Tamarack Valley Energy announced a $3.2-billion acquisition of Headwater Exploration on Tuesday — the biggest transaction in the company’s history — becoming the largest producer in the growing Clearwater formation in Alberta.

Founding Tamarack CEO Brian Schmidt also announced his plans to step aside as chief executive on Jan. 1 and become executive chair of the board, while company president Steve Buytels will move into the CEO’s chair of the combined entity.

For Schmidt, growing the company from a small junior operator to soon having 80,000 barrels of oil (boe) equivalent per day — becoming one of the largest conventional producers in Western Canada — wasn’t really in the plans when Tamarack Valley was formed in 2009.

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“Back then, it was probably build it to 5,000 barrels a day and sell it, but that model kind of disappeared when the royalty trusts left and that model didn’t work as well. So then we shifted to a company built to last,” Schmidt said in an interview.

“We wanted to be in the best plays and the best economics and deliver the best shareholder return, and that’s what led us to the Clearwater, and it’s an outstanding play.”

Under the merger announced Tuesday, Headwater Exploration investors will receive one share of Tamarack for each of their common shares, and they will collectively own about one-third of the merged business. The two Calgary-based companies will have........

© Calgary Herald