Post by
zack50 on Feb 13, 2022 4:16pm
Surge is dedicated to their model...
PC has stated that he has never had a company with as much FCF as Surge has right now. If you take current spot prices, it's ~$200M... while $85 = $175M, $80 = $150M and $75 = $130M.
Using the $130M figure, Surge could easily institute a dividend of $35M and still have $95M of FCF. With this they can add a growth wedge of 2.5%, in the vicinity of $15M - 20M, plus a share buyback. Surge has no desire to be a big growth company... they have indicated they want to stay disciplined... to stay in the low part of the decline curve.
According to PC, the NAV of Surge is ~$18/share proved and probable and that's at a $70 flat price deck, which is what Sproule is using, so NAV would be much higher at current strip.
Surge has indicated the following plan with priorities as follows... the mix or order may change but it doesn't change the fact that as of today, they're pushing out a 35% yield to its shareholders.
1. a dividend of ~$35M
2. a modest growth wedge of ~2.5%
3. a share buyback every quarter
4. a "special" dividend, spiced in... NOTE: PC has indicated that if commodity price is higher than Surge's budget estimate, then maybe every quarter would have a "special" dividend, similar to what TOU has done recently.
As I mentioned previously, Surge has no desire to be a big growth company... their love their model. They have a 14 year inventory... they want the dividend, the "special" dividend and the share buyback but no big growth. They are not interested in changing their spots at this point in time... they are dedicated to their model.
Comment by
Dibah420 on Feb 13, 2022 6:28pm
"Surge has no desire to be a big growth company... they have indicated they want to stay disciplined... to stay in the low part of the decline curve." All of that is fine and dandy. Had they really maintained discipline my ACB would not be showing $42.5!
Comment by
bigkagan on Feb 13, 2022 11:47pm
Why does SGY have such a huge EPS and P/E of only 1?
Comment by
unc12345 on Feb 14, 2022 9:24am
Where do you see that they have huge EPS? I think it's quite the opposite.
Comment by
scienceguy36 on Feb 14, 2022 10:08am
Beta 3.07 EPS $6.47 Book Value $-1.66 P/E Ratio 1.0x Price/Sales (TTM) 3.0 Price/Cash Flow (TTM) 1.4x Operating Margin 160.10%
Comment by
Baystboy07 on Feb 14, 2022 4:32pm
This as a results of the huge impairement reversal in the prior year. It is a non cash item.
Comment by
zack50 on Feb 14, 2022 11:40am
Not sure what you are refering to when you say "hugh EPS" or where you get your figures... but Surge has indicated that it expects to generate FCF of around $130M or $1.57 per share based on $75 oil. At its present share price of $6.56, that gives SGY a P/E of ~4.2x.
Comment by
Rockyboy2015 on Feb 14, 2022 3:06pm
Any guess as to FCF at $95. Oil? Thank you in advance
Comment by
ariesleaf on Feb 14, 2022 3:15pm
Time is now to change that model for the sake of the shareholders
Comment by
zack50 on Feb 14, 2022 4:24pm
Ariesleaf... what is it that you don't like about debt paydown, a dividend, share buybacks, special dividends and growth wedge. Damn it... if you're gonna' continue to flap your lips, the least you can do is offer a proposal, lol.
Comment by
pennydredful on Feb 14, 2022 4:00pm
Go fishing elsewhere troll!