Mr. Michael Rose reports

TOURMALINE CONTINUES DEEP BASIN CONSOLIDATION STRATEGY WITH THE ACQUISITION OF BONAVISTA ENERGY CORPORATION, INCREASES BASE DIVIDEND AND DECLARES SPECIAL DIVIDEND

Tourmaline Oil Corp. has entered into a definitive share purchase agreement with all of the shareholders of Bonavista Energy Corp. to acquire all of the shares of Bonavista for $1.45-billion, consisting of $725-million in Tourmaline common shares and $725-million of cash, less Bonavista's net debt at closing. The acquisition is expected to close in the second half of November, 2023, subject to customary regulatory and stock exchange approvals.

The acquisition represents a further important component of the company's continuing consolidation strategy that complements its long-term EP (exploration and production) organic growth plan, adding decades of inventory and supplementing Tourmaline's existing Deep basin assets. The Bonavista assets are a natural extension of Tourmaline's existing operations in the Deep basin, where the company is already the largest producer. The acquisition is immediately accretive to Tourmaline's 2024 free cash flow (FCF) yield. Following closing of the acquisition, Tourmaline expects to exit 2023 with production of over 600,000 barrels of oil equivalent per day. The company will release its formal 2024 guidance pro forma this acquisition with an updated five-year plan alongside third quarter results on Nov. 1, 2023.

Bonavista acquisition overview

The acquisition, which includes low-decline, long-life average production of over 60,000 barrels of oil equivalent per day, is expected to generate net operating income of approximately $450-million per year in 2024 through 2026 based on strip pricing, with anticipated EP spending of under $225-million per year on the assets.

The Bonavista assets include existing 2P (proven and probable) reserves of 459 million barrels of oil equivalent at Oct. 1, 2023; 839 gross (656.7 net) horizontal internally estimated drilling locations; and 1.2 million net acres of land rights.

Bonavista after-tax PDP (proved developed producing) reserve net present value at a 10-per-cent discount rate is $1.4-billion (based on internally estimated reserves and IC3 Q4 2023 pricing).

Bonavista YTD (year-to-date) cash costs to June 30, 2023, were $10.29 per barrel of oil equivalent, including operating costs of approximately $6.14 per barrel of oil equivalent. Tourmaline anticipates considerable cost synergies on the Bonavista assets on a go-forward basis.

The boards of directors of each of Bonavista and Tourmaline have unanimously approved the acquisition.

Peters & Co. Ltd. acted as financial adviser to Tourmaline and TPH&Co., the energy business of Perella Weinberg Partners, acted as financial adviser to Bonavista.

Base dividend increase and special dividend declaration

Given continued strong financial forecast for the second half of 2023 as well as anticipated sustainable FCF, coupled with Tourmaline's low-cost structure, the board of directors of the company has approved an increase to the quarterly base dividend effective Q4 2023 to $1.12 per share, on an annualized basis, from the current annualized $1.04 per share, representing a 7.7-per-cent increase.

The board of directors of the company has also declared a Q4 2023 special dividend of $1 per share that will be paid on Nov. 1, 2023, to shareholders of record on Oct. 24, 2023. This special dividend is designated as an eligible dividend for Canadian income tax purposes.

About Tourmaline Oil Corp.

Tourmaline is Canada's largest and most active natural gas producer dedicated to producing the lowest-emission and lowest-cost natural gas in North America. Tourmaline is an investment-grade exploration and production company providing strong and predictable operating and financial performance through the development of its three core areas in the Western Canadian sedimentary basin. With its existing large reserve base, decades long drilling inventory, relentless focus on execution and cost management, and industry-leading environmental performance, Tourmaline is excited to provide shareholders an excellent return on capital and an attractive source of income through the company's base dividend and surplus free cash flow distribution strategies.

We seek Safe Harbor.