That’s how Bill Scaff, co-CEO of Synergy Resources, describes the economic cycle in the oil and gas industry over the past 30 years.
It’s definitely boom these days at Platteville-based Synergy, which owns interests in 392,000 acres and operates more than 280 wells in the Wattenberg Field, one of the most prolific oil and gas fields in North America.
In just five years, Scaff and co-CEO Ed Holloway have built an initial $2 million investment into a company with 26 employees, a market capitalization of $810 million and a stock price hovering at $10.50.
And now Holloway and Scaff, who have worked together in the oil and gas business for 30 years, are taking the company to what they call a whole new level.
Synergy has moved from drilling vertical wells to horizontal wells in the past 12 months and will ramp up its efforts in fiscal year 2014 with a $189 million capital expenditure program.
Thanks to technological improvements and lower costs, “horizontal play really started to make more sense,” Scaff said. “It’s really changed the face of the company. It puts us on a launching pad where in the next two to three years we’ll probably double to triple what we did those first five years.”
Average daily production targets will range from 5,100 to 5,500 BOE (barrels of oil equivalent) in 2014.
The shift to horizontal drilling is “a real dynamic change for us,” Holloway said. But with that comes a greater need for capital investment.
“All of a sudden you’re running two different companies,” Holloway said. “You’re running an oil and gas company and then you’re running a public promotional company.”
As a result, he and Scaff spend a lot of time on the road talking to Wall Street and institutional investors.
That’s another change for two entrepreneurs who insist upon keeping the company’s headquarters in the middle of a farm in the Wattenberg Field, despite pressure to move to a high-profile office in Denver.
“That makes us unique with Wall Street,” Holloway said. “We tell them to go past five cows and take a left.”
Scaff gives much of the credit for the company’s success to Synergy employees. Every employee owns stock in the company, making “every employee an owner.”
A major challenge the company faces is the opposition to the drilling process known as fracking from a variety of environmental groups and concerned residents.
Synergy hires third-party environmental firms to check the company’s wells quarterly or, if the wells are in city limits, monthly. The company also has an open-door policy as well as an outreach program to speak with groups, state leaders and property owners who own mineral rights to try to explain the process.
“We do everything we can to be environmentally conscious,” Scaff said. “We live here, too. Many of our employees live right down the street from a lot of our wells. We want to make sure everything is safe.”
Synergy makes contributions to schools and flood relief programs as well as such groups as the Greeley Food Bank and Boys and Girls Club.
“To see how we’re changing lives is really gratifying,” Holloway said. “There are frustrating days and there are great days. It’s just fun to watch our team come together.”