Surge Energy Inc (Alberta) T.SGY

Should payoff debt first

[PUNJABI]

SGY should completely pay off their debt first before paying any dividends and buying back shares. Some intuitional investors have kept away from this stock. The style of the CEO has been too aggressive and unpredictable to the point of being reckless Their last debt is very expensive and around 8.8%. Why would a company pay dividends when they are carrying such an expensive debt.

The last time this company bought back shares it turned out to be a blunder.


The last statement is very balanced and some investors would be looking for a change in stryle. But still, hard to trust him again.

While the debt to cash flow ratio is low but now most oil companies have that and some have become even more aggressive and want to completely pay off their debt. There are some like GXE that are targeting zero debt. has a market cap of $288m  with the production of 5700 B/D SGY has a market cap of around $550m with 21500 B/D. SGY is producing better quality oil. Most oil stocks are doing better than SGY.


Oil is out of favour for some investors and clean energy will continue to take over the market shares. Long term future outlook is not great for this sector. Oil companies will need to become lean and debt-free. Once they become debt-free they pay dividends. No one can predict that oil prices will stay at the current levels for a long time.

[downtozero]

Totally agree.

[Bubba359]

A lot of good points Punjabi , but what's wrong with a balanced approach including both debt reduction and DIVDENDS , don't shareholders deserve to be rewarded , just like mgmt. You Shareholder increase in price , only , is really one dementional. There are many out there who are not new owners but much longer term and deserve something extra. Now a renewal of a DIV would probably trigger

[PUNJABI]

This stock is still in the penalty box. There were too drastic swings in the value of the company. It was like a casino. Oil prices were a major factor but buying other companies/ assets with debt at the wrong time. Even when they were paying dividends it did not prevent the stock fo tanking. It became a huge dividend trap for those who did not sell because of the high dividend yield. Oil is a

[cahclick]

  I agree 100%. I'm surprised juniors don't use Special Dividends. It would allow the company to throw shareholders a bone if the quarter is above projected WITHOUT putting a noose around the company neck to meet the ongoing obligation. I guess every company will handle it differently but debt is a company killer and many oil names have just been handed a "get outa jail

[Ghost73patrol]

This post has been removed in accordance with Community Policy

[pennydredful]

3  trolls  here   all   AKA   Trevor   Plow   to  put on ignore

[masfortuna]

I am putting you on ignore for posting this garbage.  If anybody is a troll, it's you.

[masfortuna]

And to clarify it's pennydreadful.

[Fastguy69]

Sounds like you forgot to buy back in when you had a chance? 

[Kherson]

Being a long term holder of Surge and watching the recent run up of the share price and the new guidance put out by the company, I too would like to see their debt reduced. Having said that, I believe that the Montney assets will be sold. Kherson

[Stockhudson]

absolutely the right thing to do   pay off debt then the oil price pressure will be reduced    great to hear from Punjabi again    GLTA LONGS   

[terroir]

National Bank updated its forecast based upon the latest results. Interesting to see the change in debt forecasted for 2021 and 2022 without explanation: 2021 previous forecasr: $285,000,000 2021 updated forecast:  $330,000,000 2022 previous forecast: $167,000,000 2022 updated forecast:  $218,000,000 So, yes, with consistent inability to hit debt reduction targets, it makes no sense

[Al42]

I think Paul has a number in mind for the share price to reach then do a share offering to pay down the debt. Maybe it's $7.00 but probably around $8.00?

[Countrin2tive]

They have been down that slippery slope before at the expense of share holders.  It think any impulse to go that route should wait while we allow the impact of reduced hedges and higher oil prices to set in.

[Al42]

I agree and hope he doesn't take this route.

[PUNJABI]

It will be another disaster for the long-term shareholders if he does another dilution at these low prices. He did massive dilution at rock bottom prices of $.59. Issued 38.9m shares for $23m.and then he did a reverse split of 8.5 something an amateur CEO would do. Now pre-split the share price is around $.79. Because of his gross mismanagement, the stock has not yet recovered. Now if he does

[Stockhudson]

checking into Pauls history    he was at CPG   what was his status there    CPG had a somewhat poor reputation  in the market    was he part of that   or am I wrong   I am long time bagholder and trying to recover    dilution would really annoy me   pay that 8% loan off   GLTA  

[zack50]

Stockhudson... Paul Colbourne actually founded Crescent Point Energy Corp., and served as its President and CEO from June 2001 to September, 2003

[downtozero]

Good report. It would be interesting to know when NB made the original forecast. The difference is huge. It also means Paul has no intention of meeting the $218,000,000 number if he starts paying dividends at $256,000,000. Based on current oil price, they could be under $100,000,000 exit 2022 if they just focused on debt reduction. If decline is 25%, they probably need at least 10% higher CAPEX