News Column

Surge Energy Inc. announces record second quarter 2014 results

August 5, 2014



ENP Newswire - 05 August 2014

Release date- 01082014 - CALGARY - Surge Energy Inc. (TSX: SGY) announces record financial and operating results for the three and six month periods ended June 30, 2014.

Surge's financial and operating results for the period ended June 30, 2014 include only 25 days of contribution from the $429 million strategic business combination with Longview Oil Corp. ('Longview'), which closed late in the second quarter of 2014.

RECORD PRODUCTION, FUNDS FLOW, NETBACKS AND CLOSING OF STRATEGIC BUSINESS COMBINATION IN THE SECOND QUARTER OF 2014

Surge is pleased to report record funds from operations of $65.5 million in the second quarter, along with record operating netbacks of over $54 per boe, and record production of approximately 16,400 boe per day, which quarterly results include only 25 days of contribution from the Longview business combination, as well as the impact of a planned facility turn-around at Valhalla.

HIGHLIGHTS

Achieved a second quarter average production rate of 16,395 boe per day, an increase of 75 percent from 9,373 boe per day in the same period of 2013.

Funds from operations increased 144 percent to a record $65.5 million in the second quarter of 2014 as compared to the same period of 2013.

A second quarter capital program (not including acquisitions and divestitures) of $19.0 million, which represents only 29 percent of funds from operations for the quarter.

Achieved records for both operating and corporate netbacks in the second quarter of 2014. Surge's operating netback increased to $54.07 per boe and its corporate netback increased 48 percent to$49.71 per boe in the second quarter of 2014, from $33.51 per boe in the second quarter of 2013.

Increased Surge's oil and natural gas liquids production weighting by 18 percent to 87 percent in the second quarter of 2014 from 74 percent in the second quarter of 2013.

Approximately 95 percent of Surge's revenue resulted from oil and natural gas liquids production in the second quarter of 2014.

Reduced G&A per boe by 58 percent in the second quarter of 2014 as compared to the same period in 2013. Surge has had excellent results with respect to managing and reducing costs. The Company's G&A costs have dropped from $4.88 per boe in the second quarter of 2013 to $2.06 per boe in the second quarter of 2014.

Announced the completion of the strategic business combination with Longview. The transaction is accretive to Surge on all metrics, and adds high quality concentrated reserves, production, land, and operations that are contiguous with Surge's three existing core areas.

Increased the Company's dividend by 11 percent from $0.54 per share per year ($0.045 per share per month), to $0.60 per share per year ($0.05 per share per month, first payment for June production on July 15, 2014) as a result of the accretive Longview transaction.

Increased the Company's bank line to $725 million during the quarter. With one of the lowest all-in payout ratios in Canada (


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Source: ENP Newswire


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