Synergy Resources Corporation Reports Third Quarter Results
DENVER, July 20, 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"), today reported third quarter results for the period ended May 31, 2011. Net oil and natural gas production for the third quarter 2011 increased to 467 barrels of oil per day (Boe/d) compared to 149 Boe/d for the third quarter 2010.
Third Quarter 2011 Highlights
- Reported oil and natural gas production of 467 Boe/d for the third quarter 2011, an increase of 213%;
- Posted a 412% increase in revenues to $3,106,336 compared to $607,253;
- Acquired interests in 88 oil and natural gas leases in the core Wattenberg Field;
- Generated $5,244,517 from the sale of mineral interests in 3,502 gross acres;
- Reported operating cash flow of $3,824,882;
- Posted positive shareholders equity of $45.1 million compared to a negative $1.0 million.
Frank Jennings, Chief Financial Officer of Synergy Resources Corporation, noted "Our financial results for the quarter reflect approximately $844,585 in non-cash charges associated with our convertible notes and derivative conversion liability. For the quarter, interest expense included non-cash amortization and accretion of $1,184,664. As discussed last quarter, all of the note holders have elected to convert their notes into shares of common stock, which eliminate future non-cash charges and interest expense after March 31, 2011. On a pro-forma basis adjusted for these non-cash charges we had net income of $550,000 for the quarter. Additionally, we no longer have the liability on our balance sheet which results in a positive shareholders' equity of $45.1 million compared to a negative $1.0 million at the beginning of the year."
Operating income for the three month period ended May 31, 2011 was $547,272 compared to an operating loss of $51,094 for the comparable year-ago quarter. Revenues for the third quarter were a record $3,106,336 compared to $607,253 for the comparable year-ago quarter. The Company narrowed its net loss to $291,612 or $0.01 per share for the third quarter 2011 from a net loss of $3,649,812 or $0.30 per share for the same year ago period. Improved operating results for the quarter were associated with increasing revenues from the Company's 36 wells completed during 2010. As of May 31, 2011, Synergy Resources had 124 gross wells, 114 producing wells, 8 wells in progress and two shut in wells (net wells of 89).
Edward Holloway, Chief Executive Officer and President of Synergy Resources, said, "Fiscal 2011 is rapidly shaping up to be our Company's best year since inception. Accelerated drilling activity on our core Wattenberg projects has improved our production rates and continues to drive our strong revenue growth. Our liquid-rich projects, located predominantly in the northeast and central portion of the Wattenberg, contributed to our record quarterly performance. In addition, we increased our prospective Niobrara acreage position and also engaged in several transactions that expanded our footprint in the Wattenberg Field and the D-J Basin."
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.
SYNERGY RESOURCES CORPORATION | |||||||||
CONDENSED BALANCE SHEETS | |||||||||
As of | As of | ||||||||
May 31, 2011 | August 31, 2010 | ||||||||
(unaudited) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 11,096,665 | $ | 6,748,637 | |||||
Accounts receivable | 5,091,538 | 3,176,320 | |||||||
Inventory | 706,742 | 387,864 | |||||||
Other current assets | 18,307 | 12,310 | |||||||
Total current assets | 16,913,252 | 10,325,131 | |||||||
Property and equipment: | |||||||||
Oil and gas properties, full cost method, net | 38,582,870 | 12,692,194 | |||||||
Other property and equipment, net | 230,671 | 150,789 | |||||||
Property and equipment, net | 38,813,541 | 12,842,983 | |||||||
Other assets | 90,000 | 1,673,799 | |||||||
Total assets | $ | 55,816,793 | $ | 24,841,913 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | 3,641,713 | 3,570,231 | |||||||
Accrued expenses | 1,334,560 | 517,921 | |||||||
Notes payable, related party | 5,200,000 | - | |||||||
Total current liabilities | 10,176,273 | 4,088,152 | |||||||
Asset retirement obligations | 521,081 | 254,648 | |||||||
Convertible promissory notes, net of debt discount | - | 12,190,945 | |||||||
Derivative conversion liability | - | 9,325,117 | |||||||
Total liabilities | 10,697,354 | 25,858,862 | |||||||
Shareholders' equity: | |||||||||
Common stock and paid in capital | 81,648,837 | 22,322,474 | |||||||
Accumulated (deficit) | (36,529,398) | (23,339,423) | |||||||
Total shareholders' equity | 45,119,439 | (1,016,949) | |||||||
Total liabilities and shareholders' equity | $ | 55,816,793 | $ | 24,841,913 | |||||
SYNERGY RESOURCES CORPORATION | |||||||||||||
CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||
(unaudited) | |||||||||||||
Three Months Ended May 31, | Nine Months Ended May 31, | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Revenues: | |||||||||||||
Oil and gas revenues | $ | 2,921,910 | $ | 607,253 | $ | 6,399,193 | $ | 995,764 | |||||
Service revenues | 184,426 | - | 211,715 | - | |||||||||
Total revenues | 3,106,336 | 607,253 | 6,610,908 | 995,764 | |||||||||
Expenses: | |||||||||||||
Lease operating expenses | 668,683 | 106,503 | 1,131,837 | 161,545 | |||||||||
Depreciation, depletion, | 830,639 | 200,890 | 2,062,825 | 293,829 | |||||||||
General and administrative | 1,059,742 | 350,954 | 2,171,721 | 986,364 | |||||||||
Total expenses | 2,559,064 | 658,347 | 5,366,383 | 1,441,738 | |||||||||
Operating income (loss) | 547,272 | (51,094) | 1,244,525 | (445,974) | |||||||||
Other income (expense): | |||||||||||||
Change in fair value of | 86,192 | (2,764,888) | (10,229,229) | (2,764,888) | |||||||||
Interest expense, net | (950,860) | (834,381) | (4,246,945) | (1,248,517) | |||||||||
Interest income | 25,784 | 551 | 41,675 | 4,237 | |||||||||
Total other income (expense) | (838,884) | (3,598,718) | (14,434,499) | (4,009,168) | |||||||||
Net loss | $ | (291,612) | $ | (3,649,812) | $ | (13,189,974) | $ | (4,455,142) | |||||
Net loss per common share: | |||||||||||||
Basic and Diluted | (0.01) | (0.30) | (0.58) | (0.37) | |||||||||
Weighted average | |||||||||||||
Basic and Diluted | 32,813,298 | 11,998,000 | 22,713,785 | 11,998,000 | |||||||||
SOURCE Synergy Resources Corporation
Share this article