SURGE ENERGY INC. ANNOUNCES FOURTH QUARTER AND YEAR END FINANCIAL RESULTS FOR 2025; STRONG 2025 YEAR END RESERVE ADDITIONS; OPERATIONAL UPDATES; AND APPOINTMENT TO THE BOARD OF DIRECTORS

Executive Summary

• Surge Energy reported FY 2025 results with production of 23,491 boepd (88% liquids), AFF of $279.2 M ($2.81/share) and free cash flow of $119.5 M, exceeding budgeted production by ~1,000 boepd while spending $10 M less than forecast.
• FY 2025 reserves increased 6% to 95.7 MMboe (TPP), delivering a 136% replacement ratio and a NAV of $13.06 per share; F&D cost was $14.87/boe with a 2.4× recycle ratio.
• The company returned $86.9 M to shareholders ($51.7 M dividends, $8.7 M share repurchases) and reduced net debt by $26.5 M; announced appointment of Ryan Gritzfeldt to the Board.

Key Details

• Production: 2025 average 23,491 boepd (88% liquids), Q4 2025 avg 23,186 boepd vs guidance 22,500 boepd.
• Capital Expenditure: $159.7 M in 2025 (‑$35 M YoY); property, plant & equipment spend $159.7 M vs $195.1 M in 2024.
• Operating Costs: Net operating cost fell to $17.91/boe (‑11% YoY).
• Adjusted Funds Flow (AFF): $279.2 M for FY 2025 ($2.81/share); Q4 AFF $56.2 M.
• Free Cash Flow (FCF): $119.5 M FY 2025 (43% of AFF) vs $99 M in 2024.
• Dividends & Share Repurchases: $51.7 M dividend ($0.52/share), $8.7 M NCIB repurchase (1.50 M shares). Total shareholder return $86.9 M (31% of AFF).
• Net Debt: Reduced to $220.6 M at year‑end 2025 from $247.1 M (‑11%).
• Reserve Highlights (GLJ, YE 2025):
• TPP reserves 95.7 MMboe (+6% YoY).
• Replacement ratio 136%; reserve life index 11.4 years.
• NAV per basic share: $13.06 (TPP), $7.62 (TP), $3.97 (PDP).
• F&D Costs: $14.87/boe (TPP) – best in three years; recycle ratio 2.4× (based on netback $36.23/boe).
• Drilling Activity 2025: 58 gross wells (48.8 net) drilled; 17 OHML wells at Hope Valley with avg IP90 197 bopd (+22% vs type‑curve). High‑density frac program doubled stages per well, raising IP90 by ~50% in Sparky.
• 2026 Outlook: Planned 60 gross (54.5 net) wells; production target ≈23,000 boepd; AFF $265 M ($2.68/share); dividend $51.5 M ($0.52/share). Undrawn $250 M credit facility remains.
• Board Appointment: Ryan Gritzfeldt, PE, former COO of Veren Inc., appointed to Board effective 4 Mar 2026.

Notable Quotes

“Our disciplined capital allocation and strong drilling results have delivered superior production, cash flow and reserve growth while returning significant value to shareholders.” – Paul Colborne, President & CEO.