Spartan Delta Corp T.SDE

Triple Five Intercontinental Group

[black4444]

The July 19 am deadline for T5 creditors to voice their opinion has come and gone.

Did they accept SDE’s deal or are they hoping for something better?

The few metrics I could find for T5 are:

• 15,887.4 mbbl of proved reserves at 12/31/20 with a PV10 of $179.2m
• Jan/21 production of 2,693 bbl/d split 17% liquids and 83% gas.
• The ARO is estimated at $2.085m.

So not a game changer but another capital starved asset for SDE to upgrade. It also consolidates some land in Ferrier and maybe production gets redirected from Strachan to the partially owned Alder Flats facility.

News release coming?

[black4444]

Unsecured creditors voted 95% by number and 98% by dollar value FOR the SDE plan. Closing looks like mid August. So another 2,500 boepd + a bunch of undrilled locations. 

[Seppelt]

Very interesting. Can't wait for the press release...

[annoncple]

im confused by the court documents are we doing a joint venture with the former creditor? or just assuming a going concern for sake of tax rightoffs..8 wells from what i see bu have no idea of land holdings. will we own 100% for the 37 500 000 or is there any facilities.

[fauxtomato]

I think they're acquiring it as a wholly owned subsidiary (the LP units) to keep the tax pools intact and the $37M will be divided up among the creditors. Production all goes to one battery, then is piped to Keyera's Strachan for processing, but likely some potential for optimization given BXE's existing infrastructure footprint in the region. Looking forward to them disclosing this

[black4444]

The details of the transaction aren’t spelled out in the court filings but this appears to be a purchase of LP units from the treasury. Hopefully the General Partner units are transferred to SDE as well and the existing LP holders are diluted to virtually nil giving SDE effectively 100% of the economic vale and control of the asset. The secured creditor (Crown) is paid out in full and the

[fauxtomato]

Thanks for the fantastic response, just a few things to in my head: - Westbrick put out their annual investory presentation recently https://www.westbrick.ca/PDF/Westbrick_Presentation_July2021_Website_FINAL.pdf and it's a lot of information to digest, but like SDE's BXE lands: things are looking pretty great at C$4 summer AECO. They are carrying $207M in debt but made a large

[Seppelt]

Hopefully Westbrick and ITE have their hands full so there is less competition for T5 and possibly CVE and other assets. There were also rumours that Petrus is struggling to restructure their debt and may be up for sale. In addition to producing assets they own a 60 mmcfd gas plant in Ferrier. SDE will have to borrow to pay in cash but if they offer shares, Don Gray will have to join the board and

[fauxtomato]

Yikes, at a 30% decline right and inability to develop that's not a great position, in addition to 60% of 2021 gas hedged at $2.36/mcf. I'd guess they could pay down maybe $2M in debt a quarter but that won't keep them afloat forever. Lot of potential suitors for those Petrus assets. We haven't seen big blow out pricing that indicates it's a seller's market yet, lot of

[black4444]

Thanks for highlighting the new Westbrick presentation. Lots of detail and data points for benchmarking. I get the impression KKR is priming this thing for a liquidity event given they’re 10 years into their first financing and are possibly facing fund maturities in November. It’s worth remembering all of SDE’s big deals were difficult situations with lots of hair. BXE, CQE and T5 were all CCAA

[fauxtomato]

The Westbrick presentation URL is on a list of 'things I check every few weeks' for a few reasons*. The previous one was in October https://www.westbrick.ca/PDF/Westbrick-October_2020.pdf and I know it's a cruel comparison, but the iincreased IRR % across their portfolio is absurd, particularly the Edson acquisition. The acquisition from Velvet looks to be good for Westbrick