T V E : T S X - V Corporate Presentation D E C E M B E R 2 0 1 0
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 A recapitalized junior E&P company with… Effective process for growth 3
TVE Out of the Gate – after Oct/10 financing Q3 2010 production 723 boe/d Working capital at September 30, 2010 (pro forma financing) $5.6 million Undrawn available bank lines $5.0 million P+P reserves (PLA Dec 31, 2009) 2,427 mboe Undeveloped land 50,300 net acres Shares outstanding (basic) 137.85 million Shares outstanding (fully diluted) 161.55 million 14% basic Ownership by management, directors & employees 27% fully diluted ... We have a strong balance sheet, a good acreage position and a committed management team with significant investment. 4
Proven Management Team Former President & CEO Spearpoint Energy sold in Aug/09; Brian Schmidt 7 years with Apache Canada, last 3 as President. Production grew from President & CEO 18,500 to 110,000 boe/d in 7 years Former VP Finance & CFO for Vaquero Resources and Vaquero Energy; Ron Hozjan 14 years as financial officer with junior publicly traded oil and gas VP Finance & CFO companies 30 years technical and management experience; recognized industry Lew Hayes leader in horizontal drilling and multi-frac completions; holds patents VP Production & Operations related to horizontal drilling More than 30 years of O&G experience in North America including Niels Gundesen Spearpoint Energy, Longford Corporation, Apache Canada where he VP Engineering evaluated $1.5 billion of assets acquisitions More than 34 years of O&G experience; Former VP Land for Vaquero Ken Cruikshank Resources, Vaquero Energy and Beau Canada Exploration; Beau grew VP Land from 2,150 boe/d to 21,900 boe/d …Comprehensive bio’s are attached. 5
The Team Personnel Position Vaquero Apache Spearpoint Brian Schmidt President & CEO VP Finance & CFO Ron Hozjan Lew Hayes VP Production & Operations Niels Gundesen VP Engineering Ken Cruikshank VP Land Dave Washenfelder Senior Staff Geologist Scott Reimond Senior Staff Geologist Debbie Kniss Engineering Technologist …Members of this team have worked together for a long time in smaller and larger companies and have delivered solid results in the past. 6
Board of Directors Floyd Price Retired Executive Vice President, Apache Houston Anthony Lambert President & CEO, Daylight Energy Ltd. Dean Setoguchi VP Finance & CFO, Keyera Facilities Income Fund David Mackenzie Past Chairman, Avant Garde Energy & past director Tusk Energy John Gunn Past Chairman, Tango Energy & past CEO Ballistic Energy Brian Schmidt President & CEO, Tamarack Valley Energy Ron Hozjan VP Finance & CFO, Tamarack Valley Energy 7
Strategic Play Criteria • Resource plays have high Apache OGIP/OOIP Non - • > 4 mmbbls/section OOIP or Resource Play 25 bcf/section GIP • Either with stacked pay sections or Conventional thick single zones Tamarack • Long life reserves Tight Sands (Cardium, Viking, • Production profiles demonstrate Montney, Deep Basin) harmonic decline • Target horizons are repeatable Heavy Oil and have large scope • Minimize the risk of encountering water Emerging Shale's (Horn River) • Conventional or unconventional Wet Mannville CBM • Initial well to de-risk play 40% to 60% chance of success Gas Hydrates …technology has advanced to open huge opportunities and rejuvenate the basin …Targeting material, sustainable corporate growth. 8
TVE’s Approach to Risk Management • Disciplined risk management • Fundamental to decision making process at TVE • Formalized economic and operational modelling process • Diversified resource plays • Assemble a base of 4 plays with an initial 40% to 60% chance of success • Any one play will have the scope and quality to provide significant growth • When possible position and allow competitors to de-risk for us • Establish critical mass • Get production momentum and stability to avoid living well by well …Risk management is a key attribute of successful junior companies. 9
How TVE plans to deliver growth Identified; Identified; Identified; evaluating Identified; assets require de-risk partially de-risked execution strategy acquired Resource Resource Resource Resource Play #1 Play #4 Play #2 Play #3 Lochend Evaluating Harmattan/ Identified & Cardium several options Garrington acquired Cardium Viking Oil Effective Risk Management …Build near term production with oil and position for future gas growth. 10
Areas of Operation • Q3 production average BC • 723 boe/d INGA ALBERTA Fort St. John • Reserves at Dec 31, 2009 WILDER • Proved 1.3 mmboe • Proved + probable 2.4 mmboe • Proved RLI 4.75 years ANSELL Edmonton • Undeveloped land FERRIER • 50,300 net acres HANLAN • 6,925 net acres of Cardium GARRINGTON LOCHEND and 14,600 net acres of Calgary Montney prospective acreage Oil QUAICH Gas 11
Garrington Cardium Production Type Curve 1000 2-3-34-4 Vertical 8 frac type model 9-17-34-4W5 Garr (E-W) 100/06-33-34-04W5 100/12-17-35-04W5 100/14-10-34-04W5 100/04-25-35-05W5 8-22-57-20W5 Pine Crk 1-25-47-3W5 - Pembina 100/14-11-34-04W5 6-4-27-3 Vertical 100/08-10-34-04W5 1-31-34-4 Vertical 100 Daily oil - bbls/d 10 1 0 5 10 15 20 25 Producing months Analyzed 35 wells in Garrington: break even IP is 60bopd • COS then is 78% • • un-risked IP Rate of success wells is 165 boepd 12
What Has Changed 8 Frac Case Mean unrisked IP = 150 boe/d Mean unrisked reserves = 130 mboe 12 Frac Case Mean unrisked IP = 240 boe/d Mean unrisked reserves = 188 mboe … Drill as long as spacing will allow and execute 14 fracs 13
Fracture Analysis Garrington Cardium HZ 450 NS in zone 400 12-17 350 others Log. (NS in zone) 300 Oil IP30- Bopd 250 200 “Maximum ROR” 150 100 50 0 0 2 4 6 8 10 12 14 16 18 20 Number of Effective Fracs ... Running economics on the “best fit” line suggests that a 14 frac design maximizes ROR. 14
Garrington Well Review Garrington Cardium HZ 400 NS in zone 350 12-17 300 other Linear (NS in zone) 250 EUR - MBbl 200 y = 0.7451x - 12.909 150 R² = 0.1524 100 50 0 0 100 200 300 400 Oil IP30 - Bopd ... There is a strong correlation between first month production rate and reserve estimate. 15
TVE Cardium Economics $80/bbl pricing 12 Frac Case 8 Frac Case 14 Frac Case Net capital (K$) 2,998 3,322 3,529 Chance of success (%) 80 80 80 Risked peak 30 day rate (boe/d) 120 192 212 Reserves (mboe) 104 150 154 F&D ($/boe) WI 28.86 22.23 22.94 Per flowing metrics ($/boepd – mid 41,650 37,350 33,950 yr rate) ROR (%) 22 30 33 BTNPV 10 (K$) 907 1,719 1,886 Recycle ratio 1.9 2.4 2.3 Note: engineering price lines add approximately 20% to ROR so base case is 53% ROR 16
Cardium Sensitivities to ROR Reserves 79% Rate Capital cost 47% 39% • Economics are most 33% sensitive to capital costs. • Several opportunities to 22% reduce capital costs exist which will be reviewed 21% • Rate can be affected by 17% minimizing downtime Decrease of 30% Increase of 30% 17
Harmattan / Garrington TVE land Farmin land (100 for 70) 14 Frac Project PBN 14-33 $ 80 Pricing Industry well licenses IP 332 boe/d Case Scope Industry HZ wells drilled TVE licensed / drilling Gross (net) sections 9.0 (3.79) Cardium vertical wells Net Cardium wells 1 14.43 PBN 2/16-27 BACCALIEU 4-30 OOIP (mmbbls) 22.7 Net capital (K$) 3,529 50,925 Chance of success (%) 80 Risked peak rate (boe/d) 212 PGF14-14 PGF14-18 Reserves (mboe) 154 2,222 IP 130 boe/d F&D ($/boe) WI 22.94 22.94 Per flowing metrics 33,950 33,950 BNP 16-32 ($/boepd – mid yr rate) PGF 8-34 Viking TVE 14-36 drilling HZ ROR (%) 33 BTNPV 10 (K$) 1,886 27,215 PGF 4-34 Recycle ratio 2.3 2.3 IP 105 boe/d Angle Viking HZ Prod’n rates are based on first month calendar day basis IP 100 boe/d Suspected considerable downtime 18
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