Spartan Delta Corp. — Capital/Financing Update 2021

Jul 29, 2021

July 28, 2021

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SPARTAN DELTA CORP.

PROSPECTUS OFFERING OF SUBSCRIPTION RECEIPTS

A preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the securities regulatory authorities in each of the provinces of Canada, other than the province of Quebec. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

ISSUER: Spartan Delta Corp. ("Spartan" or the "Company")

OFFERING: 29,703,000 Subscription Receipts ("Subscription Receipts") of the Company to be issued from treasury pursuant to the short form prospectus provisions and requirements under National Instrument 44-101 (the "Offering"). OFFERING PRICE: $5.05 per Subscription Receipt. (the "Issue Price"). GROSS PROCEEDS: $150,000,150. OVER-ALLOTMENT OPTION: Up to 15% of the Offering. USE OF PROCEEDS: The Company has entered into a definitive agreement (the "Velvet Agreement") to acquire Velvet Energy Ltd. ("Velvet") for a combination of cash and Common Shares (as defined below). The Company intends to use the net proceeds of the Offering to partially fund the cash amount payable under the Acquisition. The Acquisition is expected to close on or about August 31, 2021.

SUBSCRIPTION RECEIPTS: Each Subscription Receipt will entitle the holder thereof to receive, without payment of any additional consideration, one common share in the capital of the Company ("Common Share") upon satisfaction of the Release Conditions (as defined below).

If: (i) the Release Conditions are not satisfied on or before 5:00 p.m. (Calgary time) on November 15, 2021; (ii) the Velvet Agreement is terminated at any earlier time; or (iii) the Company has advised National Bank Financial Inc. or announced to the public that it does not intend to proceed with the Acquisition (in each case, the earliest of such dates being the "Termination Date"), the Escrowed Funds will be reimbursed pro rata to the holders of Subscription Receipts at the original subscription price, together with their pro rata portion of interest or other income earned thereon between the Closing Date and the Termination Date.

ESCROW CONDITIONS: The gross proceeds of the Offering (the “Escrowed Funds”) will be held by a Canadian trust company or other escrow agent acceptable to the Company and National Bank Financial Inc. and which is also deemed an Acceptable Institution under the guidelines of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund (the "Escrow Agent") and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments) until the earlier of: (i) the satisfaction of the Release Conditions; and (ii) the Termination Date.

Provided that the Release Conditions are satisfied on or before the Termination Date, the Escrowed Funds (and accrued interest thereon), less the remaining 50% of the Underwriters’ commission (and accrued interest thereon) in connection with the Offering which will be released to National Bank Financial Inc. on behalf of the Underwriters, will be released to the Company upon receipt of a notice by the Escrow Agent from National Bank Financial Inc. and the Company that the Release Conditions (as defined herein) have been satisfied.

July 28, 2021

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"Release Conditions" means: (i) all conditions, undertakings and other matters to be satisfied, completed and otherwise met prior to the completion of the Acquisition have been satisfied, completed and otherwise met (in accordance with the Velvet Agreement and without material waiver thereof, in whole or in part, by any of the parties thereto, unless the consent of National Bank Financial Inc., on behalf of the Underwriters, is given to such waiver, acting reasonably), but for the payment of the purchase price to be satisfied in part by the release of the Escrowed Funds, and that the Company and Velvet are otherwise ready, willing and able to complete the Acquisition; and (ii) there have been no material amendments of the terms and conditions of the Velvet Agreement (whether directly or indirectly) which have not been approved by National Bank Financial Inc., on behalf of the Underwriters.

ISSUE TYPE: The Offering is a bought treasury offering of Subscription Receipts to be completed by way of short form prospectus, qualifying the Subscription Receipts for distribution in all provinces of Canada except Quebec.

The Subscription Receipts may also be placed privately in the United States to Qualified Institutional Buyers (as defined under Rule 144A under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) pursuant to an exemption under Rule 144A, and may be distributed outside Canada and the United States on a basis which does not require the qualification or registration of any of the Company’s securities under domestic or foreign securities laws.

LISTING: The Company will apply to list the Subscription Receipts and the Common Shares issuable pursuant to the Subscription Receipts on the TSX Venture Exchange ("TSX-V"). Listing will be subject to the Company fulfilling all of the listing requirements of the TSX-V.

SOLE BOOKRUNNER: National Bank Financial Inc.

ELIGIBILITY: Eligible for RRSPs, RRIFs, RDSPs, RESPs, TFSAs and DPSPs. COMMISSION: 4.0% of the gross proceeds from the sale of the Subscription Receipts of which 50% will be payable on the Closing Date from the Company's general funds and the remaining 50%, along with any accrued interest thereon, will be payable upon the satisfaction of the Release Conditions.

CLOSING DATE: The Offering will close on or before August 18, 2021 or such other date as agreed to by the Underwriters and the Company and National Bank Financial Inc.