CALGARY,
July 31, 2014 /CNW/ - Surge Energy
Inc. ("Surge" or the "Company") (TSX: SGY) announces record
financial and operating results for the three and six month periods
ended June 30, 2014.
Surge's financial and operating results for the
period ended June 30, 2014 include
only 25 days of contribution from the $429
million strategic business combination with Longview Oil
Corp. ("Longview"), which closed late in the second quarter of
2014.
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FINANCIAL AND OPERATING SUMMARY |
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($000s except per share amounts) |
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Three Months Ended
June 30, |
Six Months Ended
June 30, |
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2014 |
2013 |
% change |
2014 |
2013 |
% change |
Financial highlights |
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Oil and NGL sales |
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122,193 |
52,624 |
132 % |
221,954 |
100,840 |
120 % |
Natural gas sales |
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5,931 |
5,342 |
11 % |
13,716 |
10,698 |
28 % |
Other revenue |
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24 |
38 |
(37)% |
45 |
48 |
(6)% |
Total oil, natural gas, and NGL revenue |
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128,148 |
58,004 |
121 % |
235,715 |
111,586 |
111 % |
Funds from Operations1 |
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65,525 |
26,812 |
144 % |
119,295 |
52,049 |
129 % |
Per share basic ($) |
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0.34 |
0.38 |
(11)% |
0.66 |
0.73 |
(10)% |
Per share diluted ($) |
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0.34 |
0.38 |
(11)% |
0.65 |
0.73 |
(11)% |
Net income (loss) |
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37,927 |
(15,004) |
nm4 |
41,349 |
(16,358) |
nm |
Per share basic ($) |
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0.20 |
(0.21) |
nm |
0.23 |
(0.23) |
nm |
Per share diluted ($) |
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0.20 |
(0.21) |
nm |
0.23 |
(0.23) |
nm |
Capital expenditures - petroleum & gas
properties2 |
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18,975 |
25,166 |
(25)% |
77,326 |
65,231 |
19 % |
Capital expenditures - acquisitions &
dispositions2 |
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473,111 |
(39,377) |
nm |
581,823 |
(40,184) |
nm |
Total capital expenditures2 |
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492,085 |
(14,212) |
nm |
659,148 |
25,046 |
nm |
Net debt at end of period3 |
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557,969 |
193,597 |
188 % |
557,969 |
193,597 |
188 % |
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Operating highlights |
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Production: |
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Oil and NGL (bbls per day) |
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14,246 |
6,966 |
105 % |
13,475 |
6,910 |
95 % |
Natural gas (mcf per day) |
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12,893 |
14,442 |
(11)% |
13,434 |
15,559 |
(14)% |
Total (boe per day) (6:1) |
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16,395 |
9,373 |
75 % |
15,714 |
9,504 |
65 % |
Average realized price (excluding hedges): |
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Oil and NGL ($per bbl) |
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94.25 |
83.01 |
14 % |
91.01 |
80.62 |
13 % |
Natural gas ($ per mcf) |
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5.06 |
4.06 |
25 % |
5.64 |
3.80 |
48 % |
Realized loss on financial contracts ($ per boe) |
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(5.52) |
(2.12) |
160 % |
(5.30) |
(1.28) |
314 % |
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Net back (excluding hedges) ($ per boe) |
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Oil, natural gas and NGL sales |
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85.89 |
68.00 |
26 % |
82.88 |
64.87 |
28 % |
Royalties |
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(14.40) |
(12.56) |
15 % |
(14.25) |
(11.74) |
21 % |
Operating expenses |
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(15.71) |
(11.97) |
31 % |
(15.07) |
(12.28) |
23 % |
Transportation expenses |
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(1.71) |
(2.46) |
(30)% |
(1.81) |
(2.35) |
(23)% |
Operating netback |
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54.07 |
41.01 |
32 % |
51.75 |
38.50 |
34 % |
G&A Expense |
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(2.06) |
(4.88) |
(58)% |
(2.10) |
(4.03) |
(48)% |
Interest Expense |
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(2.30) |
(2.62) |
(12)% |
(2.27) |
(2.67) |
(15)% |
Corporate netback |
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49.71 |
33.51 |
48 % |
47.38 |
31.80 |
49 % |
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Common shares (000s) |
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Common shares outstanding, end of period |
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217,619 |
71,918 |
203 % |
217,619 |
71,918 |
203 % |
Weighted average basic shares outstanding |
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189,969 |
71,358 |
166 % |
181,566 |
71,288 |
155 % |
Stock option dilution (treasury method) |
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1,383 |
— |
100 % |
1,122 |
— |
100 % |
Weighted average diluted shares outstanding |
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191,352 |
71,358 |
168 % |
182,688 |
71,288 |
156 % |
1 |
Management uses funds from operations (cash flow from operating
activities before changes in non-cash working capital, legal
settlement expenses, decommissioning expenditures, transaction
costs and current tax on disposition) to analyze operating
performance and leverage. Funds from operations as presented does
not have any standardized meaning prescribed by IFRS and,
therefore, may not be comparable with the calculation of similar
measures for other entities. |
2 |
Please see capital expenditures note. |
3 |
The Company defines net debt as outstanding bank debt plus or
minus working capital, however, excluding the fair value of
financial contracts and other current obligations. |
4 |
The Company views this change calculation as not meaningful, or
"nm". |
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RECORD PRODUCTION, FUNDS FLOW, NETBACKS; AND
CLOSING OF STRATEGIC BUSINESS COMBINATION IN THE SECOND QUARTER OF
2014
Surge is pleased to report record funds from
operations of $65.5 million in the
second quarter, along with record operating netbacks of over
$54 per boe, and record production of
approximately 16,400 boe per day, which quarterly results include
only 25 days of contribution from the Longview business combination, as well as the
impact of a planned facility turn-around at Valhalla.
HIGHLIGHTS
- Achieved a second quarter average production rate of 16,395
boe per day, an increase of 75 percent from 9,373 boe per day
in the same period of 2013.
- Funds from operations increased 144 percent to a record
$65.5 million in the second
quarter of 2014 as compared to the same period of 2013.
- A second quarter capital program (not including
acquisitions and divestitures) of $19.0
million, which represents only 29 percent of funds from
operations for the quarter.
- Achieved records for both operating and corporate netbacks
in the second quarter of 2014. Surge's operating netback increased
to $54.07 per boe and its corporate
netback increased 48 percent to $49.71 per boe in the second quarter of 2014,
from $33.51 per boe in the second
quarter of 2013.
- Increased Surge's oil and natural gas liquids production
weighting by 18 percent to 87 percent in the second quarter of
2014 from 74 percent in the second quarter of 2013.
- Approximately 95 percent of Surge's revenue resulted from
oil and natural gas liquids production in the second quarter of
2014.
- Reduced G&A per boe by 58 percent in the second
quarter of 2014 as compared to the same period in 2013. Surge has
had excellent results with respect to managing and reducing costs.
The Company's G&A costs have dropped from $4.88 per boe in the second quarter of 2013 to
$2.06 per boe in the second quarter
of 2014.
- Announced the completion of the strategic business
combination with Longview. The
transaction is accretive to Surge on all metrics, and adds high
quality concentrated reserves, production, land, and operations
that are contiguous with Surge's three existing core areas.
- Increased the Company's dividend by 11 percent from
$0.54 per share per year
($0.045 per share per month), to
$0.60 per share per year
($0.05 per share per month, first
payment for June production on July 15,
2014) as a result of the accretive Longview transaction.
- Increased the Company's bank line to $725 million during the quarter. With
one of the lowest all-in payout ratios in Canada (<90 percent), the Company will
maintain its excellent balance sheet giving Surge more than
$240 million of capacity on its bank
line at year end 2014.
- Subsequent to June 30, the
Company has executed definitive agreements to sell approximately
$52 million of certain miscellaneous
assets, the proceeds of which will be used to reduce debt.
These miscellaneous dispositions are expected to close before the
end of the third quarter of 2014. Based upon continued excellent
development drilling results across the Company's asset base,
Surge's 2014 production exit rate of 21,350 boepd is being
maintained, in spite of the anticipated dispositions, with only a
modest increase in capital spending of $6
million in 2014.
LONGVIEW
CLOSING
On June 5, 2014,
the Company announced that it had closed the previously announced
business combination with Longview
whereby Surge acquired all of the remaining issued and outstanding
common shares of Longview by way of a plan of arrangement
transaction.
The Longview
acquisition fits squarely within Surge's defined operating strategy
of investing growth capital to acquire high quality, operated,
light and medium gravity crude oil reservoirs, with large original
oil in place ("OOIP5") and low recovery factors. Surge
now has over 1.9 billion barrels of light and medium gravity OOIP
under the Company's ownership and management, with more than 1,000
lower risk development drilling locations, giving Surge a drilling
inventory of more than 15 years.
Surge now has proved plus probable
reserves6 of more than 117 million boe (88 percent oil
& ngls) resulting in a reserve life index of over 15 years, a
forecast decline rate of only 22 percent, pro-forma annualized
funds flow of $326 million, and a
portfolio of high quality waterflood projects. Surge also has one
of the lowest payout ratios in its peer group in Canada at 89.9 percent.
The Longview
acquisition was highly accretive to Surge shareholders on all
metrics, including funds flow, production and reserves per share.
In addition, Surge's net asset value per share increased by more
than 18 percent to an estimated $8.23.
OPERATIONS REVIEW - CONTINUED DRILLING
SUCCESS AT SHAUNAVON
In the second quarter of 2014 Surge experienced
better than anticipated development drilling results, drilling 7
gross (4.6 net) wells, with reduced drilling activity levels
relating to normal spring break up conditions. This very successful
drilling program consisted of 2 gross (2 net) development Upper
Shaunavon wells, 1 gross (1 net) well at Valhalla, 1 gross (1 net) Sparky well at
Provost, and 3 gross (0.6 net) Viking wells as part of Surge's
strategic farmout of exploration lands in this area. Production
from only 1 gross (1 net) well was included in the quarter, with 6
wells (3.6 net) to be brought on in the third quarter.
In addition, Surge successfully integrated the
producing assets and operating staff associated with the
Longview combination from the
closing date on June 5th, 2014,
adding approximately 5,600 boepd of production strategically
located in Surge's three key operating areas.
Shaunavon
As a follow up to Surge's successful first quarter Upper Shaunavon
discovery well at 191/16-36-005-19W3, the Company drilled two
additional step-out Upper Shaunavon wells (100% working interest)
in the second quarter. These successful new wells were drilled off
a pad approximately 400 meters west of the initial discovery well.
Both wells encountered excellent reservoir in the Upper Shaunavon
formation throughout. The first well extended the width of the
fairway a full mile to the south of the discovery well. The second
well was a direct offset to the discovery well, and its original
reservoir pressure did not indicate any depletion as a result of
the production from the discovery well, which has cumulative
production to date of over 33,000 barrels.
These two new wells were brought on production
in mid-July, and are currently each producing at over 325 bopd with
low water cuts; the water cuts for both wells continue to decrease
as the load fluid is recovered.
In addition, the original Upper Shaunavon
discovery well is still producing approximately 300 bopd at a low
water cut after four and a half months. This exciting discovery
well has netbacks of over $65 per
bbl, and paid out in less than 100 days.
Surge management now believe that this discovery
contains more OOIP than the 125 million net barrels originally
press released by the Company on April
8th, 2014. Surge is presently updating its
technical evaluation of the OOIP relating to this exciting,
internally generated new play. In addition, Surge now anticipates
that there will be more than 64 net additional drilling locations
in relation to this large, high quality, medium gravity,
conventional sandstone oil pool.
Surge plans to drill up to six more Upper
Shaunavon wells before the end of the year; two in the third
quarter, stepping out from the previous drills to expand the
current trend, and up to four in the fourth quarter, including a
significant step out well on a separate trend which has been
identified using the same geophysical parameters as the ones used
to drill on the current successful trend.
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5 |
Original Oil in Place (OOIP) is the equivalent to Discovered
Petroleum Initially In Place (DPIIP) for the purposes of this press
release. DPIIP is defined as quantity of hydrocarbons that are
estimated to be in place within a known accumulation, plus those
estimated quantities in accumulations yet to be discovered. There
is no certainty that it will be commercially viable to produce any
portion of the resources. A recovery project cannot be defined for
this volume of DPIIP at this time, and as such it cannot be further
sub-categorized. |
6 |
Pro-forma December 31, 2013 reserves. |
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In addition, also at its Shaunavon property, the Company brought on
production 4 gross (3 net) Lower Shaunavon wells in the second
quarter that were drilled in the first quarter. These wells have
now been optimized for production and are exceeding average type
curve expectations.
Valhalla
During the second quarter, Surge drilled and completed a successful
well in the NW area of the Company's large OOIP light oil Doig pool
at Valhalla. This well proved up
additional pay and reserves, further extending the pool. Initial
results upon completion were well above type curve
expectations.
Additionally, Surge conducted a planned
turnaround on its Valhalla oil
battery, coinciding with a major planned turnaround at the
third-party Sexsmith gas plant.
These turnaround activities combined to negatively impact second
quarter production by approximately 2,450 boepd for the 20 day
turnaround cycle, or 535 boepd for the quarter.
Surge has identified, and is in negotiations
with, two additional third-party processing facilities in the
immediate vicinity. The Company expects to begin delivering a
significant portion of the Valhalla pool's solution gas to these
facilities early in the fourth quarter, which will significantly
reduce the reliance on, and interruptions experienced with, the
Sexsmith Plant.
Surge plans to drill an additional 2 gross (0.9
net) Doig wells in the third quarter.
Provost/Wainwright/Eyehill - Sparky
During the second quarter, Surge successfully drilled and completed
1 gross (1 net) Sparky development well at its high quality, medium
gravity large OOIP pool at Provost. This well was placed on
production early in the third quarter at attractive rates. Surge
also continued its Sparky development drilling program into the
third quarter with the drilling of 1 gross (1 net) Sparky
development well at Wainwright, which is currently on production
and recovering load fluid. The Company also completed the drilling
of 2 gross (2 net) development wells at Eye Hill, which will be on
production in the third quarter.
Additionally, Surge expanded its gathering
system at Eye Hill in preparation for the third quarter drilling
program, with the construction of a water injection pipeline
related to the waterflood pilot at Eye Hill. Water injection is
expected to commence on this high quality, medium-gravity, large
OOIP asset late in the third quarter.
Macoun -
Midale
Early in the third quarter, Surge completed a frac of an existing
horizontal light oil well in the Midale formation. The well was open hole
stimulated using an inflatable straddle assembly with six fracs at
three tonnes per stage on July 11,
2014. The Company experienced excellent initial inflow and
expects this well to stabilize at nearly three times the
pre-stimulation production rate of 38 bopd.
Surge plans to drill three more Midale wells prior to the end of the year; two
in the third quarter and one in the fourth quarter, stepping out
from the previous drills to expand the current Midale trend. The Company also plans to
optimize the Midale waterflood by
adding source water and converting 1 to 2 wells to injectors.
Pinto - Midale
Late in the second quarter, Surge fraced an existing Midale well at 13-16, where the well was
stimulated with five tonnes of sand per stage on June 25, 2014. Prior to stimulation, the well was
producing 16.5 bopd with a water cut of 62 percent. Presently
the well is cleaning up on pump at attractive rates. Due to wet
weather in the Pinto area, this well did not come on production
until July 10, 2014.
Surge intends to drill two more wells before the
end of the year within the current Midale trend.
Surge has 115 net sections of land (including 85
net sections of fee land) on this exciting Midale trend, and over 90 net drilling
locations.
Viking Farmout - Southwest Saskatchewan
The farm-in operator drilled 3 gross (0.6 net) Viking wells late in
the second quarter. Two of these wells were completed and brought
on production in July. Subsequent to the second quarter, the
operator successfully rig released 6 gross (1.2 net) Viking wells
to date. Surge anticipates having a further 12 gross (2.4 net)
Viking farm-in wells drilled and on production in the third
quarter.
OUTLOOK AND GUIDANCE: WELL POSITIONED FOR SUSTAINABLE GROWTH
AND DIVIDENDS
As a result of the successful implementation of
the Company's focused business plan, Surge is one of the best
positioned light and medium gravity crude oil growth and
dividend-paying companies in Canada.
Based upon continued excellent development
drilling success across the Company's asset base, Surge's 2014
production exit rate of 21,350 boepd is being maintained, in spite
of the $52 million in anticipated
miscellaneous dispositions referred to above, with only a modest
increase in capital spending of $6
million in 2014.
Accordingly, the following sets forth Surge's revised guidance
estimates for 2014, including the $52
million of anticipated miscellaneous dispositions referred
to above:
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OPERATIONAL7 |
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Surge 2014E
Guidance |
Previous 2014E
Guidance |
2014E Exit Production (boe/d) |
21,350 (84% Oil/NGLs) |
21,350 (84% Oil/NGLs) |
RLI |
>15 years based on 2014E exit
production |
>15 years based on 2014E exit
production |
2014E Capital Spending |
$142 million |
$136 million |
2014E Wells Drilled |
66/43.5 gross/net wells |
63/40.5 gross/net wells |
2014 Decline |
22% |
22% |
2014 NAV/Share |
$8.23 |
$8.23 |
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FINANCIAL8,9,10,11,12 |
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Surge 2014E
Guidance |
Previous 2014E
Guidance |
Annualized Funds from Operations ("FFO") |
$326 million |
$326 million |
Annualized FFO per share |
$1.50 per share |
$1.50 per share |
2014E Operational Netback per BOE |
$45.28 |
$45.37 |
2014E Cash Flow Netback per BOE |
$40.48 |
$40.60 |
Basic Shares Outstanding |
217 million |
217 million |
Annual Dividend |
$130 million |
$130 million |
Yield |
7.5% |
8.6% |
Basic Payout Ratio 2014E |
40.1% |
41.9% |
"All-in" Annualized Payout Ratio |
89.7% |
89.8% |
2014E Exit Net Debt |
$486 million |
$512 million |
Annualized Net debt / FFO |
1.39x |
1.48x |
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7 |
Includes 20 farmed out Viking locations at an average net
working interest of 20%. |
8 |
Management uses funds from operations (cash flow from operating
activities before changes in non-cash working capital, legal
settlement expenses, transaction costs, decommissioning
expenditures and current tax on dispositions) to analyze operating
performance and leverage. Funds from operations as presented does
not have any standardized meaning prescribed by IFRS and,
therefore, may not be comparable with the calculation of similar
measures for other entities. |
9 |
Based on 2014 Edmonton Par $101.60/bbl; 2014 AECO gas $4.90/mcf
and a 2014 CAD/USD exchange rate of $0.91. |
10 |
Current guidance assumes a four percent growth rate on exit
2014 production of 21,350 boe/d and the annualized Q4 2014 FFO of
$314 million |
11 |
Previously based on a Surge share price of $7.00, current
guidance is based on a Surge share price of $8.00 |
12 |
Current guidance assumes the annualized FFO per note 10,
including repayment of debt with excess cashflow of $32
million. This results in ending debt of $446 million. |
In accordance with Surge's guidance set forth above, with a low
"all-in" payout ratio of less than 90 percent, the Company
forecasts its debt will be reduced by more than $31 million on an annualized basis.
Surge will continue to focus capital towards
elite, large OOIP crude oil reservoirs. Management's primary goals
for Surge include achieving three to five percent organic annual
per share growth in reserves, production and cash flow, a
sustainable and growing dividend, continued debt reduction,
together with the pursuit of high quality, accretive
acquisitions.
Management will continue maintaining balance
sheet flexibility with an effective risk management program and
confirming the commercial viability of the Company's waterflood
program. By the end of 2014 Surge anticipates that over 75 percent
of the Company's producing assets will be under waterflood. The
implementation of the waterflood pilots are an integral piece of
Surge's strategy of increasing oil recovery factors throughout the
Company's deep crude oil portfolio, lowering corporate decline
rates, continuing to improve sustainability and maximizing
shareholder value. The Company will also pursue continued, year
over year increases in recovery factors from these high quality
assets through low risk development activities, including in-fill
and step out development drilling, up-to-date completion
techniques, including hortizontal frac technology and
optimizations.
Surge is well positioned to offer solid annual
per share growth, plus a competitive increasing dividend, through
its organic development drilling program, and the Company's high
quality waterflood projects - for the foreseeable future.
FINANCIAL STATEMENTS AND ACCOMPANYING
MDA:
Surge has filed with Canadian securities
regulatory authorities its financial statements and accompanying
MD&A for the three months ended June 30,
2014. These filings are available for review at
www.sedar.com or www.surgeenergy.ca.
FORWARD LOOKING STATEMENTS:
This press release contains forward-looking
statements. More particularly, this press release contains
statements concerning: (i) expectations with respect to Surge's
balance sheet and anticipated year ended bank line availability;
(ii) the completion, timing and use of proceeds of the $52 million of disposition transactions; (iii)
the anticipated increase in capital spending for 2014; (iv)
anticipated increases in drilling inventory; (v) forecast decline
rates; (vi) Surge's drilling and development plans and enhance
recovery projects and the timing and results to be expected
thereof; (vii) the proposed delivery of solution gas to new
facilities for certain Valhalla
wells and Surge's reduction in reliance on the Sexsmith plant; (viii) management's
expectations with respect to the Company's waterflood program,
results therefrom and quantity of producing assets that will be
placed under waterflood; (ix) Surge's operational guidance,
including year-end exit production rate, capital spending, total
wells drilled, decline rates, year-end net-asset-value/share,
annualized funds from operations, including on a per share basis,
operational and cash flow netback, including on a per BOE basis,
the number of shares outstanding, total annual dividend and
expected yield, basic payout ratios, "all-in" pay-out ratios,
estimated year-end net debt to funds from operation ratio and
year-end exit debt; (xii) the Company's declared focus and primary
goals; and (xiii) the sustainability of dividends.
The forward-looking statements are based on
certain key expectations and assumptions made by Surge, including
expectations and assumptions concerning the performance of existing
wells and success obtained in drilling new wells, anticipated
expenses, cash flow and capital expenditures, the application of
regulatory and royalty regimes, prevailing commodity prices and
economic conditions, development and completion activities, the
performance of new wells, the successful implementation of
waterflood programs, the availability of and performance of
facilities and pipelines, the geological characteristics of Surge's
properties, the successful application of drilling, completion and
seismic technology, prevailing weather conditions, exchange rates,
licensing requirements, the successful completion of the
disposition transactions, the impact of completed facilities on
operating costs and the availability, costs of capital, labour and
services, the creditworthiness of industry partners and the receipt
of approval of the lenders under Surge's bank line to increases
thereto.
Although Surge believes that the expectations
and assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the
forward-looking statements because Surge can give no assurance that
they will prove to be correct. Since forward-looking statements
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number
of factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations and constraint in the availability of services,
adverse weather or break-up conditions, uncertainties resulting
from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures or
failure to obtain required approvals from the lenders under Surge's
bank line to increases thereto. Certain of these risks are set out
in more detail in Surge's Annual Information Form dated
March 19, 2014 which has been filed
on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this
press release are made as of the date hereof and Surge undertakes
no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
Note: Boe means barrel of oil equivalent on the
basis of 1 boe to 6,000 cubic feet of natural gas. Boe may be
misleading, particularly if used in isolation. A boe
conversion ratio of 1 boe for 6,000 cubic feet of natural gas is
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. Boe/d means barrel of oil
equivalent per day.
Financial Outlooks
The estimates of 2014 year end net debt, 2014
funds from operations and 2014 operating netback and cash flow
netback contained in this press release are financial outlooks
within the meaning of applicable securities laws. These financial
outlooks have been prepared by management of Surge to provide an
outlook of Surge's anticipated funds from operations and netbacks
for a full year of operations with its current assets and based on
management's expectations and assumptions as to a number of
factors, including commodity pricing, production, operating
expenses and royalties. Readers are cautioned that this information
may not be appropriate for any other purpose. Management does not
have firm commitments for all of the costs, expenditures, prices or
other financial assumptions used to prepare the financial outlooks
or assurance that such results will be achieved. The actual results
of Surge will likely vary from the amounts set forth in the
financial outlooks and such variation may be material. Surge and
its management believe that the financial outlooks have been
prepared on a reasonable basis, reflecting the best estimates and
judgments, and represent, to the best of management's knowledge and
opinion, Surge's expected expenditures and results of operations.
However, because this information is highly subjective and subject
to numerous risks, including the risks discussed under the note
regarding Forward Looking Statements, it should not be relied on as
necessarily indicative of future results. Except as required by
applicable securities laws, Surge undertakes no obligation to
update this information.
Test Results and Initial Production
Rates
Any references in this news release to initial,
early and/or test production/performance rates are useful in
confirming the presence of hydrocarbons, however, such rates are
not determinative of the rates at which such wells will continue
production and decline thereafter. While encouraging, readers
are cautioned not to place reliance on such rates in calculating
aggregate production. The initial production rate may be estimated
based on other third party estimates or limited data available at
this time. Initial production or test rates are not
necessarily indicative of long-term performance of the relevant
well or fields or of ultimate recovery of
hydrocarbons.
Neither the TSX nor its Regulation Services
Provider (as that term is defined in the policies of the TSX)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Surge Energy Inc.