CDN NEWS | 
US NEWS 
Spartan is pleased to provide its updated financial and operating guidance for 2023.
The Company’s capital expenditure budget and guidance for 2023 is presented on a pro forma basis, accounting for the forthcoming distribution of the cash proceeds of the Asset Sale and the shares and warrants of Logan Energy Corp. (“Logan“) to Spartan’s shareholders.
Based on forecast annual 2023 average production of between 52,000 to 54,000 BOE/d and commodity price assumptions of US$74/bbl for WTI crude oil and $2.75/GJ for AECO natural gas average for the year, Spartan expects to generate approximately $398 million of Adjusted Funds Flow in 2023. Free Funds Flow is forecast to be $118 million on a capital expenditure budget of $280 million.
As part of the Company’s 2023 capital budget, Spartan plans to drill a total of 16.0 net wells targeting both light oil and liquids-rich gas in the Spirit River, Cardium, and Rock Creek horizons within the Deep Basin. Spartan is also on track to have drilled a total of 14.7 wells in the Montney core area in the first half of 2023 that were divested pursuant to the Asset Sale.
Spartan’s 2023 guidance is summarized below:
|
GUIDANCE |
H1 2023 |
H2 2023 |
Full Year 2023 |
|
Year ending December 31, 2023 |
Guidance |
Guidance |
Guidance |
|
Average Production (BOE/d) (a)(b) |
68,000 to 70,000 |
36,000 to 38,000 |
52,000 to 54,000 |
|
% Liquids |
37 % |
30 % |
35 % |
|
Benchmark Average Commodity Prices |
|||
|
WTI crude oil price (US$/bbl) |
76 |
72 |
74 |
|
NYMEX Henry Hub natural gas price (US$/mmbtu) |
2.80 |
2.99 |
2.89 |
|
AECO natural gas price ($/GJ) |
3.20 |
2.30 |
2.75 |
|
Average exchange rate (US$/CA$) |
1.35 |
1.34 |
1.34 |
|
Operating Netback, before hedging ($/BOE) (b)(c) |
24.48 |
12.18 |
20.14 |
|
Operating Netback, after hedging ($/BOE) (b)(c) |
25.98 |
19.89 |
23.83 |
|
Adjusted Funds Flow ($MM) (b)(c) |
306 |
93 |
398 |
|
Capital Expenditures, before A&D ($MM) (c) |
233 |
47 |
280 |
|
Free Funds Flow ($MM) (c) |
72 |
46 |
118 |
|
Net Debt, end of period ($MM) (c) |
110 |
62 |
62 |
|
Common shares outstanding, end of period (MM) (d) |
173 |
173 |
173 |
|
a) |
The financial performance measures included in the Company’s guidance for 2023 is based on the midpoint of the average |
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|
b) |
Additional information regarding the assumptions used in the forecasted Average Production, Operating Netbacks and |
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|
c) |
“Operating Netback”, “Adjusted Funds Flow”, “Capital Expenditures, before A&D”, “Free Funds Flow” and “Net Debt (Surplus)” |
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|
d) |
The forecast of common shares outstanding at the end of 2023 includes common shares issuable in respect of the net effect |
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With a robust inventory and numerous drilling opportunities, Spartan’s management team and Board look forward to the delivery of a repositioned business model focused on highly capital efficient, liquids rich gas development to sustain annual production levels of ~39,100 boe/d into its owned and operated deep cut gas processing infrastructure in the Deep Basin.
With over 70% of Spartan’s gas hedged at attractive levels well above prevailing strip pricing through the balance of the year, the Company expects to deliver meaningful Free Funds Flow in 2023.
Maintaining a strong balance sheet continues to be a core aspect of Spartan’s sustainable business model and the Company is targeting a leverage ratio of approximately 0.5x debt to Adjusted Fund Flow into the future.
A total of 110,834,450 common shares, representing approximately 64.65% of Spartan’s issued and outstanding shares, were represented at the Meeting.
The following nominees were elected as directors of Spartan for the ensuing year, with the specific voting results being as follows:
|
Votes For |
Votes Withheld |
|||
|
Director |
# |
% |
# |
% |
|
Fotis Kalantzis |
108,448,058 |
99.55 % |
495,121 |
0.45 % |
|
Richard F. McHardy |
107,174,884 |
98.38 % |
1,768,295 |
1.62 % |
|
Donald Archibald |
104,235,622 |
95.68 % |
4,707,557 |
4.32 % |
|
Reginald J. Greenslade |
105,408,563 |
96.76 % |
3,534,616 |
3.24 % |
|
Kevin Overstrom |
103,850,036 |
95.32 % |
5,093,143 |
4.68 % |
|
Tamara MacDonald |
91,975,706 |
84.43 % |
16,967,473 |
15.57 % |
For voting results on the other matters considered at the Meeting, all of which were approved, please see the Company’s report of voting results dated May 16, 2023 available on SEDAR at www.sedar.com.
Spartan is committed to creating a modern energy company, focused on sustainability both in operations and financial performance. The Company’s ESG-focused 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 of Alberta. Spartan is focused on the execution of the Company’s organic drilling program, delivering operational synergies in a respectful and responsible manner to the environment and communities it operates in. The Company is well positioned with flexibility to continue pursuing immediate production optimization, sustainable growth with organic drilling, opportunistic acquisitions and a focus on the generation of Free Funds Flow and periodic special dividends to shareholders.
Spartan’s corporate presentation dated May 17, 2023 can be accessed on the Company’s website at www.spartandeltacorp.com.
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