'll talk to you again next quarter.