Over the past few years, Tamarack Valley has transformed into one of the Clearwater’s leading names. With total corporate production of just under 65,000 BOE/d in Q4 2023, Tamarack has grown substantially since kicking off a corporate transformation back in 2021. A smaller but noteworthy component of this transformation strategy, which saw the company retool its asset portfolio, focused on what Tamarack refers to as its South Clearwater asset.
The South Clearwater is composed of a band of mineral rights spread across the Jarvie, Meanook and Perryvale fields among others. While the company’s holdings at other prolific Clearwater zones including Nipisi and Marten Hills see Tamarack operating in close proximity with its competitors, it appears to occupy a dominant position in this area of the play. In order to give our readers an overview of this unique asset, we’ve prepared a breakdown of what Tamarack has been up to at its Southern Clearwater project.
South Clearwater Area Crown Mineral Rights & Wells (Tamarack Valley Rights in Yellow, Rubellite Rights in Pink, Clear North Rights in Green, Wells in Black)
As mentioned above, Tamarack is undoubtedly the top producer in the South Clearwater area. Clear North has a small development to the south, with Rubellite holding a larger development to the east, but overall its a fairly unsung part of the Clearwater play. This sparks an interesting question: how did Tamarack build up its holdings in this producing area? Put simply, through acquisitions. As shown below, the vast majority of the company’s South Clearwater asset was obtained through transfers that have processed within the last few years. This includes transfers from CNRL, Crestwynd and Rolling Hills along with numerous transfers from land brokers.
Tamarack South Clearwater Mineral Rights with Transfers Indicated (Crestwynd Transfers in Blue, Rolling Hills Transfers in Brown, CNRL Transfers in Red, All Other Holdings in Yellow)
The company’s acquisitions of Crestwynd and Rolling Hills were both significant boosts to the company’s portfolio in the region. Tamarack’s $184.7 million acquisition of Crestwynd saw the company bring in 4,500 BOE/d in production and 99,360 net acres. In addition, the company’s $93.0 million 2022 acquisition of Rolling Hills saw Tamarack incorporate 2,100 BOE/d in production and 34,560 net acres. At that time, the company referenced the additional “unbooked future exploitation and drilling upside” offered by the Rolling Hills deal. Perhaps unsurprisingly, the company paid a similar amount per BOE/d of production in each transaction, with a $/BOE/d metric of $41,044/BOE/d for Crestwynd and $44,286 for Rolling Hills. Tamarack has not engaged in any significant activity on the land it obtained from CNRL, although the transfer did involve a number of facilities at Rochester.
Tamarack’s South Clearwater asset is an excellent showcase of the use of multilateral well technology, and the company appears to be doing some experimenting; we’ve seen the company employ fan wells among other multilateral drilling techniques. Our data suggests that there are 203 licences associated with 1,257 unique well identifiers (UWIs), approximately 6.2 UWIs per wellbore. On average, the horizontal length of the South Clearwater wells appears to be shorter than the company’s wells at Marten Hills and Napisi. Of the company’s wells at South Clearwater, approximately 78% target the Clearwater and 18% target the Upper Mannville with a sprinkling of other formations accounting for the remainder. The Clearwater producing formation is the clear focus, however, as the last Upper Mannville well was spud in March 2022. With respect to drilling activity, 2021 and 2022 were significantly more active years than 2018-2020 and 2022-2023. It’s important to keep in mind that, given the large portion of Tamarack’s position that was acquired in 2021 and 2022, many of the active wells at South Clearwater were drilled by Rolling Hills, Crestwynd and other companies; we’ve broken out the relative spud shares between the companies in the chart below. Of the company’s 4 spuds in 2024, 3 are at Township 064-23W4 and the other is at Township 062-21W4.
Note: All licences included in this chart are currently licensed to Tamarack. The “Others” referred to above are licences with spud dates before 2022 that have had multiple historical licensees and cannot be mapped to specific corporate transactions.
Tamarack Valley South Clearwater Spuds by Year (2024 in Blue, 2023 in Red, 2022 in Green, 2021 in Purple, 2020 in Brown, 2019 in Black, Others in Grey)
Tamarack’s overall gross licensed oil production in the South Clearwater area has increased substantially over the past 5 years, jumping from around 1,000 BBL/d in Jan 2019 to around 4,000 BBL/d in March 2024. Production from the wells currently licensed to Tamarack spiked between August 2021 and November 2021, subsequently plateaued, and began to drop steadily in February 2023. The spike was undoubtedly a result of the 115 wells spud in 2021 and 2022 (some drilled by other companies), while the plateau and reduction are likely related to reduced drilling in 2023 and early 2024. While Tamarack has allowed production to decline recently in the area, it does have 15 wells planned for 2024 which would be a notable increase from only 8 spuds in 2023.
Tamarack’s acquisitions in the South Clearwater area closed fairly recently, and many of the wells drilled in the past 4 years were drilled by other producers. In order to gauge the level of production that Tamarack is getting out of this asset in recent years, we have prepared a chart of average IP90s by year since the Crestwynd and Rolling Hills acquisitions closed (recall that IP90 is the average daily production for the first 90 days that a well is on production). IP90s in the South Clearwater area are displaying an upward trend through time, with 2023 being the strongest year yet for the asset, although on a limited sample size. Interestingly 3 additional wells from 2023 do have production data although, as they are on confidential status, information on hours is not showing which means we do not have access to IP90 data yet.
Note: Licences that have been granted “Confidential” status do not have IP90 data available. Tamarack does have 6 wells on production for 2023, but only 3 with IP90 data.
As demonstrated in the production chart above, the production profile for the existing wells at South Clearwater appears to be maturing. With that said, the company’s track record in the area proves that they can ramp production up rapidly, and Tamarack has indicated that they consider the asset to be an opportunity for scalable development. As of April 2024, the company has announced plans to drill 15 net wells at South Clearwater while also converting an existing producing well into an injector. Tamarack has also announced three defined “focus areas” for 2024, which are highlighted in the company’s map below. We haven’t seen any activity thus far in the year at the Jarvie focus area, which makes it a spot worth watching as the end of the spring breakup draws nearer.
To keep tabs on the South Clearwater and other interesting plays, check out BOE Intel.