Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (June 2022)
30 slides from Tamarack Valley Energy's investor presentation, June 2022
Slide 1: Creating Sustainable Value
TVE : TSX Creating Sustainable Value June 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 (TSX: TVE)
Corporate Snapshot (TSX: TVE) Tamarack Corporate/Market Summary(1) (excl. RHE) Market Capitalization ($MM) $2,342 Charlie Lake Net Debt(2),(3) ($MM) $556 Light Oil Enterprise Value(2) ($MM) $2,898 Tax Pools(4) ($MM) $943 Clearwater Heavy Oil 2022 Full Year Cardium 2022 Capital Budget and Guidance(5)
Slide 6: Tamarack Strategic Principles
Tamarack Strategic Principles Strategic Principles Tactical Execution Low Leverage & Active Risk • <0.5x 2022 YE net debt to Q4 annualized adjusted funds flow(1) Management • Consistent hedging policy to manage exposure to commodity price volatility Sustainable • Diverse multi-play asset portfolio e
Slide 7: 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 Waterflood Management Highly Economic Inventory that Sustains Highly Economic Production and Low Decline, Meaningful Production Wh
Slide 8: 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 $600 million revolving sustainability-linked lending facility (SLL) with a lending syndicate – 3 KPIs with pot
Slide 9: 5-Year Plan Anchors Long-Term Sustainability
5-Year Plan Anchors Long-Term Sustainability Free Funds Flow(1) Generation Annual Adjusted Funds Flow(1) ($MM) $800 5-Year Plan Overview $600 (BTAX US$55/bbl WTI & $2.50/GJ AECO) $400 $200 E&D Capital $1.2B - $1.4B 57% 50% 42% 70% 48% 35% 65% 44% 33% 65% 39% 33% 69% 45% 33% Spending ($260MM - $290MM
Slide 10: 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(1) ≥$400MM Net Debt(1) $350MM-$400MM Base Base Dividend + Debt Dividend Delivering Enhanced Returns to Repayment Share Shareholders Debt and/or Bu
Slide 11: Illustrating Annual Shareholder Return Potential
Illustrating Annual Shareholder Return Potential Strip Pricing Supports Enhanced Return in mid-2022 Illustrative Free Funds Flow Allocation(1) Ability to enhance dividends even further once debt reaches $200MM $650 14% $600 $550 $500 11% Free Funds Flow (1) $MM $450 $303 $400 $350 $233 $300 6% $250
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: Clearwater Fairway
Clearwater Fairway Tamarack Clearwater Land Holdings 70.5 net section in conjunction with the Peavine Metis Peavine Settlement strategic land arrangement Nipisi 162.3 net sections through corporate and asset acquisitions in 2020 and 2021 West Marten Hills 38.4 net sections in West Marten Hills in th
Slide 14: Southern Clearwater
Southern Clearwater(1) Achieving payout(2) in ~4 months at US$85/bbl to drive free funds flow(3) Legend Southern Clearwater TVE Lands RHE/TVE 2/1-29 & 1-29 IP30: 211/151 bopd RHE/TVE 16-25 IP30: 198 bopd TVE 13-21 IP30: 212 bopd TVE 14-21 IP30: 197 bopd TVE 4-19 IP30: 162 bopd TVE 12-18 IP30: 198 bo
Slide 15: Nipisi & West Marten Hills
Nipisi & West Marten Hills Derisking acreage to enhance development inventory West Marten Hills Spur 16-20 Spur 4-33 Spur 3-35 Deltastream 15-28 Pad Spur 15-19 HWX 13-7 IP30: 140 bopd IP30: 230 bopd IP30: 320 bopd IP30 155 – 220 bopd RR: Feb 3/22 IP30: 215 bopd T78 Increased Multiple sands tested by
Slide 16: Clearwater Waterflood Potential
Clearwater Waterflood Potential Leveraging promising results from offsetting competitor pilots Upcoming Tamarack Nipisi EOR Pilots 15-13 Pad Pilot Spur Waterflood Pilots • 2 x 8-leg producers onstream Q4-2021 • Staggered leg spacing (“two-step”) allows for water injection corridors while maintaining
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 Nipisi 11-31-076-06W5 180 1 Single-leg Injector + 1 Multilateral Producer 160 140 120 Oil (bbl/d) 100 T76 80 60
Slide 18: Charlie Lake Development
Charlie Lake Development Continuing to Increase Our Presence With Added Lands & Prolific Wells TVE 13-19 Charlie Lake IP30: 970 bopd TVE 12-19 Expanded 2021 tuck-ins added 35.9 net sections IP30: 900 bopd T76 Footprint and 63 net Hz locations(1) Unlocking Drilling our first Upper Charlie Lake well T
Slide 19: 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 20: Tamarack Sustainability Results
Tamarack Sustainability Results Emissions Intensity Land Management 2020 GHG Scope 1 + 2 Intensity by Company (kgCO2e/boe) Net ARO Spend/Inactive Liability 14.0 10.50% 12.0% Net ARO Spend/Grants Awarded ARO Spend/Inactive Liability (%) 90.00 12.0 10.0% 80.00 1.3 70.00 10.0 8.0% (CAD$MM) 60.00 8.0 5.
Slide 21: Sustainability Initiatives at Tamarack
Sustainability Initiatives at Tamarack Indigenous Engagement Environmental 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 targets, • Furthered work
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: Risk Management – Current Hedges
Risk Management – Current Hedges(1) Enhancing certainty with flexibility to capture upside value 53% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 WTI Put Volume (bbls/d) 9,000 4,750 4,250 5,500 500 Oil price protection in H2 2022(2) Average Put/Premium (USD/bbl) $62.48 $3.68 $55.75 $3.00 $56.43 $3.18 $55
Slide 25: Q1 2022 Highlights
Q1 2022 Highlights Strategic • Closed the Crestwynd acquisition, further consolidating South Clearwater Acquisitions • Executed on $18.6 million of Clearwater & Charlie Lake land acquisitions Financial • Issued $200.0 million senior unsecured sustainability-linked notes (SLB)(2) Acuity • Returned ca
Slide 26: Acquisition and Return of Capital Highlights
Acquisition and Return of Capital Highlights Strategic • Acquisition of Rolling Hills Energy solidifies existing Southern Clearwater portfolio Corporate • Adds 2,100 boe/d(2), 54.0 net locations(3) and adds 54 net sections of land Acquisition Continued • Second strategic Peavine Metis Settlement agr
Slide 27: Southern Clearwater Acquisition of Rolling Hills Energy
Southern Clearwater Acquisition of Rolling Hills Energy Southern Clearwater Purchase Price: $93 million T65 Acquisition Overview Production: 2,100 boe/d(1) Operating Field Netback(2): $61 million(3) Drilling Locations(4): 70 gross (54.0 net) T64 Asset Summary Land Additions: 54.0 net sections Undisc
Slide 28: 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 Martin Malek VP Engineering KPMG LLP Christine E
Slide 29: Notes
Notes Page 5 1. Tamarack summary metrics before giving effect to the impact of the Rolling Hills Energy Ltd. acquisition 2. See Disclaimers – “Specified Financial Measures” 3. As disclosed in the Q1 2022 financial statements at March 31, 2022 4. Tax pools as at year-end 2021 5. Updated guidance incl
Slide 30: Notes
Notes Page 15 1. See “Oil and Gas Advisories – Drilling Locations” Page 17 1. Based on US$70/bbl WTI Page 18 1. See “Oil and Gas Advisories – Drilling Locations” Page 19 1. See “Oil and Gas Advisories” 2. See “Oil and Gas Advisories” Page 22 1. See Disclaimers – “Specified Financial Measures”; AFF –
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