Mr. Brian Schmidt reports

TAMARACK VALLEY ENERGY ANNOUNCES YEAR-END 2023 FINANCIAL & RESERVE RESULTS, CLEARWATER RESOURCE EVALUATION AND PROVIDES OPERATIONAL AND GUIDANCE UPDATE INCLUDING EXECUTIVE APPOINTMENT

Tamarack Valley Energy Ltd. has released its audited financial and operating results for the three months and year ended Dec. 31, 2023, and the results of Tamarack's year-end independent oil and gas reserves evaluations as of Dec. 31, 2023, prepared by McDaniel & Associates Consultants Ltd. and GLJ Ltd., Tamarack's independent qualified reserves evaluators. Selected reserves, financial and operating information is outlined herein. Selected financial and operating information should be read with Tamarack's audited annual consolidated financial statements, and related management's discussion and analysis (MD&A) for the three and 12 months ended Dec. 31, 2023, and the company's annual information form (AIF) for the year ended Dec. 31, 2023, which are available on SEDAR+ and on Tamarack's website.

Two thousand twenty-three financial and operational highlights:

• Improved balance sheet strength -- YoY (year-over-year) net debt reduction of $373-million (equal to approximately 67 cents per share) to exit the year with net debt of $984-million.
• Improved operating costs -- production expense of $8.89/boe (barrels of oil equivalent) in Q4 2023 reflected a 16 per cent QoQ (quarter-over-quarter) improvement, demonstrating the benefits of core area production growth, program efficiencies and disposition of assets with higher costs.
• Low-cost organic reserves growth -- increased proved developed producing (PDP) reserves by 15 per cent (representing 137 per cent of production) at a finding and development (F&D) cost of $16.49/boe, and total proved plus probable (TPP) reserves by 13 per cent (representing 214 per cent of production) at an F&D cost of $20.86/boe, net of dispositions.
• Achieved enhanced return of capital threshold -- delivered on Tamarack's commitment to achieve the first threshold of the company's enhanced return of capital framework. As a result, subsequent to year-end, the company was able to accelerate enhanced returns through the buyback of shares as part of its normal course issuer bid (NCIB).
• Increased oil production weighting -- delivered annual production of 67,034 boe/d (boe per day), in line with guidance. Fourth-quarter production of 64,881 boe/d, reflected approximately 4,500 boe/d from non-core asset sales and unplanned third party restrictions in the Charlie Lake. Tamarack's oil and liquids weighting as a per cent of total production increased to 85 per cent in Q4 2023, compared with 82 per cent in Q4 2022.
• Optimized capital spending -- total capital expenditures in 2023 of $516-million included: $21-million of gas conservation projects sanctioned with the Clearwater Infrastructure LP (CIP), $20-million accelerated from the 2024 capital budget and $475-million allocated to Tamarack's development program. Development spending was in line with the upper end of the $425-million to $475-million guidance. Accelerated capital of $20-million into 2023 from 2024 represented an opportunity to take advantage of favourable field conditions and services pricing, which will result in an equal reduction to 2024 spending.
• Free funds flow generation -- delivered $248-million of free funds flow during the year, which was directed to dividends and debt repayment.
• Strategic infrastructure partnership -- entered into a series of agreements with 12 first nation and Metis communities to establish the CIP, enhancing the long-term relationships between Tamarack and the indigenous communities. As part of this transaction, Tamarack received gross proceeds of $146-million and a 15-per-cent working interest in the CIP while retaining operatorship and full access to 100 per cent of Tamarack's existing mid-stream capacity.

Brian Schmidt, president and chief executive officer of Tamarack, stated:

"Tamarack completed its strategic transformation in 2023, integrating the three corporate Clearwater acquisitions that closed in 2022 and divesting our non-core west-central Alberta Cardium assets, affording our team the ability to focus on our core Clearwater, Charlie Lake and EOR [enhanced oil recovery] assets. Most importantly, we delivered on a key commitment to our shareholders to reduce our net debt and achieved the first threshold of our enhanced return of capital framework with share buybacks commencing in January, 2024.

"In addition, we continued to realize significant value generation from the assets acquired pursuant to the acquisition of Deltastream Energy Corp. Since close of the acquisition in October, 2022, Tamarack has grown production on the Deltastream assets by 29 per cent. Reflecting the highly economic nature of the Clearwater, the assets delivered approximately $230-million of free NOI [net operating income] in 2023. Incremental to that, the 2023 year-end BTAX [before tax] TPP NPV10 [net present value at a 10-per-cent discount] of the assets increased to over $1.8-billion. Over all, this transaction continues to exceed our expectations while providing long-term development visibility."

Two thousand twenty-three reserves report highlights

Tamarack's drilling program, combined with continued development of Clearwater waterflood, contributed significantly to the 2023 reserves, further enhancing the long-term resiliency and sustainability of free funds flow for the company moving forward. Key highlights of the company's PDP, total proved (TP) and TPP reserves from the reserves report are highlighted below:

• Strong development program results -- excluding reserves and production associated with the dispositions, Tamarack's capital program delivered strong results in 2023:
  • PDP reserves increased by 15 per cent to 64 MMboe (million barrels of oil equivalent) and replaced 137 per cent of production;
  • TP reserves increased by 18 per cent to 128 MMboe and replaced 189 per cent of production;
  • TPP reserves increased by 13 per cent to 224 MMboe and replaced 214 per cent of production.
• Attractive finding and development costs -- focused execution in the Charlie Lake and Clearwater achieved the following F&D costs, including changes in future development capital (FDC):
  • PDP reserves: $16.49/boe;
  • TP reserves: $20.90/boe;
  • TPP reserves: $20.86/boe.
• Strong recycle ratios -- Tamarack's highly economic oil plays delivered an annual operating netback of $42.47/boe. Coupled with low-cost reserve additions, the company delivered the following recycle ratios:
  • PDP: 2.6 times;
  • TP: 2.0 times;
  • TPP: 2.0 times.
• Increased oil weighting -- overall liquids weighting increased YoY by 7 per cent, with 2023 TPP reserves composed of 85 per cent oil and NGLs, and 15 per cent natural gas.
• Significant intrinsic value -- realized before-tax net present value of booked reserves:
  • PDP NPV10: $1.6-billion;
  • TP NPV10: $2.6-billion;
  • TPP NPV10: $4.5-billion.
• Charlie Lake pool extensions -- the company's Charlie Lake assets continued to add material pool extensions in 2023, contributing to reserves growth in the play of 4-per-cent and 147-per-cent production replacement on a TPP basis. Through continuing optimization and additions to the company's land position, the percentage of booked TPP locations exceeding 2.5 miles of lateral length increased from 35 per cent to 46 per cent YoY.
• Clearwater assets and waterflood value contribution -- the company's Clearwater assets realized significant reserves growth in 2023, delivering increased bookings of 43 per cent and 28 per cent for TP and TPP reserves, respectively. The TPP increase replaced 279 per cent of 2023 Clearwater production. At year-end 2023, 12 per cent of total Clearwater TPP reserves were associated with waterflood (3 per cent at 2022 year-end), indicating the continued opportunity for reserves growth as waterflood development continues. In support of converting the company's resource to booked reserves and realized funds flow, Tamarack has allocated capital within the 2024 budget to materially increase water injection rates from approximately 4,000 bbl/d (barrels per day) at year-end 2023 to over 15,000 bbl/d by the end of 2024.
• Contingent and prospective resource evaluation -- with the integration of the three Clearwater consolidating transactions complete, Tamarack retained McDaniel to evaluate and prepare a report on the heavy oil contingent and prospective resources of the company's Clearwater assets as at Dec. 31, 2023:
  • The resource report indicates Tamarack's Clearwater heavy oil assets have a best estimate of company gross contingent resources (unrisked) of 89.5 MMbbl (million barrels) and company gross prospective resources (unrisked) of 118.4 MMbbl.
  • Inventory attributed to the company's Clearwater assets within the report totals 592 net contingent and 1,182 net prospective drilling locations. When combined with the company's 381 net TPP locations included in the year-end evaluation, the identified Clearwater inventory exceeds 2,100 locations.
  • With Clearwater assets producing approximately 13 MMbbl of heavy oil in 2023, TPP reserves represent eight years of equivalent production. Unrisked best estimate contingent and prospective resources equate to approximately seven and nine years of equivalent production, respectively.

During 2023, Tamarack was successful in divesting certain of its non-core assets, including the west-central Cardium assets, which were weighted approximately 60 per cent to natural gas. This change is reflected in the table entitled "Year-over-year reserves data (forecast prices and costs)."

Two thousand twenty-four capital guidance update

Exiting 2023, Alberta saw favourable weather for continuing field activity through to the end of December. As a result, Tamarack was able to leverage the availability of service providers to accelerate $20-million of the dedicated H1 2024 budget into 2023. Owing to this acceleration, the company has updated its 2024 capital spending guidance associated with the previously disclosed base budget to a range of $390-million to $440-million. In addition, 2024 carbon tax expense guidance has been reduced. In total, the acceleration of capital and adjustment to the carbon tax treatment serve to increase free funds flow by approximately $35-million in 2024.

Within Tamarack's 2024 program, the company continues to retain significant capital flexibility, enabling the adjustment to plans should it see further downside oil price volatility, while not expecting to impact 2024 production guidance which is maintained at the 61,000 boe/d to 63,000 boe/d range. Tamarack will continue to monitor timing of the CSV Albright sour gas plant where the Company pro-actively secured firm processing capacity in support of its continuing Charlie Lake development program. Any decision to commence drilling associated with project will be subject to prevailing commodity prices and expected CSV on-stream timing. The company does have the ability to swing production from existing wells to this facility to utilize its capacity ahead of implementing any additional drilling.

Two thousand twenty-four operations update

Charlie Lake

Tamarack continues to see strong results from its drilling and development program in Charlie Lake. In Q1 2024, the company commenced flowback operations on the 11-11-074-08W6 pad with initial 30-day production rates (IP30) per well exceeding 1,000 bbl/d oil and 1,400 boe/d. Initial oil production rates from the 11-11-074-08W6 pad are 60 per cent higher than 2023 wells drilled at Wembley, reflecting strong reservoir quality, benefits of extended lateral length and reduced facility constraints. Expansion of Tamarack's 16-35-073-08W6 battery at Wembley is on target for later in Q1 2024, and is expected to result in an incremental 1,600 boe/d of liquids and gas handling capacity for Tamarack's operated and controlled volumes. Some associated downtime at the battery is expected during the first quarter to accommodate the expansion work.

In 2023, the company added 11.0 net sections of land through acquisition at Crown sales, further increasing the inventory depth of Tamarack's Charlie Lake asset.

Clearwater

West Marten Hills and Nipisi

At year-end 2023, Tamarack had brought 39 wells on production through the 15-15-076-05W5 battery, with December, 2023, throughput at approximately 7,000 bbl/d (including nine C-sand producers and 30 B-sand producers). The success demonstrated by Tamarack's development in the B and C sands provides the ability to generate further capital efficiencies given the stacked nature of the play. Oil production from the north Clearwater assets averaged approximately 19,000 bbl/d exiting 2023, representing a YoY increase of approximately 40 per cent:

• West Marten C sand success -- at the company's 02-22-076-05W5 and 12-22-076-05W5 pads, the eight C sand wells had average peak monthly rates of 212 bbl/d per well. Based on this success, Tamarack drilled four additional C sand wells off the 08-15-076-05W5 pad, which are currently cleaning up. As part of the 2024 program, the company expects to drill additional C sand wells, building further on the results demonstrated to date.
• West Marten B sand performance strength -- results from Tamarack's 30 B sand wells demonstrated peak monthly average rates of 270 bbl/d per well. These well results further emphasize the significant upside in the area, with the ability to leverage shared infrastructure to improve economic returns. In 2024, Tamarack is following up this success with seven additional B sand wells at the 05-15-076-05W5 and 12-15-076-05W5 pads.
• Advancing key infrastructure -- Tamarack's 10-02-077-05W5 Marten Creek gas plant came on-line in January, 2024, flowing in excess of three MMcf/d (million cubic feet per day) at the inlet, delivering on the company's gas conservation initiatives.

Marten Hills

As development is continuing at Marten Hills, Tamarack is leveraging primary well cost-efficiency improvements in conjunction with progressing waterflood. Tamarack brought 12 wells on stream in August, 2023, from the 09-06-075-25W4 pad. In aggregate, these wells were drilled at a cost of under $100/metre, representing an improvement of 12 per cent to 15 per cent relative to 2023 average budgeted cost.

Waterflood -- increasing injection at Nipisi and Marten Hills

Four additional Nipisi injectors have been brought on stream, increasing Tamarack's total area water injection to more than 3,000 bbl/d, with plans to further ramp to more than 7,500 bbl/d by year-end 2024. At Marten Hills, Tamarack converted one additional injector, bringing area water injection to more than 2,000 bbl/d. This area is also expected to ramp to more than 7,500 bbl/d by year-end 2024. Tamarack currently has 2,200 bopd (barrels of oil per day), or 6 per cent of Clearwater oil production under waterflood.

Delineation and exploration:

• West Nipisi -- since the beginning of 2023, Tamarack has drilled or participated in nine gross (4.7 net) wells in the West Nipisi area with greater than 30 days of production data. This includes five gross B sand wells with average peak monthly rates of approximately 200 bbl/d per well, and four gross C sand wells with average peak monthly rates of approximately 270 bbl/d per well, including the most recent 102/4-35-76-9W5 well which delivered an IP30 oil rate of 330 bbl/d. Based on this success, the company plans to be active on its joint venture lands in the area in 2024.
• Seal -- in Q1 2023, Tamarack successfully drilled and tested three separate Clearwater-equivalent sands off one pad (upper, middle and lower). The combined IP30 from the three wells was approximately 380 bopd. The lowermost sand was drilled with only three legs, with the objective being to test commerciality of the sand. The middle and upper sands were developed with six-leg lateral legs per sand, each extending approximately 1.25 miles in length. Based on the results of the Seal program, Tamarack was able to derisk 950 MMbbl of OOIP (original oil in place) on its existing lands. Given the stacked nature of the multiple zones, management expects development at Seal to drive strong capital efficiencies and economics with large-scale multiwell pads pushing lateral lengths to 1.5 miles.

Risk management

The company takes a systematic approach to manage commodity price risk and volatility to ensure sustaining capital, debt servicing requirements and the base dividend are protected through a prudent hedging management program. For 2024, approximately 50 per cent of net after-royalty oil production is hedged against WTI (West Texas Intermediate), with an average floor price of approximately $68 (U.S.)/bbl with structures that allow for upside price participation averaging approximately $89 (U.S.)/bbl. The company's strategy provides protection to the downside while maximizing upside exposure. Additional details of the current hedges in place can be found in the corporate presentation on the company's website.

Tamarack would like to thank its employees, shareholders and other stakeholders for all of their support over the past year. Tamarack materially advanced its multiyear transformation and would not have been able to achieve this without the dedication and hard work of its employees. The company looks forward to continuing to develop its high-quality assets to create shareholder value in a sustainable and responsible way.

Executive update

Tamarack is pleased to announce the promotion of Rocky Baker to vice-president of marketing. Since joining the company in January, 2022, Ms. Baker has been instrumental in establishing a strong internal marketing team, and executing on key initiatives to enhance both market access and product realizations. Ms. Baker brings over 17 years of oil and gas marketing experience and, prior to joining Tamarack, she was manager of the commercial services group at Inter Pipeline. Ms. Baker holds a chartered professional accounting (CPA) designation and a bachelor of commerce degree from the University of Calgary.

Investor call

Tamarack will host a webcast at 9:30 a.m. Mountain Time (11:30 a.m. Eastern time) on Wednesday, Feb. 28, 2024, to discuss the year-end reserves, financial results and an operational update. Participants can access the live webcast on-line or through links provided on the company's website. A recorded archive of the webcast will be available on the company's website following the live webcast.

Two thousand twenty-three independent qualified reserve evaluations

The associated tables highlight the findings of the reserve reports, which have been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities (NI 51-101), and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (COGEH) by McDaniel and GLJ, qualified independent reserves evaluators, each with an effective date of Dec. 31, 2023, and preparation dates of Feb. 9, 2024, and Jan. 29, 2024, respectively. All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges, or general and administrative expenses, and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs, and estimated future capital expenditures. The information included in the "Net present values of future net revenue before income taxes discounted" table is based on an average of pricing assumptions prepared by the following three independent external reserves evaluators: GLJ, Sproule Associates Ltd. and McDaniel. It should not be assumed that the estimates of future net revenues presented in the associated tables represent the fair market value of the reserves. All per-share reserves metrics below are based on basic shares outstanding as of Dec. 31, 2023. Note that columns may not add due to rounding.

Future development capital costs

The associated table is a summary of estimated FDC required to bring TP and TPP undeveloped reserves on production.

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 Tamarack delivers on its environmental, social and governance (ESG) commitments and goals.

We seek Safe Harbor.