Synergy Resources Corporation Announces Quarterly Results
DENVER, April 12, 2011 /PRNewswire/ -- Synergy Resources Corporation (OTCBB: SYRG), 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 February 28, | Six Months Ended 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, | 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 | (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 | ||||||||||||
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, 2011 | August 31, 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 retirement 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 operations 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.
SOURCE Synergy Resources Corporation
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