CALGARY,
AB, June 10, 2022 /CNW/ - 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
Rolling Hills Energy Ltd. ("Rolling
Hills"), a privately held pure play Clearwater oil producer. Tamarack acquired all
of the issued and outstanding common shares of Rolling Hills for
total net consideration of 9.3 million common shares of Tamarack
and $46.5 million in cash.
Tamarack has now successfully consolidated working interests and
operatorship in the Southern
Clearwater to 100%, as a result of the Acquisition. The
acquired assets are forecasted to produce ~2,100
bbl/d(1) average for the remainder of 2022 and deliver
~$65 million of annualized operating
field netback(2),(3). Tamarack expects to realize
synergies in gas conservation and other infrastructure projects
already in the planning phase, lowering the GHG intensity of the
assets.
As previously announced, and in conjunction with the closing of
the Acquisition, Tamarack has increased its base monthly dividend
by 20% to $0.01 per month beginning
with the June declaration with an expected payment date of
July 15, 2022. The increase in
Tamarack's monthly cash dividend reflects the improvement in
sustainable free funds flow(2) per share the Company has
generated both organically and through the strategic Crestwynd and
Rolling Hills acquisitions which
drive accretion at flat pricing of US$55/bbl WTI and $2.50/GJ AECO.
Tamarack is also pleased to announce that its existing
sustainability-linked lending facility ("SLL Facility") has been
extended to May 31, 2024. The SLL
Facility syndicate also provided a modest increase to $650 million on the revolving facility, to
account for some of the additional value added through the
Acquisition.
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 generation, financial stability and the
return of capital. The Company has an extensive inventory of
low-risk, oil development drilling locations focused primarily on
Charlie Lake, Clearwater and EOR plays in Alberta. Operating as a responsible corporate
citizen is a key focus to ensure we deliver on our environmental,
social and governance (ESG) commitments and goals. For more
information, please visit the Company's website at
www.tamarackvalley.ca.
Abbreviations
AECO
|
the natural gas storage
facility located at Suffield, Alberta connected to TC Energy's
Alberta System
|
bbls/d
|
barrels per
day
|
IFRS
|
International Financial
Reporting Standards as issued by the International Accounting
Standards Board
|
WCS
|
Western Canadian
Select, the benchmark for conventional heavy and oil sands blended
crude oil in western Canada
|
WTI
|
West Texas
Intermediate, the reference price paid in U.S. dollars at Cushing,
Oklahoma for the crude oil standard grade
|
|
|
|
READER ADVISORIES
Notes to Press Release
1 Comprised of ~2,100 bbl/d heavy crude oil product
type as defined by Canadian Securities Administrators' National
Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities.
2 See "Specified Financial Measures"
3 Operating field netback based on June to
December 2022 average pricing
assumptions, as at May 31, 2022, of
$105.66 WTI (USD/bbl); $17.39 WCS differential (USD/bbl); and
$1.2746 CAD/USD
FX.
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; the anticipated benefits of the
Acquisition, including the impact of the Acquisition on the
Company's operations, opportunities, financial condition, access to
capital and overall strategy; expectations with respect to oil and
natural gas production and operating field netbacks in 2022 in
respect of the assets (the "Assets") acquired pursuant to the
Acquisition; development and drilling plans for the Assets; future
intentions with respect to return of capital; and Tamarack's
commitment to ESG principles and the impact of the Acquisition
thereon, including the initiation of a Southern Clearwater gas conservation project.
Future dividend payments, if any, and the level thereof, is
uncertain, as the Company's dividend policy and the funds available
for the payment of dividends from time to time is dependent upon,
among other things, free funds flow financial requirements for the
Company's operations and the execution of its growth strategy,
fluctuations in working capital and the timing and amount of
capital expenditures, debt service requirements and other factors
beyond the Company's control. Further, the ability of Tamarack to
pay dividends will be subject to applicable laws (including the
satisfaction of the solvency test contained in applicable corporate
legislation) and contractual restrictions contained in the
instruments governing its indebtedness, including its credit
facility.
The forward-looking statements contained in this document are
based on certain key expectations and assumptions made by Tamarack,
including relating to: the business plan of Tamarack pro forma the
completion of the Acquisition; the timing of and success of
future drilling, development and completion activities; the
geological characteristics of Tamarack's properties; the
characteristics of the Assets; the successful integration of the
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; impact of inflation on costs; 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.
Although management considers these assumptions to be reasonable
based on information currently available, undue reliance should not
be placed on the forward-looking statements because Tamarack can
give no assurances that they may prove to be correct. By their very
nature, forward-looking statements are subject to certain risks and
uncertainties (both general and specific) that could cause actual
events or outcomes to differ materially from those anticipated or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to: unforeseen
difficulties in integrating the Assets into Tamarack's operations;
incorrect assessments of the value of benefits to be obtained from
acquisitions and exploration and development programs (including
the Acquisition); the risk that future dividend payments thereunder
are reduced, suspended or cancelled; risks associated with the oil
and gas industry in general (e.g. operational risks in development,
exploration and production; and delays or changes in plans with
respect to exploration or development projects or capital
expenditures); commodity prices; increased operating and capital
costs due to inflationary pressures; the uncertainty of estimates
and projections relating to production, cash generation, costs and
expenses; health, safety, litigation and environmental risks;
access to capital; the COVID-19 pandemic; and Russia's military actions in Ukraine. Due to the nature of the oil and
natural gas industry, drilling plans and operational activities may
be delayed or modified to react to market conditions, results of
past operations, regulatory approvals or availability of services
causing results to be delayed. Please refer to the annual
information form for the year ended December
31, 2021, the management's discussion and analysis for the
three months ended March 31, 2022
(the "MD&A") and other continuous disclosure documents for
additional risk factors relating to Tamarack, which can be accessed
either on Tamarack's website at www.tamarackvalley.ca or under the
Company's profile on www.sedar.com. The forward-looking statements
contained in this press release are made as of the date hereof and
the Company does not undertake any obligation to update publicly or
to revise any of the included forward-looking statements, except as
required by applicable law. The forward-looking statements
contained herein are expressly qualified by this cautionary
statement.
This press release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about Tamarack's prospective results of operations and
production, free funds flow and operating field netback and
components thereof, including pro forma the completion of the
Acquisition, all of which are subject to the same assumptions, risk
factors, limitations, and qualifications as set forth in the above
paragraphs. FOFI contained in this document was approved by
management as of the date of this document and was provided for the
purpose of providing further information about Tamarack's future
business operations. Tamarack and its management believe that FOFI
has been prepared on a reasonable basis, reflecting management's
best estimates and judgments, and represent, to the best of
management's knowledge and opinion, the Company's expected course
of action. However, because this information is highly subjective,
it should not be relied on as necessarily indicative of future
results. Tamarack disclaims any intention or obligation to update
or revise any FOFI contained in this document, whether as a result
of new information, future events or otherwise, unless required
pursuant to applicable law. Readers are cautioned that the FOFI
contained in this document should not be used for purposes other
than for which it is disclosed herein.
Specified Financial
Measures
This press release includes various specified financial
measures, including non-IFRS financial measures, non-IFRS financial
ratios and capital management measures as further described herein.
These measures do not have a standardized meaning prescribed by
International Financial Reporting Standards ("IFRS") and,
therefore, may not be comparable with the calculation of similar
measures by other companies.
"Adjusted funds flow (capital management measure)" is
calculated by taking cash-flow from operating activities and adding
back changes in non-cash working capital, expenditures on
decommissioning obligations and transaction costs since Tamarack
believes the timing of collection, payment or incurrence of these
items is variable. Expenditures on decommissioning obligations may
vary from period to period depending on capital programs and the
maturity of the Company's operating areas. Expenditures on
decommissioning obligations are managed through the capital
budgeting process which considers available adjusted funds flow.
Tamarack uses adjusted funds flow as a key measure to demonstrate
the Company's ability to generate funds to repay debt and fund
future capital investment. Adjusted funds flow per share is
calculated using the same weighted average basic and diluted shares
that are used in calculating loss per share.
"Free funds flow (capital management measure)"
(previously referred to as "free adjusted funds flow") is
calculated by taking adjusted funds flow and subtracting capital
expenditures, excluding acquisitions and dispositions. Management
believes that free funds flow provides a useful measure to
determine Tamarack's ability to improve returns and to manage the
long-term value of the business.
"Operating Field Netback" equals total petroleum and
natural gas sales, less royalties and net production and
transportation expenses.
Please refer to the MD&A for additional information relating
to specified financial measures including non-IFRS financial
measures, non-IFRS financial ratios and capital management
measures. The MD&A can be accessed either on Tamarack's website
at www.tamarackvalley.ca or under the Company's profile on
www.sedar.com.
SOURCE Tamarack Valley Energy