Tamarack achieved record production volumes in Q2/18 of 23,853 boe/d, exceeding the upper end of the Company's first half guidance range of 22,750 to 23,250 boe/d, with an oil and NGL production weighting of 63%.   

Supported by the Company's exceptional operational execution to date in 2018, Tamarack commenced allocating capital to longer-term projects in Q2/18, including the Veteran waterflood which is designed to shallow the overall corporate decline curve and enhance sustainability. During the quarter, the Company converted two Veteran wells to injectors and began injection late in June, 2018.  

In order to position the Company to avoid the higher costs and service interruptions that typically impact capital efficiencies in the first quarter, Tamarack has elected to accelerate $28.4 million of capital into the latter half of 2018 from its preliminary 2019 capital budget of $250 million.  This decision was made even though this accelerated capital will be allocated to projects that do not contribute to 2018 volumes. 

Approximately half of the $28 million of accelerated capital will be directed to the Veteran waterflood, with plans to drill seven to nine new injector wells and to install the associated pipe and facilities to ensure water injection can commence by early 2019. In keeping with Tamarack's capital allocation strategy, all of the planned Veteran waterflood projects achieve a 1.5 year payout based on current strip prices.  The other half of the accelerated capital will be directed to initiate the Company's Q1/19 drilling program in the fourth quarter, which includes de-risking lands located east of Veteran that had originally been targeted for delineation in early 2019.  Since Tamarack's operational performance to date has exceeded internal expectations, the Company is able to maintain a fully-funded program and able to allocate capital to initiatives that do not immediately add to production, but instead provide long-term value that can be realized through 2019 and beyond.  

Due to the Company's long runway of drilling opportunities, approximately 77% of the $250 million preliminary 2019 budget will be weighted towards drilling and completions operations with 7% weighted towards waterflood projects; the majority of the waterflood budget will be spent in late 2018. The Company's preliminary 2019 capital expenditure budget of $250 million contemplates spending approximately 95% of its anticipated adjusted operating field netback assuming commodities average US$60/bbl WTI, $1.65/GJ AECO and a $0.78 Canadian dollar.