SURGE ENERGY INC. INTENT TO REINSTITUTE BASE DIVIDEND
INTENT TO REINSTITUTE BASE DIVIDEND ON JULY 15, 2022
With crude oil prices now in excess of US$100 WTI per barrel, which is significantly above the Company's US$85 WTI guidance price for crude oil in 2022, Surge is pleased to announce its intention to resume its base cash dividend distribution, payable on a monthly basis.
At current strip commodity prices for crude oil and natural gas, Management projects that Surge's net debt target range will be achieved during Q3/22. On this basis, the Company anticipates reinstating its base annual cash dividend expected to be $0.42 per share (3.5 cents per month), payable on July 15, 2022 to holders of the Company's common shares ("Common Shares") of record at the close of business on June 30, 2022. Any anticipated dividend payment will be subject to the approval of Surge's Board of Directors at the time of declaration.
On an annualized basis, this base cash dividend is equal to approximately 20 percent of Surge's previously guided annual 2022 free cash flow1 utilizing a US$85 WTI per bbl crude oil pricing assumption2.
With the majority of the Company's mandated fixed price crude oil hedges for 2022 expiring in less than two months, Surge has resumed its regular, ongoing risk management program. This orderly program is designed to set price floors that protect Surge's dividend and capital programs, while also providing participation in a rising commodity price environment.
The monthly cash dividend is expected to be designated as an "eligible dividend" for Canadian federal and provincial income tax purposes. Dividends paid to shareholders who are non-residents of Canada will be subject to Canadian non-resident withholding taxes.