Tamarack Valley Energy Ltd.

Good morning. Welcome everyone to the Tamarac Valley Energy Limited conference call and webcast on Tuesday, February 25th, 2025, discussing the recent Q4 2024 results press release. I would like to introduce today's speakers, Mr. Brian Schmidt, President and CEO, and Mr. Steve Beitels, Chief Financial Officer. If you would like to ask a question, please press start, then the number one on 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 to the moderator and welcome everyone to the call to discuss our 2024 operating and financial results. My name is Brian Schmidt, CEO, and I'm joined this morning by Stephen Bytel, CFO. This morning, we are pleased to release our 2024 year end results. where the company achieved annual production of 64,331 VOE per day and delivered 851 million of adjusted fund flow, which was a record year for Tamarac. The rate of change is attractive to shareholders. The superior quality of these assets allows us to grow production while paying down debt, while buying back shares, while reducing sustaining capital in future years. The compounding effect is profound. and demonstrates consistent year-on-year improving debt-adjusted free cash flow per share. Through the course of the year, we achieved multiple deliverables, which I will flag as key takeaways when assessing our 2024 accomplishments. And then I'll turn it over to Steve for 2025. The first, margin enhancements. This is reflected in our netbacks, where we're seeing higher realized pricing for our oil and lower overall costs. This flows through the bottom line and also drives up our top tier recycle ratios in the context of our reserve additions. Secondly, capital efficiencies enhancements. We deployed a disciplined capital program in 24 with capex spending $439 million in line with our prior guidance. The efficiencies of our program, however, enabled us to drill four additional Charter Lake wells, which were brought on stream Q125, without an increase to our 2024 annual capital plan. These efficiencies are also recognized in our reserves, where Tamarac was able to grow 2P reserves by 8%, while associated future development costs remained essentially flat. This speaks to the significant cost reduction we are seeing in the business due to the scale of the assets and the benefits of accessing stack pay with large pad development. The third point is production growth. Significant growth in our core areas was demonstrated in the Q4-24 versus Q4-23 production. Our clearwater volumes grew 10%, while our Charlie Lake was up 9%. Fourthly, the water flood progression. This is driving down decline rates in the clearwater, which supports long-term savings capital, sustaining capital, and drives further efficiencies into our business model. And the fifth, shareholder return delivery. In 2024, Tamarac bought back 6% of the shares that were outstanding at the end of 23. We increased our base dividend by 2%, and when combined with the production growth last year and debt repayment, we achieved a total shareholder return of 21% last year. Six, the long-term value creation, identified through increased volume and value of our year-end reserves and recognition of the scale of our overall resource. which is reflected in over 2,000 identified Clearwater locations, supporting over 20 years of development at our current pace, and our Charley Lake resource, where we see the ability to maintain 16,000 BOEs per day for at least 10 years. Samarac previously released our 2024 reserves, along with our reserve report, which outlined the updated contingent and prospective resource for our Clearwater play. Samarac saw increases in all categories, Prior to the dispositions, our PDP reserves increased by 9% and we replaced 130% of our production, while our TPP reserves increased by 8% and replaced 180% of production. The benefits of margin enhancement, as noted earlier, resulted in a field operating net back of $46.41 per BOE in 24. When combined with our low corporate finding and development cost, we delivered a PDP recycle ratio of 3.1 times and a TPP recycle ratio of 4.2 times, representing top-tier performance amongst our peers and the strongest in the company's history. I'll now pass it back to Steve Vitels to speak about what's coming up in 25.

Thanks, Brian. You know, as we look at 25, we continue to focus on that continual rate of change that Brian just alluded to in the business. From a shareholder return standpoint, we continue to buy back our shares. In January, we bought back just under 5 million shares, or approximately 1% of our 2024 year-end shares outstanding. In total, we've now repurchased approximately 45% of the shares and equity associated with the Delta Stream acquisition in 2022. With respect to debt reduction, Consistent with our return of capital framework, we will continue to put up to 40% of our free funds flow towards the balance sheet and see ourselves exiting 2025 at about a half a turn from a debt to EBITDA perspective. At Strip, we would see and forecast Tamarac reaching our debt floor in 2026. On the cost improvement side of the business, As illustrated in our 25 guidance, we continue to seek out efficiencies within our operations to drive low cash costs and see that moving lower in 25 while pursuing premium pricing for our products to enhance the revenue side of our net back. Interest, carbon tax, and other costs will be lower year over year. So again, we expect to see improved costs through 25. On the water flood, as Brian alluded to, this continues to be a big piece of our investment thesis, pushing our decline rates lower and enhancing our capital efficiencies in the business. This will also continue to drive strong reserve metrics on an F&D basis going forward. And then lastly, on the capital efficiency side of the business, 2025 will see us drilling more wells per pad in the clear water than the previous years. So again, realizing additional capital efficiencies and enhancements moving forward. On the operations front, our Clearwater focus will see ongoing water flood implementation alongside our primary development. We're currently running four rigs in the play and Brian will speak a little bit more on the water flood here later in the call. With respect to the Charlie Lake, we continue to execute a one rig continuous program for the year. and remain well-positioned to deliver on our production commitments. With respect to CSV, Albright gas plant construction is underway, and we will await firm guidance or an update to guidance from the company here in due course. With that said, we do want to ensure that, you know, investors know we'll leverage our own owned and operated infrastructure, including our Wembley plant, to maintain our production outlook as we continue to flow new wells through alternative operated or ownership in different gas plants and shifting where we're drilling those wells in the Charley Lake through the year. From a macro perspective, as we look into 2025 here, we strongly view heavy oil as fundamentally well positioned. There's low inventories in Canada coupled with the enhanced egress takeaway through the TMX startup positioning, you know, heavy oil well. When it comes to the tariffs, you know, we don't, you obviously know what we don't know here. But what we will say is from an operating leverage perspective, you know, Tamarack has a sustaining break even of approximately US $38 per barrel WTI inclusive of our dividend. So, you know, there's lots of margin in our barrel to sustain any potential moves in the differential that may come with the potential for tariffs here. The other element of that really is what happens to FX and a weaker FX will offset some of that move in the widening of the diff should that come through. So with that, you know, we want to leave you with our guidance for 2025 remains unchanged, production of 65,000 to 67,000 despite the push in timing on the CSV startup and our capital program of $430 to $450 million. remains intact. I'll pass it back over to Brian here to spend a little bit more time on the water flood.