Surge Energy Inc (Alberta) T.SGY

Debt

[geezer21]

There is good debt and bad debt.  So long as the debt is earning more then the interest on the debt it is good debt. Even better if it is allowing growth in profits.

With out debt from shareholders, institutional investors, and banks all the oil would stay in the ground.

When a company is in a position to carry on business and keep growing without the bank debt than the interest will cease to come off the bottom line.

However, bank debt can enable a company to continue expanding and increasing profits that more than justifies the debt especially in a commodity bull cycle like the one oil companies are in now.

Surge is doing exactly that.

[Kontrary]

From the Q3 report: As at September 30, 2021, the Corporation had $189.4 million drawn on its committed revolving term facility. The revolving term commitment will continue to revolve until the next scheduled borrowing base redetermination date on or before November 30, 2021. The further extension of the credit facility is dependent on the Corporation's ability to repay or extend the term

[geezer21]

"Yes, debt financing is an important part of doing business, but it has to be carefully managed. Throughout most of this year, Surge hasn't benefitted much from the higher pricing environment because the banks forced it to layer on hedges last year to protect their interests. Some debt is good, but when the creditors have undue influence over the company's operations it's time to

[geezer21]

All the oil producers were hedged.  With hedges expiring and oil prices rising oil producer revenues and balance sheets are improving substantually.

[Kontrary]

Have you ever actually looked at Surge's financial statements? Despite selling their production for twice the price they were getting last year for the same period they have actually generated less cash from operations than they did last year! (Despite the carnage that took place in the O&G markets in Q2/20).