SPARTAN DELTA CORP. ANNOUNCES THIRD QUARTER 2025 RESULTS AND OPERATIONS UPDATE
SPARTAN DELTA CORP. ANNOUNCES THIRD QUARTER 2025 RESULTS AND OPERATIONS UPDATE |
| [04-November-2025] |
CALGARY, AB, Nov. 4, 2025 /CNW/ - Spartan Delta Corp. ("Spartan" or the "Company") (TSX: SDE) is pleased to report its unaudited financial results for the three and nine months ended September 30, 2025 and recent operational results.
Selected financial and operational information is set out below and should be read in conjunction with Spartan's unaudited interim financial statements and related management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2025, and 2024, which are filed on SEDAR+ at www.sedarplus.ca and are available on the Company's website at www.spartandeltacorp.com. The highlights reported in this press release include certain non-GAAP financial measures and ratios which have been identified using capital letters. The reader is cautioned that these measures may not be directly comparable to other issuers; please refer to additional information under the heading "Reader Advisories – Non-GAAP Measures and Ratios". OPERATIONS UPDATE During the third quarter, Spartan delivered strong operational results in the West Shale Basin Duvernay (the "Duvernay") and the Deep Basin from a continued focus on disciplined capital allocation, cost reductions, and liquids growth. Spartan successfully drilled 6.0 (5.7 net) wells, completed 8.0 (7.7 net) wells, and brought on-stream 10.0 (8.5 wells) in Q3 2025. Spartan is on course to achieve or exceed the high end of its 2025 production guidance range of 39,000 – 41,000 BOE/d and anticipates releasing additional details regarding its 2026 operating budget and guidance on or before the release of its annual results for 2025. The Company is well-capitalized to continue executing on its growth strategy in the Duvernay as it has increased its total credit capacity from $250.0 million to $450.0 million. DUVERNAY In the Duvernay, the Company focused operations on 100% W.I. wells. Spartan drilled 3.0 (3.0 net) wells, completed 4.0 (4.0 net wells), and brought on-stream 6.0 (4.8 net) wells during Q3 2025, wine-racking in both the upper and lower Duvernay benches which has the potential to significantly increase recoveries on its acreage.
Spartan's Duvernay asset continues to prove itself as one of the most compelling emerging oil-weighted growth opportunities in Western Canada as results exceed internal expectations. Duvernay production field estimates averaged 11,330 BOE/d (79% liquids) in October. These results underscore the productivity, consistency, and scalability of its acreage, prompting the Company to continue acquiring additional Duvernay acreage. Subsequent to the third quarter Spartan completed an asset swap consolidating its southern acreage, enabling further efficient development in 2026. To date, Spartan has established one of the largest Duvernay positions, accumulating more than 421,000 net acres (658 net sections), a 68% increase from Q3 2024. DEEP BASIN In the Deep Basin, the Company successfully drilled 3.0 (2.7 net) wells and completed and brought on-stream 4.0 (3.7 net) wells during Q3 2025.
Spartan's Deep Basin asset continues to provide strategic exposure to liquids-rich natural gas enabling the Company to capture the contango forward curve in natural gas prices in 2026. THIRD QUARTER 2025 HIGHLIGHTS
The following table summarizes the Company's financial and operating results for the three and nine months ended September 30, 2025, and September 30, 2024.
CORPORATE STATEMENT Spartan has become aware of statements made by representatives of Journey Energy Inc. ("Journey") on social media and online platforms, including podcasts, in relation to Spartan and its operated Duvernay joint venture with Journey. Spartan did not participate in the creation, and does not approve, of any such statements or content. Spartan expressly disavows responsibility for the accuracy of any statements about Spartan made by third parties on social media outlets and online platforms. ABOUT SPARTAN DELTA CORP. Spartan is committed to creating value for its shareholders, focused on sustainability in both operations and financial performance. The Company's culture is centered on generating Free Funds Flow through responsible oil and gas exploration and development. The Company has established a portfolio of high-quality production and development opportunities in the Deep Basin and the Duvernay. Spartan will continue to focus on the execution of the Company's organic drilling program across its portfolio, delivering operational synergies in a respectful and responsible manner in relation to the environment and communities it operates in. The Company is well positioned to continue pursuing optimization in the Deep Basin, participate in the consolidation of the Deep Basin fairway, and continue growing and developing its Duvernay asset. Spartan's corporate presentation, as of November 4, 2025, can be accessed on the Company's website at www.spartandeltacorp.com. READER ADVISORIES Non-GAAP Measures and Ratios This press release contains certain financial measures and ratios which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS Accounting Standards") or Generally Accepted Accounting Principles ("GAAP"). As these non-GAAP financial measures and ratios are commonly used in the oil and gas industry, Spartan believes that their inclusion is useful to investors. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used. The non-GAAP measures and ratios used in this press release, represented by the capitalized and defined terms outlined below, are used by Spartan as key measures of financial performance, and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS Accounting Standards. The definitions below should be read in conjunction with the "Non-GAAP Measures and Ratios" section of the Company's MD&A dated November 4, 2025, which includes discussion of the purpose and composition of the specified financial measures and detailed reconciliations to the most directly comparable GAAP financial measures. Operating Income and Operating Netback Operating Income, a non-GAAP financial measure, is a useful supplemental measure that provides an indication of the Company's ability to generate cash from field operations, prior to administrative overhead, financing, and other business expenses. "Operating Income, before hedging" is calculated by Spartan as oil and gas sales, net of royalties, plus processing and other revenue and net commodities purchased margin, less operating and transportation expenses. "Operating Income, after hedging" is calculated by adjusting Operating Income for realized gains or losses on derivative financial instruments. The Company refers to Operating Income expressed per unit of production as an "Operating Netback" and reports the Operating Netback before and after hedging, both of which are non-GAAP financial ratios. Spartan considers Operating Netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices. Adjusted Funds Flow and Free Funds Flow Cash provided by operating activities is the most directly comparable measure to Adjusted Funds Flow. "Adjusted Funds Flow" is a non-GAAP financial measure reconciled to cash provided by operating activities by excluding changes in non-cash working capital, adding back transaction costs on acquisitions and dispositions, and deducting the principal portion of lease payments. Spartan utilizes Adjusted Funds Flow as a key performance measure in the Company's annual financial forecasts and public guidance. Transaction costs, which primarily include legal and financial advisory fees, regulatory and other expenses directly attributable to execution of acquisitions and dispositions, are added back because the Company's definition of Free Funds Flow excludes capital expenditures related to acquisitions and dispositions. For greater clarity, incremental overhead expenses related to restructuring following significant acquisition or divestitures are included in Spartan's general and administrative expenses. Lease liabilities are not included in Spartan's definition of Net Debt therefore lease payments are deducted in the period incurred to determine Adjusted Funds Flow. The Company refers to Adjusted Funds Flow expressed per unit of production as an "Adjusted Funds Flow Netback". "Free Funds Flow" is a non-GAAP financial measure calculated by Spartan as Adjusted Funds Flow less Capital Expenditures before A&D. Spartan believes Free Funds Flow provides an indication of the amount of funds the Company has available for future capital allocation decisions such as to repay current and long-term debt, reinvest in the business or return capital to shareholders. Adjusted Funds Flow per share Adjusted Funds Flow ("AFF") per share is a non-GAAP financial ratio used by the Company as a key performance indicator. AFF per share is calculated using the same methodology as net income per share ("EPS"), however the diluted weighted average common shares ("WA Shares") outstanding for AFF may differ from the diluted weighted average determined in accordance with IFRS Accounting Standards for purposes of calculating EPS due to non-cash items that impact net income only. The impact of stock options and share awards is more dilutive to AFF than EPS because the number of shares deemed to be repurchased under the treasury stock method is not adjusted for unrecognized share-based compensation expense as it is non-cash (see also, "Share Capital"). Capital Expenditures before A&D "Capital Expenditures before A&D" is a non-GAAP financial measure used by Spartan to measure its capital investment level compared to the Company's annual budgeted capital expenditures for its organic drilling program. It includes capital expenditures on exploration and evaluation assets and property, plant and equipment, before acquisitions and dispositions. The directly comparable GAAP measure to Capital Expenditures before A&D is cash used in investing activities. Adjusted Net Capital A&D "Adjusted Net Capital A&D" is a supplemental measure disclosed by Spartan which aggregates the total amount of cash, debt, and share consideration used to acquire crude oil and natural gas assets during the period, net of cash proceeds received on dispositions. The Company believes this is useful information because it is more representative of the total transaction value than the cash acquisition costs or total cash used in investing activities, determined in accordance with IFRS Accounting Standards. The most directly comparable GAAP measures are acquisition costs and disposition proceeds included as components of cash used in investing activities. Net Debt and Adjusted Working Capital References to "Net Debt" includes long-term debt under Spartan's revolving credit facility, net of Adjusted Working Capital. Net Debt and Adjusted Working Capital are both non-GAAP financial measures. "Adjusted Working Capital" is calculated as current assets less current liabilities, excluding derivative financial instrument assets and liabilities, lease liabilities, and current debt (if applicable). The Adjusted Working Capital deficit includes cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and deposits, accounts payable and accrued liabilities, dividends payable, and the current portion of decommissioning obligations. Spartan uses Net Debt as a key performance measure to manage the Company's targeted debt levels. The Company believes its presentation of Adjusted Working Capital and Net Debt are useful as supplemental measures because lease liabilities and derivative financial instrument assets and liabilities relate to contractual obligations for future production periods. Lease payments and cash receipts or settlements on derivative financial instruments are included in Spartan's reported Adjusted Funds Flow in the production month to which the obligation relates. Net Debt to Adjusted Funds Flow Ratio The Company monitors its capital structure using a "Net Debt to Adjusted Funds Flow Ratio", which is a non-GAAP financial ratio calculated as the ratio of the Company's Net Debt to its "Annualized Adjusted Funds Flow". Annualized Adjusted Funds Flow is calculated by multiplying Adjusted Funds Flow for the most recently completed quarter, normalized for significant non-recurring items, by a factor of four. OTHER MEASUREMENTS All dollar figures included herein are presented in Canadian dollars, unless otherwise noted. 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. References to "oil" in this press release include light crude oil and medium crude oil, combined. National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (NI 51-101) includes condensate within the product type of "natural gas liquids". References to "natural gas liquids" or "NGLs" include pentane, butane, propane, and ethane. References to "gas" or "natural gas" relates to conventional natural gas. References to "liquids" includes crude oil, condensate and NGLs. The Company has disclosed condensate as combined with crude oil and/or separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results. SHARE CAPITAL Spartan's common shares are listed on the Toronto Stock Exchange ("TSX") and trade under the symbol "SDE". The volume weighted average trading price of Spartan's common shares on the TSX was $4.72 for the three months ended September 30, 2025. Spartan's closing share price was $5.41 on September 30, 2025, compared to $3.45 on December 31, 2024. As of September 30, 2025, there were 200.5 million common shares outstanding. There are no preferred shares or special preferred shares outstanding. The table below summarizes the weighted average number of common shares outstanding (000s) used in the calculation of diluted EPS and diluted AFF per share:
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 "outlook", "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 (or grammatical variations or negatives thereof). Spartan believes that the expectations reflected in such forward-looking statements are reasonable as of the date hereof, 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 business plan, objectives, strategy of Spartan; continued optimization of its Deep Basin asset, participation in the consolidation of the Deep Basin fairway and advancing and accelerating its Duvernay strategy, and expectations concerning the productivity, consistency, and scalability of this acreage; the Company's drilling strategy in the Deep Basin; expected drilling and completions in the Duvernay; expectations that the utilization of wine-racking well designs will significantly increase recoveries on the Company's acreage; further reductions to drilling and completion costs as Spartan continues to build scale; Spartan's strategies to deliver strong, repeatable and economic operational performance and to generate significant shareholder returns; being well-capitalized to continue executing on its growth strategy in the Duvernay as it has increased its total credit capacity from $250.0 million to $450.0 million; the ability of the Company to achieve drilling success consistent with management's expectations; being well positioned to take advantage of opportunities in the current business environment; risk management activities, including hedging; continuing to pursue immediate production optimization and responsible future growth with organic drilling; continuing to execute on building an extensive position in the Duvernay; and the timing of release of its 2026 operating budget and guidance. The forward-looking statements and information are based on certain key expectations and assumptions made by Spartan, including, but not limited to, expectations and assumptions concerning the business plan of Spartan, the timing of and success of future drilling, development and completion activities, the growth opportunities of Spartan's Duvernay acreage, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of Spartan's properties, the successful application of drilling, completion and seismic technology, the Company's ability to secure sufficient amounts of water, prevailing weather conditions, prevailing legislation affecting the oil and gas industry, prevailing commodity prices, price volatility, future commodity prices, price differentials and the actual prices received for the Company's products (including pursuant to hedging arrangements), anticipated fluctuations in foreign exchange and interest rates, impact of inflation on costs, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners, general economic conditions, and the ability to source and complete acquisitions. 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 and volatility in commodity prices; changes in industry regulations and legislation (including, but not limited to, tax laws, royalties, and environmental regulations); the risk that the U.S. administration (i) maintains tariffs on Canadian goods, including crude oil and natural gas, (ii) increases the rate or scope of previously announced tariffs, or (iii) imposes new tariffs on the import of goods from Canada; the risk that the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including crude oil and natural gas, and that such tariffs or other measures (and/or the Canadian government's response to such tariffs or other measures) adversely affect the Canadian, U.S., and global economies, and by extension the Canadian oil and natural gas industry and the Company; demand and/or market price for the Company's products and/or otherwise adversely affects the Company; changes in the political landscape both domestically and abroad, wars (including ongoing military actions in the Middle East and between Russia and Ukraine), hostilities, civil insurrections, foreign exchange or interest rates, increased operating and capital costs due to inflationary pressures (actual and anticipated), risks associated with the oil and gas industry in general, stock market and financial system volatility, impacts of pandemics, the retention of key management and employees, risks with respect to unplanned third-party pipeline outages and risks relating to inclement and severe weather events and natural disasters, including fire, drought, and flooding, including in respect of safety, asset integrity and shutting-in production. Please refer to Spartan's MD&A for the period ended September 30, 2025, and annual information form for the year ended December 31, 2024, for discussion of additional risk factors relating to the Company, which can be accessed either on Spartan's website at www.spartandeltacorp.com or under Spartan's SEDAR+ profile on www.sedarplus.ca. 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 This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Spartan's 2025 guidance, including prospective results of operations and production (including expectations of achieving or exceeding the high end of its 2025 guidance of 39,000-41,000 BOE/d), operating costs, organic growth, capital efficiency improvements and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Spartan's future business operations. Spartan and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Spartan disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Changes in forecast commodity prices, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in Spartan's guidance. The Company's actual results may differ materially from these estimates. References in this press release to peak rates, peak sales production, initial production rates, IP30s, IP60s, IP90s, and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production of Spartan. The Company cautions that such results should be considered preliminary. Peak rates are the highest average daily sales production rate for each well excluding clean-up and downtime. ABBREVIATIONS
SOURCE Spartan Delta Corp. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:SDE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
