TSX: TVE
CALGARY, AB, March 25, 2021 /CNW/ - Tamarack Valley
Energy Ltd. ("Tamarack" or the "Company") (TSX: TVE)
is pleased to announce the closing of the two previously announced
strategic acquisitions (together, the "Acquisitions") in the
Provost and Nipisi areas of Alberta for a total net purchase price of
$135.3 million, after deducting
the proceeds from the sale of two newly created 4.0% gross
overriding royalties ("GORR") on a select portion of the
acquired Nipisi properties.
Concurrent with the Acquisitions, the Company completed its
previously announced bought-deal financing (the "Financing")
of 30,303,000 common shares of Tamarack ("Common Shares") at
a price of $2.25 per Common Share
(the "Offering Price") for gross proceeds of approximately
$68 million. The Company also
completed an amendment to the syndicated credit facility, with an
increased borrowing base of $325
million. In addition, Tamarack issued 4,888,889 Common
Shares in conjunction with the acquisition of Woodcote Petroleum
Inc. ("Woodcote"). Post-completion of the Financing and
Acquisitions, Tamarack has 298,715,026 Common Shares
outstanding.
Acquisitions
The Acquisitions added approximately 2,800 boe/d1 of
low decline oil weighted production under waterflood in the Provost
and Nipisi areas along with an incremental 38,400 net acres of
Clearwater rights in Nipisi.
Tamarack has acquired all of the issued and outstanding shares
of Woodcote, a Clearwater focused
private company, with a 100% operated working interest in Greater
Nipisi (the "Corporate Acquisition").
Tamarack, through its wholly owned subsidiary, Tamarack
Acquisition Corp., has also acquired a working interest in the
Nipisi and Provost assets from a publicly-traded oil and gas
company ("the "Vendor") with an effective date of
February 1, 2021 (the "Asset
Acquisition").
Concurrent with the completion of the Acquisitions, Tamarack
sold two newly created 4.0% GORR on a select portion of the Nipisi
assets to Topaz Energy Corp. (the "GORR Disposition").
Tamarack has committed to spending $60.0
million of capital to further develop the GORR lands prior
to specific milestone dates up to and including March 31, 2023, subject to reduction in certain
circumstances.
With the closing of the Acquisitions, Tamarack expects 2021
production to average approximately 26,000 boe/d2. For
further details on the Acquisitions, see Tamarack's press release
dated March 5, 2021. An updated
presentation can be found on the Company's website
(www.tamarackvalley.ca).
Financing
Concurrent with the completion of the Acquisitions, Tamarack
issued, on a bought-deal financing basis, 30,303,000 Common
Shares at a price of $2.25 per
Common Share for gross proceeds of approximately $68 million. The net proceeds from the Financing
were used to fund a portion of the cash purchase price in respect
of the Acquisitions.
The Company has granted to the underwriters an
over-allotment option, exercisable in whole or in part for a
period of 30 days following the closing of the Financing, to
purchase up to an additional 3,030,300 Common Shares at the
Offering Price.
Advisors
Peters & Co. Limited acted as financial advisor to Tamarack
with respect to the Asset Acquisition and strategic advisor with
respect to the Corporate Acquisition.
National Bank Financial Inc. acted as financial advisor to
Tamarack with respect to the GORR Disposition and the Corporate
Acquisition.
ATB Capital Markets Inc. and CIBC World Markets Inc. acted
as strategic advisors to Tamarack with respect to the Asset
Acquisition.
Stikeman Elliott LLP acted as counsel to Tamarack with respect
to the Acquisitions, the GORR Disposition and the Financing.
About Tamarack Valley Energy Ltd.
Tamarack is an oil and gas exploration and production company
committed to long-term growth and the identification, evaluation
and operation of resource plays in the Western Canadian Sedimentary
Basin. Tamarack's strategic direction is focused on two key
principles: (i) targeting repeatable and relatively predictable
plays that provide long-life reserves; and (ii) using a rigorous,
proven modeling process to carefully manage risk and identify
opportunities. The Company has an extensive inventory of low-risk,
oil development drilling locations focused primarily in the
Cardium, Clearwater and Viking
fairways in Alberta that are
economic over a range of oil and natural gas prices. With this type
of portfolio and an experienced and committed management team,
Tamarack intends to continue delivering on its strategy to maximize
shareholder returns while managing its balance sheet.
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 NI 51-101 - Standards of
Disclosure for Oil and Gas Activities. Boe may be misleading,
particularly if used in isolation.
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 assets acquired pursuant to the
Acquisitions, including anticipated benefits and strategic
rationale; oil and natural gas production levels, including 2021
average production; decline rates; drilling plans and timing of
drilling; Tamarack's liquidity and financial position, the factors
contributing thereto, including the timing and level capital
expenditures, including in connection with the GORR.
The forward-looking statements contained in this document are
based on certain key expectations and assumptions made by Tamarack,
including relating to: Tamarack, Woodcote, the Vendor, the assets
acquired pursuant to the Acquisitions and the GORR Disposition,
including receipt of all required approvals; 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.
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: 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; the uncertainty of estimates and
projections relating to production, cash generation, costs and
expenses; health, safety, litigation and environmental risks;
access to capital; and the COVID-19 pandemic. 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 Tamarack's annual information form for the year ended
December 31, 2020 (the "AIF"),
management's discussion and analysis for the year ended
December 31, 2020 (the "MD&A")
for additional risk factors relating to Tamarack. The AIF and 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. 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, future capital expenditures and components thereof,
including pro forma the Acquisitions, the Financing and the GORR
Disposition, 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 made as of the date
of this document and was provided for the purpose of providing
further information about Tamarack's future business operations.
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.
1
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Comprised of
approximately 2,370 bbl/d oil, 50 bbl/d NGL and 2,280 mcf/d natural
gas.
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2
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Comprised of
approximately 15,750 bbl/d oil, 2,000 bbl/d NGL and 49,500 mcf/d
natural gas.
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SOURCE Tamarack Valley Energy