Surge Energy Inc (Alberta) T.SGY

Alternate Symbol(s): ZPTAF | T.SGY.DB.B

Energy Oil & Gas E&P

Surge Energy Inc. is a Canada-based oil focused exploration and production company. The Company’s business consists of the exploration, development and production of oil and gas from properties in western Canada. Its operations include Sparky and SE Saskatchewan. Its supporting assets include Valhalla, and Greater Sawn. The Sparky operation offers light/medium crude oil production with compelling returns. The SE Saskatchewan operation maintains asset base oil operating netbacks. It has low-cost wells with short payouts and the potential for continued area consolidation. The Valhalla operation offers a stacked pay multi-zone potential with light oil and provides a range of area infrastructure and access to multiple egress options supports attractive operating netbacks. Its Greater Swan operation consists of concentrated light oil assets with conventional slave point reefs.

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Surge Energy Inc (Alberta) > Highlights of conference call/webcast...

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Post by zack50on May 30, 2024 12:56pm

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Post# 36064716

Highlights of conference call/webcast...

Dispositions were high op cost production for 3.5x c/f that hadn't been worked for six years.
$52M of FCF after dividends will be split between debt repayment down to terminal debt target of $170M and share buybacks. Showing discipline with the $0.04/share dividend increase to $0.52/share
2P NAV post sale WITHOUT anything booked for Hope Valley discovery $16.50/share
Hedges - collars above $80 and diffs hedged into next year
Hope Valley discovery - now 100 multi leg locations. Most recent well is still producing 35% above type curve. EUR's should increase from 125kbbls to 175kbbls for $2.6M. NONE of these locations are booked in the reserve report and 650 tier one locations (>1.5year payout). There will be 4-5 locations drilled surrounding the most recent discovery well coming out of break out and a 15mile step out well to the NW.
Capital reallocated to Hope Valley with a rig running for the balance of the year.
Expect a growth wedge of 3-5% when terminal debt target is met.
17% FCF with 85% of their production in the two most economical plays in Canada - don't see much better value than this.