CALGARY, AB, July 6, 2020 /CNW/ - Spartan Delta
Corp. ("Spartan" or the "Company") (TSXV:
SDE) is pleased to provide an update on the Company's operational
and corporate activities since the closing of its transformational
transaction on June 1, 2020, which
included the acquisition of high-quality, multi-zone, oil and gas
operated production in Alberta, a
large land base and a strategic infrastructure footprint
(the "Transaction"). The Transaction positions Spartan
as an intermediate exploration and development company whose growth
strategy is focused on the acquisition and development of
underexploited and undercapitalized assets that offer material
upside and sustainable free cash flow within the current commodity
price environment.
Asset Outperformance Supported by Strong Hedge Book
Based on field receipts, Spartan's current production is
estimated at approximately 26,000 boe/d1, primarily from
the Ferrier and Willesden Green areas, compared to approximately
25,000 boe/d (30% oil and natural gas liquids) estimated at the
time of closing the Transaction five weeks ago. This production
outperformance was achieved without capital investment and
demonstrates the success of Spartan's recent production
optimization and integration activities, the high caliber of staff
retained through the Transaction, as well as the predictable and
stable nature of its asset base. Continued growth will be pursued
through the ongoing development of existing assets with exposure to
the Spirit River, Cardium and other Cretaceous target formations,
along with synergistic and accretive acquisitions. Spartan's future
growth is supported by the Company's strategic working interest
ownership in three gas plants, including one operated deep cut
facility with excess capacity. This infrastructure, with an
estimated $200 million of replacement
value net to the Company, ensures Spartan can capitalize on both
organic growth and strategic acquisitions, positively impacting
corporate operating efficiencies.
To protect project economics and cash flows, while mitigating
ongoing volatility in commodity markets, Spartan has strategically
hedged approximately 60% of its natural gas volumes for the latter
half of 2020 and approximately 45% of forecast natural gas volumes
for 2021 at attractive price levels. Spartan's complete natural gas
hedging positions as of July 6, 2020
are outlined below:
Period
|
Price
(C$/GJ)
|
Volume
(GJ/d)
|
Reference
|
Apr 1, 2020 to Oct
31, 2020
|
$1.54
|
750
|
AECO
|
Jul 1, 2020 to Mar
31, 2021
|
$2.23
|
60,000
|
AECO
|
Apr 1, 2021 to Oct
21, 2021
|
$2.02
|
5,000
|
AECO
|
Apr 1, 2021 to Mar
31, 2022
|
$2.25
|
35,000
|
AECO
|
Fostering Key Stakeholder Relationships
As a critical component of its strategy, Spartan is targeting
industry leadership across environmental, social and governance
("ESG") best practices and will uphold a corporate culture
that embodies the responsible and ethical stewardship of assets and
investor capital. Consistent with this philosophy, Spartan and the
O'Chiese First Nation community are working together to set the
stage for a long and mutually beneficial relationship based on
trust and mutual respect. The O'Chiese First Nation currently has a
five percent working interest in Spartan's operated Nees
Opawganu'ck deep cut plant and is a joint venture partner in the
development of oil and gas resources situated on O'Chiese First
Nation lands. Spartan will seek to engage O'Chiese First Nation
businesses and business partners for its field operations, further
supporting a collaborative environment that can benefit both
parties.
Upon closing of the Transaction, Spartan seamlessly integrated
the acquired assets, systems, processes and most importantly,
people, despite the social distancing challenges presented by
COVID-19. With the addition of over 100 new, permanent employees
and contractors across its head office and field operations,
Spartan is pleased to have assembled a talented group of
professionals who bring valuable skills, expertise, and knowledge
of the acquired assets, further strengthening the Company's rapidly
evolving position in the industry.
Second Quarter 2020 Results
The Company also confirms its second quarter 2020 financial and
operating results for the period ended June
30, 2020 will be issued by press release and filed on SEDAR
before markets open on August
20th. Spartan also anticipates posting an updated
corporate presentation on its website contemporaneous with the
second quarter results release.
About Spartan Delta Corp.
Spartan Delta is a differentiated energy company whose
ESG-focused culture is centered on generating sustainable free cash
flow through oil and gas exploration and development. Building
on its existing high-quality, low-decline operated production in
the heart of the Alberta Deep Basin, Spartan intends to continue
acquiring undervalued diversified assets that can be restructured,
optimized and rebranded, financially or operationally, yielding
accretion to shareholder value. With excess infrastructure
capacity, the Company is well positioned to continue pursuing
immediate production optimization and responsible future growth.
Further detail is available in Spartan's July corporate
presentation, which can be accessed on its website at
www.spartandeltacorp.com.
READER ADVISORY
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. More particularly and without
limitation, this press release contains forward looking statements
and information concerning: the growth strategy and business plan
of the Company; development plans for the Company's assets and the
completion of additional acquisitions; expected production and cash
flow; the Company's ESG initiatives; and the timing of the
Company's second quarter 2020 results announcement.
The forward-looking statements and information are based on
certain key expectations and assumptions made by Spartan, including
expectations and assumptions concerning the business plan of the
Company, expected production, and benefits and synergies arising
from the Transaction. Although Spartan believes that the
expectations and assumptions on which such forward-looking
statements and information are based are reasonable, undue reliance
should not be placed on the forward-looking statements and
information because Spartan can give no assurance that they will
prove to be correct. By its nature, such forward-looking
information is subject to various risks and uncertainties, which
could cause the actual results and expectations to differ
materially from the anticipated results or expectations expressed.
These risks and uncertainties include, but are not limited to,
fluctuations in commodity prices, changes in industry regulations
and political landscape both domestically and abroad, foreign
exchange or interest rates, stock market volatility, impacts of the
current coronavirus (COVID-19) pandemic and the retention of key
management and employees. Please refer to the Company's most recent
Annual Information Form and Management Discussion and Analysis for
additional risk factors relating to Spartan, which can be accessed
either on Spartan's website at www.spartandeltacorp.com or under
the Company's profile on www.sedar.com. Readers are cautioned not
to place undue reliance on this forward-looking information, which
is given as of the date hereof, and to not use such forward-looking
information for anything other than its intended purpose. Spartan
undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
law.
BOE Disclosure
The term barrels of oil equivalent ("boe") may be
misleading, particularly if used in isolation. A boe conversion
ratio of six thousand cubic feet per barrel (6 Mcf/bbl) of natural
gas to barrels of oil equivalence is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. All boe
conversions in the report are derived from converting gas to oil in
the ratio mix of six thousand cubic feet of gas to one barrel of
oil.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
All dollar figures included herein are presented in Canadian
dollars, unless otherwise noted.
______________________________
|
1
|
Current production is
comprised of approximately 1,390 bbls/d of condensate &
light/medium crude oil, 6,500 bbls/d of natural gas liquids and
108.6 mcf/d of natural gas.
|
www.spartandeltacorp.com
SOURCE Spartan Delta Corp