Spartan Delta Corp · TSX:SDE
Spartan Delta — Investor Presentation (September 2021)
33 slides from Spartan Delta's investor presentation, Sep 29, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION Spartan Delta Corp. (SDE: TSX) September 29, 2021
Slide 2: Spartan Delta - The Value Proposition
SPARTAN DELTA - THE VALUE PROPOSITION Building a Sustainable Energy Company With Industry Leading Returns Experienced First Class Sustainable Two Core Leadership Assets Platform Operating Areas record of efficient capital Montney and Deep Basin, with a top decile liability yielding consistently disc
Slide 3: Spartan Delta Corporate Strategy
SPARTAN DELTA CORPORATE STRATEGY Building a Sustainable Energy Company CONCENTRATED ASSET BASE DEEP BASIN MONTNEY ▪ Highly economic development within a wide ▪ Largest producer and acreage holder in range of commodity prices the oil window of the Montney ▪ Dominant deep cut infrastructure position ▪
Slide 4: Strategic Execution
STRATEGIC EXECUTION “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” - Aristotle STRATEGIC OBJECTIVES SINCE JUNE 2020 LOOKING FORWARD Capitalize on generational Deep Basin portfolio was acquired for Focus on select tuck-in opportunities acquisition opportunities less tha
Slide 5: Company Overview
COMPANY OVERVIEW Spartan Delta Corp. (SDE:TSX) Capitalization (as at September 29, 2021) 62,500 boe/d(8) Spartan Delta Corp. TSX SDE from two core development areas Share Price(1) $/sh 5.26 MONTNEY: ▪ Largest producer and land holder Market Capitalization (basic) (1) $MM 805.2 in the Montney oil win
Slide 6: Velvet Acquisition Summary
VELVET ACQUISITION SUMMARY Acquisition Positions Spartan as the Dominant Player in Canada’s Montney Oil Window ACCRETIVE METRICS BC AB ASSET FEATURES Flatrock: Undeveloped Resource Potential • No production or reserves 20,600 boe/d(1) $751.5 Million • Emerging oil weighted property (44% Liquids) Tot
Slide 7: Spartan Pro Forma
SPARTAN PRO FORMA Enhancing the Value Proposition for Spartan Shareholders PRO FORMA ATTRIBUTES ▪ Pro forma Spartan will hold a dominant position in two core areas with industry Asset Quality leading economics; land 580,000 net acres; >1,500 drilling locations(4) ~$0.9 BN ~$1.4 BN 70 mboe/d Market C
Slide 8: Deep Basin Overview
DEEP BASIN OVERVIEW Robust Economics and Infrastructure Footprint Underpin Free Funds Flow Engine SDE O’Chiese Nees-Ohpawaganu’ck 10-09 Deep Basin Asset Characteristics: 230mmscf/d Deep Cut (25% WI) ▪ Top quality resource of delineated liquids-rich Spirit River CVE Sand Creek 75 mmscf/d CVE Alder 75
Slide 9: Mid-Year Reserve Evaluation (Pre-Velvet)
MID-YEAR RESERVE EVALUATION (PRE-VELVET) Completed to Incorporate H1 2021 Acquisitions ▪ Spartan completed an independent qualified reserves evaluation effective July 1, 2021 ▪ Excludes Velvet reserves which can be found in the prospectus and the appendix ▪ Completed six acquisitions in H1 2021 prio
Slide 10: 2021 & 2022 Development Outlook
2021 & 2022 DEVELOPMENT OUTLOOK Maintaining Strong Free Funds Flow While Advancing Selected Growth Projects BC AB MONTNEY Corporate Capital Expenditures 28,000 boe/d (current)(1) Full-Year 2021: $175 million $290 – $340 MM 2021 & 2022 capital Full-Year 2022: $300 million 28-36 wells to be drilled 20
Slide 11: Three Year Development Plan
THREE YEAR DEVELOPMENT PLAN Total Return Focused Model of Organic Growth and Free Funds Flow Generation 100,000 $320 Free Funds Flow ($MM) Production (boe/d) 75,000 $240 Montney 54% 49% 50,000 54% $160 Deep Basin Free Funds Flow 25,000 $80 30% 30% 30% % liquids shown in bar chart - - 2022 2023 2024
Slide 12: Financial Sustainability
FINANCIAL SUSTAINABILITY Low Leverage and Strong Funds Flow Across a Range of Commodity Prices FCF $500 $70 $182 $70 $134 $3.75 (Guidance) $60 $134 $434 $3.25 $60 $79 $400 $2.75 $50 $50 $300 $300 Growth & Discretionary $200 $100 Sustaining (1) WTI US$/bbl AECO C$/GJ - Maintenance AFF AFF Capital Fre
Slide 13: Risk Management
RISK MANAGEMENT Velvet Acquisition Adds a Diversified Risk Management Portfolio(1) Downside protection on a portion of crude production for AECO Basis positions provide diversification to Henry Hub the next 10 months provides insulation against possible 4th natural gas prices, safeguarding against s
Slide 14: Indigenous Partnerships
INDIGENOUS PARTNERSHIPS Committed to Sustainable and Responsible Resource Development O’Chiese and Sunchild First Nations ▪ Spartan has a partnership with the O’Chiese and Sunchild First Nations based on responsible development of oil & gas resources on First Nation Spartan Supported Community Progr
Slide 15: 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 Environmental Gender Management & Acquired Velvet assets Stewardship Diversity Board include an industry Top Decile Liability Ratio Female Workf
Slide 16: 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 through consolidation Dominant position in two core areas, the Montney and Deep Basin, yielding some of Canada’s most prolif
Slide 17: Appendix
APPENDIX September 29, 2021 17
Slide 18: Second Quarter 2021 Highlights
SECOND QUARTER 2021 HIGHLIGHTS Optimization of Production and Cost Reductions Generate Material Free Funds Flow Actuals Q2 2021 Q1 2021 FY 2020 Crude Oil % 5% 2% 1% Condensate % 5% 4% 4% Natural Gas Liquids (NGLs) (1) % 19% 22% 26% Natural Gas % 71% 72% 69% Average Production boe/d 39,638 31,914 15,
Slide 19: Deep Basin Development
DEEP BASIN DEVELOPMENT Re-emerging as an Industry Leading Play Material Free Funds Flow (2) Driven by Low Sustaining Capital: Spirit River and Cardium Type Wells(3) ▪ Existing infrastructure drives attractive full cycle economics while the asset remains in drill to fill mode ▪ Low sustaining capital
Slide 20: Area Montney Map
AREA MONTNEY MAP Spartan’s Positioning in the Montney Fairway Kelt Flatrock Leucrotta Tourmaline Arc Arc Pouce Birchcliff Kelt Ovintiv Advantage CNRL Kelt Grande Prairie Pipestone Gold Creek NuVista Shell CNRL Paramount Cenovus Karr Arc Whitecap Whitecap Simonette Kiwetinohk XTO September 29, 2021 2
Slide 21: 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 Montney lands Flatrock ▪ Lands reside within the volatile oil to black oil window and exhibit light oil characteristics with an average of ~40° API
Slide 22: Velvet Reserves Summary
VELVET RESERVES SUMMARY Mid-Year Reserve Update By Velvet Energy (July 1, 2021) (1) ▪ Velvet completed an independent qualified reserves evaluation effective July 1, 2021 (McDaniel) ▪ Spartan FDC model will be applied in YE 2021 Reserves update Oil Natural Gas NGL's Total NPV10 Reserves Category (MM
Slide 23: Velvet Asset Quality: Gold Creek
VELVET ASSET QUALITY: GOLD CREEK Sustainable Development - YoY Improvement in Well Results ▪ Asset base delineated at Velvet’s expense starting in 2015 Gold Creek Well Performance(1) 1,000 ▪ Consistent improvement in costs and performance 2020 McDaniels 2P Type Curve 386mbbl oil, 2.5bcf & 104mbbl NG
Slide 24: Velvet Asset Quality: Karr and Pouce Coupe
VELVET ASSET QUALITY: KARR AND POUCE COUPE Additional Development Assets KARR POUCE COUPE ▪ Two wells with long term production data; currently flowing back three ▪ Proven development drilling with low-cost structure (both opex and new wells capex) ▪ Both producing wells are amongst the top five Mon
Slide 25: Marketing & Risk Management
MARKETING & 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) Q3 2021 6,337 $47.74 4,000 ($4.71) 1,000 ($2.26) Q4 2021
Slide 26: Analyst Coverage & Contact Information
ANALYST COVERAGE & CONTACT INFORMATION Institution Analyst EXECUTIVE OFFICE STOCK EXCHANGE LISTING ATB Capital Markets Patrick O’Rourke Spartan Delta Corp. The TSX Exchange 1500, 308 – 4 th Avenue SW Trading Symbol: SDE Calgary, Alberta T2P 0H7 BMO Capital Markets Ray Kwan INVESTOR INFORMATION P: 40
Slide 27: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS MANAGEMENT TEAM Richard McHardy ➢ Former President, CEO and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Executive Chairman & Director Fotis Kalantzis ➢ Former SVP and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Presiden
Slide 28: Disclaimer
DISCLAIMER Forward Looking Statements from f orecasts due to changes in interest rates, oil differentials, exchange rates and the timing ▪ Certain information included in this presentation constitutes forward-looking inf ormation under of expenditures and production additions. In addition, Spartan c
Slide 29: Disclaimer Cont'd
DISCLAIMER CONT’D Oil and Gas Advisories scenarios, which helps assess Spartan's ability to generate value. ▪ BOE Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if ▪ "Finding and development (F&D) cost" is the sum of capital expenditures incurred in the used i
Slide 30: Disclaimer Cont'd
DISCLAIMER CONT’D Non-GAAP Measures where "Market Capitalization" is defined as the total number of common shares outstanding ▪ This presentation contains certain f inancial measures, as described below, which do not have multiplied by the price per share at a given point in time. standardized meani
Slide 31: Price Deck Details
PRICE DECK DETAILS August 31, 2021 guidance update pricing & 3-year plan pricing All guidance, forecasts and economics are based on the following budget price deck (unless otherwise stated): H2 2021 2021 2022 2023 2024 Benchmark Prices AECO Gas C$/GJ $3.98 $3.45 $3.25 $2.75 $2.75 WTI US$/bbl $70.62
Slide 32: Abbreviations
ABBREVIATIONS AECO Alberta Energy Company “C” Meter Station of the NOVA Pipeline System ARO Asset Retirement Obligations b Basic shares outstanding 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 oil equ
Slide 33: Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com
Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com
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