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Tamarack Valley Energy Ltd. Announces Record 2017 Third Quarter Results and Increased 2017 Capital

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CALGARY, Alberta, Nov. 08, 2017 (GLOBE NEWSWIRE) -- Tamarack Valley Energy Ltd. (TSX:TVE) ("Tamarack" or the "Company") is pleased to announce its financial and operating results for the three and nine months ended September 30, 2017.  Selected financial and operational information is set out below and should be read in conjunction with Tamarack's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2017 and related management's discussion and analysis ("MD&A"), which are available for review on SEDAR at www.sedar.com or on Tamarack's website at www.tamarackvalley.ca.

Q3 2017 Financial and Operating Highlights

  • Achieved record corporate production in Q3/17 of 20,541 boe/d, up 6% over Q2/17 and more than 90% over Q3/16.

  • Based on field estimates, exited October at 22,000 boe/d achieving its guided 2017 exit rate and remaining on target to average toward the higher end of annual production guidance of 19,000-20,000 boe/d, with Q4/17 exit net debt to annualized funds from operations ratio expected at approximately 1.0 times, assuming current strip prices.

  • Oil weighting increased to 52% compared to 45% in Q3/16, driving improved netbacks, while light oil production grew 7% over Q2/17. Liquids weighting also increased to 59% in Q3/17 compared to 55% in the same period of 2016.

  • Total funds from operations increased 103% to $34.8 million in Q3/17 ($0.15/share basic and diluted), from $17.2 million in Q3/16 ($0.13/share basic and diluted), and increased 3% compared to Q2/17 despite significantly lower quarter-over-quarter natural gas prices.

  • Aided by continual access to service providers and dry summer conditions, Tamarack executed the majority of its planned second half capital program during the third quarter of 2017, investing $74.1 million to drill 50 (48.6 net) Viking oil wells, eight (8.0 net) Cardium oil wells, one (0.8 net) Ellerslie oil well, one (1.0 net) Mannville gas well, and two (2.0 net) heavy oil wells.

  • Continued to execute on various tuck-in land acquisitions within core areas to bolster Tamarack's footprint, including four separate purchases totaling 145 net sections of land for an aggregate purchase price of $3.4 million during Q3/17.  Subsequent to the end of the quarter, completed a minor tuck-in acquisition within the Company's core Viking area for $5.5 million comprised of 9.75 net sections of land, 42 boe/d of associated production and 54 low-risk, quick-payback drilling locations.

  • Tamarack intends to accelerate $10-15 million of Q1/18 capital into the Company's Q4/17 program, which when combined with Tamarack's tuck-in acquisitions, will result in an increased full year 2017 capital program of $195-198 million.  The Company forecasts that capital spending over the next two quarters (Q4/17 and Q1/18) will approximate funds flow from operations generated through that period, based on current strip prices.

  • Realized a 5% reduction in production expenses in Q3/17 over Q2/17 driven by the elimination of higher third party processing fees with the partial restart of the TransGas Coleville Gas Plant ("Coleville Plant"), as well as reduced trucking and disposal costs following completion of the Veteran oil battery expansion and installation of water handling in the latter half of Q3/17.

  • General and administrative ("G&A") expenses declined a further 7% in Q3/17 to $1.62/boe over Q2/17 and were 14% lower than Q3/16, reflecting significant production growth without commensurate increases in overhead. 

Financial & Operating Results

($ thousands, except per boe) Three months ended Nine months ended
September 30, September 30,
    2017     2016     % change   2017     2016     % change
($, except per share)            
Total Revenue   63,927     31,588   102     193,512     75,724   156  
Funds flow from operations 1   34,774     17,172   103     100,800     43,711   131  
  Per share – basic 1 $ 0.15   $ 0.13   15   $ 0.45   $ 0.37   22  
  Per share – diluted 1 $ 0.15   $ 0.13   15   $ 0.45   $ 0.37   22  
Net income (loss)   (6,742 )   (3,196 ) (111 )   (1,399 )   (19,398 ) 93  
  Per share – basic $ (0.03 ) $ (0.02 ) (50 ) $ (0.01 ) $ (0.17 ) 94  
  Per share – diluted $ (0.03 ) $ (0.02 ) (50 ) $ (0.01 ) $ (0.17 ) 94  
Net debt 1   (194,917 )   (62,817 ) (210 )   (194,917 )   (62,817 ) (210 )
Capital Expenditures 2   74,063     14,497   411     156,786     41,956   274  
Weighted average shares outstanding (thousands)            
  Basic   227,691     134,382   69     224,376     117,263   91  
  Diluted   227,691     134,382   69     224,376     117,263   91  
Share Trading (thousands, except share price)            
High $ 2.88   $ 3.74   (23 ) $ 3.59   $ 4.28   (16 )
Low $ 1.98   $ 3.15   (37 ) $ 1.96   $ 2.16   (9 )
Trading volume   25,281     21,529   17     161,588
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