Tamarack Valley, Headwater Exploration agree $7.2bn all-stock merger
Canadian oil producers Tamarack Valley and Headwater Exploration will merge in an all-stock deal valued at C$10 billion ($7.25 billion), the companies said on Tuesday.
The deal would create the largest publicly traded oil producer focused on Alberta's Clearwater formation, with the combined core land position across Marten Hills, Nipisi and Marten Hills West.
Under the deal, Headwater shareholders will receive one Tamarack share for each share held, with Tamarack issuing about 237.8-million shares. Tamarack shareholders will own 66.5% of the combined company, while Headwater shareholders will own 33.5%.
Tamarack expects the combined company's full-year production to be in the range of 65 500 to 67 500 barrels of oil equivalent per day in 2026 on a pro forma basis.
The deal brings together two producers with low-cost, high-margin production, modest reinvestment requirements and low breakeven oil prices, the companies said.
Separately, Tamarack said President Steve Buytels will become CEO and join the board of the combined company on January 1, 2027, while founding CEO Brian Schmidt will become executive chairperson.
The transaction is expected to close in the fourth quarter, following which Tamarack plans to accommodate expected growth in its Clearwater production through existing and planned pipelines to Edmonton, Alberta.
These expanded options provide Tamarack with an opportunity to mitigate the risk of local capacity constraints and obtain greater exposure to diversified oil markets, it said in a statement.
Tamarack and Headwater also plan to transfer certain non-core exploration assets into Tributary Exploration Inc, a new publicly listed firm to be run by Headwater's current management team.
The assets include some Mannville-stack exploratory mineral rights in Alberta, prospective thermal heavy oil opportunities at Handel, Saskatchewan, and legacy McCully natural gas production in New Brunswick.
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