Surge Energy today announced the completion of the previously announced acquisition of Fire Sky Energy pursuant to an amalgamation under the provisions of The Business Corporations Act (Saskatchewan).

Surge has been advised by Fire Sky that the amalgamation was approved by 97.6% of the Fire Sky Shares voted at the special meeting of Fire Sky shareholders to approve the Transaction, held on October 27, 2021.

The purchase price payable by Surge under the Transaction was $58 million, comprised of: 1) the issuance of approximately 11.2 million Surge common shares; and 2) the assumption of approximately $3.0 millionof Fire Sky net debt1, inclusive of transaction costs.

CORPORATE OUTLOOK; UPWARD REVISISION TO PRELIMINARY 2022 GUIDANCE

Surge anticipates significant free cash flow generation (at current strip pricing) in 2022, through consistent and disciplined development of its high quality, conventional crude oil asset base, including Surge's premier Sparky play in Alberta, complemented by its high operating netback, light oil Southeast Saskatchewanassets.

Following the completion by Surge and Fire Sky of their respective drilling programs to date in 2021, Surge anticipates achieving its previously announced guidance for the Company's 2021 exit production rate of 21,500 boepd.

Following the completion of the Transaction, Surge has the following operational indicia and financial attributes:

• Over 2.6 billion barrels of net combined, internally estimated, conventional OOIP2 - with a recovery factor to date of 6 percent;
• Combined proven plus probable year end 2020 reserves of over 100 million boe (86 percent liquids), generating a 13 year reserve life index;
• Exit 2021 production forecast of 21,500 boepd (86 percent liquids weighted);
• Estimated base corporate decline of 26 percent;
• A development drilling inventory of over 975 net locations (internally estimated)3; providing a development drilling inventory of more than 13 years;
• Production efficiencies2 of ~$15,600per boepd (IP 180);
• Shares outstanding (basic): 83.4 million; and
• An estimated exit 2022 net debt to annualized Q4/22 adjusted funds flow of approximately 0.6 times at US$75WTI.

KeyFacts Energy: Acquisitions & Mergers news