Tamarack Valley Energy Q3 2026 Earnings Results & Report

Tamarack Valley Energy EPS Results

• Actual EPS: C$0.28
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 3 of last 6 quarters

Tamarack Valley Energy Revenue Results

• Actual Revenue: C$365.81 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Tamarack Valley Energy (TSE:TVE). engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the Western Canadian sedimentary basin. It primarily holds interests in Cardium light oil plays in Wilson Creek/Alder Flats/Pembina, and Garrington and Lochend areas in Alberta; Viking light oil resource plays in Redwater and Westlock in Alberta, as well as in the Consort area of southeast Alberta and Hoosier area of southwest Saskatchewan; Barons Sands light oil plays located in the Penny area of Southern Alberta; and heavy oil properties located in Hatton area of Saskatchewan. The company was formerly known as Tango Energy Inc. and changed its name to Tamarack Valley Energy Ltd. in June 2010. Tamarack Valley Energy Ltd. was incorporated in 2002 and is headquartered in Calgary, Canada.

Tamarack Valley Energy Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Waterflood performance exceeded expectations: Water injection is now estimated to contribute approximately 10,000 barrels per day, or 18% of production, supporting lower development and sustaining costs and stronger margins. The South Clearwater pilot delivered more than a 100% oil uplift, prompting plans for additional pilots.
• Positive Sentiment: Headwater acquisition remains on track: The all-stock transaction, expected to close shortly after the November 18 shareholder vote, is expected to create a Clearwater-focused producer with more than 80,000 BOE per day of run-rate production, additional scale, and operating synergies.
• Positive Sentiment: Strong cash generation is funding growth and shareholder returns: Tamarack generated CAD 375 million of year-to-date free cash flow, repurchased nearly 16 million shares for CAD 190 million, and plans to increase its quarterly dividend from CAD 0.05 to CAD 0.06 per share after the Headwater closing.
• Positive Sentiment: Production and investment are being accelerated: Third-quarter Clearwater production rose 16% year over year to more than 55,000 BOE per day, while 2026 capital spending is trending toward the high end of guidance to support development and waterflood expansion. The company reaffirmed a year-end legacy Tamarack production target above 70,000 barrels per day.
• Neutral Sentiment: TMX export benefits remain uncertain: Management expects west-coast market diversification to improve realizations relative to Edmonton WCS pricing, but said freight costs and market volatility make the exact netback benefit difficult to quantify.

Presentation

[Operator]

Good morning. Welcome everyone to the Tamarack Valley Energy Limited Conference Call and Webcast on Wednesday, October 28th, 2026, discussing the recent Q3 2026 results press release. I would like to introduce today's speakers, Mr. Brian Schmidt, Founder and CEO, Mr. Steve Buytels, President, and Mr. Kevin Johnston, CFO. If you would like to ask a question, please press star then the number one on your telephone keypad to join the queue. If you would like to withdraw your question, press star two. Thank you.

[Operator]

Mr. Schmidt, you may begin your conference.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

Good morning and welcome to everyone joining our call to discuss the operating and financial results for the third quarter 2026. My name is Brian Schmidt, I am the CEO and Founder of Tamarack Valley Energy. Today, I am joined by our President, Steve Buytels, and our CFO, Kevin Johnston. We are excited to report our Q3 results, which reflect the company's first full quarter as a Clearwater-focused producer, following the successful disposition of our Charlie Lake assets in June. With strong operational execution and elevated commodity prices in 2026, we have generated substantial free cash flows year to date, which has allowed us to drive higher growth through the drill bit and accelerate our waterflood expansion, and importantly, return more capital to shareholders through higher base dividends and share buybacks.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

Tamarack's third quarter results were also highlighted by the previously announced deal to acquire Headwater Exploration in an all-stock transaction that will result in a combined value of CAD 10 billion market cap. The strategic acquisition creates a premier North American oil company with top-tier profitability and an unmatched position as the only publicly traded pure-play Clearwater producer. The combined company will have a run rate production of greater than 80,000 bbl/day.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

Kevin will now discuss our Q3 financial highlights.

[Kevin Johnston, CFO at Tamarack Valley Energy]

Thank you, Brian. Tamarack delivered Clearwater production over 55,000 BOE per day in Q3, a 16% increase over prior year. Tamarack generated Q3 funds flow of CAD 214 million and free funds flow of CAD 92 million. Year to date, the company has generated CAD 375 million of free cash flow, or CAD 0.78 per share. Tamarack's Q3 capital investments were CAD 120 million for the quarter and were heavily focused on waterflood expansion. Our 2026 capital program is trending towards the higher end of our guidance range of CAD 470 million, reflecting the acceleration of development capital into 2026 in response to higher commodity prices and the consolidation of Headwater's capital investments from mid-November to the end of the year. We continue to drive per-share returns through our share buyback program. Year to date, we allocated CAD 190 million to repurchase nearly 16 million common shares.

[Kevin Johnston, CFO at Tamarack Valley Energy]

Tamarack has now reduced its common share float by more than 15% since the commencement of the NCIB in 2024, at a weighted average share price of CAD 5.80 per share. On the heels of the Charlie Lake divestiture, we declared a 25% increase to our quarterly dividend to CAD 0.05 per share. In conjunction with the closing of the Headwater acquisition, we intend to raise the quarterly dividend a second time by another 20% to CAD 0.06 per share or CAD 0.24 per share annualized.

[Kevin Johnston, CFO at Tamarack Valley Energy]

Tamarack is entering the fourth quarter with an undrawn credit capacity of CAD 875 million and cash on hand of CAD 540 million, providing substantial balance sheet strength to fund accelerated Clearwater development, return capital to shareholders, or pursue strategic initiatives. Following the acquisition of Headwater, we expect to exit the year with net cash of more than CAD 50 million and available funding of CAD 1.2 billion.

[Kevin Johnston, CFO at Tamarack Valley Energy]

Steve will now provide an update on our Clearwater assets, the Headwater transaction, and an outlook for the remainder of the year.

[Steve Buytels, President at Tamarack Valley Energy]

Thank you, Kevin. With respect to the quarter, I'd like to highlight a few key themes. First theme here is the waterflood outperformance continues. Reservoir response from our waterflood expansion continues to exceed expectations. Oil uplift from water injection is now estimated to be 10,000 bbl/day or 18% of our total production. This advancing oil recovery continues to drive lower finding and development costs, lower sustaining capital requirements, and lower breakeven prices, resulting in stronger margins. The strong response has led to an increase in the overall standalone Tamarack production guidance for 2026, which offsets some of the production with respect to the slightly delayed timing of the close into mid-November. We exited the third quarter injecting 60,000 bbl/day across our assets and are reaffirming our 2026 exit guidance of over 70,000 bbl/day on legacy Tamarack assets.

[Steve Buytels, President at Tamarack Valley Energy]

Following the Headwater acquisition, we expect to exit the year injecting over 100,000 bbl/day. 2026 injection becomes 2027 oil production. Second, the South Clearwater Waterflood pilot. This pilot has illustrated a greater than 100% increase in oil uplift, which is a positive outcome in terms of potential upside for this area and represents potential upside to our five-year plan that we do not currently model. Given this response, we have identified other specific, more optimally located well patterns for further waterflood development in the area. We expect to add an additional waterflood pilot here later in the fourth quarter

[Steve Buytels, President at Tamarack Valley Energy]

Third, the Headwater acquisition. We are excited to complete the business combination. This transaction reflects an exceptional opportunity for the shareholders of both companies to gain exposure to a unique and differentiated value proposition through enhanced efficiency, profitability, and durability of an integrated Clearwater asset base. The combined company will benefit from decades of Clearwater drilling and waterflood inventory, meaningful operating capital synergies, and greater scale across the play. As we are designing our budget for next year and laying out a revised five-year plan, we continue to identify additional synergies from the integration of the two companies.

[Steve Buytels, President at Tamarack Valley Energy]

We plan to release our 2027 budget in conjunction with the closing of the Headwater acquisition, which is currently expected to occur shortly after the November 18th shareholder vote. At that time, we will also provide an update on our integration activities and expected synergies moving forward.

[Steve Buytels, President at Tamarack Valley Energy]

Brian will now deliver some closing comments.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

Thanks, Steve. Our share price performance over the last three months has continued to reaffirm our decision to transform the business into a Clearwater-focused company. During this time, we have maintained strict discipline in the pursuit of maximizing total shareholder returns through profitable production growth, share buybacks, base dividends, and balance sheet strength. With our vast drilling inventory and waterflood expansions, the company is well-positioned to continue to drive long-term sustainable value for our shareholders. As I have said before, and will say it again, I am extremely excited for the future of this company.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

I will now turn it back to the moderator for questions.

[Operator]

Thank you, sir. Ladies and gentlemen, as stated, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, we ask that you please lift the handset first before pressing any keys. Thank you. Please go ahead and press star one now if you have any questions. First question will be from Sam Burwell at Jefferies. Please go ahead, Sam.

[Sam Burwell, Analyst at Jefferies]

Hey, guys. Good morning. On the South Clearwater pilot, was that simply just a new injector placed in between two producers? Just curious if anything different from that standpoint might be planned for the next pilot and if it might be in a different area of that southern Clearwater acreage.

[Steve Buytels, President at Tamarack Valley Energy]

Yeah, Sam, it's Steve here. Good question. That pilot, I used the word optimal in the call there. What we ended up doing there is we had a disposal well there from the previous private operator that had a bunch of the facilities that were able to be set up to inject water there. From an efficiency perspective and test proof of concept, we went there and converted one of the old producers into an injector. As we had alluded to in previous conversations, we're pretty encouraged with what we were seeing. Now with the most recent data, seeing that uplift, it encourages us really now to take that learning and move that into more optimally located patterns where we can better set up for really true waterflood, I guess, investment moving forward.

[Steve Buytels, President at Tamarack Valley Energy]

Yes, you'll see us likely potentially do some more there and look at a little bit of incremental investment around that pad, given we have the facilities there already. Then we will move into some other areas that are specifically set up in a more optimal way for waterflood. So stay tuned. We'll do one here, and then we'll probably be able to talk a little bit more when we come out with the budget in terms of other areas within that South Clearwater fairway that we'll look to go after.

[Sam Burwell, Analyst at Jefferies]

Okay, great. Shifting gears a little bit, on the TMX capacity that you have starting up early next year, just curious if you could unpack how much benefit that might be to realizations or netbacks. Is the price that you're getting essentially like Alberta WCS plus the cost of the TMX toll? Or is it more tied to, say, an Asian price less shipping? I'm just curious within the context of wider WCS diffs and the higher shipping rates that we've all seen.

[Steve Buytels, President at Tamarack Valley Energy]

Yep, another fair point. It is really volatile right now with all the pieces moving. But essentially, you have your transport locked in to get obviously to the West Coast there, so you know that. The bigger part of that is going to be where and how is that barrel priced on a Brent basis and then working that back. It is a little bit hard to give you an exact answer right now. And with the cost of freight, that has kind of moved, obviously, that diff out in general. But I do think, obviously, we signed up on that longer term, having that diversification of that barrel into different markets should be helpful and actually drive better realizations than what we would otherwise see on an Edmonton CS basis, right?

[Steve Buytels, President at Tamarack Valley Energy]

That is why we went after that. But again, right now it is a little bit tough to say with all of the volatility, specifically around the cost of freight, to give you an exact answer.

[Sam Burwell, Analyst at Jefferies]

Yeah, for sure. Totally fair there. Thank you, Steve.

[Steve Buytels, President at Tamarack Valley Energy]

Yep.

[Operator]

At this time, it appears we have no other phone questions. Please proceed.

Thank you. We have no questions online, so I'll pass it back to Brian Schmidt for any closing comments.

[Brian Schmidt, CEO and Founder at Tamarack Valley Energy]

Thank you everybody for today's call, and the interest in Tamarack. I would say in my career, and I think I've said this before, haven't seen an asset like this where you can grow production and reduce sustaining capital at the same time. It's very impressive. I think the future for this company is very bright based on that unique concept. With that, I'll close off and any further questions, please contact our main line. Thank you.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.

Participants

Executives

• Brian Schmidt, CEO and Founder
• Kevin Johnston, CFO
• Steve Buytels, President

Analysts

• Sam Burwell, Analyst at Jefferies