CALGARY - Surge Energy Inc. ('Surge' or the 'Company') (TSX: SGY) is pleased to announce that it has successfully completed the previously announced acquisition (the 'Acquisition') of Astra Oil Corp. ('Astra') pursuant to an arrangement (the 'Arrangement') under the provisions of the Business Corporations Act (Alberta).
SPECIAL MEETING RESULTS; 95% VOTE IN FAVOR OF ACQUISITION AND GREATER THAN 93% VOTE IN FAVOR OF THE SHARE CONSOLIDATION
All the issued and outstanding common shares of Astra were acquired by Surge for aggregate consideration consisting of: 1) the issuance of approximately 229 million common shares of Surge ('Surge Shares'), and 2) approximately $13.5 million in assumed debt. At the special meeting of Surge shareholders to approve the issuance of Surge Shares pursuant to the Acquisition, held on August 17, 2021 (the 'Meeting'), 26.5% of the outstanding Surge Shares were represented and the issuance was approved by 95.0% of the Surge Shares voted at the Meeting.
Additionally, Surge shareholders voted to approve the consolidation of Surge Shares ('Consolidation') on the basis of one (1) post-Consolidation Surge Share for each 8.5 pre-Consolidation Surge Shares. At the Meeting, 26.9% of the outstanding Surge Shares were represented and the Consolidation was approved by 93.2% of the Surge Shares voted at the Meeting.
Accordingly, immediately after the Acquisition, the 608.5 million pre-Consolidation Surge Shares issued and outstanding will be consolidated to approximately 71.6 million Surge Shares on a post-Consolidation basis.
Surge expects trading of Surge Shares on a post-Consolidation basis on the Toronto Stock Exchange ('TSX') will commence 2-3 business days following the closing of the Arrangement. The Company's name and trading symbol will remain unchanged.
2022 OUTLOOK - STRONG OPERATIONAL PERFORMANCE CONFIRMS GUIDANCE
Consistent and disciplined development of the Company's high quality, low cost, conventional crude oil asset base, including Surge's premier Sparky play in Alberta, complemented by the high netback, light oil Southeast Saskatchewan assets obtained through the Acquisition, positions Surge to provide shareholders with significant free cash flow generation in 2022 and beyond.
Today, Surge possesses the key operational indicia and financial attributes required for a successful public oil company, including: Over 2.5 billion barrels of net combined, internally estimated, conventional OOIP1 - with a low 6 percent recovery factor to date; Combined proven plus probable year end 2020 reserves of over 95 million boe (85 percent liquids); Exit 2021 production of more than 20,200 boepd (85 percent liquids weighted); A low base corporate decline of 25 percent; A large development drilling inventory: >850 net locations (internally estimated)2; providing a development drilling inventory of more than 13 years; High operating netbacks3 of >$33 per boe at US$65 WTI; A 13 year reserve life index (total proved plus probable); Top tier production efficiencies4 (
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