BTE - Tamarack Valley Energy: Time To Make It All Work

2024-04-01 11:05:02 ET

Summary

• Tamarack Valley Energy Ltd. has a stock overhang due to the use of stock in a series of acquisitions that ended in 2022.
• The company's strategy differs from competitors Headwater Exploration and Baytex Energy, who have organically grown their Clearwater production.
• The Clearwater Play is expected to be highly profitable, with fast payback periods.
• The fast payback periods enable more than one well to be drilled with the same money.  This enables fast cash flow growth.
• Charlie Lake light oil production is needed for better cash flow during periods of weak oil prices when the heavy oil discount often widens.

Tamarack Valley Energy Ltd. ( TNEYF ) essentially bought its way into the Clearwater Play through several acquisitions previously covered in older articles. Because a fair amount of stock was used in those acquisitions, the overhang of shares has taken some time to find an equilibrium. That means the stock price has been acting rather weakly since the last acquisition made. This may be the time to consider investing in one of the more profitable plays in Canada....

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