Strategic Montney Acquisition, $150 Million Equity Financing NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES
CALGARY, Alberta, July 28, 2021 (GLOBE NEWSWIRE) -- Spartan Delta Corp. ("Spartan" or the "Company") (TSXV:SDE) is pleased to announce that it has entered into a definitive agreement (the "Agreement") to acquire Velvet Energy Ltd. ("Velvet"), a privately held light-oil Montney producer with operations primarily in the Gold Creek, Karr and Pouce Coupe areas of north-west Alberta (the "Velvet Assets") for total consideration of approximately $743.3 million(1) (the "Acquisition").
The Acquisition will be funded by a combination of cash on hand, a $150.0 million bought deal equity financing led by National Bank Financial Inc., as sole bookrunner, together with CIBC World Markets Inc. as co-lead underwriters (the "Financing"), a five year $150.0 million 7.7% senior unsecured term facility (the "Term Facility") and the Company's revolving credit facility (the "Credit Facility"). Spartan has received confirmation with respect to an increase in the available capacity under the Credit Facility from $100.0 million to $450.0 million concurrent with the completion of the Acquisition.
Acquisition Highlights
- Positions Spartan as the largest producer and acreage holder in the oil window of Canada's Montney fairway
- Average production from the Velvet Assets is expected to be approximately 20,600 boe/d(2) at close
- Pro forma completion of the Acquisition, Spartan expects 2022 production to average between 66,000 to 71,000 boe/d (see "2021 and 2022 Corporate Guidance" for further details)
- Includes approximately 281,700 net acres of high working interest (98%) Montney Crown land across four development areas (Gold Creek, Karr, Pouce Coupe and Flatrock)
- Proved plus probable reserves of 224.6 million boe(3), including 204 booked drilling locations(4)
- 732 net identified Montney locations(4) are expected to provide over 20 years of drilling inventory
- The Acquisition is expected to be 35% accretive to Adjusted Funds Flow per share(8) in 2022 (see "2021 and 2022 Corporate Guidance" for further details)
- Further extends the Company's tax horizon with $1.2 billion of estimated tax pools
- Award winning(11) integrated water recycling infrastructure at Gold Creek minimizes freshwater usage in completion operations, providing a solid foundation for long-term sustainable development
- Top decile liability management rating of 27.0 as at July 3, 2021
https://www.globenewswire.com/news-release/2021/07/28/2270771/0/en/Spartan-Delta-Corp-Announces-Strategic-Montney-Acquisition-150-Million-Equity-Financing-450-Million-Credit-Facility-and-150-Million-Term-Facility.html