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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

Post by Maxmoeon Jul 14, 2021 10:37am
326 Views
Post# 33542041

Reality check

Reality checkSpot prices may be at $70s but futures aka "the strip" are much lower. Closer to 60. It's called backwardation because "normal' is future prices are higher than spot due to storage costs and time value of money. Every oil producer is always using futures or hedges. Nobody sells 100% into the spot market. Remember a year ago when spot prices were actually negative? Spot prices are much much more volatile than "the strip" or longer term contracted pricing. What is driving the massive improvement in oil producer stocks is the massive improvement in all pricing this year vs last year. What's holding stocks down is not trading conspiracies, it's concern that current pricing, not just spot, is vulnerable to a pullback. Every passing month and quarterly report will ease that concern and the whole sector will "catch up" to oil prices eventually. Which one is first or last to catch up is a mugs game, so I use a little basket of names, which currently includes SGY,  rather than try and pick "the one". GLTA
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