​Tamarack Valley boosts results in 2017 with doubled production and shift towards more liquids

Image: Joey Podlubny/JWN

Tamarack Valley Energy’s 2017 results show the company realizing the benefits of a transformational acquisition that was completed early in the year.

The company also benefited from moving more of its spending away from dry natural gas and into its oil and liquids assets in an effort to capitalize on the highest pricing opportunities.

Tamarack’s annual 2017 production averaged 20,136 boe/d, nearly double its 2016 production of 10,344 boe/d. The company also achieved record production of 22,807 boe/d in the fourth quarter of 2017, exceeding its original target exit rate of 21,000 boe/d.

The increases in production are primarily a result of Tamarack’s acquisition of Spur Resources, which closed in January 2017. The cash and shares deal, valued at $407.5 million, brought Tamarack all of Spur’s light oil-weighted Viking assets as well as operations in southwest Saskatchewan and southeast Alberta. Tamarack says that since closing the deal, it has integrated the assets into its operations and “demonstrated unprecedented growth and operational success.”

The Viking play was an increased focus for the company in 2017 as it moved spending towards oil and liquids.

“Recognizing the challenges facing natural gas prices at AECO in 2017, Tamarack made the conscious decision mid-2017 to shift capital to projects with a higher oil and liquids weighting,” the company said.

“As such, capital was allocated to the Cardium at Wilson Creek and the Viking at Veteran, resulting in a higher oil-weighting in Q4/17 relative to Q4/16, resulting in stronger netbacks.”

Tamarack’s oil and NGLs weighting was in 2017 increased to 60 percent compared to 54 percent for 2016.

The increased volumes and higher netbacks narrowed the company’s net loss to $13.9 million in 2017, compared to a net loss of $27.8 million in 2016.

Tamarack expects to have annual average production in 2018 between 22,500 – 23,500 boe/d (64-66 percent oil and liquids), with 2018 exit production estimated between 24,000 – 24,500 boe/d (65-67 percent oil and liquids).