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Highlights

  • Surge Energy’s oil sales increased by 4.3% yoy in Q1, driven by a 5% improvement in realized oil prices
  • Net income saw a significant increase of 372.2% compared to pcp
  • The company began its Q1 2025 drilling with two rigs in Sparky and one in Southeast Saskatchewan

Surge Energy Inc. (TSX: SGY) is engaged in the exploration, development, and production of oil and gas from properties in western Canada. The company generates its revenue from the sale of petroleum and natural gas products such as Oil, Natural gas liquids, and Natural gas, of which a majority of the revenue is derived from the sale of oil.

In the first quarter of 2025 (Q1 2025), Surge Energy’s oil sales increased by 4.3% yoy due to price uplift of 5% in realized oil prices. Adjusted Funds Flow increased by 28.2% yoy, reflecting efficient operational performance and capital discipline. Net income saw a significant increase of 372.2% yoy as unrealized hedging losses dropped significantly to CAD 3.5 mn from CAD 15.1 mn, reducing non-cash drag on earnings. This helped the company swing to profitability even with flat production and modest revenue growth.

The company has confirmed that a cash dividend of CAD 0.043 per share would be paid on May 15, 2025, for April 2025 production. The dividend is slated to be paid to shareholders of record as of April 30, 2025.

Recent Business Update

The company commenced its Q1 2025 drilling program with two rigs operating in the Sparky core area and one rig in the Southeast Saskatchewan core area. The program included a total of 24 gross wells, comprising 13 wells in the Sparky region and 11 wells in Southeast Saskatchewan.

Company Outlook

The company has issued a decent guidance for 2025, supported by strong drilling results and a high-quality asset base. It expects average production of 22,500 boepd, with liquids comprising 89% of the total. Additionally, it expects to generate approximately CAD 275 million in adjusted funds flow and maintain an annual dividend of CAD 52 million.

Top 10 Shareholders

The top 10 shareholders of SU together form ~6.30% of the total shareholding. American Century Investment Management Inc. and Avantis Investors hold a maximum stake in the company at ~1.51% and ~1.60%, respectively.

Stock Information

The stock has witnessed an upside of ~8.67% and a downside of ~5.39% over the last 1 week and 3 months respectively. Moreover, the stock is trading below the average of its 52-week high price of CAD 7.39 and 52-week low price of CAD 4.37. Shares of SGY last traded at CAD 5.26 on May 15 2025.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is May 15 2025. The reference data in this report has been partly sourced from EODHD/Others.

Technical Indicators Defined

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.