Attached files
EXHIBIT 99.1
SYNERGY RESOURCES ANNOUNCES WATTENBERG FIELD ASSET PURCHASE, PROVIDES OPERATIONS
UPDATE, SETS FISCAL 2015 YEAR END CONFERENCE CALL
PLATTEVILLE, CO -- (Marketwired) -- 09/15/15 -- Synergy Resources Corporation
(NYSE MKT: SYRG) ("Synergy" or the "Company"), an oil and gas exploration and
production company focused in the Denver-Julesburg Basin, announced it has
signed an agreement to purchase interests in producing wells and leasehold in
the Wattenberg Field from K.P. Kauffman Company, Inc. The assets include
leasehold rights for 4,300 net acres in the Wattenberg Field and non-operated
working interests in 25 gross (approximately 5 net) horizontal wells in the
Niobrara and Codell formations. Current net production associated with the
purchased assets is approximately 1,200 barrels of oil equivalent per day
(BOED). The purchase price of the assets is $78 million, comprised of $35
million in cash and approximately 4.4 million shares of Synergy common stock,
subject to closing adjustments. The transaction has an effective date of
September 1, 2015 and is expected to close on or before October 30, 2015.
OPERATIONS UPDATE
During fiscal year 2015, which ended August 31st, Synergy drilled 46 gross
operated horizontal wells in the Wattenberg Field and brought 38 net wells into
production. As of September 1, 2015 the Company has 12 wells in inventory
awaiting completion, including four standard length laterals (~4,300'), four
mid-length laterals (~7,200') and four extended length laterals (~9,500'). The
Company plans on completing the four mid-length laterals by the end of December.
Based upon production from the Company's operated properties and the estimates
of production from non-operated properties that are still under review, the 2015
fiscal fourth quarter production should approximate 10,800 BOED, resulting in
average daily production of 8,700 BOED for fiscal 2015.
The Company has one drilling rig under contract through the end of calendar
2015, which is currently drilling a pad with eight standard length lateral
wells. The Company has discretion over its fiscal 2016 drilling program with no
long-term drilling commitments and minimal lease expirations. Utilizing one
drilling rig and associated well completions during fiscal 2016, along with
wells currently awaiting completion, the Company's fiscal 2016 production should
be relatively flat compared to the average daily production in Q4 of fiscal
2015. If one rig is utilized for the entire 2016 fiscal year, Synergy estimates
the operated drilling capital expenditures should be approximately $120 million.
Craig Rasmuson, Chief Operating Officer of Synergy, noted, "We remain steadfast
in our goal of reducing our completed well costs and are pleased to report that
on average the actual costs for the eleven wells on our Cannon pad are
approximately $2.5 million per well. These wells were all standard length
lateral wells with 20-22 completion stages each. Nine of the wells were
completed utilizing sliding sleeves and two of the wells used plug and perf. For
our fiscal 2016 drilling program we are estimating that well costs for standard
length laterals will range between $2.5 million and $3.0 million each. We
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continue to experience a positive impact from lower line pressures in the
northern section of the Wattenberg Field, where DCP Midstream's newly
operational Lucerne 2 Plant is located."
Lynn Peterson, President of Synergy commented, "The assets purchased in the
Kauffman transaction are located in the core of the Wattenberg Field where we
have existing leases and production that fit nicely into our operational
footprint. Our focus remains on aggregating assets in the Wattenberg where we
are achieving increasing efficiency rates in our drilling and completion
activities. We are in the fortunate position of having both operational and
financial flexibility, which enables us to allocate capital expenditures when we
deem it is prudent."
Synergy will hold a conference call on Friday October 16th at 11 am ET (9 am MT)
to discuss results for its fiscal year ended August 31st, 2015. The company
plans to file its 10K and issue an earnings press release prior to the call.
Synergy President Lynn Peterson, CFO James Henderson, and COO Craig Rasmuson
will host the presentation, followed by a question and answer period.
Conference Call Details
Date: Friday, October 16th, 2015
Time: 11 am Eastern time (9 am. Mountain time)
Domestic Dial-In #: 877-407-9122
International Dial-In #: 201-493-6747
The conference call will be webcast simultaneously which you can access via this
link: http://syrginfo.equisolvewebcast.com/q4-2015 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 after 3:00 p.m. Eastern time on the same
day and until October 30th, 2015.
Domestic Toll-free Replay #: 877-660-6853
International Replay #: 201-612-7415
Replay ID#411931
Important Cautions Regarding Forward-Looking Statements
This press release contains 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.
Forward-looking statements in this release include statements relating to the
closing and effect of the Kauffman transaction, future production, costs,
capital expenditures and projects, and other operational matters. These
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statements are subject to risks and uncertainties and are based on the beliefs
and assumptions of management, and information currently available to
management. Actual results could differ materially from a conclusion, forecast
or projection in the forward-looking information. 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; changes 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;
the volatility of the Company's stock price; and other risks and uncertainties
set forth in the Company's filings with the SEC, which are incorporated by
reference herein.
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 Company's
corporate offices are located in Platteville, Colorado. More company news and
information about Synergy Resources is available at www.syrginfo.com.
Company Contact:
Rhonda Sandquist
Synergy Resources Corporation
Tel (970) 737-1073
Email: rsandquist@syrginfo.com
Investor Relations Contact:
Jon Kruljac
Synergy Resources Corporation
Tel (303) 840-8166
Email: jkruljac@syrginfo.com
Source: Synergy Resources Corporatio