Spartan Delta Corp · TSX:SDE
Spartan Delta — Investor Presentation (March 2021)
38 slides from Spartan Delta's investor presentation, Mar 26, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION Spartan Delta Corp. (SDE: TSXV) March 26, 2021
Slide 2: Spartan Delta Corporate Strategy
SPARTAN DELTA CORPORATE STRATEGY Building a Sustainable Energy Company for Global Investors DISCIPLINED CONSOLIDATOR Building towards >100,000 BOE/d WEST-CENTRAL ALBERTA DEEP BASIN – Liquids-Rich ALBERTA MONTNEY – Oil-Weighted ▪ Low base decline <20% with $4,000/boepd ▪ Well delineated acreage posit
Slide 3: Company Overview
COMPANY OVERVIEW Spartan Delta Corp. ALBERTA MONTNEY: ▪ Oil-weighted Montney focus Capitalization (as at March 25, 2021) ▪ Additional consolidation opportunities Spartan Delta Corp. TSX-V SDE ▪ Oil and Liquids-Rich Montney drilling upside Share Price (1) $/sh 4.04 Market Capitalization (basic) (1) $
Slide 4: YE 2020 Highlights
YE 2020 HIGHLIGHTS Optimization of Production and Cost Reductions Generate Material Free Funds Flow in 2020 Actuals Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Crude Oil % 10% 1% 1% 1% 1% Low-cost production optimization Current (3) Condensate % - 4% 4% 4% 4% offset declines in H2 Natural Gas Liquids (N
Slide 5: West-Central Alberta Deep Basin Liquids-Rich Development
WEST-CENTRAL ALBERTA DEEP BASIN LIQUIDS-RICH DEVELOPMENT Free Funds Flow Generating Core Area - Driven by Industry Leading Capital Efficiencies West-Central Alberta Deep Basin Asset Characteristics Tidewater BRC 185 mmscf/d Deep Cut Top Quality Resource: ▪ Top tier, delineated liquids-rich Spirit Ri
Slide 6: YE2020 Reserves Highlights
YE2020 RESERVES HIGHLIGHTS Extended Reach Horizontals (“ERH”) Drives Step Change in F&D and Development Economics YE2020 West-Central Alberta Deep Basin Reserves Highlights: Oil Natural Gas NGL's Total NPV10 ▪ Spartan’s Year-End 2020 Reserves demonstrate the superior Reserves Category (MMbbl) (Bcf)
Slide 7: Deep Basin 2020 YE Reserve Auditor Model
WEST-CENTRAL ALBERTA DEEP BASIN 2020 YE RESERVE AUDITOR MODEL McDaniel’s TPP Bookings Generate $620 Million of NOI (2) After Capital Expenditure in First 5 Years TPP Production Forecast YE 2020 TPP NOI (2) Summary (5yr McDaniel’s Forecast) Achievable Development with Steady Production Growth TPP Dev
Slide 8: Deep Basin Inventory Summary
WEST-CENTRAL ALBERTA DEEP BASIN INVENTORY SUMMARY Robust Inventory with Years of Future Growth at High Rates of Return Updated Inventory: YE2020 Inventory Summary (1) ▪ As at year end 2020, prior to acquisitions announced on February 16, 2021 Zone Booked Unbooked Total % ERH ▪ Rigorous review of eve
Slide 9: Deep Basin Spirit River Type Well
WEST-CENTRAL ALBERTA DEEP BASIN SPIRIT RIVER TYPE WELL Operational Efficiencies and ERH Drilling Drives Step Change in Well Economics Highlights: ▪ Next 5-year estimated development capital efficiency (4): ~$4,000/boepd ▪ >88 locations with less than 10-month payout (4) ▪ Considerable room for futur
Slide 10: Deep Basin Cardium Type Well
WEST-CENTRAL ALBERTA DEEP BASIN CARDIUM TYPE WELL Over-Pressured Cardium Provides Compelling Condensate-Rich Economics Highlights: Inventory IRR of Cardium ▪ Next 5-year estimated development capital efficiency (3): ~$5,000-6,000/boepd ▪ >107 locations with less than 1 year payout (3) ▪ 65% of inven
Slide 11: Deep Basin Winter Drilling Results
WEST-CENTRAL ALBERTA DEEP BASIN WINTER DRILLING RESULTS Winter Drilling Program – Exceeding Expectations Highlights: 102/16-23-045-09W5 ▪ 8 well program: six extended reach horizontal Spirit River wells, one 2.0- Cardium, 2 mile HZ SDE 10-09 Deep Cut Gas Plant mile Cardium well and one 1.0-mile Spir
Slide 12: Summary of Recent Acquisitions
SUMMARY OF RECENT ACQUISITIONS Acquisition of High-Quality Assets Establishes Second Core Development and Consolidation Area Spartan has entered into three definitive acquisition agreements which execute upon its consolidation strategy. Alberta Montney Core Area Entry Acquisitions: SDE Gold Creek ▪
Slide 13: Material Entry into the Alberta Montney Fairway
MATERIAL ENTRY INTO THE ALBERTA MONTNEY FAIRWAY Introducing Spartan’s New Core Area for Development and Consolidation Best in Class Resource: Spartan Montney Lands Velvet Energy ▪ One of Canada’s most prolific plays with attractive economics Leucrotta Hammerhead Resources across a broad range of com
Slide 14: Gold Creek Montney Development
GOLD CREEK MONTNEY DEVELOPMENT Acquisition of Inception Exploration Anchors Second Core Development and Consolidation Area Inception Asset Characteristics CITY OF GRANDE PRAIRIE Bezanson Top Quality Resource: ▪ Top tier Montney asset in the core of the Alberta Montney Oil Pipestone development fairw
Slide 15: Gold Creek Montney
GOLD CREEK MONTNEY Oil-Weighted Development Across a Well Delineated Land Base ▪ Over 160m of net reservoir situated in the over-pressured (>10 kPa/m) oil prone fairway of the Alberta Montney CITY OF GRANDE PRAIRIE ▪ De-risked future development with 21 horizontals drilled to date across land base ▪
Slide 16: Simonette Montney Development
SIMONETTE MONTNEY DEVELOPMENT Acquisition of Simonette Asset Bolsters Second Core Development and Consolidation Area Simonette Asset Characteristics Undercapitalized, High-Quality Resource: Alliance Connection ▪ The Simonette asset represents a significant resource footprint within the Alberta Montn
Slide 17: Simonette Montney
SIMONETTE MONTNEY Diverse Montney Opportunity Set Within a Large Underexploited Resource Base ▪ Over 100m net reservoir of Montney resource at predominantly higher than normal reservoir pressure (> 10 kPa/m) ▪ De-risked future development with 38 horizontals (34 gas to liquids-rich and four oil) dri
Slide 18: 2021 Guidance
2021 GUIDANCE Adjusted Funds Flow Sensitivities 2021 Guidance (1)(2) West-Central Alberta Deep Basin Assets Drive Robust Cash Generation: ▪ 100% of natural gas production priced at AECO Average Production boe/d 35,500 - 37,500 ▪ West-Central Alberta Deep Basin sustaining capital (3) requirement: Cru
Slide 19: Spartan Sustainability
SPARTAN SUSTAINABILITY Environmental, Social & Governance Canada is a world leader with respect to producing sustainable energy responsibly Environment: ▪ Spartan is committed to industry leading environmental practices: ▪ Spartan has ~400 solar panels, with solar power generation at nearly every pa
Slide 20: Indigenous Partnerships
INDIGENOUS PARTNERSHIPS Committed to Sustainable and Responsible Resource Development O’Chiese First Nation: ▪ Spartan has a partnership with the O’Chiese First Nation based on responsible development of oil & gas resources on the O’Chiese First Nation lands ▪ Spartan prioritizes First Nation owned
Slide 21: Marketing & Risk Management
MARKETING & RISK MANAGEMENT High Torque to Strengthening AECO Fundamentals Natural Gas Exposure – 100% AECO: ▪ Spartan is uniquely positioned with 100% exposure to AECO pricing, and no economic burden of transport to underperforming markets ▪ Natural gas production is hedged approximately 28% in 202
Slide 22: Investor Highlights
INVESTOR HIGHLIGHTS Platform for Acquisitive Growth and Free Funds Flow Generation Experienced team with a record of efficient capital discipline and value creation through consolidation Material position in the Spirit River, Cardium and Montney, three of Canada’s most prolific plays Two Core Areas
Slide 23: Appendix
Appendix ae G SPARTAN March 26, 2021 DELTA CORP.
Slide 24: West-Central Alberta Deep Basin
WEST-CENTRAL ALBERTA DEEP BASIN Asset Quality Drives Top Tier Capital Efficiencies and Sustainable Free Funds Flow ▪ Targeting liquids-rich Spirit River and liquids-rich gas and oil Cardium ▪ Favorable subsurface properties: Deep Basin Fairway ✓ Situated in the over-pressured deep basin fairway ✓ Co
Slide 25: Analyst Coverage & Contact Information
ANALYST COVERAGE & CONTACT INFORMATION Institution Analyst EXECUTIVE OFFICE STOCK EXCHANGE LISTING Spartan Delta Corp. The TSX Venture Exchange ATB Capital Markets Patrick O’Rourke Trading Symbol: SDE.V 500, 207 – 9th Avenue SW Calgary, Alberta T2P 1K3 INVESTOR INFORMATION BMO Capital Markets Ray Kw
Slide 26: 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 27: Spartan Energy – Spartan Oil – Spartan Exploration
SPARTAN ENERGY – SPARTAN OIL – SPARTAN EXPLORATION Western Canada’s Best-in-Class Performer: Proven Low-Cost Operator ▪ From 2010 through 2018, Spartan assembled and developed multiple high-quality assets throughout Central & Southern Alberta and Southeast Saskatchewan ▪ Through infill horizontal de
Slide 28: The Spartan Domestic Advantage
THE SPARTAN DOMESTIC ADVANTAGE Domestic Operational Track Record From 2014 to its sale to Vermilion Energy, Spartan Energy Management’s ability to acquire and efficiently integrate assets established itself as the lowest cost operator in the Southeast has been proven through past transaction activit
Slide 29: Spartan Energy: 263% Total Return and 33% CAGR
SPARTAN ENERGY 263% Total Return and 33% CAGR | December 2013 – May 2018 Overview Relative Performance (Indexed to 100) 300 ▪ Spartan Energy completed the recapitalization of Alexander Energy Spartan in December 2013 and shortly after acquired Renegade Petroleum TSX Energy Post-recapitalization, in
Slide 30: Historical EV/DACF Multiple Comparison
HISTORICAL EV/DACF MULTIPLE COMPARISON Spartan Energy Corp. vs Premium Light Oil Peers (1) 16.0x Spartan Energy Corp. Light Oil Peer Avg. (2) 14.0x The Spartan management team has historically traded at, or above, the premium light oil company average multiple (1) 12.0x Fwd EV/NTM DACF Multiple (x)
Slide 31: Spartan Oil: 268% Total Return and 128% CAGR
SPARTAN OIL 268% Total Return and 128% CAGR | June 2011 – January 2013 Overview Relative Performance (Indexed to 100) 250 ▪ Formed through the spin-out of certain Cardium assets and SE Spartan As a public company, Spartan Saskatchewan assets from Spartan Exploration TSX Energy outperformed the TSX E
Slide 32: Spartan Exploration: 573% Total Return and 80% CAGR
SPARTAN EXPLORATION 573% Total Return and 80% CAGR | January 2010 – May 2011 Overview Relative Performance (Indexed to 100) 250 ▪ Spartan Exploration was formed in Q1-2008 with a view of Spartan targeting tight oil resources plays in western Canada TSX Energy As a public company, Spartan outperforme
Slide 33: Disclaimer
DISCLAIMER Forward Looking Statements effect on Spartan. While the precise impact of the COVID-19 virus on Spartan remains unknown, ▪ Certain information included in this presentation constitutes forward-looking information under rapid spread of the COVID-19 virus may have a material adverse effect
Slide 34: Disclaimer Cont'd
DISCLAIMER CONT’D Oil and Gas Advisories ▪ BOE Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if used ▪ "Undeveloped F&D costs" are calculated as the sum of development capital, divided by the in isolation. A BOE conversion ratio of six thousand cubic feet of
Slide 35: Disclaimer Cont'd
DISCLAIMER CONT’D Non-GAAP Measures ▪ This presentation contains certain financial measures, as described below, which do not have ▪ "Enterprise value" is calculated as the Market Capitalization of the Company plus Net Debt, standardized meanings prescribed by IFRS or Generally Accepted Accounting P
Slide 36: Price Deck Details
PRICE DECK DETAILS Spartan Budget Pricing All guidance, forecasts and economics are based on the following budget price deck (unless otherwise stated): March 26, 2021 36
Slide 37: 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 38: Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com
Info@SpartanDeltaCorp.com www.SpartanDeltaCorp.com