Tamarack Valley Energy Ltd.

Good morning. Welcome everyone to the Tamarack Valley Energy Limited conference call and webcast on Thursday, August 1, 2024, discussing the recent Q2 2024 results press release. I would like to introduce today's speakers, Mr. Brian Schmidt, President and CEO, and Mr. Steve Vitels, Chief Financial Officer. If you would like to ask a question, please press star, then the number one in your telephone keypad to join the queue. If you would like to withdraw your question, please press star two. Thank you. Mr. Schmidt, you may begin your conference.

Good morning, and thank you, John. Welcome to everyone to the call to discuss our second quarter operating and financial results. My name is Brian Schmidt, President and CEO, and I'm joined this morning by Steve Baitels, our CFO. The second quarter of 2024 was truly outstanding for Tamarac and was highlighted by outperformance on our production volumes that averaged 64,143 BOE per day. This was driven by success of Tamarac operations team in recovering volumes from the previously announced third-party Nipissi outage and ongoing development success in the Charter Lake. Starting with our heavier oil portfolio, we have seen significant year-over-year growth from our North Clearwater assets, achieving new record oil production, growing to 19,500 BUE per day in Q2-24. This compares to 15,400 BUE per day in Q2-23 and represents a year-on-year increase of 26%. This is the result of continued success of Tamarac's drilling and development programs. This production result was achieved despite operational headwinds at the start of the quarter. Our team responded quickly and was able to implement several solutions to restore the majority of the 6,200 VOE per day of production that had been shut in as a result of the downturn in April 13, 2024. The Metsu third-party incident, well in advance of the plant, coming on back online in the end of the quarter. Actions taken by our operating team successfully mitigated downtime impacts, reflecting the hard work, focus, and creativity of the team. I'm very proud of the group. At Nipissi, we are seeing strong BSAN results from the 12-14-76-8 West 5 pad, where five BSAN wells delivered an average of IP30 rates in excess of 215 BOE per well. These wells outperformed our expectations to date owing to higher oil quality. This is highly encouraging as Tamarac is stepping up development in the south end of the Nipissi pool. The Nipissi CSAN program continues to demonstrate success with two on the 12-15 pad, achieving IP rates, IP 30 rates in excess of 200 BME per day. We plan on following up these results with additional CSAN drilling in H2 while leveraging existing infrastructure. At Martin Hills, Tamarack Advanced Key Infrastructure was the pipeline portion of the Northwest Connector project, completed on schedule and under budget. The emulsion line was commissioned Q2 24, and the gas line is expected to start up in August. The eight well 430 patch, which completed drilling in Q1 24, saw production increase to over 1400 barrels of oil per day in June. During the quarter, the company re-released two fan wells with a total of six clear water fan wells being drilled in H-124. Plans for the second half of 24 include the drilling of an additional eight fans for a total of 14 fan wells during the year. Notable results were reserved from the two New Brook wells drilled off the 13-30-62 West 4 pad in 2024 which achieved the highest IP90 rates of all wells in the southern Clearwater Trent to date at over 225 barrels of oil per well. In support of the ongoing regional gas conservation of Tamarack's Rochester gas plant was completed during the second quarter, raising throughput capacity to over 3 million standard feet per day. The Clearwater Water Flip program continues to ramp up with encouraging results to date. The company will ramp clear water injection activity in the second half, 24, supporting water flood development to reduce asset decline rates and sustaining capital requirements in the future. Injection will commence in new zones, as well as existing, the new zones being the CSAN, Westmark, and Canal, where the company has identified high quality targets for water flood. Total water injection is expected to increase over 110% from 7,000 barrels a day to 15,000 barrels a day of water exiting the year. Moving on to Charley Lake. The program continued to drive production growth, having achieved the highest, the asset's highest quarterly production to date, delivering Q2 24 with an average of 17,900 BOE per day. In total, Seven Tamarac-operated Charter Lake wells were brought on stream in the first half of 24, with average IP rates exceeding 1,180 BOE per day per well. Looking ahead, we remain focused on our core assets. Our strategy looks to include reducing sustained capital requirements, improving pricing margins, and implementing projects with multi-payouts. I'll now pass it on to Steve Baitels to run through the financial results, as well as our outlook. Thanks, Brian.

Tamra delivered adjusted funds flow in the quarter of $226 million, which was a 43% year-over-year improvement, and were able to generate free funds flow of $137 million. Key highlights included, as Brian mentioned, strong production performance due to quick recovery from the third-party Nipissi outage and ongoing development success in the Clearwater and Charter Lake. Higher realized price margins. where we were able to leverage improved market access and lower wellhead deductions, which contribute directly to the bottom line. Improved operating costs, which were lower on a per barrel basis by 9% year over year, and we expect that to continue to improve as we move through the second half of the year. Reflecting on our emphasis on returning capital to shareholders, during the quarter, the company repurchased 2.1 million common shares. In total, in the first half, the company bought 9.7 million shares representing 1.7% of the 2023 year end shares outstanding for a total repurchase value of approximately $34 million. Total shareholder return for the first half of the year, inclusive of the base dividends of 41 million and enhanced returns was 75 million or approximately 14 cents per share. Exit net debt of $883 million marks a significant milestone arriving within the $500 million to $900 million net debt range and advances the company to the next phase of the return on capital framework. This enables us to direct up to 60% of free funds flow to base dividends and enhance returns, which is up from 40% previously, with the remaining free funds flow directed to ongoing net debt reduction and strategic growth capital allocation. We remain focused on capital discipline and execution of the business plan. Our full year annual production and capital guidance remains unchanged. The company expects to average 61 to 63,000 BUE a day in 2024 with spending in the 390 to $440 million range. When we announced our budget in December, we had included a potential increment associated with firm capacity Tamarac has committed to at the new CSB Albright sour gas gas plant expansion. We continue to monitor the CSV plan's progress and commodity prices prior to allocating any incremental joint capital for volumes associated with that project. The status of this decision will be updated in the fall. With that, I'm going to pass it back over to Brian to wrap up our call.