When you consider the fundamentals of Surge Energy it will be easy to become a shareholder @ currently depressed levels.
Facts: Insider buying, trading @ 2.3x 2013 cash flow, est. exit rate production for 2013~ over 11,000 boepd, 1P+2P est. NAV fully diluted $8.02, trading near 52 wk low and could be a juicy takeover candidate!
Surge Energy Inc. ( sgy.to or zptaf~ $3.58)
Surge is a focused O & G company with operations in Alberta & Manitoba Canada and exploration and development in North Dakota.
1. Read and listen to current presentation Dated March 12th 2013~ can be found on website: www.surgeenergy.ca
2. Go to website and review Feb 12th and March 12th 2013 press releases.
shares outstanding~71 million basic and 80 million fully diluted.
52 wk range~ $2.70-$10.79
Surge est. average production 2012~ 8900 boepd-- fourth Q 2012 average production was 9000 boepd.
Est. exit production guidance for 2013- 11,500 boepd (73% Oil and NGLs) .
Year- End rev and earnings for 2012 anticipated on or about March 21st 2013- anticipate strong results. Please review the 9 months ending Sept 30, 2012.
Insider buying- chairman of the company ($400k).
Analysts that cover the company around 15
Recently, Raymond James targets @ $5.50, Marquarie @$7.00 and Dundee @ $6.75.
Go to www.bbn.ca and review money manager John Stephenson on 03/04/13 opinion on sgy.to.
NAV est. $8.21 ~2P
NAV est. $5.29 ~1P
1P+2P reserves 46.1 million barrels
1P+2P value $732 million
1P+2P reserve life 14 years
CAPEX for 2013~ $140 million
Forecast 15% growth in production and 18% growth in cash flow.
Cash flow based upon basic shares outstanding for 2013 equals $1.62 or 2.3X 2013 cash flow~ very cheap valuation.
Current bank debt~$250 million~ bank line has been increased to $290 million.
50% net production for oil hedged @ $92.90 and for gas $3.40 for 2013.
For the 9 months ending Sept 30th 2012 revenue came in @ $121 million and .21 net income/sh.
Many Canadian Oils have not performed very well during the past 6 months and Surge Energy fits in that group with little opposition to this claim.
Investors that have bought this stock during the past 12 months most likely wish that they never had heard of Surge Energy. We are sorry for their losses, but "dogs" for some are "golden eggs" for others.
At current levels we see huge upside potential during the next 9 months and beyond. The fundamental variables mentioned within this "alert" indicate an investment with very low downside risk and 100-200% upside potential during the next 12-15 months. Surge Energy could also be a juicy takeover candidate for a trust or major looking for cheap assets with growing production.
We rate Surge Energy with a strong buy recommendation. Investors should not overlook these depressed shares of this quality O & G.
7 Favorite oils***********************
1. Surge Energy - sgy.to $3.69 or zptaf $3.58
2. Sundance Energy- sdcjf $1.08
3. Iona Energy - ina.v $.69 or ionaf $.66
4.Coastal Energy - cen.to $19.07 or cenjf $18.46
5. Marquee Energy -mql.v $.57 or skwef $.58
6 Northern O&G - nog $15.06
7. Kodiak - kog $9.28
We favor the Oils because they offer us organic growth, takeover potential, economic growth response and political unrest response.
We believe that Coastal, Kodiak and Northern are the 3 most likely takeover candidates during 2013. We believe that mql.v or skwef is one of the cheapest oils in our group ( .58 with a nav of $1.96). Coastal should have some information for investors during the next week or so~ they have not communicated with investors for almost 100 days ( poor investor relations). Sundance has finally completed the acquisition it made during Nov 2012 ( we are now off to the races). SDCJF has the potential to double during 2013 because of their Eagleford properties that they will be drilling during 2013. Iona pulled a giant rabbit out of it's hat and should takeoff during the 2nd quarter ( read the press).
SLEEPER- Urals Energy- uen.l or ureyf - around .08-very cheap Russian oil and gas company. Review uen.l Feb 2013 presentation on website. The current production is 2150 bopd and total shares outstanding equals 252 million. The company plans of drilling 3 wells during 2013. The company operates a refinery in Petrosakh, which is capable of 4200 bopd. Have reserve numbers of 58 million barrels of 2P. This a sleeper and actually may stay asleep for years or maybe weeks.
***ALL I CAN SAY *****
During Obama's first 4 years we created $7 trillion in additional debt. We got Obamacare that is like a Nuclear Bomb ready to explode over all of America! Obamacare is the real terrorist act without even a shot being fired. He hates our friends and love our enemies. He has managed to split America in half-- rich vs poor, black vs white, gay vs straight, legal vs illegal, guns vs no guns, tax vs no tax, strong defense vs weak defense, oil and NG vs electric and solar and the list goes on and on.
This is not the America that i love and defend, but an America that is being transformed into a Nanny state or Socialist country. I hate what i see and hear and am not sure how this is going to play out during the next four horrible years and beyond. We played around with North Korea since the Clinton years and now we have a problem. We are still toying around with Iran and we all know the end results~ Obama has no "balls" and the rest of the world knows that.
This is the best~we plan on giving Egypt ( actually an enemy) some $500 million in aid ( includes military) , but we close the White House tours because of money problems. This President disgusts me!
Ski season in Montana is almost over and we reached around 55 days. Total vertical for ski career is around 48 million ft.
We have not been paid by any of the list investments within this alert. We may buy, sell and hold @ our own discretion.
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For more information call 801 272 4761 or send check to S. A. Advisory, 4700 S. Holladay Blvd, SLC, Utah, 84117 you can also leave a message on 949 922 9986