SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY JUNE, 2018
REASONS TO OWN SURGE Value based with a strong focus on shareholder returns High quality, large OOIP, light/medium gravity crude oil asset base; 82% oil + liquids; low decline 24%; top tier capital efficiencies Excellent value…
CONTINUING TO DELIVER OUTSTANDING RESULTS Over the previous seven quarters Surge management has delivered: Five upward revisions to production guidance Increase in unhedged funds flow and unhedged (twice organically, and three…
GENERATING SHAREHOLDER RETURNS The foundations for sustainability and the assets to deliver low to mid-teens annual returns Adjusted Capital Funds Flow Efficiencies Decline…
2018 UPDATED GUIDANCE & CORPORATE SUMMARY Ticker Symbol TSX: SGY US65 WTI(1) US75 WTI(2) OPERATIONAL 2018 Average Production (boe/d) 16,585 16,585 2018 Exit Production (boe/d) 17,175 (82% liquids) 17,175 (82% liquids) 2018 Capital…
ELITE ASSETS FOCUSED IN THREE CORE AREAS Large OOIP pools in established conventional reservoir trends Surge 2018(e) Avg Est. Production: Total: 16,585 boe/d (82% Oil & NGLs) Western Alberta Production: Total: 6,850 boe/d (65%…
TARGETING CONVENTIONAL RESERVOIRS Surge focuses on reservoirs in the conventional end of the permeability spectrum Capital expenditures decrease, while recovery factors, rates of return, and profit to investment Ultimate Oil…
FULL CYCLE ECONOMIC DRILLING INVENTORY 11 years of drilling locations with an average 89% risked IRR 65 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 1.8 Billion barrels of net OOIP with up to 250 Million net barrels remaining recoverable Estimated OOIP Drilling Locations Internally Estimated Ultimate Avg. CTD Oil Total Booked Independent…
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…
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…
SPARKY CORE ACQUISITION Continued disciplined organic growth within strategic core areas The recent asset acquisition is the 4th major accretive Sparky core addition for Asset Acquisition Surge since 2013 and adds: Production…
SOUTHEAST ALBERTA Eyehill / Provost / Sounding Lake / Wainwright areas Oil saturated, stacked Cretaceous sands Wainwright Over 700 MMbbls of net OOIP (23-31 API oil) AB SK ** 550MMbbls of net OOIP in the Sparky** 354/340…
SPARKY EYEHILL ACTIVITY 165MMbbl net OOIP estimated in the Sparky at Eyehill with 1.5MMbbls produced to date Eyehill - Sparky Type Log 06-14-037-03W4 Sparky Sands 06-14-37-3W4 Type Log Surge has drilled 6 Sparky horizontal…
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 200…
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; 16 year…
NET ASSET VALUE - 6.06 PER SHARE Strong Year End 2017 NAV supporting per share value YE 2017 NAV Breakdown SURGE Year End 2017 NAV*** (241) 25 2P Reserves Value (MM)* 1,552 75 Reserves Value (MM) Undeveloped Land 100 and…
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…
OIL HEDGING Significant percentage of Q2-Q4 2018 production protected with a floor of over C65 WTI & significant upside maintained (collars or puts acquired) 7,500 7,000 80.00 6,500 6,000 70.00 Weighed Average Floor Price per…
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, and does not include 2018 A&D activity or shares purchased by Surge as part of the NCIB. (2) Based off of US65/bbl…
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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