ITrades latest update on SDE
Valuation: 30/20/50 Weighting of: 5.0x our '24E DACF, 8% Blended '24E FCFf yield, and our Scenario Sum of the
Assets NAV.
Key Risks: Drilling and completion risk, commodity price risk, acquisition risk, market liquidity risk, ARO risk, and regulatory risk.
Company Profile: Spartan Delta Corp. (Spartan) is a return-focused, gas-weighted, intermediate E&P company with operations in the Alberta Deep Basin. The company's core assets include exposure to the Spirit River, Cardium, and Rock Creek plays in the Ferrier region of central Alberta. Spartan trades on the TSX under the ticker SDE.
Latest Research (June 19, 2023): OUR TAKE: Neutral. Pursuant to its restructuring transaction and distributions to shareholders, SDE’s current CUSIP will be delisted on June 20, 2023, and SDE will commence trading under a new CUSIP on June 21, 2023. We have updated our standalone NAV and target price for SDE ahead of the company trading under its new CUSIP and ex the distribution of the special dividend and Logan Energy Corp. (LGN) shares and warrants. Our target price moves to $8.00/share and our rating stays at Sector Outperform based on our estimate that the market is currently pricing standalone SDE at ~$4.00/share.