Spartan Delta Corp.

Section1: Commodity Update:

Canada has the third-largest proven oil reserve in the world, most of which is in the oil sands. Total Canadian proven oil reserves are estimated at 171.0 billion barrels, of which 166.3 billion barrels are found in Alberta's oil sands and an additional 4.7 billion barrels in conventional, offshore, and tight oil formations.  Canada accounts for 10% of the world’s proven oil reserves. Recently, WTI crude oil futures rose to around $72 per barrel. Meanwhile, traders are monitoring conflicting reports on whether OPEC+ will ease output cuts in April or extend them further. Elsewhere, President Trump stated that Chevron’s Venezuela crude exports are under review, highlighting ongoing US-Venezuela tensions.

Data Source: Government of Canada and Trading Economics 

Section 2: Company Overview and Fundamental Insights:

2.1 Company Overview:

Spartan Delta Corp. (TSX: SDE) is an oil and gas exploration and production company. It is engaged in the exploration, development, and production of petroleum and natural gas properties in Alberta. The company operates and focuses its activities on Peace River Arch and Central Alberta.

Kalkine’s Penny Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

2.2 The Key Positives, Negatives, Investment Highlights and Risks

2.3 Top 10 Shareholders:

The top 10 shareholders together form ~35.05% of the total shareholding. GMT Capital Corp. and Kalatzis (Fotis) hold a maximum stake in the company at ~­­­21.65% and ~4.03%, respectively.

2.4 Key Metrics:

The company reported a lower combined average production in Q3 2024. Furthermore, it lowered its cash from operations mainly due to lower financials and the drop in average realization prices.

Section 3: Business Updates and Financial Highlights

3.1 Recent Updates: The below picture gives an overview of the company’s recent activities, such as an announcement regarding the development of liquids-rich targets in deep basin.

3.2 Insights on Q3 2024 Financial Performance:

Section 4: Key Risks and Company Outlook

Section 5: Stock Recommendation Summary:

5.1 Price Performance and Technical Summary:

The stock has witnessed a downside of ~0.79% and ~4.85% over the last 1 week and 1 month respectively. Moreover, the stock is trading above the average of 52-week high price of CAD 4.36 and 52-week low price of CAD 2.90, providing an opportunity to ride the trend.

5.2 Fundamental Valuation

Valuation Methodology: EV to EBITDA Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 18, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.