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EXHIBIT 99
July 9, 2015
Synergy Resources Reports Fiscal
Third Quarter 2015 Results
Company to Host Earnings Conference Call July 9th, 2015 at 12:00 p.m. ET
877-407-9122 Toll Free Dial-In, 201-493-6747 International/Local Dial-In
PLATTEVILLE, CO -- (Marketwired) -- 07/9/15 -- Synergy Resources Corporation
(NYSE MKT: SYRG), a U.S. oil and gas exploration and production company focused
in the Denver-Julesburg Basin, today reported its fiscal third quarter results
for the period ended May 31, 2015.
Third Quarter 2015 Financial Results
Revenues for the fiscal 2015 third quarter increased 1.4% to $26.0 million
from $25.7 million in the same quarter a year ago. The year-over-year
improvement was the result of a 95% increase in production, primarily from
the new horizontal wells brought on line and production from acquisitions
and asset swaps with other operators. Revenue growth was offset by a 48%
decrease in the realized average selling price per BOE. During fiscal Q3
2015, average selling prices were $45.77 per barrel of oil and $3.16 per
mcf of gas compared to $90.91 and $5.15, respectively, a year ago.
Net loss of $2.5 million or $0.2 per basic and diluted share is inclusive
of a $3 million full cost ceiling impairment charge resulting from lower
oil and gas prices. This compares with net income of $7.2 million, or
$0.09 per basic and diluted share in the third fiscal quarter of 2014.
Adjusted EBITDA (a non-GAAP metric) increased 31% to $24.9 million up from
$18.9 million a year ago.
At May 31, 2015, cash and cash equivalents totaled $190.2 million.
Borrowings under the credit facility were $141.0 million.
Third Quarter 2015 Highlights
Net oil and natural gas production increased to 738,357 barrels of oil
equivalent (BOE), averaging 8,026 BOE per day, compared to 379,081 BOE, or
an average of 4,120 BOE per day, in the same quarter one year ago, an
average daily increase of 95%.
Operated 52 gross producing horizontal wells in the Wattenberg Field as of
May 31st 2015.
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28 additional operated horizontal wells were awaiting completion and 4
more operated horizontal wells were in the drilling process as of May 31,
2015.
The following tables present certain per unit metrics that compare results of
the corresponding quarterly reporting periods:
Three Months Ended
May 31
2015 2014 Change
-------- ------- ------
Production:
Oil (bbls) 448,906 232,571 93%
Gas (Mcf) 1,736,702 879,062 98%
BOE 738,357 379,081 95%
Revenues (in thousands):
Oil $ 20,546 $ 21,143 -3%
Gas 5,487 4,529 21%
---------- -------- ------
Total $ 26,033 $ 25,672 1%
========== ========
Average realized price:
Oil $ 45.77 $ 90.91 -50%
Gas $ 3.16 $ 5.15 -39%
BOE $ 35.26 $ 67.72 -48%
"Bbl" refers to one stock tank barrel, or 42 U.S. gallons liquid volume in
reference to crude oil or other liquid hydrocarbons. "Mcf" refers to one
thousand cubic feet. A BOE (i.e. barrel of oil equivalent) combines Bbls of oil
and Mcf of gas by converting each six Mcf of gas to one Bbl of oil.
The following table summarizes operating costs on a per unit basis. Additional
details regarding operating costs can be found in the condensed financial
statements.
Costs per BOE Three Months Ended May 31,
----------------------------
2015 2014
Lease operating expenses $ 4.84 $ 6.07
Production taxes $ 3.05 $ 6.27
DDA $ 22.21 $ 20.57
General and administrative $ 5.26 $ 5.11
--------- -------
Total $ 35.36 $ 38.02
========= =======
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William Scaff, co-CEO of Synergy commented, "This quarter's financial results
reflect the efficiencies we are achieving as we generated a 68% operating cash
margin on revenues in the quarter, even while our realized commodity prices
were nearly 50% lower than a year ago. At the same time, we almost doubled our
production compared to the year ago quarter as we continued the horizontal
development of our assets in the Wattenberg Field. With our operating
efficiencies, cash on our balance sheet and remaining liquidity on credit
facility we believe our estimated $250-$300 million fiscal 2016 capital budget
is fully funded and will generate production growth of over 50% compared to
fiscal 2015."
Conference Call
The Company will hold a conference call to discuss results for its fiscal third
quarter ended May 31, 2015. Synergy Resources co-CEO Ed Holloway, co-CEO
William Scaff, Jr., President Lynn Peterson, CFO Monty Jennings, COO Craig
Rasmuson and VP of Capital Markets and Investor Relations Jon Kruljac will host
the presentation, followed by a question and answer period. Information for
accessing the call is as follows:
Date: Thursday, July 9, 2015
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/q3-2015 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 Rhonda Sandquist with
Synergy Resources at 970-737- 1073. A replay of the call will be available
beginning after 3:00 p.m. Eastern time on the same day and will remain
available until July 23rd, 2015.
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 news and information about Synergy
Resources is available at www.syrginfo.com.
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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 risk and uncertainties and are based
on the beliefs and assumptions of management, and information currently
available to 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; the 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; the Company's 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.
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.
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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, impairment, 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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SYNERGY RESOURCES CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands)
Three Months Ended Nine Months Ended
------------------------- -------------------------
May 31, May 31, May 31, May 31,
ADJUSTED EBITDA 2015 2014 2015 2014
------------ ----------- ----------- ------------
Net Income (loss) $ (2,481) $ 7,160 $ 23,322 $ 18,421
Depreciation, depletion,
and amortization 16,397 7,796 48,357 21,106
Full cost ceiling impairment 3,000 - 3,000 -
Income tax expense (benefit) (1,833) 3,116 13,118 8,841
Stock based compensation 1,401 702 3,330 1,569
Change in fair value -
derivatives 8,298 179 (5,578) (652)
Interest, net 83 (22) 55 (70)
--------- -------- -------- ---------
Adjusted EBITDA $ 24,865 $ 18,931 $ 85,604 $ 49,215
========= ======== ======== =========
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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, 2015.
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SYNERGY RESOURCES CORPORATION
CONDENSED BALANCE SHEETS
(unaudited, in thousands)
May 31, August 31,
2015 2014
-------------- ------------
ASSETS
Cash and cash equivalents $ 190,205 $ 34,753
Other current assets 38,847 33,487
--------- ---------
Total current assets 229,052 68,240
--------- ---------
Oil and gas properties and other equipment 583,026 379,400
Other assets 7,382 902
--------- ---------
Total assets $ 819,460 $ 448,542
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 63,881 103,578
Revolving credit facility 141,000 37,000
Asset retirement obligations 7,772 4,730
Commodity derivative - 307
Deferred tax liability, net 34,670 21,437
--------- ---------
Total liabilities 247,323 167,052
--------- ---------
Shareholders' equity:
Common stock and paid-in capital 533,196 265,871
Retained earnings 38,941 15,619
--------- ---------
Total shareholders' equity 572,137 281,490
--------- ---------
Total liabilities and shareholders' equity 819,460 448,542
========= =========
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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,
2015 2014 2015 2014
------------ ----------- ----------- -----------
Oil and gas revenues $ 26,033 $ 25,672 $ 92,284 $ 67,966
--------- --------- -------- --------
Expenses:
Lease operating expenses 3,570 2,303 10,300 5,382
Production taxes 2,249 2,376 8,570 6,647
Depreciation, depletion,
and amortization 16,397 7,796 48,357 21,106
Full cost ceiling impairment 3,000 - 3,000 -
General and administrative 3,886 1,938 12,075 6,876
--------- --------- -------- --------
Total expenses 29,102 14,413 82,302 40,011
--------- --------- -------- --------
Operating income (loss) (3,069) 11,259 9,982 27,955
--------- --------- -------- --------
Other income (expense):
Commodity derivative realized
gain (loss) 7,136 (826) 20,935 (1,415)
Commodity derivative unrealized
gain (loss) (8,298) (179) 5,578 652
Interest income and expense, net (83) 22 (55) 70
--------- --------- -------- --------
Total other income (expense) (1,245) (983) 26,458 (693)
--------- --------- -------- --------
Income tax provision (benefit) (1,833) 3,116 13,118 8,841
--------- --------- -------- --------
Net income (loss): $ (2,481) $ 7,160 $ 23,322 $ 18,421
========= ========= ======== ========
Net income (loss) per common share:
Basic $ (0.02) $ 0.09 $ 0.26 $ 0.24
========= ========= ======== ========
Diluted $ (0.02) $ 0.09 $ 0.25 $ 0.24
========= ========= ======== ========
Weighted average shares outstanding:
Basic 104,234,519 77,176,420 91,105,035 75,689,903
=========== ========== ========== ==========
Diluted 104,234,519 79,008,619 91,804,253 77,299,456
=========== ========== ========== ==========
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SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
- ----------------------------------
(unaudited, in thousands)
Nine Months Ended
------------------------------
May 31, May 31,
2015 2014
--------------- -------------
Cash flows from operating activities:
Net income $ 23,322 $ 18,421
----------- ---------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortization 48,357 21,106
Full cost ceiling impairment 3,000 -
Provision for deferred taxes 13,118 8,841
Other, non-cash items (2,248) 917
Changes in operating assets and liabilities 1,393 (2,540)
----------- ---------
Total adjustments 63,620 28,324
----------- ---------
Net cash provided by operating activities 86,942 46,745
----------- ---------
Cash flows from investing activities:
Acquisition of property and equipment (241,903) (112,155)
Net proceeds from sales of oil and gas
properties 3,696 704
Net proceeds from short term investments - 60,018
----------- ---------
Net cash used in investing activities (238,207) (51,433)
----------- ---------
Cash flows from financing activities:
Proceeds from exercise of warrants 15,367 33,380
Net Proceeds from sale of stock 190,845 -
Net Proceeds from revolving credit facility 101,700 -
Other (1,195) (176)
----------- ---------
Net cash provided by financing activities 306,717 33,204
----------- ---------
Net increase (decrease) in cash and equivalents 155,452 28,516
Cash and equivalents at beginning of period 34,753 19,463
----------- ---------
Cash and equivalents at end of period $ 190,205 $ 47,979
=========== =========
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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
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