Mr. Brian Schmidt reports

TAMARACK VALLEY ENERGY LTD. ANNOUNCES SALE OF REMAINING NON-CORE ASSETS TO BECOME PURE-PLAY CLEARWATER AND CHARLIE LAKE PRODUCER

Tamarack Valley Energy Ltd. has entered into a definitive agreement with a private company to sell its remaining non-core producing assets in the Veteran Consort and Eyehill areas of eastern Alberta for $112-million before closing adjustments.

Transaction highlights:

• Asset focus -- completes Tamarack's transformation into a pure play Clearwater and Charlie Lake producer;
• Costs -- net production expenses per barrel of oil equivalent expected to improve by approximately 10 per cent from the disposition of lower-margin barrels;
• Guidance -- no change to 2025 full-year production guidance; 2026 budget to be released in late Q4 2025.

East asset divestiture

Tamarack is selling its two remaining non-core producing assets in eastern Alberta for cash consideration of $112-million before closing adjustments and the assumption of undiscounted asset retirement obligations of $63-million (approximately 50 per cent inactive). The transaction is expected to close in October, 2025, subject to customary closing considerations.

The East assets currently produce approximately 4,000 barrels of oil equivalent per day per day (3,500 barrels per day of oil), or 6 per cent of Tamarack's corporate production. Over the next 12 months, the East assets were expected to generate field operating netbacks of approximately $45-million, reflecting a before-tax transaction multiple of approximately 2.5 times at current strip prices.

The East assets were undercapitalized in Tamarack's portfolio, with developments focused primarily on the core Clearwater and Charlie Lake assets. The transaction reduces the company's asset retirement obligations by $63-million (on an undiscounted basis), reflecting 25 per cent of the company's total corporate liability and includes approximately 40 per cent of Tamarack's total inactive decommissioning obligations. The transaction is also expected to improve Tamarack's net production expenses per barrel of oil equivalent by approximately 10 per cent as the East assets carry higher operating costs on a per-barrel basis relative to the company's corporate average.

The company has now successfully completed its transformation into a pure play Clearwater and Charlie Lake player. Over the past three years, Tamarack has divested of a number of non-core assets following strategic acquisitions, creating a solid financial foundation for future development and growth of the company's high-graded, top-tier assets.

Outlook

Tamarack continues to prioritize net debt reduction, together with continuing returns to shareholders in the form of dividends and common share buybacks under its return-of-capital framework. Proceeds from the divestiture will initially be utilized to reduce net debt, providing the company with future optionality to increase shareholder returns or accelerate continuing development at Clearwater, including expanded waterflood initiatives. Tamarack expects the East asset divestiture will be accretive to the company's five-year plan, reinforced by lower net production expenses and higher margins on a per-barrel-of-oil-equivalent basis and lower near-term asset retirement obligation expenditures. Tamarack continues to forecast reaching its net debt target of $500-million in 2027 under its long-term plan at a WTI (West Texas Intermediate) price of $65 (U.S.) per barrel.

The company's 2025 guidance remains mostly unchanged for the full year, primarily due to outperformance from the H1 (first half) 2025 development programs, Clearwater waterflood response and a tuck-in acquisition of additional Clearwater assets early in the third quarter. Full-year production outlook remains at 67,000 to 69,000 barrels of oil equivalent per day, with fourth quarter production expected to be 66,500 to 67,500 barrels of oil equivalent per day. Tamarack's annual net production expenses for 2025 are expected to be $7.75 to $8.25 per barrel of oil equivalent, a 25-cent-per-barrel-of-oil-equivalent reduction compared with previous guidance as result of the portfolio optimization. Tamarack plans to release its 2026 budget later in the fourth quarter of 2025.

Advisers

With respect to the transaction, National Bank Financial Inc. is acting as financial adviser to Tamarack and Stikeman Elliott LLP is acting as legal counsel to Tamarack.

About Tamarack Valley Energy Ltd.

Tamarack is a corporation engaged in the exploration, development, production and sale of oil and natural gas in the Western Canadian sedimentary basin. The company is currently developing two core projects in Northern Alberta -- a Clearwater heavy oil position at Nipisi, Marten Hills and South Clearwater and a Charlie Lake light oil position at Valhalla, Wembley and Pipestone. Tamarack holds an extensive inventory of low-risk, oil development drilling locations and is pursuing enhanced oil recovery upside across the company's core asset areas. Tamarack is committed to creating long-term value for its shareholders through sustainable free funds flow generation, financial stability and the return of capital. The company is publicly traded on the Toronto Stock Exchange under the symbol TVE.

We seek Safe Harbor.