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EXHIBIT 99
Synergy Resources Sets Preliminary Fiscal 2016 CapEx of $250-$300 million
PLATTEVILLE, CO -- (Marketwired) -- 06/11/15 -- Synergy Resources Corporation
(NYSE MKT: SYRG) ("Synergy" or the "Company") a U.S. oil and gas exploration and
production company focused in the Denver-Julesburg Basin, has set a range for
its fiscal year 2016 capital expenditures of $250-$300 million and provided an
update on its drilling and completion activities in the Wattenberg Field.
William Scaff Jr., co-CEO of Synergy commented, "With the significant progress
we have made reducing drilling and completion costs and increasing operational
efficiencies, we are confident our fiscal 2016 capital program, beginning
September 1st, will enable Synergy to continue to grow production and generate
excellent returns for our shareholders. Furthermore, we anticipate 2016's
capital program will be fully funded with our existing cash on hand, internally
generated operating cash flow and the remaining liquidity on the borrowing base
of our credit facility. Our 2016 capital will be predominately focused in the
Wattenberg Field and we plan on drilling a higher percentage of mid- and
extended reach horizontal wells in both the Codell and Niobrara formations. We
are making preparations to add a second rig to our drilling program early in our
2016 fiscal year. We also have the financial wherewithal to expand the capex
toward our Greenhorn prospect in the NE Wattenberg Extension Area depending on
the results from our initial horizontal well."
Operations Update
Synergy's Chief Operating Officer, Craig Rasmuson added, "We remain active as we
enter our 2015 fiscal fourth quarter. We are currently completing the eight well
Geis pad and expect the wells to be on line in July. Four of the Geis wells will
be completed using Halliburton's Access Biovert Frac design, while the other
four wells will utilize hybrid gel and slickwater designs. All eight Geis wells
will be completed utilizing sliding sleeves. Completion activities on the eleven
well Cannon pad are scheduled to begin next week with production anticipated to
begin by late July. Additionally, completion plans for our Wiedeman pad are
being finalized pending an agreement related to the remediation of an existing
offset vertical well within the spacing unit owned by a third party."
"We finished drilling the Conrad well, our first well targeting the Greenhorn,
ahead of schedule and on budget. The rig has moved to our Bestway pad and has
begun the initial phase of batch drilling four mid-reach lateral wells. These
wells were not in our original 2015 fiscal plans, but drilling efficiencies and
the reduction in service costs have allowed Synergy to deploy additional capital
during the fiscal fourth quarter. Drilling operations should be completed on
Bestway in August and the rig will move to the southern portion of the
Wattenberg Field to begin our fiscal 2016 program in September."
"Regarding the Conrad well, we are reviewing test results from the Greenhorn
formation to determine the completion technique we will utilize.
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"Our team continues to excel in overall efficiency for drilling and completion
of horizontal wells in the Wattenberg Field. We drilled the Cannon wells for
less than the original budget and several of the wells on the pad, which will be
completed using slickwater, could have a total drilling and completion cost of
less than $3.0 million per well. The Cannon wells consist of six Codell wells
and five Niobrara C bench wells, nine of the wells are sliding sleeve and two of
the wells are plug and perf, and the wells have an average 20-22 frac stages
each."
"On our Kiehn Weis pad the wells have all been completed and are in production.
We estimate the average actual cost of the thirteen wells on the Kiehn Weis pad
will be approximately $3.5 million each. The Kiehn Weis wells were drilled last
year under a higher cost drilling contract and we are pleased with the cost
reductions we were able to realize in the completion stage of the wells. The
wells are in a low gas-to-oil ratio area. Production equipment on the pad is
being optimized and we are currently installing production tubing. The Kiehn
Weis wells consist of six Codell wells, six Niobrara C bench wells and one
Niobrara A bench well. Eight of the wells utilized sliding sleeves and five of
the wells were completed with plug and perf designs. Early production results of
the Niobrara A bench well have been very encouraging and we plan on permitting
more Niobrara A bench wells going forward."
"We have been pursuing asset swaps with other operators in order to limit the
amount of non-operated expenditures we incur and to maximize our working and net
revenue interest percentages in our operated wells. We were able to consummate
several asset and acreage swaps during the quarter, which gives us a higher
working interest percentage in some of our developed operated pads as well as a
higher working interest percentage in several other leases we will develop and
operate in the future. A result of these swaps will be a 400-500 BOE per day
reduction of non-operated production in the fiscal third quarter and a savings
of approximately $14 million in non-operated expenses."
"Mid-stream constraints and high line pressures remain challenging and continue
to have a material impact on the performance of our horizontal wells in the
northern portion of the Wattenberg Field as well as on most of our vertical well
production. Also, during the quarter we shut in three of the wells on our Weld
152 pad due to offset operator fracking activities which is required by the
Colorado Oil & Gas Conservation Commission. We expect that as DCP's Lucerne 2
plant ramps up, its additional capacity will alleviate some of the line pressure
challenges."
"Flooding has delayed the final tie-in of the 8 inch gas gathering line on our
Kelly Farms pad and we have been unable to produce all the wells simultaneously,
or to what we believe is their full potential. We have also shut in some of our
vertical wells due to the flooding as a precautionary measure."
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With the lower contribution from non-operated production due to asset swaps,
continuing infrastructure challenges and shutting in wells due to offset
operator activities Synergy anticipates its fiscal 3rd quarter production will
be between 7,600 and 8,200 BOE per day.
The Company will issue its fiscal third quarter earnings results and host a
conference call on July 9th and will provide further details regarding its
fiscal fourth quarter and year-end exit rate production at that time.
Conference call details:
Date: Thursday, July 9th, 2015
Time: 12 noon Eastern time (10 a.m. 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/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 after 3:00 p.m. Eastern time on the same
day and until July 23rd, 2015.
Domestic Toll-free Replay #: 877-660-6853
International Replay #: 201-612-7415
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.
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,
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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
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
