Surge has drilled, completed and placed on production all 22 gross (17.9 net) planned wells in the fourth quarter of 2012. As such, Surge is well positioned to meet its targeted exit production guidance of 11,000 boe per day.

At Valhalla South, Surge drilled, completed and tied-in three gross (1.96 net) horizontal multi-frac wells. All wells are currently on production, and although all of the wells have not produced for an entire month, it appears that on average the wells will exceed the Company's best 30 day average production rate of 620 boe per day per well. The Company is currently in the process of drilling one gross (0.44 net) horizontal multi-frac well, which is planned to be on production in early January 2013.

On November 27, 2012, Surge's 6-18 battery at Valhalla South experienced an unplanned outage. The battery was fully operational on Sunday December 9, 2012. The repair cost impact to Surge is estimated to be less than $300,000. As a result of this unplanned outage, Surge's fourth quarter production will be negatively impacted by approximately 600 boe per day.

Tags: Surge Energy Inc.