Tamarack Valley Energy Ltd.

Good morning. Welcome everyone to the Tamarack Valley Energy Limited conference call and webcast on Thursday, July 31, 2025, discussing the recent Q2 2025 results press release. I would like to introduce today's speakers, Mr. Brian Schmidt, Founder and CAO, and Mr. Steve Pytals, President and CFO. If you would like to ask a question, please press star then the number one on your telephone keypad to join the queue. If you would like to withdraw your question, please press star, fall by the two. Thank you. Mr. Schmidt, you may begin your conference.

Thank you, and good morning. Welcome, everyone, to our call to discuss the second quarter operating and financial results. My name is Brian Schmidt, and I'm the founder and CEO of Tamarack Valley, and today I'm joined by Steve Bightells, who has just been appointed president in addition to being our CFO. This morning, Tamarac announced its Q2 results, positive updates to 2025 guidance, and a strategic clearwater tuck-in. Some key highlights of the quarter include. First, a new corporate production record. In our second quarter, we averaged 70,260 BOEs per day, surpassing all other prior quarters. Tamarac achieved its highest monthly result in April, where we averaged just over 74,300 BOE per day. Secondly, the compounding impact of our buybacks and organic growth. This has resulted in the Q2 debt-adjusted production per share being up 24% on a year-on-year basis. Point three, demonstrated water flood success. We continue to see strong production response from patterns which are well ahead of their primary baseline volumes. Fourthly, operational and efficiency gains and cost improvements. These are driving improved outlook for 2025 as we revised our production guidance up by 3% and our capital spending down by 7%, which is fostering continued free funds flow strength. Fifth, our debt reduction. Tamarac is advancing its objective to ladder the structure. Our recent bond offering supports this and was well received in the market. Overall, our net debt of $711 million is 19% lower year-on-year. Sixth, the strategic Clearwater consolidation. Consistent with our prior messaging, we have continued to monitor the basin for strategic opportunities. And yesterday, we closed a small accretive $51.5 million tuck-in of one of our partners in North Clearwater. Operationally, the water flood is driving growth while Charlie Lake continues to offer solid production performances. The clear water grew again in Q25 and was up 16% year over year. This continues to underscore the success of our primary development and strong response for the ongoing expansion of Tamarack's water flood program. Our water injection rates in the clear water have increased, and we are currently at 20,000 barrels per day injection of water and on track to achieve our exit target rate of over 30,000 barrels per day of water injection. Tamarack is demonstrating long-term value creation and resource capture capability of deploying water flood as part of our multilateral development strategy in conventional heavy oil reservoirs. To illustrate this, we can look at two water flood patterns, 50-2 and 60-2 in Martin Hills. After six and a half years on stream, these two wells ranked as the top two clearwater multilateral producers for the month of June. On a combined basis, these wells have produced over 1 million barrels of oil and are currently producing at 725 and 750 barrels per day, respectively, more than their primary production rate. Success is driving our forward outlook with the drilling of an additional 45 primary wells and nine injectors, as well as 10 injector conversions in the second half of 25. While we continue to advance our development, we are benefiting from regional peer activity, including stepping out and testing new formations, which is continuing to de-risk our assets at no cost to Tamarac. Recent results from a peer well operated at Martin Hills Grand Rapids Expiration Well, adjacent to our lands held by Tamarac, which also include Grand Rapids. It delivered an IP 60 of 345 barrels per day. Tamarac plans to test the Grand Rapids on our lands in 2026 adjacent to this well. Now let's move to Charley Lake. Our Charley Lake asset continues to deliver solid results with production in the first half ahead of plan, reflecting strong performance from the 11 net wells brought on stream so far in 2025. At 18,900 barrels equivalent per day, the Charley Lake surpassed its prior production record. We continue to await startup of the CSV plant and are prepared to continue to commence delivery of gas as the facility is currently in the final stages of commissioning. While the addition of this plant increases Tamarac's regional processing capacity, we have alternate arrangements in place to support ongoing development. With an additional eight wells planned to be drilled in the second half of 2025, the full year outlook for Charley Lake remains intact. I will turn it over to Steve to expand on the financial results, update the guidance and summary of the recent Clearwater tuck-in acquisition.

Thank you, Brian. First off, I wanted to thank Brian and the Board of Directors for both the opportunity here at Tamarack and the confidence they have in me taking on this new role. As we look at our Q2 2025, this will mark two years of consecutive quarterly outperformance by Tamarac based on a funds flow and production per share relative to consensus. In the second quarter, we generated adjusted funds flow of $197 million or $0.39 per share. Free funds flow of $133 million or $0.26 per share. To the first half of 2025, free funds with 44 cents per share is up 29% versus the first half of 2024. The year-over-year increase reflects the compounding effects of strong production, lower costs, and our continued share buybacks. It is important to note that this accretion was delivered against an 8% drop in WTI oil prices over the same timeframe. In the second quarter, Tamarac bought back an additional 10.1 million shares, pushing cumulative totals since initiation of the program at the start of 2024 to over 10% of our float. Year to date in 2025, shares were repurchased at an average price of approximately $4.33 per share. With our Q2 results, we are revising our guidance upwards with respect to production. This positive result is driven exclusively by the organic success of our Clearwater and Charlie Lake programs. Overall production guidance is increased by 3% at the midpoint, with a range now at 67 to 69,000 BUE a day for the year, up from 65 to 67,000 originally budgeted. This includes planned Q3 turnarounds in the Clearwater and Charlie Lake reflecting an impact of approximately 1,500 to 2,000 BUE a day in the quarter that was previously communicated. This will see production for Q3 trend towards the lower end of the guidance range. However, that is forecasted to increase to the higher end of the range back through Q4. While production is increasing, we are seeing lower costs and capital coming through the business, and that is being reflected in our updated capital and corporate cost guidance. We are reducing our capital, as Brian mentioned, at the midpoint by 7% or $30 million, with the new guidance range now at $400 to $420 million for 2025. We're reducing production expense by 5%, reflecting field infrastructure investments, water flood rejection, higher production, and the disposition of higher-cost non-core assets. Transportation is revised down by 3%. on a cost basis for the year and 6% on interest expense. The lower capital, coupled with the better margins in the business, is leading to higher free funds flow. This, in turn, results in additional funds being allocated to buybacks for 2025 over and above our budgeted amount, as well as accelerated debt repayment. Yesterday, Tamarac closed the $51.5 million tuck-in acquisition of a privately held Clearwater producer in the Nipissi area. This transaction will add approximately 1,100 barrels a day of heavy oil production to the balance of the year and increases our Clearwater land holdings by 17%. This was a strategic move to consolidate joint interest holdings, which establish 100% working interest ownership across our Nipissi lands. This transaction is accretive to Tamarac's five-year plan on a debt-adjusted per share basis and afford stacked clear water development and water flood upside where Tamarac can leverage our owned and operated infrastructure market access and capital scale. The combined effect of the previously announced penny disposition and our clear water tuck-in acquisition serve to offset each other on a production basis. However, the clear water assets offer a significantly stronger net back owing to lower operating costs providing accretion to our funds full outlook moving forward. The penny disposition proceeds combined with the reduction in corporate capital guidance has Tamarac on track to continue to meet its debt target as highlighted in our June investor day in 2027. Subsequent to the end of the quarter, Tamarac closed a $325 million six and seven eighths notes offering. This represented one of only two sub-7% coupons for single B-rated oil and gas issuers in Canada in approximately seven years. A portion of the proceeds was utilized to repay $100 million of our 2027 seven-and-a-quarter notes, and the balance was applied to our existing covenant-based facility as we continue to advance our laddering of the credit portfolio. Including the recent acquisition, Tamarac retains significant financial flexibility and balance sheet strength with approximately $600 million of undrawn credit capacity and a trailing 12-month net debt EBITDA multiple of 0.7 times. While oil prices have remained volatile, Tamarac retains a strong outlook for funds flow in 2025, which is underscored by our updated guidance. Our sub-US $40 per barrel WTI corporate breakeven strong balance sheet and operational performance are key to ensuring our business remains resilient to commodity price and market volatility. We continue to execute on a hedging program to support price risk management, having established coverage on approximately 50% of our oil through the balance of 25 and the first half of 2026. I'll now turn it back to Brian for additional commentary on our field operations and capital program before we open the call to questions.