Surge Energy (SGY) Q3 2024 earnings summary

Executive summary

• Completed strategic debt restructuring with $175M senior unsecured notes, repaid $126M second-lien facility, and increased undrawn revolving credit facility to $250M.

• Focused on maximizing free cash flow for shareholder returns via dividends and share buybacks.

• Expanded drilling inventory supports over 10 years of development in top North American oil plays.

Financial highlights

• Q3 2024 adjusted funds flow (AFF) was $72.7M; cash flow from operations was $73.4M.

• Q3 2024 free cash flow was $21.3M, 29% of AFF; $17M returned to shareholders via dividends and buybacks.

• Q3 2024 oil, natural gas, and NGL revenue was $162.2M, down 12% year-over-year.

• Net income for Q3 2024 was $17.3M, up 4% year-over-year.

• Net debt reduced to $247.3M, a 14% decrease year-over-year.

Outlook and guidance

• 2025 capital budget set at $170M, down $20M from 2024, focusing on capital efficiency.

• 2025 production guidance: 23,750 boepd (87% liquids) at US$70 WTI.

• Forecast 2025 AFF of $277M, free cash flow of $85M, and annual dividend of $53M.

• Majority of excess free cash flow in 2025 to be allocated to share repurchases.