Surge Energy Inc (Alberta) T.SGY

For Surge to attract New Investors....

[kavern23]

For Surge to attact a new pool of investors...say for me as an example and isn't many retail people left. Volumes are cr*ppy in everything.

I think alot of new money would think similar to me.

My biggest issue with Surge is the strategy...they are not focused on being dominent player on any play. The capital markets are demanding this now. They want consolidation and for companies to be focused...and size and effiency.

Surge obviously doesn't have the financial muscle to grow and buy property in Northern Alberta, especially in the Montney or even Charlie Lake. Spartan or Whitecap or others can bid way more on assets.

They should focus either on Sparky or SE Sasketchewan as way less competition for assets...much cheaper. Someone needs to be the consolidator in those unloved plays and would be alot of stuff available by both their Sparky and SE Sask stuff.

Who Know Surge could even be working on this. SE sask asset purchase was smart in that sense...alot of cheap stuff in sask.

They should sell Valhalla. It is way more realistic then selling greater sawn as the price you would recieve for Sawn in these market conditions would be too off the CF Surge would lose from Greater Sawn.  It would be a hard property too sell.  They probbaly would have to do a property swap and trade swan for sparky assets. Probably would may sense for a company like Cardinal to take sawn on as they have stuff in the area and Cardinal has Sparky.
Surge has let Sawn decline a ton....they must be marketing it.

Valhalla would be worth something. It has good drilling potential. Surge has drilled one Montney well this year in Valhalla and it was f*cking great. The fact that Surge isnt drilling more here quickly shows how financially strapped they are.
Anyways the well is still doing over 300 barrels of oil a day at 6 months of production. 63000 barrels of oil from from April to Sept. Surge has more locations here but not enough for a core area.  Better off selling it.

That well could have even been a showcase to help sell property.  Strange they wont drill here right now. Be a 4 month payback well the one drilled in 2021.

Has to be more deals around the corner for these companies.

[kavern23]

Surge is never going to get the per flowing barrel valuation for Valhalla with it tied to the whole corp entity. Valhalla produces 2400 BOE a day and you prob could by more then 5000 BOE in sask or sparky for what Valhalla could fetch. Surge is currently mixing higher per flowing barrel properties...Valhalla could be worth over double per flowing barrel over any other stuff they have. Just

[ppp]

Hi Kavern  SGY needs to pay down a bit of debt  and start paying a div again. Their land is ideal for that model. Water flood!! Last thing these guys need to do, is drill to much. Their declines are at the max for a div company.  They are guiding 120 capex and and lets say 140 FCF. 100 to debt 40 to div starting H2 22. For 23 they can bump capex to 160 not more. Then increase the

[Kontrary]

That goes back to Kavern's original point, which is that Surge needs to have a clear recognized strategy to attract new investment. As you point out, to be regular dividend payers, companies the size of Surge need stable production with low declines. FCF largely goes to dividends and enough CAPEX to sustain production. Alternatively, if the goal is to turn a junior into an intermediate