CALGARY, AB, June 22, 2021 /CNW/ - Spartan Delta
Corp. ("Spartan" or the "Company") (TSXV:
SDE) is pleased to announce strategic asset acquisitions in the
Gold Creek and Simonette areas. Total consideration for the
acquisitions is approximately $10.1
million in cash, subject to certain closing adjustments. In
addition, Spartan is also pleased to provide an update on the
Company's operations.
ACQUISITION HIGHLIGHTS
The acquired assets include 33,500 net acres of Montney rights, 100 net Montney locations, 300 BOE/d (51% crude oil,
5% NGLs, and 44% natural gas) of production behind pipe and
associated 100% owned and operated facilities.
GOLD CREEK:
- 12,000 net acres contiguous with Spartan's current land base in
Gold Creek
- 40 net extended reach horizontals locations identified
- Two locations are expected to be drilled on the acquired lands
in the second half of 2021 as part of Spartan's four well program
in Gold Creek
- Development will feed into Spartan's existing 100% working
interest gathering system and processing facilities
SIMONETTE:
- 300 BOE/d (51% crude oil, 5% NGLs, and 44% natural gas) of
production upon reactivation of shut-in wells that will flow into
Spartan's jointly owned Simonette 13-11 Gas Plant
- 21,500 net acres contiguous with Spartan's current Montney land base in Simonette with potential
for economic development drilling as early as 2022 upon success
with redesigning the legacy completion design
- 60 net extended reach Montney
horizontal locations identified
- 7,500 net acres of Duvernay
rights, including one producing Duvernay horizontal
The acquisitions bring Spartan's total position in the Alberta
Montney fairway to 132,000 net acres, further establishing the
Company's competitive position in the Montney and allowing Spartan to utilize its
existing infrastructure footprint to optimize operating margins and
enhance capital efficiencies.
OPERATIONAL HIGHLIGHTS
- Spartan's winter drilling program continues to outperform; six
of eight wells have achieved payout and corporate production is
consistent at ~40,000 BOE/d (5% crude oil, 4% condensate, 21% NGLs
and 70% natural gas)
- The first of Spartan's nine well program in the West Central
Deep Basin for the second half of the year commenced drilling last
week
- Spartan also expects to spud the first of its four well program
in the Gold Creek area of the Alberta Montney later this week
Further detail is available in Spartan's June corporate
presentation, which can be accessed on its website at
www.spartandeltacorp.com.
ABOUT SPARTAN DELTA CORP.
Spartan is committed to creating a modern energy company,
focused on sustainability both in operations and financial
performance. Spartan is focused on building an asset base
that will generate sustainable free funds flow and sustainable
development. Spartan's strategy is to identify, acquire
and develop diversified assets that can be restructured,
optimized and rebranded, financially or operationally, yielding
accretion to shareholder value. With excess infrastructure
capacity, Spartan is well positioned to continue
pursuing immediate production optimization and responsible
future growth. Further detail is available in
Spartan's June corporate presentation, which can be accessed on its
website at www.spartandeltacorp.com.
READER ADVISORIES
Forward-Looking and Cautionary Statements
Certain statements contained within this press release
constitute forward-looking statements within the meaning of
applicable Canadian securities legislation. All statements other
than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "budget",
"plan", "endeavor", "continue", "estimate", "evaluate", "expect",
"forecast", "monitor", "may", "will", "can", "able", "potential",
"target", "intend", "consider", "focus", "identify", "use",
"utilize", "manage", "maintain", "remain", "result", "cultivate",
"could", "should", "believe" and similar expressions. The Company
believes that the expectations reflected in such forward-looking
statements are reasonable, but no assurance can be given that such
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon. Without limitation,
this press release contains forward-looking statements pertaining
to: the intentions of management and the Company with respect to
its growth strategy and business plan; Spartan's expectations
regarding its four well drilling program in Gold Creek and the
timing thereof; Spartan's expectations regarding development
drilling on the acquired lands and the timing thereof; drilling
locations; and Spartan's expectations regarding its competitive
position, operating margins and capital efficiencies.
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, prevailing commodity prices, exchange rates, interest
rates, applicable royalty rates and tax laws; the impact (and the
duration thereof) that the COVID-19 pandemic will have on (i) the
demand for crude oil, NGLs and natural gas, (ii) Spartan's supply
chain, including its ability to obtain the equipment and services
its requires, and (iii) Spartan's ability to produce, transport
and/or sell it crude oil, NGLs and natural gas; future production
rates and estimates of operating costs; performance of existing and
future wells; reserve volumes; anticipated timing and results of
capital expenditures; the success obtained in drilling new wells;
the sufficiency of budgeted capital expenditures in carrying out
planned activities; the timing, location and extent of future
drilling operations; the state of the economy and the exploration
and production business; results of operations; performance;
business prospects and opportunities; the availability and cost of
financing, labour and services; the impact of increasing
competition; ability to market oil and natural gas successfully and
Spartan's ability to access capital.
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 COVID-19 pandemic and the
retention of key management and employees. Please refer to the
Company's most recent Annual Information Form and MD&A 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.
Oil and Gas Advisories
This press release discloses unbooked/potential drilling
locations. Unbooked locations are internal estimates based on the
prospective acreage of the acquired assets and an assumption as to
the number of wells that can be drilled per section based on
industry practice and internal review. Unbooked locations do not
have attributed reserves or resources. Unbooked locations have been
identified by management as an estimation of Spartan's multi-year
drilling activities based on evaluation of applicable geologic,
seismic, engineering, production and reserves information. There is
no certainty that Spartan will drill all unbooked drilling
locations and if drilled, there is no certainty that such locations
will result in additional oil and gas reserves, resources or
production. The drilling locations considered for future
development will ultimately depend upon the availability of
capital, regulatory approvals, seasonal restrictions, oil and
natural gas prices, costs, actual drilling results, additional
reservoir information that is obtained and other factors. While
certain of the unbooked drilling locations are being de-risked by
drilling existing wells in relative close proximity to such
unbooked drilling locations, other unbooked drilling locations are
farther away from existing wells where management has less
information about the characteristics of the reservoir, and
therefore, there is more uncertainty whether wells will be drilled
in such locations. If these wells are drilled, there is more
uncertainty that such wells will result in additional oil and gas
reserves, resources or production.
This press release contains various references to the
abbreviation "BOE" which means barrels of oil equivalent. Where
amounts are expressed on a BOE basis, natural gas volumes have been
converted to oil equivalence at six thousand cubic feet (Mcf) per
barrel (bbl). The term BOE may be misleading, particularly if used
in isolation. A BOE conversion ratio of six thousand cubic feet per
barrel is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead and is significantly different
than the value ratio based on the current price of crude oil and
natural gas. This conversion factor is an industry accepted norm
and is not based on either energy content or current prices. Such
abbreviation may be misleading, particularly if used in
isolation.
References to "oil" in this press release include crude oil.
References to "natural gas liquids" or "NGLs" includes pentane,
butane, propane, and ethane, and excludes condensate. References to
"gas" relates to natural gas. National Instrument 51-101 –
Standards of Disclosure for Oil and Gas Activities includes
condensate within the product type of "natural gas liquids".
Spartan has disclosed condensate sales separate from natural gas
liquids because the value equivalency of condensate is more closely
aligned with crude oil. The Company believes the presentation of
condensate as disclosed herein provides a more accurate
representation of operations and results therefrom.
This presentation contains metrics commonly used in the oil and
natural gas industry which have been prepared by management, such
as "payout", which do not have a standardized meaning and may not
be comparable to similar measures presented by other companies, and
therefore should not be used to make such comparisons. Management
uses these oil and gas metrics for its own performance measurements
and to provide shareholders with measures to compare Spartan's
operations over time. Readers are cautioned that the information
provided by these metrics, or that can be derived from the metrics
presented in this presentation, should not be relied upon for
investment or other purposes.
"Payout" is achieved when revenues, less royalties, production
and transportation costs are equal to the total capital costs
associated with drilling, completing, equipping and tying in a
well. Management considers payout an important measure to evaluate
its operational performance and capital allocation processes. It
demonstrates the return of cash flow and allows Spartan to
understand how a capital program is funded under different
operating scenarios, which helps assess Spartan's ability to
generate value.
Other Measurements
All dollar figures included herein are presented in Canadian
dollars, unless otherwise noted.
bbl
|
barrel
|
bbls/d
|
barrels per
day
|
MMcf
|
one million cubic
feet
|
MMcf/d
|
one million cubic
feet per day
|
NGL
|
natural gas
liquids
|
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that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
SOURCE Spartan Delta Corp.