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Dealers, dividend investors welcome Surge Energy deal

Surge Energy Inc.’s $225-million equity financing is a sizable piece of business for several dealers in a weak market, and an accompanying acquisition and strategic shift shows investor appetite for income remains strong.

There are several threads to this. First, the Calgary-based junior oil company, led by Paul Colborne, has agreed with Cenovus Energy Inc to acquire medium-gravity oil assets in Saskatchewan for $240-million. That will add 3,600 barrels a day of production right away and expose the company to as much as 230 million barrels of reserves in the lower Shaunavon formation, with just a tad recovered to date.