Tamarack Valley Energy Expands the Clearwater Infrastructure Partnership, Provides Operational Update and Announces Declaration of Monthly Dividend

Press Release

Calgary, Alberta – September 17, 2024 – Tamarack Valley Energy Ltd. (“Tamarack” or the “Company”) (TSX: TVE) and Wapiscanis Waseskwan Nipiy Holding Limited Partnership (“WWN”) are pleased to announce the expansion of the previously announced Clearwater Infrastructure Limited Partnership (the “CIP”) to include Bigstone Cree Nation (“Bigstone”) as the 13^th member of WWN, joining 12 other First Nations and Métis settlements (collectively, the “WWN Shareholders”). In conjunction with Bigstone’s entry into WWN, Tamarack transferred an additional $50.8MM of certain Clearwater midstream assets into the CIP for cash consideration of $43.2MM (before closing adjustments) and maintains a 15% operated working interest in the CIP (collectively, the “Expansion”). The Expansion closed on September 17, 2024.

Pioneering Partnerships

The Expansion reflects the Company’s commitment to the long-term relationship with Indigenous communities where Tamarack is developing its Clearwater assets.

Chief Andy Alook, of Bigstone Cree Nation, commented: “The Bigstone leadership and our supporting team are excited and proud to be part of this historical partnership with WWN and Tamarack. As we lead our nation towards the shared vision, the support and alliance with AIOC is the epitome of financial transactions that puts First Nations and the Industry on the path toward improved relationships. We continue to support our nation in economic opportunities while enhancing the relationships we develop along the way. It is time we continue to work and grow not only as a nation but as economic business partners. Our partnership with WWN is one example that ensures the future of Bigstone will be successful in regional development with industry.”

Councillor Delores Desjarlais, of East Prairie Métis Settlement, commented: “The WWN Board and WWN Shareholders are very pleased and honoured to welcome Bigstone to a newly expanded equity partnership with Tamarack. The WWN Shareholders unanimously approved the enhancements to the original partnership including increased dividends made possible by collaborative efforts by the WWN Board and WWN Shareholders, Bigstone, Tamarack, AIOC, lenders and advisors. These partnerships have opened many doors for participating Indigenous Communities and we can proudly say that the future looks much brighter for generations to come.”

Chana Martineau, CEO of Alberta Indigenous Opportunities Corporation (“AIOC”) commented: “From the outset, AIOC and the Government of Alberta have been committed to ensuring our innovative loan guarantee program delivers tangible benefits for all parties involved. We’re pleased to see Bigstone join the WWN partnership through this expanded transaction, participate in their first AIOC-supported transaction, and share in the economic opportunities that lie ahead. AIOC commends Tamarack for its exemplary leadership in fostering meaningful relationships and creating valuable opportunities with Indigenous partners.”

Brian Schmidt (Aakaikkitstaki), President and CEO of Tamarack, commented: “In a short period, WWN has proven to be a reliable business partner for Tamarack and AIOC. The expansion of this deal within a year, along with the inclusion of Bigstone, highlights the excellence of WWN as they build their brand. We are proud to be a catalyst in this significant milestone. Additionally, we warmly welcome Bigstone into the partnership and are excited to have them as a WWN shareholder, participating in the regional development. We look forward to a bright and prosperous future together.”

Clearwater Infrastructure Limited Partnership Overview

Under the terms of the definitive agreements in respect of the Expansion (collectively, the “Agreements”), Tamarack transferred an additional $50.8MM of certain Clearwater midstream assets to the CIP for a total of $222.8MM in Clearwater infrastructure assets inclusive of infrastructure transferred pursuant to the initial CIP transaction completed in December 2023 (the “Initial Transaction” and, collectively with the Expansion, the “Transaction”). Existing infrastructure transferred to the CIP as part of this Expansion is directly related to infrastructure included in the Initial Transaction, including expansion of an oil facility, water management

infrastructure and key in-field pipelines located at Nipisi and Marten Hills. The 16-year take-or-pay (“TOP”) gross commitment to the CIP, for average volumes of 29,000 boe/d⁽¹⁾, from the Initial Transaction remains unchanged. Tamarack retains priority access to any incremental capacity above this TOP, where volumes may be utilized on a fee-for-service basis. The aggregate Transaction proceeds imply a multiple of ~8.2x the average annual TOP capital fee. Tamarack will continue to be the operator of the CIP assets and will retain full access to 100% of Tamarack’s existing capacity. The CIP platform continues to allow opportunities for Tamarack to partner with Indigenous communities on projects as we build out and develop our world class Clearwater assets.

In the previously announced supply study, McDaniel & Associates Consultants Ltd. substantiated the scale of Tamarack’s current Clearwater asset holdings⁽²⁾ with forecasted Clearwater volumes well in excess of the TOP commitments. The Clearwater play continues to rank as a top decile oil resource among the most economic oil projects in North America and is expected to result in stable and predictable source of revenues to the WWN Shareholders.

Operational Update

Performance results delivered year-to-date have allowed Tamarack to allocate incremental capital within the existing Base Budget to include certain CSV capital spending as noted below. Capital guidance for 2024 is unchanged at $390MM – $440MM⁽⁵⁾ with the Company now expected to finish the year at the upper end of the range, including the additional CSV capital. With strong performance demonstrated across our Clearwater and Charlie Lake assets year-to-date, annual production is expected to trend towards the high-end of the 61,000 – 63,000 boe/d⁽³⁾ range. Guidance with respect to interest expense, which is inclusive of the incremental TOP fees, is also unchanged. The overall reduction in debt Tamarack has achieved year-to-date, coupled with the favorable shift in interest rates, is expected to result in Tamarack achieving the low-end of the prior $3.80/boe – $4.20/boe guidance range.

As part of the total 2024 capital program, Tamarack will drill 4 (4.0 net) Charlie Lake wells in Q4/24, representing our CSV capital allocation, while also expanding regional pipeline capacity. These four wells will come on-stream through H1/25, with associated production forecasted to peak at over 2,100 boe/d⁽⁴⁾ in Q2/25, achieving compelling first year half-cycle capital efficiencies of approximately $16,800 per flowing barrel of production. This incremental 2025 production will be directed to the new CSV Albright sour gas plant currently being constructed in the Charlie Lake fairway.

A portion of the proceeds from the Expansion will be directed to the capital program. As a result, the expected shareholder return profile and year-end net debt remain materially unchanged for 2024, with additional capital spending improving free funds flow generation in 2025 and beyond.

Advisors

Peters & Co. Limited acted as strategic advisor and Stikeman Elliott LLP acted as legal counsel to Tamarack with respect to the Transaction.

ATB Financial and Riverside Infrastructure Consulting acted as financial advisors, MNP acted as tax advisor and MLT Aikins LLP acted as legal counsel to WWN with respect to the Transaction.

Borden Ladner Gervais LLP acted as legal counsel to Bigstone with respect to the Transaction.

About Wapiscanis Waseskwan Nipiy Holding Limited Partnership

WWN is a limited partnership of 13 First Nation and Métis settlements located in northern Alberta. The participating communities include:

About Alberta Indigenous Opportunities Corporation

AIOC provided support for the Transaction through a loan guarantee to WWN. AIOC is a provincial Crown Corporation, established under legislation in November 2019, which exists to serve as a catalyst for Indigenous prosperity and independence. With up to $3 billion in loan guarantee capacity, AIOC facilitates Indigenous investment and involvement in Alberta’s natural resources, agriculture, transportation, and telecommunications sectors.

Declaration of Monthly Dividend

Tamarack is also pleased to announce that the Board of Directors has declared a monthly cash dividend on its common shares of C$0.0125 per share in accordance with the Company’s dividend policy. The dividend will be payable on October 15, 2024, to shareholders of record at the close of business on September 30, 2024. This monthly cash dividend is designated as an “eligible dividend” for Canadian income tax purposes.

About Tamarack Valley Energy Ltd.

Tamarack is an oil and gas exploration and production company committed to creating long-term value for its shareholders through sustainable free funds flow generation, financial stability and the return of capital. The Company has an extensive inventory of low-risk, oil development drilling locations focused primarily on Charlie Lake and Clearwater plays in Alberta while also pursuing enhanced oil recovery upside in these core areas. For more information, please visit the Company’s website at www.tamarackvalley.ca.

Reader Advisories

Notes to Press Release

• The boe composition between light oil, heavy oil, natural gas and natural gas liquids is not defined in the Agreements. The makeup of such boe is not a governing factor. Natural gas is converted to barrel of oil equivalent based on a ratio of 6 mcf to 1 barrel.
• The supply study includes all of Tamarack’s Clearwater assets excluding Peavine and Seal.
• Production of 61,000 – 63,000 boe/d: 12,800-13,200 bbl/d light and medium oil, 36,600-37,800 bbl/d heavy oil, 2,400-2,500 bbl/d NGL and 54,900-56,700 mcf/d natural gas.
• Production of 2,100 boe/d: 1,350 bbl/d light and medium oil, 200 bbl/d NGL and 3,300 mcf/d natural gas.
• Capital budget includes exploration and development capital, ESG initiatives, facilities land and seismic but excludes ARO, capital associated with the CIP and asset acquisitions and dispositions.

Abbreviations

boe                   barrels of oil equivalent

boe/d               barrels of oil equivalent per day

Disclosure of Oil and Gas Information

Unit Cost Calculation. For the purpose of calculating unit costs, natural gas volumes have been converted to a 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 Administrators’ National Instrument 51 101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Boe may be misleading, particularly if used in isolation.

Product Types. References in this press release to “crude oil” or “oil” refers to light, medium and heavy crude oil product types as defined by NI 51-101. References to “NGL” throughout this press release comprise pentane, butane, propane, and ethane, being all NGL as defined by NI 51-101. References to “natural gas” throughout this press release refers to conventional natural gas as defined by NI 51-101.

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