Surge Energy Inc. · TSX:SGY
Surge Energy — Investor Presentation (April 2025)
31 slides from Surge Energy's investor presentation, Apr 17, 2025
Slide 1: Premium Oil Assets Driving Free Cash Flow and Shareholder Returns
TSX: SGY Premium Oil Assets Driving Free Cash Flow and Shareholder Returns CORPORATE PRESENTATION Spring 2025
Slide 2: The Surge Value Proposition
The Surge Value Proposition High quality assets and strategic capital allocation maximize shareholder value and returns $$$ + + = High Quality Disciplined Capital Proven Management Maximize Free Cash Flow Conventional Assets Allocation and Board and Shareholder Returns • Light/medium oil asset base
Slide 3: Proven Business Strategy
Proven Business Strategy Focused on sustainable returns and enhancing free cash flow Surge executes on a simple, DISCIPLINED repeatable business strategy: CAPITAL ALLOCATION Undertake low cost, low risk • Develop high quality conventional oil projects that support sustainability reservoirs with prov
Slide 4: Recent Highlights
Recent Highlights During 2024, Surge: • Achieved average production of 24,319 boepd (88 percent liquids) in Q4/24, exceeding 2024 guidance exit rate of 24,000 boepd; • Disposed of non-core assets at Shaunavon, Westerose, and Valhalla, with total associated production of 2,350 boepd; • Announced revi
Slide 5: 2024 Reserves and Net Asset Value
2024 Reserves and Net Asset Value Dec. 31, 2024 Sproule Reserves Oil Equivalent Currently trading at just 40% of 1 Oil & Liquids BTax NPV10 Gross Reserves Total Reserves (Mboe) (%) ($MM)2,3 its 2P NAV per share (which includes less than half of the Proved Developed Producing (PDP) 38,186 91% $791 co
Slide 6: Corporate Guidance for 2025
Corporate Guidance for 2025 Key Guidance & Assumptions1 US$70 WTI6 2025 Adjusted Funds Flow2 $275 MM Focused on returns and 2025 Cash Flow From Operating Activities3 $255 MM enhancing free cash 2025 Free Cash Flow2 Before Dividends $85 MM flow while managing risk 2025 Free Cash Flow Margin2 31% 2025
Slide 7: Return of Capital Framework
Return of Capital Framework Surge is well positioned to deliver returns to shareholders through its base dividend and excess Free Cash Flow 2025 Guidance Cash Flow @ US$70 WTI: $255 MM Allocation of Excess Free Cash Flow1 (After Base Dividend) Share 2025 Capital Buybacks $170 MM (up to 75% Excess Fr
Slide 8: Significant Liquidity
Significant Liquidity Debt structure supports return of capital framework Surge’s current drawn debt has long-dated maturities, termed out through late 2028 and 2029, with attractive interest rates. Debt Composition ($MM) Term Debt Maturity Schedule $200 $Millions $175 $160 $175 $250 $120 $48 $80 $4
Slide 9: Net Asset Value + Free Cash Flow Margin
Net Asset Value + Free Cash Flow Margin Surge has been independently recognized as having one of the best FCF margins (31%) in its intermediate peer group while trading at a very attractive NAV valuation. Surge’s top tier FCF margin is driven by high crude oil operating netbacks, low declines, and q
Slide 10: Compelling opportunity for energy investors
Energy will continue to offer investors an attractive value Compelling proposition in 2025 and beyond opportunity for energy investors Current While global oil demand is at a record high, global crude inventories currently stand at the lowest level on record since 2017. With growing geopolitical ten
Slide 11: Spotlight: Sparky and SE Saskatchewan
Spotlight: Sparky and SE Saskatchewan Surge offers exposure to two of the top four conventional oil growth plays in Canada
Slide 12: Advantages of Conventional Reservoirs
Advantages of Conventional reservoirs offer lower risk, predictable, repeatable development with Conventional opportunity to improve recovery factors Reservoirs Surge proactively targets low risk conventional reservoirs. The Company currently has >2.7 billion barrels of net OOIP with a 6.7% recovery
Slide 13: Core Area Focused
Core Area Focused Sparky and SE Saskatchewan provide exceptional economics and a depth of drilling inventory Sparky SE Saskatchewan Light/medium crude oil production with compelling Highly focused, operated asset base with excellent light returns. Low on-stream costs with extensive drilling oil oper
Slide 14: A One-of-a-Kind Position
Sparky Over 11 Billion Barrel Trend One of Canada’s Largest Accumulations of Oil A One-of-a-Kind Lloydminster Position Edmonton Alberta Hope Surge holds a dominant land position and is drilling Valley ~60km Saskatchewan a mix of horizontal multi-frac and horizontal multi- lateral wells in the Spark
Slide 15: Sparky: Long-Term Growth Potential
Sparky Long-Term Growth Potential Pad drilling, advanced horizontal multi-stage fracturing technology, and multi-lateral horizontal success have unlocked the potential of the Sparky play Sparky Core Area Production Growth ~1.4 billion OOIP net to SGY bbls (internally estimated) >490 net >140 Multi-L
Slide 16: SE Saskatchewan: A Light Oil Balance
SE Saskatchewan A Light Oil Balance Surge’s operational track record of success in SE Saskatchewan Manitoba Surge Land Saskatchewan makes this an exciting growth area Midale Subcrop Frobisher Subcrop Alida Subcrop Area Benefits Ratcliffe Subcrop • Organic growth opportunities • Strategic acquisition
Slide 17: SE Saskatchewan: Key Growth Driver
SE Saskatchewan Key Growth Driver High operating netback1 light oil production and reserves from low risk, proven conventional reservoirs >500 million bbls OOIP net to SGY (internally estimated) SE Saskatchewan Frobisher Average IP90 By Operator (January 2022 - December 2024) >290 net SE Saskatchewa
Slide 18: Analyst Coverage
Analyst Coverage SGY 12-Month Financial Institution Analyst Email Address Target Price Acumen Capital Partners Trevor Reynolds treynolds@acumencapital.com $11.50 ATB Capital Markets Amir Arif aarif@atb.com $9.25 BMO Capital Markets Jeremy McCrea jeremy.mccrea@bmo.com $9.00 Canaccord Genuity Mike Mue
Slide 19: Leadership
Leadership Paul Colborne Jared Ducs Murray Bye Derek Christie Margaret Elekes President & CEO CFO COO Senior VP, Exploration Senior VP, Land & BD Dan Kelly Grant Cutforth VP, Finance VP, Business Development 19
Slide 20: Board of Directors
Board of Directors Paul Colborne Robert Leach 2,5,6 Board Committees President & CEO Independent Director 1. Chair of the Board 2. Member of the Compensation, Nominating and Allison Maher 2,4,5 Corporate Governance Committee. Ms. Jim Pasieka1 Burnyeat serves as Chair. Independent Director Chairman 3
Slide 21: Corporate Information
Corporate Information TSX First Lien Lending Syndicate SGY.TO National Bank of Canada ATB Financial Bank of Montreal BDC Capital Canadian Western Bank Auditor Registrar & Transfer Agent Surge Energy KPMG LLP Odyssey Trust Centennial Place, East Tower 1200 520 3rd Ave SW Legal Counsel Investor Contac
Slide 22: Appendix
Appendix
Slide 23: WTI Hedging Summary
WTI Hedging Summary 12,000 WTI Crude Oil Derivative Contracts Swaps Collars Bought Put Sold Put 10,000 Avg. Avg. Avg. Avg. Avg. Period Volumes Volumes Bought Sold Volumes Volumes Price Price Price Put Call 8,000 Volumes per day Q1 2025 5,622 $75.72 947 $65.00 $82.73 4,204 $65.00 - $- 6,000 Q2 2025 5
Slide 24: Hedging Detail
Hedging Detail WCS and MSW Derivative Contracts Natural Gas Derivative Contracts WCS: Swaps MSW: Swaps Swaps Collars Avg. Avg. Average Average Period Volumes Price Volumes Avg. Price Period Vol. Price Vol. Bought Put Sold Call Q1 2025 4,500 -$14.09 3,000 -$3.65 Q1 2025 2,000 $5.97 3,000 $5.03 $8.05
Slide 25: Sparky Core Area Reserves
Sparky Core Area Reserves Surge Dec 31, 2024 Sproule Sparky Core Area Reserves Oil Equivalent Net Booked Oil Gas NGL’s Total Reserves Oil & Liquids BTax NPV10 Gross Reserves1 Locations (Mbbl) (Mmcf) (Mbbl) (Mboe) (%) ($MM) Proved Developed Producing (PDP) n/a 18,535 15,810 271 21,441 88% $494 Total
Slide 26: SE Saskatchewan Core Area Reserves
SE Saskatchewan Core Area Reserves Surge Dec 31, 2024 Sproule SE Sask/MB Area Reserves Oil Equivalent Net Booked Oil Gas NGL’s Total Reserves Oil & Liquids BTax NPV10 Gross Reserves1 Locations (Mbbl) (Mmcf) (Mbbl) (Mboe) (%) ($MM) Proved Developed Producing (PDP) n/a 10,711 2,772 453 11,626 96% $403
Slide 27: Advisories - Forward-Looking Statements
Advisories - Forward-Looking Statements This presentation contains forward- More particularly, this presentation contains statements concerning: Surge’s value proposition; Surge’s declared focus and primary goals; Surge’s 2025 corporate guidance; looking statements are based are reasonable, undue re
Slide 28: Advisories - Oil and Gas Advisories
Advisories - Oil and Gas Advisories The term “boe” means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of dispositions, discoveries, infills, extensions, economic factors, technical revisions, and drilled in such locations and if drilled there is more uncertainty that such wells
Slide 29: Advisories - Non-GAAP & Other Financial Measures
Advisories - Non-GAAP & Other Financial Measures This presentation includes references to non-GAAP and other financial measures used by and timing of decommissioning programs to achieve greater capital efficiencies and as believes reduces comparability. Management believes the timing of collection,
Slide 30: Advisories - Non-GAAP & Other Financial Measures
Advisories - Non-GAAP & Other Financial Measures Net Debt and Net Debt to Cash Flow from Operating Activities Operating Netback, Operating Netback per boe, and Adjusted Funds Flow per boe Net debt is a non-GAAP financial measure, calculated as bank debt, senior unsecured notes, term debt, plus the l
Slide 31: Corporate Information
Corporate Information TSX First Lien Lending Syndicate SGY.TO National Bank of Canada ATB Financial Bank of Montreal BDC Capital Canadian Western Bank Auditor Registrar & Transfer Agent Surge Energy KPMG LLP Odyssey Trust Centennial Place, East Tower 1200 - 520 3rd Ave SW Legal Counsel Investor Cont