Company Announcements

CALGARY, AB , Feb. 19, 2025 /CNW/ - Spartan Delta Corp. ("Spartan" or the "Company") (TSX: SDE) is pleased to report its financial and operating results for the fourth quarter and year ended December 31, 2024, as well as highlights of the Company's year-end reserves evaluation.

Selected financial and operational information is set out below and should be read in conjunction with Spartan's audited consolidated annual financial statements and related management's discussion and analysis ("MD&A") for the years ended December 31, 2024 and 2023, 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".

MESSAGE TO SHAREHOLDERS

"Despite a challenging natural gas price environment in 2024, Spartan continued to successfully execute on its corporate strategy, establishing one of the largest positions in the Duvernay with over 250,000 net acres, while our Deep Basin asset continued to demonstrate its underlying strength by drilling one of the best natural gas wells in the Deep Basin in 2024.

2024 represents a pivotal year for Spartan as we commenced our inaugural Duvernay program, drilling four wells in the fairway and achieving a milestone of 5,000 BOE/d of Duvernay production. Spartan is encouraged by the strong Duvernay results achieved in 2024. I believe the acceleration of the 2025 Duvernay program will result in a monumental rate of change for the Company as it shifts its production from natural gas to oil and condensate while targeting production growth to 25,000 BOE/d in the Duvernay.

As we reflect on our successes of 2024, I want to extend my gratitude to the ambitious employees at Spartan for their dedication and determination in delivering on our corporate strategy and to our shareholders for their continued support. We are excited about the opportunities ahead in 2025 and I am confident we have built a solid foundation for the continued growth and success of our organization," commented Fotis Kalantzis, President and CEO of Spartan.

2024 FINANCIAL, OPERATING, AND RESERVE HIGHLIGHTS

• Spartan reported production of 38,166 BOE/d (33% liquids) in 2024.
• The Company's operations generated oil and gas sales of $301.6 million in 2024 and Adjusted Funds Flow of $164.6 million ($0.93 per share, diluted), 3% higher than 2024 guidance.
• The Company successfully executed a capital program of $161.9 million in 2024.
  • In the West Shale Basin Duvernay (the "Duvernay"), Spartan brought on-stream 3.4 net wells at an average IP30 rate of 1,132 BOE/d (87% liquids).
  • In the Deep Basin, Spartan continued to focus on the liquids-rich Cardium and Wilrich formations, drilling 14.0 net wells and completing and bringing on-stream 14.8 net wells.
• The Company reported production of 38,537 BOE/d (35% liquids) during the fourth quarter of 2024, a 2% increase from 37,664 (31% liquids) in the fourth quarter of 2023, and a 4% increase from 37,020 BOE/d (32% liquids) in the third quarter of 2024.
  • Spartan achieved a 255% increase in crude oil production and a 16% increase in condensate production as compared to the fourth quarter of 2023.
  • Additionally, the Company achieved a 78% increase in crude oil production and a 21% increase in condensate production as compared to the third quarter of 2024.
• Fourth quarter 2024 oil and gas sales totaled $83.5 million, generating Adjusted Funds Flow of $50.5 million ($0.28 per share, diluted), an increase of 61% from the third quarter of 2024.
• Spartan generated Free Funds Flow of $2.7 million in 2024, $10.7 million in the fourth quarter, and exited 2024 with Net Debt of $148.1 million. The Company's Net Debt adjusted for the bought deal equity financing is approximately $50.3 million.
• As at December 31, 2024, Spartan had $716.8 million tax pools, of which $376.2 million are non-capital losses.
• Established a dominant position of greater than 250,000 net acres in the Duvernay.
• In December 2024, the Company's Duvernay production exceeded 5,000 BOE/d (77% liquids).
• As a result of reduced capital in the Deep Basin and the reallocation to the more capital-intensive, albeit oilier Duvernay, proved developed producing reserves ("PDP") decreased by a modest 1%, while total proved reserves ("TP") increased by 7%, and total proved plus probable reserves ("TPP") increased by 7% in 2024.
  • Oil and condensate PDP reserves increased by 33%, TP reserves increased by 69%, and TPP reserves increased by 51% in 2024.
  • The increase in oil and condensate reserves reflects the Company's initial success in the Duvernay.
• The Company's before-tax net present value ("NPV") reserves, discounted at 10 percent, increased across all categories in 2024, despite lower commodity pricing.
  • PDP reserves increased by 6%, TP reserves increased by 7%, and TPP reserves increased by 11% in 2024.
• On January 30, 2025, Spartan completed an upsized bought deal equity financing for gross proceeds of approximately $97.8 million. The Company will use the net proceeds to fund the acceleration of the development program in the Duvernay and for general corporate purposes.

The following table summarizes the Company's financial and operating results for the fourth quarters and years ended December 31, 2024, and December 31, 2023.

2024 RESERVES INFORMATION

Spartan is pleased to provide select highlights from the results of its year-end independent oil and gas reserves evaluation as of December 31, 2024 (the "McDaniel Report"), as prepared by its independent qualified reserves evaluator, McDaniel & Associates Consultants Ltd. ("McDaniel"). The evaluation of Spartan's properties was prepared in accordance with the definitions, standards and procedures contained in the most recent publication of the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101").

The following tables highlight the findings of the McDaniel Report. The McDaniel Report was based on the published average forecast pricing of McDaniel, GLJ Ltd. and Sproule Associates Limited. See "O&G Reader Advisories – Reserves Disclosure" for more information. Additional reserves information as required under NI 51-101 will be included in Spartan's Annual Information Form for the year ended December 31, 2024, which will be filed on or before March 31, 2025, on SEDAR+ at www.sedarplus.ca. The numbers in the tables below may not add due to rounding.

Summary of Reserves Volumes as at December 31, 2024

The Company's reserves volumes and undiscounted Future Development Costs ("FDC") as at December 31, 2024 are summarized below:

Net Present Value of Future Net Revenue as at December 31, 2024 (Before-Tax)

The following table summarizes the NPV of the Company's reserves (before-tax) as at December 31, 2024. The reserves value on a $/BOE basis, discounted at 10% per year, is also summarized for each category.  

Forecast Costs

The following table outlines estimated annual FDC required to bring TP and TPP reserves on production per the McDaniel Report:

OPERATIONS UPDATE

Spartan has begun its 2025 drilling program with four rigs: two rigs in the Deep Basin and two rigs in the Duvernay. Spartan is continuing to focus its efforts on innovating and optimizing operations in the Deep Basin as it drills liquids-rich targets in the first half of 2025, while preserving the versatility to increase the capital budget in the second half of 2025 in response to improvements in natural gas prices. In the Duvernay, Spartan is building off the momentum of its 2024 program as it accelerates the development of its asset in 2025, while continuing to accumulate incremental Duvernay acreage. Additionally, the Company is dedicated to decreasing costs in the Duvernay in 2025 by drilling multi-well pads, optimizing completions, and utilizing owned and operated water infrastructure to accommodate growth.

ABOUT SPARTAN DELTA CORP.

Spartan is committed to creating value for its shareholders, focused on sustainability both in 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 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 February 19, 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 February 19, 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, 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, less operating and transportation expenses. "Operating Income, after hedging" is calculated by adjusting Operating Income for realized gains or losses on derivative financial instruments including settlements on acquired derivative financial instrument liabilities (together a non-GAAP financial measure "Settlements on Commodity Derivative Contracts"). 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.

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 ("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 dilutive 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" 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" 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.

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.

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.

O&G READER ADVISORIES

Reserves Disclosure

The reserves information and data provided in this press release presents only a portion of the disclosure required under NI 51-101. Spartan's Form 51-101F1 – Statement of Reserves Data and Other Oil and Gas Information dated effective as at December 31, 2024, which includes further disclosure of Spartan's oil and gas reserves and other oil and gas information in accordance with NI 51-101 and COGEH, forming the basis of this press release, will be included in the Company's Annual Information Form for the year ended December 31, 2024, which will be available on or before March 31, 2025 on SEDAR+ at www.sedarplus.ca. 

All reserves values, future net revenue and ancillary information contained in this press release are derived from the McDaniel Report unless otherwise noted. All reserve references in this press release are "company gross reserves". Company gross reserves are the Company's total working interest reserves before the deduction of any royalties payable by the Company. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Spartan's reserves will be attained and variances could be material. All reserves assigned in the McDaniel Report are located in the Province of Alberta and presented on a consolidated basis.

All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented represent the fair market value of the reserves. The recovery and reserve estimates of Spartan's oil, NGLs and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual oil, natural gas and NGL reserves may be greater than or less than the estimates provided herein. There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth herein are estimates only.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this press release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 – Revised Glossary to NI 51-101, Revised Glossary to NI 51-101, Standards of Disclosure for Oil and Gas Activities ("CSA Staff Notice 51-324") and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.

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. 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 therefore.

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 $3.43 and $3.68 per common share for the fourth quarter and year ended December 31, 2024, respectively ($3.55 and $9.54 per share for the fourth quarter and year ended December 31, 2023, respectively). Spartan's closing share price was $3.45 on December 31, 2024 compared to $2.98 on December 31, 2023, an increase primarily due to commodity and capital market volatilities.

As of December 31, 2024, there were 173.6 million common shares outstanding (173.2 million as at December 31, 2023). As of the date of this press release, there are 199.2 million common shares outstanding. There are no preferred shares or special preferred shares outstanding. The following securities are outstanding as of the date of this press release: 3.5 million restricted share awards; and 1.4 million stock options outstanding with an average exercise price of $3.25 per common share and average remaining term of 4.1 years.

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, cost model and strategy of Spartan; the Company's 2025 capital program and budget; continued optimization of its Deep Basin asset, participation in the consolidation of the Deep Basin fairway and advancing and accelerating its Duvernay strategy; the Company's drilling strategy in the Deep Basin; expected drilling and completions in the Duvernay; Spartan's strategies to deliver strong operational performance and to generate significant shareholder returns; the ability of the Company to achieve drilling success consistent with management's expectations; the estimated amount of available tax pools; being well positioned to take advantage of opportunities in the current business environment; risk management activities, including hedging; to continue pursuing immediate production optimization and responsible future growth with organic drilling, and to continue to execute on building an extensive position in the Duvernay. Statements relating to "reserves" are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.

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, 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 in commodity prices; changes in industry regulations and legislation (including, but not limited to, tax laws, royalties, and environmental regulations); the risk that the new U.S. administration imposes tariffs on Canadian goods, including crude oil and natural gas, and that such tariffs (and/or the Canadian government's response to such tariffs) adversely affect the 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 December 31, 2024, and annual information form for the year ended December 31, 2023, 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 the Company's 2025 capital program and budget, Spartan's prospective results of operations and production (including targeted Duvernay production of 25,000 BOE/d), Free Funds Flow, operating costs, FDC, 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 Company's key performance measures. The Company's actual results may differ materially from these estimates.

References in this press release to peak rates, initial production rates, test rates, average 30-day production, 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.

ABBREVIATIONS

SOURCE Spartan Delta Corp.