Tamarack Valley Energy Announces 2025 Corporate Budget

Press Release

Calgary, Alberta – December 4, 2024 – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company”) (TSX: TVE) is pleased to announce its 2025 capital and operating budget. The 2025 budget continues to generate free funds flow⁽¹⁾ in support of ongoing returns to shareholders, and further investment to capture value across Tamarack’s significant asset base.

Highlights of the 2025 Budget

• Production Growth and Capital Allocation – Budgeted capital of $430MM – $450MM expected to deliver annual production of 65,000 – 67,000 boe/d⁽²⁾, representing annual growth of ~4% on a mid-point basis, and achieving ~6% growth on an exit-to-exit basis.
• Returns to Shareholders – Tamarack targets allocating 60% of 2025 free funds flow⁽¹⁾ to shareholders through a sustainable dividend and share buybacks, while balancing continued debt repayment. At US$70/bbl WTI⁽³⁾ the 2025 budget is expected to deliver ~$300MM of free funds flow⁽¹⁾, representing a potential total shareholder return⁽⁴⁾ of ~16%.
• Financial Strength and Resiliency – The strength of Tamarack’s balance sheet, and low sustaining free funds flow breakeven cost⁽¹⁾ in 2025 (including hedging and base dividends, of approximately US$38/bbl WTI), underscores the robust nature of the asset base and resilience of the budget to commodity price volatility.
• Clearwater Waterflood Expansion – The Company remains highly encouraged by results to date, demonstrated by projects in Marten Hills and Nipisi. In 2025, Tamarack will continue to invest in expanding waterflood operations with Clearwater water injection rates expected to increase by ~60% by year-end.
• Margin Enhancement – Material improvements to heavy oil differentials, driven by the TMX pipeline, and pipeline connectivity, are supporting enhanced realizations as margin capture continues to increase. Improved production expense on a per boe basis reflects production growth, reduced water disposal costs as produced water is utilized for waterflood injection, and lower costs reflecting expanded owned and operated infrastructure capacity.

2025 Annual Corporate Guidance Summary at 2025 Budget Pricing⁽³⁾

The 2025 budget builds on success delivered in 2024, which saw production guidance increase through the year while costs remained within plan. Leveraging prior infrastructure investments, the 2025 plan optimizes free funds flow⁽¹⁾ generation while offering near- and long-term growth upside.

		Units	2025 Guidance
	2025 Capital Budget(5)	$MM	$430 – $450
	Annual Average Production(2)	boe/d	65,000 – 67,000
	Average Oil & NGL Weighting	%	83% – 85%
	Expenses:
	Royalty Rate (%)	%	20% – 22%
	Wellhead price differential – Oil(6)	$/bbl	$1.50 – $2.50
	Production(7)	$/boe	$8.40 – $8.90
	Transportation	$/boe	$3.75 – $4.25
	General and Administrative (8)	$/boe	$1.30 – $1.45
	Interest(9)	$/boe	$2.90 – $3.30
	Income Taxes(10)	%	10% – 12%

2025 Budget Details

Production growth and the overall cost structure improvements, which leverages owned and operated infrastructure, are increasing operating margins and delivering capital savings. Annual production guidance of 65,000 – 67,000 boe/d⁽²⁾ is inclusive of major planned turnaround activity at key facilities in both the Charlie Lake and Clearwater in Q3/25. The 2025 budget is expected to deliver annual mid-point growth⁽¹¹⁾ of ~4%, and ~6% growth on an exit-to-exit basis. The midpoint of the budget is comprised of ~$315MM of sustaining capital, focused on Clearwater and Charlie Lake drilling programs, and approximately ~$125MM of growth and waterflood investment supporting near term production increases and long-term decline mitigation consistent with Tamarack’s five-year plan. Growth capital is inclusive of exploration and delineation activities with Tamarack testing additional Clearwater sands and pursuing exploration of new zones across its extensive land base.

Given encouraging Clearwater waterflood results across the Nipisi, Marten Hills and West Marten assets, the Company will expand waterflood initiatives in 2025. Tamarack expects virtually all ‘B’ and ‘C’ sand future activity across its core areas in Nipisi, Marten Hills and West Marten will be developed for eventual waterflood. These projects serve to mitigate corporate declines, driving reductions to future sustaining capital requirements. In 2025, Tamarack plans to increase water injection by ~60% to >20,000 bbl/d by year-end.

The Charlie Lake remains positioned to deliver increased production to the new CSV Albright sour gas plant which is expected to be commissioned in Q1/25. Leveraging 4 (4.0 net) wells drilled in Q4/24, which will be completed in 2025, this incremental capacity is expected to drive higher growth though the latter part of the year with no incremental volumes included in Tamarack’s Q1/25 production outlook. Through 2025, the Charlie Lake will see the execution of a continuous one rig program with development focused at Pipestone and Wembley.

Tamarack would like to thank our employees, shareholders and other stakeholders, including the Wapiscanis Waseskwan Nipiy Holding Limited Partnership, for their ongoing support. We would also like to thank our board of directors for their continued guidance and insights which steward the advancement and execution of our strategic plan. Tamarack continues to deliver on its commitment to operational excellence which is underpinned by a culture focused on safety, having increased production, improved overall efficiencies, and delivered increasing returns to shareholders.

About Tamarack Valley Energy Ltd.

Tamarack is an oil and gas exploration and production company committed to creating long-term value for its shareholders through sustainable free funds flow⁽³⁾ generation, financial stability and the return of capital. The Company has an extensive inventory of low-risk, oil development drilling locations focused primarily on Clearwater and Charlie Lake plays in Alberta while also pursuing EOR upside in these core areas. For more information, please visit the Company’s website at www.tamarackvalley.ca.

Reader Advisories

Notes to Press Release

• See “Specified Financial Measures”.
• Production of 65,000 – 67,000 boe/d: 39,150-40,350 bbl/d heavy oil, 13,300-13,700 bbl/d light and medium oil, 2,300-2,360 bbl/d NGL and 61,550-63,550 mcf/d natural gas.
• Annual guidance numbers are based on 2025 average pricing assumptions of:

2025 Budget Pricing

	Crude Oil – WTI ($US/bbl)	$70.00
	Crude Oil – MSW Differential ($US/bbl)	($4.00)
	Crude Oil – WCS Differential ($US/bbl)	($14.00)
	Natural Gas – AECO ($CAD/GJ)	$2.00
	Foreign Exchange – USD/CAD	1.35

 

• Return per share calculated based on the weighted average basic shares outstanding for the relevant periods. Total shareholder return includes base dividends, share buybacks, and debt repayment yield plus production growth.
• Capital budget includes exploration and development capital, facilities land and seismic but excludes ARO of $7MM in 2025, and asset acquisitions and dispositions.
• Oil wellhead deductions for grade specific trading differential (ex CHV), blending requirements, quality differential, and pipeline tolls if Tamarack is not marketing (lease transactions).
• Production expense budget includes Clearwater Infrastructure Limited Partnership (the “CIP”) fee for service and minimal carbon tax.
• G&A noted excludes the effect of cash settled stock-based compensation.
• Budgeted interest includes CIP take-or-pay capital fee.
• Tamarack estimates a tax rate as a percentage of adjusted funds flow.
• Annual production growth references the mid-point of 2025 guidance of 66,000 boe/d (comprised of 39,750 bbl/d heavy oil, 13,500 bbl/d light and medium oil, 2,330 bbl/d of NGL and 62,550 mcf/d natural gas) relative to the midpoint of 2024 guidance 63,500 boe/d (comprised of 38,300 bbl/d heavy oil, 13,650 bbl/d light and medium oil, 2,350 bbl/d of NGL and 55,200 mcf/d natural gas).

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 Canadian Securities Administrators’ National Instrument 51 101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Boe may be misleading, particularly if used in isolation.

Product Types. References in this press release to “crude oil” or “oil” refers to light, medium and heavy crude oil product types as defined by NI 51-101. References to “NGL” throughout this press release comprise pentane, butane, propane, and ethane, being all NGL as defined by NI 51-101. References to “natural gas” throughout this press release refers to conventional natural gas as defined by NI 51-101.

For additional information, please contact:

Brian Schmidt		Steve Buytels		Christine Ezinga
President & Chief Executive Officer		Chief Financial Officer		VP Business Development &
Tamarack Valley Energy Ltd.		Tamarack Valley Energy Ltd.		Sustainability
Phone: 403.263.4440		Phone: 403.263.4440		Tamarack Valley Energy Ltd.
www.tamarackvalley.ca		www.tamarackvalley.ca		Phone: 403.263.4440
				www.tamarackvalley.ca

IBF4