Tamarack Valley Energy Ltd. Announces 2014 First Quarter Financial
Results, Operational Update and a Record Production Rate in April
2014
CALGARY, ALBERTA--(Marketwired - May 1, 2014) - Tamarack Valley
Energy Ltd. (TSX-VENTURE:TVE) ("Tamarack" or the "Company") is
pleased to announce record corporate production, as a result of the
successful first quarter 2014 drilling program. Current production
is 4,967 boe/d, based on field estimates, with additional behind
pipe production (wells already drilled and completed awaiting
permanent facilities or temporarily restricted by facilities) of
approximately 515 boe/d. With a portion of the behind pipe
production and risked production from wells expected to be fracture
stimulated during the rest of the second quarter, Tamarack
reiterates its original average production forecast of 4,700 boe/d
during the first half of 2014 and reiterates its annual average
production between 5,300 and 5,500 boe/d for 2014.
During the first quarter of 2014, Tamarack focused on pad
drilling operations in Garrington and on farm-in lands in greater
Pembina area. These pad drilling operations will reduce drilling
costs and allow Tamarack to perform "tandem" fracture stimulation
operations that contribute to improved capital efficiencies. The
Company enjoyed a record first quarter of activity, and because
spring break-up was delayed into April, Tamarack was able to drill
17 (14.0 net) wells during the first four months of 2014. No wells
drilled in the first quarter contributed any production during the
first quarter. During the month of April, the Company brought on 10
(7.2 net) Cardium and Viking wells. The majority of the remaining 7
(6.8 net) wells drilled in the first quarter are to be brought on
production in the second quarter.
Tamarack has filed its unaudited condensed consolidated interim
financial statements for the three months ended March 31, 2014
("Financial Statements") and management's discussion and analysis
("MD&A") on SEDAR. Selected financial and operational
information is outlined below and should be read in conjunction
with the Financial Statements, which were prepared in accordance
with International Financial Reporting Standards ("IFRS"), and the
related MD&A. These documents are accessible on Tamarack's
website at www.tamarackvalley.ca or on SEDAR at www.sedar.com.
First Quarter 2014 Results
Tamarack is pleased to announce its first quarter financial and
operational highlights as follows:
- Production increased by 55% to 4,182 boe/d (56% oil and NGLs)
in Q1/14 compared to Q1/13.
- Funds from operations increased by 28% to $13.4 million in
Q1/14, compared to $10.5 million in Q4/13 and increased by 92%
compared to $7.0 million in Q1/13.
- Cash flow per share increased by 8% quarter over quarter to
$0.26/share in Q1/14 compared to $0.24/share in Q4/13
- Field operating netbacks increased by 16% to $43.98/boe in
Q1/14 from $37.77/boe in Q4/13.
- A record quarter of drilling activity: drilled 6 (4.8 net)
Cardium wells in the greater Pembina area, 3 (1.5 net) Cardium
wells in Garrington, and 5 (4.7 net) Viking oil wells in
Redwater.
Financial & Operating Results
|
Three months ended March 31 |
|
2014 |
|
2013 |
|
% change |
|
| ($, except share numbers) |
|
|
|
|
|
|
|
|
| Total Revenue |
|
24,498,255 |
|
|
12,922,879 |
|
90 |
|
| Funds from operations 1 |
|
13,445,163 |
|
|
7,005,572 |
|
92 |
|
|
Per share - basic 1 |
$ |
0.26 |
|
$ |
0.24 |
|
8 |
|
|
Per share - diluted 1 |
$ |
0.25 |
|
$ |
0.24 |
|
4 |
|
| Net income |
|
1,790,681 |
|
|
296,846 |
|
503 |
|
|
Per share - basic |
$ |
0.03 |
|
$ |
0.01 |
|
200 |
|
|
Per share - diluted |
$ |
0.03 |
|
$ |
0.01 |
|
200 |
|
| Net debt 2 |
|
(37,130,296 |
) |
|
(81,764,155 |
) |
(55 |
) |
| Capital Expenditures 3 |
|
25,012,046 |
|
|
11,783,298 |
|
112 |
|
| Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
52,546,496 |
|
|
29,706,752 |
|
77 |
|
|
Diluted |
|
53,646,513 |
|
|
29,706,752 |
|
81 |
|
| Share Trading |
|
|
|
|
|
|
|
|
|
High |
$ |
6.08 |
|
$ |
2.80 |
|
117 |
|
|
Low |
$ |
3.59 |
|
$ |
2.00 |
|
80 |
|
|
Trading volume |
|
42,411,701 |
|
|
4,383,439 |
|
868 |
|
| Average daily production |
|
|
|
|
|
|
|
|
|
Crude oil and NGLs (bbls/d) |
|
2,333 |
|
|
1,452 |
|
61 |
|
|
Natural gas (mcf/d) |
|
11,093 |
|
|
7,496 |
|
48 |
|
|
Total (boe/d) |
|
4,182 |
|
|
2,701 |
|
55 |
|
| Average sale prices |
|
|
|
|
|
|
|
|
|
Crude oil and NGLs ($/bbl) |
|
93.23 |
|
|
82.11 |
|
14 |
|
|
Natural gas ($/mcf) |
|
4.93 |
|
|
3.25 |
|
52 |
|
|
Total ($/boe) |
|
65.09 |
|
|
53.16 |
|
22 |
|
| Operating netbacks ($/boe) 4 |
|
|
|
|
|
|
|
|
|
Average realized sales |
|
65.09 |
|
|
53.16 |
|
22 |
|
|
Royalty expenses |
|
(7.86 |
) |
|
(5.96 |
) |
32 |
|
|
Production expenses |
|
(13.25 |
) |
|
(12.84 |
) |
3 |
|
|
Operating field netback |
|
43.98 |
|
|
34.36 |
|
28 |
|
|
Realized commodity hedging loss |
|
(3.46 |
) |
|
(0.02 |
) |
14,898 |
|
|
Operating netback |
|
40.52 |
|
|
34.34 |
|
18 |
|
| Funds flow from operations netback ($/Boe) 1 |
|
35.72 |
|
|
28.82 |
|
24 |
|
|
| Notes: |
| 1 |
Funds
from operations is calculated as cash flow from operating
activities before the change in non-cash working capital and
abandonment. |
| 2 |
Working capital (deficiency) includes accounts receivable, prepaid
expenses and deposits, bank debt and accounts payable and accrued
liabilities, but exclude the future value of financial
instruments. |
| 3 |
Capital expenditures include property acquisitions and are
presented net of disposals, but exclude corporate
acquisitions. |
| 4 |
"Operating netback" does not have any standardized meaning
prescribed by IFRS and therefore may not be comparable with the
calculation of similar measures for other entities. Operating
netback equals total petroleum and natural gas sales including
realized gains and losses on commodity derivative contracts less
royalties and operating costs calculated on a boe basis. Tamarack
considers operating netback an important measure to evaluate its
operational performance as it demonstrates its field level
profitability relative to current commodity prices. |
Operations
Update
The first four
months of 2014 was the most active drill program in the history of
the Company. Operations focused on Cardium drilling at Garrington,
earning on farm-in lands in the greater Pembina area and Viking
development in the Redwater area.
During the month of
April, 2014, the Company brought on production 5 (2.5 net) Cardium
wells and 5 (4.7 net) Viking oil wells with an additional 2 (1.8
net) Cardium wells and 3 net Viking oil wells being fracture
stimulated in May, 2014. The two new wells drilled in Wilson Creek
area are currently not expected to be fracture stimulated until
early July, unless a dry spring allows the Company surface access
sooner. Tamarack is preparing for an active summer drilling program
where it is currently planning to drill up to eight gross Cardium
horizontal wells in the greater Pembina area and eight gross Viking
oil wells in the Redwater area.
The Company
continued to consolidate working interests in the greater Pembina
area. Through a combination of deals, Tamarack has gained access to
another 8 sections of land and added 20.8 net Cardium drilling
locations to its 175 low risk horizontal Cardium inventory across
its 211,408 net undeveloped acres.
Management
Announcements
On April 30, 2014,
Mr. Niels Gundesen announced his retirement as Vice President,
Engineering. Tamarack's Board and management team would like to
thank Mr. Gundesen for his enormous contributions since the Company
was formed in mid-2009 and wish him the very best in his
retirement. Mr. Gundesen has made himself available to provide
consulting services to the Company on an as needed part-time
basis.
Tamarack is pleased
to announce that Mr. Dave Christensen has been promoted to Vice
President, Engineering. Mr. Christensen has more than 30 years of
experience in the oil and gas industry, most recently he was the
Development Engineering Manager for the West Region with an
intermediate oil and gas company. All of Tamarack's current Cardium
assets fall within the west region Mr. Christensen managed with his
previous company, which grew from approximately 15,000 boe/d to
over 40,000 boe/d during his five year tenure. Dave joined the
Tamarack team in February, 2014. In addition, Tamarack is also
pleased to announce that Mr. Martin Malek has also joined the
Tamarack team as Senior Development Engineer. Martin joined
Tamarack in February, 2014. Mr. Malek spent the last seven years
with the same North American based Company as Mr. Brian Schmidt,
President & CEO and the majority of the technical team.
In April 2014,
Tamarack was honored once again as one of the TSX Venture Exchange
"Venture 50" member companies". "Venture 50" is an annual ranking
of the strongest performing TSX Venture Exchange listed companies;
and is assessed on the basis of a combination of share price
appreciation, trading volumes, change in market capitalization and
analyst coverage. This list of top performers is comprised of the
top 10 companies from each of five market sectors: Clean
Technology, Oil and Gas, Diversified Industries, Mining, and
Technology & Life Sciences.
About Tamarack
Valley Energy Ltd.
Tamarack is an oil
and gas exploration and production company committed to long-term
growth and the increased identification, evaluation and operation
of resource plays in the Western Canadian sedimentary basin.
Tamarack's strategic direction is focused on two key principles -
targeting resource plays that provide long-life reserves, and using
a rigorous, proven modeling process to carefully manage risk and
identify opportunities. The Company recently expanded its inventory
of low-risk development oil locations in the Redwater Viking play
through the acquisition of Sure Energy Inc. Continuing to build on
its sustainable growth platform; Tamarack also increased its
low-risk development locations within the Cardium fairway in the
greater Pembina area, through a farm-in agreement with an industry
major. These endeavors add to Tamarack's strong resource portfolio,
including Cardium properties at Lochend, Garrington and Buck Lake
and heavy oil properties in Saskatchewan. With a balanced
portfolio, and an experienced and committed management team,
Tamarack intends to continue to deliver on its promise to increase
its production and maximize shareholder return.
Abbreviations
|
bbl |
barrel |
|
bbls/d |
barrels per day |
|
boe/d |
barrels of oil equivalent per day |
|
mcf |
thousand cubic feet |
|
mcf/d |
thousand cubic feet per day |
Unit Cost
Calculation
For the purpose of
calculating unit costs, natural gas volumes have been converted to
a barrel of oil equivalent ("boe") using six thousand cubic feet
equal to one barrel unless otherwise stated. A boe conversion ratio
of 6:1 is based upon an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. This conversion conforms with
Canadian Securities Regulators' National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities. Boe's may be
misleading, particularly if used in isolation.
Forward-Looking
Information
This press release
contains certain forward-looking information (collectively referred
to herein as "forward-looking statements") within the meaning of
applicable Canadian securities laws. Forward-looking statements are
often, but not always, identified by the use of words such as
"anticipate", "believe", "plan", "potential", "intend",
"objective", "continuous", "ongoing", "encouraging", "estimate",
"expect", "may", "will", "project", "should", or similar words
suggesting future outcomes. More particularly, this press release
contains statements concerning Tamarack's planned future drilling
plans and operations, anticipated future production and
expectations as to improved future capital efficiencies. The
forward-looking statements contained in this document are based on
certain key expectations and assumptions made by Tamarack relating
to prevailing commodity prices, the availability of drilling rigs
and other oilfield services, the timing of past operations and
activities in the planned areas of focus, the drilling, fracture
stimulation, completion and tie-in of wells being completed as
planned, the performance of new and existing wells, the application
of existing drilling and fracturing techniques, surface access to
wells, weather conditions, the continued availability of capital
and skilled personnel, the ability to maintain or grow the banking
facilities and the accuracy of Tamarack's geological interpretation
of its drilling and land opportunities. Although management
considers these assumptions to be reasonable based on information
currently available to it, undue reliance should not be placed on
the forward-looking statements because Tamarack can give no
assurances that they may prove to be correct.
By their very
nature, forward-looking statements are subject to certain risks and
uncertainties (both general and specific) that could cause actual
events or outcomes to differ materially from those anticipated or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to: risks associated
with the oil and gas industry (e.g. operational risks in
development, exploration and production; delays or changes in plans
with respect to exploration or development projects or capital
expenditures); commodity prices; the uncertainty of estimates and
projections relating to production, cash generation, costs and
expenses; health, safety, litigation and environmental risks; and
access to capital. Due to the nature of the oil and natural gas
industry, drilling plans and operational activities may be delayed
or modified to react to market conditions, results of past
operations, regulatory approvals or availability of services
causing results to be delayed. Please refer to Tamarack's revised
Annual Information Form ("AIF") dated March 13, 2014 for additional
risk factors relating to Tamarack. The AIF is available for viewing
under the Company's profile on www.sedar.com.
The forward-looking
statements contained in this press release are made as of the date
hereof and the Company does not undertake any obligation to update
publicly or to revise any of the included forward-looking
statements, except as required by applicable law. The
forward-looking statements contained herein are expressly qualified
by this cautionary statement.
Neither TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Tamarack Valley Energy Ltd.Brian SchmidtPresident &
CEO403.263.4440Tamarack Valley Energy Ltd.Ron HozjanVP Finance
& CFO403.263.4440www.tamarackvalley.ca
