CALGARY - Surge Energy Inc. ('Surge' or the 'Company') (TSX: SGY) is pleased to announce it has successfully completed its previously announced strategic $106 million asset sale (the 'Sale'), and finalized a positive re-determination of the Company's credit facilities.

ACCRETIVE ASSET SALE COMPLETED

Surge has now closed its previously announced strategic Sale, providing a significant, immediate, positive impact on the Company's balance sheet. As a result of the Sale transaction, Surge's bank indebtedness is reduced by over $100 million, and its annual interest expense is anticipated to decrease by approximately $10 million. On this basis, Surge received a 'corporate' cash flow multiple of 5.3 times1 on the Sale.

Following the Sale, Surge maintains a high quality, low decline, medium and light oil asset base - with large original oil in place ('OOIP')2 reservoirs, high netbacks, and a large internally estimated drilling inventory of over 750 locations3 (>14 year inventory).

In 1H/21, Surge anticipates adding over 3,200 boepd from the Company's 32 well drilling program at a cost of $39 million, while selling 2,700 boepd for gross proceeds of $106 million pursuant to the Sale.

The Company has rig released all 31 gross (31.0 net) wells budgeted for the Sparky core area. One additional (1.0 net) well commenced drilling in late March, 2021 into the Company's large OOIP, Montney turbidite, pool in the Valhalla core area. This is a development location offsetting the Company's successful Montney horizontal well that was drilled and brought on production in Q4/19. This well had an IP30 oil rate of more than 1,000 bopd, and has delivered cumulative production of over 230,000 barrels of light oil in just over one year.

POSITIVE CREDIT FACILITIES RE-DETERMINATION CONFIRMED

In combination with the Sale, the Company is pleased to announce that it has completed a re-determination of its credit facilities.

Surge's first lien credit facility has been re-determined at $215 million, with the Company's next bank review scheduled on or before November 30, 2021. In addition, the previous obligation to conduct an asset sale solicitation process has been eliminated. This re-determination is forecast to provide the Company with significant available liquidity, and substantially reduces Surge's annual interest expense.

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 concerning: Management's expectations and plans with respect to the development of its assets and the timing thereof; Surge's declared focus and primary goals and its strategy for 2H/21; Surge's planned drilling program and the anticipated costs thereof and payout thereunder; Surge's drilling inventory and locations; management's expectations regarding 2021 production levels; the expectation that the Sale will further enhance the Company's financial flexibility and available liquidity; the anticipated benefits of the re-determination of Surge's credit facilities, including the anticipated reduction in Surge's annual interest expense and the anticipated timing of release of revised 2021/22 guidance.

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 year ended December 31, 2020, both of which have been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and Surge undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact:

Paul Colborne

Tel: (403) 930-1507

Fax: (403) 930-1011

Email: pcolborne@surgeenergy.ca

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