Spartan Delta Corp · TSX:SDE
Spartan Delta — Investor Presentation (February 2022)
28 slides from Spartan Delta's investor presentation, Feb 15, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION Spartan Delta Corp. (SDE: TSX) February 15, 2022
Slide 2: Spartan Delta Corporate Strategy
SPARTAN DELTA CORPORATE STRATEGY Building a Sustainable Energy Company CONCENTRATED ASSET BASE DEEP BASIN – ~40,000 boe/d(2) MONTNEY – ~30,000 boe/d(3) Sustaining capital ~30% of asset level NOI(1) Largest producer and acreage holder in the oil window of the Montney Low OPEX and high margin li
Slide 3: Company Overview
COMPANY OVERVIEW Spartan Delta Corp. (SDE:TSX) Capitalization (as at February 14, 2021) Spartan Delta Corp. TSX SDE MONTNEY: (1) • Spartan is the largest Share Price $/sh 8.19 producer and land holder in (1) the Montney oil window Market Capitalization (basic) $MM 1,255 • Deep inventory of Common Sh
Slide 4: Fourth Quarter and Full-Year 2021 Highlights
FOURTH QUARTER AND FULL-YEAR 2021 HIGHLIGHTS Transformational Strategic and Operational Execution Previous 2021 Fourth quarter production 17% above UNAUDITED HIGHLIGHTS Q4 2021 FY 2021 Guidance previous guidance due to well performance Crude Oil boe/d 11,450 4,697 4,030 and some acceleration of well
Slide 5: Year-End 2021 Reserve Evaluation
YEAR-END 2021 RESERVE EVALUATION Material Growth Through Acquisitions and Organic Development in 2021 Spartan completed an independent qualified reserves evaluation effective December 31, 2021 (3) 2021 RESERVE HIGHLIGHTS Volume - Gross (MMboe) Value - NPV10 ($MM) PDP TP TPP PDP TP TPP 2020 67.289
Slide 6: Deep Basin Overview
DEEP BASIN OVERVIEW Robust Economics and Infrastructure Footprint Underpin Free Funds Flow Engine Deep Basin Asset Characteristics: CENOVUS SAND CREEK SDE O’CHIESE NEES-OHPAWAGANU’CK 10-09 • 75 MMcf/d (9.6% WI) • 230 MMCF/d Deep Cut (25% WI) Top quality resource of delineated liquids-rich Spirit R
Slide 7: Montney Overview
MONTNEY OVERVIEW Large Contiguous Blocks of Land Assembled in the Montney Oil Window BC AB Spartan Working Interest Gas Plant Montney Asset Characteristics: Third Party Gas Plant Spartan Compressor Station / Battery Largest land position (~450,000 net acres(1)) and production FLATROCK Third Party
Slide 8: 2022 Development
2022 DEVELOPMENT Maintaining Strong Free Funds Flow While Advancing Selected Growth Projects BC AB MONTNEY ~30,000 boe/d (Q4 2021)(1) ~$231MM 2022 capital 20-22 net wells 450,000 net acres > 1,000 net drilling locations identified (278 booked)(2)(4) Self-funding growth core area Development
Slide 9: 2022 Guidance
2022 GUIDANCE Total Return Focused Model of Organic Growth and Free Funds Flow Generation (1) 2022 Guidance 2022 Average Production boe/d 68,500 - 72,500 Crude Oil and Condensate boe/d 14,900 (2) Natural Gas Liquids (NGLs) boe/d 13,200 Natural Gas mcf/d 254,400 Operating Expenses $/boe 7.91 Transpor
Slide 10: 2022 Commodity Price Sensitivity
2022 COMMODITY PRICE SENSITIVITY Significant Torque to Oil and Gas Prices (1) (1) 2022 Adjusted Funds Flow ($MM) 2022 Free Funds Flow ($MM) WTI (US$/bbl) $70 $80 $80 $90 WTI (US$/bbl) $70 $80 $80 $90 AECO Gas Price (C$/GJ) AECO Gas Price (C$/GJ) $3.25 $475 $547 $615 $3.25 $145 $217 $285 $3.75 $521 $
Slide 11: Value Proposition
VALUE PROPOSITION Top Decile Growth and FCF Yield at a Discounted Multiple Avg. 2022E DAFCF Yield: 17% Avg. 2022E Production Growth: 14% Avg. 2022E DAFCF + Growth Yield: 31% Avg. 2022E EV/DACF: 3.0 Spartan offers top decile 2022E DAFCF Yields (SDE 28% versus Peers(1) 17%) and 2022E Production Grow
Slide 12: Risk Management
RISK MANAGEMENT Risk Management Portfolio(1) AECO Basis positions provide diversification to Henry Hub Near-term right way risk management position in place as natural gas prices, safeguarding against structural or supply- the balance sheet moves to Spartan’s target D/CF of 0.5x led push back of Can
Slide 13: Spartan's Sustainable Development Goals
SPARTAN’S SUSTAINABLE DEVELOPMENT GOALS Spartan is Committed to Meeting the Needs of the Present, While Protecting the Future Focus Since Inception in 2020 Active Initiatives Environmental Gender Management & Stewardship Diversity Board Top Decile LMR Female Workforce: Ownership Water Recycling Dril
Slide 14: Investor Highlights
INVESTOR HIGHLIGHTS Platform for Sustainable Organic Growth and Free Funds Flow(1) Generation Experienced team with a record of efficient capital discipline and value creation Dominant position in two core areas, the Montney and Deep Basin, yielding some of Canada’s most prolific economics The Deep
Slide 15: Appendix
APPENDIX February 15, 2022 15
Slide 16: Area Montney Map
AREA MONTNEY MAP Spartan’s Positioning in the Montney Fairway Kelt Flatrock Leucrotta Tourmaline Arc Pouce Coupe Arc Birchcliff Kelt Ovintiv Advantage CNRL Kelt Grande Prairie Pipestone Gold Creek NuVista Shell CNRL Paramount Cenovus Karr Arc Whitecap Whitecap Simonette Kiwetinohk XTO February 15, 2
Slide 17: The Montney Oil Window
THE MONTNEY OIL WINDOW Largest Semi-Contiguous Position in the Up-Dip Light Oil Montney Fairway ~450,000 net acres (703 sections)(2) of ~95% WI Crown Flatrock Montney lands Lands reside within the volatile oil to black oil window and exhibit light oil characteristics with an average of ~40° API
Slide 18: Risk Management
RISK MANAGEMENT High Torque To Improving Fundamentals of Both Oil and Natural Gas Oil and Condensates US$ WTI Swaps US$ MSW - WTI Swaps US$ C5 - WTI Swaps Volume Volume Volume Period US$/bbl US$/bbl US$/bbl (Bbl/d) (Bbl/d) (Bbl/d) Q1 2022 4,750 $49.71 - - - - Q2 2022 4,000 $49.74 - - - - Natural Gas
Slide 19: Analyst Coverage & Contact Information
ANALYST COVERAGE & CONTACT INFORMATION Institution Analyst EXECUTIVE OFFICE STOCK EXCHANGE LISTING ATB Capital Markets Patrick O’Rourke Spartan Delta Corp. The TSX Exchange 1500, 308 – 4th Avenue SW Trading Symbol: SDE Calgary, Alberta T2P 0H7 BMO Capital Markets Ray Kwan INVESTOR INFORMATION P: 403
Slide 20: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS MANAGEMENT TEAM Richard McHardy Former President, CEO and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Executive Chairman & Director Fotis Kalantzis Former SVP and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Presiden
Slide 21: Disclaimer
DISCLAIMER Forward Looking Statements uncertainty with respect to the spread of the COVID-19 virus and COVID-19 variant viruses Certain information included in this presentation constitutes forward-looking information under and their effect on the broader global economy may have a significant nega
Slide 22: Disclaimer Cont'd
DISCLAIMER CONT’D Oil and Gas Advisories “FDC” Future development costs are the future capital cost estimated for each respective BOE Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if category in year-end reserves attributed with realizing those reserves a
Slide 23: Disclaimer Cont'd
DISCLAIMER CONT’D Non-GAAP Measures and Ratios financial instrument assets and liabilities and lease liabilities. As at December 31, 2020 and This presentation contains certain financial measures and ratios, as described below, which do 2019, the Adjusted Working Capital deficit (surplus) includes
Slide 24: Price Deck Details
PRICE DECK DETAILS Guidance Pricing All guidance, forecasts and economics are based on the following budget price deck (unless otherwise stated): 2022 2023 2024 AECO Gas C$/GJ $3.75 $3.50 $3.25 WTI US$/bbl $80.00 $75.00 $70.00 Edmonton Oil C$/bbl $97.02 $91.08 $85.09 Edmonton Cond. C$/bbl $101.43 $9
Slide 25: Auditor Price Deck Details
AUDITOR PRICE DECK DETAILS Three Consultant Average (McDaniel, GLJ and Sproule) January 1, 2022 3 Consultant Average (McDaniel, GLJ and Sproule) Summary of Price Forecasts Saturday, January 1, 2022 C rude O il P ric e F o re c as t s Liquids P ric e F o re c a s t s G a s P ric e F o re c as t s E d
Slide 26: Auditor Price Deck Details
AUDITOR PRICE DECK DETAILS Three Consultant Average (McDaniel, GLJ and Sproule) January 1, 2021 3 Consultant Average (McDaniel, GLJ and Sproule) Summary of Price Forecasts Friday, January 1, 2021 C rude O il P ric e F o re c as t s Liquids P ric e F o re c a s t s G a s P ric e F o re c as t s E dm
Slide 27: Abbreviations
ABBREVIATIONS A&D Acquisition and Divestiture AECO Alberta Energy Company "C" Meter Station of the NOVA Pipeline System ARO Asset Retirement Obligations bbl; bbl/d Barrel; barrels per day bcf; bcf/d Billion cubic feet of natural gas; billion cubic feet per day of natural gas boe; boe/d Barrels of oi
Slide 28: Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com
Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com
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