Spartan Delta Corp T.SDE

Scotia confirms Petrinex data (Summary, more to follow)

[Bamsmba]

Production Monitor – December 2021

OUR TAKE: Mixed. We have updated our Public Data Evaluation (PDE) production tracking for our coverage names for December 2021. Based on our interpretation of the data for Q4/21, we see potential for:

• SDE to beat (i.e., +5% or more) consensus production expectations (high confidence)
• ARX to come in moderately ahead (i.e., 0% to +5%) of consensus production expectations (high confidence)
• BIR to come in moderately below consensus production expectations (high confidence)
• CR to miss consensus production expectations (medium confidence)
• KEL to beat liquids production expectations (low confidence)

AAV, NVA, PEY, and TOU have pre-reported Q4/21 production. We expect POU and TPZ to report volumes in line with expectations.

KEY POINTS

New well alerts. The December 2021 data includes the following key well results:

• KEL’s new Oak Montney wells continued to ramp up during December 2021 (see Exhibit 6). The average initial results from the wells are broadly in line with our base type curve expectations; however, four of the eight wells are showing stronger-than-expected productivity. Given the early stage of the play, we see the early results as a promising sign for future productivity gains and economic development potential.
• December 2021 was the first full month onstream for SDE’s initial Elmworth / Gold Creek Montney wells from the Inception lands (see Exhibit 11). The initial productivity from the wells is roughly in line with the peak month forecast for our base type curve. To the south, the company’s most recent Montney oil wells on the Velvet lands continue to outperform our high case type curve expectations for the play. Overall, we view the results from SDE’s recent Elmworth / Gold Creek Montney wells as a strong positive development for the company.