Tamarack Valley Energy (TVE) Q2 2024 earnings summary

Executive summary

• Q2 2024 production averaged 64,143 BOE/day, driven by rapid recovery from third-party outages and strong development in Clearwater and Charlie Lake assets, with 86% oil and NGL weighting.

• North Clearwater assets achieved record oil production of 19,500 BOE/day, a 26% year-over-year increase.

• Free funds flow reached $137.2M in Q2 and $189.0M in H1 2024, enabling $100.9M net debt reduction and $74.8M returned to shareholders via dividends and buybacks.

• Achieved second net debt threshold ahead of schedule, planning to allocate 60% of free funds flow to shareholder returns and 40% to further debt reduction.

• Infrastructure projects, such as the Northwest Connector pipeline and Rochester gas plant expansion, were completed on schedule and under budget.

Financial highlights

• Adjusted funds flow reached CAD 226 million in Q2, up 43% year-over-year; free funds flow was CAD 137 million.

• Q2 2024 oil and gas sales were $461.5M, up 16% year-over-year; H1 2024 sales were $854.8M, up 10%.

• Net income for Q2 was $94.9M (up 269%); H1 net income was $62.1M (up 120%).

• Net debt at June 30, 2024 was $882.7M, down 36% year-over-year.

• Operating costs per barrel declined 9% year-over-year.

Outlook and guidance

• 2024 production guidance remains 61,000–63,000 BOE/day, with capital spending of CAD 390–440 million.

• Up to 60% of free funds flow will be allocated to dividends and buybacks, up from 40%.

• Net production expense guidance maintained at $8.75–$9.25/boe, with expected reductions in H2 2024.

• Potential incremental capital for CSV Albright Sour Gas plant expansion is under review, with updates expected in the fall.

• Majority of 2024 free funds flow to be directed to shareholder returns and net debt reduction.