PLATTEVILLE, CO--(Marketwired - May 16, 2013) - Synergy Resources Corporation (NYSE MKT: SYRG), a Colorado-based oil and gas company with assets in the Denver-Julesberg Basin and Southwestern Nebraska, commenced its operated horizontal drilling program on May 16th with the rigging up of Ensign Rig #17 to begin drilling the SRC Renfroe 32-1-36NHZ well on its Renfroe lease in the Wattenberg Field. Synergy's initial plan is to drill five wells from one pad site on the Renfroe lease comprised of three Niobrara and two Codell wells. The wells will be approximately 4,700 feet in lateral length and Synergy anticipates there will be between 16-20 frac stages per lateral. All the wells are being drilled under the terms of a turnkey contract with Ensign United States Drilling.
William Scaff, Jr., Executive Vice President of Synergy, commented, "We are excited to begin Synergy's operated horizontal drilling program at a time which we feel is ideal for the company as the returns on investment in the Wattenberg Field rival those of any other resource play in the United States. The industry is still in the early stages of unlocking the potential of the Niobrara and Codell formations in the Wattenberg Field as different spacing densities within multiple formations are still being delineated. We remain active on a non-operated basis, having participated in ten producing horizontal wells to date. We also have a working interest in four more wells currently being drilled and have been notified on another fifty potential horizontal wells that will be drilled by other companies including Noble Energy, PDC Energy, Bill Barrett Corp., Carrizo and others. With this experience in hand, combined with utilizing service providers that have been working with the largest operators in the play, Synergy's goal is to drill and complete horizontal wells in the Wattenberg Field at lower than industry average historical costs."
Craig Rasmuson, VP of Operations, added, "Our Renfroe lease provides Synergy with the opportunity to begin its horizontal drilling within an area of the Wattenberg Field that has demonstrated a high production mix of oil and natural gas liquids. We recently participated with PDC Energy in three horizontal Codell wells on leases that are either adjacent to, or within one mile of the Renfroe lease. These wells are currently in flow back or final stages of completion and we will watch their performance closely as we prepare for the completion of the five Renfroe wells later this summer. Synergy's non-operated working interest in the three wells is as follows: 65% in the Leffler 26Q-421, 56% in the Leffler 26T-421 and 13% in the Leffler 34-1CH. We participated with Noble Energy on the Sebastyen PC 023-63HC, a horizontal Codell well located in the Wattenberg Field that is currently in early stages of production. We have a 25% working interest in the Sebastyen well. We intend to continue our operated drilling program beyond the Renfroe wells and we have sixteen permits submitted for future horizontal wells in the Wattenberg Field and another thirty permits in process for submission."
Ed Holloway, President and CEO, commented, "While the pace of activity in the Wattenberg Field is impressive, there are also encouraging developments in the other areas where we have acreage positions. In the Northern DJ Basin area offset operators such as Whiting Petroleum and Noble Energy have announced promising results and are in the process of testing tighter spacing between the wells to determine best practices to enhance recovery rates. In this area we have participated as a non-operator in several wells in which we have fractional working interest percentages. Thus we will gain valuable insight without a great deal of capital expenditure as we contemplate our initial operated drilling activity in this area for fiscal 2014. In summary, we are in a great position to harvest the potential of the assets we have assembled in the Wattenberg Field and the Northern DJ Basin and we look forward to keeping the public apprised of our progress in the coming months."
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 risks 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, 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; 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.
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