CALGARY - Surge Energy Inc. ('Surge' or the 'Company') (TSX: SGY) is pleased to announce its financial and operating results for the quarter ended June 30, 2021.

Improving Macro Environment for Oil

Demand for crude oil continues to recover from the dramatic plunge caused by the COVID-19 pandemic in 2020. The recovery, combined with historical reductions in capital spending on world-wide oil projects, has resulted in a very tight physical market for oil, and a large, ongoing, structural deficit for crude oil supply. This tight physical oil market is evidenced by a number of large weekly draws on US crude oil inventories in Q2/21, erasing much of the crude oil inventory accumulations that occurred during the COVID-19 pandemic in 2020.

As world oil demand continues to return to pre-COVID-19 levels, oil prices have recovered quickly and continued to improve throughout the second quarter of 2021, with WTI averaging US$66.07 per bbl during the period. Oil prices are currently trading over US$73 per bbl. Furthermore, Canadian crude oil differentials continue to trade well below their long-term historical averages, resulting in a very positive pricing environment for Canadian oil weighted producers.

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 with respect to management's expectations regarding commodity prices; Surge's declared focus and primary goals; the acquisition of all of the outstanding shares of Astra and the anticipated benefits and timing thereof; management's expectations regarding the reduction of net debt and free cash flow generation; guidance regarding exit 2021 production and exit 2022 net debt; Surge's hedging program; Surge's planned drilling program; Surge's drilling inventory and locations; management's expectations and plans with respect to the development of its assets and the timing thereof; netbacks; production levels; amendments to Surge's credit facilities and Surge's ongoing ESG initiatives, including abandonment activities and Surge's participation in emissions reduction and gas conservation programs.

The forward-looking statements are based on certain key expectations and assumptions made by Surge, including expectations and assumptions the performance of existing wells and success obtained in drilling new wells; 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 (including the impact of COVID-19) 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 9, 2021 and in Surge's MD&A for the period ended December 31, 2020, both of which have been filed on SEDAR and can be accessed at www.sedar.com.

Contact:

Paul Colborne

Tel: (403) 930-1507

Fax: (403) 930-1011

Email:pcolborne@surgeenergy.ca

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