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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 PUNJABIon Jan 28, 2022 8:53am
219 Views
Post# 34370430

Company should pay off the Debt first

Company should pay off the Debt firstThis stock was a big dividend trap in the past. It had a huge dividend yield and when it was taking some held on to the stock because the dividend yield kept becoming higher and higher as the price dropped.


The interest rate of 8.8 % on debt is high and should be paid first. The company can hedge for six months or a year. No one can guarantee long-term oil prices. It is better to strengthen the balance sheet become debt-free and learn from past mistakes. The projected cash flow to debt ratio is going to be very low, still, it is much better to be debt-free because this will give the share price a debt-free premium. Once the debt is paid issue dividends and avoid share buybacks.


Some will not become long-term shareholders for the dividend. Some will trade in for the dividend on a monthly or quarterly basis. Buy in get the dividend and then get out.

Once the dividend is paid the price of the stock is adjusted down by the amount of the payout. You have to figure out the trading pattern of the stock. One approach is to buy a week or 10 days ahead to become most will come to buy close to the ex-div date and if the stock runs up because of some buyers coming in for the dividend in the last few days sell it to them to make a profit which could be even more than the dividend. After ex-div sometimes the stock may take time to recover to get out as there would be others ready to sell after ex. dividend.



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