Q: I received an email from Paul Colbourne with regards to surge having 6 of the top 10 producing medium heavy oil wells in Canada and 14 year plus inventory in the Sparky.Your thoughts on this please and Surge in general please? Lots of insider selling of late doesn't look great.
5i Research Answer:
SGY has described Sparky as one of the top two conventional oil growth plays in Canada, with solid economics and a deep drilling inventory. SGY is almost a $1B name, with a 5.6% yield, it is up 35% year-to-date and over 80% in the past year. We think that energy stocks can start printing solid free cash flows with oil above $90, and we feel the name can continue to move higher if the price of oil is sustained around these levels or even in the $90s. There have been some sales in the open market, but they have been small, insiders still own over 3% of the stock.