Businessweek

Synergy Resources Corporation commenced its operated horizontal drilling program on May 16, 2013 with the rigging up of Ensign Rig #17 to begin drilling the SRC Renfroe 32-1-36NHZ well on its Renfroe lease in the Wattenberg Field. Synergy's initial plan is to drill five wells from one pad site on the Renfroe lease comprised of three Niobrara and two Codell wells. The wells will be approximately 4,700 feet in lateral length and Synergy anticipates there will be between 16-20 frac stages per lateral. All the wells are being drilled under the terms of a turnkey contract with Ensign United States Drilling. The industry is still in the early stages of unlocking the potential of the Niobrara and These wells are currently in flow back or final stages of completion and the company will watch their performance closely as the company prepare for the completion of the five Renfroe wells later this summer. Synergy's non-operated working interest in the three wells is as follows: 65% in the Leffler 26Q-421, 56% in the Leffler 26T-421 and 13% in the Leffler 34-1CH. the company participated with Noble Energy on the Sebastyen PC 023-63HC, a horizontal Codell well located in the Wattenberg Field that is currently in early stages of production. The company have a 25% working interest in the Sebastyen well. The company intend to continue its operated drilling program beyond the Renfroe wells and it have sixteen permits submitted for future horizontal wells in the Wattenberg Field and another thirty permits in process for submission. While the pace of activity in the Wattenberg Field is impressive, there are also encouraging developments in the other areas where the company have acreage positions. In the Northern DJ Basin area offset operators such as Whiting Petroleum and Noble Energy have announced promising results and are in the process of testing tighter spacing between the wells to determine best practices to enhance recovery rates. In this area the company have participated as a non-operator in several wells in which it have fractional working interest percentages. Thus the company will gain valuable insight without a great deal of capital expenditure as it contemplate its initial operated drilling activity in this area for fiscal 2014. In summary, the company is in a great position to harvest the potential of the assets it have assembled in the Wattenberg Field and the Northern DJ Basin.

Synergy Resources Corporation expects to commence drilling operations on a four well horizontal drilling program in the Wattenberg Field in May, 2013. Synergy has contracted with Ensign United States Drilling Inc. (Ensign) to drill 4 horizontal wells on its Renfroe lease. The wells' objectives will include both the Niobrara and Codell formations. Ensign Rig #17 will be mobilized to drill 4,900 foot lateral length wells on Synergy's Renfroe Lease and is expected to spud the first horizontal well in Mid-May. Synergy is entering the horizontal play in the Wattenberg Field at an opportune time as the play has been considerably de-risked by the major operators, best demonstrated by Ensign's willingness to offer turn-key pricing for drilling these wells. Turn-key pricing allows Synergy to plan its budget with greater certainty and efficiency. During the second half of the fiscal year the emphasis will be to transition from the vertical development drilling program to an operated horizontal development drilling program. Recent improvements in horizontal drilling technology have reduced costs and improved results.

Synergy Resources Corporation reported unaudited earnings and production results for the second quarter and six months ended February 29, 2013. For the quarter, the company reported oil and gas revenues of $10,921,000 against $6,219,000 a year ago. The year-over-year improvement was attributed to an 87% increase in production, primarily from the new wells brought on line and the Orr acquisition, offset by a 6% decrease in the realized average selling price per BOE. Operating income was $4,482,000 against $2,875,000 a year ago. Net income was $2,732,000 or $0.05 per diluted share against $6,119,000 or $0.12 per diluted share a year ago. Adjusted EBITDA was $7,853,000 against $4,545,000 a year ago. For six months, the company reported oil and gas revenues of $19,235,000 against $10,698,000 a year ago. Operating income was $8,028,000 against $4,494,000 a year ago. Net income was $4,970,000 or $0.09 per diluted share against $7,746,000 or $0.18 per diluted share a year ago. Net cash provided by operating activities was $17,675,000 against $9,631,000 a year ago. Acquisition of property and equipment was $57,579,000 against $17,883,000 a year ago. Adjusted EBITDA was $13,887,000 against $7,475,000 a year ago. For the quarter, the company reported Net oil and natural gas production increased to 186,039 barrels of oil equivalent (BOE), averaging 2,067 BOE per day versus 1,091, as compared to the same year-ago quarter, an average daily increase of 90%. Sales volumes - oil was 100,694 Bbls against 55,823 Bbls a year ago. Sales volumes - gas was 512,069 Mcf against 260,627 Mcf a year ago. For the six months, the company reported net oil and natural gas production increased to 1,861 barrels of oil equivalent per day (Boe/d) compared to 1,001 Boe/d for the year ago period. Sales volumes - oil was 180,995 Bbls against 97,227 Bbls a year ago. Sales volumes - gas was 935,715 Mcf against 504,208 Mcf a year ago. Sales Volumes were 336,948 BOE against 181,262 BOE a year ago.

Synergy Resources Corporation announced that they will report Q2, 2013 results on Apr 09, 2013

Synergy Resources Corporation, Q2 2013 Earnings Call, Apr 09, 2013