Scotia Confirms January 2022 Petrinex Data! Production up!
Spartan Delta Corp. (SDE-T; SO; $14/share TP)
SDE beat Q4/21 production expectations by ~7% on strong
contributions from its Montney and Spirit River plays. As noted
in our previous Production Monitor, we have recalibrated our
production model forecasts based on the Q4/21 actuals. Our
updated calculations point to strong January 2022 production and
put the company ~4% ahead of Q1/22 consensus expectations one
month into the quarter.
New well update. The January production data shows higher month
over month productivity from SDE’s initial batch of Elmworth / Gold
Creek Montney wells drilled on the Inception lands (profiled in our
previous Production Monitor). The wells averaged 374 bbl/d of oil
(up 3% m/m; 328 bbl/d to 419 bbl/d range) and ~1.9 mmcf/d of
raw gas (up 36% m/m; 1.6 mmcf/d to 2.4 mmcf/d range) during the gas
month (see Exhibit 12). The strong January 2022 production data
gives us further confidence in the play and puts the wells ~in line
with our base Gold Creek Montney type curve peak month forecast
at 400 bbl/d of oil and ~1.4 mmcf/d of raw gas (76% IRR and 13
month payback period at $80/bbl Canadian light oil and 3.50 AECO.