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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 zack50on Jan 28, 2022 6:15pm
217 Views
Post# 34373361

RE:Still not happy with the hedges

RE:Still not happy with the hedgesSGY has a new "Hedging Strategy" for 2022.

The hedges for 2021 were, as we all know, horrendous... in the vicinity of $47 WTI... forced upon Surge by the major chartered banks. That's all DONE!

To give you an idea of how that translates in terms of CF, here's an example:
* Unhedged CF for Jan./21... ~$  7M
* Unhedged CF for Jan./22... ~$28M

That's a significant increase for sure! Surge is now taking the hedges that have run out... those that were forced upon them by the banks in 2021... and has begun to layer their hedges in, with a bottom around $60 - $65 WTI. In some cases Surge is doing costless collars where they keep the upside at $80 - $85 WTI.

So they're rehedging and curtailing the downside which allows them to share in the upside price. According to PC, Surge's goal is to be 50% locked in of their net, after crown volumes and they're working toward that goal now. Their hedges are presently $20 - $25 higher when compared to last year.


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