Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (September 2021)
25 slides from Tamarack Valley Energy's investor presentation, September 2021
Slide 1: Creating Sustainable Value
TVE : TSX Creating Sustainable Value September 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) $1,011 Net Debt(1) ($mm) $506 Charlie Lake Enterprise Value(1) ($mm) $1,517 Light Oil Bank Line Capacity ($mm) $600 Tax Pools ($mm)(2) $1,030 Clearwater Medium Oil P+P Reserves (mmboe)(3) 164.8 2021 Capita
Slide 5: 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 6: Tamarack Strategic Principles
Tamarack Strategic Principles Strategic Principles Tactical Execution BALANCE SHEET STRENGTH AND RISK MANAGEMENT Low Leverage & Balance • <1.2x 2021 YE net debt to Q4 annualized adjusted funds flow(1) decreasing to <0.5x at 2022 YE Sheet Strength • Consistent hedging policy to manage exposure to com
Slide 7: 5 Year Plan – Anchoring Long Term Sustainability
5 Year Plan – Anchoring Long Term Sustainability Base Case 41,000 – 43,000 boe/d(2) $600 Total Annual Adjusted Funds Flow(1) ($MM) 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 62% 44% 33% Spending ($200MM - $250MM/yr) 59% 44% 32% 61%
Slide 8: 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 9: North American Payout Period & Half-Cycle Breakeven by Play
9 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 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 10: 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 11: Highly Economic Lower Charlie Lake Light Oil Locations
Highly Economic Lower Charlie Lake Light Oil Locations Two Mile Lateral Length Normalized Well Performance(1) 200 Cumulative Production (Mbbl) ~45% of wells ≥ 2 miles(3) 150 Tier10 100 Tier 9 Tier 8 Tier 7 50 102/16-22-073-07W6 IP30 Rate(2): 1,048 boe/d(3) 0 (650 bopd) 0 4 8 12 16 Months TVE’s First
Slide 12: Tamarack's Clearwater Assets
Tamarack’s Clearwater Assets Drilling Inventory of >10 years on Primary Recovery Type Curve(1) Payout Period 14 15-29 West 14-26 West Stepout Stepout 12 ~300bopd ~240bopd Payout (months) 10 5-13 Marten Stepout 8 • ~118bopd • 14 API 6 4 2 13-25 West Stepout 15-17 West 0 • ~70b/d (3 legs) Main • 19 AP
Slide 13: 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 14: Tamarack's Waterflood Assets
Tamarack’s Waterflood Assets Improving corporate declines with increasing exposure to assets under waterflood Total Area Prod. Under Total Asset Est. Recovery Est. Ultimate Asset Current Initiatives Prod. Waterflood OOIP(1) to Date(2) Recovery(2) Veteran Viking Adding ~8 new injection patterns in Ve
Slide 15: Tamarack's Waterflood Assets
Tamarack’s Waterflood Assets Improving corporate declines with increasing exposure to assets under waterflood Net Waterflooded Oil - Includes 2021 Capital Program Production (bopd) 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 Apr/
Slide 16: Sustainability at Tamarack
Sustainability at Tamarack 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 • Effecti
Slide 17: Sustainability at Tamarack
Sustainability 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 partner to crea
Slide 18: 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 19: Appendix
APPENDIX 19 w w w . t a m a r a c k v a l l e y. c a 19
Slide 20: 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 21: Q2 2021 & Year to Date Highlights
Q2 2021 & Year to Date Highlights Strategic • Anegada Oil Corp. (June ‘21) and Clearwater Assets (Aug ‘21) Acquisitions • Added 410+ locations in the Clearwater and Charlie Lake oil plays Financial • Increased credit facilities to $600 million in Q2 and extended to May 2022 Flexibility • Path to < 1
Slide 22: Risk Management – Current Hedges
Risk Management – Current Hedges(1) 58% Enhancing certainty with flexibility to capture upside value (2),(3) 60% Oil price protection in 2021 Target oil hedging for H2 2021 Oil Hedge Coverage(3) Q3 2021 Q4 2021 Q1 2022 Q2 2022 70% WTI Put 60% Volume (bbls/d) 3,250 4,750 9,250 5,500 50% Average Put/P
Slide 23: 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 24: 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 25: Notes
Notes Page 11 1. Lateral length normalized to 3,000m, based on a 1:1 ratio of lateral length to well performance 2. See “Oil and Gas Advisories” 3. Comprised of 650 bbl/d light and medium oil, 74 bbl/d NGL and 1,942 mcf/d natural gas 4. Comprised of 1,157 bbl/d light and medium oil, 38 bbl/d NGL and
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