SPARTAN DELTA CORP. ANNOUNCES 2026 GUIDANCE AND OPERATIONS UPDATE
CALGARY, AB, Jan. 5, 2026 /CNW/ - Spartan Delta Corp. ("Spartan" or the "Company") (TSX: SDE) is pleased to announce its guidance for 2026 and an operations update following the successful completion of its 2025 drilling program.
2026 BUDGET AND GUIDANCE
Spartan is pleased to provide its financial and operating guidance for 2026 focused on delivering significant light oil and condensate production growth as it accelerates development in the West Shale Basin Duvernay (the "Duvernay").
For 2026, Spartan intends to deploy a capital program of $410 to $470 million, delivering annualized production of 50,000 to 52,000 BOE/d (44% liquids), a 28% increase in production and an 89% increase in crude oil and condensate production from midpoint 2025 guidance.
Spartan anticipates spending $320 to $360 million on drilling, completion, equipping and tie-ins ("DCET"), bringing 38 net wells on-stream, and is allocating $60 to $80 million of capital to infrastructure, and $30 million to corporate and other.
DUVERNAY
Building off the strong success and momentum of Spartan's Duvernay results to date, the Company is allocating approximately $350 million of capital at midpoint guidance in 2026, inclusive of DCET, the construction of facilities, gathering, pipelines, and other. Spartan anticipates bringing 24 net wells on-stream and is targeting an annual production growth rate of greater than 100% in the Duvernay.
Spartan's Duvernay performance underscores the robust productivity, consistency, and scalability of its acreage. These results reinforce that Spartan's Duvernay asset is one of the most compelling emerging oil-weighted growth opportunities in Western Canada and has advanced the Company's production target to 50,000 BOE/d in the Duvernay by 2030 while maintaining a strong balance sheet of approximately 1.0x Net Debt to Adjusted Funds Flow Ratio at guidance pricing.
Spartan's Duvernay field production estimates averaged 13,872 BOE/d (78% liquids) for December 2025, a 174% increase from December 2024. Spartan's most recent production results are:
- 04-20-041-03W5 Pad Initial production results from 3.0 net wells have averaged IP30 rates of 1,179 BOE/d and 91% liquids per well (1,043 BBL/d of crude oil, 29 BBL/d of NGLs, and 0.6 MMcf/d of natural gas).
Spartan is focused on continuing cost reductions and increasing well productivity through decreased drilling and completion times, consistent frac placements, and optimizing proppant and water usage. These initiatives have reduced Spartan's drilling and completion costs by more than 17% and increased productivity by 25% since 2024. Spartan is targeting average DCET costs of less than $12.0 million per well in 2026.
To date, Spartan has established one of the largest Duvernay positions, totaling 457,000 net acres (714 sections), an 83% increase from 2024, supporting more than 800 drilling locations. In 2025, Spartan acquired more than 204,000 net acres (319 sections) for approximately $40 million and intends to continue acquiring additional Duvernay acreage in 2026.
DEEP BASIN
In 2026, Spartan is allocating approximately $90 million of capital at midpoint guidance, inclusive of DCET, infrastructure, and other. Spartan anticipates bringing 14 net wells on-stream to maintain flat production. The Company intends to focus on development in the Belly River, Cardium, Viking, Spirit River, Wilrich, Lower Manville, and Rock Creek formations, and is prepared to expand the capital budget in response to higher natural gas prices.
Based on the success of Spartan's 2025 Deep Basin program, the Company has strategically accumulated additional acreage and has identified multiple, liquids weighted high-value targets. To date, Spartan has 243,000 net acres (380 sections) in the Deep Basin, an 87% increase since 2024. Spartan intends to commence drilling on its newly acquired Deep Basin acreage in the first half of 2026.
2026 GUIDANCE
ANNUAL GUIDANCE (1) | 2025 | 2026 | Variance | |
Guidance | Guidance | Amount | % | |
Average Production (BOE/d) | 39,000 – 41,000 | 50,000 – 52,000 | 11,000 | 28 |
% Liquids | 38 % | 44 % | 6 | 16 |
Natural gas (mmcf/d) | 148 | 170 | 22 | 15 |
NGLs (bbls/d) | 9,700 | 12,000 | 2,300 | 24 |
Crude oil and condensate (bbls/d) | 5,600 | 10,600 | 5,000 | 89 |
Benchmark Average Commodity Prices | ||||
WTI crude oil price (US$/bbl) | 72.00 | 60.00 | (12.00) | (17) |
AECO 7A natural gas price ($/GJ) | 2.20 | 3.00 | 0.80 | 36 |
Average exchange rate (US$/CA$) | 1.43 | 1.37 | (0.06) | (4) |
Operating Netback, before hedging ($/BOE) (2) | 18.39 | 20.65 | 2.26 | 12 |
Adjusted Funds Flow ($MM) (2) | 223 | 331 | 108 | 48 |
Adjusted Funds Flow per share ($/sh) (2) | 1.12 | 1.65 | 0.53 | 47 |
Capital Expenditures, before A&D ($MM) (2) | 300 – 325 | 410 – 470 | 128 | 41 |
Net Debt, end of year ($MM) (2) | 148 | 319 | 171 | 116 |
Common shares outstanding, end of year (MM) | 199 | 201 | 2 | 1 |
(1) | The financial performance measures included in the Company's guidance is based on the midpoint of the average production forecast. |
(2) | "Operating Netback, before hedging", "Adjusted Funds Flow", "Capital Expenditures, before A&D", and "Net Debt" do not have standardized meanings under IFRS Accounting Standards, see "Readers Advisories – Non-GAAP Measures and Ratios". |
MANAGEMENT RETIREMENT
Spartan announces the retirement of Randy Berg, Vice President, Land and Stakeholder Relations, effective February 28, 2026. Mr. Berg has been an integral part of Spartan's success and growth since inception and has contributed to the Spartan franchise for more than a decade. The Board and management extend their sincere appreciation for his leadership and dedication and wish him all the best in his retirement.
ABOUT SPARTAN DELTA CORP.
Spartan is committed to creating value for its shareholders, focused on sustainability in both operations and financial performance. The Company's culture is centered on generating Free Funds Flow through responsible oil and gas exploration and development. The Company has established a portfolio of high-quality production and development opportunities in the Deep Basin and the Duvernay. Spartan will continue to focus on the execution of the Company's organic drilling program across its portfolio, delivering operational synergies in a respectful and responsible manner in relation to the environment and communities it operates in. The Company is well positioned to continue pursuing optimization in the Deep Basin, participate in the consolidation of the Deep Basin fairway, and continue growing and developing its Duvernay asset.
Spartan's corporate presentation, as of January 5, 2026, can be accessed on the Company's website at www.spartandeltacorp.com.
READER ADVISORIES
Non-GAAP Measures and Ratios
This press release contains certain financial measures and ratios which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS Accounting Standards") or Generally Accepted Accounting Principles ("GAAP"). As these non-GAAP financial measures and ratios are commonly used in the oil and gas industry, Spartan believes that their inclusion is useful to investors. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used.
The non-GAAP financial measures and ratios used in this press release, represented by the capitalized and defined terms outlined below, are used by Spartan as key measures of financial performance, and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS Accounting Standards.
The definitions below should be read in conjunction with the "Non-GAAP Measures and Ratios" section of the Company's MD&A dated November 4, 2025, which includes discussion of the purpose and composition of the specified financial measures and detailed reconciliations to the most directly comparable GAAP financial measures.
Operating Income and Operating NetbackOperating Income, a non-GAAP financial measure, is a useful supplemental measure that provides an indication of the Company's ability to generate cash from field operations, prior to administrative overhead, financing, and other business expenses. "Operating Income, before hedging" is calculated by Spartan as oil and gas sales, net of royalties, plus processing and other revenue and net commodities purchased margin, less operating and transportation expenses. "Operating Income, after hedging" is calculated by adjusting Operating Income for realized gains or losses on derivative financial instruments. The Company refers to Operating Income expressed per unit of production as an "Operating Netback" and reports the Operating Netback before and after hedging, both of which are non-GAAP financial ratios. Spartan considers Operating Netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.
Adjusted Funds Flow and Free Funds FlowCash provided by operating activities is the most directly comparable measure to Adjusted Funds Flow. "Adjusted Funds Flow" is a non-GAAP financial measure reconciled to cash provided by operating activities by excluding changes in non-cash working capital, adding back transaction costs on acquisitions and dispositions, and deducting the principal portion of lease payments. Spartan utilizes Adjusted Funds Flow as a key performance measure in the Company's annual financial forecasts and public guidance. Transaction costs, which primarily include legal and financial advisory fees, regulatory and other expenses directly attributable to the execution of acquisitions and dispositions, are added back because the Company's definition of Free Funds Flow excludes capital expenditures related to acquisitions and dispositions. For greater clarity, incremental overhead expenses related to restructuring following significant acquisition or divestitures are included in Spartan's general and administrative expenses. Lease liabilities are not included in Spartan's definition of Net Debt therefore lease payments are deducted in the period incurred to determine Adjusted Funds Flow.
"Free Funds Flow" is a non-GAAP financial measure calculated by Spartan as Adjusted Funds Flow less Capital Expenditures before A&D. Spartan believes Free Funds Flow provides an indication of the amount of funds the Company has available for future capital allocation decisions such as to repay long-term debt, reinvest in the business or return capital to shareholders.
Adjusted Funds Flow per shareAdjusted Funds Flow ("AFF") per share is a non-GAAP financial ratio used by the Company as a key performance indicator. AFF per share is calculated using the same methodology as net income per share ("EPS"), however the diluted weighted average common shares ("WA Shares") outstanding for AFF may differ from the diluted weighted average determined in accordance with IFRS Accounting Standards for purposes of calculating EPS due to non-cash items that impact net income only. The impact of stock options and share awards is more dilutive to AFF than EPS because the number of shares deemed to be repurchased under the treasury stock method is not adjusted for unrecognized share-based compensation expense as it is non-cash (see also, "Share Capital").
Capital Expenditures before A&D"Capital Expenditures before A&D" is a non-GAAP financial measure used by Spartan to measure its capital investment level compared to the Company's annual budgeted capital expenditures for its organic drilling program. It includes capital expenditures on exploration and evaluation assets and property, plant and equipment, before acquisitions and dispositions. The most directly comparable GAAP measure to Capital Expenditures before A&D is cash used in investing activities.
Adjusted Net Capital A&D"Adjusted Net Capital A&D" is a supplemental measure disclosed by Spartan which aggregates the total amount of cash, debt, and share consideration used to acquire crude oil and natural gas assets during the period, net of cash proceeds received on dispositions. The Company believes this is useful information because it is more representative of the total transaction value than the cash acquisition costs or total cash used in investing activities, determined in accordance with IFRS Accounting Standards. The most directly comparable GAAP measures are acquisition costs and disposition proceeds included as components of cash used in investing activities.
Net Debt and Adjusted Working CapitalReferences to "Net Debt" includes long-term debt under Spartan's revolving credit facility, net of Adjusted Working Capital. Net Debt and Adjusted Working Capital are both non-GAAP financial measures. "Adjusted Working Capital" is calculated as current assets less current liabilities, excluding derivative financial instrument assets and liabilities, lease liabilities, and current debt (if applicable). The Adjusted Working Capital deficit includes cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and deposits, accounts payable and accrued liabilities, dividends payable, and the current portion of decommissioning obligations.
Spartan uses Net Debt as a key performance measure to manage the Company's targeted debt levels. The Company believes its presentation of Adjusted Working Capital and Net Debt are useful as supplemental measures because lease liabilities and derivative financial instrument assets and liabilities relate to contractual obligations for future production periods. Lease payments and cash receipts or settlements on derivative financial instruments are included in Spartan's reported Adjusted Funds Flow in the production month to which the obligation relates.
Net Debt to Adjusted Funds Flow RatioThe Company monitors its capital structure using a "Net Debt to Adjusted Funds Flow Ratio", which is a non-GAAP financial ratio calculated as the ratio of the Company's Net Debt to its "Annualized Adjusted Funds Flow". Annualized Adjusted Funds Flow is calculated by multiplying Adjusted Funds Flow for the most recently completed quarter, normalized for significant non-recurring items, by a factor of four.
OTHER MEASUREMENTS
All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.
This press release contains various references to the abbreviation "BOE" which means barrels of oil equivalent. Where amounts are expressed on a BOE basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet (mcf) per barrel (bbl). The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and is significantly different than the value ratio based on the current price of crude oil and natural gas. This conversion factor is an industry accepted norm and is not based on either energy content or current prices.
References to "oil" and "crude oil" in this press release include light crude oil and medium crude oil, combined. National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (NI 51-101) includes condensate within the product type of "natural gas liquids". References to "natural gas liquids" or "NGLs" include pentane, butane, propane, and ethane. References to "gas" or "natural gas" relates to conventional natural gas.
References to "liquids" includes crude oil, condensate and NGLs.
The Company has disclosed condensate as combined with crude oil and/or separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results.
ASSUMPTIONS FOR 2026 GUIDANCE
The significant assumptions used in the forecast of Operating Netbacks and Adjusted Funds Flow for 2026 are summarized below. These key performance measures expressed per BOE are based on the calendar year average production guidance for 2026 of approximately 51,000 BOE/d.
2026 financial Guidance ($/BOE) | Guidance | ||
Oil and gas sales | 32.14 | ||
Processing and other revenue | 0.30 | ||
Royalties | (3.38) | ||
Operating expenses | (6.60) | ||
Transportation expenses | (1.81) | ||
Operating Netback, before hedging | 20.65 | ||
Settlements on Commodity Derivative Contracts | (0.10) | ||
Operating Netback, after hedging | 20.55 | ||
General and administrative expenses | (1.05) | ||
Cash financing expenses | (0.96) | ||
Settlements of decommissioning obligations | (0.12) | ||
Lease payments | (0.57) | ||
Adjusted Funds Flow | 17.85 |
Changes in forecast commodity prices, exchange rates, differences in the amount and timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in Spartan's guidance. The Company's actual results may differ materially from these estimates. Holding all other assumptions constant, a US$5.00/bbl increase (decrease) in the forecasted average WTI crude oil price for 2026 would increase Adjusted Funds Flow by approximately $22 million (decrease by $22 million). An increase (decrease) of CA$0.25/GJ in the forecasted average AECO natural gas price for 2026, holding the NYMEX-AECO basis differential and all other assumptions constant, would increase Adjusted Funds Flow by approximately $9 million (decrease by $9 million). Holding U.S. dollar benchmark commodity prices and all other assumptions constant, an increase (decrease) of $0.05 in the US$/CA$ exchange rate would increase Adjusted Funds Flow by approximately $11 million (decrease by $11 million). Assuming capital expenditures are unchanged, the impact on Free Funds Flow would be equivalent to the increase or decrease in Adjusted Funds Flow. An increase (decrease) in Free Funds Flow will result in an equivalent decrease (increase) in the forecasted Net Debt (Surplus).
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Certain statements contained within this press release constitute forward-looking statements within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "outlook", "anticipate", "budget", "plan", "endeavor", "continue", "estimate", "evaluate", "expect", "forecast", "monitor", "may", "will", "can", "able", "potential", "target", "intend", "consider", "focus", "identify", "use", "utilize", "manage", "maintain", "remain", "result", "cultivate", "could", "should", "believe" and similar expressions (or grammatical variations or negatives thereof). Spartan believes that the expectations reflected in such forward-looking statements are reasonable as of the date hereof, but no assurance can be given that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Without limitation, this press release contains forward-looking statements pertaining to: the business plan, objectives, strategy of Spartan, the Company's capital program, budget and guidance for 2026 and components thereof, including flexibility to expand the capital budget in response to higher natural gas prices, continued optimization of its Deep Basin asset, participation in the consolidation of the Deep Basin fairway and advancing and accelerating its Duvernay strategy, and expectations concerning the productivity, consistency, and scalability of this acreage; the Company's drilling strategy in the Deep Basin; expected drilling and completions in the Duvernay; further reductions to drilling and completion costs as Spartan continues to build scale; Spartan's strategies to deliver strong, repeatable and economic operational performance; being well-capitalized to continue executing on its growth strategy in the Duvernay; the ability of the Company to achieve drilling success consistent with management's expectations; being well positioned to take advantage of opportunities in the current business environment; risk management activities, including hedging; continuing to pursue immediate production optimization and responsible future growth with organic drilling; and continuing to execute on building an extensive position in the Duvernay.
The forward-looking statements and information are based on certain key expectations and assumptions made by Spartan, including, but not limited to, expectations and assumptions concerning the business plan of Spartan, the timing of and success of future drilling, development and completion activities, the growth opportunities of Spartan's Duvernay acreage, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of Spartan's properties, the successful application of drilling, completion and seismic technology, the Company's ability to secure sufficient amounts of water, prevailing weather conditions, prevailing legislation affecting the oil and gas industry, prevailing commodity prices, price volatility, future commodity prices, price differentials and the actual prices received for the Company's products (including pursuant to hedging arrangements), anticipated fluctuations in foreign exchange and interest rates, impact of inflation on costs, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners, general economic conditions, and the ability to source and complete acquisitions.
Although Spartan believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Spartan can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, fluctuations and volatility in commodity prices; changes in industry regulations and legislation (including, but not limited to, tax laws, royalties, and environmental regulations); the risk that the U.S. administration (i) maintains tariffs on Canadian goods, including crude oil and natural gas, (ii) increases the rate or scope of previously announced tariffs, or (iii) imposes new tariffs on the import of goods from Canada; the risk that the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including crude oil and natural gas, and that such tariffs or other measures (and/or the Canadian government's response to such tariffs or other measures) adversely affect the Canadian, U.S., and global economies, and by extension the Canadian oil and natural gas industry and the Company; demand and/or market price for the Company's products and/or otherwise adversely affects the Company; changes in the political landscape both domestically and abroad, wars (including ongoing military actions in the Middle East and between Russia and Ukraine), hostilities, civil insurrections, foreign exchange or interest rates, increased operating and capital costs due to inflationary pressures (actual and anticipated), risks associated with the oil and gas industry in general, stock market and financial system volatility, impacts of pandemics, the retention of key management and employees, risks with respect to unplanned third-party pipeline outages and risks relating to inclement and severe weather events and natural disasters, including fire, drought, and flooding, including in respect of safety, asset integrity and shutting-in production.
Please refer to Spartan's MD&A for the period ended September 30, 2025, and annual information form for the year ended December 31, 2024, for discussion of additional risk factors relating to the Company, which can be accessed either on Spartan's website at www.spartandeltacorp.com or under Spartan's SEDAR+ profile on www.sedarplus.ca. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Spartan undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Spartan's 2026 capital program of $410 to $470 million, budget and guidance, including prospective results of operations and production (including delivering annualized production 50,000 to 52,000 BOE/d (44% liquids)), Operating Netback, before hedging, Adjusted Funds Flow, Adjusted Funds Flow per share, Capital Expenditures, before A&D, Net Debt, operating costs, organic growth, capital efficiency improvements and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Spartan's future business operations. Spartan and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Spartan disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Changes in forecast commodity prices, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in Spartan's 2026 guidance. The Company's actual results may differ materially from these estimates.
References in this press release to peak rates, peak sales production, initial production rates, IP30s, and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production of Spartan. The Company cautions that such results should be considered preliminary. Peak rates are the highest average daily sales production rate for each well excluding clean-up and downtime.
ABBREVIATIONS
A&D | acquisitions and dispositions |
bbl | barrel |
bbls/d | barrels per day |
BOE/d | barrels of oil equivalent per day |
CA$ or CAD | Canadian dollar |
GJ | gigajoule |
GJ/d | gigajoule per day |
IP | Initial production |
mcf | thousand cubic feet |
mcf/d | thousand cubic feet per day |
Mbbls | thousand barrels |
MBOE | thousand barrels of oil equivalent |
MMbtu | million British thermal units |
MMcf | million cubic feet |
MM | millions |
$MM | millions of dollars |
US$ or USD | United States dollar |
WA | Weighted average |
SOURCE Spartan Delta Corp.