Spartan Delta Corp. Boosts Duvernay Development with $50 Million Equity Offering
Calgary, Monday, 13 January 2025.
Spartan Delta Corp. is accelerating its Duvernay development with a $50 million equity offering, aiming to enhance oil production and shareholder value amid recovering energy demand.
Strategic Expansion Details
Spartan Delta Corp. (TSE:SDE) has unveiled an ambitious development program with a preliminary capital budget of $300 to $325 million for 2025 [1]. The company plans to drill 35 (32 net) wells, targeting approximately 40,000 BOE/d production, representing a 5% increase from 2024 levels [1]. A significant portion of this expansion, approximately $200 to $215 million, is specifically allocated for the Duvernay development [1].
Production Growth Targets
The company’s strategic initiative is expected to deliver substantial production growth, with crude oil and condensate production forecasted to increase by 75% compared to 2024 guidance [1]. This growth builds upon Spartan’s strong performance in 2024, where their Duvernay position exceeded 250,000 net acres with production surpassing 5,000 BOE/d (77% liquids) by December [1]. The company’s Duvernay operations have shown promising results, with four wells brought on-stream in 2024 achieving an average peak IP30 rate of 1,132 BOE/d [1].
Financial Structure and Equity Offering
To support this expansion, Spartan has arranged a $50 million equity offering, structured through the issuance of 13,090,000 common shares at $3.82 each [1]. The offering is expected to close around January 30, 2025 [1]. The company projects its 2025 Adjusted Funds Flow to reach approximately $219 million, marking a 37% increase compared to 2024 guidance [1]. The financial outlook is supported by analyst confidence, with the company receiving predominantly positive ratings from market analysts as of December 2024 [3].
Market Outlook and Risk Factors
While Spartan’s expansion plans are ambitious, the company acknowledges various risk factors that could impact its forecasts, including commodity price fluctuations and regulatory changes [1]. The company’s financial projections demonstrate sensitivity to market conditions, with estimates suggesting that a US$5/bbl increase in WTI crude price could potentially increase Adjusted Funds Flow by CA$10 million [1]. The success of this development program will be closely tied to market conditions and the company’s execution capabilities in both the Duvernay and Deep Basin regions.