Surge Energy Inc (Alberta) T.SGY

RE:RE:RE:RE:So…is the new acquisition negative accretion yet?

[VeritasVern]

Kherson wrote:

VeritasVern wrote:

Kherson wrote:

Baystboy07 wrote: Starting to wonder if the Board will approve the dividend increase now that the acquisition is probably negative accretion to EPS. I hope they do not.

It seriously keeps pi$ing me off that the management team is one giant FU&KUP.

PAY DOWN YOUR FUC&ING DEBT...INSTITUTE A NCIB...STOP BUYING ASSETS TO RAISE THE DIVIDEND TO LINE YOUR POCKETS

ITS NOT THAT FUC&ING HARD YOU IDIOTS!!!!!

Pretty obvious that the proposed dividend increase is now off of the table. In fact, Paul's proposed dividend increase from his November 2nd NR was never a viable option when announced simply because Surge has way too much debt!
Kherson

At $70 oil is most likely off the table, but it is too early to say based on just the last week of trading alone. If oil runs up again to $80 and closer to $90 it's still an option. I'm thinking the cap on Russian oil will not have only positive outcomes for the G7 but some of the negative consequences for reduced supplies globally as well. Perhaps we will see $80+ oil in early Jan but the biggest risk to oil is recession related and volitility. 

The BOD actually meets this week and they should be making their next dividend announcement on the 15th, so your reasoning of future higher oil prices providing the FCF to boost the dividend are complete foolishness.
Sadly, with the present oil price, coupled with Surge's huge debt, Surge can no longer maintain the present dividend in a sustainable manner. On top of that, the acquisition will no longer be accretive to the bottom line.
The smart thing here is for Surge to cut the dividend until their debt is eliminated.
Kherson
P.S. Let's not forget that the new $100 million amortizing term loan that the banks are providing for the acquisition will force them to pressure Surge to eliminate the dividend and since the closing date is December 19th, their opinion will sway the decision of the BOD.

 True enough, but the raise to the dividend  if approved was slated to be decided in early 2023 not in Dec from what I read in the release. The BOD would have to be completely incompetent if they were proposing a dividend increase if they were not able to sustain the current level.

As we are now seeing the Russian price cap is causing all sorts of complications from the Turkish demand to see all proof of insuance passing through their straights. But the larger problem is that oil is mostly traded on formulas and spot differentials to a benchmark crude for the trading of actual cargoes as well as for hedging that follows and that that the top three Russian oil blends—Urals, Sokol, and ESPO—are priced under forward or floating contracts, which means that the final price of a cargo is only determined several weeks after the purchase of the cargo. So it seems we will be adding additional volatility to the market which adds to a price premium. $80 oil by weeks end?