CORRECTED-Surge Energy swings to profit in Q2, raises 2025 production guidance

Overview

• Surge Energy Q2 production averaged 23,589 boepd

• Co reports Q2 net income C$31.91 mln

• Company raises average 2025 production guidance to 23,000 boepd, cuts capex by $15 mln

• Q2 adjusted funds flow at C$72.8 mln, cash flow from operations C$56.3 mln

Outlook

• Surge Energy raises average 2025 production guidance to 23,000 boepd

• Company lowers 2025 capital expenditure budget to C$155 mln

• Surge forecasts 2025 free cash flow to increase to C$105 mln

• Company hedges 8,750 bbl/d of Q3/25 oil production at US$71 WTI

Result Drivers

• DRILLING SUCCESS - Strong drilling results in Sparky and SE Saskatchewan core areas drove production outperformance

• CAPITAL EFFICIENCIES - Improved capital efficiencies led to a reduction in 2025 capital expenditure estimates by C$15 mln

• OPERATING EXPENSES - Net operating expenses decreased by 16% due to successful drilling and operational efficiencies

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

• Wall Street's median 12-month price target for Surge Energy Inc (Alberta) is C$9.00, about 17.8% above its July 28 closing price of C$7.40

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nCNWWcKHfa