Spartan Delta Corp. announces $1.7 billion Montney asset sale, distribution of proceeds to shareholders, creation of a new growth-oriented pure-play Montney oriented company and transition of Spartan Delta to a deep basin focused corporation

Spartan will transfer 4,000 BOE/d¹ of production in the Pouce Coupe and Simonette areas of north-west Alberta, 500 BOE/d² of legacy north-east British Columbia production and 55,769 net undeveloped acres in the Flatrock area of north-east British Columbia (the “Logan Assets“) to “Logan Energy Corp.” (“Logan“), a newly-formed subsidiary of Spartan, which will be led by Richard (Rick) McHardy, as President and Chief Executive Officer, Brendan Paton, as Chief Operating Officer, and certain other members of Spartan’s existing executive team (the “Spin-Out“). The Board of Directors of Logan will include certain members of Spartan’s existing Board of Directors (the “Spartan Board“). It is anticipated that one or more additional independent board members will be announced in conjunction with the closing.

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 Spartan Shareholders. The Company will continue to be led by Fotis Kalantzis, as President and Chief Executive Officer, and certain members of the executive team of Spartan. The composition of the Spartan Board will remain unchanged. Spartan intends to return a portion of its Free Funds Flow to Spartan Shareholders through periodic special dividends, while maintaining a strong financial position targeting a leverage ratio of approximately 0.5x debt to cash flow.

“I am pleased to announce the successful conclusion of our strategic repositioning process with our core Montney development asset sale, the creation of a new growth-focused Montney junior company and the retention of our sustainable Free Funds Flow and dividend generating assets in the Deep Basin. We believe this outcome demonstrates the tremendous success and value creation this team has created since our initial recapitalization transaction in December 2019 and the total issuance of $537 million of equity at an average cost of $3.16 per share. I would like to thank our shareholders, our talented employees, our Board, our stakeholders, and other supporters who helped cultivate this successful outcome,” commented Fotis Kalantzis, President & CEO of Spartan.

Spartan will distribute the proceeds of the Asset Sale, the Logan Shares and the Transaction Warrants (each as defined below) as a return of capital and special dividend to its eligible shareholders (“Spartan Shareholders“).

Spartan Shareholders will receive:

• $9.50 (the “Sale Dividend“) per common share of Spartan (each, a “Spartan Share“)^(a);
• 1.0 common share of Logan (each, a “Logan Share“) per Spartan Share. The Company has applied to list the Logan Shares on the facilities of the TSX Venture Exchange (the “TSXV“); and
• 1.0 Logan Share purchase warrant (each, a “Transaction Warrant“) per Spartan Share. Each Transaction Warrant is non-transferrable and will entitle the holder to acquire one Logan Share at an exercise price equal to Logan’s defined net asset value of $0.35 per Logan Share at any time on or before the close of business on July 17, 2023 (the “Distribution” and, collectively with the Asset Sale and the Spin-Out, the “Transaction“).

_{a) Refer to “Share Capital” section of this press release.}

In addition, Spartan intends to pay an additional special dividend of $0.10 per Spartan Share to shareholders of record on June 30, 2023, payable on July 17, 2023.

Eligible Spartan Shareholders will receive the Sale Dividend, the Logan Shares and the Transaction Warrants partly as a return of capital and special dividend. See “Meeting and Distribution Details” for guidance and instructions with respect to eligibility to receive the Distribution. Further details regarding the Distribution will be included in an information circular (the “Circular“) to be filed on SEDAR in connection with an upcoming annual general and special meeting of Spartan Shareholders to be held on May 16, 2023 (the “Meeting“).

Spartan’s successful capital allocation has resulted in significant growth in oil and gas production, reserves and cash flow since the recapitalization in 2019. The Spartan Board and management continuously review options available to the Company to ensure that shareholder value is being maximized. On November 30, 2022, the Spartan Board commenced a formal process to evaluate strategic repositioning alternatives in an effort to enhance shareholder value. The Transaction is a culmination of that process and over three years of exploration, development and acquisitions, pursuant to which the Company achieved growth from approximately 250³ BOE/d to current production of approximately 80,000⁴ BOE/d.

The Spartan Board and management team view the Transaction as advantageous for Spartan Shareholders. Given Spartan’s tremendous success in growing its assets, the management team is confident that it will be able to deliver continued value to the Spartan Shareholders through appreciation in their equity interest in Spartan and Logan.

• Cash Distribution. Spartan will realize an immediate and substantial Sale Dividend of $9.50 per share.
• Spartan Ownership. Spartan Shareholders will participate in the continued development of the Company’s Deep Basin assets, opportunistic strategic acquisitions, and the declaration of periodic special dividends from Spartan’s Free Funds Flow.
• Logan Ownership. Through ownership of the Logan Shares and the Transaction Warrants (if exercised), significant value is accelerated for shareholders through the growth and future potential of the opportunity rich Logan Assets.

National Bank Financial Inc. (“NBF“) has acted as exclusive financial advisor to Spartan in connection with the Asset Sale. NBF and Scotia Capital Inc. (“Scotia“) have acted as co-financial advisors to Spartan in conjunction with the creation of Logan.

NBF has provided the Spartan Board a fairness opinion that, as at the date of the Agreement, the consideration to be received by Spartan pursuant to the Asset Sale is fair, from a financial point of view to Spartan. Separately, NBF has provided the Spartan Board a fairness opinion that, as at the date of the Agreement, the Logan Shares and Transaction Warrants to be received by Spartan Shareholders pursuant to the Distribution is fair, from a financial point of view to the Spartan Shareholders, other than the Insider Shareholders (as defined below).

Based on the fairness opinions received from NBF and discussions with its financial and legal advisors, among other considerations, the Spartan Board has unanimously determined that the Transaction and the entering into of the Agreement are in the best interests of Spartan Shareholders.

Spartan entered into the Agreement with Crescent Point in respect of the sale of the Assets for cash consideration of approximately $1.7 billion prior to adjustments. The effective date of the Asset Sale is May 1, 2023, and closing is expected to occur on May 10, 2023, subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.

Spartan believes the Asset Sale is a compelling acceleration of value to the Spartan Shareholder for the more mature portion of its Montney assets. The Assets to be sold to Crescent Point include:

• 377 (362 net) sections of Montney land in Gold Creek East, Gold Creek West and Karr;
• Estimated sales volumes of approximately 33,198 BOE/d⁵ (56% liquids) for the two month period ended February 28, 2023;
• Reserves as at December 31, 2022 based on the evaluation by Spartans independent reserves evaluator, McDaniel & Associates Consultants Ltd. (“McDaniel“) with year-end pricing (2023 pricing of US$ 80.33/bbl WTI and CA$ 4.01/GJ AECO) (see Reserves Disclosure);
• • Total proved reserves of 151 MMboe⁶ with a BTax NPV10 of $1.6 billion; and
  • Total proved plus probable reserves of 294 MMboe⁷ with a BTax NPV10 of $2.9 billion; and

• The Assets also include facilities and gathering systems related to the oil and gas properties being sold.

Pursuant to the Agreement, Crescent Point will provide Spartan with a $68.0 million non-refundable deposit, except for certain instances as specified in the Agreement. The Agreement contains customary representations and warranties of each party and interim operational covenants by Spartan.

A copy of the Agreement will be filed on Spartan’s SEDAR profile and will be available for viewing at www.sedar.com.

The management team has been fundamental to Spartan’s growth since inception by leading Spartan’s efforts in the exploitation and acquisition of its high quality oil and gas assets and will be a key component of Logan’s future success. The Transaction allows the Logan management team to immediately apply its expertise at creating value in a growth-oriented, pure-play Montney company. Logan will be well-capitalized with $104.1 million in cash (assuming the Logan Financing (as defined below) is fully-subscribed and the Transaction Warrants are fully exercised), no debt, significant management ownership and a premium focused portfolio of assets.

The primary assets to be transferred to Logan consist of 193,000 net acres of high working interest 95% Montney Crown land across three properties (Simonette, Pouce Coupe and Flatrock). Logan will have approximately 4,500 BOE/d⁸ of long life, balanced oil and gas production and 15.5⁹ MMboe of TPP reserves as evaluated by McDaniel prepared on March 14, 2023, effective March 1, 2023 (the “McDaniel Logan Report“). The evaluation of Logan’s properties was prepared in accordance with the definitions, standards and procedures contained in the most recent publication of the Canadian Oil and Gas Evaluation Handbook (“COGEH“) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101“).

Contemporaneous with the completion of the Distribution, Logan will complete a non-brokered private placement of securities of Logan at an issuance price equal to the net asset value per Logan Share of the Logan Assets to raise up to $43.5 million (the “Logan Financing“). Pursuant to the Logan Financing, Logan will offer up to a maximum of approximately 60.0 million Logan Shares and 64.3 million units (the “Units“) of Logan at a price of $0.35 per Logan Shares or Unit, as applicable. Units will be issued to subscribers that are members of the board and management team of Logan, together with certain additional subscribers identified by such persons (the “Insider Shareholders“). Logan Shares will be issued to all other subscribers.

Each Unit issued pursuant to the Logan Financing will be comprised of one Logan Share and one Logan Share purchase warrant (each, a “Financing Warrant“). Each Financing Warrant will entitle the holder to purchase one Common Share at a price of $0.35 (the “Exercise Price“) for a period of five years. The Warrants will vest and become exercisable as to one-third upon the 10-day weighted average trading price of the Common Shares (the “Market Price“) equaling or exceeding $0.70, an additional one-third upon the Market Price equaling or exceeding $0.7875 and a final one-third upon the Market Price equaling or exceeding $0.875. Completion of the Logan Financing is subject to certain approvals, including TSXV approval and disinterested approval of Spartan Shareholders.

The Logan net asset value has been determined to be $0.35 per Logan Share, calculated as follows:

Notes

The Transaction Warrants and the Logan Shares issuable upon exercise thereof have not been registered under the U.S. Securities Act or the securities law of any state of the United States, and the Transaction Warrants may not be exercised within the United States or by or on behalf of any person in the United States unless the Logan Shares issuable upon the exercise of the Transaction Warrants are registered under the U.S. Securities Act and the securities laws of all applicable states of the United States or an exemption from such registration requirements is available.

Further details regarding Logan and the Logan Financing will be included in the Circular. The price and corresponding defined net asset value are subject to final approval of the TSXV, of which there is no assurance.

The Transaction is a transformational event for Spartan and is consistent with Spartan’s track record of early stage resource capture and delineation followed by strategic and creative value realization.

Post-closing, Spartan will continue to be led by Fotis Kalantzis, as President and Chief Executive Officer, and will include certain members of the current executive team of Spartan. The composition of the Spartan Board will remain unchanged.

Following the Transaction, Spartan will have approximately 40,000¹⁰ BOE/d of liquids rich production (29% Liquids). The Company will retain a dominant infrastructure footprint in central Alberta, including operatorship of the O’Chiese Nees-Ohpawganu’ck deep cut gas plant and will have approximately 65% of its 2023 gas production hedged at an average of C$4.45/GJ.

The Company plans to begin paying a periodic special dividend based on Free Funds Flow, while also maintaining a solid financial position with a target leverage ratio of approximately 0.5x debt to cash flow.

At the Meeting on May 16, 2023, Spartan Shareholders will be asked to consider, among other things, a special resolution authorizing the Company to reduce the stated capital account maintained in respect of the Spartan Shares by $579.9 million, which is the current aggregate stated capital of the Spartan Shares.

Pursuant to the Distribution, the Company will distribute $519.3 million in cash and $60.6 million in Logan Shares and the Transaction Warrants as a return of capital to eligible Spartan Shareholders.

The balance of the Distribution will be distributed to eligible Spartan Shareholders as a 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.

PLEASE NOTE THAT THE CASH TO BE PAID AS PART OF THE RETURN OF CAPITAL AND SPECIAL DIVIDEND AND THE LOGAN SHARES AND TRANSACTION WARRANTS TO BE DISTRIBUTED PURSUANT TO THE DISTRIBUTION WILL NOT BE AUTOMATICALLY PAID AND ISSUED TO SHAREHOLDERS. 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, ITS ULTIMATE BENEFICIAL OWNER(S) OR ANY PERSON(S) THAT DIRECTLY OR INDIRECTLY CONTROLS THE SHAREHOLDER THROUGH THE OWNERSHIP OF EQUITY INTERESTS ARE IGOR MAKAROV, ARETI ENERGY S.A. (SWITZERLAND), ARETI ENERGY SPV, LLC (US) OR ARETI ENERGY LIMITED.

You are a registered shareholder if you own Spartan Shares in your own name and either have a share certificate or direct registration statement that shows your ownership. Registered shareholders need to follow the procedure outlined below, otherwise you will not receive the Distribution.

A letter of transmittal and confirmation of eligibility form (the “Registered Eligibility Form“) will be provided to registered Spartan Shareholders on May 16, 2023, which must be completed, signed and returned to Kingsdale Advisors (the “Information Agent“) on or prior to 5:00 p.m. (Mountain time) on Tuesday, June 13, 2023 (the “Eligibility Deadline“). 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. The cash portion of the Distribution will be paid by cheque and the Logan Shares and Transaction Warrants will be issued only to registered shareholders that have submitted a Registered Eligibility Form. 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.

If you have any questions or need assistance in completing the Registered Eligibility Form, please contact the Information Agent, Kingsdale Advisors, toll free at 1-888-327-0819 or by email at corpaction@kingsdaleadvisors.com.

You are a beneficial shareholder if you own Spartan Shares through a financial intermediary such as a bank, broker or trust company (a “Financial Intermediary“). Beneficial shareholders will not be required to take action individually in order to receive the Distribution. Your Financial Intermediary will be required to confirm eligibility to receive the Distribution 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 letter of transmittal and confirmation of eligibility form (the “Beneficial Eligibility Form“) for each of their CDS Participant positions and return it to the Information Agent as outlined on the Beneficial Eligibility Form on or prior to the Eligibility Deadline. Financial Intermediaries will receive an electronic copy of the Beneficial Eligibility Form from the Information Agent on May 16, 2023. Any Financial Intermediary that does not receive the Beneficial Eligibility Form should immediately contact the Information Agent 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.

In addition to completing the Beneficial Eligibility Form, Financial Intermediaries are required to complete a signature and medallion guarantee section and return the Beneficial Eligibility Form, all as further explained in the form, on or prior to the Eligibility Deadline.

Financial Intermediaries will receive the Distribution entitlement for eligible shareholders by wire payment and CDS deposit, unless they direct the Information Agent to issue a cheque and DRS advice in accordance with the Beneficial Eligibility Form.

Financial Intermediaries that have questions about completing the Beneficial Eligibility Form should contact the Information Agent, Kingsdale Advisors, toll free at 1-888-327-0819 or by email at corpaction@kingsdaleadvisors.com.

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 Transaction, 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.

Spartan’s corporate presentation as of March 28, 2023 can be accessed on the Company’s website at www.spartandeltacorp.com.

NBF acted as exclusive financial advisor to Spartan in connection with the Asset Sale.

NBF and Scotia acted as co-financial advisors in connection with the creation of Logan.

Stikeman Elliott LLP is acting as legal counsel to Spartan in connection with the Transaction and will act as legal counsel to Spartan and Logan upon completion of the Transaction.

Norton Rose Fulbright Canada LLP is acting as legal counsel to Crescent Point in connection with the Asset Sale.

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.

O&G READER ADVISORIES

Notes:

The reserves information and data provided in this press release presents only a portion of the disclosure required under NI 51-101. Spartan’s Statement of Reserves Data and Other Oil and Gas Information on Form 51-101F1 dated effective as at December 31, 2022, which includes further disclosure of Spartan’s oil and gas reserves and other oil and gas information in accordance with NI 51-101 and COGEH forming the basis of this press release, will be included in the Company’s Annual Information Form for the year ended December 31, 2022, which will be available on or before March 31, 2023 on SEDAR at www.sedar.com.

All reserves values, future net revenue and ancillary information contained in this press release are derived from the McDaniel Report unless otherwise noted. All reserve references in this press release are “Company gross reserves”. Company gross reserves are the Company’s total working interest reserves before the deduction of any royalties payable by the Company. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Spartan’s reserves will be attained and variances could be material. All reserves assigned in the McDaniel Report are located in the Province of Alberta and presented on a consolidated basis.

All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented represent the fair market value of the reserves. The recovery and reserve estimates of Spartan’s oil, NGLs and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual oil, natural gas and NGL reserves may be greater than or less than the estimates provided herein. There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth herein are estimates only.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this press release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 – Revised Glossary to NI 51-101, Revised Glossary to NI 51-101, Standards of Disclosure for Oil and Gas Activities (“CSA Staff Notice 51-324“) and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.

The following table outlines forecasted future prices that McDaniel has used in their evaluation of the Logan Assets at March 1, 2023, which are reflective of Strip pricing as of March 1, 2023. The forecast price assumptions consider inflation with respect to future operating and capital costs.

The following table outlines forecasted future prices that McDaniel has used in their evaluation of the Montney Assets as at December 31, 2022, which are based on published average forecast pricing of McDaniel, GLJ Ltd. and Sproule Associates Limited. The forecast price assumptions consider inflation with respect to future operating and capital costs.

This press release contains certain financial measures and ratios which do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS“) 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 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.

The definitions below should be read in conjunction with the “Non-GAAP Measures and Ratios” section of the Company’s MD&A dated March 2, 2023, which includes discussion of the purpose and composition of the specified financial measures and detailed reconciliations to the most directly comparable GAAP financial measures.

Cash provided by operating activities is the most directly comparable measure to Adjusted Funds Flow. “Adjusted Funds Flow” is reconciled to cash provided by operating activities by excluding changes in non-cash working capital, adding back transaction costs on acquisitions, 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 execution of acquisitions, 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 ongoing integration and restructuring post-acquisition are not adjusted and are included in Spartan’s general and administrative expenses. Lease liabilities are not included in Spartan’s definition of Net Debt (non-GAAP measure) therefore lease payments are deducted in the period incurred to determine Adjusted Funds Flow.

“Free Funds Flow” is calculated by Spartan as Adjusted Funds Flow less Capital Expenditures before A&D, which is also a non-GAAP financial measure. 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.

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. Such abbreviation may be misleading, particularly if used in isolation.

References to “oil” in this press release include light crude oil, medium crude oil, heavy oil and tight oil combined. 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.

As of the date hereof, there are 171.4 million common shares outstanding. There are no preferred shares or special shares outstanding. The following securities are outstanding as of the date of this press release: 3.7 million restricted share awards; and 3.3 million stock options outstanding with an average exercise price of $4.56 per common share and average remaining term of 2.8 years.

For the purposes of calculating per share amounts throughout this press release, the Company has assumed that in advance of closing (i) all outstanding stock options will be exercised on a cashless basis resulting in the issuance of an estimated 1.7 million Spartan Shares and (ii) all outstanding restricted share awards will be settled by the Company in cash, resulting in an estimated 173.1 million Spartan Shares outstanding at the time of the Transaction. The actual number of shares to be issued in connection with the cashless exercise of stock options and resulting shares outstanding upon closing of the Transaction may differ from these estimates.