Surge Energy Inc. - ZPTAF stock

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OTC Symbol: ZPTAF | OTC Tier: Pink Current | Related ticker symbols: TSX:SGY

Company Profile[edit]

Surge Energy Inc. (OTC: ZPTAF, TSX: SGY) is an oil-focused company based in Canada. The company was incorporated in 1998 as Zapata Energy Corporation before revising its name to Surge Energy Inc. in June 2010. It is headquartered in Calgary, Canada.[1] Surge Energy Inc. explores, develops, and produces oil and gas properties in Western Canada. It has conventional, medium to light crude oil reserves and a low decline production base. The firm's oil reservoirs have original oil in place (OOIP) with lower recovery factors. The company has unveiled more than 975 net drilling locations and several waterflood projects on its lands. Surge Energy's operations concentrate in core areas, including Greater Sawn, Valhalla, Sparky Core, SE Sask. and Manitoba, and Shaunavon.[2]

On August 18, 2021, the company announced the successful completion of the acquisition of Astra Oil Corp.[3] Surge confirmed that it had acquired all the issued and outstanding shares of Astra Oil for total consideration of $160 million approximately. Astra holds valuable assets, including over 4,100 boepd (barrels of oil equivalent per day) of operated, liquid oil production, primarily focused in SE Saskatchewan with an operating netback1 of more than $42 per boepd at US $65 WTI pricing.[4]

The company's nipping rivals include Harbour Energy, Calfrac Well Services, Medco Energy Internasional, and Sapura Energy.[5]

In its inaugural report, the company confirmed the abandonment of nearly 150 inactive wells, over 21% of inactive wells in 2020, and reduced CO2 equivalent emissions by 25,000 tonnes from its Surge's 2019 and 2020 Vapor Recovery Unit installation program.[6]

Projects[edit]

Surge Energy Inc. has an underlying sustainable strategy for its operations destined to enhance returns and free cash flow. The reputable business plan focuses on developing high-quality, conventional oil reservoirs using proven technology to improve recovery through waterflood. Disciplined capital allocation, financial flexibility, and responsible ESG principles substitute the pillars of the strategy.[7]

On November 1, last year, the company announced the closure of the pre-announced acquisition of Fire Sky Energy Inc. ("Fire Sky") according to an amalgamation (the "Transaction") under the provisions of The Business Corporations Act. The purchase price for the transaction was $58 million. Surge also indicated that it anticipates significant cash flow generation in 2022 via the acquisitions and consistent development of its high-quality, conventional crude oil assets.[8]

On top of the earlier acquisition of Astra Oil Corp, the management strategically targeted SE Saskatchewan for its high-value oil netbacks, cheaper production efficiency, and quick drilling returns. Fire Sky Assets produce over 1,500 boepd of operated, liquid oil, with more than $52 per boe operating netback, at US$70 WTI pricing – which is now less than 2022 average strip pricing.[9]

Surge's 2021 Fourth Quarter operation result highlights include:

  • Achieved average daily production of 21,163 boepd (85% liquids) during the fourth quarter of 2021, an increase of 22% as compared to Q4/20 production of 17,356 boepd (84% liquids).
  • Successfully drilled 48 (48.0 net) wells in 2021, with activity strategically focused on the Company's Sparky and SE Saskatchewan high quality, conventional, medium, and light gravity crude oil core areas.[10]

The page is authored by: Crescendo