CALGARY - Tamarack Valley Energy Ltd. ('Tamarack' or the 'Company') is pleased to announce its financial and operating results for the three and six months ended June 30, 2021.
Selected financial and operational information is outlined below and should be read in conjunction with Tamarack's unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2021 and related management's discussion and analysis ('MD&A') which are available on SEDAR at www.sedar.com and on Tamarack's website at www.tamarackvalley.caBrian Schmidt, President and CEO of Tamarack commented: 'We are proud to report another very strong quarter driven by the successful integration of Anegada Oil Corp. ('Anegada') along with the continued execution of our Clearwater and Waterflood operations. The Anegada acquisition complements our balanced asset portfolio and provides further upside and resiliency to our free adjusted funds flow(1) and potential return of capital profile. In addition, we remain focused on advancing the 2021 initiatives and targets set within our robust environmental, social and governance ('ESG') reporting.'
Q2 2021 Financial and Operating Highlights
Successfully closed the acquisition of Anegada on June 1, 2021, providing the Company an entrance into the Charlie Lake light oil play ('Charlie Lake'), one of the most profitable oil plays in North America.
The Company's syndicate of lenders increased the Company's credit facilities to $600 million and extended the revolving period to May 31, 2022.
Achieved quarterly production volumes of 32,416 boe/d(2) in Q2/21, representing a 54% increase compared to the same period in 2020.
Generated adjusted funds flow(1) of $71.7 million in Q2/21 ($0.21 per share basic and diluted) compared to $21.0 million in the same period in 2020 ($0.09 per share basic and diluted).
Generated free adjusted funds flow(1), excluding acquisition expenditures, of $40.9 million and net income of $230.2 million during the quarter.
Invested $30.8 million in exploration and development capital expenditures, excluding acquisitions, during the second quarter of 2021, which contributed to the drilling of 20 (20.0 net) wells, comprised of 10 (10.0 net) Viking oil wells, 8 (8.0 net) Clearwater oil wells and 2 (2.0 net) Charlie Lake oil wells.
Exited the second quarter with $506 million of net debt; with a forecasted year end 2021 net debt to Q4 annualized adjusted funds flow(1) of less than 1.2x.
Charlie Lake Update
Tamarack brought on its first two operated Charlie Lake light oil wells in June (12-16-071-08W6 and 02/16-22-073-07W6) with IP30 rates of approximately 1,367 boe/d(3) (1,157 bopd) and 1,048 boe/d(4) (650 bopd), respectively. This compares to the internal TVE Tier 8 development type curve of 482 bbls/d. Production for June and July was impacted by third party plant outages due to the extreme temperatures that plagued the province. However, the Company remains on track with its planned production range of 12,000-13,000 boe/d(5) for the asset going forward, with current production of approximately 13,000 boe/d(5). Tamarack currently has three rigs running with the third and fourth wells in the program rig released.
Clearwater Update
In the quarter Tamarack drilled 8 gross (8.0 net) Clearwater wells in the Nipisi area bringing the yearly total to 23.5 net wells for the year in Nipisi and Jarvie. All the wells in the second quarter were drilled with 8 legs, and Tamarack plans to continue with this strategy throughout the remainder of 2021. Average well production from the second quarter program is 210bbls/d(6) (8-leg laterals) after cleanup versus the 160 bbls/d(6) winter program 6-leg average in the core Nipsi development area with well costs for the eight leg laterals averaging an incremental $105 thousand per well, driving significant capital efficiency gains. Total Clearwater production averaged 4,550bbls/d(7) for the quarter with June averaging approximately 5,000bbls/d(7).
Tamarack plans to drill another 13-14 net wells in Nipisi keeping one rig working throughout the year with a second rig planned to start up in December. Additionally, Tamarack plans to participate in 3-4 net (6-8 gross) wells in the Jarvie area. Gas conservation work is slated to begin at Nipisi in July with commissioning and start up in late September. In addition to this, technical work continues on a waterflood pilot and high graded areas for a trial have been selected. Tamarack anticipates drilling the pilot in early Q4 with injection slated to start in late Q4 2021 or early Q1 2022.
Forward Looking Information
This press release contains certain forward-looking information (collectively referred to herein as 'forward-looking statements') within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as 'guidance', 'outlook', 'anticipate', 'target', 'plan', 'continue', 'intend', 'consider', 'estimate', 'expect', 'may', 'will', 'should', 'could' or similar words suggesting future outcomes. More particularly, this press release contains statements concerning: Tamarack's business strategy, objectives, strength and focus, including with respect to Charlie Lake; expectations with respect to reserves, oil and natural gas production levels, operating field netbacks, decline rates, adjusted funds flow, free adjusted funds flow and net debt to Q4 annualized adjusted funds flow relating Tamarack, including pro forma the acquisition of Anegada; development and drilling plans for Anegada's assets, including the drilling locations associated therewith and timing of results therefrom; anticipated operational results for 2021 including, but not limited to, estimated or anticipated production levels, capital expenditures and drilling plans; the Company's capital program, guidance and budget for 2021; expectations regarding commodity prices in 2021; deployment of the Company's 2021 capital program; the expected allocation of the Company's 2021 capital expenditure budget; the performance characteristics of the Company's oil and natural gas properties; the ability of the Company to achieve drilling success consistent with management's expectations; Tamarack's commitment to ESG principles; the source of funding for the Company's activities including development costs; development costs, operating costs, general and administrative costs, costs of services and other costs and expenses and projections of commodity prices and costs, and exchange rates.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Tamarack, including relating to: the timing of and success of future drilling, development and completion activities; the geological characteristics of Tamarack's properties; the characteristics of Anegada's assets; the successful integration of Anegada's assets into Tamarack's operations; prevailing commodity prices, price volatility, price differentials and the actual prices received for the Company's products; the availability and performance of drilling rigs, facilities, pipelines and other oilfield services; the timing of past operations and activities in the planned areas of focus; the drilling, completion and tie-in of wells being completed as planned; the performance of new and existing wells; the application of existing drilling and fracturing techniques; prevailing weather and break-up conditions; royalty regimes and exchange rates; the application of regulatory and licensing requirements; the continued availability of capital and skilled personnel; the ability to maintain or grow the banking facilities; the accuracy of Tamarack's geological interpretation of its drilling and land opportunities, including the ability of seismic activity to enhance such interpretation and Tamarack's ability to execute its plans and strategies.
Contact:
Brian Schmidt
Tel: 403.263.4440
Web: www.tamarackvalley.ca
TAMARACK VALLEY ENERGY LTD. 
