Investors can expect a one-off dividend next month and an increased base quarterly dividend
A major deal in Canada’s oil and gas sector will bring together two key producers in Alberta’s Deep Basin.
Tourmaline Oil Corporation is to acquire Bonavista Energy Corporation for $1.45 billion including $725 million in Tourmaline common shares and $725 million of cash, less Bonavista's net debt at closing, expected to be in the second half of November 2023 subject to approvals.
The addition of the Bonavista assets will consolidate Tourmaline’s existing operations in the Deep Basin where it is already the largest producer, and adds decades of inventory which aligns with the firm’s long-term exploration and production organic growth plan.
Tourmaline says the deal will be immediately accretive to its 2024 free cash flow yield and that it expects to exit 2023 with production of 600,000 barrels of oil equivalent per day.
Windfall for shareholders
The firm’s shareholders will also benefit from the acquisition with Tourmaline’s board approving a $1 per ordinary share special dividend which will be paid to shareholders of record on October 24, 2023. This special dividend is designated as an ‘eligible dividend’ for Canadian income tax purposes and will be paid on November 1, 2023.
The board also approved an increase to its quarterly base dividend effective Q4 2023 to $1.12/share, on an annualized basis, from the current annualized $1.04/share, representing a 7.7% increase.
