Tamarack Valley Energy to acquire Clearwater producer Deltastream Energy
Tamarack Valley Energy has signed an agreement to acquire pure-play Clearwater oil producer Deltastream Energy Corporation for CAD 1.425 billion ($1.1 billion).
The acquisition of Deltastream Energy will allow Tamarack Valley Energy to take its average Clearwater production of about 23,000 boe/d in 2023, which will include 94% oil and natural gas liquids.
It will also enable the Canadian oil and gas company to add more than 500 net future development locations, which are situated across 184 net sections of land adjacent to its core Nipisi and Marten Hills operations.
Besides, the deal is expected to position Tamarack Valley Energy as one of the leading producers in the Clearwater play, which is considered the most economic play in North America. The Canadian oil and gas firm is expected to possess a significant scale and upside across Nipisi, Canal, Perryvale, Marten Hills, Greater Peavine, and Jarvie.
Brian Schmidt — President and CEO of Tamarack Valley Energy said: “The acquisition of Deltastream solidifies Tamarack as the largest producer in the Clearwater oil fairway. This transaction builds on the Company’s core position in the Clearwater, which is recognized as North America’s most economic play.
“Deltastream brings scale and a leading economic development drilling inventory, comprised of high quality, long life assets with low sustaining capital requirements that enhance capital allocation flexibility. This strategic transaction delivers significant accretion to our existing business model and drives increased long-term value creation for our shareholders.”
The total consideration consists of CAD 825 million in cash, CAD 300 million in the form of a deferred acquisition payment, and CAD 300 million in equity.
Subject to regulatory approvals from the Toronto Stock Exchange, the Commissioner of Competition pursuant to the Competition Act (Canada), and other conditions, the deal is likely to close by the end of October 2022.