Corporate Presentation 1 Disclaimers & Advisories This - - PowerPoint PPT Presentation

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Corporate Presentation

March 2012

T V E : T S X - V

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Disclaimers & Advisories

This presentation may contain forward looking information. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on this forward-looking information. In this presentation, production is stated in barrels of oil equivalent (“BOE”) using a six to one conversion basis when converting thousands of cubic feet of natural gas to barrels of oil and a one to one conversion basis for natural gas liquids. Such conversion may be misleading, particularly if used in isolation. A 6:1 conversion ratio is based on energy equivalence between natural gas and oil at the burner tip and does not represent economic equivalence at the wellhead or point of sale. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

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Introducing Tamarack Valley Energy

We are a junior oil and gas company focused on increasing liquids production and reserves through the identification and

• peration of properties throughout Western Canada.

... We have a balanced drilling portfolio and a committed management team with significant personal investment. The right ingredients to build a strong company.

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Key Messages

• TVE is positioned to direct capital to the drill bit in 2012
• Evaluated water vs. oil fracs in Cardium – identified additional

upside on all future Cardium drills; early success at Buck Lake

• Capital allocated to new areas in Q4/11 & Q1/12 to de-risk:

– Initial well drilled in Q1/12 on Alberta shallow Viking oil play – Heavy oil 3D shoot in Q4/11, combined with existing 2D data identified large multi- well features; go-forward costs to evaluate is low

• TVE has a sizable, high quality, and diverse drilling inventory to

fuel production growth – TVE will shift capital to low GOR oil plays

• Minor gas production shut-ins in Q1/12 due to low prices

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Four Play Strategy

Identify Acquire land and seismic De-risk and

• ptimize

Reduce costs, build production and reserves

D R I L L B I T C A P I T A L

Lochend / Garrington Buck Lake Viking Oil Heavy Oil

... 2011 accomplishments position the company to focus on the drill bit in 2012.

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Lochend / Garrington Investment Review

Land $5.3 million

Total investment: $27.1 million P2 value created: $47.7 million

D&C&E and facility infrastructure $21.8 million Proven reserves (PV10) $33.5 million Cash flow $7.7 million

Break-even with proven reserves

... The most mature TVE play should provide a 3.3X return for shareholders.

Probable reserves (PV10) $33.6 million

P3 value created: $88.5 million

Possible risked reserves (PV10) $40.8 million

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The Tamarack Team

• Brian Schmidt, President & CEO
• Ron Hozjan, VP Finance & CFO
• Niels Gundesen, VP Engineering
• Ken Cruikshank, VP Land
• Kevin Screen, VP Production & Operations
• Dave Washenfelder, Exploitation Manager
• Scott Reimond, Exploration Manager

Management

• Floyd Price, Chairman
• Anthony Lambert
• Dean Setoguchi
• David Mackenzie
• John Gunn
• Brian Schmidt

Board of Directors

• Reserve Evaluators – InSite Petroleum Consultants Ltd.
• Legal – Osler, Hoskin & Harcourt LLP
• Auditors – KPMG LLP

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Tamarack Valley Competitive Advantage

• Established track record of accessing First Nations lands and

impact drilling deals with major oil companies

• Consistent delivery of drilling results – technical team drilled

thousands of wells on many plays at Apache

• Unique, stringent and disciplined risk management process that

maximizes returns for shareholders

• Management can handle a much larger entity – if the right thing for

TVE shareholders is to grow to 10,000+ boepd then the capability exists

• Up to date on technology used to find and exploit tight reservoirs

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TVE Capital Structure

Recent trading range $0.31 - 0.33 Market cap $63 million Q4 2011 est. production (Q3 – 1,101 boe/d) 1,503 boe/d Estimated net debt at December 31, 2012 $8.0 million Available bank lines (updated with current gas pricing) $15.0 million P+P reserves, InSite Dec 31, 2011 (81% PV10 from liquids) 5.65 mmboe (48% liquids) Undeveloped land (excluding farm-in acreage) 54,800 net acres Shares outstanding (basic / fully diluted) 196.75 / 220.1 million Ownership by management, directors & employees 10% basic / 21% fully diluted

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Strategic Play Criteria

Emerging Shale's (Horn River, Duvernay) Wet Mannville CBM Gas Hydrates Non - Resource Play Conventional Tight Sands (Cardium, Viking, Deep Basin) Heavy Oil

Apache Tamarack

…technology has advanced to open huge opportunities and rejuvenate the basin

…Targeting material, sustainable corporate growth.

Resource plays have high:

• OGIP/OOIP

– > 4 mmbbls/section OOIP or 25 bcf/section GIP – Either with stacked pay sections

• r thick single zones
• Long life reserves

– Production profiles demonstrate harmonic decline

• Target horizons are repeatable and

have large scope

• Conventional or unconventional

Initial well to de-risk play - 40% to 60% chance of success will maximize return to shareholders. To minimize risk, we will develop 4 resource plays; disappointments can be easily carried by winners.

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654 2,337 162 369 2,215 2,947

• Dec. 31, 2010
• Dec. 31, 2011

Natural gas NGLs Oil

Transformation to Oil Weighting

Positioning for the Future

39,700 24,463 30,460 16,160 6,100 10,021

• Jun. 2010
• Mar. 2012

Cardium oil Viking oil Heavy oil Legacy gas Undeveloped land (acres)

81,104 45,800

P+P Reserves (mboe)

Liquids +232% +87%

21.6 76.8 20.6 18.0

• Dec. 31, 2010
• Dec. 31, 2011

Natural gas Oil & associated products

Reserve Value PV10 ($millions)

+256%

• Tamarack has delivered on promises to

shift to oil weighting

• Oil and associated products now

accounts for 81% of PV10 value

• With solid oil prone lands oil drilling

inventory will increase

3,031 mboe 5,653 mboe 42.1 94.8

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40 30.0 37.0 35.0 68.0 20.0

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P+P Reserves at Dec 31/11 PV Lochend / Garrington Alberta Shallow Viking Buck Lake Sask Heavy Oil

Risked Before Tax PAV10 ($mm) – at Jan 1/12

$369.0mm $1.68/share $243.1 mm $1.10/share

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94.8 94.8 94.8 36.0 42.4 40.8 68.0 35.5 41.8 36.0 122.0

• Jan. 2012
• Jan. 2012 - Risked
• Jan. 2012 - Un-risked

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Four Play Strategy

Edmonton Calgary

GARRINGTON LOCHEND

ALBERTA

BUCK LAKE

(Duvernay rights)

SK

HEAVY OIL

Lloydminster

Resource Play #1

Lochend / Garrington Cardium Oil

Resource Play #2

Buck Lake Cardium Oil

Resource Play #3

Shallow Viking Oil

Resource Play #4

Saskatchewan Heavy Oil Identified; de-risked, adding production Identified; de-risked; adding production Identified; acquired, seismic Q4/11 and drilling 2012 Identified; acquired and preparing to de-risk Q1/12

…Developing four plays provides flexibility, superior returns and risk management.

Redwater Foley Lake VIKING OIL

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100 200 300 400 500 600 700 800 Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Mth 7 Mth 8 Mth 9 Mth 10 Mth 11 Mth 12 Lochend 16-32-026-03W5M Lochend 15-32-026-03W5M Lochend 08-29-026-03W5M Harmattan 1-20-032-03 W5M Buck Lake 4-35-046-06W5M Buck Lake 4-34-046-06W5M Original risked type curve New type curve

2011 Multi-Well Cardium Program

…After 10 months of production the 16-32 well produced

• ver 28,800 bbls of oil at an average rate of 93 bopd and

earned $2.73 million of revenue.

Calendar Day Prod’n (boe/d)

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Lochend “Sweet Spot” IP30 Calendar Day Prod’n

100 200 300 400 500 600 700 800 Jan-10 Aug-10 Feb-11 Sep-11 Apr-12 IP30 - bbls/d On Prod’n Date Oil frac Water frac

GLJ pricing – Jan/12 Un-risked comparison Oil Fracs Water Fracs % Change Capital ($mm) 4.300 3.900

• 10%

IP30 rate (boe/d) (12% gas) 236 456 +93% IP30 oil rate 202 404 +93% Reserves (mboe) 156 208 +33% ROR (%) 30 118 BTNPV10 ($mm) 1.810 4.290 +137% Recycle ratio (over reserve life) 2.2 3.4 +55%

• Avg. water frac

408 bbls/d (456 boe/d)

• Avg. oil frac

202 bbls/d (236 boe/d)

100 200 300 400 500 600 700 800 2 4 6 8 10 Calendar oil - bbl/d Production month

Lochend water fracs vs. original TVE type curve

…Field data supports a valuation step change.

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Lochend / Garrington

TVE 16-32 498 boe/d (prod day)

GLJ pricing – Jan/12 Sweet Spot Per Well East Well Case Garr. Well Total Net Cardium wells 9 13 10.5 32.5 Capital ($mm) 3.900 3.900 3.900 126.8 IP30 rate (boe/d) (12% gas) 390 200 390 Reserves (mboe) 177 132 177 5,170 ROR (%) 74% 25% 74% BTNPV10 ($mm) 3.100 1.300 3.100 77.4 Recycle ratio (over reserve life) 2.9 2.1 2.9 2.6

*Lochend & Garrington rate and reserves risked at 85% COS Prod’n rates are based on peak calendar month basis

TVE 15-32 432 boe/d TVE 8-29 443 boe/d

PBN 14-33 332 boe/d 58 mbbls to date

TVE 16-36 IP10 124 boe/d

PGF 1-34 215 boe/d MEL sec 4 wells 353, 284, 289, 153 boe/d

TVE 1-20 369 boe/d TVE land TVE Royalty interest TVE locations Industry well licenses Frac’d with oil Frac’d with water Cardium vertical wells

PBN 16-22 223 boe/d TOL 16-26 271 boe/d PBN 2-5 408 boe/d 770 boe/d 813 boe/d NAL recent water fracs sec 19 & 20 Exxon drilled wells 308 boe/d 485 boe/d NAL 1-18 524 boe/d PBN 4-8 539 boe/d PBN 4-5 313 boe/d NGL 2-3 423 boe/d PBN 4-28 299 boe/d NAL 3-17 334 boe/d 79 mbbls to date

Lochend “Sweet Spot”

$72.40 $10.93 $4.41 Lochend Royalties Opex Netback

• 2011 netbacks in Lochend

were approx. $72.40/boe – WTI avg. was $95/bbl

• TVE will switch to slick water

frac’s in 2012

Garrington

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Buck Lake

TVE 75% WI Cardium land TVE 75% WI excl. Cardium rights Industry well licenses Frac’d with oil Frac’d with water Cardium vertical oil wells Cardium vertical gas wells TVE 5-24 IP30 109 boe/d (prod day) 4-34 3-35 Low High Rock quality Upper Cardium Conglomerate Gas Oil TVE 3-35 IP14 1,239 boe/d IP30 898 boe/d 222 boe/d (mo. 3) 223 boe/d (mo. 2) 225 boe/d (mo. 2) 112 boe/d (mo. 2) 215 boe/d (mo. 2) Industry off-sets TVE 4-34 IP30 366 boe/d TVE 3-34 IP15 627 boe/d

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Buck Lake Development Plan

• Completed first water frac in Q1/12
• Frac down casing and mono-bore

technology to reduce costs

• Commence water flood study in 2012
• 75% working interest

*Buck Lake rate and reserves risked at 85% COS

GLJ pricing – Jan/12 High perm 2 mile

Medium

perm Total net Cardium wells 5 4 12 17.25 Capital ($mm) 3.20 4.35 3.20 72.00 IP30 (gross boe/d) 480 720 249 % Gas 47 47 37 Reserves (mboe) 181 295 170 4,125 ROR (%) 74 98 43 BTNPV10 ($mm) 1.900 3.300 1.680 43.000 Recycle ratio (over reserve life) 2.60 3.30 2.18 TVE land TVE land excl. Cardium rights Drilled wells Proposed locations Licensed wells

…With the quality of rock - Tamarack lands would have been drilled long ago had it not been for the lake.

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Manitou Lake Sparky Channel

TVE land Farm-in lands TVE locations 3D seismic 2D seismic Regional Sparky oil pools Lithic channels SST filled channels Heavy oil differential $30/bbl GLJ Pricing – Jan/12 E Well Case D Well Case Full Field Net vertical wells 56 Chance of success 40 100 Capital ($mm) 0.650 0.650 36.4 Peak rate (mo. 5-7) (bbls/d) 26 76 Reserves (mbbls) 27 77 4,300 ROR (%) 36 220 BTNPV10 ($mm) 270 1.860 104 Recycle ratio (over reserve life) 1.8 5.3 5.3

Pre-depositional Post-depositional (Differential Compaction)

North Sparky Channel Feature

Sparky Channel Propriety 3D seismic

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Manitou Lake Sparky Pool – Map and Analog Pool

X X1 111/10-25-43-28W3 2,800 bbls 4m oil pay Potential OOIP 29.5 mmbbls 11-28 Analog pool TVE feature Area (Ha) 631 825 OOIP (mmbbls) 31.0 29.5 Average pay (meters) 4 3 Peak rate (bbls/d) 708 Cumulative production (mmbbls) 3.1 Cumulative EUR (mmbbls) 3.5 Recovery factor 11% 10% Number of wells 22 40 Cumulative reserves per well (mbbls) 140 75

Analog Pool

TVE land Farm-in lands TVE locations 3D seismic 2D seismic Regional Sparky oil pools Lithic channels SST filled channels

…Manitou Sparky success would have a material impact to TVE valuation.

South Sparky Bed Feature

X 10-25-043-28W3 Location 03-29-043-27W3 X1 04-22-043-27W3 Oil Water

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• Hz heavy oil drilling potential
• Characteristics – analog play, mapable zone,

vertical well control, known oil in place

• Initial well 40% COS, up to 24 wells under full

development

• Will be de-risked by a competitor before Aug/12

Sask Heavy Oil – First Nations

Oil Water Post Deposition High Channel Facies Hz Well

Farm-in lands Potential drilling locations Heavy oil differential $30/bbl

GLJ pricing – Jan/12 Well case Full Play Net Hz wells 24 Capital ($mm) 0.850 20.4 Peak rate (bbls/d) 56 Reserves (mboe) 49 1,180 ROR (%) 96 BTNPV10 ($mm) 0.750 18.0 Recycle ratio (over reserve life) 2.2

* Rate and reserves risked at 90% COS

Competitor licensed - to de-risk

New producing well

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Shallow Alberta Viking Oil Trend

• Foley Lake is on

trend with Redwater

• Area is 30 km north
• f Ft. Assiniboine
• Not a deep basin

environment so a trap is required to avoid water

• Currently winter

access but road upgrade cost is not expensive

TVE land

Foley Lake Judy Creek Westlock Legal Redwater

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Foley Lake Viking Oil Play

Well Date drilled Frac IP30 prod day (bbls/d) IP30 calendar day (bbls/d) Current (bbls/d) Cum to date (bbls) Comments 14-8 1983 No 31 9 3.5 8,160 1-8 1982 No 21 3

• 150

Acid squeeze 12-4 1982 No 59 30 5 16,750 1985 frac 6-4 1973 No 104 49

• 31,200

Acid squeeze 48.5 23

Husky application: Holding 2 wells per pool per ¼ section (4 Hz wells per section)

Husky 4-20 Husky 4-16

TVE well spudded Dec/11 14-8 1-8 12-4 6-4

TVE land Joint land acquired with Husky (50% WI) Vertical Viking producers Other deeper penetrations

• Vertical wells were all initially un-frac'd
• Sweet spot is characterized by one meter

> 22% porosity

• TVE drilled first Hz well in play
• Husky active next to TVE lands
• TVE partnered with a major to acquire lands and

exchange technical information

• Husky drilled and cored one offsetting well
• Husky currently preparing to drill second well
• Valuable information was gathered on the play

to properly evaluate potential

Vertical wells avg.

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Foley 05-09-66-06 W5M Hz Section

S N

Upper Viking Lower Viking Joli Fou

100 m

…The first 285 meters of horizontal section was drilled in medium to high quality reservoir rock.

645 meters

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Play Characteristics – Redwater vs. Foley Lake

Viking Comparison (Sandstone / Siltstone) Redwater Foley Lake

Very Good Medium

Average porosity 18-22% 21-24% 14-16% Permeability (md) 1-50 10-50 0.5-5 Net pay 2-5 m 1 m 3-4 m Average OOIP per section (mmbbls) 5-8 5-8 API (degrees) 30-37 29 V well production - IP30 (bbls/d) 15-90 3-50 V well reserves (mbbls) 10-100 10-35 Hz well production (avg IP30) 75 bbls/d 70 bbls/d (un-risked) NAV/well using $85/bbl and PVBT10 ($mm) 1.5 – 2.0 1.0 Inventory at 6 wells per section 68 wells on 25.25 net sec Chance of success 60%

…Large mapable resource, demonstrable vertical production and appropriate analog at Redwater with Hz well development.

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Building Credibility - Six Month Review

The next 6 months Q2/12 to Q3/12 …

Approve 2012 budget and disseminate guidance Heavy Oil – drill 2-4 Sask. locations Viking Oil – work with partner; review rock core and fluid properties; model frac’s; geo-steering strategy “Live within Means” – keep debt at acceptable levels given current commodity prices and the effect to cash flow Build base production with low GOR Cardium wells; drill Lochend 2-29 during spring break-up

What we said we’d do October 2011… What we did Q4/11 to Q1/12 …

Develop Buck Lake – tie-in BL#2; complete and tie-in BL#3; drill 1- 2 more wells Buck Lake #2 & #3 tied-in and #4 drilled and on production De-risk Heavy Oil – drill 2-4 Sask. locations; shoot 3-D Drilled 4 wells at 50% success; 3-D completed, processed & interpreted De-risk Viking Oil – drill first well in Q1/12 and test Drilled & tested initial Hz well; JV established; acquired additional lands “Live within Means” – keep debt <1.0 times cash flow; grow Play #3 once de-risked Positioned to drill Play #3 – Heavy Oil after spring break-up Continue to review M&A

• pportunities and execute if

accretive Evaluated and submitted some proposals; no hit yet

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Why Invest in TVE?

• Proven, rigorous process to identify, evaluate and operate in

multiple resource plays

• Managing risk through a portfolio approach enables us flexibility to

achieve targets by redirecting capital to the higher ROR projects

• Key initial assets – internally generated, three de-risked core areas
• Technical and corporate expertise to evolve from a junior oil and

gas exploration company to a much larger entity

• Continues to deliver on execution of strategy and building

credibility to investors

…Quality committed team, great assets to start with and a solid plan to grow.

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TVE Contact Information

Tamarack Valley Energy 1800, 407 – 2nd Street SW Calgary AB T2P 2Y3 Tel: 403.263.4440 www.tamarackvalley.ca info@tamarackvalley.ca

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Corporate Presentation

March 2012

T V E : T S X - V