Surge Energy (SGY.TO and ZPTAF) Valuation Update - Apr 12

[dan_s]

Paul Colborne, CEO and Jared Ducs (CFO) made a very strong presentation at our luncheon today.
SGY.TO closed at $9.57Cdn today. I have updated my valuation model and I am increasing my valuation by $2.00 to $17.25

Why?
> Surge has a lot more "running room" than I previously thought.
> They are going to report more Q1 production than I expected and a BIG increase over Q4 production.
> Based on my forecast, if WTI stays over $80US/bbl they should generate enough free cash flow to raise their dividend from $0.04/month to $0.05/month by Q3 and may be able to double it in 2024.
> Eleven highly respected energy sector analysts cover Surge and their price targets range from $11.50Cdn to $16.00Cdn, all written before the recent run-up in oil prices.
> ~30% of Surge's oil production for 2023 is hedged only with Puts and Collars with very high ceilings ($145.38Cdn in Q1 and $138.81 in Q4), so they have full exposure to the recent oil price increase. They purchased Puts just to cover the downside, with no upside limit.
> Their natural gas hedges give them a bit of protection this year, but most of Surge's revenues come from oil sales.

My updated forecast/valuation model has been posted to the EPG website.

For those of you in the Houston Area: We have two very promising Canadian Juniors coming to host luncheons for us next week.
At the Ballroom at Tanglewood, 5430 Westheimer.
April 18: ROK Resources (ROK)
April 19: InPlay Oil (IPOOF)

[Fraser921]

Did anyone get a BBQ stain on their white t-shirt?

Is the CFO last name Ducs?

I like this CEO, very intense

[ChuckGeb]

Colbern and Duck are a dynamic duo. Laser focused. I liked this company before today and more after. Get your chips down before it doubles.

[ChuckGeb]

Ducs (Darn it Siri!)

[Fraser921]

I watched a presentation on youtube and the host called him Dicks. Hmmmm

I gotta get into this name