Surge Energy (TSX: SGY|, OTC: ZTPAF):

• Shares O/S: 99.0MM

• Market Cap: ~$655

• .79X Debt to Cashflow

• Enterprise Value: $875MM

• Average Daily Trading Volume: ~585k shares/day

• $1.2B in Tax Pools

 Surge Energy is a medium and light oil producer in two of the most economic plays in NA; their traditional Sparky play, the new Hope Valley multi-leg Sparky discovery and the Frobisher in SE Saskatchewan.

📌 Not only does Surge have an enviable asset base, they have one of the top management teams, which is extremely adept at M&A, building four of the most successful companies in Canada. The result is the combination of building great asset packages, top technical teams, and capital markets prowess. 

📌 Surge’s first three quarters of 2025 delivered record-breaking corporate performance. As a result, the company has increased its production for 2026 to 23000 boepd, while only spending $150MM for maintenance CAPEX on cashflow of $265MM and FCF of $95MM. The company currently pays a dividend of $0.52/share (or $0.0433/month) offering a 7.5% yield (18% payout ratio) in addition to an aggressive buyback, as they are trading well below their 1P NAV of $9.33. Very competitive netbacks of $35.00/bbl.  

📌 The company has multiple drilling catalysts with their multi-leg horizontals at Hope Valley and continues to deliver the top Frobisher wells in SE Saskatchewan. The company currently has 900 internal drilling locations with 60% considered top-tier (less than 1.5-year payout). They also offer a very low decline of 25% providing stability while allowing the ability to pivot with changing oil prices. The majority of their plays are under waterflood, and they will be drilling 20 injectors this year.

💡 Surge offers one of the best value propositions among their peers, with multiple catalysts and the biggest beneficiary of oil price increases, with every $1 change in WTI = $8.3MM in Cashflow.