CALGARY, ALBERTA -- (Marketwire) -- 03/27/13 -- Tamarack Valley Energy Ltd. (TSX VENTURE: TVE) ("Tamarack" or the "Company") has filed its audited condensed consolidated financial statements for the year ended December 31, 2012 ("Financial Statements") and management's discussion and analysis ("MD&A") on SEDAR. Selected financial and operational information is outlined below and should be read in conjunction with the Financial Statements, which were prepared in accordance with International Financial Reporting Standards ("IFRS") and related MD&A. These documents are accessible on Tamarack's website at www.tamarackvalley.ca or on SEDAR at www.sedar.com.
Year-end 2012 Results
Tamarack is pleased to announce its fourth quarter financial and operational highlights as follows:
-- Production increased by 103% to 2,166 boe/d in 2012 from 1,069 boe/d in 2011.-- Production guidance for 2012 was achieved while maintaining the Company's initial capital expenditure guidance.-- Crude oil and natural gas liquids production weighting increased to 51% in Q4/12 from 49% in Q3/12.-- Funds from operations were $6.03 million for Q4/12 and $16.67 million for the year ended 2012 compared to $2.89 million and $8.85 million for the same periods in 2011.-- Operating netbacks increased by 5% to $31.83/boe in Q4/12 from $30.22/boe in Q3/12.-- Drilled 8 (4.8 net) successful Cardium oil wells, 12 (11.6 net) Viking oil wells and one net heavy oil well in 2012.
Tamarack's production guidance, disclosed on April 19, 2012, assumed the Company would average 2,000 to 2,200 boe/d in 2012 compared to actual production of 2,166 boe/d. Tamarack was able to achieve production guidance despite two (1.0 net) non-operated Lochend wells, drilled in the third quarter of 2012, not coming on-stream until the middle of the first quarter of 2013.
During 2012, Tamarack enjoyed continued Cardium oil drilling success in the Lochend and Garrington areas of Alberta. Production rates from wells operated by Tamarack, continue to outperform industry averages for Cardium water fracture stimulated wells in both areas. This was achieved while reducing drilling, completion and equipping costs by more than 30% from Tamarack's first Cardium well drilled in 2010.
On April 17, 2012, Tamarack increased its exposure to the Redwater Viking oil trend by completing the acquisition of Echoex Ltd. During the remainder of 2012, the Company drilled 12 Viking oil wells in the Redwater and Westlock areas of Alberta. Viking economics have been enhanced through the achievement of higher initial production rates and lower capital costs. Average initial production rates of 76 bbls/d exceeded pre-acquisition expectations by 27%. Costs to drill, complete and equip the Redwater wells in 2012 were also reduced by 20% from those incurred by the previous operator.
The significant capital cost savings in Lochend, Garrington and Redwater and better Cardium and Viking oil well production performance has allowed Tamarack to reduce its payout times to less than 14 months. By reducing payout times, Tamarack is better positioned to continue to grow production while maintaining industry competitive debt to cash flow levels.