Overview

* Surge Energy Q2 production averaged 23,589 boepd

* Co reports Q2 net income C$31.91 mln

* Company raises average 2025 production guidance to 23,000 boepd, cuts capex by $15 mln

* Q2 adjusted funds flow at $72.8 mln, cash flow from operations $56.3 mln

Outlook

* Surge Energy raises average 2025 production guidance to 23,000 boepd

* Company lowers 2025 capital expenditure budget to $155 mln

* Surge forecasts 2025 free cash flow to increase to $105 mln

* Company hedges 8,750 bbl/d of Q3/25 oil production at US$71 WTI

Result Drivers

* DRILLING SUCCESS - Strong drilling results in Sparky and SE Saskatchewan core areas drove production outperformance

* CAPITAL EFFICIENCIES - Improved capital efficiencies led to a reduction in 2025 capital expenditure estimates by $15 mln

* OPERATING EXPENSES - Net operating expenses decreased by 16% due to successful drilling and operational efficiencies

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Oil C$137.14

Sales mln

Q2 Net C$31.91

Income mln

Q2 Capex C$30.77

mln

Q2 Cash C$56.34

Flow mln

from

Operatin

g

Activiti

es

Q2 -C$17,08

Operatin 0

g

Expenses

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

* Wall Street's median 12-month price target for Surge Energy Inc (Alberta) ( ZPTAF ) is C$9.00, about 17.8% above its July 28 closing price of C$7.40

* The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)