Spartan Delta : Press Release

500, 207 - 9th Avenue SW Calgary, Alberta T2P 1K3

CANADA

Tel : [phone] www.SpartanDeltaCorp.com

SPARTAN DELTA CORP. ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED

ACQUISITION AND FINANCING, THREE-YEAR PLAN, AND INAUGURAL ESG REPORT

Calgary, Alberta - August 31, 2021 - Spartan Delta Corp. ("Spartan" or the "Company") (TSXV:SDE) is pleased to announce the closing of its previously announced acquisition (the "Acquisition") of Velvet Energy Ltd. ("Velvet"), a privately held light-oilMontney producer with operations primarily in the Gold Creek, Karr and Pouce Coupe areas of northwest Alberta (the "Velvet Assets").

Total consideration for the Acquisition is approximately $751.5 million(20), comprised of $355.9 million of cash, the issuance of 2,986,787 common shares (the "Common Shares") of Spartan, and the assumption of Velvet's net debt estimated to be $382.6 million. The Acquisition was funded by a combination of cash on hand, net proceeds released to Spartan pursuant to its previously announced $150.0 million bought deal equity financing (the "Financing"), a new $150.0 million five-year term facility and advances under the Company's revolving credit facility with increased borrowing capacity of up to $450.0 million.

Post completion of the Financing and the Acquisition, Spartan has 147,169,390 Common Shares issued and outstanding, inclusive of the 29,703,000 Common Shares issued in connection with the Financing at a subscription price of $5.05 per Common Share and 2,986,787 Common Shares issued in connection with the Acquisition at a deemed issuance price of $5.30 per Common Share.

In accordance with their terms, each subscription receipt issued pursuant to the Financing was exchanged for one Common Share contemporaneous with the completion of the Acquisition, and the net proceeds of $144.3 million were released to Spartan from escrow. Holders of subscription receipts are not required to take any action in order to receive the underlying Common Shares.

ACQUISITION OF VELVET ENERGY LTD.

The Acquisition represents a major milestone in Spartan's Montney business strategy, positioning Spartan as the largest producer and acreage holder in the oil window of Canada's Montney fairway. Current production from the Velvet Assets is approximately 20,600 boe/d, consisting of 8,600 bbl/d of oil (42%), 3,000 bbl/d of NGLs (14%) and 54.0 MMcf/d of natural gas (44%).

The Acquisition includes proved plus probable reserves of 224.6 million boe(1)(2)(3). Significant growth opportunities have been identified on the 286,700 gross (281,700 net) acres of Montney lands, including 732 net identified Montney drilling locations(4). For further details on the Acquisition, see Spartan's press release dated July 28, 2021, and short form prospectus dated August 10, 2021.

GRADUATION TO THE TORONTO STOCK EXCHANGE

Spartan is pleased to announce that it has received final approval to list the Common Shares on the Toronto Stock Exchange (the "TSX"). Effective at market open on Wednesday, September 1, 2021, the Common Shares will commence trading on the TSX under the existing symbol "SDE" and will concurrently be delisted from the TSX Venture Exchange.

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STRATEGY UPDATE AND THREE-YEAR DEVELOPMENT PLAN

The fourth iteration of the Spartan franchise was launched less than two years ago with a clear and consistent message to investors. Through a targeted consolidation strategy, Spartan set out to create a strong intermediate energy company focused on: (i) Free Funds Flow growth; (ii) generating compelling returns for shareholders; and (iii) a forward-thinking approach to ESG.

Spartan embarked on a series of acquisitions, anchored by an initial acquisition of assets in the Deep Basin in June 2020, and culminating in the acquisition of Velvet which adds material scale to the Company's Montney oil operations in northwest Alberta.

The acquisition of Velvet completes the strategic platform that Spartan has been building and marks the beginning of the next phase of the Company's development. While Spartan will continue to take advantage of select acquisition opportunities as they may arise, the near-term focus will shift to the integration of Velvet as well as the execution of the Company's organic drilling program. The significant Free Funds Flow that the Company's assets generate will be principally directed to debt repayment through 2022.

The Company believes its focused asset base offers investors a unique combination of Free Funds Flow, scale, and repeatability in the Deep Basin and Montney. Spartan's two core areas provide a diversified mix of high-quality development with torque to both oil and gas prices (sensitivities to commodity prices can be found in "Future Oriented Financial Information").

To reflect the shift in the Company's strategy, Spartan has introduced a Three-Year Development Plan for 2022 through 2024 (the "Plan"). The Plan is estimated to grow production by an annualized rate of 11% to 84,000 boe per day(7) from the current 62,500 boe per day(16) and generate over $656.0 million of Free Funds Flow from the closing of the Velvet Acquisition to the end 2024. The Company intends to use Free Funds Flow to reduce its current Net Debt, estimated to be approximately $492.0 million(21), and is forecasting a Net Surplus of approximately $164.0 million by the end of 2024(10).

		2022			2023			2024
Three-Year Development Plan(19)
Average production (boe/d)(9)	70,000	78,000		84,000
% Oil and NGLs	41%	42%		44%
Organic production growth (%)(18)	12%	11%		8%
Operating Netback, before hedging ($/boe)(10)	21.68	20.81		21.47
Loss on commodity price derivative contracts ($MM)	(45)	(17)		-
Adjusted Funds Flow ($MM)(10)	434	506		607
Capital expenditures ($MM)(11)	300	300		300
Free Funds Flow ($MM)(10)	134	206		307
Free Funds Flow Yield (%)(8)(10)	18%	28%		42%
Net Debt (Surplus), end of year ($MM)(10)	349	143		(164)
Net Debt to Adjusted Funds Flow(10)		0.8x			0.3x		nm
Key Assumptions:
WTI oil price (US$/bbl)	60.00	60.00		60.00
AECO natural gas price (C$/GJ)	3.25	2.75		2.75
Average exchange rate (CAD/USD)	1.28	1.28		1.28

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DEEP BASIN TUCK-IN ACQUISTION

Spartan has entered into a definitive agreement to acquire the issued and outstanding securities of an arms-length private entity in connection with a court supervised restructuring process for cash consideration of $34.9 million, net of positive working capital (the "Ferrier Acquisition"). The Ferrier Acquisition is anticipated to be completed on or about September 2, 2021.

The assets to be acquired (the "Ferrier Assets") are adjacent to the Company's core properties in the Ferrier area of Alberta and include current production of approximately 2,100 boe per day(12) and 19.0 MMboe of 2P reserves(1). The Ferrier Assets unlock 12.0 top tier Spirit River drilling locations(1) expected to achieve IRRs(10) in excess of 300% on current strip pricing, which have been layered into the Company's near-term development plan.

Current and future volumes from the Ferrier Acquisition will be re-routed to flow through Spartan's infrastructure, benefiting from Spartan's low operating cost structure. After pooling with one section of Spartan's undeveloped and previously sterilized land, the Company expects to drill two net wells in 2021 contributing to total production of 3,700 boe per day(13) and $25.0 million of forecasted Operating Income in 2022 from the Ferrier Assets and pooled section.

UPDATES TO CORPORATE GUIDANCE FOR 2021 AND 2022

As part of the Company's press release dated July 28, 2021, relating to the initial announcement of the Velvet Acquisition, Spartan provided pro forma post-acquisition guidance for 2021 and 2022 incorporating the preliminary forecasts for the Velvet Assets ("Previous Guidance"). Based on the anticipated closing of the Ferrier Acquisition, reallocation of certain capital expenditures within the budget, and other refinements to preliminary estimates, Spartan has provided revised operating and financial guidance for 2021 and 2022 below ("Revised Guidance").

The Revised Guidance for 2021 includes the Ferrier Assets and the Velvet Assets for the four-month period from September to December 2021. The forecasted commodity price assumptions used in the Revised Guidance for the remainder of 2021 are unchanged from the forecasts used in the Previous Guidance to isolate the impact of other changes in estimates.

			Revised				Previous
2021 Guidance			Guidance				Guidance				Change
Average production (boe/d)(5)	44,000 - 46,000		43,000 - 45,000			1,000
% Oil and NGLs	33%		34%			(1%)
Operating Netback, before hedging ($/boe)(5)(10)	21.43		21.65			(0.22)
Loss on commodity derivative contracts ($MM)	(56)		(56)			-
Adjusted Funds Flow ($MM)(5)(10)	251		249			2
Capital expenditures, before A&D ($MM)(11)	175		175			-
Free Funds Flow ($MM)(5)(10)	76		74			2
Net Debt (Surplus), end of year ($MM)(5)(10)(14)	483		446			37
Common Shares outstanding, end of year (MM)	147		147			-

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The Company's revised guidance for 2022 is based on calendar year average forecasts of US$60.00 per barrel for WTI crude oil and $3.25 per GJ for AECO natural gas. Compared to Previous Guidance, the forecast for WTI decreased by 8% from US$65.24 per barrel (based on strip pricing as of July 26, 2021). The forecasted AECO natural gas price is substantially unchanged for 2022 (previously $3.22 per GJ).

		Revised		Previous
2022 Guidance		Guidance		Guidance		Change
Average production (boe/d)(6)	67,500 - 72,500	66,000 - 71,000		1,500
% Oil and NGLs	41%	41%		-
Operating Netback, before hedging ($/boe)(6)(10)	21.68	22.73		(1.05)
Loss on commodity derivative contracts ($MM)	(45)	(53)		8
Adjusted Funds Flow ($MM)(6)(10)	434	444		(10)
Capital expenditures, before A&D ($MM)(11)	300	300		-
Free Funds Flow ($MM)(6)(10)	134	144		(10)
Net Debt (Surplus), end of year ($MM)(6)(10)(14)	349	302		47
Common Shares outstanding, end of year (MM)	147	147		-

MID-YEAR 2021 INDEPENDENT QUALIFIED RESERVE EVALUATION HIGHLIGHTS

Spartan is pleased to provide highlights of its mid-year reserves evaluation prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") effective July 1, 2021 (the "Spartan Mid-YearReport"). The results of the Spartan Mid-Year Report do not include the Velvet Assets(15) or the Ferrier Assets and are reflective of the acquisitions completed by Spartan during the first six months of 2021, including: the Inception Acquisition, the purchase of assets located primarily in the Simonette area of Alberta, and other acquisitions of assets located in the Willesden Green, Gold Creek and Simonette core areas (collectively, the "Acquired Assets").

• Relative to year-end 2020, Spartan's mid-year 2021 proved plus probable ("2P") reserves increased by 36% to 282 MMboe, total proved ("1P") reserves increased by 46% to 197 MMboe, and proved developed producing ("PDP") reserves increased by 22% to 82 MMboe.
• Future development capital ("FDC") totaled $852.0 million in the total proved category with 128 net booked locations and $1.111 billion in the total proved plus probable category with 170 net booked locations(4)(17).
• Go-forwardestimated undeveloped finding and development ("F&D") costs of $7.45 per boe for 1P reserves and $6.13 per boe for 2P reserves resulting in an undeveloped recycle ratio of 2.3x 1P and 2.8x 2P based on Spartan's Operating Netback of $16.89 per boe in the second quarter of 2021(10)(17).

The following table summarizes reserves volumes by category and product type, as well as the before-tax net present value discounted at 10%. The Spartan Mid-Year Report has been prepared in accordance with the definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). The NPV10 values are based on the average forecast July 1, 2021 pricing of McDaniel, GLJ Ltd. and Sproule Associates Limited. See "Reader Advisories - Reserves Disclosure" for more information.

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	Crude Oil	Natural Gas	NGLs	Total	NPV10
Reserves Category	(MMbbl)	(Bcf)	(MMbbl)	(MMboe)	($MM)
Proved Developed Producing	2.8	338	22.7	81.9	$547
Total Proved	18.1	774	49.4	196.5	$1,249
Total Proved + Probable	28.8	1,100	69.5	281.8	$1,758

ENVIRONMENT, SOCIAL AND GOVERNANCE REPORT

Spartan is pleased to release its inaugural Environment, Social and Governance Report (the "ESG Report") which outlines the Company's performance in 2020 and vision for its evolving ESG program. As a relatively new and growing organization, Spartan has identified sustainability as a cornerstone of its corporate strategy.

The Company has accumulated a suite of assets with an industry leading Alberta Liability Management Rating ("LMR") of 8.26 and has created a proactive approach to reclamation and abandonment obligations through a unique program with Indigenous partners. As the Company continues to grow, its ESG practices will also expand and evolve, driven by a focus on assessing material ESG factors in the coming years.

Spartan recognizes the importance of providing transparent ESG reporting to its investors, community members and the public, and has utilized globally recognized frameworks to provide this data, including the framework of the Sustainability Accounting Standards Board and the United Nations Sustainable Development Goals. The ESG report is presented in an innovative and environmentally friendly online format and may be accessed at esg.spartandeltacorp.com.

ADVISORS

National Bank Financial Inc. and CIBC World Markets Inc. acted as financial advisors to Spartan in respect of the Acquisition and the Financing. Eight Capital acted as strategic advisor to Spartan with respect to the Acquisition. Stikeman Elliott LLP acted as legal counsel to Spartan in respect of the Velvet Acquisition, the Ferrier Acquisiiton, the Financing, the term facility and the credit facility.

ABOUT SPARTAN DELTA CORP.

Spartan is building a sustainable energy company whose ESG-focused culture is centered on generating sustainable 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 Montney. Spartan is focused on the execution of the Company's organic drilling program, 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, responsible future growth with organic drilling, opportunistic acquisitions and the delivery of Free Funds Flow. Further detail is available in Spartan's corporate presentation, which can be accessed on its website at www.spartandeltacorp.com.