Tamarack to sell non-core Alberta assets for $112M

Executive Summary

• Tamarack Valley Energy Ltd. has entered into a definitive agreement to sell its remaining non-core producing assets in the Veteran Consort and Eyehill areas of eastern Alberta to a private company.
• The transaction completes Tamarack's strategic transformation into a pure-play Clearwater and Charlie Lake producer, removing lower-margin, higher-cost assets from the portfolio.
• The sale is expected to close in October 2025, generating $112 million in cash proceeds (before adjustments) and reducing asset retirement obligations by $63 million.

Key Details

• Transaction Value: $112 million in cash consideration before closing adjustments.
• Asset Retirement Obligations (ARO): The buyer assumes undiscounted AROs of $63 million (approximately 50% inactive), representing 25% of Tamarack’s total corporate liability and 40% of its total inactive decommissioning obligations.
• Asset Profile: The divested assets are located in eastern Alberta (Veteran Consort and Eyehill areas).
• Production Impact: The East assets currently produce approximately 4,000 barrels of oil equivalent per day (boepd), comprising 6% of Tamarack’s corporate production (specifically 3,500 boepd of oil).
• Financial Efficiency:
  • Net production expenses per barrel of oil equivalent are expected to improve by approximately 10% due to the disposition of lower-margin barrels.
  • The East assets were expected to generate field operating netbacks of approximately $45 million over the next 12 months.
  • The transaction reflects a before-tax transaction multiple of approximately 2.5 times at current strip prices.
• Use of Proceeds: Proceeds will initially be used to reduce net debt, with future optionality for increased shareholder returns or accelerated development at Clearwater (including expanded waterflood initiatives).
• Guidance Updates:
  • 2025 Production: Full-year production guidance remains unchanged at 67,000 to 69,000 boepd. Q4 2025 production is expected to be 66,500 to 67,500 boepd.
  • 2025 Expenses: Annual net production expenses for 2025 are revised downward to $7.75 to $8.25 per boepd (a $0.25 reduction from previous guidance) due to portfolio optimization.
  • 2026 Budget: To be released in late Q4 2025.
• Strategic Context: This divestiture marks the completion of Tamarack’s transformation into a pure-play Clearwater and Charlie Lake producer, following three years of strategic acquisitions and non-core asset disposals.
• Long-Term Targets: Tamarack forecasts reaching a net debt target of $500 million in 2027, assuming a WTI price of $65 USD per barrel.
• Advisers: National Bank Financial Inc. (Financial Adviser) and Stikeman Elliott LLP (Legal Counsel).