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SURGE ENERGY INC. ANNOUNCES INCREASE TO 2026 PRODUCTION GUIDANCE; EXPANDS SECOND HALF 2026 DRILLING AND WATERFLOOD CAPITAL PROGRAM
SURGE ENERGY INC. ANNOUNCES INCREASE TO 2026 PRODUCTION GUIDANCE; EXPANDS SECOND HALF 2026 DRILLING AND WATERFLOOD CAPITAL
About this update from Surge Energy Inc.
CALGARY, AB, June 1, 2026 /CNW/ - Surge Energy Inc. ("Surge" or the "Company") (TSX: SGY) is pleased to announce that its Board of Directors has approved an expanded second half 2026 capital program, including increased waterflood spending and incremental production growth. Additionally, the Company has increased its 2026 exit production rate guidance from 23,000 boepd to 24,000 boepd.2026 PRODUCTION GUIDANCE INCREASE AND CAPITAL PROGRAM EXPANSIONThe conflict between the United States and Iran continues in the Middle East, restricting oil flows through the Strait of Hormuz and contributing to significant drawdowns in global crude inventories. These macro events, combined with the ongoing Russia/Ukraine conflict, are driving a "higher for longer" crude oil price scenario than many market participants were projecting.As a result of Surge's significant financial exposure to rising crude oil prices, together with the Company's strong balance sheet, the Company is generating much higher free cash flow ("FCF") in 2026 as compared to Management's budgeted crude oil price assumption of US$65 WTI per barrel. Further, based on Surge's independent reserve report for the year ended December 31, 2025, prepared by GLJ Ltd. ("GLJ"), the Company's net asset value ("NAV")1, when run at US$75 WTI flat pricing, is $11.04 per share for total proved reserves, and $17.10 per share for proven and probable reserves. On this basis, Management is currently allocating up to $5 million per month towards share buybacks under the Company's existing Normal Course Issuer Bid ("NCIB").In addition, given the significant increase in forward crude oil prices, together with Surge's deep (>12 year) inventory of more than 900 internally identified drilling locations2, Surge's Board of Directors and Management have now approved an expansion of the Company's 2026 capital program to add incremental production per share growth in the second half of the year. This expansion of Surge's 2H/26 capital program is comprised of additional drilling in the Sparky and SE Saskatchewan core areas, together with additional waterflood capital, as compared to the current 2026 budget.Accordingly, Management forecasts that the Company's 2026 exit production guidance will increase by over four percent, to 24,...