Based on continued operational success at each at each of Surge's core areas in Western Alberta, Southeast Alberta and Manitoba/North Dakota, the Company has exceeded its 2011 upwardly revised exit production rate of 7,800 boe per day. The Company's substantial inventory of light and medium gravity oil drilling locations and strong balance sheet provides the financial and operating flexibility for continued and sustainable growth in 2012.

The completion of the PrivateCo acquisition, as described in the Company's press release dated December 15, 2011, adds 1,200 bbls per day (100 percent light oil) of focused, high quality, high netback and high working interest Slave Point/Gilwood light oil assets to the Company's portfolio. Total consideration of the acquisition was approximately $106 million, consisting of 7.9 million Surge common shares and approximately $33 million in cash including the assumption of net debt.

Surge estimates there to be 65 million barrels (gross) of Discovered Petroleum Initially In Place1 ("DPIIP") in the contiguous Slave Point pool with a cumulative oil recovery to date of less than one percent on the acquired lands. Management believes the acquired assets have the potential to grow production beyond 2,500 bbls per day (100 percent light oil) over the next two years under primary development and beyond 4,000 bbls per day (100 percent light oil) under secondary waterflood development. Surge has secured drilling services and plans to spud its first horizontal multi-frac well on the property early in the first quarter of 2012.

Surge is now positioned in five established light and medium oil resource plays with significant secondary recovery potential and in several high impact, emerging light oil resource plays. The Company controls a significant undeveloped land base of more than 480,000 net acres, more than 525 million barrels (gross) of internally estimated DPIIP and more than 500 gross (390 net) oil drilling locations. Surge will continue to grow the Company organically in each of its core areas and continue to make accretive acquisitions that fit its business plan of positioning Surge in high impact, emerging light oil resource plays. Surge is committed to delivering top quartile corporate performance and creating value for shareholders by growing reserves, cash flow and production on a per share basis.

Surge is pleased to confirm its previously announced guidance for 2012. The Company is forecasting a growth rate of more than 60 percent (35 percent per share) on average production and more than 40 percent (25 percent per share) on exit production from 2011 to 2012.

Tags: Surge Energy Inc.