CALGARY, AB – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company“) (TSX: TVE) is pleased to announce the closing of two strategic acquisitions (together, the “Acquisitions“) which establish a significant consolidated and operated position in the Clearwater oil play in the Greater Nipisi area, along with interests in the Jarvie area of Alberta, for a total net purchase price of $74.0 million, after deducting the proceeds from the sale of a 2% newly created gross overriding royalty (the “GORR Disposition“) on a select portion of the acquired properties. Pursuant to the Acquisitions, Tamarack acquired approximately 2,000 barrels per day of crude oil production and 107,000 net acres of Clearwater rights (the “Assets“) and now controls and operates 100% of the Greater Nipisi acquired assets. The Company is also pleased to announce the completion of a $47 million private placement equity financing (the “Financing“).
The Acquisitions and the Financing provide Tamarack with a significant position in one of the most economic oil plays in Western Canada and further the Company’s strategy of maintaining a resilient balance sheet while pursuing opportunities to enhance free adjusted funds flow and sustainability.
Tamarack, through its wholly owned subsidiary Tamarack Acquisition Corp., has acquired all of the issued and outstanding shares of Woodcote Oil Corp. (“Woodcote“), a Clearwater focused private company (the “Corporate Acquisition“). The Corporate Acquisition secured Tamarack a 50% operated working interest in the Greater Nipisi area, an established Clearwater development area with top decile economics in the Western Canadian Sedimentary Basin.
Tamarack, through its wholly owned subsidiary Tamarack Acquisition Corp., has also acquired a 50% working interest in the “Greater Nipisi” assets and an approximately 50 to 100% working interest in the Jarvie assets from Highwood Oil Company Ltd. (“Highwood“) with an effective date of November 1, 2020 (the “Asset Acquisition“).
In conjunction with the Acquisitions, Tamarack has entered into an arrangement with Topaz Energy Corp. to sell a newly created 2.0% gross overriding royalty (“GORR“) on a select portion of the Assets, which is expected to close before December 31, 2020. Tamarack has committed to spending $80.0 million of capital to further develop the GORR lands prior to December 31, 2022.
Concurrent with the completion of the Acquisitions, Tamarack issued, on a non-brokered private placement basis, 40,925,000 common shares (“Common Shares“) at a price of $1.15 per Common Share for aggregate gross proceeds of approximately $47 million, of which $2.1 million was subscribed for by directors and officers of Tamarack. The proceeds from the Financing will be initially used to reduce indebtedness and thereafter to partially fund the Company’s 2021 capital expenditures.
The Common Shares issued in connection with the Financing are subject to a statutory hold period of four months plus one day, in accordance with applicable securities legislation. The Financing remains subject to the final approval of the Toronto Stock Exchange.
Peters & Co. Limited acted as financial advisor to Tamarack with respect to the Acquisitions, the GORR Disposition and the Financing.
National Bank Financial Inc. acted as financial advisor to Tamarack with respect to the Corporate Acquisition, the GORR Disposition and the Financing.
CIBC Capital Markets and Stifel FirstEnergy acted as strategic advisors to Tamarack.
Stikeman Elliott LLP acted as counsel to Tamarack with respect to the Acquisitions, the GORR Disposition and the Financing.
About Tamarack Valley Energy Ltd.
Tamarack is an oil and gas exploration and production company committed to long-term growth and the identification, evaluation and operation of resource plays in the Western Canadian Sedimentary Basin. Tamarack’s strategic direction is focused on two key principles: (i) targeting repeatable and relatively predictable plays that provide long-life reserves; and (ii) using a rigorous, proven modeling process to carefully manage risk and identify opportunities. The Company has an extensive inventory of low-risk, oil development drilling locations focused primarily in the Cardium and Viking fairways in Alberta that are economic over a range of oil and natural gas prices. With this type of portfolio and an experienced and committed management team, Tamarack intends to continue delivering on its strategy to maximize shareholder returns while managing its balance sheet.