Synergy increases borrowing base to $90M

PLATTEVILLE – Synergy Resources Corp. (NYSE MKT: SYRG) said Thursday it has increased its borrowing base on its credit facility to $90 million from $75 million.

“It gives us another $15 million on the credit facility immediately on the borrowing base,´ said Jon Kruljak, vice president for capital markets and investor relations. “It gives us more liquidity.”

Synergy Resources has also expanded its overall credit facility to $300 million from $150 million. The expansion means Synergy now can borrow as much as $300 million on the credit facility led by Community Banks of Colorado as the company’s proven reserves of oil and gas increase.

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Synergy valued its proven reserves at $236 million as of Aug. 31, Synergy Chief Financial Officer Monty Jennings said. Synergy has borrowed $37 million at a 2.67 percent interest rate on its credit facility as of Nov. 30.

Platteville-based Synergy Resources, which drills oil and natural-gas wells in Weld County, earned $9.6 million in fiscal 2013, down from $12.1 million during fiscal 2012. The company posted record revenue of $46.2 million during fiscal 2013 vs. $25 million in revenue last fiscal year. Synergy’s fiscal year runs from Sep. 1 through Aug. 31.

Synergy attributed the earnings drop to a deferred income tax expense of $6.8 million and a loss of $2.6 million on commodity derivatives during fiscal 2013.

Synergy shares rose 2 percent to $9.20 on Thursday.