Surge Energy (SGY.TO and ZPTAF) Valuation - May 18

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dan_s
Posts: 34908
Joined: Fri Apr 23, 2010 8:22 am

Surge Energy (SGY.TO and ZPTAF) Valuation - May 18

Post by dan_s »

I have updated my forecast/valuation model for Surge Energy and it has been posted to the EPG website.

Their Q1 results were good, but a bit lower than I expected. I've also lowered my Q2 forecast a bit due to wildfires in Canada, which will likely just have a minor impact on the Company's full year production.

I have lowered my valuation by $0.25 to $12.25US per share ($16.33Cdn for SGY.TO). The most recent price targets submitted to TipRanks are $11.45Cdn by Stifel and $12.00Cdn by National Bank of Canada.

At the time of this post, ZPTAF was trading at $5.62US.

Surge will be ramping up their summer drilling program in June and I do expect them to generate steady production growth in Q3 and Q4, with a 2023 exit rate approaching 27,000 Boepd, up from 25,138 Boepd in Q1 and 21,262 Boepd for the year 2022.

Surge pays a monthly dividend of $0.04 ($0.48Cdn for the year), which is annualized dividend yield of ~6.35%. Not bad for a stock that has the potential to be a double for us.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34908
Joined: Fri Apr 23, 2010 8:22 am

Re: Surge Energy (SGY.TO and ZPTAF) Valuation - May 18

Post by dan_s »

I just confirmed that as of today none of Surge's production is shut in due to the fires, which are west of them in Alberta.
Dan Steffens
Energy Prospectus Group
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