CALGARY,
AB, June 14, 2024 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to announce that
the Toronto Stock Exchange (the "TSX") has accepted Surge's notice
of intention to make a normal course issuer bid ("NCIB") for its
outstanding common shares ("Common Shares") in accordance with the
rules and policies of the TSX.
The NCIB is an integral component of the Company's return of
capital framework for the distribution of excess free cash flow,
providing direct returns to Surge shareholders. Surge's Board and
Management believe that at times the prevailing trading price of
the Common Shares does not reflect the underlying value of the
Common Shares. Consequently, the repurchase of Common Shares
provides an opportunity to enhance per share metrics.
Surge expects that the repurchase of Common Shares will benefit
remaining shareholders by increasing their equity ownership
interest in the Company. Further, Surge does not have to pay a
dividend on the Common Shares that it acquires pursuant to the
NCIB, thereby improving the Company's sustainability.
The Company had 100,593,460 Common Shares issued and outstanding
as at June 10, 2024. The NCIB allows
Surge to repurchase up to 9,781,079 Common Shares of the Company
(representing approximately 10% of the 97,810,793 issued and
outstanding Common Shares that comprise the public float as of
June 10, 2024) over a period of
twelve months commencing on June 19,
2024. The NCIB will expire no later than June 18, 2025. The actual number of Common Shares
which may be repurchased pursuant to the NCIB will be determined by
management of the Company. Any Common Shares that are repurchased
by Surge under the NCIB will be cancelled.
Under the NCIB, Common Shares may be repurchased in open market
transactions through the facilities of the TSX, on alternative
Canadian trading systems, if eligible, or on other designated
exchanges such as CBOE Canada Inc., Canadian Securities Exchange
(CSE) or Nasdaq CXC Limited, in each case, in accordance with the
rules of the TSX governing NCIBs. The price paid by the Company for
any such Common Shares will be the prevailing market price at the
time of repurchase.
The total number of Common Shares the Company is permitted to
repurchase is subject to a daily purchase limit of 132,755 Common
Shares, representing 25% of the average daily trading volume of
531,023 Common Shares on the TSX, calculated for the six-month
period ended May 31, 2024.
Notwithstanding the daily purchase limit, Surge may make one block
purchase per calendar week which exceeds the daily repurchase
restrictions.
The Company may approve the implementation of an automatic
repurchase plan with its designated broker in order to facilitate
purchases of Common Shares under the NCIB, at times when the
Company ordinarily would not be active in the market due to
regulatory restrictions or self-imposed blackout periods. If
implemented, purchases made pursuant to the automatic repurchase
plan, if any, will be made by the Company's designated broker based
upon the parameters prescribed by the TSX, applicable Canadian
securities laws and the terms of the written agreement between the
Company and its designated broker. If entered into, the automatic
repurchase plan will constitute an "automatic plan" for purposes of
applicable Canadian securities legislation and the form of
agreement to be entered into has been reviewed by the TSX.
Forward-Looking Statements
This press release contains forward-looking statements. The use
of any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe" and similar
expressions are intended to identify forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to
differ materially from those anticipated in such forward-looking
statements.
More particularly, this press release contains statements
concerning: Surge's intention to commence the NCIB; Surge's capital
framework and the ability of Surge to distribute excess free cash
flow, including the ability of the NCIB to contribute to such
framework; the expectation that the repurchase of Common Shares
will benefit remaining shareholders by increasing their equity
ownership in the Company; the anticipated expiration date of the
NCIB; the number of Common Shares to be repurchased pursuant to the
NCIB, the timing of such purchases and the price to be paid for
Common Shares repurchased; the implementation of an automatic
purchase plan during the NCIB, the purchase of Common Shares
thereunder by the Company's designated broker, that the automatic
purchase plan will constitute an "automatic plan" for purposes of
applicable Canadian securities legislation and the form of
agreement to be entered into in respect of the automatic repurchase
plan.
The forward-looking statements are based on certain key
expectations and assumptions made by Surge, including expectations
and assumptions around the performance of existing wells and
success obtained in drilling new wells; Surge's belief that at
times the prevailing trading price of the Common Shares does not
reflect the underlying value of the Common Shares; anticipated
expenses, cash flow and capital expenditures; the application of
regulatory and royalty regimes; prevailing commodity prices and
economic conditions; development and completion activities; the
performance of new wells; the successful implementation of
waterflood programs; the availability of and performance of
facilities and pipelines; the geological characteristics of Surge's
properties; the successful application of drilling, completion and
seismic technology; the determination of decommissioning
liabilities; prevailing weather conditions; exchange rates;
licensing requirements; the impact of completed facilities on
operating costs; the availability and costs of capital, labour and
services; and the creditworthiness of industry partners.
Although Surge believes that the expectations and assumptions on
which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Surge can give no assurance that they will prove
to be correct. Since forward-looking statements address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of
factors and risks. These include, but are not
limited to, risks associated with the condition
of the global economy, including trade, public health and
other geopolitical risks; risks associated
with the oil and gas industry
in general (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect
to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks); commodity price and exchange rate
fluctuations and constraint in the availability of services,
adverse weather or break-up conditions; uncertainties resulting
from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; and
failure to obtain the continued support of the lenders under
Surge's bank line. Certain of these risks are set out in more
detail in Surge's AIF dated March 6,
2024 and in Surge's MD&A for the period ended
December 31, 2023, both of which have
been filed on SEDAR+ and can be accessed at www.sedarplus.ca.
The forward-looking statements contained in this press release
are made as of the date hereof and Surge undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
Neither
the TSX nor its Regulation Services Provider (as that term is defined
in the policies of the TSX) accepts
responsibility of the accuracy of this release.
SOURCE Surge Energy Inc.
