Mr. Brian Schmidt reports

INDIGENOUS COMMUNITIES AND TAMARACK VALLEY ENERGY ANNOUNCE CLEARWATER INFRASTRUCTURE LIMITED PARTNERSHIP

Tamarack Valley Energy Ltd. and 12 first nation and Metis communities have entered into a series of definitive agreements whereby the indigenous communities, collectively through a newly formed entity called Wapiscanis Waseskwan Nipiy Holding Limited Partnership, will acquire an 85-per-cent non-operated working interest in the newly formed Clearwater Infrastructure Limited Partnership and Tamarack will transfer $172.0-million of certain Clearwater mid-stream assets to the CIP for total consideration consisting of $146.2-million in cash and a 15-per-cent operated working interest in the CIP. The transaction is expected to close on or about Dec. 15, 2023.

Pioneering partnerships

The transaction enhances the long-term relationship between Tamarack and the indigenous communities where Tamarack is developing its Clearwater resource and ensures long-term economic benefit for the indigenous communities participating in the CIP.

Chief Gilbert Okemow, of Peerless Trout First Nation, commented: "We are excited to be partnering with an industry leader such as Tamarack, where our indigenous community has the opportunity to participate in a large multimillion-dollar business involved in oil and gas transportation and processing on our lands. Our ownership in WWN will provide much needed revenues for indigenous people for decades while at the same time giving our people experience in the business community. We are thankful to Tamarack and AIOC for this opportunity, and look forward to continuing to build on the success achieved to date."

Brian Schmidt (Aakaikkitstaki), president and chief executive officer of Tamarack, commented: "Formation of the CIP with WWN expands our commitment to finding opportunities to create shared value through partnership. The new venture will provide for meaningful long-term economic ownership by the indigenous communities in proximity to our world-class Clearwater assets. We are proud to be able to participate in this innovative business opportunity, which strengthens our existing relationships, builds indigenous business capacity and affords Tamarack continued alignment with the indigenous communities surrounding the areas we operate in. I want to thank the first nation and Metis communities that are now our partners, as well as AIOC, for the hard work and collaborative effort that enabled us to achieve this milestone."

Chana Martineau, CEO of AIOC, commented: "This transaction signifies a substantial leap in cultivating impactful partnerships with indigenous communities, fostering lasting prosperity for generations. AIOC takes pride in facilitating these transformative deals. Congratulations to the 12 indigenous communities and Tamarack. The resulting revenues promise authentic change and inclusion in the province's prosperity, representing a crucial milestone in collaborative economic growth."

Clearwater Infrastructure LP overview

Under the terms of the agreements, Tamarack has made a 16-year take-or-pay commitment for average volumes of 29,000 barrels of oil equivalent per day, which represents the gross commitment of the CIP. Tamarack retains priority access to any incremental capacity above this TOP, where volumes may be utilized on a fee-for-service basis. The transaction proceeds imply a multiple of approximately 8.3 times the average annual take-or-pay capital fee. Infrastructure transferred to the CIP as part of the transaction includes strategic oil batteries, gas processing facilities and key infield pipelines located at Nipisi, West Marten Hills, Marten Hills and Perryvale. Tamarack will continue to be the operator of these assets and will retain full access to 100 per cent of Tamarack's existing capacity. The assets also include approximately $30-million of gas conservation projects currently under construction, which will be financed by a portion of the transaction proceeds. Capital associated with these gas conservation projects will be identified as CIP capital in Tamarack's financial statements and is expected to be allocated approximately $25-million in 2023 and approximately $5-million in first quarter 2024. This $30-million investment is expected to reduce Tamarack's annual carbon dioxide equivalent emissions by approximately 140,000 tonnes. Furthermore, these projects can be leveraged to support additional future infrastructure projects, including gas conservation, allowing Tamarack to build on the success of its Clearwater development programs. This new platform will allow future opportunities for Tamarack to partner with indigenous communities on other projects as it continues to build and develop its world-class assets.

In a supply study, commissioned in support of the transaction, McDaniel & Associates Consultants Ltd. substantiated the scale of Tamarack's current Clearwater asset holding with forecasted Clearwater volumes well in excess of the TOP commitments. The Clearwater play continues to rank as a top-decile oil resource when ranked against the most economic oil projects in North America, and is expected to result in stable and predictable source of revenues to the indigenous communities.

The transaction continues to accelerate Tamarack's debt repayment and return of capital for shareholders. Proceeds from the transaction will reduce net debt to less than $1.0-billion exiting 2023, well below the initial return of capital net debt threshold of $1.1-billion contemplated in the company's return of capital framework. As Tamarack looks to confirm achievement of the first threshold of the return of capital framework, share buybacks remain the preferred mechanism to enhance shareholder returns at this time.

Advisers

RBC Capital Markets acted as exclusive financial adviser to Tamarack with respect to the transaction. CIBC Capital Markets and National Bank Financial acted as strategic advisers to Tamarack with respect to the transaction. Stikeman Elliott LLP acted as legal counsel to Tamarack with respect to the transaction.

Asokan Generational Developments acted as lead negotiator and assisted in structuring while ATB Financial acted as financial adviser, MNP as tax adviser and MLT Aikins LLP acted as legal counsel to WWN with respect to the transaction.

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. Operating as a responsible corporate citizen is a key focus to ensure it delivers on its environmental, social and governance commitments and goals.

Press conference and ceremonial closing

Tamarack and WWN will be hosting a press conference along with a ceremonial closing to celebrate the successful culmination of this newly formed partnership between the indigenous communities and Tamarack. Press conference details will be communicated once appropriate arrangements have been made.

We seek Safe Harbor.