Surge Energy Inc (Alberta) T.SGY

Kherson

[RayDonovan78]

So when is it going to hit $4:00 ????

[Kherson]

Ray, I am surprised that you are still allowed to post on Stockhouse given your past anti-Semitic comment.  Hopefully Stockhouse will enforce their rules and ban you and just maybe even a civil suite to boot! Kherson

[RayDonovan78]

You are delusional my friend !!!  So when are we going to see $4.00 ????  Lol

[martrob83]

Well, I don't know aboug $4.00 a share but all the current metrics at current price based on historical FS and valuation gives me a value of above $2.50 per share. For this to happen, investors need to see what I see, price of oil and gas need to remain where they are at, which I do not see a crash in oil prices. In only has to stay in a range of $50-70. It's all about probabilities, there

[jremple]

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[downtozero]

Round numbers based on $75 oil. $140M projected FCF in 2022. 500M shares. 10* PE Ratio. $140M*10/500M Value = $2.80 per share. Note that during the conference call Surge also stated they will be restating their loss from 2020 based on current oil market value. This should significantly increase Surge's market value.

[ariesleaf]

downtozero  So all this B.S aroung when do we see your $2.80 .Not much time SGY.

[downtozero]

My prediction: By end 2021 SGY will be over $1. By end 2022 SGY will be over $2.50 If oil prices hold up over $75 USD If deal goes through to increase FCF from extra BOPD.

[Chris007]

why in the world would you multiply FCF by a P/E ratio...much less a ratio of 10? If you do decide to use the 2022 guidance numbers... Take expected cash flow...multiply by peer group multiple...small cap o&g should probably be 3-4x, realistically (as per Nutall). minus net debt of $210M Divide by shares outstanding of 608M\

[downtozero]

Chris007, Eric Nutall uses EV/CF and not FCF in his presentations and says average 4 by 6 times target multiple. https://twitter.com/ericnuttall/status/1405516548807213065/photo/1 $250M Cash flow @$75 608M shares 4 to 6 multiple is $1.64 to $2.45 Debt at end of 2022 is expected to be significantly lower. If all FCF this year and next year is applied to debt, it will be <$50M. They expect

[Chris007]

5x6 times for large cap (CNQ, CVE, SU, IMO) 4x for the small caps As per company guidance (https://surgeenergy.mediaroom.com/2021-06-22-Surge-Energy-Inc-Announces-Strategic-160-Million-Southeast-Saskatchewan-Light-Oil-Acquisition-New-215-Million-Credit-Facility-and-Upward-Revision-to-2021-Exit-Rate-and-2022-Production-Guidance) The company expect net debt to be 210M for 2022 Funds flow for

[downtozero]

Subtracting the entire debt is your creation and not Eric Nuttall's. Look at the attached link and consider the debt of the companies in his list (i.e. ATH, VET, etc.).

[Chris007]

Of course you have to subtract net debt...EV is Market cap + Net debt...

[downtozero]

Again, not by Eric Nuttall's guidance you pointed to earlier. Take VET for example. Debt, $2B. Cash Flow, $1.4B, FCF $800M. CF - debt = -$600M (that's negative 600 million). But...Eric's presentation show's they're worth between  $10 and $14 per share (4 to 6 times MV). Obviously he's not considering the full debt in his calculations.

[Chris007]

Once gain, its not that complicated...here is how you do it algebraically: EV/CF = 4 EV =  4CF (Price per share x 608M shares outstanding) + Net Debt =  4 (265M) 608,000,000x  - 210,000,000 = 1,060,000,000 608,000,000x  = 1,060,000,000 - 210,000,000 608,000,000x  = $850,000,000 X = $850,000,000/608,000,000 X= $1.40 I have no idea where you got the VET numbers from

[downtozero]

So what you're saying is that any company where the debt exceeds cash flow (a multiple greater than 1), the company shares are then worthless. 

[downtozero]

correction, a multiple greater than 4.

[Chris007]

Are you really that dense... or do you not know how to do simple math... thats what cash flow multiples are for...if you use a 1x EV/CF, almost every o&g stock has a negative worth...hence the 4x -6x EV/CF = 4 EV =  4CF (Price per share x 608M shares outstanding) + Net Debt =  4 (265M) 608,000,000x  + 210,000,000 = 1,060,000,000 608,000,000x  = 1,060,000,000 - 210,000,000

[downtozero]

Well done. My point once again is that Eric Nuttall is not using this math yet is your basis for 4 to 6x cash flow. When you look at his presentation, his chosen companies with high debt are showing significant growth potential, when in actual fact they would be worth much less than their current value based on current debt. Maybe go look at ATH and try your math and see how well it works against

[Chris007]

The ATH numbers check out...as per his valuation breakdown (numbers such as net debt aren't entirely accurate, but using his numbers, i get the same result) https://twitter.com/ericnuttall/status/1352646378120499205/photo/1 *based on older ATH data (45 WTI breakeven, with each additional $5WTI generating 70M Cash flow) @70 WTI 70-45 =5 5 X 70 = 350M 350M x 4 = 1,4000,000,000 Net debt 1.1 x

[Chris007]

On my last post, I noticed I put in an extra zero for the 1.4B CF using the 4x EV/CF multiple. However, the end result is accurate. *based on older ATH data (45 WTI breakeven, with each additional $5WTI generating 70M Cash flow) @70 WTI 70-45 =5 5 X 70 = 350M 350M x 4 = 1,400,000,000 Net debt 1.1 x 354 = 389M Net Debt *as per Nutall’s twitter post* 1,400,000,000 -  389,000,000 = 1,010,600

[masfortuna]

Umm  I think you have another mathe error on your last line. I think $1.90 is correct and NOT .90...

[Chris007]

Indeed it is....1,010,600,000/ approx 531M shares outstanding = $1.90 , $0.01 difference from Nutalls valuation (https://twitter.com/ericnuttall/status/1352646378120499205) My god, this +37C weather in Alberta is defintely not agreeing me

[masfortuna]

It must be the weather lol :)   All good!

[Jerichoberry]

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