The royalty paper is for sale. The buyback has not started
Tourmaline Oil Corp. (TSX: TOU) and Topaz Energy Corp. (TSX: TPZ) said Tuesday at 4:31 p.m. ET that Peters & Co. and Scotiabank, for a syndicate, will buy 10 million Topaz common shares from Tourmaline on a bought deal at $28.75 a share. Gross proceeds to Tourmaline are about $287.5 million. Topaz will not receive any of the proceeds. The underwriters have a 15 percent over-allotment option for 30 days after close.
Tourmaline now holds 19,931,097 Topaz shares, about 12.9 percent of the float. That is the same block the September 8 early-warning report left after it used 3.6 million Topaz shares as deal currency. After this sale closes, Tourmaline would hold 9,931,097 shares, about 6.4 percent, or 5.4 percent if the greenshoe is taken in full. Close is on or about October 8, subject to customary conditions and regulatory approvals.
Tourmaline said it intends to use the net proceeds to repurchase its own shares under the existing normal-course issuer bid. It has not bought those shares yet. The board also approved a Q4 base-dividend increase from $0.50 to $0.525 a share, or $2.10 annualized, a 5 percent lift. That cheque is expected to be declared in early December, payable December 31 to holders of record December 15. The long-term net-debt target of $1.75 billion is unchanged. The northeast B.C. Montney buildout is still described as on schedule and funded by cash flow.
This is a secondary sale of an existing Topaz block. It is not a Topaz equity raise, not a closed trade, and not a special dividend. It is not Line 5.