By Amanda Stephenson in Calgary

Tamarack Valley Energy Ltd. is buying Deltastream Energy Corp. for $1.425 billion, a move that Tamarack says solidifies its position as the largest producer in northern Alberta’s Clearwater heavy oil play.

In a news release Monday, Calgary-based Tamarack said it will pay $825 million in cash, $300 million in the form of a deferred acquisition payment and $300 million in equity comprised of about 80 million Tamarack shares, for Deltastream.

Deltastream, which is 85 per cent owned by ARC Financial, is a pure-play operator in the Clearwater — one of North America’s newest oil plays which saw its first development in 2016.

The Clearwater is considered to be the most economic oil play in North America, with wells that pay out in less than six months at current oil prices, said Brian Schmidt, chief executive of Tamarack Valley.

“Deltastream brings scale and a leading economic development drilling inventory, comprised of high quality, long life assets with low sustaining capital requirements that enhance capital allocation flexibility,” Schmidt said in the release.

The acquisition will add about 23,000 barrels of oil equivalent per day of production in 2023, according to Tamarack.

In conjunction with the acquisition, Tamarack also said it will increase its monthly dividend by 25 per cent.

The company said it will pay 1.25 cents per share, up from a penny per share, starting with its November dividend, payable in December.

This report by The Canadian Press was first published Sept. 12, 2022.

Companies in this story: (TSX:TVE)

News from © The Canadian Press, 2022. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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