SOURCE: Synergy Resources Corporation

Synergy Resources Corporation Logo

January 09, 2015 15:17 ET

CORRECTION - Synergy Resources Reports Fiscal First Quarter 2015 Results

PLATTEVILLE, CO--(Marketwired - January 09, 2015) - In the news release "Synergy Resources Reports Fiscal First Quarter 2015 Results" issued earlier today by Synergy Resources Corporation (NYSE MKT: SYRG), we are advised by the company of an edit to the CONDENSED STATEMENTS OF OPERATIONS table. The figures for the "Income tax provision" line item should read "11,744" and "3,387" rather than dashes as originally issued. Complete corrected text follows.

Synergy Resources Reports Fiscal First Quarter 2015 Results

Revenues up 121% to $42.5 Million, Driving Operating Income up 104% to $14.8 Million and Net Income of $0.27 per Share; Company to Host Earnings Conference Call Today, January 9th, 2015 at 11:00 a.m. ET 877-407-9122 Toll Free Dial-In, 201-493-6747 International/Local Dial-In

PLATTEVILLE, CO -- January 09, 2015 -- Synergy Resources Corporation (NYSE MKT: SYRG), a U.S. oil and gas exploration and production company focused in the Denver-Julesburg Basin, reported its fiscal first quarter results for the period ended November 30th, 2014.

First Quarter 2015 Financial Highlights vs. Same Year-Ago Quarter

  • Revenues increased 121% to $42.5 million
  • Operating income increased 104% to $14.8 million
  • Adjusted EBITDA (a non-GAAP metric) increased 161% to $33.4 million representing a 79% margin on revenues
  • Net income increased 247% to $21.2 million
  • At November 30th, 2014, cash and equivalents totaled $47.1 million

First Quarter 2015 Operational Highlights

  • Net oil and natural gas production increased to 753,312 barrels of oil equivalent (BOE), averaging 8,278 BOE per day versus 3,208 BOE per day in the same year ago quarter, an average daily increase of 158%
  • As operator, completed 8 horizontal wells including one well on the Phelps pad, one mid-reach lateral well on the Eberle pad and six wells on the Weld 152 pad, all of which commenced production by November 30th, 2014
  • As of November 30th, 2014, the company was the operator of 39 producing horizontal wells in the Wattenberg Field

First Quarter 2015 Financial Results

Revenues totaled $42.5 million, up 17% from $36.3 million in the previous quarter and up 121% from $19.3 million in the year ago quarter. The year-over-year improvement was attributed to a 158% increase in production, primarily from the new horizontal wells brought on line partially offset by a 14% decrease in the realized average selling price per BOE. During fiscal Q1 2015, average selling prices were $73.69 per barrel of oil and $4.74 per mcf of gas, as compared to $93.06 and $4.86, respectively a year-ago.

Operating income decreased to $14.8 million down 5% from $15.5 million in the previous quarter and up 104% from $7.2 million in the same year-ago period. Net income was $21.2 million or $0.27 per basic and $0.26 per diluted share, up from $10.4 million or $0.13 per basic and diluted share in the previous quarter and up 247% from $6.1 million or $0.08 per basic and diluted share in the same year-ago period. 

Adjusted EBITDA (a non-GAAP financial measure) increased to $33.4 million, up 19% from $28 million in the previous quarter and up 161% from $12.8 million in the same year-ago quarter.

As of November 30th, 2014, the company's cash and equivalents and short term instruments totaled $47.1 million, as compared to $34.8 million at August 31st, 2014. At November 30th 2014, there was $77 million borrowed under the revolving line of credit.

The following tables present certain per unit metrics that compare results of the corresponding quarterly reporting periods:

     
  Three Months Ended     
  November 30,
2014
 November 30,
2013
 Change  
Production:            
 Oil (Bbls)  466,656   168,278  177 %
 Gas (Mcf)  1,719,938   741,755  132 %
             
Total production in BOE  753,312   291,904  158 %
             
Revenues (in thousands):            
 Oil $34,386  $15,660  120 %
 Gas  8,152   3,606  126 %
  $42,538  $19,266  121 %
Average sales price:            
 Oil $73.69  $93.06  -21 %
 Gas $4.74  $4.86  -2 %
 BOE $56.47  $66.00  -14 %
          

"Bbl" refers to one stock tank barrel, or 42 U.S. gallons liquid volume in reference to crude oil or other liquid hydrocarbons. "Mcf" refers to one thousand cubic feet. A BOE (i.e. barrel of oil equivalent) combines Bbls of oil and Mcf of gas by converting each six Mcf of gas to one Bbl of oil. 

Lease Operating Expenses ("LOE") - The following table summarizes operating costs on a per unit basis:

  
  Three Months Ended
  November 30,  November 30,
  2014  2013
Production Costs $3,035  $1,203
Work-Over  6   70
 Lifting cost  3,041   1,273
Severance and ad valorem taxes  4,178   2,016
 Total LOE $7,219  $3,289
        
Per BOE:       
Production costs $4.03  $4.12
Work-Over  0.01   0.24
 Lifting cost  4.04   4.36
Severance and ad valorem taxes  5.55   6.91
 Total LOE $9.59  $11.27
       

Depletion, Depreciation, and Amortization ("DDA") - The following table summarizes the components of DDA:

   
  Three Months Ended
  November 30,  November 30,
(in thousands) 2014  2013
Depletion $16,304  $5,490
Depreciation and amortization  150   101
 Total DDA $16,454  $5,591
        
DDA expense per BOE $21.84  $19.15
      

General and Administrative ("G&A") - The following table summarizes G&A expenses incurred and capitalized during the periods presented:

  
  Three Months Ended
  November 30,  November 30,
(in thousands) 2014  2013
G&A costs incurred $4,613  $3,485
Capitalized costs  (503)   (317)
 Total G&A $4,110  $3,168
        
G&A Expense per BOE $5.46  $10.85
      

Conference Call

The company will hold a conference call on Friday, January 9th, 2015 at 11:00 a.m. Eastern time to discuss results for its fiscal first quarter ended November 30th, 2014.

Synergy Resources co-CEO Ed Holloway, co-CEO William Scaff, Jr., CFO Monty Jennings, COO Craig Rasmuson, and VP of Capital Markets and Investor Relations Jon Kruljac will host the presentation, followed by a question and answer period.

Date: Friday, January 9th, 2015
Time: 11:00 a.m. Eastern time (9:00 a.m. Mountain time)

877-407-9122 Toll Free Dial-In (US & Canada)
201-493-6747 International/Local Dial-In

The conference call will be webcast simultaneously which you can access via this link: http://syrginfo.equisolvewebcast.com/q1-2015 and via the investor section of the company's web site at www.syrginfo.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, contact Rhonda Sandquist with Synergy Resources at 970-737-1073. A replay of the call will be available after 3:00 p.m. Eastern time on the same day and until January 23rd, 2015.

Replay Dial-In Numbers
877-660-6853 Toll Free (US & Canada)
201-612-7415 International/Local
Replay ID#411931

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 risk 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.

About Non-GAAP Financial Measures

The company uses "adjusted EBITDA," as a non-GAAP financial measure to evaluate financial performance such as period-to-period comparisons. This Non-GAAP measure is not defined under U.S. GAAP and should be considered in addition to, not as a substitute for, indicators of financial performance reported in accordance with U.S. GAAP. The company may use non-GAAP measures that are not comparable to measures with similar titles reported by other companies. Also, in the future, the company may disclose different non-GAAP financial measures in order to help investors more meaningfully evaluate and compare the company's future results of operations to its previously reported results. The company encourages investors to review its financial statements and publicly-filed reports in their entirety and not rely on any single financial measure. The section titled "Reconciliation of Non-GAAP Financial Measures" includes a detailed description of this measure as well as reconciling to its most similar U.S. GAAP measure.

Reconciliation of Non-GAAP Financial Measures

The company defines adjusted EBITDA as net income adjusted to exclude the impact of interest expense, interest income, income taxes, depreciation, depletion and amortization, stock based compensation, and the plus or minus change in fair value of derivative assets or liabilities. The company believes adjusted EBITDA is relevant because it is a measure of cash flow available to fund capital expenditures and service debt and is a metric used by some industry analysts to provide a comparison of its results with its peers. The following table presents a reconciliation of the company's non-GAAP financial measures to the nearest GAAP measure.

  
  Three Months Ended
  November 30,  November 30,
(in thousands) 2014  2013
Adjusted EBITDA:       
 Net income $21,151  $6,100
 Depletion, depreciation and amortization  16,454   5,591
 Provision for income tax  11,744   3,387
 Stock-based compensation  793   419
 Commodity derivative change  (16,708)   (2,636)
 Interest income  -   (31)
  Adjusted EBITDA $33,434  $12,830
        

Financial Statements
Condensed financial statements are included below. Additional financial information, including footnotes that are considered an integral part of the financial statements, will be included in Synergy's Edgar Filings at www.sec.gov on Form10-Q for the period ended November 30th, 2014.

           
           
  SYNERGY RESOURCES CORPORATION
  CONDENSED BALANCE SHEETS
  (unaudited, in thousands)
   
           
      November 30,   August 31,
      2014   2014
  ASSETS          
  Cash and short term investments   $47,111   $34,753
  Other current assets    65,331    33,487
   Total current assets    112,442    68,240
  Oil and gas properties and other equipment    427,239    379,400
  Other assets    5,384    902
    Total assets   $545,065   $448,542
             
  LIABILITIES AND SHAREHOLDERS' EQUITY          
  Current liabilities   $115,917    103,578
  Revolving credit facility    77,000    37,000
  Asset retirement obligations    5,109    4,730
  Commodity derivative    -    307
  Deferred tax liability, net    33,296    21,437
   Total liabilities    231,322    167,052
  Shareholders' equity:          
   Common stock and paid-in capital    276,973    265,871
   Retained earnings    36,770    15,619
    Total shareholders' equity    313,743    281,490
     Total liabilities and shareholders' equity   $545,065   $448,542
         
         
      
           
  SYNERGY RESOURCES CORPORATION
  CONDENSED STATEMENTS OF OPERATIONS
  (unaudited, in thousands, except share and per share data)
       
      Three Months Ended
      November 30,   November 30,
      2014   2013
             
  Oil and gas revenues   $42,538   $19,266
  Expenses:          
   Lease operating expenses    3,041    1,273
   Production taxes    4,178    2,016
   Depreciation, depletion, and amortization    16,454    5,591
   General and administrative    4,110    3,168
    Total expenses    27,783    12,048
  Operating income    14,755    7,218
             
  Other income (expense):          
   Commodity derivative realized gain (loss)    1,432    (398)
   Commodity derivative unrealized gain    16,708    2,636
   Interest income, net    -    31
    Total other income    18,140    2,269
    Income tax provision    11,744    3,387
  Net income   $32,895   $9,487
  Net income per common share:          
   Basic   $0.27   $0.08
   Diluted   $0.26   $0.08
  Weighted average shares outstanding:          
   Basic    79,008,719    73,674,865
   Diluted    80,141,152    76,044,605
         
         
      
           
  SYNERGY RESOURCES CORPORATION
  CONDENSED STATEMENTS OF CASH FLOWS
  (unaudited, in thousands)
  
      Three Months Ended
      November 30,   November 30,
      2014   2013
             
  Cash flows from operating activities:          
   Net income   $21,151   $6,100
   Adjustments to reconcile net income to net cash provided by operating activities:          
    Depreciation, depletion, and amortization    16,454    5,591
    Provision for deferred taxes    11,744    3,387
    Other, non-cash items    (15,915)    (2,217)
    Changes in operating assets and liabilities    1,001    2,052
   Total adjustments    13,284    8,813
    Net cash provided by operating activities    34,435    14,913
  Cash flows from investing activities:          
   Acquisition of property and equipment    (66,137)    (57,127)
   Earnest money deposit    (6,250)    -
   Net proceeds from short term investments    -    19,987
   Net cash used in investing activities    (72,387)    (37,140)
  Cash flows from financing activities:          
   Equity financing activities:    10,699    23,771
   Debt financing activities    40,000    -
   Other    (389)    (34)
   Net cash provided by financing activities    50,310    23,737
  Net increase in cash and equivalents    12,358    1,510
  Cash and equivalents at beginning of period    34,753    19,463
  Cash and equivalents at end of period    47,111    20,973
  Short term investments    -    -
  Cash, equivalents and short term investments   $47,111   $20,973
        
        

Contact Information