Surge Energy Inc (Alberta) T.SGY

Highlights of conference call/webcast...

[zack50]

1. Dispositions were high op cost production for 3.5x c/f that hadn't been worked for six years.
    
2. $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
    
3. 2P NAV post sale WITHOUT anything booked for Hope Valley discovery $16.50/share
    
4. Hedges  - collars above $80 and diffs hedged into next year
    
5. 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.
    
6. Capital reallocated to Hope Valley with a rig running for the balance of the year.
     
7. Expect a growth wedge of 3-5% when terminal debt target is met.
    
8. 17% FCF with 85% of their production in the two most economical plays in Canada - don't see much better value than this. 

 

[tinkvid]

Good update!

[uwebb429]

A 15 mile step out well to the NW of Hope Valley takes Surge to the center of the Wildmere Oil and Gas Field. 3D seismic and horizontal multi-lateral drilling will be a game changer. Good to see that Surge now has 100 future locations ready to be drilled.  In summary, the Wildmere field is a mature oil and gas asset with declining production levels, but enhanced oil recovery techniques like