Logo of Headwater Exploration seen at the company’s office in Calgary, Alta., Wednesday, Dec. 9, 2020.THE CANADIAN PRESS/Jeff McIntosh
By Lauren Krugel
Tamarack Valley Energy Ltd. and Headwater Exploration Inc. are joining up in a $10-billion all-stock deal that they say will create an oil-producing heavyweight in the Clearwater region of northern Alberta.
“The transaction brings together two leading Clearwater producers, each characterized by low-cost, high-margin production, low corporate decline rates, modest reinvestment requirements and low corporate break-even oil prices,” the companies said in a news release Tuesday.
“The combined business will benefit from decades of Clearwater drilling and waterflood inventory, meaningful operating and capital synergies and greater scale across the play.”
Under the proposed deal, Headwater shareholders will receive one share of Tamarack for each Headwater common share they hold. Tamarack shareholders will own 66.5 per cent of the combined company, while Headwater shareholders will own 33.5 per cent.
Tamarack shares were trading 2.6 per cent higher early-morning Tuesday on the Toronto Stock Exchange while Headwater shares were slightly lower.
In the new year, Tamarack’s current president Steve Buytels will take the helm of the merged company and its current CEO, Brian Schmidt, is to move into the executive chairman role.
The deal requires approval by both companies’ shareholders.
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In connection with the transaction, Tamarack says it plans to increase its quarterly dividend to six cents per share from five cents.
Certain non-core exploration assets in Alberta, Saskatchewan and New Brunswick will be transferred into Tributary Exploration Inc., a new company. Tributary is to be two-thirds held by Tamarack Valley shareholders, with Headwater shareholders owning the rest. It is expected to be publicly listed and be operated by the current management team at Headwater.
Robert Mann, an analyst at Desjardins Securities, wrote in a note Tuesday that the deal makes strategic sense and is consistent with his firm’s view that consolidation should take place in Clearwater between small- and mid-sized operators.
“For (Tamarack Valley) shareholders, the transaction provides scale through the addition of top-tier inventory, expanded secondary recovery opportunities, an improved long-term growth profile and a lower corporate decline rate,” Mann wrote.
“For (Headwater) shareholders, despite a modest discount on the implied share consideration, investors retain exposure to a larger pure-play Clearwater company with enhanced inventory depth and meaningful synergy capture potential, while also participating in the Tributary Exploration spin-out, which will be led by the (Headwater) management team and benefits from management’s established track record of creating value through similar structures.”
This report by The Canadian Press was first published Sept. 8, 2026.
Companies in this story: (TSX:TVE, TSX:HWX)
- 0121 Ministry of Energy and Resources April 20260121 Ministry of Energy and Resources April 2026
- 0134 SASPO-2956_ Safety 20260134 SASPO-2956_ Safety 2026
- 0133 LC Trucking hiring Class 1A Payden0133 LC Trucking hiring Class 1A Payden
- 0132 UMWA 20260132 UMWA 2026
- 0129 Turnbull drivers operators0129 Turnbull drivers operators
- 0128 OSY Rentals updated0128 OSY Rentals updated
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- 0118 IBEW 30 sec0118 IBEW 30 sec
- 0114 Prospera Bold Vision0114 Prospera Bold Vision
- 0113 Miller Epic Cinematic Hollywood trailer0113 Miller Epic Cinematic Hollywood trailer
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
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