Current TVE:CA Stock Info

Tamarack Valley reports production growth and earnings of $2.3 million in the first quarter

Calgary-based Tamarack Valley Energy (ticker: TVE) announced its first quarter results Monday reporting more production along with earnings of $2.3 million following its combination with Spur Resources in January.

The acquisition increased the company’s oil-weighted production, causing funds flow netback per BOE to increase by 5% sequentially, according to the company. Production for the quarter averaged 17.8 MBOEPD, up 55% from fourth quarter 2016 and up 86% from the first quarter of last year.

Total funds from operations increased 141% to $32.4 million in Q1’17 ($0.15 per share basic and diluted), excluding transaction costs, from $11.1 million in Q1’16 ($0.11 per share basic and diluted), and increased 58% compared to Q4’16. Production expense fell 6% per BOE quarter-over-quarter, which, combined with the improved funds flow per BOE, helped the company achieve earnings of $2.3 million in the first quarter compared to a $5.8 million loss in the first quarter of last year.

In April 2017, production averaged over 20 MBOEPD (58% liquids), Tamarack Valley said in its quarterly earnings release. Production averaged 47% for the entire quarter, up 2% from the fourth quarter of last year.

Tamarack Valley Energy drilling inventory of wells with payback of less than 1.5 years

Tamarack Valley planning an active second-half drilling program in the Viking

The Viking light oil assets Tamarack Valley acquired as part of the Spur deal played a major role in the higher production this quarter, and TVE plans to drill on the new assets actively during the second half of this year. Base production from the Viking assets averaged 6.1 MBOEPD from the closing date to the end of the first quarter, while Tamarack’s Viking drilling program added 0.4 MBOEPD of average production over the same period.

Tamarack Vice President Finance and CFO Ron Hozjan told Oil & Gas 360® that the company’s record first quarter activity was setting the stage for an even more active second half of the year.

“We’re currently testing a few concepts in the Viking from testing reduced well spacing to re-orientating the direction of our wells,” Hozjan said. Tamarack believes that by reducing its well spacing to 100-150 meters from its current 200 meters, the company will be able to add 100-200 well locations to its drilling inventory.

Tamarack Valley Energy Veteran Viking oil assets overview

TVE is concentrating on locations that offer payout in 1.5 years or less. The company calculates it has 759 potential drilling locations in that category across all of its acreage, according to the company’s investor presentation.

Tamarack has begun to adjust capital spending to the bottom end of its 2017 guidance range of $165 to $175 million and due to recent instability in oil prices, and will adjust further if WTI prices fall below $45 per barrel, the company said in its earnings report. The company still expects full-year 2017 average production to remain between 19 MBOEPD and 20 MBOEPD, with a forecast exit production rate of 21 MBOEPD.

Through the second half of 2017, the company plans to drill and complete eight Cardium wells and three Mannville wells at Wilson Creek, and 44 extended reach horizontal wells at Veteran and Milton. Tamarack continues to be on target to achieve 7% – 9% production per share growth (Q4’17 over Q4’16), while keeping debt to Q4’17 annualized funds flow from operations at 1.0x, the company said in its release.

Tamarack Valley Energy in Boston

Tamarack Valley Energy’s management team will be in Boston May 25 to meet with investors. Institutional investors interested in meeting with management may contact EnerCom to schedule a meeting.

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