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CALGARY, Dec. 12, 2019 /CNW/ - Surge Energy Inc. ("Surge"
or the "Company") (TSX: SGY) is pleased to announce its budget
guidance for 2020 as approved by the Company's Board of
Directors.
2020 BUDGET – DEFENSIVE AND SUSTAINABLE
Surge's disciplined 2020 capital expenditure budget reaffirms
the Company's commitment to free cash flow generation and debt
reduction.
Surge's Board of Directors has approved a defensive, sustainable
budget for 2020 at US $56.50 WTI flat
pricing (less than current strip), that:
- Delivers production of 21,000 boepd (86 percent oil) in 2020,
for total capital of $98.5
million;
- Continues to pay down the Company's debt by more than
$20 million;
- Increases Surge's debt adjusted production per share by
3.1 percent1- cost effectively;
- Improves Surge's all-in payout ratio to 86
percent2;
- Delivers the Company's dividend – using only 19.3 percent of
2020 adjusted funds flow2;
- Maximizes cash flow through a returns-focused, efficient,
capital expenditure program;
- Maintains operational flexibility to adjust to a changing
commodity price environment; and
- Provides disciplined capital allocation, with cash flow
strategically allocated between capital projects, debt repayment,
and the payment of Surge's dividend.
In summary, as a result of Surge's low 23 percent annual
corporate decline, and by focusing drilling operations to the top
tier production efficiencies associated with the Company's core
Sparky play, Surge can deliver average production of 21,000 boepd
in 2020 – spending $36.5 million less
exploration and development capital than Surge's 2019 budget of
$135 million.
On this basis, Surge is currently providing an attractive annual
dividend yield of more than 9.5 percent, as well as a free cash
flow yield of more than 6 percent, based on the Company's 2020
budget.
Details relating to the 2020 budget are set forth below.
OVERVIEW OF CURRENT BUSINESS ENVIRONMENT
Current pricing fundamentals for crude oil continue to improve.
The forward one-year strip price for crude oil is currently over
US$57 WTI per barrel. Spot oil prices
are over US$59 WTI per barrel, and
continue to show volatility in relation to various shorter-term
events, including improving US/China trade talks, continued unrest in the
Middle East (i.e. the Saudi oil
installation bombing), OPEC production cuts, US and Canadian rig
counts dropping, and the slowing of US shale oil production growth
estimates.
On a macro scale, the long-term demand for crude oil continues
to move upward. The IEA projects that world crude oil demand growth
in Q3/19 was up 1.1 million barrels per day over the same period in
2018 (i.e. total crude oil demand is over 100 million barrels a
day). Growth in world oil demand in 2020 is now projected to be up
another 1.2 million barrels per day3.
POSITIONING FOR SUCCESS IN 2019
In 2019, Surge anticipates spending approximately $15-16 million less than the Company's
exploration and development capital budget guidance of $135 million, as management strategically chose
to drill 21 percent less wells (12 wells), and to continue to pay
down debt.
Despite drilling 21 percent fewer wells than budgeted, in 2019
Surge will still exit the year with production of approximately
21,000 boepd (85 percent oil).
Through a combination of primarily non-core asset sales and
reduced capital spending, during the first nine months of 2019
Surge has reduced net debt2 by $84 million, adding significant additional
liquidity to the Company's credit facilities.
Furthermore, in the last three financial quarters Surge has:
- Acquired 8.5 sections of highly prospective Crown land to the
North of the Company's large, core area Sparky oil discovery at
Betty Lake ("Betty Lake North") (with vertical Sparky well control
and logs);
- Leased 4 highly prospective sections of land at Betty Lake
North (with vertical Sparky well control and logs);
- Leased 2.75 sections of highly prospective Sparky land on an
exciting new Sparky play, and acquired an additional section of
Crown land on this play (which has vertical Sparky well control and
well logs); and
- Acquired 9.5 sections of highly prospective Slave Point acreage
at the Company's large OOIP4, waterflooded Nipisi light
oil asset in the Greater Sawn core area; this acreage includes both
Slave Point, and Clearwater
rights.
These smaller, core area top-up land acquisitions have added an
internally estimated 71 net drilling locations5 in
Surge's Sparky core area, and an internally estimated 17 net
locations5 in the Greater Sawn core area, replacing
more than 1.5 years of annual drilling inventory for Surge, at a
low total cost of $5.4 million.
In Surge's core Sparky asset, the Company has now amassed a
conventional, low cost, low risk, medium/light oil play that
has:
|
|
a.
|
> 900 million of
net internally estimated OOIP;
|
|
|
b.
|
Grown from 1,200
boepd four years ago, to more than 8,250 boepd (>90% oil)
today;
|
|
|
c.
|
An extensive 13-year
drilling inventory5;
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|
|
d.
|
Per well economics
that deliver quick payouts and excellent rates of return at current
strip prices;
|
|
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e.
|
Top tier production
efficiencies of $9,565 per boepd (i.e. 115 boepd IP90 for a total
cost of $1.1 mm); and
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|
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f.
|
Excellent longer term
waterflood results and profit to investment ratios (all at current
strip prices).
|
Further, the Sparky core area has been "de-risked" geologically,
operationally and financially over the last five years, as Surge
has now drilled 121 out of 122 successful horizontal wells.
On this basis, the Sparky play provides a significant
'operational advantage' to the Company's management and Board when
guiding and positioning the Company through the challenging
business conditions present today. Surge's Sparky play has
excellent production efficiencies and compelling economics - even
in a low oil price environment.
2020 BUDGET – DEFENSIVE AND SUSTAINABLE
In 2020 Surge is budgeting to spend $98.5
million of exploration and development capital (including
corporate overhead charges), which includes the drilling of 56
wells. The 2020 budget will primarily be focused in Surge's Sparky
core area and will consist of returns-based development drilling.
This focused drilling program increases Surge's oil and liquids
weighting from 85 percent in 2019, to 87 percent exit 2020.
Using Surge's annual corporate decline of 23 percent, and a 2020
drilling and completion capital budget of $68 million, the drilling program will have
robust production efficiencies of less than $15,000 boepd. These top tier efficiencies are
being achieved from both Surge's high-quality drilling inventory,
as well as the strong operational benefits of a large program
utilizing pad drilling.
The table below provides a detailed list of the capital
categories:
Capital
Category
|
2020e
|
Drilling and
Completions
|
$68.0
million
|
Facilities,
Equipment, Pipelines, & Seismic
|
$23.5
million
|
Other (Land,
Corporate)
|
$7.0
million
|
Total Exploration
& Development Capital
|
$98.5
million
|
Production and
Cost Guidance
|
2020e
|
Average
Production
|
21,000 boepd (86%
liquids)
|
Exit
Production
|
21,000 boepd (87%
liquids)
|
Net Operating
Expenses2
|
$14.00 - $14.50 per
boe
|
Transportation
Expenses
|
$1.50 - $1.75 per
boe
|
General &
Administrative Expenses
|
$1.85 - $1.95 per
boe
|
Financial &
Pricing Guidance
|
2020e
|
Cash Flow from
Operating Activities
|
$162.8
million
|
Asset Retirement
Obligations
|
$6.0
million
|
Adjusted Funds
Flow2
|
$168.8
million
|
|
|
Total Exploration
& Development Capital
|
$98.5
million
|
Dividends
|
$32.6
million
|
Leasing
expenditures
|
$10.8
million
|
|
|
WTI
(US$/bbl)
|
$56.50
|
Edmonton Par
Differential (US$/bbl)
|
($5.50)
|
WCS Differential
(US$/bbl)
|
($15.50)
|
CAD/USD Exchange
Rate
|
0.75
|
Natural Gas (AECO
C$/GJ)
|
$1.50
|
OPERATIONAL HIGHLIGHTS
Successful Q4/19 Drilling Program
During the fourth quarter of 2019, the Company drilled 13 net
successful wells, comprised of 12 Sparky wells and one Valhalla
Montney well.
In the Sparky core area, Surge expects to add more than 1,500
boepd (>90% oil) from the 12 well program, at an estimated
"all-in" capital cost of $13.5
million. Pad drilling continues to deliver significant cost
savings, consistently driving the cost per pad well to less than
budget estimates of $1.2 million per
well.
At Valhalla, Surge drilled an
exciting new light oil horizontal well into a large, conventional
Montney (Turbidite) pool that sits
below the Company's Doig pool. This Montney pool has large internally estimated
OOIP of more than 40 million barrels, and a pay column of up to 17
meters thick. The new horizontal well is currently exceeding the
Company's 300 bopd type curve by more than 85 percent, and has a
number of follow-up drilling locations, as well as waterflood
upside.
Environment, Social and Governance
In 2020 Surge will continue its commitment to being an industry
leader in environmental, social, and governance matters.
Pursuant to the Company's 2020 budget, management has now
increased Surge's target abandonment program to more than 150
wells, which is approximately three times the number of wells the
Company plans to drill during the year.
OUTLOOK – RESILIENT ADJUSTED FUNDS FLOW BASE
Management's stated goal is to be the best positioned, top
performing, light/medium gravity crude oil growth and dividend
paying public company in its peer group in Canada.
Appointment of Senior Vice President, Geosciences
Surge is pleased to announce that Mr. Derek Christie has joined the Company as Senior
Vice President, Geosciences effective November 18, 2019.
Mr. Christie is a Senior Energy Executive and professional
Geologist with over 28 years of wide-ranging experience across
North American Basins in both conventional and unconventional
reservoir exploration and development. Most recently, he was
the Senior Vice President of Exploration & Corporate
Development at a large Canadian oil company.
"We are excited to have Derek join the Surge team. His extensive
geoscience, operational, and strategic business experience will be
a huge asset for the Company," said Surge President and
CEO, Paul Colborne.
Consistent Production; Sustainable Dividend
In setting and approving the Company's 2020 budget, Surge's
management team and Board were able to take advantage of:
- Surge's high quality, large OOIP, low cost, conventional light
and medium gravity crude oil asset base;
- The Company's low annual corporate decline of 23 percent;
and
- The top tier production efficiencies, quick payouts, and
excellent rates of return associated with Surge's Sparky core
area.
As a result of these key operational strengths, in 2020 Surge
anticipates:
- delivering average production of 21,000 boepd – spending
$36.5 million less capital than
Surge's 2019 capital budget of $135
million (with 2020 debt adjusted exit production per share
increasing by 3.1 percent);
- continuing to pay down debt by more than $20 million;
- delivering an all-in payout ratio of 86 percent; and
- paying the Company's attractive dividend of $0.10 per share, per year – using only 19.3
percent of 2020 adjusted funds flow.
Consequently, Surge is currently providing an attractive annual
dividend yield of more than 9.5 percent, as well as a free cash
flow yield of more than 6 percent, based on the Company's 2020
budget.
Today the Company has over 2.5 billion barrels of internally
estimated OOIP, a low 6.2 percent recovery factor to date, and a
deep inventory of over 800 highly economic drilling
locations5 - providing a 13 year drilling
inventory. Additionally, the Company has a low annual corporate
decline, with over 60 percent of Surge's asset base under various
stages of waterflood.
Based on the Company's forecast debt reduction of more than
$20 million in 2020, and in
conjunction with its semi-annual borrowing base review, Surge
anticipates a renewal of its credit facilities at $425 million, comprised of a $300 million revolving line of credit, a
$50 million operating line of credit,
and an accordion of $75
million. This accordion feature allows Surge to
increase the revolving credit facility portion from $300 million to $375
million, for total credit facilities of $425 million, upon exercise and unanimous
syndicate approval. These credit facilities provide the Company
ample liquidity to execute on its 2020 budget, and will
significantly reduce stand-by fees. Surge anticipates closing its
semi-annual borrowing base review on or before December 18th, 2019.
Surge's high quality, light and medium gravity, crude oil asset
base provides an excellent platform for the Company to continue to
grow its reserves, production base, and drilling inventory in its
four core areas of Sparky, Valhalla, Greater Sawn, and Shaunavon through low risk development
drilling, and waterfloods. Surge also applies growth capital to
high quality, large OOIP, core area acquisitions where applicable.
This is in accordance with management's disciplined Business Plan
and Operating Strategy.
In light of the present business environment, Surge's primary
focus in 2020 is on sustainability, balance sheet management, cost
controls, and maintaining the Company's dividend.
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HTTP://SURGEENERGY.MEDIAROOM.COM/INDEX.PHP?S=14208&TYPE=1
FORWARD LOOKING STATEMENTS:
This press release contains forward-looking statements.
The use of any of the words "anticipate", "continue", "estimate",
"expect", "may", "will", "project", "should", "believe" and similar
expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements.
More particularly, this press release contains statements
concerning: Surge's budget for 2020, including Surge's anticipated
dividend payout ratio, all-in payout ratio, production, capital
expenditures, ability to pay down debt, cash flow, operational
flexibility and capital allocation; anticipated 2020 exit rate
production; predicted increases to Surge's oil and liquids
weighting; Surge's declared focus and primary goals, and the
ability of management to successfully implement such goals;
reserves; management's expectations with respect to Surge's asset
base; the quality and characteristics of Surge's assets; Surge's
annual exploration and development capital expenditure program and
budget; continued success of Surge's drilling and waterflood
programs; drilling inventory; corporate decline; anticipated 2020
realized crude oil prices and demand; commodity prices;
availability of undrawn capacity with respect to Surge's credit
facility; allocation of the Company's adjusted funds flow; and
Surge's dividend policy and the expectations of management with
respect to an increase to Surge's dividend.
Information respecting Surge's 2020 forecast operating netback
and forecast cash flow from operating activities set forth in this
press release may be considered to be future-oriented financial
information or a financial outlook for the purposes of applicable
Canadian securities laws. Financial outlook and future-oriented
financial information and projected operational information
contained in this press release are based on assumptions about
future events based on management's assessment of the relevant
information currently available that management considers to be
reasonable in the circumstances. The future-oriented financial
information and financial outlooks and projected operational
information contained in this press release have been approved by
management as of the date of this press release. Readers are
cautioned that any such future-oriented financial information,
financial outlooks and projected operational information contained
herein should not be used for purposes other than those for which
it is disclosed herein.
The forward-looking statements are based on certain key
expectations and assumptions made by Surge; 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; the determination
of decommissioning liabilities; prevailing weather conditions;
exchange rates; licensing requirements; the impact of completed
facilities on operating costs; the ability of Surge to continue to
pay its dividend; the availability and costs of capital, labour and
services; and the creditworthiness of industry partners.
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 the continued support of the
lenders under Surge's bank line. Certain of these risks are set out
in more detail in Surge's Annual Information Form dated
March 12, 2019 and in Surge's
MD&A for the period ended September 30,
2019, both of which have 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.
Reserves Data
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 and boepd means barrel of oil equivalent per day. 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. 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. Bbl means barrel of oil. NGLs means natural
gas liquids.
Drilling Locations
This press release discloses drilling locations in two
categories: (i) booked locations; and (ii) unbooked locations.
Booked locations are proved locations and probable locations
derived from an internal evaluation using standard practices as
prescribed in the Canadian Oil and Gas Evaluations Handbook and
account for drilling locations that have associated proved and/or
probable reserves, as applicable.
Unbooked locations are internal estimates based on prospective
acreage and assumptions as to the number of wells that can be
drilled per section based on industry practice and internal review.
Unbooked locations do not have attributed reserves or resources.
Unbooked locations have been identified by Surge's internal
certified Engineers and Geologists (who are also Qualified Reserve
Evaluators) as an estimation of our multi-year drilling activities
based on evaluation of applicable geologic, seismic, engineering,
production and reserves information. There is no certainty that the
Company will drill all unbooked drilling locations and if drilled
there is no certainty that such locations will result in additional
oil and gas reserves, resources or production. The drilling
locations on which the Company actually drills wells will
ultimately depend upon the availability of capital, regulatory
approvals, seasonal restrictions, oil and natural gas prices,
costs, actual drilling results, additional reservoir information
that is obtained and other factors. While certain of the unbooked
drilling locations have been de-risked by drilling existing wells
in relative close proximity to such unbooked drilling locations,
the majority of other unbooked drilling locations are farther away
from existing wells where management has less information about the
characteristics of the reservoir and therefore there is more
uncertainty whether wells will be drilled in such locations and if
drilled there is more uncertainty that such wells will result in
additional oil and gas reserves, resources or production.
Assuming a Jan 1, 2020 reference
date, the company will have over >800 gross (>800 net)
drilling locations identified herein, of these >400 gross
(>400 net) are unbooked locations. Of the 388 net booked
locations identified herein 297 net are Proved locations and 91 net
are Probable locations based on Sproule's 2018YE reserves. The
Company's Sparky core area has 136 net booked locations, of which
100 net are Proved locations and 36 net are Probable locations
based on 2018YE reserves. The Company's Greater Sawn area has
79 net booked locations, of which 58 net are Proved locations and
21 net are Probable locations based on 2018YE reserves.
Surge type curves were constructed using a representative,
factual and balanced analog data set, as of Aug 31, 2019. All locations were risked
appropriately, and EUR's were measured against OOIP estimates to
ensure a reasonable recovery factor was being achieved based on the
respective spacing assumption. Other assumptions, such as
capital, operating expenses, wellhead offsets, land encumbrances,
working interests and NGL yields were all reviewed and accounted
for on a well by well basis by Surge's Qualifies Reserve
Evaluators. All type curves fully comply with Part 5.8 of the
Companion Policy 51 – 101CP.
Non-GAAP Financial Measures
Certain secondary financial measures in this press release –
namely, "adjusted funds flow", "all-in payout ratio", "net
operating expenses" and "net debt" are not prescribed by GAAP.
These non-GAAP financial measures are included because management
uses the information to analyze business performance, cash flow
generated from the business, leverage and liquidity, resulting from
the Company's principal business activities and it may be useful to
investors on the same basis. None of these measures are used to
enhance the Company's reported financial performance or position.
The non-GAAP measures do not have a standardized meaning prescribed
by IFRS and therefore are unlikely to be comparable to similar
measures presented by other issuers. They are common in the reports
of other companies but may differ by definition and application.
All non-GAAP financial measures used in this document are defined
below:
Adjusted Funds Flow
The Company adjusts cash flow from operating activities in
calculating adjusted funds flow for changes in non-cash working
capital, decommissioning expenditures, transaction and other costs,
and cash settled stock-based compensation plans, particularly cash
used to settle withholding obligations on stock-based compensation
arrangements that are settled in shares. Management believes the
timing of collection, payment or incurrence of these items involves
a high degree of discretion and as such may not be useful for
evaluating Surge's cash flows.
Changes in non-cash working capital are a result of the timing
of cash flows related to items such as accounts receivable and
accounts payable, which management believes reduces comparability
between periods. Management views decommissioning expenditures
predominately as a discretionary allocation of capital, with
flexibility to determine the size and timing of decommissioning
programs to achieve greater capital efficiencies and as such, costs
may vary between periods. Transaction and other costs represent
expenditures associated with acquisitions, which management
believes do not reflect the ongoing cash flows of the business, and
as such reduces comparability. Subsequent to the third quarter of
2018, all of the Company's stock-based compensation plans are
equity classified as the Company has the intention of settling all
awards with shares. Cash settled stock-based compensation currently
represents the statutory tax withholdings required on stock-based
compensation awards and is a discretionary allocation of capital.
The Company has the option to either require the holder to sell
shares earned in the stock-based compensation plan to satisfy tax
withholdings, or the Company can issue less shares to the
individual and remit a cash payment to satisfy tax withholding
requirements. Each of these expenditures, due to their nature, are
not considered principal business activities and vary between
periods, which management believes reduces comparability.
The following table reconciles forecast cash flow from operating
activities to adjusted funds flow
($000s)
|
2020e
|
Petroleum and natural
gas revenue
|
$388,962
|
Processing and other
income
|
$4,600
|
Royalties
|
-$55,933
|
Operating
expenses
|
-$114,106
|
Transportation
expenses
|
-$11,529
|
Loss on financial
contracts
|
-$2,561
|
Operating
netback
|
$209,433
|
G&A
expense
|
-$14,400
|
Interest
expense
|
-$26,239
|
Adjusted Funds
Flow
|
$168,794
|
Changes in
non-cash working capital
|
$0
|
Abandonments
|
-$6,000
|
Cashflow from
Operating Activities
|
$162,794
|
All-in Payout Ratio
All-in payout ratio is calculated using the sum of total
exploration and development capital, plus dividends paid, divided
by adjusted funds flow, less lease obligations and asset retirement
obligations. This capital management measure is used by management
to analyze allocated capital in comparison to the cash being
generated by the principal business activities. This measure is
provided to allow readers to quantify the amount of adjusted funds
flow that is being used to either: i) pay dividends; and ii)
deployed into the Company's development and exploration program. A
ratio of less than 100% indicates that a portion of the adjusted
funds flow is being retained by the Company and can be used to fund
items such as asset abandonment, repayment of debt, fund
acquisitions or the costs related thereto, withholding tax
obligations on stock-based compensation, or other items.
Net Debt
There is no comparable measure in accordance with IFRS for net
debt. Net debt is calculated as bank debt plus the liability
component of the convertible debentures plus or minus working
capital, however, excluding the fair value of financial contracts
and other long term liabilities. This metric is used by management
to analyze the level of debt in the Company including the impact of
working capital, which varies with timing of settlement of these
balances. Net debt reduction includes $11
million in lease obligation repayments, it is calculated as
follows:
($000s)
|
2020e
|
Cashflow from
Operating Activities
|
$162,794
|
Less:
|
|
Lease
expenditures
|
-$10,800
|
Total Exploration
& Development Capital
|
-$98,500
|
Dividends
|
-$32,600
|
Total Estimated
Net Debt Reduction
|
$20,894
|
Net Operating Expenses
Net operating expenses are determined by deducting processing
and other revenue primarily generated by processing third party
volumes at processing facilities where the Company has an ownership
interest. It is common in the industry to earn third party
processing revenue on facilities where the entity has a working
interest in the infrastructure asset. Under IFRS this source of
funds is required to be reported as revenue. However, the Company's
principal business is not that of a midstream entity whose
activities are dedicated to earning processing and other
infrastructure payments. Where the Company has excess capacity at
one of its facilities, it will look to process third party volumes
as a means to reduce the cost of operating/owning the facility. As
such, third party processing revenue is netted against operating
costs.
Additional Metrics
This press release contains additional metrics commonly used in
the oil and natural gas industry. These terms have been calculated
by Management and do not have a standardized meaning. Management
uses these oil and gas metrics to further analyze the performance
of the Company over time and to compare the results of the Company
with others in the industry.
Additional information relating to non-GAAP and capital
management measures can be found in the Company's most recent
management's discussion and analysis MD&A, which may be
accessed through the SEDAR website (www.sedar.com).
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.
________________________________________________
1
|
|
Debt-adjusted shares
are calculated using exit shares of 326.2 million for 2019 and 2020
respectively, adjusted by the reduction in exit net debt, divided
by a $1.00 share price for 2019 and the 2020 budget.
|
2
|
|
This is a non-GAAP
financial measure which is defined in the Non-GAAP Financial
Measures section of this document.
|
3
|
|
Source: IEA (2019),
"Oil Market Report - November 2019", IEA, Paris
https://www.iea.org/reports/oil-market-report-november-2019.
|
4
|
|
See Reserves Data in
the Forward-Looking Statement section of this document for further
details.
|
5
|
|
See Drilling
Locations Section in the Forward-Looking Statement section of this
document for further details.
|
SOURCE Surge Energy Inc.