Tamarack Valley Energy (TSE:TVE) executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight what President Steve Buytels described as a “record-setting year,” driven by operational outperformance, lower costs, and continued expansion of its Clearwater-focused waterflood strategy.
Management said the company has completed a multi-year transformation into a Clearwater and Charlie Lake conventional oil producer, with the portfolio now “exclusively focused” on those plays. Buytels said the operational execution led to two positive guidance revisions during the year, with capital spending landing at the low end of guidance due to efficiency gains while production outperformed even after adjusting for M&A activity.
2025 financial performance and shareholder returns
Johnston reported fourth-quarter adjusted fund flow of CAD 172 million, capital expenditures of CAD 99 million, and free fund flow of CAD 71 million. For the full year, Tamarack generated approximately CAD 390 million of free fund flow, or CAD 0.78 per basic share. He said free fund flow per share increased 10% from the prior year even though WTI prices averaged 14% lower in 2025.
Shareholder returns were a key theme throughout the call. Buytels said the company repurchased approximately 36 million shares in 2025, representing 6.9% of the 2024 year-end share count, at an average price of about CAD 5 per share, and increased the dividend by 5%. Combined, management said Tamarack returned CAD 262 million to shareholders through buybacks and the base dividend in 2025. Buytels also framed the company’s total shareholder return for 2025 at approximately 19% when combining buybacks, base dividends, production growth, and debt repayment.
Cost reductions and leverage targets
Management emphasized improvements in cost structure. Johnston said net operating expenses declined 17% year-over-year to CAD 7.43 per BOE, attributing the decrease to infrastructure investments, lower water handling costs and waterflood reinjection, higher production volumes, and portfolio optimization through divestments of higher-cost non-core assets over the last two years. He added that the company made two positive revisions to its net operating expense guidance in 2025, and the final result still came in below the revised range of CAD 7.75 to CAD 8.00 per BOE.
For 2026, Johnston said Tamarack is forecasting a run-rate net operating expense of CAD 7.00 per BOE at the midpoint, which he said would represent a 25% decrease compared to 2023.
On leverage, Johnston said Tamarack achieved its net debt target of 1.0x net debt-to-EBITDA at a US$50 WTI oil price in the fourth quarter of 2025. With that target met, he said the company will focus on allocating additional free fund flow to shareholder returns in 2026, with buybacks remaining the preferred tool. In response to an online question, Johnston said that in the current environment the company is modeling shareholder returns of “greater than 60%,” in the range of 70% to 90% of free fund flow in 2026, while emphasizing flexibility depending on commodity conditions.
Reserves growth led by Clearwater and waterflood performance
Vice President of Engineering Ben Stoodley said Tamarack delivered “meaningful and capital-efficient” reserves growth in 2025. He reported year-over-year increases of 31% in proved developed producing (PDP) reserves, 26% in total proved reserves, and 18% in total proved plus probable (2P) reserves. Excluding reserves and production associated with acquisitions and divestitures completed during the year, Stoodley said 2P reserves increased 30%, equating to 413% production replacement.
Stoodley also provided cost and profitability metrics from the reserves report. For 2025, he said PDP finding and development (F&D) costs were CAD 8.09 per BOE, total proved F&D costs were CAD 8.01 per BOE, and 2P F&D costs were CAD 7.93 per BOE. With a 2025 field netback of CAD 41.71 per BOE, he said Tamarack generated corporate recycle ratios exceeding 5x across all reserve categories.
In the Clearwater, Stoodley reported particularly strong reserve growth, including PDP reserves up 63%, total proved up 64%, and 2P up 56% year-over-year. He said Clearwater F&D costs averaged about CAD 7 per BOE, generating recycle ratios of roughly 6x across reserve categories. He added that waterflood-related PDP reserve additions achieved F&D costs of less than CAD 3 per BOE, and that PDP reserves under waterflood expanded by 300% in 2025, while only 37% of total Clearwater reserves are currently assigned to waterflood development.
Clearwater inventory, waterflood expansion, and operational details
Buytels said Tamarack has positioned itself as the largest public Clearwater producer, citing more than 12 billion barrels of original oil in place. He said the company expanded its Clearwater land holdings by 25% in 2025 to more than 850 net sections and identified over 2,100 primary locations across the land base, implying more than 25 years of drilling inventory across stacked horizons, excluding potential future success in the Wabasca formation in the Pelican region.
Stoodley said that as of Dec. 31, 2025, Tamarack held 115 million barrels of best-estimate gross unrisked contingent resources in the Clearwater (up 8% year-over-year) and 104 million barrels of gross unrisked prospective resources (up 6%). He said approximately 520 net locations are booked.
Operationally in 2025, Stoodley said Tamarack drilled 94.3 net horizontal heavy oil wells for primary development in the Clearwater fairway. To support waterflood expansion, he said the company drilled 25 water injection wells, drilled two source water wells, and converted 16 producing wells to water injectors.
Management said waterflood response continues to build. Stoodley said heavy oil production uplift is now estimated at more than 5,000 bbl/d, representing about 10% of total Clearwater production. He added Tamarack exited 2025 with water injection rates exceeding 40,000 bbl/d, nearly three times the rate at the end of 2024. Looking ahead, the company plans to increase water injection to about 60,000 bbl/d by the end of 2026 and expects roughly 35% of Clearwater oil production to be under waterflood, compared with about 24% “today.” Stoodley said 2026 waterflood capital expenditures are forecast at CAD 100 million, roughly double 2025 levels.
In Q&A, executives addressed questions about waterflood performance and water breakthrough. Stoodley said the company has kept estimated ultimate recoveries (EURs) “pretty standard,” tied to simulation results, noting some short-term “outsized responses” but that overall results have been in line with expectations. Buytels said water breakthrough is expected in heavy oil waterfloods and is incorporated into simulation and decline estimates. He added that the company has invested in infrastructure to handle higher water volumes, citing facility expansions at West Martin Hills, Nipisi, and Martin Hills, and argued that many analog floods generate a substantial portion of recovery at high water cuts.
Charlie Lake operations and 2026 activity
In the Charlie Lake, Stoodley said Tamarack drilled 13.8 net wells and brought 16.8 net wells onstream across Wembley and Pipestone in 2025. He said the Charlie Lake generated approximately CAD 190 million in asset-level operating netback and CAD 70 million in asset-level free net operating income during the year. Stoodley also said Tamarack successfully redirected production in the fourth quarter to a new third-party CSV Albright gas plant and the AltaGas Pipestone II gas plant expansion, providing flexibility with both owned and third-party processing and egress capacity.
For 2026, Stoodley said Tamarack plans a “flat exit rate production profile” in the Charlie Lake with a one-rig program, drilling about 10 wells across Pipestone and Wembley.
In the Pelican area, management said two de-risking wells are planned for 2026—one targeting the Wabasca and one targeting the Clearwater. Buytels told an online questioner that one well is expected to be drilled on legacy lands and one on newly acquired lands, while noting competitor activity and data in the area could influence final location selection. Buytels also told analysts that potential upside from Pelican success is not included in the company’s current plan.
About Tamarack Valley Energy (TSE:TVE)
Tamarack Valley Energy Ltd. engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the Western Canadian sedimentary basin. It primarily holds interests in Cardium light oil plays in Wilson Creek/Alder Flats/Pembina, and Garrington and Lochend areas in Alberta; Viking light oil resource plays in Redwater and Westlock in Alberta, as well as in the Consort area of southeast Alberta and Hoosier area of southwest Saskatchewan; Barons Sands light oil plays located in the Penny area of Southern Alberta; and heavy oil properties located in Hatton area of Saskatchewan.
