Press Release

DBRS Morningstar Upgrades Tourmaline Oil Corp. Following the Close of the Black Swan Energy Ltd. Acquisition, Removes Ratings from Under Review with Positive Implications

July 19, 2021

DBRS Limited (DBRS Morningstar) upgraded Tourmaline Oil Corp.’s (Tourmaline or the Company) Issuer Rating and Senior Unsecured Notes rating to BBB (high) from BBB following the close of the previously announced acquisition of Black Swan Energy Ltd. (Black Swan). Both trends are Stable. The upgrades remove the ratings from Under Review with Positive Implications, where they were placed on June 18, 2021, after the Black Swan acquisition was announced. The rating upgrades reflect the improvement in the Company’s (1) business risk profile, largely as a result of primarily equity-funded acquisitions that have been announced and concluded since Q3 2020, and (2) financial risk profile, as a result of deleveraging and a stronger cash flow outlook tied to the recovery in crude oil and natural gas prices as well as increased volumes (see DBRS Morningstar’s press release titled “DBRS Morningstar Places Tourmaline Oil Corp. Under Review with Positive Implications Following Agreement to Acquire Black Swan Energy Ltd.,” dated June 18, 2021).

Tourmaline has indicated that with the close of the Black Swan acquisition, the Company’s strategy will shift from consolidation to a focus on integrating recently acquired assets and reducing overall cash costs. The Company also announced that it has entered into a 15-year marketing arrangement with Cheniere Energy, Inc. (Cheniere) whereby Tourmaline will supply approximately 140 million cubic feet of natural gas per day to Cheniere’s Corpus Christi liquefaction terminal on the U.S. Gulf Coast. The arrangement is expected to commence in January 2023. Tourmaline has secured long-term firm transportation capacity on existing pipelines to deliver natural gas from its assets in Western Canada to Corpus Christi. The arrangement provides the Company access to higher-priced Asian markets while further diversifying the markets for its natural gas sales.

DBRS Morningstar notes that the Company has renewed its normal course issuer bid and could initiate share buybacks given the expectation for significant free cash flow (cash flow after capital expenditure and dividends) surpluses in 2021 and 2022. However, DBRS Morningstar expects the Company to maintain a strong financial risk profile with a lease-adjusted debt-to-cash flow ratio at or below 1.0 times. Given the Company’s strong financial risk profile, a positive rating action would require a material improvement in the Company’s business risk profile. A sustained material deterioration in the Company's financial risk profile could lead to a negative rating action.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Oil and Gas and Oilfield Services Industries (August 17, 2020; and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (May 31, 2021;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021;

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

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