Lesson Learned: Debt-Free Energy Companies Vs Indebted Ones A bunch of indebted energy names have collapsed or have filed for bankruptcy over the last years. Only those energy names with a strong debt-free balance sheet (i.e. Epsilon Energy (EPSN)) have survived and thrived. Therefore, many investors have learned the importance of a debt-free balance sheet.
That said, if you look for debt-free low-risk energy companies, see new, unknown and debt-free Spartan Delta (SDE) before it becomes popular.
SDE is natural-gas weighted and is currently producing about 30,000 boepd (70% gas, all sold at AECO prices).
Currently, SDE is
debt-free with surplus of CAD$35 million, facts below: https://www.globenewswire.com/news-release/2021/02/16/2176560/0/en/Spartan-Delta-Corp-Announces-Three-Strategic-Acquisitions-and-80-0-Million-Financing.html
Proforma the latest deals, SDE produces 36,000 boepd while also remaining debt-free with a significant surplus of CAD$54 million by the end of 2021, based on the latest guidance below:
https://www.globenewswire.com/news-release/2021/02/16/2176560/0/en/Spartan-Delta-Corp-Announces-Three-Strategic-Acquisitions-and-80-0-Million-Financing.html
So debt-free SDE has the strongest balance sheet while being the most undervalued Canadian nat gas weighted producer because SDE currently trades at just C$9,000 per boepd and just about 2.4 times its annual cash flow.
Insiders own about about 26%.
SDE's management team has an impeccable pedigree with very high returns from their previous 3 companies, Spartan Exploration, Spartan Oil, Spartan Energy sold to VET.
My two cents.