2024-03-11 10:30:00 ET
Summary
- Surge Energy's Q4 results showed a capex-heavy quarter but remained free cash flow positive.
- The company anticipates generating C$295M in operating cash flow in 2024, resulting in a net free cash flow of C$105M.
- Surge Energy's updated reserve calculation shows a net asset value of approximately C$1.48B or almost C$15/share, offering an attractive discount to the current share price.
Introduction
I initially only owned the convertible debentures issued by Surge Energy ( SGY:CA ) ( OTCPK:ZPTAF ), but I recently also initiated a long position in the common shares as I like the production mix which offers me exposure to a blend of light oil and heavy oil. It is generally expected the price differential for heavy oil will decrease as the new pipeline connecting the BC/Alberta oilfields with the West Coast will come online in the second quarter of this year. But even if the differential doesn't move, the current valuation of Surge Energy makes the stock relatively attractive....
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For further details see:
Surge Energy: Trading At Just 6 Times Free Cash Flow At US$75 WTI