Surge Energy Inc (Alberta) T.SGY

RE:What is latest round of hedging going to cost us?

[zack50]

drunk@noon wrote: In latest presentation Colburne was yapping about his great call put hedges for 2022 where they would'nt be impacted on upside until wti was over 80-85.
Then he went on to say, they liked tp be 50% hedged. So just how much of the upside has been capped at 80 or 85. Therefore, I think we are going to lose bigtime on the upside thanks to the B-head.

It never ceases to amaze me... the number of shareholders who come to the forum complaining about Surge's position in regards to their hedging and issues related to the hedging... PC's yapping and big-time loses on the upside thanks to the B-head.

Here's a suggestion for you... take it or leave it... pick up the phone and call PC (don't forget to ask for the B-head), or send him an e-mail and put your questions to him directly... he is approachable... althoughh if you call him a B-head to his ear, he might suggest you shove the phone up your A$$, lol.

You've probably heard it before but here it is again, just in case you haven't... SGY 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

I don't have the February figures on-hand but I imagine they are more superior to those for January. That's a significant increase for sure! Surge has been 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 and I presume that these levels may have risen with the more recent rise in oil price.

So they're rehedging and curtailing the downside which allows them to share in the upside price. You are right that PC indicated that Surge's goal is to be 50% locked in of their net, after crown volumes and they're working toward that goal now. From Dec/21 - Jan/22 their hedges were $20 - $25 higher when compared to last year... this most likely has increased as well.

Btw, like I always say, if you don't like a company's policyes and/or management, you have a choice... don't BUY or if you own... SELL.

Q4/YE21 results are out on March 9... we'll have up-to-date #s and further 2022 guidance at that time.