TSX:TVE - Post Discussion
Post by
retiredcf on Sep 18, 2024 8:14am
RBC
September 18, 2024
Tamarack Valley Energy Ltd.
Expands Clearwater Partnership; Operational Update
TSX: TVE | CAD 3.99 | Outperform | Speculative Risk | Price Target CAD 4.50
Sentiment: Positive
Tamarack Valley announced yesterday that it is expanding its Clearwater Infrastructure Limited Partnership (see more here) to include Bigstone Cree Nation as the 13th member of WWN, alongside the other WWN shareholders. TVE has transferred an additional $50.8mm of certain Clearwater midstream assets into the CIP for cash consideration of $43.2mm (for total consideration $222.8mm) and maintains its 15% operated working interest.
Transaction details. Tamarack will retain a 16-year take-or-pay on an average of 29,000 boe/d (gross commitment to CIP) while retaining priority access to incremental capacity above this on a fee-for-service basis; Tamarack will remain the operator for these assets and retain full access to 100% of Tamarack’s existing capacity. The aggregate transaction proceeds imply ~8.2x the average annual TOP capital fee. The deal includes strategic oil batteries, gas processing facilities, and key in-field pipelines located at Nipisi, West Marten Hills, Marten Hills, and Perryvale.
Operational update. TVE’s capital budget has been left unchanged at $390–440mm (now including CSV capital), while the company expects to reach the high end of its guidance range (61–63 mboe/d). The company expects its interest expense to be at the low end of guidance ($3.80–4.20/boe), which is inclusive of incremental TOP fees. With a portion of the transaction proceeds, TVE will drill four Charlie Lake wells in Q4/24, which it expects to bring onstream in H1/25, representative of its CSV capital allocation and expanding regional pipeline capacity.
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