When a CEO of a company steps in with the idea of becoming an entrepreneur, they have multiple goals in mind. One company’s CEO is Linhua Guan, who arrived in 2019 at Surge Energy U.S Holdings Company (“Surge Energy” or “Surge”). His primary focus was to continue the success and growth of the company, contribute to America’s healthy economy, and set an example for the world, ensuring their spot as an independent oil & gas company.
Surge Energy is focused on developing, exploiting, and acquiring oil and natural gas reserves in the Midland Basin of West Texas, one of the three primary sub-basins of the Permian Basin. Headquartered in Houston, Texas, Surge Energy has grown substantially due to acquisitions. With each acquisition, the company took a step ahead towards its success. The company’s foundations were laid with their original asset purchases in 2015 of Hoople and Moss Creek. Before that, Surge Energy began with an investment from China-based Shandong Xinchao Energy Corporation Limited. Shandong entered into an agreement to purchase its first asset, Hoople Field in early 2015, and this acquisition was the kickstart for Surge Energy. Ever since there has been no stopping.
From Acquisitions to Milestones to Awards – Efforts do Count!
Since the original asset purchases in 2015 of Hoople and Moss Creek, which laid the foundation for Surge’s operations, there have been three additional acquisitions of significance.
Q2 2021 –
Surge acquired leasehold interest and wells from Apache Corporation (“Apache”) in Howard County, TX. The aggregate purchase price of the transaction at closing was USD 37.5 million.
Highlights of the acquired assets at the time of acquisition include:
- Approximately 4,000 net leasehold acres (100% held-by-production) adjacent to existing leasehold position in Howard County
- Around 800 net barrels of oil equivalent per day of production
- Includes saltwater disposal infrastructure and approximately 960 surface acres
- Adds about 14 net drilling locations primarily through increased lateral lengths and working interests
Per Surge’s CEO, Linhua Guan, “This acquisition is consistent with our objective of strategically adding to our portfolio. In addition, based on the location of this acreage, it allows us to extend laterals from our existing leasehold that should result in increased economics and capital efficiency.”
The Transaction closed on July 30.
Q1 2021 –
Surge acquired leasehold interest and produced wells from Grenadier Energy Partners II LLC in Howard County, TX. The aggregate purchase price of the Transaction was approximately USD 420 million.
At the time of acquisition, the highlights of the acquired assets include:
- Average production of approximately 9,000 net barrels of oil equivalent per day (about 75% oil)
- Approximately 18,010 net leasehold acreage
- Operated inventory of around 120 high-quality drilling locations
Per Surge’s CEO, Linhua Guan, “This acquisition is consistent with our strategy of building a long-term, sustainable oil, and gas company. The combination of both production and high-quality inventory support both near-term cash flow and strong economic returns for years to come.”
Q4 2019 –
Surge acquired leasehold interest from Cordero Energy Holdings, LLC in Howard and Borden Counties of Texas. The aggregate purchase price of the Transaction was approximately USD 52 million.
When the assets were acquired, the highlights included:
- Approximately 6,000 net leasehold acres directly to the east of Surge’s Borden county acreage
- Operated inventory of around 40 drilling high-quality drilling locations
- About 300 net barrels of oil equivalent per day existing production from non-operated properties.
While growing its asset base, Surge has also celebrated many other achievements in its short history. The most recent that was internally celebrated was reaching 100 million gross barrels of oil produced. Arriving at this achievement in 2021, when the organization is getting back to a growth trajectory (after a 2020 pullback), solidified Surge’s objective of building a long-term, sustainable organization.
Additional achievements celebrated by the organization include the following:
- In late 2019 Surge completed the construction of a company-owned electrical substation which connected a 138 kV utility transmission system into Surge’s operated power line infrastructure, eliminating the need for individual generators and the associated Green House Gas emissions, at each well location, significantly reducing Surge’s environmental footprint.
- In mid-2019, Surge drilled the longest known lateral well in the Permian Basin of 3.4 miles. This technological accomplishment was executed in 18 days from surface to total depth utilizing conventional mud motor and measurement-while-drilling (MWD) technology.
- As of the end of 2018, Surge had built three water management facilities, allowing a large majority of fracking operations going forward to utilize recycled produced water instead of freshwater, preserving freshwater for irrigation or domestic supply.
Surge has also enjoyed several local industry awards over the past several years including the following:
- Houston Business Journal’s 2019 Innovation Award Honoree
- Recognition on the Houston Business Journal’s 2020 Middle Market 50 list, which ranks companies based on the recent percentage of revenue growth
- Recognition on Houston Business Journal’s 2020 Best Place to Work List
- Houston Business Journal’s 2021 Innovation Award Honoree
- Recognition on Houston Business Journal’s 2021 Best Place to Work List
Surge’s growth and achievements have benefitted the communities in which Surge is involved. Areas local to Surge’s drilling and production operations have the benefit of added jobs, production and value related taxes paid to counties, and royalties paid to area landowners as well as various charitable contributions supporting community activities. Surge is proud to be a leader of the energy industry that helps fuel economic growth and improve the quality of life for Americans. Surge has proven that the company can operate efficiently and generate positive returns, while also being a responsible steward of the environment and contributor to the well-being of the community.
