Surge Energy Inc (Alberta) T.SGY

Energy Summary-6th

[2smart4u2]

From Stockwatch Business Reporter, Energy Summary 6th  courtesy Carswell $PeakIV


Surge Energy Inc. (SGY) added eight cents to $2.40 on 2.13 million shares, after boosting its year-end 2016 guidance and laying out preliminary guidance for 2017. The company already announced in July that it was producing above its planned year-end rate of 13,000 barrels of oil equivalent a day, thanks to a 14-well drill program at its Shaunavon assets in Saskatchewan and its Valhalla and Sparky assets in Alberta. It did not raise its year-end guidance at the time, but today it boosted the target to 13,500 barrels a day, in conjunction with a boost to this year's drill program and a new budget of $66-million (up from $55-million previously). In 2017, Surge plans to spend $85-million and produce 13,650 barrels a day for the full year and 14,150 barrels a day at year-end. Assuming that WTI oil prices average $50 (U.S.), Surge reckons that its cash flow will be just enough to cover both its spending program and its 0.625-cent monthly dividend, which yields 3.1 per cent. Should WTI rise to $60 (U.S.), Surge expects an extra $27-million in cash flow, which would primarily go toward paying down its debt. This is expected to be $138-million at the end of this year, with Surge being just 55 per cent drawn on its $250-million credit line. The company pats itself on the back for its "balance sheet flexibility" and its progress on its goal to become "the best-positioned light/medium crude oil growth and dividend-paying company in Canada." The abundance of qualifiers aside, insiders seem confident. Since mid-August, 14 officers and directors have acquired thousands of shares through exercises of rights, share dividends and other non-public-market transactions. President and chief executive officer Paul Colborne has also acquired 92,051 shares in the market at prices ranging from $2.40 to $2.54. He now controls 3.64 million of the company's 221 million shares.