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Energy Summary for Jan. 8, 2015

2015-01-08 19:44 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for February delivery added 14 cents to $48.79 on the New York Merc, while Brent for February lost 19 cents to $50.96 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.40 to WTI ($34.39), down from a discount of $14.35. Natural gas for February added 5.6 cents to $2.92. The TSX energy index added 3.32 points to close at 207.71.

Paul Colborne's Surge Energy Inc. (SGY) lost four cents to $3.02 on 8.84 million shares. The company has done the inevitable. Its five-cent monthly dividend, which yielded 19.6 per cent as of yesterday's close, has been halved to 2.5 cents, for a new yield 9.9 per cent. Naturally, Surge waited hours after yesterday's close to make the announcement, although to be fair, some of its frequent announcements of dividend increases have come after the close as well. When it first announced a dividend in June, 2013, that news came just 15 minutes before the close. It also accompanied the announcement of a $240-million asset acquisition. Surge almost always increased the dividend when it made a big acquisition. The exception was August, 2013, when it raised the dividend and cited strong drill results. That news came before the open. There were four more dividend increases plus acquisitions announced from October, 2013, to March, 2014, with two coming before the open and two after the close. It is still a safe bet that when oil prices recover and the dividend is raised anew, Surge will shout it from the rooftops as early as possible. President, CEO and former chairman Colborne is no doubt looking forward to it already. He does not take a salary at Surge, but receives dividend income from his 3.09 million shares, which until now provided him with a very comfortable $155,000 a month. Halving that payout must have been a disappointing decision. Interestingly, the board of directors (which is in charge of dividend decisions) has also been changed. Mr. Colborne has stepped down as chairman and been replaced by Jim Pasieka, and Rob Leach will be lead director when Mr. Pasieka has a conflict of interest. The mention of Mr. Leach's name has led to rumours that such a conflict has already arisen for Mr. Pasieka, regarding a company or asset that Surge may acquire.

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