Tamarack Valley Energy (ticker: TVE) is a rate-of-return focused Canadian E&P operating in the Western Canadian Sedimentary Basin.
The company is currently targeting the Viking and Cardium in Alberta and Saskatchewan, each of which offers significant light oil potential. The company is primarily focused on the Viking, where Tamarack drilled 45 wells in Q3.
The company is also ahead of its growth schedule, as Tamarack recently announced it is producing 25 MBOEPD based on field estimates. This outperformance has led Tamarack to increase production guidance for both 2018 and 2019, the company now expects to produce an average of 24.3 MBOEPD in 2018 and 26 MBOEPD in 2019.
Unlike many Permian E&P companies, Tamarack did not also increase expected CapEx when updating guidance but continues to expect $227 million in spending in the year. Tamarack’s capital spending is fully funded by its adjusted operating field netback in both this year and 2018.
TD Securities initiated coverage of Tamarack today, stating in its announcement that “Tamarack Valley Energy Ltd is an intermediate Canadian E&P focused on light oil development in Alberta and Saskatchewan. The company’s assets are predominately located in the Viking (AB and SK) and Cardium (AB) plays which together account for ~90% of total corporate production. TVE’s strengths include a top-tier cost structure which drives excellent corporate netbacks, a strong sustainability profile, a very clean balance sheet and solid liquidity, and a management team that has a demonstrated track record. Importantly, we also believe the company’s main core growth asset in the Alberta Viking is underappreciated by the market, in spite of the progressive growth and economic improvement since being acquired in early 2017.”
