Attached files
EXHIBIT 99
SYNERGY RESOURCES CORPORATION
July 10, 2013 06:00 ET
Synergy Resources Reports Fiscal Third Quarter 2013 Results
Revenues up 64% to $12.3 Million, Driving Operating Income up 26% to $4.9
Million and Net Income of $0.07 per Share;
Company to Host Earnings Conference Call Today, July 10, 2013 at 12:00 p.m.
ET
Phone Numbers are 877-407-9122 for Toll Free Dial-In; or 201-493-6747 for
International/Local Dial-In
PLATTEVILLE, CO--(Marketwire - July 10, 2013) - Synergy Resources Corporation
(NYSE MKT: SYRG), a U.S. oil and gas exploration and production company focused
in the Denver-Julesburg Basin, reported its fiscal third quarter results for
the period ended May 31, 2013.
Third Quarter 2013 Financial Highlights vs. Same Year-Ago Quarter
o Revenues increased 64% to $12.3 million;
o Operating income increased 26% to $4.9 million;
o Net income increased 32% to $3.6 million; and
o Adjusted EBITDA (a non-GAAP metric) increased 61% to a total of $9.3
million, representing a 76% return on revenue.
Third Quarter 2013 Operational Highlights
o Net oil and natural gas production increased to 207,543 barrels of oil
equivalent (BOE), a year over year increase of 66%;
o Average daily production increased to 2,256 BOE, a sequential quarter
increase of 9% from 2,067 BOE produced during the second quarter and a
66% increase from 1,356 BOE in the year-ago quarter;
o As non-operator, participated in 6 gross horizontal wells (2 net) in
the Wattenberg Field.
o As of May 31, 2013, our well count increased to a total of 294 gross
oil and gas wells (221 net), including 9 wells in various stages of
drilling or completion activities; and
o Spudded the first operated horizontal well on the Renfroe pad where we
have a 97% working interest and over 80% net revenue interest.
Third Quarter 2013 Financial Results
Revenues totaled $12.3 million, up 13% from $10.9 million in the previous
quarter and up 64% from $7.5 million in the same quarter a year ago. The
year-over-year improvement was attributed to a 66% increase in production,
primarily from our operated vertical program and from our participation in
non-operated horizontal wells in the Wattenberg Field, offset by a 2% decrease
in the realized average selling price per BOE. During fiscal Q3 2013, average
selling prices were $83.98 per barrel of oil and $4.76 per mcf of gas, as
compared to $91.21 and $3.62, respectively, a year-ago.
Operating income increased to $4.9 million, up 9% from $4.5 million in the
previous quarter and up 26% from $3.8 million in the same year- ago period. Net
income was $3.6 million or $0.07 per basic share and $0.06 per diluted share, up
49% from $2.4 million or $0.05 per basic and diluted share in the year ago
period.
Adjusted EBITDA (a non-GAAP financial measure) increased to $9.3 million, up
from $7.9 million in the previous quarter and up from $5.8 million in the same
period a year-ago.
As of May 31, 2013, our cash and equivalents totaled $19.2 million, as compared
to $19.3 million at August 31, 2012. At May 31, 2013, there was $44.5 million
borrowed under the revolving line of credit.
The following tables present certain per unit metrics that compare results of
the corresponding quarterly reporting periods:
Year over Year Three Months Ended
-------------- -------------------
May 31, May 31,
2013 2012 Change
-------- ------- --------
Production:
Oil (Bbls) 115,225 69,230 66%
Gas (McF) 553,909 333,200 66%
BOE (Bbls) 207,543 124,763 66%
BOEPD 2,256 1,356 66%
Revenues (in thousands):
Oil $ 9,677 $ 6,314 53%
Gas 2,637 1,208 118%
-------- --------
Total $ 12,314 $ 7,522 64%
========= ========
Average sales price:
Oil $ 83.98 $ 91.21 -8%
Gas 4.76 3.62 31%
BOE (Bbls) $ 59.33 60.29 -2%
Lease operating expense ($/BOE) $ 5.05 $ 3.65 38%
Production taxes ($/BOE) $ 5.14 $ 5.64 -9%
DD&A expense ($/BOE) $ 18.41 $ 14.70 25%
G&A expense ($/BOE) $ 7.29 $ 6.87 6%
2
Quarter over Quarter Three Months Ended
-------------------- ------------------------
May 31, February 28,
2013 2013 Change
---------- ----------- ------
Production:
Oil (Bbls) 115,225 100,694 14%
Gas (McF) 553,909 512,069 8%
BOE (Bbls) 207,543 186,039 12%
BOEPD 2,256 2,067 9%
Revenues (in thousands):
Oil $ 9,677 $ 8,478 14%
Gas 2,637 2,443 8%
-------- --------
Total $ 12,314 $ 10,921 13%
======== ========
Average sales price:
Oil $ 83.98 $ 84.20 0%
Gas $ 4.76 $ 4.77 0%
BOE (Bbls) $ 59.33 $ 58.70 1%
Lease operating expense ($/BOE) $ 5.05 $ 4.20 20%
Production taxes ($/BOE) $ 5.14 $ 5.88 -13%
DD&A expense ($/BOE) $ 18.41 $ 17.07 8%
G&A expense ($/BOE) $ 7.29 $ 7.46 -2%
Year over Year
--------------
Nine Months Ended
----------------------
May 31, May 31
2013 2012 Change
-------- ------- ------
Production:
Oil (Bbls) 296,220 160,995 84%
Gas (McF) 1,489,624 794,691 87%
BOE (Bbls) 544,490 293,444 86%
BOEPD 1,994 1,075 86%
Revenues (in thousands):
Oil $ 24,662 $ 14,646 68%
Gas 6,887 3,574 93%
---------- ---------
Total $ 31,549 $ 18,220 73%
========== =========
Average sales price:
Oil $ 83.25 $ 90.97 -8%
Gas $ 4.62 $ 4.50 3%
BOE (Bbls) $ 57.94 $ 62.09 -7%
Lease operating expense ($/BOE) $ 4.32 $ 3.57 21%
Production taxes $ 5.46 $ 5.70 -4%
($/BOE)
DD&A expense ($/BOE) $ 17.11 $ 15.68 9%
G&A expense ($/BOE) $ 7.37 $ 8.72 -15%
3
Monty Jennings, Chief Financial Officer, commented "In our fiscal third quarter
we began the transition to horizontal operations and we have been focused on
readying our initial horizontal pad sites for drilling activity and building our
inventory of permits for horizontal wells in the Wattenberg Field. Although we
didn't complete any new operated wells in the third quarter, our production has
grown through additional compression equipment on our vertical well pad sites
and through continued participation in non-operated wells. The third quarter was
another record quarter in both production and revenue for Synergy while we
maintained a high operating margin. We look forward to completing our first five
operated horizontal wells later this quarter and continuing our aggressive
horizontal drilling program which should accelerate our growth in fiscal 2014."
Conference Call Information
Synergy Resources President and CEO Ed Holloway, Executive Vice President
William Scaff, Jr., CFO Monty Jennings, and VP of Operations Craig Rasmuson will
host the presentation, followed by a question and answer period.
Date: Wednesday, July10, 2013 Time: 12:00 p.m. Eastern time (10:00 a.m. Mountain
time)
877-407-9122 Toll Free Dial-In (US & Canada)
201-493-6747 International/Local Dial-In
The conference call will be webcast simultaneously which you can access via this
link: http://syrginfo.equisolvewebcast.com/q3-2013 and via the investor section
of the company's web site at www.syrginfo.com.
Please call the conference telephone number 5-10 minutes prior to the start
time. An operator will register your name and organization. If you have any
difficulty connecting with the conference call, contact Jon Kruljac with Synergy
Resources at 303-840-8166. A replay of the call will be available after 3:00
p.m. Eastern time on the same day and until July 24, 2013.
Replay Dial-In Numbers
877-660-6853 Toll Free (US & Canada)
201-612-7415 International/Local
Replay ID#411931
About Synergy Resources Corporation
Synergy Resources Corporation is a domestic oil and natural gas exploration and
production company. Synergy's core area of operations is in the Denver-Julesburg
Basin, which encompasses Colorado, Wyoming, Kansas, and Nebraska. The Wattenberg
field in the D-J Basin ranks as one of the most productive fields in the U.S.
The company's corporate offices are located in Platteville, Colorado. More
company new s and information about Synergy Resources is available at
www.syrginfo.com.
Important Cautions Regarding Forward Looking Statements
This press release may contain forward-looking statements, within the meaning of
the Private Securities Litigation Reform Act of 1995. The use of words such as
"believes", "expects", "anticipates", "intends", "plans", "estimates", "should",
"likely" or similar expressions, indicates a forward-looking statement. These
statements are subject to risks and uncertainties and are based on the beliefs
and assumptions of management, and information currently available to
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management. 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. The
identification in this press release of factors that may affect the company's
future performance and the accuracy of forward-looking statements is meant to be
illustrative and by no means exhaustive. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty. Factors that
could cause the company's actual results to differ materially from those
expressed or implied by forward-looking statements include, but are not limited
to: the success of the company's exploration and development efforts; the price
of oil and gas; worldwide economic situation; change in interest rates or
inflation; willingness and ability of third parties to honor their contractual
commitments; the company's ability to raise additional capital, as it may be
affected by current conditions in the stock market and competition in the oil
and gas industry for risk capital; costs, which may be affected by delays or
cost overruns; costs of production; environmental and other regulations, as the
same presently exist or may later be amended; the company's ability to identify,
finance and integrate any future acquisitions; and the volatility of the
company's stock price.
Financial Statements
Condensed financial statements are included below. Additional financial
information, including footnotes that are considered an integral part of the
financial statements, will be included in Synergy's Edgar Filings at www.sec.gov
on Form10-Q for the period ended May 31, 2013.
SYNERGY RESOURCES CORPORATION
CONDENSED BALANCE SHEETS
(Unaudited, in thousands)
May 31, 2013 August 31, 2012
--------------- ---------------
ASSETS
Cash and cash equivalents $ 19,211 $ 19,284
Other current assets 10,792 7,183
----------- -----------
Total current assets 30,003 26,467
----------- -----------
Oil and gas properties and other equipment 172,810 92,702
Deferred tax asset, net - 332
Other assets 728 1,230
----------- -----------
Total assets 203,541 120,731
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 24,319 15,592
Revolving credit facility 44,486 3,000
Deferred tax liability, net 4,288 -
Asset retirement obligations 2,694 1,027
----------- -----------
Total liabilities 75,787 19,619
----------- -----------
Shareholder's equity:
Common stock and paid-in capital 141,985 123,927
Accumulated deficit (14,231) (22,815)
----------- -----------
Total shareholders' equity 127,754 101,112
----------- -----------
Total liabilities and shareholders'
equity 203,541 120,731
=========== ===========
5
SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
------- ------- ------ ------
Oil and gas revenues $12,314 $ 7,522 $ 31,549 $18,220
------- ------- -------- -------
Expenses
Lease operating expenses 1,048 456 2,352 1,048
Production taxes 1,067 703 2,975 1,672
Depreciation, depletion,
and amortization 3,820 1,834 9,316 4,600
General and administrative 1,514 682 4,013 2,559
------- ------- -------- -------
Total
expenses 7,449 3,675 18,656 9,879
------- ------- -------- -------
Operating income 4,865 3,847 12,893 8,341
------- ------- -------- -------
Other income
(expense)
Commodity derivative gain 540 - 386 -
Interest expense, net (94) - (94) -
Interest income 5 16 20 27
------- ------- -------- -------
Total other income 451 16 312 27
------- ------- -------- -------
Income before income taxes 5,316 3,863 13,205 8,368
Deferred income tax (provision)
benefit (1,701) (1,432) (4,620) 1,809
------- ------- -------- -------
Net income $ 3,615 $ 2,431 $ 8,585 $10,177
======= ======= ======== =======
Net income per common share:
Basic $ 0.07 $ 0.05 $ 0.16 $ 0.23
======= ======= ======== =======
Diluted $ 0.06 $ 0.05 $ 0.15 $ 0.22
======= ======= ======== =======
Weighted average shares
outstanding:
Basic 55,238,098 51,292,810 53,283,695 44,968,566
Diluted 58,918,586 53,174,793 b 5,623,990 46,775,994
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SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Nine Months Ended
May 31, 2013 May 31, 2012
------------ ------------
Cash flow from operating activities:
Net income $ 8,585 $ 10,177
-------- --------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, and amortization 9,316 4,600
Provision for deferred taxes 4,620 (1,809)
Other, non-cash items 626 323
Changes in operating assets and liabilities 5,096 3,787
-------- --------
Total adjustments 19,658 6,901
-------- --------
Net cash provided by operating activities 28,243 17,078
-------- --------
Cash flows from investing activities:
Acquisition of property and equipment (70,269) (34,026)
-------- --------
Net cash used in investing activities (70,269) (34,026)
-------- --------
Cash flows from financing activities:
Net proceeds from equity transactions 467 37,422
Net proceeds from/(repayments of) debt 41,486 (2,200)
-------- --------
Net cash provided by financing activities 41,953 35,222
Net increase (decrease) in cash and cash equivalents (73) 18,274
Cash and equivalents at beginning of period 19,284 9,491
-------- --------
Cash and equivalents at end of period $ 19,211 $ 27,765
======== ========
About Non-GAAP Financial Measures
The company uses "adjusted EBITDA," as a non-GAAP financial measure to evaluate
financial performance such as period-to-period comparisons. This Non-GAAP
measure is not defined under U.S. GAAP and should be considered in addition to,
not as a substitute for, indicators of financial performance reported in
accordance with U.S. GAAP. The company may use non-GAAP measures that are not
comparable to measures with similar titles reported by other companies. Also, in
the future, the company may disclose different non-GAAP financial measures in
order to help investors more meaningfully evaluate and compare the company's
future results of operations to its previously reported results. The company
encourages investors to review its financial statements and publicly-filed
reports in their entirety and not rely on any single financial measure. The
section titled "Reconciliation of Non-GAAP Financial Measures" includes a
detailed description of this measure as well as a reconciliation to its most
similar U.S. GAAP measure.
Reconciliation of Non-GAAP Financial Measures
The company defines adjusted EBITDA as net income adjusted to exclude the impact
of interest expense, interest income, income taxes, depreciation, depletion and
amortization, stock based compensation, and the plus or minus change in fair
value of derivative assets or liabilities. The company believes adjusted EBITDA
is relevant because it is a measure of cash flow available to fund capital
expenditures and service debt and is a metric used by some industry analysts to
provide a comparison of its results with its peers. The following table presents
a reconciliation of the company's non-GAAP financial measures to the nearest
GAAP measure.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands)
Three Months Ended
-----------------------------------------
May 31, February 28, May 31,
2013 2013 2012
------- ------------ ------
Adjusted EBITDA:
Net income $ 3,615 $ 2,732 $ 2,431
Depreciation, depletion, and
amortization 3,820 3,176 1,834
Provision for deferred income tax 1,701 1,604 1,432
Stock based compensation 611 215 108
Commodity derivative change (502) 134 -
Interest and related items, net 89 (8) (16)
------- -------- -------
Adjusted EBITDA $ 9,334 $ 7,853 $ 5,789
======= ======== =======
Nine Months Ended
----------------------------------
May 31, 2013 May 31, 2012
------------ ------------
Adjusted EBITDA:
Net income $ 8,585 $ 10,177
Depreciation, depletion, and
amortization 9,316 4,600
Provision for deferred income tax 4,620 (1,809)
Stock based compensation 994 323
Commodity derivative change (368) -
Interest and related items, net 74 (27)
---------- ----------
Adjusted EBITDA $ 23,221 $ 13,264
========== ==========
Contact Information
Investor Relations Contact:
Jon Kruljac
Synergy Resources Corporation
jkruljac@syrginfo.com
Tel (303) 840-8166
Company Contact:
Rhonda Sandquist
Synergy Resources Corporation
rsandquist@syrginfo.com
Tel (970) 737-1073
