Tamarack Valley Energy Ltd. is pleased to announce the results of its independent oil and gas reserves evaluation as of December 31, 2016, prepared by GLJ Petroleum Consultants Ltd. summarized below. The reserves evaluation contained herein does not include the impact of the Spur Resources Ltd. acquisition that closed January 11, 2017. Pro-forma reserves details including the new assets from the Viking Acquisition will be made available concurrent with the Company’s year-end 2016 financial and operating results with further details included in the 2016 Annual Information Form, both of which are expected to be issued and filed on March 23, 2017.

Throughout 2016, Tamarack continued to focus on the successful execution of its core strategy and strategic acquisitions generating positive results despite ongoing weakness in commodity prices. The Company achieved strong reserves additions organically due to the success of its drilling program, enhancements to completion techniques and improvements in well performance, all of which contributed to attractive capital efficiencies.  Tamarack’s complementary acquisitions during 2016 at Wilson Creek / Redwater and the low-decline acquired production at Penny further supported the growth profile and contributed to near and longer-term value creation. A successful development program and cost reductions on the Acquired Assets during the latter half of 2016 led to an increase in the net present value of before tax future net revenues discounted at 10% of proved plus probable reserves to approximately $240 million compared to the purchase price paid of $85 million in June of 2016.

The NPVBT10 of Tamarack’s total 2P reserves increased by 61% year over year to $668.8 million, representing $4.55 per fully diluted share. Tamarack delivered 5% growth per fully diluted share in proved developed producing reserves ,and increased its drilling location inventory while maintaining a strong balance sheet. On an absolute basis, the Company’s significant reserves growth includes a 43% increase in PDP, a 34% increase in total proved reserves and a 26% increase in 2P reserves.


  • PDP reserves increased by 43% on an absolute basis and by 5% per fully diluted share.
  • Increased 1P reserves by 34% to 33.4 million boe, and 2P reserves by 26% to 56.5 million boe.
  • Oil and natural gas liquids weighting across all reserves categories increased to approximately 60% compared to 2015 weightings of approximately 50% on PDP, 52% on 1P and 54% on 2P.
  • Significant increases in oil reserves of 85%, 67% and 45% on PDP, 1P and 2P, respectively, over 2015.
  • As a percentage of total 2P reserves, 1P reserves increased from 56% to 59%.
  • Including acquisitions, the Company replaced 322% of production on a 1P basis and 406% on a 2P basis.
  • Maintained a consistent approach to reserves booking, with 1P reserves including only 67 (52.6 net) proved undeveloped horizontal Cardium drilling locations and 2P reserves including only 103 (81.1 net) proved plus probable undeveloped horizontal Cardium drilling locations.
  • Achieved 1P finding and development costs of approximately $14.44/boe and 1P finding, development and acquisition costs of approximately $14.68/boe, both including the change in future development capital.
  • Achieved 2P F&D costs of approximately $7.20/boe and 2P FD&A costs of approximately $11.34/boe, both including the change in FDC.
  • Realized three year average 2P F&D costs of approximately $15.14/boe and 2P FD&A costs of $15.68/boe, both including the change in FDC.
  • Generated a 2P F&D recycle ratio of 2.3 times and a 2P FD&A recycle ratio of 1.5 times using the estimated 2016 operating netback, excluding hedges, of $16.55/boe (unaudited) and a 2P F&D recycle ratio of 3.1 times and a 2P FD&A recycle ratio of 1.9 times using the estimated Q4 2016 operating netback, excluding hedges, of $22.03/boe (unaudited).
  • Increased 2P reserve life index to 15.0 years based on estimated 2016 average production of 10,344 boe/d.


The following tables highlight Tamarack’s 2016 year-end independent reserves assessment and evaluation prepared by GLJ with an effective date of December 31, 2016. The GLJ Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves.

Operational Update

To date in the first quarter of 2017, Tamarack has remained focused on executing its capital program and continues to be on target for expected activity levels and production volumes. Since the start of the year, the Company has brought a total of 15 (13.9 net) new wells on production, including 11 (10.9 net) Viking light oil wells, two net extended reach horizontal Cardium light oil wells, one net Notikewin liquids-rich natural gas well, and one net heavy oil well. Volumes from these new wells are contributing to the Company’s current production of approximately 19,000 boe/d and Tamarack remains on target to meet its first half production guidance range of 18,500 to 19,000 boe/d despite numerous factors negatively impacting field operations thus far in the first quarter. Tamarack has experienced non-operated production curtailments, a third-party gas plant curtailment, earlier than expected road bans due to warm weather and delays due to lack of availability of frack crews required for well completions. The Company has been able to continue to meet production and capital deployment expectations even while faced with multiple headwinds, demonstrating the high-quality nature of Tamarack’s diverse asset base and its ability to efficiently operate and allocate capital and resources.

Based on three rigs currently running and Tamarack’s capital plans for the balance of the first quarter, the Company

anticipates bringing on an additional 15 (12.4 net) Viking wells and four (3.3 net) Cardium wells by the end of March, 2017 contributing to an estimated first quarter 2017 exit production rate of approximately 20,000 boe/d. Into the second quarter, nine (8.9 net) Viking wells and one net Cardium well that were drilled in the first quarter are expected to be brought on production, bolstering the Company’s positive momentum through the first half of 2017.

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