Mr. Fotis Kalantzis reports

SPARTAN DELTA CORP. ANNOUNCES SECOND QUARTER 2023 RESULTS

Spartan Delta Corp. has released its unaudited financial and operating results for the three and six months ended June 30, 2023.

Selected financial and operational information is set out below and should be read in conjunction with Spartan's unaudited consolidated interim financial statements and related management's discussion and analysis (MD&A) for the three and six months ended June 30, 2023, and 2022, which are filed on SEDAR+ and are available on the company's website. The highlights reported in this press release include certain non-GAAP (generally accepted accounting principles) financial measures. The reader is cautioned that these measures may not be directly comparable with other issuers.

Second quarter 2023 highlights

• Spartan successfully closed on May 10, 2023, the sale of its Gold Creek and Karr Montney assets to Crescent Point Energy Corp. for cash consideration of $1.7-billion (asset sale).
• Spartan, on June 20, 2023, completed the transfer of its early stage Montney assets to Logan Energy Corp. and on July 6, 2023, the distribution to eligible shareholders of $9.50 in cash per Spartan share, 1.0 common share of Logan per Spartan share and 1.0 Logan share purchase warrant per Spartan share.
• Second quarter production of 57,972 BOE/d (barrels of oil equivalent per day) included 20,919 bbl/d (barrels per day) of liquids (oil, condensate and NGLs (natural gas liquids)) and 222,320 mcf/d (thousand cubic feet per day) of natural gas. The reduction in production quarter over quarter was a result of the asset sale. Spartan experienced temporary shut-ins due to the Alberta wildfires, which resulted in a 525 BOE/d impact to second quarter production volumes. Spartan would like to thank its staff, their families and all the emergency response personnel for their efforts to control the fires.
• Spartan successfully executed a $95.8-million capital program in the second quarter of 2023, with specific focus placed on the continued development across multiple horizons in the Deep basin as well as development of its recently divested Gold Creek and Karr assets located in the Montney oil window.
  • In the Deep basin, Spartan drilled 3.9 net wells, completed 2.9 net wells and brought 2.9 net wells on production.
  • In the Montney, Spartan drilled 3.6 net wells, completed 6.0 net wells, brought 4.0 net wells on production and completed 1.0 service/disposal well.
• Net income of $457.1-million ($2.64 per share, diluted) in the second quarter of 2023, up 151 per cent from $181.7-million ($1.05 per share, diluted) in the second quarter of 2022 due to the gain on the asset sale of $549.2-million, as well as hedging gains.
• Adjusted funds flow of $123.3-million (71 cents per share, diluted) in the second quarter of 2023; despite weaker commodity prices, which benefited from the company's strong gas hedge position.
• Free funds flow of $27.5-million in the second quarter of 2023.
• Balance sheet is strong with the company's net debt at $96.7-million and 0.4 times annualized net debt/adjusted funds flow.

Outlook

On May 17, 2023, the company issued a press release to announce the approval of a revised pro forma 2023 capital expenditure budget of $280-million and updated guidance production of 53,000 BOE/d. The updated guidance reflects the reduction in forecasted production resulting from the asset sale, the transfer of its early stage Montney assets to Logan and a reduction in forecast commodity prices.

"Spartan, with its depth of economic drilling inventory, strategic operated infrastructure, strong gas hedges and clean balance sheet is uniquely positioned to continue pursuing organic growth augmented with opportunistic strategic acquisitions and periodic special dividends that generate enhanced returns for our shareholders," commented Fotis Kalantzis, president and chief executive officer of Spartan.

As previously announced on May 10, 2023, a special cash dividend of 10 cents per common share of Spartan was paid on July 31, 2023, to eligible holders of Spartan shares of record at the close of business on July 14, 2023.

ESG report

Spartan is committed to producing energy sustainably and responsibly, as such Spartan regularly updates its environment, social and governance (ESG) reporting tool which can be accessed on the company website. Spartan's recent updates to its ESG reporting tool include 2022 performance data and charts. Spartan is committed to maintaining the highest standards of environmental stewardship and is committed to reducing environmental impacts on the communities in which it operates.

The attached table summarizes the company's financial and operating results for the three and six months ended June 30, 2023, and June 30, 2022:

About Spartan Delta Corp.

Spartan is committed to creating value for its shareholders, focused on sustainability both in operations and financial performance. Spartan's environmental, social and governance focused culture is centred on generating free funds flow through responsible oil and gas exploration and development. Spartan has established a portfolio of high-quality production and development opportunities in the Deep basin. Spartan will continue to focus on the execution of Spartan's organic drilling program in the Deep basin, delivering operational synergies in a respectful and responsible manner to the environment and communities it operates in. Spartan is well positioned to continue pursuing growth with organic drilling, opportunistic acquisitions, and the delivery of free funds flow and periodic special dividends to shareholders.

Spartan's corporate presentation as of Aug. 2, 2023, can be accessed on the company's website.

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