CALGARY, Feb. 20, 2018 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to
announce that the Toronto Stock Exchange (the "TSX") has
accepted Surge's notice of intention to make a normal course issuer
bid for its outstanding common shares in accordance with the rules
and policies of the TSX.
Surge believes that the market price of its common shares, in
today's current oil price environment, does not accurately reflect
their underlying value, making the purchase of common shares an
attractive investment and an advantageous use of Surge's capital
spending. Surge's new independently engineered total proved
("1P") net asset value ("NAV") is $3.671 per share, utilizing Sproule's
2017 year end engineering price deck, and the Company's new proved
developed producing ("PDP") NAV is $2.011 per share.
Surge's common shares are presently trading at a price of
$1.88 per share on the TSX. As
such, the repurchase of the Company's common shares at these levels
represents a return of more than 195 percent, based on Surge's 1P
NAV.
The Company is currently generating significant annualized free
funds flow, based on budget pricing assumptions and current strip
WTI pricing. Surge has approximately $100
million of credit availability on its bank line.
Surge expects that the purchase of its common shares will
benefit remaining shareholders by increasing their equity ownership
interest in Surge's high quality, light and medium, crude oil
assets. Further, Surge does not have to pay a dividend on common
shares that it acquires pursuant to the NCIB - thereby improving
the Company's sustainability.
As of February 9, 2018 and
February 20, 2018, there were
233,069,499 common shares issued and outstanding. As approved
by the TSX, Surge is authorized to purchase up to 11,653,475 common
shares under the normal course issuer bid, representing
approximately 5 percent of Surge's current issued and outstanding
common shares. On any trading day, Surge will not purchase more
than 25 percent of the average daily trading volume (average daily
trading volume being 713,870 of the common shares for the past six
calendar months calculated in accordance with the rules of the TSX,
being 178,467 common shares per trading day, except where such
purchases are made in accordance with the block purchase exemptions
under the TSX rules. The normal course issuer bid will
commence on February 23, 2018, and
will terminate on February 22,
2019. Any common shares acquired will be cancelled.
All purchases under the bid will be purchased on the open market
through the facilities of the TSX and alternative Canadian trading
platforms at the prevailing market price at the time of such
transaction. National Bank Financial Inc. will conduct the
bid on behalf of Surge pursuant to a non-automatic purchase plan to
be entered into between Surge and National Bank Financial Inc.
ABOUT SURGE
Surge is an oil-weighted production and development company with
high quality, large OOIP, crude oil reservoirs. Management is
focused on delivering to its shareholders solid per share organic
growth, sustainable monthly dividends, and further growth through
accretive acquisitions of additional elite oil reservoirs.
For further information visit our website at
www.surgeenergy.ca.
Caution regarding forward-looking statements
This news release contains certain statements that may
constitute forward-looking information within the meaning of
applicable securities laws. This information includes, but is not
limited to: (i) Surge's intentions with respect to the normal
course issuer bid and purchases thereunder and the effects of
repurchases under the bid; and (ii) management views on the value
of the reserves acquired under the normal course issuer bid.
Although Surge believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Surge can give no assurance that they will prove
to be correct. Since forward-looking statements address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. Certain of these risks are set out in more detail in Surge's
Annual Information Form dated March 15,
2017 which has been filed on SEDAR and can be accessed at
www.sedar.com.
The forward-looking statements contained in this press release
are made as of the date hereof and Surge undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
Non-IFRS measures
This press release contains the term "NAV" which does not have a
standardized meaning prescribed by International Financial
Reporting Standards ("IFRS") and therefore may not be
comparable with the calculation of similar measures by other
companies. The NAV is calculated as the value of total assets less
the value of total liabilities. To arrive at NAV per share,
the NAV is then divided by the total number of common shares
outstanding as at a specific date. Additional information
relating to these non-IFRS measures can be found in the Company's
most recent management's discussion and analysis MD&A, which
may be accessed through the SEDAR website (www.sedar.com).
Reserves data
Statements relating to "reserves" are deemed to be forward
looking statements, as they involve the implied assessment, based
on certain estimates and assumptions, that the reserves described
exist in the quantities predicted or estimated and that the
reserves can be profitably produced in the future. Any reserves
data provided in or from which reserve based figures are derived in
this news release are based on the independent engineering report
of Surge with an effective date of December
31, 2016, prepared by Sproule. Any such reserves data
presented in this news release forms only a portion of the
Company's reserve information and additional reserves information
are contained in Surge's annual information form dated March 15, 2017, which was filed on and which may
be accessed through the SEDAR website.
Boe means barrel of oil equivalent on the basis of 1 boe to
6,000 cubic feet of natural gas. Boe may be misleading,
particularly if used in isolation. A boe conversion ratio of 1 boe
for 6,000 cubic feet of natural gas is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
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1 NPV10 before tax, based on Sproule's 2017 year end
independent reserves valuation and price forecast, combined with
internally estimated values for land, seismic and net debt.
SOURCE Surge Energy Inc.