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Tourmaline continues to trim 2019 capital budget, still sees higher production

Tourmaline Oil Corp. said Jan. 16 it has approved a capital expenditure budget of C$1.225 billion, down from the C$1.3 billion announced in November 2018, which was already down 4% from 2018.

The finalized budget will be allocated to five new exploration wells and fracturing operations.

The Calgary, Alberta-based oil producer is targeting average production of 300,000 barrels of oil equivalent per day, an increase of 12% from 2018. The estimate, which is unchanged from November 2018, accounts for 9% unscheduled downtime, up from the 5% used historically.

The company said the 50,000 boe/d Gundy deep cut facility is expected to commence operations in June, adding between 35,000 boe/d and 50,000 boe/d to production.

Another 100 million cubic feet per day will be added to its production due to the TransCanada GTN expansion, which will be completed in the second half of the year and will serve the West Coast U.S. market.

Tourmaline plans to bring online 125 new wells in the first half.

The company said the C$75 million reduction in the budget since November 2018 is due to fewer delineation wells in two complexes and lower completed well costs across all three core complexes. Tourmaline also said it could trim program spending by an additional C$30 million to C$50 million in 2020.