Relatively, Tourmaline oil (TSX:TOU) has returned 256% to shareholders in the form of dividend-adjusted profits since November 2015. With a market capitalization of $23.6 billion, Tourmaline engages in the acquisition, exploration, development and production of petroleum and natural gas properties in the Western Canadian Sedimentary Basin. It has interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney and the Peace River High Trias oil complex.
Despite its market-beating returns, the TSX energy stock is down nearly 28% from its all-time high, giving you a chance to buy the dip. Let’s take a look at why you can beat the TSX with this cash-gushing dividend stock in your stock portfolio.
How did the TSX stock perform in the third quarter of 2025?
Tourmaline Oil delivered third quarter (Q3) production of 634,750 barrels of oil equivalent (BoE) per day at the high end of expectations, despite the weakest AECO natural gas prices (Alberta Energy Company benchmark) in more than 30 years.
The Canadian producer posted cash flow of $720 million and profit of $190 million during a challenging quarter plagued by major pipeline maintenance shutdowns, forcing significant volumes into depressed local spot markets.
Tourmaline curtailed production during the worst price days, but maintained low prices at AECO and Station 2, averaging just $0.64 and $0.48 per thousand cubic feet, respectively, negatively impacting third quarter results.
Pipeline maintenance on both the East Gate and West Gate export routes reduced Tourmaline’s access to premium markets, including the Gulf Coast and the western United States, by approximately 155 million cubic feet per day.
These volumes were instead sold at weak AECO and Station 2 spot prices, significantly impacting September natural gas revenues. The silver lining emerged in early October when the Great Lakes Pipeline force majeure ended and East Gate exports returned to normal levels. Maintenance at West Gate was completed in November, paving the way for improved pricing in the fourth quarter.
Looking ahead, the AECO price for the second and third quarters of 2026 currently averages $3.00 per thousand cubic feet, compared to just $1.18 in the same period in 2025. Management expects further tightening of the base as demand for liquefied natural gas in Canada creates additional capacity on local pipelines.
The company strengthened its strategic positioning through a ten-year natural gas storage agreement with AltaGas at the Dimsdale facility, which will provide access to six billion cubic feet of storage capacity from April 2026, with potential expansion to 10 billion cubic feet.
Tourmaline is pursuing the sale of its Peace River High oil and gas complex to further reduce operating costs and redirect capital to higher-margin growth assets in British Columbia.
The country maintains its 2026 production guidance of 690,000 to 710,000 barrels of oil equivalent per day and its multi-year plan targeting production growth of 30% to 850,000 barrels of oil equivalent per day by 2031.
The board declared a special dividend of $0.25 per share, payable on November 25, in addition to plans for the regular quarterly base dividend of $0.50 per share in December.
Management emphasized fiscal discipline and made it clear that it will not use the balance sheet to finance special dividends in the future.
What is the price target for the TSX dividend stock?
Analysts who follow TSX stock predict that free cash flow will increase from $1 billion in 2024 to $1.80 billion in 2029. If TOU stock is priced at 25 times FCF forward, which is lower than the five-year average of 26.6 times, it should rise about 100% by the end of 2028.
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