Spartan Delta Corp. Sets Sights on Growth with 2025 Guidance and $50 Million Equity Offering
January 15, 2025, 9:31 am
In the heart of Calgary, Spartan Delta Corp. is revving its engines for 2025. The company recently unveiled its preliminary guidance, signaling ambitious plans for growth in oil and liquids production. With a capital budget of $300 to $325 million, Spartan aims to drill 35 wells, targeting an annualized production of approximately 40,000 barrels of oil equivalent per day (BOE/d). This marks a 5% increase from 2024, but the real star of the show is the Duvernay development program, which is set to accelerate significantly.
The Duvernay formation, a geological treasure trove, has proven to be a goldmine for Spartan. In 2024, the company brought on-stream four wells in the Willesden Green area, achieving an impressive average peak initial production rate of 1,132 BOE/d, with 87% of that being liquids. This performance exceeded expectations and positioned Spartan as a key player in the region. With over 250,000 net acres in the Duvernay and production exceeding 5,000 BOE/d, Spartan is poised for a breakout year.
For 2025, Spartan plans to allocate between $200 and $215 million to the Duvernay, aiming for a staggering 180% growth in annualized production. The company anticipates drilling 16 wells and completing 17, all while expanding its water infrastructure to support future growth. The target? A production goal of 25,000 BOE/d in the Duvernay alone.
But Spartan isn’t putting all its eggs in one basket. The Deep Basin, another key area of focus, will receive approximately $100 to $110 million in capital. Here, Spartan plans to drill 19 wells, concentrating on liquids-rich targets in the first half of the year. The company is also keeping its options open, ready to adjust its budget in response to fluctuations in natural gas prices.
Spartan’s guidance for 2025 paints a picture of robust financial health. With an expected Adjusted Funds Flow of around $219 million, the company anticipates a 37% increase compared to 2024. This growth is driven by a forecasted average commodity price of $72.00 per barrel for WTI crude oil and $2.20 per gigajoule for AECO natural gas. The anticipated Adjusted Funds Flow per share is set to rise by 27%, reflecting the company’s strategic moves and the anticipated success of its development programs.
Operating Netback, a key measure of profitability, is projected to soar to $18.39 per BOE, a 61% increase from the previous year. This surge is largely attributed to the expected 75% growth in crude oil and condensate production. Spartan has also hedged a significant portion of its production, securing prices of $99.59 per barrel for crude oil and $2.22 per gigajoule for natural gas, providing a safety net against market volatility.
To fuel its ambitious plans, Spartan has initiated a $50 million equity offering, led by National Bank Financial Inc. This offering involves the sale of 13,090,000 common shares at a price of $3.82 each. The underwriters have the option to purchase an additional 15% of the shares to cover over-allotments, ensuring that Spartan has the capital it needs to accelerate its development programs.
The proceeds from this equity offering will primarily support the Duvernay development, enabling Spartan to ramp up production and enhance its financial performance. The company’s commitment to sustainability and responsible operations remains at the forefront of its strategy, ensuring that growth does not come at the expense of environmental stewardship.
Spartan Delta Corp. is not just another player in the oil and gas sector; it’s a company on the rise. With a clear vision for 2025, backed by solid financial planning and a focus on high-quality production opportunities, Spartan is well-positioned to capitalize on the burgeoning demand for energy. The company’s strategic investments in the Duvernay and Deep Basin are set to pay dividends, not just for shareholders but for the communities it operates in.
As the energy landscape continues to evolve, Spartan’s proactive approach and commitment to operational excellence will be crucial. The company is not merely reacting to market conditions; it is shaping its future with calculated moves and a clear focus on growth. With the 2025 guidance in place and the equity offering underway, Spartan Delta Corp. is ready to make waves in the oil and gas industry. The road ahead is bright, and Spartan is steering towards success.
The Duvernay formation, a geological treasure trove, has proven to be a goldmine for Spartan. In 2024, the company brought on-stream four wells in the Willesden Green area, achieving an impressive average peak initial production rate of 1,132 BOE/d, with 87% of that being liquids. This performance exceeded expectations and positioned Spartan as a key player in the region. With over 250,000 net acres in the Duvernay and production exceeding 5,000 BOE/d, Spartan is poised for a breakout year.
For 2025, Spartan plans to allocate between $200 and $215 million to the Duvernay, aiming for a staggering 180% growth in annualized production. The company anticipates drilling 16 wells and completing 17, all while expanding its water infrastructure to support future growth. The target? A production goal of 25,000 BOE/d in the Duvernay alone.
But Spartan isn’t putting all its eggs in one basket. The Deep Basin, another key area of focus, will receive approximately $100 to $110 million in capital. Here, Spartan plans to drill 19 wells, concentrating on liquids-rich targets in the first half of the year. The company is also keeping its options open, ready to adjust its budget in response to fluctuations in natural gas prices.
Spartan’s guidance for 2025 paints a picture of robust financial health. With an expected Adjusted Funds Flow of around $219 million, the company anticipates a 37% increase compared to 2024. This growth is driven by a forecasted average commodity price of $72.00 per barrel for WTI crude oil and $2.20 per gigajoule for AECO natural gas. The anticipated Adjusted Funds Flow per share is set to rise by 27%, reflecting the company’s strategic moves and the anticipated success of its development programs.
Operating Netback, a key measure of profitability, is projected to soar to $18.39 per BOE, a 61% increase from the previous year. This surge is largely attributed to the expected 75% growth in crude oil and condensate production. Spartan has also hedged a significant portion of its production, securing prices of $99.59 per barrel for crude oil and $2.22 per gigajoule for natural gas, providing a safety net against market volatility.
To fuel its ambitious plans, Spartan has initiated a $50 million equity offering, led by National Bank Financial Inc. This offering involves the sale of 13,090,000 common shares at a price of $3.82 each. The underwriters have the option to purchase an additional 15% of the shares to cover over-allotments, ensuring that Spartan has the capital it needs to accelerate its development programs.
The proceeds from this equity offering will primarily support the Duvernay development, enabling Spartan to ramp up production and enhance its financial performance. The company’s commitment to sustainability and responsible operations remains at the forefront of its strategy, ensuring that growth does not come at the expense of environmental stewardship.
Spartan Delta Corp. is not just another player in the oil and gas sector; it’s a company on the rise. With a clear vision for 2025, backed by solid financial planning and a focus on high-quality production opportunities, Spartan is well-positioned to capitalize on the burgeoning demand for energy. The company’s strategic investments in the Duvernay and Deep Basin are set to pay dividends, not just for shareholders but for the communities it operates in.
As the energy landscape continues to evolve, Spartan’s proactive approach and commitment to operational excellence will be crucial. The company is not merely reacting to market conditions; it is shaping its future with calculated moves and a clear focus on growth. With the 2025 guidance in place and the equity offering underway, Spartan Delta Corp. is ready to make waves in the oil and gas industry. The road ahead is bright, and Spartan is steering towards success.