CALGARY,
AB, Nov. 2, 2022 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to announce the
Company's financial and operating results for the quarter ended
September 30, 2022, and an update on
Surge's latest drilling results.
Q3 2022 FINANCIAL & OPERATING HIGHLIGHTS
Surge's Board and Management continue to be optimistic on the
outlook for crude oil prices, based on a historically tight
physical market, ongoing geopolitical issues, and the significant
underinvestment in the energy industry over the past several
years.
During the third quarter of 2022, Surge delivered cash flow from
operating activities of $69.2
million, an increase of 163 percent as compared to Q3/21
cash flow from operating activities of $26.3
million. Additionally, the Company delivered adjusted funds
flow1("AFF") of $80.3
million in Q3/22, an increase of 189 percent compared to
Q3/21 AFF of $27.8 million.
Despite WTI crude oil prices dropping by nearly C$20 per barrel from Q2/22 to Q3/22, Surge's
Q3/22 AFF was $1.7 million higher as
compared to Q2/22, increasing from $78.6
million in Q2/22 to $80.3
million. This quarter over quarter increase is due to the
Company's better than anticipated drilling results and the expiry
of most of Surge's previously mandated fixed price crude oil
hedges.
In Q3/22, Surge also returned $8.8
million to its shareholders in the form of cash dividends
pursuant to the Company's base cash dividend of $0.42 per share per annum (paid monthly).
Annualized, the Company's base cash dividend represents less than
13 percent of Q3/22 cash flow from operating activities.
During the quarter, Surge reduced net debt by 6 percent, from
$280.1 million at June 30, 2022 to $264.3
million at September 30,
2022.
Additional highlights from the Company's
Q3 2022 financial and operating
results include:
- Achieved average daily production of 21,380 boepd (86 percent
liquids) during Q3/22, an increase of over 21 percent as compared
to Q3/21 production of 17,642 boepd (84 percent liquids);
- Successfully drilled 26 gross (20.7 net) wells with activity
focused in the Company's Sparky and SE
Saskatchewan conventional light and medium gravity crude oil
core areas; and
- Reduced net debt1 by $15.9
million as compared to June 30,
2022 while concurrently completing Surge's successful Q3/22
capital program for $42.4
million.
FINANCIAL AND OPERATING HIGHLIGHTS
|
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|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
|
($000s except per
share amounts)
|
2022
|
2021
|
%
Change
|
2022
|
2021
|
%
Change
|
|
|
Financial
highlights
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|
|
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|
Oil sales
|
166,487
|
97,272
|
71 %
|
520,397
|
243,639
|
114 %
|
|
|
NGL sales
|
3,920
|
2,663
|
47 %
|
12,912
|
6,437
|
101 %
|
|
|
Natural gas
sales
|
8,890
|
5,170
|
72 %
|
28,111
|
16,606
|
69 %
|
|
|
Total oil, natural gas,
and NGL revenue
|
179,297
|
105,104
|
71 %
|
561,420
|
266,682
|
111 %
|
|
|
Cash flow from
operating activities
|
69,170
|
26,263
|
163 %
|
197,150
|
50,067
|
294 %
|
|
|
Per share - basic
($)
|
0.83
|
0.46
|
81 %
|
2.36
|
1.07
|
120 %
|
|
Per share diluted
($)
|
0.80
|
0.45
|
79 %
|
2.29
|
1.05
|
119 %
|
|
Adjusted funds
flowi
|
80,294
|
27,804
|
189 %
|
221,748
|
57,118
|
288 %
|
|
|
Per share - basic
($)i
|
0.96
|
0.48
|
98 %
|
2.66
|
1.22
|
117 %
|
|
Per share diluted
($)
|
0.93
|
0.47
|
97 %
|
2.58
|
1.20
|
116 %
|
|
Net income
(loss)iii
|
78,057
|
67,612
|
15 %
|
128,216
|
364,740
|
(65) %
|
|
|
Per share basic
($)
|
0.93
|
1.18
|
(21) %
|
1.54
|
7.82
|
(80) %
|
|
Per share diluted
($)
|
0.91
|
1.15
|
(21) %
|
1.49
|
7.63
|
(80) %
|
|
Expenditures on
property, plant and equipment
|
42,358
|
33,932
|
25 %
|
122,216
|
81,330
|
50 %
|
|
|
Net acquisitions and
dispositions
|
—
|
90,000
|
nmii
|
(32)
|
(12,591)
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nm
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|
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Net capital
expenditures
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42,358
|
123,932
|
(66) %
|
122,184
|
68,739
|
78 %
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Net debti,
end of period
|
264,261
|
319,790
|
(17) %
|
264,261
|
319,790
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(17) %
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|
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Operating
highlights
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Production:
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Oil (bbls per
day)
|
17,639
|
14,264
|
24 %
|
17,173
|
13,299
|
29 %
|
|
|
NGLs (bbls per
day)
|
647
|
575
|
12 %
|
712
|
560
|
27 %
|
|
|
Natural gas (mcf per
day)
|
18,561
|
16,815
|
10 %
|
18,573
|
15,582
|
19 %
|
|
|
Total (boe per day)
(6:1)
|
21,380
|
17,642
|
21 %
|
20,981
|
16,456
|
27 %
|
|
|
Average realized price
(excluding hedges):
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Oil ($ per
bbl)
|
102.59
|
74.12
|
38 %
|
111.00
|
67.11
|
65 %
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|
|
NGL ($ per
bbl)
|
65.91
|
50.31
|
31 %
|
66.44
|
42.13
|
58 %
|
|
|
Natural gas ($ per
mcf)
|
5.21
|
3.34
|
56 %
|
5.54
|
3.90
|
42 %
|
|
|
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Netback ($ per
boe)
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Petroleum and natural
gas revenue
|
91.16
|
64.76
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41 %
|
98.02
|
59.36
|
65 %
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|
|
Realized gain (loss) on
commodity and FX contracts
|
(7.01)
|
(14.30)
|
(51) %
|
(15.46)
|
(13.57)
|
14 %
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|
|
Royalties
|
(17.27)
|
(9.55)
|
81 %
|
(17.48)
|
(7.80)
|
124 %
|
|
|
Net operating
expensesi
|
(19.31)
|
(16.83)
|
15 %
|
(19.25)
|
(17.57)
|
10 %
|
|
|
Transportation
expenses
|
(1.30)
|
(1.11)
|
17 %
|
(1.47)
|
(1.03)
|
43 %
|
|
|
Operating
netbacki
|
46.27
|
22.97
|
101 %
|
44.36
|
19.39
|
129 %
|
|
|
G&A
expense
|
(2.14)
|
(2.06)
|
4 %
|
(2.17)
|
(2.08)
|
4 %
|
|
|
Interest
expense
|
(3.30)
|
(3.78)
|
(13) %
|
(3.47)
|
(4.60)
|
(25) %
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|
|
Adjusted funds
flowi
|
40.83
|
17.13
|
138 %
|
38.72
|
12.71
|
205 %
|
|
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|
|
|
|
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|
|
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|
|
|
|
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|
Common shares
outstanding, end of period
|
83,977
|
72,177
|
16 %
|
83,977
|
72,177
|
16 %
|
|
|
Weighted average basic
shares outstanding
|
83,626
|
57,380
|
46 %
|
83,448
|
46,662
|
79 %
|
|
|
Stock based
compensation dilution
|
2,414
|
1,243
|
94 %
|
2,559
|
1,127
|
127 %
|
|
|
Weighted average
diluted shares outstanding
|
86,040
|
58,623
|
47 %
|
86,007
|
47,789
|
80 %
|
|
|
|
|
|
|
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i
This is a non-GAAP and other financial
measure which is defined in the Non-GAAP and Other Financial
Measures section of this document.
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ii
The Company views this change calculation
as not meaningful, or "nm".
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iii The nine
months ended September 30, 2021 includes a non-cash impairment
reversal of $323.6 million
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|
|
OPERATIONS UPDATE: STRONG DRILLING SUCCESS IN SE SASKATCHEWAN AND SPARKY CORE AREAS
During Q3/22, Surge continued its SE
Saskatchewan and Sparky drilling programs, drilling 26 gross
(20.7 net) wells, with 17 gross (11.7 net) horizontal wells in
SE Saskatchewan targeting the
Frobisher and Midale Formations,
and 9.0 gross (net) horizontal wells in the Sparky core area.
As previously released, in Q2/22 Surge was successful at a
highly competitive Saskatchewan Crown Land Sale in the Steelman area, which added more than 40.0
(net) internally estimated, highly economic2, light oil
Frobisher drilling
locations2 to its inventory. As part of the Company's
SE Saskatchewan Q3/22 drilling
program, 3 gross (3.0 net) Frobisher horizontal wells were drilled on the
newly acquired lands. All three of these wells are currently on
production and are exceeding internal type curve expectations.
The average 30 day initial production rates from Surge's latest
three Steelman Frobisher wells is over 550 boepd (90% light oil)
per well, versus an internal type curve expectation of 250
boepd2. Each of these three Steelman wells paid out in less than five
weeks2 (at US$85
WTI3), demonstrating the top-tier economics associated
with Surge's large eight year SE
Saskatchewan drilling inventory3.
Surge's exciting new drilling results, along with other nearby
industry activity, have substantially de-risked the Company's
internal drilling inventory of up to 110 gross (80 net) locations
in the Steelman area. Surge
continues to be active at Steelman, with 6 gross (5.1 net) wells
anticipated to be drilled during Q4/22.
In the Sparky core area, Surge drilled 7.0 (net) horizonal wells
at the Company's operated Provost and Betty
Lake properties. All of these Sparky wells are now on
production, with a four well pad in Provost producing at a combined
30 day initial production rate of over 750 boepd.
In Q3/22, Surge's Sparky core area production exceeded 9,500
boepd (>95% liquids; 26° API average crude oil gravity) for the
first time in the Company's history, up over 675% from 1,200 boepd
seven years ago. Surge has a deep, 12 year Sparky drilling
inventory3 of more than 425 internally estimated
locations.
OUTLOOK: PREMIUM
ASSET QUALITY DRIVES SUPERIOR RETURNS
Surge is an intermediate, publicly traded oil company, focused
on enhancing shareholder returns through free cash flow generation.
The Company's defined operating strategy is based on acquiring and
developing high quality, conventional, light and medium gravity
crude oil reservoirs, using proven technology to enhance ultimate
oil recoveries.
Surge's Board and Management continue to be optimistic on the
outlook for crude oil prices, based on a historically tight
physical market, ongoing geopolitical issues, and the significant
underinvestment in the global energy sector over the past several
years.
Despite WTI crude oil prices dropping by nearly CAD$20 per barrel from Q2/22 to Q3/22, Surge's
Q3/22 AFF was $1.7 million higher
than in Q2/22, increasing from $78.6
million in Q2/22 to $80.3
million in Q3/22. This quarter over quarter increase is due
to the Company's better than anticipated drilling results, along
with the expiry of most of the Company's previously mandated
fixed-price crude oil hedges.
During the third quarter of 2022, Surge returned to its
shareholders cash dividends totaling over $8.8 million, pursuant to the Company's base cash
dividend of $0.42 per share per annum
(paid monthly). Annualized, the Company's base cash dividend
represents less than 13 percent of Q3/22 cash flow from operating
activities.
With cash flow strategically allocated between high rate of
return capital projects and the achievement of the Company's
previously announced net debt targets, Management currently
forecasts that the Company will achieve its previously announced
Phase 2 return of capital net debt target in late Q2/23, based on
US$80 WTI crude oil flat
pricing.
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 expectations regarding crude oil prices; its
defined operating strategy; and its forecast for achievement of its
Phase 2 return to capital net debt target.
The forward-looking statements are based on certain key
expectations and assumptions made by Surge, including expectations
and assumptions around 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 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 condition
of the global economy, including trade, public health
(including the impact of COVID-19) and other geopolitical risks;
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; and 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 AIF dated
March 9, 2022 and in Surge's MD&A
for the period ended December 31,
2021, 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.
Oil and Gas Advisories
The term "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" mean barrel of oil equivalent per day. Bbl means barrel of oil and "bopd" means barrels
of oil per day. NGLs means natural gas liquids.
This press release contains certain oil and gas metrics and
defined terms which do not have standardized meanings or
standard methods of calculation and therefore such measures may not be comparable to similar metrics/terms presented by
other issuers and may differ by definition and application.
Drilling Inventory
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 COGEH 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 any or 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, 2022 reference
date, the Company will have over >1,050 gross (>975 net)
drilling locations identified herein; of these >550 gross
(>500 net) are unbooked locations. Of the 456 net booked
locations identified herein, 362 net are Proved locations
and 95 net are Probable
locations based on Sproule's 2021YE
reserves. Assuming an average number of wells
drilled per year of 75, Surge's >1,050 locations provide 13
years of drilling.
Assuming a Jan 1, 2022 reference
date, the Company will have over >425 gross (>425 net)
Sparky Core drilling locations
identified herein; of these >280 gross (>280 net) are
unbooked locations. Of the 147 net booked locations identified
herein, 107 net are Proved locations
and 40 net are Probable
locations based on Sproule's 2021YE
reserves. Assuming an average number of wells
drilled per year of 35, Surge's >400 locations provide >12
years of drilling.
Surge's internally used type curves were constructed using a
representative, factual and balanced analog data set, as of
January 1, 2022. All locations were
risked appropriately, and EURs 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, updated and
accounted for on a well by well basis by Surge's Qualified
Reserve Evaluators. All type curves fully comply with
Part 5.8 of the Companion Policy 51 – 101CP.
Assuming an Oct 15, 2022 reference
date, the Company will have over >300 gross (>250 net) SE
Sask drilling locations identified herein; of these 149 gross (129
net) are unbooked locations. Of the 131 net booked locations as of
Jan 1, 2022, 103 net
are Proved locations and 28 net are Probable locations based on Sproule's 2021YE reserves. Assuming
an average number of wells drilled per year of 30.0 net,
Surge's >250 net locations provide >8 years of drilling.
Surge's average internal Frobisher type curve (Steelman land sale) economics have a payout of
< 3 months @ US$85/bbl WTI
(C$104 LSB) and are supported by
>125 internally evaluated Frobisher locations by Surge's Qualified
Reserve Evaluators, with average metrics of: ~$1.4 MM per well capital, ~260 boe/d IP30 per
well and ~82 mboe (73 mbbl Oil + NGL's) Estimated Ultimate
Recoverable reserves per well).
Non-GAAP and Other Financial Measures
This press release includes references to non-GAAP and other
financial measures used by the Company to evaluate its financial
performance, financial position or cash flow. These specified
financial measures include non-GAAP financial measures and non-GAAP
ratios, are not defined by IFRS and therefore are referred to as
non-GAAP and other financial measures. Certain secondary
financial measures in this press release
– namely "adjusted funds flow", "adjusted
funds flow per share", "free cash flow", "net
debt", "net operating expenses", "operating
netback", and "adjusted funds flow per
boe" are not prescribed by GAAP. These non-GAAP and other 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 and other financial 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 and
other financial measures used in this document are defined
below.
Adjusted Funds Flow & Adjusted Funds Flow Per Share
Adjusted funds flow is a non-GAAP financial measure. The Company
adjusts cash flow from operating activities in calculating adjusted
funds flow for changes in non-cash working capital, decommissioning
expenditures, and cash settled
transaction and other costs.
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 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 property acquisitions and dispositions,
debt restructuring and employee severance costs,
which management believes do not reflect the ongoing cash flows of the business,
and as such reduces comparability. Each of
these expenditures, due to their nature, are not considered
principal business activities and vary between
periods, which management believes reduces comparability.
Adjusted funds flow per share is a non-GAAP ratio calculated
using the same weighted average basic and diluted shares used in
calculating income per share.
The following table reconciles cash flow from operating activities to adjusted funds flow and adjusted funds flow per share:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
($000s except per
share amounts)
|
2022
|
2021
|
2022
|
2021
|
Cash flow from
operating activities
|
69,170
|
26,263
|
197,150
|
50,067
|
Change in non-cash
working capital
|
7,164
|
(2,866)
|
18,423
|
(2,485)
|
Decommissioning
expenditures
|
3,532
|
2,105
|
5,528
|
4,649
|
Cash settled
transaction and other costs
|
428
|
2,303
|
647
|
4,888
|
Adjusted funds
flow
|
$
80,294
|
$
27,804
|
$
221,748
|
$
57,118
|
Per share -
basic
|
$
0.96
|
$
0.48
|
$
2.66
|
$
1.22
|
Free Cash Flow
Free cash flow is a non-GAAP financial measure, calculated as
cash flow from operating activities less expenditures on
property, plant, equipment and dividends paid.
Management uses free cash flow to determine the amount of funds available
to the Company for future capital allocation decisions.
Net Debt
Net debt is a non-GAAP
financial measure, calculated as bank debt, term debt, plus the liability component of the convertible
debentures plus current assets, less current liabilities, however,
excluding the fair value of financial contracts, decommissioning
obligations, and lease and other obligations. There is no
comparable measure in accordance with IFRS
for net debt. This metric
is used by management to analyze the level of debt in the Company
including the impact of working capital, which
varies with the timing of settlement of these balances.
($000s)
|
As at Sep 30,
2022
|
As at Jun 31,
2022
|
As at Sep 30,
2021
|
Accounts
receivable
|
62,984
|
80,589
|
58,968
|
Prepaid expenses and
deposits
|
3,055
|
4,227
|
4,044
|
Accounts payable and
accrued liabilities
|
(82,298)
|
(102,172)
|
(73,009)
|
Dividends
payable
|
(2,939)
|
(2,918)
|
—
|
Bank debt
|
(9,758)
|
(22,254)
|
(189,371)
|
Term debt
|
(159,108)
|
(162,180)
|
(47,203)
|
Convertible
debentures
|
(76,197)
|
(75,423)
|
(73,219)
|
Net Debt
|
(264,261)
|
(280,131)
|
(319,790)
|
Net Operating Expenses
Net operating expenses is a non-GAAP financial
measure, determined by deducting processing income, 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 when analyzed by
management.
Operating Netback
& Adjusted Funds Flow per boe
Operating netback is a non-GAAP financial measure, calculated as
petroleum and natural gas revenue and processing and other income,
less royalties, realized gain (loss) on commodity and FX contracts,
operating expenses, and transportation expenses. Operating netback
per boe is calculated as operating netback divided by total barrels
of oil equivalent produced during a specific period of time. There
is no comparable measure in accordance with IFRS. This metric is
used by management to evaluate the Company's ability to generate
cash margin on a unit of production basis.
Operating netback
& adjusted funds flow are calculated on a per unit basis as follows:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
($000s)
|
2022
|
2021
|
2022
|
2021
|
Petroleum and natural
gas revenue
|
179,297
|
105,104
|
561,420
|
266,682
|
Processing and other
income
|
1,941
|
978
|
5,316
|
3,239
|
Royalties
|
(33,964)
|
(15,501)
|
(100,099)
|
(35,051)
|
Realized gain (loss) on
commodity and FX contracts
|
(13,790)
|
(23,209)
|
(88,565)
|
(60,942)
|
Operating
expenses
|
(39,920)
|
(28,288)
|
(115,563)
|
(82,156)
|
Transportation
expenses
|
(2,554)
|
(1,798)
|
(8,426)
|
(4,630)
|
Operating
netback
|
91,010
|
37,286
|
254,083
|
87,142
|
G&A
expense
|
(4,218)
|
(3,346)
|
(12,436)
|
(9,344)
|
Interest
expense
|
(6,498)
|
(6,135)
|
(19,899)
|
(20,679)
|
Adjusted funds
flow
|
80,294
|
27,804
|
221,748
|
57,118
|
Barrels of oil
equivalent (boe)
|
1,966,876
|
1,623,036
|
5,727,563
|
4,492,511
|
Operating netback ($
per boe)
|
$
46.27
|
$
22.97
|
$
44.36
|
$
19.39
|
Adjusted funds flow ($
per boe)
|
$
40.83
|
$
17.13
|
$
38.72
|
$
12.71
|
For more information about Surge, please
visit our website
at www.surgeenergy.ca
Neither the TSX nor its Regulation Services Provider (as that term is defined
in the policies of the TSX) accepts
responsibility of the accuracy of this release.
_________________________
|
1 This is a
non-GAAP and other financial measure which is defined in the
Non-GAAP and Other Financial Measures section of this
document.
|
2 See
the Drilling Inventory section of this document.
|
3 Average
WTI from Sept 9 to Oct 21 (when these wells produced for their
first 30 days) was US$85/bbl (C$108/bbl
LSB).
|
SOURCE Surge Energy Inc.