Tamarack Valley Energy Acquires Additional Clearwater Oil Assets
TSX-listed Tamarack Valley Energy Ltd. has announced strategic acquisitions with Calgary-based Woodcote Petroleum Inc. and an undisclosed, publicly-traded oil & gas company to acquire certain Clearwater oil play assets in Alberta, for a total combined consideration of C$149 million (~US$117.8 million).
Concurrently, Tamarack has also entered into an agreement with royalty and energy infrastructure company Topaz Energy Corp. to sell a 4% gross overriding royalty (GORR) on crude oil production from approximately 45,000 acres of Clearwater and Nipisi area assets for C$13.7 million.
Under the terms of the agreement with Woodcote, Tamarack will acquire 100% of Woodcote in a corporate transaction valued at C$43 million. Woodcote holds a 100% operated interest in certain Clearwater assets located in the Greater Nipisi area of Alberta.
Pursuant to the agreement with the other unnamed seller, Tamarack will acquire working interests in certain properties in the Nipisi and Provost areas of Alberta, for a total purchase consideration of C$106 million.
The assets acquired by Tamarack include approximately 38,400 net acres of Clearwater rights, containing over 166 net drilling locations, with over 105 net locations identified in the Nipisi area. The acreage primarily targets the Provost Sparky low decline medium oil production under waterflood, and the company expects to bring four net Sparky horizontal wells on production in March 2021. Tamarack also plans to bring two additional Clearwater Oil wells on production, with one well currently being drilled.
As of March 1st, 2021, total proven (1P) and proven plus probable (2P) reserves attributable to the assets are 4.3 and 10.9 million barrels of oil equivalent (MMboe), respectively. Production from the assets currently averages approximately 2,800 barrels of oil equivalent per day (boe/d), of which 86% is oil.
“The acquisitions supplement Tamarack’s existing position in the Clearwater fairway and are consistent with our returns-focused strategy to enhance the sustainability and resiliency of the company’s free adjusted funds flow profile with low decline oil production, long reserve life and economic oil weighted drilling inventory,” said Brian Schmidt, President & CEO of Tamarack.
Calgary-based Tamarack is engaged in the acquisition, exploration, development, and production of oil, natural gas and natural gas liquids in Western Canada, with a primary focus on the Cardium and Viking light oil plays in Alberta and Saskatchewan.
The acquisitions are subject to the receipt of regulatory and other approvals, and the satisfaction or waiver of customary closing conditions, and are expected to close by March 25th, 2021.