Attached files
EXHIBIT 99.1
Synergy Resources Corporation Announces Quarterly Results
Press Release
Source: Synergy Resources Corporation On Tuesday April 12, 2011, 2:37 pm
DENVER, April 12, 2011 /PRNewswire/ -- Synergy Resources Corporation
(OTCBB:SYRG.ob - News), a domestic oil and gas exploration and production
company focused in the Denver-Julesburg Basin (the "D-J Basin"), reported
results for the quarter ended February 28, 2011 (the "Quarter").
Increased Production:
Revenue for the Quarter was $2,053,534 or $0.0956 per share, up over 500% from
$335,725 in 2Q-2010. The improvement reflects the increase in the Company's
number of producing wells. As of April 11, 2011, the Company had 60 gross wells,
including 48 producing wells, and 10 wells in progress. All wells are located in
the Wattenberg Field of the D-J Basin. Net oil and gas production for the
Quarter was approximately 34,733 BOE or 386 BOEPD. As of February 28th 2011,
Synergy Resources had estimated proved reserves of 641,572 Bbls of oil and
4,313,939 Mcf of gas.
Increased Acreage:
Throughout the quarter, Synergy has significantly expanded its footprint in the
D-J Basin and as of April 11th 2011, Synergy had an approximately 116,000 gross
acres (100,000 net acres) under lease. This is approximately a 100,000 gross
acre increase from the same time last year. Synergy also is contemplating a
transaction with Petroleum Exploration & Management LLC to potentially acquire
interests in 87 producing oil and gas wells, one shut-in well and leases
covering 6,968 gross acres in the D-J Basin.
Improved Cash Position:
As of February 28, 2011, Synergy had cash of over $21,000,000 on its balance
sheet, up from approximately $4,700,000 as of November 30, 2010. The increased
cash position is a result of an increase in cash flow from operations and
$16,690,721 of net proceeds from a private placement of common stock in January
2011.
Financial Results
For the Quarter, Synergy had an operating income of $686,413 compared to an
operating loss of $130,438 for the same period a year prior. Synergy posted a
net loss for the Quarter of $11,738,360 compared to a net loss of $543,661 a
year prior. The net loss for the quarter included a $9,926,158 non-cash change
in the fair value of the derivative conversion liability and $2,514,045 in
interest expense. Frank Jennings, CFO of Synergy Resources Corporation, noted
"Our financial results for the quarter reflect approximately $12.4 million in
non-cash charges and interest expense associated with our convertible notes. As
of March 31, 2011, all of the note holders had elected to convert their notes
into shares of common stock, which will eliminate the non-cash charges and
interest expense after March 31, 2011. We look forward to reporting results in
the future that will no longer be encumbered by these charges."
Ed Holloway, CEO of Synergy Resources Corporation, stated "We had a record
quarter and I am quite pleased with our results. Our revenue topped $2 million
for the quarter, and we continue the upward trend as we bring more wells into
production. Having over $20,000,000 of cash and no debt on our balance sheet
will help us further implement our business plan. We will continue to look to
expand our acreage, reserves, and production in the D-J Basin in order to
maximize our shareholder's value. "
SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
2011 2010 2011 2010
------------------------------------------------------
Revenues:
Oil and gas revenues $ 2,033,687 $ 335,725 $ 3,477,282 $ 388,511
Service revenues 19,847 - 27,289 -
--------------- ---------- ------------ ----------
Total revenues 2,053,534 335,725 3,504,571 388,511
--------------- ---------- ------------ ----------
Expenses:
Lease operating expenses 260,480 47,152 463,155 55,042
Depreciation, depletion,
and amortization 647,205 64,733 1,232,186 92,939
General and
administrative 459,436 354,278 1,111,979 635,410
--------------- ---------- ------------ ----------
Total expenses 1,367,121 466,163 2,807,320 783,391
--------------- ---------- ------------ -----------
Operating income (loss) 686,413 (130,438) 697,251 (394,880)
--------------- ---------- ------------ ----------
Other income (expense):
Change in fair value of
derivative conversion
liability (9,926,158) - (10,315,421) -
Interest expense, net (2,514,045) (414,136) (3,296,084) (414,136)
Interest income 15,430 913 15,891 3,686
--------------- ---------- ------------ ----------
Total other income
(expense) (12,424,773) (413,223) (13,595,614) (410,450)
--------------- ---------- ------------ ----------
Net loss $ (11,738,360) $ (543,661) $(12,898,363) $ (805,330)
=============== ========== ============ ==========
Net loss per common
share:
Basic and Diluted (0.55) (0.05) (0.73) (0.07)
=============== ========== ============ ==========
Weighted average
shares outstanding:
Basic and Diluted 21,487,951 11,998,000 17,580,331 11,998,000
=============== =========== ============ ==========
SYNERGY RESOURCES CORPORATION
CONDENSED BALANCE SHEETS
As of As of
February 28, August 31,
2011 2010
---------------- --------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,161,538 $ 6,748,637
Accounts receivable 3,962,054 3,176,320
Inventory 506,845 387,864
Other current assets 81,401 12,310
---------------- --------------
Total current assets 25,711,838 10,325,131
---------------- --------------
Property and equipment:
Oil and gas properties, full cost method, net 16,500,170 12,692,194
Other property and equipment, net 217,533 150,789
---------------- --------------
Property and equipment, net 16,717,703 12,842,983
---------------- --------------
Other assets 507,528 1,673,799
---------------- --------------
Total assets $ 42,937,069 $ 24,841,913
================ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 4,961,604 3,570,231
Accrued expenses 856,281 517,921
---------------- --------------
Total current liabilities 5,817,885 4,088,152
---------------- --------------
Asset retirem ent obligations 346,204 254,648
Convertible promissory notes, net of debt
discount 4,946,032 12,190,945
Derivative conversion liability 10,246,260 9,325,117
---------------- --------------
Total liabilities 21,356,381 25,858,862
---------------- --------------
Shareholders' equity:
Common stock and paid in capital 57,818,475 22,322,474
Accumulated (deficit) (36,237,787) (23,339,423)
---------------- --------------
Total shareholders' equity 21,580,688 (1,016,949)
---------------- --------------
Total liabilities and
shareholders' equity $ 42,937,069 $ 24,841,913
================ ==============
SYNERGY RESOURCES CORPORATION
OPERATIONAL DATA
Three Months Ended February 28,
--------------------------------
2011 2010
--------------------------------
Production:
Oil (Bbls) 19,511 2,857
Gas (Mcf) 91,333 19,480
Total production in
BOE 34,733 6,104
Revenues:
Oil $ 1,631,905 $ 198,392
Gas 401,782 137,333
------------------------------
Total $ 2,033,687 $ 335,725
==============================
Average sales price:
Oil (Bbls) $ 83.64 $ 69.44
Gas (Mcf) $ 4.40 $ 7.05
Three Months Ended February 28,
--------------------------------
2011 2010
--------------------------------
Production costs $ 55,471 $ 13,345
Severance and ad valorem
taxes 205,009 33,807
-----------------------------
Total lease operating
expenses $ 260,480 $ 47,152
=============================
Per BOE:
Production costs $ 1.60 $ 2.19
Severance and ad valorem
taxes 5.90 5.54
-----------------------------
Total per BOE $ 7.50 $ 7.73
=============================
About Synergy Resources Corporation
Synergy Resources Corporation is a domestic oil and natural gas exploration and
production company. Synergy's core area of op erations is in the
Denver-Julesburg Basin, which encompasses Colorado, Wyoming, Kansas, and
Nebraska. The Wattenberg field in the D-J Basin ranks as the 7th largest field
in the U.S. in terms of proved gas reserves and 9th in production. Synergy's
corporate offices are located in Platteville, Colorado. More company news and
information is available at www.SYRGinfo.com.
This press release may contain forward-looking statements. The actual results
could differ materially from a conclusion, forecast or projection in the
forward-looking information. Certain material factors or assumptions were
applied in drawing a conclusion or making a forecast or projection as reflected
in the forward-looking information.
