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.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
Minor delay but lower cost and better visibility enhance the investment profile
13 Jan 17
First oil at Stella is delayed by about a month, reducing the contribution of Stella to FY17 production by the same period. While this has an impact on FY17e free cash flow, this is negligible to our valuation. More importantly, FY17 opex are estimated at only US$18/boe, below our estimates of US$20/boe. There are opportunities to reduce opex further. Harrier is expected to reach first oil in 2018, one year earlier than we expected and at a cost of US$40 mm lower than we anticipated. The overall development cost is less than US$6.0/boe. Ithaca holds numerous discoveries around Stella that would be developed with a similar cost structure to Harrier.
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.