Spartan Delta Corp T.SDE

Price paid makes obvious how undervalued Spartans 50k boe/d

[Valuecan]

At first glance it seems they paid a pretty price especially compared to the Bellatrix assets.  But it also shows that their current production is extremely undervalued at the enterprise value.  Therefore I believe the enterprise value rises to an amount closer to the likes of a Birchcliff over the next year in my opinion.

[fauxtomato]

And production will be growing, FCF increasing with current commodity pricing, and still FCF positive outside of acquisitions. I think it's interesting they're going big into NW AB now while harvesting cashflow from the BXE asset. Velvet was capital constrained but not on the ropes like Cequence, Inception, or TKO'd like BXE. The increase in scale (from the top of my head, this more

[black4444]

Well, they went and did exactly what I asked them not to do. Specifically, “Just don’t issue more undervalued paper unless its an extraordinary deal please!”. Of the $372m in equity Warburg Pincus et al are giving up they are taking a whopping $15.7m in SDE paper at $5.30. The rest is cash. Interesting. So where are we going to wind up? Fully diluted, about 175m shares outstanding and net

[fauxtomato]

>>I guess I’m glad they ignored me. I was going to say $8/sh but you did the 3 minutes of math required and got $9. I think PIPE gets them there, too, and could be in play for equity next fall. This transaction turned them into a recognizable E&P form and they're still damn attractive.

[Seppelt]

Apart from flowing barrels, there are some interesting undeveloped assets. Among other things, a big chunk of land just east of Birchcliff's Gordondale sharing the neighborhood with TOU and Kelt. Further northwest in BC there is Flatrock, just west of Oak where Kelt is currently building infrastructure planning to bring 10 wells to production later this year. Light oil/condensate rich, Oak

[fauxtomato]

I had to google Flatrock to make sure it was still Velvet's, as I think it got one mention in the SDE PR https://velvetenergy.ca/wp-content/uploads/2019/09/velvet-ir-presentation-sep2019.pdf Is nearly 2 years old but other than the disposition to Westbrick gives a good idea. Spartan Delta has, beyond BXE, just formed its identity and it's NW AB Montney and I think that's kind of a