Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (August 2022)
29 slides from Tamarack Valley Energy's investor presentation, August 2022
Slide 1: Creating Sustainable Value
TVE : TSX Creating Sustainable Value July – August 2022 See Disclaimers and Forward-Looking Statements attached
Slide 2: Disclaimers
Disclaimers Forward Looking Statements: Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”,
Slide 3: Disclaimers (Oil and Gas Advisories)
Disclaimers (Oil and Gas Advisories) FOFI Disclosure: This presentation contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about Tamarack’s updated five year plan, including generating sustainable long-term growth in free funds flow, dividends and
Slide 4: Disclaimers (Oil and Gas Advisories)
Disclaimers (Oil and Gas Advisories) Specified Financial Measures: This presentation includes various specified financial measures, including non-IFRS financial measures, non-IFRS financial ratios, capital management measures and supplementary financial measures as further described herein. These me
Slide 5: Corporate Snapshot
Corporate Snapshot CAPITAL STRUCTURE Ticker Symbol TVE.TSX Shares Outstanding (MM) 441.7 Market Capitalization ($MM) $1,953 Debt Capacity/Net Debt(1) ($MM) $850/$471 OPERATING GUIDANCE Production – H2 2022(2) (boed) 44,500-46,500 Capital Expenditures – H2 2022 ($MM) $160-170 H2 2022 Production 2022
Slide 6: Q2 2022 Highlights
Q2 2022 Highlights Strategic • Closed Rolling Hills Acquisition, consolidating South Clearwater position Acquisitions • Executed on $29.0 million of Clearwater & Charlie Lake land acquisitions Financial • Returned capital via declared monthly dividends ($0.0083-$0.0100/share) Acuity • Non-Core Vikin
Slide 7: Tamarack Strategic Principles
Tamarack Strategic Principles Strategic Principles Tactical Execution Low Leverage & Active Risk • Long term debt target of <1x net debt to annualized adjusted funds flow(1) at US$45/bbl WTI Management • Consistent hedging policy to manage exposure to commodity price volatility • Diverse multi-play
Slide 8: Capital Allocation Optionality Delivers Sustainability
Capital Allocation Optionality Delivers Sustainability Portfolio that can deliver near-term and long-term free funds flow(1) Asset Value Expansion Free Cash Maximization Decline Management Highly Economic Inventory that Sustains Highly Economic Production and Low Decline, Meaningful Production While
Slide 9: Financial Flexibility & Reinvesting to Support FFF
Financial Flexibility & Reinvesting to Support FFF(1) Liquidity and Debt Utilization ($ millions) Strip(2) • SLL(3) capacity increased to $650MM (from $600MM) during Q2 2022 $900 • Based on strip pricing Tamarack expects to reach the $200MM SLB(3) $800 debt floor in 2023 • Execution of strategic dis
Slide 10: 5-Year Plan Anchors Long-Term Sustainability
5-Year Plan Anchors Long-Term Sustainability 5-Year Plan Overview At Strip(2) Corporate FFF (1),(3) of $2.0B - $2.2B Over 5 Years (BTAX US$55/bbl WTI & $2.50/GJ AECO) E&D Capital $1.2B - $1.4B Free Funds Flow(1) Generation Spending ($260MM - $290MM/yr) $1,000 $800 Annual Adjusted Funds Flow(1) ($MM)
Slide 11: Updated Framework – Returning Capital to Shareholders
Updated Framework – Returning Capital to Shareholders < $400 MM but @ $200 MM Net Debt > $400 MM > $200 MM Debt Floor Net Debt to AFF(1) > 1.0x < 1.0x < 1.0x (at $45 USD/BBL WTI) Up to 50% Shareholder Returns Up to 75% Free Funds Flow(1) (NCIB and/or Enhanced Dividend) Shareholder Returns 100% (NCIB
Slide 12: North American Payout Period & Half-Cycle Breakeven by Play
Payout (Years) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 12 Clearwater Marten Hills Clearwater Nipisi Frobisher Dual Leg Charlie Lake Payout Period SK Mississippian Conventional Conventional Heavy Oil Hz Delaware Wolfcamp A (Top Quartile) Viking Dodsland Break-Even ND Bakken/Three Forks (Top Quartile) Eagle Ford
Slide 13: Significant Clearwater Holdings: 568.2 Net Sections
Significant Clearwater Holdings: 568.2 Net Sections North Clearwater Peavine / Seal T88 • 77.5 net sections acquired in conjunction with the Peavine Metis Settlement strategic land arrangement Nipisi • 162.3 net sections through corporate and asset acquisitions in 2020 and 2021 T84 Seal Marten Hills
Slide 14: Peavine/Seal Clearwater Exploration
Peavine/Seal Clearwater Exploration Adding Future Upside Through Organic Development T88 Seal • 2022 De-risk: 3 Clearwater target sands H1 2022 acquired lands • Future Development: Stacked zone potential offers operational Seal Land Block Q4/22 De-risk BTE 3-34 efficiencies in both de-risking and de
Slide 15: Nipisi & West Marten Hills: Enhancing Inventory
Nipisi & West Marten Hills: Enhancing Inventory 41 net booked locations(1) and >310 net unbooked locations(1) West Marten Hills • Deliverability: IP30 of 155 – 275 bopd; ~19○ API • Increased Activity: Peers testing multiple sands offsetting TVE lands Spur 3-35 IP30: 320 bopd • Stepping Out: Derisk d
Slide 16: Southern Clearwater: Stepping Out Post Consolidation
Southern Clearwater: Stepping Out Post Consolidation(1) Achieving payout(2) in ~6 months at US$85/bbl to drive free funds flow(3) Rate-Time Normalized to 11,000m Well Length Stepping Out 300 at Perryvale TVE 13-21 TVE 14-21 IP30: 212 bopd IP30: 197 bopd T65 250 Continued Jarvie Development 200 TVE 1
Slide 17: Nipisi Waterflood Design
Nipisi Waterflood Design Substantial fairway has been delineated and is ready for development “Two-Step” Waterflood Design “Two-Step” Waterflood Pilot Potential Waterflood Development Area 500 TVE Nipisi 02/13-19-076-07W5 450 400 Injection commences 350 300 Oil (bbl/d) 250 T76 200 150 Oil rate respo
Slide 18: Charlie Lake Development
Charlie Lake Development Continuing to Increase Our Presence With Added Lands & Prolific Wells Recent M&A Charlie Lake Expanded 2021 tuck-ins added 35.9 net sections T78 Footprint and 63 net Hz locations(1) Longshore 08-06 IP30: 520 bopd Unlocking First Upper Charlie Lake well Inventory at Saddle Hi
Slide 19: Charlie Lake Infrastructure Strategy
Charlie Lake Infrastructure Strategy Building robust infrastructure and egress solutions Charlie Lake T76 CNRL Valhalla Ovintiv Sexsmith Plant Ownership Working interest in four major plants where we deliver gas T75 Firm Service Firm service agreement in place for additional sour TVE Plant (Q2/23) T
Slide 20: Sustainability-Linked Lending & Notes
Sustainability-Linked Lending & Notes Strengthening Our Commitment to Responsible Energy Production All of Tamarack’s debt has been converted to sustainability-linked debt and includes: • A $600 million revolving sustainability-linked lending facility (SLL) with a lending syndicate – 3 KPIs with pot
Slide 21: Tamarack Sustainability Results
Tamarack Sustainability Results Emissions Intensity Land Management Net ARO Spend/Inactive Liability 2020 GHG Scope 1 + 2 Intensity by Company 10.13% ARO Spend/Inactive Liability (%) (kgCO2e/boe) 9.97% 1.3 Net ARO Spend/Grants Awarded (CAD$MM) 10.0 10.0% 90.00 80.00 2.1 8.0 8.0% 70.00 5.4 60.00 5.36
Slide 22: Sustainability Initiatives at Tamarack
Sustainability Initiatives at Tamarack Indigenous Engagement Environmental, Social & Governance Initiatives Tamarack is committed to the principles of UNDRIP and participating in reconciliatory activities. 2021 and 2022 year-to-date projects include: To ensure achievement of long-term goals and targ
Slide 23: Investment Summary
Investment Summary Track record of meeting and exceeding estimates Sustainable Returns Focused Strategy to Grow Production and Free Funds Flow(1) per Share Management team that has demonstrated its ability to execute and capitalize on opportunities Stable Base Economic Oil Balance Sheet Leading ESG
Slide 24: APPENDIX
APPENDIX 24 w w w . t a m a r a c k v a l l e y. c a 24
Slide 25: Risk Management – Current Hedges
Risk Management – Current Hedges(1) Enhancing certainty with flexibility to capture upside value Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Oil Hedge Coverage WTI Put Volume (bbls/d) 4,750 4,250 7,000 2,000 60% Average Put/Premium (USD/bbl) $55.75 $3.00 $56.43 $3.18 $55.71 $3.03 $55.00 $2.90 50% WTI 2-
Slide 26: Tamarack’s Waterflood Assets
Tamarack’s Waterflood Assets Improving corporate declines with increasing exposure to assets under waterflood Total Est. Est. Total Area Prod. Under Injection % of P+P Asset Asset Recovery Ultimate Current Initiatives Prod. Waterflood Start Reserves OOIP(1) to Date(2) Recovery(2) Veteran Focus on ne
Slide 27: Corporate Information
Corporate Information Executive Independent Reserve Evaluator Brian Schmidt (Aakaikkitstaki) President & Chief Executive Officer GLJ Petroleum Consultants Steve Buytels VP Finance & Chief Financial Officer Kevin Screen Chief Operating Officer Auditors Christine Ezinga VP Corporate Planning & Busines
Slide 28: Notes
Notes Page 5 1. See Disclaimers – “Specified Financial Measures” 2. Comprised of 16,500-17,500 bbl/d light and medium oil, 14,000-15,000 bbl/d heavy oil, 3,000-3,500 bbl/d NGL and 63,000-65,000 mcf/d natural gas Page 6 1. See Disclaimers – “Specified Financial Measures”; 2. Comprised of 18,233 bbl/d
Slide 29: Notes
Notes Page 15 1. See “Oil and Gas Advisories – Drilling Locations” Page 16 1. Asset details after giving effect to the Rolling Hills Energy acquisition 2. See “Oil and Gas Advisories” 3. See Disclaimers – “Specified Financial Measures”; 4. See “Oil and Gas Advisories – Drilling Locations” Page 17 1.
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