SURGE is what it is !
Corporate Profile/Strategy
Surge Energy Inc. has the highest standards of honesty, business ethics and integrity. Managements' stated goal is to be the best positioned junior/intermediate oil and gas company in Canada.
Surge has a high quality crude oil reserve, production and cash flow base, focused in just three areas. The Company has elite, operated properties characterized by large OOIP crude oil reservoirs with low recovery factors. Surge has an extensive 14 year inventory of more than 700 net low risk development drilling locations, several high quality waterflood projects, and an excellent balance sheet. Management has initiated an orderly, on-going risk management/hedging program designed to protect cash flows, fund capital expenditures, and to pay dividends. Surge's common shares currently trade on the Toronto Stock Exchange under the symbol SGY.
Defined Business Strategy:
- Provide a sustainable, protected, annual dividend to shareholders, payable monthly; and
- Grow, cost effectively, at 3-5% per year on a reserves, production and cash flow per share basis; and
- Pursue additional growth through accretive acquisitions targeting high quality, large OOIP assets, with low recovery factors.
To my untrained eye it appears that Paul Colborne is successfully attempting to do exactly what he said he was going to do in a very challenging commodity price environment.
SURGE has a very good balance sheet that is being protected.
They continue to pay a monthly dividend albeit drastically reduced from previous levels.
They are growing production modestly with a conservative but very effective Capex program.
Anybody that doesn’t like the “divco” model or would prefer a more aggressive Capex program should look elsewhere.
In my opinion SURGE is one of the safer albeit not “exciting” companies in what is essentially a High Risk industry.
Although my position in SGY is currently under water I am quite content to be patient while Paul Colborne continues to do what I feel is a very good job in very challenging circumstances.
As Always; Do Your Own Due Diligence; It’s Your Money !!