INTENT TO REINSTITUTE BASE DIVIDEND ON
With crude oil prices now in excess of
At current strip commodity prices for crude oil and natural gas, Management projects that Surge's net debt target range will be achieved during Q3/22. On this basis, the Company anticipates reinstating its base annual cash dividend expected to be
On an annualized basis, this base cash dividend is equal to approximately 20 percent of Surge's previously guided annual 2022 free cash flow1 utilizing a
With the majority of the Company's mandated fixed price crude oil hedges for 2022 expiring in less than two months, Surge has resumed its regular, ongoing risk management program. This orderly program is designed to set price floors that protect Surge's dividend and capital programs, while also providing participation in a rising commodity price environment.
The monthly cash dividend is expected to be designated as an 'eligible dividend' for Canadian federal and provincial income tax purposes. Dividends paid to shareholders who are non-residents of
NEW LIGHT OIL POOL EXTENSION AND LAND ACQUISITION AT
Surge is pleased to announce that drilling on its operated, light oil, core area assets at
The Company's most recent 4.0 gross (2.5 net) wells drilled at
In addition to these excellent drilling results, Surge was also successful at a recent, highly competitive, Saskatchewan Crown land sale at
Furthermore, Surge's integrated geotechnical modeling on the new pool extension has added internally estimated original oil in place ('OOIP6') of over 20 million barrels (15 million barrels net) on the new lands. The Company now internally estimates combined OOIP of over 72 million barrels (53 million net) at its Steelman Frobisher pool.
TERM DEBT UPDATE, INTENTION TO REDEEM 5.75% CONVERTIBLE DEBENTURES FOR CASH, AND CREDIT FACILITY UPDATE
The Company's Term Debt Facility provider has exercised their previously announced right to deliver an additional
Concurrently, Surge has reconfirmed and extended its existing
The addition of the incremental Term Debt Facility proceeds, combined with the intention to redeem the 5.75% convertible debentures for cash, will provide Surge with a simplified debt capital structure, significant liquidity, and no debt capital maturities through to mid-2024.
OPERATIONS UPDATE: SUCCESSFUL Q1/22 DRILLING PROGRAM AT SPARKY AND
Surge completed its Q1/22 capital program drilling 23 (21.5 net) wells, with three rigs active in the quarter. This program was comprised of 14.0 net wells in the Company's Sparky core area, and 7.5 net wells in Surge's
In recent months, Management has been successful in adding significant organic growth opportunities across its core areas. On this basis, the Company has added more than 10 net sections of highly prospective land. These strategic core area land acquisitions have added an incremental 79 gross (70.0 net) drilling locations7 to Surge's deep 13 year drilling inventory at a total cost of
The Company is currently monitoring the impact of cost inflation, labour shortages, and global supply chain challenges on its 2022 capital and operating expense guidance. Surge's Q1/22 capital program tracked the Company's 2022 budget, and the Company will continue to monitor the impact of these inflationary pressures over the second half of 2022 and into 2023.
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