Tamarack Valley Energy's shares have reached a more than five-month low following the release of their spending plans for the upcoming year. The company aims to achieve average production of between 61,000 and 63,000 barrels of oil equivalent per day, which represents a decline compared to the record pace set in the recent quarter.
On Wednesday, the shares experienced a drop of up to 8.9%, but managed to recover slightly and were trading 7.1% lower at 3.12 Canadian dollars (US$2.30) in the afternoon. The stock has seen a decline of 30% so far this year.
Tamarack Valley focuses its oil developments primarily on the Charlie Lake and Clearwater plays in Alberta. Their budget for 2024 prioritizes the generation of near-term free funds flow and consists of two phases that align spending with the on-stream timing of their new CSV Albright sour gas plant in the Charlie Lake area.
The base budget for 2024 is estimated to be between C$410 million and C$460 million, while the growth budget for CSV Albright is set at C$450 million to C$500 million, assuming the plant is operational by the final quarter of next year.
In addition, the company plans to reduce sustaining capital in the base budget for 2024 to about C$330 million from C$370 million in 2023.
During the third quarter, Tamarack Valley achieved an average production of 68,597 barrels of oil equivalent. Furthermore, they recently closed the sale of their non-core assets in west-central Alberta for C$123 million in cash.
Jeremy McCrea, an analyst at Raymond James, commented that Tamarack Valley's 2024 budget did not come with significant surprises and emphasizes maintaining discipline. However, lower commodity prices are impacting sentiment towards the stock.