SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY AUGUST, 2019
REASONS TO OWN SURGE TSX: SGY Value based with a strong focus on shareholder returns High quality conventional, large OOIP(1), light/medium gravity crude oil asset base; 84% liquids production; low corporate decline of 23%; Deep…
Q2 2019 HIGHLIGHTS Exceeding Budget Guidance for Production & Costs Production of 21,544 boepd in Q2/19 averaged more than Surges 2019 exit rate guidance of 21,500 boepd(1); represents an increase of 26% over Q2/18; Adjusted funds…
Q2 2019 HIGHLIGHTS Debt Update Surge reported a net debt to annualized Q2/19 Adjusted Funds Flow ratio(1) of 1.9x; Surges bank line was confirmed at 500 million(2); and As at June 30, 2019, Surge has over 105 million(3) of…
CONSISTENT PRODUCTION GROWTH Surge management continues to deliver quarterly production growth * Flat Q/Q production 77% Production Growth Since Q2 2016 inclusive of 490 boe/d 23,000 Q1/19 asset sale 21,000 19,000 Production…
2019 GUIDANCE AND KEY CORPORATE ATTRIBUTES Cost effective, sustainable, low decline production base Key Operational and Financial Attributes Large Net OOIP: 2.5 Billion barrels (6.2% cum to date recovery factor)(1)(2) Reserves: 123…
OPERATIONS FOCUSED IN 4 CORE AREAS Large OOIP pools in established conventional reservoir trends Greater Sawn: Total: 5,750 boe/d (98% Oil & NGLs) Surge 2019e Average Production Total: 21,500 boe/d (84% Oil & NGLs)…
TARGETING CONVENTIONAL RESERVOIRS Surge focuses on reservoirs at the conventional end of the permeability spectrum Recovery factors, internal rates of return (IRR)(1), decline rate, and profit to investment ratio (PIR)(1) improves…
NET OOIP OF 2.5 BILLION BARRELS Large OOIP, with low recovery factors - focused in conventional reservoirs SGY Net CTD(2) Total Booked Net Total Net drilling Estimated Net Avg. WI Oil Independent Recovery Core Area Formations…
SPARKY A DOMINANT POSITION Applying modern technology to a prolific Western Canadian formation AB SK The Sparky is a well established prolific oil producing formation in Western Canada. Surge holds a dominant land position in the…
SPARKY - A DIVERSIFIED LOW RISK ASSET BASE Over 900 MMbbls of net OOIP and 450 drilling locations 900 MMbbls of net OOIP Wainwright 160MMbbls OOIP 450 net drilling locations (136 net booked) 11 year drilling inventory Lakeview…
SPARKY TOP QUARTILE ECONOMICS Competing with the best light/medium oil plays in Western Canada 1.60 1.40 1.20 As per Scotiabanks Playbook 1.00 As per internal estimates(1) Profit to Investment Ratio (9%) 0.80 0.60…
EYEHILL A CASE STUDY Increased production and cashflow over 380% in 3 years Waterflood maintains lower production decline as per Surges Divco Model YE 2015 1st Water Injection Surge Eyehill: 170 MMbbl net OOIP 65 net…
GREATER SAWN - CONCENTRATED LIGHT OIL 600 million barrels net OOIP in concentrated Slave Point reservoirs Sawn OOIP of 600 million bbls net of light oil OOIP: 200 MMbbl net (35-42 API). Development inventory of 100 net locations…
VALHALLA STACKED MULTI-ZONE POTENTIAL Multiple large OOIP light oil reservoirs provide a sustainable drilling inventory and production base 200 MMbbls of net combined OOIP on Surges Valhalla lands. Montney Doig wells continue to be…
SHAUNAVON 400 MMbbl net OOIP on Surge lands in the Upper and Lower Shaunavon Total Shaunavon production (Upper & Lower) is 2,500 bopd. Upper Shaunavon net OOIP estimated to be 200 MMbbl. 65 net locations (43 net booked). 9…
CORPORATE SUSTAINABILITY Surge is committed to a strong Environmental, Social, and Governance program (ESG) During the last 5 years Surge has spent over 17 million for the abandonment and reclamation of wells; Surge is committed to…
CORPORATE SUSTAINABILITY Surge is committed to a strong Environmental, Social, and Governance program (ESG) Surges is committed to diversity in the workplace and on its Board of Directors; Surge has increased the gender diversity on…
HIGH QUALITY CRUDE OIL ASSET BASE Positioned for long term sustainability Low base production decline of 23%; high netbacks; excellent capital efficiencies; Sustainable dividend of 0.10 / share annually (dividend yield 8%); 4…
APPENDIX 22 FOOTNOTES INCLUDED IN THE BACK AS ENDNOTES
RISK MANAGEMENT / HEDGING STRATEGY The Company has an 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 hedging…
RISK MANAGEMENT / HEDGING STRATEGY The Company has an 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 hedging…
INTEREST RATE HEDGING & CONVERTIBLE DEBENTURE INTEREST RATE HEDGE Notional Amount Surge Type Term Surge Pays Fixed Rate Surge Pays (CAD) Receives Semi-Annual Step Up Beginning at 1.786% Fixed-to-Floating Rate Swap Feb 2018 to Feb…
2018 YEAR END RESERVES 2 Billion of Total Proved plus Probable Reserves Value (NPVBT10) 2018 Year End Reserves(1)(2) Total Proved Plus Probable reserves of 122.6 Mmboe, an Oil & NGLs Gas Total NPVBT10 Reserve Category increase of 29%…
NET ASSET VALUE High quality conventional reservoirs continuing to deliver value Surges 2018 NAV TP TPP Reserve Value NPV10 BT (MM)(1) 1,318 2,054 Undeveloped Land and Seismic (MM)(2) 134 134 Net Debt (MM) (461) (461)…
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…
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…
NON-GAAP FINANCIAL MEASURES AND CAPITAL MANAGEMENT MEASURES Certain secondary measures in this presentation namely, all-in payout ratio, net debt, and net operating expenses are disclosed for the purpose of providing investors with…
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