CALGARY, AB – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company“) (TSX: TVE) is pleased to announce the closing of the two previously announced strategic acquisitions (together, the “Acquisitions“) in the Provost and Nipisi areas of Alberta for a total net purchase price of $135.3 million, after deducting the proceeds from the sale of two newly created 4% gross overriding royalties (“GORR“) on a select portion of the acquired Nipisi properties.
Concurrent with the Acquisitions, the Company completed its previously announced bought-deal financing (the “Financing“) of 30,303,000 common shares of Tamarack (“Common Shares“) at a price of $2.25 per Common Share (the “Offering Price“) for gross proceeds of approximately $68 million. The Company also completed an amendment to the syndicated credit facility, with an increased borrowing base of $325 million. In addition, Tamarack issued 4,888,889 Common Shares in conjunction with the acquisition of Woodcote Petroleum Inc. (“Woodcote“). Post-completion of the Financing and Acquisitions, Tamarack has 298,715,026 Common Shares outstanding.
The Acquisitions added approximately 2,800 boe/d1 of low decline oil weighted production under waterflood in the Provost and Nipisi areas along with an incremental 38,400 net acres of Clearwater rights in Nipisi.
Tamarack has acquired all of the issued and outstanding shares of Woodcote, a Clearwater focused private company, with a 100% operated working interest in Greater Nipisi (the “Corporate Acquisition“).
Tamarack, through its wholly owned subsidiary, Tamarack Acquisition Corp., has also acquired a working interest in the Nipisi and Provost assets from a publicly-traded oil and gas company (“the “Vendor“) with an effective date of February 1, 2021 (the “Asset Acquisition“).
Concurrent with the completion of the Acquisitions, Tamarack sold two newly created 4.0% GORR on a select portion of the Nipisi assets to Topaz Energy Corp. (the “GORR Disposition“). Tamarack has committed to spending $60.0 million of capital to further develop the GORR lands prior to specific milestone dates up to and including March 31, 2023, subject to reduction in certain circumstances.
With the closing of the Acquisitions, Tamarack expects 2021 production to average approximately 26,000 boe/d2. For further details on the Acquisitions, see Tamarack’s press release dated March 5, 2021. An updated presentation can be found on the Company’s website (www.tamarackvalley.ca).
Concurrent with the completion of the Acquisitions, Tamarack issued, on a bought-deal financing basis, 30,303,000 Common Shares at a price of $2.25 per Common Share for gross proceeds of approximately $68 million. The net proceeds from the Financing were used to fund a portion of the cash purchase price in respect of the Acquisitions.
The Company has granted to the underwriters an over-allotment option, exercisable in whole or in part for a period of 30 days following the closing of the Financing, to purchase up to an additional 3,030,300 Common Shares at the Offering Price.
Peters & Co. Limited acted as financial advisor to Tamarack with respect to the Asset Acquisition and strategic advisor with respect to the Corporate Acquisition.
National Bank Financial Inc. acted as financial advisor to Tamarack with respect to the GORR Disposition and the Corporate Acquisition.
ATB Capital Markets Inc. and CIBC World Markets Inc. acted as strategic advisors to Tamarack with respect to the Asset Acquisition.
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, Clearwater 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.
Disclosure of Oil and Gas Information
Unit Cost Calculation. For the purpose of calculating unit costs, natural gas volumes have been converted to a boe using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with NI 51-101 – Standards of Disclosure for Oil and Gas Activities. Boe may be misleading, particularly if used in isolation.