Tamarack Valley Energy Acquires Anegada Oil
TSX-listed Tamarack Valley Energy Ltd. has entered into a definitive agreement to acquire 100% of Calgary-based Anegada Oil Corp., for a total consideration of C$526 million (~US$420 million) including the assumption of debt. Anegada holds interests in certain Charlie Lake oil assets in Alberta.
Concurrently, Tamarack has also entered into an agreement with royalty and energy infrastructure company Topaz Energy Corp. to sell a 2% gross overriding royalty (GORR) on the assets acquired as part of the Anagada transaction, for C$32 million.
Under the terms of the agreement, Tamarack will acquire 100% of Anegada in exchange for an initial cash consideration of C$31.5 million and an additional ~C$246.5 million payable via the issuance of 105,341,880 shares of Tamarack common stock valued at a deemed price of CAD2.34 per share. In addition, Tamarack will also assume C$248 million of existing net debt, resulting in an implied total transaction value of approximately C$526 million on an enterprise value basis.
The acquired assets include approximately 321.2 net sections of Charlie Lake lands, containing over 200 net drilling locations. Anegada’s assets also include ownership interests in four gas plants, nine operated multi-well batteries, four operated oil satellites, and around 260 km of pipeline infrastructure. Effective June 1st, 2021, total proved plus probable (2P) reserves attributable to the company’s assets is 40.1 million barrels of oil equivalent (MMboe), and production currently averages approximately 11,800 barrels of oil equivalent per day (boe/d), of which 71% is oil/liquids.
“Our shareholders indicated a desire to be a part of a larger high-quality entity with greater free cash flow. We see the combination of the Clearwater and Charlie Lake oil plays providing Tamarack with top decile inventory with significant free cash flow growth and yield potential,” said M. Brandon Swertz, President & CEO of Anegada.
“The Acquisition will provide Tamarack with a material position in the Charlie Lake, one of the leading oil plays in North America. Our strategic portfolio approach of investing in high impact oil plays, combined with a focus on decline mitigation through our waterflood assets enhances corporate free cash flow sustainability and resiliency,” added 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.
RBC Capital Markets and CIBC World Markets are acting as financial advisors to Tamarack, while National Bank Financial is advising Anegada on the deal.
The transaction, which is subject to the receipt of regulatory and other approvals, including the approval of the TSX and the Commissioner of Competition pursuant to the Competition Act (Canada), is expected to close by May 31st.