Exploration & Production | Quarterly / Earnings Reports | Second Quarter (2Q) Update | Financial Results | Capital Markets

Synergy Ups Production 98 Percent to 7,745 BOE/d

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Synergy Resources Corporation reported its fiscal second quarter results for the period ended February 28, 2015.

Second Quarter 2015 Financial Results

• Revenues increased 3% to $23.7 million up from $23.0 million in the same quarter a year ago. The year-over-year improvement was attributed to a 98% increase in production, primarily from the new horizontal wells brought on line and production from the Bayswater acquisition that closed in December 2014. Revenue growth was offset by a 48% decrease in the realized average selling price per BOE. During fiscal Q2 2015, average selling prices were $43.51 per barrel of oil and $3.38 per mcf of gas, as compared to $86.82 and $5.93, respectively, a year ago.
• Net income was $4.7 million or $0.05 per basic and diluted share, down from $5.2 million or $0.07 per basic and diluted share in the same year-ago period.
• Adjusted EBITDA (a non-GAAP metric) increased 56% to $27.3 million up from $17.5 million a year ago.
• At February 28, 2015, cash and cash equivalents totaled $218.5 million. Borrowings under the credit facility were $146.0 million with remaining liquidity of $46.0 million on a borrowing base of $192.0 million.

Second Quarter 2015 Highlights

• Net oil and natural gas production increased to 697,069 barrels of oil equivalent (BOE), averaging 7,745 BOE per day versus 3,917, as compared to the same year-ago quarter, an average daily increase of 98%.
• Closed on the acquisition of the Bayswater assets located in the Wattenberg Field on December 15, 2014.
• Raised approximately $191 million in net proceeds in an equity offering at $10.75 per share that closed on February 2, 2015.
• As of February 28, 2015, we were the operator of 39 gross producing horizontal wells in the Wattenberg Field.
• 29 additional operated horizontal wells were awaiting completion and 11 more horizontal operated wells were in the drilling process as of February 28, 2015.

Monty Jennings, CFO of Synergy commented, "This quarter's financial results reflect the benefits we are reaping from maintaining a keen eye on controlling costs as we achieved a 63% operating cash margin on revenues in the quarter, even while commodity prices were falling. Our financial EBITDA in the quarter was greater than 100% of revenues as we realized over twelve million in cash proceeds from monetizing commodity hedges that were entered into when prices for oil ranged from $80 to $95 per barrel. At the same time, we nearly doubled our production compared to the period a year ago as our shift to horizontal development has been fully implemented. We further bolstered our balance sheet during the quarter with nearly $191 million in net proceeds from our equity offering. We have also added to our human resource capital with the hiring of Brandon Lorenz as our Drilling Manager and Brant DeMuth as VP of Finance along with key people in land, environmental, and accounting, all of which positions the company well to manage its continued rapid growth."