SPARTAN DELTA CORP. ANNOUNCES SECOND QUARTER 2025 RESULTS AND OPERATIONS UPDATE
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 six months ended
OPERATIONS UPDATE
Spartan successfully completed its first half 2025 capital program, highlighting strong execution and operational discipline across its West
Spartan is on course to meet its 2025 guidance of 40,000 BOE/d and is well-positioned for continued operational momentum entering the second half of 2025. With a strong balance sheet, disciplined capital allocation, significant liquids growth, and a deep inventory of locations, Spartan is committed to delivering significant value for shareholders while maintaining a responsible and sustainable development strategy.
DUVERNAY
In the Duvernay, the Company contracted two rigs and drilled 12.0 (9.6 net) wells, completed 7.0 (4.9 net wells), and brought on-stream 3.0 (2.1 net) wells during H1 2025. In Q2 2025, Spartan drilled 6.0 (5.4 net) wells, completed 7.0 (4.9 net) wells, and brought on-stream 3.0 (2.1 net) wells, wine-racking in both the upper and lower Duvernay benches. The utilization of wine-racking well designs has the potential to significantly increase recoveries on the Company's acreage.
- 06-04-043-03W5 Pad Initial production results from 3.0 (2.1 net) wells have averaged IP30 rates of 1,261 BOE/d and 86% liquids per well (1,042 BBL/d of crude oil, 49 BBL/d of NGLs, and 1.0 MMcf/d of natural gas).
- 02-22-042-03W5 Pad Initial results from the Company's most recent 4.0 (2.8 net) wells are encouraging as production rates exceed internal expectations. Current field production estimates for the first 15 days are averaging greater than 1,600 BOE/d with more than 1,300 BBL/d of crude oil and NGLs per well.
- 07-15-044-03W5 Pad Spartan has commenced completions on 4.0 (4.0 net) wells.
- 04-20-041-03W5 Pad Spartan has begun drilling operations.
In the second half of 2025, the Company anticipates drilling 5.0 (5.0 net) wells, completing 10.0 (10.0 net) wells, and bringing on-stream 14.0 (12.8 net) wells.
Spartan's 2025 Duvernay program has benefited from a strong focus on reducing costs. These improvements stem from decreasing drilling and completion times, consistent frac placements, optimizing proppant tonnage, and reducing water usage. The Company is motivated to further reduce drilling and completion costs as it continues to build scale. Spartan's Duvernay results have exceeded internal expectations to date, underscoring the productivity and consistency of its acreage. Current Duvernay field production estimates are greater than 9,000 BOE/d (77% liquids), a 400% increase in production in twelve months.
In the
-
08-21-045-11W5 & 10-20-043-09W5
Initial Spirit River production results averaged IP30 rates of 1,657 BOE/d and 25% liquids per well and IP90 rates of 1,254 BOE/d and 24% liquids per well. - 03-07-045-09W5 Pad Initial production results from 3.0 (3.0 net) Cardium wells averaged IP30 rates of 482 BOE/d and 43% liquids per well and IP90 rates of 566 BOE/d and 42% liquids per well.
- 14-08-044-08W5 Pad Initial production results from 3.0 (3.0 net) Cardium wells are exceeding internal expectations, averaging IP30 rates of 1,203 BOE/d and 40% liquids per well.
-
15-25-044-09W5
Spirit River well is significantly exceeding internal expectations, with the well onstream for less than 30 days.
In the second half of 2025, the Company anticipates drilling 10.0 (9.2 net) wells and completing and bringing on-stream 9.0 (8.2 net) wells, focusing on drilling liquid-rich targets in the Cardium,
SECOND QUARTER 2025 HIGHLIGHTS
- Spartan reported production of 38,513 BOE/d (36% liquids) during the second quarter of 2025.
- Spartan achieved a 151% increase in crude oil production as compared to the second quarter of 2024 and a 12% increase as compared to the first quarter of 2025.
- The Company's operations generated oil and gas sales of
$81.0 million and Adjusted Funds Flow of$47.9 million ($0.23 per share, diluted) in the second quarter of 2025, a 29% increase from the second quarter of 2024, and a 5% increase from the first quarter of 2025. - The Company successfully executed a capital program of
$83.5 million in the second quarter of 2025, of which approximately 85% was spent on drilling, completing, equipping, and tie-ins.- In the Duvernay, Spartan drilled 6.0 (5.4 net) wells, completed 7.0 (4.9 net) wells, and brought on-stream 3.0 (2.1 net) wells.
- In the
Deep Basin , Spartan drilled 2.0 (1.9 net) wells and completed and brought on-stream 3.0 (2.6 net) wells.
- Spartan has accumulated approximately 365,000 net acres (570 net sections) in the Duvernay, a 52% increase from the second quarter of 2024 and a 14% increase from the first quarter of 2025.
- Spartan continues to maintain a strong statement of financial position with Net Debt of
$123.7 million resulting in a 0.7X Net Debt to Annualized Adjusted Funds Flow ratio. - Despite volatile commodity prices, Spartan has hedges in place for the remainder of 2025 greater than current strip. As at
June 30, 2025 , the Company has hedged 91,065 GJ/d of its natural gas production at an average price of$2.25 /GJ and has hedged 2,700 bbl/d of its crude oil and condensate production at an average price of$99.75 /bbl.
The following table summarizes the Company's financial and operating results for the three and six months ended
|
Three months ended |
Six months ended |
||||
(CA$ thousands, unless otherwise indicated) |
2025 |
2024 |
% |
2025 |
2024 |
% |
FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
Oil and gas sales |
81,004 |
73,451 |
10 |
172,245 |
157,599 |
9 |
Net income and comprehensive income |
33,531 |
14,371 |
133 |
28,362 |
25,566 |
11 |
$ per share, basic (1) |
0.17 |
0.09 |
89 |
0.14 |
0.15 |
(7) |
$ per share, diluted (1) |
0.17 |
0.09 |
89 |
0.14 |
0.15 |
(7) |
Cash provided by operating activities |
43,627 |
44,674 |
(2) |
99,895 |
92,825 |
8 |
Adjusted Funds Flow (2) |
47,949 |
37,177 |
29 |
93,514 |
82,850 |
13 |
$ per share, basic (1)(2) |
0.24 |
0.22 |
9 |
0.48 |
0.48 |
- |
$ per share, diluted (1)(2) |
0.23 |
0.21 |
10 |
0.46 |
0.47 |
(2) |
Free Funds Flow (deficit) (2) |
(35,581) |
14,623 |
nm |
(62,769) |
15,261 |
nm |
Cash used in investing activities |
84,393 |
101,377 |
(17) |
134,576 |
152,513 |
(12) |
Capital Expenditures before A&D (2) |
83,530 |
22,554 |
270 |
156,283 |
67,589 |
131 |
Adjusted Net Capital A&D (2) |
6,067 |
54,401 |
(89) |
6,020 |
72,468 |
(92) |
Total assets |
1,037,524 |
884,244 |
17 |
1,037,524 |
884,244 |
17 |
Debt |
66,476 |
109,040 |
(39) |
66,476 |
109,040 |
(39) |
Net Debt (2) |
123,739 |
132,449 |
(7) |
123,739 |
132,449 |
(7) |
Shareholders' equity |
600,077 |
458,802 |
31 |
600,077 |
458,802 |
31 |
Common shares outstanding, end of period (000s) (1) |
200,060 |
173,201 |
16 |
200,060 |
173,201 |
16 |
OPERATING HIGHLIGHTS |
|
|
|
|
|
|
Average daily production |
|
|
|
|
|
|
Crude oil (bbls/d) |
2,485 |
992 |
151 |
2,349 |
870 |
170 |
Condensate (bbls/d) (3) |
2,056 |
2,198 |
(6) |
2,021 |
2,154 |
(6) |
NGLs (bbls/d) (3) |
9,304 |
9,084 |
2 |
9,460 |
9,263 |
2 |
Natural gas (mcf/d) |
148,010 |
157,853 |
(6) |
147,549 |
157,623 |
(6) |
BOE/d |
38,513 |
38,583 |
(0) |
38,422 |
38,558 |
(0) |
Average realized prices, before financial instruments |
|
|
|
|
|
|
Crude oil ($/bbl) |
87.33 |
102.04 |
(14) |
90.63 |
97.85 |
(7) |
Condensate ($/bbl) (3) |
86.61 |
100.29 |
(14) |
92.31 |
98.23 |
(6) |
NGLs ($/bbl) (3) |
23.78 |
29.96 |
(21) |
27.17 |
30.51 |
(11) |
Natural gas ($/mcf) |
1.85 |
1.35 |
37 |
2.00 |
1.82 |
10 |
Combined average ($/BOE) |
23.11 |
20.92 |
10 |
24.77 |
22.46 |
10 |
Operating Netbacks ($/BOE) (2) |
|
|
|
|
|
|
Oil and gas sales |
23.11 |
20.92 |
10 |
24.77 |
22.46 |
10 |
Processing and other revenue |
1.19 |
0.52 |
129 |
0.77 |
0.48 |
60 |
Net commodities purchased margin |
0.09 |
- |
- |
0.04 |
- |
- |
Royalties |
(2.98) |
(2.89) |
3 |
(3.38) |
(3.09) |
9 |
Operating expenses |
(6.02) |
(6.38) |
(6) |
(6.26) |
(6.01) |
4 |
Transportation expenses |
(1.73) |
(1.50) |
15 |
(1.73) |
(1.54) |
12 |
Operating Netback, before hedging ($/BOE) (2) |
13.66 |
10.67 |
28 |
14.21 |
12.30 |
16 |
Operating Netback, after hedging ($/BOE) (2) |
14.70 |
12.91 |
14 |
15.14 |
13.64 |
11 |
Adjusted Funds Flow Netback ($/BOE) (2) |
13.68 |
10.59 |
29 |
13.45 |
11.81 |
14 |
(1) |
Refer to "Share Capital" section of this press release. |
(2) |
"Adjusted Funds Flow", "Free Funds Flow", "Capital Expenditures before A&D", "Adjusted Net Capital A&D", "Net Debt" and "Operating Netbacks" do not have standardized meanings under IFRS Accounting Standards, refer to "Non-GAAP Measures and Ratios" section of this press release. |
(3) |
Condensate is a natural gas liquid as defined by NI 51-101. See "Other Measurements". |
ABOUT
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
Spartan's corporate presentation, as of
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
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.
References to "Net Debt" includes long-term debt under Spartan's revolving credit facility, net of
Spartan uses Net Debt as a key performance measure to manage the Company's targeted debt levels. The Company believes its presentation of
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
As of
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:
|
Three months ended |
Six months ended |
||||
(000s) |
2025 |
2024 |
% |
2025 |
2024 |
% |
WA Shares outstanding, basic |
200,052 |
173,201 |
16 |
195,669 |
173,201 |
13 |
Dilutive effect of outstanding securities |
2,064 |
1,765 |
17 |
2,358 |
1,537 |
53 |
WA Shares, diluted – for EPS |
202,116 |
174,966 |
16 |
198,027 |
174,738 |
13 |
Incremental dilution for AFF (1) |
3,949 |
2,339 |
69 |
3,744 |
2,465 |
52 |
WA Shares, diluted – for AFF (1) |
206,065 |
177,305 |
16 |
201,771 |
177,203 |
14 |
(1) |
AFF per share does not have a standardized meaning under IFRS Accounting Standards, refer to "Non-GAAP Measures and Ratios". |
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
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
Please refer to Spartan's MD&A for the period ended
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 2025 guidance of 40,000 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, IP90s, test rates, 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
A&D |
acquisitions and dispositions |
bbl |
barrel |
bbls/d |
barrels per day |
BOE/d |
barrels of oil equivalent per day |
CA$ or CAD |
Canadian dollar |
GJ |
gigajoule |
GJ/d |
gigajoule per day |
IP |
Initial production |
mcf |
thousand cubic feet |
mcf/d |
thousand cubic feet per day |
Mbbls |
thousand barrels |
MBOE |
thousand barrels of oil equivalent |
MMbtu |
million British thermal units |
MMcf |
million cubic feet |
MM |
millions |
$MM |
millions of dollars |
US$ or USD |
|
WA |
Weighted average |
WI |
Working interest |
SOURCE