Earnings release
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TSX: TVE Tamarack Valley Energy Announces Strong Q3 2026 Results and Provides OperaƟonal Update Calgary, Alberta – October 28, 2026 – Tamarack Valley Energy Ltd. is pleased to announce its financial and operaƟng results for the three and nine months ended September 30, 2026. Selected financial and operaƟng informaƟon should be read with Tamarack’s unaudited consolidated interim financial statements and management’s discussion and analysis for the three and nine months ended September 30, 2026, which are available at www.sedarplus.ca and www.tamarackvalley.ca. Tamarack’s third quarter 2026 results were highlighted by the previously announced definiƟve arrangement agreement to merge with Headwater ExploraƟon Inc. (“Headwater”) in an all-stock transacƟon (the “TransacƟon”) creaƟng a premier North American oil company with top-Ɵer profitability and the unmatched posiƟon as the only publicly-traded pure-play Clearwater producer. The combined company will be valued at $10 billion and have run-rate Clearwater producƟon(2) of >80,000 boe per day. From an operaƟonal perspecƟve, Tamarack conƟnues to deliver strong Clearwater producƟon, operaƟng results and cash flows, driven by robust operaƟonal execuƟon and elevated commodity prices. With significant capital allocation flexibility, the Company continues to focus on maximizing total shareholder returns through a combination of accelerated development of the Clearwater’s high-margin, long-duration inventory and enhanced returns via share buybacks and the base dividend. Q3 2026 OperaƟonal and Financial Highlights ProducƟon – Tamarack’s Clearwater assets delivered 55,298 boe per day(2) in Q3 2026, a 16% increase over Q3 2025, driven by ongoing drilling and development activities and strong reservoir response from waterflood expansions. Cash flows – Tamarack delivered cash provided by operaƟng acƟviƟes of $247.7 million, adjusted funds flow(1) of $214.0 million and free funds flow(1) of $92.4 million ($0.19 per diluted share). Year to date, Tamarack has delivered free funds flow(1) of $375.3 million ($0.78 per diluted share). Capital investments – Tamarack invested $120.5 million in the third quarter and $312.6 million year-to-date. Since the beginning of the year, Tamarack has drilled 70 producing wells, 38 injecƟon wells, three water source wells and converted 18 producers to injecƟon. The Company exited the third quarter with water injecƟon rates of over 60,000 bbl per day. Strategic combinaƟon – On September 7, 2026, Tamarack entered into the TransacƟon with Headwater to acquire 25,000 boe per day of high-margin heavy oil producƟon(2), >100 million boe of proved plus probable reserves(2) and >1,000 potenƟal drilling locaƟons(2) across the greater Clearwater fairway. The TransacƟon is expected to close in mid-to-late November. Enhanced dividends - In connecƟon with the TransacƟon, Tamarack plans to increase its quarterly dividend by 20% from $0.05 per share to $0.06 per share ($0.24 per share annualized), commencing December 2026. This second 2026 increase to Tamarack’s dividend is expected to be declared in November following compleƟon of the Headwater acquisiƟon. Share buybacks – In Q3, Tamarack repurchased 4.6 million common shares, or 0.9% of the common share float, for a total cost of $61.7 million under its share buyback program. Year to date, Tamarack repurchased 15.8 million common shares, or 3.2% of the common share float, for a total cost of $189.1 million. Liquidity – Tamarack exited the third quarter with net cash(1) of $141.2 million and available funding(1) of $1.3 billion, including cash on hand of $541.4 million and an undrawn credit capacity of $875.0 million. Q3 2026 OperaƟonal and Financial Highlights ($ thousands, except per share amounts) Three months ended Nine months ended September 30 2026 2025 % change 2026 2025 % change Oil and natural gas sales $ 468,687 $ 394,088 19 $ 1,516,417 $ 1,246,643 22 Cash provided by operating activities 247,725 226,194 10 744,353 603,326 23 Per share – basic 0.52 0.46 13 1.56 1.19 31 Per share – diluted 0.52 0.45 16 1.54 1.18 31 Adjusted funds flow(1) 214,042 200,586 7 690,870 623,769 11 Per share – basic 0.45 0.40 13 1.44 1.24 16 Per share – diluted 0.45 0.40 13 1.43 1.22 17 Free funds flow(1) 92,441 95,720 (3) 375,331 319,527 17 Per share – basic 0.20 0.19 5 0.78 0.63 24 Per share – diluted 0.19 0.19 - 0.78 0.63 24
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($ thousands, except per share amounts) Three months ended Nine months ended September 30 2026 2025 % change 2026 2025 % change Net income (loss) 98,841 (248,766) nm 310,162 (98,271) nm Per share – basic 0.21 (0.50) nm 0.65 (0.19) nm Per share – diluted 0.21 (0.50) nm 0.64 (0.19) nm Purchase of common shares for cancellation $ 61,732 $ 37,764 63 $ 189,097 $ 135,897 39 Dividends 23,591 18,949 24 62,066 57,748 7 Debt 319,921 702,147 (54) 319,921 702,147 (54) Net (cash) debt(1) (141,243) 631,057 (122) (141,243) 631,057 (122) Available funding(1) 1,347,745 775,339 74 1,347,745 775,339 74 Investments in oil and natural gas assets 120,471 104,825 15 312,648 300,722 4 Weighted average shares outstanding Basic 472,615 496,617 (5) 478,225 505,051 (5) Diluted 478,141 502,453 (5) 483,609 510,489 (5) Average daily production Heavy oil (bbls/d) 50,500 43,357 16 49,385 41,926 18 Light oil (bbls/d) - 11,283 (100) 6,275 13,201 (52) NGL (bbls/d) 665 2,029 (67) 1,767 2,715 (35) Natural gas (mcf/d) 24,800 56,740 (56) 46,806 61,079 (23) Total (boe/d) 55,298 66,126 (16) 65,228 68,022 (4) Average sale prices Heavy oil ($/bbl) $ 99.09 $ 73.37 35 $ 94.66 $ 76.51 24 Light oil ($/bbl) - 86.64 (100) 113.53 87.43 30 NGL ($/bbl) 59.63 36.51 63 43.01 33.50 28 Natural gas ($/mcf) 2.04 0.90 127 1.95 1.86 5 Total ($/boe) 92.12 64.77 42 85.16 67.13 27 Benchmark pricing West Texas Intermediate (US$/bbl) 85.79 64.93 32 83.50 66.70 25 Western Canadian Select (WCS) (C$/bbl) 100.58 75.11 34 95.95 77.79 23 WCS differential (US$/bbl) 13.87 10.39 33 14.22 11.11 28 Foreign Exchange (USD to CAD) 1.40 1.38 1 1.38 1.40 (1) Operating netback ($/boe) Oil and natural gas sales 92.12 64.77 42 85.16 67.13 27 Royalty expenses (21.30) (11.60) 84 (17.16) (12.61) 36 Net operating expenses(1) (6.14) (7.22) (15) (6.86) (7.67) (11) Transportation expenses (4.01) (3.24) 24 (3.83) (3.49) 10 Operating field netback ($/boe)(1) 60.67 42.71 42 57.31 43.36 32 Realized commodity hedging loss (3.76) (0.02) nm (4.88) (0.54) nm Operating netback ($/boe)(1) $ 56.91 $ 42.69 33 $ 52.43 $ 42.82 22 Adjusted funds flow ($/boe)(1) $ 42.07 $ 32.97 28 $ 38.80 $ 33.59 16 2026 Pro Forma Outlook & OperaƟonal Update(3) For the year ended December 31, 2026 Revised guidance (June 2026) Revised guidance (September 2026) Capital investments ($ millions) Legacy Tamarack Clearwater assets and other 385 - 405 385 - 405 Legacy Headwater assets acquired (estimated completion Nov. 2026) - 20 H1 2026 Charlie Lake assets (sold in June) 45 45 Base 2026 capital investment budget 430 - 450 450 - 470 Production(2) (boe/d) Legacy Tamarack Clearwater assets 53,500 - 55,000 54,500 - 56,000 Legacy Headwater assets acquired (estimated completion Nov. 2026 3,000 - 3,500 H1 2026 Charlie Lake asset (sold in June) 8,000 8,000 Annual average production 61,500 - 63,000 65,500 - 67,500
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For the year ended December 31, 2026 Revised guidance (June 2026) Revised guidance (September 2026) Selected operating metrics Average oil & NGL weighting (%) 88 - 90 88 - 90 Royalty rate (%) 20 - 22 20 - 22 Corporate wellhead price differential – Oil(4) ($/bbl) 0.75 - 1.25 0.75 - 1.25 Net operating expense(1) ($/boe) 6.65 - 6.90 6.65 - 6.90 Transportation ($/boe) 4.00 - 4.50 4.00 - 4.50 Interest ($/boe) 2.00 - 2.40 2.00 - 2.40 General and administrative ($/boe) 1.40 - 1.55 1.40 - 1.55 Income taxes (% of adjusted funds flow(1) before tax) 17 - 19 17 - 19 Tamarack’s Clearwater assets delivered producƟon of 55,298 boe per day(2) in Q3 2026, a 16% increase compared to 47,751 boe per day(2) in Q3 2025, reflecƟng the ongoing success of the primary development drilling and waterflood expansion programs. Tamarack drilled 28 wells in the third quarter and 70 wells year to date. The Company conƟnues to build out waterflood injecƟon capacity across all of its core Clearwater posiƟons. In the first nine months of the year, Tamarack drilled 38 injectors, three water source wells and converted 18 producer wells to injecƟon. InjecƟvity and waterflood response conƟnues to exceed expectaƟons, providing addiƟonal runway for waterflood growth in Tamarack’s core areas. In the South Clearwater fairway, the Company conƟnues to see posiƟve indicaƟons from its injecƟon pilot in the Meanook area. InjecƟon has stabilized into the pilot well and the offseƫng producers are currently showing a 100% upliŌ of incremental oil over base producƟon. Tamarack is planning to add a second injector to this pilot program in Q4 2026. Tamarack exited the third quarter of 2026 with over 60,000 bbl per day of water injecƟon and esƟmated total oil upliŌ from injecƟon currently esƟmated to be 10,000 bbl per day. The Company is reaffirming its previous 2026 exit rate injecƟon guidance of 70,000 bbl per day with ~40% of Clearwater oil producƟon supported by waterflood (in respect of legacy Tamarack assets on a standalone basis). Tamarack expects that the combined company will have 2026 exit water injecƟon rates of >100,000 bbl per day (45% of producƟon supported by waterflood). On a standalone basis, Tamarack increased full year 2026 Clearwater producƟon guidance to 54,500 - 56,000 boe per day(2) primarily in response to waterflood outperformance. The revised guidance reflects a 17% increase in Clearwater production year- over-year, excluding the expected consolidation of acquired Headwater producƟon from mid-November to the end of the year (>3,000 boe per day annualized). Full year corporate producƟon(2) is forecasted to average 65,500 - 67,500 boe per day, which also includes H1 producƟon from the Charlie Lake assets that were sold in June (full year impact of 8,000 boe per day annualized). Following the TransacƟon, the run-rate producƟon(2) of the combined company on a pro forma basis is anƟcipated to be >80,000 boe per day. The 2026 combined capital investment programs of both individual companies for the full year are expected to be approximately $700 million. Tamarack is reaffirming its revised full year 2026 capital program of $450 - 470 million, which includes the consolidaƟon of Headwater’s planned capital investment programs following the compleƟon of the TransacƟon to the end of the year. Tamarack’s capital program is trending towards the high end of the range, reflecƟng the Company’s acceleraƟon of development capital into 2026 in response to higher commodity prices in the second and third quarters. As previously announced, the TransacƟon is subject to regulatory and shareholder approvals and is expected to close shortly aŌer the shareholder vote, which is scheduled for November 18, 2026. IntegraƟon planning for the combined operaƟons, markeƟng and corporate office are well underway. Tamarack conƟnues to idenƟfy addiƟonal synergies related to the business combinaƟon and plans to provide an update in mid-November, together with a combined 2027 budget, expected to be announced in conjuncƟon with the compleƟon of the TransacƟon. Shareholder Returns & Dividend Increase In the third quarter of 2026, the Company repurchased 4.6 million common shares at an average cost of $13.09 per share. Year to date, the Company has repurchased 3.2% of the common share float, or 15.8 million shares at a weighted average price of $11.74 per share. Since the commencement of the share buyback program in January 2024, the Company has now reduced the common share count by 15.4%, or 85.8 million common shares, at a weighted average cost of $5.80 per share. In conjuncƟon with the sale of Charlie Lake, Tamarack previously announced a 25% increase to its quarterly dividend from $0.04 per share to $0.05 per share ($0.20 per share annualized), commencing in the third quarter of 2026. In connecƟon with the TransacƟon, Tamarack previously announced a second quarterly dividend increase by 20% from $0.05 per share to $0.06 per share ($0.24 per share annualized), commencing December 2026. This second increase to Tamarack’s dividend is conƟngent upon the compleƟon of the TransacƟon and is expected to be declared in conjuncƟon with the compleƟon of the TransacƟon in November 2026.
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Investor Call Tamarack will host a webcast at 9:30 AM MDT (11:30 AM EDT) on Wednesday, October 28, 2026, to discuss the Q3 2026 financial results. Participants can access the live webcast through links provided on the Company’s website. An archive of the webcast will also be made available on the Company’s website. About Tamarack Valley Energy Ltd. Tamarack is a corporation engaged in the exploration, development, production and sale of oil and natural gas in the Western Canadian Sedimentary Basin. In 2026, Tamarack transitioned to become a pure-play Clearwater heavy oil producer, currently developing heavy oil positions at Nipisi, Marten Hills and South Clearwater. Tamarack holds an extensive inventory of low-risk, oil development drilling locations and is pursuing enhanced oil recovery upside across the Company’s core asset areas. Tamarack is committed to creating long-term value for its shareholders through sustainable free funds flow generation, financial stability and the return of capital. The Company is publicly traded on the Toronto Stock Exchange under the symbol “TVE”. For more information, visit www.tamarackvalley.ca. For addiƟonal informaƟon, please contact: Brian Schmidt Chief Executive Officer & Founder Tamarack Valley Energy Ltd. Phone: 403.263.4440 www.tamarackvalley.ca Steve Buytels President Tamarack Valley Energy Ltd. Phone: 403.263.4440 www.tamarackvalley.ca Kevin Johnston Chief Financial Officer Tamarack Valley Energy Ltd. Phone: 403.263.4440 www.tamarackvalley.ca Reader Advisories Selected financial and operaƟng informaƟon should be read with Tamarack’s unaudited interim consolidated financial statements and related management’s discussion and analysis for the period ended September 30, 2026, which are available on SEDAR+ at www.sedarplus.ca and on Tamarack’s website at www.tamarackvalley.ca. Notes to News Release 1. See “Specified Financial Measures” . 2. See “Disclosure of Oil and Gas information” . 3. 2026 annual guidance numbers are based on average pricing assumpƟons of: Crude Oil – WTI US$60.00/bbl, Crude Oil – MSW DifferenƟal $US(4.00)/bbl, Crude Oil – WCS DifferenƟal $US(12.75)/bbl, Natural Gas – AECO C$2.75/GJ, Foreign Exchange – USD/CAD 1.35. 4. Oil wellhead deducƟons for grade specific trading differenƟal (ex CHV), blending requirements, quality differenƟal, and pipeline tolls if Tamarack is not markeƟng (lease transacƟons). Disclosure of Oil and Gas InformaƟon Units of measurement For the purpose of calculaƟng unit costs, natural gas volumes have been converted to a boe using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion raƟo of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner Ɵp and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian SecuriƟes Administrators' NaƟonal Instrument 51 101 - Standards of Disclosure for Oil and Gas AcƟviƟes ("NI 51-101"). Boe may not be accurate, parƟcularly if used in isolaƟon. Short-term producƟon rates and waterflood response References in this news release to iniƟal producƟon rates, incremental oil upliŌ from waterflood injecƟon and other short-term results, including the results of the Meanook injecƟon pilot, are useful in confirming the presence of hydrocarbons and reservoir response; however, such rates are not determinaƟve of the rates at which wells will produce and decrease thereaŌer and are not indicaƟve of long-term performance or of ulƟmate recovery. Readers should be aware not to place reliance on such rates in calculaƟng the aggregate producƟon of Tamarack. Product Types References in this news release to “crude oil” or “oil” refers to light, medium and heavy crude oil product types as defined by NI 51-101. References to “NGL” throughout this news release comprise pentane, butane, propane, and ethane, being all NGL as defined by NI 51-101. References to “natural gas” throughout this news release refers to convenƟonal natural gas as defined by NI 51-101. Tamarack’s Clearwater producƟon volumes on a standalone total boe per day basis are comprised of approximately 91% heavy oil, 1% NGLs and 8% natural gas. The Charlie Lake producƟon volumes referenced in this news release on a boe per day basis are comprised of approximately 55% light oil, 12% NGLs and 33% natural gas. The run-rate producƟon volumes of the combined company are comprised of approximately 94% heavy oil and 6% natural gas. The Company’s 2026 annual average producƟon guidance is comprised of approximately 80% heavy oil, 7% light oil, 2% NGLs and 11% natural gas. Reserves and Future Net Revenue Disclosures All reserves values, future net revenue and ancillary informaƟon contained in this news release are derived from evaluaƟons by McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared in accordance with the definiƟons, standards and procedures contained in the Canadian Oil and Gas EvaluaƟon Handbook (“COGEH”) and NI 51-101 unless otherwise noted. Headwater’s reserves and associated net present value are derived from an independent reserves assessment prepared by McDaniel dated January 15, 2026, evaluaƟng the oil and gas properƟes of Headwater as at December 31, 2025 (the “Headwater Reserves Report”). Tamarack’s reserves and associated net present value are derived from an independent reserves assessment prepared by McDaniel dated January 21, 2026, evaluaƟng the oil and gas properƟes of Tamarack as at December 31, 2025 (the "Tamarack Reserves Report"). Both the Headwater Reserves Report and the Tamarack Reserves Report uƟlize forecast prices based on the average of forecast prices of McDaniel, Sproule ERCE and GLJ Ltd. as at January 1, 2026. All reserve references in this news release are “Company Gross Reserves”. Company Gross reserves are defined as the applicable company’s working interest share of reserves prior to royalty deducƟons. EsƟmates of reserves and future net revenue for individual properƟes may not reflect the same level of confidence as esƟmates of reserves and future net revenue for all properƟes, due to the effect of aggregaƟon. There is no assurance that the forecast price and cost assumpƟons applied by McDaniel in evaluaƟng Tamarack’s or Headwater’s reserves will be aƩained and variances could be material. Other than with respect to Headwater’s McCully assets, which are to be transferred to Tributary ExploraƟon Inc. (a newly formed company to which certain assets of Headwater and Tamarack will be transferred under the plan of arrangement), all reserves assigned in the Headwater Reserves Report and the Tamarack Reserves Report are located in the Province of Alberta. For more informaƟon relaƟng to the Headwater Reserves Report and the Tamarack Reserves Report, see the annual informaƟon forms of Headwater and Tamarack for the year ended December 31, 2025, which are available on SEDAR+ at www.sedarplus.ca.
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All evaluaƟons and summaries of future net revenue are stated prior to the provision for interest, debt service charges and general and administraƟve expenses and aŌer the deducƟons of royalƟes, operaƟng costs, esƟmated asset reƟrement obligaƟon costs and esƟmated future capital expenditures. It should not be assumed that the esƟmates of future net revenues presented in this news release represent the fair market value of the reserves. The recovery and reserve esƟmates of crude oil, natural gas liquids and natural gas reserves provided herein are esƟmates only and there is no guarantee that the esƟmated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the esƟmates provided herein. There are numerous uncertainƟes inherent in esƟmaƟng quanƟƟes of crude oil, reserves and the future cash flows aƩributed to such reserves. The reserve and associated cash flow informaƟon set forth herein are esƟmates only. Proved reserves are those reserves that can be esƟmated with a high degree of certainty to be recoverable. It is likely that the actual remaining quanƟƟes recovered will exceed the esƟmated proved reserves. Probable reserves are those addiƟonal reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quanƟƟes recovered will be greater or less than the sum of the esƟmated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from compleƟon intervals open at the Ɵme of the esƟmate. These reserves may be currently producing or, if inacƟve, they must have previously been on producƟon, and the date of resumpƟon of producƟon must be known with reasonable certainty. Undeveloped reserves are those reserves expected to be recovered from known accumulaƟons where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of producƟon. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this news release but not defined are defined in NI 51-101, CSA Staff NoƟce 51-324 – Revised Glossary to NI 51-101 ("CSA Staff NoƟce 51-324") and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff NoƟce 51-324 and the COGEH, as the case may be. Drilling LocaƟons Disclosure This news release may discuss Clearwater drilling locaƟons in two categories: (i) booked locaƟons; and (ii) unbooked locaƟons. Booked locaƟons are proved and probable locaƟons derived from either the Headwater Reserves Report or the Tamarack Reserves Report, which were prepared in accordance with NI 51-101 and the COGEH. Unbooked locaƟons do not have aƩributed reserves. Tamarack’s unbooked Clearwater locaƟons have aƩributed conƟngent or prospecƟve resources, based on the resource report prepared by McDaniel, a qualified independent resource evaluator, effecƟve as of December 31, 2025, in accordance with the definiƟons, standards and procedures contained in NI 51-101 and COGEH. ConƟngent resources are those quanƟƟes of petroleum esƟmated, as of a given date, to be potenƟally recoverable from known accumulaƟons using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more conƟngencies. There is uncertainty that it will be commercially viable to produce any porƟon of the conƟngent resources. ProspecƟve resources are those quanƟƟes of petroleum esƟmated, as of a given date, to be potenƟally recoverable from undiscovered accumulaƟons by applicaƟon of future development projects. There is no certainty that any porƟon of the prospecƟve resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any porƟon of the prospecƟve resources. Headwater’s unbooked Clearwater locaƟons do not have aƩributed resources. References in this news release to the pro forma combined company’s idenƟfied drilling locaƟons represent the aggregate of Tamarack’s and Headwater’s respecƟve drilling locaƟon inventories, on a pro forma basis giving effect to the TransacƟon. Of Tamarack’s Clearwater inventory of >2,000 (net) primary drilling locaƟons, 520 (net) are proved or probable locaƟons, and the remainder are unbooked locaƟons. Of Headwater’s Clearwater inventory of >1,000 (net) primary drilling locaƟons, 273 (net) are proved or probable locaƟons, and the remainder are unbooked locaƟons. Unbooked locaƟons have been idenƟfied by management as an esƟmaƟon of the combined company’s mulƟ-year drilling acƟviƟes based on evaluaƟon of applicable geologic, seismic, engineering, producƟon and reserves informaƟon. There is no certainty that the combined company will drill all unbooked drilling locaƟons and if drilled there is no certainty that such locaƟons will result in addiƟonal oil and gas reserves, resources or producƟon. The drilling locaƟons on which the combined company actually drills wells will ulƟmately depend upon the availability of capital, regulatory approvals, seasonal restricƟons, oil and natural gas prices, costs, actual drilling results, addiƟonal reservoir informaƟon that is obtained and other factors. While certain of the unbooked drilling locaƟons have been de-risked by drilling exisƟng wells in relaƟve close proximity to such unbooked drilling locaƟons, the majority of other unbooked drilling locaƟons are farther away from exisƟng wells where management has less informaƟon about the characterisƟcs of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locaƟons and if drilled there is more uncertainty that such wells will result in addiƟonal oil and gas reserves, resources or producƟon. Forward Looking InformaƟon This news release contains certain forward-looking informaƟon (collecƟvely referred to herein as “forward-looking statements”) within the meaning of applicable Canadian securiƟes laws. Forward-looking statements are oŌen, but not always, idenƟfied by the use of words such as “budget”, “guidance”, “outlook”, “anƟcipate”, “target”, “plan” , “conƟnue”, “intend”, “consider”, “esƟmate”, “expect”, “may”, “will”, “should”, “could” or similar words (including grammaƟcal variaƟons) suggesƟng future outcomes. More parƟcularly, this news release contains statements concerning: Tamarack’s business strategy, objecƟves, strength and focus; plans to merge with Headwater; value of the all-stock transacƟon; expectaƟons of being the only pure-play publicly-traded Clearwater producer, expectaƟons of producƟon and liquidity of the combined company; volume, reserves and drilling locaƟons being acquired with the TransacƟon; planned increases in dividends; expectaƟon of waterflood growth in core areas and waterflood expansion plans; the Company’s exploraƟon and development plans and strategies; 2026 outlook and guidance; capital investment plans; Ɵming of TransacƟon compleƟon; the Ɵming of the Headwater and Tamarack shareholder meeƟngs and the receipt of court, regulatory and stock exchange approvals; the anƟcipated operaƟng, markeƟng and corporate synergies of the combined company and the Ɵming of an update thereon and of a combined 2027 budget; 2026 Clearwater producƟon guidance; the combined 2026 capital investment programs of approximately $700 million; 2026 exit water injecƟon rates and the proporƟon of producƟon under waterflood, on a standalone and pro forma basis; the transfer of certain assets to Tributary ExploraƟon Inc. and the distribuƟon of its shares; the Ɵming, amount and allocaƟon of the planned addiƟonal Clearwater capital investments by the Company and planned secondary waterflood recovery iniƟaƟve and payment of declared dividends. Future dividend payments and share buybacks, if any, and the level thereof, are uncertain, as the Company’s return of capital framework and the funds available for such acƟviƟes from Ɵme to Ɵme is dependent upon, among other things, free funds flow financial requirements for the Company’s operaƟons and the execuƟon of its strategy, fluctuaƟons in working capital and the Ɵming and amount of capital expenditures, debt service requirements and other factors beyond the Company’s control. Further, the ability of Tamarack to pay dividends and buyback shares will be subject to applicable laws (including the saƟsfacƟon of the solvency test contained in applicable corporate legislaƟon) and contractual restricƟons contained in the instruments governing its indebtedness, including its credit facility. The forward-looking statements contained in this document are based on certain key expectaƟons and assumpƟons made by Tamarack, including those relaƟng to: the business plan of Tamarack; the saƟsfacƟon of the condiƟons to compleƟon of the TransacƟon, including receipt of shareholder, court, regulatory and stock exchange approvals, on the anƟcipated Ɵmeline; the accuracy of Headwater’s public disclosure and of the reserves and resources evaluaƟons of Headwater’s properƟes; the realizaƟon of the anƟcipated benefits and synergies of the TransacƟon and the successful integraƟon of Headwater’s business; execuƟon of the Company’s 2026 budget; the Ɵming of and success of future drilling, conversion, development and compleƟon acƟviƟes; the Ɵming, amount and performance of addiƟonal Clearwater capital investments and secondary waterflood recovery iniƟaƟves; the availability of cash on hand, available credit and future anƟcipated adjusted funds flow to fund planned capital development programs and future acquisiƟons, dividends or share buybacks; the geological characterisƟcs of Tamarack’s properƟes; prevailing commodity prices, price changes, price differenƟals and the actual prices received for the Company’s products; the realizaƟon of anƟcipated benefits of the Company’s infrastructure, waterflood development program and recent acquisiƟons and asset sales; the availability and performance of drilling rigs, faciliƟes, pipelines and other oilfield services; the Ɵming of past operaƟons and acƟviƟes in the planned areas of focus; the performance of new and exisƟng wells; the applicaƟon of exisƟng drilling and fracturing techniques; the Company’s ability to secure sufficient amounts of water; prevailing weather and spring weather condiƟons; royalty regimes and exchange rates; impact of inflaƟon on costs; the applicaƟon of regulatory and licensing requirements; the conƟnued availability of capital and skilled personnel; the ability to maintain or grow the banking faciliƟes; the accuracy of Tamarack’s geological interpretaƟon of its drilling and land opportuniƟes, including the ability of seismic acƟvity to enhance such interpretaƟon; and Tamarack’s ability to execute its plans and strategies.
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Although management considers these assumpƟons to be reasonable based on informaƟon currently available, excessive reliance should not be placed on the forward-looking statements because Tamarack can give no assurances that they may prove to be correct. By their very nature, forward-looking statements are subject to certain risks and uncertainƟes (both general and specific) that could cause actual events or outcomes to differ materially from those anƟcipated or implied by such forward-looking statements. These risks and uncertainƟes include, but are not limited to: the risk that the TransacƟon is not completed on the anƟcipated Ɵmeline or at all, including as a result of not being able to obtain required shareholder, court or regulatory approvals or to saƟsfy other condiƟons needed to complete the TransacƟon; the risk that the arrangement agreement is not completed, including the payment of any cessaƟon fee; the risk that the anƟcipated benefits and synergies of the TransacƟon are not realized or that the integraƟon of Headwater’s business is more difficult or costly than anƟcipated; diluƟon resulƟng from the issuance of common shares under the TransacƟon; risks relaƟng to the Tributary ExploraƟon Inc. spin-out and to Headwater’s business; the U.S.-Venezuela conflict and the impact of potenƟal increases in North American heavy oil supply; risks with respect to third party pipeline outages and risks relaƟng to inclement weather events and natural events, such as fire, drought and flooding, including in respect of safety, asset integrity and shuƫng-in producƟon; the risk that future dividend payments thereunder are reduced, suspended or cancelled; differing assessments of the value of benefits to be obtained from exploraƟon and development programs; that income taxes, general and administraƟve expenses or interest expenses to differ materially from the Company’s expectaƟons; the risk that the Company may not achieve anƟcipated water injecƟon rates, anƟcipated Clearwater oil producƟon or meet the capital investment guidance; the risk that cash on hand, available credit and anƟcipated adjusted funds flow will not be sufficient to fund the Company’s planned capital programs and any future acquisiƟons, dividends and share buybacks; risks associated with the oil and gas industry in general (e.g. operaƟonal risks in development, exploraƟon and producƟon; and changes in plans with respect to exploraƟon or development projects or capital expenditures); the risk that (i) the U.S. and Canadian governments maintain tariffs, increase the rate or scope of tariffs, or impose new tariffs on the import of goods from one country to the other, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restricƟon or prohibiƟon on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed by the U.S. on other countries and responses thereto could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company; the risks related to the renegoƟaƟon of the United States-Mexico-Canada Agreement, resulƟng in changes to trade, tariff or market access terms that may adversely affect the Company; commodity prices, including the impact of the acƟons of OPEC and OPEC+ members; risks relaƟng to reliance on third parƟes, the uncertainty of esƟmates and projecƟons relaƟng to producƟon, cash generaƟon, costs and expenses, including increased operaƟng and capital costs due to inflaƟonary pressures; health, safety, liƟgaƟon and environmental risks; access to capital; and pandemics. In addiƟon, ongoing military acƟons in Iran and elsewhere in the Middle East and between Russia and Ukraine have the potenƟal to impact the supply of oil and gas from those regions. The long-term impacts of the acƟons between these naƟons remain uncertain. Due to the nature of the oil and natural gas industry, drilling plans and operaƟonal acƟviƟes may be deferred or modified to respond to market condiƟons, results of past operaƟons, regulatory approvals or availability of services causing results to be deferred. Please refer to the most recent annual informaƟon form and management’s discussion and analysis of the Company, for addiƟonal risk factors relaƟng to Tamarack, which can be accessed either on Tamarack’s website at www.tamarackvalley.ca or under the Company’s profile on www.sedarplus.ca. The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligaƟon to update publicly or to revise any of the included statements, except as required by law. The forward-looking statements contained herein are qualified by this cauƟonary statement. This news release contains future-oriented financial informaƟon and financial outlook informaƟon (collecƟvely, “FOFI”) about generaƟng sustainable long-term growth in free funds flow, dividends, share buybacks and debt reducƟon, the 2026 capital budget of $450 - 470 million, the combined 2026 capital investment programs of approximately $700 million, 2026 Clearwater producƟon of 57,500 – 59,500 boe per day, anƟcipated synergies of the combined company, the anƟcipated net cash and available funding of the combined company, guidance and budget pricing and allocaƟon, including prospecƟve results of operaƟons, producƟon (including annual average producƟon of 65,500 – 67,500 boe/day, average oil and natural gas weighƟngs of 88 – 90% , free funds flow, operaƟng costs (including net operaƟng expenses in 2026), balance sheet strength, and components thereof, all of which are subject to the same assumpƟons, risk factors, limitaƟons and qualificaƟons as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further informaƟon about Tamarack’s future business operaƟons. Tamarack and its management believe that FOFI has been prepared on a reasonable basis, reflecƟng management’s best esƟmates and judgments, and represent, to the best of management’s knowledge and opinion, the Company’s expected course of acƟon. However, because this informaƟon is highly subjecƟve, it should not be relied on as necessarily indicaƟve of future results. Tamarack disclaims any intenƟon or obligaƟon to update or revise any FOFI contained in this document, whether as a result of new informaƟon, future events or otherwise, unless required pursuant to applicable law. Readers should be aware that the FOFI contained in this document should not be used for purposes other than for which it is discussed herein. Changes in commodity prices, differences in the Ɵming and allocaƟon of capital expenditures, and variances in average producƟon esƟmates can have a significant impact on the key performance measures included in Tamarack’s guidance. Actual results may differ materially from these esƟmates. Specified Financial Measures This news release includes various specified financial measures, including non-IFRS financial measures, non-IFRS financial raƟos, capital management measures and supplemental financial measures as further described herein. These measures do not have a standardized meaning prescribed by InternaƟonal Financial ReporƟng Standards (“IFRS”) and, therefore, may not be comparable with the calculaƟon of similar measures by other companies. This news release also contains forward-looking non-IFRS financial measures and capital management measures, including the anƟcipated net cash and available funding of the combined company following compleƟon of the TransacƟon. Such forward-looking measures are calculated on a basis consistent with the equivalent historical measures described below, and there are no significant differences between the forward-looking measures and the equivalent historical measures. Net operating expenses (Non-IFRS Financial Measure and Non-IFRS Financial Ratio if calculated on a per boe basis) is calculated as operating expenses less processing income. The most directly comparable IFRS measure is operating expenses. Tamarack generates processing income from third parties that utilize excess capacity at Tamarack’s facilities. If Tamarack has excess capacity at one of its facilities, the Company will seek to process third-party volumes as a means of offsetting a portion of the facility costs. Accordingly, net operating expenses allow Tamarack and others to assess the profitability of field operating results by including the associated income generated from plant operations. Adjusted funds flow (capital management measure) is defined as cash provided by operaƟng acƟviƟes excluding asset reƟrement obligaƟon expenditures, transacƟon costs and changes in non-cash working capital. Asset reƟrement obligaƟon expenditures and transacƟons costs from business combinaƟons both result from the Company’s capital budgeƟng and strategic planning processes, which first considers available adjusted funds flow. Asset reƟrement obligaƟon expenditures vary from period to period depending on capital programs, government regulaƟons and the maturity of the Company’s operaƟng areas. By also excluding changes in non-cash working capital from cash provided by operaƟng acƟviƟes, the adjusted funds flow measure provides a meaningful metric for Tamarack and others by establishing a clear link between the Company's cash flows, income statement and operaƟng netbacks by isolaƟng the impact of changes in the Ɵming between accrual and cash seƩlement dates, which can oŌen be within management’s control. Tamarack uses adjusted funds flow to assess the Company’s financial performance and cash generated from operaƟng acƟviƟes. Free funds flow (capital management measure) is defined as adjusted funds flow less investments in oil and natural gas assets (excluding acquisiƟons and disposiƟons) and the seƩlement of asset reƟrement obligaƟons. Management uƟlizes free funds flow to assess how much cash was generated in excess of the Company’s capital investment and asset reƟrement programs within the same period, which can be uƟlized to reduce debt, fund acquisiƟons or return capital. Net (cash) debt (capital management measure) is calculated as the sum of the Company’s debt, government loans and other, cash, accounts receivable, prepaid expenses and deposits, cross-currency swap liability (asset), assets held for sale (net), accounts payable and accrued liabiliƟes. Tamarack and others uƟlize net debt to assess liquidity and balance sheet strength by aggregaƟng the select financial assets and financial liabiliƟes on the Company’s balance sheet.
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Available funding is calculated as the sum of undrawn credit capacity under the Company’s credit facility and cash, accounts receivable, prepaid expenses and deposits, cross-currency swap liability (asset), assets held for sale (net), accounts payable and accrued liabiliƟes. Tamarack and others uƟlize available funding to assess the amount of funds that could be available to the Company in the near term to fund capital management iniƟaƟves. OperaƟng netback equals total oil and natural gas sales, including realized gains and losses on commodity hedges, less royalƟes, net operaƟng expenses and transportaƟon expenses. OperaƟng Field Netback equals total oil and natural gas sales, less royalƟes, net operaƟng expenses and transportaƟon expenses. These metrics can also be calculated on a per boe basis, which results in them being considered a non-IFRS financial raƟo. Management considers operaƟng netback and operaƟng field netback important measures to evaluate performance by asset area by isolaƟng the impact of corporate and other overhead related expenditures. The most directly comparable IFRS measure is oil and natural gas sales. AddiƟonal informaƟon relaƟng to the specified financial measures used in this news release, including the quanƟtaƟve reconciliaƟons of non-IFRS financial measures to their most directly comparable IFRS measures, is contained under the headings “Non-GAAP financial measures and non-GAAP financial raƟos” and “Capital management measures and raƟos” in the “Advisories and guidance” secƟon of Tamarack’s management’s discussion and analysis for the three and nine months ended September 30, 2026, which informaƟon is incorporated by reference into this news release. The management’s discussion and analysis can be accessed either on Tamarack’s website at www.tamarackvalley.ca or under the Company’s profile on www.sedarplus.ca. AbbreviaƟons bbl(s) barrel(s) bbls/d barrels per day boe barrels of oil equivalent boe/d barrels of oil equivalent per day NGL natural gas liquids WTI West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade