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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

Comment by Kontraryon Nov 25, 2021 1:13pm
158 Views
Post# 34165760

RE:RE:For Surge to attract New Investors....

RE:RE:For Surge to attract New Investors....That goes back to Kavern's original point, which is that Surge needs to have a clear recognized strategy to attract new investment. As you point out, to be regular dividend payers, companies the size of Surge need stable production with low declines. FCF largely goes to dividends and enough CAPEX to sustain production. Alternatively, if the goal is to turn a junior into an intermediate through acquisitions, dividends aren't a thing and FCF mostly goes toward the balance sheet and more acquisitions.  That's simplistic, but you get the idea.

Diluting shareholder equity by 50% to buy relatively high-decline assets while hoping for sustained high oil prices to pay dividends may not be a compelling enough plan to bring in new investors.

ppp wrote: Hi Kavern 

SGY needs to pay down a bit of debt  and start paying a div again. Their land is ideal for that model. Water flood!! Last thing these guys need to do, is drill to much. Their declines are at the max for a div company.  They are guiding 120 capex and and lets say 140 FCF. 100 to debt 40 to div starting H2 22. For 23 they can bump capex to 160 not more. Then increase the div to 80 mil. I am sure you will see investors then. There are way better growth companies to invest in.  


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