RE:The SGY advantage.Tradestay wrote: I know some here did not like the recent share dilution but I was ok, we are still under 100M shares and have more production that is super accretive to cash flow.
The SGY advantage is this low share count, when they hit that debt target which is by Q3 this year, they can quickly move the dial on the share and put a bottom in for shareholder, but honestly if oil keeps above $75 this will go up without that.
Here is the SGY advantage that got me excited.
https://youtu.be/WD9MPjalF5A?t=1010 If you only have 2 minutes, that link will take you directly to the 16:50 minute mark of Surge's recent presentation. Listen until the 18:30 mark and let that information sink in.
Surge is sitting on a mountain of light or medium oil that can be easily recovered at low cost with very little risk. The horizontal drilling and water flood technology to recover a higher percentage of oil from these pools is already avaiable and is being successfully used throughout Alberta today. No fracking required.
A single 1% increase in oil recovery can add a billion dollars of shareholder value (+$10 per share). That is based on WTI pricing that is far below what Surge is getting for their oil today.
The land they acquired in SE Saskatchewan allows them to drill and tie in new wells in under two weeks. Drilling costs are fully recovered within eight weeks after that. SGY significantly under paid for what they are already getting out of their new assets. Any share dilution has been money well spent.