T V E : T S X - V March 2012 Corporate Presentation 1
Disclaimers & Advisories This presentation may contain forward looking information. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on this forward-looking information. In this presentation, production is stated in barrels of oil equivalent (“BOE”) using a six to one conversion basis when converting thousands of cubic feet of natural gas to barrels of oil and a one to one conversion basis for natural gas liquids. Such conversion may be misleading, particularly if used in isolation. A 6:1 conversion ratio is based on energy equivalence between natural gas and oil at the burner tip and does not represent economic equivalence at the wellhead or point of sale. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. 2
Introducing Tamarack Valley Energy We are a junior oil and gas company focused on increasing liquids production and reserves through the identification and operation of properties throughout Western Canada. ... We have a balanced drilling portfolio and a committed management team with significant personal investment. The right ingredients to build a strong company. 3
Key Messages • TVE is positioned to direct capital to the drill bit in 2012 • Evaluated water vs. oil fracs in Cardium – identified additional upside on all future Cardium drills; early success at Buck Lake • Capital allocated to new areas in Q4/11 & Q1/12 to de-risk: – Initial well drilled in Q1/12 on Alberta shallow Viking oil play – Heavy oil 3D shoot in Q4/11, combined with existing 2D data identified large multi- well features; go-forward costs to evaluate is low • TVE has a sizable, high quality, and diverse drilling inventory to fuel production growth – TVE will shift capital to low GOR oil plays • Minor gas production shut-ins in Q1/12 due to low prices 4
Four Play Strategy D R I L L B I T C A P I T A L Reduce De-risk Acquire costs, build Identify land and and production seismic optimize and reserves Lochend / Garrington Buck Lake Viking Oil Heavy Oil ... 2011 accomplishments position the company to focus on the drill bit in 2012. 5
Lochend / Garrington Investment Review P3 value created: $88.5 million Possible risked reserves (PV 10 ) $40.8 million P2 value created: $47.7 million Probable reserves (PV 10 ) $33.6 million Break-even with proven reserves Proven reserves Land (PV 10 ) $5.3 million D&C&E $33.5 million and facility infrastructure Cash flow Total investment: $27.1 million $21.8 million $7.7 million ... The most mature TVE play should provide a 3.3X return for shareholders. 6
The Tamarack Team Management Board of Directors • Brian Schmidt, President & CEO • Floyd Price, Chairman • Ron Hozjan, VP Finance & CFO • Anthony Lambert • Niels Gundesen, VP Engineering • Dean Setoguchi • Ken Cruikshank, VP Land • David Mackenzie • Kevin Screen, VP Production & Operations • John Gunn • Dave Washenfelder, Exploitation Manager • Brian Schmidt • Scott Reimond, Exploration Manager • Reserve Evaluators – InSite Petroleum Consultants Ltd. • Legal – Osler, Hoskin & Harcourt LLP • Auditors – KPMG LLP 7
Tamarack Valley Competitive Advantage • Established track record of accessing First Nations lands and impact drilling deals with major oil companies • Consistent delivery of drilling results – technical team drilled thousands of wells on many plays at Apache • Unique, stringent and disciplined risk management process that maximizes returns for shareholders • Management can handle a much larger entity – if the right thing for TVE shareholders is to grow to 10,000+ boepd then the capability exists • Up to date on technology used to find and exploit tight reservoirs 8
TVE Capital Structure Recent trading range $0.31 - 0.33 Market cap $63 million Q4 2011 est. production (Q3 – 1,101 boe/d) 1,503 boe/d Estimated net debt at December 31, 2012 $8.0 million Available bank lines (updated with current gas pricing) $15.0 million P+P reserves, InSite Dec 31, 2011 (81% PV10 from liquids) 5.65 mmboe (48% liquids) Undeveloped land (excluding farm-in acreage) 54,800 net acres Shares outstanding (basic / fully diluted) 196.75 / 220.1 million Ownership by management, directors & employees 10% basic / 21% fully diluted 9
Strategic Play Criteria Resource plays have high: Apache • OGIP/OOIP – > 4 mmbbls/section OOIP or Non - 25 bcf/section GIP Resource Play Either with stacked pay sections – or thick single zones Conventional • Long life reserves Tamarack Tight Sands – Production profiles demonstrate harmonic decline (Cardium, Viking, • Target horizons are repeatable and Deep Basin) have large scope Heavy Oil • Conventional or unconventional Initial well to de-risk play - 40% to 60% Emerging Shale's chance of success will maximize (Horn River, Duvernay) return to shareholders. Wet Mannville CBM To minimize risk, we will develop 4 Gas Hydrates resource plays; disappointments can be easily carried by winners. …technology has advanced to open huge opportunities and rejuvenate the basin …Targeting material, sustainable corporate growth. 10
Transformation to Oil Weighting P+P Reserves (mboe) Reserve Value PV 10 ($millions) 5,653 mboe 94.8 Natural gas 18.0 Natural gas +87% NGLs 2,947 Oil & associated products Oil 3,031 mboe +256% 42.1 369 76.8 2,215 20.6 2,337 Liquids 162 21.6 654 +232% Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Positioning for the Future • Tamarack has delivered on promises to 81,104 shift to oil weighting Undeveloped land (acres) 10,021 Cardium oil Viking oil • Oil and associated products now Heavy oil Legacy gas 16,160 accounts for 81% of PV 10 value 45,800 • With solid oil prone lands oil drilling 6,100 30,460 inventory will increase 39,700 24,463 Jun. 2010 Mar. 2012 11
Risked Before Tax PAV 10 ($mm) – at Jan 1/12 $1.68/share P+P Reserves at Dec 31/11 PV 10 $369.0mm Lochend / Garrington Alberta Shallow Viking Buck Lake 122.0 $1.10/share Sask Heavy Oil $243.1 mm 36.0 41.8 33 35.5 20.0 37.0 68.0 68.0 30.0 40.8 40 35.0 42.4 36.0 94.8 94.8 94.8 Jan. 2012 Jan. 2012 - Risked Jan. 2012 - Un-risked 12
Four Play Strategy ALBERTA Resource Play #1 Resource Play #3 SK Lochend / Garrington Shallow Viking Oil Cardium Oil Identified; acquired and Identified; de-risked, Foley Lake preparing to de-risk Q1/12 adding production VIKING OIL Redwater Edmonton Lloydminster Resource Play #4 Resource Play #2 BUCK LAKE Saskatchewan Buck Lake HEAVY OIL (Duvernay rights) Heavy Oil Cardium Oil GARRINGTON Identified; acquired, LOCHEND Identified; de-risked; seismic Q4/11 and Calgary adding production drilling 2012 …Developing four plays provides flexibility, superior returns and risk management. 13
2011 Multi-Well Cardium Program 800 Lochend 16-32-026-03W5M 700 Lochend 15-32-026-03W5M Lochend 08-29-026-03W5M Calendar Day Prod’n (boe/d) 600 Harmattan 1-20-032-03 W5M Buck Lake 4-35-046-06W5M Buck Lake 4-34-046-06W5M 500 Original risked type curve New type curve 400 300 200 100 0 Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Mth 7 Mth 8 Mth 9 Mth 10 Mth 11 Mth 12 …After 10 months of production the 16 -32 well produced over 28,800 bbls of oil at an average rate of 93 bopd and earned $2.73 million of revenue. 14
Lochend “Sweet Spot” IP30 Calendar Day Prod’n Lochend water fracs vs. original TVE type curve 800 800 700 Oil frac Calendar oil - bbl/d 600 700 Water frac 500 400 600 300 Avg. water frac 408 bbls/d 200 (456 boe/d) 100 500 0 IP30 - bbls/d 0 2 4 6 8 10 Production month 400 Oil Water % GLJ pricing – Jan/12 Un-risked comparison Fracs Fracs Change 300 Capital ($mm) 4.300 3.900 -10% IP30 rate (boe/d) (12% gas) 236 456 +93% 200 IP30 oil rate 202 404 +93% Avg. oil frac 202 bbls/d Reserves (mboe) 156 208 +33% (236 boe/d) 100 ROR (%) 30 118 BTNPV 10 ($mm) 1.810 4.290 +137% 0 Recycle ratio (over reserve life) 2.2 3.4 +55% Jan-10 Aug-10 Feb-11 Sep-11 Apr-12 On Prod’n Date …Field data supports a valuation step change. 15
Recommend
More recommend
