CALGARY, ALBERTA — (Marketwire) — 08/11/11 — Tamarack Valley Energy Ltd. (TSX VENTURE: TVE) (“Tamarack” or the “Company”) has filed its unaudited consolidated financial statements for the three and six months ended June 30, 2011 and its management–s discussion and analysis on SEDAR. The documents are accessible on Tamarack–s website at or on SEDAR–s website at . Tamarack is also pleased to provide and update to its spring drilling program.
“We are pleased with the execution of our spring multi-well program. We had timely access to quality services when needed and experienced minimal weather delays.” said Brian Schmidt, President and CEO. “At Lochend and Garrington we have achieved strong initial production rates and have a very promising second well on the horizon in the Buck Lake area.”
Garrington Cardium Drilling Results
Tamarack–s horizontal Cardium well located at 1-20-32-3W5M (54% WI) was drilled to a measured depth of 3,200 meters, and was completed using a 16 stage nitrified oil frac. After recovering all 5,400 barrels of load fluid over a six day period, the well produced an average of 484 boe/d (406.5 bbls/d oil with a solution gas rate of 465 mcf/d) over the next nineteen days. The initial 19-day test was conducted without any artificial lift as the well flowed on its own.
The well is currently being fully equipped and additional facilities are being installed to conserve natural gas volumes for future production. Tamarack expects to commission the new well-site facility and commence production activities in September 2011. Early stage results indicate the well has the potential to be one of the best wells in the Garrington/Harmattan trend. Tamarack has 10.5 net un- risked future drilling locations in the area.
Lochend Cardium Production Update
On June 22, 2011, Tamarack Valley provided an operation update regarding the three day average initial production results for two Lochend wells drilled and completed during the second quarter of 2011. The following table summarizes the average production day boe rates post recovery of load fluid, updated to 14 day average results for the 8-29-26-3 W5M (100% WI) and 15-32-26-3 W5M (100% WI) wells.
The wells were shut in for most of July to install a multi-well battery. However, the new facility has now been fully commissioned and the wells have been put back on production. Once the multi-well facility became operational, Tamarack constrained oil production to 330 bbls/d from both wells. This constraint will be in effect until a new gas conservation system is commissioned scheduled for the third quarter of 2011. Tamarack has 22.0 net un-risked future drilling locations in the area.
Although the new Garrington and Lochend wells are currently exhibiting production performance at an initial rate much higher than area offsets, we anticipate future decline rates will be similar to the offsetting Cardium wells.
Buck Lake Update and Drilling Outlook
Tamarack–s horizontal well located at 3-35-46-6 W5M was drilled to a measured depth of 3,450 meters with approximately 1,500 meters of horizontal section in the Cardium zone. The well has been prepared in order to conduct an 18 stage fracture stimulation operation scheduled to occur in August 2011. The drilling rig was released while results from the multi-well program are evaluated. The Company has tentatively booked a rig for early October 2011 and has licensed wells that provide an option to continue drilling Cardium locations in Lochend, Buck Lake and Garrington.
Production
Tamarack–s average production rate in July based on field estimates was 947 boe/d. During July, the Quaich wells were shut-in for 5 days as a result of a third party plant turnaround and all three Lochend wells were shut-in for two weeks during the month while construction of the multi-well battery took place.
During a 10 day period (between July 29 and August 7, 2011), prior to the new Garrington well being shut-in, production averaged 1,226 boe/d based on field estimates. However, with the new Garrington well anticipated to experience downtime in August due to installation of well-site facilities and tie-in of the solution gas, Tamarack expects to average between 1,030-1,080 boe/d in the third quarter.
About Tamarack Valley Energy Ltd.
Tamarack is an oil and gas company involved in the identification, evaluation and operation of resource plays in the western Canadian sedimentary basin. The Company uses a rigorous, proven modeling process to carefully manage risk and identify growth opportunities and has assets at Lochend, Garrington/Harmattan, Buck Lake and Quaich areas in Alberta, southeast of Lloydminster in Saskatchewan and at Wilder in northeast British Columbia.
Unit Cost Calculation
For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent (“boe”) using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Boe–s may be misleading, particularly if used in isolation.
Forward Looking Information
This press release contains certain forward-looking statements within the meaning of applicable securities laws, including statements relating to expected drilling plans and operational activities and results. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “intends”, forecast”, “plans”, “guidance” and similar expressions are intended to identify forward-looking statements or information. The intended drilling plans, infrastructure additions, operational activities and results are based on assumptions relating to the timing of past operations and activities in the planned areas of drilling as well as information from consultants on regulatory processes, drilling and fracturing techniques. The statement regarding the impact of the two new Lochend wells are forward looking statements based on the assumption that current results continue and that infrastructure additions provide the benefits expected and commodity prices do not decline significantly.
Although management considers these assumptions to be reasonable based on information currently available to it, undue 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 involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. These risks and uncertainties include, but are not limited to: risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; commodity prices, the uncertainty of estimates and projections relating to production, cash generation, costs and expenses; health, safety, litigation and environmental risks and access to capital. Due to the nature of the oil and natural gas industry, drilling plans and operational activities may be delayed or modified to react to market conditions, results of past operations, regulatory approvals or availability of services causing results to be delayed.
The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward- looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX has neither approved nor disapproved the contents of this press release.
Contacts:
Tamarack Valley Energy Ltd.
Brian Schmidt
President & CEO
403.263.4440
Tamarack Valley Energy Ltd.
Ron Hozjan
VP Finance & CFO
403.263.4440