Surge Energy America was formed in early 2015 as a U.S. subsidiary of Chinese based Shandong Xinchao Energy Corporation Limited, a publicly traded company on the Shanghai Stock Exchange, with a strategy to make a significant acquisition in the U.S. oil shale play and pursue a long term sustainable U.S. oil & gas company. Upon entering into an agreement to purchase its first asset, Hoople Field, in early 2015, the Surge Energy organization began in May 2015 to enable taking over operatorship. Hoople Field is a 5,000 acre established water flood asset in Crosby County, TX.
The Surge Energy organization immediately began to assimilate the expertise and talent to provide strong oil industry technical, operating, and business capabilities for not only the original acquisition but also to position the company for growth in the prolific Permian Basin. By the time Surge Energy began operating Hoople in September 2015, a much larger acquisition was on the horizon.
In November 2015, Surge Energy closed on the acquisition of the Moss Creek asset from two private equity operators. This new asset consisted of approximately 76,000 acres of leasehold, along with a large drilling and development inventory, in the Midland Basin. The acquired acreage stretches between northern Howard County and southern Borden County of Texas. The original operations came with approximately 30 producing wells, ~6,500 BOE/D of production, and a large opportunity slate of greenfield development.
The original acquisitions, having been both funded 100% with equity from the Parent company, afforded Surge Energy the extreme benefit of a clean balance sheet as the company began to build and increase activity to pursue the large drilling investment opportunities that accompanied Moss Creek.
The development of Moss Creek since the acquisition in 2015 has fueled impressive growth and success for Surge Energy America. Since its inception the Surge Energy organization has grown to over 140 employees, employing a full suite of oil industry skills, talents, and expertise. This highly talented and experienced team has drilled and completed over 260 horizontal wells, achieved a Permian Basin record for the longest lateral drilled in the fewest days, driven production past 40,000 BOE/P net, and installed the required infrastructure to move oil, gas, & water. The Moss Creek field was largely lacking infrastructure at the time of the acquisition but now has significant pipelines, batteries, electrical, and water facilities ensuring numerous offtakes to markets for oil and gas and a robust water recycling asset. In addition, through continuous bolt on acquisitions, the acreage position has grown to about 80,000 acres.
In Surge’s short history of roughly four years, it has proven to be a team with deep experience, high capabilities and standards as well as technical, operating, and business expertise. The team has executed capital programs close to $1 Billion annually running up to eight rigs effectively. All of this exceptional performance and results have been executed while continuing to deliver on a conservative and flexible financial strategy to ensure a strong balance sheet. This delivery on both operating and financial commitments has allowed Surge to attract U.S funding from 22 institutional banks and over 100 high yield bond investors.
As Surge continues on the journey set forth in the original strategy to develop a long term sustainable premier oil and gas company in the U.S., the company believes it is uniquely positioned to couple investors from both the U.S. and China to deliver outstanding financial and operating results for the benefit of all stakeholders: our investors, our Employees, our Communities, and our industry partners.