RE:insider buysThey have been buying (in particular the CEO) as soon as their major transaction was announced.
Each time it goes down, investors get spooked with "end of the oil world" talk. The fact of the matter is, the demand for oil has never been greater, shale producers remain the marginal price setters at this point in time with breakeven points in the high 60s/low 70s for most; the Middle East is cranking out as much as they can and are not satisfying all of the demand. As Nigeria, Algeria, Venezuela and other fall in disarray, it is hard to conceive a world where the likes of Surge will not thrive. The massive rig fallout in North America will feed through production/output numbers in the coming weeks. We are also one step away from allowing the export of crude in the US. That could lead to an overnight repricing. All in all, I do not buy the doom and gloom scenario. The only major "negative" for oil right now is if Iran is allowed to pump massively back into the market (basically 1M boe/d extra is being negotiated). That clearly is a negative. Russian production is the unknown...not clear how much they will cut back, profitability is lower but drilling costs are in roubles I was told so they could still be quite profitable even with these much lower price levels.
I would not touch any oil sands producers right now. Surge has 100s and 100s of locations that have an IRR of more than 80% at these prices. All of that for a meager enterprise value of less than $1Bn. Can it go lower? Sure...and probably will if negativity stays this strong in the sector.
However, I am going to follow the CEO and add more in the coming days. GLTA!