Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (December 2022)
30 slides from Tamarack Valley Energy's investor presentation, December 2022
Slide 1: Creating Sustainable Value
TVE : TSX Creating Sustainable Value December 2022 See Disclaimers and Forward-Looking Statements attached
Slide 2: Corporate Snapshot
Corporate Snapshot Capital Structure Ticker Symbol TVE.TSX Shares Outstanding (MM) 556.9 Market Capitalization ($MM)(1) $2,612 Annual Dividend ($/share)(2) $0.15 Implied Annual Yield(3) 3.2% Production by Capital by Production by Core Area Core Area Commodity Other Other/ Marten Marten Corp Gas Hill
Slide 3: Tamarack: Differentiated Among Oil Producers
Tamarack: Differentiated Among Oil Producers Demonstrated ability to deliver returns to shareholders while adding scale in top tier North American plays The Largest Clearwater Producer – Balance Sheet Strength & Core Holdings in North America's Return of Capital Commitment Most Economic Plays Plan F
Slide 4: 2023 Budget: Disciplined & Balanced Capital Program
2023 Budget: Disciplined & Balanced Capital Program Disciplined • Investing $425MM to $475MM of annual capital Capital Deployment • 2023 average production of 68,000 – 72,000 boe/d(1) (82% liquids) Long-Term • Clearwater wells payout quickly and multiple times over first 5 years on-stream Sustainabi
Slide 5: 2023 Guidance: Investing in Sustainability
2023 Guidance: Investing in Sustainability 2023 Guidance Highlights WTI (US$/bbl) $80.00 • Activity for 2023 will be primarily focused in the Clearwater as TVE continues to develop its expanded core area WTI / MSW Diff (US$/bbl) ($3.00) WTI / WTI Diff (US$/bbl) ($22.00) • Investing in Clearwater and
Slide 6: Capital Structure Provides Financial Flexibility
Capital Structure Provides Financial Flexibility Amortization and Notable Maturities ($MM) $700MM 3-Year • Covenant-based facility provides available capital Sustainability-Linked over the three-year term that is not subject to Covenant Based RCF semi-annual reviews Revolver Term Loan (Maturity Bala
Slide 7: Risk Management – Increasing 2023 Floor Coverage
Risk Management – Increasing 2023 Floor Coverage(1) Enhancing certainty with flexibility to capture upside value Corporate Hedge Coverage (net of Royalty) 75% 80% 71% 64% Systematic Risk Management Production net of Royalty (%) 70% 60% 51% 50% • Hedging coverage underpins revenues 40% 30% • Supports
Slide 8: Return of Capital Program
Return of Capital Program Return of Capital Program Highlights Acquisitions Drive Greater Potential for Return of Capital Increased Base Dividend (Annual $/share) • Low corporate sustaining breakeven price results in Free Funds FFF(1) resilience across the commodity price cycle – Flow(1) provides RO
Slide 9: Updated Return of Capital Framework
Updated Return of Capital Framework Net Debt(1) ($MM) $900 – $1,100 $500 – $900 Calculating Excess Funds Flow @ $500 & Debt Floor (~1.0x @ US$45 WTI)(2) Net Debt(1) to Annualized AFF(1) <1.0x <1.0x Up to 25% Shareholder Returns Adjusted Funds Flow (AFF)(1) (NCIB and/or Enhanced Dividend) Up to 50% S
Slide 10: 5-Year Plan Anchors Long-Term Sustainability
5-Year Plan Anchors Long-Term Sustainability Update to 5-Year Plan to be provided in early 2023 5-Year Plan Overview (2023-2027) (BTAX US$55/bbl WTI & $2.50/GJ AECO)(1) ATAX Free Funds Flow(1,3) Generation E&D $1.8B - $2.0B Capital Spending ($350MM - $380MM/yr) $1,400 Annual Adjusted ATAX Funds Flow
Slide 11: Largest Public Producer in North America’s Top Play
Largest Public Producer in North America’s Top Play North American Payout Period & Half-Cycle Breakeven by Play(1) Focused on 3 of the Top 4 North American Plays 2.5 $70 • Core holdings in plays that: Payout Period Break-Even o Demonstrate repeatable results $60 o Facilitate a portfolio approach to
Slide 12: Clearwater Production Growth
Clearwater Production Growth Industry acceleration in the play lifts total oil production to >100,000 bbl/d Estimated Clearwater Location Inventory Tier 1 CNQ Tier 2 Tamarack is the dominant producer and retains the largest RBY Tier 3 inventory among publicly traded companies HWX TVE internal est. a
Slide 13: Canadian Clearwater Advantage
Canadian Clearwater Advantage Alberta Clearwater demonstrates superior economics Marten Hills Clearwater Value Drivers Marten Hills Clearwater 250 • Higher and faster returns: Marten Hills wells will payout 3x in under two years vs. top quartile Delaware Payout 1 which take approximately five years
Slide 14: Significant Clearwater Holdings: 752 Net Sections
Significant Clearwater Holdings: 752 Net Sections 2023E Production Land Peavine / Seal: Oil Gas NGL Total Net Delineation program in 2023 bbl/d mcf/d bbl/d boe/d Sections Marten Hills 14,133 4,900 110 15,060 96.9 Nipisi / West Marten Hills 14,020 5,425 76 15,000 253.4 South Clearwater 5,800 - - 5,80
Slide 15: Marten Hills: Developing Top Tier Acreage in the Core
Marten Hills: Developing Top Tier Acreage in the Core Marten Hills TVE 05-25 Pad • 2023 Activity: Drilling 39 net wells and converting 4 existing wells to injection Peak Monthly Rate: 350– 430 bopd • Area Activity: Over 500 industry wells drilled in the region that provide confidence in future devel
Slide 16: Nipisi & West Marten Hills: Enhancing Inventory
Nipisi & West Marten Hills: Enhancing Inventory Focusing on top tier lands in support of long-term sustainable development West Marten Hills • 2023 Activity: Drilling 28 net wells; >50% set to accommodate future waterflood 2023 TVE Nipisi Pipeline • Area Activity: Peers delineating multiple sands to
Slide 17: Nipisi EOR Design
Nipisi EOR Design Substantial fairway delineated and ready for development Trident Pattern EOR Pilot Potential EOR Development Area Nipisi EOR Production 700 100/14-19-076-07W5/00 Primary Injection 102/13-19-076-07W5/00 WF 600 Start 500 Oil (bbl/d) 400 T76 300 200 100 ----- Waterflood Area - ----- T
Slide 18: Southern Clearwater: Substantial Delineated Inventory
Southern Clearwater: Substantial Delineated Inventory Scalable development provides capital deployment flexibility across the asset portfolio Southern Clearwater • 2023 Activity: Drilling 11 net wells and initiating Jarvie waterflood pilot T65 • Area Activity: As the dominant area producer, TVE can
Slide 19: Charlie Lake Development
Charlie Lake Development Continuing to increase our presence with added lands & prolific wells Recent Charlie Lake M&A • 2023 Activity: Drilling 19 net wells and initiating Saddle Hills waterflood pilot • New Strategic Infrastructure: Construction of the new Tamarack owned and T78 operated Wembley g
Slide 20: Charlie Lake Execution & Economics
Charlie Lake Execution & Economics Delivering top tier results with wells paying out in <1 year Well Payout Periods 1.4 Base Case Type Curve Tamarack operates 16 of the top 25 Charlie Lake wells 1.2 Top Quartile Type Curve Since acquiring Anegada Tamarack has drilled ~30 wells 1.0 Base Case + 10% We
Slide 21: 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: • $700MM covenant-based revolving sustainability-linked lending facility (SLL) with a lending syndicate • $300MM n
Slide 22: Tamarack Sustainability Results
Tamarack Sustainability Results Emissions Intensity Indigenous Engagement GHG Emissions Intensity Workforce Metrics 45 41.40 25% 300 6% 40 2.12 37.53 decrease over 3.48% 4.43% Indigenous Workforce Participation (%) 2020 baseline Emissions Intensity (kg CO2e/boe) 33.58 32.96 3.43 250 from 2020 base
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: Deltastream Acquisition: Enhancing Clearwater Scale
Deltastream Acquisition: Enhancing Clearwater Scale Enhances • 2023 estimated production of 23 Mboe/d(1) in the most economic play in North America Clearwater Asset • Adds 184 net sections of core Clearwater acreage at Marten Hills, Nipisi and Canal Quality and Scale • Asset level free funds flow br
Slide 26: 2023 Budget Price Sensitivities
2023 Budget Price Sensitivities 2023 Commodity Price Sensitivity (Hedged) WTI (+/- US$2.00/bbl) +/- $27MM WCS Differential (+/- US$1.00/bbl) +/- $9MM FX (+/- CAD/USD $0.01) +/- $6MM AECO (+/- $0.25/GJ) +/- $4MM MSW Differential (+/- US$0.50/bbl) +/- $3MM -$30 -$20 -$10 $0 $10 $20 $30 ATAX Annual Fun
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 Lynne Chrumka VP Exploration KPMG LLP Christine
Slide 28: 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 29: Disclaimers (Oil and Gas Advisories)
Disclaimers (Oil and Gas Advisories) Reserves Disclosure 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 a
Slide 30: 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
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