Tamarack Valley Energy Ltd. closed the second of its two strategic asset acquisitions, which consolidates assets in Tamarack's core operating areas of Redwater and Wilson Creek in Alberta, Canada, the company said July 25.

The operating areas currently produce 850 barrels of oil equivalent per day (boe/d), 71% light oil and NGL, with a 20% to 22% decline rate.

There are 95 gross (60 net) total sections of land contiguous with Tamarack's existing Viking and Cardium interests.

The Redwater acquisition adds significant infrastructure, including an 82% ownership in a central oil battery at Redwater, which has capacity to handle 8 Mbbl/d of oil and 1.5 million cubic feet per day of natural gas, and which could boost low-cost operations in both areas.

The total cash consideration for the Redwater acquisition was CA$25.8 million, financed with part of the proceeds from the CA$81.6 million bought deal equity financing that closed on July 12.

Tamarack said that this financing was led by National Bank Financial Inc. and included Dundee Securities Ltd., Macquarie Capital Markets Canada Ltd., CIBC World Markets Inc., FirstEnergy Capital Corp., Peters & Co. Ltd., Desjardins Securities Inc., Acumen Capital Finance Partners Ltd. and AltaCorp Capital Inc.

Concurrent with the closing of the Redwater acquisition, Tamarack's new bank line was put into place with a total credit capacity of CA$120 million, comprised of a CA$110 million revolving credit facility and a CA$10 million operating facility.

The previous borrowing base of CA$165 million was reduced to CA$120 million.

Tamarack’s capex budget remains between CA$45 million and CA$53 million, and its average estimated 2016 annual production guidance remains between 9,700 boe/d and 10,000 boe/d, about 53% to 57% oil and NGL.

Tamarack also said that during second-quarter 2016, the first two-mile lateral Cardium oil wells at Wilson Creek were drilled and brought on production. Tamarack said it will place longer horizontal wells across more of its Wilson Creek area.