Tamarack Valley Energy Announces Strong Q3 2026 Results and Provides Operational Update

CALGARY, AB, Oct. 28, 2026 /CNW/ -- Tamarack Valley Energy Ltd. is pleased to announce its financial and operating results for the three and nine months ended September 30, 2026. Selected financial and operating information should be read with Tamarack's unaudited consolidated interim financial statements and management's discussion and analysis for the three and nine months ended September 30, 2026, which are available at www.sedarplus.ca and www.tamarackvalley.ca.

Tamarack's third quarter 2026 results were highlighted by the previously announced definitive arrangement agreement to merge with Headwater Exploration Inc. ("Headwater") in an all-stock transaction (the "Transaction") creating a premier North American oil company with top-tier profitability and the unmatched position as the only publicly-traded pure-play Clearwater producer. The combined company will be valued at $10 billion and have run-rate Clearwater production⁽²⁾ of >80,000 boe per day.

From an operational perspective, Tamarack continues to deliver strong Clearwater production, operating results and cash flows, driven by robust operational execution and elevated commodity prices. With significant capital allocation flexibility, the Company continues to focus on maximizing total shareholder returns through a combination of accelerated development of the Clearwater's high-margin, long-duration inventory and enhanced returns via share buybacks and the base dividend.

Q3 2026 Operational and Financial Highlights

• Production – Tamarack's Clearwater assets delivered 55,298 boe per day⁽²⁾ in Q3 2026, a 16% increase over Q3 2025, driven by ongoing drilling and development activities and strong reservoir response from waterflood expansions.
• Cash flows – Tamarack delivered cash provided by operating activities of $247.7 million, adjusted funds flow⁽¹⁾ of $214.0 million and free funds flow⁽¹⁾ of $92.4 million ($0.19 per diluted share). Year to date, Tamarack has delivered free funds flow⁽¹⁾ of $375.3 million ($0.78 per diluted share).
• Capital investments – Tamarack invested $120.5 million in the third quarter and $312.6 million year-to-date. Since the beginning of the year, Tamarack has drilled 70 producing wells, 38 injection wells, three water source wells and converted 18 producers to injection. The Company exited the third quarter with water injection rates of over 60,000 bbl per day.
• Strategic combination – On September 7, 2026, Tamarack entered into the Transaction with Headwater to acquire 25,000 boe per day of high-margin heavy oil production⁽²⁾, >100 million boe of proved plus probable reserves⁽²⁾ and >1,000 potential drilling locations⁽²⁾ across the greater Clearwater fairway. The Transaction is expected to close in mid-to-late November.
• Enhanced dividends - In connection with the Transaction, Tamarack plans to increase its quarterly dividend by 20% from $0.05 per share to $0.06 per share ($0.24 per share annualized), commencing December 2026. This second 2026 increase to Tamarack's dividend is expected to be declared in November following completion of the Headwater acquisition.
• Share buybacks – In Q3, Tamarack repurchased 4.6 million common shares, or 0.9% of the common share float, for a total cost of $61.7 million under its share buyback program. Year to date, Tamarack repurchased 15.8 million common shares, or 3.2% of the common share float, for a total cost of $189.1 million.
• Liquidity – Tamarack exited the third quarter with net cash⁽¹⁾ of $141.2 million and available funding⁽¹⁾ of $1.3 billion, including cash on hand of $541.4 million and an undrawn credit capacity of $875.0 million.

Q3 2026 Operational and Financial Highlights

2026 Pro Forma Outlook & Operational Update⁽³⁾

Tamarack's Clearwater assets delivered production of 55,298 boe per day⁽²⁾ in Q3 2026, a 16% increase compared to 47,751 boe per day⁽²⁾ in Q3 2025, reflecting the ongoing success of the primary development drilling and waterflood expansion programs. Tamarack drilled 28 wells in the third quarter and 70 wells year to date.

The Company continues to build out waterflood injection capacity across all of its core Clearwater positions. In the first nine months of the year, Tamarack drilled 38 injectors, three water source wells and converted 18 producer wells to injection. Injectivity and waterflood response continues to exceed expectations, providing additional runway for waterflood growth in Tamarack's core areas. In the South Clearwater fairway, the Company continues to see positive indications from its injection pilot in the Meanook area. Injection has stabilized into the pilot well and the offsetting producers are currently showing a 100% uplift of incremental oil over base production. Tamarack is planning to add a second injector to this pilot program in Q4 2026.

Tamarack exited the third quarter of 2026 with over 60,000 bbl per day of water injection and estimated total oil uplift from injection currently estimated to be 10,000 bbl per day. The Company is reaffirming its previous 2026 exit rate injection guidance of 70,000 bbl per day with ~40% of Clearwater oil production supported by waterflood (in respect of legacy Tamarack assets on a standalone basis). Tamarack expects that the combined company will have 2026 exit water injection rates of >100,000 bbl per day (45% of production supported by waterflood).

On a standalone basis, Tamarack increased full year 2026 Clearwater production guidance to 54,500 - 56,000 boe per day⁽²⁾ primarily in response to waterflood outperformance. The revised guidance reflects a 17% increase in Clearwater production year-over-year, excluding the expected consolidation of acquired Headwater production from mid-November to the end of the year (>3,000 boe per day annualized). Full year corporate production⁽²⁾ is forecasted to average 65,500 - 67,500 boe per day, which also includes H1 production from the Charlie Lake assets that were sold in June (full year impact of 8,000 boe per day annualized). Following the Transaction, the run-rate production⁽²⁾ of the combined company on a pro forma basis is anticipated to be >80,000 boe per day.

The 2026 combined capital investment programs of both individual companies for the full year are expected to be approximately $700 million. Tamarack is reaffirming its revised full year 2026 capital program of $450 - 470 million, which includes the consolidation of Headwater's planned capital investment programs following the completion of the Transaction to the end of the year. Tamarack's capital program is trending towards the high end of the range, reflecting the Company's acceleration of development capital into 2026 in response to higher commodity prices in the second and third quarters.

As previously announced, the Transaction is subject to regulatory and shareholder approvals and is expected to close shortly after the shareholder vote, which is scheduled for November 18, 2026. Integration planning for the combined operations, marketing and corporate office are well underway. Tamarack continues to identify additional synergies related to the business combination and plans to provide an update in mid-November, together with a combined 2027 budget, expected to be announced in conjunction with the completion of the Transaction.

Shareholder Returns & Dividend Increase

In the third quarter of 2026, the Company repurchased 4.6 million common shares at an average cost of $13.09 per share. Year to date, the Company has repurchased 3.2% of the common share float, or 15.8 million shares at a weighted average price of $11.74 per share. Since the commencement of the share buyback program in January 2024, the Company has now reduced the common share count by 15.4%, or 85.8 million common shares, at a weighted average cost of $5.80 per share.

In conjunction with the sale of Charlie Lake, Tamarack previously announced a 25% increase to its quarterly dividend from $0.04 per share to $0.05 per share ($0.20 per share annualized), commencing in the third quarter of 2026. In connection with the Transaction, Tamarack previously announced a second quarterly dividend increase by 20% from $0.05 per share to $0.06 per share ($0.24 per share annualized), commencing December 2026. This second increase to Tamarack's dividend is contingent upon the completion of the Transaction and is expected to be declared in conjunction with the completion of the Transaction in November 2026.

Investor Call

Tamarack will host a webcast at 9:30 AM MDT (11:30 AM EDT) on Wednesday, October 28, 2026, to discuss the Q3 2026 financial results. Participants can access the live webcast through links provided on the Company's website. An archive of the webcast will also be made available on the Company's website.

About Tamarack Valley Energy Ltd.

Tamarack is a corporation engaged in the exploration, development, production and sale of oil and natural gas in the Western Canadian Sedimentary Basin. In 2026, Tamarack transitioned to become a pure-play Clearwater heavy oil producer, currently developing heavy oil positions at Nipisi, Marten Hills and South Clearwater. Tamarack holds an extensive inventory of low-risk, oil development drilling locations and is pursuing enhanced oil recovery upside across the Company's core asset areas. Tamarack is committed to creating long-term value for its shareholders through sustainable free funds flow generation, financial stability and the return of capital. The Company is publicly traded on the Toronto Stock Exchange under the symbol "TVE". For more information, visit www.tamarackvalley.ca.

Reader Advisories

Selected financial and operating information should be read with Tamarack's unaudited interim consolidated financial statements and related management's discussion and analysis for the period ended September 30, 2026, which are available on SEDAR+ at www.sedarplus.ca and on Tamarack's website at www.tamarackvalley.ca.

Notes to News Release

1. See "Specified Financial Measures".
2. See "Disclosure of Oil and Gas information".
3. 2026 annual guidance numbers are based on average pricing assumptions of: Crude Oil – WTI US$60.00/bbl, Crude Oil – MSW Differential $US(4.00)/bbl, Crude Oil – WCS Differential $US(12.75)/bbl, Natural Gas – AECO C$2.75/GJ, Foreign Exchange – USD/CAD 1.35.
4. Oil wellhead deductions for grade specific trading differential (ex CHV), blending requirements, quality differential, and pipeline tolls if Tamarack is not marketing (lease transactions).

Disclosure of Oil and Gas Information

Units of measurement

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 not be accurate, particularly if used in isolation.

Short-term production rates and waterflood response

References in this news release to initial production rates, incremental oil uplift from waterflood injection and other short-term results, including the results of the Meanook injection pilot, are useful in confirming the presence of hydrocarbons and reservoir response; however, such rates are not determinative of the rates at which wells will produce and decrease thereafter and are not indicative of long-term performance or of ultimate recovery. Readers should be aware not to place reliance on such rates in calculating the aggregate production of Tamarack.

Product Types

References in this news 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 news release comprise pentane, butane, propane, and ethane, being all NGL as defined by NI 51-101. References to "natural gas" throughout this news release refers to conventional natural gas as defined by NI 51-101. Tamarack's Clearwater production volumes on a standalone total boe per day basis are comprised of approximately 91% heavy oil, 1% NGLs and 8% natural gas. The Charlie Lake production volumes referenced in this news release on a boe per day basis are comprised of approximately 55% light oil, 12% NGLs and 33% natural gas. The run-rate production volumes of the combined company are comprised of approximately 94% heavy oil and 6% natural gas. The Company's 2026 annual average production guidance is comprised of approximately 80% heavy oil, 7% light oil, 2% NGLs and 11% natural gas.

Reserves and Future Net Revenue Disclosures

All reserves values, future net revenue and ancillary information contained in this news release are derived from evaluations by McDaniel & Associates Consultants Ltd. ("McDaniel") prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and NI 51-101 unless otherwise noted. Headwater's reserves and associated net present value are derived from an independent reserves assessment prepared by McDaniel dated January 15, 2026, evaluating the oil and gas properties of Headwater as at December 31, 2025 (the "Headwater Reserves Report"). Tamarack's reserves and associated net present value are derived from an independent reserves assessment prepared by McDaniel dated January 21, 2026, evaluating the oil and gas properties of Tamarack as at December 31, 2025 (the "Tamarack Reserves Report"). Both the Headwater Reserves Report and the Tamarack Reserves Report utilize forecast prices based on the average of forecast prices of McDaniel, Sproule ERCE and GLJ Ltd. as at January 1, 2026. All reserve references in this news release are "Company Gross Reserves". Company Gross reserves are defined as the applicable company's working interest share of reserves prior to royalty deductions. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Tamarack's or Headwater's reserves will be attained and variances could be material. Other than with respect to Headwater's McCully assets, which are to be transferred to Tributary Exploration Inc. (a newly formed company to which certain assets of Headwater and Tamarack will be transferred under the plan of arrangement), all reserves assigned in the Headwater Reserves Report and the Tamarack Reserves Report are located in the Province of Alberta. For more information relating to the Headwater Reserves Report and the Tamarack Reserves Report, see the annual information forms of Headwater and Tamarack for the year ended December 31, 2025, which are available on SEDAR+ at www.sedarplus.ca.

All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges and general and administrative expenses and after the deductions of royalties, operating costs, estimated asset retirement obligation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in this news release represent the fair market value of the reserves. The recovery and reserve estimates of crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein. There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth herein are estimates only.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if inactive, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this news release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 – Revised Glossary to NI 51-101 ("CSA Staff Notice 51-324") and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.

Drilling Locations Disclosure

This news release may discuss Clearwater drilling locations in two categories: (i) booked locations; and (ii) unbooked locations. Booked locations are proved and probable locations derived from either the Headwater Reserves Report or the Tamarack Reserves Report, which were prepared in accordance with NI 51-101 and the COGEH. Unbooked locations do not have attributed reserves. Tamarack's unbooked Clearwater locations have attributed contingent or prospective resources, based on the resource report prepared by McDaniel, a qualified independent resource evaluator, effective as of December 31, 2025, in accordance with the definitions, standards and procedures contained in NI 51-101 and COGEH. Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. There is uncertainty that it will be commercially viable to produce any portion of the contingent resources. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. Headwater's unbooked Clearwater locations do not have attributed resources.

References in this news release to the pro forma combined company's identified drilling locations represent the aggregate of Tamarack's and Headwater's respective drilling location inventories, on a pro forma basis giving effect to the Transaction. Of Tamarack's Clearwater inventory of >2,000 (net) primary drilling locations, 520 (net) are proved or probable locations, and the remainder are unbooked locations. Of Headwater's Clearwater inventory of >1,000 (net) primary drilling locations, 273 (net) are proved or probable locations, and the remainder are unbooked locations. Unbooked locations have been identified by management as an estimation of the combined company's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the combined company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the combined company actually drills wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

Forward Looking Information

This news release contains certain forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "budget", "guidance", "outlook", "anticipate", "target", "plan", "continue", "intend", "consider", "estimate", "expect", "may", "will", "should", "could" or similar words (including grammatical variations) suggesting future outcomes. More particularly, this news release contains statements concerning: Tamarack's business strategy, objectives, strength and focus; plans to merge with Headwater; value of the all-stock transaction; expectations of being the only pure-play publicly-traded Clearwater producer, expectations of production and liquidity of the combined company; volume, reserves and drilling locations being acquired with the Transaction; planned increases in dividends; expectation of waterflood growth in core areas and waterflood expansion plans; the Company's exploration and development plans and strategies; 2026 outlook and guidance; capital investment plans; timing of Transaction completion; the timing of the Headwater and Tamarack shareholder meetings and the receipt of court, regulatory and stock exchange approvals; the anticipated operating, marketing and corporate synergies of the combined company and the timing of an update thereon and of a combined 2027 budget; 2026 Clearwater production guidance; the combined 2026 capital investment programs of approximately $700 million; 2026 exit water injection rates and the proportion of production under waterflood, on a standalone and pro forma basis; the transfer of certain assets to Tributary Exploration Inc. and the distribution of its shares; the timing, amount and allocation of the planned additional Clearwater capital investments by the Company and planned secondary waterflood recovery initiative and payment of declared dividends. Future dividend payments and share buybacks, if any, and the level thereof, are uncertain, as the Company's return of capital framework and the funds available for such activities from time to time is dependent upon, among other things, free funds flow financial requirements for the Company's operations and the execution of its strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of Tamarack to pay dividends and buyback shares will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness, including its credit facility.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Tamarack, including those relating to: the business plan of Tamarack; the satisfaction of the conditions to completion of the Transaction, including receipt of shareholder, court, regulatory and stock exchange approvals, on the anticipated timeline; the accuracy of Headwater's public disclosure and of the reserves and resources evaluations of Headwater's properties; the realization of the anticipated benefits and synergies of the Transaction and the successful integration of Headwater's business; execution of the Company's 2026 budget; the timing of and success of future drilling, conversion, development and completion activities; the timing, amount and performance of additional Clearwater capital investments and secondary waterflood recovery initiatives; the availability of cash on hand, available credit and future anticipated adjusted funds flow to fund planned capital development programs and future acquisitions, dividends or share buybacks; the geological characteristics of Tamarack's properties; prevailing commodity prices, price changes, price differentials and the actual prices received for the Company's products; the realization of anticipated benefits of the Company's infrastructure, waterflood development program and recent acquisitions and asset sales; the availability and performance of drilling rigs, facilities, pipelines and other oilfield services; the timing of past operations and activities in the planned areas of focus; the performance of new and existing wells; the application of existing drilling and fracturing techniques; the Company's ability to secure sufficient amounts of water; prevailing weather and spring weather conditions; royalty regimes and exchange rates; impact of inflation on costs; the application of regulatory and licensing requirements; the continued availability of capital and skilled personnel; the ability to maintain or grow the banking facilities; the accuracy of Tamarack's geological interpretation of its drilling and land opportunities, including the ability of seismic activity to enhance such interpretation; and Tamarack's ability to execute its plans and strategies.

Although management considers these assumptions to be reasonable based on information currently available, excessive reliance should not be placed on the forward-looking statements because Tamarack can give no assurances that they may prove to be correct. By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that the Transaction is not completed on the anticipated timeline or at all, including as a result of not being able to obtain required shareholder, court or regulatory approvals or to satisfy other conditions needed to complete the Transaction; the risk that the arrangement agreement is not completed, including the payment of any cessation fee; the risk that the anticipated benefits and synergies of the Transaction are not realized or that the integration of Headwater's business is more difficult or costly than anticipated; dilution resulting from the issuance of common shares under the Transaction; risks relating to the Tributary Exploration Inc. spin-out and to Headwater's business; the U.S.-Venezuela conflict and the impact of potential increases in North American heavy oil supply; risks with respect to third party pipeline outages and risks relating to inclement weather events and natural events, such as fire, drought and flooding, including in respect of safety, asset integrity and shutting-in production; the risk that future dividend payments thereunder are reduced, suspended or cancelled; differing assessments of the value of benefits to be obtained from exploration and development programs; that income taxes, general and administrative expenses or interest expenses to differ materially from the Company's expectations; the risk that the Company may not achieve anticipated water injection rates, anticipated Clearwater oil production or meet the capital investment guidance; the risk that cash on hand, available credit and anticipated adjusted funds flow will not be sufficient to fund the Company's planned capital programs and any future acquisitions, dividends and share buybacks; risks associated with the oil and gas industry in general (e.g. operational risks in development, exploration and production; and changes in plans with respect to exploration or development projects or capital expenditures); the risk that (i) the U.S. and Canadian governments maintain tariffs, increase the rate or scope of tariffs, or impose new tariffs on the import of goods from one country to the other, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed by the U.S. on other countries and responses thereto could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company; the risks related to the renegotiation of the United States-Mexico-Canada Agreement, resulting in changes to trade, tariff or market access terms that may adversely affect the Company; commodity prices, including the impact of the actions of OPEC and OPEC+ members; risks relating to reliance on third parties, the uncertainty of estimates and projections relating to production, cash generation, costs and expenses, including increased operating and capital costs due to inflationary pressures; health, safety, litigation and environmental risks; access to capital; and pandemics. In addition, ongoing military actions in Iran and elsewhere in the Middle East and between Russia and Ukraine have the potential to impact the supply of oil and gas from those regions. The long-term impacts of the actions between these nations remain uncertain. Due to the nature of the oil and natural gas industry, drilling plans and operational activities may be deferred or modified to respond to market conditions, results of past operations, regulatory approvals or availability of services causing results to be deferred. Please refer to the most recent annual information form and management's discussion and analysis of the Company, for additional risk factors relating to Tamarack, which can be accessed either on Tamarack's website at www.tamarackvalley.ca or under the Company's profile on www.sedarplus.ca. The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included statements, except as required by law. The forward-looking statements contained herein are qualified by this cautionary statement.

This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about generating sustainable long-term growth in free funds flow, dividends, share buybacks and debt reduction, the 2026 capital budget of $450 - 470 million, the combined 2026 capital investment programs of approximately $700 million, 2026 Clearwater production of 57,500 – 59,500 boe per day, anticipated synergies of the combined company, the anticipated net cash and available funding of the combined company, guidance and budget pricing and allocation, including prospective results of operations, production (including annual average production of 65,500 – 67,500 boe/day, average oil and natural gas weightings of 88 – 90% , free funds flow, operating costs (including net operating expenses in 2026), balance sheet strength, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Tamarack's future business operations. Tamarack and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Tamarack disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers should be aware that the FOFI contained in this document should not be used for purposes other than for which it is discussed herein. Changes in commodity prices, differences in the timing and allocation of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in Tamarack's guidance. Actual results may differ materially from these estimates.

Specified Financial Measures

This news release includes various specified financial measures, including non-IFRS financial measures, non-IFRS financial ratios, capital management measures and supplemental financial measures as further described herein. These measures do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable with the calculation of similar measures by other companies.

This news release also contains forward-looking non-IFRS financial measures and capital management measures, including the anticipated net cash and available funding of the combined company following completion of the Transaction. Such forward-looking measures are calculated on a basis consistent with the equivalent historical measures described below, and there are no significant differences between the forward-looking measures and the equivalent historical measures.

Net operating expenses (Non-IFRS Financial Measure and Non-IFRS Financial Ratio if calculated on a per boe basis) is calculated as operating expenses less processing income. The most directly comparable IFRS measure is operating expenses. Tamarack generates processing income from third parties that utilize excess capacity at Tamarack's facilities. If Tamarack has excess capacity at one of its facilities, the Company will seek to process third-party volumes as a means of offsetting a portion of the facility costs. Accordingly, net operating expenses allow Tamarack and others to assess the profitability of field operating results by including the associated income generated from plant operations.

Adjusted funds flow (capital management measure) is defined as cash provided by operating activities excluding asset retirement obligation expenditures, transaction costs and changes in non-cash working capital. Asset retirement obligation expenditures and transactions costs from business combinations both result from the Company's capital budgeting and strategic planning processes, which first considers available adjusted funds flow. Asset retirement obligation expenditures vary from period to period depending on capital programs, government regulations and the maturity of the Company's operating areas. By also excluding changes in non-cash working capital from cash provided by operating activities, the adjusted funds flow measure provides a meaningful metric for Tamarack and others by establishing a clear link between the Company's cash flows, income statement and operating netbacks by isolating the impact of changes in the timing between accrual and cash settlement dates, which can often be within management's control. Tamarack uses adjusted funds flow to assess the Company's financial performance and cash generated from operating activities.

Free funds flow (capital management measure) is defined as adjusted funds flow less investments in oil and natural gas assets (excluding acquisitions and dispositions) and the settlement of asset retirement obligations. Management utilizes free funds flow to assess how much cash was generated in excess of the Company's capital investment and asset retirement programs within the same period, which can be utilized to reduce debt, fund acquisitions or return capital.

Net (cash) debt (capital management measure) is calculated as the sum of the Company's debt, government loans and other, cash, accounts receivable, prepaid expenses and deposits, cross-currency swap liability (asset), assets held for sale (net), accounts payable and accrued liabilities. Tamarack and others utilize net debt to assess liquidity and balance sheet strength by aggregating the select financial assets and financial liabilities on the Company's balance sheet.

Available funding is calculated as the sum of undrawn credit capacity under the Company's credit facility and cash, accounts receivable, prepaid expenses and deposits, cross-currency swap liability (asset), assets held for sale (net), accounts payable and accrued liabilities. Tamarack and others utilize available funding to assess the amount of funds that could be available to the Company in the near term to fund capital management initiatives.

Operating netback equals total oil and natural gas sales, including realized gains and losses on commodity hedges, less royalties, net operating expenses and transportation expenses. Operating Field Netback equals total oil and natural gas sales, less royalties, net operating expenses and transportation expenses. These metrics can also be calculated on a per boe basis, which results in them being considered a non-IFRS financial ratio. Management considers operating netback and operating field netback important measures to evaluate performance by asset area by isolating the impact of corporate and other overhead related expenditures. The most directly comparable IFRS measure is oil and natural gas sales.

Additional information relating to the specified financial measures used in this news release, including the quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures, is contained under the headings "Non-GAAP financial measures and non-GAAP financial ratios" and "Capital management measures and ratios" in the "Advisories and guidance" section of Tamarack's management's discussion and analysis for the three and nine months ended September 30, 2026, which information is incorporated by reference into this news release. The management's discussion and analysis can be accessed either on Tamarack's website at www.tamarackvalley.ca or under the Company's profile on www.sedarplus.ca.

Abbreviations

SOURCE Tamarack Valley Energy Ltd.

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