Tamarack Valley Energy Announces 2024 Reserve Results, Clearwater Resource Evaluation and, Operational Update
Press Release
Calgary, Alberta – February 12, 2025 – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company”) (TSX: TVE) is pleased to announce the results of its year-end independent oil and gas reserves evaluations as of December 31, 2024, (the “Reserve Reports”), prepared by Tamarack’s independent qualified reserves evaluators, McDaniel & Associates Consultants Ltd. (“McDaniel) and GLJ Ltd. (“GLJ”).
Tamarack’s 2024 results were highlighted by operational outperformance with the Company continuing to execute on its long-term strategic plan to deliver debt reduction and enhanced returns through share buybacks to drive substantial, per share, value creation. Reflecting this success, Tamarack delivered proved developed producing (“PDP”) and total proved plus probable (“TPP”) YoY debt-adjusted reserves per share increases of 22% and 19% respectively.
Production of 66,104 boe/d(1) (85% oil & liquids) during Q4/24 exceeded prior expectations. This result was driven by success in the Clearwater, including growth and performance of the waterflood program. In addition, Tamarack’s Charlie Lake assets continue to demonstrate solid production rates as the Company again delivered top performing well results in the play. Q4/24 delivered YoY production growth of 10% and 9% for the Clearwater and Charlie Lake plays, respectively. Annual 2024 production averaged 64,331 boe/d(2) (85% oil & liquids) including 41,269 boe/d(3) (93% oil & liquids) in the Clearwater and 16,963 boe/d(4) (68% oil and liquids) in the Charlie Lake. Tamarack’s full year capital expenditures were inline with prior guidance of $440MM(5), and included acceleration of drilling exiting the year. Overall efficiencies of the 2024 program, which exceeded prior expectations, were driven by well outperformance, enhanced field and program execution, and expansion of the waterflood program.
2024 Reserves Report Highlights
Tamarack’s drilling program and continued development of Clearwater waterflood contributed significantly to the 2024 reserves, further enhancing the long-term resiliency and sustainability of free funds flow for the Company moving forward. Key highlights of the Company’s PDP, total proved (“TP”) and TPP reserves from the Reserve Reports are highlighted below:
⦁ Continued Reserves Growth – Bookings across all categories, prior to dispositions, increased in 2024. Highly cost-effective TPP additions of approximately 10 MMboe(6) from Clearwater waterflood activity contributed to this growth:
o PDP: increased by 9% to 70 MMboe(7) (replaced 127% of production)
o TP: increased by 9% to 140 MMboe(8) (replaced 150% of production)
o TPP: increased by 8% to 243 MMboe(9) (replaced 179% of production)
⦁ Accretive Capital Efficiencies – TPP reserves growth of 8% (prior to dispositions) was achieved with a less than 1% increase in Future Development Capital (“FDC”)(10). This success was driven by consistent operational improvements in the Clearwater, supporting the ability to hold FDC assumptions flat, and offsetting any inflationary impacts.
⦁ Top Tier Finding and Development (“F&D”)(11) Costs – Results in the Charlie Lake and the addition of highly accretive waterflood barrels in the Clearwater, achieved PDP, TP, and TPP F&D costs, including changes in FDC(10), of $15.20/boe, $14.16/boe and $10.94/boe respectively
⦁ Strong Recycle Ratios – The Company’s highly economic oil plays delivered an annual field operating netback(12) of $46.41/boe, reflecting cost efficient operations and solid pricing margins. Coupled with low-cost reserve additions, Tamarack achieved PDP, TP, and TPP recycle ratios(12) of 3.1x, 3.3x and 4.2x respectively.
⦁ Increased Intrinsic Valuation – At year-end 2024, Tamarack’s before-tax net present value of PDP, TP, and TPP booked reserves was $1.9 billion(13), $3.0 billion(13) and $5.1 billion(13) respectively.
Clearwater Growth and Resiliency – The highly economic Clearwater asset remains a key driver of Tamarack’s free funds flow growth and a significant contributor to its portfolio of long-life oil production. Continued success in primary development and the addition of cost-effective waterflood reserves led to 18% growth, while replacing 235% of production on a TPP basis. Building on previous success, waterflood reserves grew by 75%, adding over 10 MMboe(6) at a TPP F&D cost of less than $6.00/boe. Tamarack remains committed to investing in enhanced oil recovery (“EOR”) projects, creating ongoing opportunities for reserves expansion and value growth.
Charlie Lake Continues to Add Increased Value – The Company’s Charlie Lake asset continues to deliver significant growth through impressive results and innovative development strategies, achieving a 5% increase in reserves and a 155% reserve replacement on a TPP basis. This is inclusive of ~3 MMboe(14) of positive technical revisions based on demonstrated results from both base performance and the 2024 development program.
Contingent and Prospective Resource Evaluation – Tamarack retained McDaniel to evaluate the heavy oil contingent and prospective resources of the Company’s Clearwater assets as at December 31, 2024 (the “Resource Report”).
o The Resource Report indicates Tamarack’s Clearwater heavy oil assets have a “best estimate” of Company gross Contingent Resources (unrisked) of 106 MMbbl(15) and Company gross Prospective Resources (unrisked) of 98 MMbbl(16).
o The Resource Report exemplifies the Company’s continued progression of delineating its vast resource base. At year-end 2024, promotion of oil volumes from Other Resources Categories resulted in the addition of 22.4 MMbbl(15) to TPP reserves and 33.4 MMbbl(16) to Contingent Resources (unrisked).
o The Resource Report includes 635 net Contingent and 1,035 net Prospective drilling locations, representing primary development inventory attributed to the Company’s Clearwater assets. When combined with the Company’s 401 net TPP locations included in the year-end evaluation, Tamarack’s identified Clearwater inventory exceeds 2,000 locations. At the current rate of development this would imply upwards of 20 years of drilling on the Clearwater asset base.
o With the Clearwater assets producing approximately 14 MMbbl of heavy oil in 2024, TPP reserves represent nine years of equivalent production. Unrisked best estimate contingent and prospective resources equate to approximately eight and seven years of equivalent production, respectively which affords incremental visibility to future opportunities.
o See “Reader Advisories – Resource Disclosure” below and our supplementary filing titled “Statement of Contingent and Prospective Resources” dated February 11, 2024 which has been filed on SEDAR+ at www.sedarplus.ca for additional details with respect to Tamarack’s contingent and prospective resources, including the risks and uncertainties related thereto.
Non-core Asset Divestment
In Q4/24 Tamarack entered into a definitive agreement to divest its Penny Barons assets in southern Alberta for $28MM (before closing adjustments), including ~900 boe/d(17) of production, with the transaction expected to close in early 2025. Proceeds from the sale will be initially utilized to advance Tamarack’s debt reduction strategy to further enhance the Company’s financial flexibility.
Risk Management
The Company takes a systematic approach to manage commodity price risk and volatility to ensure sustaining capital, debt servicing requirements and the base dividend are protected through a prudent hedging management program. For 2025, approximately 40% of net after royalty oil production is hedged against WTI with an average floor price of ~US$63/bbl with structures that allow for upside price participation averaging ~US$84/bbl. Our strategy provides protection to the downside while maximizing upside exposure. Additional details related to current hedges in place can be found in the corporate presentation on Tamarack’s website (www.tamarackvalley.ca).
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