Surge Energy Inc (Alberta) T.SGY

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

Energy Oil & Gas E&P

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

Surge Energy Inc (Alberta)

Bullboard Posts

Comment by PUNJABIon Feb 25, 2018 11:14am

129 Views

Post# 27616878

RE:Punjabi

You cannot base your expectation of performance of SGY on the present prices of WTI. SGY production is subjected to a huge discount which is about $28. If this discount does not shrink in the next few quarters .Then you will see a huge difference in the evaluations and the share prices of companies that produce light over medium oil. You will get some indication when 4^th quarter’s results are released and lot more when 1^st quarter 2018 results are released.

In the schedule pasted below you will see WTI at $63.55 Canadian Crude index at $37.69 and West Canadian select at $32.27. Canadian companies who are subject to huge discount are in a very tough situation.

What will happen to the share price of SGY will depend on where the discount is in the next few quarters along with WTI prices? SGY is not out of the woods unless this the discount shrinks or the WTI runs up another $10 and stays there.

With large debt and this huge WCS discount WCS discount companies should excise caution. They should pay down the debt and not buy back shares.

What happens if the WCS discount does not shrink in the next two to four quarters and the WTI is stuck in the price of $50 to $60. For things to work for SGY they would need much higher WTI prices.

If this discount does not shrink and they move up the share price with buy back for a short time then the smart money will sell and get out and move to light oil stocks. What will happen when their buy back is over and they have increased their debt?

Futures & Indexes	Last	Change	%Change	Last Updated
WTI Crude	63.55	+0.78	+1.24%	(1 day delay)
Brent Crude	67.04	+0.93	+1.41%	(1 day delay)
Mars US	62.00	+0.88	+1.44%	(1 day delay)
Opec Basket	63.08	+0.58	+0.93%	(22 Feb)
Canadian Crude Index	37.69	+0.00	+0.00%	(1 day delay)
DME Oman	64.28	+0.81	+1.28%	(1 day delay)
Urals	62.60	+0.34	+0.55%	(22 Feb)
Mexican Basket	56.21	+0.81	+1.46%	(22 Feb)
Indian Basket	62.91	+0.54	+0.87%	(22 Feb)
Western Canadian Select	32.27	+2.84	+9.65%	(22 Feb)
Middle East Sour Crude	63.55	+0.97	+1.55%	(22 Feb)
Dubai	62.62	+0.15	+0.24%	(22 Feb)
Brent Weighted Average	65.75	+0.70	+1.08%	(22 Feb)
Louisiana Light	64.82	+0.94	+1.47%	(22 Feb)
Coastal Grade A	52.00	+1.00	+1.96%	(22 Feb)
Domestic Swt. @ Cushing	59.00	+1.00	+1.72%	(22 Feb)
Giddings	52.75	+1.00	+1.93%	(22 Feb)
ANS West Coast	65.25	-0.29	-0.44%	(2 day delay)
Gulf Coast HSFO	54.20	+0.16	+0.30%	(22 Feb)
Natural Gas	2.657	-0.019	-0.71%	(1 day delay)
Heating Oil	1.973	+0.019	+0.97%	(1 day delay)
Gasoline	1.990	+0.029	+1.47%	(1 day delay)
Ethanol	1.484	-0.015	-1%	(1 day delay)