Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on SURGE ENERGY INC. We currently have 31 research reports from 1 professional analysts.
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SURGE ENERGY INC
SURGE ENERGY INC
Surge Increases 2016e Guidance, Provides Preliminary Glimpse into 2017e
07 Sep 16
Surge has increased its 2016e exit production target to 13,500 boe/d in concert with its 2016e budget moving to $66 mm ($55 mm previously). Preliminary plans for 2017e include an $85 mm capital program that is expected to generate average volumes of 13,650 boe/d with an exit rate of 14,100 boe/d, outlining a “return to growth” strategy. With our 2017e volumes and liquids weighting on the rise, paired with cash costs coming down, our cash flow outlook increases 24% alongside an improvement in leverage and sustainability profile. We are increasing our target price to $3.25 per share (previously $3.00) and are upgrading the stock to an Outperform ranking.
INCREASES 2016E GUIDANCE, PROVIDES PRELIMINARY GLIMPSE INTO 2017E
06 Sep 16
Impact: Slightly positive, as the Company's formal 2016e exit target rate of 13,500 boe/d is up 4% over the prior view, on capital spending that increases by $11 mm to $66 mm. This sets up for positive moves required in our 2017e forecast with Management's preliminary outlook for an $85 mm capital outlay generating average volumes of 13,650 boe/d and an exit rate of 14,150 boe/d.
Announces Second Quarter Results
04 Aug 16
Surge Energy reported 2Q16 results that were slightly behind on production and well ahead on a cash flow basis due primarily to non-recurring items. Adjusting for these items brings cash flow essentially in line with our estimate. Updating for 2Q16 actuals and making adjustments to our forecast pricing and cost related inputs moving forward, we show our cash flow outlook improving by 21% and 7% in 2016e and 2017e, respectively. With positive moves to our proforma view, we are increasing our target price to $3.00 per share (previously $2.75) which leaves implied returns that could soon require an upgrade from our current Market Perform ranking.
2Q16e Quarterly Preview
26 Jul 16
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
Provides Operations Update, Announces Reduction to Bank Line
21 Jul 16
Surge provided an operations update to the market ahead of its 2Q16 results release. Conditions within the Company’s key operating areas allowed an early start to the drilling program and, as a result, production has crested its exit rate guidance of 13,000 boe/d early. Well costs continue to trend down notably within its core Upper Shaunavon play where recent DC&T costs have dropped 20% from previous guidance and are well below our type curve assumptions. Following a normal course bank line review, Surge’s credit facility has been reduced to $250 mm from $400 mm. The Company has more than sufficient capacity to carry out its unchanged 2016 capital program of $55 mm.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Small Cap Breakfast
24 Feb 17
GBGI—Schedule One update from integrated provider of international benefits insurance. Raising £32m at 150p. Admission expected tomorrow. Anglo African Oil & Gas— Admission expected early March. Acquiring stake in producing near offshore field in the Republic of the Congo. Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb.
Sound Energy is an AIM-listed upstream gas company
27 Feb 17
Sound Energy is an AIM-listed upstream gas company with a balanced exploration and appraisal portfolio focussed on three strategic assets in onshore Morocco and Italy. The share price has trebled in the past year, following drilling success in the Tendrara licence of eastern Morocco. The work program of the next 12-18 months has the potential to de-risk additional gas resources in Morocco and Italy, providing short-term catalysts for further upside in the share price. However, any disappointing drilling results might leave the stock rather exposed given recent momentum and lack of certified reserves, although we recognise that the optionality in the portfolio would remain substantial.
Opuama production restarts
21 Feb 17
Eland has confirmed the successful restart of exports from OML 40 through the new shipping alternative that it has implemented. Sales from the export terminal are expected imminently, re-establishing cash generation for Eland. Cash at YE16 was US$11.1m which has since reduced to US$5.9m, mainly reflecting initial operating expenses for the shipping alternative. While it is early days, Eland has demonstrated its ability to restart exports and production from OML 40 following the shut-down of the Forcados terminal a year ago. Production to date is averaging around 7kbd and we expect that to ramp up as Opuama operational performance improves. At US$55/bbl Brent, we estimate Eland is generating a net cash margin of around US$25/bbl. We reiterate our Buy recommendation and 95p per share Target Price.