/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR
DISSEMINATION IN THE UNITED
STATES./
CALGARY,
AB, May 10, 2023 /CNW/ - Spartan Delta
Corp. ("Spartan" or the "Company") (TSX: SDE) is
pleased to announce that it has completed the sale of its Gold
Creek and Karr Montney assets to
Crescent Point Energy Corp. for cash consideration of $1.7 billion (the "Asset Sale"). Spartan
also confirms that, on June 20, 2023,
the Company will transfer its Simonette, Pouce Coupe and Flatrock assets (the "Logan Assets") to
Logan Energy Corp. ("Logan"), a newly formed subsidiary of
Spartan, in exchange for common shares (the "Logan Shares")
and warrants (the "Logan Warrants") of Logan
(the "Spin-Out").
Spartan will distribute the cash proceeds from the Asset Sale
(the "Cash Proceeds"), and the Logan Shares and Logan
Warrants issued pursuant to the Spin-Out, to the eligible holders
(the "Shareholders") of the common shares of Spartan (the
"Spartan Shares" and collectively, the
"Distribution"). The Company has applied to list the Logan
Shares on the facilities of the TSX Venture Exchange (the
"TSXV").
Spartan will retain and continue to develop its prolific
liquids-rich, sustainable production Deep Basin assets, with a
focus on returning free funds flow to Shareholders.
Logan will be a growth-oriented, pure-play Montney company
accelerating value for its shareholders through the organic
development potential of its opportunity-rich Logan Assets.
Pursuant to the Distribution, eligible Shareholders will
receive:
- $9.50 in Cash Proceeds per
Spartan Share;
- 1.0 Logan Share per Spartan
Share; and
- 1.0 Logan Warrant per Spartan Share, each warrant entitling the
holder to acquire one Logan Share at
an exercise price of $0.35 per
Logan Share at any time on or before
July 31, 2023.
At the upcoming annual general and special meeting of
Shareholders to be held on May 16,
2023 (the "Meeting"), Shareholders will be asked to
consider a special resolution authorizing the Company to reduce the
stated capital account maintained in respect of the Spartan Shares
by $540.0 million. Pursuant to the
Distribution, the Company will distribute $479.4 million in Cash Proceeds and $60.6 million in Logan Shares and the Logan
Warrants as a return of capital to eligible Shareholders. The
balance of the Cash Proceeds will be distributed to eligible
Shareholders as a special dividend. For Canadian income tax
purposes, the special dividend will be designated as an "eligible
dividend" and the balance of the Distribution will be treated as a
return of capital by way of a reduction in the stated capital of
the Spartan Shares.
The Company also confirms that the board of directors has
declared an additional special cash dividend to eligible
Shareholders of $0.10 per Spartan
Share (the "Additional Dividend"). The Additional Dividend
will be payable on July 31, 2023, to
holders of Spartan Shares of record at the close of business on
July 14, 2023 under the new CUSIP
described below. The Additional Dividend is designated as an
"eligible dividend" for Canadian income tax purposes.
Action is required by Shareholders to receive the
Distribution. Below are details with respect to eligibility and
process to receive the Distribution.
Registered Shareholders will receive a letter of transmittal and
confirmation of eligibility form (the "Registered Eligibility
Form") in connection with the Distribution on or about
June 22, 2023. If you own Spartan
Shares through a financial intermediary such as a bank, broker or
trust company (a "Financial Intermediary"), your Financial
Intermediary will be responsible for the completion of the
Beneficial Eligibility Form. Financial Intermediaries will be
required to complete a letter of transmittal and confirmation of
eligibility form to be delivered to Financial Intermediaries for
each of their CDS Participant IDs (the "Beneficial Eligibility
Form") in connection with the Distribution.
In connection with the Distribution, Shareholders will be
required to exchange their Spartan Shares for new Spartan Shares,
which will be identical to the existing Spartan Shares except that
they will be evidenced by a new CUSIP. The new CUSIP will trade in
substitution of the old CUSIP in connection with the
Distribution.
Spartan expects that the Spartan Shares will commence trading on
the TSX under the new CUSIP at market open on Wednesday June 21, 2023, under the current ticker
symbol "SDE". The Spartan Shares will trade on the TSX under the
old CUSIP until market close on June 20,
2023.
The letter of transmittal and confirmation of eligibility
requirements and process in respect of the Distribution may impair
the active and liquid market in respect of the Spartan Shares
during the Distribution period commencing on June 21, 2023. The timeline for Shareholders to
receive the Distribution, and the ability of a Shareholder to seek
liquidity in respect of its Spartan Shares, may be significantly
impaired or delayed during this period. Shareholders should
consult with their own financial advisors with respect to the
tradability of the Spartan Shares during this period.
DISTRIBUTION PROCEDURE
THE CASH TO BE PAID AS PART OF THE RETURN OF CAPITAL AND
SPECIAL DIVIDEND AND THE LOGAN SHARES AND LOGAN WARRANTS TO BE
DISTRIBUTED PURSUANT TO THE DISTRIBUTION WILL NOT BE AUTOMATICALLY
PAID AND ISSUED TO SHAREHOLDERS. SHAREHOLDER ACTION IS
REQUIRED.
REGISTERED SHAREHOLDERS AND FINANCIAL INTERMEDIARIES,
ON BEHALF OF THEIR UNDERLYING CLIENTS, WILL BE REQUIRED TO CONFIRM
ELIGIBILITY TO RECEIVE THE DISTRIBUTION. IN ORDER TO BE ELIGIBLE,
REGISTERED SHAREHOLDERS AND FINANCIAL INTERMEDIARIES, ON BEHALF OF
THEIR UNDERLYING CLIENTS, WILL BE REQUIRED TO CONFIRM THAT NONE OF
THE SHAREHOLDER(S), THE ULTIMATE BENEFICIAL OWNER(S) OR ANY
PERSON(S) THAT DIRECTLY OR INDIRECTLY CONTROLS THE SHAREHOLDER(S)
THROUGH THE OWNERSHIP OF EQUITY INTERESTS ARE IGOR MAKAROV, ARETI
ENERGY S.A. (SWITZERLAND), ARETI
ENERGY SPV, LLC (US) OR ARETI ENERGY LIMITED.
Registered Shareholders will receive the Registered Eligibility
Form on or about June 22, 2023,
which, when properly completed, duly executed and returned
together with the certificates and/or Direct Registration
System (DRS) statements representing Spartan Shares and all other
required documents described in the Registered Eligibility Form,
will enable each registered Shareholder to obtain their
entitlements with respect to the Distribution and exchange their
Spartan Shares for new Spartan Shares, which will be identical to
the existing Spartan Shares except that they will be evidenced by a
new CUSIP and which will trade in substitution of the old
CUSIP.
Beneficial Shareholders will be subject to the process set out
below under "Financial Intermediary Procedure".
The Registered Eligibility Form and/or Beneficial Eligibility
Form, as applicable, will contain complete instructions on how to
tender Spartan Shares to receive the Distribution. The Distribution
will not affect the validity of currently outstanding share
certificates of Spartan. However, once requisite eligibility
documentation has been received by the Company, Spartan Shares will
be substituted with new Spartan Shares under the new CUSIP.
Spartan Shares for which a Registered Eligibility Form and/or
Beneficial Eligibility Form, as applicable, has not been submitted
to positively confirm eligibility will remain registered under the
Company's existing CUSIP.
As the Logan Warrants expire on July
31, 2023, it is important that: (a) Registered Shareholders
expedite the submission of their Registered Eligibility
requirements; and (b) Beneficial Shareholders should contact their
Financial Intermediary or broker to confirm if they have any
additional internal shareholder requirements.
Registered Shareholder
Procedure
You are a registered Shareholder if you own Spartan Shares in
your own name and either have a share certificate or DRS statement
that shows your ownership. Registered Shareholders need to follow
the procedure outlined below, otherwise you will not receive the
Distribution or be able to exchange for the Spartan Shares under
the new CUSIP.
The Registered Eligibility Form will be provided to registered
Shareholders on or about June 22,
2023. Registered Shareholders that are corporations,
partnerships or trusts, or where a person is acting in a power or
attorney or executor capacity, will also need to send evidence of
their capacity to confirm eligibility on behalf of the registered
Shareholder.
All entitlements will be issued only to Registered Shareholders
that have submitted a duly completed Registered Eligibility
Form:
- The Cash Proceeds will be paid by cheque or wire, as
applicable.
- The Logan Shares and Logan Warrants.
- Spartan Shares will be exchanged for new Spartan Shares with
the new CUSIP.
Registered Shareholders that wish to have their cheque and
securities sent to an address other than the registered address
will also be required to obtain a signature guarantee from a
Canadian Financial Institution.
Please submit your Registered Eligibility Form to Kingsdale
Advisors prior to June 29, 2023 (the
"Eligibility Deadline") to receive your Distribution
entitlement on or about July 6, 2023.
If your Registered Eligibility Form is not submitted by the
Eligibility Deadline, it will delay processing and receipt of the
Distribution and the Additional Dividend. If you have any questions
or need assistance in completing the Registered Eligibility Form,
please contact Kingsdale Advisors, toll free at 1-888-327-0819 or
by email at corpaction@kingsdaleadvisors.com.
Financial Intermediary
Procedure
You are a beneficial Shareholder if you own Spartan Shares
through a Financial Intermediary such as a bank, broker or trust
company. Beneficial shareholders will not be required to take
action individually in order to receive the Distribution or to
exchange existing Spartan Shares for new Spartan Shares with the
new CUSIP. Your Financial Intermediary will be required to confirm
eligibility to receive the Distribution and be able to exchange for
the Spartan Shares under the new CUSIP on your behalf. If you have
any questions regarding your eligibility status, you should contact
your Financial Intermediary.
Financial Intermediaries will be required to complete a
Beneficial Eligibility Form for each of their CDS Participant IDs
and return it to Kingsdale Advisors as outlined on the Beneficial
Eligibility Form. Financial Intermediaries will receive an
electronic copy of the Beneficial Eligibility Form from Kingsdale
Advisors after on or about June 22,
2023. Any Financial Intermediary that does not receive the
Beneficial Eligibility Form should immediately contact Kingsdale
Advisors for assistance. Financial Intermediaries are instructed to
note the eligibility definition included within the Beneficial
Eligibility Form and to confirm compliance with the definition on
its own behalf and on behalf of its underlying clients. Where a
Financial Intermediary's client is itself an Intermediary (an
"Intermediary Client") holding on behalf of beneficial
shareholders, the Financial Intermediary must seek confirmation of
eligibility from any such Intermediary Client, and for clarity
cannot attest on behalf of such Intermediary Client. The Beneficial
Eligibility Form requires separate confirmation of the aggregate
number of Spartan Shares held that are eligible to receive the
Distribution and the aggregate number of Spartan Shares that are
ineligible to receive the Distribution. Any client or Intermediary
Client position that has not been positively confirmed as either
eligible or ineligible must not be attested for under either
category and will be defaulted to a "No Attestation" status. Only
Spartan Shares under the eligible category will receive the
Distribution and have their Spartan Shares transferred to the new
CUSIP.
In addition to completing the Beneficial Eligibility Form,
Financial Intermediaries are required to complete a medallion
guarantee section and return the Beneficial Eligibility Form, as
will be further explained in the Beneficial Eligibility Form.
Financial Intermediaries will receive the Distribution
entitlement for eligible shareholders by CDS manual cash and ledger
adjustments.
Financial Intermediaries are encouraged to submit all Beneficial
Eligibility Forms prior to the Eligibility Deadline to receive the
Distribution entitlement on or about July 6,
2023. If Beneficial Eligibility Forms are submitted after
the Eligibility Deadline, it will delay processing and receipt of
the Distribution and the Dividend. Financial Intermediaries that
have questions about completing the Beneficial Eligibility Form
should contact Kingsdale Advisors, toll free at 1-888-327-0819 or
by email at corpaction@kingsdaleadvisors.com.
RETIREMENT OF MARK
HODGSON
The Company also announces the retirement of Mr. Mark Hodgson as Vice President, Corporate
Development and Information Technology effective today. The Company
thanks Mr. Hodgson for his many contributions since the
recapitalization of the Company in 2019 and wishes him the best in
all his future endeavors.
ABOUT SPARTAN DELTA
CORP.
Spartan is committed to creating value for its shareholders,
focused on sustainability both in operations and financial
performance. The Company's ESG-focused 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. Following completion of the Spin-Out and the
Distribution, Spartan will continue to focus on the execution of
the Company's organic drilling program in the Deep Basin,
delivering operational synergies in a respectful and responsible
manner to the environment and communities it operates in. The
Company is well positioned to continue pursuing immediate
production optimization, future growth with organic drilling,
opportunistic acquisitions and the delivery of free funds flow and
periodic special dividends to shareholders.
This press release is not an offer of the securities for sale
in the United States. The
securities offered have not been, and will not be, registered under
the U.S. Securities Act or any U.S. state securities laws and may
not be offered or sold in the United
States absent registration or an available exemption from
the registration requirement of the U.S. Securities Act and
applicable U.S. state securities laws. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of these securities, in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
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 "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. 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 anticipated benefits of the Spin-Out
and the Distribution to Spartan and its shareholders; the timing
and anticipated receipt of required shareholder approval in respect
of the reduction of stated capital and receipt of required stock
exchange approvals for the Spin-Out and the Distribution; the
anticipated timing of the holding of the Meeting and the completion
of the Spin-Out and the Distribution; and Spartan's and Logan's
growth strategy. All statements other than statements of historical
fact may be forward-looking statements. Future dividend payments,
if any, and the level thereof, are uncertain, as the Company's
return of capital framework and the funds available for such
activities from time to time is dependent upon, among other things,
free funds flow financial requirements for the Company's operations
and the execution of its growth strategy, fluctuations in working
capital and the timing and amount of capital expenditures, debt
service requirements and other factors beyond the Company's
control. Further, the ability of Spartan to pay dividends will be
subject to applicable laws (including the satisfaction of the
solvency test contained in applicable corporate legislation) and
contractual restrictions contained in the instruments governing its
indebtedness, including its credit facility.
The forward-looking statements and information are based on
certain key expectations and assumptions made in respect of Spartan
or Logan, as the case may be, including expectations and
assumptions concerning the completion of the Spin-Out and the
Distribution, the business plan of Spartan and Logan, the timing of
and success of future drilling, development and completion
activities, 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 integration of the recently acquired assets into
Spartan's operations, the successful application of drilling,
completion and seismic technology, prevailing weather conditions,
prevailing legislation affecting the oil and gas industry,
prevailing commodity prices, price volatility, price differentials
and the actual prices received for the Company's products, 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 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 in commodity prices, changes in
industry regulations and political landscape both domestically and
abroad, wars (including Russia's
military actions in Ukraine),
hostilities, civil insurrections, foreign exchange or interest
rates, increased operating and capital costs due to inflationary
pressures (actual and anticipated), volatility in the stock market
and financial system, impacts of the current COVID-19 pandemic and
the retention of key management and employees. Ongoing military
actions between Russia and
Ukraine have the potential to
threaten the supply of oil and gas from the region. The long-term
impacts of the actions between these nations remains uncertain. The
foregoing list is not exhaustive. Additional information on these
and other risks that could affect completion of the Spin-Out and
the Distribution are set forth in the information circular, which
is available on SEDAR at www.sedar.com.
Please refer to Spartan's MD&A for the year ended
December 31, 2022 and AIF for the
year ended December 31, 2022 for
discussion of additional risk factors relating to Spartan, which
can be accessed either on Spartan's website at
www.spartandeltacorp.com or under Spartan's SEDAR profile on
www.sedar.com. 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 and Logan's prospective results of
operations and production, generating free funds flow and organic
growth, the Distribution, the Special Dividend, expenditures and
guidance 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 guidance. The Company's
actual results may differ materially from these estimates.
SOURCE Spartan Delta Corp.