SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY MARCH, 2018
REASONS TO OWN SURGE Value based with a strong focus on shareholder returns Experienced management team with proven track records High quality light/medium crude oil asset base; low…
CONTINUING TO DELIVER OUTSTANDING RESULTS Over the previous six quarters Surge management has delivered: Four upward revisions to production guidance Increase in unhedged cashflow by 83% and (twice organically, and twice with…
GENERATING SHAREHOLDER RETURNS The foundations for sustainability and the assets to deliver low to mid-teens annual returns Cashflow Capital Netback Efficiencies Decline CAD 22/…
2018 GUIDANCE & CORPORATE SUMMARY Ticker Symbol TSX: SGY US57.50 WTI(1) US65.00 WTI(2) OPERATIONAL 2018 Average Production (boe/d) 16,150 16,150 2018 Exit Production (boe/d) 16,650 (82% liquids) 16,650 (82% liquids) Total Capital…
NEW NET ASSET VALUE - 6.06 PER SHARE Strong NAV supporting per share value 2017 NAV Breakdown SURGE 2017 NAV (241) 25 2P Reserves Value (MM)* 1,552 75 Reserves Value (MM) Undeveloped Land 100 and Seismic (MM)** Land est. (MM)…
2017 YEAR END RESERVES 1.55 Billion of Total Proved plus Probable Reserves Value (NPVBT10) 2017 Year End Reserves(1) Surge replaced and Oil& NGLs Gas Total NPVBT10 Reserve Category (Mbbl) (MMcf) (Mboe) (MM) added more than 170% of…
ELITE ASSETS FOCUSED IN THREE CORE AREAS Large OOIP pools in established conventional reservoir trends Surge 2018(e) Avg Est. Production: Total: 16,150 boe/d (82% Oil & NGLs) Western Alberta Production: Total: 6,150 boe/d (65%…
TARGETING CONVENTIONAL RESERVOIRS Surge focuses on reservoirs in the conventional end of the permeability spectrum Capital expenditures decrease, Ultimate Oil while recovery factors, rates of Recovery PIR return, and…
FULL CYCLE ECONOMIC DRILLING INVENTORY 10 years of drilling locations with an average 78% risked IRR 55 WTI & 3 Henry Hub IRR*: 94% IRR*: 89% IRR*: 78% IRR*: 53% Strong balance sheet: 2017 Debt/CF = 1.25x Ample liquidity:…
SURGE 5 YEAR PLAN (ORGANIC GROWTH) SGY can grow organically to 20,000 boe/d in 5 years while generating FCF of 36 MM to 380 MM Surge 5 Year Plan 25,000 250 * 5 year plan uses only 47% of drilling inventory. 20,000 200 2022…
LARGE OOIP, LOW RECOVERY FACTORS 1.77 Billion bbls net OOIP with up to 235 Million net barrels remaining recoverable Estimated OOIP Drilling Locations Internally Estimated Ultimate Avg. CTD Oil Total Booked Independent (MMbbls)…
THREE CORE CONVENTIONAL RESERVOIRS Applying proven technology to conventional reservoirs provides top tier performance and higher recovery factors U. Shaunavon Valhalla Doig Sparky Depth 1450m Depth 2000m Depth 725m Net Pay 4-10m…
CORE AREA PRIMARY DEVELOPMENT ECONOMICS Top tier capital efficiencies, replacement metrics and long life profit to investment ratios 2018 Budget Areas/Formations Profit to Capital Drill/ Internal EUR Core Locations Investment…
SPARKY UNDER-DEVELOPED COMPARED TO SIMILAR RESOURCE TRENDS Surge leading the charge with horizontal multi-stage fracs on the next big play Oil Play Comparison Alberta Sask Cum oil Recovery of Hz Avg. oil OOIP Play Prod Factor…
SOUTHEAST ALBERTA Eyehill / Provost / Sounding Lake / Wainwright areas Oil saturated, stacked Cretaceous sands Wainwright 700 MMbbls of net OOIP (23-31 API oil) AB SK ** 500MMbbls of net OOIP in the Sparky** 324/321 (gross/net)…
SPARKY EYEHILL ACTIVITY 150MMbbl net OOIP estimated in the Sparky at Eyehill…
EYEHILL SPARKY WATERFLOOD PERFORMANCE Waterflood pressure support flattening production profiles, and increasing EURs Eyehill SPKY - SGY Results vs Type Curve 160 100/12-10-037-03W4/00 Rate 102/13-10-037-03W4/00 Rate Injection…
UPPER SHAUNAVON Large contiguous land position in the 2.0Bbbl Upper Shaunavon trend R21W3 R19W3 Instow T10 T8 Reference: Table above sourced from Discovery Digest Volume 4, 2016 Total Shaunavon production (Upper & Lower) is…
UPPER SHAUNAVON ACTIVITY 275MMbbl (265MMbbl net) OOIP on Surge lands in the Upper Shaunavon R20W3 R19W3 Shaunavon Type Log 15-25-005-20W3 T7 Upper Shaunavon A Sand Upper Shaunavon B Sand Upper Shaunavon C Sand T6 Lower…
UPPER SHAUNAVON WATERFLOOD RESPONSE Average production 70 bopd per well after 24 months U. Shaunavon Primary Type Curve vs Waterflood Production Waterflood: 9 horizontal Upper Shaunavon wells have been converted to injection 120…
NORTHWEST ALBERTA Large OOIP 595MMbbls net in concentrated high quality light oil reservoirs Large OOIP of 700 (595 net) MMbbls of high quality light oil (32-40 API) Valhalla OOIP: 300 mmbbl (257 mmbbl net) Nipisi Large…
NORTHWEST ALBERTA - VALHALLA Control of large OOIP stacked pay, light oil reservoirs, with working interest ownership in key facilities, and firm service agreements in place Stacked Reservoirs Sexsmith Depth Net OOIP Current…
POSITIONED FOR LONG TERM SUSTAINABILITY Low base decline
HIGH QUALITY CRUDE OIL ASSET BASE Focused, high quality, crude oil asset and opportunity base; 3 core areas are 100% operated, with working interests of 90% Large OOIP crude oil reservoirs with low recovery factors; 17 year…
OIL HEDGING Significant percentage of 2018 production protected with a floor of over C65 WTI & significant upside maintained (collars or puts acquired) 8,000 7,500 80.00 7,000 6,500 70.00 Weighed Average Floor Price per bbl…
RISK MANAGEMENT / HEDGING STRATEGY The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capital program and fund dividends. Below is a list of Surges current…
RISK MANAGEMENT / HEDGING STRATEGY The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capital program and fund dividends. Below is a list of Surges current…
FIXING INTEREST COSTS IN A RISING RATE ENVIRONMENT Type Term Notional Amount (CAD) Surge Receives Surge Pays Effective Fixed Rate SGY Pays Fixed-to-Floating Rate Swap Feb 2018 to Feb 2023 100,000,000 Floating Rate Fixed Rate…
ANALYST COVERAGE Financial Institution Analyst Email Address Acumen Capital Partners Trevor Reynolds treynoldsacumencapital.com BMO Capital Markets Ray Kwan ray.kwanbmo.com Canaccord Genuity Anthony Petrucci apetruccicanaccordgenuity.com…
CORPORATE PARTNERS Advisors National Bank of Canada Bank of Nova Scotia Canadian Imperial Bank of Commerce Toronto-Dominion Bank Bank of Montreal Bankers Syndicate: ATB Financial HSBC Bank Canada Wells Fargo Goldman Sachs BDC…
ENDNOTES Slide 2: (1) Based on Sproules independently audited reserves and Sproules December 31, 2017 Price Forecast. (2) Based on 2018e pricing averaging as follows: US57.50 WTI/bbl; CAD75 WTI/bbl; EDM CAD71/bbl; WCS CAD55/bbl; AECO…
NON-GAAP MEASURES NON-GAAP MEASURES This presentation includes non-GAAP measures as further described herein. These non-GAAP measures do not have a standardized meaning prescribed by International Financial Reporting Standards (IFRS…
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