Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (October 2021)
28 slides from Tamarack Valley Energy's investor presentation, October 2021
Slide 1: Creating Sustainable Value
TVE : TSX Creating Sustainable Value October 2021 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) Reserves Disclosure: All reserve references in this presentation are to gross reserves as at the effective date of the applicable evaluation. Gross reserves are Tamarack’s total working interest reserves before the deduction of any royalties and including any roy
Slide 4: Corporate Snapshot (TSX: TVE)
Corporate Snapshot (TSX: TVE) Corporate/Market Summary Tamarack Market Capitalization(1) ($mm) $1,478 Net Debt(1) ($mm) $520 Charlie Lake Enterprise Value(1) ($mm) $1,998 Light Oil Bank Line Capacity ($mm) $600 Tax Pools ($mm)(2) $1,030 Clearwater Medium Oil P+P Reserves (mmboe)(3) 164.8 2021 Capita
Slide 5: Q3 2021 & Year to Date Highlights
Q3 2021 & Year to Date Highlights Strategic • Clearwater Assets (Aug ‘21) and additional tuck-ins Acquisitions • Added locations and lands in the Clearwater and Charlie Lake oil plays Financial • Path to < 1.2x Debt to Q4 Annualized Adjusted Funds Flow(1) by YE2021 Flexibility • Announcement of divi
Slide 6: Repositioning During the Downturn
Repositioning During the Downturn Theme: Generate Long-term Sustainable Free Funds Flow(1) Objectives 2020 Status Transformational Action Outcomes Align compensation with long- Long-term focus: 5-year DAFFF(1), Revamp Incentive Plan 1-year focused goals & TSR(1) term FFF(1) growth decline rate, PIR(
Slide 7: Tamarack Strategic Principles
Tamarack Strategic Principles Strategic Principles Tactical Execution BALANCE SHEET STRENGTH AND RISK MANAGEMENT Low Leverage & Balance Sheet • <1.2x 2021 YE net debt to Q4 annualized adjusted funds flow(1) decreasing to <0.5x at 2022 YE Strength • Consistent hedging policy to manage exposure to com
Slide 8: Framework for Returning Capital to Shareholders
Framework for Returning Capital to Shareholders Sustaining Capital & Base Dividend Protected Down to US$35/bbl WTI Free Funds Flow(1) Allocation Net Debt ≥$300MM Net Debt $250MM-$300MM(2) Base Base Dividend + Delivering Enhanced Returns to Dividend Debt Repayment Share Shareholders and/or Buybacks D
Slide 9: Return of Capital Strategy
Return of Capital Strategy Sustainable Base Dividend • Predicated on up to 25% of free funds flow(1) at US$55 WTI and $2.50/GJ AECO • Sustaining capital + base dividend is fully fundable down to US$35/bbl WTI and would represent only 37% payout on current strip • Up to 75% for debt repayment, strate
Slide 10: Illustrating Annual Shareholder Return Potential
Illustrating Annual Shareholder Return Potential Base Dividend Fully Funded at US$35/bbl While Continuing to Reduce Debt At US$70/bbl Debt <$300MM by mid 2022 $350 12% 2022 funds flow at strip reduces debt <$300MM by H2/22, implies 8% yield with total dividends(1) $300 $250 Debt Target Achieved $166
Slide 11: 5-Year Plan Anchors Long Term Sustainability
5-Year Plan Anchors Long Term Sustainability Base Case 41,000 – 43,000 boe/d(2) Total Annual Adjusted Funds Flow(1) ($MM) $700 $600 5-Year Plan Overview $500 (assumes US$55/bbl WTI & $2.50/GJ AECO) $400 $300 $200 E&D Capital $1.0B - $1.2B $100 51% 39% 30% 53% 40% 30% 54% 40% 31% 46% 35% 26% 47% 35%
Slide 12: Transformative 2021 Enhances Focused Inventory
Transformative 2021 Enhances Focused Inventory Balancing Duration with Free Funds Flow(1) Growth Inventory of Net Locations(2) HIGHLY ECONOMIC INVENTORY SUPPORTS LONG TERM SUSTAINABILITY (assumes payout <18 months) • Strategic inventory management 1,200 Total 1,092 • Retain multiple years of high-gr
Slide 13: North American Payout Period & Half-Cycle Breakeven by Play
13 0.0 1.0 1.5 2.0 2.5 3.0 3.5 0.5 Years Clearwater Multi-Laterals Frobisher Dual Leg Charlie Lake SK Mississippian Conventional Payout Period Viking Dodsland Conventional Heavy Oil Hz. Delaware Wolfcamp A (Top Quartile) Eagle Ford Oil - East (Top Quartile) N. Midland Wolfcamp A (Top Quartile) North
Slide 14: Capital Allocation Optionality Delivers Sustainability
Capital Allocation Optionality Delivers Sustainability Portfolio that can deliver near-term and long-term free funds flow(1) Sustaining Capital Waterflood Management Economic Growth Modest Growth Highly Economic Inventory that Sustains Low Decline, Meaningful Production While Generating Highly Econo
Slide 15: Highly Economic Lower Charlie Lake Light Oil Locations
Highly Economic Lower Charlie Lake Light Oil Locations Production maintained between 12,000 – 13,000 boe/d(2) Two Mile Lateral Length Normalized Well Performance(1) 200 Cumulative Production (Mbbl) 13-19: ~45% of wells ≥ 2 miles(3) 150 890 bopd 1,060 boe/d(3) Tier10 100 Tier 9 12-19: Tier 8 931 bopd
Slide 16: Tamarack Clearwater Asset Overview
Tamarack Clearwater Asset Overview Drilling Inventory of >10 years on Primary Recovery 15-29 West 14-26 West NIPISI/MARTEN Type Curve(1) Payout Period Stepout Stepout ~300bopd ~240bopd 14 5-13 Marten Stepout 12 • ~118bopd Payout (months) • 14 API 10 8 6 13-25 West Stepout 15-17 West 4 • ~70b/d (3 le
Slide 17: Clearwater Waterflood Potential
Clearwater Waterflood Potential Tamarack will develop the play with a long-term view to the application of EOR Nipisi/Marten Hills EOR Pilots Evolution of Waterflooding Criteria/Applicability Spur Deltastream Headwater Spur • Other companies have initiated EOR pilot projects (both waterflood and pol
Slide 18: Tamarack Waterflood Asset Summary
Tamarack Waterflood Asset Summary 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 Oil Prod. Waterflood Start Reserves OOIP(1) to Date(2) Recovery(2) Veteran Ad
Slide 19: Tamarack Waterflood Production
Tamarack Waterflood Production Improving corporate declines with increasing exposure to assets under waterflood Production (bopd) Net Waterflooded Oil – Includes 2021 Capital Program Penny Barons Veteran Viking Nipisi Slave Point Eyehill Sparky 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jan-2020 Ap
Slide 20: Tamarack Sustainability Program
Tamarack Sustainability Program Environment, Social & Governance Focus Areas • Reduce greenhouse gas emissions • Understand climate change risks • Innovate to lower energy intensity • Prudently use water where required • Recycle produced water in operations • Innovate to minimize freshwater use • Ef
Slide 21: Sustainability Initiatives at Tamarack
Sustainability Initiatives at Tamarack Indigenous Partnerships Emissions & Land Management • Tamarack is committed to the principles of UNDRIP and participating in 2019 GHG Scope 1 + 2 Intensity by Company reconciliatory activities (tCO2e/boe) 0.10 • The Kainai First Nation and Tamarack actively par
Slide 22: 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 23: Appendix
APPENDIX 23 w w w . t a m a r a c k v a l l e y. c a 23
Slide 24: Successfully Executing on Acquisition Strategy
Successfully Executing on Acquisition Strategy Improving sustainability and resiliency, while enhancing free funds flow(1) profile West Central Sparky / Charlie Lake Clearwater Clearwater Alberta Clearwater Light Oil Total December 2020 August 2021 July 2020 March 2021 June 2021 Acquisition Overview
Slide 25: Risk Management – Current Hedges
Risk Management – Current Hedges(1) Enhancing certainty with flexibility to capture upside value 52% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 WTI Put Volume (bbls/d) 4,750 11,250 7,750 750 750 Oil price protection in H1 2022 Average Put/Premium (USD/bbl) $51.59 $2.18 $52.56 $2.56 $52.71 $2.70 $53.10
Slide 26: 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 Scott Reimond VP Exploration KPMG LLP Martin Mal
Slide 27: Notes
Notes Page 4 1. See Disclaimers – “Non-IFRS Measures”; free funds flow and free funds breakeven were formerly referred to as free adjusted funds flow and free adjusted funds flow breakeven respectively 2. Estimated as at December 31, 2020, adjusted for the previously announced March acquisitions and
Slide 28: Notes
Notes Page 12 1. See Disclaimers – “Non-IFRS Measures”; free funds flow was formerly referred to as free adjusted funds flow 2. See “Oil and Gas Advisories – Drilling Locations” 3. Assumes flat pricing; WTIUS$55.00/bbl, AECO C$2.50/GJ, CAD/USD 1.2600 Page 13 1. See Disclaimers – “Non-IFRS Measures”;
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