Mr. Fotis Kalantzis reports

SPARTAN DELTA CORP. ANNOUNCES PRELIMINARY 2025 GUIDANCE, ACCELERATION OF DUVERNAY DEVELOPMENT PROGRAM, AND $50 MILLION EQUITY OFFERING

Spartan Delta Corp. has released its preliminary guidance for 2025, has accelerated a West Shale basin Duvernay development program, and has arranged a $50.0-million bought deal equity financing led by National Bank Financial Inc., as lead underwriter and sole bookrunner.

2025 budget and preliminary guidance

Spartan Delta is pleased to provide its preliminary financial and operating guidance for 2025, focused on delivering significant growth in oil and liquids production and adjusted funds flow per share.

For 2025, Spartan Delta's board has approved an initial capital budget of $300-million to $325-million to drill 35 (32 net) wells, targeting estimated annualized production of approximately 40,000 barrels of oil equivalent per day, a 5-per-cent increase compared with 2024 guidance. Additionally, Spartan Delta forecasts its 2025 crude oil and condensate production to increase by approximately 75 per cent compared with 2024 guidance.

Duvernay

In 2024, Spartan Delta brought on stream 4.0 (3.4 net) wells at an average peak IP30 rate of 1,132 boe/d (87 per cent liquids) in the Willesden Green Duvernay, significantly exceeding internal expectations and exhibiting top-tier regional performance. In December, 2024, the company's Duvernay position exceeded 250,000 net acres, and production exceeded 5,000 boe/d (77 per cent liquids).

Building off the success achieved in 2024, Spartan Delta is allocating approximately $200-million to $215-million of capital in the Duvernay in 2025, targeting an annualized production growth rate of 180 per cent. Spartan Delta anticipates drilling 16 (14 net) wells and completing and bringing on stream 17 (15 net) wells in the Duvernay in 2025. Additionally, the company continues to allocate capital to expand its water infrastructure to accommodate future growth as Spartan Delta targets production growth to 25,000 boe/d in the Duvernay.

Deep basin

In 2025, Spartan Delta is allocating approximately $100-million to $110-million of capital, focusing on liquids-rich targets in the first half of 2025. The company anticipates drilling, completing and bringing on stream 19 (18 net) wells in the Deep basin in 2025. Additionally, Spartan Delta is preserving the versatility to increase the capital budget in the second half of 2025 in response to improvements in natural gas prices.

2025 guidance

Based on forecast average commodity pricing of $72 (U.S.) per barrel West Texas Intermediate crude oil and $2.20 per gigajoule Alberta Energy Company natural gas, Spartan Delta expects to generate:

• Adjusted funds flow of approximately $219-million in 2025, an increase of 37 per cent compared with 2024 guidance;
• Adjusted funds flow per share accretion of 27 per cent in 2025 compared with 2024 guidance, inclusive of the equity offering;
• Operating netback, before hedging, of $18.39 per boe, an increase of 61 per cent compared with 2024 guidance, as a result of growing crude oil and condensate production by 75 per cent;
• Spartan Delta has hedged 78,362 gigajoules per day of its 2025 natural gas production at an average price of $2.22 per GJ and 2,450 bbl/d of its 2025 crude oil and condensate production at an average price of $99.59 per bbl.

Equity offering

Spartan Delta has entered into an agreement with a syndicate of underwriters led by National Bank Financial as lead underwriter and sole bookrunner, pursuant to which the underwriters have agreed to purchase for resale to the public, on a bought deal basis, 13.09 million common shares of Spartan Delta at a price of $3.82 per common share for aggregate gross proceeds of approximately $50.0-million. The underwriters will have an option to purchase up to an additional 15 per cent of the common shares issued under the equity offering at a price of $3.82 per common share to cover overallotments exercisable in whole or in part at any time until 30 days after the closing of the equity offering. It is anticipated that certain directors, officers and employees of the company will subscribe for approximately $5.4-million of the equity offering.

The common shares offered in the equity offering will be offered by way of a short form prospectus in all provinces of Canada except Quebec. The common shares may also be placed privately in the United States to qualified institutional buyers (as defined under Rule 144A under the U.S. Securities Act of 1933, as amended), pursuant to an exemption under Rule 144A, and may be distributed outside of Canada and the United States on a basis which does not require the qualification or registration of any of the company's securities under domestic or foreign securities laws. The completion of the equity offering is subject to customary closing conditions, including the receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange. Closing of the equity offering is expected to occur on or around Jan. 30, 2025.

Spartan Delta will use the net proceeds from the equity offering to finance the acceleration of the development program in the Duvernay as the company targets Duvernay production growth to 25,000 boe/d and general corporate purposes. The acceleration of the Duvernay will deliver significant growth in oil and liquids production and material accretion to adjusted funds flow per share.

Stikeman Elliott LLP is acting as legal counsel to Spartan Delta in respect of the equity offering. Burnet, Duckworth & Palmer LLP is acting as legal counsel to the underwriters in respect of the equity offering.

About Spartan Delta Corp.

Spartan Delta is committed to creating value for its shareholders, focused on sustainability, both in operations and financial performance. The company's culture is centred 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 and the Duvernay. Spartan Delta will continue to focus on the execution of the company's organic drilling program across its portfolio, delivering operational synergies in a respectful and responsible manner to the environment and communities it operates in. The company is well positioned to continue pursuing optimization in the Deep basin, participate in the consolidation of the Deep basin fairway, and continue expanding and developing its Duvernay asset.

We seek Safe Harbor.