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Surge Energy Inc (Alberta) T.SGY

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

Surge Energy Inc. is a Canada-based oil focused exploration and production (E&P) company. The Company's business consists of the exploration, development and production of oil and gas from properties in Western Canada. It holds focused and operated light and medium gravity crude oil properties in Alberta, Saskatchewan and Manitoba, characterized by large oil in place crude oil reservoirs with low recovery factors. It offers exposure to two of the five conventional oil growth plays in Canada: the Sparky and SE Saskatchewan. It holds a dominant land position and is drilling a mix of horizontal multi-frac and horizontal multi-lateral wells in the Sparky area. Sparky is a large, well established oil producing fairway in Western Canada. SE Saskatchewan is a focused operated asset base with light oil operating netbacks. SE Saskatchewan operates low-cost wells with short payouts and offers potential for continued area consolidation.


TSX:SGY - Post by User

Bullboard Posts
Comment by BigA!on Mar 25, 2013 1:25pm
196 Views
Post# 21164071

RE: RE: RE: RE: CIBC

RE: RE: RE: RE: CIBC

RNAV is a common approach to companies within the hard asset business, like real estate developers, natural resources, etc. Unless a different approach is being used, it's often referred to Revalued Net Asset Value. Add investment value of property, plus any surplus value of additional propety (like SGY holds land with reserves yet to be discovered), plus overall company value (like cash), less liabilities. Discount this by some applied rate. 

 

You could also do (land area* price of property- less liabilities)/ Total Capital 

 

I imagine the model components are more important than the overall end figure. At what rate are cash flows being discounted? What about assumptions on property that has unproven reserves and management ability to access those reserves? Changing the model by a few % points could make huge differences. Is this analyst an optimistic or pessimistic person? I hope pessimistic because that leaves up side for management to deliver and analyst up grades to come through.

Bullboard Posts