Scotia Says it likes Strong Q1'22 Earnings and Well Results.Spartan Delta Corp (SDE:TSX) - News Alert
Scotiabank Says Spartan Delta Q1 Results as Expected; Notes 'Strong' Well Results Continue
07:13 AM EDT, 05/11/2022 (MT Newswires) -- Scotiabank noted energy company Spartan Delta (SDE.TO) overnight Tuesday delivered "solid" Q1 results, with production, adjusted funds flow, and capex in line with Street expectations.
The company also announced "a strong array of recent well results" from the Deep Basin and Montney plays, in Canada's Western Sedimentary Basin, the bank noted. This is trending favorably compared to the bank's type-curve expectations and is on track for payout periods of less than one year, it added.
Scotiabank said that, while Spartan confirmed its 2022 capital budget and production guidance for the time being, it expects to see a budget increase and shareholder returns program (likely buybacks) during the second half of 2022.
The bank said the key catalysts for the stock are debt reduction, the potential introduction of a shareholder return framework, the next round of Gold Creek Montney well results, initial Simonette Montney well results, and possible bolt-on acquisitions.
It also said Spartan continues to be its top oil-weighted idea because of "consistently strong" operating results, a rapidly deleveraging balance sheet, and an "underappreciated" high-quality asset base.