Tamarack Valley Energy Ltd. is pleased to announce it 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 $112.0 million before closing adjustments (the "East Asset Divestiture").

Transaction Highlights

East Asset DivestitureTamarack is selling its two remaining non-core producing assets in Eastern Alberta for cash consideration of $112.0 million before closing adjustments, and the assumption of undiscounted asset retirement obligations of $63 million (~50% inactive). The transaction is expected to close in October 2025, subject to customary closing considerations.

The East Assets currently produce approximately 4,000 boe per day (3,500 bbl per day of oil), or 6% of Tamarack's corporate production. Over the next 12 months, the East Assets were expected to generate field operating netbacks(1) of approximately $45 million, reflecting a before-tax transaction multiple of ~2.5x 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% of the Company's total corporate liability and includes ~40% of Tamarack's total inactive decommissioning obligations. The transaction is also expected to improve Tamarack's net production expenses per boe(1) by ~10% 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.

OutlookTamarack continues to prioritize net debt(1) reduction together with ongoing 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(1) providing the Company with future optionality to increase shareholder returns or accelerate ongoing development in the 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 boe basis and lower near-term asset retirement obligation expenditures. Tamarack continues to forecast reaching its net debt(1) target of $500 million in 2027 under its long-term plan at a WTI price of US$65 per barrel.

The Company's 2025 guidance remains mostly unchanged for the full year, primarily due to outperformance from the H1 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 boe per day with fourth quarter production expected to be 66,500 to 67,500 boe per day. Tamarack's annual net production expenses(1) for 2025 are expected to be $7.75 - $8.25 per boe, a $0.25 per boe reduction compared to previous guidance as result of the portfolio optimization. Tamarack plans to release its 2026 budget later in the fourth quarter of 2025.

AdvisorsWith respect to the transaction, National Bank Financial Inc. is acting as financial advisor 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 â?? 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". For more information, visit www.tamarackvalley.ca.

Reader AdvisoriesDisclosure of Oil and Gas InformationFor the purpose of calculating unit costs, natural gas volumes have been converted to a boe using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Administrators' National Instrument 51 101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Boe may be misleading, particularly if used in isolation. References in this press release to "crude oil" or "oil" refers to light, medium and heavy crude oil product types as defined by NI 51-101. References to "NGL" throughout this press release comprise pentane, butane, propane, and ethane, being all NGL as defined by NI 51-101. References to "natural gas" throughout this press release refers to conventional natural gas as defined by NI 51-101.

2025 production guidance of 67,000 â?? 69,000 boe per day is comprised of 41,150 - 42,350 bbl per day heavy oil, 13,300 - 13,700 bbl per day light and medium oil, 2,300 - 2,360 bbl per day natural gas liquids and 61,550 - 63,550 mcf per day natural gas. Q4 2025 production guidance of 66,500 â?? 67,500 boe per day consists of 44,250 - 44,500 bbl per day heavy oil, 9,750 - 10,000 bbl per day light/medium oil, 2,200 - 2,300 bbl per day natural gas liquids and 62,000 - 64,000 mcf per day natural gas.

Forward Looking InformationThis press release contains certain forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "guidance", "outlook", "anticipate", "target", "plan", "continue", "intend", "consider", "estimate", "expect", "may", "will", "should", "could" or similar words (including negatives and variations thereof) suggesting future outcomes. This press release contains forward-looking statements concerning: Tamarack's business strategy, objectives, strength and focus (as at the date hereof and following the anticipated completion of the East Asset Divestiture); the ability and timing of achieving a net debt target of $500 million; the expected completion of the East Asset Divestiture, including terms and timing thereof; the anticipated benefits of the East Asset Divestiture; the Company's intended use of proceeds of the East Asset Divestiture, including intentions to reduce net debt providing the Company with future optionality to increase shareholder returns or accelerate ongoing development in the Clearwater, including expanded waterflood initiatives; anticipated improvements to the Company's asset retirement obligations, net production expense per boe, and operating netbacks as a result of the East Asset Divestiture; the Company's intentions to continue prioritizing net debt reductions together with ongoing shareholder returns; in respect of the East Assets, anticipated production, operating netbacks and the corresponding transaction multiple associated with the East Asset Divestiture; the expectation that 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 boe basis and lower near-term asset retirement obligation expenditures; the Company's 2025 full year and fourth quarter production outlook; expectations regarding actual 2025 results relative to the 2025 guidance; and the timing of 2026 budget and guidance announcements.

This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Tamarack's annual guidance, net debt targets (and the reduction thereof), expected improvement in operating netbacks; expected operating netbacks, asset retirement obligations, and prospective results of operations and production, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs and the assumptions outlined under "Specified Financial Measures" below, and should not be used for purposes other than those for which it is disclosed herein. Tamarack and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, Tamarack's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future activities or results.

The expected net debt target of $500 million in 2027 is based on the following assumptions: production of 68,000 - 73,000 boe per day, WTI price of US$65 per bbl, differentials of (US$13.25) per boe, (US$3.00) MSW, USD to CAD foreign exchange rate of 1.30 and shareholder returns of 60% of free cash flow, in-line with the Company's current return of capital framework.

Specified Financial MeasuresThis press release includes various specified financial measures, including non-IFRS financial measures, non-IFRS financial ratios, capital management measures and supplemental financial measures as further described herein. These measures do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable with the calculation of similar measures by other companies.

Field operating netbacks (non-IFRS financial measure) is calculated by subtracting royalty expenses, net operating expenses and transportation expenses from oil and natural gas sales. Tamarack and others utilize the Field Operating Netback measure to assess the operational performance of the Company's assets areas by isolating the impact of corporate and other overhead related expenditures. This metric is also presented on a per boe basis as a non-GAAP financial ratio.

Net production expenses (non-IFRS financial measure) is calculated by subtracting processing income from production expenses. Tamarack generates processing income from third parties that utilize excess capacity at Tamarack's facilities. Processing income is recognized as a reduction to production expenses, whereas processing income is reported as other income under GAAP. If Tamarack has excess capacity at one of its facilities, the Company will seek to process third-party volumes as a means to reduce the cost of operating those facilities. Accordingly, net production expenses allow Tamarack and others to assess the performance of its field and facility operating results by including the associated income generated from plant operations. Net production expenses are also presented on a per boe basis as a non-GAAP financial ratio.

Net debt (capital management measure) is determined by aggregating the Company's debt, government loans and other and current liabilities (net of current assets), excluding the current portion of commodity-based risk management contracts, asset retirement obligations and other liabilities. Tamarack and others utilize net debt to assess liquidity and balance sheet strength by aggregating select financial assets and financial liabilities on the Company's balance sheet.

Please refer to the Company's latest MD&A for additional information relating to specified financial measures including non-IFRS financial measures, non-IFRS financial ratios and capital management measures. The MD&A can be accessed either on Tamarack's website at www.tamarackvalley.ca or under the Company's profile on www.sedarplus.ca.

Abbreviations

SOURCE Tamarack Valley Energy Ltd.

SOURCE: Tamarack Valley Energy Ltd.

For additional information, please contact: Brian Schmidt, Chief Executive Officer,
Tamarack Valley Energy Ltd., Phone: 403.263.4440, www.tamarackvalley.ca; Steve
Buytels, President & Chief Financial Officer, Tamarack Valley Energy Ltd., Phone:
403.263.4440, www.tamarackvalley.ca; Kevin Johnston, Vice President, Finance,
Tamarack Valley Energy Ltd., Phone: 403.263.4440, www.tamarackvalley.ca

COMTEX_468855571/2197/2025-09-18T05:30:00