Spartan Delta (SDE) Q3 2024 earnings summary

Executive summary

• Established a major position in the Duvernay, focusing on oil and condensate-rich areas, with strong initial well results prompting accelerated development.

• Third quarter saw production of 37,020 BOE/d (32% liquids), down 1% year-over-year due to delayed Deep Basin activity and facility outages.

• Voluntary shut-ins and deferred drilling in response to low natural gas prices impacted volumes, with capital reallocated to Duvernay development.

Financial highlights

• Q3 2024 oil and gas sales were $60.6 million, down 26% year-over-year; Adjusted Funds Flow was $31.3 million ($0.18/share, diluted), down 51%.

• Net income for Q3 was $3.5 million, a 61% decrease year-over-year; net debt rose to $159.2 million.

• Capital expenditures before acquisitions/dispositions nearly doubled to $54.5 million in Q3.

• Free Funds Flow was negative at $(23.2) million for Q3.

Outlook and guidance

• 2024 guidance updated for lower natural gas and oil prices, with forecasted average production of 38,000 BOE/d (33% liquids).

• Adjusted Funds Flow for 2024 expected at $160 million on $164 million capital expenditures, with year-end net debt of $156 million.

• Capital budget increased by $14 million to accelerate Duvernay development and infrastructure.