Stockwatch Business Reporter June 22A little blurb from Stockwatch Business Reporter about Surge, Curious as to why Surge included an update on Sparky for a redetermination report. It may be that if Surge sold some production to repay debt the amount lost could be made up from increased production in Sparky, but just my two cents. Out west, Paul Colborne's Alberta- and Saskatchewan-focused Surge Energy Inc. (SGY) lost half a cent to 36.5 cents on 2.21 million shares, on a barrage of updates about its finances and operations. The company was particularly pleased with what it dubbed the "exciting" internal technical analysis of its core Sparky play in Alberta. The gist of the analysis was that Surge's infill wells are producing just as much as its primary wells. This is important because it suggests that Surge is doing a good job with well spacing. Spacing is a tricky business: too great a distance can mean that the productive rock in between wells is never tapped; too close can lead to well-to-well interference, causing lower production and steeper declines. Surge has now drilled 138 wells in the Sparky and reckons it has a good handle on things. It cheered the play's "top-tier production efficiencies" and "excellent rates of return," while patting itself on the back for increasing its Sparky production to 9,000 barrels a day from 1,200 over the last six years.
Surge also provided a long-awaited update on its credit facility. This was scheduled to undergo a borrowing base review on May 31, a date that came and went without comment; the bankers may have granted a brief extension that Surge did not feel the need to announce. Surge also did not feel the need to mention in today's announcement that the facility used to be set at $350-million. It merely disclosed that the facility is now $335-million -- so, a 4-per-cent cut. This is still a pleasing outcome for Surge, which had been worried that the facility could be chopped below the drawn amount of $305-million, forcing the company to cough up the shortfall. That is less of a concern now that the bankers have left a full $30-million of availability. Considering that Surge's entire 2020 budget is $45-million and it spent $32.5-million of that during the first quarter, it expects "sufficient liquidity to execute on its business plan."