Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 12 May, 25 | TVE | Buy | CAD 3.95 | CAD 4.15 | CAD 4.25 | Same day | 7.6% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Tamarack Valley Energy Ltd. acquires, explores, develops, and produces crude oil, natural gas, and natural gas liquids in the Western Canadian sedimentary basin. Its oil and natural gas properties are the Cardium, Clearwater, Charlie Lake, and Enhanced Oil Recovery assets located in the province of Alberta, Canada. The company was formerly known as Tango Energy Inc. and changed its name to Tamarack Valley Energy Ltd. in June 2010. The company was incorporated in 2002 and is headquartered in Calgary, Canada.
AFF per share grew by 33% YoY to $0.44, demonstrating improved cash generation
Free funds flow per share doubled YoY from $0.09 to $0.18, reflecting significant capital efficiency gains
Natural gas prices dropped by 10% YoY, from $2.93/mcf to $2.64/mcf, impacting revenue from gas operations
Light oil production declined by 7% YoY, falling from 15,270 bbl/d to 14,204 bbl/d
Tamarack's investment performance is significantly exposed to fluctuations in commodity prices and heavy oil differentials, which could materially impact cash flow and returns despite strong operational execution
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 3.95 | 3.68 | 4.15 | 4.25 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Financial Performance and Shareholder Returns
Tamarack Valley Energy Ltd. delivered solid financial results in Q1 2025, achieving adjusted funds flow (AFF) of CAD 226 million or CAD 0.44 per share, marking a 33% year-over-year (YoY) increase. Free funds flow (FFF), after capital spending, rose significantly to CAD 91 million or CAD 0.18 per share, doubling from CAD 0.09 per share in Q1 2024. Reflecting a commitment to shareholder value, the company repurchased 12.5 million common shares, reducing shares outstanding by 2.4% from year-end 2024. Over the past twelve months, total capital returned to shareholders through dividends and buybacks amounted to CAD 246 million.
Operational Outperformance and Liquids Production Growth
Tamarack reported record-breaking operational results, with Q1 2025 production averaging 67,697 barrels of oil equivalent per day (boe/d). Liquids production, a key driver of profitability, reached an all-time quarterly high of 57,594 barrels per day (bbl/d). Heavy oil volumes, which averaged 40,383 bbl/d, increased by 11% YoY, while natural gas and natural gas liquids (NGLs) also saw healthy gains of 18% and 56% respectively. Light oil production declined modestly by 7% YoY.
Improved Margins and Cost Efficiencies
The company realized margin enhancements, driven by improved heavy oil price realizations. The heavy oil price differential, net of transportation relative to the WCS benchmark, improved by 13% to CAD 4.96/bbl. Operating netbacks increased by 8% YoY to CAD 45.63/boe. Tamarack also reduced its production expense to CAD 7.76/boe, a 23% improvement from Q1 2024, due to operational synergies, lower trucking and energy costs, enhanced pipeline connectivity, and divestment of higher-cost assets.
Disciplined Capital Deployment and Waterflood Expansion
Capital expenditures for Q1 2025 totaled CAD 133 million, with an additional CAD 5 million invested in Clearwater land acquisitions. The company’s capital efficiency enabled reallocation of savings to the Clearwater waterflood program, which is expected to more than double water injection rates to approximately 30,000 bbl/d by year-end. The company’s 2025 capital budget guidance remains at CAD 430–CAD 450 million, with investments trending toward the lower end due to continued cost savings.
Clearwater and Charlie Lake Asset Performance
Clearwater production reached 44,560 boe/d in Q1 2025, a 15% YoY increase, bolstered by waterflood performance and drilling success. Tamarack drilled 29 heavy oil wells and 3 water injectors in the quarter. At Marten Hills and Nipisi, multiple waterflood patterns exceeded production baselines by up to 400–500 bbl/d, showcasing strong reservoir response. Charlie Lake production also increased by 6% YoY to 17,780 boe/d, driven by 7 horizontal wells drilled during the quarter and the efficient ramp-up of wells completed in Q4 2024 and Q1 2025.
Robust Liquidity and Financial Position
Tamarack further strengthened its balance sheet, reducing net debt to CAD 768.6 million, a 22% reduction YoY. The company exited the quarter with approximately CAD 400 million in undrawn credit capacity and maintained a conservative 0.7x net debt-to-EBITDA ratio on a trailing 12-month basis. Despite a 7% drop in WTI prices YoY, Tamarack's integrated strategy and capital discipline allowed it to maintain strong financial and operational momentum into 2025.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Tamarack Valley Energy Ltd (TSX: TVE) at the closing market price of USD 3.95, as on May 09, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| TVE Tamarack Valley Energy Ltd |
0.07 1.61% | 4.43 | 11.26 | 12.33 | 1.62 | 1.08 | 1.79 | 3.21 |
| CNQ Canadian Natural Resources Ltd |
0.12 0.28% | 42.85 | 13.55 | 12.48 | 2.82 | 2.52 | 2.67 | 6.50 |
| TOU Tourmaline Oil Corp. |
1.34 2.07% | 66.04 | 14.42 | 10.96 | 5.30 | 1.64 | 4.12 | 6.49 |
| OVV Ovintiv Inc |
-1.11 2.16% | 50.32 | 5.72 | 10.39 | 1.64 | 1.06 | 1.78 | 3.44 |
| ARX ARC Resources Ltd. |
0.17 0.58% | 29.72 | 11.94 | 9.67 | 2.92 | 1.91 | 3.07 | 5.55 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 09,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
