Surge Energy (SGY) Q1 2026 earnings summary

Executive summary

• Q1 2026 production averaged 23,893 boepd (89% liquids), exceeding the budgeted 23,000 boepd, driven by strong drilling and waterflood results in Sparky and SE Saskatchewan core areas.

• Adjusted funds flow (AFF) was $70.9 million ($0.72/share), with cash flow from operating activities at $60.0 million, and free cash flow (FCF) at $26.3 million (37% of AFF).

• Capital expenditures were $44.6 million, down 18% year-over-year, highlighting improved capital efficiency.

• Net debt reduced by 13% to $213.3 million, and $12.9 million in dividends were paid in Q1 2026.

• Shareholder returns from Q1 2025 to Q1 2026 totaled $88.2 million, including dividends, debt reduction, and share repurchases.

Financial highlights

• Total petroleum and natural gas revenue was $158.0 million, down 2% year-over-year.

• Net income was a loss of $24.7 million, compared to a profit of $8.2 million in Q1 2025.

• AFF per share basic was $0.72, down 10% year-over-year.

• Operating netback per boe was $38.31, down 11% year-over-year.

• Net operating expenses per boe remained stable at $18.70.

Outlook and guidance

• 2026 guidance updated for WTI scenarios: at $75 WTI, estimated AFF is $315 million ($3.19/share), FCF is $145 million ($1.47/share), and production is 23,000 boepd (88% liquids).

• Management is considering expanding the 2026 capital program in 2H/26 to drive incremental production growth.

• Strategic hedging is in place to protect the 2026 capital program and dividend.