Welcome!

News Feed Item

Tamarack Valley Energy Ltd. Announces Record Second Quarter Financial and Operating Results and an Increase in Guidance

CALGARY, ALBERTA -- (Marketwired) -- 08/11/14 -- Tamarack Valley Energy Ltd. (TSX VENTURE: TVE) ("Tamarack" or the "Company") is pleased to announce record quarterly cash flow from operations and production results. With the success of Tamarack's first half drilling program, well results being ahead of budget, and the strength of cash flow the Company has increased the 2014 capital program by $24 million to $116 million resulting in a 12% increase to exit guidance and a 6% increase to the second half 2014 production guidance.

Second Quarter 2014 Highlights


--  Record funds from operations of $17.8 million ($0.29 per share on a
    diluted basis), a 32% increase and 16% per share increase from $13.4
    million ($0.25 per share on a diluted basis) in Q1 2014
--  Record production of 5,203 boe/d in Q2 2014, a 24% increase from 4,182
    boe/d and a 8% production per share increase over Q1 2014
--  Record operating field netbacks of $45.05/boe in Q2 2014, up from
    $43.98/boe in Q1 2014
--  Oil and liquids weighting increase to 61% in Q2 2014 from 56% in Q1 2014
--  Record quarter of drilling activity, including 4 (3.7 net) Cardium wells
    in the greater Pembina area, 11 (9.3 net) Viking oil wells in Redwater
    and 4 (4.0 net) heavy oil wells in Hatton
--  Exited the quarter with production averaging over 6,000 boe/d during the
    last week of June, excluding seven wells drilled in Q2 2014 and expected
    to be on production in Q3 2014

First Half 2014 Highlights

Tamarack's record quarter is the result of a very successful first half drilling program which saw the Company drill 10 net Cardium oil wells, 14 net Viking oil wells and 4 net heavy oil wells. During the first half of the year Tamarack's production averaged 4,696 boe/d, in-line with first half 2014 guidance of 4,700 boe/d, despite having an average of 296 boe/d of production shut-in due to facility curtailments or restrictions and unscheduled third party facility downtime. Production rates benefited from Cardium and Viking results that exceeded budget expectations. Additionally, due to favorable spring break up conditions, Tamarack was able to accelerate its planned second half drilling program for no additional cost, including the 2014 Viking oil drilling program, which is now one full quarter ahead of our prior budget.

Increased Guidance

As a result of strong first half results, Tamarack is pleased to announce that the Company's board of directors has approved an increase to the 2014 capital budget to $116 million from $90-92 million resulting in the following guidance revisions:


--  Second half of 2014 estimated production rate increased to 6,624 boe/d
    (approximately 59-61% liquids) from 6,250 boe/d.
--  2014 estimated average production rate increased to 5,500 to 5,700 boe/d
    (approximately
    59-61% liquids) from 5,300 to 5,500 boe/d.
--  2014 estimated exit production rate of between 7,300 to 7,500 boe/d
    (approximately 58-61% liquids) from 6,500 to 6,700 boe/d.
--  2014 estimate for cash flow from operations of between $74 to $77
    million, assuming a second half of 2014 Edmonton par price average of
    $91.50/bbl and AECO average of $4.00/GJ.
--  Estimated 2014 year end debt to annualized fourth quarter of 2014 cash
    flow from operations of less than 0.9 times.

Tamarack has filed its unaudited condensed consolidated interim financial statements as at June 30, 2014 and for the three and six months ended June 30, 2014 and 2013 ("Financial Statements") and management's discussion and analysis ("MD&A") on SEDAR. Selected financial and operational information is outlined below and should be read in conjunction with the Financial Statements, which were prepared in accordance with International Financial Reporting Standards ("IFRS"), and the related MD&A. These documents are accessible on Tamarack's website at www.tamarackvalley.ca or on SEDAR at www.sedar.com.

Financial & Operating Results



----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                              Three months ended
                                                   June 30,
----------------------------------------------------------------------------
                                           2014             2013   % change
----------------------------------------------------------------------------
($, except share numbers)
Total Revenue                        32,322,265       15,829,768        104
Funds from operations (1)            17,789,622        8,823,188        102
  Per share - basic (1)          $         0.29  $          0.30         (3)
  Per share - diluted (1)        $         0.29  $          0.30         (3)
Net income (loss)                     5,242,572          (59,585)     8,898
  Per share - basic              $         0.09  $         (0.00)         -
  Per share - diluted            $         0.08  $         (0.00)         -
Net debt (2)                        (59,489,653)     (56,648,969)         5
Capital Expenditures (3)             40,742,269       13,056,631        212
----------------------------------------------------------------------------
Weighted average shares
 outstanding
  Basic                              60,352,255       29,706,752        103
  Diluted                            62,079,457       29,706,752        109
----------------------------------------------------------------------------
Share Trading
High                             $         6.86  $          2.45        180
Low                              $         5.10  $          1.74        193
Trading volume                       28,344,806        4,518,332        527
----------------------------------------------------------------------------
Average daily production
  Crude oil and NGLs (bbls/d)             3,197            1,702         88
  Natural gas (mcf/d)                    12,033            7,125         69
  Total (boe/d)                           5,203            2,890         80
----------------------------------------------------------------------------
Average sale prices
  Crude oil and NGLs ($/bbl)              94.65            87.09          9
  Natural gas ($/mcf)                      4.37             3.61         21
  Total ($/boe)                           68.27            60.21         13
----------------------------------------------------------------------------
Operating netbacks ($/boe) (4)
  Average realized sales                  68.27            60.21         13
  Royalty expenses                        (8.87)           (7.14)        24
  Production expenses                    (14.35)          (12.88)        11
----------------------------------------------------------------------------
  Operating field netback                 45.05            40.19         12
  Realized commodity hedging loss         (3.58)           (0.92)       291
----------------------------------------------------------------------------
  Operating netback                       41.47            39.27          6
----------------------------------------------------------------------------
Funds flow from operations
 netback ($/Boe) (4)                      37.58            33.56         12
----------------------------------------------------------------------------
----------------------------------------------------------------------------



----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                 Six months ended
                                                   June 30,
----------------------------------------------------------------------------
                                           2014             2013    % change
----------------------------------------------------------------------------
($, except share numbers)
Total Revenue                        56,820,520       28,752,647          98
Funds from operations (1)            31,234,785       15,828,760          97
  Per share - basic (1)          $         0.55  $          0.53           4
  Per share - diluted (1)        $         0.54  $          0.53           2
Net income (loss)                     7,033,253          237,261       2,864
  Per share - basic              $         0.12  $          0.01       1,100
  Per share - diluted            $         0.12  $          0.01       1,100
Net debt (2)                        (59,489,653)     (56,648,969)          5
Capital Expenditures (3)             65,754,315       24,839,929         165
----------------------------------------------------------------------------
Weighted average shares
 outstanding
  Basic                              56,471,970       29,706,752          90
  Diluted                            57,910,218       29,706,752          95
----------------------------------------------------------------------------
Share Trading
High                             $         6.86  $          2.80         145
Low                              $         3.59  $          1.74         106
Trading volume                       70,756,507        8,901,771         695
----------------------------------------------------------------------------
Average daily production
  Crude oil and NGLs (bbls/d)             2,768            1,577          76
  Natural gas (mcf/d)                    11,565            7,310          58
  Total (boe/d)                           4,696            2,795          68
----------------------------------------------------------------------------
Average sale prices
  Crude oil and NGLs ($/bbl)              94.05            84.81          11
  Natural gas ($/mcf)                      4.64             3.43          35
  Total ($/boe)                           66.86            56.82          18
----------------------------------------------------------------------------
Operating netbacks ($/boe) (4)
  Average realized sales                  66.86            56.82          18
  Royalty expenses                        (8.43)           (6.58)         28
  Production expenses                    (13.86)          (12.86)          8
----------------------------------------------------------------------------
  Operating field netback                 44.57            37.38          19
  Realized commodity hedging loss         (3.53)           (0.49)        620
----------------------------------------------------------------------------
  Operating netback                       41.04            36.89          11
----------------------------------------------------------------------------
Funds flow from operations
 netback ($/Boe) (4)                      36.75            31.28          17
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:
(1) Funds from operations is calculated as cash flow from operating
    activities before the change in non-cash working capital and
    abandonment.

(2) Net debt does not have any standard meaning prescribed by IFRS and
    therefore may not be comparable with the calculation of similar measures
    for other entities. Net debt includes accounts receivable, prepaid
    expenses and deposits, bank debt and accounts payable and accrued
    liabilities, but excludes the fair value of financial instruments.

(3) Capital expenditures include property acquisitions and are presented net
    of disposals, but exclude corporate acquisitions.

(4) Operating netback and funds flow from operations netback does not have
    any standardized meaning prescribed by IFRS and therefore may not be
    comparable with the calculation of similar measures for other entities.
    Operating netback equals total petroleum and natural gas sales including
    realized gains and losses on commodity derivative contracts less
    royalties and operating costs calculated on a boe basis. Funds flow from
    operations netback equals funds flow from operations divided by the
    total sales volume and reported on a per boe basis. Tamarack considers
    operating netback and funds flow from operations netback as an important
    measure to evaluate its operational performance as it demonstrates its
    field level profitability relative to current commodity prices.

Operations Update

Tamarack has continued to accelerate its rate of growth, drilling more wells in the first half of 2014 than all of 2013. In the first half of 2014, Tamarack drilled 13 (10 net) Cardium oil wells, 16 (14 net) Viking oil wells, 4 net heavy oil wells and 1 net disposal well in Hatton. Of the 10 net Cardium oil wells drilled in 2014, the Company estimates 5.45 net wells added new reserves and Tamarack has earned 5.75 net sections of the previously announced 177 gross (113 net) section farm-in with an industry major. During the first ten months of the three-year farm-in agreement, the Company has fulfilled approximately 39% of the drilling commitment, well ahead of expectations.

The Company was also active adding to its approximate eight years of drilling inventory by acquiring or farming-in on an additional 14.5 (9.1 net) sections of undeveloped acreage on lands in the greater Pembina area. In all, Tamarack has added 29.8 net Cardium drilling locations to its inventory which now sits at 182.5 net low risk horizontal Cardium locations. The Company's undeveloped acreage was 198,477 acres at the end of the second quarter of 2014.

During the third quarter, Tamarack plans to bring on production seven wells that were drilled in the second quarter, 1 net Cardium oil well in the Wilson Creek area, 2 (1.7 net) Cardium oil wells in the Blue Rapids area and 4 (2.3 net) Viking oil wells in the Redwater area. The Company also has drilled the first of 4 net wells in the Wilson Creek area and is planning on drilling 3 net heavy oil wells in Hatton.

Bank Syndicate in Place

On August 7, 2014, the Company executed a new credit facility with a syndicate of Canadian chartered banks. The new facility consists of a revolving credit facility in the amount of $100,000,000 and a $10,000,000 operating facility (collectively the "Facility"). The Facility lasts for a 364 day period and will be subject to its next 364 day extension by May 30, 2015. If not extended, the facility will cease to revolve and all outstanding balances will become repayable in one year from that extension date.

About Tamarack Valley Energy Ltd.

Tamarack is an oil and gas exploration and production company committed to long-term growth and the increased identification, evaluation and operation of resource plays in the Western Canadian sedimentary basin. Tamarack's strategic direction is focused on two key principles - targeting resource plays that provide long-life reserves, and using a rigorous, proven modeling process to carefully manage risk and identify opportunities. The Company recently expanded its inventory of low-risk development oil locations in the Redwater Viking play through the acquisition of Sure Energy Inc. While continuing to build on its sustainable growth platform, Tamarack also increased its low-risk development locations within the Cardium fairway through a farm-in agreement with an industry major. These endeavors add to Tamarack's strong resource portfolio, including Cardium properties at Lochend, Garrington and Buck Lake and heavy oil properties in Saskatchewan. With a balanced portfolio, and an experienced and committed management team, Tamarack intends to continue to deliver on its promise to increase its production and maximize shareholder return.

In April 2014, Tamarack was honored as one of the TSX Venture 50. The TSX Venture 50 is a ranking of the strongest performing TSX Venture companies in 2013 and is assessed on the basis of a combination of share price appreciation, trading volumes, change in market capitalization and analyst coverage. The index is comprised of ten companies from each of five sectors: Clean Technology, Oil and Gas, Diversified Industries, Mining, and Technology & Life Sciences.

Abbreviations


bbl       barrel
bbls/d    barrels per day
boe/d     barrels of oil equivalent per day
mcf       thousand cubic feet
mcf/d     thousand cubic feet per day

Unit Cost Calculation

For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators' National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Boe's may be misleading, particularly if used in isolation.

Forward-Looking Information

This press release contains certain forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "potential", "intend", "objective", "continuous", "ongoing", "encouraging", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. More particularly, this press release contains statements concerning Tamarack's future drilling plans and operations, estimated average and exit production rates in 2014 and expectations regarding the addition of reserves through drilling. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Tamarack relating to prevailing commodity prices, the availability of drilling rigs and other oilfield services, the timing of past operations and activities in the planned areas of focus, the drilling, completion and tie-in of wells being completed as planned, the performance of new and existing wells, the application of existing drilling and fracturing techniques, the continued availability of capital and skilled personnel, the ability to maintain or grow the banking facilities and the accuracy of Tamarack's geological interpretation of its drilling and land opportunities. Although management considers these assumptions to be reasonable based on information currently available to it, undue reliance should not be placed on the forward-looking statements because Tamarack can give no assurances that they may prove to be correct.

Also included in this press release are estimates of Tamarack's 2014 cash flow from operations and 2014 year end debt to annualized fourth quarter of 2014 cash flow from operations, which are based on the assumptions as to production levels, capital expenditures and commodity pricing disclosed in this press release. To the extent that such estimates constitute a financial outlook within the meaning of applicable securities laws, they were approved by management of Tamarack on August 11, 2014 and are included to provide readers with an understanding of Tamarack's anticipated cash flow based on the capital expenditure and other assumptions described herein. Readers are cautioned that the information may not be appropriate for other purposes. The actual results of Tamarack will likely vary from the amounts set forth in the financial outlook and such variation may be material.

By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures); commodity prices; the uncertainty of estimates and projections relating to production, cash generation, costs and expenses; health, safety, litigation and environmental risks; and access to capital. Due to the nature of the oil and natural gas industry, drilling plans and operational activities may be delayed or modified to react to market conditions, results of past operations, regulatory approvals or availability of services causing results to be delayed. Please refer to Tamarack's Annual Information Form ("AIF") dated March 13, 2014 for additional risk factors relating to Tamarack. The AIF is available for viewing under the Company's profile on www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Tamarack Valley Energy Ltd.
Brian Schmidt
President & CEO
403.263.4440

Tamarack Valley Energy Ltd.
Ron Hozjan
VP Finance & CFO
403.263.4440
www.tamarackvalley.ca

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
"With Digital Experience Monitoring what used to be a simple visit to a web page has exploded into app on phones, data from social media feeds, competitive benchmarking - these are all components that are only available because of some type of digital asset," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Secure Channels, a cybersecurity firm, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Secure Channels, Inc. offers several products and solutions to its many clients, helping them protect critical data from being compromised and access to computer networks from the unauthorized. The company develops comprehensive data encryption security strategie...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
Vulnerability management is vital for large companies that need to secure containers across thousands of hosts, but many struggle to understand how exposed they are when they discover a new high security vulnerability. In his session at 21st Cloud Expo, John Morello, CTO of Twistlock, will address this pressing concern by introducing the concept of the “Vulnerability Risk Tree API,” which brings all the data together in a simple REST endpoint, allowing companies to easily grasp the severity of t...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
The goal of Continuous Testing is to shift testing left to find defects earlier and release software faster. This can be achieved by integrating a set of open source functional and performance testing tools in the early stages of your software delivery lifecycle. There is one process that binds all application delivery stages together into one well-orchestrated machine: Continuous Testing. Continuous Testing is the conveyer belt between the Software Factory and production stages. Artifacts are m...
Connecting to major cloud service providers is becoming central to doing business. But your cloud provider’s performance is only as good as your connectivity solution. Massive Networks will place you in the driver's seat by exposing how you can extend your LAN from any location to include any cloud platform through an advanced high-performance connection that is secure and dedicated to your business-critical data. In his session at 21st Cloud Expo, Paul Mako, CEO & CIO of Massive Networks, wil...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Cloud adoption is often driven by a desire to increase efficiency, boost agility and save money. All too often, however, the reality involves unpredictable cost spikes and lack of oversight due to resource limitations. In his session at 20th Cloud Expo, Joe Kinsella, CTO and Founder of CloudHealth Technologies, tackled the question: “How do you build a fully optimized cloud?” He will examine: Why TCO is critical to achieving cloud success – and why attendees should be thinking holistically ab...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
Cloud resources, although available in abundance, are inherently volatile. For transactional computing, like ERP and most enterprise software, this is a challenge as transactional integrity and data fidelity is paramount – making it a challenge to create cloud native applications while relying on RDBMS. In his session at 21st Cloud Expo, Claus Jepsen, Chief Architect and Head of Innovation Labs at Unit4, will explore that in order to create distributed and scalable solutions ensuring high availa...
SYS-CON Events announced today that App2Cloud will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. App2Cloud is an online Platform, specializing in migrating legacy applications to any Cloud Providers (AWS, Azure, Google Cloud).
In his session at @DevOpsSummit at 20th Cloud Expo, Kelly Looney, director of DevOps consulting for Skytap, showed how an incremental approach to introducing containers into complex, distributed applications results in modernization with less risk and more reward. He also shared the story of how Skytap used Docker to get out of the business of managing infrastructure, and into the business of delivering innovation and business value. Attendees learned how up-front planning allows for a clean sep...