Spartan Energy Corp. ("Spartan" or the "Company") (TSX:SPE) is pleased to report its financial and operating results for the fourth quarter and year ended December 31, 2016. Selected financial and operational information is set out below and should be read in conjunction with Spartan's December 31, 2016 audited annual financial statements and the related management's discussion and analysis ("MD&A"). The financial statements and MD&A are available for review at www.sedar.com or on the Company's website at www.spartanenergy.ca.
FOURTH QUARTER 2016 HIGHLIGHTS
2016 ANNUAL HIGHLIGHTS
Spartan has had an active first quarter in the field, with three rigs operating in southeast Saskatchewan and an additional rig drilling our 2016 Viking program in west central Saskatchewan. First quarter activity levels have been in line with budget, and we anticipate we will drill 16.9 net open hole, 8.0 net frac Midale and 14.5 net Viking wells in the quarter. All wells are scheduled to be on production prior to the end of the quarter, with the exception of 9.5 net Viking wells and 3.0 net frac Midale wells which are scheduled to be completed and brought on production in the second quarter.
Spartan executed a very successful drilling program in 2016, with both open-hole Frobisher wells and frac-Midale wells brought on production during the year exceeding internal type curves. Early results from our first quarter program indicate that this outperformance is continuing, with open-hole wells at Queensdale and Winmore and frac Midale wells at Alameda currently ahead of budgeted type curves.
Since our inception in 2013, Spartan has strived to build a high quality, light oil focused asset base characterized by low risk, sustainable growth. The commodity price challenges experienced by the energy industry in 2016 created unique acquisition opportunities, and Spartan was able to capitalize on these opportunities to significantly enhance our asset portfolio. We transformed the Company into an intermediate producer in 2016, adding almost 11,000 boe/d of production, while also significantly adding to our inventory of economic drilling locations, improving the quality of our reserve base, lowering our corporate decline from 30% to 24% and maintaining the strength of our balance sheet. Our business model has never been stronger. The asset base we have assembled is highlighted by a moderate decline profile and a multi-year inventory of high quality drilling locations, and our organic drilling results have exceeded expectations. As a result, Spartan is well positioned to drive long-term value for shareholders through production and reserves growth combined with significant free cash flow generation at current commodity price levels.
Spartan is on track to meet or exceed our 2017 annual average production guidance of 21,080 boe/d, representing 11% annual per share growth. Based on a 2017 average WTI price of US$50, we anticipate free cash flow (in excess of forecast drilling and maintenance capital) of approximately $42 million in 2017. We are budgeting to allocate up to $15 million of our excess cash flow to discretionary investments such as the initiation and expansion of waterflood projects and the acquisition of additional land and seismic data. The remainder of our free cash flow will be used to further strengthen our balance sheet and drive additional growth by pursuing acquisition opportunities in our core operating areas.
SOURCE: Spartan Energy Corp.
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