Q2 2026 Tourmaline Oil Corp Earnings Call

July 30, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Tourmaline Q2 2026 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session.

Operator 3: Good morning, ladies and gentlemen, and welcome to the Tourmaline Q2 2026 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on 30 July 2026. I would now like to turn the conference over to Scott Kirker. Please go ahead.

Operator: Good morning, ladies and gentlemen, and welcome to the Tourmaline Q2 2026 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on 30 July 2026. I would now like to turn the conference over to Scott Kirker. Please go ahead.

Speaker #1: If at any time during this call you require immediate assistance, please press *0 for the operator. This call is being recorded on July 30, 2026.

Speaker #1: I would now like to turn the conference over to Scott Kirker. Please go ahead.

Speaker #2: Thank you, John, and welcome everyone to our discussion of Tourmaline's financial and operating results as of June 30, 2026, and for the three and six months ended June 30, 2026, and 2025.

Scott Kirker: Thank you, John, and welcome everyone to our discussion of Tourmaline's financial and operating results as at 30 June 2026, and for the three and six months ended 30 June 2026 and 2025. My name is Scott Kirker, and I'm the Chief Legal Officer here at Tourmaline Oil. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release, as well as the advisories contained in the Tourmaline annual information form and our MD&A available on SEDAR and on our website. I also draw your attention to the material factors and assumptions in these advisories. I am here with Mike Rose, Tourmaline's President, Chief Executive Officer, Brian Robinson, our Chief Financial Officer, and Jamie Heard, Tourmaline's Vice President of Capital Markets. We'll start with Mike speaking to some of the highlights for the last quarter and the year so far.

Speaker #2: My name is Scott Kirker, and I'm the Chief Legal Officer here at Tourmaline Oil. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release, as well as the advisories contained in the Tourmaline Annual Information Form and MD&A available on SEDAR and on our website.

Speaker #2: I also draw your attention to the material factors and assumptions in these advisories. I am here with Mike Rose, Tourmaline's President and Chief Executive Officer.

Scott Kirker: I also draw your attention to the material factors and assumptions in these advisories. I am here with Mike Rose, Tourmaline's President, Chief Executive Officer, Brian Robinson, our Chief Financial Officer, and Jamie Heard, Tourmaline's Vice President of Capital Markets. We'll start with Mike speaking to some of the highlights for the last quarter and the year so far. After his remarks, we'll be open for questions. Go ahead, Mike.

Speaker #2: Ryan Robinson, our Chief Financial Officer, and Jamie Hurd, Tourmaline's Vice President of Capital Markets. We'll start with Mike speaking to some of the highlights of the last quarter and the year so far.

Speaker #2: After his remarks, we'll be open for questions. Go ahead, Mike.

Scott Kirker: After his remarks, we'll be open for questions. Go ahead, Mike.

Speaker #3: Thanks, Scott. Thanks, everybody, for dialing in this morning. So, a few highlights: Q2 2026 cash flow was $786 million, generating $192 million of free cash flow in the quarter.

Mike Rose: Thanks, Scott. A few highlights. Q2 2026 cash flow was CAD 786 million, generating CAD 192 million of free cash flow in the quarter. We have entered into a long-term agreement to increase propane and butane exports through the new AltaGas Reef terminal, increasing Tourmaline's exposure to premium LPG export markets by approximately 55% and improving realized margins for these products. Our strong well outperformance has continued, with H1 2026 performance now up 28% for the NEBC Montney complex and 14% for the Alberta Deep Basin over the prior five-year averages. The NEBC infra build-out is on schedule and on budget, with 5 of the 6 regional connector pipelines already completed and the Aitken plant expansion start-up on schedule for Q4 of this year.

Mike Rose: Thanks, Scott. A few highlights. Q2 2026 cash flow was CAD 786 million, generating CAD 192 million of free cash flow in the quarter. We have entered into a long-term agreement to increase propane and butane exports through the new AltaGas REEF terminal, increasing Tourmaline's exposure to premium LPG export markets by approximately 55% and improving realized margins for these products. Our strong well outperformance has continued, with H1 2026 performance now up 28% for the NEBC Montney complex and 14% for the Alberta Deep Basin over the prior five-year averages. The NEBC infra build-out is on schedule and on budget, with five of the six regional connector pipelines already completed and the Aitken plant expansion start-up on schedule for Q4 of this year.

Speaker #3: We've entered into a long-term agreement to increase propane and butane exports. Through the new AltaGas reef terminal, increasing Tourmaline's exposure to premium LPG export markets by approximately 55%, and improving realized margins for these products.

Speaker #3: Our strong, well-outperformance has continued with first half 26 performance, now up 28% for the Northeast BC Montany Complex and 14% for the Alberta Deep Basin over the prior 5-year averages.

Speaker #3: The Northeast BC infrastructure build-out is on schedule and on budget, with five of the six regional connector pipelines already completed, and the 8 Can Plant expansion start-up on schedule for Q4 of this year.

Speaker #3: We're now scheduling a 1-year pause between Phase 1 and Phase 2 of the BC infrastructure build-out, enhancing anticipated second half 2027 and 2028 free cash flow and shareholder returns.

Mike Rose: We are now scheduling a one-year pause between phase 1 and phase 2 of the BC infrastructure build-out, enhancing anticipated H2 2027 and 2028 free cash flow and shareholder returns. Looking at production, Q2 average production was 594,000 BOEs a day, marginally below the guidance range of 595,000 to 605,000 BOEs per day. That was by choice, as we injected more net gas into storage, deferred activity in response to low Q2 natural gas prices, and also had some price-related shut-ins during the quarter. Storage injections at Dimsdale, Alberta, Dawn, Ontario, and Wild Goose in California averaged 8,900 BOEs per day in the quarter, and that was higher than initially planned. These volumes are expected to be largely withdrawn from storage during Q4 of this year and perhaps into Q1 2027, obviously at a higher price than we injected them at.

Mike Rose: We are now scheduling a one-year pause between phase I and phase II of the BC infrastructure build-out, enhancing anticipated H2 2027 and 2028 free cash flow and shareholder returns. Looking at production, Q2 average production was 594,000 BOEs a day, marginally below the guidance range of 595,000 to 605,000 BOEs per day. That was by choice, as we injected more net gas into storage, deferred activity in response to low Q2 natural gas prices, and also had some price-related shut-ins during the quarter. Storage injections at Dimsdale, Alberta, Dawn, Ontario, and Wild Goose in California averaged 8,900 BOEs per day in the quarter, and that was higher than initially planned. These volumes are expected to be largely withdrawn from storage during Q4 of this year and perhaps into Q1 2027, obviously at a higher price than we injected them at.

Speaker #3: Looking at production, Q2 average production was 594,000 BOEs per day, marginally below the guidance range of 595,000 to 605,000 BOEs per day. That was by choice.

Speaker #3: As we injected more nat gas into storage, deferred activity in response to low Q2 natural gas prices, and also had some price-related shut-ins, during the quarter.

Speaker #3: Storage injections at Dimsdale, Alberta, Dawn, Ontario, and Wild Goose in California averaged $8,900 BOEs per day in the quarter, and that was higher than initially planned.

Speaker #3: These volumes are expected to be largely withdrawn from storage during the fourth quarter of this year, and perhaps into the first quarter of 2027.

Speaker #3: Obviously at a higher price than we injected them at. Full year 2026 production range of $620,000 to $640,000 BOEs per day still anticipated, including a 2026 production exit target of $660,000 BOEs per day.

Mike Rose: Full year 2026 production range of 620,000 to 640,000 BOEs per day is still anticipated, including a 2026 production exit target of 660,000 BOEs per day. Given the activity deferrals from Q2, we have 67 wells ready to frack and an additional 21 wells to turn in line. We will do that in concert with improving prices. Looking at our financial results and the capital budget, net debt as of 30 June of this year was CAD 1.5 billion, and that is below our long-term debt target of CAD 1.75 billion. Q2 OpEx was CAD 459 per BOE, and that is down 10% from the corresponding quarter in 2025 and 3% from Q1 of this year. Full year 2026 operating costs of CAD 450 to CAD 460 per BOE are expected, and that will take us down between 7% and 9% from full year 2025.

Mike Rose: Full-year 2026 production range of 620,000 to 640,000 BOEs per day is still anticipated, including a 2026 production exit target of 660,000 BOEs per day. Given the activity deferrals from Q2, we have 67 wells ready to frack and an additional 21 wells to turn in line. We will do that in concert with improving prices. Looking at our financial results and the capital budget, net debt as of 30 June of this year was CAD 1.5 billion, and that is below our long-term debt target of CAD 1.75 billion. Q2 OpEx was CAD 459 per BOE, and that is down 10% from the corresponding quarter in 2025 and 3% from Q1 of this year. Full-year 2026 operating costs of CAD 450 to CAD 460 per BOE are expected, and that will take us down between 7% and 9% from full-year 2025.

Speaker #3: Given the activity deferrals from Q2, we have 67 wells ready to frack and an additional 21 wells to turn in line. We'll do that in concert with improving prices.

Speaker #3: Looking at our financial results and the capital budget, net debt as of June 30 of this year was $1.5 billion, and that's below our long-term debt target of $1.75 billion.

Speaker #3: Second quarter OPEX was $459 per BOE, and that's down 10% from the corresponding quarter in 2025, and 3% from Q1 of this year. Full year 2026 operating costs of $450 to $460 per BOE are expected and that'll take us down between 7 and 9% from full year 2025.

Speaker #3: And we're maintaining the aggregate operating and transportation cost reduction target of $1.50 per BOE by 2031, relative to first-half 2025 levels. The full-year 2026 EP capital budget remains at $2.55 billion, following the $350 million reduction to the full-year budget that we announced on March 4 of this year.

Mike Rose: We are maintaining the aggregate operating and transportation cost reduction target of CAD 1.50 per BOE by 2031 relative to H1 2025 levels. The full year 2026 E&P capital budget remains at CAD 2.55 billion, following the CAD 350 million reduction to the full-year budget that we announced on 4 March of this year. At current strip pricing, 2026 free cash flow is now estimated to be CAD 880 million, and the free cash flow benefit from the company's exposure to JKM and TTF pricing via our LNG export-related contracts is expected to continue through the balance of 2026 and 2027.

Mike Rose: We are maintaining the aggregate operating and transportation cost reduction target of CAD 1.50 per BOE by 2031 relative to H1 2025 levels. The full-year 2026 E&P capital budget remains at CAD 2.55 billion, following the CAD 350 million reduction to the full-year budget that we announced on 4 March of this year. At current strip pricing, 2026 free cash flow is now estimated to be CAD 880 million, and the free cash flow benefit from the company's exposure to JKM and TTF pricing via our LNG export-related contracts is expected to continue through the balance of 2026 and 2027.

Speaker #3: At current strip pricing, 2026 free cash flow is now estimated to be $880 million, and the free cash flow benefit from the company's exposure to JKM and TTF pricing via our LNG export-related contracts is expected to continue through the balance of 2026 and 2027.

Speaker #3: We are now scheduling, as mentioned, a one-year gross spending pause between the two phases of the BC Montney build-out and development project. This will allow the company and shareholders to realize the full operational benefits and free cash flow growth from Phase 1, commencing in the second half of 2027 and into 2028.

Mike Rose: We are now scheduling, as mentioned, a one-year growth spending pause between the two phases of the BC Montney build-out and development project. This will allow the company and shareholders to realize the full operational benefits and free cash flow growth from phase one, commencing in H2 2027 and into 2028 prior to embarking on phase two. The pause also lets us assess global natural gas supply, demand, and various pricing outlooks around the globe. 2027 EP spending is thus revised down to CAD 2.55 billion, and 2028 EP spending is revised down to CAD 2.3 billion. On A&D activity, we continue to pursue small tuck-in acquisitions and working interest consolidation opportunities adjacent to existing company lands and operated infrastructure. During the second quarter, we acquired Aduro Resources in the South Montney Complex.

Mike Rose: We are now scheduling, as mentioned, a one-year growth spending pause between the two phases of the BC Montney build-out and development project. This will allow the company and shareholders to realize the full operational benefits and free cash flow growth from phase I, commencing in H2 2027 and into 2028 prior to embarking on phase II. The pause also lets us assess global natural gas supply, demand, and various pricing outlooks around the globe. 2027 EP spending is thus revised down to CAD 2.55 billion, and 2028 EP spending is revised down to CAD 2.3 billion. On A&D activity, we continue to pursue small tuck-in acquisitions and working interest consolidation opportunities adjacent to existing company lands and operated infrastructure. During the second quarter, we acquired Aduro Resources in the South Montney Complex.

Speaker #3: Prior to embarking on Phase 2, the pause also lets us assess global natural gas supply-demand and various pricing outlooks around the globe. 2027 E&P spending is thus revised down to $2.55 billion, and 2028 E&P spending is revised down to $2.3 billion.

Speaker #3: On A and D activity, we continue to pursue small tuck-in acquisitions and working interest consolidation opportunities adjacent to existing company lands and operated infrastructure.

Speaker #3: During the second quarter, we acquired Aduro Resources in the South Montany Complex. That was for total consideration of $100 million and that included net debt, and it consisted of $50 million of cash and approximately $1.5 million common shares of TOPAZ Energy Corp.

Mike Rose: That was for total consideration of CAD 100 million, and that included net debt, and it consisted of CAD 50 million of cash and approximately 1.5 million common shares of Topaz Energy Corp. The acquisition included modest current production and infra, as well as 174 net Tier 1 Montney locations adjacent to the Tourmaline Groundbirch-Monias Deep Cut plant that is currently under construction. During the quarter, we also completed the sale of GORR on the Aduro lands, as well as certain recently acquired Alberta Deep Basin lands to Topaz for cash proceeds back to Tourmaline of CAD 38.7 million. Briefly on marketing, our average realized natural gas price in Q2 was CAD 3.12 per Mcf Canadian. We continue to benefit from the diversified marketing portfolio and strategic hedging program that we continue to evolve.

Speaker #3: The acquisition included modest current production and infra, as well as $174 net Tier 1 Montany locations. Adjacent to the tourmaline ground birch manias deep-cut plant that is currently under construction.

Speaker #3: And during the quarter, we also completed the sale of a GOR on the Aduro lands, as well as certain recently acquired Alberta Deep Basin lands, to back to tourmaline of $38.7 million.

Speaker #3: Briefly on marketing, our average realized natural gas price in Q2 was $3.12 per MCF Canadian. As we continue to benefit from the diversified marketing portfolio and strategic hedging program that we continue to evolve.

Speaker #3: Tourmaline has an average of a little over a BCF a day of natural gas hedge for the remainder of 2026, at a weighted average fixed price of $4.97 per MCF Canadian.

Mike Rose: Tourmaline has an average of a little over a Bcf a day of natural gas hedge for the remainder of 2026 at a weighted average fixed price of CAD 497 per Mcf Canadian. We have 220 MMBtus exposed to international pricing, both TTF and JKM in 2026. For the balance of 2026, JKM and TTF are trading over $15 USD per MMBtu, which is a 60% price appreciation for the same strip as at the beginning of this year. The company's amongst Canada's largest propane producers and similar to the natural gas business, we have a long-standing propane marketing diversification strategy that we've been pursuing. As mentioned, we've entered into a long-term agreement with AltaGas to increase our propane and butane exports through the Ridley Island Energy Export Facility, commonly known as REEF.

Speaker #3: We have 220 MMBtus exposed to international pricing, both TTF and JKM, in 2026. For the balance of 2026, JKM and TTF are trading over $15 USD per MMBtu, which is a 60% price appreciation for the same strip as at the beginning of this year.

Speaker #3: The company is amongst Canada's largest propane producers and similar to the natural gas business, we have a long-standing propane marketing diversification strategy, that we've been pursuing.

Speaker #3: And as mentioned, we've entered into a long-term agreement with Altogas to increase our propane and butane exports through the Ridley Island Energy Export Facility, commonly known as REEF.

Speaker #3: The increased LPG volumes will be supplied to REEF from our planned unit train rail loading facility located adjacent to the ground birch manias deep-cut plant that's already being built.

Mike Rose: The increased LPG volumes will be supplied to REEF from our planned unit train rail loading facility located adjacent to the Groundbirch-Monias Deep Cut plant that's already being built. The new rail terminal is expected to improve our realized LPG margins by enabling direct rail shipments to the West Coast. It's all part of that whole integrated Northeast BC infrastructure project. Our expanded natural gas storage capacity is yet another important component of the continued vertical integration of our entire natural gas business. On the EP front, we drilled a total of 43 wells and completed 33 wells during Q2 2026. As you know, considerable EP activity was deferred from Q2 into H2 of this year. Importantly, strong well performance has continued in both gas complexes in H1 of the year.

Speaker #3: The new rail terminal is expected to improve our realized LPG margins by enabling direct rail shipments to the West Coast. And it's all part of that infrastructure project.

Speaker #3: Our expanded natural gas storage capacity is yet another important component of the continued vertical integration of our entire natural gas business. On the EP front, we drilled a total of 43 wells and completed 33 wells during the second quarter of 2026.

Speaker #3: And as you know, considerable EP activity was deferred from Q2 into the second half of this year. Importantly, strong well performance has continued in both gas complexes in the first half of the year.

Speaker #3: As mentioned, the BC Montney well performance is up 28% in the first half of 2026 over the prior five-year average, based on the 25 wells that have actually reached IP90.

Mike Rose: As mentioned, the BC Montney well performance is up 28% in H1 2026 over the prior five-year average based on the 25 wells that have actually reached IP 90. Recall that 2025 was up 22% over the previous five years. Alberta Deep Basin is now also up, and it is 14% up in H1 2026 over the prior five-year averages, and that is based on 30 wells. We continue to evolve our E&P approach to optimize deliverability, EUR, and IRR. You are seeing those results. It is also in part the result of our machine learning-assisted multi-discipline data integration capability that we have been developing in-house. On the inventory front, as mentioned, the Aduro acquisition added 174 net Tier 1 locations at a cost of CAD 462,000 per location.

Speaker #3: And recall that 2025 was up 22% over the previous 5 years. Alberta Deep Basin is now also up, and it's 14% up in the first half of 2026 over the prior 5-year averages.

Speaker #3: And that's based on 30 wells. We continue to evolve our EP approach to optimize deliverability, EUR, and IRR, and so you're seeing those results.

Speaker #3: It's also in part the result of our machine learning-assisted multidiscipline data integration capability that we've been developing in-house. On the inventory front, as mentioned, the Aduro acquisition added $174 net Tier 1 locations at a cost of $462,000 per location.

Speaker #3: In the Deep Basin land sales, which included the first disposition of previously restricted Alberta Caribou lands, other minor asset consolidations added 110 locations at an average cost of $173,000 per location.

Mike Rose: In the Deep Basin, land sales, which included the first disposition of previously restricted Alberta Caribou lands and other minor asset consolidations, added 110 locations at an average cost of CAD 173,000 per location. I think you have probably observed that the location prices are a lot higher south of the border, in Canadian dollars, as high as CAD 10 million per location. On the BC infra build-out, it is actually a major Canadian project that is fully funded by cash flow and currently being executed. The overall project, including both phases, will add 1.1 Bcf a day of gas and over 50,000 barrels per day of condensate and NGLs. Once completed, it is anticipated to generate over CAD 400 million of structural incremental annual cash flow compared to H1 2025 cost structures. That is above the cash flow generated by the growing natural gas business and product sales that the growth will deliver.

Speaker #3: I think you've probably observed that the location prices are a lot higher south of the border in Canadian dollars as high as $10 million per location.

Speaker #3: On the BC infra build-out, it's actually a major Canadian project that is fully funded by cash flow and currently being executed. The overall project including both phases will add $1.1 BCF a day of gas, and over 50,000 barrels per day of condensate and NGLs.

Speaker #3: Once completed, it's anticipated to generate over $400 million of structural incremental annual cash flow compared to first half 2025 cost structures, and that's above the cash flow generated by the growing natural gas business and product sales that the growth will deliver.

Speaker #3: A substantial amount of the Phase 1 build-out is complete. That includes the Highway Condensate Hub, five of the six major pipeline interconnects, the Birch facility, and the South Montney electrification project, and they're already leading to OPEX and transportation cost reductions this year.

Mike Rose: A substantial amount of the phase I build-out is complete. That includes the highway condensate hub, five of the six major pipeline interconnects, the Birch facility, the South Montney electrification project, and they are already leading to OpEx and transportation cost reductions in this year. You probably saw that Brian Robinson, our CFO, is going to retire effective 1 November of this year. Brian has been here since we started Tourmaline in 2008, has done a brilliant job all the way along at Tourmaline, and of course, prior to that at Duvernay and Berkley. Safe to say, the best CFO in the sector over the past two and a half decades, I may be a little biased. Brian will remain on the board of directors of Tourmaline following his retirement as CFO.

Speaker #3: And you probably saw that Brian Robinson, our CFO, is going to retire effective November 1 of this year. Brian's been here since we started Tourmaline in 2008, has done a brilliant job all the way along at Tourmaline and, of course, prior to that at Duvernay and Berkeley.

Speaker #3: Safe to say, the best CFO in the sector over the past 2 and a half decades. I may be a little biased. Brian will remain on the board of directors of Tourmaline following his retirement as CFO.

Speaker #3: And I'm also very pleased to announce that Jamie Hurd, currently our VP Capital Markets, will succeed Brian as our CFO. Jamie's been doing a tremendous job in the capital markets role.

Mike Rose: I am also very pleased to announce that Jamie Heard, currently our VP Capital Markets, will succeed Brian as our CFO. Jamie has been doing a tremendous job in the capital markets role, and we know that that will continue with his expanded scope beginning in November. Jamie also inherits the very strong and very deep finance team that Brian has built over his years with Tourmaline. Finally, our board of directors intends to declare a quarterly-based dividend of CAD 0.50 per share in early September, which will be payable on 29 September 2026 to shareholders of record at the close of business on 15 September 2026. That is all for comments. All of us are here to answer your questions.

Speaker #3: And we know that will continue with his expanded scope beginning in November. Jamie also inherits the very strong and very deep finance team that Brian has built over his years with Tourmaline.

Speaker #3: And finally, our board of directors intends to declare a quarterly-based dividend of $0.50 per share in early September, which will be payable on September 29, 2026, to shareholders of record at the close of business on September 15, 2026.

Speaker #3: So that's all for comments, and all of us are here to answer your questions.

Operator 3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. Once again, star and one if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting. We now have our first question, and this comes from Anil Mehta from Goldman Sachs. Your line is now open. Please go ahead.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. Once again, star and one if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting. We now have our first question, and this comes from Anil Mehta from Goldman Sachs. Your line is now open. Please go ahead.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. And if you wish to ask a question, please press star and 1 on your telephone keypad, and wait for your name to be announced.

Speaker #1: Once again, press star and 1 if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting.

Speaker #1: We now have our first question. And this comes from Anil Mehta from Goldman Sachs, your line is now open. Please go ahead.

Speaker #2: Yes, thanks. And congrats, Brian, and thanks Jamie, and congrats to you as well for everything. So just wonder if your perspective first on the pause between Phase 1 and Phase 2 of NEBC.

Anil Mehta: Yeah. Thanks, and congrats, Bryan. Thanks, Jamie, and congrats to you as well for everything. Just wanted your perspective first on the pause between phase one and phase two of NEBC. What drove it? What are you looking for in terms of confidence of bringing the project back? Then this will save you some cash here. How do you think about allocation of that cash between reinvestment and shareholder return?

Neil Mehta: Yeah. Thanks, and congrats, Bryan. Thanks, Jamie, and congrats to you as well for everything. Just wanted your perspective first on the pause between phase I and phase II of NEBC. What drove it? What are you looking for in terms of confidence of bringing the project back? Then this will save you some cash here. How do you think about allocation of that cash between reinvestment and shareholder return?

Speaker #2: And what drove it? What are you looking for in terms of confidence of bringing the project back? And then this will save you some cash here, so how do you think about allocation of that cash between reinvestment and shareholder return?

Speaker #3: Yeah. I mean, I think in the general comments, that I made before, really describe it. It does give shareholders that opportunity to see how much better the business is getting just from Phase 1.

Mike Rose: Yeah. I think in the general comments that I made before really describe it. It does give shareholders that opportunity to see how much better the business is getting just from phase one. We'll have two of the plants on Aitken and Groundbirch. You're already seeing an improvement in OpEx and transportation costs and the initiation of that sustained commodity price, independent incremental revenue and cash flow. We think it's the right thing to do. It's that balance between growth and shareholder returns. We do listen to shareholders and get feedback to that end. We'll continue planning phase two all the way along. We don't actually make any significant capital investments on phase two or decisions to order the long lead time items really until mid-2027. For now, we'll do the planning.

Mike Rose: Yeah. I think in the general comments that I made before really describe it. It does give shareholders that opportunity to see how much better the business is getting just from phase I. We'll have two of the plants on Aitken and Groundbirch. You're already seeing an improvement in OpEx and transportation costs and the initiation of that sustained commodity price, independent incremental revenue and cash flow. We think it's the right thing to do. It's that balance between growth and shareholder returns. We do listen to shareholders and get feedback to that end. We'll continue planning phase II all the way along. We don't actually make any significant capital investments on phase II or decisions to order the long lead time items really until mid-2027. For now, we'll do the planning.

Speaker #3: So we'll have two of the plants on, Aken and Ground Birch. I mean, you're already seeing an improvement in OPEX and transportation costs and the initiation of that sustained commodity price independent incremental revenue and cash flow.

Speaker #3: So, we think it's the right thing to do. It's that balance between growth and shareholder returns. So, we do listen to shareholders and get feedback to that end.

Speaker #3: We'll continue planning Phase 2 all the way along. We don't actually make any significant capital investments on Phase 2 or decisions to order the long lead-time items.

Speaker #3: Really, until mid-2027. But for now, we'll do the planning. If there's a three-year sustained improvement in natural gas prices, in the $4 to $5 range, we can rethink the pause.

Mike Rose: If there's a 3-year sustained improvement in natural gas prices in CAD 4 to 5, we can rethink the pause. Right now, we think it's the best thing to do for everybody. Jamie, anything you wanted to add to that, or?

Speaker #3: But right now, we think it's the best thing to do for everybody. Jamie, anything you want to add to that, or?

Speaker #2: Yeah. We'll also be watching to see all the demand announcements we expect over the next 6 to 12 months. We expect several new LNG plants on the West Coast.

Jamie Heard: Yeah. We'll also be watching to see all the demand announcements we expect over the next 6 to 12 months. We expect several new LNG plants on the West Coast. We expect several power announcements in the province of Alberta, potentially one we're more closely involved with. We also expect to see a large demand increase for our product on the Northwest and West Side of the United States, where we have an established transportation network. We're kind of monitoring in a quickly evolving data center build-out in many of these states that actually don't have growing gas supply. The ethos here is we want demand to pull gas, increase price, and then when we have that pull to answer, then we'll respond with supply and feed it into exactly where that demand is.

Speaker #2: We expect several power announcements. And the province of Alberta potentially one where more closely involved with. And we also expect to see a large demand increase for our product on the Northwest and West side of the United States, where we have an established transportation network and we're kind of monitoring in a quickly evolving data center buildout in many of these states that actually don't have growing gas supply.

Speaker #2: The ethos here is we want demand to pull gas, increase price, and then when we have that pull to answer, then we'll respond with supply and feed it into exactly where that demand is.

Anil Mehta: That makes a lot of sense. That kind of, Jamie, ties into the marketing side and the pricing side. Talk about the outlook for AECO gas and your confidence that the differentials will tighten up. Do you have confidence that your peers will show discipline as well in the basin to allow demand to pull price?

Neil Mehta: That makes a lot of sense. That kind of, Jamie, ties into the marketing side and the pricing side. Talk about the outlook for AECO gas and your confidence that the differentials will tighten up. Do you have confidence that your peers will show discipline as well in the basin to allow demand to pull price?

Speaker #4: That makes a lot of sense. And that kind of, Jamie, ties into the marketing side and the pricing side. Talk about the outlook for EcoGas.

Speaker #4: Given your confidence that the differentials will tighten up, do you also believe that your peers will show discipline in the basin to allow demand to pull price?

Speaker #3: Yeah, I'll start. I mean, a few comments on Western North American gas prices. California led the whole complex down in the first half of 2026.

Mike Rose: Yeah, I'll start. A few comments on Western North American gas prices. California led the whole complex down in H1 2026. Warm winter, record hydro that was available for the first 4 months of 2026. Now California's going to lead the complex back up. You've seen that already. There's heat in California. Storage has withdrawn, I think, 26 of the first 29 days in July. Pricing's improved from $1.50 to well over $3 US now. We think you'll see that start to drag AECO in Station 2 up towards the end of August when the current GTN maintenance that TransCanada has going on allows full volumes to flow west. GTN exports hit a low of below 1.5. They're typically close to three.

Speaker #3: Warm winter record hydro that was available for the first 4 months of 2026. And now California's going to lead the complex back up. You've seen that already.

Speaker #3: There's heat in California; storage has withdrawn. I think in 2026, for the first 29 days of July, pricing's improved from $1.50 to well over $3 US now.

Speaker #3: We think you'll see that start to drag Eco and Station 2 up towards the end of August when the current GTN maintenance that Trans-Canada has going on allows full volumes to flow west.

Speaker #3: So GTN exports hit a low of below 1.5. They're typically close to 3. They're running about 2 and a half bees a day right now, and there's room for another half bee, and we expect that will fully flow west.

Mike Rose: They're running about two and a half Bs a day right now. There's room for another half B, and we expect that will fully flow west towards the end of this month. Then you'll start to see AECO and Station 2 follow the California PG&E price up.

Speaker #3: Towards the end of this month, and then you'll start to see Eco and Station 2 follow the California PGE price up.

Speaker #2: And local supply has remained disciplined, Neil. So we have not seen a major push of supply growth. In fact, we're targeting roughly half a billion cubic feet a day of year-over-year supply growth.

Jamie Heard: Local supply has remained disciplined, Neil, we have not seen a major push of supply growth. In fact, we are targeting roughly half a billion cubic feet a day of year-over-year supply growth. With the export restrictions and the economic impulse to bring less Canadian gas to the US, normally you would expect local storage to ramp quickly. That has not been the case. We have definitely lagged the prior several years on our rate of injection, and we do not expect to have a very full storage picture at the end of this year's injection picture. As Mike was saying, as GTN maintenance comes off through August and we are unrestricted in September, that is going to be a very open period for pushing gas both south, also east, as the east is still tight. LNG Canada should be running full as well.

Speaker #2: With the export restrictions and the economic impulse to bring less Canadian gas to the United States, normally you would expect local storage to ramp quickly.

Speaker #2: That hasn't been the case. We have definitely lagged the prior several years on our rate of injection, and we do not expect to have a very full storage picture at the end of this year's injection season.

Speaker #2: As Mike was saying, as GTN maintenance comes off through August and we're unrestricted in September, that's going to be a very open period for pushing gas both south but also east, as the East is still tight.

Speaker #2: And LNG Canada should be running full as well. So we expect that continuing tightening picture for hub Eco basis in. And we continue to see that long-term basis needing to get closer to $1 versus the $1.50 to $1.75 you see today.

Jamie Heard: We expect that continuing tightening picture for AECO to help bring hub AECO basis in, we continue to see that long-term basis needing to get closer to CAD 1 versus the CAD 1.50 to CAD 1.75 you see today, which for Tourmaline is a meaningful cash flow improvement. That kind of size of cash flow improvement for Tourmaline would equate to roughly half a billion CAD of free cash flow.

Speaker #2: Which for Tourmaline is a meaningful cash flow improvement. That kind of size of cash flow improvement for Tourmaline would equate to roughly half a billion dollars of free cash flow.

Speaker #4: Thanks, Mike. Thanks, Jamie.

Anil Mehta: Thanks, Mike. Thanks, Jamie.

Neil Mehta: Thanks, Mike. Thanks, Jamie.

Speaker #3: Thanks, Neil.

Jamie Heard: Thanks, Neil.

Speaker #1: Thank you. Yes, sir. Thank you. And the next question comes from Patrick O'Rourke from ATB Capital Markets, your line is now open. Please go ahead.

Jamie Heard: Thank you. Yes, sir. Thank you. The next question comes from Patrick O'Rourke from ATB Capital Markets. Your line is now open. Please go ahead.

Speaker #5: Hey, good morning, guys, and thanks for taking my question. First off, just congratulations to both Brian and Jamie—well-deserved on both fronts. My first question is with respect to the improvement in the type curves here, which looks pretty markedly improved here in 2026.

Operator 2: Hey, good morning, guys, and thanks for taking my question. First off, just congratulations to both Bryan and Jamie. Well deserved on both fronts. First question is just with respect to the improvement in the type curves here, and looks pretty markedly improved here in 2026. Now, there's a numerator and a denominator to capital efficiency, and I know there's longer laterals, improved completions. Maybe some color with respect to, at the capital efficiency level, the improvement that you're seeing from these type curves, then, if there is the potential that this could translate to some lower capital in the future, given higher production.

Patrick O'Rourke: Hey, good morning, guys, and thanks for taking my question. First off, just congratulations to both Bryan and Jamie. Well deserved on both fronts. First question is just with respect to the improvement in the type curves here, and looks pretty markedly improved here in 2026. Now, there's a numerator and a denominator to capital efficiency, and I know there's longer laterals, improved completions. Maybe some color with respect to, at the capital efficiency level, the improvement that you're seeing from these type curves, then, if there is the potential that this could translate to some lower capital in the future, given higher production.

Speaker #5: Now, there's a numerator and a denominator to laterals improved completions. Maybe some color with respect to at the capital efficiency level, the improvement that you're seeing from these type curves.

Speaker #5: And then if there is the potential that this could translate to some lower capital in the future, given higher production.

Speaker #2: Yeah, that's right, Patrick. And I actually think that's where you've seen it shine through so far, because markets haven't been buoyant in terms of price.

Jamie Heard: Yeah, that's right, Patrick. I actually think that's where you've seen it shine through so far. Because markets haven't been buoyant in terms of price, we've taken these efficiencies and as a result, have put less wells on production and yet have been able to maintain the profile we are hoping to achieve on production. Less CapEx. What you're seeing in the well results and the remarkable improvement over the five-year average is both higher completion intensity. It is also longer laterals, and it's also some of our learnings in the play on landing and some of the machine learnings that Mike was speaking to on tweaking the technology to optimize each individual assumption and component of the completion. What you're also seeing along with this productivity increase is us maintaining capital cost per foot at flat or lower levels.

Speaker #2: We've taken these efficiencies and as a result, have put less wells on production. And yet have been able to maintain the profile we were hoping to achieve on production.

Speaker #2: And so less capex. What you're seeing in the well results and the remarkable improvement over the 5-year average is both higher completion intensity. It is also longer laterals, and it's also some of our learnings in the play on landing and some of the machine learnings that Mike was speaking to on tweaking the technology to optimize each individual assumption and component of the completion.

Speaker #2: What you're also seeing along with this productivity increase is us maintaining capital cost per foot at flat or lower levels. And so while we're doing more work in the well, higher tonnage, sometimes more water, more pressure, longer laterals, we've also been able to continue to push costs down and continue to expect OFS costs for Termaline to come down slightly this year.

Jamie Heard: While we're doing more work in the well, higher tonnage, sometimes more water, more pressure, longer laterals, we've also been able to continue to push costs down and continue to expect OFS costs for Tourmaline to come down slightly this year, and we hope to lower them again next year. That does allow us to have better capital efficiencies over time. We haven't yet reflected that in all the forward plan years. We honor the last year's rate of efficiencies and the last year's type curves. As these soak into our actual results and our reserves, you will see commensurate improvements in the forward plan efficiencies, and that will also drive higher free cash flow.

Speaker #2: And we hope to lower them again next year. And so that does allow us to have better capital efficiencies over time. We haven't yet reflected that in all the forward planned years.

Speaker #2: We honor last year's rate of efficiencies and last year's type curves. And so, as these soak into our actual results and our reserves, you will see commensurate improvements in the forward plan efficiencies, and that will also drive higher free cash flow.

Speaker #5: Great, great. And maybe just to build on Neil and this may come off a little bit long-winded here as I'm sure you're all aware I'm not known for my brevity.

Operator 2: Great. Maybe just to build on Neil, this may come off a little bit long-winded here, as I am sure you are all aware, I am not known for my brevity. Considering your outlook for demand and the shift to demand pull here, the things from a secular growth perspective seem to be shaping up. LNG export, increased power demand, not necessarily seeing it and the resource reflected in the equity today. Specifically in terms of the mode of those capital returns, and the incremental free cash flow you guys have generated or will generate with the capital reduction or shift with the phase 2 plan. Any thought now at these equity prices to be a little bit more aggressive and potentially start to dip into the NCIB?

Patrick O'Rourke: Great. Maybe just to build on Neil, this may come off a little bit long-winded here, as I am sure you are all aware, I am not known for my brevity. Considering your outlook for demand and the shift to demand pull here, the things from a secular growth perspective seem to be shaping up. LNG export, increased power demand, not necessarily seeing it and the resource reflected in the equity today. Specifically in terms of the mode of those capital returns, and the incremental free cash flow you guys have generated or will generate with the capital reduction or shift with the phase II plan. Any thought now at these equity prices to be a little bit more aggressive and potentially start to dip into the NCIB?

Speaker #5: Considering your outlook for demand and the shift to demand pull here, the things from a secular growth perspective, seem to be shaping up. LNG export increased power demand.

Speaker #5: Not necessarily seeing it and the resource reflected in the equity today, specifically in terms of the mode of those capital returns and the incremental free cash flow you guys have generated or will generate with the capital reduction or shifts with the Phase 2 plan.

Speaker #5: Any thought now at these equity prices to be a little bit more aggressive and potentially start to dip into the NCIB?

Speaker #3: We always look at that, Patrick. Right now, I mean, it's fairly simple math. At $2 gas, we can cover maintenance capital, the growth capital component for '26 and '27, and the base dividend.

Mike Rose: We always look at that, Patrick. Right now, it is fairly simple math. At CAD 2 gas, we can cover maintenance capital, the growth capital component for 2026 and 2027, and the base dividend, and there is not a lot of free cash flow left over beyond that. We do think that is going to change rapidly here. We are going to realize that free cash flow first and then look at what are our options. I would say priority one would be a base dividend increase when we have enough free cash flow on a sustained outlook, to fund that. As you know, we use a very harsh price environment for 5 years when we contemplate base dividend increases. As the free cash flow continues to accrete, Jamie mentioned that CAD 1 on AECO, which really is not very much from where we are now, is CAD 500 million in free cash.

Speaker #3: And there's not a lot of free cash flow left over beyond that. We do think that is going to change rapidly here. We're going to realize that free cash flow first, and then look at what our options are.

Speaker #3: I would say priority one would be a base dividend increase when we have enough free cash flow on a sustained outlook to fund that.

Speaker #3: And as you know, we use a very harsh price environment for 5 years when we contemplate base dividend increases. And as the free cash flow continues to accrete, Jamie mentioned that $1 on Eco, which really isn't very much from where we are now, is $500 million in free cash.

Speaker #3: And then we will look at the full gamut of shareholder return options.

Mike Rose: Then we will look at the full gamut of shareholder return options.

Speaker #5: Okay. Thank you very much.

Patrick O'Rourke: Okay. Thank you very much.

Speaker #1: Thank you. And the next question comes from Jamie Kubik from CIBC. Your line is now open. Please go ahead.

Operator 3: Thank you. The next question comes from Jamie Kubik from CIBC. Your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Jamie Kubik from CIBC. Your line is now open. Please go ahead.

Speaker #6: Yeah, good morning. Thanks for taking my question here. You touched on this a little bit earlier, but can you talk about the power opportunity or data center opportunity for Termaline and what something like that could look like?

Jamie Kubik: Yeah. Good morning. Thanks for taking my question here. You touched on this a little bit earlier, but can you talk about the power opportunity or data center opportunity for Tourmaline, and what something like that could look like? Thank you.

Speaker #6: Thank you.

Speaker #3: Yeah, I think we can all jump in on that one. I mean, we're not going to build a data center. They're quite expensive. I just want to make that clear.

Mike Rose: I think we can all jump in on that one. We are not going to build a data center. They are quite expensive. I just want to make that clear. We do see it as another opportunity for our gas market diversification portfolio. We would be seeking a gas supply deal with pricing that reflects reliability and all the other services that we can offer, and those include land, water, power redundancy, fiber connect, further growth opportunities, low CI gas to begin with, but also the opportunity for full CCUS disposal. All those would translate into a higher fixed price contract. We are well over a year into trying to co-locate with a hyperscaler at one of our plants. It is the Banshee plant near Edson. It is about 40 km from Edson. Nothing firm to announce on that, but we are quite far along in the process.

Speaker #3: But we do see it as another opportunity for our gas market diversification portfolio. So we'd be seeking a gas supply deal with pricing that reflects reliability and all the other services that we can offer.

Speaker #3: And those include land, water, power redundancy, fiber connect, further growth opportunities. Low CI gas to begin with, but also the opportunity for full CCUS disposal.

Speaker #3: All those would translate into a higher fixed price contract. So we're well over a year into trying to co-locate with a hyperscaler at one of our plants.

Speaker #3: It's the Banshee plant near Edison. It's about 40 kilometers from Edison. So nothing firm to announce on that, but we're quite far along in the process.

Speaker #2: And Jamie, I'd say first, we always like our own cooking, right? At first, we thought we had a good site, and we engaged partners to proceed with this project.

Jamie Heard: Jamie, I would say, at first, you always like your own cooking, right? At first, we thought we had a good site and we engaged partners to proceed with this project. Now that we are in market and trying to find offtakers for this, I think we firmly understand they think it is a good site, too. Our confidence in being able to try to build a project here is increasing. I think these projects are complex, and they take some time, so have patience with us. We firmly believe when we do get this across the line, it will be a big win for Tourmaline.

Speaker #2: Now that we're in market and trying to find off-takers for this, I think we firmly understand they think it's a good site too. So our confidence in being able to try to build a project here is increasing.

Speaker #2: And I think these are these projects are complex and they take some time. So have patience with us. But we firmly believe when we do get this across the line, it will be a big win for Termaline.

Speaker #6: Okay, thank you. That's a good color. And then appreciating there's a number of moving parts in the guidance adjustments for 27, 28. But can you talk a little bit about the liquids guide for 26 as well?

Jamie Kubik: Okay. Thank you. That's good color. Appreciating there's a number of moving parts in the guidance adjustments for 2027, 2028. Can you talk a little bit about the liquids guide for 2026 as well, and maybe the condensate outlook in particular, just with the update overnight? Yeah. Any color on that side would be helpful. Thanks.

Speaker #6: And maybe the condensate outlook in particular, just with the update overnight? Yeah, any color on that side would be helpful. Thanks.

Speaker #2: Yeah, thanks, Jamie. I think if you pull well results for Tourmaline right now, you're going to be able to replicate that 26% upside. And you're also going to see very strong upticks on the liquids we're receiving out of the wells.

Jamie Heard: Yeah. Thanks, Jamie. I think if you pull well results for Tourmaline right now, you're going to be able to replicate that 26% upside, and you're also going to see very strong upticks on the liquids we're receiving out of the wells. We're winning on both products. One of the effects of slowing down is all businesses in resource plays have a slightly higher decline rate on liquids than they do on gas. When you bring less wells into market, you're going to have a slight decrease in liquids relative to gas as an MBOE mix. We're going to have that come back to us this fall. As we get all these wells that we've drilled and completed and now are able to complete more through Q3 and turn them in line, you're going to see the liquids mix really ramp into the back of the year.

Speaker #2: We're winning on both products. One of the effects of slowing down is all businesses and resource plays have a slightly higher decline rate on liquids than they do on gas.

Speaker #2: And so, when you bring fewer wells into the market, you're going to see a slight decrease in liquids relative to gas as an MBOE mix.

Speaker #2: We're going to have that come back to us this fall. As we get all these wells that we've drilled and completed and now are able to complete more through Q3 and turn them in line, you're going to see the liquids mix really ramp into the back of the year.

Speaker #2: And I'm comfortable with the guidance we have out for 27 and thereforward. Condensate is a big part of the NACB build-out. We're going to have very rich condensate wells contribute to both the Akin plant startup and the ground bridge plant startup.

Jamie Heard: I'm comfortable with the guidance we have out for 2027 and there forward. Condensate is a big part of the NEBC build-out. We're going to have very rich condensate wells contribute to both the Aitken plant startup and the Groundbirch plant startup. It's going to be a meaningful cash flow driver for Tourmaline. It's just been on the bench a little bit as we've had to slow down due to weak gas prices this year and last year.

Speaker #2: It's going to be a meaningful cash flow driver for Termaline. It's just been on the bench a little bit as we've had to slow down due to weak gas prices this year and last year.

Speaker #3: The other thing is the market is really—we're seeing much more potential for strength in condensate pricing. With the build-out of the oil sands projects and the attention to oil pipelines, etc., and the ability to bring condensate back in via co-aching in Southern Lights is limited.

Mike Rose: The other thing is the market is really, we're seeing much more potential for strength in condensate pricing with the build-out of the oil sands projects and the attention to oil pipelines, et cetera. The ability to bring condensate back in via Cochin and Southern Lights is limited. We'll see that premium rise. In tandem with that, of course, that creates another demand source for nat gas too, that goes along with that, because we think every million barrels of additional oil sands production is about 0.7 Bcf of new gas demand.

Mike Rose: The other thing is the market is really, we're seeing much more potential for strength in condensate pricing with the build-out of the oil sands projects and the attention to oil pipelines, etc. The ability to bring condensate back in via Cochin and Southern Lights is limited. We'll see that premium rise. In tandem with that, of course, that creates another demand source for nat gas too, that goes along with that, because we think every million barrels of additional oil sands production is about 0.7 Bcf of new gas demand.

Speaker #3: So we'll see that premium rise, and in tandem with that, of course, that creates another demand source for nat gas too that goes along with that, because we think every million barrels of additional oil sands production is about 0.7 BCF of new gas demand.

Speaker #6: Okay, thank you for the color. I will hand it back.

Jamie Kubik: Okay. Thank you for the color. I will hand it back.

Speaker #2: Thanks, Jamie.

Jamie Heard: Thanks, Jamie.

Speaker #1: Thank you. And the next question comes from Sam Burwell from Jefferies. Your line is now open. Please go ahead.

Operator 3: Thank you. The next question comes from Sam Burwell from Jefferies. Your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Sam Burwell from Jefferies. Your line is now open. Please go ahead.

Speaker #5: Hey guys, good morning, and congrats again to Brian and Jamie on the respective moves. I wanted to follow up on the data center aspect.

Sam Burwell: Hey, guys. Good morning. Congrats again to Brian and Jamie on the respective moves. I wanted to follow up on the data center aspect. Mike, appreciate you confirming that you won't be building the data center itself, just curious what type of capital commitments, if any, would there be at the Tourmaline level? It sounds like you're just interested in doing a gas supply contract rather than delving into power. Sort of just curious how this Emerald entity might be capitalized, if there's any Tourmaline contribution contemplated, or this would be funded by partners or external financing at the Emerald level.

Speaker #5: Mike, appreciate you confirming that you won't be building the data center itself, but just curious, what type of capital commitments, if any, would there be at the Tourmaline level?

Speaker #5: It sounds like you're just interested in doing a gas supply contract, rather than delving into power. But I'm just curious—how this Emerald entity might be capitalized—if there's any Tourmaline contribution contemplated, or if this would be funded by partners or external financing at the Emerald level.

Speaker #3: Yeah, you're right, Sam. It's low capital commitment from Termaline. That's our mantra. For this whole thing, it really is just gas diversification. There may be opportunities on the power side.

Jamie Heard: You're right, Sam. It's low capital commitment from Tourmaline. That's our mantra for this whole thing. It really is just gas diversification. There may be opportunities on the power side. That remains to be seen. We're keen to help get this whole gas demand sleeve from data centers moved along in Alberta. That's one of the reasons we'd like to help get that going with a project of our own. As Jamie referenced, they're very complicated and very expensive, and there's a very long due diligence process. There's been one announcement, and we think there's going to be several others. Ultimately, we want to see, or we believe that it could be up to a Bcf a day of incremental in-basin demand, which will just be wonderful for the AECO market and tighten it even further.

Mike Rose: You're right, Sam. It's low capital commitment from Tourmaline. That's our mantra for this whole thing. It really is just gas diversification. There may be opportunities on the power side. That remains to be seen. We're keen to help get this whole gas demand sleeve from data centers moved along in Alberta. That's one of the reasons we'd like to help get that going with a project of our own. As Jamie referenced, they're very complicated and very expensive, and there's a very long due diligence process. There's been one announcement, and we think there's going to be several others. Ultimately, we want to see, or we believe that it could be up to a Bcf a day of incremental in-basin demand, which will just be wonderful for the AECO market and tighten it even further.

Speaker #3: That remains to be seen. And we're keen to help get this whole gas demand sleeve from data centers moved along in Alberta. So that's one of the reasons we'd like to help get that going.

Speaker #3: With a project of our own—and as Jamie referenced, they're very complicated and very expensive, and there's a very long due diligence process. But there's been one announcement, and we think there are going to be several others. Ultimately, we want to see, or we believe, that it could be up to a BCF a day of incremental in-basin demand, which will just be wonderful for the ACO market and tighten it even further.

Speaker #3: It's almost like another LNG project happening in the basin.

Mike Rose: It's almost like another LNG project happening in the basin.

Speaker #5: Yeah, for sure. And I guess on the topic of LNG, Solisims has been in the news. They've been selling more gas, which is good.

Sam Burwell: Yeah, for sure. I guess on the topic of LNG, Cedar LNG has been in the news. They've been selling more gas, which is good. You and, I think, a few other companies exited the Rockies LNG consortium. Curious for your outlook on that project's timeline, whether you think it can be a meaningful driver of demand pull in the early 2030s, and are you guys more confident now that you can execute a bilateral arrangement, where you might get a JKM-linked price by selling gas into that facility at some point?

Speaker #5: And you—and I think a few other companies—exited the Rockies LNG consortium. So, curious for your outlook on that project's timeline, and whether you think it can be a meaningful driver of demand pull in the early 2030s?

Speaker #5: And are you guys more confident now that you can execute a bilateral arrangement where you might get a JKM-linked price by selling gas into that facility at some point?

Speaker #2: Yeah, I mean, you hit it at the end of your comment. That's what we'd be seeking from a contract standpoint. And we really hope Sealism to go with the head.

Mike Rose: Yeah. You hit it at the end of your comment. That's what we'd be seeking from a contract standpoint. We really hope Cedar LNG goes ahead and hope that we're in a position to be a supplier to that pipeline.

Speaker #2: And hope that we're in a position to be a supplier to that pipeline.

Speaker #5: All righty. Thank you, Mike.

Sam Burwell: All righty. Thank you, Mike.

Speaker #2: Thanks.

Mike Rose: Thanks.

Speaker #1: Thank you. And the next question comes from Filee from Odlum Brown, your line is now open. Please go ahead.

Operator 3: Thank you. The next question comes from Faye Lee from Odlum Brown. Your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Faye Lee from Odlum Brown. Your line is now open. Please go ahead.

Speaker #7: Oh, thank you. Yeah, congrats to Brian and Jamie as well. Just related to the last question, I was just wondering, in terms of the type of agreement that you'd be looking at on a long-term basis, would you be looking for some locked-in, fixed price, or would you be looking for some variability? How are you thinking about it in terms of marketing, in terms of these potential LNG agreements?

Faye Lee: Oh, thank you. Yeah, congrats to Brian and Jamie as well. Just related to the last question, I was just wondering in terms of the type of agreement that you'd be looking at on a long-term basis. Would you be looking for some locked-in fixed price, or would you be looking for some variability? How are you thinking about in terms of marketing, in terms of these potential LNG agreements?

Fai Lee: Oh, thank you. Yeah, congrats to Brian and Jamie as well. Just related to the last question, I was just wondering in terms of the type of agreement that you'd be looking at on a long-term basis. Would you be looking for some locked-in fixed price, or would you be looking for some variability? How are you thinking about in terms of marketing, in terms of these potential LNG agreements?

Speaker #2: Are you talking about additional LNG agreements or the data center? Just clarifying.

Jamie Heard: Are you talking about additional LNG agreements or the data center route? Just clarifying.

Speaker #7: Yeah, sorry. The additional LNG agreements.

Faye Lee: Yeah, sorry. The additional LNG term agreements.

Fai Lee: Yeah, sorry. The additional LNG term agreements.

Speaker #2: Yeah, so we like access to international pricing, whether it be JKM, TTF, or something of that ilk. And then we are willing to pay a fixed deduction below those prices.

Jamie Heard: We like access to international pricing, whether it be JKM, TTF, or something of that ilk, we are willing to pay a fixed deduction below those prices. Those deductions are based on shipping costs. Obviously on the West Coast, shipping costs are much lower than the Gulf Coast, but they're also based on liquefaction costs, liquefaction costs will be borne out of the capital cost that was made to construct the facility. To date, we have seven different agreements in the Gulf Coast. Many of which we supply physically, some of which we supply locally and then enjoy a net delivery point. Those deductions have been very competitive. In fact, if you look at our portfolio, we are in some of the lowest-cost LNG facilities in the world.

Speaker #2: And those deductions are based on shipping costs. So, obviously, on the West Coast, shipping costs are much lower than the Gulf Coast. But they're also based on liquefaction costs.

Speaker #2: And liquefaction costs will be borne out of the capital cost that was made to construct the facility. So, to date, we have seven different agreements.

Speaker #2: In the Gulf Coast, many of which we supply physically, some of which we supply locally, and then enjoy a net delivery point. And those deductions have been very competitive and, in fact, if you look at our portfolio, we are in some of the lowest cost LNG facilities in the world.

Speaker #2: And that's how we've driven our decision-making, because it allows us to make money through the entire LNG price cycle. When we're looking at these West Coast opportunities, we're looking at it under the same lens.

Jamie Heard: That's how we've driven our decision-making because it allows us to make money through the entire LNG price cycle. When we're looking at these West Coast opportunities, we're looking at it under the same lens, we think as they expand, also more are announced, we're going to be able to blend down that liquefaction cost to a competitive level, they already have the shipping cost advantage. We continue to seek to try to replicate our Gulf Coast strategy on the West Coast on a similar contract style.

Speaker #2: And we think, as they expand and also more are announced, we're going to be able to blend down that liquefaction cost to a competitive level.

Speaker #2: And they already have the shipping cost advantage. And so we continue to seek to try to replicate our Gulf Coast strategy on the West Coast on a similar contract style.

Speaker #7: Okay, great. That’s what I was wondering about. Thank you.

Faye Lee: Okay, great. That's what I was wondering about. Thank you.

Fai Lee: Okay, great. That's what I was wondering about. Thank you.

Speaker #2: Next slide.

Jamie Heard: Thanks, Faye.

Speaker #7: Thanks.

Faye Lee: Thanks.

Fai Lee: Thanks.

Speaker #1: Thank you. And no further questions that came through at this time. I'll now turn the call over back to Scott Kirker. Please go ahead, sir.

Operator 3: Thank you. No further questions that came through at this time. I will now turn the call over back to Scott Kirker. Please go ahead, sir.

Operator: Thank you. No further questions that came through at this time. I will now turn the call over back to Scott Kirker. Please go ahead, sir.

Speaker #6: Thanks everyone for checking in. We'll see you in the next quarter.

Scott Kirker: Thanks everyone for checking in. We'll see you in the next quarter.

Operator 3: Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Operator: Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Q2 2026 Tourmaline Oil Corp Earnings Call

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Tourmaline Oil

Earnings