Tamarack Valley released its 2023 sustainability report, covering sustainability performance metrics from 2020-2022, which are aligned under SASB, TCFD, and GRI. The company also provided an operations update outlining production impacts from the Alberta wildfires and third-party downtime, as well as the startup of the Wembley Gas Plant. Overall, we view the update constructively as Tamarack underscores its ESG goals and commitment to responsible asset development, along with increased clarity related to wildfire volumes, which were in-line with prior expectations and incorporated into prior guidance. Management plans to provide a more detailed operations update with Q2/23 results on July 27, 2023.
Details:
• Sustainability goals remain a key focus for Tamarack. Tamarack outlined progress towards its 2025 ESG targets, including a 19%/45% reduction in emissions/methane intensities relative to 2020 baseline levels; Tamarack has already exceeded its 2025 methane intensity goal (40%) and is progressing toward its emissions intensity reduction goal (39%). Tamarack spent over 200% of its voluntary regulatory program spend on ARO in 2022, ahead of management's target of 150%.
• Gas conservation projects in the Clearwater. Management noted multiple ongoing gas conservation projects spanning West Marten Hills, Nipisi, and South Clearwater areas with its emissions intensity reduction target of 39% by 2025 as a backdrop. Tamarack noted an example where over $20 million of capital was invested through 2021-2022 on the Nipisi multi-phase gas infrastructure project; Tamarack was able to reduce emissions intensities from 100 kgCO2e/boe on acquisition to 38 kgCO2e/ boe in the first 3 months and down to under 20 kgCO2e/boe within 2 years.
• Increased clarity on Q2/23 Alberta wildfire impacts. Tamarack noted a ~1,500 boe/d impact to Q2/23 volumes as a result of Alberta wildfires and unplanned third-party infrastructure downtime. The team noted negligible infrastructure damage and has reiterated that issues have been resolved and are not expected to have an impact on production through H2/23. We note that this impact is relatively in-line with the prior guidance update with Q1/23 results (i.e. no change to 2023 volume guidance).
• Wembley gas plant fully operational, completed ahead of schedule. Tamarack highlighted its Wembley gas plant was completed ahead of schedule and operational as of mid-June (note here). We note the facility's current capacity of 15 mmcf/d offers more reliable processing capacity for Tamarack and is a key component to Tamarack's regional development strategy. The plant is expandable to 30 mmcf/d, supporting long-term growth in Charlie Lake.