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— The company's website talks glowingly of oil and gas prospects, but its government filings are not upbeat. The company has not yet produced any revenue from operations. It has a cumulative deficit of $12.3 million and lost $1.6 million in its most recent quarter. It has only four employees. Because of limited capital resources, it pays its nonemployee service providers in company stock. Its auditor says that because the company is having difficulty generating sufficient cash flow to fund operations, there is "substantial doubt about its ability to continue as a going concern."

Surge's stock trades on the over-the-counter bulletin board, which is not part of Nasdaq, and is speculative by its very nature. And the fact that it's an oil-and-gas issue can make it even more speculative, says David Allen of North County's Palomar Equity Research. The company admits that it could have a hard time raising capital and that its stock could be "extremely volatile."

The company's project in Alberta, Canada, "does hold potential," says Allen, but oil there is "very thick, a molasseslike substance which does not flow easily."

Neither Perez nor Daniel Schreiber, chief executive of Granite, returned repeated phone calls and e-mails. I initially called and e-mailed both on October 4 and October 5. Although not responding to my call or queries, Perez appeared on a Society of Professional Journalists panel at San Diego State on October 5 and gave journalists a report card of A for covering Katrina but F for being "predators."

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