CALGARY, AB – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company“) (TSX:TVE) is pleased to announce that it has successfully closed the previously announced acquisition (the “Acquisition”) of Anegada Oil Corp. (“Anegada”). Tamarack acquired all of the issued and outstanding common shares of Anegada for total net consideration of 105.3 million common shares of Tamarack and $247.5 million in cash and assumed net debt(1), after deducting the proceeds from the closing of the previously announced 2% gross overriding royalty (the “GORR”). In conjunction with the acquisition, Tamarack’s credit syndicate has increased the Company’s credit facilities to $600 million and extended the revolving period to May 31, 2022.
Charlie Lake Update
Current production from the newly acquired assets is approximately 12,500 boe/d(2). The Company forecasts a range of 12,000 to 13,000 boe/d(3) for the second half of 2021, maintaining that level of production on a go forward basis. Tamarack plans to run two rigs in the play during the month of June, with plans to drill 12 (12.0 net) wells for the remainder of the year, with seven (7.0 net) in the Pipestone area, two (2.0 net) in Wembley, two (2.0 net) in Saddle Hills and one (1.0 net) in Valhalla. Approximately two-thirds of the wells planned are three-mile horizontals with the remainder being two-mile horizontals. Tamarack’s total budget for 2021 is expected to be approximately $180 million.
Tamarack has proactively enhanced the inventory of future drilling locations and Charlie Lake acreage by an incremental 33 (32.7 net) locations and greater than 18,000 additional acres of land, through strategic tuck-in activity in the greater Charlie Lake fairway since the initial announcement of the Acquisition. Tamarack’s highly economic Charlie Lake inventory represents >257 (240.0 net) locations and over 10 years of planned drilling inventory in the play. The Charlie Lake light oil inventory has very robust economics consisting of: high productivity wells (IP30 rates of >650 boe/d(4)); payouts of less than 6 months; profit to investment ratios(1) (10% discount) of >1.7; and long-term net asset value growth (NPV10 per well greater than $5 million) at US $55/bbl WTI and $2.50/GJ AECO.
Anegada brought on-stream another notable well in late March (3-16-071-8W6), which produced an average of 919 bbls/d of oil for the calendar month of April. Two other notable wells in the Pipestone area that were brought on-stream in February (2-22 & 3-22-071-08W6) were down for approximately half of the month in April due to a battery fire. All of these wells are three-mile horizontals.
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 three key principles: (i) targeting repeatable and relatively predictable plays that provide long-life reserves; (ii) using a rigorous, proven modeling process to carefully manage risk and identify opportunities; and (iii) operating as a responsible corporate citizen with a focus on environmental, social and governance (ESG) commitments and goals. 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.
Abbreviations
AECO |
the natural gas storage facility located at Suffield, Alberta connected to TC Energy’s Alberta System |
bbls/d |
barrels per day |
boe |
barrels of oil equivalent |
boe/d |
barrels of oil equivalent per day |
GJ |
gigajoule |
IFRS |
International Financial Reporting Standards as issued by the International Accounting Standards Board |
mcf/d |
thousand cubic feet per day |
WTI |
West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade |