Tamarack Valley Energy Acquires Clearwater Oil Properties in Alberta
TSX-listed Tamarack Valley Energy Ltd. has announced two strategic acquisitions with privately-held Woodcote Oil Corp. and Calgary-based Highwood Oil Company Ltd. to acquire certain Clearwater oil play assets in in Alberta, for a combined consideration of C$90 million (~US$70.5 million).
Under the terms of the agreements, Tamarack will acquire 100% of Woodcote in a corporate transaction valued at C$49.2 million. Woodcote holds a 50% operated interest in certain Clearwater assets located in the Greater Nipisi area of Alberta.
Pursuant to the agreement with Highwood Oil, Tamarack will acquire Highwood’s 50% working interest in the Greater Nipisi area assets, plus a 50-100% working interest in certain Jarvie area assets in Alberta, for a total purchase consideration of C$40.8 million. Upon closing, Tamarack will control and operate 100% of the Greater Nipisi area assets.
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 a select portion of the acquired assets for C$16 million.
The assets acquired by Tamarack include ~107,000 net acres of Clearwater rights, containing over 400 net future drilling locations identified by management, including over 300 locations in the Greater Nipisi area. Planned development on the area is expected to increase production from the assets to 4,500 to 5,500 bbl/d in Q4-2021, through capital investments of approximately C$55 million. As of December 31st, 2019, total proven plus probable (2P) reserves attributable to the assets were 6.5 million barrels of oil equivalent (MMboe), with current oil production of approximately 2,000 barrels per day (bbls/d).
“The assets are complementary to Tamarack’s strengths in execution and recovery improvement. The assets also complement our expanding waterflood production in Veteran and boost the Company’s free adjusted funds flow over the next several years,” said Brian Schmidt, President & CEO of Tamarack.
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 December 21st, 2020.
Peters & Co. and National Bank Financial are acting as advisors to Tamarack with respect to the two acquisitions and the GORR disposition.