Canada’s largest natural gas producer,

Tourmaline Oil Corp.

, cut its spending plans for the year, citing “unusually volatile times,” and said it could cut more if

gas prices

remain weak.

The company trimmed $400 million from its 2026 capital budget — which now sits at $2.55 billion — after an unseasonably warm winter in the western U.S. and outages at LNG Canada dampened demand for natural gas in western Canada.

“We believe that during these unusually volatile times, the best business approach is to just steadily reduce debt and continually improve the overall cost structure,” Tourmaline chief executive Mike Rose said Thursday during the company’s fourth-quarter earnings call.

“We believe it’s prudent to defer certain gas-focused expenditures until we see a sustained stronger local price.”

The Calgary-based producer also said it will use proceeds from the nearly $800-million sale of assets in the Peace River region

to oilsands major Canadian Natural Resources Ltd. 

to pay down debt and help fund the build-out of its large gas complex in the Northeast B.C. Montney play.

Tourmaline said it expects average production in 2026 to range from 620,000 to 640,000 barrels of oil equivalent per day, down from its earlier forecast of 690,000 to 710,000.

The natural gas producer reported a fourth-quarter net loss of $655 million, compared with net earnings of $407 million a year earlier — largely reflecting accounting adjustments.

However, Tourmaline reported $890 million in cash flow in the quarter, up from $850 million, showing that the business continued to generate strong cash from operations.

Gas prices in Europe and Asia jumped to multi-year highs this week after major liquefied natural gas exporter Qatar halted production amid the U.S.–Israeli war with Iran, raising fears of a global supply shortage.

Tourmaline said Thursday that it has growing exposure to international prices through its long-term supply deals with energy traders and U.S. LNG exporters.

The company said it expects to have around 213,000 per million British thermal units per day of production exposed to international prices this year, growing to 253,000 by the end of 2027.

“We’re totally aware that a long-term outage, specifically of the Qatar LNG plant, would rapidly reshape the (supply and demand) dynamics on the water and we were available for that upside,” Jamie Heard, Tourmaline’s vice-president of capital markets said.

“It could end up being a windfall.”