Synergy Resources buys stakes in 101 wells, plans new hires

PLATTEVILLE – Synergy Resources Corp. (NYSE MKT: SYRG) plans to add several employees following a $125 million purchase of stakes in 101 oil and natural-gas wells in Northern Colorado.

Synergy, a Platteville-based oil and gas producer, plans to add administrative and field positions following the acquisition, Co-CEO Bill Scaff said in a conference call with analysts Friday.

“We’re going to add a few, but it’s not like we’re going to add 10 people,” Scaff said.

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Company shares rose 4 percent to $12.65 in afternoon trading after the company gained 15 percent Friday following the announcement of the acquisition.

Synergy said it signed a purchase and sale agreement for a stake in 17 horizontal wells from an undisclosed “private party.” The deal, which comprises $87.5 million in cash and $37.5 million in Synergy common stock, will close Dec. 15.

Ten of the horizontal wells are producing oil and gas while the other seven horizontal wells are being completed. The company has a 6- to 40-percent stake in the wells.

The acquisition also includes stakes in 84 vertical wells and 91 horizontal drilling locations, raising Synergy’s footprint in the lucrative core Wattenberg oil field in Weld County.

“This does spread us around the field,” Co-CEO Ed Holloway said.

Net production from the producing wells totaled 1,240 barrels of oil per day in September, Synergy said.

Synergy also said it reached an agreement with SunTrust Robinson Humphrey Inc. and SunTrust Bank for a $230 million loan, as part of a $500 million senior secured revolving credit facility.

Synergy earned $10.4 million during the fourth quarter, up from $1 million during the same period a year earlier. The company earned $28.9 million during its 2014 fiscal year ended Aug. 31 compared with $9.6 million during the previous fiscal year.