from Stockwatch todaySurge Energy Inc. (SGY) added 19 cents to $7.13 on 3.52 million shares. It earned two cents a share in the first quarter, below analysts' predictions of six cents a share, but still above its loss of two cents a share in the same period last year. Revenue doubled to $107-million from $53-million. Average output increased to 15,024 from 9,636 barrels of oil equivalent a day, despite a bad winter in Alberta and Saskatchewan, and without including a full quarter of production from assets it acquired in February. If it adjusts for winter outages and the timing of the acquisition, Surge says production during the first quarter would have exceeded its year-end target of 16,850 barrels a day. (The company plans to increase that target once it closes its acquisition of Longview Oil Corp. (LNV: $6.83) next month.)
During the quarter, Surge completed about half of its planned full-year drilling program, achieving a 100-per-cent success rate on 20 gross (13.96 net) wells. It also spent over $15-million on pipeline and waterflood projects. Waterflooding has improved Surge's decline rate to about 24 per cent now from over 37 per cent in 2012. By the end of this year, the company hopes to have over three-quarters of its properties under waterflood, with new pilots at Eyehill, Provost, Valhalla and the Saskatchewan Viking.
Insiders seem optimistic. Since the beginning of April, seven of them have acquired nearly 457,000 shares through market acquisitions, warrant exercises or purchase plans. The biggest buyer was president and chief executive officer Paul Colborne, who acquired 385,000 shares from April 10 to 17.