08:43 AM EDT, 03/28/2023 (MT Newswires) -- Spartan Delta (SDE.TO) on Tuesday said it agreed to sell holdings Western Canada's Montney shale field to Crescent Point Energy (CPG.TO) for C$1.7 billion and distribute the profits to shareholders with a special dividend, as it plans to spin out properties in Alberta and British Columbia into a new company while concentrating on its holdings in Alberta's deep basin.
The company said it will distribute proceeds of the sale of its Gold Creek and Karr Montney properties to shareholders through a C$9.50 per share special dividend. Investors will also receive a share of the newly formed Logan Energy spin out, which will hold 4,500 barrels of oil equivalent per day of production from properties in the Pouce Coupe and Simonette areas of northwest Alberta and northeastern British Columbia, along with 55,769 acres of exploration lands in northeast BC.
Spartan Delta's executive chairman Richard McHardy will become Logan's chief executive officer, while Brendan Paton, its current vice president of engineering, will step in as chief operating officer.
With the sale and spin out, Spartan Delta will concentrate its operations on western Alberta's Deep Basin region, with a plan to distribute most of its free cash flow to shareholders through special dividends.
"I am pleased to announce the successful conclusion of our strategic repositioning process with our core Montney development asset sale, the creation of a new growth-focused Montney junior company and the retention of our sustainable free funds flow and dividend generating assets in the Deep Basin," chief executive Fotis Kalantzis said in a release.
Along with the C$9.50 special dividend and Logan share, shareholders will also receive a non-transferable warrant to buy a second Logan share for C$0.35 that expires on July 17 and an additional C$0.10 special dividend paid on July 17 to shareholders of record on June 30.
Spartan Delta shares closed down C$0.01 to C$13.79 Monday on the Toronto Stock Exchange.