Tamarack Valley Energy Ltd. and Headwater Exploration Inc. have agreed to combine in an all-stock transaction valued at $10 billion that will create the largest publicly traded pure-play Clearwater oil producer in North America.
Under the definitive arrangement agreement announced September 8th, 2026, Headwater shareholders will receive one Tamarack common share for each Headwater share they own. Tamarack will issue approximately 237.8 million shares. After closing, existing Tamarack shareholders are expected to own about 66.5 percent of the combined company and Headwater shareholders about 33.5 percent.
The merged company, to be led by current Tamarack management and headquartered in Calgary, is projected to have run-rate Clearwater production exceeding 80,000 barrels of oil equivalent per day, more than $50 million in net cash and available funding of more than $1.2 billion. It will also hold a contiguous land position of more than 1,500 sections across the Clearwater fairway and more than 3,000 identified drilling locations.
Tamarack plans to raise its quarterly dividend 20 percent to 6 cents per share ($0.24 annualised), starting in December 2026, contingent on the deal closing. The transaction is expected to be immediately accretive to free funds flow per share and to lower the combined company’s free-funds-flow breakeven cost to about US$37 per barrel (unhedged). Annual run-rate synergies are estimated at more than $50 million.
Certain non-core exploration assets, including Mannville-stack rights in Alberta, thermal heavy-oil prospects at Handel, Saskatchewan, and Headwater’s McCully natural-gas production in New Brunswick, will be transferred into a new publicly listed company called Tributary Exploration Inc. Tributary will be led by current Headwater management, including Neil Roszell as executive chair and Jason Jaskela as president and chief executive officer. Shareholders of both companies will receive shares in Tributary, and Headwater shareholders will also receive warrants.
The deal requires approval by at least two-thirds of votes cast by shareholders of each company, a majority of minority Headwater shareholders, court approval and other customary regulatory clearances, including under the Competition Act. Shareholder meetings are expected in November 2026, with closing targeted for the middle of the fourth quarter of 2026.
Upon closing, Headwater President and CEO Jason Jaskela and one other Headwater nominee will join the Tamarack board. Tamarack’s current president, Steve Buytels, is expected to become president and CEO of the combined company effective January 1st, 2027, with founding CEO Brian Schmidt moving to executive chairman.
National Bank Financial Markets is exclusive financial adviser to Tamarack. Peters & Co. Limited is exclusive financial adviser to Headwater. Both boards unanimously recommended the transaction.
For more information visit www.tamarackvalley.ca
