Undervalued Productivity Gains and Improving Economics Support Buy Rating on Surge Energy

BMO Capital analyst Jeremy Mccrea has maintained their bullish stance on ZPTAF stock, giving a Buy rating on January 15.

Jeremy Mccrea has given his Buy rating due to a combination of factors that, in his view, are not yet fully reflected in Surge Energy’s share price. He highlights that 2025 marked a step-change in well productivity, particularly in the Frobisher and Sparky plays and in the company’s waterflood initiatives, which together point to stronger underlying asset performance. He notes that recent Sparky wells are delivering results roughly double those of the prior year, and when this uplift is combined with favourable reserve-evaluator profitability metrics, the current valuation appears too low relative to the company’s forward cash flow potential.

Jeremy Mccrea also argues that common investor focus on corporate break-even levels is overly backward-looking and can obscure the impact of rapidly improving marginal well economics, which for Surge are materially lower than its historical break-even figures. As new, more profitable wells increasingly replace older production and cost structures, he expects the company’s overall break-even profile to decline over time. Because much of the value of the existing production is already captured in Proved Developed Producing reserves, he believes incremental upside will come from the market re-rating the value of Surge’s undrilled inventory, potentially driving expansion in EV/PDP multiples. Combined with what he views as an attractive valuation and an underfollowed profile, these dynamics support his Buy recommendation.

In another report released on January 15, TipRanks – Google also initiated coverage with a Buy rating on the stock with a C$7.50 price target.

Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is neutral on the stock.