Spartan Delta Corp. reaped the benefit of higher energy prices and a recent acquisition in its fourth quarter, while investors navigate the company's connection to a Russian business leader.
The Calgary-based oil and gas producer said its average daily production surged 178 per cent year-over-year in the fourth quarter to 72,428 barrels of oil equivalent. Its free funds flow spiked 664 per cent to $21.3 million.
The fourth quarter was the first full quarter since Spartan Delta closed its $743-million acquisition of Velvet Energy Ltd. at the end of August.
Spartan Delta has recently attracted some attention because of its ties to Igor Makarov, a Russian billionaire who controls the Canadian oil and gas producer's top shareholder, Areti Energy.
However, at least one analyst has brushed off that perceived overhang.
In a report to clients late Tuesday, National Bank of Canada Financial Markets Analyst Dan Payne touched on the Makarov issue, and said he struggles “to connect the risk of sanction to fundamental downside risk for shareholders.”
Payne has an outperform (the equivalent of a buy) recommendation on Spartan Delta, with a price target of $14.50 per share, which implies a total potential return of 60.8 per cent.
In its earnings release Tuesday evening, Spartan Delta expressed its support for Ukraine and decried the Russian hostilities.
"We urge the Russian government and its armed forces to stop their inhumane military operations against civilians and through peaceful and diplomatic resolution to end the war," the company said in the release.
Editor’s note: An earlier version of this story incorrectly stated that an outperform recommendation is the equivalent of a hold. BNN Bloomberg regrets the error.
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