Surge Energy Makes ‘Exciting Reentry’ with Astra Oil Acquisition
Surge Energy had previously exited the region through the sale of its southeast Saskatchewan and Manitoba assets in 2015 to Torc Oil & Gas for CA$430 million.
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Surge Energy Inc. agreed to acquire Astra Oil Corp., which the company said represents an “exciting reentry” into southeast Saskatchewan for the Surge team.
The Astra acquisition will be funded through the issuance of Surge common shares and the assumption of approximately CA$15 million of net debt for total consideration of roughly CA$160 million. The assets include more than 4,100 boe/d (90% liquids) of operated, light oil production with an operating netback of more than $42 per boe at US$65 WTI pricing.
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MARKET OUTLOOK:
Oil has entered a multi-year bull market, given normalizing demand and structural supply challenges. With the successful vaccine rollout (in most areas of the world) we look for demand to reach pre-pandemic levels by the end of 2021. This will allow for OPEC to return the majority of their curtailed production back onto the market, thereby exhausting its spare capacity. The priority is the return of capital over growth and premium inventory exhaustion. The era of U.S. shale hyper growth is over; this is a watershed event for the sector given shaleâs disruptive role over the past decade, which led to price wars, billions of dollars of shareholder capital lost, and artificially low oil prices. Looking forward as inventories normalize in the coming months and head into steep deficit, we see the need for either global offshore production growth (challenged given th
Whitecap Returns to Profitability on Canada Oil, Gas Acquisitions and Higher Prices
Improved prices for increased oil, natural gas and liquids volumes, achieved in part on corporate takeovers, fueled a return to profitability by Canadian producer Whitecap Resources Inc. in the first three months of this year.
Whitecap oil production volumes grew year/year to 64,795 b/d from 56,631 b/d, with natural gas volumes hitting 129 MMcf/d from 70.5 MMcf/d. Natural gas liquids (NGL) volumes increased to 9,508 b/d from 5,077 b/d.
Volume growth resulted from takeovers last year of Torc Oil & Gas Ltd. and NAL Resources Ltd. Whitecap set its stage for further growth with a deal in early April to acquire Kicking Horse Oil & Gas Ltd., which has a portfolio of Montney Shale gas and NGL assets.