2Q19 results as expected; Shuffling capital into Saskatchewan and waterflood activity
Tamarack Valley reported 2Q19 results which were largely in line with consensus, with production, FFOPS, and capital expenditures reported at 24,090 boe/d, $0.26/sh, and $30.7 mm, respectively, as the company continued to be subject to the ongoing Alberta mandated production curtailments. There was no change to the company’s 2019 guidance, with capital investment of $170-$180 mm still expected to generate production of 23,500-24,500 boe/d and FCF in the realm of $40-$50 mm.
09 Aug 19
2018/2019 production guidance on the rise once again, Capital plans remain unchanged
With continued well outperformance in all core areas, production over the last four weeks has crested 25,000 boe/d. Annual and exit 2018e guidance ranges have increased by 500 boe/d to 24,000-24,500 boe/d and 24,500-25,000 boe/d respectively. The capital budget is left unaltered at $223mm - $233 mm. Similarly in 2019e, preliminary guidance grows to 25,500-26,500 boe/d (previously 25,000-26,000 boe/d) and spawns from an unchanged capital program of $222 mm. Tamarack Valley will be added to the TSX Composite Index effective September 24th, 2018.
20 Sep 18
2Q18 results top expectations, 2018 guidance in the rise
Production in 2Q18 came in at 23,853 boe/d which was slightly ahead of GMP FE , consensus and company forecasts. Strong cash flow of $61.0 mm or $0.26/sh was 3% ahead of the GMP FE estimate and 8% better than the “street”. Field activity was busier than expected with expenditures of $52.7 mm (vs our $35 mm outlook), however even when paired with $8.4 mm of share buy backs, cash flow sufficiently covered the cash outlay in 2Q. 2018 guidance is being increased to 23,500-24,000 boe/d on strong 1H18 volumes while 2019e capital ($28 mm) is being accelerated into 2018e, which should facilitate continued growth momentum going into next year.
10 Aug 18
Posts high quality beat in 1Q18 results
Production in 1Q18 came in at 23,532 boe/d which was slightly ahead of GMP FE, consensus and company forecasts. This was ideally achieved from a capital outlay of ~$72 mm, which was 10% lower than we were forecasting. Strong cash flow of $58.5 mm or $0.25/sh was 10% ahead of GMP FE and street estimates of ~$53 mm or $0.23/sh. Volume growth and lower costs continued to be expected in 2H18 with the 10,000 bbl/d Veteran battery expansion complete and the reactivation of an operated gas plant by the end of 2Q18.
10 May 18
Posts strong 4Q17 results, announces opex lowering Viking takeaway agreement
Despite 4Q17 production being pre-released, the company’s cash flow of $57.6 mm or $0.25/sh handily topped consensus estimates of $0.20/sh and our expectation of $0.22/sh. All delivered through capital expenditures that were more than 20% lower than anticipated. The winter drilling program has been completed ahead of schedule and has led to January/February average volumes of 22,800 boe/d, with 20 more wells to bring onstream. Key to its 1H18 outlook is the corporate liquids contributions increasing to 64-66% (up from 62% in 4Q17). Reserve results were as expected and highlighted by F&D costs that imply recycle ratios of 1.4x-1.6x from year-end bookings we continue to view as conservative. A crude oil takeaway agreement for its Alberta Viking oil production, where dedicating 4,000 bbl/d towards Gibson’s 120 km Provost pipeline project, will save it $1.45/boe in operating costs at Veteran.
06 Mar 18
Volumes hit 2017 exit guidance, capital acceleration on tap with continued success
Tamarack Valley reported production of 20,541 boe/d for 3Q17, in line with consensus expectations; however, a busy third quarter has boosted volumes to 22,000 boe/d, framing the early achievement of 2017e exit guidance. Cash flow of $34.8 mm or $0.15/sh topped our outlook of $0.13/sh, but remained in line with consensus expectations. With forecasted cash flow on the rise, management is accelerating a fraction of its 2018e capital program into 2017e, with increased guidance ranging from $195 to $198 mm (previously $165 to $180 mm), inclusive of ~$9.0 mm of tuck in acquisitions. The company’s credit facility will be increased to $290 mm (from $265 mm) by the end of 2017.
08 Nov 17
Announces 2Q16 Financial Results, Cash Flow Ahead of Expectations
Tamarack’s 2Q16 financial results featured production (pre-released) and capital spending in line with forecasts, with corresponding cash flow that was meaningfully ahead of expectations underpinned by corporate initiatives to reduce operating costs. As a result, the Company’s balance sheet was stronger than anticipated exiting the period, with net debt levels equivalent to a 0.9x run-rate cash flow, or 0.5x its recently reduced $120 mm credit facility (down from $165 mm prior). Our forward view is virtually unchanged as is our 12-month target price of $5.00 per share and Outperform recommendation. We continue to like this name, noting the Company remains in a position of strength through the current downturn, thus being able to continue to capitalize on accretive acquisition opportunities that may arise, while also remaining well positioned to accelerate growth into an improving commodity price environment.
12 Aug 16
ANNOUNCES 2Q16 FINANCIAL RESULTS
Impact: Positive. Tamarack's 2Q16 financial results featured production (pre-released) and capital spending that were in-line with forecasts, with corresponding cash flow that was ahead of ours and consensus estimates in the period underpinned by initiatives to reduce operating costs in combination with stronger pricing and lower royalty expenses.
11 Aug 16
2Q16e Quarterly Preview
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
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26 Jul 16
Expands Footprint Yet Again, Completes $81.6 mm Financings, Increases 2016e Guidance
Coming off restriction from our participation in the Company’s latest $81.6 mm equity financing, we update our estimates.Concurrent with the financing, Tamarack announced two strategic acquisitions, further expanding its footprint in the Redwater/Wilson Creek areas, while adding a new core area at Penny in southern Alberta.In light of the acquisitions, Management has put forth updated 2016e guidance factoring in a modest bump to both E&D spending and production volumes given a partial year contribution from the new assets.We have updated our forecast for the acquisitions along with our latest commodity price deck update, leading to a revised target price of $5.00 per share, with implied returns continuing to be supportive of our Outperform ranking.
13 Jul 16
ANNOUNCES 1Q16 RESULTS
slightly positive with the quarterly results largely in line with expectations, while results to date look strong relative to Management's guidance. In addition, first quarter activity included key infrastructure initiatives along with additional tuck-in acquisitions, both of which will set the Company up to continue to create long-term value for shareholders
11 May 16
Intermediates, Mid Caps & Small Caps
With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe
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26 Apr 16
Domestic E&P Statistical Package and FD&A Review
With this publication we highlight various metrics and statistics forthcoming from yearend reserve books for our Domestic E&P coverage universe (Integrateds, Large Cap, Oilsands, Intermediate, Mid Cap, and Small Cap). Similar charts for YE2014 reserves can be found in our Statistical Package dated April 7, 2015.
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12 Apr 16
Intermediates, Mid Caps & Small Cap Commodity Price Update
With this publication we highlight forecast revisions associated with our commodity price update (Natural Gas Update; Crude Oil Update), roughly characterized by near term lifts in crude oil prices concurrent with a reduction to portended 2016e and 2017e natural gas pricing outlooks. While there are a few ranking changes on mostly non-material moves to valuations, implied returns within the group on the whole are far less than postulated only a few months ago, reflective of resurgent equity prices on what was previously an oversold market. Details of the Alberta royalty review should arrive in the following weeks; hence the likelihood of subsequent forecast changes is likely.
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24 Mar 16
Reports 2015 Year-End Financial Results, Reiterates Guidance Range
Tamarack reported strong year-end financial results with cash flow that came in ahead of our estimate, while net debt was lower on the back of lower spending and disposition activity. Production performance was strong on capital spending that was ~15% lower than formal guidance as the Company continues to benefit from improved capital efficiencies as a result of redesigned drilling and completion techniques coupled with service cost deflation. Management has reiterated its 2016e guidance that will see $40-$57 mm of capital spending to average 8,700-9,700 boe/d, with the range dependent on commodity prices. We have updated our forecast for year-end results with only minor tweaks to our overall outlook for the stock. As such, we see no reason to alter our Outperform ranking or $4.50 per share target price.
24 Mar 16
Reports 2015 Year-End Reserves, Defers Capital Plans and Revises Guidance Range
Tamarack reported year-end reserves indica ve of per share growth of 14% on a 1P basis and 5% on a 2P basis, largely re ec ng acquisi on activity during the year. With continued weakness in commodity prices to date in 2016, Management has prudently deferred $6 mm to $8 mm of planned capital expenditures to the back half of the year, while providing revised guidance ranges in the event commodity prices do not recover. We have updated our forecast with only modest changes from our prior view, while also updaing our NAV methodology for the 2015 reserve book. We have maintained our Outperform ranking and $4.00 per share target price.
25 Feb 16
Intermediate/Mid/Small Cap Commodity Price Update Impact
With this publication we highlight forecast revisions associated with our crude oil commodity price update. Concurrent within a dynamic time for E&Ps, some of which have already begun the process of 2016 capital budget downdrafts, revised estimates attempt to directionally capture a shift towards capital conservation, though severely weakened futures curves have influenced our thinking for the better part of 6 months anyway. We expect further capital investment reductions forthcoming from E&Ps in the coming weeks.
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08 Feb 16
Tamarack Valley Reports Strong Fourth Quarter Results, Provides 2016e Guidance
Fourth quarter production was strong coming in ahead of our estimate and Management’s exit guidance, with the Company able to achieve this on lower than anticipated spending. Estimated net debt exiting the year was also lower than expected, allowing for additional financial flexibility for the Company entering 2016. With balance sheet preservation the top priority, Management has put forth a preliminary capital spending budget of $52-$57 mm with average annual production pegged at 9,500-9,700 boe/d, although this remains fluid in light of current commodity prices.
20 Jan 16
TAMARACK VALLEY ENERGY LTD. (TVE) REPORTS STRONG FOURTH QUARTER RESULTS, PROVIDES 2016E GUIDANCE
Impact - positive with estimated fourth quarter production ahead of our thinking on lower spending resulting in lower than anticipated net debt exiting the year, while 2016e guidance will also see a higher level of production on lower spending compared to our forecast. That said, in light of current commodity prices, Management will remain prudent in its approach to capital allocation and will look to reduce spending should commodity prices remain at or below current levels.
19 Jan 16
New Commodity Price Outlook Impact
“Worse? How could they get any worse? Take a look around you, Ellen. We’re at the threshold of hell”. These are the words spoken by Clark Gris-wold in the holiday classic “Christmas Vacation”, and seem aptly suited for the general sentiment in the Canadian energy space at the moment as we roll out a summary of our regular forecast revisions extending from our most recent crude oil and natural gas price forecast update.
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14 Dec 15
TAMARACK VALLEY ENERGY LTD. (TVE) ANNOUNCES STRONG THIRD QUARTER RESULTS
Impact - positive given quarterly results that came in ahead of both our expectation and the consensus, while the Company has nudged up production guidance for the year on the back of strong production performance to date
11 Nov 15
INTERMEDIATES, MID CAPS & SMALL CAPS - 3Q15e Quarterly Preview
With this publication we briefly summarize our projections for 3Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. Within the backdrop of continued weakness in the commodity price complex that saw the retrenchment of crude oil pricing during the quarter, after what was a short lived rally during the second quarter, we are anticipating yet another lacklustre reporting period in the Junior E&P space, with the key themes coming out of the quarter likely to be centered on further reductions to capital programs, ongoing takeaway capacity constraints, potential dividend cuts, reduced bank lines from fall credit reviews, continued weakness in the Station 2 and CREC natural gas price markers, and for some, the rollout of formal 2016e budgets.
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23 Oct 15
TAMARACK VALLEY ENERGY LTD. (TVE) CORPORATE UPDATE
We had the pleasure of hosting the senior management team from Tamarack on Thursday afternoon for a presentation discussing capital and operating cost reductions at its Wilson Creek asset that have helped build a Cardium well inventory that pays out in less than 1.5 years. Underpinned by these strong half-cycle well economics, the Company anticipates that it will be able to generate free cash flow at current production levels while maintaining its debt levels under 2.0x trailing cash flow within a US$50.00/bbl crude oil environment.
25 Sep 15
INTERMEDIATES, MID CAPS & SMALL CAPS - Crude Oil Downdraft, Though Remain Far More Constructive Than Current Forward Strip Would Suggest
With this publication we highlight forecast revisions stemming from an interim commodity price update centered around the crude oil pricing complex. Moves for crude oil weighted producers are significant, with 2016e cash flows down 12%-15%, and portended NAVs reduced sizably on the employment of a materially lower terminal value within the scope of the forecast period, though not reflective of the potential attrition in E&D capital investment and dividend policy should the current forward strip come to fruition in the cash market.
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31 Aug 15
Junior E&P 2Q15 Review
Within this publication we summarize changes to forward estimates coming off of the reporting of second quarter financial and operating results, highlighting equity price movements and a few valuation comparatives through to the end of 2016e.
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20 Aug 15
Tamarack Valley Reports 2Q15 Financial Results In Line with Expectations
Given a prior operational update provided by Tamarack at the end of July, the Company’s 2Q15 financial and operating results were consistent with our expectations for the period. The Company’s 2015e annual guidance remains unchanged from this prior update where a weakening commodity price picture prompted a reduction to annual capital spending to between $125-$130 mm, although left corresponding annual production at between 8,000-8,200 boe/d (55-60% oil and liquids).
14 Aug 15
TAMARACK VALLEY ENERGY LTD. (TVE) REPORTS 2Q15 FINANCIAL RESULTS IN LINE WITH EXPECTATIONS
Impact: Neutral. Given a prior operational update provided by Tamarack, the Company's 2Q15 financial and operating results were consistent with our expectations for the period.
13 Aug 15
Tamarack Valley Announces 2Q15e Production, Reduces 2015e Capital Budget While Maintaining Annual Production Guidance
We view Tamarack’s latest update in a positive light, as Tamarack’s 2Q15e and current production levels appear to be tracking ahead of both internal forecasts and our outlook coming into this release, while its reduced corporate budget and increased credit facility will maintain the Company’s financial flexibility, allowing it to take advantage of tuck-in acquisition opportunities or preserve its balance sheet within a low commodity price environment.
30 Jul 15
TAMARACK VALLEY ENERGY LTD. (TVE) ANNOUNCES 2Q15 PRODUCTION, REDUCES 2015E CAPITAL BUDGET WHILE MAINTAINING ANNUAL PRODUCTION GUIDANCE
Impact: Positive, as Tamarack's 2Q15e and current production levels appear to be tracking ahead of both internal forecasts and our current outlook while its reduced corporate budget and increased credit facility will maintain the Company's financial flexibility, allowing it to take advantage of tuck-in acquisition opportunities or preserve its balance sheet within a low commodity price environment.
29 Jul 15
INTERMEDIATES, MID CAPS & SMALL CAPS 2Q15e - Quarterly Preview
With this publication we briefly summarize our projections for 2Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. In what could be viewed as the “Perfect Storm”, we are anticipating yet another weak reporting period in the Junior E&P space as continued deterioration of the commodity price complex will surely influence 2H15e capital investment plans, exacerbated by ongoing takeaway capacity constraints that have resulted in rolling shut-ins for many of the names that we cover, within the backdrop of an uncertain fiscal regime in Alberta in the interim. Typically the second quarter is already a relatively quiet period to begin with in terms of activity in the field due to the onset of spring breakup, though with most shuttering operations early in late February motivated in part to extract service cost deflation in a volatile pricing environment, activity specific to 2Q15e should be muted.
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23 Jul 15
Rebalancing of Commodity Price Forecast Preserves Challenging Outlook for Broader Intermediate, Mid, Small Cap Sector: New Commodity Price Outlook Impact
With this publication we provide our regular forecast revisions stemming from our quarterly commodity price update for both the crude oil and natural gas pricing complex. All told, we see only modest moves in the near term to our pricing streams with our longer term view largely intact. Given the current state of commodity prices from an oversupply of both crude oil and natural gas, the kick off of summer, ongoing restrictions on TCPL’s NGTL system, and the recent election of an NDP majority government, we anticipate the market to trade sideways from here for the next few months until further certainty is obtained in the fall as to the direction of commodity prices along with any potential changes to the royalty structure in Alberta. We had anticipated to see an active M&A market by now that would pick up even further heading into the back half of the year, although in reality see this as somewhat sterilized until further clarity is obtained on the NDP’s energy policies.
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25 Jun 15
Tamarack Valley Announces Acquisition of Wilson Creek Cardium Assets, $70 mm Bought Deal Financing, and Increased 2015 Guidance
On the heels of the Company’s first quarter results, as detailed in our Facts dated May 14, 2015, Tamarack has announced an acquisition of Cardium assets in the Wilson Creek area for cash consideration of $54 mm, further consolidating the Company’s position here and in the process achieving critical mass with a contiguous land base locked up in the Wilson Creek/Alder Flats region where the Company has been carrying out an active drilling program.
15 May 15
Tamarack Valley Energy Announces 1Q15 Financial & Operating Results Ahead of Expectations
Tamarack’s 1Q15 financial results featured production that was consistent with our forecast while corresponding cash flow was slightly ahead of expectations, as well as consensus estimates from E&D capital that was modestly lower than our estimate.
14 May 15
TAMARACK VALLEY ENERGY LTD. (TVE) ANNOUNCES 1Q15 FINANCIAL & OPERATING RESULTS AHEAD OF EXPECTATIONS
Impact: Slightly Positive, as Tamarack's 1Q15 production was consistent with our forecast while corresponding cash flow was slightly ahead of expectations (as well as consensus estimates) from E&D capital that was lower than our estimate.
13 May 15