SPARTAN DELTA CORP. SPARTAN DELTA CORP.
INVESTOR PRESENTATION
M AY 7 , 2 0 2 4
SPARTAN DELTA CORPORATE STRATEGY
Three Pillar Strategy
I . DEEP BASIN OPTIMIZATION | I I . DEEP BASIN CONSOLIDATION | I I I . NEW DUVERNAY CORE AREA |
ORGANIC GROWTH | TECHNICAL EXPERTISE | LOW COST OF ENTRY |
FREE FUNDS FLOW GENERATION | OPERATIONAL AND G&A SYNERGIES | OIL AND CONDENSATE RICH RESOURCE PLAY |
20% IMPROVEMENTS IN CAPITAL EFFICIENCY | FOUNDATIONAL ASSET PROVIDES M&A SPRINGBOARD | UNDERUTILIZED INFRASTRUCTURE SUPPORTS GROWTH |
May 7, 2024 | 2 |
CORPORATE SUMMARY
Building a Sustainable Energy Company
Edmonton, Alberta
S PA RTAN D E LTA C O R P.
40,500 BOE/d 2024 Production
$150 MM 2024 Capital
D E E P B A S I N
~$100-125 MM 2024 Capital
>130,000 net acres
- >790 net drilling locations
- Free Funds Flow generation
D U V E R NAY
~$25-50 MM 2024 Capital
~240,000 net acres
- New growth core area
- Oil and condensate rich
C A P I TA L I Z AT I O N
SPARTAN DELTA CORP | TSX | SDE | ||
(1) | $/sh | 4.21 | ||
Share Price | ||||
Common Shares Outstanding | (2) | MM | 173.2 | |
Market Capitalization | $MM | 729 | ||
(2) | $MM | 93 | ||
Net Debt | ||||
Enterprise Value | $MM | 822 | ||
Tax Pools | (2) | $MM | 659 | |
Management & Board Ownership | % | 13% |
Calgary, Alberta
May 7, 2024
A B O U T S PA R TA N D E LTA C O R P.
Spartan is committed to creating value for its shareholders, focused on sustainability both in operations and financial performance. The Company's ESG- focused culture is centered on generating Free Funds Flow through responsible oil and gas exploration and development. The Company has established a portfolio of high-quality production and development opportunities in the Deep Basin and the Duvernay. Spartan will continue to focus on the execution of the Company's organic drilling program in the Deep Basin, delivering operational synergies in a respectful and responsible manner to the environment and communities it operates in. The Company is well positioned to continue pursuing growth in the Deep Basin, participate in the consolidation of the Deep Basin fairway, and continue advancing its Duvernay strategy by leveraging Spartan's balance sheet and Free Funds Flow.
1) | As at closing May 7, 2024 | 3 |
2) | As at March 31, 2024 |
SPARTAN'S STRATEGIC MILESTONES
Continuously Generating Shareholder Value
C O R P O R AT E H I G H L I G H T S S I N C E I N C E P T I O N ( 1 )
$537 MM | $1,623 MM | $980 MM |
E Q U I T Y | C U M U L A T I V E | C U M U L A T I V E |
I S S U E D | A D J U S T E D F U N D S | C A P I T A L |
F L O W | E X P E N D I T U R E S ( 3 ) |
T R A C K R E C O R D O F E X E C U T I N G S T R AT E G Y
1 | Growth Through Targeted Strategic Acquisitions in a Depressed |
Market. | |
2 | Dominant Positions Secured in the Oil-Weighted Window of the |
Montney and the Liquids-Rich Deep Basin. | |
$1,809 MM | $10.45/sh. |
D I V I D E N D S A N D | D I V I D E N D S A N D |
D I S T R I B U T I O N S ( 2 ) | D I S T R I B U T I O N S ( 2 ) |
G R O W T H T I M E L I N E
Velvet
Acquisition
Aug 2021
Inception
Acquisition
BellatrixFeb 2021
Acquisition
Jun 2020
496%
C U M U L A T I V E
R E T U R N O N C A P I T A L
E M P L O Y E D ( 4 )
Montney
Divestiture
May 2023
Duvernay
Acquisitions
Nov 2023 - Current
Integration of Acquired Assets and Demonstration of the True | |
3 | Productive Potential at Gold Creek and Karr Through Execution of |
Drilling Program. | |
Acceleration of Debt Repayment, Returning the Company to a Clean | |
4 | Balance Sheet Position, Allowing for Inaugural Special Dividend of |
$0.50/sh. | |
Monetization of Gold Creek and Karr Montney Declaring $9.60/sh. in | |
5 | Dividends and Distributions. |
Creation and Distribution of Logan Energy Corp. at $0.35/sh. to | |
Spartan Shareholders. | |
6 | Refocusing on the Deep Basin and Building a New Core Growth Area |
in the West Shale Basin Duvernay at a Low Entry Cost. | |
May 7, 2024 | 1) | December 19, 2019, to March 31, 2024 | 3) | Cumulative Capital Expenditures Before A&D | 4 |
2) | Inclusive of $1,748 MM cash proceeds and the $60.6 MM | 4) | ROCE = EBIT/Total Capital Expenditures (including A&D) | ||
Logan distribution |
Q1 2024 HIGHLIGHTS
Consistently Delivering Results
U N A U D I T E D H I G H L I G H T S | Q 3 2 0 2 3 | Q 4 2 0 2 3 | Q 1 2 0 2 4 | |
Crude Oil | bbls/d | 478 | 570 | 748 |
Condensate | bbls/d | 1,653 | 1,870 | 2,111 |
Natural Gas Liquids (NGLs) | bbls/d | 8,670 | 9,196 | 9,442 |
Natural Gas | MMcf/d | 160.3 | 156.2 | 157.4 |
Average Production | boe/d | 37,518 | 37,664 | 38,533 |
Operating Netback, before Hedging | $/boe | 14.08 | 15.29 | 13.92 |
Adjusted Funds Flow | $MM | 64 | 56 | 46 |
Capital Expenditures, before A&D | $MM | 27 | 32 | 45 |
Free Funds Flow | $MM | 36 | 24 | 1 |
Diluted Shares Outstanding, Weighted Average | MM | 174 | 174 | 177 |
AFF per share, diluted | $/sh | 0.37 | 0.32 | 0.26 |
F I R S T Q U A R T E R 2 0 2 4 H I G H L I G H T S
38,533 BOE/D | 6% |
A V E R A G E | L I Q U I D S G R O W T H |
P R O D U C T I O N | Q o Q |
2% | $46 MM |
P R O D U C T I O N | A D J U S T E D F U N D S |
G R O W T H Q o Q | F L O W |
$659 MM | $93 MM |
T A X P O O L S | E X I T N E T D E B T |
Period Ended Net Debt (Surplus) | $MM | 65 | 75 |
93
May 7, 2024 | 5 |
I. DEEP BASIN OPTIMIZATION
Free Funds Flow with Substantial Inventory Duration Into Owned Infrastructure
S U M M A R Y
- Spartan's foundational asset generating organic growth resulting in significant Free Funds Flow
- Targeting >20% capital efficiency improvements in 2024 compared to 2023
- Top quality resource of delineated liquids-rich Spirit River and oil and condensate-rich Cardium development
- Deep inventory of economic drilling locations across multiple targets resulting in the addition of a second rig to Spartan's 2024 development plan
- Significant owned and operated strategic infrastructure
- Working interest ("WI") in three gas plants, as well as owned and operated compressor stations resulting in ~300 mmscf/d of capacity
Belly River
Cardium
Lwr Clrd Shales
Viking
Notikewin
Falher A
Falher B
Falher D
Falher E
D E E P B A S I N H I G H L I G H T S
~38,500 BOE/d | ~45,000 BOE/d |
2 0 2 4 F O R E C A S T | I N F R A S T R U C T U R E |
P R O D U C T I O N | C A P A C I T Y |
~$100-125 MM | >800 |
2 0 2 4 C A P I T A L | N E T D R I L L I N G |
E X P E N D I T U R E S | L O C A T I O N S |
>130,000 | ~$18 MM |
N E T A C R E S | I N A C T I V E , |
U N D I S C O U N T E D |
CENOVUS SAND CREEK
- 75 MMcf/d (9.6% WI)
Spartan Working Interest Gas Plant
Third Party Gas Plant
Spartan Compressor Station / Battery Spartan Lands
SDE O'CHIESE NEES-OHPAWAGANU'CK10-09
- 230 MMcf/d Deep Cut (25% WI)
CENOVUS ALDER
• 75 MMcf/d (20% WI)
Wilrich
Glauconite
Ostracod
Ellerslie
Fernie
Rock Creek
Nordegg
Shunda
Pekisko
Banff
Nisku
Leduc
Duvernay
May 7, 2024 | L I A B I L I T I E S | 6 |
II. DEEP BASIN CONSOLIDATION
Fairway Poised for Consolidation
D E E P B A S I N FA I R WAY
▪ Spartan has a proven consolidation and integration record and a clean balance sheet position ▪ Deep Basin offers scale and operational synergies
▪ Spartan possesses technical expertise in the fairway
▪ Existing underutilized infrastructure
▪ High quality liquids rich natural gas assets with established infrastructure that supports attractive half-cycle economics
May 7, 2024 | 7 |
III. NEW DUVERNAY CORE AREA
Prolific Liquids-Rich Shale Asset Offers Significant Scalability and Commerciality
W E S T S H A L E B A S I N D U V E R N AY
- Spartan acreage possesses geotechnical attributes comparable to Kaybob Duvernay
- Spartan has established one of the largest positions in the oil and condensate rich West Shale Basin Duvernay, consolidating fragmented and undercapitalized acreage
- Spartan has access to available egress and existing underutilized infrastructure to support rapid growth and development
- In 2024, Spartan anticipates drilling and completing a minimum of one horizontal well, completing a previously drilled and uncompleted well ("DUC"), and drilling a vertical stratigraphic well
- Additionally, Spartan has the optionality to drill and complete an additional two horizontal wells in 2024
S PA R TA N D U V E R N AY H I G H L I G H T S
~240,000 | ~2,000 BOE/D | ~68% |
N E T | 2 0 2 4 | A V E R A G E |
A C R E S | F O R E C A S T | L I Q U I D S |
( 3 7 5 N E T S E C T I O N S ) | P R O D U C T I O N | P R O D U C T I O N |
~$25-50 MM | ~$104 MM | ~$4 MM |
2 0 2 4 | T O T A L | I N A C T I V E , |
C A P I T A L | A C Q U I S I T I O N | U N D I S C O U N T E D |
E X P E N D I T U R E S | C A P I T A L | L I A B I L I T I E S |
C A R R O T C R E E K D U V E R N A Y
P E M B I N A D U V E R N A Y
W I L L E S D E N G R E E N D U V E R N A Y
May 7, 2024 | 8 |
- NEW DUVERNAY CORE AREA
Expansive Position Across the Willesden Green & Pembina Fairway
W I L L E S D E N G R E E N & P E M B I N A
W I L L E S D E N G R E E N N O R T H A C Q U I S I T I O N
~186,000~162,000
G R O S SN E T
A C R E SA C R E S
~350 | ~300 |
G R O S S D U V E R N A Y | N E T D U V E R N A Y |
L O C A T I O N S ( 1 ) | L O C A T I O N S ( 1 ) |
~0.5-1 MMboe | ~$11.5-13.5 MM |
E S T I M A T E D | E S T I M A T E D D R I L L , |
R E C O V E R Y | C O M P L E T E , E Q U I P , |
P E R W E L L | T I E - I N C O S T S |
~38,000
N E T D U V E R N A Y
A C R E S
~50
N E T D U V E R N A Y
L O C A T I O N S
~$53.1 MM
T R A N S A C T I O N
P R I C E
~1,600 BOE/D
A V E R A G E
P R O D U C T I O N
~70%
L I Q U I D S
P R O D U C T I O N
~2.8X
N E T O P E R A T I N G
I N C O M E ( 2 )
~600-1,200 BOE/D | ~50-350 bbl/MMcf |
I P 3 0 R A T E | A V E R A G E C G R |
May 7, 2024 |
SDE W.I. Lands | ||||||
SDE Operated Duvernay Wells | ||||||
Industry Duvernay Wells | ||||||
Acquisition Lands | ||||||
Joint Venture Area(3) | ||||||
9 | ||||||
1) | Inventory estimates assume 400 meter interwell spacing | |||||
2) | Estimated second quarter 2024 annualized net operating income at US$80/bbl WTI and $1.75/GJ AECO natural gas | |||||
3) | Initial joint venture W.I. 62.5% Spartan |
2024 UPDATED GUIDANCE
Optimizing the Deep Basin and Growing the Duvernay
P R E V I O U S | U P D AT E D | |||
G U I D A N C E ( 1 ) | F Y 2 0 2 4 | F Y 2 0 2 4 | G U I D A N C E H I G H L I G H T S ( 1 ) |
Crude Oil & Condensate | bbls/d |
Natural Gas Liquids (NGLs) | bbls/d |
Natural Gas | MMcf/d |
Average Production | boe/d |
Operating Expenses | $/boe |
Transportation Expenses | $/boe |
2,700 | 3,300 |
9,700 | 10,100 |
163 | 162 |
38,500 - 40,500 | 39,500 - 41,500 |
(6.07) | (6.15) |
(1.69) | (1.63) |
~15% | ~35% |
I N C R E A S E I N | I N C R E A S E I N O I L & |
L I Q U I D S | C O N D E N S A T E |
P R O D U C T I O N ( 2 ) | P R O D U C T I O N ( 2 ) |
Operating Netback, before Hedging | $/boe |
Settlement on Commodity Derivative Contracts | $/boe |
Operating Netback, after Hedging | $/boe |
G&A | $/boe |
Adjusted Funds Flow | $MM |
Capital Expenditures, before A&D | $MM |
Free Funds Flow | $MM |
Year Ended Net Debt (Surplus) | $MM |
13.05 | 13.12 |
1.15 | 1.48 |
14.20 | 14.60 |
(1.33) | (1.29) |
170 | 176 |
125 | 150 |
45 | 26 |
30 | 127 |
~40,500 BOE/D | ~$176 MM |
M I D P O I N T A V E R A G E | A D J U S T E D F U N D S |
P R O D U C T I O N | F L O W |
~$100-125 MM | ~$25-50 MM |
2 0 2 4 D E E P B A S I N | 2 0 2 4 D U V E R N A Y |
C A P I T A L | C A P I T A L |
WTI | US$/bbl |
AECO | C$/GJ |
FX | US$/C$ |
May 7, 2024
75.00 | 80.00 | A D J U S T E D F U N D S F L O W S E N S I T I V I T I E S | ||
2.00 | 1.75 | |||
1.35 | 1.36 | |||
~$5.5 MM | ~$5.5 MM | ~$4.5 MM | ||
AECO +/ - | WTI +/ - | FX +/ - | ||
$ 0 .25/GJ | US $ 5/BBL | $ 0 .05 | ||
1) | The financial performance measures are based on the midpoint average production forecast; numbers may not add due to rounding | 10 | ||
2) | Fourth quarter 2023 to FY2024 |
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Spartan Delta Corp. published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 23:33:04 UTC.
