Spartan Delta Corp · TSX:SDE
Spartan Delta — Investor Presentation (November 2021)
33 slides from Spartan Delta's investor presentation, Nov 8, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION Spartan Delta Corp. (SDE: TSX) November 8, 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 Decades of inventory in Top decile liability rating 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 November 5, 2021) 68,000 boe/d(8) Spartan Delta Corp. TSX SDE from two core development areas Share Price(1) $/sh 6.38 MONTNEY: ▪ Largest producer and land holder Market Capitalization (basic) (1) $MM 976.6 in the Montney oil windo
Slide 6: Third Quarter 2021 Highlights
THIRD QUARTER 2021 HIGHLIGHTS Partial Quarter Contribution From Velvet in September Actuals Q3 2021 Q2 2021 Q1 2021 FY 2020 Crude Oil % 10% 5% 2% 1% Condensate % 4% 5% 4% 4% Natural Gas Liquids (NGLs) (1) % 18% 19% 22% 26% Natural Gas % 68% 71% 72% 69% Average Production boe/d 46,282 39,638 31,914 1
Slide 7: Deep Basin Overview
DEEP BASIN OVERVIEW Robust Economics and Infrastructure Footprint Underpin Free Funds Flow Engine SDE O’Chiese Nees-Ohpawaganu’ck 10-09 230mmscf/d Deep Cut (25% WI) Deep Basin Asset Characteristics: CVE Sand Creek ▪ Top quality resource of delineated liquids-rich Spirit River 75 mmscf/d CVE Alder (9
Slide 8: Montney Overview
MONTNEY OVERVIEW Large Contiguous Blocks of Land Assembled in the Montney Oil Window Montney Asset Characteristics: BC AB ▪ Largest land position and production base within the prolific Montney oil window ▪ Deep inventory of economic drilling locations across several core Flatrock asset blocks ▪ Ind
Slide 9: 2021 & 2022 Development Outlook
2021 & 2022 DEVELOPMENT OUTLOOK Maintaining Strong Free Funds Flow While Advancing Selected Growth Projects BC AB Corporate Capital Expenditures MONTNEY Full-Year 2021: $175 million 29,000 boe/d (October Field Estimate)(1) Full-Year 2022: $300 million $290 – $340 MM 2021 & 2022 capital 2021 & 2022:
Slide 10: 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 50,000 $160 Deep Basin Free Funds Flow 25,000 $80 - - 2022 2023 2024 Production boe/d 70,000 78,000 84,000 Liquids % 41% 4
Slide 11: Financial Sustainability
FINANCIAL SUSTAINABILITY Strong Funds Flow Across a Range of Commodity Prices WTI U$90/bbl 2022 AECO C$4.75/GJ 2023+ AECO C$4.25/GJ WTI U$80/bbl 2022 AECO C$4.25/GJ 2023+ AECO C$3.75/GJ WTI U$70/bbl 2022 AECO C$3.75/GJ 2023+ AECO C$3.25/GJ WTI U$60/bbl BUDGET 2022 AECO C$3.25/GJ PRICING 2023+ AECO C
Slide 12: Financial Sustainability
FINANCIAL SUSTAINABILITY Strong Free Funds Flow Across a Range of Commodity Prices WTI U$90/bbl 2022 AECO C$4.75/GJ 2023+ AECO C$4.25/GJ SDE Market Capitalization Value(3) of ~$1.1 BN WTI U$80/bbl 2022 AECO C$4.25/GJ 2023+ AECO C$3.75/GJ WTI U$70/bbl 2022 AECO C$3.75/GJ 2023+ AECO C$3.25/GJ WTI U$60
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 8 months provides insulation against possible 4th natural gas prices, safeguarding against st
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
& SPARTAN November 8, 2021 DELTA CORP. APPENDIX 17
Slide 18: 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 19: Deep Basin Development
DEEP BASIN DEVELOPMENT Re-emerging as an Industry Leading Play Material Free Funds Flow(1) Driven by Low Sustaining Capital: Spirit River and Cardium Type Wells(2) ▪ Existing infrastructure drives attractive full cycle economics while the asset remains in drill to fill mode ▪ <25% of asset NOI(1) re
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 November 8, 2021 20
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 (MMb
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) Q4 2021 5,250 $49.69 4,000 ($4.71) 1,000 ($2.26) Q1 2022
Slide 26: Analyst Coverage & Contact Information
ANALYST COVERAGE & CONTACT INFORMATION Institution Analyst EXECUTIVE OFFICE STOCK EXCHANGE LISTING ATB Capital Markets Patrick O’Rourke Spartan Delta Corp. The TSX Exchange 1500, 308 – 4th Avenue SW Trading Symbol: SDE Calgary, Alberta T2P 0H7 BMO Capital Markets Ray Kwan INVESTOR INFORMATION P: 403
Slide 27: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS MANAGEMENT TEAM Richard McHardy ➢ Former President, CEO and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Executive Chairman & Director Fotis Kalantzis ➢ Former SVP and co-founder of Spartan Energy, Spartan Oil and Spartan Exploration Presiden
Slide 28: Disclaimer
DISCLAIMER Forward Looking Statements from forecasts due to changes in interest rates, oil differentials, exchange rates and the timing ▪ Certain information included in this presentation constitutes forward-looking information under of expenditures and production additions. In addition, Spartan cau
Slide 29: Disclaimer Cont'd
DISCLAIMER CONT’D Oil and Gas Advisories scenarios, which helps assess Spartan's ability to generate value. ▪ BOE Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if ▪ "Finding and development (F&D) cost" is the sum of capital expenditures incurred in the used i
Slide 30: Disclaimer Cont'd
DISCLAIMER CONT’D Non-GAAP Measures measure of the Company's financial position and liquidity, however it is not intended to be ▪ This presentation contains certain financial measures, as described below, which do not have viewed as an alternative to other measures calculated in accordance with IFRS
Slide 31: Price Deck Details
PRICE DECK DETAILS August 31, 2021 Guidance Update Pricing & 3-Year Plan Pricing All guidance, forecasts and economics are based on the following budget price deck (unless otherwise stated): H2 2021 2021 2022 2023 2024 Benchmark Prices AECO Gas C$/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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