Stock Picks: Spartan Exploration (TSE:SPE)

Spartan Exploration Ltd. is a uniquely positioned oil weighted junior. It has significant exposure to three leading resource plays, strategically focused in Western Canada.

Quick Facts (Q3 2010):

Q3 Average Production: 979 boe/d, 84% Oil + NGL

O/S: 41.5 million FD (management ownership 33%)

Debt: nil

Land: 91k gross acres undeveloped

  • 62,930 acres (43,307 net acres) in SE Saskatchewan prospective for Bakken and Mississippian; (light oil)
  • 15,657 acres (12,900 net acres) in SW Saskatchwan prospective for Upper and Lower Shaunavon; (heavy oil)
  • 12,480 net acres in the Pembina area of central Alberta prospective for Cardium oil; (light oil)

Q3 Highlights

Q3/10 production:??+101% Q-Q.

Q3/10 operating netback: $42.11 per barrel +9% Q-Q.

Outlook (updated November 16 2010)

Spartan has exceeded its year end exit target of 1,800 boe/d and is currently producing approximately 1,825 boe/d (82% oil and liquids). For 2011 the company is expecting a similar capex program to 2010 which would increase average production to 2,000-2,250 boe/d. 2011 capex should be confirmed by the end of November or early December of 2010.

The Company has another 2 (0.95 net) Cardium horizontal wells that have been drilled, completed and are awaiting tie-in and is expecting to drill up to another 4 (3.75 net) Cardium horizontal wells prior to the end of the year.

For those amongst you who follow analyst ratings, here are the latest targets:

Company Analyst Target Previous Target Date
Spartan Exp. Stonecap $5.90 $5.80 16 Nov 2010
Spartan Exp. GMP Securities $6.00 $5.50 16 Nov 2010
Spartan Exp. Mackie $5.00 $4.25 16 Nov 2010
Spartan Exp. Clarus Securities $6.50 $6.00 16 Nov 2010

SPE is an excellent company to capitalize on Canadas hottest resource play sectors; The Cardium and the Bakken. Its oil weighting in this low priced natural gas environment is very profitable. Providing oil prices remain above $75 per barrel, the return on this company will be excellent in the near future as they successfully drill one well after another. In my opinion, at $3.45/share SPE is undervalued compared to many of its peers; I expect the market to weigh it properly in the near future providing we dont go through another crash.


I am currently a shareholder of Spartan Exploration. I was not paid any fees to feature this stock. I am just sharing my research. Please do your own due diligence before buying or selling any security.