Topic: How To Invest

Can you give me your comments on Surge Energy, please? Thanks.

Article Excerpt

Surge Energy, $8.26, symbol SGY on Toronto (Shares outstanding: 217.5 million; Market cap: $1.8 billion; www.surgeenergy.ca), produces oil and gas in central and northwestern Alberta and southwestern Saskatchewan. Its output is 84% oil and 16% gas. In the three months ended March 31, 2014, Surge produced 15,024 barrels of oil equivalent per day, up 55.9% from 9,636 barrels a year earlier. Acquisitions were the main reason for the gain. Cash flow jumped 109.2%, to $53.8 million from $25.7 million, on the increased output and higher realized oil and gas prices. However, per-share cash flow fell 13.9%, to $0.31 from $0.36, as the company issued more shares to pay for acquisitions, boosting the total number outstanding by 152%. Surge continues to grow by acquisition. In June 2014, it completed its purchase of Longview Oil Corp. for $430 million. Longview’s properties, which are near Surge’s holdings in southeastern Saskatchewan and central Alberta, immediately started adding to its per-share cash flow. That cash flow increase has prompted…