As we predicted after its $804M Charlie Lake sale, Tamarack (TVE) is consolidating the Clearwater play - announcing an all stock $10B merger with Headwater…

… with HWX shareholders getting warrants in a SpinCo (natural gas + exploration land) to make up the valuation gap. Once closed, the combined entity will produce over 80,000 barrels of heavy oil per day…

… and capture more than $50M of annual synergies, given the two companies have plenty of neighbouring assets.

With no debt used to fund the deal, pro-forma Tamarack sits in a $50M+ net cash position - with over $1.2B of available liquidity to support a 20% dividend hike, continued buybacks…

… and opportunistic M&A, which could involve Rubellite (RBY) given it just sold its natural gas assets for $67M - aligning its much smaller portfolio with TVE’s.

After three straight months of improvement, the unemployment rate held steady at 6.4% in August…

… thanks to a 0.1% decrease in the participation rate, which offset a 42K decline in employment (mostly full-time)…

… that was widespread at the sector level. Worth noting that a lot of this monthly variation isn’t indicative of longer term trends, with sectors in black unchanged Y/Y…

… though the pressure on wage growth has been fairly durable, slowing to 2% Y/Y in August and coming in well below inflation.

Unemployment duration has been another sticky problem, with the share of job seekers out of luck for more than 27 weeks rising to 24%…

… and the average length of a job search sitting at 23 weeks, which could be impacted by ongoing trade negotiations.

The Ivey PMI rose to 64.3, beating expectations and reaching its highest level since May of 2022…

… though much of that growth in purchasing activity is likely price-driven, with tariffs putting more upward pressure on already elevated input costs.

To hedge against inflation and slower delivery times, purchasing managers are increasing inventories at an accelerated rate…

… which we expect could be consumed in future months by companies hoping to outlast the trade war - placing downward pressure on future purchasing behaviour.

A lot of trade noise to start the week with Canada’s tariffs taking effect, rumours of a bigger EU relationship coming, Trump kicking Canada from GSA MAS procurement, and the US imposing import bans and additional tariffs. As you know, we’re not headline chasers - so we’ll take our time with the data and report back Friday.

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